DEVELOPMENT SERVICES AGREEMENT
AGREEMENT made as of May 1, 1998 by and between
PINERIDGE APARTMENTS PARTNERSHIP, a Louisiana Partnership In
Commendam (the Partnership) and ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr. (the
Developer).
RECITALS
1. The Partnership was formed to acquire, construct,
develop, improve, maintain, own, operate, lease, dispose of
and otherwise deal with an apartment complex located in
Franklinton, Louisiana (the Apartment Complex).
2. The Apartment Complex, following the completion of
construction, is expected to constitute a qualified low
income housing project (as defined in Section 42(g)(1) of
the Code).
3. The Developer has provided and will continue to
provide certain services with respect to the Apartment
Complex during the development and construction thereof.
4. In consideration for such services, the
Partnership has agreed to pay to the Developer a fee
computed in the manner stated herein.
NOW, THEREFORE, in consideration of the mutual
covenants and conditions set forth herein and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Defined Terms
Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings specified below:
Completion Date shall mean the date upon which (i) the
Apartment Complex shall have been completed as evidenced by
the issuance by the inspecting architect and by each
governmental agency having jurisdiction, of certificates of
substantial completion or occupancy (or local equivalents)
with respect to all apartment units in the Apartment
Complex, and (ii) each such apartment unit shall have been
placed in service after rehabilitation thereof.
Permanent Mortgage Commencement shall mean the first date on
which all of the following shall have occurred with respect
to the Apartment Complex: (a) Completion Date; (b) the
principal amount and maturity date of the permanent mortgage
loan shall have been finally determined; (c) amortization of
the permanent mortgage loan shall have commenced, and (d)
repayment in full of the construction financing and
discharge of the construction mortgage and all other liens
related thereto.
State means Louisiana.
Section 2. Development Services
(a) The Developer shall oversee the development and
construction of the Apartment Complex, and shall perform the
services and carry out the responsibilities with respect to
the Apartment Complex as are set forth herein, and such
additional duties and responsibilities as are reasonably
within the general scope of such services and
responsibilities and are designated from time to time by the
general partners of the Partnership (the General Partners)
on behalf of the Partnership.
(b) The Developer's services shall be performed in the name
and on behalf of the Partnership and shall consist of the
duties set forth in the following subparagraphs of this
Section 2(b) and as provided elsewhere in this Agreement;
provided, however, that if the performance of any duty of
the Developer set forth in this Agreement is beyond the
reasonable control of the Developer, the Developer shall
nonetheless be obligated to (i) use its best efforts to
perform such duty and (ii) promptly notify the Partnership
that the performance of such duty is beyond its reasonable
control. The Developer has performed or shall perform the
following:
(i) Negotiate and cause to be executed in the name and
on behalf of the Partnership agreements for architectural,
engineering, testing or consulting services for the
Apartment Complex, and any agreements for the construction
of any improvements or tenant improvements to be constructed
or installed by the Partnership or the furnishing of any
supplies, materials, machinery or equipment therefor, or any
amendments thereof, provided that no agreement shall be
executed nor binding commitment made until the terms and
conditions thereof and the party with whom the agreement is
to be made shall have on approved by the Partnership unless
the terms, conditions, and parties comply with guidelines
issued by the General Partners concerning such agreements;
(ii) Assist the Partnership in dealing with neighborhood
groups, local organizations, abutters and other parties
interested in the development of the Apartment Complex;
(iii) Assist the Partnership in identifying sources of
construction financing for the Apartment Complex and
negotiate the terms of such financing with lenders;
(iv) Establish and implement appropriate administrative and
financial controls for the design and construction of the
Apartment Complex, including but not limited to:
(A) coordination and administration of the Apartment
Complex architect, the general contractor, and other
contractors, professionals and consultants employed in
connection with the design of the Apartment Complex;
(B) administration of any construction contracts on behalf
of the Partnership;
(C) participation in conferences and the rendering of such
advice and assistance as will aid in developing economical,
efficient and desirable design and construction procedures;
(D) the rendering of advice and recommendations as to the
selection procedures for and selection of subcontractors and
suppliers;
(E) the review and submission to the Partnership for
approval of all requests for payments under any
architectural agreement, general contractor's agreement, or
any loan agreements with any lending institutions providing
funds for the benefit of the Partnership for the design or
construction of any improvements;
(F) the submission of any suggestions or requests for
changes which could in any reasonable manner improve the
design, efficiency or cost of the Apartment Complex;
(G) applying for and maintaining in full force and effect
any and all governmental permits and approvals required for
the lawful construction of the Apartment Complex;
(H) compliance with all terms and conditions applicable to
the Partnership or the Apartment Complex Contained in any
governmental permit or approval required or obtained for the
lawful construction of the Apartment Complex, or in any
insurance policy affecting or covering the Apartment
Complex, or in any surety bond obtained in connection with
the Apartment Complex;
(I) furnishing such consultation and advice relating to the
construction and development of the Apartment Complex as may
be reasonably requested from time to time by the
Partnership;
(J) keeping the Partnership fully informed on a regular
basis of the progress of the design and construction of the
Apartment Complex, including the preparation of such reports
as are provided for herein or as may reasonably be requested
by the Partnership;
(K) giving or making the Partnership's instructions,
requirements, approvals and payments provided for in the
agreements with the Apartment Complex architect, general
contractor, and other contractors, professionals and
consultants retained for the Apartment Complex; and
(L) at the Partnership's expense, filing on behalf of, and
as the attorney fact for, the Partnership, any notices of
completion required or permitted to be filed upon the
completion of any improvements and taking such actions as
may be required to obtain any certificates of occupancy or
equivalent documents required to permit the occupancy of
dwelling units and other space in the Apartment Complex.
(v) Assist the Partnership in obtaining access to utilities
and required zoning approvals;
(vi) Inspect the progress of the course of construction of
the Apartment Complex, including verification of the
materials and labor being furnished to and on such
construction so as to be fully competent to approve or
disapprove requests for payment made by the Apartment
Complex architect and the general contractor, or by any
other parties with respect to the design and construction of
the Apartment Complex, and in addition to verify that the
same is being carried out substantially in accordance with
the plans and specifications approved by the Partnership or,
in the event that the same is not being so carried out, to
promptly so notify the Partnership;
(vii) If requested to do so by the Partnership, perform on
behalf of the Partnership all obligations of the Partnership
with respect to the design and construction of the Apartment
Complex contained in any loan agreement or security
agreement entered into in connection with any financing for
the Apartment Complex, or in any lease or rental agreement
relating to space in the Apartment Complex, or in any
agreement entered into with any governmental body or agency
relating to the terms and conditions of such construction,
provided that copies of such agreements have been provided
by the Partnership to the Developer or the Partnership has
otherwise notified the Developer in writing of such
obligations;
(viii) To the extent requested to do so by the Partnership,
prepare and distribute to the Partnership a critical path
schedule, and periodic updates thereto as necessary to
reflect any material changes, but in any event not less
frequently than quarterly, other design or construction cost
estimates as required by the Partnership, and financial
accounting reports, including monthly progress reports on
the quality, progress and cost of construction and
recommendations as to the drawing of funds from any loans
arranged by the Partnership to cover the cost of design and
construction of the Apartment Complex;
(ix) Assist the Partnership in obtaining and maintaining
insurance coverage for the Apartment Complex, the
Partnership and its employees during the development phase
of the Apartment Complex in accordance with an insurance
schedule approved by the Partnership, which insurance shall
include general public liability insurance covering claims
for personal injury, including but not limited to bodily
injury, or property damage, occurring in or upon the
Property or the streets, passageways, curbs and vaults
adjoining the Property. Such insurance shall be in a
liability amount approvals by the Partnership;
(x) During the construction and development period of the
Apartment Complex, comply with all applicable present and
future laws, ordinances, orders, rules, regulations and
requirements (hereinafter called laws) of all Federal, state
and municipal government courts, departments, commissions,
boards and offices, any national or local Board of Fire
Underwriters or Insurance Services Offices having
jurisdiction in the county in which the Apartment Complex is
located or any other body exercising functions similar to
those of any of the foregoing, or any insurance carriers
providing any insurance coverage for the Partnership or the
Apartment Complex, which may be applicable to the Apartment
Complex or any part thereof. Any such compliance undertaken
by the Developer on behalf of and in the name of the
Partnership, in accordance with the provisions of this
Agreement, shall be at the Partnership's expense. The
Developer shall likewise ensure that all agreements between
the Partnership and independent contractors to comply with
all such applicable laws;
(xi) Assemble and retain all contracts, agreements and
other records and data as may be necessary to carry out the
Developer's functions hereunder. Without limiting the
foregoing, the Developer will prepare, accumulate and
furnish to the General Partners and the appropriate
governmental authorities, as necessary, data and information
sufficient to identify the market value of improvements in
place as of each real property tax lien date, and will make
application for appropriate exclusions from the capital
costs of the Apartment Complex for purposes of real property
ad valorem taxes;
(xii) Coordinate and administer the design and construction
of all interior tenant improvements to the extent required
under any leases or other occupancy agreements to be
constructed or furnished by the Partnership with respect to
the initial leasing of space in the Apartment Complex,
whether involving building standard or non building standard
work;
(xiii) Use its best efforts to accomplish the timely
completion of the Apartment Complex in accordance with the
approved plans and specifications and the time schedules for
such completion approved by the Partnership;
(xiv) At the direction of the Partnership, implement any
decisions of the Partnership made in connection with the
design, development and construction of the Apartment
Complex or any policies and procedures relating thereto,
exclusive of leasing activities; and
(xv) Perform and administer any and all other services and
responsibilities of the Developer which are set forth in
any other provisions of this Agreement or, which are
requested to be performed by the Partnership and are within
the general scope of the services described herein.
Section 3. Obligation to Complete Construction and to Pay
Development Costs
The Developer shall complete the construction of the
Apartment Complex or cause the same to be completed in a
good and workmanlike manner, free and clear of all
mechanics', materialmen's or similar liens, and shall equip
the Apartment Complex or cause the same to be equipped with
all necessary and appropriate fixtures, equipment and
articles of personal property including refrigerators and
ranges, all in accordance with the drawings and
specifications forming a part of the construction contract.
The Developer shall be obligated to pay any costs or
expenses, incurred by the Partnership to fund any Apartment
Complex construction, development or other costs and
expenses in excess of (i) the funds available to the
Partnership for the payment thereof through the later to
occur Completion Date/Permanent Mortgage Commencement or the
date of the admission of an investment limited partner to
the Partnership and (ii) the proceeds of such investment
limited partner's capital contribution to the Partnership
(together, the Designated Proceeds). Any funds provided by
the Developer pursuant to this Section 3 shall not be
reimbursed by the Partnership, nor create any liability on
behalf of the Partnership to the Developer, except that the
Developer may be reimbursed for such items from Designated
Proceeds. No such advance of funds by the Developer shall
change the interest of any partner or be credited to any
partner's capital account or capital contribution for any
purpose. Excess development costs shall be borne solely by
the Developer in its capacity as the developer of the
Apartment Complex.
Section 4. Limitations and Restrictions
Notwithstanding any provisions of this Agreement, the
Developer shall not take any action, expend any sum, make
any decision, give any consent, approval, or authorization
or incur any obligation with respects to any of the
following matters unless and until the same has been
approved by the General Partners:
(a) Approval of all construction and architectural
contracts and all architectural plans, specifications and
drawings prior to the construction of any improvements
contemplated thereby, except for such matters as may be
expressly delegated in writing to the Developer by the
General Partners;
(b) Any proposed change in the work of the
construction of the Apartment Complex, or in the plans and
specifications therefor as previously approved by the
General Partners, or in the cost thereof, or any change
which would affect the design, cost, value or quality of the
Apartment Complex, except for such matters as may be
expressly delegated In writing to the Developer by the
General Partners; or
(c) Expending an amount greater than the amount which the
Developer in good faith believes the fair and reasonable
market value at the time and place of contracting for any
goods purchased or leased or services engaged on behalf of
the Partnership or otherwise in connection with the
Apartment Complex.
Section 5. Accounts and Records
(a) The Developer, on behalf of the Partnership, shall keep
such books of account and other records as may be required
and approvals by the General Partners, including, but not
limited to, records relating to the costs for which
construction advances have been requested and/or received.
The Developer shall keep vouchers, statements, receipted
bills and invoices and all other records, in the form
approved by the General Partners, covering all collections,
if any, disbursements and other data in connection with the
Apartment Complex prior to final completion of construction.
All accounts and records relating to the Apartment Complex,
including all correspondence, shall be surrendered to the
Partnership upon demand without charge therefor.
(b) All books and records prepared or maintained by the
Developer shall be kept and maintained at all times at the
place or places approved by the General Partners, and shall
be available for and subject to audit, inspection and
copying by the management agent for the Apartment Complex,
the General Partners or any representative or auditor
therefor or supervisory or regulatory authority, at the
times and in the manner set forth in the limited partnership
agreement of the Partnership.
Section 6. Compensation
For its services in connection with the development of
the Apartment Complex and the supervision of the
construction of the Apartment Complex, the Developer and
Quad Area Community Action Agency, Inc. shall be entitled to
receive, as and when the same is available from Designated
Proceeds or any other source, but in no event later than
December 31, 2000, a fee (the Development Fee) equal to
$160,000, $72,000 of which has accrued previously for
services rendered through May 1, 1998, prior to the date of
this Agreement. The Development Fee will be or has been
earned by Developer as follows:
(i) Fifteen percent (15%) at such time as the Partnership
shall have obtained satisfactory environmental, title and
survey reports with respect to the Apartment Complex,
obtained all necessary easements for off-site utilities
relating to sanitary sewers and storm water run-off and
obtained (or confirmed) all required zoning approvals to
permit development of the Apartment Complex at the Apartment
Complex site;
(ii) Ten percent (10%) upon finalization of architectural
and engineering service contracts and substantial completion
of architectural and engineering drawings for the Apartment
Complex and required off-site improvements;
(iii) Ten percent (10%) upon finalization of
construction management and general contractor agreements
for the construction of the Apartment Complex;
(iv) Ten percent (10%) upon obtaining a construction loan
commitment and other commitments as required for the
construction of the Apartment Complex;
(v) Forty percent upon the Apartment Complex being 50%
complete as evidenced by a certificate of the Apartment
Complex architect to such effect;
(vi) Fifteen percent (15%) upon the issuance of certificates
of occupancy for all units in the Apartment Complex (or
local equivalent, or a certificate of substantial completion
from the Apartment Complex architect if certificates of
occupancy are not issued by the local governmental
authorities.
The parties confirm that the Development Fee was earned
as of May 1, 1998 to the extent of $72,000 and upon the
Developer having performed the following services for the
Partnership (among other valuable services heretofore
provided by the Developer to the Partnership):
(i) Negotiation with the former land owner with respect to
the contemplated development plans of the Partnership for
the Apartment Complex. Confirmation and/or negotiation of
zoning, utility availability and off-site easements as
required for development of the Apartment Complex;
(ii) Negotiation of engineering and architectural services
agreements required for the development of the Apartment
Complex;
(iii) Overseeing the work of the architect and engineer
in the preparation of design drawings for the development of
the Apartment Complex and coordinating the same with the
Partnership desired budget levels therefor;
(iv) Negotiating, structuring and obtaining a construction
loan commitment in an amount as required to enable the
Apartment Complex to be developed; and
(v) Working with and finalizing agreement with various
professionals in the acquisition, design, financing and
implementation of the Apartment Complex.
The Development Fee shall be paid as nearly as
practicable to the date earned and in no event shall any
portion of the Development Fee be paid later than December
31, 1999.
Section 8. Applicable Law
This Agreement, and the application or interpretation
hereof, shall be governed by and construed in accordance
with the laws of the State.
Section 9. Binding Agreement
This Agreement shall be binding on the parties hereto,
their heirs, executors, personal representatives, successors
and assigns and supersedes any prior agreement for the
development of the Apartment Complex between the parties
hereto.
Section 10. Headings
All section headings in this Agreement are for
convenience of reference only and are not intended to
qualify the meaning of any section.
Section 11. Terminology
All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall
include all other genders, the singular shall include the
plural, and vice versa as the context may require.
Section 12. Benefit of Agreement
The obligations and undertakings of the Developer set
forth in this Agreement are made for the benefit of the
Partnership and its partners and shall not inure to the
benefit of any creditor of the Partnership other than a
Partner, notwithstanding any pledge or assignment by the
Partnership of this Agreement or any rights hereunder.
IN WITNESS WHEREOF, the parities have caused this Agreement
to be duly executed as of the date first written above.
PARTNERSHIP: PINERIDGE APARTMENTS
PARTNERSHIP, A LOUISIANA
PARTNERSHIP IN COMMENDAM
By: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Its: Managing General Partner
/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
DEVELOPER: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, JR.
/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
iv
Pineridge Apartments Partnership
Amended Partnership Agreement
Pineridge Apartments Partnership
Amended Partnership Agreement
BOS354861.1
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BOS354861.1
