XXXXXXX XXXX, L.P.
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Dated as of November __, 1998
XXXXXXX XXXX, L.P.
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Preliminary Statement
Xxxxxxx Xxxx, L.P. (the "Partnership") was formed as a
Mississippi limited partnership pursuant to a Limited
Partnership Agreement dated February 26, 1998, as amended
(the "Original Agreement") by and between PARK RIDGE, LLC, a
Mississippi limited liability company ("PRLLC"), as general
partner (the "General Partner") and XXXXX X. XXXXXX as the
limited partner (the "Original Limited Partner"), and a
Certificate of Mississippi Limited Partnership (the
"Certificate") filed in the Filing Office on February 26,
1998.
The parties desire to amend and restate the Original
Agreement to (i) provide for the withdrawal from the
Partnership of the Original Limited Partner, (ii) provide
for the admission of BOSTON CAPITAL TAX CREDIT FUND IV L.P.,
a Delaware limited partnership ("BCTCF"), as the Investment
Limited Partner, (iii) provide for the admission of BCTC 94,
INC., a Delaware corporation as the Special Limited Partner,
and (iv) more fully set forth the rights and obligations of
the Partners.
In consideration of the mutual agreements set forth
herein, it is agreed and certified, and the Original
Agreement is hereby amended and restated in its entirety as
follows:
ARTICLE I
Defined Terms
The defined terms used in the Agreement shall have the
meanings specified below:
"Act" means the Revised Uniform Limited Partnership Act
as in effect in the State of Mississippi.
"Actual Credit" means, with respect to a particular
Fiscal Year, the total amount of Tax Credit properly
allocable by the Partnership to the Investment Limited
Partner for such Fiscal Year. The Actual Credit shall be
retroactively revised if the amount of Tax Credit properly
allocable to the Investment Limited Partner is revised as
the result of an audit or is recaptured.
"Additional Limited Partner" means any holder of an
Interest designated as an Additional Limited Partner
pursuant to the provisions of Section 4.5(b) or Section 7.4.
"Adjusted Capital Account Deficit" means, with respect
to any Partner, the deficit balance, if any, in such
Partner's Capital Account as of the end of the relevant
Fiscal Year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account any amounts which
such Partner is obligated to restore pursuant to any
provisions of this Agreement or is deemed to be obligated to
restore pursuant to the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(i) and 1.704-2(i)(5),
respectively; and
(ii) Debit to such Capital Account the items described
in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5)
and 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations.
The foregoing definition of Adjusted Capital Account
Deficit is intended to comply with the provisions of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall
be interpreted consistently therewith.
"Admission Date" means the first date on which all
parties hereto shall have executed this Agreement.
"Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, expenses and fees, including court costs and
reasonable attorneys' fees and expenses.
"Affiliate" means as to a specified Person, (i) such
Person; (ii) each member of the Immediate Family of such
Person; (iii) each legal representative, successor or
assignee of any Person referred to in the preceding clauses
(i) or (ii); (iv) each trustee of a trust for the benefit of
any Person referred to in the preceding clauses (i) or (ii);
or (v) any other Person (a) who directly or indirectly
controls, is controlled by, or is under common control with
such Person, (b) who is an officer of, director of, partner
in or trustee of, or serves in a similar capacity with
respect to, such Person or of which such Person is an
officer, director, partner or trustee, or with respect to
which such Person serves in a similar capacity, (c) who,
directly or indirectly, is the beneficial owner of ten
percent (10%) or more of any class of equity securities of
such Person or of which such Person is directly or
indirectly the owner of ten percent (10%) or more of any
class of equity securities, (d) who is an officer, director,
general partner, trustee or holder of ten percent (10%) or
more of the voting securities or beneficial interests of any
Person referred to in the foregoing clauses (v) (b) or (v)
(c), or (e) who, whatever such Person's title, performs
functions for such Person or any Affiliate of such Person
similar to a Chairman or member of the Board of Directors,
or executive officer such as the President, Executive Vice
President or Senior Vice President, Corporate Secretary, or
Treasurer, or any Person holding a five percent (5%) or more
equity interest in such Person, or any Person having the
power to direct or cause the direction of such Person
whether through the ownership of voting securities, by
contract or otherwise. An Affiliate of any Investment
Limited Partner or of any Investment General Partner does
not include a Person who is a partner in a Partnership or
joint venture with any Investment Limited Partner or any
other Affiliate of any Investment Limited Partner if such
Person is not otherwise an Affiliate of any Investment
Limited Partner or any Investment General Partner. For
purposes of this definition, the term Affiliate shall not be
deemed to include any law firm (or member or associate
thereof) providing legal services to any Investment Limited
Partner, any Investment General Partner, the General Partner
or any Affiliate of any of them.
"AFR" means the "applicable federal rate" as defined
and determined in the manner set forth in Section 1274 of
the Code.
"Agency" means the Credit Agency, Issuer or any other
Governmental Authority with jurisdiction over the Apartment
Complex, or the business and operations of the Partnership.
"Agreement" means this First Amended and Restated
Agreement of Limited Partnership, including Schedule A, as
amended from time to time.
"Allocation Regulations" means the Treasury Regulations
issued under Sections 704(b) and 752 of the Code, as the
same may be modified or amended from time to time. In the
event that the Allocation Regulations are revised or amended
subsequent to the date of this Agreement, references herein
to sections or paragraphs of the Allocation Regulations
shall be deemed to be references to the applicable sections
or paragraphs of the Allocation Regulations as then in
effect
"Apartment Complex" means the real property located in
Jackson, Madison County, Tennessee, as more fully described
in Exhibit A attached hereto, together with (i) all
buildings and other improvements constructed or to be
constructed thereon and (ii) all furnishings, equipment and
personal property located thereon or otherwise covered by
the Mortgages.
"Applicable Percentage" has the meaning set forth in
Section 42(b) of the Code.
"Applied Amounts" shall have the meaning set forth in
Section 6.10.
"Asset Management Fee" means the fee payable to BCTCF
or an Affiliate thereof pursuant to the provisions of
Section 6.12(b).
"Assignee" shall have the meaning set forth in Section
4.1(c).
"Auditors" means Xxx Xxxxxxxx, CPA of Jackson,
Mississippi, or such other firm of independent certified
public accountants as may be engaged by the General Partner
with the Consent of the Special Limited Partner for the
purposes of preparing the Partnership's income tax returns,
auditing the books and records of the Partnership and
certifying financial reports of the Partnership.
"BCTC 94" means BCTC 94, Inc., a Delaware corporation,
and its successors.
"BCTCF" means Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership, and its successors.
"Best Knowledge" shall mean and include, in the case of
a specified Person, (i) actual knowledge and (ii) that
knowledge which a prudent businessperson (including, in the
case of an Entity, the general or managing partners,
officers, directors and key employees of such Entity) should
have obtained in the management of his or her business
affairs after making due inquiry and exercising due
diligence with respect thereto. In connection therewith,
the knowledge (both actual and constructive) of any general
or managing partner, director, officer or key employee of an
Entity shall be deemed to be the knowledge of the Entity.
"Bond Documents" means the Indenture, the Bonds, the
XXXX, the Rebate Agreement and all other documents and
instruments executed and delivered in connection with the
issuance and sale of the Bonds.
"Bond Loan" means the loan in the amount of $5,000,000
to be provided by the Issuer to the Partnership pursuant to
the terms of the Bond Loan Documents.
"Bond Loan Agreement" means the Loan Agreement dated
November __ , 1998, by and between the Issuer and the
Partnership, as amended.
"Bond Loan Documents" means the Bond Documents, the
Bond Loan Note, the Bond Loan Mortgage, the Bond Loan
Agreement, the Letter of Credit Documents, the Escrow
Agreement and all other documents executed and/or delivered
in connection with the Bond Loan.
"Bond Loan Full Funding Date" means the date on which
the proceeds of the Bond Loan on deposit in the Construction
Fund (as defined in the Indenture) are available to be
distributed by the Trustee to pay Cost of the Project (as
defined in the Indenture) on a dollar for dollar basis with
funds on deposit in the Equity Fund (as defined in the
Indenture) after distribution of [$_______ to pay Project
costs in accordance with the Construction Disbursement
Agreement.
"Bond Loan Note" means the promissory note executed by
the Partnership to evidence its obligations with respect to
the Bond Loan, which note is or shall be secured by the Bond
Loan Mortgage.
"Bonds" means the $5,000,000 Multifamily Housing
Adjustable/Fixed Rate Revenue Bonds (Park Ridge Apartments)
Series 1998 issued by the Issuer.
"Capital Account" has the meaning set forth in Section
4.1(b).
"Capital Contribution" means the total value of cash or
property contributed and agreed to be contributed to the
Partnership by each Partner, as set forth in Schedule A.
Any reference in this Agreement to the Capital Contribution
of a then Partner shall include a Capital Contribution
previously made by any prior Partner for the Interest of
such then Partner.
"Capital Proceeds" means the proceeds of a Capital
Transaction.
"Capital Transaction" means a refinancing of any
Partnership indebtedness or a sale, exchange, eminent domain
taking, damage or destruction (whether insured or
uninsured), insured title defect or other disposition of all
or any portion of the Apartment Complex (other than an event
generating proceeds of any business or rental interruption
insurance), but excluding the payment of Capital
Contributions.
"Cash Available for Debt Service Requirements" for any
period, means the excess of (i) all cash actually received
by the Partnership on a cash basis from normal operations
during such period, but specifically excluding the proceeds
of insurance (other than business or rental interruption
insurance), loans, Capital Transactions or Capital
Contributions over (ii) all cash requirements of the
Partnership properly allocable to such period of time on an
accrual basis (not including distributions to Partners out
of Cash Flow of the Partnership or fees payable from Cash
Flow) and, on an annualized basis, all projected
expenditures, including those of a seasonal nature, which
might reasonably be expected to be incurred on an unequal
basis during a full annual period of operation as determined
by the Auditors but specifically excluding Debt Service
Requirements. For purposes of this definition, (i) cash
requirements of the Partnership shall include to the extent
not otherwise covered above, full funding of reserves
(including, without limitation, funding of the Replacement
Reserve), normal repairs, real estate taxes at fully
assessed levels assuming a fully improved property and
necessary capital improvements and (ii) if free rent or
other rental concessions shall have been granted to tenants,
the calculation of rental revenues under clause (i) of the
preceding sentence shall be adjusted so that the effect of
such concessions is amortized equally over the term of all
leases (excluding renewal periods) to which it applies.
"Cash Expenditures" means all disbursements of cash
during a specified Fiscal Year (other than distributions to
Partners), including, without limitation, payment of
operating expenses, payment of principal and interest on any
Partnership indebtedness (other than payments of principal
and interest on any Subordinated Loans or Voluntary Loans),
the cost of repairs to the Apartment Complex, amounts
allocated to reserves by the General Partner and the payment
of any fees other than the Asset Management Fee, the
Partnership Management Fee and the Development Fee. In
addition, the net increase during such Fiscal Year in any
escrow account or reserve maintained by or for the
Partnership shall be considered a Cash Expenditure during
such Fiscal Year. The term Cash Expenditures shall not
include Development Costs. Cash Expenditures payable to
Partners or Affiliates of Partners shall be paid after Cash
Expenditures payable to third parties.
"Cash Flow" means the excess of Cash Receipts over Cash
Expenditures. Cash Flow shall be determined separately for
each Fiscal Year or portion thereof.
"Cash Receipts" means all cash receipts of the
Partnership from whatever source derived other than from a
Capital Transaction, including, without limitation, rental
revenues, government subsidy payments. In addition, the net
reduction in any Fiscal Year in the amounts of any escrow
account or reserve maintained by or for the Partnership
(including, without limitation, the Replacement Reserve)
shall be considered a cash receipt of the Partnership for
such Fiscal Year. Notwithstanding the foregoing, at the
election of the General Partner, Cash Receipts received near
the end of a Fiscal Year and intended for use in meeting the
Partnership's obligations (including the cost of acquiring
assets or paying debts or expenses) in the subsequent Fiscal
Year shall not be deemed to be received until such following
Fiscal Year.
"Certificate" shall have the meaning set forth in the
Preliminary Statement.
"Class Contribution" means the aggregate Capital
Contributions of all members of a particular class of
Partners (i.e., the General Partner, the Investment Limited
Partner, the Special Limited Partner or any Additional
Limited Partner).
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations (permanent
and temporary) issued thereunder. References herein to any
Code section shall include any successor provisions.
"Commencement Date" means the first day of the month in
which the Admission Date occurs.
"Competitive Real Estate Commission" means that real
estate or brokerage commission paid for the purchase or sale
of the Apartment Complex or other Partnership property which
is reasonable, customary and competitive in light of the
size, type and location of the Apartment Complex or other
property.
"Completion Date" means the later of: (i) the date the
Investment Limited Partner shall have received copies of all
requisite certificates or permits permitting occupancy of
100% of the apartments units in the Apartment Complex as
issued by each Agency having jurisdiction; provided,
however, that if such certificates or permits are of a
temporary nature, the Completion Date shall not be deemed to
have occurred unless the General Partner certifies to the
Investment Limited Partner that any work remaining to be
completed is for so-called "punch list items" and the
General Partner knows of no reason why permanent
certificates of occupancy will not be issued upon completion
of such "punch list items"; or (ii) the date as of which the
Inspecting Consultant certifies that the work to be
performed by the Contractor under the Construction Contract
is substantially complete. Any representation by the
General Partner under this Agreement that the Completion
Date has occurred shall be subject to confirmation by the
Special Limited Partner pursuant to a physical inspection of
the Apartment Complex; provided, however, that in the event
that the Special Limited Partner does not make such physical
inspection of the Apartment Complex within ten (10) business
days after having received a written representation of the
General Partner that the Completion Date has occurred, then
the Special Limited Partner will be deemed to have waived
the physical inspection requirement.
"Compliance Period" means the fifteen (15)-year period
commencing with the first year of the Credit Period.
"Consent of the Investment Limited Partner" means the
prior written consent or approval of the Investment Limited
Partner which, unless otherwise specifically provided
herein, may be given or withheld in its sole discretion.
The Consent of the Investment Limited Partner shall be
exercised by and through the Investment General Partner,
acting in the name and on behalf of the Investment Limited
Partner.
"Consent of the Special Limited Partner" means the
prior written consent or approval of the Special Limited
Partner which, unless otherwise specifically provided
herein, may be given or withheld in its sole discretion.
"Construction Contract" means the construction contract
dated as of August 10, 1998, by and between the Contractor
and the Partnership, as amended.
"Construction Permitting Date" means the first date
upon which the Partnership shall have received the Requisite
Approvals for the commencement of the construction of the
Apartment Complex in accordance with the Plans and
Specifications therefor.
"Contractor" means Unicorp, Inc., a Mississippi
corporation, and its successors.
"Contractor Pay-Off Letter" means a letter in form and
substance reasonably satisfactory to the Special Limited
Partner delivered by the Contractor to the Partnership which
certifies that (i) all amounts due to the Contractor from
the Partnership have been paid, (ii) the Partnership is not
in default under the Construction Contract and (iii) the
Contractor has paid in full each materialman and
subcontractor who performed work on the Apartment Complex.
"Controlling Person" has the meaning set forth in
Section 15 of the Securities Act of 1933, as amended.
"Cost Certification" means the date upon which each
Limited Partner shall have received the written
certification of the Auditors, in a form and in substance
satisfactory to the Special Limited Partner, as to the
itemized amounts of the construction and development costs
of the Apartment Complex and the Actual Credit pertaining to
each building in the Apartment Complex.
"Credit Agency" means the Tennessee Housing Development
Agency, and its successors.
"Credit Approval" means the written determinations to
be issued pursuant to Sections 42(m)(1)(D) and 42(m)(2)(D)
of the Code approving low-income housing tax credits for the
Project in an amount of not less than $342,788.
"Credit Period" has the meaning set forth in Section
42(f)(1) of the Code.
"Credit Recovery Loan" means a constructive interest-
bearing advance of the Investment Limited Partner, as more
fully described in Section 5.1(g). Credit Recovery Loans
and interest thereon shall not be treated as loans or
interest, respectively, for accounting, tax or liability
purposes or for the purposes of Section 6.2(a)(i). For the
purposes of Article X, the term Credit Recovery Loan shall
not include any portion of such a deemed advance which shall
have theretofore been paid to the Investment Limited
Partner.
"Credit Shortfall" shall have the meaning set forth in
Section 5.1(g).
"Debt Service Coverage Ratio" means, for any period
with each month considered individually, a fraction, the
numerator of which is the Cash Available for Debt Service
Requirements with respect to such period and the denominator
of which is the Debt Service Requirements for such period.
The achievement by the Partnership of a specified Debt
Service Coverage Ratio shall be confirmed by the Auditors
and shall be subject to the approval of the Special Limited
Partner, which shall not be unreasonably withheld, provided,
however, that no objection by the Special Limited Partner to
the determination of the Auditors shall be valid unless the
General Partner is notified of such objection, and the
specific reasons therefor, within seven (7) business days
following the receipt by the Special Limited Partner of the
Auditor's determination letter and in the event that the
Special Limited Partner does not so notify the General
Partner within such seven business day period, the Special
Limited Partner will be deemed to have waived its right to
object to such determination.
"Debt Service Requirements" means for any period, all
debt service, reserve, mortgage insurance premium, tax and
insurance escrows and/or other cash requirements imposed
with respect to the Mortgage or any other indebtedness
(except for the Subordinated Loans and Voluntary Loans)
properly allocable to such period of time on an annualized
accrual basis as determined by the Auditors.
"Deficit Restoration Obligation" means, for each
Partner, the sum of (i) any amounts which such Partner is
obligated to restore to the Partnership in accordance with
the provisions of Sections 1.704-1(b)(2)(ii)(c), 1.704-
1(b)(2)(ii)(h) or any other applicable provisions of the
Allocation Regulations, (ii) such Partner's Share of
Partnership Minimum Gain if any, and (iii) such Partner's
Share of Partner Nonrecourse Debt Minimum Gain, if any.
"Developer" means PRLLC in its capacity as an
independent developer and not as a General Partner, and its
successors.
"Development Agreement" means the Development
Agreement, dated as of November __, 1998, by and between the
Developer and the Partnership.
"Development Costs" means any and all costs and
expenses necessary to (i) acquire the real property for the
Project, (ii) cause the construction of the Apartment
Complex to be completed, in a good and workmanlike manner,
free and clear of all mechanics', materialmen's or similar
liens, in accordance with the Plans and Specifications,
(iii) equip the Apartment Complex with all necessary and
appropriate fixtures, equipment and articles of personal
property (including, without limitation, refrigerators and
ranges), (iv) obtain all required certificates of occupancy
for the apartment units and other space in the Apartment
Complex, (v) pay the Development Fee, (vi) finance the
construction of the Apartment Complex and achieve the
Completion Date in accordance with the provisions of the
Project Documents, (vii) discharge all Partnership
liabilities and obligations arising out of any casualty
generating insurance proceeds for the Partnership, (viii)
fund any Partnership reserves required hereunder or under
any of the Project Documents, and (ix) pay any other costs
or expenses necessary to achieve the Completion Date and
Rental Achievement.
"Development Fee" means the fees payable by the
Partnership to the Developer pursuant to the terms of the
Development Agreement for its services in connection with
the development and construction of the Apartment Complex.
"Disposition" (including the forms Dispose and
Disposing) means, as to a specified Partner, the assignment,
sale, transfer, exchange or other disposition of all or any
part of its Interest.
"Economic Risk of Loss" has the meaning set forth in
Treasury Regulation Section 1.752-2.
"Eligible Basis" has the meaning set forth in Section
42(d) of the Code.
"Entity" means any Person, general partnership, limited
partnership, limited liability company, corporation, joint
venture, trust, business trust, cooperative or association.
"Escrow Agreement" means that certain Construction
Disbursement Agreement entered into by and among the
Partnership, the Trustee and the Investment Limited Partner,
the terms of which will govern the disbursement of the First
and Second Installment.
"Estoppel Letter" means an estoppel letter in form and
substance reasonably satisfactory to the Special Limited
Partner delivered to the Partnership from each Lender which
certifies as to each Mortgage Loan (i) that there is no
default ongoing pursuant to the Mortgage Loan Documents,
(ii) the amounts of interest and principal paid on such
Mortgage Loan to date and (ii) the outstanding principal
balance of such Mortgage Loan, as applicable.
"Event of Bankruptcy" means with respect to any Person,
(i) the entry of a decree or order for relief by a
court having jurisdiction in respect of such Person in an
involuntary case under the federal bankruptcy laws, as now
or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person
or for any substantial part of his property, or ordering the
winding-up or liquidation of his affairs and the continuance
of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive days;
(ii) the commencement by such Person of a voluntary
case under the federal bankruptcy laws, as now constituted
or hereafter amended, or any other applicable federal or
state bankruptcy, insolvency or other similar law, or the
consent by him to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of such Person or for any
substantial part of his property, or the making by him of
any assignment for the benefit of creditors, or the taking
of corporate action by the Person in furtherance of any of
the foregoing; or
(iii) the commencement against such Person of an
involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, which has not been
vacated, discharged or bonded within sixty (60) consecutive
days.
"Event of Default" shall have the meaning set forth in
Section 5.1(h).
"Extended Use Agreement" means the extended use housing
commitment to be executed by the Partnership in accordance
with the requirements of the Credit Agency and the
provisions of Section 42(h)(6)(A) of the Code.
"50% Completion Date" means the date the Inspecting
Consultant (or if none, the Contractor and the General
Partner) certifies that fifty percent (50%) of the projected
hard construction costs for the completion of the Apartment
Complex have been incurred by the Partnership.
"Filing Office" means the Office of the Secretary of
State of the State of Mississippi.
"Fiscal Year" means the twelve (12)-month period which
begins on the first day of January and ends on the thirty-
first day of December of each calendar year (or ends on the
date of final dissolution for the year in which the
Partnership is wound up or dissolved).
"General Partner" means PRLLC and any Person who
becomes a General Partner as provided herein, in its
capacity as a general partner of the Partnership. At any
and all times where there is more than one General Partner,
the term General Partner shall mean such General Partners.
"Governmental Authority" means the Credit Agency or any
other federal, state or local governmental authority having
jurisdiction over the particular matter to which reference
is being made.
"Gross Asset Value" means, with respect to any asset,
the asset's adjusted basis for federal income tax purposes,
except as follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the
gross fair market value of such asset, as determined by the
contributing Partner and the Partnership;
(ii) The Gross Asset Values of all Partnership assets
shall be adjusted to equal their respective gross fair
market values, as determined by the General Partner, as of
the following times: (a) the acquisition of an additional
interest in the Partnership by any new or existing Partner
in exchange for more than a de minimis Capital Contribution;
(b) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as
consideration for an interest in the Partnership; and (c)
the liquidation of the Partnership within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Allocation Regulations;
provided, however, that the adjustments pursuant to clauses
(a) and (b) above shall be made only if the General Partner
reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(iii) The Gross Asset Value of any Partnership
asset distributed to any Partner shall be the gross fair
market value of such asset on the date of distribution; and
(iv) The Gross Asset Values of Partnership assets shall
be increased (or decreased) to reflect any adjustments to
the adjusted basis of such assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that
such adjustments are taken into account in determining
Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of
the Allocation Regulations and Section 4.1 hereof; provided,
however, that Gross Asset Values shall not be adjusted
pursuant to this clause (iv) to the extent that the General
Partner determines that an adjustment pursuant to clause
(ii) hereof is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment
pursuant to this clause (iv).
If the Gross Asset Value of an asset has been
determined or adjusted pursuant to Section (i), (ii) or (iv)
hereof, such Gross Asset Value shall thereafter be adjusted
by the depreciation taken into account with respect to such
asset for purposes of computing Profits or Losses.
"Guarantor[s]" means, singly and collectively, each of
X.X. Xxxxxx, Xx. and Xxxxxx X. Xxxxxxxx, Xx. and both
individuals collectively, and their respective successors.
"Guaranty" means each of the Guarantys, dated as of
November __, 1998, of each of the Guarantors of all of the
obligations of the General Partner hereunder and of the
Developer as set forth in the Development Agreement, as
amended.
"Hazardous Material" has the collective meanings given
to the terms "hazardous material", "hazardous substances",
"hazardous wastes", toxic substances" and analogous terms,
in the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sec. 9601
et seq., as amended, and to the term "radioactive materials"
in the context of the Atomic Energy Act, 28 U.S.C. Sec.
2344, and also includes any meanings given to such terms in
any similar state or local statutes, ordinances, regulations
or by-laws. The term Hazardous Material also includes oil
and any other substance known to be hazardous.
"Immediate Family" means with respect to any Person,
such Person's spouse, parents, parents-in-law, descendants,
nephews, nieces, brothers, sisters, brothers-in-law,
sisters-in-law, children, children-in-law, grandchildren and
grandchildren-in-law.
"Includable Items" shall have the meaning set forth in
Section 6.11.
"Indenture" means the Trust Indenture dated as of
November __, 1998, by and between the Issuer and the
Trustee.
"Initial Adjustment Date" shall have the meaning set
forth in Section 5.1(e).
"Initial 100% Occupancy Date" means the first date on
which not less than 100% of the 136 apartment units in the
Apartment Complex shall have been leased to and physically
occupied by tenants on such date meeting the terms of the
Minimum Set-Aside Test under executed leases at rentals
meeting the requirements of the Rent Restriction Test.
"Initial Operating Period" means the period commencing
upon Cost Certification and ending on the fifth anniversary
of the Completion Date.
"Inspecting Consultant" means the consultant retained
by any Lender to monitor the progress of the construction of
the Apartment Complex and to certify as to the completion of
such construction.
"Installment" means an installment of the Investment
Limited Partner's Capital Contribution paid or payable to
the Partnership pursuant to Section 5.1.
"Insurance Requirements" means the insurance which the
General Partners are required to cause the Partnership to
maintain during the term of the Partnership as set forth on
Exhibit D hereto.
"Interest" means the entire interest of a Partner in
the Partnership at any particular time, including the right
of such Partner to any and all benefits to which a Partner
may be entitled hereunder and the obligation of such Partner
to comply with the terms of this Agreement.
"Invested Amount" means (i) as to the Investment
Limited Partner, an amount equal to the Capital Contribution
of the Investment Limited Partner divided by 0.73 and
(ii) as to any other Partner, an amount equal to its paid-in
Capital Contribution.
"Investment General Partner" means Boston Capital
Associates IV L.P., a Delaware limited partnership, in its
capacity as the general partner of the Investment Limited
Partner, and any other Person who may become a successor or
additional general partner of the Investment Limited
Partner.
"Investment Limited Partner" means BCTCF and any Person
or Persons who replace it as Substituted Limited Partner,
but shall not include any Additional Limited Partner.
"Investment Partnership Agreement" means the Agreement
of Limited Partnership of the Investment Limited Partner, as
amended from time to time.
"Issuer" means The Health, Educational and Housing
Facility Board of the City of Xxxxxxx, and its successors.
"Lender" means any Person (other than the General
Partner or its Affiliates) who makes a loan to the
Partnership, whether or not such loan is secured by a
Mortgage, or the successors and assigns of such Person in
such capacity.
"Letter of Credit" means that certain irrevocable
direct-pay letter of credit to be delivered by the Letter of
Credit Lender to the Trustee pursuant to the terms of the
Letter of Credit Agreement in a principal amount of not less
than $5,000,000.
"Letter of Credit Agreement" means that certain Credit
Agreement, dated November 1, 1998, by and between the Letter
of Credit Lender and the Partnership, as amended.
"Letter of Credit Commitment" means that certain
commitment dated ___________, 1998, by the Letter of Credit
Lender to issue the Letter of Credit.
"Letter of Credit Documents" means the Letter of Credit
Commitment, the Letter of Credit, the Letter of Credit
Agreement, the Letter of Credit Mortgage, the Pledge
Agreement, the Security Agreement and any other document
executed by the Letter of Credit Lender, the Partnership,
the Trustee and/or the Issuer in connection with the
delivery of the Letter of Credit.
"Letter of Credit Lender" means First Tennessee Bank
National Association, a national banking association, in its
capacity as the issuer of the Letter of Credit.
"Letter of Credit Mortgage" means that certain
Mortgage, Security Agreement and Assignment of Rents and
Leases executed and delivered by the Partnership to the
Letter of Credit Lender as set forth in the Letter of Credit
Agreement.
"Limited Partners" means the Investment Limited
Partner, the Special Limited Partner and any Additional
Limited Partner.
"Liquidating Event" shall have the meaning set forth in
Section 2.4.
"XXXX" means the Land Use Restriction Agreement by and
among the Partnership, the Issuer and the Trustee dated as
of November 1, 1998.
"Managing General Partner" means any Person designated
as such pursuant to the provisions of Section 6.4.
"Management Agent" means Park Management, Inc., a
Mississippi corporation in its capacity as the initial
management and rental agent for the Apartment Complex, and
any successor management and rental agent designated or
appointed at any time.
"Management Agreement" means the agreement between the
Partnership and the Management Agent dated as of November
__, 1998 providing for the management of the Apartment
Complex.
"Management Fee" means the Management Fee to which
reference is made in Section 11.1.
"Material Agreement" means any agreement to which the
Partnership is a party or to which the Apartment Complex is
subject, the termination of which would have a material
adverse impact on the Apartment Complex or the business and
operations of the Partnership.
"Material Event" means the occurrence of any of the
following events:
(i) a material breach by a General Partner (or any of
its Affiliates) in the performance of any of its obligations
under this Agreement, or any of the Material Agreements;
(ii) a Terminating Event as to any General Partner or
an Event of Bankruptcy as to the Partnership;
(iii) a material violation by any General Partner
of its fiduciary duties as a General Partner of the
Partnership;
(iv) a violation by any General Partner of any law,
regulation or order applicable to the General Partner or the
Partnership which has or may have a material adverse effect
on the Partnership or the Apartment Complex;
(v) a material breach by the Partnership or any
General Partner (or any of their respective Affiliates)
under any Project Document or other material agreement or
document affecting the Partnership or the Apartment Complex;
(vi) the failure to achieve the Completion Date by
December 31, 2000;
(vii) the failure to begin the Credit Period by
January 1, 2001;
(viii) the commencement of foreclosure proceedings
with respect to any Mortgage, which have not been withdrawn
or dismissed within thirty (30) days after the date of such
commencement;
(ix) the failure of the General Partner to make any
payment required to be made to the Investment Limited
Partner pursuant to the provisions of Section 5.1(e) or (f);
or
(x) the fraud, bad faith, gross negligence, or willful
misconduct by a General Partner.
"Minimum Set-Aside Test" means the set aside test
selected by the Partnership pursuant to Section 42(g) of the
Code whereby at least 40% of the units in the Apartment
Complex must be occupied by individuals with incomes equal
to 60% or less of area median income, as adjusted for family
size.
"Mortgage" means any mortgage indebtedness of the
Partnership evidenced by any Note and secured by any
mortgage on the Apartment Complex from the Partnership to
any Lender and includes the Letter of Credit Mortgage; and,
where the context admits, the term "Mortgage" shall mean and
include any of the mortgages securing said indebtedness and
any other documents pertaining to said indebtedness which
were required by the Lender as a condition to making such
Mortgage Loan. In case any Mortgage is replaced by any
subsequent mortgage or mortgages, such term shall refer to
any such subsequent mortgage or mortgages. The term
"mortgage" means any mortgage, mortgage deed, deed of trust,
deed to secure debt or any similar security instrument, and
"foreclose" and words of like import include the exercise of
a power of sale under a mortgage or comparable remedies.
"Mortgage Loan" means a loan to the Partnership made by
any Lender and secured by a Mortgage.
"Mortgage Loan Documents" means the Bond Loan Documents
and/or the New Permanent Loan Documents, as the context may
require.
"New Allocation" shall have the meaning set forth in
Section 10.5(b).
"New Permanent Loan Commitment" means the commitment
for a New Permanent Loan or a new Letter of Credit, as the
case may be.
"New Permanent Loan" means any permanent loan provided
by the Permanent Lender to the Partnership on the New
Permanent Loan Conditions pursuant to the terms of the New
Permanent Loan Documents.
"New Permanent Loan Conditions" means, with respect to
a proposed New Permanent Loan, that (a) such Mortgage Loan
(i) has a term which expires after the end of the Compliance
Period, (ii) bears interest at a fixed annual rate and
(iii) is nonrecourse, unless otherwise approved by the
Special Limited Partner, and (b) when such New Permanent
Loan is in place, the Debt Service Coverage Ratio of the
Partnership is projected to be not less than 1.15 to 1.00,
where such Debt Service Coverage Ratio is based upon
projected operating expenses for the Apartment Complex
reasonably approved by the Special Limited Partner.
"New Permanent Loan Documents" means the New Permanent
Note, the New Permanent Mortgage and all other documents
executed and/or delivered in connection with the New
Permanent Loan.
"New Permanent Mortgage" means the Mortgage securing
the Partnership's obligations under the New Permanent Note.
"New Permanent Note" means the Note to be executed by
the Partnership to evidence its obligations with respect to
the New Permanent Loan, which Note shall be secured by the
New Permanent Mortgage.
"Nonrecourse Debt" or "Nonrecourse Liability" means any
indebtedness for which none of the Partners has any Economic
Risk of Loss other than through his or its interest in the
Partnership Property securing such indebtedness, as defined
in Section 1.752-1(a)(2) of the Allocation Regulations.
"Nonrecourse Deductions" has the meaning set forth in
Section 1.704-2(b)(1) of the Allocation Regulations.
"Note" means and includes any Note from the Partnership
to a Lender evidencing a Mortgage Loan, and shall also mean
and include any Note supplemental to said original Note
issued to a Lender or any Note issued to a Lender in
substitution for any such original Note.
"Operating Deficit" means, for any specified period of
time, the amount by which the Cash Receipts of the
Partnership are less than the amount necessary to pay all
Cash Expenditures of the Partnership.
"Operating Deficit Guaranty Maximum" shall be
determined for the first Fiscal Year following the Initial
100% Occupancy Date as the sum of 12 consecutive months of
Partnership Reserves deposits plus 12 consecutive months of
Cash Expenditures.
"Operating Profits or Losses" means, with respect to
any Fiscal Year, the Profits or Losses of the Partnership
for such Fiscal Year other than Profits or Losses from a
Capital Transaction.
"Original Agreement" has the meaning set forth in the
Preliminary Statement.
"Original Limited Partner" has the meaning set forth in
the Preliminary Statement.
"Partner" means any General Partner or Limited Partner.
"Partner Nonrecourse Debt" has the meaning set forth in
Section 1.704-2(b)(4) of the Allocation Regulations.
"Partner Nonrecourse Debt Minimum Gain" has the meaning
set forth in Sections 1.704-2(i)(2) and (3) of the
Allocation Regulations.
"Partner Nonrecourse Deductions" has the meaning set
forth in Section 1.704-2(i)(1) of the Allocation
Regulations.
"Partnership" means the limited partnership continued
pursuant to this Agreement.
"Partnership Items" shall have the meaning set forth in
Section 10.4(b)(xvi).
"Partnership Management Fee" shall have the meaning set
forth in Section 6.12(c).
"Partnership Minimum Gain" has the meaning set forth in
Section 1.704-2(d) of the Allocation Regulations.
"Payment Certificate" shall have the meaning set forth
in Section 5.1(b)
"Percentage Interests" means the interests of the
Partners in Profits and Losses, tax-exempt income, non-
deductible, non-capitalizable expenditures and Tax Credits,
as set forth in Schedule A.
"Permanent Lender" means any Lender providing permanent
financing for the Apartment Complex who has been approved by
the Special Limited Partner and the General Partner, except
as otherwise provided in Section 3.2.
"Permanent Mortgage Commencement" means the conversion
of the Bond Loan from the construction period to permanent
financing and the execution and delivery of the New
Permanent Loan Documents.
"Person" means any individual or Entity.
"Plans and Specifications" means the plans and
specifications for the construction of the Apartment
Complex, including, without limitation, specifications for
materials, and all properly approved amendments and
modifications thereof.
"Pledge Agreement" means that certain Pledge Agreement
dated November __, 1998, by the Partnership and the Trustee.
"Prime Rate" means the rate of interest announced from
time to time by the Wall Street Journal as its base rate.
"Profits or Losses" shall have the meaning set forth in
Section 10.4(b)(v).
"PRLLC" means Park Ridge, LLC, a Mississippi limited
liability company, and its successors.
"Project Documents" means and includes the Mortgage
Loan Documents, this Agreement, the Development Agreement,
the Extended Use Agreement, the Guaranty, the Bond
Documents, the Management Agreement, the Escrow Agreement,
all other instruments delivered to (or required by) any
Lender and all other documents relating to the Apartment
Complex and by which the Partnership is bound, as amended or
supplemented.
"Projected Credit" means $120,972 for 2000, $342,753
per annum for each of the Fiscal Years 2001 through 2009
(inclusive), and $221,781 for 2010; provided, however, that
the Projected Credit for 2010 shall be reduced by the
amount, if any, by which the Actual Credit for 2000 exceeds
$120,972; provided, upon the occurrence of any of the events
described in Section 5.1(e), the Projected Credit shall
thereafter be the Revised Projected Credit.
"Projected Rents" means the rents described in
Exhibit B attached hereto and made a part hereof.
"Qualified Basis" has the meaning set forth in Section
42(c) of the Code.
"Qualified Income Offset Item" means (1) an allocation
of loss or deduction that, as of the end of each year,
reasonably is expected to be made (a) pursuant to Section
704(e)(2) of the Code to a donee of an interest in the
Partnership, (b) pursuant to Section 706(d) of the Code as
the result of a change in any Partner's Interest, or
(c) pursuant to Treasury Regulation Section
1.751-1(b)(2)(ii) as the result of a distribution by the
Partnership of unrealized receivables or inventory items and
(2) a distribution that, as of the end of such year,
reasonably is expected to be made to a Partner to the extent
it exceeds offsetting increases to such Partner's Capital
Account which reasonably are expected to occur during or
prior to the Partnership taxable year in which such
distribution reasonably is expected to occur.
"Recapture Amount" shall have the meaning set forth in
Section 10.6.
"Recapture Event" shall have the meaning set forth in
Section 10.6(a).
"Reconstitution Period" shall have the meaning set
forth in Section 7.2(b).
"Recourse Obligations" shall have the meaning set forth
in Section 10.4(b)(i).
"Reduction Amount" shall have the meaning set forth in
Section 5.1(f).
"Reduction Year" shall have the meaning set forth in
Section 5.1(f).
"Regulations" means the rules and regulations
applicable to the Apartment Complex or the Partnership of
the Credit Agency, the Issuer, the City of Jackson,
Tennessee, Madison County and any other Governmental
Authority having jurisdiction over the Partnership and/or
the Apartment Complex.
"Related Person" means a Person related to a Partner
within the meaning of Treasury Regulation Section
1.752-4(b).
"Remaining Interest" shall have the meaning set forth
in Section 7.4(d).
"Rent Restriction Test" means the test pursuant to
Section 42 of the Code whereby the gross rent charged to
tenants of the low-income units in the Apartment Complex may
not exceed thirty percent (30%) of the qualifying income
levels.
"Rental Achievement" means the first time following
three (3) consecutive full calendar months of operations,
one prior to Permanent Mortgage Commencement and two months
thereafter (with each month considered individually) that
the Apartment Complex generates a 1.15 to 1.00 Debt Service
Coverage Ratio; provided, however, that for the purposes of
this Rental Achievement definition only, Debt Service
Requirements shall be deemed to include full debt service
payments of principal and interest in respect of the Bond
Loan regardless of whether such principal payments are
required to be paid for the month in question.
"Replacement Reserve" shall have the meaning set forth
in Section 6.5(e).
"Repurchase Amount" shall have the meaning set forth in
Section 5.2(a).
"Requisite Approvals" means any required approvals of
each Lender and Agency to an action proposed to be taken by
the Partnership.
"Revised Projected Credit" has the meaning set forth in
Section 5.1(e).
"Schedule A" means Schedule A to this Agreement, as
amended from time to time.
"Security Agreement" means that certain Security
Agreement for Interest in Partnership dated November __,
1998 by and between the Partnership and the Letter of Credit
Lender.
"Service" means the Internal Revenue Service.
"Share of Partner Nonrecourse Debt Minimum Gain" means,
for each Partner an amount equal to his or its "share of
partner nonrecourse debt minimum gain" as determined in
accordance with Section 1.704-2(i)(5) of the Allocation
Regulations.
"Share of Partnership Minimum Gain" means for each
Partner, an amount equal to his or its "share of partnership
minimum gain" as determined in accordance with Section
1.704-2(g) of the Allocation Regulations.
"Site" has the meaning given to it in the Federal
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Sec. 9601 et seq., as
amended, and shall also include any meaning given to it in
any similar state or local statutes, ordinances, regulations
or by-laws.
"Special Limited Partner" means BCTC 94, and any Person
who becomes a Special Limited Partner as provided herein, in
its capacity as a special limited partner of the
Partnership.
"Specified Proceeds" means (i) the proceeds of all
Mortgage Loans, (ii) the net rental income, if any,
generated by the Apartment Complex prior to the Completion
Date which is permitted by the Lenders to be applied to the
payment of Development Costs, (iii) the Capital
Contributions of the Investment Limited Partner, (iv) the
Capital Contributions of the General Partner in the amounts
set forth in Schedule A as of the Admission Date, and (v)
any insurance proceeds arising out of casualties occurring
prior to the Completion Date.
"State" means the State of Tennessee.
"State Designation" means the date on which the
Partnership receives an allocation in proper form pursuant
to Section 42 of the Code from the Credit Agency of the Tax
Credits, as evidenced by the execution by or on behalf of
the Credit Agency of one or more Form(s) 8609. For the
purposes of determining State Designation, each building in
the Apartment Complex shall be treated as having received an
allocation of Tax Credit in an amount equal to the lesser of
(i) the amount of Tax Credit carryover allocation received
from the Credit Agency as to such building or (ii) the
amount of Tax Credits set forth on the Form 8609 as to such
building.
"Subordinated Loan" means any loan made by the General
Partner to the Partnership pursuant to Section 6.5(e),
Section 6.10 or any other provision of this Agreement which
specifies advances to be made as a Subordinated Loan.
"Subordinated Loan Period" shall have the meaning set
forth in Section 6.10.
"Substituted Limited Partner" means any Person who is
admitted to the Partnership as Limited Partner under Section
8.2 or acquires the Interest of a Limited Partner pursuant
to Section 5.2.
"Successor" shall have the meaning set forth in
Section 7.5(a).
"Syndication Expenses" means all expenditures
classified as syndication expenses pursuant to Treasury
Regulation Section 1.709-2(b). Syndication Expenses shall
be taken into account under this Agreement at the time they
would be taken into account under the Partnership's method
of accounting if they were deductible expenses.
"Tax Accountants" means Xxxxxxx, Xxxxxx & Xxxxxxxxx of
Bethesda, Maryland or such other firms of independent
certified public accountants as may be engaged by the
Special Limited Partner to review the Partnership income tax
returns.
"Tax Credit" means the low-income housing tax credit
described in Section 42 of the Code.
"Tax Credit Set-Aside" means the date on which the
Partnership receives the Credit Approval in a form
reasonably satisfactory to the Special Limited Partner from
the Credit Agency and the Housing Authority.
"Terminating Event" means the death or permanent
disability of, or a Final Determination of insanity or
incompetence as to, an individual General Partner (unless
the Consent of the Special Limited Partner to a substitute
General Partner is received, and such substitute General
Partner is admitted to the Partnership by the first to occur
of (i) the sixtieth day following such event or (ii) such
earlier date as is necessary to prevent a dissolution of the
Partnership under the Act), the Bankruptcy or dissolution of
a General Partner, the transfer of all of its Partnership
Interest by a General Partner, or the voluntary or
involuntary withdrawal of the General Partner from the
Partnership. For purposes of the foregoing, an individual
General Partner shall be deemed to be permanently disabled
if he or she becomes disabled during the term of this
Agreement through any illness, injury, accident or condition
of either a physical or psychological nature and, as a
result, is unable to perform substantially all of his or her
duties and responsibilities hereunder for one hundred twenty
(120) days during any period of three hundred sixty-five
(365) consecutive calendar days. Involuntary withdrawal
shall occur whenever a General Partner may no longer
continue as a General Partner by law or pursuant to any
terms of this Agreement. In the case of a General Partner
which is an Entity, a transfer of a majority of the voting
stock (or other beneficial interest) of the General Partner
to a Person who is not an Affiliate of the General Partner
or any Entity constituting the General Partner shall be
deemed to be a transfer by the General Partner of its
Partnership Interest.
"Title Policy" means the owner's title insurance
policy, or at the option of the Special Limited Partner an
endorsement thereto, with an effective date on or after the
Admission Date, in the amount of not less than $7,536,374
(debt plus equity) issued to the Partnership by a title
insurance company acceptable to the Special Limited Partner,
evidencing the Partnership's ownership of the Apartment
Complex subject only to such exclusions, exceptions,
conditions and stipulations as may be approved by the
Special Limited Partner in its sole discretion and endorsed
with a zoning endorsement, non-imputation endorsement and a
Fairway endorsement.
"Trustee" means First Tennessee Bank National
Association, a national banking association, in its
capacity as the Trustee under the Bond Loan Documents.
"Vessel" has the meaning given to it in the Federal
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Sec. 9601 et seq., as
amended, and shall also include any meaning given to it in
any similar state or local statutes, ordinances, regulations
or by-laws.
"Voluntary Loans" shall have the meaning set forth in
Article IX.
"Withdrawal" (including the forms Withdraw, Withdrawing
and Withdrawn) means, as to a General Partner, the
occurrence of death, adjudication of insanity or
incompetence, Event of Bankruptcy, dissolution, liquidation,
or voluntary or involuntary withdrawal or retirement from
the Partnership for any reason, including whenever a General
Partner may no longer continue as a General Partner by law
or pursuant to any terms of this Agreement. Withdrawal also
shall mean the sale, assignment, transfer or encumbrance by
a General Partner of its interest as a General Partner other
than a pledge of assignment by a General Partner of its
Interest required pursuant to the terms of the Bond Loan
Documents and as approved in writing by the Special Limited
Partner. A General Partner which is a corporation, limited
liability company or partnership shall be deemed to have
sold, assigned, transferred or encumbered its interest as a
General Partner in the event (as a result of one or more
transactions) of any sale, assignment or other transfer (but
specifically excluding any transfer occurring pursuant to
the laws of descent and distribution) or encumbrance of a
controlling interest in a corporate or limited liability
company General Partner or of a general partner interest in
a General Partner which is a partnership to a Person who is
not an Affiliate of the General Partner. For purposes of
this definition of Withdrawal, the term "controlling
interest" shall mean the power to direct the management and
policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise.
ARTICLE II
Name and Business
2.1 Name; Continuation
The name of the Partnership is Xxxxxxx Xxxx, L.P. The
Partners agree to continue the Partnership which was formed
pursuant to the provisions of the Act.
2.2 Office and Resident Agent
(a) The principal office of the Partnership is 0000
Xxxxxxx Xxxx, Xxxxx 000, P.O. Box 741, Jackson, MS 39205-
0741, at which office there shall be maintained those
records required by the Act to be kept by the Partnership.
The Partnership may have such other or additional offices as
the General Partner shall deem desirable. The General
Partner may at any time change the location of the principal
office and shall give due notice thereof to the Limited
Partners, provided that doing so shall not adversely affect
the Investment Limited Partner for tax purposes.
(b) The resident agent for the Partnership in the
State of Mississippi for service of process is as follows:
X.X. Xxxxxx, Xx.
0000 Xxxxxxx Xxxx, Xxxxx 000, (39208)
X.X. Xxx 000, Xxxxxxx, XX 00000-0000
(c) The Partnership is qualified to do business in the
State of Tennessee and its principal office in Tennessee is
c/o Park Ridge Apartments 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX
00000.
2.3 Purpose
The purpose of the Partnership is to acquire, hold,
invest in, secure financing for, construct, develop,
improve, maintain, operate, lease and otherwise deal with
the Apartment Complex. The Partnership shall operate the
Apartment Complex in accordance with any applicable
Regulations. The Partnership shall not engage in any other
business or activity.
2.4 Term and Dissolution
(a) The Partnership shall continue in full force and
effect until December 31, 2046, except that the Partnership
shall be dissolved and its assets liquidated prior to such
date upon the first to occur of the following events
("Liquidating Events"):
(i) The sale or other disposition of all or
substantially all of the assets of the Partnership;
(ii) The Withdrawal of a General Partner, unless the
Partnership is continued as provided in Section 7.2(a);
(iii) The election to dissolve the Partnership made in
writing by the General Partner with the Consent of the
Investment Limited Partner and any Requisite Approvals;
(iv) The entry of a final decree of dissolution of the
Partnership by a court of competent jurisdiction; or
(v) Any other event which causes the dissolution of
the Partnership under the Act if the Partnership is not
reconstituted pursuant to the provisions of Section 7.2 or
Section 7.3.
(b) Upon the dissolution of the Partnership, the
General Partner (or for purposes of this paragraph, its
trustees, receivers or successors) shall cause the
cancellation of the Certificate and shall liquidate the
Partnership assets and apply and distribute the proceeds
thereof in accordance with the provisions of Section 10.3,
unless the Investment Limited Partner elects to reconstitute
the Partnership and continue its business as provided in
Section 7.2 or 7.3, in which case the Partnership assets
shall be transferred to the new Partnership as provided in
such Section. Notwithstanding the foregoing, if, during
liquidation, the General Partner shall determine that an
immediate sale of part or all of the Partnership's assets
would be impermissible, impractical or cause undue loss to
the Partners, the General Partner may defer liquidation of,
and withhold from distribution for a reasonable time, any
assets of the Partnership except those necessary to satisfy
Partnership debts and obligations (other than Subordinated
Loans).
ARTICLE III
Mortgage, Refinancing and Disposition of Property
3.1 Personal Liability
The Partnership shall be authorized to obtain the Bond
Loan and the Letter of Credit pursuant to the Bond Loan
Documents and the Letter of Credit Documents, as applicable,
to finance the acquisition, development and construction of
the Apartment Complex. The General Partner and its
Affiliates, jointly and severally, are hereby authorized to
incur personal liability for the repayment of funds advanced
by the Issuer and First Tennessee Bank, in its capacity as
the Letter of Credit Lender (and interest thereon) pursuant
to the Bond Loan Documents and the Letter of Credit
Documents. However, unless otherwise approved by the
Special Limited Partner, neither the General Partner nor any
Related Person shall at any time bear, nor shall the General
Partner permit any other Partner or any Related Person to
bear, the Economic Risk of Loss for the payment of any
portion of any Mortgage Loan unless, prior to the
effectiveness of the transaction in which such Economic Risk
of Loss is created or assumed, the General Partner shall
have obtained, at the expense of the Partnership, an opinion
from reputable tax counsel, in form and substance reasonably
satisfactory to the Special Limited Partner, to the effect
that such Economic Risk of Loss will not result in the
reallocation of Tax Credits or Losses from the Investment
Limited Partner and the Special Limited Partner to the
General Partner.
3.2 Refinancings
The Partnership may decrease, increase or refinance any
Mortgage Loan and may make any required transfer or
conveyance of Partnership assets for security or mortgage
purposes, provided, however, any such decrease, increase or
refinancing of any Mortgage Loan (except for the borrowing
of the New Permanent Loan on the New Permanent Loan
Conditions and the borrowing of the original principal
amount of the Bond Loan and the Letter of Credit) may be
made by the General Partner only with the Consent of the
Special Limited Partner.
3.3 Sale of Assets
The Partnership may sell, lease, exchange or otherwise
transfer or convey all or substantially all the assets of
the Partnership only with the Consent of the Special Limited
Partner. Notwithstanding the foregoing and except as set
forth in Section 6.2(a)(vi), no Consent of the Special
Limited Partner shall be required for the execution and
delivery of the Bond Loan Documents and the Letter of Credit
Documents, the leasing of apartments to tenants in the
normal course of operations or the leasing of all or
substantially all the apartments to a public housing
authority at rents satisfactory to any Agency or Lender as
expressed in writing, provided (subject to the Rent
Restriction Test) that such rents are not less than the
Projected Rents.
3.4 Real Estate Commissions
The total compensation to all Persons for the sale of
the Apartment Complex shall be limited to a Competitive Real
Estate Commission, which shall not exceed ten percent (10%)
of the contract price for the sale of the Apartment Complex
or such fee as is reasonable and customary in Jackson,
Tennessee.
ARTICLE IV
Partners; Capital
4.1 Capital and Capital Accounts
(a) The capital of the Partnership shall be the
aggregate amount of the cash and the Gross Asset Value of
property contributed by the General Partner and by the
Limited Partners as set forth in Schedule A. No interest
shall be paid by the Partnership on any Capital Contribution
to the Partnership. Schedule A shall be amended from time
to time to reflect the withdrawal or admission of Partners,
any changes in the Partnership Interests held by a Partner
arising from the transfer of an Interest to or by such
Partner and any change in the amounts to be contributed or
agreed to be contributed by any Partner. No Partner shall
have the right to withdraw or receive a return of any of its
Capital Contributions except as set forth in this Agreement.
(b) An individual Capital Account shall be established
and maintained for each Partner, including any additional or
substituted Partner who shall hereafter receive an interest
in the Partnership. The Capital Account of each Partner
shall be maintained in accordance with the following
provisions:
(i) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions, such
Partner's distributive share of Profits, and any items in
the nature of income or gain that are specially allocated
pursuant to Section 10.4 hereof, and the amount of any
Partnership liabilities that are assumed by such Partner or
that are secured by any Partnership Property distributed to
such Partner;
(ii) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to
any provision of this Agreement, such Partner's distributive
share of Losses, and any items in the nature of expenses or
losses that are specially allocated pursuant to Section 10.4
hereof, and the amount of any liabilities of such Partner
that are assumed by the Partnership or that are secured by
any property contributed by such Partner to the Partnership.
In the event that the Gross Asset Values of Partnership
assets are adjusted pursuant to this Agreement, the Capital
Accounts of all Partners shall be adjusted simultaneously to
reflect the aggregate net adjustment as if the Partnership
recognized gain or loss equal to the amount of such
aggregate net adjustment.
(c) The original Capital Account established for any
Assignee (as hereinafter defined) shall be in the same
amount as, and shall replace, the adjusted Capital Account
of the Partner which such Assignee succeeds, and, for the
purpose of the Agreement, such Assignee shall be deemed to
have made the Capital Contribution, to the extent actually
paid in, of the Partner which such Assignee succeeds. The
term "Assignee," as used in this paragraph, shall mean a
Person who shall become entitled to receive a share of the
Profits, Losses, Tax Credits and distributions of the
Partnership by reason of such Person succeeding to the
Interest of a Partner by assignment of all or any part of an
Interest. To the extent an Assignee receives less than 100%
of the Interest of a Partner, such Assignee's Capital
Account and Capital Contribution shall be in proportion to
the Partnership Interest such Assignee receives, and the
Capital Account and Capital Contribution of the Partner who
retains a partial interest in the Partnership shall
continue, and not be replaced, in proportion to the
Partnership Interest such Partner retains.
(d) The foregoing provisions and other provisions of
this Agreement relating to the maintenance of the Capital
Accounts are intended to comply with the Allocation
Regulations, and shall be interpreted and applied in a
manner consistent with such Allocation Regulations.
4.2 General Partner
The name, address and Capital Contribution of the
General Partner are as set forth on Schedule A.
4.3 Investment Limited Partner, Special Limited
Partner and Original Limited Partner
(a) The Original Limited Partner hereby withdraws as a
limited partner of the Partnership and acknowledges that she
no longer has any Interest in, or rights or claims against,
the Partnership as a Partner as of the Admission Date.
(b) Each of the Special Limited Partner and the
Investment Limited Partner is hereby admitted to the
Partnership as a Limited Partner in substitution for the
Original Limited Partner as of the Admission Date and agrees
to be bound by the terms and provisions of the Project
Documents and this Agreement. The name and address of the
Investment Limited Partner and the Special Limited Partner
are as set forth on Schedule A.
(c) Except as otherwise specifically set forth in
Sections 4.5 or 7.4, the General Partner shall have no
authority to admit additional Limited Partners without the
Consent of the Investment Limited Partner.
4.4 Liability of the Limited Partners
Neither the Investment Limited Partner, the Special
Limited Partner nor any Person who becomes an Additional
Limited Partner shall be liable for any debts, liabilities,
contracts or obligations of the Partnership; such Persons
shall be liable only to pay their respective Capital
Contributions as and when the same are due hereunder and
under the Act. After its Capital Contribution shall be
fully paid, no Limited Partner shall, except as otherwise
required by the Act, be required to make any further capital
contributions or payments or lend any funds to the
Partnership.
4.5 Special Rights of the Special Limited Partner
(a) Notwithstanding any other provisions herein (other
than Section 13.8), to the extent the law of the State of
Mississippi is not inconsistent, the Special Limited Partner
shall have the right, subject to any Requisite Approvals,
to:
(i) amend this Agreement provided, however, that no
such amendment affect the vested rights (including, without
limitation, the right to receive any fees, allocable share
of Cash Flow or other distributions, or Profits or Losses
and Tax Credits hereunder) or increase any of the
liabilities or obligations of any General Partner without
its prior written consent;
(ii) dissolve the Partnership provided, however, that
such dissolution shall not be caused by the Special Limited
Partner unless the General Partner has violated a material
provision of any Project Document, which violation has not
been cured within any applicable cure period specified;
(iii) remove any General Partner and elect a new
General Partner (A) on the basis of the performance and
discharge of such General Partner's obligations constituting
fraud, bad faith, gross negligence, willful misconduct or
breach of fiduciary duty, or (B) upon the occurrence of a
Material Event.
(iv) continue the business of the Partnership with a
substitute General Partner, provided that the General
Partner has been removed pursuant to Section 4.5(a)(iii)
above; and
(v) approve or disapprove the sale of all or
substantially all of the assets of the Partnership.
(b) Upon the removal of a General Partner for cause
pursuant to Section 4.5(a)(iii),
(i) without any further action by any Partner, the
Special Limited Partner shall cause an Affiliate
automatically to become a General Partner (the "Substitute
General Partner") and acquire in consideration of a cash
payment of $100 such portion of the Interest of the removed
General Partner as counsel to the Special Limited Partner
shall determine is the minimum appropriate interest in order
to assure the continued status of the Partnership as a
partnership under the Code and under the Act,
(ii) the economic Interest of the Special Limited
Partner as the Special Limited Partner shall continue
unaffected by the new status of the Special Limited Partner
as a Substitute General Partner,
(iii) the Substitute General Partner shall
automatically be irrevocably delegated all of the powers and
duties of the General Partners pursuant to Section 6.13. A
General Partner so removed will not be liable as a general
partner for any obligations of the Partnership incurred
after the effective date of its removal. Each General
Partner hereby grants to the Special Limited Partner an
irrevocable (to the extent permitted by applicable law)
power of attorney coupled with an interest to execute and
deliver any and all documents and instruments on behalf of
such General Partner and the Partnership as the Special
Limited Partner may deem to be necessary or appropriate in
order to effect the provisions of this Section 4.5 and to
enable the new General Partner to manage the business of the
Partnership, and
(iv) The Substitute General Partner or any Affiliate
approved by such Substitute General Partner shall have the
option, exercisable in its sole discretion, to acquire the
remainder of the Interest of any removed General Partner
upon payment of the agreed or then present fair market value
of such interest or portion thereof. Any dispute as to the
value of the Interest or portion thereof to be acquired
pursuant to the immediately preceding sentence shall be
submitted to a committee composed of three qualified real
estate appraisers, one chosen by the removed General
Partner, one chosen by the Substitute General Partner or the
Investment Limited Partner, as the case may be, and the
third chosen by the two so chosen. The proceedings of such
committee shall conform to the rules of the American
Arbitration Association, as far as appropriate, and its
decision shall be final and binding. The expense of
arbitration shall be born equally by the removed General
Partner and the Partnership. The method of payment to the
removed General Partner shall be fair and must protect the
solvency and liquidity of the Partnership. The method of
payment will be deemed presumptively fair where it provides
for an interest-bearing promissory note coming due in no
less than five (5) years with equal installments each year.
In addition, upon removal, the Partnership must promptly pay
to the removed General Partner all amounts then accrued and
owing to the removed General Partner; provided, however,
that notwithstanding the language of Section 6.12, Article
X, Article XI and any other provision hereof, no removed
General Partner or any Affiliate thereof shall be entitled
to receive any fee, compensation or other remuneration from
the Partnership, other than (x) the above-described payment
for the Interest, or portion thereof, of the removed General
Partner, and (y) any such fee, compensation or other
remuneration which had already been earned in full prior the
date of such removal. The Partnership is not authorized to
enter into any arrangement whereby any fee, compensation or
other remuneration could be payable directly or indirectly
to any General Partner or Affiliate thereof in a manner
inconsistent with the immediately preceding sentence unless
the prior written consent of the Special Limited Partner
shall have been obtained to such particular agreement. The
Partnership may offset against any payments to a General
Partner removed under this Section 4.5 any damages suffered
by the Partnership as a result of any breach of the
obligations of such General Partner hereunder.
(c) The General Partner is hereby required, within
fifteen (15) days after its receipt of any offer to purchase
the Apartment Complex or all of the Interests in the
Partnership, to send a copy of such offer (or a written
description of any such oral offer) to each of the Limited
Partners. In connection with any proposed sale of the
Apartment Complex, the Special Limited Partner (or its
designee) shall have the right to (i) receive and review
copies of all documents relating to the proposed sale,
(ii) participate in the negotiations of the terms and
conditions of the proposed sale, (iii) meet with the
proposed purchaser, (iv) solicit proposals for alternative
offers for the Apartment Complex, and (v) provide such other
services in connection with the proposed sale as it deems to
be appropriate.
4.6 Meetings
The General Partner or Limited Partners holding more
than ten percent (10%) of the then outstanding Limited
Partner Interests may call meetings of the Partnership for
any matters for which the Limited Partners may vote as set
forth in this Agreement. A list of the names and addresses
of all Limited Partners shall be maintained as part of the
books and records of the Partnership and shall be made
available upon request to any Limited Partner or his
representative at his cost. Upon receipt of a written
request either in person or by certified mail stating the
purpose(s) of the meeting, the General Partner shall provide
all Limited Partners within ten (10) days after receipt of
said request, written notice of a meeting and the purpose of
such meeting to be held on a date not less than fifteen (15)
nor more than sixty (60) days after receipt of said request,
at a time and place convenient to the Limited Partners.
ARTICLE V
Capital Contributions of the Investment Limited
Partner and the Special Limited Partner
5.1 Payments
(a) The Special Limited Partner's Capital Contribution
of $10 shall be paid in full in cash on the Admission Date.
The Investment Limited Partner's Capital Contribution in the
aggregate amount of $2,536,374 shall be paid in cash
installments (the "Installments"), as follows:
(i) $1,521,824 (the "First Installment") on the latest
to occur of (A) the Admission Date, (B) the Bond Loan Full
Funding Date, and (C) Tax Credit Set-Aside;
(ii) $634,093 (the "Second Installment") on the 50%
Completion Date;
(iii) $317,047 (the "Third Installment"), on the latest
to occur of (A) the Completion Date, (B) Cost Certification,
(C) receipt by the Special Limited Partner of an updated
Title Policy in form and substance satisfactory to the
Special Limited Partner, which policy in no event shall
contain a survey exception, (D) receipt by the Special
Limited Partner of current liability insurance certificates
conforming to the requirements of the Partnership Agreement,
(E) receipt by the Special Limited Partner of an Estoppel
Letter from each Lender or (F) receipt by the Special
Limited Partner of the Contractor Pay-Off Letter;
(iv) $63,410 (the "Fourth Installment") on the latest
to occur of (A) the Initial 100% Occupancy Date, (B) the
closing and funding of the New Permanent Loan, (C) Rental
Achievement or (D) State Designation.
provided, however, that (x) the General Partner shall give
the Investment Limited Partner not less than fourteen (14)
days' written notice prior to the due date of each
Installment subsequent to the First Installment, and (y) no
Installment shall be due unless and until all conditions to
the payment of all prior Installments have been satisfied.
(b) The obligation of the Investment Limited Partner
to pay each Installment is conditioned upon delivery by the
General Partner to the Investment Limited Partner of a
written certificate (the "Payment Certificate") stating that
as of the date of such certificate (i) all the conditions to
the payment of such Installment and each prior Installment
have been satisfied, (ii) all representations and warranties
of the General Partner contained in this Agreement are true
and correct and (iii) no event has occurred which suspends
or terminates the obligations of the Investment Limited
Partner to pay Installments under this Agreement which has
not been cured as herein provided, (iv) no event has
occurred which, with the giving of notice, would oblige the
General Partner to repurchase the Interests of the
Investment Limited Partner pursuant to Section 5.2(a).
Except as provided in the final sentence of this Section
5.1(b), acceptance by the Partnership of any Installment
shall constitute a confirmation that, as of the date of
payment, all such conditions are satisfied and all such
representations and warranties are true and correct. The
obligation of the Investment Limited Partner to pay the
First Installment is also conditioned upon delivery by the
General Partner to the Investment Limited Partner of (x) a
legal opinion of independent counsel to the Partnership, the
General Partner, the Developer and the Guarantors, which
opinion(s) must be satisfactory to the Investment Limited
Partner as to form, content and identity of counsel and
(y) a photocopy of a binding commitment, in form and
substance satisfactory to the Special Limited Partner, to
issue the Title Policy and endorsements thereto in form and
substance satisfactory to the Special Limited Partner. In
no event shall any Installment become due until all of the
conditions for all of the Installments listed prior to the
Installment in question in Section 5.1(a) shall have been
satisfied and all of such prior Installments shall have
become due. Notwithstanding the foregoing, however, if at
any time prior to the date when an Installment becomes due
and payable, the Partnership has an Operating Deficit which
the General Partner would be required to fund pursuant to
Section 6.10, then the Investment Limited Partner may, at
its option, waive the requirement of the delivery of the
Payment Certificate or any other condition with respect to
part or all of such Installment and pay such part or all of
such Installment, provided that the proceeds of the amount
so paid are used by the Partnership to fully fund such
Operating Deficit; provided, however, that if the proceeds
of such amount so paid are designated in Section 6.12 to be
used to pay fee(s), then such proceeds shall be utilized to
pay such fee(s) and the recipient(s) thereof shall be
required to, and hereby agree to, utilize the proceeds of
such fee(s) to fund such Operating Deficit, in which case
the Investment Limited Partner is hereby authorized to
directly fund such Operating Deficit, with the funds so
applied being deemed to have been paid as aforesaid.
(c) The Payment Certificate for each Installment shall
be dated and delivered not less than ten (10) nor more than
thirty (30) days prior to the due date for such Installment.
(d) If, as of the date when an Installment would
otherwise be due, any statement required to be made in the
Payment Certificate for such Installment cannot be
truthfully made in any material respect, the General Partner
shall notify the Investment Limited Partner of the reason
why such statement would be untrue if made, and the
Investment Limited Partner shall not be required to pay such
Installment; provided, however, that if (i) any such
statement can subsequently be truthfully made and (ii) the
Investment Limited Partner shall not have irrevocably lost,
in the good faith judgment of the Investment General
Partner, any material tax or other benefits hereunder (other
than tax benefits for which the Investment Limited Partner
has been fully compensated pursuant to the provisions of
paragraphs (e), (f) and (g) of this Section 5.1), then the
Investment Limited Partner shall pay such Installment to the
Partnership thirty (30) days after delivery by the General
Partner to the Investment Limited Partner of the Payment
Certificate together with an explanation of the manner in
which each such statement had become true.
(e) In the event that as of or any time prior to Cost
Certification (the "Initial Adjustment Date"), the
Investment Limited Partner shall receive a written
certification of the Auditors indicating that the aggregate
Actual Credit during the Credit Period will be less than the
aggregate Projected Credit during the Credit Period, then
(i) the next succeeding Installments of the Capital
Contributions of the Investment Limited Partner shall be
reduced by an amount equal to the product of (X) the
difference between (1) the aggregate Projected Credit during
the Credit Period and (2) the aggregate Actual Credit during
the Credit Period and (Y) 0.80, and (ii) the Projected
Credit for each Fiscal Year shall thereafter be redefined to
mean the Actual Credit, as so determined (the "Revised
Projected Credit"). Any such reduction pursuant to this
Section 5.1(e) shall be made first to the Installment, if
any, next due to be paid by the Investment Limited Partner,
and any balance of such amount payable by the General
Partner in excess of the amount of such Installment shall be
applied to succeeding Installments, if any, provided that if
the amount of any such reductions exceeds the sum of the
remaining Installments, if any, then an amount equal to the
amount of such excess shall be paid by the General Partner
to the Investment Limited Partner promptly after demand is
made therefor, as a payment of damages for breach of
warranty, regardless of the reason for the occurrence of
such event (unless such reduction was caused by an act or
omission of the Investment Limited Partner or its
Affiliates, in which event no such reduction or payment
shall be required). No reduction of any Installment or any
payment by the General Partner pursuant to this Section
5.1(e) shall be deemed to be a Capital Contribution by the
General Partner to the Partnership, nor shall any such
payment constitute a return of capital to the Investment
Limited Partner.
(f) If with respect to any Fiscal Year all or a
portion of which occurs during the Initial Operating Period,
the Actual Credit is or was less than the Projected Credit
(or the Revised Projected Credit, if applicable) for such
Fiscal Year (a "Reduction Year"), then the General Partner
shall pay to the Investment Limited Partner the Reduction
Amount. The Reduction Amount shall be equal to the sum of
(A) the excess of the Projected Credit (or the Revised
Projected Credit, if applicable) for such Fiscal Year over
the Actual Credit for such Fiscal Year multiplied by 0.80
plus (B) the Recapture Amount as determined pursuant to
Section 10.6 and, to the extent not already accounted for,
any interest or penalties payable by the limited partners
and/or holders of beneficial assignee certificates of the
Investment Limited Partner as a result of such shortfall or
Recapture Event, assuming that each limited partner and/or
holder of a beneficial assignee certificate in the
Investment Limited Partner used all of the Tax Credits
allocated to it in the Fiscal Year of allocation. The
Auditors shall make their determination of the amount of the
Actual Credit with respect to each Reduction Year within
thirty (30) days following the end of such Fiscal Year. The
Investment Limited Partner shall be eligible to be paid a
Reduction Amount as hereinabove described with respect to
each Reduction Year. Any Reduction Amount shall first be
applied to the Installment next due to be paid by the
Investment Limited Partner, with any portion of such
Reduction Amount in excess of the amount of such Installment
then being applied to succeeding Installments, provided that
if no further Installments remain to be paid or if the
Reduction Amount shall exceed the sum of the amounts of the
remaining Installments, then the entire Reduction Amount or
the balance of the Reduction Amount, as the case may be,
shall be paid by the General Partner to the Investment
Limited Partner promptly after demand is made therefor, as a
payment of damages for breach of warranty, regardless of the
reason for the occurrence of such event (unless such
reduction was caused by an act or omission of the Investment
Limited Partner or its Affiliates, in which event no
Reduction Amount shall be payable). No payment by the
General Partner pursuant to this Section 5.1(f) shall be
deemed to be a Capital Contribution to the Partnership nor
shall any such payment constitute a return of capital to the
Investment Limited Partner.
(g) In the event that, for any reason, at any time
after the end of the Initial Operating Period, the amount of
the Actual Credit shall be less than the Projected Credit
(or the Revised Projected Credit, if applicable) with
respect to any Fiscal Year of the Partnership (such
difference being hereinafter referred to as a "Credit
Shortfall"), the Investment Limited Partner shall be treated
as having made a constructive advance to the Partnership
with respect to such Fiscal Year (a "Credit Recovery Loan"),
which shall be deemed to have been made on February 1 of
such Fiscal Year in an amount equal to the sum of (A) the
Credit Shortfall for such Fiscal Year plus (B) the Recapture
Amount as determined pursuant to Section 10.6 and, to the
extent not already accounted for, any interest or penalties
payable by the limited partners and/or the holders of
beneficial assignee certificates of the Investment Limited
Partner as a result of the Credit Shortfall for such Fiscal
Year, assuming that each limited partner and/or holder of a
beneficial assignee certificate in the Investment
Partnership used all of the Tax Credits allocated to him in
the Fiscal Year of allocation. Credit Recovery Loans shall
be deemed to bear simple (not compounded) interest from the
respective dates on which such principal advances shall have
been deemed to have been made under this Section 5.1(g) at a
rate of nine percent (9%) per annum. Credit Recovery Loans
shall be payable by the Partnership as provided in Section
10.2(b), Clause Third.
5.2 Return of Capital Contributions
(a) Failure to Achieve Development and/or Tax Credit
Benchmarks and Standards. Upon the occurrence of any of the
events (a "Repurchase Event") listed below in this Section
5.2(a), within five (5) days of the occurrence thereof, the
General Partner shall send to the Investment Limited Partner
and the Investment Limited Partner notice of such event and
of the General Partner's obligation to repurchase the
Interests of the Investment Limited Partner by paying to the
Investment Limited Partner an amount in cash (the
"Repurchase Amount") equal to each such Partner's Invested
Amount minus the portion, if any, of such Partner's Capital
Contribution which shall not yet have been paid (or deemed
to have been paid) to the Partnership plus the amount of any
third-party costs, including, without limitation, attorney's
fees incurred by or on behalf of such Partner in
implementing this Section 5.2(a) in the event the Investment
Limited Partner requires such a repurchase plus interest
thereon at the AFR commencing on the fifth (5th) day after
delivery of the notice referred to in the next sentence. If
the Investment Limited Partner elects to require a
repurchase of its Interest and the payment to it of an
amount equal to its Repurchase Amount, it shall send notice
thereof to the Partnership within sixty (60) days after the
mailing date of the General Partner's notice, or at any time
after the occurrence of any of the foregoing if the General
Partner shall not have sent a notice thereof, and the
General Partner shall within thirty (30) days after the
Partnership receives any such notice from a Partner
requesting the purchase of its Interest repurchase the
Interest of such Partner by paying to such Partner an amount
equal to its Repurchase Amount. If, following receipt of
the General Partner's notice, the Investment Limited Partner
fails to send notice to the General Partner by the end of
such 30-day period requesting the General Partner to
purchase its Interest, the Investment Limited Partner, as
the case may be, shall be deemed to have waived its right to
cause the General Partner to purchase its Interest as a
result of the event described in the General Partner's
notice. No such waiver, however, shall affect the right of
the Investment Limited Partner to cause the General Partner
to purchase its Interest upon the occurrence of any other
event described in this Section 5.2(a), or upon any
subsequent occurrence of the event described in the General
Partner's notice. The Repurchase Events are as follows:
(i) each of the buildings in the Apartment Complex
shall not have been placed in service by December 31, 2000;
or
(ii) by November 30, 2000, the Completion Date shall
not have occurred; or
(iii) construction or operation of the Apartment
Complex shall have been enjoined by a final order (from
which no further appeals are possible) of a court having
jurisdiction and such injunction shall continue for a period
of ninety (90) days; or
(iv) State Designation shall not have occurred by
February 1, 2001 (or any later date fixed by the General
Partner with the Consent of the Investment Limited Partner)
and by said date the General Partner shall not have made any
payment as described in the next to last sentence of Section
5.1(e) or, if the Investment Limited Partner shall have
elected to have all or a portion of any payment under
Section 5.1(e) applied toward future Installment obligations
of the Investment Limited Partner, amendments to this
Agreement shall not have been adopted and filed in the
Filing Office, reflecting such event; or
(v) if by the date which is twelve (12) months
following the Completion Date, Rental Achievement shall not
have been achieved; or
(vi) the Partnership shall fail to meet the Minimum
Set-Aside Test or the Rent Restriction Test by the close of
the first year of the Credit Period and/or fails to continue
to meet either of such tests at any time during the sixty
(60)-month period commencing on such date; or
(vii)(A) foreclosure proceedings shall have commenced
under any Mortgage and such proceedings shall not have been
dismissed within thirty (30) days, (B) any of the
commitments of a Lender to provide a Mortgage Loan and/or
any subsidy financing shall be terminated or withdrawn and
not reinstated or replaced within sixty (60) days with terms
at least as favorable to the Partnership or terms for which
the Consent of the Investment Limited Partner and any
Requisite Approvals shall have been obtained, or (C) the
Issuer, acting in good faith and in accordance with the
provisions of the Bond Loan Documents, shall have
irrevocably refused to make any further advances under the
Bond Loan Documents and such decision shall not have been
reversed or the Issuer replaced within thirty (30) days; or
(viii) at any time the General Partner fails to
advance Subordinated Loans and such failure continues for
ten (10) days; or
(ix) any action is commenced to foreclose any
mechanics, or any other lien (other than the lien of a
Mortgage) against the Apartment Complex and such action has
not within thirty (30) days been either bonded against in
such a manner as to preclude the holder of such lien from
having any recourse to the Apartment Complex or to the
Partnership for payment of any debt secured thereby, or
affirmatively insured against by the title insurance policy
or an endorsement thereto issued to the Partnership by a
reputable title insurance company (which insurance company
will not have indemnity from or recourse against Partnership
assets by reason of any loss it may suffer by reason of such
insurance) in an amount satisfactory to the Investment
Limited Partner; or
(x) a casualty occurs resulting in substantial
destruction of all or a portion of the Apartment Complex,
and the insurance proceeds (if any) are insufficient to
restore the Apartment Complex or the Apartment Complex is
not so restored within twenty-four (24) months following
such casualty.
(b) Lender/Agency Disapproval. If any Agency or
Lender shall disapprove, or fail to give any required
approval of, the Investment Limited Partner and/or the
Special Limited Partner as a Limited Partner hereunder
within one hundred eighty (180) days of the Admission Date,
then the Partner being disapproved or not approved shall,
effective as of such time or such later time as may be
elected by the Partner being disapproved or not approved as
may be specified by such Agency or Lender in its
disapproval, at the option of the Partner being disapproved
or not approved (if not directed by such Agency or Lender to
withdraw), cease to be a Limited Partner. The General
Partner shall, within ten (10) days of the effective date of
such cessation, pay to the Partner being disapproved or not
approved an amount equal to its Invested Amount minus the
amount, if any, of such Partner's Capital Contribution which
shall not yet have been paid (or deemed to have been paid)
to the Partnership plus the amount of any third party costs,
including, but not limited to attorney's fees, incurred by
or on behalf of such Partner in implementing this Section
5.2(b).
(c) Substitution and Indemnification. Upon the
receipt by the Investment Limited Partner and/or the Special
Limited Partner of the amount due to it pursuant to either
Section 5.2(a) or Section 5.2(b), the Interest of such
Partner shall terminate, and the General Partner shall
indemnify and hold harmless such Partner from and against
any Adverse Consequences to which such Partner (as a result
of its participation hereunder) may be subject, provided
that such Adverse Consequences do not result from such
Partner's acts or omissions.
(d) Waiver of Repurchase Right. Each of the
Investment Limited Partner and the Special Limited Partner
shall have the right to irrevocably waive its right to have
its Interest repurchased pursuant to any clause or clauses
of Section 5.2(a), or any portion thereof, at any time
during which any of such rights shall be in effect. Such a
waiver shall be exercised by delivery to the General Partner
of a written notice stating that the rights being waived
pursuant to any specified clause or clauses of Section
5.2(a), or any specified portion thereof, are thereby waived
for a specified period of time.
(e) Additional General Partner. If the General
Partner shall fail to make on the due date therefor any
payment required under Section 5.2(a) or Section 5.2(b),
time being of the essence, at any time thereafter the
Special Limited Partner shall have the option, exercisable
in its sole discretion, to cause itself or its designee to
be admitted as an additional General Partner, receiving from
the existing General Partner, in consideration of the
payment of ten dollars ($10.00), a one one-hundredth of one
per cent (0.01%) interest in the Profits, Losses, Tax
Credits and distributions of the Partnership, with the
Special Limited Partner retaining its status as such and its
economic interest in the Partnership as the Special Limited
Partner (or its designee as an additional General Partner).
If the Special Limited Partner exercises the option
described in this Section 5.2(e), each of the other General
Partner hereby agrees that all of its rights and powers
hereunder as a General Partner shall automatically be
irrevocably delegated to the Special Limited Partner
pursuant to Section 6.13 without the necessity of any
further action by any Partner. Each Partner hereby grants
to the Special Limited Partner an irrevocable (to the extent
permitted by applicable law) power of attorney coupled with
an interest to take any action and to execute, deliver and
file or record any and all documents and instruments on
behalf of such Partner and the Partnership as the Special
Limited Partner may deem necessary or appropriate in order
to effectuate the provisions of this Section 5.2(e) and to
allow the additional General Partner to manage the business
of the Partnership. The admission of the Special Limited
Partner or its designee as an additional General Partner
shall not relieve any other General Partner of any of its
economic obligations hereunder, and each other General
Partner shall fully indemnify and hold harmless the
additional General Partner on an after-tax basis from and
against any and all Adverse Consequences sustained by such
additional General Partner in connection with its status as
a General Partner (other than Adverse Consequences arising
solely from the gross negligence or willful misconduct of
such additional General Partner).
ARTICLE VI
Rights, Powers and Duties of General Partner
6.1 Authorized Acts
Subject to the provisions of Section 6.2, Section 6.3,
Section 6.15 and all other provisions of this Agreement, the
General Partner for, in the name and on behalf of the
Partnership, is hereby authorized, in furtherance of the
purposes of the Partnership:
(i) to acquire by purchase, lease, exchange or
otherwise any real or personal property;
(ii) to construct, rehabilitate, operate, maintain,
finance and improve, and to own, sell, convey, assign,
mortgage or lease any real estate and any personal property;
(iii) to borrow money and issue evidences of
indebtedness and to secure the same by mortgage, pledge or
other lien on the Apartment Complex or any other assets of
the Partnership;
(iv) to execute the Mortgage Loan Documents and the
other Project Documents and all such other documents as the
General Partner deems to be necessary or appropriate in
connection with the acquisition, development, construction
and financing of the Apartment Complex;
(v) subject to Section 3.2, to prepay in whole or in
part, refinance or modify any Mortgage Loan or other
financing affecting the Apartment Complex;
(vi) to employ the Management Agent (which may be an
Affiliate of the General Partner) and, subject to the
provisions of Article XI, to pay reasonable compensation for
its services;
(vii) to employ its Affiliates to perform services
for, or sell goods to, the Partnership provided that (except
with respect to any contract specifically authorized by this
Agreement) the terms of any such transaction with an
Affiliate shall not be less favorable to the Partnership
than would be arrived at by unaffiliated parties dealing at
arms' length;
(viii) to execute contracts with any Agency, the State
or any subdivision or agency thereof or any other
Governmental Authority to make apartments or tenants in the
Apartment Complex eligible for any public-subsidy program;
(ix) to execute leases of some or all of the apartment
units of the Apartment Complex to individuals and/or to a
public housing authority and/or to a non-profit corporation,
cooperative or other non-profit Entity;
(x) to employ or engage such engineers, architects,
technicians, accountants, attorneys and other Persons, as
may be necessary, convenient or incidental to the
accomplishment of the purposes of the Partnership; and
(xi) to enter into any kind of activity and to perform
and carry out contracts of any kind which may be lawfully
carried on or performed by a partnership and to file all
certificates and document which may be required under the
laws of the State.
6.2 Restrictions on Authority
Notwithstanding any other Section of this Agreement,
the General Partner shall have no authority to perform any
act in violation of the Act, any other applicable law,
Agency or other government regulations, the requirements of
any Lender, or the Project Documents. In the event of any
conflict between the terms of this Agreement and any
applicable Regulations or requirements of any Lender, the
terms of such Regulations or the requirements of such
Lender, as the case may be, shall govern. Subject to the
provisions of Section 6.2(b), the General Partner, acting in
its capacity as General Partner, shall not have the
authority, without the Consent of the Special Limited
Partner:
(i) to have unsecured borrowings in excess of twenty
thousand dollars ($20,000.00) in the aggregate at any one
time outstanding, except borrowings constituting
Subordinated Loans or Credit Recovery Loans;
(ii) to borrow from the Partnership or commingle
Partnership funds with the funds of any other Person;
(iii) following the Completion Date, to construct any
new or replacement capital improvements on the Apartment
Complex which substantially alter the character or use of
the Apartment Complex or which cost in excess of twenty
thousand dollars ($20,000.00) in a single Fiscal Year,
except (x) replacements and remodeling in the ordinary
course of business or under emergency conditions or (y)
construction paid for from insurance proceeds;
(iv) to acquire any real property in addition to the
Apartment Complex;
(v) except as otherwise provided in Article III, to
increase, decrease or modify the terms of or refinance any
Mortgage Loan, such Consent of the Special Limited Partner
not to be unreasonably withheld;
(vi) to rent apartments in the Apartment Complex such
that the Apartment Complex would not meet the requirements
of the Minimum Set-Aside Test or the Rent Restriction Test;
(vii) to sell, exchange or otherwise convey or
transfer the Apartment Complex or substantially all the
assets of the Partnership;
(viii) to terminate any Material Agreement;
(ix) to cause the Partnership to commence a proceeding
seeking any decree, relief, order or appointment in respect
to the Partnership under the federal bankruptcy laws, as now
or hereafter constituted, or under any other federal or
state bankruptcy, insolvency or similar law, or the
appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) for the
Partnership or for any other substantial part of the
Partnership's business or property, or to cause the
Partnership to consent to any such decree, relief, order or
appointment initiated by any Person other than the
Partnership;
(x) to execute contracts with any Agency, the State or
any subdivision or agency thereof or any other Governmental
Authority to make apartments or tenants in the Apartment
Complex eligible for any public-subsidy program;
(xi) to amend in any material respect any construction
contract;
(xii) to pledge or assign any of the Capital
Contributions of the Investment Limited Partner or the
proceeds thereof (except to the extent required by the terms
of the Bond Loan Documents and the Letter of Credit
Documents and agreed to in writing by the Special Limited
Partner);
(xiii) to amend any Project Document, or to permit any
party thereunder to waive any provision thereof, to the
extent that the effect of such amendment or waiver would be
to materially eliminate, diminish or defer any obligation or
undertaking of the Partnership, the General Partner or its
Affiliates which accrues, directly or indirectly, to the
benefit of, or provides additional security or protection
to, the Investment Limited Partner (notwithstanding that the
Investment Limited Partner is neither a party to nor express
beneficiary of such provision or was not a partner when such
provision became effective);
(xiv) to approve any changes to the plans and
specifications for the Apartment Complex which would result,
either individually or in the aggregate, in an overall
development cost increase or decrease in excess of $25,000;
(xv) to permit the merger, termination or dissolution
of the Partnership; or
(xvi) to do any act required to be approved or ratified
by all limited partners under the Act.
(b) In the event that any General Partner violates any
provision of Section 6.2(a), the Special Limited Partner in
its sole discretion and without prejudice to its rights
under Sections 405(b) and 7.6(a), may cause itself or its
designee to be admitted as an additional General Partner
without any further action by any other Partner. Upon any
such admission of an additional General Partner, each
existing General Partner shall be deemed to have assigned
proportionally to the additional General Partner,
automatically and without further action, such portion of
its General Partnership Interest so that the additional
General Partner shall receive not less than a one one-
hundredth of one percent (0.01%) interest in the Profits,
Losses, Tax Credits and distributions of the Partnership in
consideration of one dollar ($1.00) and any other
consideration which may be agreed upon. An additional
General Partner so admitted shall automatically become the
Managing General Partner and shall be irrevocably delegated
all of the power and authority of all of the General Partner
pursuant to Section 6.13. Any such additional General
Partner shall have the right to withdraw as a General
Partner at any time, leaving the prior General Partner once
again as the only General Partner, the provisions of Article
VII notwithstanding. Each Partner hereby grants to the
Special Limited Partner a special power of attorney,
irrevocable to the extent permitted by law and coupled with
an interest, to amend this Agreement and to do anything else
which, in view of the Special Limited Partner, may be
necessary or appropriate to accomplish the purposes of this
Section 6.2(b) or to enable any additional General Partner
admitted pursuant to this Section 6.2(b) to manage the
business of the Partnership. The admission of an additional
General Partner shall not relieve any other General Partner
of any of its economic obligations hereunder, and each other
General Partner on an after-tax basis shall fully indemnify
and hold harmless the additional General Partner from and
against any and all Adverse Consequences sustained by the
additional General Partner in connection with its status as
a General Partner (other than Adverse Consequences arising
solely from the gross negligence or willful misconduct of
such additional General Partner).
(c) Neither the Investment General Partner nor any
Affiliate thereof shall be given an exclusive right to sell,
or exclusive employment to sell, the Apartment Complex.
6.3 Personal Services; Other Business Ventures
No General Partner or Affiliate thereof shall receive
any salary or other direct or indirect compensation for any
services or goods provided in connection with the
Partnership or the Apartment Complex, except as may be
specifically provided in Section 6.12, Section 6.15 and
Article XI or as to which the Consent of the Special Limited
Partner shall have been obtained to the precise terms
thereof prior to the commencement of such services or the
provision of such goods. Any Partner may engage
independently or with others in other business ventures of
every nature and description, including the ownership,
operation, management, syndication and development of real
estate; neither the Partnership nor any other Partner shall
have any rights in and to such independent ventures or the
income or profits derived therefrom.
6.4 Business Management and Control
(a) Subject to the provisions of this Agreement, the
General Partner shall have the exclusive right to control
the business of the Partnership. If at any time there is
more than one General Partner, the powers and duties of the
General Partners hereunder shall be exercised in the first
instance by a Managing General Partner who, subject to the
terms and provisions of this Agreement, shall manage the
business and affairs of the Partnership. The Managing
General Partner may bind the Partnership by executing and
delivering, in the name and on behalf of the Partnership,
any documents which this Agreement authorizes the General
Partners to execute hereunder without the requirement that
any other General Partner execute such documents. The
initial Managing General Partner shall be PRLLC; if it is
unwilling or unable to serve in such capacity or shall cease
to be a General Partner, the remaining General Partners may
from time to time designate a new Managing General Partner.
If for any reason no designation is in effect, the powers of
the Managing General Partner shall be exercised by a
majority in interest of the General Partners. Any action
required or permitted to be taken by a corporate General
Partner hereunder may be taken by such of its proper
officers or agents as it shall validly designate for such
purpose.
(b) The Managing General Partner shall have control
over the business of the Partnership and shall have all
rights, powers and authority conferred by law as necessary,
advisable or consistent in connection therewith. Without
limiting the generality of the foregoing, the Managing
General Partner shall have the right, power and authority to
execute any documents relating to the acquisition,
financing, construction, operation and sale of all or any
portion of the Apartment Complex with the prior approval of
the other General Partners, if any. The Managing General
Partner shall be responsible for administering any
construction loan draw requests for the development of the
Apartment Complex.
(c) Neither the Investment Limited Partner nor the
Special Limited Partner shall have any right to take part in
the management or control of the business of the Partnership
or to transact any business in the name of the Partnership.
No provision of this Agreement which makes the Consent of
the Investment Limited Partner or the Consent of the Special
Limited Partner a condition for the effectiveness of an
action taken by the General Partner is intended, and no such
provisions shall be construed, to give the Investment
Limited Partner or the Special Limited Partner, as the case
may be, any participation in the control of the Partnership
business. Each of the Special Limited Partner and the
Investment Limited Partner hereby consents to the exercise
by the General Partner of the powers conferred on it by law
and this Agreement, and the General Partner agrees to
exercise control of the business of the Partnership only in
accordance with the provisions of this Agreement.
Notwithstanding the foregoing, in no event may the
provisions of this Section 6.4 be invoked by any General
Partner or by any other Person as a defense against or as an
impediment to the ability of either the Investment Limited
Partner or the Special Limited Partner to take any action
hereunder.
6.5 Duties and Obligations
(a) The General Partner shall manage the affairs of
the Partnership to the best of its ability, shall use its
best efforts to carry out the purpose of the Partnership,
and shall devote to the Partnership such time as may be
necessary for the proper performance of its duties and the
business of the Partnership. The General Partner shall
promptly take all action which may be necessary or
appropriate for the proper development, construction,
maintenance and operation of the Apartment Complex in
accordance with the provisions of this Agreement, the
Project Documents and any applicable laws and Regulations.
The General Partner is responsible for the management and
operation of the Partnership, including the oversight of the
rent-up and operational stages of the Apartment Complex.
(b) Subject to the provisions of Section 6.5(g), the
General Partner shall use its diligent good faith efforts to
cause the Partnership to generate Cash Flow for distribution
to the Partners at the maximum realizable level in view of
(i) any applicable Regulations, (ii) the Minimum Set-Aside
Test, (iii) the Rent Restriction Test and (iv) the Projected
Rents, and, if necessary, the General Partner also shall use
its best efforts to obtain approvals and implementation of
appropriate adjustments in the rental schedule of the
Apartment Complex.
(c) The General Partner shall cause the Partnership to
obtain and keep in force, during the term of the
Partnership, insurance policies in accordance with the
Insurance Requirements set forth on Exhibit C hereto.
Throughout the term of the Partnership, the General Partner
shall provide copies of all such policies (or binders) to
the Investment Limited Partner within thirty (30) days after
their receipt thereof. The General Partner shall cause the
applicable insurer to name the Investment Limited Partner as
an "additional insured" on each Partnership insurance
policy. Each Partnership insurance policy shall include a
provision requiring the insurance company to notify the
Investment Limited Partner in writing no less than thirty
(30) days prior to any cancellation, non-renewal or material
change in the terms and conditions of coverage. The General
Partner shall review regularly all of the Partnership and
Apartment Complex insurance coverage to insure that it is
adequate and continuing. In particular, the General Partner
shall review at least annually the insurance coverage
required by this Section 6.5(c) to insure that it is in an
amount at least equal to the then current full replacement
value of the Apartment Complex.
(d) Without limitation of the foregoing, the General
Partner shall deliver to the Investment Limited Partner on
or before the Admission Date one or more certificates or
memoranda of insurance, in form reasonably acceptable to the
Investment Limited Partner, evidencing, (i) the existence of
the insurance policies and coverages specified on Exhibit C,
(ii) that the Partnership and its Partners (including the
Investment Limited Partner) are named insured on such
policies, and (iii) that such insurance policies will not be
cancelled by the insurers except within thirty (30) days'
written notice to the Investment Limited Partner. From time
to time following the Admission Date, the General Partner
shall deliver to the Investment Limited Partner such further
certificates or memoranda of insurance as the Investment
Limited Partner may reasonably require to confirm that such
insurance and notice provisions with respect to insurance
under this Agreement have been complied with.
(e) If at any time there is more than one General
Partner, the obligations of the General Partners hereunder
shall be the joint and several obligations of each General
Partner. Except as otherwise provided in Sections 4.5(b)
and 7.1, such obligations shall survive any Withdrawal of a
General Partner from the Partnership.
(f) The General Partner shall establish and maintain
reasonable reserves (the "Replacement Reserve") to provide
for working capital needs, improvements, replacements and
any other contingencies of the Partnership. At a minimum,
beginning on February 1, 2001, the General Partner shall
cause the Partnership to annually deposit $27,200 from Cash
Flow into the Replacement Reserve; to the extent that Cash
Flow (as determined before deduction of such reserve
deposit) for any Fiscal Year shall be insufficient to make
such deposit in full, the General Partner shall fund such
shortfall from its own funds as a Subordinated Loan.
(g) Each General Partner shall be bound by the
provisions of the Project Documents, and no additional
General Partner shall be admitted if he, she or it has not
first agreed to be bound by this Agreement (and assume the
obligations of a General Partner hereunder) and by the
Project Documents to the same extent and under the same
terms as each of the other General Partners.
(h) The General Partner shall take all actions
appropriate to ensure that the Investment Limited Partner
receives the full amount of the Projected Credit, including,
without limitation, the rental of apartments to appropriate
tenants and the filing of annual certifications as may be
required. In this regard, the General Partner shall, inter
alia, cause (i) the Partnership to satisfy the Minimum Set-
Aside Test, the Rent Restriction Test and all other
requirements imposed from time to time under the Code with
respect to rental levels and occupancy by qualified tenants
by the close of the first year of the Credit Period and
throughout the Compliance Period so as to permit the
Partnership to be entitled to the maximum available Tax
Credit (ii) the Partnership to comply with all State Tax
Credit monitoring procedures, (iii) all dwelling units in
the Apartment Complex to be leased for initial periods of
not less than six months to individuals satisfying the Rent
Restriction Test, (iv) the Partnership to make all
appropriate Tax Credit elections in a timely fashion, and
(v) all rental units in the Apartment Complex to be of equal
quality with comparable amenities available to low-income
tenants on a comparable basis without separate fees.
(i) On or before the Admission Date, the General
Partner shall provide to the Special Limited Partner either
(i) an appraisal of the Apartment Complex prepared by a
competent independent appraiser or (ii) completed FmHA Forms
1924-13 (estimate and certificate of actual cost) and 1930-7
(statement of budget, income and expense) or HUD project
cost and budget analysis on Form 2264, or any successor FmHA
or HUD form, any comparable form of a state or other
Governmental Authority, including any applicable Credit
Agency, setting forth estimates with respect to
construction, rehabilitation and mortgage financing costs
and initial rental income and operating expense figures for
the Apartment Complex.
(j) The General Partner shall (i) not store or dispose
of (except in compliance with all laws, ordinances, and
regulations pertaining thereto) any Hazardous Material at
the Apartment Complex, or at or on any other Site or Vessel
owned, occupied, or operated either by any General Partner,
any Affiliate of a General Partner, or any Person for whose
conduct any General Partner is or was responsible; (ii)
neither directly nor indirectly transport or arrange for the
transport of any Hazardous Material (except in compliance
with all laws, ordinances, and regulations pertaining
thereto); (iii) provide the Investment Limited Partner with
written notice (x) upon any General Partner's obtaining
knowledge of any potential or known release, or threat of
release, of any Hazardous Material at or from the Apartment
Complex or any other Site or Vessel owned, occupied, or
operated by any General Partner, any Affiliate of a General
Partner or any Person for whose conduct any General Partner
is or was responsible or whose liability may result in a
lien on the Apartment Complex; (y) upon any General
Partner's receipt of any notice to such effect from any
federal, state, or other Governmental Authority; and (z)
upon any General Partner's obtaining knowledge of any
incurrence of any expense or loss by any such government
authority in connection with the assessment, containment, or
removal of any Hazardous Material for which expense or loss
any General Partner may be liable or for which expense or
loss a lien may be imposed on the Apartment Complex.
(k) The General Partner shall promptly request in
writing of any Lender that such Lender cause the Special
Limited Partner to be named as an "interested party" in the
applicable Mortgage Loan Documents, so that such Lender will
notify the Special Limited Partner of any default under the
applicable Mortgage or the General Partner shall itself
notify the Special Limited Partner of any such default.
(l) The General Partner shall provide the Special
Limited Partner with a true and accurate copy of each Bond
Loan requisition and any supporting documents and
information which has been submitted for approval by the
Issuer or the Bank (whether submitted before or after the
Admission Date).
The General Partner shall have a fiduciary
responsibility for the safekeeping and use of all funds and
assets of the Partnership, whether or not in its immediate
possession or control. The General Partner shall not
employ, or permit another to employ, such funds or assets in
any manner except for the exclusive benefit of the
Partnership. No General Partner shall contract away the
fiduciary duty owed at common law to the Limited Partners.
6.6 Representations and Warranties
The General Partner represents and warrants to the
Investment Limited Partner and the Special Limited Partner
as follows:
(a) The Partnership is a duly organized limited
partnership validly existing and in good standing under the
laws of the State of Mississippi and is qualified to do
business in and in good standing under the laws of the State
of Tennessee and has complied with all filing requirements
necessary for its existence and to preserve the limited
liability of the Investment Limited Partner and the Special
Limited Partner.
(b) No event or proceeding has occurred or is pending
or, is to the Best Knowledge of the General Partner,
threatened which would (i) materially adversely affect the
Partnership or its properties, or (ii) materially adversely
affect the ability of the General Partner or any of its
Affiliates to perform their respective obligations hereunder
or under any other agreement with respect to the Apartment
Complex, other than legal proceedings which have been bonded
against without recourse to Partnership assets in such
manner as to stay the effect of the proceedings or otherwise
have been adequately provided for. This subparagraph shall
be deemed to include, without limitation, the following:
(x) legal actions or proceedings before any court,
commission, administrative body or other Governmental
Authority having jurisdiction over the zoning applicable to
the Apartment Complex; (y) labor disputes; and (z) acts of
any Governmental Authority.
(c) No default (or event which, with the giving of
notice or the passage of time or both, would constitute a
default) has occurred and is continuing under this Agreement
or under any material provision of the Project Documents,
and the Project Documents are in full force and effect.
(d) Except as specifically permitted under Section
3.1, no Partner or Related Person bears (or will bear) the
Economic Risk of Loss with respect to any Mortgage Loan. No
General Partner has, either on its own behalf or on behalf
of the Partnership, incurred any financial obligation with
respect to the Partnership prior to the Admission Date,
other than as disclosed in writing to the Special Limited
Partner prior to the Admission Date.
(e) The Apartment Complex will be, is being or has
been constructed in a timely manner in substantial
conformity with the Project Documents. To the Best
Knowledge of the General Partner, there is no violation by
the Partnership or the General Partner of any zoning,
environmental or similar regulation applicable to the
Apartment Complex which could have a material adverse effect
thereon, and the Partnership has complied and will comply
with all applicable municipal and other laws, ordinances and
regulations relating to such construction and use of the
Apartment Complex. All appropriate public utilities,
including, but not limited to, water, electricity, gas (if
called for in the Plans and Specifications), and sanitary
and storm sewers, are or will be available and operating
properly for each unit in the Apartment Complex at the time
of the initial occupancy of such unit, except for Acts of
God or acts beyond the control of the General Partner.
(f) The Partnership owns good and marketable fee
simple title to the Apartment Complex, subject to no
material liens, charges or encumbrances other than those
which (i) are both permitted by the Project Documents and
are noted or excepted in the Title Policy, (ii) do not
materially interfere with use of the Apartment Complex (or
any part thereof) for its intended purpose or, other than
the permitted Mortgages, have a material adverse effect on
the value of the Apartment Complex, or (iii) have been
bonded or insured against in such a manner as to preclude
the holder of such lien or such surety or insurer from
having any recourse to the Apartment Complex or the
Partnership for payment of any debt secured thereby, which
bond(s) or insurance have been approved by the Lenders.
(g) The execution and delivery of all instruments and
the performance of all acts heretofore or hereafter made or
taken pertaining to the Partnership or the Apartment Complex
by each Affiliate of a General Partner which is a
corporation or limited liability company have been or will
be duly authorized by all necessary corporate or other
actions, and the consummation of any such transactions with
or on behalf of the Partnership will not constitute a breach
or violation of, or a default under, the charter or by-laws
of such Affiliate or any agreement by which such Affiliate
or any of its properties is bound, nor constitute a
violation of any law, administrative regulation or court
decree.
(h) Any General Partner (or partner or member of a
General Partner) which is a corporation or limited liability
company (a "Corporation/LLC") has been duly organized, is
validly existing and in good standing under the laws of the
State of its organization and has all requisite corporate
and other power to be a General Partner and to perform its
duties and obligations as contemplated by this Agreement and
the Project Documents. Neither the execution and delivery
by any Corporation/LLC of this Agreement nor the performance
of any of the actions of any Corporation/LLC contemplated
hereby has constituted or will constitute a violation of (a)
the articles of incorporation, operating agreement, by-laws
and any other organizational documents of such
Corporation/LLC, (b) any agreement by which such
Corporation/LLC is bound or to which any of its property or
assets is subject, or (c) any law, administrative regulation
or court decree.
(i) No Event of Bankruptcy has occurred with respect
to the Partnership, any General Partner or the Developer.
(j) All accounts of the Partnership required to be
maintained under the terms of the Project Documents,
including, but not necessarily limited to, any account for
replacement reserves, are currently funded to the levels
required by any Agency or Lender.
(k) The aggregate net worth of the General Partner and
the Guarantor is not less than $1,000,000.
(l) All anticipated payments and expenses required to
be made or incurred in order to complete the construction of
the Apartment Complex in conformity with the Project
Documents, to fund any reserves hereunder or under any other
Project Document required to be funded at or prior to the
Completion Date, to satisfy all requirements under the
Project Documents and to pay the Development Fee and all
other fees, have been or will be paid or provided for
utilizing only (i) the funds available from the Bond Loan,
(ii) the Capital Contributions of the Investment Limited
Partner, (iii) the Capital Contributions of the General
Partner in the amounts set forth on Schedule A as of the
Admission Date, (iv) the available net rental income, if
any, earned by the Partnership prior to the Completion Date
(to the extent that it is permitted to be used for such
purposes by any Agency or Lender), (v) any Cash Flow
generated subsequent to the Completion Date (to the extent
provided in Section 10.2(a)), (vi) any insurance proceeds
and (vii) any funds furnished by the General Partner
pursuant to Sections 6.5(e) and 6.11(a).
(m) The aggregate amount of Tax Credit which is
expected to be allocated by the Partnership to the
Investment Limited Partner is $120,972 for 2000, $342,753
per annum for each of the years 2001 through 2009
(inclusive), and $221,781 for 2010; provided, however, that
the Projected Credit for 2010 shall be reduced by the
amount, if any, by which the Actual Credit for 2000 exceeds
$120,972; provided, however, that the General Partner shall
have no liability to the Investment Limited Partner or the
Special Limited Partner for any breach of the representation
contained in this paragraph (m) if (but only to the extent
that) the adjuster provisions set forth in Sections 5.1(e),
(f) and (g) have become operative and all required payments
or adjustments have been made thereunder in accordance with
the terms thereof.
(n) The Apartment Complex will be, is being or has
been constructed and operated in a manner which satisfies
Section 42 of the Code and shall continue to satisfy all
existing and anticipated restrictions applicable to projects
generating Tax Credits.
(o) The General Partner has provided the Investment
Limited Partner with a complete copy of "Phase I" hazardous
waste site assessment report for the Apartment Complex. No
General Partner, Affiliate of a General Partner or Person
for whose conduct any General Partner is or was responsible
has ever: (i) owned, occupied, or operated a Site or Vessel
on which any Hazardous Material was or is stored,
transported, or disposed of, except if such storage,
transport or disposition was and is at all times in
compliance with all laws, ordinances, and regulations
pertaining thereto; (ii) directly or indirectly transported,
or arranged for transport, of any Hazardous Material (except
if such transport was and is at all times in compliance with
all laws, ordinances and regulations pertaining thereto);
(iii) caused or was legally responsible for any release or
threat of release of any Hazardous Material; (iv) received
notification from any federal, state or other Governmental
Authority of (x) any potential, known, or threat of release
of any Hazardous Material from the Apartment Complex or any
other Site or Vessel owned, occupied, or operated by any
General Partner, by any Affiliate of a General Partner, or
by any Person for whose conduct any General Partner is or
was responsible or whose liability may result in a lien on
the Apartment Complex; or (y) the incurrence of any expense
or loss by any such Governmental Authority or by any other
Person in connection with the assessment, containment, or
removal of any release or threat of release of any Hazardous
Material from the Apartment Complex or any such Site or
Vessel.
(p) To the Best Knowledge of the General Partner, no
Hazardous Material was ever or is now stored on,
transported, or disposed of on the land comprising the
Apartment Complex, except to the extent any such storage,
transport or disposition was at all times in compliance with
all laws, ordinances, and regulations pertaining thereto.
(q) The General Partner has fulfilled and will
continue to fulfill all of its duties and obligations under
Section 6.5.
(r) Certifications have been obtained or will be
obtained in a timely fashion from the Credit Agency and the
Housing Authority, to the extent required in accordance with
Code Sections 42(m)(1)(D) and 42(m)(2)(D), which confirm
their determinations that (i) the Apartment Complex
satisfies the requirements for allocation of Tax Credits
under the qualified allocation plan applicable to the area
in which the Apartment Complex is located, and (ii) the Tax
Credits to be claimed with respect to the Apartment Complex
do not exceed the amount necessary for the financial
feasibility of the Apartment Complex and its viability as a
qualified low-income housing project throughout the
Compliance Period.
(s) At least 50% of the aggregate basis of the
Apartment Complex has been or will be financed by the
proceeds of bonds (i) the interest from which is exempt from
federal income taxation under Section 103 of the Code, (ii)
which are taken into account under Section 146 of the Code
and (iii) which will be redeemed within a reasonable period
using principal payments on the bond loan.
6.7 Liability on Mortgages
Neither any General Partner nor any Related Person
shall at any time bear the Economic Risk of Loss for the
payment of any portion of any Mortgage Loan, and the General
Partner shall not permit any other Partner or any Related
Person to bear the Economic Risk of Loss for the payment of
any portion of any Mortgage Loan, except as may be expressly
permitted pursuant to the provisions of Article III or with
the Consent of the Special Limited Partner.
6.8 Indemnification of the General Partner
(a) Except as provided by Article V, no General
Partner or any Affiliate thereof shall have liability to the
Partnership or to any Limited Partner for any loss suffered
by the Partnership which arises out of any action or
inaction of any General Partner or Affiliate thereof if such
General Partner or Affiliate thereof in good faith
determined that such course of conduct was in the best
interest of the Partnership and such course of conduct did
not constitute gross negligence or willful misconduct of
such General Partner or Affiliate thereof.
(b) A General Partner or any Affiliate thereof shall
be indemnified by the Partnership from and against any
Adverse Consequences sustained in connection with the
business and operations of the Partnership, provided that
all of the following conditions are met: (i) such General
Partner has determined, in good faith, that the course of
conduct which caused the loss, judgment, liability, expense
or amount paid in settlement was in the best interests of
the Partnership; and (ii) such Adverse Consequences were not
the result of gross negligence or willful misconduct on the
part of such General Partner or Affiliate thereof; and (iii)
such indemnification or agreement to hold harmless is
recoverable only out of the assets of the Partnership, and
not from the Limited Partners.
(c) Notwithstanding the above, no Partner or any
Affiliate thereof performing services for the Partnership or
any broker-dealer shall be indemnified for any Adverse
Consequences arising from or out of an alleged violation of
federal or state securities laws unless there has been a
successful adjudication on the merits of each count
involving securities laws violations as to the particular
indemnitee and the court finds that indemnification of the
settlement and related costs should be made. In any claim
for indemnification for federal or state securities law
violations, the party seeking indemnification shall, prior
to seeking court approval for such indemnification, place
before the court the positions of the Securities and
Exchange Commission, the Massachusetts Securities Division
and any other applicable state securities administrator with
respect to the issue of indemnification for securities law
violations.
(d) The Partnership shall not incur the cost of the
portion of any insurance, other than public liability
insurance or course of construction insurance, which insures
any party against any liability as to which such party is
herein prohibited from being indemnified.
(e) The Partnership may indemnify Affiliates of a
General Partner under this Section 6.8 only if the loss
involves an activity in which such Affiliates acted in the
capacity of a General Partner.
(f) For purposes of this Section 6.8 only, the term
"Affiliate" shall mean (i) any Person performing services on
behalf of the Partnership who (x) directly or indirectly
controls, is controlled by or is under common control with a
General Partner; (y) owns or controls ten percent (10%) or
more of the outstanding voting securities of a General
Partner or (z) is an officer, director, partner, member,
manager or trustee of a General Partner; and (ii) any Person
for whom the General Partner acts as an officer, director,
partner or trustee. For purposes of this Section 6.8 only,
the term "controls" and any form of such term shall mean the
power to direct the management and policies of a Person,
directly or indirectly, whether through ownership of voting
securities, by contract or otherwise.
6.9 Indemnification of the Partnership and the Limited
Partners
(a) The General Partner will indemnify and hold the
Partnership and the Limited Partners harmless from and
against any and all Adverse Consequences which the
Partnership or any Limited Partner may incur by reason of
(i) the past, present or future actions or omissions of the
General Partner or any of its Affiliates constituting gross
negligence or willful misconduct, or (ii) any liabilities to
which either the Partnership or the Apartment Complex is
subject other than (x) any Mortgage or (y) necessary
contractual obligations incurred pursuant to the
requirements of any Agency or Lender in connection with the
operation of the Apartment Complex in the ordinary course of
business.
(b) Notwithstanding the foregoing, no General Partner
shall be liable to a Limited Partner or the Partnership for
any act or omission for which the Partnership is required to
indemnify such General Partner under Section 6.8, except as
provided by Article V.
(c) The General Partner shall indemnify, defend, and
hold the Limited Partners harmless on an after-tax basis
from and against any Adverse Consequences related to or
arising out of the presence of any Hazardous Material at the
Apartment Complex (other than any Adverse Consequences
resulting from the acts or omissions of the Limited
Partners). Any claim or loss described in the immediately
preceding sentence may be defended, compromised, settled, or
pursued by the Limited Partners with counsel of the Limited
Partners' selection, but at the expense of the General
Partner. Notwithstanding anything else set forth herein,
this indemnification shall survive the withdrawal of any
General Partner and/or the termination of this Agreement.
6.10 Operating Deficits
Subject to any Requisite Approvals, the General Partner
shall be obligated until the later of the third (3rd)
anniversary of Rental Achievement or the closing of the New
Permanent Loan (the "Subordinated Loan Period"), to promptly
advance funds to eliminate any Operating Deficit up to the
Operating Deficit Guaranty Maximum. In the event that the
General Partner shall fail to make any such advance as
aforesaid, (a) the Partnership shall utilize amounts (the
"Applied Amounts") otherwise payable to the General Partner
or its Affiliates under Section 6.12 and/or Article X to
meet the obligations of the General Partner pursuant to this
Section 6.10, with such utilization of Applied Amounts
constituting payment and satisfaction of the corresponding
amounts payable to the General Partner or its Affiliates
under Section 6.12 and/or Article X, with the proceeds
thereof being applied to such obligations, and with the
obligation of the Partnership to make such payments to the
General Partner or its Affiliates pursuant to Section 6.12
and/or Article X being deemed to have been satisfied to the
extent thereof and (b) the Special Limited Partner shall
have the option, exercisable in its sole discretion, to
cause it or one or more of its designees to be admitted to
the Partnership as additional General Partner(s). An
additional General Partner so admitted shall automatically,
without the need for any further action by any Partner,
become the Managing General Partner and shall be delegated
all of the powers and authority of all of the General
Partners pursuant to Section 6.13, and each Partner hereby
grants to any such additional General Partner a power of
attorney, coupled with an interest and irrevocable to the
extent permitted by law, to execute and deliver any and all
instruments and documents which it believes to be necessary
or appropriate in order to accomplish the purposes of this
Section 6.10 and to manage the business of the Partnership.
The admission of an additional General Partner shall not
relieve any other General Partner of any of its economic
obligations hereunder, and each other General Partner shall
indemnify and hold harmless the additional General Partner
from and against any and all Adverse Consequences sustained
in connection with the additional General Partner's status
as a General Partner (other than Adverse Consequences
arising solely out of the negligence or misconduct of such
additional General Partner). For the purpose of this
Section 6.10, all expenses shall be paid on a sixty (60)-day
current basis. Moreover, the General Partner may in its
sole discretion at any time advance funds to the Partnership
to pay operating expenses and/or debt service of the
Partnership in order to facilitate the Partnership's
compliance with the Rent Restriction Test. All advances
pursuant to Section 6.5(e) and this Section 6.10 (including
any Applied Amounts), shall constitute non-interest-bearing
Subordinated Loans. Subordinated Loans shall be repaid in
accordance with the provisions of Article X. The form and
provisions of all Subordinated Loans shall conform to any
applicable Regulations.
6.11 Obligation to Complete the Construction of the
Apartment Complex
(a) The Developer and the General Partner shall be
obligated to complete the construction of the Apartment
Complex, to achieve Permanent Mortgage Commencement and to
achieve Rental Achievement in the manner set forth in this
Agreement and the Development Agreement.
(b) The completion of the Apartment Complex shall be
secured by the Guaranty.
6.12 Certain Payments to the General Partner and Others
(a) As reimbursement for certain advances and as
compensation for the Developer's services in connection with
the development and construction of the Apartment Complex,
the Partnership shall pay to the Developer a development fee
(the "Development Fee") in the amount and at the times set
forth in the Development Agreement. If the Development Fee
has not been fully paid by the tenth (10th) anniversary of
the Completion Date, the General Partner shall make a
Capital Contribution to the Partnership in an amount
sufficient to enable the Partnership to pay any unpaid
portion of the Development Fee.
(b) The Partnership shall pay to the Special Limited
Partner or an Affiliate thereof a fee (the "Asset Management
Fee") commencing in 2001 for its services in connection with
the Partnership's accounting matters relating to the
Investment Limited Partner and assisting with the
preparation of tax returns and the reports required by
Section 12.7 in the annual amount of $5,000. The Asset
Management Fee shall be payable from Cash Flow in the manner
and priority set forth in Section 10.2(a); provided however,
that if in any Fiscal Year, Cash Flow is insufficient to pay
the full amount of the Asset Management Fee, the General
Partner shall advance the amount of such deficiency to the
Partnership as a Subordinated Loan. If for any reason the
Asset Management Fee is not paid in any Fiscal Year, the
unpaid portion thereof shall accrue and be payable on a
cumulative basis in the first Fiscal Year in which there is
sufficient Cash Flow or Capital Proceeds as provided in
Article X.
(c) In consideration of the services of the General
Partner in managing the day-to-day business and affairs of
the Partnership, the Partnership shall pay to the General
Partner an annual fee (the "Partnership Management Fee")
commencing in 2001 in the amount of $27,000, payable from
Cash Flow in the manner set forth in Section 10.2(a). If
for any reason the Partnership Management Fee is not paid in
any Fiscal Year, the unpaid portion thereof shall accrue and
be payable on a cumulative basis in the first Fiscal Year in
which there is sufficient Cash Flow or Capital Proceeds as
provided in Article X.
6.13 Delegation of General Partner Authority
(a) If there shall be more than one General Partner
serving hereunder, each General Partner may from time to
time, by an instrument in writing, delegate all or any of
his powers or duties hereunder to another General Partner or
General Partners.
(b) Each contract, deed, mortgage, lease and other
instrument executed by any General Partner shall be
conclusive evidence in favor of every Person relying thereon
or claiming thereunder that at the time of the delivery
thereof (i) the Partnership was in existence, (ii) this
Agreement had not been amended in any manner so as to
restrict the delegation of authority among General Partners
(except as shown in certificates or other instruments duly
filed in the Filing Office) and (iii) the execution and
delivery of such instrument was duly authorized by the
General Partners. Any Person may always rely on a
certificate addressed to him and signed by any General
Partner hereunder:
(1) as to who are the General Partners or Limited
Partners hereunder;
(2) as to the existence or nonexistence of any fact
which constitutes a condition precedent to acts by the
General Partners or in any other manner germane to the
affairs of the Partnership;
(3) as to who is authorized to execute and deliver any
instrument or document of the Partnership;
(4) as to the authenticity of any copy of this
Agreement and any amendments thereto; or
(5) as to any act or failure to act by the Partnership
or as to any other matter whatsoever involving the
Partnership or any Partner.
6.14 Assignment to Partnership
The Developer and the General Partner hereby transfer
and assign to the Partnership all of their right, title and
interest in and to the Apartment Complex and in and to all
of the Project Documents, including, but not limited to, the
following: (i) all contracts with architects, supervising
architects, engineers and contractors with respect to the
development of the Apartment Complex; (ii) all plans,
specifications and working drawings heretofore prepared or
obtained in connection with the Apartment Complex; (iii) all
governmental commitments and approvals obtained, and
applications therefore, including, but not limited to those
relating to planning, zoning, building permits and Tax
Credits; (iv) any and all commitments with respect to any
Mortgage(s); and (v) any and all contracts or rights with
respect to any agreements with any Agency or Lender.
6.15 Contracts with Affiliates
(a) The General Partner or any Affiliate thereof may
act as Management Agent upon the terms and conditions set
forth in Article XI.
(b) The General Partner or any Affiliates thereof
shall have the right to contract or otherwise deal with the
Partnership for the sale of goods or services to the
Partnership in addition to those set forth herein, if (i)
compensation paid or promised for such goods or services is
reasonable (i.e., at fair market value) and is paid only for
goods or services actually furnished to the Partnership,
(ii) the goods or services to be furnished shall be
reasonable for and necessary to the Partnership, (iii) the
fees, terms and conditions of such transaction are at least
as favorable to the Partnership as would be obtainable in an
arm's-length transaction, and (iv) no agent, attorney,
accountant or other independent consultant or contractor who
also is employed on a full-time basis by the General Partner
or any Affiliate shall be compensated by the Partnership for
his services. Any contract covering such transactions shall
be in writing and shall be terminable without penalty on
sixty (60) days written notice. Any payment made to the
General Partner or any Affiliate for such goods or services
shall be fully disclosed to all Limited Partners in the
reports required under Article XII. Neither the General
Partner nor any Affiliate shall, by the making of lump-sum
payments to any other Person for disbursement by such other
Person, circumvent the provisions of this Section 6.15(b).
6.16 Tax Matters Partner
(a) The General Partner hereby is designated as Tax
Matters Partner of the Partnership, and shall engage in such
undertakings as are required of the Tax Matters Partner of
the Partnership as provided in treasury regulations pursuant
to Section 6231 of the Code. Each Partner, by the execution
of this Agreement, consents to such designation of the Tax
Matters Partner and agrees to execute, certify, acknowledge,
deliver, swear to, file and record at the appropriate public
offices such documents as may be necessary or appropriate to
evidence such consent.
(b) The Tax Matters Partner hereby is authorized, but
not required:
(i) to enter into any settlement agreement with the
Service with respect to any tax audit or judicial review, in
which agreement the Tax Matters Partner may expressly state
that such agreement shall bind the other Partners, except
that such settlement agreement shall not bind any Partner
who (within the time prescribed pursuant to the Code and
treasury regulations thereunder) files a statement with the
Service providing that the Tax Matters Partner shall not
have the authority to enter into a settlement agreement on
the behalf of such Partner;
(ii) in the event that a notice of final administrative
adjustment at the Partnership level of any item required to
be taken into account by a Partner for tax purposes (a
"Final Adjustment") is mailed to the Tax Matters Partner, to
seek judicial review of such Final Adjustment, including the
filing of a petition for readjustment with the Tax Court,
the District Court of the United States for the district in
which the Partnership's principal place of business is
located, or the United States Claims Court;
(iii) to intervene in any action brought by any other
Partner for judicial review of a Final Adjustment;
(iv) to file a request for an administrative
adjustment with the Service at any time and, if any part of
such request is not allowed by the Service, to file an
appropriate pleading (petition or complaint) for judicial
review with respect to such request;
(v) to enter into an agreement with the Service to
extend the period for assessing any tax which is
attributable to any item required to be taken into account
by a Partner for tax purposes, or an item effected by such
item; and
(vi) to take any other action on behalf of the
Partners or the Partnership in connection with any
administrative or judicial tax proceeding to the extent
permitted by applicable law or Regulations.
(c) The Partnership shall indemnify and reimburse the
Tax Matters Partner for all expenses, including legal and
accounting fees, claims, liabilities, losses and damages
incurred in connection with any administrative or judicial
proceeding with respect to the tax liability of the
Partners. The payment of all such expenses shall be made
before any distributions are made from Cash Flow or any
discretionary reserves are set aside by the General Partner.
The General Partner shall have the obligation to provide
Partnership funds for such purpose, but only to the extent
of available Partnership resources. The taking of any
action and the incurring of any expense by the Tax Matters
Partner in connection with any such proceeding, except to
the extent required by law, is a matter in the sole
discretion of the Tax Matters Partner and the provisions on
limitations of liability of the General Partner and
indemnification set forth in Section 6.8 of this Agreement
shall be fully applicable to the Tax Matters Partner in its
capacity as such.
ARTICLE VII
Withdrawal of a General Partner; New General Partners
7.1 Voluntary Withdrawal
No General Partner shall have the right to Withdraw
voluntarily from the Partnership or to sell, assign or
encumber its Interest without the Consent of the Investment
Limited Partner and each of the other General Partners (if
any) and, if required, any Requisite Approvals.
7.2 Reconstitution
In the event of the Withdrawal of a General Partner,
the Partnership shall not be dissolved or required to be
wound up if (i) at the time of such Withdrawal there is at
least one remaining General Partner and that General Partner
carries on the business of the Partnership (any such
remaining General Partner being hereby authorized to carry
on the business of the Partnership), or (ii) within ninety
(90) days after such Withdrawal all remaining Partners agree
in writing to continue the business of the Partnership and
to the appointment, effective as of the date of such
Withdrawal, of one or more additional General Partners.
Within ten (10) days after the occurrence of such
Withdrawal, the remaining General Partners, if any, shall
notify the Investment Limited Partner thereof:
(i) The reconstituted limited partnership shall
continue until the occurrence of a Liquidating Event as
provided in Section 2.4;
(ii) If the successor General Partner is not a former
General Partner, then the provisions of Section 7.4(d) shall
apply; and
(iii) All necessary steps shall be taken to cancel this
Agreement and the Certificate and to enter into a new
partnership agreement and certificate of limited
partnership, and the successor General Partner shall be
obligated to take such steps.
7.3 Successor General Partner
(a) Upon the occurrence of any Withdrawal, the
remaining General Partners may designate a Person to become
a successor General Partner to the Withdrawing General
Partner. Any Person so designated, subject to any Requisite
Approvals, the Consent of the Investment Limited Partner
and, if required by the Act or any other applicable law, the
consent of any other Partner so required, shall become a
successor General Partner upon his written agreement to be
bound by the Project Documents and by the provisions of this
Agreement.
(b) If any Withdrawal shall occur at a time when there
is no remaining General Partner and the Partners do not
unanimously elect to continue the business of the
Partnership in accordance with the provisions of clause (ii)
of Section 7.2(a) above, then the Investment Limited Partner
shall have the right, subject to any Requisite Approvals, to
designate a Person to become a successor General Partner
upon his written agreement to be bound by the Project
Documents and by the provisions of this Agreement.
(c) If the Investment Limited Partner elects to
reconstitute the Partnership and admit a successor General
Partner pursuant to this Section 7.3, the relationship of
the Partners in the reconstituted Partnership shall be
governed by this Agreement.
7.4 Interest of Predecessor General Partner
(a) No assignee or transferee of all or any part of
the Interest as a General Partner of a General Partner shall
have any automatic right to become a General Partner. Until
the acquisition of the Interest of a Withdrawing General
Partner pursuant to Section 7.4(d) or 7.6, such Interest
shall be deemed to be that of an assignee and the holder
thereof shall be entitled only to such rights as an assignee
may have as such under the laws of the State of Mississippi.
(b) Anything herein contained to the contrary
notwithstanding, any General Partner who Withdraws
voluntarily in violation of Section 7.1 shall remain liable
for all of its obligations under this Agreement, for all its
other obligations and liabilities hereunder incurred or
accrued prior to the date of its Withdrawal and for any loss
or damage which the Partnership or any of its Partners may
incur as a result of such Withdrawal (except as provided in
Section 6.8(a)).
(c) The estate (which term, for purposes of this
Section 7.4(c), shall include the heirs, distributees,
estate, executors, administrators, guardian, committee,
trustee or other personal representative) of a Withdrawn
General Partner shall be liable for all his liabilities and
obligations hereunder, except as provided in this
Section 7.4(c). In the event of the death, insanity or
incompetency of a General Partner, his estate shall remain
liable for all of his obligations and liabilities hereunder
incurred or accrued prior to the date of such event, and for
any damages arising out of any breach of this Agreement by
him, but his estate shall not have any obligation or
liability on account of the business of the Partnership or
the activities of the other General Partners after his
death, insanity or incompetency unless it becomes a General
Partner pursuant to Section 7.3(a).
(d) The Disposition of the General Partner Interest of
a General Partner who or which Withdraws voluntarily in
compliance with this Agreement shall be accomplished in such
manner as shall be acceptable to the remaining General
Partners and shall be approved by Consent of the Investment
Limited Partner. Except as provided in the preceding
sentence, upon the Withdrawal of a General Partner (other
than a General Partner who or which is removed as such
pursuant to Section 4.5), such Withdrawn General Partner
shall be deemed to have automatically transferred to the
remaining General Partners, in proportion to their
respective General Partner Interests, or, if there shall be
no remaining General Partner, then to the Partnership for
the benefit of the remaining Partners, all or such portion
of the General Partner Interest of such Withdrawn General
Partner which, when aggregated with the existing General
Partner Interests of all such remaining General Partners,
will be sufficient to assure such remaining General Partners
a 0.01% interest in all Profits, Losses, Tax Credits and
distributions of the Partnership under Article X. No
documentation shall be necessary to effectuate such
transfer, which shall be automatic, and no consideration
shall be payable therefor. For the purposes of Article X,
the effective date of the transfer pursuant to the
provisions of this Section 7.4(d) of the General Partner
Interest of a Withdrawn General Partner shall be deemed to
be the date on which such Withdrawal occurs. That portion
of the General Partner Interest (the "Remaining Interest")
of the Withdrawing General Partner which shall not have been
transferred pursuant to this Section 7.4(d) (except in
respect of a removed General Partner), shall be retained by
such Withdrawing General Partner (or pass to legal
representatives thereof) who or which shall have the status
of a special Limited Partner, but with the right to receive
only that share of the Profits, Losses, Tax Credits and
distributions of the Partnership to which the Withdrawing
General Partner, as such, would have been entitled had he or
it remained, reduced to the extent of the General Partner
Interest transferred hereunder, but such Withdrawing Partner
(or his or its legal representatives, as the case may be)
shall not be considered to be a Special Limited Partner for
the purpose of exercising any rights reserved to the Special
Limited Partner under this Agreement or sharing the benefits
allocated to the Special Limited Partner under Article X
hereof and shall not participate in the votes or consents of
the Limited Partners hereunder; provided, however, that in
the case of a General Partner who or which Withdraws
involuntarily without violation of this Agreement, the
Partnership shall have the option (but not the obligation),
exercisable by notice to the holder of such Interest within
six (6) months following the date of such Withdrawal, to
acquire the Remaining Interest of such Withdrawing General
Partner (or the Special Limited Partner Interest deriving
therefrom) in accordance with the valuation and payment
provisions of Section 7.6.
7.5 Amendment of Certificate; Approval of Certain
Events
(a) Upon the admission of a new General Partner
pursuant to the preceding provisions of this Article VII,
Schedule A shall be amended to reflect such admission and an
amendment to the Certificate, also reflecting such
admission, shall be filed as required by the Act.
(b) Each Partner hereby consents to and authorizes any
admission or substitution of a General Partner or any other
transaction, including, without limitation, the continuation
of the Partnership business, which has been authorized under
the provisions of this Agreement, and hereby ratifies and
confirms each amendment of this Agreement necessary or
appropriate to give effect to any such transaction.
7.6 Valuation and Sale of Interest of Former General
Partner
(a) Subject to the provisions of Section 7.4(d), if
the business of the Partnership is continued after the
Withdrawal of a General Partner, or if, following such
event, the Partnership is reconstituted and continued, in
each case as contemplated by this Agreement, the Partnership
shall purchase such General Partner's Interest if such
removal is without cause or if such Withdrawal is not in
violation of this Agreement (which term, and words of like
import, as used in this Section 7.6 shall refer only to the
"Remaining Interest" of such Withdrawing General Partner as
defined in Section 7.4(d) in all cases where applicable)
each for a price equal to the fair market value thereof.
Such fair market value shall be determined by two
independent appraisers, one selected by the former General
Partner or its representative and one by the Partnership.
If such appraisers are unable to agree on the value of the
former General Partner's Interest, they shall jointly
appoint a third independent appraiser whose determination
shall be final and binding. The appraisers may act with or
without a hearing, and the cost of the appraisal will be
shared equally between such former General Partner and the
Partnership. If a General Partner is removed by the
Investment Limited Partner for cause, or if a General
Partner has voluntarily withdrawn from the Partnership in
contravention of the terms of this Agreement, the General
Partner shall forfeit its Interest to the Partnership, not
as a penalty but as liquidated damages to compensate the
Partnership for the action of such General Partner leading
to its removal, or for the fact of its violation of the
terms of this Agreement.
(b) Promptly after the determination of the purchase
price of a former General Partner's Interest pursuant to
Section 7.6(a), the Partnership shall deliver to such former
General Partner a promissory note of the Partnership for
such purchase price, payable in five equal consecutive
annual installments commencing on the first anniversary of
the date of such note. Such promissory note shall bear
simple interest at the rate per annum which is at all times
the AFR, payable on the last day of each calendar quarter
during which such note is outstanding. Within one hundred
twenty (120) days after the determination of the purchase
price of the former General Partner's Interest, the
Partnership may, with the consent of all remaining General
Partners and the Consent of the Investment Limited Partner,
sell such Interests to one or more Persons, who may be
Affiliates of the remaining General Partner or General
Partners, and admit such Person or Persons to the
Partnership as substitute General Partners; provided,
however, that the purchase price to be paid to the
Partnership for the Interest of the former General Partner
shall not be less than its purchase price as determined by
the appraisal and, if applicable, arbitration described
above. Such substitute General Partners may pay said
purchase price in installments in the manner set forth above
in this Section 7.6(b).
7.7 Designation of New General Partners
The General Partner may, with the written consent of
all Partners, at any time designate new General Partners,
each with such Interest as a General Partner in the
Partnership as the General Partner may specify, subject to
any Requisite Approvals.
Any new General Partner shall, as a condition of
receiving any interest in the Partnership property, agree to
be bound by the Project Documents and any other documents
required in connection therewith and by the provisions of
this Agreement, to the same extent and on the same terms as
any other General Partner.
ARTICLE VIII
Transferability of Limited Partner Interests
8.1 Assignments
(a) Except by operation of law (including the laws of
descent and distribution) or pursuant to the provisions of
Section 8.1(b), no Limited Partner may assign all or any
part of its Interest without the written consent of the
General Partner, the giving or withholding of which is
exclusively within its discretion.
(b) A Limited Partner, without the consent of the
General Partner, may assign to any Person all or any portion
of the economic benefits of the ownership of such Limited
Partner's Interest; provided, however, that such assignment
shall not be binding on the Partnership until there shall
have been filed with the Partnership by registered mail
certified copies of an executed and acknowledged assignment
and the written acceptance by the assignee of all the terms
and provisions of this Agreement; if such assignment and
acceptance are not so filed, the Partnership need not
recognize such assignment for any purpose. An assignee of a
Limited Partner who does not become a Substituted Limited
Partner shall have the right to receive the allocable share
of any Profits, Losses, Tax Credits or distributions of the
Partnership to which the assigning Limited Partner would
have been entitled with respect to the Interest (or portion
thereof) so assigned if no such assignment had been made by
such Limited Partner. Any assigning Limited Partner whose
permitted assignee becomes a Substituted Limited Partner
shall thereupon cease to be a Limited Partner and shall no
longer have any of the rights or privileges of a Limited
Partner. Where the assignee does not become a Substituted
Limited Partner, the Partnership shall recognize such
assignment not later than the last day of the calendar month
following receipt of notice of assignment and all
documentation required in connection therewith.
(c) Each assignee of a Limited Partner Interest (or
any portion thereof) who desires to make a further
assignment of its Interest shall be subject to all the
provisions of this Article VIII.
8.2 Substituted Limited Partner
(a) No Limited Partner shall have the right to
substitute an assignee as Limited Partner in its place.
Subject to the provisions of Section 8.3, the General
Partner may, in its sole discretion, permit an assignee to
become a Substituted Limited Partner. The consent of the
General Partner to an assignment of a Limited Partner's
Interest under Section 8.1 shall not, in and of itself,
constitute its consent to the admission of the assignee as a
Substituted Limited Partner under this Section 8.2.
(b) Any Substituted Limited Partner shall execute such
instrument or instruments as shall be required by the
General Partner to signify the agreement of such Substituted
Limited Partner to be bound by all the provisions of this
Agreement and shall pay the Partnership's reasonable legal
fees and filing costs in connection with its substitution as
a Limited Partner.
8.3 Restrictions
(a) No Disposition of a Limited Partner Interest may
be made if such Disposition would violate the provisions of
Sections 8.1, 8.2 or 13.1.
(b) In no event shall all or any part of a Limited
Partner Interest be Disposed of to a minor (other than to a
descendant by reason of death) or to an incompetent.
(c) The General Partner may, in addition to any other
requirement it may impose, require as a condition of any
Disposition of a Limited Partner Interest that the
transferor (i) assume all costs incurred by the Partnership
in connection therewith and (ii) furnish the Partnership and
the other Partners with an opinion of counsel satisfactory
to counsel to the Partnership that such Disposition complies
with applicable federal and state securities laws.
(d) Any sale, exchange, transfer or other Disposition
of a Limited Partner Interest in contravention of any of the
provisions of this Section 8.3 shall be void and ineffectual
and shall not bind or be recognized by the Partnership.
(e) Notwithstanding any other provision contained in
this Article VIII, if at any time there is more than one
Investment Limited Partner, each Investment Limited Partner
shall have a right of first refusal to purchase the Interest
of any other Investment Limited Partner who wishes to sell
or otherwise transfer its Interest at a price equal to and
on terms identical to those of the prospective purchaser
thereof, to the extent reasonably practical, and shall have
at least fifteen (15) business days in which to exercise
such right after receiving notice thereof. If there shall
be more than two non-selling or transferring Investment
Limited Partners, each of which desires to exercise such a
right of first refusal, they may do so pro rata or, to the
extent one does not so desire to exercise such right, to the
extent of the entire Interest being so sold or transferred.
ARTICLE IX
Borrowings
All Partnership borrowings shall be subject to the
terms of this Agreement and the Project Documents and may be
made from any source, including Partners and their
Affiliates. Any Partnership borrowings from any Partner
shall be subject to any Requisite Approvals. If any Partner
shall lend any monies to the Partnership, the amount of any
such loan shall not increase such Partner's Capital
Contribution. If any Partner shall so lend monies, each
such loan (a "Voluntary Loan") shall be an obligation of the
Partnership and (except for Subordinated Loans) shall be
repayable to such Partner on the same basis and with the
same rate of interest as would be applicable to a comparable
loan to the Partnership from a third party. Funds advanced
by the General Partner to the Partnership pursuant to the
provisions of Section 6.10 shall not constitute borrowings
for the purposes of this Article IX or for any other
purposes.
ARTICLE X
Profits, Losses, Tax Credits, Distributions and Capital
Accounts
10.1 Profits, Losses and Tax Credits
(a) Subject to the provisions of Section 10.1(b) and
Section 10.4, for each Partnership Fiscal Year or portion
thereof, all Operating Profits and Losses, tax-exempt
income, losses, non-deductible non-capitalizable
expenditures and Tax Credits incurred or accrued on or after
the Commencement Date shall be allocated ninety-nine and
ninety-nine one hundredths percent (99.99%) to the
Investment Limited Partner and one one-hundredth of one
percent (0.01%) to the General Partner.
(b) Except as otherwise specifically provided in this
Article, all Profits and Losses arising from a Capital
Transaction shall be allocated to the Partners as follows:
As to Profits:
First, that portion of Profits (including any Profits
treated as ordinary income for federal income tax purposes)
shall be allocated to the Partners who have negative Capital
Account balances in proportion to the amounts of such
balances, provided that no Profits shall be allocated to a
Partner under this Clause First to increase any such
Partner's Capital Account above zero; and
Second, Profits in excess of the amounts allocated
under Clause First above shall be allocated to and among the
Partners in the same percentages as cash is distributed
under Clauses Sixth, Seventh, and Eighth, of Section
10.2(b);
As to Losses:
First, an amount of Losses shall be allocated to the
Partners to the extent and in such proportions as shall be
necessary such that, after giving effect thereto, the
respective balances in all Partners' Capital Accounts shall
be in the ratio of 99.99% for the Investment Limited Partner
and 0.01% for the General Partner;
Second, an amount of Losses shall be allocated to the
Partners until the balance in each Partner Capital Account
equals the amount of such Partner's Capital Contribution
(after the allocation under Clause First above);
Third, an amount of Losses shall be allocated to the
Partners to the extent of and in proportion to such
Partners' Capital Account balances (after the allocations
under Clauses First and Second above); and
Fourth, any remaining amount of Losses after the
allocation under Clauses First, Second and Third above shall
be allocated to the Partners in accordance with the manner
in which they bear the Economic Risk of Loss associated with
such Loss; provided, however, that in the event that no
Partner bears an Economic Risk of Loss then any remaining
Losses shall be allocated 99.99% to the Investment Limited
Partner and 0.01% to the General Partner.
10.2 Cash Distributions Prior to Dissolution
(a) Cash Flow
Subject to any Requisite Approvals and the provisions
of the Bond Loan Documents and Letter of Credit Documents,
Cash Flow for each Fiscal Year or portion thereof shall be
applied as follows (i) prior to the Completion Date, Cash
Flow shall be deposited with the Trustee to be disbursed
pursuant to the Trust Indenture and (ii) from and after the
Completion Date:
First, to the payment of the Asset Management Fee for
such Fiscal Year and for any previous Fiscal Year(s) as to
which the Asset Management Fee shall not yet have been paid
in full;
Second, to the payment of any unpaid portion of the
Development Fee;
Third, to the repayment of any Subordinated Loans;
Fourth, to the payment of the Partnership Management
Fee for such Fiscal Year and for any previous Fiscal Year(s)
as to which the Partnership Management Fee shall not yet
have been paid in full; and
Fifth, the balance thereof, if any, shall be
distributed annually, seventy-five (75) days after the end
of the Fiscal Year, 10% to the Investment Limited Partner
and 90% to the General Partner.
(b) Distributions of Capital Proceeds
Prior to dissolution, if Capital Proceeds are available
for distribution from a Capital Transaction, such Capital
Proceeds shall be applied or distributed as follows:
First, to the payment of all matured debts and
liabilities of the Partnership (including, but not limited
to, all expenses of the Partnership incident to such Capital
Transaction), excluding (i) debts and liabilities of the
Partnership to Partners or their Affiliates, (ii) all unpaid
fees owing to the General Partner or its Affiliates and
(iii) notes delivered and payable pursuant to Section
7.8(b)(i) and (ii); and to the establishment of any reserves
which the General Partner and the Auditors shall deem
reasonably necessary for contingent, unmatured or unforeseen
liabilities or obligations of the Partnership;
Second, to the payment of any accrued and unpaid Asset
Management Fees;
Third, to the payment to the Investment Limited Partner
of the full amount (including interest) of any Credit
Recovery Loans;
Fourth, to the repayment of any Subordinated Loans;
Fifth, to the repayment of any remaining unpaid debts
and liabilities owed to Partners or Affiliates thereof by
the Partnership for Partnership obligations (exclusive of
Credit Recovery Loans and Subordinated Loans) to any of
them, including, but not limited to, accrued and unpaid
amounts due in respect of any and all fees (including but
not limited to the Development Fee and the Partnership
Management Fee) due and payable to the General Partner or
its Affiliates as set forth in Section 6.12; provided,
however, that any debts or obligations to be repaid to any
Limited Partner or Affiliate thereof pursuant to this Clause
Fifth shall be repaid prior to the repayment of any such
debts or obligations to any General Partner or Affiliate
thereof;
Sixth, to the payment to each Limited Partner of an
amount equal to its Invested Amount, in each case minus any
prior distributions made to such Partner under this Clause
Sixth, but never an amount less than zero;
Seventh, to the payment to each General Partner of an
amount equal to its Invested Amount in each case minus any
prior distributions made to such Partner under this
Clause Seventh, but never an amount less than zero; and
Eighth, subject to the provisions of Section 10.3(a),
any balance 19.999% to the Investment Limited Partner, .001%
to the Special Limited Partner and 80% to the General
Partner.
10.3 Distributions Upon Dissolution
(a) Upon dissolution and termination, after payment
of, or adequate provision for, the debts and obligations of
the Partnership, the remaining assets of the Partnership
shall be distributed to the Partners in accordance with the
positive balances in their Capital Accounts after taking
into account all Capital Account adjustments for the
Partnership Fiscal Year, including adjustments to Capital
Accounts pursuant to Sections 10.1(b) and 10.3(b). In the
event that a General Partner or Additional Limited Partner
has a negative balance in its Capital Account following the
liquidation of the Partnership or such Partner's Interest,
after taking into account all Capital Account adjustments
for the Partnership Fiscal Year in which such liquidation
occurs, such Partner shall pay to the Partnership in cash an
amount equal to the negative balance in such Partner's
Capital Account. Such payment shall be made by the end of
such Fiscal Year (or, if later, within ninety (90) days
after the date of such liquidation) and shall, upon
liquidation of the Partnership, be paid to recourse
creditors of the Partnership or distributed to other
Partners in accordance with the positive balances in their
Capital Accounts.
(b) With respect to assets distributed in kind to the
Partners in liquidation or otherwise, (i) any unrealized
appreciation or unrealized depreciation in the values of
such assets shall be deemed to be Profits and Losses
realized by the Partnership immediately prior to the
liquidation or other distribution event; and (ii) such
Profits and Losses shall be allocated to the Partners in
accordance with the provisions of Section 10.1(b), and any
property so distributed shall be treated as a distribution
of an amount in cash equal to the excess of such fair market
value over the outstanding principal balance of and accrued
interest on any debt by which the property is encumbered.
For the purposes of this Section 10.3(b), the terms
"unrealized appreciation" or "unrealized depreciation" shall
mean the difference between the fair market value of such
assets, taking into account the fair market value of the
associated financing (but subject to the provisions of
Section 7701(g) of the Code), and the Partnership's adjusted
basis for such assets as determined under the applicable
provisions of the Allocation Regulations. This Section
10.3(b) is merely intended to provide a rule for allocating
unrealized gains and losses upon liquidation or other
distribution event, and nothing contained in this Section
10.3(b) or elsewhere herein is intended to treat or cause
such distributions to be treated as sales for value. The
fair market value of such assets shall be determined by an
appraiser to be selected by the General Partner with the
Consent of the Special Limited Partner.
10.4 Special Provisions
(a) Except as otherwise provided in this Agreement,
all Profits, tax-exempt income, Losses, non-deductible non-
capitalizable expenditures, Tax Credits and cash
distributions shared by a class of Partners shall be shared
by each Partner in such class in the ratio of such Partner's
paid-in Capital Contribution to the paid-in Class
Contribution of the class of Partners of which such Partner
is a member.
(b) Notwithstanding the foregoing provisions of this
Article X:
(i) If (a) the Partnership incurs recourse obligations
or Partner Nonrecourse Debt (including, without limitation,
Voluntary Loans or Subordinated Loans) or (b) the
Partnership incurs Losses from extraordinary events which
are not recovered from insurance or otherwise (collectively
"Recourse Obligations") in respect of any Partnership Fiscal
Year, then the calculation and allocation of Profits and
Losses shall be adjusted as follows: first, an amount of
deductions attributable to the Recourse Obligations shall be
allocated to the General Partner; and second, the balance of
such deductions shall be allocated as provided in Section
10.1(a).
(ii) If any Profits arise from the sale or other
disposition of any Partnership asset which shall be treated
as ordinary income under the depreciation recapture
provisions of the Code, then the full amount of such
ordinary income shall be allocated among the Partners in the
proportions that the Partnership deductions from the
depreciation giving rise to such recapture were actually
allocated. In the event that subsequently-enacted
provisions of the Code result in other recapture income, no
allocation of such recapture income shall be made to any
Partner who has not received the benefit of those items
giving rise to such other recapture income.
(iii) If the Partnership shall receive any purchase
money indebtedness in partial payment of the purchase price
of the Apartment Complex and such indebtedness is
distributed to the Partners pursuant to the provisions of
Section 10.2(b) or Section 10.3, the distributions of the
cash portion of such purchase price and the principal amount
of such purchase money indebtedness hereunder shall be
allocated among the Partners in the following manner: On
the basis of the sum of the principal amount of the purchase
money indebtedness and cash payments received on the sale
(net of amounts required to pay Partnership obligations and
fund reasonable reserves), there shall be calculated the
percentage of the total net proceeds distributable to each
class of Partners based on Section 10.2(b) or Section 10.3,
as applicable, treating cash payments and purchase money
indebtedness principal interchangeably for this purpose, and
the respective classes shall receive such respective
percentages of the net cash purchase price and purchase
money principal. Payments on such purchase money
indebtedness retained by the Partnership shall be
distributed in accordance with the respective portions of
principal allocated to the respective classes of Partners in
accordance with the preceding sentence, and if any such
purchase money indebtedness shall be sold, the sale proceeds
shall be allocated in the same proportion.
(iv) Income, gain, loss and deduction with respect to
any asset which has a variation between its basis computed
in accordance with the applicable provisions of the
Allocation Regulations and its basis computed for federal
income tax purposes shall be shared among the Partners so as
to take account of such variation in a manner consistent
with the principles of Section 704(c) of the Code and
Section 1.704-1(b)(2)(iv)(g) of the Allocation Regulations.
(v) The terms "Profits" and "Losses" used in this
Agreement shall mean income and losses, and each item of
income, gain, loss, deduction or credit entering into the
computation thereof, as determined in accordance with the
accounting methods followed by the Partnership and computed
in accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv). Profits and Losses for federal income tax
purposes shall be allocated in the same manner as set forth
in this Article X, except as provided in Section
10.4(b)(iv).
(vi) Nonrecourse Deductions shall be allocated 0.01% to
the General Partner and 99.99% to the Investment Limited
Partner.
(vii) Partner Nonrecourse Deductions shall be allocated
to and among the Partners in the manner provided in the
Allocation Regulations.
(viii) Subject to the provisions of Section
10.4(b)(xix), if there is a net decrease in Partnership
Minimum Gain for a Partnership Fiscal Year, the Partners
shall be allocated items of Partnership income and gain in
accordance with the provisions of Section 1.704-(2)(f) of
the Allocation Regulations.
(ix) Subject to the provisions of Section
10.4(b)(xix), if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain for a Partnership Fiscal Year
then any Partner with a Share of such Partner Nonrecourse
Debt Minimum Gain shall be allocated items of Partnership
income and gain in accordance with the provisions of Section
1.704-2(i)(4) of the Allocation Regulations.
(x) Subject to the provisions of 10.4(b)(vi) through
10.4(b)(ix) above, in the event that any Limited Partner
unexpectedly receives any adjustments, allocations or
distributions described in Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) of the Allocation Regulations, items of
Partnership income and gain shall be specially allocated to
each such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Allocation
Regulations, the Adjusted Capital Account Deficit of such
Limited Partner as quickly as possible. This Section
10.4(b)(x) is intended to constitute a "qualified income
offset" provision within the meaning of the Allocation
Regulations and shall be interpreted consistently therewith.
(xi) Subject to the provisions of Sections 10.4(b)(vi)
through 10.4(b)(x) above, in no event shall any Limited
Partner be allocated Losses which would cause it to have an
Adjusted Capital Account Deficit as of the end of any
Partnership Fiscal Year. Any Losses which are not allocated
to a Limited Partner by reason of the application of the
provisions of this Section 10.4(b)(xi) shall be allocated to
the General Partner.
(xii) Subject to the provisions of Sections 10.4(b)(vi)
through 10.4(b)(xi) above, in the event that any Limited
Partner has an Adjusted Capital Account Deficit at the end
of any Partnership Fiscal Year, items of Partnership income
and gain shall be specially allocated to each such Limited
Partner in the amount of such Adjusted Capital Account
Deficit as quickly as possible.
(xiii) Syndication Expenses for any Fiscal Year or
other period shall be specially allocated to the Investment
Limited Partner.
(xiv) For purposes of determining the Profits, Losses,
Tax Credits or any other items allocable to any period,
Profits, Losses, Tax Credits and any such other items shall
be determined on a daily, monthly, or other basis, as
determined by the General Partner using any permissible
method under Code Section 706 and the Treasury Regulations
thereunder.
(xv) To the extent that interest on loans (or other
advances which are deemed to be loans) made by a General
Partner to the Partnership is determined to be deductible by
the Partnership in excess of the amount of interest actually
paid by the Partnership, such additional interest
deduction(s) shall be allocated solely to such General
Partner.
(xvi) Notwithstanding anything to the contrary
contained herein, the General Partner (or, if there is more
than one General Partner, all of the General Partners as a
group) shall be allocated not less than 0.01% of each
material item of Partnership income, gain, loss, deduction
and credit ("Partnership Items") at all times during the
existence of the Partnership, provided, however, that
temporary nonconformance with the provisions of this Section
10.4(b)(xvi) shall be permitted to the extent permitted by
Revenue Procedure 89-12 or any successor provisions.
Subject to the foregoing, in the event that there is no
allocation of a material Partnership Item to the General
Partner(s) hereunder or if the amount of any material
Partnership Item allocable to the General Partner(s)
hereunder shall not equal 0.01% of the aggregate amount
allocable to all the Partners without giving effect to this
provision, then the amount of such Partnership Item(s)
otherwise allocable to the Limited Partners hereunder shall
be correspondingly reduced in order to assure the General
Partner(s) of its or their 0.01% share. Any such reduction
shall be applied to reduce the share of all classes of
Limited Partners in proportion to their respective
Interests.
(xvii) For purposes of determining each Partner's
proportionate share of the excess Nonrecourse Liabilities of
the Partnership pursuant to Section 1.752-3(a)(3) of the
Allocation Regulations, the Investment Limited Partner shall
be deemed to have a 99.99% interest in Profits and the
General Partner shall be deemed to have a 0.01% interest in
Profits.
(xviii) Any recapture of any Tax Credit shall be
allocated to and among the Partners in the same manner in
which the Partners share the expenditures giving rise to
such Tax Credit.
(xix) If for any Fiscal Year the application of the
minimum gain chargeback provisions of Section 10.4(b)(viii)
or Section 10.4(b)(ix) of this Agreement would cause
distortion in the economic arrangement among the Partners
and it is not expected that the Partnership will have
sufficient other income to correct that distortion, the
General Partner may request a waiver from the Commissioner
of the Service of the application in whole or in part of
Section 10.4(b)(viii) or Section 10.4(b)(ix) in accordance
with Section 1.704-2(f)(4) of the Allocation Regulations.
Furthermore, if additional exceptions to the minimum gain
chargeback requirements of the Allocation Regulations have
been provided through revenue rulings or other Service
pronouncements, the General Partner is authorized to cause
the Partnership to take advantage of such exceptions if to
do so would be in the best interest of a majority in
interest of the Partners.
(xx) In the event that any fee payable to any General
Partner or any Affiliate thereof shall instead be determined
to be a non-deductible, non-capitalizable distribution from
the Partnership to a Partner for federal income tax
purposes, then there shall be allocated to such General
Partner an amount of gross income equal to the amount of
such distribution.
(xxi) In applying the provisions of Article X with
respect to distributions and allocations, the following
ordering of priorities shall apply:
(1) Capital Accounts shall be deemed to be reduced by
Qualified Income Offset Items.
(2) Capital Accounts shall be reduced by distributions
of Cash Flow under Clause Fifth of Section 10.2(a).
(3) Capital Accounts shall be reduced by distributions
of Capital Proceeds under Clauses Sixth, Seventh or Eighth
of Section 10.2(b).
(4) Capital Accounts shall be increased by any minimum
gain chargeback under Section 10.4(b)(viii) or Section
10.4(b)(ix).
(5) Capital Accounts shall be increased by any
qualified income offset required under Section 10.4(b)(x).
(6) Capital Accounts shall be increased by allocations
of Operating Profits under Section 10.1(a).
(7) Capital Accounts shall be reduced by allocations of
Operating Losses under Section 10.1(a).
(8) Capital Accounts shall be reduced by allocations of
Losses under Section 10.1(b).
(9) Capital Accounts shall be increased by allocations
of Profits under Section 10.1(b).
(xxii) To the maximum extent permitted under the Code,
allocations of Profits and Losses shall be modified so that
the Partners' Capital Accounts reflect the amount they would
have reflected if adjustments required by Sections
10.4(b)(x), 10.4(b)(xi) and 10.4(b)(xii) had not occurred.
10.5 Authority of the General Partner to Vary
Allocations to Preserve and Protect the Partners' Intent
(a) It is the intent of the Partners that each
Partner's distributive share of Profits, tax-exempt income,
Losses, non-deductible non-capitalizable expenditures and
Tax Credits (and items thereof) shall be determined and
allocated in accordance with this Agreement to the fullest
extent permitted by Section 704(b) of the Code and the
Allocation Regulations. In order to preserve and protect
the determinations and allocations provided for in this
Agreement, the General Partner is hereby authorized and
directed to allocate Profits, tax-exempt income, Losses,
non-deductible non-capitalizable expenditures and credits
(and items thereof) arising in any Fiscal Year differently
than otherwise provided for in this Agreement to the extent
that allocating Profits, tax-exempt income, Losses, non-
deductible non-capitalizable expenditures or credits (or any
item thereof) in the manner provided for herein would cause
the determinations and allocations of each Partner's
distributive share of Profits, tax-exempt income, Losses,
non-deductible non-capitalizable expenditures or credits (or
any item thereof) not to be permitted by Section 704(b) of
the Code. Any allocation made pursuant to this Section 10.5
shall be deemed to be a complete substitute for any
allocation otherwise provided for in this Agreement, and no
amendment of this Agreement or approval of any Partner shall
be required.
(b) In making any allocation (the "New Allocation")
under Section 10.5(a), the General Partner is authorized to
act only after having been advised in writing by the Tax
Accountants that, under Section 704(b) of the Code and/or
the Allocation Regulations, (i) the New Allocation is
necessary, and (ii) the New Allocation is the minimum
modification of the allocations otherwise provided for in
this Agreement necessary in order to assure that, either in
the then-current Fiscal Year or in any preceding Fiscal
Year, each Partner's distributive share of Profits, tax-
exempt income, Losses, non-deductible non-capitalizable
expenditures and Tax Credits (or any item thereof) is
determined and allocated in accordance with this Agreement
to the fullest extent permitted by Section 704(b) of the
Code and the Allocation Regulations.
(c) If the General Partner is required by Section
10.5(a) to make any New Allocation in a manner less
favorable to the Limited Partners than is otherwise provided
for herein, then the General Partner is authorized and
directed, only after having been advised in writing by the
Tax Accountants that such an allocation is permitted by
Section 704(b) of the Code and the Allocation Regulations,
to allocate Profits, tax-exempt income, Losses, non-
deductible non-capitalizable expenditures and credits (and
any item thereof) arising in later years in such manner so
as to bring the allocations of Profits, tax-exempt income,
Losses, non-deductible non-capitalizable expenditures and
credits (and each item thereof) to the Limited Partners as
nearly as possible to the allocations thereof otherwise
contemplated by this Agreement.
(d) New Allocations made by the General Partner under
Section 10.5(a) and Section 10.5(c) in reliance upon the
advice of the Tax Accountants shall be deemed to be made
pursuant to the fiduciary obligation of the General Partner
to the Partnership and the Limited Partners, and no such
allocation shall give rise to any claim or cause of action
by any Limited Partner.
10.6 Recapture Amount
(a) If at any time during the "compliance period" (as
defined in Section 42(i)(1) of the Code), the Apartment
Complex ceases to be a "qualified low income housing
project" (as defined in Section 42(g)(1) of the Code) or any
Low-Income Unit in the Apartment Complex ceases to be a "low
income unit" (as defined in Section 42(i)(3) of the Code),
and as a result thereof all or any portion of credits
allowed to the Partnership and its Partners under Section 42
of the Code are subject to recapture pursuant to Section
42(j) of the Code (such an occurrence being referred to
herein as a "Recapture Event"), the Investment Limited
Partner shall become entitled to additional cash
distributions equal to the "Recapture Amount".
(b) The Recapture Amount is an amount that, after
deduction of all federal income taxes payable by the
Investment Limited Partner (or its partners) as computed
under Section 10.6(d) below, is equal the sum of (i) the
"credit recapture amount" allocable to the Investment
Limited Partner as defined in Section 42(j) of the Code plus
(ii) the amount of credits allocable to the Investment
Limited Partner which are disallowed in the year of the
Recapture Event and in each subsequent year.
(c) Any Recapture Amount distributable to the
Investment Limited Partner pursuant to the foregoing
provisions shall be distributed as funds become available
for such distributions, but such distributions shall not be
made prior to (i) in the case of the "credit recapture
amount", the year of the Recapture Event and (ii) in the
case of any credits disallowed with respect to any year
subsequent to the Recapture Event, in each such subsequent
year.
(d) Determination of the Recapture Amount shall be made
on the assumption that receipt or accrual by each partner of
the Investment Limited Partner of any amounts distributable
to such partner under Subsection (c) above will currently be
subject to United States federal income tax at the highest
marginal rate applicable to corporations for the year(s) in
question (and assuming the non-applicability of the
alternative minimum tax).
(e) All computations required under this Section 10.6
shall be made reasonably by the Investment Limited Partner,
and the results of such computations, together with a
statement describing in reasonable detail the manner in
which such computations were made, shall be delivered to the
Managing General Partner in writing. Within fifteen (15)
days following receipt of such computation, the Managing
General Partner may request that the Auditors determine
whether such computations are reasonable and are not
erroneous. If the Auditors determine that such computations
are unreasonable or contain errors, then the Auditors shall
determine what they believe to be the appropriate
computations. If the Investment Limited Partner does not
agree with the determination of the Auditors, then another
accounting firm other than the Auditors to be selected
jointly by the Investment Limited Partner and the Managing
General Partner or, if they cannot agree, by the American
Arbitration Association, from among the ten largest national
accounting firms, shall make such computations. The
computations of the Investment Limited Partner, the
Auditors, or the other accounting firm so selected,
whichever is applicable, shall be final, binding and
conclusive upon the parties. All fees and expenses payable
to an accounting firm other than the Auditors under this
paragraph shall be borne solely by the Managing General
Partner. All fees and expenses payable to the American
Arbitration Association shall be borne equally by the
General Partner and the Investment Limited Partner.
ARTICLE XI
Management Agent
11.1 General
The General Partner shall engage the Management Agent
to manage the Apartment Complex pursuant to the Management
Agreement. The Management Agent shall receive a Management
Fee of those amounts payable from time to time by the
Partnership to the Management Agent for management services
in accordance with a management contract approved by any
Agency or Lender with the right to approve the same, or,
when any such management contract is not subject to the
approval of any Agency or Lender, in accordance with a
reasonable and competitive fee arrangement; which fee may
equal 5% of gross collected revenues plus an additional 1%
contingent on available Cash Flow as provided in the
Management Agreement and, further, may equal up to 7.5%
provided that (i) there are no unfunded Operating Deficits,
(ii) the Debt Service Coverage Ratio for such Fiscal Year is
1.15 to 1.00 and (iii) a New Permanent Loan Commitment has
been obtained by the Partnership. The initial Management
Agent shall be Park Management, Inc. From and after the
Admission Date, the Partnership shall not enter into any
Management Agreement or modify in any material respect or
extend on other than substantially similar terms as the
immediately preceding Management Agreement any Management
Agreement unless (i) the General Partner shall have obtained
the prior Consent of the Special Limited Partner to the
identity of the Management Agent and the terms of the
Management Agreement or the modification or extension
thereof and (ii) such new Management Agreement or modified
or extended Management Agreement provides that it is
terminable by the Partnership on thirty (30) days' notice by
the Partnership in the event of any change in the identity
of the General Partner. The Management Agent shall maintain
insurance in accordance with the applicable Insurance
Requirements set forth in Exhibit C. Copies of such
policies (or binders) shall be provided to the Partnership
and the Investment Limited Partner within thirty (30) days
after the effective date of the Management Agreement and
annually thereafter.
11.2 Fees
Notwithstanding the provisions of Section 11.1,
however, should the Investment General Partner or an
Affiliate thereof perform property management services for
the Partnership, property management, rent-up or leasing
fees shall be paid to the Investment General Partner or such
Affiliate only for services actually rendered and shall be
in an amount equal to the lesser of (i) fees competitive in
price and terms with those of non-affiliated Persons
rendering comparable services in the locality where the
Apartment Complex is located and which could reasonably be
available to the Partnership, or (ii) five percent (5%) of
the gross revenues of the Apartment Complex. No duplicate
property manager fees shall be paid to any Person.
11.3 Removal and Replacement
If (i) the Apartment Complex shall be subject to a
substantial building code violation which shall not have
been cured within six (6) months after notice from a
Governmental Authority or (ii) the Partnership shall not
have achieved a 1.15 to 1.00 Debt Service Coverage Ratio
during any Fiscal Year commencing on February 1, 2001, or
(iii) an Event of Bankruptcy shall occur with respect to the
Management Agent, or (iv) the Management Agent shall commit
willful misconduct or gross negligence in its conduct of its
duties and obligations under the Management Agreement or (v)
there is any change in the Persons acting as General
Partners (to which the Special Limited Partner has not
consented), or (vi) the Management Agent is cited by the
Credit Agency or any other Tax Credit monitoring or
compliance agency of the State or any other Governmental
Authority for a violation or alleged violation of any
applicable rules, regulations or requirements, including,
without limitation, non-compliance with the Minimum
Set-Aside Test, the Rent Restriction Test or any other Tax
Credit-related provision, then, upon request by the Special
Limited Partner and subject to Agency and Lender approval,
if required, the General Partner shall cause the Partnership
to promptly terminate the Management Agreement with the
Management Agent and appoint a new Management Agent selected
by the Special Limited Partner, which new Management Agent
shall not be an Affiliate of a General Partner. Each
General Partner hereby grants to the Special Limited Partner
an irrevocable (to the extent permitted by applicable law)
power of attorney coupled with an interest to take any
action and to execute and deliver any and all documents and
instruments on behalf of such General Partner and the
Partnership as the Special Limited Partner may deem to be
necessary or appropriate in order to effectuate the
provisions of this Article XI. Subject to any Requisite
Approvals, the Partnership shall not enter into any future
management arrangement or renew or extend any existing
management arrangement unless such arrangement is terminable
without penalty upon the occurrence of the events described
in this Article XI.
11.4 Lack of Management Agent
The General Partner shall have the duty to manage the
Apartment Complex during any period when there is no
Management Agent.
ARTICLE XII
Books and Records, Accounting, Tax Elections, Etc.
12.1 Books and Records
The Partnership shall maintain all books and records
which are required under the Act or by any Governmental
Authority and may maintain such other books and records as
the General Partner in its discretion deems advisable. Each
Limited Partner, or its duly authorized representatives,
shall have access to the records of the Partnership at the
principal office of the Partnership at any and all
reasonable times, and may inspect and copy any of such
records. A list of the name and addresses of all of the
Limited Partners shall be maintained as part of the books
and records of the Partnership and shall be mailed to any
Limited Partner upon request. The Partnership may require
reimbursement for any out of pocket expenses which it incurs
as a result of the exercise by any Limited Partner of its
rights under this Section 12.1, including, without
limitation, photocopying expenses.
12.2 Bank Accounts
The bank accounts of the Partnership shall be
maintained in the Partnership's name with such financial
institutions as the General Partner shall determine.
Withdrawals shall be made only in the regular course of
Partnership business on such signature or signatures as the
General Partner may determine. All deposits (including
security deposits and other funds required to be escrowed by
any Lender or Agency) and other funds not needed in the
operation of the business shall be deposited, if required by
applicable law and to the extent permitted by applicable
Agency or Lender requirements, in interest bearing accounts
or invested in United States Government obligations maturing
within one year.
12.3 Auditors
(a) The Auditors shall prepare, for execution by the
General Partner, all tax returns of the Partnership. Prior
to the filing of the Partnership tax returns, and in no
event later than February 1 of each Fiscal Year, the
Auditors shall deliver the tax returns for the prior Fiscal
Year to the Tax Accountants for their review and comment.
If a dispute arises between the Auditors and the Tax
Accountants over the proper preparation of the tax returns
and such dispute cannot be resolved by the Auditors and the
Tax Accountants by March 1 of such Fiscal Year, then the Tax
Accountants shall make the final decision with respect to
whether any changes are necessary. The Partnership shall
reimburse the Investment Limited Partner and its Affiliates
for all costs and expenses paid to the Tax Accountants for
the aforementioned services.
(b) The Auditors shall certify all annual financial
reports to the Partners in accordance with generally
accepted auditing standards.
(c) If the Partnership fails to fulfill any of its
obligations under Section 12.7(a)(i) and/or Section
12.7(a)(ii) within the time periods set forth therein, at
any time thereafter upon written notice from the Special
Limited Partner, the General Partner shall appoint
replacement Auditors. If no such notice from the Special
Limited Partner is delivered, the Consent of the Special
Limited Partner must be received to the appointment of
replacement Auditors. If the General Partner fails to
appoint replacement Auditors within thirty (30) days of the
notice from the Special Limited Partner to replace the
Auditors, then the Special Limited Partner shall appoint
replacement Auditors of its own choosing, the cost of which
shall be borne by the Partnership as a Partnership expense.
All of the Partners hereby grant to the Special Limited
Partner a special power of attorney, irrevocable to the
extent permitted by law, coupled with an interest, to so
appoint replacement Auditors and to anything else which in
the judgment of the Special Limited Partner may be necessary
or appropriate to accomplish the purposes of this Section
12.3(c).
12.4 Cost Recovery and Elections
(a) With respect to all depreciable assets for which
cost recovery deductions are permitted, the Partnership
shall elect to use, so far as permitted by the provisions of
the Code, accelerated cost recovery methods. However, the
Partnership may change to another method of cost recovery if
such other method is, in the opinion of the Auditors, more
advantageous to the Investment Limited Partner (and the
limited partners and/or holders of beneficial assignee
certificates thereof).
(b) Subject to the provisions of Section 12.5, all
other elections required or permitted to be made by the
Partnership under the Code shall be made by the General
Partner in such manner as will, in the opinion of the
Auditors, be most advantageous to the Investment Limited
Partner and the limited partners and/or holders of
beneficial assignee certificates thereof.
12.5 Special Basis Adjustments
In the event of a transfer of all or any part of the
Interest of the Investment Limited Partner or a transfer of
all or any part of an interest of a partner and/or a holder
of a beneficial assignee certificate of the Investment
Limited Partner, the Partnership shall elect, upon the
request of the Investment Limited Partner, pursuant to
Section 754 of the Code, to adjust the basis of the
Partnership property. Any adjustments made pursuant to said
Section 754 shall affect only the successor in interest to
the transferring Partner or partner or holder of a
beneficial assignee certificate thereof. Each Partner will
furnish the Partnership all information necessary to give
effect to any such election.
12.6 Fiscal Year
Unless otherwise required by law, the Fiscal Year and
tax year of the Partnership shall be the calendar year. The
books of the Partnership shall be maintained on an accrual
basis.
12.7 Information to Partners
(a) The General Partner shall cause to be prepared and
distributed to all Persons who were Partners at any time
during a Fiscal Year of the Partnership:
(i) Within forty-five (45) days after the end of each
Fiscal Year of the Partnership, (A) a balance sheet as of
the end of such Fiscal Year, a statement of income, a
statement of partners' equity, and a statement of cash
flows, each for the Fiscal Year then ended, all of which,
except the statement of cash flows, shall be prepared in
accordance with generally accepted accounting principles and
accompanied by a report of the Auditors containing an
opinion of the Auditors, and (B) a report of the activities
of the Partnership during the period covered by the report.
With respect to any distribution to the Investment Limited
Partner, the report called for shall separately identify
distributions from (1) Cash Flow from operations during the
period, (2) Cash Flow from operations during a prior period
which had been held as reserves, (3) proceeds from
disposition of property and investments, (4) lease payments
on net leases with builders and sellers, (5) reserves from
the gross proceeds of the Capital Contributions of the
Investment Limited Partner, (6) borrowed monies, and (7)
transactions outside of the ordinary course of business with
a description thereof.
(ii) Within thirty (30) days after the end of each
Fiscal Year of the Partnership, all information relating to
the Partnership and/or the Apartment Complex which is
necessary, in the view of the Tax Accountants, for the
preparation of the Limited Partners' federal income tax
returns for the prior Fiscal Year.
(iii) Within thirty (30) days after the end of each
quarter of a Fiscal Year of the Partnership, a report
containing:
(A) a balance sheet, which may be unaudited;
(B) a statement of income for the quarter then ended,
which may be unaudited;
(C) a statement of cash flows for the quarter then
ended, which may be unaudited;
(D) a certification of the General Partner that the
Apartment Complex and its tenants are in compliance with all
applicable federal, state and local requirements and
regulations;
(E) a Tax Credit monitoring form, a copy of the rent
roll for the Apartment Complex for each month during such
quarter, a statement of income and expenses, an operating
statement and an Occupancy/Rental Report, all in a form
specified by the Special Limited Partner;
(F) all other information which would be pertinent to
a reasonable investor regarding the Partnership and its
activities during the quarter covered by the report; and
(b) Within sixty (60) days after the end of each Fiscal
Year of the Partnership a copy of the annual report to be
filed with the United States Treasury concerning the status
of the Apartment Complex as low-income housing and, if
required, a certificate to the appropriate state agency
concerning the same.
(c) upon the written request of the Investment Limited
Partner for further information with respect to any matter
covered in item (a) or item (b) above, the General Partner
shall furnish such information within thirty (30) days of
receipt of such request or such longer time if delay is
reasonable and such additional information shall be
delivered at the cost of the Investment Limited Partner;
provided, however, that such expenses shall be reasonable
and comparable to those ordinarily and customarily incurred
for such information.
(d) Prior to October 15 of each Fiscal Year, the
Partnership shall send to the Investment Limited Partner an
estimate of the Investment Limited Partner's share of the
Tax Credits, Profits and Losses of the Partnership for
federal income tax purposes for the current Fiscal Year.
Such estimate shall be prepared by the General Partner and
the Auditors and shall be in the form specified by the
Special Limited Partner.
(e) Within fifteen (15) days after the end of any
calendar quarter during which:
(i) there is a material default by the Partnership
under any Project Document or in the payment of any
mortgage, taxes, interest or other obligation on secured or
unsecured debt,
(ii) any reserve has been reduced or terminated by
application of funds therein for purposes materially
different from those for which such reserve was established,
(iii) any General Partner has received any notice of a
material fact which may substantially affect further
distributions or Tax Credit allocations to any Limited
Partner, or
(iv) any Partner has pledged or collateralized its
Interest in the Partnership, the General Partner shall send
the Investment Limited Partner a detailed report of such
event.
(f) After the Admission Date, the Partnership shall
send to the Investment Limited Partner copies of all
applicable periodic reports covering the status of project
operations and any matters relating to the Tax Credit as are
required by any Lender or Agency.
(g) On or before May 1 of each Fiscal Year, the
Partnership shall send to the Investment Limited Partner a
report on operations, in the form supplied by the Special
Limited Partner.
(h) The General Partner hereby consents to each Lender
or Agency providing the Special Limited Partner with copies
of all material communications between any such Lender or
Agency and the General Partner and/or the Partnership,
including, but not limited to, any notices of default.
(i) If the earlier of (A) the Completion Date or (B)
the date upon which tenants first occupied apartment units
in the Apartment Complex after the construction of such
units, shall have occurred six (6) months or more prior to
the date on which the Investment Limited Partner acquired
its Interest in the Partnership, then the General Partner
shall cause to be prepared and delivered to the Investment
Limited Partner within sixty (60) days of the Admission Date
the following items:
(i) An unaudited statement of income of the Partnership
for the year (or such shorter period as there may be from
the date of the most recent audited statement of income of
the Partnership) ended on the date upon which the Investment
Limited Partner acquired its Interest in the Partnership;
and
(ii) An audited statement of income of the Partnership
for any fiscal year of the Partnership ending between (A)
the earlier of (1) the Completion Date or (2) the date upon
which tenants first occupied apartment units in the
Apartment Complex after the rehabilitation of such units and
(B) the date upon which the Investment Limited Partner
acquired its Interest in the Partnership.
(j) Within thirty (30) days following the Completion
Date, the General Partner shall prepare, or cause the
Auditors to prepare, and deliver to each Limited Partner a
Tax Credit basis worksheet for each building in the
Apartment Complex, all in a form specified by the Special
Limited Partner.
(k) Promptly after the closing of any New Permanent
Loan, the General Partner shall send to the Special Limited
Partner a closing binder containing photocopies of the fully
executed versions of all documents signed in connection with
the New Permanent Mortgage. From and after any date upon
which the General Partner receives notice from the Special
Limited Partner that the Special Limited Partner would like
copies of the monthly rent rolls for the Apartment Complex
to be sent to the Special Limited Partner, the General
Partner shall send copies of the rent rolls to the Special
Limited Partner no later than ten (10) days after the
expiration of each month.
(l) If the General Partner does not cause the
Partnership to fulfill its obligations under Section
12.7(a)(i) and/or Section 12.7(a)(ii) within the time
periods set forth therein, the General Partner shall pay as
damages the sum of $250 per day (plus interest at a rate
equal to the Prime Rate plus three percent (3%)) to the
Investment Limited Partner until such obligations shall have
been fulfilled. Such damages shall be paid forthwith by the
General Partner, and the failure to pay any such damages
shall constitute a material default by the General Partner
hereunder. In addition, if the General Partner shall fail
to pay any such damages, the General Partner and its
Affiliates shall forthwith cease to be entitled to the
distribution of any Cash Flow or Capital Proceeds to which
they may otherwise be entitled hereunder. Such
distributions of Cash Flow and Capital Proceeds shall be
restored only upon the payment of such damages in full, and
any amount of such damages not so paid shall be deducted
against distributions of Cash Flow and Capital Proceeds
otherwise due to the General Partner or its Affiliates.
12.8 Expenses of the Partnership
(a) All expenses of the Partnership shall be billed
directly to and paid by the Partnership.
(b) Except in extraordinary circumstances, neither the
Investment General Partner nor any Affiliate thereof shall
be permitted to contract or otherwise deal with the
Partnership for the sale of goods or services or the lending
of money to the Partnership or the General Partners, except
for (i) management services, subject to the restrictions set
forth in Article XI, (ii) loans made by, or guaranteed by,
the Investment General Partner or any of its Affiliates and
(iii) those dealings, contracts or provision of services
described in the Investment Partnership Agreement.
Extraordinary circumstances shall only be presumed to exist
where there is an emergency situation requiring immediate
action and the services required are not immediately
available from unaffiliated parties. All services rendered
under such circumstances must be rendered pursuant to a
written contract which must contain a clause allowing
termination without penalty on sixty (60) days' notice.
Goods and services provided under such circumstances must be
provided at the lesser of actual cost or the price charged
for such goods or services by independent parties.
(c) In the event that extraordinary circumstances
arise, the Investment General Partner and its Affiliates may
provide construction services in connection with the
Apartment Complex. Neither the Investment General Partner
nor any of its Affiliates shall provide such services unless
it believes it has an adequate staff to do so and unless
such provision of goods and construction services is part of
its ordinary and ongoing business in which it has previously
engaged, independent of the activities of the Investment
Limited Partner. Any such services must be reasonable for
and necessary to the Partnership, actually furnished to the
Partnership, and provided at the lower of one hundred
percent (100%) of the construction contract rate with
respect to the Apartment Complex or ninety percent (90%) of
the competitive price charged for such services by
independent parties for comparable goods and services in the
same geographic location (except that in the case of
transfer agent, custodial and similar banking-type fees, and
insurance fees, the compensation, price or fee shall be at
the lesser of costs or the compensation, price or fee of any
other Person rendering comparable services as aforesaid).
Cost of services as used herein means the pro rata cost of
personnel, including an allocation of overhead directly
attributable to such personnel, based on the amount of time
such personnel spend on such services or other method of
allocation acceptable to the accountants for the Investment
Limited Partner.
(d) All services provided by the Investment General
Partner or any Affiliate thereof pursuant to Section 12.8(c)
must be rendered pursuant to the Investment Partnership
Agreement or a written contract which precisely describes
the services to be rendered and all compensation to be paid
and shall contain a clause allowing termination without
penalty upon sixty (60) days' notice to the Investment
General Partner by a vote of a majority in interest of the
limited partners and assignees of beneficial interests in
the Investment Limited Partner.
(e) No compensation or fees may be paid by the
Partnership to the Investment General Partner or its
Affiliates except as described in the Investment Partnership
Agreement.
ARTICLE XIII
General Provisions
13.1 Restrictions by Reason of Section 708 of the Code
No Disposition of an Interest may be made if the
Interest sought to be Disposed of, when added to the total
of all other Interests Disposed of within the period of
twelve (12) consecutive months prior to the proposed date of
the Disposition, would, in the opinion of the Tax
Accountants or tax counsel to the Partnership, result in the
termination of the Partnership under Section 708 of the
Code. This Section 13.1 shall have no application to any
required repurchase of the Investment Limited Partner's
Interest. Any Disposition in contravention of any of the
provisions of this Section 13.1 shall be void ab initio and
ineffectual and shall not bind or be recognized by the
Partnership. Notwithstanding the foregoing provisions of
this Section 13.1, however, the Investment Limited Partner
may waive the provisions of this Section 13.1 at any time as
to a Disposition or series of Dispositions, and in the event
of such a waiver, this Section 13.1 shall have no force or
effect upon such Disposition or series of Dispositions.
13.2 Amendments to Certificates
Within one hundred twenty (120) days after the end of
the Partnership Fiscal Year in which the Investment Limited
Partner shall have received any distributions under
Article X, the General Partner shall file an amendment to
the Certificate reducing the amount of its allocable share
of such distribution the amount of Capital Contribution of
the Investment Limited Partner as stated in the last
previous amendment to the Certificate. However, Schedule A
shall not be amended on account of any such distribution.
The Partnership shall amend the Certificate at least
once each calendar quarter to effect the substitution of
Substitute Limited Partners, although the General Partner
may elect to do so more frequently. In the case of
assignments, where the assignee does not become a Substitute
Limited Partner, the Partnership shall recognize the
assignment not later than the last day of the calendar month
following receipt of notice of assignment and all
documentation required in connection therewith hereunder.
Notwithstanding the foregoing provisions of this
Section 13.2, no such amendments to the Certificate need be
filed by the General Partner if the Certificate is not
required to and does not identify the Limited Partners or
their Capital Contributions in such capacity.
13.3 Notices
Except as otherwise specifically provided herein, all
notices, demands or other communications hereunder shall be
in writing and shall be deemed to have been given when the
same are (i) deposited in the United States mail and sent by
certified or registered mail, postage prepaid, (ii)
delivered to a nationally recognized overnight delivery
service, (iii) sent by telecopier or other facsimile
transmission, answerback requested, or (iv) delivered
personally, in each case, to the parties at the addresses
set forth below or at such other addresses as such parties
may designate by notice to the Partnership:
(a) If to the Partnership, at the office of the
Partnership set forth in Section 2.2.
(b) If to a Partner, at its address set forth in the
Schedule, with copies to M. Xxxxxx Xxxx, Esq., Xxxxxxxxx,
Powers & Xxxxxxx, P.C., Xxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, XX, 00000 and Xxxx X. Xxxx, Esq., Xxxxxx, Xxxxxxxxx
& Xxxxx, P.A., 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000.
13.4 Word Meanings
The words such as "herein," "hereinafter," "hereof" and
"hereunder" refer to this Agreement as a whole and not
merely to a subdivision in which such words appear unless
the context otherwise requires. The singular shall include
the plural, and vice versa, and each gender (masculine,
feminine and neuter) shall include the other genders, unless
the context requires otherwise. Each reference to a
"Section" or an "Article" refers to the corresponding
Section or Article of this Agreement, unless specified
otherwise. References to Treasury Regulations (permanent or
temporary) or Revenue Procedures shall include any successor
provisions.
13.5 Binding Effect
The covenants and agreements contained herein shall be
binding upon and inure to the benefit of the heirs,
executors, administrators, successors and assigns of the
respective parties hereto.
13.6 Applicable Law
This Agreement shall be construed and enforced in
accordance with the laws of the State of Mississippi.
13.7 Counterparts
This Agreement may be executed in several counterparts
and all so executed shall constitute one agreement binding
on all parties hereto, notwithstanding that all the parties
have not signed the original or the same counterpart.
13.8 Financing Regulations
(a) So long as any of the Project Documents are in
effect, (i) each of the provisions of this Agreement shall
be subject to, and the General Partner covenants to act in
accordance with, the Project Documents; (ii) the Project
Documents shall govern the rights and obligations of the
Partners, their heirs, executors, administrators, successors
and assigns to the extent expressly provided therein; (iii)
upon any dissolution of the Partnership or any transfer of
the Apartment Complex, no title or right to the possession
and control of the Apartment Complex and no right to collect
the rent therefrom shall pass to any Person who is not, or
does not become, bound by the Project Documents in a manner
satisfactory to the Lenders and any Agency (to the extent
that its approval is required); (iv) no amendment to any
provision of the Project Documents shall become effective
without the prior written consent of any Lender and/or
Agency (to the extent that its approval is required); and
(v) the affairs of the Partnership shall be subject to the
Regulations, and no action shall be taken which would
require the consent or approval of any Lender and/or Agency
unless the prior consent or approval of such Lender and/or
Agency, as the case may be, shall have been obtained. No
new Partner shall be admitted to the Partnership, and no
Partner shall withdraw from the Partnership or be
substituted for without the consent of any Lender and/or
Agency (if such consent is then required). No amendment to
this Agreement relating to matters governed by the
Regulations or requirements shall become effective until any
Requisite Approvals to such amendment shall have been
obtained.
(b) Any conveyance or transfer of title to all or any
portion of the Apartment Complex required or permitted under
this Agreement shall in all respects be subject to all
conditions, approvals and other requirements of any
Regulations applicable thereto.
13.9 Separability of Provisions
Each provision of this Agreement shall be considered
separable and (a) if for any reason any provision is
determined to be invalid, such invalidity shall not impair
the operation of or affect those portions of this Agreement
which are valid, and (b) if for any reason any provision
would cause the Investment Limited Partner or the Special
Limited Partner (in its capacity as a Limited Partner) to be
bound by the obligations of the Partnership (other than the
Regulations and the other requirements of any Agency or
Lender), such provision or provisions shall be deemed void
and of no effect.
13.10 Paragraph Titles
All article and section headings in this Agreement are
for convenience of reference only and are not intended to
qualify the meaning of any article or section.
13.11 Amendment Procedure
This Agreement may be amended by the General Partner
only with the Consent of the Investment Limited Partner and
the Consent of the Special Limited Partner.
13.12 Time of Admission
The Investment Limited Partner shall be deemed to have
been admitted to the Partnership as of the Commencement Date
for all purposes of this Agreement, including Article X,
provided, however, that if treasury regulations are issued
under the Code or an amendment to the Code is adopted which
would require, in the opinion of the Auditors, that the
Investment Limited Partner be deemed admitted on a date
other than as of the Commencement Date, then the General
Partner shall select a permitted admission date which is
most favorable to the Investment Limited Partner.
WITNESS the execution hereof under seal as of the ____
day of November, 1998.
ORIGINAL (WITHDRAWING)
LIMITED PARTNER:
/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
GENERAL PARTNER:
Park Ridge, LLC, a Mississippi limited
liability company
By: /s/ X.X. Xxxxxx, Xx.
X.X. Xxxxxx, Xx., Member/Manager
SPECIAL LIMITED PARTNER:
BCTC 94, INC., a Delaware corporation
By: /s/ Xxxxxx Xxxx Xxx
Xxxxxx Xxxx Xxx, as
Attorney-in-Fact for
Xxxx X. Xxxxxxx, President
INVESTMENT LIMITED PARTNER:
BOSTON CAPITAL TAX CREDIT FUND
IV L.P., a Delaware limited
partnership, by its general
partner, Boston Capital
Associates IV L.P., a Delaware
limited partnership, by its
general partner, C&M
Associates d/b/a Boston
Capital Associates, a
Massachusetts general
partnership
By: /s/Xxxxxx Xxxx Xxx
Xxxxxx Xxxx Xxx,
as Attorney-in-Fact for
Xxxx X. Xxxxxxx, a Partner
CONSENTS AND AGREEMENTS
The undersigned hereby executes this Agreement for the
sole purpose of agreeing to the provisions of Article XI of
the foregoing First Amended and Restated Agreement of
Limited Partnership notwithstanding any provision of the
Management Agreement to the contrary.
PARK MANAGEMENT, INC., a Mississippi corporation
By: /s/ X.X. Xxxxxx, Xx.
X. X. Xxxxxx, Xx., President
The undersigned hereby executes this Agreement for the
sole purpose of agreeing to the provisions of Sections 6.11
and 6.12(a) of the foregoing First Amended and Restated
Agreement of Limited Partnership.
PARK RIDGE, LLC, a Mississippi limited liability
company
By: /s/ X. X. Xxxxxx, Xx.
X. X. Xxxxxx, Xx.,
Member/Manager
Xxxxxxx Xxxx, L.P.
SCHEDULE A
As of November 1, 1998
Percentage
Interests
Of Operating
Profits and
General Capital Losses and
Partner Capital Contributions Tax Credits
Park Ridge, LLC
X.X. Xxx 000
0000 Xxxxxxx Xxxx,
Xxxxx 000-00000
Xxxxxxx, XX 00000-0000 100% 0.01%
Percentage
Interests of
Operating
Profits and
Special Limited Capital Losses and
Partner Contribution Tax Credits
BCTC 94, Inc.
c/o Boston Capital
Partners, Inc.
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 $10 0%
Percentage
Interests of
Total Operating
Agreed-to Paid-In Profits and
Special Limited Capital Capital Losses and
Partner Contribution Contribution Tax Credits
Boston Capital
Tax Credit Fund
IV L.P.
Xxx Xxxxxx Xxxxx,
00xx Xxxxx
Xxxxxx, XX 00000 $2,536,374 $1,521,824 99.99%
*Paid-in Capital Contribution as of the date of this
Schedule A. Future Installments of Capital Contribution are
subject to adjustment and are due at the times and subject
to the conditions set forth in the Agreement to which this
Schedule is attached.
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
PROJECTED RENTS
EXHIBIT C
INSURANCE REQUIREMENTS
The General Partner shall cause the Partnership to
maintain insurance for the term of the Partnership in
accordance with the following:
I. Comprehensive Casualty.
The General Partner shall cause to be maintained
comprehensive casualty insurance including, but not limited
to, fire, earthquakes and other risks generally included
under "extended coverage" policies in favor of the
Partnership in an amount not less than the replacement value
of the Apartment Complex and shall include loss of rents
coverage in an amount not less than the Apartment Complex's
projected annual gross rent, an agreed amount endorsement
covering all property and rental values, and a standard
building laws endorsement which includes coverage for
building ordinance compliance, demolition and any increased
cost of construction of the Apartment Complex.
II. Comprehensive General Liability.
The General Partner shall cause to be maintained
commercial general liability insurance in favor of the
Partnership in an amount not less than $1,000,000 per
occurrence (combined single limit) and $2,000,000 in the
aggregate.
III. Worker's Compensation and Employer's Liability.
The General Partner shall cause to be maintained
worker's compensation and employer's liability insurance in
favor of the Partnership in an amount equal to the greater
of (i) the amount required by the State's laws governing
such insurance or (ii) $500,000.
IV. Comprehensive Automobile.
The General Partner shall cause to be maintained
comprehensive automobile, including non-owned automobile
liability, insurance in favor of the Partnership in an
amount not less than $1,000,000 (combined single limit).
V. Excess or Umbrella Liability.
The General Partner shall cause to be maintained excess
or umbrella liability insurance in favor of the Partnership
in an amount not less than $5,000,000 (combined single
limit).
VI. Builder's Risk.
Through the Completion Date, or such later date as may
be required by any Agency or any Lender, the General Partner
shall cause the Partnership to maintain builder's risk
insurance in favor of the Partnership in an amount not less
than the greater of (i) the full replacement value of the
Apartment Complex (excluding the value of the underlying
land, the site utilities and the foundations) or (ii) such
other amount as shall be required by any Agency or Lender.
VII. Management Agent.
The Management Agent shall maintain for the term of the
Management Agreement liability insurance in the amount of
$1,000,000 per incident and $2,000,000 in the aggregate,
worker's compensation insurance in accordance with the
State's laws governing such insurance, a blanket fidelity
bond in the amount of not less than six (6) months of the
Apartment Complex's projected gross rent, auto liability
insurance in the amount of $1,000,000 per incident and error
and omissions insurance in the amount of $1,000,000 per
incident.
VIII. General Requirements.
All of the policies required above, including those to
be maintained by the Management Agent, shall be issued by
insurance carriers which are currently rated by Standard &
Poors as A or better. No deductibles on such policies shall
exceed $25,000 during construction and $5,000 thereafter.
TABLE OF CONTENTS
Page
ARTICLE I Defined Terms 1
ARTICLE II Name and Business 29
2.1 Name; Continuation 29
2.2 Office and Resident Agent 30
2.3 Purpose 30
2.4 Term and Dissolution 30
ARTICLE III Mortgage, Refinancing and Disposition of
Property 31
3.1 Personal Liability 31
3.2 Refinancings 32
3.3 Sale of Assets 32
3.4 Real Estate Commissions 33
ARTICLE IV Partners; Capital 33
4.1 Capital and Capital Accounts 33
4.2 General Partner 35
4.3 Investment Limited Partner, Special Limited
Partner and Original Limited Partner 35
4.4 Liability of the Limited Partners 35
4.5 Special Rights of the Special Limited Partner
35
4.6 Meetings 38
ARTICLE V Capital Contributions of the Investment
Limited Partner and the Special Limited Partner 39
5.1 Payments 39
5.2 Return of Capital Contributions 44
ARTICLE VI Rights, Powers and Duties of General Partner
49
6.1 Authorized Acts 49
6.2 Restrictions on Authority 50
6.3 Personal Services; Other Business Ventures 53
6.4 Business Management and Control 54
6.5 Duties and Obligations 55
6.6 Representations and Warranties 59
6.7 Liability on Mortgages 64
6.8 Indemnification of the General Partner 64
6.9 Indemnification of the Partnership and the Limited
Partners 66
6.10 Operating Deficits 67
6.11 Obligation to Complete the Construction of the
Apartment Complex 68
6.12 Certain Payments to the General Partner and Others
68
6.13 Delegation of General Partner Authority 69
6.14 Assignment to Partnership 70
6.15 Contracts with Affiliates 71
6.16 Tax Matters Partner 71
ARTICLE VII Withdrawal of a General Partner; New
General Partners 73
7.1 Voluntary Withdrawal 73
7.2 Reconstitution 73
7.3 Successor General Partner 74
7.4 Interest of Predecessor General Partner 74
7.5 Amendment of Certificate; Approval of Certain
Events 77
7.6 Valuation and Sale of Interest of Former General
Partner 77
7.7 Designation of New General Partners 78
ARTICLE VIII Transferability of Limited Partner
Interests 79
8.1 Assignments 79
8.2 Substituted Limited Partner 79
8.3 Restrictions 80
ARTICLE IX Borrowings 81
ARTICLE X Profits, Losses, Tax Credits, Distributions
and Capital Accounts 81
10.1 Profits, Losses and Tax Credits 81
10.2 Cash Distributions Prior to Dissolution 83
10.3 Distributions Upon Dissolution 85
10.4 Special Provisions 86
10.5 Authority of the General Partner to Vary
Allocations to Preserve and Protect the Partners' Intent
92
10.6 Recapture Amount 94
ARTICLE XI Management Agent 95
11.1 General 95
11.2 Fees 96
11.3 Removal and Replacement 97
11.4 Lack of Management Agent 98
ARTICLE XII Books and Records, Accounting, Tax
Elections, Etc. 98
12.1 Books and Records 98
12.2 Bank Accounts 98
12.3 Auditors 99
12.4 Cost Recovery and Elections 100
12.5 Special Basis Adjustments 100
12.6 Fiscal Year 100
12.7 Information to Partners 101
12.8 Expenses of the Partnership 105
ARTICLE XIII General Provisions 107
13.1 Restrictions by Reason of Section 708 of the Code
107
13.2 Amendments to Certificates 107
13.3 Notices 108
13.4 Word Meanings 108
13.5 Binding Effect 109
13.6 Applicable Law 109
13.7 Counterparts 109
13.8 Financing Regulations 109
13.9 Separability of Provisions 110
13.10 Paragraph Titles 110
13.11 Amendment Procedure 111
13.12 Time of Admission 111
Exhibit A Legal Description
Exhibit B Projected Rents
Exhibit C Insurance Requirements
