As of October 15, 1998
LOMBARD PARTNERS, L.P.
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
This Amended and Restated Agreement of Limited Partnership
is made and entered into as of October 15, 1998, by and among the
undersigned parties.
RECITALS
A. As of January 9, 1997, ▇▇▇▇▇▇▇▇▇▇ -▇▇▇▇▇▇ Properties,
L.L.C., a Kansas limited liability company, (the "General
Partner"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, as initial limited partner
(the "Initial Limited Partner"), executed an Agreement of Limited
Partnership of Lombard Partners, L.P., a Missouri limited
partnership (the "Initial Agreement") for the formation of
Lombard Partners, L.P. (the "Partnership") pursuant to the
Missouri Uniform Limited Partnership Act Chapter 359 ▇.▇.▇▇. (the
"Act");
B. A Certificate of Limited Partnership was subsequently
filed with the Secretary of State for Missouri on April 1, 1997;
C. The Partnership has been formed to acquire,
rehabilitate, construct, own, maintain and operate the
hereinafter defined Apartment Complex;
D. The parties hereto now desire to enter into this
Amended and Restated Agreement of Limited Partnership to (i)
continue the Partnership; (ii) admit Boston Capital Tax Credit
Fund IV, L.P., a Massachusetts limited partnership, to the
Partnership as a Limited Partner, and BCTC 94, Inc., a
Massachusetts corporation, to the Partnership as the Special
Limited Partner; (iii) withdraw the Initial Limited Partner from
the Partnership; (v) reassign Interests in the Partnership; (vi)
supercede all provisions of the Initial Agreement; and (vii) set
forth all of the provisions governing the Partnership.
NOW, THEREFORE, in consideration of the foregoing, of mutual
promises of the parties hereto and of other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree to continue the
Partnership pursuant to the Act, as set forth in this Amended and
Restated Agreement of Limited Partnership, which reads in its
entirety as follows:
ARTICLE I
CONTINUATION OF PARTNERSHIP TC "ARTICLE I - CONTINUATION OF
PARTNERSHIP"\l1
1.01. Continuation TC "1.01. Continuation"\l2 . The
undersigned hereby continue the Partnership as a limited
partnership under the Act.
1.02. Name TC "1.02. Name"\l2 . The name of the
Partnership is Lombard Partners, L.P., a Missouri Limited
Partnership.
1.03. Principal Executive Offices; Agent for Service of
Process TC "1.03. Principal Executive Offices; Agent for
Service of Process"\l2 . The principal executive and record
office of the Partnership is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Partnership may change the location of its
principal executive office to such other place or places as may
hereafter be determined by the General Partner. The General
Partner shall promptly notify all other Partners of any change in
the principal executive office. The Partnership may maintain
such other offices at such other place or places as the General
Partner may from time to time deem advisable. The resident agent
in Missouri for the Partnership for service of process is G.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
1.04. Term TC "1.04. Term"\l2 . The term of the
Partnership commenced as of April 1, 1997 and shall continue
until December 31, 2051, unless the Partnership is sooner
dissolved in accordance with the provisions of this Agreement.
1.05. Recording TC "1.05. Recording"\l2 . Upon
the execution of this Amended and Restated Agreement of Limited
Partnership by the parties hereto, the General Partner shall take
all necessary action required by law to perfect and maintain the
Partnership as a limited partnership under the laws of the State;
and to effectuate the admission of the Investment Partnership and
the Special Limited Partner as Limited Partners and the
withdrawal of the Initial Limited Partner hereunder.
ARTICLE II
DEFINED TERMS TC "ARTICLE II - DEFINED TERMS"\L1
In addition to the abbreviations of the parties set forth in
the preamble to this Agreement, the following defined terms used
in this Agreement shall have the meanings specified below:
"Accountants" means such firm of independent certified
public accountants as may be engaged by the General Partner, with
the Consent of the Special Limited Partner, to prepare the
Partnership income tax returns and to be responsible for the
Partnership's audit and tax matters reporting obligations under
Section 13.04 hereof.
"Act" means the Missouri Uniform Limited Partnership Act, as
cited in the recitals, as amended from time to time during the
term of the Partnership.
"Actual Credit" means as of any point in time, the total
amount of the Tax Credits actually allocated by the Partnership
to the Investment Partnership representing ninety-nine and
ninety-eight hundredths percent (99.98%) of the Tax Credits
actually received by the Partnership, as shown on the applicable
tax return of the Partnership.
"Admission Date" means the date upon which the Investment
Partnership is admitted to the Partnership by execution and
delivery of this Agreement by all signatories hereto and the
filing of any such Certificates as may be required by the State
to effectuate the admission of the Investment Partnership.
"Affiliate" means any Person that directly or indirectly,
through one or more intermediaries, controls or is controlled by
or is under common control with a General Partner, or with
another designated Person, as the context may require.
"Affiliated Limited Partnership" means any limited
partnership, other than the Partnership, in which the General
Partner or an Affiliate of a General Partner is a general partner
and the Investment Partnership or an Affiliate of the Investment
Partnership is a limited partner.
"Agency" means the Missouri Housing Development Commission
in its capacity as the designated agency of the State to allocate
Low-Income Housing Tax Credits, acting through any authorized
representative.
"Agreement" means this Amended and Restated Agreement of
Limited Partnership, as amended from time to time.
"Apartment Complex" means the land owned by the Partnership
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and the 24-
unit rental housing development and other improvements
constructed thereon, and to be owned and operated therein by the
Partnership, and known as Lombard Heights Apartments.
"Applicable Percentage" has the meaning given to it in
Section 42(b) of the Code.
"Asset Management Fee" means the fee payable by the
Partnership to Boston Capital, or an Affiliate thereof, pursuant
to Section 8.11.1.
"Bankruptcy" or "Bankrupt" as to any Person means (a) the
entry of an order for relief (or similar court order) against
such Person which authorizes a case brought under Chapter 7, 11
or 13 of Title 11 of the United States Code to proceed; (b) the
commencement of a federal, state or foreign bankruptcy,
insolvency, reorganization, arrangement or liquidation proceeding
by such Person; (c) the commencement of a federal, state or
foreign bankruptcy, insolvency, reorganization, arrangement or
liquidation proceeding against such Person if such proceeding is
not dismissed within sixty (60) days after the commencement
thereof; (d) the entry of a court decree or court order which
remains unstayed and in effect for a period of thirty (30)
consecutive days: (i) adjudging such Person insolvent under any
federal, state or foreign law relating to bankruptcy, insolvency,
reorganization, arrangement, liquidation, receivership or the
like; (ii) approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of, or in
respect of, such Person or his properties under any federal,
state or foreign law relating to insolvency, reorganization,
arrangement, liquidation, receivership or the like; (iii)
appointing a receiver, liquidator, assignee, trustee,
conservator, or sequester (or other similar official) of such
Person, or of all, or of a substantial part, of such Person's
properties; or (iv) ordering the winding up, dissolution or
liquidation of the affairs of such Person; (e) the written
consent by such Person to the institution against it of any
proceeding of the type described in subsection (a), (b), (c) and
(d); (f) the written consent by such Person to the appointment of
a receiver, liquidator, assignee, trustee, conservator or
sequester (or other similar official) of such Person, or of all,
or of a substantial part, of its properties; (g) the making by
such Person of an assignment for the benefit of creditors; (h)
the admission in writing by such Person of its inability to pay
its debts generally as they come due; (i) the taking of any
corporate or other action by such Person in furtherance of any of
the foregoing; or (j) if such Person becomes insolvent by the
making of any act or the making of any transfer, or otherwise, as
"insolvency" is or may be defined pursuant to the Federal
Bankruptcy Code, the Federal Bankruptcy Act, the Uniform
Fraudulent Conveyances Act, any state or federal act or the
ruling of any court.
"Book Depreciation" has the meaning set forth in Section
11.12C.
"Book Profits and Losses" means the Taxable Income or Tax
Losses of the Partnership, adjusted for purposes of determining
and maintaining the Partners' Capital Accounts as provided in
Section 11.12.
"Boston Capital" means Boston Capital Partners, Inc., a
Massachusetts corporation.
"Capital Account" means the capital account of a Partner as
described in Section 11.12.
"Capital Contribution" with respect to any Partner, means
the total amount of money and the initial Gross Asset Value of
any property (other than money) contributed or agreed to be
contributed, as the context requires, to the Partnership by each
Partner pursuant to the terms of this Agreement. Any reference
to the Capital Contribution of a Partner shall include the
Capital Contribution made by a predecessor holder of the Interest
of such Partner.
"Capital Transaction" means the sale, exchange or
disposition (other than leasing in the ordinary course of
business) of any Partnership property that is not in the ordinary
course of business, or casualty damage to or condemnation of any
Partnership property, or any substantial interest therein or
portion thereof.
"Carryover Certification" means the date upon which the
Investment Partnership shall have received, in a form and in
substance satisfactory to the Investment Partnership, the
certification of the Accountants that as of a date no later than
December 31, 1999, the Partnership shall have incurred
capitalizable costs with respect to the Apartment Complex of at
least ten percent (10%) of the Partnership's reasonably expected
basis in the Apartment Complex as of December 31, 1999, so that
each building in the Apartment Complex will constitute a
"qualified building" for the purposes of Section 42(h)(1)(E)(ii)
of the Code.
"Cash Flow" means, with respect to any year or other
applicable period, (a) all Revenues received by the Partnership
during such period, plus (b) any amounts which the General
Partner, acting jointly with the Special Limited Partner,
releases from the Reserve Fund for Replacements as being no
longer necessary to hold as part of the Reserve Fund for
Replacements, less (i) all operating expenses and obligations of
the Partnership paid or payable (on a thirty-day current basis)
during the applicable period, including without limitation escrow
deposits for taxes and insurance, maintenance and repairs, (ii)
all sums due or currently required to be paid under the terms of
the Mortgage Loan or any other third-party indebtedness of the
Partnership, and (iii) all amounts from Revenues, if any, added
or required to be added to the Reserve Fund for Replacements
during such period. In no event will deductions in determining
Cash Flow pursuant to clauses (i) and (ii) above include payments
made on account of, the Asset Management Fee, amounts due on any
Subordinated Loans, the Incentive Partnership Management Fee
and/or the Deferred Development Fee, if any.
Cash Flow shall be determined separately for each fiscal
year and shall not be cumulative.
"Certificate" means the Certificate of Limited Partnership
for Lombard Partners, L.P., filed with the Secretary of State of
Missouri on April 1, 1997, or any certificate of limited
partnership or any other instrument or document which is required
under the law of the State to be signed and/or sworn to by the
Partners of the Partnership and filed in the appropriate public
offices within the State to perfect or maintain the Partnership
as a limited partnership under the laws of the State, to effect
the admission, withdrawal or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited
Partners as limited partners under the laws of the State.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any corresponding provision or provisions
of succeeding law.
"Compliance Period" has the meaning ascribed to such term in
Section 42 of the Code.
"Consent" means the prior written consent or approval of the
Special Limited Partner and/or the Investment Partnership and/or
any other Partner, as the context may require, to do the act or
thing for which the consent is solicited.
"Construction Contract" means that certain construction
contract (including all exhibits and attachments thereto)
between the Partnership and the Contractor pursuant to which the
Apartment Complex is being rehabilitated.
"Contractor" means ▇▇▇▇▇▇▇▇▇▇ Development Co., Inc., in its
capacity as the general construction contractor for the Apartment
Complex.
"Cost Certification" means the date upon which each Limited
Partner shall have received the written certification of the
Accountants, in a form and in substance satisfactory to Boston
Capital, as to the itemized amounts of the rehabilitation and
development costs of the Apartment Complex and the Eligible Basis
and Applicable Percentage (in each case, as defined in Section
42(d) of the Code), pertaining to each building in the Apartment
Complex.
"Counsel" or "Counsel for the Partnership" shall mean ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq. or such other attorney or law firm upon which the
Investment Partnership and the General Partner shall agree;
provided, however, that if any section of this Agreement either
(i) designates particular counsel for the purpose described
therein, or (ii) provides that counsel for the purpose described
therein shall be chosen by another method or by another Person,
then such designation or provision shall prevail over this
general definition. The Limited Partners have been, and will
continue to be, separately represented by ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or
such other counsel as they may choose in connection with all
Partnership matters.
"Credit Recovery Loan" has the meaning set forth in Section
5.01(d)(iii).
"Credit Shortfall" means the amount by which the Actual
Credit is less than the Projected Credit (or Revised Projected
Credit) for any year or portion thereof.
"Debt Service" means scheduled principal and interest
payments on indebtedness under the Mortgage Loan determined on an
annual basis for each year of Partnership operations, but
excluding (i) principal and interest due on acceleration of the
Mortgage Loan upon occurrence of an event of default and (ii)
balloon payments of principal and interest due upon expiration of
the term of the Mortgage Loan
"Developer" means ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties, L.L.C.
"Deferred Development Fee" means any portion of the
Development Fee not actually paid to and received by the
Developer from the Installments, the payment of which is deferred
and payable only in accordance with Sections 5.01(a), 11.03 and
11.04(A) hereof.
"Development Fee" means the fee payable by the Partnership
to the Developer pursuant to Section 8.10 of this Agreement.
"Development Sources" means the aggregate of: (a) the
Capital Contributions of the General Partner, as set forth in
Section 5.01(a) of this Agreement (including the Special
Construction Capital Contribution referred to therein); (b) the
Capital Contributions of the Investment Partnership, as set forth
in Section 5.01(a) of this Agreement, less the amount of the non-
Deferred Development Fee; (c) the proceeds of the Permanent
Loan; and (d) any rental income of the Partnership for the period
prior to Final Closing.
"Distributable Proceeds from Capital Transactions" means
the excess of all cash receipts and other consideration arising
from the sale or other disposition of all or any portion of the
Apartment Complex or any proceeds realized from condemnation,
casualty, or title defect, but excluding proceeds, if any, from
rental interruption insurance or a temporary condemnation in the
nature of a lease, over the sum of the following, to the extent
paid out of such cash receipts or other consideration: (i) the
amount of cash disbursed or to be disbursed in connection with or
as an expense of such sale or other disposition, (ii) the amount
necessary for the payment of all debts and obligations of the
Partnership arising from or otherwise related to such sale or
other disposition or to which the Apartment Complex is subject
and which are otherwise then due (other than debts and
obligations owed to the Partners and their Affiliates, which
shall be satisfied in the order set forth in Section 11.04), and
(iii) any amounts set aside by the General Partner for reserves
which the General Partner deems reasonably necessary for
contingent, unmatured or unforeseen liabilities of the
Partnership.
"Distributable Proceeds from Refinancings" means the excess
of the gross proceeds of any borrowing by the Partnership over
the sum of the following, to the extent paid out of such gross
proceeds: (i) any amounts disbursed to repay then existing loans
of the Partnership and to pay and provide for all debts and
obligations of the Partnership then to be paid or which are
otherwise then due (other than debts and obligations owed to the
Partners and their Affiliates, which shall be satisfied in the
order set forth in Section 11.04), (ii) all reasonable expenses
of such borrowings, including, without limitation, all commitment
fees, brokers' commissions, and attorneys' fees, (iii) all
amounts paid to improve the Apartment Complex or for any other
purpose in order to satisfy conditions to or established in
connection with such borrowings, and (iv) any amounts used to
meet the operating expenses of the Apartment Complex or set aside
by the General Partner for reserves which the General Partner
deems reasonably necessary for contingent, unmatured, or
unforeseen liabilities of the Partnership.
"Eligible Basis" has the meaning given to it in Section
42(d) of the Code.
"Excess Development Costs" means all funds in excess of the
Development Sources which are required to (i) complete
rehabilitation and/or construction, as applicable, of the
Apartment Complex, (ii) achieve Substantial Completion, (iii)
achieve Final Closing and satisfy any escrow deposit requirements
which are conditions to the Final Closing, including without
limitation, any amounts necessary for local taxes, utilities,
insurance premiums and other amounts which are required, (iv) pay
any applicable loan assessment fees, discounts or other costs and
expenses incurred by the Partnership as a result of the
occurrence of the Final Closing, (v) make the required deposit
into the Operating Deficit Reserve, (vi) make the required
deposit into the Reserve Fund for Replacements and (vii) pay any
Operating Deficits incurred by the Partnership prior to the
occurrence of Rental Achievement. Excess Development Costs shall
not include any amounts paid or to be paid in respect of the
Development Fee.
"Extended Use Commitment" means the agreement between the
Partnership and the Agency, which is intended to meet the
definition of a "long term commitment to low-income housing" as
required by Section 42(h)(6) of the Code and the requirements of
the Agency's Low-Income Housing Tax Credit Program.
"Final Closing" means the occurrence of both of the
following: (i) Substantial Completion, and (ii) the closing of
the Permanent Loan pursuant to the terms of the Permanent Loan
Documents and upon satisfaction or waiver of all conditions to
such closing set forth therein.
"40-60 Set-Aside Test" means the Minimum Set-Aside Test
whereby at least 40% of the units in the Apartment Complex must
be occupied by individuals, with incomes of 60% or less of area
median income, as adjusted for family size.
"General Partner" means ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties,
L.L.C., a Kansas Limited Liability Company, and any other Person
or entity admitted as a general partner pursuant to this
Agreement, and their respective successors pursuant to this
Agreement, including particularly the provisions of Section 6.03
and 8.13.
"General Partner's Special Capital Contribution" has the
meaning ascribed to such term in Section 5.01 of this Agreement.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as
adjusted pursuant to Section 11.12B. 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 Partners and the Partnership.
"Guarantor" means collectively, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, G.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as trustee of the Revocable
Trust Agreement of G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ u/d/t dated July 19, 1991.
"Incentive Partnership Management Fee" means the fee payable
by the Partnership to the General Partner pursuant to Section
8.11 of this Agreement.
"Initial 100% Occupancy Date" means the first date, after
the completion of construction, upon which 100% of the low-income
apartment units in the Apartment Complex have been leased to and
are occupied by, qualified tenants under executed Agency approved
leases, if any such approval is applicable.
"Installment" means an Installment of the Investment
Partnership's Capital Contribution paid or payable to the
Partnership pursuant to Section 5.01.
"Interest" or "Partnership Interest" means the ownership
interest of a Partner in the Partnership at any particular time,
including the right of such Partner to any and all benefits to
which such Partner may be entitled as provided in this Agreement
and in the Act, together with the obligations of such Partner to
comply with all the terms and provisions of this Agreement and of
said Act. Such Interest of each Partner shall, except as
otherwise specifically provided herein, be that percentage of the
aggregate of such benefit or obligation specified by Section 5.01
as such Partner's Percentage Interest.
"Invested Amount" means (i) as to the Investment
Partnership, an amount equal to the paid-in Capital Contribution
of the Investment Partnership divided by .87 and (ii) as to any
other Partner, an amount equal to its paid-in Capital
Contribution.
"Investment Partnership" means Boston Capital Tax Credit
Fund IV, L.P., a Massachusetts limited partnership, which is a
Limited Partner of the Partnership.
"Issuer" means The Industrial Development Authority of the
City of Springfield, Missouri as issuer of the Permanent Loan.
"Land" means the real property which the Partnership owns or
expects to own, upon which the Apartment Complex is or will be
located.
"Lender" means the Permanent Lender, or each of its
successors and assigns in such capacity, including any substitute
Lender permitted pursuant to Section 8.02(b)(v) hereof, each
acting through any authorized representative.
"Limited Partners" means the Investment Partnership and/or
the Special Limited Partner, or any other Limited Partner in such
Person's capacity as a limited partner of the Partnership.
"Liquidator" means the General Partner or, if there is none
at the time in question, such other Person who may be appointed
in accordance with applicable law and who shall be responsible
for taking all action necessary or appropriate to wind up the
affairs of, and distribute the assets of, the Partnership upon
its dissolution.
"Loan Documents" means, collectively, all documents entered
into by the Partnership in connection with the Permanent Loan.
"Low-Income Housing Tax Credit" means the low-income housing
tax credit allowed for low-income housing projects pursuant to
Section 42 of the Code.
"Low-Income Unit" shall have the meaning set forth in
Section 42(i)(3) of the Code.
"Management Agent" means the management and rental agent for
the Apartment Complex and/or its successors and/or assigns, as
described in Section 8.05 hereof.
"Management Agreement" means the agreement between the
Partnership and the Management Agent providing for the management
of the Apartment Complex, approved as to form by the Investment
Partnership.
"Minimum Gain" means the amount determined by computing,
with respect to each non-recourse liability of the Partnership,
the amount of Taxable Income, if any, that would be realized by
the Partnership if it disposed of (in a taxable transaction) the
property subject to such liability in full satisfaction thereof,
and by then aggregating the amounts so computed, in accordance
with Treasury Regulation 1.704-2(d). For purposes of determining
the amount of such Taxable Income with respect to a liability,
the adjusted basis, for federal income tax purposes, of the asset
subject to the liability shall be allocated among all the
liabilities that the asset secures in the manner set forth in
Treasury Regulation 1.704-2(d)(2) (or successor provisions). If
Partnership property subject to one or more non-recourse
liabilities of the Partnership is, under Treasury Regulation
1.704-1(b)(2)(iv)(d),(f), or (r), properly reflected on the books
of the Partnership at a book value that differs from the adjusted
tax basis of such property, then the determination of Minimum
Gain shall be made with reference to such book value.
"Minimum Set-Aside Test" means the set-aside test selected
by the Partnership pursuant to Section 42(g) of the Code with
respect to the percentage of units in its Apartment Complex to be
occupied by tenants with incomes equal to no more than a certain
percentage of area median income. The Partnership has selected
or will select the 40-60 Set-Aside Test as the Minimum Set-Aside
Test.
"Mortgage" means, collectively, the Mortgage Deeds and/or or
Deeds of Trust given by the Partnership to any Lender securing
the Mortgage Loan. The term "mortgage" means any mortgage,
mortgage deed, deed of trust, deed to secure debt, or any other
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 the Permanent Loan.
"Net Capital Contribution" means an amount equal to a
Partner's paid-in Capital Contribution, less the aggregate amount
of cash distributions, if any, made to such Partner hereunder.
"Nonrecourse Deductions" has the meaning set forth in
Section 1.704-2(c) of the Treasury Regulations. The amount of
Nonrecourse Deductions for a Fiscal Year of the Partnership
equals the net increase, if any, in the amount of Minimum Gain
during that Fiscal Year, determined according to the provisions
of Treasury Regulation Section 1.704-2(c).
"Notice" means a writing containing the information required
by this Agreement to be communicated to a Partner and sent by
registered or certified mail, postage prepaid, return receipt
requested, to such Partner at the last known address of such
Partner, the date of registry thereof or the date of the
certification receipt therefor being deemed the date of such
Notice; provided, however, that any written communication
containing such information sent to such Partner actually
received by such Partner shall constitute Notice for all purposes
of this agreement.
"Operating Deficit " means the amount by which (i) the
income of the Partnership from rental payments made by tenants of
the Apartment Complex and all other income of the Partnership,
including unrestricted earnings on reserve or escrow funds (other
than proceeds of any loans to the Partnership and investment
earnings on funds on deposit in the Reserve Fund for
Replacements) for a particular period of time, is exceeded by
(ii) the sum of all the operating expenses, including all Debt
Service payments, operating and maintenance expenses, deposits
into the Reserve Fund for Replacements, any Lender fee payments,
and all other Partnership obligations or expenditures, excluding
payments for rehabilitation of the Apartment Complex and fees and
other expenses and obligations of the Partnership to be paid from
the Capital Contributions of the Investment Partnership to the
Partnership pursuant to this Agreement, during the same period of
time. For the purposes of this definition, all expenses shall be
paid on a thirty (30) day current basis. In no event will
deductions in determining Operating Deficits pursuant to clause
(ii) above include payments made on account of the Asset
Management Fee (unless guaranteed), amounts due on Subordinated
Loans and/or the Deferred Development Fee.
"Operating Deficit Loan" means a loan made pursuant to
Section 8.09(b).
"Operating Deficit Reserve" means the operating deficit
reserve account established pursuant to the provisions of Section
8.18(b) of this Agreement.
"Partner" means any General Partner or any Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning
attributed to "partner loan nonrecourse debt minimum gain" in
Treasury Regulation 1.704-2(i)(3).
"Partner Loan Nonrecourse Deductions" means any deductions
of the Partnership that are attributable to a nonrecourse
liability for which a Partner bears the risk of loss within the
meaning of Treasury Regulation Section 1.704-2(i).
"Partnership" means Lombard Partners, L.P., a Missouri
limited partnership.
"Partnership Agreement" means this Amended and Restated
Agreement of Limited Partnership, as amended from time to time.
"Percentage Interest" means the percentage Interest of each
Partner as set forth in Section 5.01.
"Permanent Lender" means the Issuer.
"Permanent Loan" means the $800,000 The Industrial
Development Authority of the City of Springfield, Missouri
Multifamily Housing Revenue Bonds (Lombard Heights Apartment
Project) Series 1998 issue, dated May 1, 1998.
"Permanent Loan Documents" mean collectively all documents
executed and/or delivered in connection with the Permanent Loan.
"Person" means any individual, partnership, corporation,
trust or other entity.
"Plans and Specifications" means the plans and
specifications for rehabilitation of the Apartment Complex,
referred to in the Construction Contract and any changes thereto
made in accordance with the terms of this Agreement.
"Project Documents" means and includes the Loan Documents,
the Extended Use Commitment, the Regulatory Agreement, if any,
the Management Agreement and all other instruments delivered to
(or required by) the Lender or the Agency and all other documents
relating to the Apartment Complex and by which the Partnership is
bound, as amended or supplemented from time to time.
"Projected Credit" means Low-Income Housing Tax Credits in
the amount of $47,994 per year for each of the years 1999 through
2008, constituting ninety-nine and ninety-nine one hundredths
percent (99.99%) of the Tax Credits which the General Partner has
projected to be available to the Partnership.
"Regulatory Agreement" means the Land Use Restriction
Agreement dated as of May 1, 1998 among the Partnership, the
Issuer and State Street Bank and Trust Company, as trustee
setting forth certain terms and conditions under which the
Apartment Complex is to be operated.
"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 cannot exceed 30% of
the qualifying income levels of those units under Section 42.
"Rental Achievement" means the first time, based upon three
(3) consecutive full calendar months of operation after Final
Closing, with each month taken individually, that Cash Available
for Debt Service Requirements (as defined below) equals or
exceeds 1.15 times Debt Service requirements. "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, but specifically excluding Debt Service requirements.
For purposes of this definition, cash requirements of the
Partnership shall include to the extent not otherwise covered
above, full funding of all Partnership reserves, normal repairs,
real estate taxes at fully assessed levels assuming a fully
improved property, and necessary capital improvements.
"Reserve Fund for Replacements" means the reserve fund for
replacements with respect to the Apartment Complex as established
pursuant to the provisions of Section 8.18(a) of this Agreement.
"Revenues" means all cash receipts of the Partnership during
any period except for Capital Contributions, proceeds from the
liquidation, sale or refinancing of Partnership property or of a
Capital Transaction, or the proceeds of any loan to the
Partnership.
"Revised Projected Credit" has the meaning set forth in
Section 5.01(d)(i).
"Share of Minimum Gain" means for each Partner, the excess
of (1) the sum of (a) the aggregate Non-Recourse Deductions
allocated to such Partner (and such Partner's predecessors in
interest) up to that time and (b) the aggregate distributions to
such Partner (and such Partner's predecessors in interest) up to
that time of proceeds of a non-recourse liability that are
allocable to an increase in Partnership Minimum Gain over (2) the
sum of (a) such Partner's (and such Partner's predecessors in
interest) aggregate share of the net decrease in Partnership
Minimum Gain up to that time and (b) such Partner's (and such
Partner's predecessors in interest) aggregate share of the
decreases up to that time in Partnership Minimum Gain resulting
from revaluations of Partnership Property subject to one or more
non-recourse liabilities of the Partnership, as more fully set
forth in Treasury Regulation 1.704-2(g).
"Special Limited Partner" means BCTC 94, Inc., a
Massachusetts corporation, which is the Special Limited Partner
of the Partnership.
"State" means Missouri.
"State Designation" means, with respect to the Apartment
Complex, the final allocation by the Agency of Low-Income Housing
Tax Credits, as evidenced by the receipt by the Partnership of
IRS Form 8609 executed by the Agency as to all buildings in the
Apartment Complex.
"Subordinated Loan" means any loan made by the General
Partner to the Partnership pursuant to Section 8.17.
"Substantial Completion" means the date upon which the
Partnership has received (a) both a certificate of substantial
completion from the applicable inspecting architect certifying
that the construction has been completed in accordance with the
Plans and Specifications and (b), if applicable, certificates of
substantial completion or certificates of occupancy from the
applicable governmental jurisdiction(s) or authority(ies) for one
hundred percent (100%) of the apartment units in the Apartment
Complex; provided, however, that Substantial Completion shall not
be deemed to have occurred if on such date any liens or other
encumbrances as to title to the Land and the Apartment Complex
exist, other than those securing the Mortgage Loan and/or those
Consented to by the Investment Partnership.
"Substitute Limited Partner" means any Person admitted to
the Partnership as a Limited Partner pursuant to Section 9.03.
"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 in
determining and maintaining Capital Accounts pursuant to Section
11.12 of this Agreement at the time they would be taken into
account under the Partnership's method of accounting if they were
deductible expenses.
"Taxable Income" and "Tax Losses" means the Partnership's
taxable income or tax losses, respectively, for each fiscal year
(or part thereof) as determined for federal income tax purposes,
including, where the context requires, all items of income, gain,
loss, deduction and credit which enter into the computation
thereof.
"Tax Credit" means the Low-Income Housing Tax Credit.
"Tax Credit Set-Aside" means the date upon which the
Partnership received a reservation for an allocation of Tax
Credit, by the Agency in an annual dollar amount of not less than
$47,999, which reservation shall not have expired or been revoked
prior to the date on which the First Installment is paid.
ARTICLE III
PURPOSE AND BUSINESS OF THE PARTNERSHIP TC "ARTICLE III -
PURPOSE OF BUSINESS OF THE PARTNERSHIP"\l1
3.01. Purpose of the Partnership TC "3.01. Purpose of the
Partnership"\l2 . The Partnership has been organized to acquire
the Land and to construct the Apartment Complex located and to
develop, finance, own, construct, rehabilitate, maintain, operate
and sell or otherwise dispose of the Apartment Complex, in order
to obtain long-term appreciation, cash income, Tax Credits and
tax losses and to manage the Apartment Complex in a manner that
provides and preserves safe, decent, affordable housing and
needed supportive services.
3.02. Authority of the Partnership TC"3.02. Authority of
the Partnership"\2 . In order to carry out its purpose, the
Partnership is empowered and authorized to do any and all acts
and things necessary, appropriate, proper, advisable, incidental
to or convenient for the furtherance and accomplishment of its
purpose, and for the protection and benefit of the Partnership,
including but not limited to the following:
(a) acquire ownership of the Land and construct the
Apartment Complex to be located thereon;
(b) rehabilitate, operate, maintain, improve, buy, own,
sell, convey, assign, mortgage, rent or lease any real estate and
any personal property necessary to the operation of the Apartment
Complex;
(c) provide housing, subject to the Minimum Set-Aside Test
and the Rent Restriction Test and consistent with the
requirements of the Project Documents so long as any Project
Documents remain(s) in force;
(d) enter into any kind of activity, and perform and carry
out contracts of any kind necessary to, or in connection with, or
incidental to, the accomplishment of the purposes of the
Partnership;
(e) borrow money and issue evidences of indebtedness in
furtherance of the Partnership business and secure any such
indebtedness by mortgage, pledge, or other lien;
(f) maintain and operate the Apartment Complex, including
hiring the Management Agent (which Management Agent may be any of
the Partners or an Affiliate thereof) and entering into any
agreement for the management of the Apartment Complex during its
rent-up and after its rent-up period;
(g) subject to the approval of the Agency and/or the
Lender, if required, and to other limitations expressly set forth
elsewhere in this Agreement, negotiate for and conclude
agreements for the sale, exchange, lease or other disposition of
all or substantially all of the property of the Partnership, or
for the refinancing of any mortgage loan on the property of the
Partnership;
(h) enter into the Loan Documents with the Lender and grant
the Mortgage, enter into the Mortgage Loan and all other
documents required by the Lender with respect to the Mortgage
Loan, and the Extended Use Commitment and Regulatory Agreement,
if any, with the Agency, providing for regulations with respect
to rents, profits, dividends and the disposition of the Apartment
Complex and the long-term use of the Apartment Complex for low-
income housing;
(i) rent dwelling units in the Apartment Complex from time
to time, in accordance with the provisions of the Code applicable
to Low-Income Housing Tax Credits and in accordance with
applicable federal, state and local regulations, collecting the
rents therefrom, paying the expenses incurred in connection with
the Apartment Complex, and distributing the net proceeds to the
Partners, subject to any requirements which may be imposed by the
Extended Use Commitment, the Regulatory Agreement, if any, and
the Loan Documents; and
(j) do any and all other acts and things necessary or
proper in furtherance of the Partnership business.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS;
DUTIES AND OBLIGATIONS TC "ARTICLE IV - REPRESENTATIONS,
WARRANTIES AND COVENANTS, DUTIES AND OBLIGATIONS"\L1
4.01. Representations, Warranties and Covenants Relating to
the Apartment Complex and the Partnership TC "4.01.
Representations, Warranties and Covenants Relating to the
Apartment Complex and the Partnership"\L2 . As of the date
hereof, the General Partner hereby represents, warrants and
covenants to the Partnership and to the Partners that:
(a) the construction, rehabilitation and development of the
Apartment Complex shall be completed in a timely and workmanlike
manner in accordance with (i) all applicable requirements of the
Construction Contract and the Project Documents, (ii) all
applicable requirements of all appropriate governmental entities,
and (iii) the Plans and Specifications of the Apartment Complex
that have been or shall be hereafter approved by the Lender and
any applicable governmental entities, as such Plans and
Specifications may be changed from time to time with the approval
of the Lender and any applicable governmental entities, if such
approval shall be required;
(b) at the commencement of construction or rehabilitation,
and as of the date hereof, the Land is and will be properly zoned
for the Apartment Complex, all consents, permissions and licenses
required by all applicable governmental entities have been
obtained (excepting however any certificates of occupancy which
must be obtained prior to the occupancy of the Apartment Complex,
which such certificates will be obtained by the General Partner
on behalf of the Partnership), and the Apartment Complex
conformed and conforms to all applicable federal, state and local
land use, zoning, environmental and other governmental laws and
regulations;
(c) all appropriate public utilities, including sanitary
and storm sewers, water, gas and electricity, are currently
available and will be operating properly for all units in the
Apartment Complex at the time of first occupancy of such units;
(d) as of the date hereof, at the Final Closing, good and
marketable fee simple title to the Apartment Complex is and will
be held by the Partnership, and title insurance policies of a
financially-responsible institution acceptable to the Special
Limited Partner, in the amount of the replacement cost of the
Apartment Complex, which amount (as to the Partnership) shall not
be less than the aggregate of the Invested Amount of the General
Partner and the Investment Partnership plus the principal amount
of the Mortgage Loan, in favor of the Partnership were issued,
and remain in full force and effect, subject only to such
easements, covenants, restrictions and such other standard
exceptions as are normally included in owner's or mortgagee's
title insurance policies and which are acceptable to the Special
Limited Partner and shall contain a non-imputation endorsement
and such other endorsements as deemed reasonably necessary by the
Special Limited Partner;
(e) the General Partner is not aware of any default under
any agreement, contract, lease, or other commitment, or of any
claim, demand, litigation, proceedings or governmental
investigation pending or threatened against it, the Apartment
Complex or the Partnership, or related to the business or assets
of the Partnership or of the Apartment Complex, which claim,
demand, litigation, proceeding or governmental investigation
could result in any judgment, order, decree, or settlement which
would materially and adversely affect the business or assets of
the Partnership, the General Partner, or of the Apartment
Complex;
(f) except for the commitment fees paid to the Lender,
neither the General Partner nor any Affiliate of the General
Partner or the Partnership, has entered, or shall enter into any
agreement or contract for the payment of any Mortgage Loan
discounts, additional interest, yield maintenance or other
interest charges or financing fees or any agreement providing for
the guarantee of payment of any such interest charges or
financing fees relating to the Mortgage Loan.
(g) the execution of this Agreement, the incurrence of the
obligations set forth in this Agreement, and the consummation of
the transactions contemplated by this Agreement do not violate
any provision of law, any order, judgment or decree of any court
binding on the Partnership, the General Partner or any of them or
their Affiliates, any provision of any indenture, agreement, or
other instrument to which the Partnership or they or either of
them is a party or by which the Partnership or the Apartment
Complex is affected, and is not in conflict with, and will not
result in a breach of or constitute a default under any such
indenture, agreement, or other instrument or result in creating
or imposing any lien, charge, or encumbrance of any nature
whatsoever upon the Apartment Complex;
(h) the Construction Contract will be entered into between
the Partnership and the Contractor; no other consideration or fee
shall be paid to the Contractor, in its capacity as the
Contractor, other than the amounts set forth in the Construction
Contract or as evidenced by change orders approved by the Lender
or as otherwise disclosed in writing to and approved by the
Investment Partnership; and all change orders that have been
submitted by the Contractor to date have been paid in full;
(i) as of the date hereof, the General Partner, on behalf
of the Partnership, will maintain liability insurance covering
the Land and the Apartment Complex in an amount equal to the full
replacement value thereof;
The term "full replacement value" as used herein shall
mean and include the total cost of replacement of the Apartment
Complex at each respective stage of construction or
rehabilitation, as applicable, thereof up to completion;
(j) neither the General Partner nor the Partnership has
incurred any financial responsibility with respect to the
Apartment Complex prior to the date of execution of this
Agreement, other than that disclosed to the Investment
Partnership;
(k) at the time of execution of this Agreement, at the time
of Final Closing, and at Substantial Completion, the Partnership
was, is and will continue to be a valid limited partnership, duly
organized under the laws of the State, (and, if the Apartment
Complex is located in a state other than the State, the
Partnership has been duly registered as a foreign limited
partnership in such state) had, has and shall continue to have
full power and authority to acquire the Land and to rehabilitate,
develop, operate and maintain the Apartment Complex in accordance
with the terms of this Agreement, and has taken and shall
continue to take all action under the laws of the State and any
other applicable jurisdiction that is necessary to protect the
limited liability of the Limited Partners and to enable the
Partnership to engage in its business;
(l) no restrictions on the sale or refinancing of the
Apartment Complex, other than the restrictions set forth in the
Loan Documents, in the Extended Use Commitment, the Regulatory
Agreement, if any, and as set forth in this Agreement, exist as
of the date hereof, and no such restrictions shall, at any time
while the Investment Partnership is a Limited Partner, be placed
upon the sale or refinancing of the Apartment Complex;
(m) the Apartment Complex is being developed in a manner
which satisfies, and shall continue to satisfy, all restrictions,
including tenant income and rent restrictions, applicable to
projects generating Low-Income Housing Tax Credits under Section
42 of the Code;
(n) the Tax Credits projected to be applicable to the
Apartment Complex are the Projected Credits;
(o) the General Partner shall obtain from the Agency, not
later than December 31, 1998 a duly authorized, valid and binding
carryover allocation of Low-Income Housing Tax Credits in the
name of the Partnership and as to the Apartment Complex in an
amount not less than $47,999 per year should the Apartment
Complex not be complete and placed in service, each determined by
the Investment Partnership, by October 1, l998;
(p) to the best of its knowledge after due inquiry, at the
time of the execution of this Agreement, the General Partner has
fully complied with all applicable material provisions and
requirements of any and all purchase and/or lease agreements,
loan agreements, Project Documents and other agreements with
respect to the acquisition, development, financing,
rehabilitation and operation of the Apartment Complex; it shall
take, and/or cause the Partnership to take, all actions as shall
be necessary to achieve and maintain continued compliance with
the provisions, and fulfill all applicable requirements, of such
agreements;
(q) the obligations of the General Partner will be
guaranteed by the Guarantors pursuant to the terms of an
unlimited guaranty of even date by and between the Partnership
and the Guarantor(s); and
(r) the Partnership shall satisfy all conditions to the
Agency's allocation of Tax Credits set forth in the Carryover
Allocation Agreement and all other documents entered into with
the Agency within the time periods specified in each such
document, and, in each case, to the extent required to be
satisfied as of the date hereof and shall remain in full
compliance with the Agency's requirements.
(s) the Partnership is not in default under either of the
Mortgage Loan and knows of no event that with the passage of
time, would constitute an event of default under either of the
Mortgage Loan.
4.02. Duties and Obligations Relating to the Apartment
Complex and the Partnership TC "4.02. Duties and Obligations
Relating to the Apartment Complex and the Partnership"\L2 . The
General Partner shall have the following duties and obligations
with respect to the Apartment Complex and the Partnership:
(a) all requirements shall be met which are necessary to
obtain or achieve (i) compliance with the Minimum Set-Aside Test,
the Rent Restriction Test, and any other requirements necessary
for the Apartment Complex to initially qualify, and to continue
to qualify, for Tax Credits, including all requirements set forth
in the Extended Use Commitment, (ii) issuance of all necessary
certificates of occupancy, including all governmental approvals
required to permit occupancy of all of the apartment units in the
Apartment Complex, (iii) Final Closing and (iv) compliance with
all provisions of the Project Documents;
(b) while conducting the business of the Partnership, the
General Partner shall not act in any manner which it knows or
should have known after due inquiry will (i) cause the
termination of the Partnership for federal income tax purposes
without the Consent of the Investment Partnership, or (ii) cause
the Partnership to be treated for federal income tax purposes as
an association taxable as a corporation;
(c) the Apartment Complex shall be managed upon Substantial
Completion so that (i) not less than eighty per cent (80%) of the
gross income from the Apartment Complex in every year is rental
income from dwelling units in the Apartment Complex used to
provide living accommodations not on a transient basis, (ii) the
rental of all units in the Apartment Complex complies with the
tenant income limitations and other restrictions under the Rent
Restriction Test and as set forth in the Extended Use Commitment
and all applicable documents entered into in connection with the
Mortgage Loan, and (iii) one hundred percent (100%) of the Low-
Income Units in the Apartment Complex are occupied or held for
occupancy by individuals with incomes of sixty percent (60%) or
less of area median income as adjusted for family size;
(d) the General Partner shall exercise good faith in all
activities relating to the conduct of the business of the
Partnership, including the development, operation and maintenance
of the Apartment Complex, and shall take no action with respect
to the business and property of the Partnership which is not
reasonably related to the achievement of the purpose of the
Partnership;
(e) all of (i) the fixtures, maintenance supplies, tools,
equipment and the like now and to be owned by the Partnership or
to be appurtenant to, or to be used in the operation of the
Apartment Complex, as well as (ii) the rents, revenues and
profits earned from the operation of the Apartment Complex, will
be free and clear of all security interests and encumbrances
except for the Mortgage Loan and the Mortgage, and any additional
security agreements executed in connection therewith;
(f) the General Partner will execute on behalf of the
Partnership all documents necessary to elect, pursuant to
Sections 732, 743 and 754 of the Code, to adjust the basis of the
Partnership's property upon the request of the Special Limited
Partner, if, in the sole opinion of the Investment Partnership,
such election would be advantageous to the Special Limited
Partner and any such elections (including elections made at the
direction or with the consent of the Special Limited Partner)
shall not reduce the obligations of the General Partner pursuant
to Section 5.01(d);
(g) the General Partner guarantees payment by the
Partnership of any Credit Recovery Loan, the Asset Management
Fee, and Excess Development Costs, as more fully provided herein
and in the Guaranty;
(h) the General Partner shall comply and cause the
Partnership to comply with the provisions of all applicable
governmental and contractual obligations;
(i) the General Partner shall be responsible for the
payment of any fines or penalties imposed by the Agency or the
Lender pursuant to the Project Documents and any documents
executed in connection with obtaining Tax Credits (other than
with respect to payments of principal or interest under the
Mortgage Loan from and after Final Closing);
(j) the General Partner shall promptly notify the
Investment Partnership of any written or oral notice of (i) any
default or failure of compliance with respect to the Mortgage
Loan or any other financial, contractual or governmental
obligation of the Partnership or the General Partner (in the case
of the General Partner, if such default or failure of compliance
may have a material adverse impact on the Partnership or its
operations), or (ii) any Internal Revenue Service proceeding
regarding the Apartment Complex or the Partnership;
(k) the General Partner shall provide the Investment
Partnership with such information and sign such documents as are
necessary for the Partnership to make timely, accurate and
complete submissions of federal and state income tax returns;
(l) within thirty (30) days following the Admission Date,
the General Partner shall submit to Boston Capital evidence of
the Partnership's engagement of Accountants, who have been
approved by the Special Limited Partner, to be responsible for
the Partnership's audit and tax matter reporting obligations
under Section 13.04 hereof;
(m) the General Partner shall provide to Special Limited
Partner, for its approval and Consent, prior to execution, a copy
of the Extended Use Commitment to be entered into between the
Partnership and the Agency and shall ensure that such Extended
Use Commitment is executed and ensure that all Lenders
subordinate to same and recorded no later than the end of the
first taxable year in which any Tax Credit is claimed by the
Partnership with respect to any building in the Apartment
Complex; and
(n) the General Partner shall establish and maintain all
reserve accounts required by the Lender pursuant to the Loan
Documents.
ARTICLE V
PARTNERS, PARTNERSHIP INTERESTS
AND OBLIGATIONS OF THE PARTNERSHIP TC
"ARTICLE V - PARTNERS, PARTNERSHIP INTERESTS AND OBLIGATIONS OF
THE PARTNERSHIP"\l1
5.01. Partners, Capital Contributions and Partnership
Interests TC "5.01. Partners, Capital Contributions and
Partnership Interests"\l2 .
(a) The General Partner, its principal address or place of
business, its Capital Contribution and Percentage Interest are as
follows:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties, LLC $164,227 .01%
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
In the event that the Partnership has not paid all or part
of the Deferred Development Fee when the final payment is due
pursuant to the Development Agreement and Section 8.10 hereof,
the General Partner shall contribute to the Partnership an amount
equal to any such remaining principal balance (the "General
Partner's Special Capital Contribution") and the Partnership
shall thereupon make a payment in an equal amount to pay off the
balance due under the Development Agreement. The capital
contribution of the General Partner reflects, in part, an amount
equal to $164,217 which constitutes an amount contributed by the
General Partner to the Partnership necessary to fund additional
project costs. (the "General Partner's Special Capital
Construction Contribution").
(b)(i) The Investment Partnership, its principal office
or place of business, its Capital Contribution and its Percentage
Interest is as follows:
Boston Capital Tax Credit Fund IV, $359,958 99.98%
L.P.
c/o Boston Capital Partners, Inc.
One Boston Place as more
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ specifically set forth
in sub-
paragraph (c)(i)
immediately below
(ii) The Special Limited Partner, its principal office or
place of business, its Capital Contribution and its Percentage
Interest is as follows:
BCTC 94, Inc. $10.00 0.01%
c/o Boston Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) Subject to the provisions of this Agreement, including,
without limitation, the provisions of Sections 5.01(d) and 5.03,
the Investment Partnership shall be obligated to make Capital
Contributions to the Partnership in the aggregate amount of
$359,958 in four (4) installments (the "Installments"), which
Installments shall be due and payable in cash by the Investment
Partnership within twenty-one (21) days after the Investment
Partnership shall have received evidence, reasonably satisfactory
to them, of the occurrence of each of the conditions set forth
below as to the applicable Installment, as follows:
(i) $233,973 on the Admission Date, which shall not occur
prior to confirmation by Boston Capital that outstanding due
diligence items have been completed by the General Partner to the
reasonable satisfaction of Boston Capital (the "First
Installment") of which $75,000will be deducted to reflect the
repayment of a pre-development loan advanced by the Investment
Partnership to the Partnership prior to the effective date of
this Agreement.
(ii) $89,990 on the latest to occur of (A) Cost
Certification, (B) receipt of an updated title insurance policy
satisfactory to the Special Limited Partner, (C) Initial 100%
Occupancy Date, (D) State Designation, (E) receipt of a payoff
letter from the Contractor stating that all amounts payable to
the Contractor have been paid in full and that the Partnership is
not in violation of the Construction Contract, (F) Substantial
Completion, (G) receipt of a valid and recorded Extended Use
Commitment and receipt of a subordination agreement subordinating
the Mortgage Loan to the Extended Use Commitment, (H) receipt
of updated insurance certificates relating to the Apartment
Complex satisfactory to the Special Limited Partnership or (I)
satisfaction of all of the conditions to the payment of the First
Installment (the "Second Installment"); and
(iii) $30,995 on the latest to occur of (A) Rental
Achievement or (B) satisfaction of all of the conditions to the
payment of the First and Second Installment (the "Third
Installment"); and
(iv) $5,000 on the latest to occur of (A) the receipt by
the Investment Partnership of the Partnership's federal income
tax return and an audited financial statement for the year in
which Rental Achievement occurred or (B) satisfaction of all of
the conditions to the payment of the First, Second and Third
Installments (the "Fourth Installment").
As a condition precedent to each payment set forth above other
than the First Installment, the General Partner shall, not less
than twenty (20) days nor more than thirty (30) days prior to the
time such Installment is due, give the Investment Partnership
Notice in the form of a written certification that: (A) all
conditions precedent to such Installment have been satisfied, (B)
the representations, warranties and covenants given by the
General Partner in Section 4.01 are valid and accurate, where
still applicable, with respect to the General Partner, the
Partnership and/or the Apartment Complex, as of the date of such
certificate, and (C) to the best of its knowledge, after due
inquiry, no condition exists which would, pursuant to Section
5.03, entitle the Investment Partnership to withhold the payment
of such Installment. Based upon the giving of such Notice, such
Installment shall be made on the due date therefor, or if such
Notice is not timely given, then within twenty-one (21) days
after receipt of such Notice.
(d) (i) Upon the occurrence of Cost Certification or State
Designation, if ninety-nine and ninety-nine hundredths percent
(99.99%) of the aggregate amount of Tax Credits: (A) for which
the Partnership would be eligible with respect to the Apartment
Complex based upon the Cost Certification, and/or (B) allocated
by the Agency with respect to the Apartment Complex, is less than
the aggregate amount of the Projected Credit over the ten-year
credit period (the "Allocation Differential"), then the Capital
Contribution of the Investment Partnership shall be reduced by
the "Adjustment Amount". The Adjustment Amount shall be equal to
the Allocation Differential multiplied by .75. Any such reduction
in Capital Contribution shall first be applied to reduce the
Installment next due to be paid by the Investment Partnership,
and any portion of such reduction in excess of such Installment
shall be applied to reduce succeeding Installments. If no
further Installments are due to be paid, then the entire amount
of such reduction shall be repaid by the Partnership to the
Investment Partnership promptly after demand is made therefor.
The General Partner is obligated to provide such funds to the
Partnership as shall be necessary to cause the aforesaid payment
to be made by the Partnership to the Investment Partnership. In
the event that there is a reduction in Capital Contributions
equal to the Adjustment Amount, then the amount of the Projected
Credit shall be proportionately reduced to reflect the Allocation
Differential, and thereafter shall be referred to as the "Revised
Projected Credit".
(ii) If at any time the Accountants determine that, for
any fiscal year or portion thereof during the Partnership's
operation, ending on the date five (5) years from and after the
date of Substantial Completion (the "Reduction Period"), the
Actual Credit for such fiscal year or portion thereof is less
than the Projected Credit (or Revised Projected Credit)
applicable to such fiscal year or portion thereof, then the
Capital Contribution of the Investment Partnership shall be
reduced by the Reduction Amount. The "Reduction Amount" shall be
equal to the sum of (A) the Credit Shortfall multiplied by .882
and (B) the amount of any recapture, interest or penalty payable
by the limited partners of the Investment Partnership (assuming
pass through of all such liability in the year incurred and a tax
rate equal to the maximum individual rate applicable in such
year) as a result of the Credit Shortfall for such year. Any
such reduction in Capital Contribution shall first be applied to
reduce the Installment next due to be paid by the Investment
Partnership, and any portion of such reduction in excess of such
Installment shall be applied to reduce succeeding Installments.
If no further Installments are due to be paid, then the entire
amount of such reduction shall be repaid by the Partnership to
the Investment Partnership promptly after demand is made
therefor. The General Partner is obligated to provide such funds
to the Partnership as shall be necessary to cause the aforesaid
payment to be made by the Partnership to the Investment
Partnership.
(iii) In the event that, for any reason, at any time
after the Reduction Period, there is a Credit Shortfall with
respect to any fiscal year during the Partnership's operation,
the Investment Partnership shall be treated as having made a
constructive advance to the Partnership with respect to such year
(a "Credit Recovery Loan"), which shall be deemed to have been
made on January 1 of such year, in an amount equal to the sum of
(A) the Credit Shortfall for such year, plus (B) the amount of
any recapture, interest or penalty payable by the limited
partners of the Investment Partnership (assuming pass-through of
all such liability in the year incurred and a tax rate equal to
the maximum individual rate applicable in such year) as a result
of the Credit Shortfall for such year. Credit Recovery Loans
shall be deemed to bear simple (not compounded) interest, from
the respective dates on which such principal advances are deemed
to have been made under this Section 5.01(d) (iii) at 9% per
annum. Credit Recovery Loans shall be repayable by the
Partnership as provided in Section 11.04(A).
(iv) Permanent Increase in Credit. In the event that,
as a result of an increase in the qualified basis and the
Eligible Basis of the Apartment Complex for purposes of Tax
Credits (which increase is verified by the Accountants to the
reasonable satisfaction of the Investment Partnership), the
Partnership receives a duly-authorized, valid and binding
allocation, from the Agency, of an additional amount of Tax
Credits with respect to the Apartment Complex (the "Additional
Credits"), the Investment Partnership agrees that it will either,
in its sole and absolute discretion: (A) make additional Capital
Contributions to the Partnership in an amount determined on the
same terms and conditions as are applicable to the investment
being made by the Investment Partnership pursuant to this
Agreement in an aggregate amount not in excess of $5,000, applied
to the increase in the amount of the Projected Low-Income Tax
Credit resulting from the Additional Credits (the "Additional
Capital Contributions"); or (B) reduce its allocation of profits,
losses and credits from the Partnership, pursuant to Section
11.01, to such percentage as shall permit it to realize its
proportionate share of the full amount of the Projected Credit,
but no portion of the Additional Credits. Any Additional Capital
Contributions payable as aforesaid shall be included ratably over
the remaining Installments due to be paid by the Investment
Partnership, unless otherwise determined by the Investment
Partnership in its sole discretion; provided, however, that if no
further Installments remain to be paid, then the entire amount of
such Additional Capital Contributions shall be paid by the
Investment Partnership to the Partnership within thirty (30) days
after the determination of the amount thereof by the Investment
Partnership as aforesaid. The General Partner agrees that, in the
situation described above in this Section 5.01(d)(iv), it shall
pay all costs associated with the preparation of documents
necessary or desirable to implement the foregoing provisions of
this Section 5.01(d)(iv), including the reasonable fees and
expenses of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as counsel to the Investment
Partnership.
(e) Without the Consent of the General Partner and the
Investment Partnership, no additional Persons may be admitted as
additional Limited Partners and Capital Contributions may be
accepted only as and to the extent expressly provided for in this
Article V.
5.02. Return of Capital Contribution TC "5.02. Return of
Capital Contribution"\l2 . Except as provided in this
Agreement, no Partner shall be entitled to demand or receive the
return of his Capital Contribution.
5.03. Withholding of Capital Contribution Upon Default TC
"5.03. Withholding of Capital Contribution Upon Default"\l2 .
In the event that: (a) the General Partner, or any successor
General Partner, shall not have substantially complied with any
material provisions under this Agreement, after Notice from the
Investment Partnership of such noncompliance and failure to cure
such noncompliance within a period of thirty (30) days from and
after the date of such Notice, or (b) the Partnership is in
default under the Project Documents and such default has
continued uncured beyond any applicable cure or grace period, or
(c) foreclosure proceedings shall have been commenced against the
Apartment Complex, or (d) the Partnership shall not have
satisfied the post-closing conditions described on Exhibit A
attached hereto within the time frames designated therein, then
the Partnership and the Investment Partnership, at its sole
election, may cause the withholding of payment of any Installment
otherwise payable to the Partnership. Notwithstanding the
provisions herein, in the event that an Installment payment
becomes due during any cure period stated in this Section 5.03,
the Investment Partnership, at its sole election, may cause the
withholding of any payment of any such Installment otherwise
payable to the Partnership until the termination of such cure
period, and then, according to the provisions herein.
All amounts so withheld by the Investment Partnership under
this Section 5.03 shall be promptly released to the Partnership
only after the General Partner or the Partnership has cured the
default justifying the withholding, as demonstrated by evidence
reasonably acceptable to the Investment Partnership.
5.04. Legal Opinions TC "5.04. Legal Opinions"\l2 . As
a condition precedent to payment of the First Installment, the
Investment Partnership shall have received the opinions of ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq., which opinions shall be in form and substance
satisfactory to the Investment Partnership and shall explicitly
state that ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, of Boston, Massachusetts,
counsel to the Limited Partner, may explicitly rely upon them.
5.05. Repurchase Obligation TC "5.05. Repurchase
Obligation"\l2 .
(a) If (i) the building(s) comprising the Apartment Complex
is/are not placed in service by December 31, 1998; (ii) the
Partnership has not received State Designation by (a) December
31, 1998, or (b) by such later date demonstrated by the General
Partner satisfactory to the Investment Partnership as customary
with Agency practice, in either instance for the year or years
that the Apartment Complex is placed in service; (iii) Rental
Achievement does not occur within 12 months from and after the
occurrence of Substantial Completion; (iv) the Partnership fails
to initially meet the Minimum Set-Aside Test or the Rent
Restriction Test within 12 months of the date that the Apartment
Complex is placed in service; (v) the Partnership fails to meet
the Minimum Set-Aside Test or the Rent Restriction Test at
anytime during the first 60 months after initial achievement of
the Minimum Set Aside and Rent Restriction Tests; (vi) an event
of default described in Section 5.03 shall exist and shall not
have been cured within the applicable cure or grace period; (vii)
the buildings comprising the Apartment Complex are not placed in
service prior to December 31 in the year in which State
Designation has occurred; (viii) the General Partner fails to
make Subordinated Loans as required by this Agreement; then (A)
the General Partner shall, within 30 days of the occurrence
thereof, send to the Investment Partnership Notice of such event
and of its obligation to purchase the Interest of the Investment
Partnership hereunder and pay to the Investment Partnership its
Invested Amount in the event the Investment Partnership in its
sole discretion requires such purchase of its Interest or (B)
failing any such required Notice by the General Partner to the
Investment Partnership and upon the Investment Partnership
gaining knowledge of any of the foregoing repurchase events, the
Investment Partnership will promptly notify the General Partner
of its obligation to repurchase the Interest of the Investment
Partnership. Thereafter, the General Partner, within 30 days of
receipt of Notice from the Investment Partnership of such
election, shall acquire the entire Interest of the Investment
Partnership in the Partnership by making payment to the
Investment Partnership, in cash, of an amount equal to its
Invested Amount.
(b) If the Agency shall disapprove the Investment
Partnership as a Partner hereunder within 180 days of its
admission to the Partnership, then the Investment Partnership
shall, effective as of such time (or such other time as may be
specified by the Agency in its disapproval), cease to be a
Limited Partner. The General Partner shall, within 10 days of
the effective date of such termination, purchase the Interest of
the Investment Partnership in the Partnership and pay to the
Investment Partnership an amount equal to its Net Capital
Contribution.
(c) Upon receipt by the Investment Partnership of any such
payment of its Net Capital Contribution or the Invested Amount,
as applicable, the Interest of the Investment Partnership shall
terminate, the Investment Partnership shall execute, acknowledge
and deliver such documents of assignment as the General Partner
shall require and effectuate termination or transfer of its
Interest, and the General Partner shall indemnify and hold
harmless the Investment Partnership from any losses, damages,
and/or liabilities to which the Investment Partnership (as a
result of its participation hereunder) may be subject, except as
and to the extent of any losses, damages and/or liabilities
arising from the Investment Partnership's own negligence,
misconduct or fraud.
ARTICLE VI
CHANGES IN PARTNERS TC "ARTICLE VI
- CHANGES IN PARTNERS"\l1
6.01. Withdrawal of a General Partner TC "6.01.
Withdrawal of a General Partner"\L2 .
(a) A General Partner may withdraw from the Partnership or
sell, transfer or assign his or its Interest as General Partner
only with the prior Consent of the Special Limited Partner, and
only after being given written approval by the necessary parties
as provided in Section 6.02, and by the General Partner(s) to be
substituted for him or it or to receive all or part of his or its
Interest as General Partner.
(b) In the event that a General Partner withdraws from the
Partnership or sells, transfers or assigns his or its entire
Interest pursuant to Section 6.01(a), he or it shall be and shall
remain liable for all obligations and liabilities incurred by him
or it as General Partner, or arising out of any events occurring
before such withdrawal, sale, transfer or assignment shall have
become effective, but shall be free of any obligation or
liability incurred on account of the activities of the
Partnership from and after the time such withdrawal, sale,
transfer or assignment shall have become effective; provided that
if the withdrawal is in breach of this Agreement, the General
Partner shall be liable to the Partnership and/or the Limited
Partners for all damage, loss, cost or expense incurred by the
Partnership or the Limited Partners as a result of such
unauthorized withdrawal.
6.02. Admission of a Successor or Additional General
Partner TC "6.02. Admission of a Successor or Additional
General Partner"\L2 . A Person shall be admitted as a General
Partner of the Partnership only if the following terms and
conditions are satisfied:
(a) the withdrawal of any withdrawing General Partner and
the admission of such Person shall have been Consented to by the
remaining General Partner or its successors and the Investment
Partnership;
(b) the successor or additional Person shall have accepted
and agreed to be bound by (i) all the terms and provisions of
this Agreement, by executing a counterpart hereof, and (ii) all
the terms and provisions of the Loan Documents, including by
executing a counterpart thereof to the extent required by a
Lender, and (iii) all the terms and provisions of such other
documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a General
Partner, and an amendment to this Agreement and/or the
Certificate, as applicable, evidencing the admission of such
Person as a General Partner shall have been filed and all other
actions required by Section 1.05 in connection with such
admission shall have been performed;
(c) if the successor or additional Person is a corporation
or a limited liability company, it shall have provided the
Partnership with evidence satisfactory to counsel for the
Partnership of its authority to become a General Partner, to do
business in the State and to be bound by the terms and provisions
of this Agreement; and
(d) counsel for the Partnership shall have rendered an
opinion that the admission of the successor or additional Person
is in conformity with the Act and that none of the actions taken
in connection with the admission of the successor Person will
cause the termination or dissolution of the Partnership or will
cause it to be classified other than as a partnership for federal
income tax purposes.
6.03. Effect of Bankruptcy, Death, Withdrawal,
Dissolution or Incompetence of a
General Partner TC "6.03. Effect of Bankruptcy,
Death, Withdrawal, Dissolution or Incompetence of a General
Partner"\l2 .
(a) In the event of the Bankruptcy of a General Partner or
the withdrawal, death or dissolution of a General Partner or an
adjudication that a General Partner is incompetent (which term
shall include, but not be limited to, insanity) the business of
the Partnership shall be continued by the other General Partner,
if any, (and the other General Partner, by execution of this
Agreement, expressly so agrees to continue the business of the
Partnership); provided, however, that if the withdrawn, Bankrupt,
deceased, dissolved or incompetent General Partner is then the
sole General Partner, unless the Limited Partners within ninety
(90) days after receiving Notice of such Bankruptcy, withdrawal,
death, dissolution or adjudication of incompetence elect to
designate a successor General Partner and continue the
Partnership upon the admission of such successor General Partner
to the Partnership, the Partnership shall be terminated.
(b) Upon the Bankruptcy, death, dissolution or adjudication
of incompetence of a General Partner, such General Partner shall
immediately cease to be a General Partner and his or its Interest
shall without further action be converted to a Limited Partner
Interest; provided, however, that if such Bankrupt, dissolved,
incompetent or deceased General Partner is the sole remaining
General Partner, such General Partner shall cease to be a General
Partner only upon the expiration of ninety (90) days after Notice
to the Special Limited Partner of the Bankruptcy, death,
dissolution or declaration of incompetence of such General
Partner; and provided further that if such Bankrupt, dissolved,
incompetent or deceased General Partner is the sole remaining
General Partner, the converted Partnership Interest of such
replaced General Partner shall be ratably reduced to the extent
necessary to insure that the substitute General Partner holds a
1% Percentage Interest (as set forth in Section 5.01) and will
receive such percentage interest distribution of the General
Partner's percentage pursuant to Section 11.04A(f), as is deemed
reasonable by the Limited Partners as a result of good faith
negotiations with such substitute General Partner; such replaced
General Partner whose Interest has been converted to that of a
Limited Partner shall remain entitled to his or its proportionate
share of the remainder of the distribution pursuant to Section
11.04A(f).
Except as set forth above, such conversion of a General
Partner Interest to a Limited Partner Interest shall not affect
any rights, obligations or liabilities (including without
limitation, any of the General Partner's obligations under
Section 8.09 herein) of the Bankrupt, deceased, dissolved or
incompetent General Partner existing prior to the Bankruptcy,
death, dissolution or incompetence of such person as a General
Partner (whether or not such rights, obligations or liabilities
were known or had matured).
(c) If, at the time of the withdrawal, Bankruptcy, death,
dissolution or adjudication of incompetence of a General Partner,
the Bankrupt, deceased, dissolved or incompetent General Partner
was not the sole General Partner of the Partnership, the
remaining General Partner or General Partners shall promptly (i)
give Notice to the Special Limited Partner of such Bankruptcy,
death, dissolution or adjudication of incompetence, and (ii) make
such amendments to this Agreement and execute and file such
amendments or documents or other instruments as are necessary to
reflect the conversion of the Interest of the Bankrupt, deceased,
dissolved or incompetent General Partner and his having ceased to
be a General Partner. The remaining General Partner or General
Partners are hereby granted an irrevocable power of attorney to
execute any or all documents on behalf of the Partners and the
Partnership and to file such documents as may be required to
effectuate the provisions of this Section 6.03.
ARTICLE VII
ASSIGNMENT TO THE PARTNERSHIP TC
"ARTICLE VII - ASSIGNMENT TO THE PARTNERSHIP"\l1
7.01. Assignment of Contracts, etc TC "7.01. Assignment
of Contracts, etc."\l2 . The General Partner hereby transfers
and assigns to the Partnership all of its right, title and
interest in and to the Apartment Complex, including the
following:
(i) all contracts with architects, engineers, contractors,
developers, supervising architects and all other professionals or
service providers with respect to the rehabilitation or
development of the Apartment Complex;
(ii) all plans, specifications, appraisals, reports and
working drawings, heretofore prepared or obtained in connection
with the Apartment Complex and all governmental approvals
obtained, including planning, zoning and building permits;
(iii) any and all commitments with respect to the Mortgage
Loan; and
(iv) any other work product related to the Apartment
Complex.
ARTICLE VIII
RIGHTS, OBLIGATIONS AND POWERS
OF THE GENERAL PARTNER TC
"ARTICLE VIII - RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL
PARTNER"\l1
8.01. Management of the Partnership TC "8.01. Management
of the Partnership"\l2 .
(a) Except as otherwise set forth in this Agreement, the
General Partner, within the authority granted to it under this
Agreement, shall have full, complete and exclusive discretion to
manage and control the business of the Partnership for the
purposes stated in Article III, shall make all decisions
affecting the business of the Partnership and shall manage and
control the affairs of the Partnership to the best of its ability
and use its best efforts to carry out the purpose of the
Partnership. In so doing, the General Partner shall take all
actions necessary or appropriate to protect the interests of the
Limited Partner and of the Partnership. The General Partner
shall devote such of its time as is necessary to the affairs of
the Partnership.
(b) Except as otherwise set forth in this Agreement and
subject to the applicable provisions of the Project Documents,
the General Partner (acting for and on behalf of the
Partnership), in extension and not in limitation of the rights
and powers given by law or by the other provisions of this
Agreement, shall, in its sole discretion, have the full and
entire right, power and authority in the management of the
Partnership business to do any and all acts and things necessary,
proper, convenient or advisable to effectuate the purpose of the
Partnership. In furtherance and not in limitation of the
foregoing provisions, the General Partner is specifically
authorized and empowered to execute and deliver, on behalf of the
Partnership, the Project Documents and to execute any and all
other instruments and documents, and amendments thereto, as shall
be required in connection with the Mortgage Loan, including, but
not limited to, executing any mortgage, note, contract, building
loan agreement, bank resolution and signature card, release,
discharge, or any other document or instrument in any way related
thereto or necessary or appropriate in connection therewith;
provided, however, that copies of all applications for advances
of Mortgage Loan proceeds which occur after the Admission Date
shall be provided to the Special Limited Partner for its Consent
thereto prior to the disbursement of any funds pursuant thereto.
All decisions made for and on behalf of the Partnership by the
General Partner shall be binding upon the Partnership. No person
dealing with the General Partner shall be required to determine
its authority to make any undertaking on behalf of the
Partnership, nor to determine any facts or circumstances bearing
upon the existence of such authority.
(c) Subject to the terms of this Partnership Agreement, the
General Partners shall be responsible for the management and
administration of the Partnership business and shall have all
rights and authority generally conferred by law or necessary,
advisable or consistent with accomplishing the purpose of the
Partnership. Subject to the consent of the Special Limited
Partner, the General Partner shall have the power to assign
duties and may delegate any of its powers, rights and obligations
hereunder and may appoint, employ, contract or otherwise deal
with any person for the transaction of business of the
Partnership, which person may, but only under the supervision of
the General Partner, perform any acts or services for the
Partnership as the General Partner may approve.
(e) Notwithstanding anything to the contrary contained
herein, the Limited Partners reserve the right, at their option
to conduct an audit on twenty five (25%) percent of the initial
leases or occupancy agreements executed in connection with the
Apartment Complex in order to ensure compliance with the
applicable Rent Restriction Test, Minimum Set Aside Test, or any
other applicable tenant restriction test ("Occupancy Agreement
Audit"). The Limited Partners shall select at their option, any
combination of occupancy agreements which shall comprise the
Occupancy Agreement Audit (the "Selected Occupancy Agreements").
The Occupancy Agreement Audit shall consist of a review of the
complete tenant files in connection with the Selected Occupancy
Agreements, including but not limited to any tenant financial
information. Further, the Occupancy Agreement Audit shall be
conducted with the cooperation of, and at the sole cost and
expense of the General Partner if the Occupancy Agreement Audit
reveals a material noncompliance. A material noncompliance shall
be deemed to exist if at least five (5) occupancy agreements
reveal noncompliance or violations of any applicable tenant
restriction test. If the Occupancy Agreement Audit does not
reveal a material noncompliance the Limited Partners shall bear
the cost of such audit.
Notwithstanding anything to the contrary contained herein or
in the Project Documents, the General Partner or any affiliate
thereof, commencing subsequent to the Admission Date, shall in
all instances submit to the Special Limited Partner for review
all relevant financial information and underlying tenant
qualification certifications with respect to any proposed tenant
prior to execution of any lease or similar occupancy agreement.
Neither the General Partner, nor any affiliate thereof, shall be
authorized to enter into any lease or occupancy agreement with
any proposed tenant without the prior written consent of the
Special Limited Partner.
8.02. Limitations Upon the Authority of the General
Partners TC "8.02. Limitations Upon the Authority of the
General Partners"\l2 .
(a) The General Partner shall not have any authority to:
(i) perform any act in violation of any applicable law
or regulation thereunder;
(ii) perform any act in violation of the provisions of
the Extended Use Commitment, the Loan Documents, or any other
Project Documents;
(iii) do any act required to be approved or
ratified in writing by all Limited Partners under the Act unless
the right to do so is expressly otherwise given in this
Agreement;
(iv) rent apartments in the Apartment Complex such that
the Apartment Complex would not meet the requirements of the Rent
Restriction Test or Minimum Set-Aside Test or to rent Low Income
Units to any individuals where income exceeds 60% of area median
income, as adjusted for family size; or
(v) borrow from the Partnership or commingle
Partnership funds with funds of any other Person.
(b) The General Partner shall not, without the Consent of
the Special Limited Partner have any authority to:
(i) sell or otherwise dispose of, at any time, all or
substantially all of the assets of the Partnership;
(ii) borrow in excess of $10,000 in the aggregate at
any one time outstanding on the general credit of the
Partnership, except borrowings constituting Subordinated Loans or
Credit Recovery Loans;
(iii) following Substantial Completion, construct
any new or replacement capital improvements on the Apartment
Complex which substantially alter the Apartment Complex or its
use or which are at a cost in excess of $10,000 in a single
Partnership fiscal year, except (a) replacements and remodeling
in the ordinary course of business or under emergency conditions
or (b) construction paid for from insurance proceeds;
(iv) acquire any real property in addition to the
Apartment Complex; or
(v) refinance the Mortgage Loan with the Lender.
8.03. Management Purposes TC "8.03. Management
Purposes"\l2 . In conducting the business of the Partnership,
the General Partner shall be bound by the Partnership's
purpose(s) set forth in Article III.
8.04. Delegation of Authority TC"8.04. Delegation of
Authority"\l2 . Subject to Section 8.05 hereof, the General
Partner may employ, contract, or otherwise deal with any Person
in connection with the performance of its management
responsibilities hereunder, provided such Person acts only under
the supervision of the General Partner.
8.05. General Partner or Affiliates Dealing with
Partnership TC "8.05. General Partner or Affiliates Dealing
with Partnership"\l2 .
(a) The General Partner or any Affiliate may act as
Management Agent on such terms and conditions permitted by the
Agency, and may receive compensation at the highest rates
approved and permitted by the Agency at any time; provided that
notwithstanding the foregoing, the Management Agent may not
receive compensation in excess of 5% of gross rental receipts
received from tenants of the Apartment Complex without the prior
approval of the Special Limited Partner.
(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 (A) 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, (B) the goods or services
to be furnished shall be reasonable for and necessary to the
Partnership, (C) 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, (D) 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
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 Section 13.04.
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
8.05(b).
8.06. Other Activities TC "8.06. Other Activities"\l2 .
The General Partner and any Affiliates thereof may engage in or
possess interests in other business ventures of every kind and
description for their own account, including, without limitation,
serving as general partner of other partnerships which own,
either directly or through interests in other partnerships,
government-assisted housing projects similar to the Apartment
Complex. Neither the Partnership nor any of the Partners shall
have any rights by virtue of this Agreement in or to such other
business ventures or to the income or profits derived therefrom.
8.07. Liability for Acts and Omissions TC "8.07.
Liability for Acts and Omissions"\l2 . No General Partner
shall be liable, responsible or accountable in damages or
otherwise to any of the Partners for any act or omission
performed or omitted by him or it, or any of them, in good faith
on behalf of the Partnership and in a manner reasonably believed
by him or it or any of them to be within the scope of the
authority granted to him or it or any of them by this Agreement
and in the best interest of the Partnership, except for
negligence, willful misconduct, fraud or any material breach of
his or its or their fiduciary duty as General Partner with
respect to such acts or omissions. Any loss or damage incurred
by any General Partner by reason of any act or omission performed
or omitted by him or it or any of them in good faith on behalf of
the Partnership and in a manner reasonably believed by him or it
or any of them to be within the scope of the authority granted to
him or it by this Agreement and in the best interests of the
Partnership (but not, in any event, any loss or damage incurred
by any General Partner by reason of negligence, willful
misconduct, fraud or any material breach of his or its or their
fiduciary duty as General Partner with respect to such acts or
omissions, or liabilities of the Partners chargeable to the
General Partner) shall be paid from Partnership assets to the
extent available, but the Limited Partners shall not have any
personal liability to the General Partner under any circumstances
on account of any such loss or damage incurred by the General
Partner or on account of the payment thereof.
8.08. Partnership Status TC "8.08. Partnership Status"\l2
. The Partners intend that the Partnership will be classified as
a partnership for federal income tax purposes. The General
Partner will undertake any and all actions necessary under the
Code and the regulations promulgated thereunder, including any
future amendments to such regulations, to ensure that the
Partnership will be classified as a partnership for federal
income tax purposes. The General Partner will file or cause to
be filed any elections that may be required (but only if
required) under the Code and the regulations promulgated
thereunder, including any future amendments to such regulations,
in order to ensure that the Partnership will be classified as a
partnership for federal income tax purposes. The General Partner
will not change its classification status or election without the
consent of the Special Limited Partner.
8.09. Construction/Rehabilitation of the Apartment Complex,
Construction Cost Overruns, Operating Deficits TC
"8.09. Construction/Rehabilitation of the Apartment
Complex, Construction Cost Overruns, Operating
Deficits"\l2 .
(a) (i) The Partnership has entered into the Construction
Contract. The General Partner shall be responsible for:
(A) achieving completion of construction or
rehabilitation of the Apartment Complex on a timely basis in
accordance with the Plans and Specifications, this Agreement and
the Project Documents;
(B) meeting all requirements for obtaining all
necessary permanent, unconditional certificates of occupancy for
all the apartment units in the Apartment Complex;
(C) fulfilling all actions required of the Partnership
to assure that the Apartment Complex satisfies the Minimum Set-
Aside Test and the Rent Restriction Test; and
(D) causing the making of the Mortgage Loan by the
Lender, the achievement of Final Closing, to the extent
applicable as of the Admission Date.
(ii) The General Partner hereby is obligated to pay all
Excess Development Costs; the Partnership shall have no
obligation to pay any Excess Development Costs.
(iii) In the event that the General Partner shall fail
to pay any such Excess Development Costs as required in this
Section 8.09(a), an amount not in excess of such Excess
Development Costs shall be applied by the Partnership against the
Development Fee due to the Developer as an offset against such
obligations of the General Partner.
Any such direction and application of funds otherwise
payable to the Developer as aforesaid shall be deemed to have
been paid by the Partnership to the Developer and then applied to
reduce the amount of the Excess Development Costs, and the
Partnership's obligation to make installment payments to the
Developer pursuant to Section 8.10, as well as the Investment
Partnership's obligation to make future Installments, shall be
deemed satisfied to the extent of the funds applied to reduce the
General Partner's obligation to fund Excess Development Costs,
and the obligations of the General Partner pursuant to Sections
8.09(a) (i) or 8.09(a) (ii) shall be deemed satisfied to the
extent of the funds applied.
(b) In the event that, at any time, prior to the day which
is on the anniversary date five years following the date of
Rental Achievement, an Operating Deficit shall exist, the
General Partner shall provide such funds to the Partnership as
shall be necessary to pay such Operating Deficit(s) in the form
of a loan to the Partnership (the "Operating Deficit Loan(s)").
An Operating Deficit Loan shall be a Subordinated Loan payable in
accordance with the provisions of Section 8.17; provided that
Operating Deficit Loans shall bear no interest shall, on a
cumulative basis, represent a maximum financing obligation of the
part of the General Partner not in excess of $250,000.
In the event that the General Partner shall fail to make any
such Operating Deficit Loan as aforesaid, an amount not in excess
of the required Operating Deficit Loan shall be applied by the
Partnership against the Development Fee then due and payable to
the Developer under Section 11.03 (if funds are then available in
accordance with said Section) as an offset against the
obligations of the General Partner pursuant to this Section
8.09(b). Any such direction and application of funds otherwise
payable to the Developer as aforesaid shall be deemed to have
been paid by the Partnership to the Developer and then applied to
reduce the amount of the Operating Deficit Loan, and the
Partnership's obligation to make installment payments to the
Developer pursuant to Section 8.10, as well as the Investment
Partnership's obligation to make future Installments, shall be
deemed satisfied to the extent of the funds applied to reduce the
General Partner's obligation to make such Operating Deficit Loan,
and the obligations of the General Partner pursuant to Sections
8.09(a) (i) or 8.09(a) (ii) shall be deemed satisfied to the
extent of the funds applied.
8.10. Development Fee TC "8.10. Development Fee"\l2 .
The Partnership has entered into a Development Agreement of even
date herewith with the Developer for its services in connection
with the development and rehabilitation of the Apartment Complex.
In consideration for such services, a Development Fee in the
total amount of $198,626 shall be payable by the Partnership to
the Developer.
The Development Fee, all of which shall be deferred, shall
be due and payable only in accordance with Section 11.03 and, if
not sooner paid, the total amount then outstanding will be
payable on October 1, 2008.
8.11. Incentive Partnership Management Fee TC "8.11.
Incentive Partnership Management Fee"\l2 . The Partnership has
entered into a Partnership Management Services Agreement with the
General Partner of even date herewith for its services in managing
the business of the Partnership for the period from the date
hereof throughout the term of the Partnership, commencing in 1999.
Such agreement includes provisions to the effect that in return
for its services in administering and directing the business of
the Partnership, maintaining appropriate books and records
relating to all financial affairs of the Partnership, and
reporting periodically to the Partners and the Agency with respect
to the financial and administrative affairs of the Partnership and
the Apartment Complex, the Partnership shall pay to the General
Partner, from the Cash Flow and/or from Proceeds of Capital
Transactions of the Partnership available for distribution and in
accordance with Section 11.03 and 11.04(A) an annual Incentive
Partnership Management Fee.
Such fee shall be payable in accordance with the provisions
of any applicable regulations of or the Agency and of the Project
Documents and shall be in an amount equal to $1,800 per year,
commencing in 1999 and payable from Cash Flow. Such fee shall
not be cumulative from year to year and shall only be paid to the
extent that Cash Flow or Proceeds of Capital Transaction are
sufficient to make all or a portion of the then-due payments.
8.11.1 Asset Management Fee TC "8.11.1 Asset Management
Fee"\l2 . The Partnership shall pay to Boston Capital, or an
Affiliate thereof, an annual Asset Management Fee in the amount
of $1,800 per annum, commencing in 1999, for its services in
assisting with the preparation of the reports required pursuant
to Section 13.04, which fee shall be payable from Cash Flow;
provided, however, that if in any fiscal year, Cash Flow is
insufficient to pay all or any portion of the Asset Management
Fee, the General Partner shall make a Subordinated Loan to the
Partnership in an amount not to exceed the lesser of $1,800 per
annum or that amount necessary to pay the unpaid portion of such
fee. Any unpaid portion of said Asset Management Fee, to the
extent the General Partner defaults in its obligation to make a
Subordinated Loan, shall accrue, without interest, and shall be
payable on a cumulative basis in the first year in which there is
sufficient Cash Flow available for the payment of such fee, or,
in the first year in which proceeds of a Capital Transaction are
available.
8.12. Withholding of Fee Payments TC "8.12. Withholding
of Fee Payments"\l2 . In the event that: (a) a General Partner
or any successor General Partner shall not have substantially
complied with any material provisions under this Agreement, after
Notice from the Investment Partnership of such noncompliance and
failure to cure such noncompliance within a period of thirty (30)
days from and after the date of such Notice, or (b) the
Partnership is in default under any of the Project Documents, or
(c) foreclosure proceedings shall have been commenced against the
Apartment Complex, or (d) the Partnership shall not have
satisfied the post-closing conditions described on Exhibit A
attached hereto within the time frames designated therein, then
(i) then the Investment Partnership, at its sole election, may
cause the withholding of payment of any installment of fees
payable pursuant to Sections 8.10 and 8.11, and (ii) the General
Partner shall be liable for the Partnership's payment of any and
all installments of the Development Fee payable pursuant to
Section 8.10, to the extent that the Investment Partnership has
withheld any Installment(s) pursuant to Section 5.03 as a result
of the above-described default.
All amounts so withheld by the Partnership under this
Section 8.12 shall be promptly released only after the General
Partner has cured the default justifying the withholding, as
demonstrated by evidence reasonably acceptable to the Investment
Partnership.
8.13. Removal of the General Partner TC "8.13. Removal of
the General Partner"\l2 .
(a) the Special Limited Partner, acting on behalf of the
Investment Partnership, so long as the Investment Partnership is
a Partner, shall have the right to remove any or all General
Partners (i) for any intentional misconduct or gross negligence
in the discharge of its duties and obligations as a General
Partner, or (ii) upon the occurrence of any of the following:
(A) such General Partner shall have violated any of
the material provisions of the Extended Use Commitment, the Loan
Documents, or any provisions of any other Project Document or
other document required in connection with the Mortgage Loan, or
any provisions of the Agency regulations applicable to the
Apartment Complex;
(B) such General Partner shall have violated any
material provision of this Agreement or any provision of
applicable law, which violations shall include, without
limitation (i) withdrawal of the General Partner without the
Consent of the Investment Partnership pursuant to the Section
6.01(a), (ii) the failure of the General Partner to make
Subordinated Loans required under this Agreement or (iii) the
failure of a sole General Partner which is a corporation to
satisfy the requirements of Section 8.08;
(C) such General Partner shall have caused the
Mortgage Loan to go into default; or
(D) such General Partner shall have conducted its own
affairs or the affairs of the Partnership in such manner as
would: (1) cause the termination of the Partnership for federal
income tax purposes; or (2) cause the Partnership to be treated
for federal income tax purposes as an association, taxable as a
corporation.
(b) the Special Limited Partner shall give Notice to all
Partners of its determination that any such General Partner shall
be removed. The General Partner shall have thirty (30) days
after receipt of such Notice to cure any default or other reason
for such removal, in which event it shall remain as General
Partner. If, at the end of such cure period such General Partner
has not cured any default or other reason for such removal, (i)
without any further action by any Partner, the Special Limited
Partner or its designee shall automatically become a General
Partner and acquire in consideration of a cash payment such
portion of the Interest of the removed General Partner as counsel
to the Investment Partnership 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 remaining portion of the economic Interest of the
removed General Partner shall automatically be converted to an
equal economic Interest as an Additional Limited Partner, (iii)
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 or its designee as a
General Partner, and (iv) the new General Partner shall
automatically be irrevocably delegated all of the powers and
duties of the General Partners hereunder.
(c) the Special Limited Partner or any successor General
Partner proposed by the Special Limited Partner shall have the
option, exercisable in its sole discretion, to acquire the
Additional Limited Partner Interest, or any portion thereof, 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 successor General Partner, 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 will
be deemed presumptively fair where it provides for a promissory
note bearing simple interest at eight percent (8%) per annum
coming due in no less than five (5) years with equal installments
each year.
(d) Upon removal, no General Partner or any Affiliate
thereof shall be entitled to receive any fee, compensation or
other remuneration from the Partnership, other than the above-
described payment for the Interest, or portion thereof, of the
Removed General Partner. 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 arrangement. The Partnership may offset
against any payments to a General Partner removed under this
Section 8.13 any damages suffered by the Partnership as a result
of any breach of the obligations of such General Partner
hereunder. 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, but shall be and remain
liable for all obligations and liabilities incurred by it as
General Partner before such removal became effective, including,
but not limited to, its obligations set forth in Section 8.09
hereof.
(e) The General Partner hereby grants to each of the
Investment Partnership and the Special Limited Partner an
irrevocable power of attorney, coupled with an interest, to
execute any and all documents on behalf of the Partners and the
Partnership as shall be legally necessary and sufficient to
effect all of the foregoing provisions of this Section 8.13. The
election by the Special Limited Partner to remove such General
Partner under this Section shall not limit or restrict the
availability and use of any other remedy which the Special
Limited Partner or any other Partner might have with respect to
the General Partner in connection with its undertakings and
responsibilities under this Agreement.
8.14. Selection of Management Agent TC "8.14. Selection
of Management Agent"\l2 . The Partnership, with the approval of
the Agency, if required, shall engage such person, firm or
company as the General Partner may select, and as the Special
Limited Partner may approve, which approval shall not be
unreasonably withheld (hereinafter referred to as "Management
Agent") to manage the operation of the Apartment Complex during
the rent-up period and following Substantial Completion for a
period of one year, and thereafter such management contract may
be extended on an annual basis unless terminated for cause. The
Management Agent shall be paid a management fee subject to the
approval of the Agency, if required. The contract between the
Partnership and the Management Agent and the management plan for
the Apartment Complex shall be in a form acceptable to the
Investment Partnership or Special Limited Partner and the Agency,
if required. ▇▇▇▇▇▇▇▇▇▇ Properties is hereby approved by the
parties hereto as the initial Management Agent.
8.15. Removal of the Management Agent TC"8.15. Removal of
the Management Agent"\l2 . The General Partner, (i) may, upon
receiving any required approval of the Agency, dismiss the
Management Agent as the entity responsible for the management of
the Apartment Complex under the terms of the contract between the
Partnership and the Management Agent, and (ii) at the request of
the Special Limited Partner, shall remove the Management Agent in
the event that (A) the Special Limited Partner, in its reasonable
discretion, determines that the Management Agent does not possess
the necessary experience to properly manage the Apartment Complex
or (B) the Management Agent is declared Bankrupt, is dissolved,
or makes an assignment for the benefit of its creditors, or for
any intentional misconduct by the Management Agent or gross
negligence in the discharge of its duties and obligations as
Management Agent, including, without limitation, for any action
or failure to take any action which:
(1) violates in any material respect any provision
of the Management Agreement entered into with the
Partnership and approved by the Lender, and/or any provision
of the Extended Use Commitment and/or the Loan Documents
applicable to the Apartment Complex, or
(2) violates in any material respect any provision
of this Agreement or provision of applicable law.
. 8.16 Replacement of the Management Agent TC "8.16
Replacement of the Management Agent"\l2 . Upon the removal of
the Management Agent as the entity responsible for the management
of the Apartment Complex, a substitute Management Agent, which
may be an Affiliate of the General Partner, shall be named by the
General Partner, subject to the Consent of the Special Limited
Partner.
8.17. Subordinated Loans to the Partnership TC "8.17.
Subordinated Loans to the Partnership"\l2 . In the event that
additional funds are required by the Partnership for any purpose
relating to the business of the Partnership or for any of its
obligations, expenses, costs or expenditures, the Partnership may
borrow such funds as are needed from any Partners or other Person
or organization, including the General Partner, for such period of
time and on such terms as the General Partner and the Special
Limited Partner may agree and at the rate of interest then
prevailing for comparable loans (except for Operating Deficit
Loans made pursuant to Section 8.09(b), which shall bear interest
only as provided in Section 8.09(b)); provided however, that no
such additional loans shall be secured by any mortgage or other
encumbrance on the property of the Partnership without the Consent
of the Special Limited Partner. Loans made under this Section
shall be repaid as set forth in Section 11.04A. The General
Partner is obligated to make Subordinated Loans in accordance with
Section 8.09 and Section 8.11.1.
8.18. Reserve Fund for Replacements; Operating Deficit
Reserve TC "8.18. Reserve Fund for Replacements; Operating
Deficit Reserve"\l2 .
(a) Reserve Fund for Replacements. The Partnership
shall establish a Reserve Fund for Replacements with respect to
the Apartment Complex, as required by the Special Limited Partner
The Partnership shall make an initial deposit into the Reserve
Fund for Replacements equal to $1,600 from the proceeds of the
First Installment funded under Section 5.01(c)(i) and shall make
subsequent deposits into the Reserve Fund for Replacements equal
to $4,800 annually commencing in 1999; such deposits may be
suspended only as approved by the Special Limited Partner. Funds
in the Reserve Fund for Replacements are intended to be employed
for the replacement as needed of fixtures, equipment, structural
elements and other components of the Apartment Complex of a
capital nature. All interest earnings on funds on deposit in the
Reserve Fund for Replacements shall be retained therein for the
aforesaid purposes. The Reserve Fund for Replacements shall
remain under the control of the Special Limited Partner.
Withdrawals from the Reserve Fund for Replacements shall be made
only upon the direction of the General Partner and the Special
Limited Partner.
(b) Operating Deficit Reserve. The Partnership shall
establish the Operating Deficit Reserve as a separate, interest
bearing account with a financial institution acceptable to the
Special Limited Partner and shall deposit therein funds in the
amount of $36,000 from the Second Installment funded under
Section 5.01(c)(ii). Funds in the Operating Deficit Reserve are
intended to be employed solely for the payment of Operating
Deficits (including, without limitation, debt service, taxes and
insurance), unless otherwise released from escrow by the Special
Limited Partner All interest earnings on funds on deposit in the
Operating Deficit Reserve shall be retained therein for the
aforesaid purposes. Withdrawals from the Operating Deficit
Reserve shall be made only upon the direction of the Special
Limited Partner and shall not be required to be replenished by
the Partnership. The Operating Deficit Reserve shall be
maintained for a period of the later of (i) five (5) years
commencing on the first day of the month in which Rental
Achievement is recognized by the Special Limited Partner to have
occurred with respect to the Apartment Complex, or (ii) the last
day of the month which represents, in the opinion of the Special
Limited Partner, the last of twelve (12) consecutive months in
which (a) the Apartment Complex has continuously maintained
rental occupancy of at least 93%, and (b) Cash Available for Debt
Service Requirements (as defined within the term "Rental
Achievement") equals or exceeds 1.15 times the debt service
requirements relating to all permanent loans associated with the
Apartment Complex, including the Mortgage Loan.
ARTICLE IX
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS
OF INTERESTS OF LIMITED PARTNERS TC
"ARTICLE IX - TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS OF
INTERESTS OF LIMITED PARTNERS"\l1
9.01. Purchase for Investment TC "9.01. Purchase for
Investment"\l2 .
(a) The Investment Partnership hereby represents and
warrants to the General Partner and to the Partnership that the
acquisition of its Interests is made as principal for its
respective account for investment purposes only and not with a
view to the resale or distribution of such Interests, except
insofar as the Securities Act of 1933 and any applicable
securities law of any state or other jurisdiction permit such
acquisitions to be made for the account of others or with a view
to the resale or distribution of such Interests without requiring
that such Interests, or the acquisition, resale or distribution
thereof, be registered under the Securities Act of 1933 or any
applicable securities law of any state or other jurisdiction.
(b) The Investment Partnership agrees that it will not
sell, assign or otherwise transfer its Interest or any fraction
thereof to any Person who does not similarly represent and
warrant and similarly agree not to sell, assign or transfer such
Interest or fraction thereof to any Person who does not similarly
represent and warrant and agree.
(c) The Investment Partnership shall not sell, assign
or otherwise transfer its Interest or any fraction thereof to any
Person until the Investment Partnership has provided the
Partnership with a legal opinion, reasonably satisfactory to the
General Partner, that such sale, assignment or other transfer
does not violate any state or federal securities laws or require
the Interest to be registered under any such laws.
9.02. Restrictions on Transfer of Limited Partner's
Interests TC"9.02. Restrictions on Transfer of Limited
Partner's Interests"\l2 .
(a) Under no circumstances will any offer, sale,
transfer, assignment, hypothecation or pledge of any Limited
Partner Interest (other than to an Affiliate of any Limited
Partner) be permitted unless the General Partner, in its sole
discretion, shall have Consented.
(b) The Limited Partner whose interest is being
transferred shall pay such reasonable expenses as may be incurred
by the Partnership in connection with such transfer.
9.03. Admission of Substitute Limited Partners TC "9.03.
Admission of Substitute Limited Partners"\l2 .
(a) Subject to the other provisions of this Article
IX, an assignee of the Interest of a Limited Partner (which shall
be understood to include any purchaser, transferee, donee, or
other recipient of any disposition of such Interest) shall be
admitted as a Substitute Limited Partner of the Partnership only
upon the satisfactory completion of the following:
(i) Except with respect to an Affiliate of any Limited
Partner, consent of the General Partner (which may be withheld in
its sole discretion) shall have been given, which Consent of the
General Partners may be evidenced by the execution by the General
Partners of an amended Agreement and/or Certificate evidencing
the admission of such Person as a Limited Partner pursuant to the
requirements to the Act;
(ii) the assignee shall have accepted and agreed to be
bound by the terms and provisions of this Agreement by executing
a counterpart thereof or an appropriate amendment hereto, and
such other documents or instruments as the General Partner may
require in order to effect the admission of such Person as a
Limited Partner;
(iii) an amended Agreement and/or Certificate
evidencing the admission of such Person as a Limited Partner
shall have been filed for recording pursuant to the requirements
of the Act to the extent required in order to effectuate the
admission of such Person as a Limited Partner;
(iv) the assignee shall have represented and agreed in
writing as required by Section 9.01;
(v) if the assignee is a corporation, the assignee
shall have provided the General Partner with evidence
satisfactory to counsel for the Partnership of its authority to
become a Limited Partner under the terms and provisions of this
Agreement; and
(vi) the assignee or the assignor shall have reimbursed
the Partnership for all reasonable expenses, including all
reasonable legal fees and recording charges, incurred by the
Partnership in connection with such assignment.
(b) For the purpose of allocation of Taxable Income, Tax
Losses, Tax Credits, and for the purpose of distributing cash of
the Partnership, a Substitute Limited Partner shall be treated as
having become, and as appearing in, the records of the
Partnership as a Partner upon its signing of an amendment to this
Agreement, agreeing to be bound hereby.
(c) The General Partner shall cooperate with the Person
seeking to become a Substitute Limited Partner by preparing the
documentation required by this Section and making all official
filings and publications. The Partnership shall take all such
action, including the filing of any amended Agreement and/or
Certificate evidencing the admission of any Person as a Limited
Partner, and the making of any other official filings and
publications, as promptly as practicable after the satisfaction
by the assignee of the Interest of a Limited Partner of the
conditions contained in this Article IX to the admission of such
Person as a Limited Partner of the Partnership. Any cost or
expense incurred in connection with such admission shall be borne
by the Partnership to the extent of available Partnership assets,
and otherwise by such assignee.
9.04. Rights of Assignee of Partnership Interest TC "9.04.
Rights of Assignee of Partnership Interest"\l2 .
(a) Except as provided in this Article and as required by
operation of law, the Partnership shall not be obligated for any
purpose whatsoever to recognize the assignment by any Limited
Partner of his (its) Interest until the Partnership has received
actual Notice thereof.
(b) Any Person who is the assignee of all or any portion of
a Limited Partner's Interest, but does not become a Substitute
Limited Partner and desires to make a further assignment of such
Interest, shall be subject to all the provisions of this Article
IX to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of his its Interest.
ARTICLE X
RIGHTS AND OBLIGATIONS
OF LIMITED PARTNERS TC
"ARTICLE X - RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS"\l1
10.01. Management of the Partnership TC "10.01.
Management of the Partnership"\l2 . No Limited Partner shall
take part in the management or control of the business of the
Partnership nor transact any business in the name of the
Partnership. Except as otherwise expressly provided in this
Agreement, no Limited Partner shall have the power or authority
to bind the Partnership or to sign any agreement or document in
the name of the Partnership. No Limited Partner shall have any
power or authority with respect to the Partnership except insofar
as the consent of any Limited Partner shall be expressly required
and except as otherwise expressly provided in this Agreement.
10.02. Limitation on Liability of Limited Partners TC
"10.02. Limitation on Liability of Limited Partners"\l2 . The
liability of each Limited Partner shall be limited to its Capital
Contribution as and when payable under the provisions of this
Agreement. No Limited Partner shall have any other liability to
contribute money to, or in respect of the liabilities or
obligations of, the Partnership, nor shall any Limited Partner be
personally liable for any obligations of the Partnership. No
Limited Partner shall be obligated to make loans to the
Partnership.
10.03. Other Activities TC "10.03. Other Activities"\l2
. Any Limited Partner may engage in or possess interests in
other business ventures of every kind and description for its own
account, including without limitation, serving as general or
limited partner of other partnerships which own, either directly
or through interests in other partnerships, government-assisted
housing projects similar to the Apartment Complex. Neither the
Partnership nor any of the Partners shall have any right by
virtue of this Agreement in or to such other business ventures to
the income or profits derived therefrom.
10.04. Ownership by Limited Partner of Corporate General
Partners or Affiliate TC "10.04. Ownership by Limited Partner
of Corporate General Partners or Affiliate"\l2 . No Limited
Partner shall, at any time, either directly or indirectly, own
any stock or other interest in any corporate General Partner if
such ownership by itself or in conjunction with other stock or
other interests owned by other Limited Partners would, in the
opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP or other tax counsel to the
Investment Partnership, jeopardize the classification of the
Partnership as a partnership for federal income tax purposes. In
the event of any violation of the provisions of this Section by
any one or more Limited Partners, such Limited Partner or Limited
Partners shall either dispose of their Interests in the
Partnership (subject to and in compliance with the provisions of
Article IX) or of their stock or other interest in the corporate
General Partner or Affiliates to the extent necessary so that, in
the opinion of counsel for the Partnership, the classification of
the Partnership as a partnership for federal income tax purposes
is no longer in jeopardy. The obligation of any such disposition
required of more than one Limited Partner shall be shared among
them on an equitable basis. Notwithstanding the foregoing,
neither the General Partner nor any Limited Partner shall be
liable in damages to the Partnership or to any Partner by reason
of any violation of this Section, except for damages arising (a)
out of any material misrepresentation by any Limited Partner
relating to the ownership of stock or other interest in a
corporate General Partner or any affiliate by him or by any
member of his family (within the meaning of the attribution rules
set forth in Section 318 of the Code), or (b) out of any failure
by any Limited Partner to dispose of his Interest in the
Partnership or of his stock or other interest in a corporate
General Partner or Affiliate within a reasonable time after
Notice to such Limited Partner by the Partnership of the
obligations to make such disposition.
ARTICLE XI
ALLOCATION OF TAXABLE INCOME, TAX LOSSES, TAX CREDITS
AND CASH DISTRIBUTIONS TC "ARTICLE
XI - ALLOCATION OF TAXABLE INCOME, TAX LOSSES, TAX CREDITS AND
CASH DISTRIBUTIONS"\L1
Section 11.01. Allocation of Taxable Income, Tax Losses and
Tax Credits TC "Section 11.01. Allocation of Taxable Income,
Tax Losses and Tax Credits"\L2 .
A. General. Subject to the special allocations set forth
in this Article XI, Taxable Income, Tax Credits and Tax Losses
for each fiscal year of the Partnership (or part thereof) other
than those to be allocated pursuant to Section 11.01B or Section
11.02 hereof, shall be allocated 99.99% to the Investment
Partnership and .01% to the General Partner.
B. Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be specially allocated 99.99%
to the Investment Partnership and .01% to the General Partner.
C. Partner Loan Nonrecourse Deductions. Any Partner Loan
Nonrecourse Deductions for any Fiscal Year or other period shall
be specially allocated to the Partner who bears the economic risk
of loss with respect to the loan to which such Partner Loan
Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i).
Section 11.02. Allocation of Taxable Income and Tax Losses
from Capital Transactions TC "Section 11.02. Allocation of
Taxable Income and Tax Losses from Capital Transactions"\L2 .
Subject to the special allocations set forth in this Article XI,
Taxable Income and Tax Losses from Capital Transactions shall be
allocated to the Partners as follows:
(i) Taxable Income from Capital Transactions shall be
allocated:
(a) first, to the Partners with negative Capital
Accounts pro rata in such amounts as will result in the
elimination of the negative Capital Accounts of such Partners;
provided, however, that if Taxable Income to be allocated
pursuant to this Section 11.02(i)(a) is insufficient to eliminate
all negative Capital Accounts, such Taxable Income will be
allocated to Partners with negative Capital Accounts in the
proportion that each such Partner's negative Capital Account
bears to the total of all such Negative Capital Accounts;
(b) second, in the amount and to the extent necessary to
increase the Partners' respective Capital Accounts to equal the
amounts distributable under Sections 11.04(d), then 11.04(e);
(c) then, the balance, if any, of such Taxable Income
shall be allocated 75% to the General Partner and 25% to the
Investment Partnership.
(ii) Tax Losses from Capital Transactions shall be
allocated:
(a) first, to the extent of the respective positive
balances in the Partners' Capital Accounts; and
(b) any balance, 25% to the Investment Partnership and
75% to the General Partner.
(iii) Notwithstanding the foregoing provisions, if
Taxable Income to be allocated includes income treated as
ordinary income for federal income tax purposes because such
Taxable Income is attributable to the recapture of depreciation
under Section 1245 or 1250 of the Code, such Taxable Income, to
the extent treated as ordinary income, shall be allocated to and
reported by the Partners in proportion to their accumulated
depreciation allocations. The Partnership shall keep records of
such allocations of depreciation to the Partners. In determining
the accumulated depreciation allocations of the Partners,
depreciation deductions for each taxable year shall be deemed
allocated to the Partners in the same proportion as the Taxable
Income or Tax Losses in that particular taxable year were
allocated to the Partners.
11.03. Distribution of Cash Flow TC "11.03. Distribution
of Cash Flow"\L2 . Cash Flow shall be determined for each
fiscal year and shall be applied or distributed at such time or
times as the General Partner deems appropriate, but in no event
less than once in each fiscal year, in the following order of
priority:
(a) First, to payment of the Asset Management Fee
currently due;
(b) Second, to pay an accrued but unpaid Asset
Management Fees;
(c) Third, to payment to the Developer of the Deferred
Development Fee;
(d) [Reserved];
(e) Fifth, to repayment of any amounts due with
respect to any Subordinated Loans (including, without
limitation, Operating Deficit Loans made under Section
8.09);
(f) Sixth, to payment of any Partnership Incentive
Management Fee currently due;
(g) Seventh, to the repayment, in whole or in part, of
the General Partner's Special Capital Construction
Contribution; and
(h) Any balance, 85% to the General Partner and 15% to the
Investment Partnership.
Section 11.04. Distributions of Distributable Proceeds from
Capital Transactions and Distributable Proceeds from
Refinancings TC "Section 11.04. Distributions of Distributable
Proceeds from Capital Transactions and Distributable Proceeds
from Refinancings"\l2 .
A. Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings (other than liquidating
distributions pursuant to Section 12.02) shall be distributed in
the following order of priority:
(a) First, to the payment of any debts and liabilities
(including unpaid fees but excluding any debts, liabilities
and/or fees owed to any Partners) and to the establishment of any
required reserves;
(b) Second, to the payment of the Asset Management
Fees currently due, if any, together with any accrued and unpaid
Asset Management Fees;
(c) Third, the repayment to the Investment Partnership
of any Reduction Amount pursuant to Section 5.01(d)(ii) together
with any accrued or unpaid interest or Credit Recovery Loan
Pursuant to Section 5.01(d)(iii) together with any accrued or
unpaid interest;
(d) Fourth, the repayment of any Subordinated Loans to
the General Partner;
(e) Fifth, any other debts and liabilities owed to the
Partners; provided, however, that all such other debts and
liabilities owed to the Investment Partnership shall be paid
prior to any such debts and liabilities owed to the General
Partner;
(f) Sixth, to the Investment Partnership in an amount
equal to its Investment Amount;
(g) Seventh, to the General Partner in an amount equal
to its Investment Amount; and
(h) The balance, if any, 75% to the General Partner
and 25% to the Investment Partnership.
B. Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings shall be distributed
within 90 days after the end of the fiscal quarter in which such
Capital Transaction or Refinancing occurs. Distributions of
Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings to the Partners shall be
made only after Capital Accounts have been adjusted to reflect
all previous allocations of Taxable Income and Tax losses to the
Partners, for distributions of Cash Flow, and for any other
distributions of Distributable Proceeds form Capital Transactions
or Distributable Proceeds from Refinancings.
Section 11.05. Allocations Among Partners TC "Section
11.05. Allocations Among Partners"\l2 .
A. For purposes of determining the Taxable Income (or Tax
Losses) or any other items allocable to any period, Taxable
Income (or Tax Losses) 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.
B. Taxable Income, Tax Losses, and Tax Credits for all
purposes of this Agreement shall be determined in accordance with
the accrual accounting method. Except as otherwise provided in
this Agreement, all items of Partnership income, gain, loss,
deduction, and any other allocations, including allocation of
Book Profits and Losses, shall be divided among the Partners in
the same proportions as they share Taxable Income, Tax Credits,
and Taxable Losses, as the case may be, for such fiscal year.
C. In any year in which a Partner sells, assigns or
transfers all or any portion of an Interest to any Person who
during such year is admitted as a substitute Partner, the share
of all Taxable Income, Tax Losses, and Tax Credits, allocated to
and of all Cash Flow and all cash proceeds distributable under
Section 11.04 distributed to, all Partners which is attributable
to the Interest sold, assigned or transferred shall be divided
between the assignor and the assignee using any one of the
following methods as determined by agreement between the assignor
and assignee: (i) ratably on the basis of the number of days in
such year before, and the number of days on and after, the
execution by the assignee of this Agreement, or (ii) by dividing
the Partnership fiscal year into two segments, the first segment
being the time period in such year before the execution by the
assignee of this Agreement and the second segment being the time
period in such year beginning on the date of execution of this
Agreement, and allocating Taxable Income, Tax Losses, Tax
Credits, Cash Flow, and all cash proceeds distributable in each
such segment among the persons who were Partners during that
segment, or (iii) using such other method as provided by the Code
or regulations thereunder.
D. In the event that there is a determination that there
is any original issue discount or imputed interest attributable
to the Capital Contribution of any Partner, or any loan between a
Partner and the Partnership, any income or deduction of the
Partnership attributable to such imputed interest or original
issue discount on such Capital Contribution or loan (whether
stated or unstated) shall be allocated solely to such Partner.
E. If a taxing authority ignores the characterization of
any amounts (other than the receipt of a profits interest in the
Partnership by a Partner) paid to a Partner (or an Affiliate
thereof) as salaries, management fees, commissions or other
compensation for services, including interest ("Compensation"),
and refuses to treat such payments as either guaranteed payments
within the meaning of Code Section 707(c) or payments made to
such Partner other than in such Partner's capacity as a Partner
within the meaning of Code Section 707(a), and such taxing
authority ultimately treats such amounts paid to a partner (or an
Affiliate thereto) as a distribution to such Partner for federal
income tax purposes which reduces such Partner's Capital Account,
then the Compensation shall be offset to the extent possible by a
special allocation of item of income or gain of the Partnership
to the recipient Partner so that, consistent with the intent of
the Partners, the Compensation shall not be treated as a
distribution which reduces the recipient Partner's Capital
Account without an offsetting allocation of income or gain.
Accordingly, such Partner shall be allocated the first available
items of Partnership income and gain (including in a succeeding
year) in an amount equal to the Compensation.
F. If any Partner's Interest in the Partnership is reduced
but not eliminated because of the admission of new Partners or
otherwise, or if any Partner is treated as receiving any items of
property described in Section 751(a) of the Code, the Partner's
Interest in such items of Section 751(a) property that was
property of the Partnership while such Person was a Partner shall
not be reduced, but shall be retained by the Partner so long as
the Partner has an Interest in the Partnership and so long as the
Partnership has an Interest in such property.
G. The Partners are aware of the income tax consequences
of the allocations made by this Article XI and hereby agree to be
bound by the provisions of this Article XI in reporting their
shares of Partnership income and loss for income tax purposes.
Section 11.06. Qualified Income Offset TC "Section 11.06.
Qualified Income Offset"\l2 .
(i) Notwithstanding any other provision of this
Article XI, in the event any Partner unexpectedly receives (a) an
adjustment to the Capital Account balance of such Partner as
described in Section 1.704-1(b)(2)(ii)(d)(4) of the Treasury
Regulations, (b) an allocation to such Partner of loss or
deduction of the type described in Section 1.704-
1(b)(2)(ii)(d)(5) of the Treasury Regulations, or (c) a
distribution to such Partner in excess of any offsetting increase
in the Partner's Capital Account balance during or prior to the
year of distribution, items of Partnership Taxable Income and of
income that constitute a credit to such Partner's Capital Account
shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate, to the extent required by the
Treasury Regulations under Code Section 704(b), the Qualified
Income Offset Amount (defined in Section 11.06(ii)) created by
such adjustments, allocations, or distributions as quickly as
possible, provided that an allocation pursuant to this Section
11.06(i) shall be made only if and to the extent that such
Partner would have a Qualified Income Offset Amount after all
other allocations provided for in this Article have been
tentatively made as if this Section 11.06(i) were not in this
Agreement.
(ii) Notwithstanding anything to the contrary
contained in this Agreement, in no event shall Tax Losses of the
Partnership be allocated to a Partner if such allocation would
result in such Partner having a "Qualified Income Offset Amount"
(as defined below). As used herein, the term "Qualified Income
Offset Amount" for a Partner means 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 an amount equal to (a) the
Partner's Share of Minimum Gain immediately prior to the
allocation or distribution and (b) the sum of such Partner's
allocable share of any recourse indebtedness of the Partnership
as determined under Section 752 of the Code and any unconditional
obligation of such Partner to contribute additional amounts to
the capital of the Partnership in the future (to the extent not
previously taken into account in determining such Partner's share
of recourse liabilities of the Partnership) and (ii) debit to
such Capital Account the allocations or distributions described
in Section 11.06(i) that, as of the end of the taxable year, are
reasonably expected to be made to such Partner. All Tax Losses
in excess of the limitation set forth in this Section 11.06(ii)
shall be allocated to the General Partner.
Section 11.07. Minimum Gain Allocations TC "Section 11.07.
Minimum Gain Allocations"\l2 .
A. Notwithstanding any other provisions of this Article
XI, if in any year there is a net decrease in the amount of the
Partnership's Minimum Gain, each Partner will be allocated items
of Taxable Income and gain for such year equal to that Partner's
share of the net decrease in Minimum Gain, within the meaning of
Treasury Regulation 1.704-2(g)(2), and subject to the exceptions
set forth in Treasury Regulation 1.704-2(f).
Allocations of Taxable Income and gain (hereinafter referred
to as a "Minimum Gain Chargeback") required pursuant to this
Section 11.07 shall consist first of gains recognized from the
disposition of items of Partnership property subject to one or
more nonrecourse liabilities of the Partnership to the extent of
the decrease in Minimum Gain attributable to the disposition of
such items of property (or if such gains exceed the amount of the
Minimum Gain Chargeback required for such taxable year, the
Minimum Gain Chargeback shall consist of a proportionate share of
each such gain), and the remainder of such Minimum Gain
Chargeback shall consist of a pro-rata portion of the other items
of Taxable Income and gain of the Partnership for that year. If
the amount of the Minimum Gain Chargeback requirement exceeds the
Partnership's Taxable Income and gains for the taxable year, the
excess shall carry over to subsequent years.
B. If in any year there is a net decrease (within the
meaning of Treasury Regulations Section 1.704-2(i)(3) in Partner
Nonrecourse Debt Minimum Gain, any Partner with a share of that
Member Nonrecourse Debt Minimum Gain (determined under Treasury
Regulation 1.704-2(i)(5)) as of the beginning of the year shall
be allocated items of profits and gains for that year (and if
necessary, subsequent years) equal to that Partner's share of the
net decrease in Member Nonrecourse Debt Minimum Gain in
accordance with Treasury Regulation Section 1.704-2(i)(4).
Section 11.08. Regulatory Allocations TC "Section 11.08.
Regulatory Allocations"\l2 . The allocations set forth in
Sections 11.01B, 11.01C, 11.06 and 11.07 (the "Regulatory
Allocations") are intended to comply with certain requirements of
Treasury Regulation Section 1.704-1(b). It is the intent of the
Partners that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with
special allocations of other items of Taxable Income, Tax Losses
and items of income, gain, loss, or deduction pursuant to this
Section 11.08. Therefore, notwithstanding any other provision of
this Article (other than the Regulatory Allocations), the General
Partners shall make such offsetting special allocations of
Taxable Income, Tax Losses, and items of income, gain, loss, or
deduction in whatever manner it determines appropriate so that,
after such offsetting allocations are made, each Capital Account
balance is, to the extent possible, equal to the Capital Account
balance such Partner would have had if the Regulatory Allocations
were not part of the Agreement and all items were allocated
pursuant to Sections 11.01A and 11.02. In exercising its
discretion under this Section 11.08, the General Partners shall
take into account future Regulatory Allocations under Section
11.07 that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Sections 11.01B and
11.01C.
Section 11.09. Partners' Partnership Non-recourse
Liabilities TC "Section 11.09. Partners' Partnership Non-
recourse Liabilities"\l2 . For purposes of Code Section 752,
each Partner's share of Partnership non-recourse liabilities
shall be determined in accordance with Treasury Regulation 1.752-
3(a) or successor regulation. In this connection, for purposes
of determining each Partner's proportionate share of the excess
non-recourse liabilities of the Partnership pursuant to Treasury
Regulation 1.752-3(a), the Investment Partnership shall have a
99.99% interest in Partnership Taxable Income or profits and the
General Partner shall have a .01% interest in Partnership Taxable
Income or profits.
Section 11.10. Tax Allocations: Code Section 704(c) TC
"Section 11.10. Tax Allocations: Code Section 704(c)"\l2 . In
accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall be
allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross
Asset Value (computed in accordance with Section 11.12 hereof).
In the event the Gross Asset Value of any Partnership prop-
erties is adjusted pursuant to Section 11.12 hereof, subsequent
allocations of income, gain, loss, and deduction with respect to
such asset shall take into account any variation between the
adjusted basis of such asset for federal income tax purposes and
its Gross Asset Value in the same manner as under Code Section
704(c) and the Treasury Regulations thereunder.
Any elections or other decisions relating to such
allocations shall be made by the Managing General Partner with
the Consent of the Limited Partner, in any manner that reasonably
reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section are solely for purposes of
federal, state, and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital
Account or share of Book Profits and Losses, other items, or
distributions pursuant to any provision of this Agreement.
11.11. Tax Matters Partner TC "11.11. Tax Matters
Partner"\l2 .
A. Subject to Section 11.11 C, the General Partner is
hereby 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 regulations
pursuant to Section 6231 of the Code. Each Partner, by its
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 is hereby authorized, but not
required:
(a) to enter into any settlement with the Internal
Revenue Service or the Secretary 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 regulations thereunder) files a statement with the Secretary
providing that the Tax Matters Partner shall not have the
authority to enter into a settlement agreement on behalf of such
Partner;
(b) in the event that a notice of a 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;
(c) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(d) to file a request for an administrative adjustment
with the Internal Revenue Service at any time and, if any part of
such request is not allowed by the Internal Revenue Service, to
file a petition for judicial review with respect to such request;
(e) to enter into an agreement with the Internal
Revenue 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 affected by such item; and
(f) 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 Tax Matters Partner agrees to promptly notify the
Special Limited Partner upon receipt of any correspondence from
federal, state, or local authorities relating to any examination
of the Partnership's affairs and to permit the Special Limited
Partner to participate in the development of the Tax Matters
Partner's position and to Consent to the Tax Matter Partner's
proposed response to any matter arising in connection with such
examination. The Tax Matters Partner shall not enter into any
settlement or arrangement on behalf of the Partnership with
respect to any federal, state or local tax authorities without the
Consent of the Special Limited Partner.
D. 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 (including any reimbursement of the Tax Matters
Partner for expenses that it may incur under the following
sentence) shall be made before any distributions are made or any
discretionary reserves are set aside by the General Partner. In
the event that funds are not available from the Partnership for
such expenses, the General Partner shall have the obligation to
provide funds for such purpose. 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 8.07 of this Agreement shall
be fully applicable to the Tax Matters Partner in its capacity as
such.
11.12. Capital Accounts TC "11.12. Capital Accounts"\l2
.
A. A Capital Account shall be maintained on the books of
the Partnership for each Partner, which shall be (i) credited
with its Capital Contributions 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)
credited with its distributive share of Taxable Income and any
income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Taxable Income;
(iii) charged with its distributive share of Tax Losses and any
nondeductible expenditures of the Partnership (including
Syndication Expenses) described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not
otherwise taken into account under this Section 11.12; and (iv)
charged with any distributions to it and with 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 case of property other than cash contributed to the
Partnership or distributed to a Partner, each Partner's Capital
Account will be credited with the Gross Asset Value of property
contributed to the Partnership (net of liabilities assumed by the
Partnership and liabilities to which such contributed property is
subject) and shall be debited with the cash and the Gross Asset
Value of property distributed to it (net of liabilities assumed
by such Partner and liabilities to which such distributed
property is subject). In the event the Gross Asset Values of
Partnership assets are adjusted pursuant to Section 11.12B
hereof, 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.
Upon the sale, exchange or other transfer of an Interest, or
the assignment of such Interest to a new Partner, the Capital
Account of the transferor Partner shall carry over to the
transferee Partner.
B. For purposes of determining and maintaining the
Partners' Capital Accounts, the Gross Asset Value of Partnership
assets shall be adjusted 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 Partners, 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) upon liquidation
of the Partnership, or upon the distribution by the Partnership
to a Partner of more than a de minimis amount of money or other
Partnership property to a retiring or continuing Partner as
consideration for an Interest in the Partnership; or (c) under
generally accepted industry accounting practices, provided
substantially all of the Partnership's property (excluding money)
consists of stock, securities, commodities, options, warrants,
futures, or similar instruments that are readily tradeable on an
established securities market; and
(iii) If the Gross Asset Value of an asset has been
determined or adjusted pursuant to subsection (i) or (ii) of this
Section 11.12B, such Gross Asset Value shall thereafter be
adjusted by the Book Depreciation taken into account with respect
to such asset for purposes of computing Book Profits and Losses,
as set forth in Section 11.12B.
C. For purposes of determining and maintaining the
Partners' Capital Accounts and the computation of Book Profits
and Losses only, the following adjustments shall be made to the
calculation of Taxable Income and Tax Losses reflected in the
Partners' Capital Accounts:
(i) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(ii) In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in computing
such Taxable Income or Tax Losses, there shall be taken into
account Book Depreciation for such fiscal year or other period,
computed as hereinafter set forth;
(iii) For this purpose, "Book Depreciation" means,
for each fiscal year or other period, an amount equal to the
depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year or other period,
except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning
of such year or other period, Book Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or
other cost recovery deductions for such year or other period
bears to such beginning adjusted tax basis; and
(iv) Allocations of Book Profits and Losses among the
Partners shall be made in accordance with the provisions of this
Article XI respecting allocations of Taxable Income and Tax
Losses among the Partners.
11.13. Authority of General Partner to Vary Allocations to
Preserve and Protect Partner's Intent TC "11.13. Authority of
General Partner to Vary Allocations to Preserve and Protect
Partner's Intent"\l2 .
(a) It is the intent of the Partners that each
Partner's distributive share of income, gain, loss, deduction, or
credit (or item thereof) shall be determined and allocated in
accordance with this Article XI to the fullest extent permitted
by Section 704(b) of the Code. In order to preserve and protect
the determinations and allocations provided for in this Article
XI, the General Partner, acting on the advice of the Accountants
and the Special Limited Partner's accountants (identified in
Section 13.03) and with the Consent of the Special Limited
Partner hereby is authorized and directed to allocate income,
gain, loss, deduction, or credit (or item thereof) arising in any
year differently than otherwise provided for in this Article XI
to the extent that allocating income, gain, loss, deduction or
credit (or item thereof) in the manner provided for in Article XI
would cause the determinations and allocations of each Partner's
distributive share of income, gain, loss, deduction, or credit
(or item thereof) not to be permitted by Section 704 (b) of the
Code and Treasury Regulations promulgated thereunder. Any
allocation made pursuant to this Section 11.13 shall be deemed to
be a complete substitute for any allocation otherwise provided
for in this Article XI and no amendment of this Agreement shall
be required.
(b) In making any allocation (the "new allocation")
under Section 11.13(a), the General Partner is authorized to act
only after having been advised by the Accountants that, under
Section 704(b) of the Code and the Treasury Regulations
thereunder, (i) the new allocation is necessary, and (ii) the new
allocation is the minimum modification of the allocations
otherwise provided for in this Article XI necessary in order to
assure that, either in the then current year or in any preceding
year, each Partner's distributive share of income, gain, loss,
deduction, or credit (or item thereof) is determined and
allocated in accordance with this Article XI to the fullest
extent permitted by Section 704(b) of the Code and the Treasury
Regulations thereunder.
(c) If the General Partner is required by Section
11.13(a) to make any new allocation in a manner less favorable to
any Partner than is otherwise provided for in this Article XI,
then the General Partner is authorized and directed, only after
having been advised by the Accountants that it is permitted by
Section 704(b) of the Code, to allocate income, gain, loss,
deduction, or credit (or item thereof) arising in later years in
such manner so as to bring the allocations of income, gain, loss,
deduction, or credit (or item thereof) to such Partner as nearly
as possible to the allocations thereof otherwise contemplated by
this Article XI.
(d) New allocations made by the General Partner under
Section 11.13(a) and Section 11.13(c) in reliance upon the advice
of the 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.
ARTICLE XII
SALE, DISSOLUTION AND LIQUIDATION TC
"ARTICLE XII - SALE, DISSOLUTION AND
LIQUIDATION'\l1
12.01. Dissolution of the Partnership TC "12.01.
Dissolution of the Partnership"\l2 . The Partnership shall be
dissolved upon the earlier of the expiration of the term of the
Partnership, or upon:
(a) subject to Section 6.03, the withdrawal, Bankruptcy,
death, dissolution or adjudication of incompetency of a General
Partner who is at that time the sole General Partner;
(b) the sale or other disposition of all or substantially
all of the assets of the Partnership;
(c) the election by the General Partner, with the Consent
of the Special Limited Partner;
(d) the election of the Special Limited Partner, without
the Consent of the General Partner; or
(e) any other event causing the dissolution of the
Partnership under the laws of the State.
12.02. Winding Up and Distribution TC "12.02. Winding Up
and Distribution"\l2 .
(a) In the event of dissolution and termination of the
Partnership, a full accounting of the assets and liabilities
shall be taken, and the assets shall be distributed in accordance
with this Section 12.02 as follows, after taking into account all
other allocations and distributions under this Agreement for the
Fiscal Year, including, without limitation, the allocations under
Article XI hereof:
(A) To the payment of all debts and liabilities of the
Partnership then due (including fees and loans payable to
Partners);
(B) To the setting up of any reserves that the
Liquidator may deem reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Partnership; and
(C) To the Partners, in an amount equal to the
positive balances in their Capital Accounts.
If any General Partner has a negative Capital Account
balance following the liquidation of the Partnership or of the
General Partner's Interest in the Partnership within the meaning
of Treasury Regulation Section 1.704-1(b)(ii)(g), excluding from
such General Partner's negative Capital Account balance, (a) such
General Partner's Share of Minimum Gain, and (b) any other amount
that such General Partner is deemed to be obligated to restore to
the Partnerships under Treasury Regulation Section 1.704-
1(b)(2)(ii)(c) or otherwise under the Treasury Regulations
promulgated under Code Section 704(b), and after taking into
account all Capital Account adjustments (including adjustments
arising from the liquidation) for the Partnership taxable year
during which such liquidation occurs, other than those made
pursuant to this Section, such General Partner shall be
unconditionally obligated to restore the amount of such negative
Capital Account balance to the Partnership by the end of such
taxable year (or, if later, within 90 days after the date of
liquidation). Amounts contributed to the Partnership in respect
of such General Partner's obligation to restore negative Capital
Account balances shall be paid to creditors of the Partnership or
distributed to the other Partners in accordance with their
positive Capital Account balances, if any, as of the date of
liquidation.
(b) The Liquidator shall file all certificates and
notices of the dissolution of the Partnership required by law.
The Liquidator shall proceed without any unnecessary delay to
sell and otherwise liquidate the Partnership's property and
assets; provided, however, that if the Liquidator shall determine
that an immediate sale of part or all of the Partnership property
would cause undue loss to the Partners, then in order to avoid
such loss, the Liquidator may, except to the extent provided by
the Act, defer the liquidation as may be necessary to satisfy the
debts and liabilities of the Partnership to Persons other than
the Partners. Upon the complete liquidation and distribution of
the Partnership assets, the Partners shall cease to be Partners
of the Partnership, and the Liquidator shall execute, acknowledge
and cause to be filed all certificates and notices required by
the law to terminate the Partnership.
(c) Upon the dissolution of the Partnership pursuant
to Section 12.01, the Accountants shall promptly prepare, and the
Liquidator shall furnish to each Partner, a statement setting
forth the assets and liabilities of the Partnership upon its
dissolution. Promptly following the complete liquidation and
distribution of the Partnership property and assets, the
Accountants shall prepare, and the Liquidator shall furnish to
each Partner, a statement showing the manner in which the
Partnership assets were liquidated and distributed.
ARTICLE XIII
BOOKS AND RECORDS, ACCOUNTING
TAX ELECTIONS, ETC. TC
"ARTICLE XIII - BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS,
ETC."\l1
13.01. Books and Records TC "13.01. Books and Records"\l2
. The books and records of the Partnership shall be maintained
on an accrual basis in accordance with sound federal income tax
accounting principles. These and all other records of the
Partnership, including information relating to the status of the
Apartment Complex, information with respect to the sale by the
General Partner or any Affiliate of goods or services to the
Partnership, and any information required to be maintained by the
Act or any governmental agencies having jurisdiction, shall be
kept at the principal office of the Partnership and shall be
available for examination there by any Partner, or his duly
authorized representative, at any and all reasonable times. Any
Partner, or his duly authorized representative, upon paying the
costs of collection, duplication and mailing, shall be entitled
to a copy of the list of names and addresses of the Limited
Partners and of any of the books and records of the Partnership.
The General Partner shall maintain and store all original tenant
files in fire-proof file cabinets in a secure location.
Microfiche or other similar storage technologies may also be used
provided that the General Partner obtains the Consent of the
Investment Partnership with respect to such alternate storage
technology.
13.02. Bank Accounts TC "13.02. Bank Accounts"\l2 . All
funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking
institutions as the General Partner shall determine, and
withdrawals shall be made only in the regular course of
Partnership business on such signature or signatures as the
General Partner may, from time to time, determine. No funds of
the Partnership shall be deposited in any financial institution
in which any Partner is an officer, director or holder of any
proprietary interest.
13.03. Accountants TC "13.03. Accountants"\l2 . The
Accountants shall annually prepare for execution by the General
Partner all tax returns of the Partnership, shall annually audit
the books of the Partnership, and shall certify, in accordance
with generally accepted accounting principles, a balance sheet, a
profit and loss statement, and a cash flow statement. With
respect to each fiscal year during the Partnership's operations,
at such time as the Accountants shall have prepared the proposed
tax return for such year, the Accountants shall provide copies of
such proposed tax return to the Investment Partnership and to its
accountants, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, of Bethesda, Maryland,
for their review and comment. Any comments and/or changes in such
proposed tax return reasonably recommended by the Investment
Partnership's accountants shall be taken into account and made by
the Accountants prior to the completion of such tax return for
execution by the General Partner. The Partnership shall reimburse
Boston Capital Communications Limited Partnership, an affiliate of
the Investment Partnership, for its expenses incurred in causing
the Partnership's proposed tax return to be reviewed by the
Investment Partnership's accountants, if and to the extent that
such review results in material modifications to such proposed tax
return. A full detailed statement shall be furnished to all
Partners, showing such assets, properties, and net worth and the
profits and losses of the Partnership for the preceding fiscal
year. All Partners shall have the right and power to examine and
copy, at any and all reasonable times, the books, records and
accounts of the Partnership.
13.04. Reports to Partners TC "13.04. Reports to
Partners"\l2 .
(a) Within thirty (30) days of the date of Substantial
Completion, the General Partner shall cause to be prepared and
distributed to the Investment Partnership, a Credit Basis
Worksheet for each building, and in the form specified by Boston
Capital.
(b) By December 1 of each year, the General Partner
shall caused to be prepared and distributed to the Investment
Partnership the projected annual operating budget for the
Apartment Complex for the next year.
(c) 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) By March 1 of the year after the end of each
fiscal year of the Partnership, (A) an audited financial
statement which includes a balance sheet as of the end of such
fiscal year and statements of income, Partners' equity, and
changes in financial position and a Cash Flow statement, for the
year then ended, all of which, except the Cash Flow statement,
shall be prepared in accordance with generally accepted
accounting principles and accompanied by an auditor's report
containing an opinion of the Accountants, and (B) a report of the
activities of the Partnership during the period covered by the
report. Such report shall set forth distributions to Limited
Partners for the period covered thereby and 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
the Apartment Complex or any other investments of the
Partnership, (4) lease payments on net leases with builders and
sellers, and (5) reserves. With respect to any distribution to
the Investment Partnership, the report called for shall
separately identify distributions from (A) Cash Flow from
operations during the period, (B) Cash Flow from operations
during a prior period which had been held as reserves, (C)
proceeds from disposition of property and investments, (D) lease
payments on net leases with builders and sellers, (E) reserves
from the gross proceeds of the offering originally obtained from
the Investment Partnership, (F) borrowed monies, (G) loans or
contributions from the Investment Partnership, and (H)
transactions outside of the ordinary course of business with a
description thereof. If the Completion Date had not yet occurred
as of December 31 in the year which is the subject of the report,
then this Section 13.04(a)(i) shall require only the balance
sheet for the year then ended.
(ii) By February 1 of the year after the end of each
fiscal year of the Partnership, all information necessary for the
preparation of the Limited Partners' federal income tax returns,
together with a draft of the Partnership's federal income tax
return for such fiscal year.
(iii) Within thirty (30) days after the end of each
calendar quarter of a fiscal year of the Partnership, a report
containing:
(A) A balance sheet, which may be unaudited; and
(B) a statement of income for the quarter then
ended, which may be unaudited; and
(C) A Low Income Housing Credit Monitoring form,
Rent Rolls, Statement of Income and Expenses, Operating Statement
and Occupancy Rental Report, all in the form specified by Boston
Capital; and
(D) A certification that the Apartment Complex
and its tenants are in compliance with all applicable federal and
state laws and regulation; and
(E) other pertinent information regarding the
Partnership and its activities during the quarter covered by the
report.
(d) Within ninety (90) days after the end of each fiscal
year of the Partnership the General Partner shall provide to the
Investment Partnership:
(i) A certification by the General Partner that (A)
all Mortgage Loan payments and taxes and insurance payments with
respect to the Apartment Complex are current as of the date of
the year-end report, (B) to the best of the General Partner's
knowledge and belief there is no default under the Project
Documents or this Agreement, or if there is any default, a
description thereof, and (C) to the best of the General Partner's
knowledge and belief there is no building, health or fire code
violation or similar violation of a governmental law, ordinance
or regulation against the Apartment Complex or, if there is any
violation, a description thereof;
(ii) the information specified in Section 13.04(b);
(iii) to the extent not previously disclosed in a
report required hereunder a descriptive statement of all
transactions during the fiscal year between the Partnership and
the General Partner and/or any Affiliates, including the nature
of the transaction and the payments involved (including accrued
cash or other payments);
(iv) a Cash Flow statement; and
(v) if required, 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 Agency concerning the same.
(e) Upon the written request of the Investment Partnership
for further information with respect to any matter covered in
items (a) or (b) above, the General Partner shall utilize its
best efforts to furnish such information within thirty (30) days
of receipt of such request.
(f) Prior to November 1 of each year commencing in 1998,
the General Partner, on behalf of and at the expense of the
Partnership, shall send to the Investment Partnership an estimate
of the Investment Partnership's share of the Tax Credits,
identified by building, and of Taxable Income and Tax Losses of
the Partnership for federal income tax purposes for the current
fiscal year, all in the form specified by Boston Capital. Such
estimate shall be prepared by the General Partner and the
Accountants.
(g) Within fifteen (15) days after the end of any calendar
month during which
(i) there is a material default by the Partnership
under the Project Documents or in 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) the General Partner has received any notice
of a material fact which may substantially affect further
distributions, or
(iv) any Partner has pledged or collateralized his
Interest in the Partnership, the General Partner shall send the
Investment Partnership a detailed report of such event.
(h) On or before the Admission Date, the General Partner,
on behalf of the Partnership, shall send to the Investment
Partnership a copy of all requests for disbursements or other
extensions of credit under the Mortgage Loan which have been
submitted to the Lender prior to the Admission Date. After the
Admission Date, the General Partner, on behalf of the
Partnership, shall send to the Investment Partnership, on or
before the tenth day of each month, a copy of (i) all reports
required by the Agency, filed the previous month and covering the
status of project operations and (ii) each request for a
disbursement or other extensions of credit under the Mortgage
Loan submitted to the Lender during the previous month. In
addition, within thirty (30) days after the occurrence of
Substantial Completion, the General Partner, on behalf of the
Partnership, shall prepare and send to the Investment Partnership
a Credit Basis Worksheet for each building within the Apartment
Complex, in the format provided by Boston Capital. The General
Partner shall provide to the Investment Partnership such other
reports from time to time as may be reasonably required by the
Investment Partnership with the reasonable consent of the General
Partner or by federal or state agencies having jurisdiction.
(i) (i) In the event that the reports or information
provided for in Sections 13.04 (b)(i) and/or 13.04(b)(ii) above
are, at any time, not provided within the time period(s)
specified in such Sections, the General Partner shall be
obligated to pay to the Investment Partnership the sum of $25 per
day, as liquidated damages, for each day from the date upon which
such reports or information is(are) due pursuant to the
provisions of the aforesaid Sections until the date upon which
such reports or information is (are) provided. This penalty,
however, may be waived by the Investment Partnership in the event
such failure is due to circumstances not within the General
Partner's control.
(ii) In the event that the reporting requirements set
forth in any of the above provisions of this Section 13.04 are
not met, the Investment Partnership, in its reasonable
discretion, may direct the General Partner to dismiss the
Accountants, and to designate successor Accountants, subject to
the approval of the Investment Partnership; provided however,
that if the
General Partner and the Investment Partnership cannot agree on
the designation of successor Accountants, the successor
Accountants shall be designated by the Investment Partnership in
its sole discretion. These costs shall not exceed the average of
three bids from qualified Accountants obtained by the General
Partner. The Special Limited Partner may change the reporting
requirements at any time if required to do so by the Investment
Partnership's limited partners to make changes reasonably
required by the Special Limited Partner to permit it to
adequately monitor its investment. The Investment Partnership
shall give the General Partner at least sixty (60 ) days' Notice
of any material change in the reporting requirements set forth
herein.
13.05. Section 754 Elections TC "13.05. Section 754
Elections"\l2 . In the event of a transfer of all or any part
of the Interest of a General Partner or of a Limited Partner, the
Partnership may elect, pursuant to Sections 743 and 754 of the
Code (or any corresponding provision of succeeding law), to
adjust the basis of the Partnership property if, in the opinion
of the Special Limited Partner, based upon the advice of the
Accountants, such election would be most advantageous to the
Investment Partnership. Each Partner agrees to furnish the
Partnership with all information necessary to give effect to such
election.
13.06. Fiscal Year and Accounting Method TC "13.06.
Fiscal Year and Accounting Method"\l2 . The fiscal year of the
Partnership shall be the calendar year. All Partnership accounts
shall be determined on the accrual basis.
ARTICLE XIV
AMENDMENTS TC "ARTICLE
XIV - AMENDMENTS"\l1
14.01 Amendments. This Agreement may be amended, after
giving 20 days' Notice to the Partners hereunder (a) by the
General Partner with the Consent of the Investment Partnership or
(b) by the Investment Partnership without the Consent of the
General Partner (except in the case of any proposed amendment
which the General Partner reasonably determines to be adverse to
its interest as Partner, and if such Consent is required by the
foregoing, which Consent shall not be unreasonably withheld or
delayed). In determining whether or not to give its Consent to
an amendment prepared by the Investment Partnership, the General
Partner agrees to take into account the investment objectives of
the Investment Partnership.
ARTICLE XV
CONSENTS, VOTING AND MEETINGS TC
"ARTICLE XV - CONSENTS, VOTING AND MEETINGS"\L1
15.01. Method of Giving Consent TC "15.01. Method of
Giving Consent"\L1 . Any Consent required by this Agreement may
be given by a written Consent given by the consenting Partner and
received by the General Partner at or prior to the doing of the
act or thing for which the Consent is solicited.
15.02. Submissions to Limited Partners TC "15.02.
Submissions to Limited Partners"\L2 . The General Partner shall
give the Limited Partners Notice of any proposal or other matter
required by any provision of this Agreement or by law to be
submitted for consideration and approval of the Limited Partners.
Such Notice shall include any information required by the
relevant provision or by law.
15.03. Meetings; Submission of Matter for Voting TC
"15.03. Meetings; Submission of Matter for Voting"\L2 .
Subject to the provisions of Section 10.01, a majority in
Interest of the Limited Partners shall have the authority to
convene meetings of the Partnership and to submit matters to a
vote of the Partners.
ARTICLE XVI
GENERAL PROVISIONS TC
"ARTICLE XVI - GENERAL PROVISIONS"\l1
16.01. Burden and Benefit TC "16.01. Burden and
Benefit"\l2 . 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.
16.02. Applicable Law TC "16.02. Applicable Law"\l2 .
This Agreement shall be construed and enforced in accordance with
the laws of the State.
16.03. Counterparts TC "16.03. Counterparts"\l2 . This
Agreement may be executed in several counterparts, each of which
shall be deemed to be an original copy and all of which together
shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties shall not have signed the
same counterpart.
16.04. Separability of Provisions TC "16.04. Separability
of Provisions"\l2 . Each provision of this Agreement shall be
considered separable and if for any reason any provision which is
not essential to the effectuation of the basic purposes of this
Agreement is determined to be invalid and contrary to any
existing or future law, such invalidity shall not impair the
operation of or affect those provisions of this Agreement which
are valid.
16.05. Entire Agreement TC "16.05. Entire Agreement"\l2
. This Agreement and the ancillary agreements executed in
connection herewith set forth all (and is intended by all parties
to be an integration of all) of the representations, promises,
agreements and understandings among the parties hereto with
respect to the Partnership, the Partnership business and the
property of the Partnership, and there are no representations,
promises, agreements or understandings, oral or written, express
or implied, among them other than as set forth or incorporated
herein.
16.06. Liability of the Investment Partnership TC "16.06.
Liability of the Investment Partnership"\l2 . Notwithstanding
anything to the contrary contained herein, neither the Investment
Partnership nor any of its partners, general or limited, shall
have any personal liability to any of the parties to this
Agreement with regard to the representations and covenants
extended, or the obligations undertaken, by the Investment
Partnership under this Agreement. In the event that the
Investment Partnership shall be in default under any of the terms
of this Agreement, the sole recourse of any party hereto for any
indebtedness due hereunder, or for any damages resulting from any
such default by the Investment Partnership, shall be against the
capital contributions of the investor limited partners of the
Investment Partnership allocated to, and remaining for investment
in, the Partnership; provided however, that under no circumstances
shall the liability of the Investment Partnership for any such
default be in excess of the aggregate of: (a) the amount of
Capital Contribution payable by the Investment Partnership to the
Partnership, under the terms of this Agreement, at the time of
such default, and (b) an amount equal to reasonable attorneys'
fees reasonably and necessarily incurred by the General Partners
in obtaining payment of any Installment(s) not made by the
Investment Partnership when due and payable pursuant to the
provisions of this Agreement.
16.07. Environmental Protection TC "16.07. Environmental
Protection"\l2 .
(a) The General Partner represents and warrants that
(i) it has no actual knowledge of any deposit, storage, disposal,
burial, discharge, spillage, uncontrolled loss, seepage or
filtration of any Hazardous Substances at, upon, under or within
the Land or any contiguous real estate, and (ii) it has not
caused or permitted to occur, and shall not permit to exist, any
condition which may cause a discharge of any Hazardous Substances
at, upon, under or within the Land or on any contiguous real
estate.
(b) The General Partner further represents and
warrants that neither it nor any of its Affiliates (i) has been,
or will be involved in operations at or, pursuant to its best
efforts, near the Land, which operations could lead to (A) the
imposition of liability under the Hazardous Waste Laws on the
Partnership or on any other subsequent or former owner of the
Land or (B) the creation of a lien on the Land under the
Hazardous Waste Laws or under any similar laws or regulations;
and (ii) has permitted, or will permit, any tenant or occupant of
the Apartment Complex to engage in any activity that could impose
liability under the Hazardous Waste Laws on such tenant or
occupant, on the Land or on any other owner of the Apartment
Complex.
(c) The General Partner shall comply strictly and in
all respects with the requirements of the Hazardous Waste Laws
and related regulations and with all similar laws and
regulations.
(d) The General Partner, shall at all times indemnify
and hold harmless the Investment Partnership against and from any
and all claims, suits, actions, debts, damages, costs, charges,
losses, obligations, judgments, and expenses, of any nature
whatsoever, suffered or incurred by the Investment Partnership,
under or on account of the Hazardous Waste Laws or any similar
laws or regulations, including the assertion of any lien
thereunder, except for claims, suits, actions, debts, damages,
costs, charges, losses, obligations, judgments, or expenses
arising from the Investment Partnership's own gross negligence,
willful misconduct or fraud.
(e) For purposes of this Section 16.07, "Hazardous
Substances" means oil, petroleum or chemical liquids or solids,
liquid or gaseous products or any hazardous wastes or hazardous
substances, as those terms are used in the Hazardous Waste Laws;
and "Hazardous Waste Laws" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, and any other
federal, state or local law governing Hazardous Substances, as
such laws may be amended from time to time.
16.08. Notices to the Investment Partnership TC "16.08.
Notices to the Investment Partnership"\l2 . Any Notice required
by the provisions of this Agreement to be given to the Investment
Partnership shall be addressed as follows:
Boston Capital Tax Credit Fund, IV, LP
c/o Boston Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
And a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
16.09. Notices to the General Partner TC "16.09. Notices
to the General Partner"\l2 . Any Notice required by the
provisions of this Agreement to be given to the General Partner
shall be addressed as follows:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties, LLC
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
16.10. Withdrawal of Initial Limited Partner TC "16.10.
Withdrawal of Initial Limited Partner"\l2 . The Initial Limited
Partner hereby withdraws as the Initial Limited Partner of the
Partnership and shall have no further right, title and interest
in the Partnership. The Initial Limited Partner acknowledges
that it has received the return of any Capital Contribution or
other amount to which it is entitled from the Partnership and
represents and warrants to the Partnership, which representation
and warranty shall survive its withdrawal, that, as of the date
hereof, its interest as limited partner is free and clear of any
liens and encumbrances
16.11. Postponement and Waiver TC "16.11. Postponement
and Waiver"\l2 . No failure or delay on the part of any party
in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies expressly
specified in this Agreement are cumulative and are not exclusive
of any rights or remedies which any party would otherwise have.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have affixed their
signatures and seals to this Amended and Restated Agreement of
Limited Partnership of Lombard Properties, L.P. as of the date
first written above.
GENERAL PARTNER:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Properties, L.L.C.
____________________________ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Witness ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Manager
INVESTMENT PARTNERSHIP:
BOSTON CAPITAL TAX
CREDIT
FUND IV, L.P.
By: Boston Capital
Associates IV, L.P.,
its General Partner
By: C & M Associates
d/b/a Boston
Capital Associates,
its General
Partner
____________________________ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
Witness ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇,
Attorney-in-fact for ▇▇▇▇
▇. ▇▇▇▇▇▇▇,
General Partner
SPECIAL LIMITED PARTNER:
BCTC 94, Inc.
____________________________ By: /s/▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Witness ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney-in-
fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
INITIAL LIMITED PARTNER:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties,
L.L.C.
____________________________ By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Witness ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
EXHIBIT A
Post-Closing Conditions
[Refer to that certain Post-Closing Letter dated as
of the date hereof,
which is incorporated herein by reference]