SECOND AMENDED AND RESTATED
ARTICLES OF PARTNERSHIP IN COMMENDAM
OF
EDGEWOOD APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
By and Among
X. XXXXXX XXXXXXX, JR.
as the Managing General Partner
and
CALEB COMMUNITY DEVELOPMENT CORPORATION
as a General Partner
and
T.F. MANAGEMENT, INC.
as the Withdrawing Original Limited Partner
and
BOSTON CAPITAL TAX CREDIT FUND IV, L.P.
(Series 29)
as the Investment Limited Partner
and
BCTC 94, INC.
as the Special Limited Partner
Dated as of March 3, 1998
Table of Contents
PRELIMINARY STATEMENT 1
ARTICLE I DEFINED TERMS 1
ARTICLE II NAME AND BUSINESS 15
2.1 NAME; CONTINUATION 15
2.2 OFFICE AND RESIDENT AGENTS 15
2.3 PURPOSE 16
2.4 TERM AND DISSOLUTION 16
ARTICLE III MORTGAGES; REFINANCING AND DISPOSITION OF
PROPERTY 17
ARTICLE IV PARTNERS 18
4.1 GENERAL PARTNERS 18
4.2 INVESTMENT LIMITED PARTNER, SPECIAL LIMITED PARTNER AND WITHDRAWING
ORIGINAL LIMITED PARTNER 18
4.3 LIABILITY OF THE LIMITED PARTNERS 18
4.4 SPECIAL RIGHTS OF THE INVESTMENT LIMITED PARTNER AND THE SPECIAL
LIMITED PARTNER 18
4.5 MEETINGS 21
ARTICLE V CAPITAL CONTRIBUTIONS OF THE INVESTMENT LIMITED
PARTNER AND THE SPECIAL LIMITED PARTNER 21
5.1 PAYMENTS 21
5.2 RETURN OF CAPITAL CONTRIBUTIONS 25
ARTICLE VI RIGHTS, POWERS AND DUTIES OF THE MANAGING
GENERAL PARTNER 28
6.1 AUTHORIZED ACTS 28
6.2 RESTRICTIONS ON AUTHORITY 29
6.3 PERSONAL SERVICES 30
6.4 BUSINESS MANAGEMENT AND CONTROL; TAX MATTERS PARTNER 30
6.5 SPECIAL DUTIES OF CALEB COMMUNITY DEVELOPMENT CORPORATION 31
6.6 ADDITIONAL DUTIES AND OBLIGATIONS OF THE MANAGING GENERAL PARTNER 32
6.7 REPRESENTATIONS AND WARRANTIES 34
6.8 LIABILITY ON THE PERMANENT MORTGAGES 37
6.9 INDEMNIFICATION OF THE GENERAL PARTNERS 38
6.10 INDEMNIFICATION OF THE PARTNERSHIP AND THE LIMITED PARTNERS 39
6.11 OPERATING DEFICITS 39
6.12 OBLIGATION TO COMPLETE THE CONSTRUCTION OF THE APARTMENT COMPLEX 40
6.13 CERTAIN PAYMENTS TO THE GENERAL PARTNERS AND OTHERS 41
6.14 ASSIGNMENT TO PARTNERSHIP 43
ARTICLE VII WITHDRAWAL OF A GENERAL PARTNER; NEW GENERAL
PARTNERS 43
7.1 WITHDRAWAL 43
7.2 OBLIGATION TO CONTINUE 43
7.3 WITHDRAWAL OF ALL GENERAL PARTNERS 44
7.4 INTEREST OF GENERAL PARTNER AFTER PERMITTED WITHDRAWAL 44
7.5 ADMISSION OF ADDITIONAL GENERAL PARTNER(S) UNDER CERTAIN
CIRCUMSTANCES 45
ARTICLE VIII TRANSFERABILITY OF LIMITED PARTNER INTERESTS 45
8.1 ASSIGNMENTS 45
8.2 SUBSTITUTED LIMITED PARTNER 46
8.3 RESTRICTIONS 46
ARTICLE IX BORROWINGS 47
ARTICLE X PROFITS, LOSSES, TAX CREDITS, DISTRIBUTIONS AND
CAPITAL ACCOUNTS 47
10.1 CAPITAL AND CAPITAL ACCOUNTS 47
10.2 PROFITS, LOSSES AND TAX CREDITS 48
10.3 CASH DISTRIBUTIONS PRIOR TO DISSOLUTION 49
10.4 DISTRIBUTIONS UPON DISSOLUTION 51
10.5 SPECIAL PROVISIONS 52
10.6 AUTHORITY OF THE GENERAL PARTNERS TO VARY ALLOCATIONS TO PRESERVE
AND PROTECT THE PARTNERS' INTENT 56
ARTICLE XI MANAGEMENT AGENT 57
ARTICLE XII BOOKS AND RECORDS, ACCOUNTING, TAX ELECTIONS,
ETC. 58
12.1 BOOKS AND RECORDS 58
12.2 BANK ACCOUNTS 59
12.3 AUDITORS 59
12.4 COST RECOVERY AND ELECTIONS 60
12.5 SPECIAL BASIS ADJUSTMENTS 60
12.6 FISCAL YEAR 60
12.7 INFORMATION TO PARTNERS 60
12.8 EXPENSES OF THE PARTNERSHIP 65
ARTICLE XIII GENERAL PROVISIONS 65
13.1 RESTRICTIONS BY REASON OF SECTION 708 OF THE CODE 65
13.2 AMENDMENTS TO CERTIFICATE 65
13.3 NOTICES 65
13.4 WORD MEANINGS 66
13.5 BINDING EFFECT 66
13.6 APPLICABLE LAW 66
13.7 COUNTERPARTS 66
13.8 FINANCING REGULATIONS 66
13.9 SEPARABILITY OF PROVISIONS 67
13.10 PARAGRAPH TITLES 67
13.11 AMENDMENT PROCEDURE 67
13.12 EXTRAORDINARY LIMITED PARTNER EXPENSES 67
13.13 TIME OF ADMISSION 68
CONSENT AND AGREEMENT 72
SCHEDULE A 73
EDGEWOOD APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
SECOND AMENDED AND RESTATED
ARTICLES OF PARTNERSHIP IN COMMENDAM
Preliminary Statement
Edgewood Apartments Partnership, A Louisiana
Partnership In Commendam (the "Partnership"), was formed as
a Louisiana partnership in commendam pursuant to Articles of
Partnership In Commendam dated October 29, 1996 (the
"Original Agreement"), by and among X. Xxxxxx Xxxxxxx, Jr.
and The Caleb Foundation, Inc. as the general partners, and
The Caleb Foundation, Inc., as the limited partner. The
Original Agreement was filed and registered in the Filing
Office on October 29, 1996 (as so filed, the "Original
Certificate"). The Original Agreement was amended by
Amended and Restated Articles of Partnership In Commendam
dated January 8, 1998, whereby The Caleb Foundation, Inc.
withdrew as a general partner, Caleb Community Development
Corporation, a Louisiana not-for-profit corporation was
substituted as a general partner (the "General Partner"),
The Caleb Foundation, Inc. withdrew as the limited partner
and T.F. Management, Inc., a Louisiana corporation, was
admitted as the limited partner (the "Withdrawing Original
Limited Partner"). The Amended Certificate of Limited
Partnership was filed and registered with the Filing Office
on January 8, 1998. Certain capitalized terms used herein
shall have the respective meanings specified in Article I.
The parties hereto now desire to enter into these
Second Amended and Restated Articles of Partnership In
Commendam to: (i) continue the Partnership; (ii) admit
Boston Capital Tax Credit Fund IV, L.P., a Delaware limited
partnership (specifically Series 29 thereof), to the
Partnership as its Investment Limited Partner; (iii) admit
BCTC 94, Inc., a Delaware corporation, as Special Limited
Partner; (iv) acknowledge the withdrawal of the Withdrawing
Original Limited Partner; (v) reassign the Interests in the
Partnership; and (vi) set forth all of the provisions
governing the Partnership and the Partners herein.
In consideration of mutual agreements set forth
herein, it is agreed and certified, and the Original
Agreement and the Original Certificate are hereby amended
and restated in their entireties, as follows:
ARTICLE I Defined Terms
The following defined terms used in this Agreement shall
have the meanings specified below:
Act means Article 2801 et seq. of the Louisiana Civil
Code and Louisiana Revised Statutes 9:3401 et seq., as
amended from time to time.
Actual Credit means, with respect to a particular
year, the total amount of Tax Credit properly allocable by
the Partnership to the Investment Limited Partner for such
year. The Actual Credit for a year shall be retroactively
revised if the amount of Tax Credit properly allocable to
the Investment Limited Partner for such year is revised
after audit or recaptured.
Additional Limited Partner means any holder of an
Interest designated as an Additional Limited Partner
pursuant to Section 4.4(b) or Section 7.4.
Admission Date means the first date on which all
parties hereto shall have executed this Agreement, or, if,
pursuant to the Act, the Investment Limited Partner shall
not be deemed admitted to the Partnership on such date, then
the next date thereafter on which the Investment Limited
Partner shall be deemed to be admitted to the Partnership
under the Act.
Affiliate means (A) as to the Investment Limited
Partner or Boston Capital: (i) such Person; (ii) each member
of the Immediate Family of such Person; (iii) each legal
representative, successor or assignee of any Person referred
to in the preceding clauses (i) or (ii); (iv) each trustee
of a trust for the benefit of any Person referred to in the
preceding clauses (i) or (ii); or (v) any other Person (a)
who directly or indirectly controls, is controlled by, or is
under common control with such Person, (b) who is an officer
of, director of, partner in or trustee of, or serves in a
similar capacity, (c) who, directly or indirectly, is the
beneficial owner of ten percent (10%) or more of any class
of equity securities of such Person of which such Person is
directly the owner of ten percent (10%) or more of any class
of securities, (d) who is an officer, director, general
partner, trustee or holder of ten percent (10%) or more of
the voting securities or beneficial interests of any Person
referred to in the foregoing clauses (v)(a), (v)(b) or
(v)(c) or (e) who, whatever his title, performs functions
for such Person or any Affiliate of such Person similar to a
Chairman or member of the Board of Directors, or executive
officer such as the President, Executive Vice President or
Senior Vice President, Corporate Secretary, or Treasurer, or
any Person holding a five percent (5%) or more equity
interest in such Person, or any Person having the power to
direct or cause the direction of such Person whether through
the ownership of voting securities, by contract or
otherwise; and (B) as to any other named Person or Persons:
(i) such Person; (ii) each member of the Immediate Family of
such Person; (iii) each legal representative, successor or
assignee of any Person referred to in the preceding clauses
(i) or (ii); (iv) each trustee of a trust for the benefit of
any Person referred to in the preceding clauses (i) or (ii);
or (v) any other Person(a) who directly or indirectly
controls, is controlled by, or is under common control with
such Person, (b) who owns or controls ten percent (10%) or
more of the outstanding voting securities of such Person,
(c) of which ten percent (10%) or more of the outstanding
voting securities is owned by such Person or any of the
Persons referred to in the foregoing clauses (i) through
(iii), (d) who is an officer, director, partner or trustee
of such Person, or (e) for which such Person acts in the
capacity of the officer, partner or trustee of such Person,
or (e) for which such Person acts in the capacity of the
officer, director, partner or trustee. An affiliate of the
Investment limited Partner does not include a Person who is
a partner in a partnership or joint venture with the
Investment Limited Partner or any other Affiliate of the
Investment Limited Partner if such Person is not otherwise
an Affiliate of the Investment Limited Partner. For the
purposes of this definition, the term Affiliate shall not be
deemed to include any law firm (or member or associate
thereof) providing legal services to the Investment Limited
Partner or any Affiliate.
Agency means, as applicable, the Credit Agency and/or
any other governmental agency having jurisdiction over the
particular matter to which reference is being made.
Agency Regulatory Agreement means the HOME Affordable
Rental Housing Program Regulatory Agreement to be entered
into between the Permanent Second Lender and the
Partnership.
Agreement means these Second Amended and Restated
Articles of Partnership In Commendam, including Schedule A,
as amended from time to time.
Apartment Complex means the real property located in
Baker, East Baton Rouge Parish, Louisiana, as more fully
described in the Mortgages, together with (i) all buildings
and other improvements constructed or to be constructed
thereon and (ii) all furnishings, equipment, fixtures and
personal property covered by the Mortgages, known or to be
known as Edgewood Apartments.
Applicable Federal Rate means the "applicable federal
rate" as defined in Section 1274(d) of the Code.
Applicable Percentage has the meaning given to it in
Section 42(b) of the Code.
Asset Management Fee means the fee payable to BCCLP or
an Affiliate thereof pursuant to Section 6.13(c).
Auditors means Xxxx Xxxxxx & Company, or such other
firm of independent certified public accountants as may be
engaged by the General Partners with the consent of the
Special Limited Partner for the purposes of preparing the
Partnership income tax returns, auditing the books and
records of the Partnership and certifying financial reports
of the Partnership.
BCCLP means Boston Capital Communications Limited
Partnership, a Massachusetts limited partnership, and its
successors and assigns.
Boston Capital means Boston Capital Partners, Inc., a
Massachusetts corporation, and its successors and assigns.
Breakeven Confirmation means the date upon which each
of the Limited Partners receive a copy of the federal income
tax return of the Partnership for the Partnership fiscal
year in which the Breakeven Point shall have occurred,
evidencing to the satisfaction of the Special Limited
Partner that the Breakeven Point occurred in such year.
Breakeven Point means thirty (30) days after the first
time at which, as certified by the Managing General Partner
to the Limited Partners in writing together with a statement
fully disclosing the basis therefor and the manner of
calculation thereof, there have been an average of three (3)
consecutive full calendar months of Partnership operations
occurring after the later to occur of (i) the Admission Date
or (ii) Permanent Mortgage Commencement, during which
Revenues for each of such months shall have exceeded all the
Partnership's expenses for such month on an accrual basis
(including, but not limited to, (a) all operational costs
and expenses, (b) all items payable in connection with the
Permanent Mortgages, and (c) the funding of any reserves
required by any Lender or Agency and/or pursuant to the
terms of this Agreement), except for depreciation,
amortization and other non-cash charges, distributions of
Cash Flow and Capital Transaction proceeds to the Partners
and the fees payable pursuant to this Agreement. If free
rent or other rental concessions shall have been granted to
tenants, the calculation of income pursuant to the preceding
sentence shall be adjusted so that the effect of such
concessions is amortized equally over the term of all leases
(excluding renewal periods) to which it applies. For
purposes of the foregoing, expenses shall (i) include
monthly payments of principal and interest in the amount
specified in the Permanent Mortgages regardless of any
forbearance thereof, (ii) include a ratable portion of the
annual amount (as estimated by the General Partners) of
those seasonal expenses (such as utilities and maintenance
expenses) which might reasonably be expected to be incurred
on an unequal basis during a full annual period of
operation, and (iii) be adjusted, if necessary, so that the
expenses of real estate taxes and insurance are based on the
General Partners' reasonable estimate of the full assessed
value of the Apartment Complex after completion of
construction.
Capital Account has the meaning specified in Section
10.1(b).
Capital Contribution means the total value of cash or
property contributed and agreed to be contributed to the
Partnership by each Partner, as shown in Schedule A. Any
reference in this Agreement to the Capital Contribution of a
then Partner shall include a Capital Contribution previously
made by any prior Partner for the Interest of such then
Partner.
Capital Transaction means any transaction the proceeds
of which are not includable in determining Cash Flow,
including, without limitation, the sale or other disposition
of all or substantially all of the assets of the
Partnership, casualty where any insurance proceeds are not
to be used for reconstruction, condemnation or refinancing
of the Apartment Complex, but excluding the payment of
Capital Contributions.
Carryover Certification means the date upon which the
Limited Partners shall have received, in a form and in
substance satisfactory to the Special Limited Partner, the
certification of the Auditors that as of a date no later
than December 31, 1997, the Partnership had owned land or
depreciable property constituting part of the Apartment
Complex and had incurred capitalizable costs with respect to
the Apartment Complex of at least ten per cent (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 constitutes a "qualified building" for
the purposes of Section 42(h)(1)(E)(ii) of the Code.
Cash Flow means, with respect to any fiscal year of
the Partnership, or any other applicable period, from and
after the Commencement Date, subject to any applicable
Agency requirements (a) all Revenues received by the
Partnership during such period plus (b) any amounts which
the Managing General Partner, with the prior written consent
of each Lender or Agency whose consent may be required and
the Consent of the Investment Limited Partner, releases from
any Partnership reserve account as no longer being necessary
to be held as part of such reserve account, less (i)
operating expenses of the Partnership paid from Revenues
during the applicable period, (ii) all cash payments made
from Revenues during such period to discharge interest
and/or principal obligations of Partnership indebtedness,
and (iii) all amounts from Revenues, if any, added to
Partnership reserves during such period; provided, however,
that in no event will the deductions in determining Cash
Flow pursuant to clauses (i) and (ii) above include payments
made on account of the Asset Management Fee, the Partnership
Management Fee or Subordinated Loans. Cash Flow Shall be
determined separately for each fiscal year and shall not be
cumulative.
Certificate means the Original Certificate as amended
from time to time (including any amendment thereto effected
by or in connection with this Agreement).
Class Contribution means the aggregate Capital
Contributions of all members of a particular class of
Partners (i.e., the General Partners, the Investment Limited
Partner, the Special Limited Partner or any Additional
Limited Partner).
Code means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations (permanent
and temporary) issued thereunder. References herein to any
Code section shall include any successor provisions.
Commencement Date means the first day of the month in
which the Admission Date occurs.
Competitive Real Estate Commission means that real
estate or brokerage commission paid for the purchase or sale
of the Apartment Complex or other Partnership property which
is reasonable, customary and competitive in light of the
size, type and location of the Apartment Complex or other
property.
Completion Date means the latest of (a) the date upon
which the Apartment Complex has 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 (b) the Partnership shall have obtained and furnished to
the Investment Limited Partner all due diligence
documentation with respect to the construction and
development of the Apartment Complex (which documentation
shall be satisfactory in form and content to the Investment
Limited Partner in its sole discretion), including without
limitation (i) an estoppel letter from each of the Lenders
stating that the Mortgages are in full force and effect and
no defaults have occurred thereunder (provided, however,
that if an estoppel letter is not obtainable from the Agency
notwithstanding the best efforts of the General Partners,
then the Investment Limited Partner shall be provided with
such certification and other evidence as it may request to
the effect that the Permanent Second Mortgage is in full
force and effect and no defaults have occurred thereunder),
and (ii) a letter from the contractor stating all amounts
due to it pursuant to the construction contract and
otherwise in connection with the construction and
development of the Apartment Complex have been paid in full
and the Partnership is not in default under said
construction contract (or, instead of such payoff letter,
submission to the Investment Limited Partner of other
evidence demonstrating the truth of said payoff letter
statements).
Compliance Period means the fifteen (15)-year period
commencing with the first year of the Credit Period.
Consent of the Investment Limited Partner means the
prior written consent or approval of the Investment Limited
Partner.
Construction and Development Fee means the fee
described in Section 6.13(b).
Construction Lender means the Hibernia National Bank,
in its capacity as holder of the Construction Mortgage, or
its successors or assigns in such capacity.
Construction Mortgage means the financing for the
construction of the Apartment Complex provided by the
Construction Lender in a principal amount of up to
$2,140,000.
Construction Mortgage Closing means the first date
upon which (i) the Partnership shall have received all
necessary governmental and other permits and approvals for
the construction and operation of the Apartment Complex in
accordance with the plans and specifications therefor and
(ii) the Construction Mortgage shall have closed and the
initial draw thereunder shall have been disbursed.
Construction Permitting Date means the first date upon
which the Partnership shall have received all necessary
governmental and other permits and approvals for the
construction and operation of the Apartment Complex in
accordance with the plans and specifications therefor.
Controlling Person has the meaning given to it in the
context of Section 15 of the Securities Act of 1933, as
amended.
Cost Certification means the date upon which each
Limited Partner shall have received the written
certification of the Auditors, in a form and in substance
satisfactory to the Special Limited Partner, as to the
itemized amounts of the construction and development costs
of the Apartment Complex and the Eligible Basis and
Applicable Percentage pertaining to each building in the
Apartment Complex.
Credit Agency means the Louisiana Housing Finance
Agency.
Credit Period has the meaning given to it in Section
42(f)(1) of the Code.
Credit Recovery Loan means a constructive
interest-bearing advance of the Investment Limited Partner,
as more fully described in Section 5.1(g). Credit Recovery
Loans and interest thereon shall not be treated as loans or
interest, respectively, for accounting, tax or liability
purposes or for the purposes of Section 6.2(1). For the
purposes of Article X, the term Credit Recovery Loan shall
not include any portion of such an advance which shall have
theretofore been paid to the Investment Limited Partner.
Credit Shortfall has the meaning given to it in
Section 5.1(g).
Developer's Overhead Reimbursement means the
reimbursement to the Managing General Partner described in
Section 6.13(e).
Disposition (including the forms Dispose and Disposing)
means, as to a Limited Partner, the assignment, sale,
transfer, exchange or other disposition of all or any part
of its Interest.
Economic Risk of Loss has the meaning set forth in
Treasury Regulation Section 1.752-2.
Eligible Basis has the meaning given to it in Section
42(d) of the Code.
Entity means any general partnership, limited
partnership, limited liability company, limited liability
partnership, corporation, joint venture, trust, business
trust, cooperative or association.
Event of Bankruptcy means with respect to any Person:
(i) the entry of a decree or order for relief by a
court having jurisdiction in respect of such Person or
in respect of any Controlling Person of such Person in
a case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal
or state bankruptcy, insolvency or other similar law,
or the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official)
of such Person or of any Controlling Person of such
Person or for any substantial part of such Person's
property or of the property of any Controlling Person
of such Person, or the issuance of an order for the
winding-up or liquidation of such Person's affairs or
the affairs of any Controlling Person of such Person
and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60)
consecutive days; or
(ii) the commencement by such Person or by any
Controlling Person of such Person of a proceeding
seeking any decree, order or appointment referred to in
clause (i), the consent by such Person or by any
Controlling Person of such Person to any such decree,
order or the appointment, or the taking of any action
by such Person or by any Controlling Person of such
Person in furtherance of any of the foregoing.
Filing Office means the Office of the Secretary of the
State.
General Partners means the Persons designated as
General Partners in Schedule A and any Persons who become
General Partners as provided herein, in their capacities as
general partners of the Partnership. At any and all times
where there is only one General Partner, the term General
Partners shall mean such sole General Partner.
Hazardous Material has the collective meanings given to
the terms "hazardous material," "hazardous substances" and
"hazardous wastes" in the Federal Comprehensive
Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Sec. 9601 et seq., as amended, and to the
term "radioactive materials" in the context of the Atomic
Energy Act, 28 U.S.C. Sec. 2344, and also includes any
meanings given to such terms in any similar state or local
statutes, ordinances, regulations or laws. In addition, the
term Hazardous Material also includes oil and any other
substance known to be hazardous.
HUD means the United States Department of Housing and
Urban Development.
Immediate Family means with respect to any Person, such
Person's spouse, parents, parents-inlaw, descendants,
nephews, nieces, brothers, sisters, brothers-in-law,
sisters-in-law, children-in-law and grandchildren-in-law.
Incentive Management Fee has the meaning specified in
Article XI.E.
Initial 100% Occupancy Date means the first date upon
which not less than 100% of the 72 apartment units in the
Apartment Complex shall have been leased to and physically
occupied by Qualified Tenants.
Installment means an installment of the Investment
Limited Partner's Capital Contribution paid or payable to
the Partnership pursuant to Section 5.1.
Interest means the entire interest of a Partner in the
Partnership at any particular time, including the right of
such Partner to any and all benefits to which a Partner may
be entitled hereunder and the obligation of such Partner to
comply with the terms of this Agreement.
Invested Amount means (i) as to the Investment Limited
Partner, an amount equal to the quotient of (a) the paid-in
Capital Contribution of the Investment Limited Partner,
divided by (b) 84.41% and (ii) as to any other Partner, an
amount equal to its Capital Contribution.
Investment General Partner means Boston Capital
Associates IV, L.P., in its capacity as the general partner
of the Investment Limited Partner, and any other Persons who
may become successor or additional general partners of the
Investment Limited Partner.
Investment Limited Partner means Boston Capital Tax
Credit Fund IV, L.P., a Delaware limited partnership
(specifically Series 29 thereof), and any Person or Persons
who replace it as Substituted Limited Partner, but shall not
include any Special Limited Partner or Additional Limited
Partner.
Investment Partnership Agreement means the Amended and
Restated Agreement of Limited Partnership of the Investment
Limited Partner, as amended from time to time.
Lenders means the Construction Lender, Permanent First
Lender and the Permanent Second Lender, each in its capacity
as maker of a Mortgage loan and their successors and assigns
in such capacity.
Limited Partners means the Investment Limited Partner,
the Special Limited Partner and any Additional Limited
Partner.
Low-Income Apartment Units means the 72 units in the
Project with respect to which the Partnership has agreed to
comply with the requirements for the Tax Credit under
Section 42 of the Code.
Management Agent means the management and rental agent
for the Apartment Complex.
Management Agreement means the agreement between the
Partnership and the Management Agent providing for the
management of the Apartment Complex.
Management Fee means the Management Fee to which
reference is made in Article XI.A.
Management Sub-Contract means the agreement between
Xxxxxxx Property Management, Inc. and the General Partner
relating to certain management obligations and
responsibilities of the Apartment Complex.
Managing General Partner means X. Xxxxxx Xxxxxxx, Jr.
and his successors and assigns.
Minimum Set-Aside Test means the set aside test
selected by the Partnership pursuant to Section 42(g) of the
Code whereby at least 40% of the units in the Apartment
Complex must be occupied by individuals with incomes equal
to 60% or less of area median income, as adjusted for family
size.
Mortgages means the mortgage indebtedness of the
Partnership to the Construction Lender, the Permanent First
Lender and the Permanent Second Lender; where the context
admits, Mortgages shall mean the Construction Mortgage, the
Permanent First Mortgage and the Permanent Second Mortgage
and include, with respect to the Construction Mortgage and
the Permanent First Mortgage, the Promissory Note, the
Multiple Indebtedness Mortgage and Security Agreement, the
Loan Agreement, the Assignment of Leases and Rentals, the
Guaranty Agreement, the Security Agreements, the UCC-1
Financing Statements, and, with respect to the Permanent
Second Mortgage, the Note, the Mortgage, the Agency
Regulatory Agreement, the Assignment of Leases and Rents and
the UCC-1 Financing Statement, and all other documentation
related thereto which evidence and secure such indebtedness,
including any Agency documentation related thereto.
Original Agreement has the meaning specified in the
Preliminary Statement.
Original Certificate has the meaning specified in the
Preliminary Statement.
Partner means any General Partner or Limited Partner.
Partner Non-Recourse Debt means any Partnership
liability (a) that is considered non-recourse under Treasury
Regulation Section 1.1001-2 or for which the creditor's
right to repayment is limited to one or more assets of the
Partnership and (b) for which any Partner or Related Person
bears the Economic Risk of Loss.
Partner Non-Recourse Debt Minimum Gain means the amount
of partner nonrecourse debt minimum gain and the net
increase or decrease in partner nonrecourse debt minimum
gain determined in a manner consistent with Treasury
Regulation Sections 1.704-2(d) and 1.704-2(g)(3).
Partnership means the limited partnership continued
pursuant to this Agreement.
Partnership Management Fee means the fee payable to the
General Partners pursuant to the provisions of Section
6.13(a).
Partnership Minimum Gain means the amount determined by
computing, with respect to each Partnership Non-Recourse
Liability, the amount of gain, 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 of such liability, and by then aggregating the
amounts so computed. Such computations shall be made in a
manner consistent with Treasury Regulation Section
1.704-2(d).
Partnership Non-Recourse Liability means any
Partnership liability (or portion thereof) for which no
Partner or Related Person bears the Economic Risk of Loss.
Permanent Lenders mean, collectively, the Permanent
First Lender and the Permanent Second Lender.
Permanent First Lender means Hibernia National Bank, in
its capacity as maker and holder of the Permanent First
Mortgage, together with its successors and assigns in such
capacity.
Permanent First Mortgage means the permanent financing
provided, or to be provided, by the Permanent First Lender
for the Apartment Complex following the completion thereof
in the initial principal amount of up of $1,470,000.
Permanent Mortgages means the Permanent First Mortgage
and the Permanent Second Mortgage.
Permanent Mortgage Commencement means the first date on
which all of the following shall have occurred: (a) the
Completion Date; (b) the principal amount and maturity date
of the Permanent Mortgages shall have been finally
determined; and (c) amortization of the Permanent Mortgages
shall have commenced.
Permanent Mortgage Commitment means the first date on
which the Partnership receives the written commitment of the
Permanent Lenders to make the Permanent Mortgages.
Permanent Second Lender means the Agency, in its
capacity as maker and holder of the Permanent Second
Mortgage, together with its successors and assigns in such
capacity.
Permanent Second Mortgage means the permanent financing
provided by the Permanent Second Lender for the Apartment
Complex following the completion thereof in the initial
principal amount of up of $400,000.
Person means any individual or Entity.
Project Documents means and includes all documents
evidencing or relating to the Construction Mortgage and the
Permanent Mortgages, the Construction Contract, the
Architect Agreement, the Payment and Performance Bond, the
Title Policy, the Survey, the Building Permit, the
Management Agreement, the Management Sub-Contract, and all
other instruments delivered to (or required by) the
Construction Lender and/or the Permanent Lenders 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 to the Investment Limited Partner
means $147,340 for 1998, $294,681 per annum for each of the
years 1999 through 2007 (inclusive) and $147,340 for 2008;
provided, however, that the Projected Credit for 2008 shall
be reduced by the amount, if any, by which the Actual Credit
for 1998 exceeds $147,340; and provided further that upon
the occurrence of any of the events described in clauses
(i), (ii) and (iii) of Section 5.1(e), the Projected Credit
shall thereafter be the Revised Projected Credit.
Qualified Basis has the meaning given to it in Section
42(c) of the Code.
Qualified Income Offset Item means (1) an allocation of
loss or deduction that, as of the end of each year,
reasonably is expected to be made (a) pursuant to Section
704(e)(2) of the Code to a donee of an interest in the
Partnership, (b) pursuant to Section 706(d) of the Code as
the result of a change in any Partner's Interest, or (c)
pursuant to Regulation Section 1.751-1(b)(2)(ii) as the
result of a distribution by the Partnership of unrealized
receivables or inventory items and (2) a distribution that,
as of the end of such year, reasonably is expected to be
made to a Partner to the extent it exceeds offsetting
increases to such Partner's Capital Account which reasonably
are expected to occur during or prior to the Partnership
taxable year in which such distribution reasonably is
expected to occur.
Qualified Tenant means a tenant (i) with income not
exceeding that permitted by the Minimum Set-Aside Test who
leases a Low-Income Apartment Unit in the Apartment Complex
at a rent which satisfies the Rent Restriction Test and (ii)
complying with any other requirements imposed by the Project
Documents.
Related Person means a Person related to a Partner
within the meaning of Treasury Regulation Section
1.752-4(b).
Rent Restriction Test means the test pursuant to
Section 42 of the Code whereby the gross rent (as defined
therein) charged to tenants of the Low-Income Apartment
Units may not exceed thirty per cent (30%) of the qualifying
income levels.
Revenues means all cash receipts (actually received) of
the Partnership during a specified period of time, including
rental assistance payments, operating subsidies and the
proceeds of rental interruption insurance receipts, but
excluding the proceeds of Capital Contributions, the
proceeds of the sale or other disposition of Partnership
assets, liquidation proceeds, loan or refinancing proceeds,
casualty proceeds, condemnation or eminent domain proceeds.
Any net rental income applied to complete the construction
of the Apartment Complex pursuant to Section 6.12 prior to
the later of the Admission Date or Permanent Mortgage
Commencement shall not be included when determining
Revenues. For the purposes of computing Revenues, rental
receipts shall not include prepaid rent and, if attributable
to Low-Income Apartment Units, shall be included only if
attributable to Qualified Tenants.
Revised Projected Credit has the meaning given to it in
Section 5.1(e).
Sales Disposition Fee has the meaning given to it in
Section 6.13(d).
Schedule A means Schedule A to this Agreement, as
amended from time to time.
Service means the Internal Revenue Service.
Site has the meaning given to it in the Federal
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Sec. 9601 et seq., as
amended, and shall also include any meaning given to it in
any similar state or local statutes, ordinances, regulations
or laws.
Special Limited Partner means BCTC 94, Inc., a Delaware
corporation, and any Person who becomes a Special Limited
Partner as provided herein, in its capacity as a special
limited partner of the Partnership.
State means the State of Louisiana.
State Designation means the date upon which the
Partnership receives the final allocation from the Credit
Agency for the building(s) constituting the Apartment
Complex in an annual dollar amount of not less than
$294,710, as evidenced by the execution by or on behalf of
said agency of Form(s) 8609. For the purposes of determining
State Designation, each building in the Apartment Complex
shall be treated as having received an allocation of Tax
Credit in an amount equal to the lesser of (i) the amount of
Tax Credit carryover allocation received from the Credit
Agency as to such building or (ii) the amount of Tax Credit
set forth on the Form 8609 as to such building.
Subordinated Loan means any loan made by the General
Partners to the Partnership pursuant to Section 6.11.
Substituted Limited Partner means any Person who is
admitted to the Partnership as Limited Partner under Section
8.2 or acquires the Interest of a Limited Partner pursuant
to Section 5.2.
Tax Accountants means Xxxxxxx, Xxxxxx & Xxxxxxxxx, of
Bethesda, Maryland, or such other firms of independent
certified public accountants as may be engaged by Boston
Capital to review the Partnership income tax returns.
Tax Credit means the low-income housing tax credit
pursuant to Section 42 of the Code.
Tax Credit Set-Aside means the date upon which the
Partnership receives a reservation, effective for the year
1997, in an annual dollar amount of not less than $294,710,
which reservation shall not have expired or been revoked
prior to the date on which the First Installment is paid.
Vessel has the meaning given to it in the Federal
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Sec. 9601 et seq., as
amended, and shall also include any meaning given to it in
any similar state or local statutes, ordinances, regulations
or laws.
Withdrawal (including the forms Withdraw, Withdrawing
and Withdrawn) means, as to a General Partner, the
occurrence of death, adjudication of insanity or
incompetence, Event of Bankruptcy, dissolution, liquidation,
or voluntary or involuntary withdrawal or retirement from
the Partnership for any reason, including whenever a General
Partner may no longer continue as a General Partner by law
or pursuant to any terms of this Agreement. Withdrawal shall
also mean the sale, assignment, transfer or encumbrance by a
General Partner of its interest as a General Partner. A
General Partner which is a corporation or partnership shall
be deemed to have sold, assigned, transferred or encumbered
its interest as a General Partner in the event (as a result
of one or more transactions) of any sale, assignment or
other transfer (but specifically excluding any transfer
occurring pursuant to the laws of descent and distribution)
or encumbrance of a controlling interest or the interest of
a Controlling Person in a corporate General Partner or of a
general partner interest in a General Partner which is a
partnership. For purposes of this definition of Withdrawal,
"controlling interest" shall mean the power to direct the
management and policies of such person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise.
Withdrawing Original Limited Partner has the meaning
specified in the Preliminary Statement.
ARTICLE II Name and Business
2.1 Name; Continuation
The name of the Partnership is Edgewood Apartments
Partnership, A Louisiana Partnership In Commendam. The
Partners agree to continue the Partnership which was formed
pursuant to the provisions of the Act.
2.2 Office and Resident Agents
(a) The principal office of the Partnership is:
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
at which office there shall be maintained those records
required by the Act to be kept by the Partnership.
The Partnership may have such other or additional
offices as the Managing General Partner shall deem
desirable. The Managing General Partner may at any time
change the location of the Partnership offices and shall
give due notice thereof to the Limited Partners.
(b) The resident agents in the State for the
Partnership for service of process are as follows:
X. Xxxxxx Xxxxxxx, Jr.
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
or
Caleb Community Development Corporation
0000 Xxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
2.3 Purpose
The purpose of the Partnership is to acquire, hold,
invest in, construct, develop, improve, maintain, operate,
lease and otherwise deal with the Apartment Complex. The
Partnership shall operate the Apartment Complex in
accordance with any applicable Agency regulations and
requirements. The Partnership shall not engage in any other
business or activity.
2.4 Term and Dissolution
The Partnership shall continue in full force and effect
until December 31, 2038, except that the Partnership shall
be dissolved and its assets liquidated prior to such date
upon:
(a) The sale or other disposition of all or
substantially all of the assets of the Partnership;
(b) The Withdrawal of a General Partner if (i) the
remaining General Partner(s), if any, shall fail to
continue the business of the Partnership and
reconstitute the Partnership as a successor limited
partnership as provided in Section 7.2 and (ii) the
Investment Limited Partner and the Special Limited
Partner shall fail to exercise the right provided in
Section 7.3;
(c) The election to dissolve the Partnership made in
writing by the General Partners with the Consent of
the Investment Limited Partner and the approval (if
required) of each applicable Agency;
(d) The entry of a final decree of dissolution of the
Partnership by a court of competent jurisdiction; or
(e) Any other event which causes the dissolution of
the Partnership under the Act if the Partnership is
not reconstituted pursuant to Section 7.2 or Section
7.3.
Upon dissolution of the Partnership, the Managing
General Partner (or for purposes of this paragraph, his
trustees, receivers or successors) shall cause the
cancellation of the Certificate, liquidate the assets of the
Partnership and apply and distribute the proceeds thereof in
accordance with Section 10.3. Notwithstanding the foregoing,
if, during liquidation, the Managing General Partner shall
determine that an immediate sale of part or all of the
Partnership's assets would be impermissible, impractical or
cause undue loss to the Partners, the Managing General
Partner may defer liquidation of, and withhold from
distribution for a reasonable time, any assets of the
Partnership except those necessary to satisfy Partnership
debts and obligations (other than Subordinated Loans).
ARTICLE III Mortgages; Refinancing and Disposition of
Property
A. The Managing General Partner and his Affiliates,
jointly, severally, and in solido, is hereby authorized to
incur personal liability for the repayment of funds advanced
by the Construction Lender (and interest thereon) pursuant
to the Construction Mortgage. However, from and after
Permanent Mortgage Commencement, neither any General Partner
nor any Related Person shall at any time bear, nor shall the
General Partners permit any other Partner or any Related
Person to bear, the Economic Risk of Loss for the payment of
any portion of the Permanent Mortgages.
B. The Partnership may amend, modify, decrease,
increase or refinance the Construction or Permanent
Mortgages and may make any required transfer or conveyance
of Partnership assets for security or mortgage purposes;
provided, however, any such amendment, modification,
decrease (except through the Permanent Mortgage amortization
schedule anticipated at Permanent Mortgage Commencement),
increase or refinancing of the Construction or Permanent
Mortgages may be made by the General Partners only with the
Consent of the Investment Limited Partner.
C. The Partnership may sell, lease, exchange or
otherwise transfer or convey all or any substantial part of
the assets of the Partnership only with the Consent of the
Investment Limited Partner. Notwithstanding the foregoing
and except as set forth in Section 6.2(6), no Consent of the
Investment Limited Partner shall be required for the leasing
of apartments to tenants in the normal course of operations.
D. The total compensation to all Persons for the sale
of the Apartment Complex shall be limited to a Competitive
Real Estate Commission, not to exceed three percent (3%) of
the contract price for the sale of the Apartment Complex.
ARTICLE IV Partners
4.1 General Partners
The name, address and Capital Contribution of each
General Partner are as set forth on Schedule A. The General
Partners shall make additional Capital Contributions to the
Partnership in an amount sufficient to enable the
Partnership to pay any deferred portion of the Construction
and Development Fee not paid by December 31, 2008.
4.2 Investment Limited Partner, Special Limited Partner
and Withdrawing Original Limited Partner
The Withdrawing Original Limited Partner hereby
withdraws as a limited partner of the Partnership and
acknowledges that the Withdrawing Original Limited Partner
no longer has any Interest in, or rights or claims against,
the Partnership as a Limited Partner as of the Admission
Date. The Investment Limited Partner and the Special Limited
Partner are hereby admitted to the Partnership as the sole
Limited Partners in substitution for the Withdrawing
Original Limited Partner as of the Admission Date and agree
to be bound by the terms and provisions of the Project
Documents and this Agreement. The names and addresses of the
Investment Limited Partner and the Special Limited Partner
are as set forth on Schedule A. The General Partners shall
have no authority to admit additional Limited Partners
without the Consent of the Investment Limited Partner.
4.3 Liability of the Limited Partners
None of the Investment Limited Partner, the Special
Limited Partner and any Person who becomes an Additional
Limited Partner shall be liable for any debts, liabilities,
contracts or obligations of the Partnership and shall only
be liable to pay their respective Capital Contributions as
and when the same are due hereunder and under the Act.
4.4 Special Rights of the Investment Limited Partner
and the Special Limited Partner
(a) Notwithstanding any other provision herein, to the
extent the law of the State is not inconsistent, each of the
Investment Limited Partner and the Special Limited Partner
shall have the right, subject to the prior written consent
of any Lender or Agency (if such consent is required) to:
(i) amend this Agreement in any particular,
subject to the reasonable consent of the General
Partners so long as the General Partners are not
subject to the removal provisions pursuant to Section
4.4(a)(ii);
(ii) remove any General Partner and elect a new
General Partner (A) on the basis of the performance and
discharge of any General Partner's obligations
constituting fraud, bad faith, negligence, misconduct
or breach of fiduciary duty, or (B) upon the occurrence
of any of the following: (1) a General Partner shall
have materially violated any provisions of any Project
Document or other document required in connection with
any Mortgage, or any provisions of any Agency
regulations applicable to the Apartment Complex; (2) a
General Partner shall have materially violated any
provision of this Agreement, including, but not limited
to, any obligation to fund any Partnership expenses
under Section 6.11, or a General Partner shall have
materially violated any provision of applicable law;
(3) any Mortgage shall have gone into default; (4) the
termination of the Partnership for Federal income tax
purposes; (5) the treatment of the Partnership for
federal income tax purposes as an association taxable
as a corporation; or (6) the Partnership failing to pay
on a timely basis any of its real estate or personal
property tax obligations to any county, city, town or
other local government;
(iii) continue the business of the Partnership
with a substitute General Partner; and
(iv) approve or disapprove the sale of all or
substantially all of the assets of the Partnership.
(b) Upon the removal of a General Partner, (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 of
$100 such portion of the Interest of the removed General
Partner as counsel to the Investment Limited 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 Interest of the removed General
Partner shall automatically be converted to an equal
Interest as an Additional Limited Partner, (iii) the
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 pursuant to Section 6.4. 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 committee of appraisers shall meet in
Shreveport, Louisiana, and the proceedings of such committee
shall conform to the rules of the American Arbitration
Association, as far as appropriate, and its decision shall
be final and binding. The expense of arbitration shall be
born equally by the removed General Partner and the
Partnership. The method of payment to the removed General
Partner shall be fair and must protect the solvency and
liquidity of the Partnership. The method of payment will be
deemed presumptively fair where it provides for an
interest-bearing promissory note coming due in no less than
five (5) years with equal installments each year. In
addition, upon removal, the Partnership must promptly pay to
the removed General Partner all amounts then accrued and
owing to the removed General Partner; provided, however,
that notwithstanding the language of Section 6.13, Article
X, Article XI and any other provision hereof, no removed
General Partner or any Affiliate thereof shall be entitled
to receive any fee, compensation or other remuneration from
the Partnership, other than (i) the above-described payment
for the Interest, or portion thereof, of the removed General
Partner, and (ii) any such fee, compensation or other
remuneration which had already been earned in full prior to
the date of such removal. The Partnership is not authorized
to enter into any arrangement whereby any fee, compensation
or other remuneration could be payable directly or
indirectly to any General Partner or Affiliate thereof in a
manner inconsistent with the immediately preceding sentence
unless the prior written consent of the Special Limited
Partner shall have been obtained to such particular
arrangement. The Partnership may offset against any payments
to a General Partner removed under this Section 4.4 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. Each General
Partner hereby grants to the Special Limited Partner an
irrevocable (to the extent permitted by applicable law)
power of attorney coupled with an interest to execute and
deliver any and all documents and instruments on behalf of
such General Partner and the Partnership as the Special
Limited Partner may deem to be necessary or appropriate in
order to effect the provisions of this Section 4.4 and to
enable the new General Partner to manage the business of the
Partnership.
(a) In order to implement Section 4.4(a)(iv), the
Managing General Partner is hereby required, within five (5)
days after his receipt of any offer to purchase the
Apartment Complex or all of the Interests in the
Partnership, to send a copy of such offer (or a written
description of any such oral offer) to each of the Limited
Partners. If, within thirty (30) days of its receipt of any
such copy of such an offer, the Special Limited Partner
shall send notice to the Managing General Partner that the
Special Limited Partner desires that the Partnership accept
such offer, then the Managing General Partner shall be
required to accept such offer on behalf of the Partnership
and proceed promptly to close such transaction unless
otherwise instructed by the Special Limited Partner at any
point prior to the closing of such transaction. To the
extent, if any, that the Special Limited Partner shall
determine, in its discretion, that the Managing General
Partner is not proceeding in a manner satisfactory to it
with respect to any such offer or closing, each Partner
hereby grants to the Special Limited Partner an irrevocable
(to the extent permitted by law) power of attorney coupled
with an interest to execute and deliver any and all
documents and instruments on behalf of the Partnership and
any Partner as the Special Limited Partner may deem to be
necessary or appropriate in order to effect the acceptance
of and/or closing pursuant to any such offer in such a
manner as the Special Limited Partner shall, in its
discretion, determine to be satisfactory.
4.5 Meetings
The Managing General Partner or Limited Partners
holding more than ten per cent (10%) of the then outstanding
Limited Partner Interests may call meetings of the
Partnership for any matters for which the Limited Partners
may vote as set forth in this Agreement. A list of the names
and addresses of all Limited Partners shall be maintained as
part of the books and records of the Partnership and shall
be made available upon request to any Limited Partner or his
representative at his cost. Upon receipt of a written
request either in person or by certified mail stating the
purpose(s) of the meeting, the Managing General Partner
shall provide all Limited Partners within ten (10) days
after receipt of said request, written notice (either in
person or by certified mail) of a meeting and the purpose of
such meeting to be held on a date not less then fifteen (15)
nor more than sixty (60) days after receipt of said request,
at a time convenient to the Limited Partners. All meetings
shall be held at the principal office of the Partnership.
ARTICLE V Capital Contributions of the Investment Limited
Partner and the Special Limited Partner
5.1 Payments
(a) The Special Limited Partner's Capital Contribution
shall be $10, payable in full in cash on the Admission Date.
The Investment Limited Partner may deliver to the
Partnership, on behalf of the Special Limited Partner, the
Special Limited Partner's Capital Contribution. The
Investment Limited Partner's Capital Contribution shall be
paid in cash installments (the "Installments"), as follows:
(1) $1,392,721 (the "First Installment") on the latest
of (i) the Admission Date, (ii) Tax Credit Set-Aside, (iii)
Construction Mortgage Closing or (iv) Permanent Mortgage
Commitment;
(2) $185,696 (the "Second Installment") on the latest
of (i) the Completion Date, (ii) Cost Certification or (iii)
State Designation; and
(3) $278,544 (the "Third Installment") on the latest of
(i) the Initial 100% Occupancy Date, (ii) Permanent Mortgage
Commencement, (iii) receipt by the Limited Partners of a
copy of the Partnership's owner's title insurance policy, as
endorsed through Permanent Mortgage Commencement, with such
policy and endorsement in form and substance satisfactory to
the Special Limited Partner, (iv) delivery of an opinion of
counsel to the Partnership concerning the Permanent
Mortgages, including the non-recourse nature thereof,
satisfactory as to form, content and counsel to the Special
Limited Partner and (v) Breakeven Point; provided, however,
that the Managing General Partner shall give the Investment
Limited Partner not less than twenty-one (21) days written
notice prior to the due date of each Installment subsequent
to the First Installment.
(b) The obligation of the Investment Limited Partner
to pay each Installment is conditioned upon delivery by the
Managing General Partner to the Investment Limited Partner
of a written certificate (the "Payment Certificate") stating
that as of the date of such certificate (i) all the
conditions to the payment of such Installment have been
satisfied and (ii) all representations and warranties of the
General Partners contained in this Agreement are true and
correct. Except as provided in the final sentence of this
Section 5.1(b), acceptance by the Partnership of any
Installment shall constitute a confirmation that, as of the
date of payment, all such conditions are satisfied and all
such representations and warranties are true and correct. In
addition, the obligation of the Investment Limited Partner
to pay the First Installment is also conditioned upon
delivery by the Managing General Partner to the Investment
Limited Partner of (i) a legal opinion of independent
counsel to the Partnership, which opinion must be
satisfactory to the Investment Limited Partner as to form,
content and identity of counsel and (ii) a photocopy of an
owner's title insurance policy, or an endorsement thereto,
issued to the Partnership with respect to the Apartment
Complex with an effective date on or after the Admission
Date, in an insured amount of not less than $4,069,368.00,
from a title insurance company reasonably satisfactory to
the Investment Limited Partner and evidencing the
Partnership's ownership of the Apartment Complex subject
only to such exclusions, exceptions, conditions and
stipulations as shall be acceptable to the Investment
Limited Partner, in its sole discretion. In no event shall
any Installment become due until all of the conditions for
all of the Installments listed prior to the Installment in
question in Section 5.1(a) shall have been satisfied and all
of such prior Installments shall have become due.
Notwithstanding the foregoing, however, if at any time prior
to the date when an Installment becomes due and payable, the
Partnership has any unpaid items enumerated in the numbered
clauses of the second sentence of Section 6.12 or an
"Operating Deficit" (expenses in excess of revenues which
the Managing General Partner would be required to fund
pursuant to Section 6.11), then the Investment Limited
Partner may, at its option, waive the requirement of the
delivery of the Payment Certificate or any other condition
with respect to part or all of such Installment and pay such
part or all of such Installment, provided that the proceeds
of the amount so paid are used by the Partnership to fully
fund such unpaid item and/or Operating Deficit; provided,
however, that if the proceeds so paid are designated in this
Agreement to be used to pay fee(s) or distributions to the
General Partners or their Affiliates, then such proceeds
shall be deemed to have first been paid to the General
Partners or their Affiliates as such fees or distributions
and then applied by the General Partners to fund such unpaid
item and/or Operating Deficit as provided in said Section
6.11 or 6.12, as the case may be.
(c) The Payment Certificate for each Installment shall
be dated and delivered not less than ten (10) nor more than
thirty (30) days prior to the due date for such Installment.
(d) If, as of the date when an Installment would
otherwise be due, any statement required to be made in the
Payment Certificate for such Installment cannot be
truthfully made, the Managing General Partner shall notify
the Investment Limited Partner of the reason why such
statement would be untrue if made, and the Investment
Limited Partner shall not be required to pay such
Installment; provided, however, that if (i) any such
statement can subsequently be truthfully made and (ii) the
Investment Limited Partner shall not have irrevocably lost,
in the good faith judgment of the Investment General
Partner, any material tax or other benefits hereunder, then
the Investment Limited Partner shall pay such Installment to
the Partnership thirty (30) days after delivery by the
General Partners to the Investment Limited Partner of the
Payment Certificate together with an explanation of the
manner in which each such statement had become true.
(e) In the event that (i) State Designation does not
occur by December 31, 1998, or (ii) by September 30, 1998,
the Limited Partners shall not have received a written
certification of the Auditors in a form and in substance
satisfactory for the purpose of achieving Cost Certification
and indicating that the product of the Apartment Complex's
Qualified Basis and its Applicable Percentage is such that
the Apartment Complex will be eligible to receive Tax Credit
in an annual amount of at least $294,710, or (iii) at any
time after the Completion Date the product of the Apartment
Complex's Qualified Basis and its Applicable Percentage is
determined by the Auditors, the Tax Accountants or the
Service to be such that the Apartment Complex will not be
eligible to receive Tax Credit in an annual dollar amount of
at least $294,710, then (a) the Managing General Partner
shall pay to the Investment Limited Partner an amount equal
to 99.99% of the product of (A) the excess of $2,947,100
over the total amount of Tax Credit actually allocated or
expected to be allocated to the Partnership over the entire
Credit Period and (B) 0.6325, and (b) the Projected Credit
for each year shall thereafter be redefined to mean 99.99%
of the annual amount of Tax Credit actually so allocated to
the Partnership (the "Revised Projected Credit"). Any amount
payable by the Managing General Partner to the Investment
Limited Partner pursuant to this Section 5.1(e) shall, at
the option of the Investment Limited Partner, (i) be applied
first to the Installment, if any, next due to be paid by the
Investment Limited Partner, and any balance of such amount
payable by the Managing General Partner in excess of the
amount of such Installment shall be applied to succeeding
Installments, if any, and/or (ii) be paid in its entirety by
the Managing General Partner directly to the Investment
Limited Partner promptly after demand is made therefor, as a
payment of damages for breach of warranty, regardless of the
reason for the occurrence of such event.
(f) If with respect to any fiscal year commencing
during the sixty (60)-month period commencing on the later
of (i) the Admission Date or (ii) the date on which the
first building in the Apartment Complex is placed in service
for the purposes of Section 42 of the Code (a "Reduction
Year") the Actual Credit is or was less than the Projected
Credit to the Investment Limited Partner, then the Managing
General Partner shall pay to the Investment Limited Partner
the Reduction Amount. The Reduction Amount shall be equal to
the sum of (A) 63.25% of the excess of the Projected Credit
to the Investment Limited Partner for such year over the
Actual Credit for such year, plus (B) the amount of any
recapture, interest or penalty payable by the limited
partners of the Investment Limited Partner as a result of
such shortfall, assuming that each limited partner in the
Investment Limited Partner used all of the Tax Credits
allocated to it in the year of allocation and that each such
Person was subject to interest at the rate set forth in
Section 6621(a)(2) of the Code and to the penalty for
understatement of tax set forth in Section 6662(d) of the
Code. The Auditors shall make their determination of the
amount of the Actual Credit with respect to each Reduction
Year within thirty (30) days following the end of such year
but such amount shall be subject to later adjustment by the
Auditors or by the Service in connection with an audit. The
Investment Limited Partner shall be eligible to be paid a
Reduction Amount as hereinabove described with respect to
each Reduction Year and may receive multiple payments of
Reduction Amounts in the event of multiple changes in the
Actual Credit. Any Reduction Amount shall, at the option of
the Investment Limited Partner, (i) first be applied to the
Installment next due to be paid by the Investment Limited
Partner, with any portion of such Reduction Amount in excess
of the amount of such Installment then being applied to
succeeding Installments, and/or (ii) be paid in its entirety
by the Managing General Partner directly to the Investment
Limited Partner promptly after demand is made therefor, as a
payment of damages for breach of warranty, regardless of the
reason for the occurrence of such event.
(g) In the event that, for any reason, with respect to
any fiscal year following the fiscal years referred to in
Section 5.1(f), the amount of the Actual Credit shall be
less than the Projected Credit to the Investment Limited
Partner (such difference being hereinafter referred to as a
"Credit Shortfall"), the Investment Limited Partner shall be
treated as having made a constructive advance to the
Partnership (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 (i) the Credit Shortfall for such
year plus (ii) the amount of any recapture, interest or
penalty payable by the limited partners of the Investment
Limited Partner as a result of the Credit Shortfall for such
year, assuming that each limited partner in the Investment
Partnership used all of the Tax Credits allocated to it in
the year of allocation and that each such Person was subject
to interest at the rate set forth in Section 6621(a)(2) of
the Code and to the penalty for understatement of tax set
forth in Section 6662(d) of the Code. Credit Recovery Loans
shall be deemed to bear simple (not compounded) interest
from the respective dates on which such constructive
advances shall have been deemed to have been made under this
Section 5.1(g) at 9% per annum. Credit Recovery Loans shall
be payable by the Partnership as provided in Section
10.3(b), Clause Fourth.
5.2 Return of Capital Contributions
(a) Failure to Achieve Developmental and/or Tax Credit
Benchmarks and Standards. If:
(1) all of the Low-Income Apartment Units shall not
have been placed in service by October 30, 1998 (or any
later date fixed by the Managing General Partner with the
Consent of Investment Limited Partner), or
(2) by October 30, 1998 (or any later date fixed by
the Managing General Partner with the Consent of the
Investment Limited Partner) less than 72 apartment units in
the Apartment Complex shall have been occupied by Qualified
Tenants, or
(3) Permanent Mortgage Commencement shall not have
occurred prior to October 30, 1998 (or any later date fixed
by the Managing General Partner with the Consent of the
Investment Limited Partner), or
(4) State Designation shall not have occurred by
December 31, 1998 (or any later date fixed by the General
Partners with the Consent of the Investment Limited
Partner), or
(5) the Partnership shall fail to meet the Minimum
Set-Aside Test or the Rent Restriction Test by the close of
the first year of the Credit Period and/or fails to continue
to meet either of those Tests at any time during the sixty
(60)-month period commencing on such date, or
(6) prior to Permanent Mortgage Commencement, (a)
foreclosure proceedings shall have commenced under the
Construction Mortgage and such proceedings shall not have
been dismissed within thirty (30) days, (b) any of the
commitments of any Lender or Agency to provide the Permanent
Mortgages and/or any subsidy financing shall be terminated
or withdrawn and not reinstated or replaced within sixty
(60) days with terms equally or more favorable to the
Investment Limited Partner or terms for which the Consent of
the Investment Limited Partner and (if required) the
approval of any Agency or other Lender shall have been
obtained, or (c) the Construction Lender shall have
irrevocably refused to make any further advances under the
Construction Mortgage and such decision shall not have been
reversed or the Construction Lender replaced within thirty
(30) days, or
(7) if by October 30, 1998 (or any later date fixed by
the Managing General Partner with the Consent of the
Investment Limited Partner), the Investment Limited Partner
shall not have received, in form and substance satisfactory
to the Investment Limited Partner, the certification of the
Auditors that as of a date no later than December 31, 1997,
the Partnership will have had incurred capitalizable costs
with respect to the Apartment Complex of at least ten per
cent (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 is a "qualified building"
for the purposes of Section 42(h)(1)(E)(ii) of the Code, or
(8) if at any time it shall be determined by the
Service or by the Tax Accountants that as of December 31,
1997 the Partnership had not incurred capitalizable costs
with respect to the Apartment Complex of at least ten per
cent (10%) of the Partnership's reasonably expected basis in
the Apartment Complex as of December 31, 1999, or
(9) if by December 31, 1998 (or any later date fixed by
the Managing General Partner with the Consent of the
Investment Limited Partner) Cost Certification shall not
have occurred, or
(10) if by January 31, 1998 (or any later date fixed by
the Managing General Partner with the Consent of the
Investment Limited Partner) Breakeven shall not have been
achieved, or
(11) the Managing General Partner fails to make any
advances necessary to fund payment of the Asset Management
Fee pursuant to Section 6.13,
then the Managing General Partner shall, within five (5)
days of the occurrence thereof, send to the Investment
Limited Partner and the Special Limited Partner notice of
such event and of the Managing General Partner's obligation
to repurchase the Interests of the Investment Limited
Partner and the Special Limited Partner by paying to the
Investment Limited Partner and the Special Limited Partner
an amount (the "Repurchase Amount") equal to each such
Partner's Invested Amount minus the amount, if any, of such
Partner's Capital Contribution which shall not yet have been
paid (or deemed to have been paid) to the Partnership plus
the amount of any third-party costs, including, but not
limited to, attorney's fees incurred by or on behalf of such
Partner in implementing this Section 5.2(a) in the event the
Investment Limited Partner and/or the Special Limited
Partner requires such a repurchase. If either the Special
Limited Partner or the Investment Limited Partner elects to
require a repurchase of its Interest and the payment to it
of an amount equal to its Repurchase Amount, it shall send
notice thereof to the Partnership within thirty (30) days
after the mailing date of the Managing General Partner's
notice, or at any time after the occurrence of any of the
foregoing if the Managing General Partner shall not have
sent notice thereof, and the Managing General Partner shall
within ten (10) days after the Partnership receives any such
notice from a Partner requesting the purchase of its
Interest repurchase the Interest of such Partner by paying
to such Partner an amount equal to its Repurchase Amount.
(b) Lender Disapproval. If any Lender and/or Agency
shall disapprove, or fail to give any required approval of,
the Investment Limited Partner and/or the Special Limited
Partner as a Limited Partner hereunder within one hundred
eighty (180) days of the Admission Date, then such Limited
Partner shall, effective as of such time or such later time
as may be selected by such Limited Partner (or such other
time as may be specified by the Lender and/or Agency in its
disapproval), at the option of such Limited Partner, if not
directed by the Lender and/or Agency to withdraw), cease to
be a Limited Partner. The Managing General Partner shall,
within ten (10) days of the effective date of such
cessation, pay to such Limited Partner an amount equal to
its Invested Amount minus the amount, if any, of such
Limited Partner's Capital Contribution which shall not yet
have been paid (or deemed to have been paid) to the
Partnership plus the amount of any third party costs,
including, but not limited to attorney's fees, incurred by
or on behalf of such Partner in implementing this Section
5.2(b).
(c) Substitution and Indemnification. Upon the receipt
by the Investment Limited Partner and/or the Special Limited
Partner of the amount due to it pursuant to either Section
5.2(a) or Section 5.2(b), the Interest of such Partner shall
terminate, and the Managing General Partner shall indemnify
and hold harmless such Partner from any losses, damages, and
liabilities to which such Partner (as a result of its
participation hereunder) may be subject.
(d) Waiver of Repurchase Right. The Investment Limited
Partner shall have the right to irrevocably waive its right
to have its Interest repurchased pursuant to any clause or
clauses of Section 5.2(a), or any portion thereof, at any
time during which any of such rights shall be in effect.
Such a waiver shall be exercised by delivery to the Managing
General Partner of a written notice stating that the rights
being waived pursuant to any specified clause or clauses of
Section 5.2(a), or any specified portion thereof, are
thereby waived from that date forward.
(e) Failure to Perform. If the Managing General
Partner shall fail to make on the due date therefor any
payment required under Section 5.2(a) or Section 5.2(b),
time being of the essence, then, in addition to all other
remedies available for such failure, the Special Limited
Partner shall have the rights set forth in Section 7.5.
ARTICLE VI Rights, Powers and Duties of the Managing
General Partner
6.1 Authorized Acts
Subject to Section 6.2, Section 6.3 and all other
provisions of this Agreement, the Managing General Partner
for, in the name and on behalf of the Partnership, is hereby
authorized to do the following in furtherance of the
purposes of the Partnership:
(1) To acquire by purchase, lease, exchange or
otherwise any real or personal property;
(2) To construct, operate, maintain, finance and
improve, and to own, sell, convey, assign, mortgage or lease
any real estate and any personal property;
(3) To borrow money and issue evidences of
indebtedness and to secure the same by mortgage, pledge or
other lien on the Apartment Complex or any other assets of
the Partnership;
(4) To execute the Construction and Permanent
Mortgages, the other Project Documents and all such other
documents as the Managing General Partner deems necessary or
appropriate in connection with the acquisition, development
and financing of the Apartment Complex;
(5) To prepay in whole or in part, refinance or amend
or modify the Construction and Permanent Mortgages or any
other financing affecting the Apartment Complex;
(6) To employ the Management Agent (which may be an
Affiliate of the Managing General Partner) and to pay
reasonable compensation for its services;
(7) To employ his respective Affiliates to perform
services for, or sell goods to, the Partnership;
(8) To execute contracts with the State or any
subdivision or agency thereof or any other government agency
to make apartments or tenants in the Apartment Complex
eligible for any public-subsidy program;
(9) To execute leases of some or all of the apartment
units of the Apartment Complex to a public housing authority
and/or to a non-profit corporation, cooperative or other
non-profit Entity; and
(10) To enter into any kind of activity and to perform
and carry out contracts of any kind which may be lawfully
carried on or performed by a partnership and to file all
certificates and documents which may be required under the
laws of the State.
6.2 Restrictions on Authority
Notwithstanding any other Section of this Agreement,
the General Partners shall have no authority to perform any
act in violation of applicable law, Agency or other
government regulations, requirements of any Lender, or the
Project Documents. In the event of any conflict between the
terms of this Agreement and any applicable Agency or other
government regulations or requirements of the Lender, the
terms of such regulations or requirements shall govern.
Neither shall the General Partners have any authority to do
any of the following acts without the Consent of the
Investment Limited Partner and the prior written consent of
the Special Limited Partner, and in the event that any
General Partner violates any provision of this Section 6.2,
the Special Limited Partner shall have the rights set forth
in Section 7.5:
(1) To have borrowings 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;
(2) To borrow from the Partnership or commingle
Partnership funds with funds of any other Person;
(3) Following the Completion Date, to 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, excent (a) replacements and
remodeling in the ordinary course of business or under
emergency conditions or (b) construction paid for from
insurance proceeds;
(4) To acquire any real property in addition to the
Apartment Complex;
(5) To increase, decrease (except through the
amortization schedule provided for in the Permanent
Mortgages), amend or modify the terms of or refinance the
Construction or Permanent Mortgages;
(6) To rent apartments in the Apartment Complex such
that the Apartment Complex would not meet the requirements
of the Minimum Set-Aside Test or the Rent Restriction Test;
(7) To sell, exchange or otherwise convey or transfer
the Apartment Complex or all or any substantial part of the
assets of the Partnership;
(1) To terminate any agreement with any Agency;
(9) To cause the Partnership to commence a proceeding
seeking any decree, relief, order or appointment in respect
to the Partnership under the federal bankruptcy laws, as now
or hereafter constituted, or under any other federal or
state bankruptcy, insolvency or similar law, or the
appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) for the
Partnership or for any substantial part of the Partnership's
business or property, or to cause the Partnership to consent
to any such decree, relief, order or appointment initiated
by any Person other than the Partnership;
(10) To amend the Construction Contract, except for
change orders approved by the Lenders;
(11) To pledge or assign any of the Capital
Contribution of the Investment Limited Partner or the
proceeds thereof; or
(12) To do any act required to be approved or ratified
by all limited partners under the Act.
6.3 Personal Services
No General Partner or Affiliate thereof shall receive
any salary or other direct or indirect compensation for any
services or goods provided in connection with the
Partnership or the Apartment Complex, except as may be
specifically provided in Section 6.13 and Article XI or as
to which the prior written consent of the Special Limited
Partner shall have been obtained to the precise terms
thereof prior to the commencement of such services or the
provision of such goods. Any Partner may engage
independently or with others in other business ventures of
every nature and description; neither the Partnership nor
any other Partner shall have any rights in and to such
independent ventures or the income or profits derived
therefrom. Any and all contractual relationships between the
Partnership and any General Partner or Affiliate thereof
must (i) be cancelable upon sixty (60) days' notice from the
Special Limited Partner and (ii) not provided for payments
in excess of those determined by the Special Limited Partner
to be reasonable. Any and all compensation received directly
or indirectly by any General Partner or Affiliate thereof
pursuant to any such relationship must be fully disclosed
and specifically itemized in reports pursuant to Section
12.7.
6.4 Business Management and Control; Tax Matters
Partner
Subject to the provisions of this Agreement, the
Managing General Partner shall have the exclusive right to
control the business of the Partnership. The Investment
Limited Partner shall have no right to take part in the
management or control of the business of the Partnership or
to transact any business in the name of the Partnership. No
provision of this Agreement which makes the Consent of the
Investment Limited Partner a condition for the effectiveness
of an action taken by the Managing General Partner is
intended, and no such provision shall be construed, to give
the Investment Limited Partner any participation in the
control of the Partnership business. The General Partner and
each of the Special Limited Partner and the Investment
Limited Partner hereby consent to the exercise by the
Managing General Partner of the powers conferred on him by
law and this Agreement, and the Managing General Partner
agrees to exercise control of the business of the
Partnership only in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, in no event may
the provisions of this Section 6.4 be invoked by any General
Partner or by any other Person as a defense against or as an
impediment to the ability of the Investment Limited Partner
or the Special Limited Partner to take any action hereunder.
All Partners hereby agree that the Managing General Partner
shall serve as the "Tax Matters Partner." In the case of
litigation, the Tax Matters Partner is required to file suit
in the United States Tax Court unless the Consent of the
Investment Limited Partner is obtained to file suit in the
United States Claims Court or the United States District
Court. Nothing herein shall be construed to restrict the
Partnership from engaging the Auditors to assist the Tax
Matters Partner in discharging his duties hereunder.
6.5 Special Duties of Caleb Community Development
Corporation
Caleb Community Development Corporation is delegated
the following non-exclusive roles and responsibilities:
(i) selection of a site manager with the consent of
the Managing General Partner, which shall not be
unreasonably be withheld;
(ii) selection of the caretaker or maintenance
person, with the consent of the Managing General
Partner, which shall not be unreasonably
withheld;
(iii) marketing of the Apartment Complex units;
(iv) tenant eligibility certification;
(v) tenant leasing policies;
(vi) rent collection procedures; and
(vii) tenant participation programs and
tenant/management relations, procedures,
arbitrations and evictions.
6.6 Additional Duties and Obligations of the
Managing General Partner
(a) The Managing General Partner shall manage the
affairs of the Partnership to the best of his ability, shall
use his best efforts to carry out the purposes of the
Partnership, and shall devote to the Partnership such time
as may be necessary for the proper performance of his duties
and the business of the Partnership. The Managing General
Partner shall promptly take all action which may be
necessary or appropriate for the proper development,
maintenance and operation of the Apartment Complex in
accordance with the provisions of this Agreement, the
Project Documents and applicable laws and regulations,
including, without limitation, funding the Construction and
Development Fee to the extent Capital Contributions are
insufficient. The Managing General Partner shall be
responsible for the management and operation of the
Partnership, including the oversight of the rent-up and
operational stages of the Apartment Complex.
(b) The Managing General Partner shall use his best
efforts to cause the Partnership to generate Cash Flow for
distribution to the Partners at the maximum realizable level
in view of (i) any applicable Agency and other regulations,
(ii) the Minimum Set-Aside Test and (iii) the Rent
Restriction Test, and, if necessary, the Managing General
Partner shall also use his best efforts to obtain approvals
and implementation of appropriate adjustments in the rental
schedule of the Apartment Complex.
(c) The Managing General Partner shall cause the
Partnership to obtain and keep in force, during the term of
the Partnership, comprehensive casualty insurance,
including, but not limited to, fire and other risks
generally included under "extended coverage" policies,
workmen's compensation and public liability insurance in
favor of the Partnership (i) with such companies and in such
amounts as shall be satisfactory to the Lenders and any
Agency, or, if the Apartment Complex is no longer subject to
Lender or Agency regulation or requirements, as shall be
customary for apartment complexes similar to the Apartment
Complex, and (ii) in amounts which shall be (A) no less than
those amounts which are customary in the area for apartment
complexes such as the Apartment Complex, (B) in the case of
the "extended coverage" portion, no less than the full
original replacement value of the Apartment Complex, (C) no
less than such amounts as may be reasonably requested by the
Investment Limited Partner and/or the Special Limited
Partner from time to time, and (D) in any event, sufficient
to prevent the Partnership from becoming a co-insurer under
any such policies. No deductibles on such policies may
exceed $1,000. The public liability insurance in favor of
the Partnership shall be in an amount not less than
$5,000,000. Through the Completion Date, or such later date
as may be required by the Construction Lender or any Agency,
the Managing General Partner shall also cause the
Partnership to obtain and keep in force a builder's risk
policy in favor of the Partnership in an amount not less
than the greater of (i) the full replacement value of the
Apartment Complex (excluding the value of the underlying
land, the site utilities and the foundations) or (ii) such
other amount as shall be required by any Agency or the
Construction Lender. Throughout the term of the Partnership,
the Managing General Partner shall provide copies of all
such policies (or binders) to the Investment Limited Partner
promptly after their receipt thereof or upon request but no
less frequently than annually. The Managing General Partner
shall cause the applicable insurer to name the Investment
Limited Partner as an "additional insured" on each
Partnership insurance policy. Prior to the expiration date
for any such Partnership insurance policy, the Managing
General Partner shall deliver to the Investment Limited
Partner a copy of the comparable new or replacement policy,
including all endorsements, exhibits and riders thereto.
(d) Except as otherwise provided herein, the
obligations of the Managing General Partner hereunder shall
be the joint and several obligations of each General
Partner. Except as otherwise provided in Sections 4.4(b) and
7.1, such obligations shall survive any Withdrawal of the
Managing General Partner from the Partnership.
(e) The Managing General Partner shall establish and
maintain reasonable reserves to provide for working capital
needs, improvements, replacements and any other
contingencies of the Partnership. At a minimum, the
Managing General Partner shall cause the Partnership to
annually deposit, commencing in 1999, $14,400 from its Cash
Flow into replacement reserves; to the extent that Cash Flow
(as determined before deduction of this reserve deposit) for
any year shall be insufficient to make such deposit in full,
the Managing General Partner shall fund such shortfall from
its own funds as a Subordinated Loan.
(f) Each General Partner shall be bound by the Project
Documents, and no additional General Partner shall be
admitted if he, she or it has not first agreed to be bound
by this Agreement (and assume the obligations of a General
Partner hereunder) and by the Project Documents to the same
extent and under the same terms as the other General
Partners.
(g) The Managing General Partner shall take all
actions necessary to ensure that the Investment Limited
Partner receives the full amount of the Projected Credit to
the Investment Limited Partner, including, without
limitation, the rental of apartments to Qualified Tenants
and the filing of annual certifications as may be required.
In this regard, the Managing General Partner shall, inter
alia, cause (i) the Partnership to satisfy all requirements
imposed from time to time under the Code with respect to
rental levels and occupancy by Qualified Tenants by the
close of the first year of the Credit Period and throughout
the Compliance Period so as to permit the Partnership to be
entitled to the maximum available Tax Credit, (ii) the
Partnership to comply with all Tax Credit monitoring
procedures, (iii) all Low-Income Apartment Units to be
occupied pursuant to leases to Qualified Tenants for periods
of not less than six (6) months, (iv) the Partnership to
make all appropriate Tax Credit elections in a timely
fashion, and (v) all rental units in the Apartment Complex
to be available for rental by the general public and to be
of equal quality and all Apartment Complex amenities to be
made available to all tenants on a comparable basis without
separate fees.
(h) On or before the Admission Date, the Managing
General Partner shall provide to the Investment Limited
Partner either (i) an appraisal of the Apartment Complex
prepared by a competent independent appraiser or (ii) a
project cost and budget analysis on an Agency form or any
comparable form of a state or other governmental agency,
including any applicable Tax Credit allocation agency,
setting forth estimates with respect to construction and
mortgage financing costs and initial rental income and
operating expense figures for the Apartment Complex.
(i) The Managing General Partner shall (i) not store
(except in compliance with all laws, ordinances, and
regulations pertaining thereto) or dispose of any Hazardous
Material at the Apartment Complex, or at or on any other
Site or Vessel owned, occupied, or operated either by any
General Partner, any Affiliate of a General Partner, or any
Person for whose conduct any General Partner is or was
responsible; (ii) neither directly nor indirectly transport
or arrange for the transport of any Hazardous Material
(except in compliance with all laws, ordinances, and
regulations pertaining thereto); (iii) provide the
Investment Limited Partner with written notice (x) upon any
General Partner's obtaining knowledge of any potential or
known release, or threat of release, of any Hazardous
Material at or from the Apartment Complex or any other Site
or Vessel owned, occupied, or operated by any General
Partner, any Affiliate of a General Partner or any Person
for whose conduct any General Partner is or was responsible
or whose liability may result in a lien on the Apartment
Complex; (y) upon any General Partner's receipt of any
notice to such effect from any Federal, state, or other
governmental authority; and (z) upon any General Partner's
obtaining knowledge of any incurrence of any expense or loss
by any such governmental authority in connection with the
assessment, containment, or removal of any Hazardous
Material for which expense or loss any General Partner may
be liable or for which expense or loss a lien may be imposed
on the Apartment Complex.
6.7 Representations and Warranties
The General Partners represent and warrant to the
Investment Limited Partner and the Special Limited Partner
as follows:
(1) The Partnership is a duly organized limited
partnership validly existing under the laws of the State and
has complied with all filing requirements necessary for its
existence and to preserve the limited liability of the
Investment Limited Partner and the Special Limited Partner.
(2) No event or proceeding has occurred or is pending
or threatened which would (a) materially adversely affect
the Partnership or its properties, or (b) materially
adversely affect the ability of the General Partners or any
of their Affiliates to perform their respective obligations
hereunder or under any other agreement with respect to the
Apartment Complex, other than legal proceedings which have
been bonded against without recourse to Partnership assets
in such manner as to stay the effect of the proceedings or
otherwise have been adequately provided for. This
subparagraph shall be deemed to include, without limitation,
the following: (x) legal actions or proceedings before any
court, commission, administrative body or other governmental
authority having jurisdiction over the zoning applicable to
the Apartment Complex, (y) disputes with suppliers of labor
and/or materials; and (z) acts of any governmental
authority.
(3) No default (or event which, with the giving of
notice or the passage of time or both, would constitute a
default) has occurred and is continuing under this Agreement
or under any provision of the Project Documents, and the
same are in full force and effect.
(4) No Partner or Related Person bears the Economic
Risk of Loss with respect to the Permanent Mortgages, except
as may be expressly permitted by Article III. No General
Partner has, either on his or its own behalf or on behalf of
the Partnership, incurred any financial responsibility with
respect to the Partnership prior to the Admission Date,
other than as disclosed in writing to the Investment Limited
Partner prior to the Admission Date.
(5) The Apartment Complex is being completed in a
timely manner in conformity with the Project Documents.
There is no violation by the Partnership or the General
Partners of any zoning, environmental or similar regulation
applicable to the Apartment Complex which could have a
material adverse effect thereon, and the Partnership has
complied with all applicable municipal and other laws,
ordinances and regulations relating to such construction and
use of the Apartment Complex. All appropriate public
utilities, including, but not limited to, water,
electricity, gas (if called for in the plans and
specifications), and sanitary and storm sewers, are or will
be available and operating properly for each unit in the
Apartment Complex at the time of the first occupancy of such
unit.
(6) The Partnership owns good and marketable fee
simple title to the Apartment Complex, subject to no
material liens, charges or encumbrances other than those
which (a) are both permitted by the Project Documents and
are noted or excepted in title insurance policy delivered to
the Partnership pursuant to Section 5.1(b) and (b) do not
materially interfere with use of the Apartment Complex (or
any part thereof) for its intended purpose or have a
material adverse effect on the value of the Apartment
Complex.
(7) The execution and delivery of all instruments and
the performance of all acts heretofore or hereafter made or
taken pertaining to the Partnership or the Apartment Complex
by each Affiliate of a General Partner which is a
corporation or a limited liability company have been or will
be duly authorized by all necessary organizational action,
and the consummation of any such transactions with or on
behalf of the Partnership will not constitute a breach or
violation of, or a default under, the charter, by-laws or
other organizational documents of such Affiliate or any
agreement by which such Affiliate or any of its properties
is bound, nor constitute a violation of any law,
administrative regulation or court decree.
(8) Any General Partner which is a corporation or
limited liability company has been duly organized, is
validly existing and in good standing under the laws of its
state of organization and has all requisite power to be a
General Partner and to perform its duties and obligations as
contemplated by this Agreement and the Project Documents.
Neither the execution and delivery by such General Partner
of this Agreement nor the performance of any of the actions
of such General Partner contemplated hereby has constituted
or will constitute a violation of (a) the articles of
organization, by-laws, operating agreement or other
organizational documents of such General Partner, (b) any
agreement by which such General Partner is bound or to which
any of its property or assets is subject, or (c) any law,
administrative regulation or court decree.
(9) No Event of Bankruptcy has occurred with respect
to any General Partner or any Controlling Person of a
General Partner.
(10) All accounts of the Partnership required to be
maintained under the terms of the Project Documents,
including, but not necessarily limited to, any account for
replacement reserves, are currently funded to the levels
required by the Lenders and/or any Agency.
(11) All payments and expenses required to be made or
incurred in order to complete construction of the Apartment
Complex in conformity with the Project Documents, to fund
any reserves hereunder or under any other Project Document
required to be funded at or prior to the later of the
Admission Date or Permanent Mortgage Commencement, to
satisfy all requirements under the Project Documents and/or
which form the basis for determining the principal sum of
the Permanent Mortgages and to pay the Construction and
Development Fee have been or will be paid or provided for
utilizing only (a) the funds available from the Construction
Mortgage, (b) the Capital Contribution of the Investment
Limited Partner, (c) the Capital Contributions of the
General Partners in the amounts set forth on Schedule A as
of the Admission Date, (d) the available net rental income,
if any, earned by the Partnership prior to Permanent
Mortgage Commencement (to the extent that it is permitted to
be used for such purposes by the Lenders and/or any Agency),
(e) any insurance proceeds and (f) any funds furnished by
the Managing General Partner pursuant to Sections 6.6(a) and
6.11.
(12) The amount of Tax Credit which is expected to be
allocated by the Partnership to the Investment Limited
Partner is $147,340 for 1998, $294,681 per annum for each of
the years 1999 through 2007 (inclusive) and $147,340 for
2008.
(13) 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 eligible for Tax Credits and in
accordance with the Agency Regulatory Agreement.
(14) The Managing General Partner has provided to the
Investment Limited Partner a complete copy of a "Phase I"
hazardous waste site assessment report for the Apartment
Complex, prepared in accordance with ASTM standards. No
General Partner, Affiliate of a General Partner or Person
for whose conduct any General Partner is or was responsible
has ever: (i) owned, occupied, or operated a Site or Vessel
on which any Hazardous Material was or is stored,
transported, or disposed of, except if such storage,
transport or disposition was and is at all times in
compliance with all laws, ordinances, and regulations
pertaining thereto; (ii) directly or indirectly transported,
or arranged for transport, of any Hazardous Material (except
if such transport was and is at all times in compliance with
all laws, ordinances and regulations pertaining thereto);
(iii) caused or was legally responsible for any release or
threat of release of any Hazardous Material; (iv) received
notification from any Federal, state or other governmental
authority of (x) any potential, known, or threat of release
of any Hazardous Material from the Apartment Complex or any
other Site or Vessel owned, occupied, or operated by any
General Partner, by any Affiliate of a General Partner, or
by any Person for whose conduct any General Partner is or
was responsible or whose liability may result in a lien on
the Apartment Complex; or (y) the incurrence of any expense
or loss by any such governmental authonty or by any other
Person in connection with the assessment, containment, or
removal of any release or threat of release of any Hazardous
Material from the Apartment Complex or any such Site or
Vessel.
(15) To the best of the General Partners' knowledge, no
Hazardous Material was ever or is now stored on,
transported, or disposed of on the land comprising the
Apartment Complex, except to the extent any such storage,
transport or disposition was at all times in compliance with
all laws, ordinances, and regulations pertaining thereto.
(16) The Managing General Partner and the General have
or will fulfill and will continue to fulfill all of their
duties and obligations under Sections 6.3 through 6.6.
6.8 Liability on the Permanent Mortgages
Neither any General Partner nor any Related Person
shall at any time bear the Economic Risk of Loss for the
payment of any portion of any Mortgage, and the General
Partners shall not permit any other Partner or any Related
Person to bear the Economic Risk of Loss for the payment of
any portion of any Mortgage, except as may be expressly
permitted pursuant to Article III.
6.9 Indemnification of the General Partners
(a) No General Partner nor any Affiliate thereof shall
have liability to the Partnership or to any Limited Partner
for any loss suffered by the Partnership which arises out of
any action or inaction of any General Partner or Affiliate
thereof if such General Partner or Affiliate thereof in good
faith determined that such course of conduct was in the best
interest of the Partnership and such course of conduct did
not constitute negligence or misconduct of such General
Partner or Affiliate thereof.
(b) A General Partner or any Affiliate thereof may be
indemnified by the Partnership against losses, judgments,
liabilities, expenses and amounts paid in settlement of any
claims sustained in connection with the Partnership,
provided that all of the following conditions are met: (i)
such General Partner has determined, in good faith, that the
course of conduct which caused the loss, judgment,
liability, expense or amount paid in settlement was in the
best interests of the Partnership; and (ii) such loss,
judgment, liability, expense or amount paid in settlement
was not the result of negligence or misconduct on the part
of such General Partner or Affiliate thereof; and (iii) such
indemnification or agreement to hold harmless is recoverable
only out of the assets of the Partnership, and not from the
Limited Partners.
(c) Notwithstanding the above, no General Partner or
any Affiliate thereof performing services for the
Partnership or any broker-dealer shall be indemnified for
any losses, liabilities or expenses arising from or out of
an alleged violation of Federal or state securities laws
unless (i) there has been a successful adjudication on the
merits of each count involving securities laws violations as
to the particular indemnitee and the court approves the
indemnification of such litigation costs, (ii) such claims
have been dismissed with prejudice on the merits by a court
of competent jurisdiction as to the particular indemnitee
and the court approves the indemnification of such
litigation costs or (iii) a court of competent jurisdiction
approves a settlement of the claims against a particular
indemnitee and the court finds that indemnification of the
settlement and related costs should be made. In any claim
for indemnification for Federal or state securities law
violations, the party seeking indemnification shall, prior
to seeking court approval for such indemnification, place
before the court the positions of the Securities and
Exchange Commission, and any applicable state securities
administrator with respect to the issue of indemnification
for securities law violations.
(d) The Partnership shall not incur the cost of the
portion of any insurance, other than public liability
insurance, which insures any party against any liability as
to which such party is herein prohibited from being
indemnified.
(e) The Partnership may indemnify Affiliates of a
General Partner under this Section 6.9 only if the loss
involves activity in which such Affiliates acted in the
capacity of a General Partner.
(f) For purposes of this Section 6.9 only, the term
"Affiliate" shall mean any Person performing services on
behalf of the Partnership who (i) directly or indirectly
controls, is controlled by or is under common control with a
General Partner; (ii) owns or controls ten per cent (10%) or
more of the outstanding voting securities of a General
Partner; (iii) is an officer, director, partner or trustee
of a General Partner; or (iv) if a General Partner is an
officer, director, partner or trustee, is any company for
which such General Partner acts in any such capacity.
6.10 Indemnification of the Partnership and the Limited
Partners
(a) The General Partners will indemnify and hold the
Partnership and the Limited Partners harmless from and
against any and all losses, damages and liabilities which
the Partnership or any Limited Partner may incur by reason
of the (a) past, present or future actions or omissions of
the General Partners or any of their Affiliates, or (b) any
liabilities to which either the Partnership or the Apartment
Complex is subject; provided, however, that the foregoing
indemnification shall not apply to (i) any Mortgage or (ii)
necessary contractual obligations incurred pursuant to
Agency or Lender requirements in connection with the
operation of the Apartment Complex in the ordinary course of
business.
(b) Notwithstanding the foregoing, no General Partner
shall be liable to a Limited Partner or the Partnership for
any act or omission for which the Partnership is required to
indemnify such General Partner under Section 6.9.
(c) The Managing General Partner shall indemnify,
defend, and hold the Limited Partners harmless from and
against any claim brought or threatened against any Limited
Partner or loss (as well as from any and all attorneys' fees
and expenses incurred in connection with any such claim or
loss) on account of the presence of any Hazardous Material
at the Apartment Complex. Any claim or loss described in the
immediately preceding sentence may be defended, compromised,
settled, or pursued by the Limited Partners with counsel of
the Limited Partners' selection, but at the expense of the
Managing General Partner. Notwithstanding anything else set
forth herein, this indemnification shall survive the
withdrawal of any General Partner and/or the termination of
this Agreement.
6.11 Operating Deficits
The Managing General Partner shall be obligated to
promptly advance funds to meet operating expenses (including
full payment of the Asset Management Fee and reserve
deposits required pursuant to Section 6.6(e) or by any
Lender or Agency) and debt service of the Partnership
following the later to occur of (i) the Admission Date or
(ii) Permanent Mortgage Commencement which exceed operating
income attributable to such period and available for the
payment thereof. In the event that the Managing General
Partner shall fail to make any such advance as aforesaid,
(a) the Partnership shall utilize amounts (the "Applied
Amounts") otherwise payable to the General Partners or
Affiliates thereof under Section 6.13 and/or Article X to
meet the obligations of the Managing General Partner
pursuant to this Section 6.11, with such utilization of
Applied Amounts constituting payment and satisfaction of the
corresponding amounts payable to the General Partners or
Affiliates thereof under Section 6.13 and/or Article X, with
the proceeds thereof being applied to such obligations, and
with the obligation of the Partnership to make such payments
to the General Partners or Affiliates thereof pursuant to
Section 6.13 and/or Article X being deemed satisfied to the
extent thereof and (b) the Special Limited Partner shall
have the rights set forth in Section 7.5. For the purpose of
this Section 6.11, all expenses shall be paid on a sixty
(60)-day current basis. Moreover, the Managing General
Partner may in his sole discretion at any time advance funds
to the Partnership to pay operating expenses and/or debt
service of the Partnership in order to facilitate the
Partnership's compliance with the Rent Restriction Test. All
advances pursuant to this Section 6.11 (including any
Applied Amounts) shall be Subordinated Loans repayable
without interest in accordance with the provisions of
Article X.
6.12 Obligation to Complete the Construction of the
Apartment Complex
The Managing General Partner shall complete the
construction of the Apartment Complex substantially in
accordance with the plans and specifications approved by the
Lenders and/or any Agency and all requirements necessary to
obtain the required certificates of occupancy for dwelling
units, 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,
and shall cause all necessary certificates of occupancy for
all apartment units in the Apartment Complex to be obtained,
all in accordance with the Project Documents. If the
proceeds of the Construction and Permanent Mortgages, the
net rental income, if any, of the Apartment Complex
generated prior to the later of Permanent Mortgage
Commencement or the Admission Date and which is permitted by
the Lenders and/or any Agency to be utilized for any of the
purposes hereinafter set forth, the Capital Contribution of
the Investment Limited Partner, the Capital Contributions of
the General Partners in the amounts set forth on Schedule A
as of the Admission Date, and any insurance proceeds arising
out of casualties prior to the later of Permanent Mortgage
Commencement or the Admission Date as available from time to
time are insufficient to (i) acquire and complete the
construction of the Apartment Complex and satisfy all other
obligations, all as provided in the first sentence of this
Section 6.12, (ii) pay the Construction and Development Fee,
(iii) arrive at Permanent Mortgage Commencement in
conformity with the Project Documents, (iv) discharge all
Partnership liabilities and obligations arising out of any
casualty giving rise to any such insurance proceeds, and (v)
provide for all other payments and expenses required to be
made or incurred through the later of Permanent Mortgage
Commencement or the Admission Date, including the funding of
any reserves required hereunder or under any other Project
Document and the repayment in full of all obligations under
the Construction Mortgage, the Managing General Partner in
his capacity as developer shall be responsible for and
obligated to pay such deficiencies and shall, to the extent
permitted under the Project Documents and any applicable
regulations or requirements of the Lenders and/or any
Agency, be reimbursed at or prior to the later of Permanent
Mortgage Commencement or the Admission Date only out of the
proceeds designated in this sentence available from time to
time after payment of all costs described in this sentence.
Any amounts not reimbursed through the later of Permanent
Mortgage Commencement or the Admission Date or from the
proceeds of the Capital Contribution of the Investment
Limited Partner as provided in Section 5.1 shall not be
reimbursable or otherwise change the Interest of any Person
in the Partnership but shall be borne by the Managing
General Partner in his capacity as developer; provided,
however, that, notwithstanding the foregoing, to the extent
any such amounts represent items which are properly included
in the Partnership's Qualified Basis and result in an
increase in the amount of Tax Credit allocated and available
to the Partnership over and above the amount of Tax Credit
required in order to achieve State Designation ("Includable
Items"), the Managing General Partner shall make an
additional Capital Contribution in the amount of the
Includable Items and the Partnership shall utilize the
proceeds of such additional Capital Contribution to pay the
Includable Items. In the event that the Managing General
Partner and/or the Developer shall fail to fund any such
deficiency as required by this Section 6.12, an amount not
in excess of the unpaid portion of the Construction and
Development Fee due to the Developer, the Managing General
Partners or any of his Affiliates under Section 6.13 or any
other provision hereof shall be applied by the Partnership
to meet such obligation of the Managing General Partner
and/or the Developer, and, to the extent there may still be
a deficiency, any amounts otherwise payable as the
Partnership Management Fee or distributable to the General
Partners pursuant to Article X shall also be so applied. Any
such application of funds as described in the immediately
preceding sentence shall constitute a payment of the amount
of the Fee or such other item which such funds had been
earmarked to pay, and the obligation of the Managing General
Partner and/or the Developer to advance such amount under
this Section 6.12 shall be satisfied to the extent of such
application.
6.13 Certain Payments to the General Partners and
Others
(a) The Partnership shall pay to the General Partners
a cumulative fee (the "Partnership Management Fee")
commencing in 1999 for their services in connection with the
administration of the day to day business of the Partnership
in an annual amount equal to $7,200 per annum. The
Partnership Management Fee for each fiscal year of the
Partnership shall be payable from Cash Flow in the manner
and priority set forth in Section 10.3(a) to the extent Cash
Flow is available therefor for such year; provided, however,
that if in any fiscal year commencing with 1999, Cash Flow
is insufficient to pay the full amount of the Partnership
Management Fee, the unpaid portion thereof shall accrue and
be payable on a cumulative basis in the first year in which
there is sufficient Cash Flow or from the proceeds of a
Capital Transaction as provided in Article X.
(b) In consideration of his consultation, advice and
other services in connection with the construction and
development of the Apartment Complex and as consideration
for the assignment described in Section 6.14, the
Partnership shall pay to the General Partners (or their
designee) a construction and development fee (the
"Construction and Development Fee") in the amount of
$435,000 (of which $87,000 shall be paid to the General
Partner and $348,000 to the Managing General Partner), which
fee shall be earned in full as to each building in the
Apartment Complex as of the date such building is completed.
The Construction and Development Fee shall be payable
$168,397 at the time of the Second Installment and $266,603
at the time of the payment of the Third Installment.
(c) The Partnership shall pay to BCCLP or an Affiliate
thereof a fee (the "Asset Management Fee") commencing in
1999 for its services in connection with the Partnership's
accounting matters relating to the Investment Limited
Partner and assisting with the preparation of tax returns
and the reports required by Section 12.7 in the annual
amount of $7,200. The Asset Management Fee shall be payable
from Cash Flow in the manner and priority set forth in
Section 10.3(a); provided, however, that if in any fiscal
year commencing with 1999, Cash Flow is insufficient to pay
the full amount of the Asset Management Fee and the
shortfall is not paid from funds advanced pursuant to
Section 6.11, the unpaid portion thereof shall accrue and be
payable on a cumulative basis in the first year in which
there is sufficient Cash Flow or from the proceeds of a
Capital Transaction as provided in Article X.
(d) In consideration of its services in connection
with any sale of the Apartment Complex in accordance with
this Agreement, the General Partner (or its designee) shall
be entitled to a Sales Disposition Fee (the "Sales
Disposition Fee") in the amount of 3% of the sales price of
the Apartment Complex. Such fee will be reduced to the
extent necessary so that all fees and expenses to the
Partnership in connection with such sale will not exceed 6%
as required by Article III.D.
(e) As reimbursement for costs incurred in connection
with the development of the Apartment Complex, the
Partnership shall pay to the Managing General Partner (or
his designee) an overhead reimbursement (the "Developer's
Overhead Reimbursement") in the amount of $11,941, which
amount shall be earned in full as to each building in the
Apartment Complex as of the date such building is completed.
The Developer's Overhead Reimbursement shall be payable in
the amount of $11,941 at the time of the payment of the
Third Installment.
6.14 Assignment to Partnership
The General Partners hereby transfer and assign to the
Partnership all of their right, title and interest in and to
the Apartment Complex and in and to all of the Project
Documents, including, but not limited to, the following: (i)
all contracts with architects, supervising architects,
engineers and contractors with respect to the development of
the Apartment Complex; (ii) all plans, specifications and
working drawings heretofore prepared or obtained in
connection with the Apartment Complex; (iii) all
governmental commitments and approvals obtained, and
applications therefor, including, but not limited to, those
relating to planning, zoning, building permits and Tax
Credit; (iv) any and all commitments with respect to any
Mortgage(s); (v) any and all contracts or rights with
respect to any agreements with the Lenders and any Agency;
and (vi) any other work product related to the Apartment
Complex and/or the Partnership, all of which shall have an
agreed to value of $1.00 for purposes of determining the
opening Capital Account of the General Partners.
ARTICLE VII Withdrawal of a General Partner; New General
Partners
7.1 Withdrawal
No General Partner shall Withdraw from the Partnership
(other than by reason of death or ad)udication of
incompetence or insanity) or sell, assign or encumber his or
its Interest without the Consent of the Investment Limited
Partner and any other General Partners, if any, except that
if the Special Limited Partner or a designee thereof becomes
a General Partner, it shall not be required to obtain the
consent of any other General Partner to transfer all or any
portion of its interest as a General Partner, other than as
may be required under the Act. In the event of any
Withdrawal by a General Partner in violation of this Section
7.1, such General Partner, in addition to being subject to
any and all other legal remedies which may be pursued by the
Partners, shall forfeit to the Special Limited Partner or
its designee, such General Partner's Interest and all unpaid
fees from the Partnership and shall remain liable for all of
the Withdrawing General Partner's obligations under this
Agreement. In addition, upon such Withdrawal and transfer,
the Special Limited Partner or its designee shall
automatically become a General Partner on the terms set
forth in Section 7.5 without further action by the
Withdrawing General Partner or any other Partner, and each
Partner hereby consents to such transfer and to the
admission of the Special Limited Partner or its designee as
a General Partner in such a situation. Such transfer shall
occur automatically upon such Withdrawal without further
action by such Withdrawing General Partner.
7.2 Obligation to Continue
Upon the Withdrawal of a General Partner, the
remaining General Partner, if any, shall have the right and
obligation to continue the business of the Partnership
employing its assets and name, all as contemplated by the
Act. Within thirty (30) days after they obtain knowledge of
the Withdrawal of a General Partner, the remaining General
Partner, if any, shall notify the Limited Partners of such
Withdrawal.
7.3 Withdrawal of All General Partners
If, following the Withdrawal of a General Partner,
there is no remaining General Partner, the Investment
Limited Partner and the Special Limited Partner may elect to
reconstitute the Partnership and continue the business of
the Partnership for the balance of the term specified in
Section 2.4 by selecting a successor General Partner. If the
Investment Limited Partner and the Special Limited Partner
elect to reconstitute the Partnership pursuant to this
Section 7.3 and admit the designated successor General
Partner, the relationship among the then Partners shall be
governed by this Agreement.
7.4 Interest of General Partner After Permitted
Withdrawal
In the event of the Withdrawal of a General Partner
not in violation of Section 7.1 and except as otherwise
provided in Section 4.4(b), the Withdrawing General Partner
hereby covenants and agrees to transfer to the remaining
General Partner, if any, or to a successor General Partner
selected in accordance with Section 7.3, as the case may be,
such portion of the Withdrawing General Partner's Interest
as such remaining or successor General Partners may
designate, such transfer to be made in consideration of the
payment by the transferee of either the agreed value of such
Interest or, if such value is not agreed to, the fair market
value of such Interest as determined by a committee of three
qualified real estate appraisers, one selected by the
Withdrawing General Partner, one selected by the transferee
and a third selected by the other two. The portion of the
Withdrawing General Partner's Interest designated to be
transferred in accordance with the provisions of this
Section 7.4 shall be sufficient to ensure the continued
treatment of the Partnership as a partnership under the Code
and as a limited partnership under the Act, and, for the
purposes of Article X, shall be deemed to be effective as of
the date of Withdrawal, but the Partnership shall not make
any distributions to the designated transferee until the
transfer shall have been made. Any holder of any portion of
the Interest of a Withdrawing General Partner which is not
designated to be transferred to the remaining or successor
General Partners pursuant to the provisions of this Section
7.4 shall become an Additional Limited Partner but (i) with
the same share of the profits, losses, tax credits, Cash
Flow and other distributions to which the holder of such
Interest was entitled when held as a General Partner
Interest, and (ii) shall not participate in the votes or
Consents of the Investment Limited Partner hereunder. The
admission of any successor or additional General Partner
shall be subject to the consent of the Lenders and any
Agency (if required) and the Consent of the Investment
Limited Partner.
7.5 Admission of Additional General Partner(s) under
Certain Circumstances
In the event that a General Partner violates any
provision of this Agreement, the Special Limited Partner, in
its sole discretion, shall have the option at any time
thereafter to cause itself or its designee to be admitted as
an additional General Partner on the terms set forth herein
without any further action by any other Partner. Upon any
such admission of an additional General Partner and in
consideration of the payment of $10, all pre-existing
General Partners shall be deemed to have transferred
(ratably in accordance with their respective Interests) to
the additional General Partner such portion of their
respective General Partner interests so that the additional
General Partner shall receive not less than a one percent
(1%) interest in all profits, losses, tax credits and
distributions of the Partnership (such transfer
notwithstanding, the Special Limited Partner shall also
retain its status as such, and its interest in the
Partnership as the Special Limited Partner shall not be
affected). An additional General Partner so admitted shall
automatically become the Managing General Partner and be
irrevocably delegated all of the power and authority of all
of the other General Partners pursuant to Section 6.4. Any
such additional General Partner shall have the right to
withdraw as a General Partner at any time, leaving the
pre-existing General Partners once again as the only General
Partners, the provisions of this Article VII
notwithstanding. Each Partner hereby grants to the Special
Limited Partner a special power of attorney, irrevocable to
the extent permitted by law and coupled with an interest, to
amend the Certificate and this Agreement and to do anything
else which, in the view of the Special Limited Partner, may
be necessary or appropriate to accomplish the purposes of
this Section 7.5 or to enable any additional General Partner
admitted pursuant to this Section 7.5 to manage the business
of the Partnership. The admission of an additional General
Partner shall not relieve any other General Partner of any
of its obligations hereunder, and each other General Partner
shall fully indemnify and hold harmless the additional
General Partner from and against any and all losses,
judgments, liabilities, expenses and amounts paid in
settlement of any claims sustained in connection with its
capacity as a General Partner.
ARTICLE VIII Transferability of Limited Partner Interests
8.1 Assignments
(a) Except by operation of law (including the laws of
descent and distribution), no Limited Partner may assign all
or any part of its Interest without the written consent of
the General Partners, the giving or withholding of which is
exclusively within their discretion.
(b) An assignee of a Limited Partner who does not
become a Substituted Limited Partner shall have, and shall
only have, the right to receive the share of allocations and
distributions of the Partnership to which the assigning
Limited Partner would have been entitled with respect to the
Interest (or portion thereof) so assigned if no such
assignment had been made by such Limited Partner. Any
assigning Limited Partner whose permitted assignee becomes a
Substituted Limited Partner shall thereupon cease to be a
Limited Partner and shall no longer have any of the rights
or privileges of a Limited Partner. Where the assignee does
not become a Substituted Limited Partner, the Partnership
shall recognize such assignment not later than the last day
of the calendar month following receipt of notice of
assignment and all documentation required in connection
therewith.
(c) Every assignee of a Limited Partner Interest (or
any portion thereof) who desires to make a further
assignment of its Interest shall be subject to all the
provisions of this Article VIII.
8.2 Substituted Limited Partner
No Limited Partner shall have the right to substitute
an assignee as Limited Partner in its place. Subject to
Section 8.3, the General Partners may, however, in their
sole discretion, permit an assignee to become a Substituted
Limited Partner. The consent of the General Partners to an
assignment of a Limited Partner Interest under Section 8.1
shall not, in and of itself, constitute permission under
this Section 8.2.
Any Substituted Limited Partner shall execute such
instrument or instruments as shall be required by the
General Partners to signify the agreement of such
Substituted Limited Partner to be bound by all the
provisions of this Agreement and shall pay the Partnership's
reasonable legal fees and filing costs in connection with
its substitution as a Limited Partner.
8.3 Restrictions
(a) No Disposition may be made if such Disposition
would violate Section 13.1.
(b) In no event shall all or any part of a Limited
Partner Interest be Disposed of to a minor (other than to a
descendant by reason of death) or to an incompetent.
(c) The General Partners may, in addition to any other
requirement they may impose, require as a condition of any
Disposition that the transferor (i) assume all costs
incurred by the Partnership in connection therewith and (ii)
furnish the Partnership and the other Partners with an
opinion of counsel satisfactory to counsel to the
Partnership that such Disposition complies with applicable
Federal and state securities laws.
(d) Any sale, exchange, transfer or other Disposition
in contravention of any of the provisions of this Section
8.3 shall be void and ineffectual and shall not bind or be
recognized by the Partnership.
ARTICLE IX Borrowings
All Partnership borrowings shall be subject to the
terms of this Agreement, including, but not limited to, the
restrictions of Section 6.2, and may be made from any
source, including Partners and their Affiliates. Any
Partnership borrowings from any Partner shall be subject to
the prior written consent of the Special Limited Partner and
any Lender or Agency (if required under applicable Lender or
Agency regulations or requirements). If any Partner shall
lend any monies to the Partnership, the amount of any such
loan shall not be an increase of such Partner's Capital
Contribution. If any Partner shall so lend monies, each such
loan shall be an obligation of the Partnership and (except
for Subordinated Loans) shall be repayable to such Partner
on the same basis and with the same rate of interest as
would be applicable to a comparable loan to the Partnership
from a third party. Funds provided by the Managing General
Partner to the Partnership pursuant to Section 6.11 shall
not constitute borrowings for the purposes of this Article
IX or for any other purposes.
ARTICLE X Profits, Losses, Tax Credits, Distributions and
Capital Accounts
10.1 Capital and Capital Accounts
(a) The Capital Contribution of each Partner shall be
as set forth on Schedule A. No interest shall be paid on any
Capital Contribution. No Partner shall have the right to
withdraw its Capital Contribution or to demand and receive
property of the Partnership in return for its Capital
Contribution, except as may be specifically provided in this
Agreement or required by law.
(b) An individual Capital Account shall be established
and maintained on behalf of each Partner, including any
additional or substituted Partner who shall hereafter
receive an interest in the Partnership. In accordance with
Treasury Regulation Section 1.704-l(b), the Capital Account
of each partner shall consist of (i) the amount of cash such
Partner has contributed to the Partnership plus (ii) the
fair market value of any property such Partner has
contributed to the Partnership net of any liabilities
assumed by the Partnership or to which such property is
subject plus (iii) the amount of profits or income
(including tax-exempt income) allocated to such Partner less
(iv) the amount of losses and deductions allocated to such
Partner less (v) the amount of all cash distributed to such
Partner less (vi) the fair market value of any property
distributed to such Partner net of any liabilities assumed
by such Partner or to which such property is subject less
(vii) such Partner's share of any other expenditures which
are not deductible by the Partnership for Federal income tax
purposes or which are not allowable as additions to the
basis of Partnership property and shall be (viii) subject to
such other adjustments as may be required under the Code.
The Capital Account of a Partner shall not be affected by
any adjustments to basis made pursuant to Section 743 of the
Code but shall be adjusted with respect to adjustments to
basis made pursuant to Section 734 of the Code.
The original Capital Account established for any
Substituted Partner (as hereinafter defined) shall be in the
same amount as, and shall replace, the Capital Account of
the Partner which such Substituted Partner succeeds, and,
for the purposes of this Agreement, such Substituted Partner
shall be deemed to have made the Capital Contribution, to
the extent actually paid in, of the Partner which such
Substituted Partner succeeds. The term "Substituted
Partner," as used in this paragraph, shall mean a Person who
shall become entitled to receive a share of the allocations
and distributions of the Partnership by reason of such
Person succeeding to all or any part of the Interest of a
Partner by assignment of all or any part of a Partner's
Interest. To the extent a Substituted Partner receives less
than 100% of the Interest of a Partner he succeeds, the
original Capital Account of such transferee Substituted
Partner and his Capital Contribution shall be in proportion
to the portion of the transferor Partner's Interest prior to
the transfer which the transferee receives, and the Capital
Account of the transferor Partner who retains a portion of
his former Interest and his Capital Contribution shall
continue, and not be replaced, in proportion to the portion
of the transferor Partner's Interest prior to the transfer
which the transferor Partner retains. Nothing in this
Section 10.1(b) shall affect the limitations on
transferability of Interests set forth in Article VII or
Article VIII.
10.2 Profits, Losses and Tax Credits
(a) Except as otherwise specifically provided in this
Article, for each Partnership fiscal year or portion
thereof, all profits, tax-exempt income, losses,
non-deductible non-capitalizable expenditures and tax
credits incurred or accrued on or after the Commencement
Date, other than those arising from a Capital Transaction,
shall be allocated 99.99% to the Investment Limited Partner
and .01% to the General Partners.
(b) Except as otherwise specifically provided in this
Article, all profits and losses arising from a Capital
Transaction shall be allocated to the Partners as follows:
As to profits:
First, an amount of profit equal to the aggregate
negative balances (if any) in the Capital Accounts of all
Partners having negative balance Capital Accounts shall be
allocated to such Partners in proportion to their negative
Capital Account balances until all such Capital Accounts
shall have zero balances; and
Second, an amount of profits shall be allocated to each
of the Partners until the positive balance in the Capital
Account of each Partner equals, as nearly as possible, the
amount of cash which would be distributed to such Partner if
the aggregate amount in the Capital Accounts of all Partners
were cash available to be distributed in accordance with the
provisions of Clauses Fourth, Sixth, Seventh, Eighth, Ninth
and Tenth of Section 10.3(b).
As to losses:
First, an amount of losses equal to the aggregate
positive balances (if any) in the Capital Accounts of all
Partners having positive balance Capital Accounts shall be
allocated to such Partners in proportion to their positive
Capital Account balances until all such Capital Accounts
shall have zero balances; provided, however, that if the
amount of losses so to be allocated is less than the sum of
the positive balances in the Capital Accounts of those
Partners having positive balances in their Capital Accounts,
then such losses shall be allocated to the Partners in such
proportions and in such amounts so that the Capital Account
balances of each Partner shall equal, as nearly as possible,
the amount such Partner would receive if an amount equal to
the excess of (a) the sum of all Partners' balances in their
Capital Accounts computed prior to the allocation of losses
under this clause First over (b) the aggregate amount of
losses to be allocated to the Partners pursuant to this
clause First were distributed to the Partners in accordance
with the provisions of Clauses Fourth, Sixth, Seventh,
Eighth, Ninth and Tenth of Section 10.3(b); and
Second, the balance, if any, of such losses shall be
allocated .01% to the General Partners and 99.99% to the
Investment Limited Partner.
(c) Notwithstanding the foregoing provisions of
Sections 10.2(a) and 10.3(b), in no event shall any losses
be allocated to the Investment Limited Partner, the Special
Limited Partner, or to any additional General Partner
admitted pursuant to any of Section 4.4(b), Section 5.2(e),
Section 7.1(a) or Section 7.5, if and to the extent that
such allocation would cause, as of the end of the
Partnership taxable year, the negative balance in such
Partner's Capital Account to exceed such Partner's
obligation (actual or deemed under Treasury Regulation
Section 1.704-l(b)(2)(ii)(c)) to restore a deficit balance
in such Partner's Capital Account plus such Partner's share
of Partnership Minimum Gain plus such Partner's share of
Partner Non-Recourse Debt Minimum Gain. Any losses which are
not allocated to a Partner by virtue of the application of
this Section 10.2(c) shall be allocated to the General
Partners. For the purposes of this Section 10.2(c), a
Partner's Capital Account shall be treated as reduced by
Qualified Income Offset Items.
10.3 Cash Distributions Prior to Dissolution
(a) Cash Flow
Subject to Agency and Lender approval (if required),
Cash Flow for each fiscal year or portion thereof of the
Partnership shall be applied in the following priority:
First, to the payment of the Asset Management Fee for
such year and for any previous year(s) as to which the Asset
Management Fee shall not yet have been paid in full;
Second, to the repayment of any Subordinated Loans;
Third, to the payment of the Partnership Management
Fee attributable to such year and for any previous year(s)
as to which the Partnership Management Fee shall not yet
have been paid in full;
Fourth, to the payment of the Incentive Management Fee
of up to $3,000 for such year; and
Fifth, any balance 49% to the Managing General
Partner, 1% to Caleb Community Development Corporation and
50% to the Investment Limited Partner;
provided, however, that during such time as Agency
regulations are applicable to the Apartment Complex, the
total amount of Cash Flow which may be so distributed to the
Partners in respect to any fiscal year shall not exceed such
amounts as Agency regulations permit to be distributed.
(b) Distributions of other than Cash Flow
Prior to dissolution, if the General Partners shall
determine from time to time that cash is available for
distribution from a Capital Transaction, such cash shall be
applied or distributed as follows:
First, to the payment of all matured debts and
liabilities of the Partnership (including, but not limited
to, all expenses of the Partnership incident to the Capital
Transaction), excluding (i) debts and liabilities of the
Partnership to Partners or their Affiliates and (ii) all
unpaid fees owing to the General Partners or their
Affiliates; and to the establishment of any reserves which
the General Partners and the Auditors shall deem reasonably
necessary for contingent, unmatured or unforeseen
liabilities or obligations of the Partnership;
Second, to the payment of any accrued and unpaid Asset
Management Fees;
Third, to the payment of any accrued and unpaid
Partnership Management Fees;
Fourth, to the payment to the Investment Limited
Partner of the full amount (including interest) of any
Credit Recovery Loans;
Fifth, to the repayment of any Subordinated Loans;
Sixth, to the repayment of any then-unpaid debts and
liabilities owed to Partners or Affiliates thereof by the
Partnership for Partnership obligations (exclusive of Credit
Recovery Loans and Subordinated Loans) to any of them,
including, but not limited to, any accrued and unpaid
Partnership Management Fee for the fiscal year of the
Capital Transaction; provided, however, that any debts or
obligations to be repaid to any Limited Partner or Affiliate
thereof pursuant to this Clause Sixth shall be repaid prior
to the repayment of any such debts or obligations to any
General Partner or Affiliate thereof;
Seventh, to the payment to the Investment Limited
Partner of an amount equal to its paid-in capital, less any
prior distributions made to such Investment Limited Partner
under this Clause Seventh, but never an amount less than
zero;
Eighth, to the repayment to the General Partners of
their paid-in Capital Contributions minus any prior
distributions made to them under this Clause Eighth and
under Section 10.1(b), but never an amount less than zero;
Ninth, to the payment of the Sales Disposition Fee; and
Tenth, any balance 49.999% to the Investment Limited
Partner, .001% to the Special Limited Partner, 49% to the
Managing General Partner and 1% to Caleb Community
Development Corporation.
10.4 Distributions Upon Dissolution
(a) Upon dissolution and termination, after payment of,
or adequate provision for, the debts and obligations of the
Partnership, the remaining assets of the Partnership shall
be distributed to the Partners in accordance with the
positive balances in their Capital Accounts after taking
into account all Capital Account adjustments for the
Partnership taxable year, including adjustments to Capital
Accounts pursuant to Sections 10.3(b) and 10.4(b). In the
event that a General Partner, other than a General Partner
admitted pursuant to any of Section 4.4(b), Section 5.2(e),
Section 7.1(a) or Section 7.5, or Additional Limited Partner
has a negative balance in its Capital Account following the
liquidation of the Partnership or such Partner's Interest,
after taking into account all Capital Account adjustments
for the Partnership taxable year in which such liquidation
occurs, such Partner shall pay to the Partnership in cash an
amount equal to the negative balance in such Partner's
Capital Account. Such payment shall be made by the end of
such taxable year (or, if later, within ninety (90) days
after the date of such liquidation) and shall, upon
liquidation of the Partnership, be paid to recourse
creditors of the Partnership or distributed to other
Partners in accordance with the positive balances in their
Capital Accounts.
(b) With respect to assets distributed in kind to the
Partners in liquidation or otherwise, (i) any unrealized
appreciation or unrealized depreciation in the values of
such assets shall be deemed to be profits and losses
realized by the Partnership immediately prior to the
liquidation or other distribution event; and (ii) such
profits and losses shall be allocated to the Partners in
accordance with Section 10.2(b), and any property so
distributed shall be treated as a distribution of an amount
in cash equal to the excess of such fair market value over
the outstanding principal balance of and accrued interest on
any debt by which the property is encumbered. For the
purposes of this Section 10.4(b), "unrealized appreciation"
or "unrealized depreciation" shall mean the difference
between the fair market value of such assets, taking into
account the fair market value of the associated financing
(but subject to Section 7701(g) of the Code), and the
Partnership's adjusted basis for such assets as determined
under Regulation Section 1.704-l(b). This Section 10.4(b) is
merely intended to provide a rule for allocating unrealized
gains and losses upon liquidation or other distribution
event, and nothing contained in this Section 10.4(b) or
elsewhere herein is intended to treat or cause such
distributions to be treated as sales for value. The fair
market value of such assets shall be determined by an
appraiser to be selected by the General Partners with the
Consent of the Investment Limited Partner.
10.5 Special Provisions
(a) Except as otherwise provided in this Agreement,
all profits, tax-exempt income, losses, non-deductible
non-capitalizable expenditures, tax credits and cash
distributions shared by a class of Partners shall be shared
by each Partner in such class in the ratio of such Partner's
paid-in Capital Contribution to the paid-in Class
Contribution of the class of Partners of which such Partner
is a member.
(b) Notwithstanding the foregoing provisions of this
Article X:
(i) If (a) the Partnership incurs recourse
obligations or Partner Non-Recourse Debt (including,
without limitation, Subordinated Loans) or (b) the
Partnership incurs losses from extraordinary events
which are not recovered from insurance or otherwise
(collectively "Recourse Obligations") in respect of any
Partnership taxable year, then the calculation and
allocation of profits and losses shall be adjusted as
follows: first, an amount of deductions attributable to
the Recourse Obligations (consisting of deductions
other than cost recovery deductions) shall be allocated
to the General Partners; and second, the balance of
deductions (including all cost recovery deductions)
shall be allocated as provided in Section 10.2(a). For
purposes of this section, extraordinary events include
casualty losses, losses resulting from liability to
third parties for tortious injury, losses resulting
from a breach of legal duty by the Partnership or by
the General Partners, and losses resulting from other
liabilities which are not incurred in the ordinary
course of business. Nothing in this Section 10.5(b)(i)
shall prevent the Partnership from recovering an
extraordinary loss from a General Partner who is liable
therefor by law or under this Agreement.
(ii) If any Recourse Obligations shall be repaid
from Cash Flow generated in respect of any Partnership
taxable year, then the allocation of profits and losses
under Section 10.2(a) for such year shall be adjusted
as follows: first, the General Partners shall be
allocated an amount of the gross income of the
Partnership equal to the lesser of (i) the amount of
items of Loss previously allocated to the General
Partner under Section 10.5(b)(i) and not previously
offset by allocations of Profits or items thereof, and
(ii) the amount of the excess expenses repaid in such
year.
(iii) If the Partnership shall receive any purchase
money indebtedness in partial payment of the purchase
price of the Apartment Complex and such indebtedness is
distributed to the Partners pursuant to the provisions
of Section 10.3(b) or Section 10.4, the distributions
of the cash portion of such purchase price and the
principal amount of such purchase money indebtedness
hereunder shall be allocated among the Partners in the
following manner: On the basis of the sum of the
principal amount of the purchase money indebtedness and
cash payments received on the sale (net of amounts
required to pay Partnership obligations and fund
reasonable reserves), there shall be calculated the
percentage of the total net proceeds distributable to
each Partner based on Section 10.3(b) or Section 10.4
as applicable, treating cash payments and purchase
money indebtedness principal interchangeably for this
purpose, and the respective Partners shall receive such
respective percentages of the net cash purchase price
and purchase money principal. Payments on such purchase
money indebtedness retained by the Partnership shall be
distributed in accordance with the respective portions
of principal allocated to the respective Partners in
accordance with the preceding sentence, and if any such
purchase money indebtedness shall be sold, the sale
proceeds shall be allocated in the same proportion.
(iv) Income, gain, loss and deduction with respect
to any asset which has a variation between its basis
computed in accordance with Treasury Regulation Section
1.704-l(b) and its basis computed for Federal income
tax purposes shall be shared among the Partners so as
to take account of such variation in a manner
consistent with the principles of Section 704(c) of the
Code and Treasury Regulation Section
1.704-l(b)(2)(iv)(g).
(v) The terms "profits" and "losses" used in this
Agreement shall mean income and losses, and each item
of income, gain, loss, deduction or credit entering
into the computation thereof, as determined in
accordance with the accounting methods followed by the
Partnership and computed in accordance with Treasury
Regulation Section 1.704-l(b)(2)(iv). Profits and
losses for federal income tax purposes shall be
computed and allocated in the same manner as set forth
in this Article X, except as provided in Section
10.5(b)(iv).
(vi) If there is a net decrease in Partnership
Minimum Gain during a Partnership taxable year, each
Partner will be allocated items of income and gain for
such year (and, if necessary, subsequent years) in
proportion to, and to the extent of, an amount equal to
such Partner's share of the net decrease in Partnership
Minimum Gain during the year, before any other
allocation of Partnership items for such taxable year.
A Partner shall not be subject to this mandatory
allocation of income or gain to the extent that any of
the exceptions provided in Treasury Regulation Section
1.704-2(f)(2)-(5) applies. All allocations pursuant to
this Section 10.5(b)(vi) shall be in accordance with
Treasury Regulation Section 1.704-2(f). This provision
is a "minimum gain chargeback" within the meaning of
Treasury Regulation Section 1.704-2(f) and shall be
construed as such.
(vii) If there is a net decrease in Partner
Non-Recourse Debt Minimum Gain during a Partnership
taxable year, then each Partner with a share of the
minimum gain attributable to such debt at the beginning
of such year will be allocated items of income and gain
for such year (and, if necessary, subsequent years) in
an amount equal to such Partner's share of the net
decrease in Partner Non-Recourse Debt Minimum Gain
during the year. A Partner is not subject to this
Partner Non-Recourse Debt Minimum Gain chargeback to
the extent that any of the exceptions provided in
Treasury Regulation Section 1.704-2(i)(4) applied
consistently with Treasury Regulation Section
1.704-2(f)(2)-(5) applies. Such allocations shall be
made in a manner consistent with the requirements of
Treasury Regulation Section 1.704-2(i)(4) under Section
704 of the Code.
(viii) If a Limited Partner unexpectedly receives
(a) an allocation of loss or deduction or expenditures
described in Section 705(a)(2)(B) of the Code made (1)
pursuant to Section 704(e)(2) of the Code to a donee of
an Interest, (2) pursuant to Section 706(d) of the Code
as the result of a change in any Partner's Interest, or
(3) pursuant to Regulation Section 1.751-l(b)(2)(ii) as
a result of a distribution by the Partnership of
unrealized receivables or inventory items or (b) a
distribution, and such allocation and/or distribution
would cause the negative balance in such Partner's
Capital Account to exceed (i) such Partner's share of
Partnership Minimum Gain plus (ii) the amount of such
Partner's obligation (actual or deemed), to restore a
negative balance in such Partner's Capital Account plus
(iii) such Partner's share of Partner Non-Recourse Debt
Minimum Gain, then such Partner shall be allocated
items of income and gain in an amount and manner
sufficient to eliminate such negative balance as
quickly as possible. For purposes of this Section
10.5(b)(viii), a Partner's Capital Account shall be
treated as reduced by Qualified Income Offset Items.
(ix) In the event that any fee payable to any
General Partner or any Affiliate thereof shall instead
be determined to be a non-deductible, non-capitalizable
distribution from the Partnership to a Partner for
Federal income tax purposes, then there shall be
allocated to such General Partner in the year(s) of
payment an amount of gross income equal to the amount
of such distribution in such year.
(x) In applying the provisions of Article X with
respect to distributions and allocations, the following
ordering of priorities shall apply:
(1) Capital Accounts shall be deemed to be reduced
by Qualified Income Offset Items.
(2) Capital Accounts shall be reduced by
distributions of Cash Flow under Section
10.3(a).
(3) Capital Accounts shall be reduced by
distributions from Capital Transactions under
Section 10.3(b).
(4) Capital Accounts shall be increased by any
minimum gain chargeback under Section
10.5(b)(vi) or Section 10.5(b)(vii).
(5) Capital Accounts shall be increased by any
qualified income offset under Section
10.5(b)(viii).
(6) Capital Accounts shall be increased by
allocations of profits under Section 10.2(a).
(7) Capital Accounts shall be reduced by
allocations of losses under Section 10.2(a).
(8) Capital Accounts shall be reduced by
allocations of losses under Section 10.2(b).
(9) Capital Accounts shall be increased by
allocations of profits under Section 10.2(b).
(xi) To the maximum extent permitted under the Code,
allocations of profits and losses shall be modified so that
the Partners' Capital Accounts reflect the amounts they
would have reflected if adjustments required by Sections
10.5(b)(vi), 10.5(b)(vii) and 10.5(b)(viii) had not
occurred.
10.6 Authority of the General Partners to Vary
Allocations to Preserve and Protect the Partners'
Intent
(a) It is the intent of the Partners that each
Partner's distributive share of profits, tax-exempt income,
losses, non-deductible non-capitalizable expenditures and
credits (and items thereof) shall be determined and
allocated in accordance with this Agreement to the fullest
extent permitted by Section 704(b) of the Code. In order to
preserve and protect the determinations and allocations
provided for in this Agreement, the General Partners are
hereby authorized and directed to allocate profits,
tax-exempt income, losses, non-deductible non-capitalizable
expenditures and credits (and items thereof) arising in any
year differently than otherwise provided for in this
Agreement to the extent that allocating profits, tax-exempt
income, losses, non-deductible non-capitalizable
expenditures or credits (or any item thereof) in the manner
provided for herein would cause the determinations and
allocations of each Partner's distributive share of profits,
tax-exempt income, losses, non-deductible non-capitalizable
expenditures or credits (or any item thereof) not to be
permitted by Section 704(b) of the Code. Any allocation made
pursuant to this Section 10.6 shall be deemed to be a
complete substitute for any allocation otherwise provided
for in this Agreement, and no amendment of this Agreement or
approval of any Partner shall be required.
(b) In making any allocation (the "New Allocation")
under Section 10.6(a), the General Partners are authorized
to act only after having been advised in writing by the Tax
Accountants or the Special Limited Partner that, under
Section 704(b) of the Code, (i) the New Allocation is
necessary, and (ii) the New Allocation is the minimum
modification of the allocations otherwise provided for in
this Agreement necessary in order to assure that, either in
the then-current year or in any preceding year, each
Partner's distributive share of profits, tax-exempt income,
losses, non-deductible noncapitalizable expenditures and
credits (or any item thereof) is determined and allocated in
accordance with this Agreement to the fullest extent
permitted by Section 704(b) of the Code.
(c) If the General Partners are required by Section
10.6(a) to make any New Allocation in a manner less
favorable to the Limited Partners than is otherwise provided
for herein, then the General Partners are authorized and
directed, only after having been advised in writing by the
Tax Accountants or the Special Limited Partner that such an
allocation is permitted by Section 704(b) of the Code, to
allocate profits, tax-exempt income, losses, non-deductible
non-capitalizable expenditures and credits (and any item
thereof) arising in later years in such manner so as to
bring the allocations of profits, tax-exempt income, losses,
non-deductible non-capitalizable expenditures and credits
(and each item thereof) to the Limited Partners as nearly as
possible to the allocations thereof otherwise contemplated
by this Agreement.
(d) New Allocations made by the General Partners under
Section 10.6(a) and Section 10.6(c) in reliance upon the
advice of the Tax Accountants shall be deemed to be made
pursuant to the fiduciary obligation of the General Partners
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 XI Management Agent
A. The General Partners shall engage the Management
Agent to manage the Apartment Complex pursuant to the
Management Agreement. The initial Management Agent shall be
Xxxxxxx Property Management, Inc. The Management Agent shall
receive a Management Fee of those amounts payable from time
to time by the Partnership to the Management Agent for
management services in accordance with a management contract
approved by the Agency and Lenders (if such approval is
required) or, when the Apartment Complex is not subject to
Agency and Lender regulation, in accordance with a
reasonable and competitive fee arrangement and in no event
in excess of 5% of gross rental income from the Apartment
Complex. From and after the Admission Date, the Partnership
shall not enter into any Management Agreement or modify or
extend any Management Agreement unless (i) the General
Partners shall have obtained the prior written consent of
the Special Limited Partner to the identity of the
Management Agent and the terms of the Management Agreement
or the modification or extension thereof and (ii) such new
Management Agreement or modified or extended Management
Agreement provides that it is terminable by the Partnership
on thirty (30) days' notice by the Partnership in the event
of any change in the identity of the General Partners.
B. No duplicate property management fees shall be paid
to any Person.
C. If (i) the Management Agent is the Managing General
Partner or an Affiliate of the Managing General Partner, and
(a) the Apartment Complex shall be subject to a substantial
building code violation which shall not have been cured
within six months after notice from the applicable
governmental agency or department or (b) the Partnership
shall not have Cash Flow of at least $14,400 during any year
after 1998, or (ii) an Event of Bankruptcy shall occur with
respect to the Management Agent, or (iii) the Management
Agent shall commit willful misconduct or gross negligence in
its conduct of its duties and obligations under the
Management Agreement or (iv) there is any change in the
identity of the Managing General Partner, or (v) (subject to
the last sentence of Article XI.C.) the Management Agent is
cited by any Agency, including the Credit Agency or any
other governmental agency, for a material violation or
alleged material violation of any applicable rules,
regulations or requirements, including, but not limited to,
non-compliance with the Minimum Set-Aside Test, the Rent
Restriction Test or any other Tax Credit-related provision,
then, upon request by the Special Limited Partner and
subject to Agency approval, if required, the Managing
General Partner must cause the Partnership to promptly
terminate the Management Agreement with the Management Agent
and appoint a new Management Agent selected by the Special
Limited Partner, which new Management Agent shall not be an
Affiliate of the Managing General Partner. Each General
Partner hereby grants to the Special Limited Partner an
irrevocable (to the extent permitted by applicable law)
power of attorney coupled with an interest to take any
action and to execute and deliver any and all documents and
instruments on behalf of such General Partner and the
Partnership as the Special Limited Partner may deem to be
necessary or appropriate in order to effectuate the
provisions of this Article XI.C. Subject to Agency approval,
if required, the Partnership shall not enter into any future
management arrangement or renew or extend any existing
management arrangement unless such arrangement is terminable
without penalty upon the occurrence of the events described
in this Article XI. Notwithstanding the foregoing, with
respect to any material violation or alleged violation of
clause (v) above, the Managing General Partner shall be
given a period of 60 days after notice of any violation to
cure the event or condition cited by any such agency prior
to any removal by the Special Limited Partner.
D. The General Partners shall have the duty to manage
the Apartment Complex during any period when there is no
Management Agent.
E. The Partnership shall pay to the General Partner
on an annual non-cumulative basis an Incentive Management
Fee for its services in achieving high operating efficiency
of the Apartment Complex (such fee to be treated as a
Partnership expense regardless of its treatment for Lender
purposes), which fee for each fiscal year shall in an amount
be equal to $3,000 and payable only from and to the extent
of Cash Flow, after payment of all other obligations of the
partnership, including the Asset Management Fee.
ARTICLE XII Books and Records, Accounting, Tax Elections,
Etc.
12.1 Books and Records
The Partnership shall maintain all books and records
which are required under the Act by any governmental agency
having jurisdiction and may maintain such other books and
records as the Managing General Partner in his discretion
deems advisable. Every Limited Partner, or its duly
authorized representatives, shall at all times have access
to the records of the Partnership at the principal office of
the Partnership at any and all reasonable times, and may
inspect and copy any of such records. A list of the names
and addresses of all of the Limited Partners shall be
maintained as part of the books and records of the
Partnership and shall be mailed to any Limited Partner upon
request. A reasonable charge for copy work may be charged by
the Partnership.
The Managing General Partner shall maintain and store
all original Qualified Tenant files in fire-proof storage
facilities in a secure location. Subject to the consent of
the Investment Limited Partner, the Managing General Partner
may utilize microfiche or other similar storage technologies
to maintain the integrity of the original Qualified Tenant
files.
12.2 Bank Accounts
The bank accounts of the Partnership shall be
maintained in the Partnership's name with such financial
institutions as the Managing General Partner shall
determine; provided, however, that no such account may be
held in a bank which is an Affiliate of any General Partner
unless the prior written consent of the Special Limited
Partner shall have been received thereto. Withdrawals shall
be made only in the regular course of Partnership business
on such signature or signatures as the Managing General
Partner may determine. All deposits (including security
deposits and other funds required to be escrowed by the
Lenders) and other funds not needed in the operation of the
business shall be deposited, if required by applicable law
and to the extent permitted by applicable Agency or Mortgage
requirements, in interestbearing accounts or invested in
United States Government obligations maturing within one
year.
12.3 Auditors
(a) The Auditors shall prepare, for execution by the
Managing General Partner, all tax returns of the
Partnership. Prior to the filing of the Partnership tax
returns, and in no event later than February 1 of each year,
the Auditors shall deliver the tax returns for such year to
the Tax Accountants for their review and comment. If a
dispute arises between the Auditors and the Tax Accountants
over the proper preparation of the tax returns and such
dispute cannot be resolved by the Auditors and the Tax
Accountants by March 1 of such year, then the Tax
Accountants shall make the final decision on whether any
changes are necessary. The Partnership shall reimburse BCCLP
for all costs and expenses paid to the Tax Accountants for
the aforementioned services.
(b) The Auditors shall audit and certify all annual
financial reports to the Partners in accordance with
generally accepted auditing standards.
(c) If the Partnership fails to fulfill any of its
obligations under Section 12.7(a)(i) and/or Section
12.7(a)(ii) within the time periods set forth therein, at
any time thereafter upon notice from the Special Limited
Partner that a change in the identity of the Auditors is
desired, the Managing General Partner, on behalf of the
Partnership, shall promptly terminate the Partnership's
engagement of the Auditors, and the written consent of the
Special Limited Partner must be received to the appointment
of replacement Auditors. If no such consent is received to
the appointment of replacement Auditors within thirty (30)
days of the notice from the Special Limited Partner to
replace the Auditors, then the Special Limited Partner shall
appoint replacement Auditors of its own choosing, the cost
of which shall be borne by the Partnership as a Partnership
expense. All Partners hereby grant to the Special Limited
Partner a special power of attorney, irrevocable to the
extent permitted by law, coupled with an interest, to so
appoint replacement Auditors and to do anything else which
in the view of the Special Limited Partner may be necessary
or appropriate to accomplish the purposes of this Section
12.3(c).
12.4 Cost Recovery and Elections
(a) With respect to all depreciable assets for which
cost recovery deductions are permitted, the Partnership
shall elect to use, so far as permitted by the provisions of
the Code, accelerated cost recovery methods. However, the
Partnership may change to another method of cost recovery if
such other method is, in the opinion of the Auditors, more
advantageous to the Investment Limited Partner and the
limited partners thereof.
(b) Subject to the provisions of Section 12.5, all
other elections required or permitted to be made by the
Partnership under the Code shall be made by the Managing
General Partner in such manner as will, in the opinion of
the Auditors, be most advantageous to the Investment Limited
Partner and the limited partners thereof.
12.5 Special Basis Adjustments
In the event of a transfer of all or any part of the
Interest of the Investment Limited Partner or a transfer of
all or any part of an interest of a partner of the
Investment Limited Partner, the Partnership shall elect,
upon the request of the Investment Limited Partner, pursuant
to Section 754 of the Code, to adjust the basis of the
Partnership property. Any adjustments made pursuant to said
Section 754 shall affect only the successor in interest to
the transferring Partner or partner thereof. Each Partner
will furnish the Partnership all information necessary to
give effect to such election.
12.6 Fiscal Year
The fiscal and tax year of the Partnership shall be the
calendar year. The books of the Partnership shall be kept on
an accrual basis.
12.7 Information to Partners
(a) The Managing General Partner shall cause to be
prepared and distributed to all Persons who were Partners at
any time during a fiscal year of the Partnership:
(i) Within forty-five (45) days after the end of
each fiscal year of the Partnership, (A) a balance sheet as
of the end of such fiscal year, a statement of income, a
statement of partners' equity, and a statement of cash
flows, each for the year then ended, all of which, except
the statement of cash flows, shall be prepared in accordance
with generally accepted accounting principles and
accompanied by a report of the Auditors containing an
opinion of the Auditors, and (B) a report of the activities
of the Partnership during the period covered by the report.
With respect to any distribution to the Investment Limited
Partner, the report called for shall separately identify
distributions from (1) Cash Flow from operations during the
period, (2) Cash Flow from operations during a prior period
which had been held as reserves, (3) proceeds from
disposition of property and investments, (4) lease payments
on net leases with builders and sellers, (5) reserves from
the gross proceeds of the Capital Contribution of the
Investment Limited Partner, (6) borrowed monies, and (7)
transactions outside of the ordinary course of business with
a description thereof.
(ii) Within thirty (30) days after the end of each
fiscal year of the Partnership, all information relating to
the Partnership and/or the Apartment Complex which is
necessary, in the view of the Tax Accountants, for the
preparation of the Limited Partners' Federal income tax
returns together with a draft of the Partnership's Federal
income tax return and, promptly following the filing thereof
with the Service, a final copy of such return as filed.
(iii) Within thirty (30) days after the end of each
quarter of a fiscal year of the Partnership, a
report containing:
(A) a balance sheet, which may be unaudited;
(B) a statement of income and expenses for the
quarter then ended, which may be unaudited, in the
form specified by BCCLP;
(C) a statement of cash flows for the quarter then
ended, which may be unaudited;
(D) a certification of the Managing General
Partner that the Apartment Complex and its tenants
are in compliance with all applicable federal,
state and local requirements and regulations;
(E) a low-income housing tax credit monitoring
form and an Occupancy/Rental Report, all in the
form specified by BCCLP;
(F) a copy of the rent roll for the Apartment
Complex; and
(G) all other information which would be pertinant
to a reasonable investor regarding the Partnership
and its activities during the quarter covered by
the report.
(iv) Within forty five (45) days after the end of
each fiscal year of the Partnership a copy of the
annual report or Form(s) 8609 to be filed with the
United States Department of the Treasury concerning
the status of the Apartment Complex as low-income
housing and any reports filed in connection with the
compliance monitoring conducted by the Credit
Agency.
(b) Upon the written request of the Investment Limited
Partner for further information with respect to any matter
covered in item (a) above, the Managing General Partner
shall furnish such information within thirty (30) days of
receipt of such request.
(c) Within ninety (90) days after the end of each
fiscal year of the Partnership, the Managing General Partner
shall provide to the Limited Partners:
(i) a certification from the Managing General
Partner that (A) all Construction and/or Permanent
Mortgage payments and taxes and insurance with
respect to the Apartment Complex are current as of
the date of the year-end report, (B) there is no
default under the Project Documents or this
Agreement, or if there is any such default, a
detailed description thereof, and (C) 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 such violation, a detailed description
thereof; and
(ii) a descriptive statement of all transactions
during the fiscal year between the Partnership and
General Partners or any Affiliate thereof, including
the nature of the transaction and the payments
involved.
(d) Within fifteen (15) days after the end of any
calendar quarter during which:
(i) there is a material default by the Partnership
under any Project Document or in the payment of any
mortgage, taxes, interest or other obligation on
secured or unsecured debt,
(ii) any reserve has been reduced or terminated by
application of funds therein for purposes materially
different from those for which such reserve was
established,
(iii) any General Partner has received any notice of
a material fact which may substantially affect
further distributions or Tax Credit allocations to
any Limited Partner, or
(iv) any Partner has pledged or collateralized its
Interest in the Partnership,
the Managing General Partner shall send the Investment
Limited Partner a detailed report of such event.
(e) After the Admission Date, the Partnership shall
send to the Investment Limited Partner, on or before the
tenth day of each month, the monthly housing credit
monitoring form in a form prescribed by BCCLP, as well as
copies of all applicable periodic reports covering the
status of project operations from the previous period, as
may be required by the Credit Agency or any other Agency.
(f) On or before ninety (90) days after the expiration
of each fiscal year of the Managing General Partner, the
Managing General Partner shall send to the Investment
Limited Partner copies of the balance sheet and income
statement of the Managing General Partner for such fiscal
year, which financial statements shall be reviewed by an
independent certified public accountant.
(g) The Managing General Partner shall cause the
Partnership to send to the Investment Limited Partner a copy
of each Construction Mortgage draw requisition and any
notification or correspondence from the Construction Lender
indicating that any such draw will not be paid as
requisitioned. Upon receipt, the Partnership shall send to
the Investment Limited Partner copies of all documents
evidencing any "carryover allocation" pursuant to Section
42(h)(1)(E) of the Code and the Form(s) 8609 evidencing the
Tax Credit allocation. Promptly after Permanent Mortgage
Commencement, the Managing General Partner shall send to
BCCLP a closing binder containing photocopies of the
fully-executed versions of all documents signed in
connection with the Permanent Mortgages. The General
Partners hereby consent to any Agency's providing BCCLP with
copies of all material communications between any such
office and the General Partners and/or the Partnership,
including, but not limited to, any notices of default. From
and after any date upon which the General Partners receive
notice from the Investment Limited Partner that the
Investment Limited Partner would like copies of the monthly
rent rolls for the Apartment Complex to be sent to BCCLP,
the General Partners shall send copies of the rent rolls to
BCCLP no later than ten (10) days after the expiration of
each month.
(h) If either (A) the Completion Date or (B) the date
upon which tenants first occupied apartment units in the
Apartment Complex shall have occurred six months or more
prior to the date upon which the Investment Limited Partner
acquired its Interest in the Partnership, then the Managing
General Partner shall cause to be prepared and delivered to
the Investment Limited Partner within sixty (60) days of the
Admission Date the following items:
(i) An unaudited statement of income of the
Partnership for the year (or such shorter period as
there may be from the date of the most recent audited
statement of income of the Partnership) ended on the
date upon which the Investment Limited Partner acquired
its Interest in the Partnership; and
(ii) An audited statement of income of the
Partnership for any fiscal year of the Partnership
ending between (A) the earlier of (1) the Completion
Date or (2) the date upon which tenants first occupied
apartment units in the Apartment Complex (after the
construction of such units) and (B) the date upon which
the Investment Limited Partner acquired its Interest in
the Partnership.
(i) Within thirty (30) days of the Completion Date, the
Managing General Partner shall prepare, or cause the Auditors to
prepare, and deliver to each Limited Partner a Tax Credit basis
worksheet for each building in the Apartment Complex, all in a
form specified by BCCLP.
(j) Prior to October 15 of each year, the Partnership shall
send to the Investment Limited Partner an estimate of the
Investment Limited Partner's share of the tax credits, profits
and losses of the Partnership for Federal income tax purposes for
the current fiscal year. Such estimate shall be prepared by the
Managing General Partner and the Auditors and shall be in the
form specified by BCCLP.
(k) On or before January 31st of each Partnership fiscal
year, the Partnership shall send to the Investment Limited
Partner copies of the complete insurance policies satisfactory to
the Investment Limited Partner so that the Investment Limited
Partner will be able to determine that insurance policies
required to be maintained on the Apartment Complex pursuant to
Section 6.6(c) are in force, accompanied by a certificate of the
Managing General Partner stating that such insurance policies
satisfy the requirements of Section 6.6(c).
(l) On or before December 1 of each Partnership fiscal
year, the Partnership shall send to the Investment Limited
Partner a proposed budget for the up-coming fiscal year setting
forth the anticipated rental income and operating expenses for
the Apartment Complex.
(m) If the Managing General Partner does not cause the
Partnership to fulfill his obligations under Section 12.7(a)(i)
and/or Section 12.7(a)(ii) within the time periods set forth
therein and after notice by the Investment Limited Partner of its
failure to fulfill his obligations, the ManagingGeneral Partners
shall pay as damages the sum of $100 per day to the Investment
Limited Partner until such obligations shall have been fulfilled.
Such damages shall be paid forthwith by the Managing General
Partner, and failure to so pay shall constitute a material
default of the General Partners hereunder. In addition, if the
Managing General Partner shall fail so to pay, the Managing
General Partner and his Affiliates shall forthwith cease to be
entitled to the Partnership Management Fee and to the payment of
any Cash Flow or Capital Transaction proceeds to which he may
otherwise be entitled hereunder. Such payments of the Partnership
Management Fee, Cash Flow and Capital Transaction proceeds shall
be restored only upon the payment of such damages in full, and
any amount of such damages not so paid shall be deducted against
payments of the Partnership Management Fee, Cash Flow and Capital
Transaction proceeds otherwise due to the Managing General
Partners or his Affiliates.
12.8 Expenses of the Partnership
All expenses of the Partnership shall be billed directly to
and paid by the Partnership.
ARTICLE XIII General Provisions
13.1 Restrictions by Reason of Section 708 of the Code
No Disposition may be made if the Interest sought to be
Disposed of, when added to the total of all other Interests
Disposed of within the period of twelve consecutive months prior
to the proposed date of the Disposition, could, in the opinion of
tax counsel to the Partnership, result in the termination of the
Partnership under Section 708 of the Code. This Section 13.1
shall have no application to any required repurchase of the
Investment Limited Partner's Interest. Any Disposition in
contravention of any of the provisions of this Section 13.1 shall
be void ab initio and ineffectual and shall not bind or be
recognized by the Partnership. Notwithstanding the foregoing
provisions of this Section 13.1, however, the Investment Limited
Partner may waive the provisions of this Section 13.1 at any time
as to a Disposition or series of Dispositions, and in the event
of such a waiver, this Section 13.1 shall have no force or effect
upon such Disposition or series of Dispositions.
13.2 Amendments to Certificate
Within one hundred twenty (120) days after the end of any
Partnership fiscal year in which the Investment Limited Partner
shall have received any distributions under Article X, the
Managing General Partner shall file an amendment to the
Certificate reducing by the amount of its allocable share of such
distribution the amount of Capital Contribution of the Investment
Limited Partner as stated in the last previous amendment to the
Certificate. However, Schedule A shall not be amended on account
of any such distribution. The Partnership shall amend the
Certificate as necessary to effect the substitution of
substituted Limited Partners.
Notwithstanding the foregoing provisions of this Section
13.2, no such amendments to the Certificate need be filed by the
Managing General Partner if the Certificate is not required to
and does not identify the Limited Partners or their Capital
Contributions in such capacity.
13.3 Notices
Any notice called for under this Agreement shall be in
writing and shall be deemed adequately given if actually
delivered or if sent by registered or certified mail, postage
prepaid, to the party for whom such notice is intended at such
party's last address of record on the Partnership books.
13.4 Word Meanings
The words such as "herein," "hereinafter," "hereof" and
"hereunder" refer to this Agreement as a whole and not merely to
a subdivision in which such words appear unless the context
otherwise requires. The singular shall include the plural, and
vice versa, and each gender (masculine, feminine and neuter)
shall include the other genders, unless the context requires
otherwise. Each reference to a "Section" or an "Article" refers
to the corresponding Section or Article of this Agreement, unless
specified otherwise. References to Treasury Regulations
(permanent or temporary) or Revenue Procedures shall include any
successor provisions.
13.5 Binding Effect
The covenants and agreements contained herein shall be
binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the respective parties
hereto.
13.6 Applicable Law
This Agreement shall be construed and enforced in accordance
with the laws of the State.
13.7 Counterparts
This Agreement may be executed in several counterparts and
all so executed shall constitute one agreement binding on all
parties hereto, notwithstanding that all the parties have not
signed the onginal or the same counterpart.
13.8 Financing Regulations
So long as any of the Project Documents are in effect, (a)
each of the provisions of this Agreement shall be subject to, and
the General Partners covenant to act in accordance with, the
Project Documents; (b) the Project Documents shall govern the
rights and obligations of the Partners, their heirs, executors,
administrators, successors and assigns to the extent expressly
provided therein; (c) upon any dissolution of the Partnership or
any transfer of the Apartment Complex, no title or right to the
possession and control of the Apartment Complex and no right to
collect the rent therefrom shall pass to any Person who is not,
or does not become, bound by the Project Documents in a manner
satisfactory to each Agency; (d) no amendment to any provision of
the Project Documents shall become effective without the prior
written consent of each Agency (if required); and (e) the affairs
of the Partnership shall be subject to Agency regulation, and no
action shall be taken which would require the consent or approval
of any Agency unless the prior consent or approval of such Agency
shall have been obtained. No new Partner shall be admitted to the
Partnership, and no Partner shall withdraw from the Partnership
or be substituted for without the consent of each Agency (if such
consent is then required). No amendment to this Agreement
relating to matters governed by Agency regulations or
requirements shall become effective until the prior written
consent of each Agency (if required) to such amendment shall have
been obtained.
Any conveyance or transfer of title to all or any portion of
the Apartment Complex required or permitted under this Agreement
shall in all respects be subject to all conditions, approvals and
other requirements of Agency rules and regulations applicable
thereto.
13.9 Separability of Provisions
Each provision of this Agreement shall be considered
separable and (a) if for any reason any provision is determined
to be invalid, such invalidity shall not impair the operation of
or affect those portions of this Agreement which are valid, and
(b) if for any reason any provision would cause the Investment
Limited Partner to be bound by the obligations of the Partnership
(other than the rules and regulations of an Agency and the
requirements of any Lender), such provision or provisions shall
be deemed void and of no effect.
13.10 Paragraph Titles
All article and section headings in this Agreement are for
convenience of reference only and are not intended to qualify the
meaning of any article or section.
13.11 Amendment Procedure
This Agreement may be amended by the General Partners only
with the Consent of the Investment Limited Partner and the prior
written consent of the Special Limited Partner.
13.12 Extraordinary Limited Partner Expenses
Any and all costs and expenses incurred by the Investment
Limited Partner and/or the Special Limited Partner in connection
with exercising rights and remedies against the Managing General
Partner with respect to this Agreement, including without
limitation, reasonable attorneys' fees, shall be paid by the
Managing General Partner on demand. All amounts due to the
Investment Limited Partner and/or the Special Limited Partner
pursuant to this provision shall bear interest from demand at a
rate of 9%.
If the General Partners breach any provision of this
Agreement, the Investment Limited Partner and/or the Special
Limited Partner may employ an attorney or attorneys to protect
its rights hereunder, and the Managing General Partner shall pay
on demand the reasonable attorneys' fees and expenses incurred by
the Investment Limited Partner and/or the Special Limited
Partner, whether or not a legal action is actually commenced
against the General Partners by reason of such breach. All
amounts due to the Investment Limited Partner and/or the Special
Limited Partner pursuant to this provision shall bear interest
from demand at a rate equal to 9%.
13.13 Time of Admission
The Investment Limited Partner shall be deemed to have been
admitted to the Partnership as of the Commencement Date for all
purposes of this Agreement, including Article X; provided,
however, that if regulations are issued under the Code or an
amendment to the Code is adopted which would require, in the
opinion of the Auditors, that the Investment Limited Partner be
deemed admitted on a date other than as of the Commencement Date,
then the Managing General Partner shall select a permitted
admission date which is most favorable to the Investment Limited
Partner.
EXECUTED this 3rd day of March, 1998.
PARTNERSHIP: EDGEWOOD APARTMENTS
PARTNERSHIP, A LOUISIANA
PARTNERSHIP IN COMMENDAM
By: X. Xxxxxx Xxxxxxx, Jr.
Its: Managing General Partner
/s/X. Xxxxxx Xxxxxxx, Jr.
By: Caleb Community
Development Corporation
Its: General Partner
By: Xxxxxxx Xxxxxxx, Xx.
Its: President
/s/Xxxxxxx Xxxxxxx, Xx.
GENERAL PARTNERS X. XXXXXX XXXXXXX, JR.
/s/X. Xxxxxx Xxxxxxx, Jr.
CALEB COMMUNITY
DEVELOPMENT CORPORATION
By: Xxxxxxx Xxxxxxx, Xx.
Its: President
/s/Xxxxxxx Xxxxxxx, Xx.
WITHDRAWING ORIGINAL T.F. MANAGEMENT, INC.
LIMITED PARTNER:
By: X. Xxxxxx Xxxxxxx, Jr.
Its: President
/s/X. Xxxxxx Xxxxxxx, Jr.
INVESTMENT LIMITED BOSTON CAPITAL TAX
PARTNER: TAX CREDIT FUND IV, L.P.
a Delaware limited partnership
By: Boston Capital Associates IV., L.P.
its general partner
By: C&M Associates d/b/a Boston
Capital Associates, its
generalpartner
By: /s/Xxxxxx Xxxx Xxx
Xxxxxx Xxxx Xxx, Attorney-In-Fact
for Xxxx X. Xxxxxxx, its general
partner
SPECIAL LIMITE BCTC 94, INC.
PARTNER:
By: /s/Xxxxxx Xxxx Xxx
Xxxxxx Xxxx Xxx, Attorney-In-Fact
for Xxxx X. Xxxxxxx, its President
CONSENT AND AGREEMENT
The undersigned hereby executes this Agreement for the sole
purpose of agreeing to the provisions of Article XI of the
foregoing Second Amended and Restated Articles of Partnership In
Commendam notwithstanding any provision of the Management
Agreement to the contrary.
Management Agent: XXXXXXX PROPERTY
MANAGEMENT, INC.
By: X. Xxxxxx Xxxxxxx, Jr.
Its: President
/s/X. Xxxxxx Xxxxxxx
EDGEWOOD APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
Schedule A
As of March 3, 1998
General Partners Capital Contribution
X. Xxxxxx Xxxxxxx, Jr. $50
000 Xxxx Xxxxxx
P.O. Drawer 799
Mansfield, LA 71052
Caleb Community Development Corporation $50
0000 Xxxxxx Xxxx
Xxxxx, XX 00000
Special Limited Partner Capital Contribution
BCTC 94, Inc. $10.00
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Investment Limited Partner
Total Agreed-to Paid-In
Capital Contribution Capital Contribution*
Boston Capital Tax $1,856,961 $1,392,721
Credit Fund IV, L.P. (Series 29)
c/o Boston Capital Partners, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
*Paid-in Capital Contribution as of the date of this
Schedule A. Future Installments of Capital Contribution are
subject to adjustment and are due at the times and subject
to the conditions set forth in the Agreement to which this
Schedule is attached.
