SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 9, 1996
Boston Capital Tax Credit Fund IV L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-26200 04-3208648
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
c/o Boston Capital Partners, Inc.,
One Boston Place, 21st Floor
Boston, Massachusetts 02108
(Address of principal executive offices)
Registrant's telephone number, including area code (617)
624-8900
N.A.
(Former Name or former address, if changed since last
report)
Item 2. Acquisition or Disposition of Assets.
On May 9, 1996, Boston Capital Tax Credit Fund IV L.P.
(the "Partnership") acquired a limited partnership interest
in New Madison Park IV Limited Partnership, a Massachusetts
limited partnership ("MP IV").
MP IV has been formed to acquire, develop,
rehabilitate, maintain and operate an existing 143-unit
apartment complex, consisting of 126 two-bedroom and 17
three-bedroom dwelling units for individuals and families of
low and moderate income, contained in fifteen, two-story
buildings, known as Madison Park IV Apartments, and located
in the Roxbury section of Boston, Suffolk County,
Massachusetts (the "Apartment Complex").
Each dwelling unit will contain a refrigerator, a
range, a smoke detector, a carbon monoxide detector, a
washer and dryer hook-up, wall-to-wall carpeting and cable
TV hook-up. Management will pay water and sewer charges.
Rehabilitation of the Apartment Complex was commenced
on or about May 9, 1996, and is expected to be substantially
completed in November, 1996. The Operating General Partner
expects the Apartment Complex to be 100% occupied by
December, 1996.
Permanent financing for the Apartment Complex is being
supplied from the proceeds of a non-recourse mortgage loan,
originally made to Madison Park IV Associates (MPA), a
Massachusetts limited partnership, which subsequently
conveyed its ownership interest in the Apartment Complex to
MP IV on May 9, 1996 (the Initial Closing), and which
mortgage loan in the original principal amount of $8,162,700
(the Mortgage Loan) was obtained from Philadelphia
National Bank (PNB), as bond trustee of the $17,990,000
Boston Housing Development Corporation Mortgage Revenue
Refunding Bonds Series 1994A (FHA Insured Mortgage Loans--
Section 8 Assisted Projects), a portion of the proceeds of
which have been used to refund the bonds previously issued
to provide funds to make the Mortgage Loan. CoreStates
Bank, as successor to PNB, subsequently assigned the
Mortgage Loan to Fleet National Bank (Fleet Bank). The
Mortgage Loan was assumed by MP IV at the Initial Closing,
and the outstanding balance of the Mortgage Loan as of the
Initial Closing was $7,833,585.06. The Mortgage Loan is
insured by HUD under Section 221(d)(4) of the National
Housing Act. The Mortgage Loan bears interest at the rate
of twelve percent (12%) per annum up to and including
January 31, 2003, and thereafter, at the rate of five and
seven hundred twenty-five one thousandths percent (5.725%)
per annum until February 1, 2024 (the Maturity Date), at
which time the Mortgage Loan shall be due and payable in
full. Monthly payments on account of interest and
principal, based on a level annuity amortization schedule
over the remaining term of the Mortgage Loan, and based upon
interest rates as aforesaid, are due and payable until the
Maturity Date of the Mortgage Loan.
Permanent financing is also being supplied from the
proceeds of an unsecured nonrecourse loan made to MPA by
Madison Park Housing Corporation with respect to the
Apartment Complex, in the original principal amount of
$648,902 (the Second Loan). The Second Loan was assumed
by MP IV at the Initial Closing and bears interest at the
rate of six and fifty-one one-hundredths percent (6.51%) per
annum. The Second Loan is to mature on April 30, 2026.
Payments on account of principal of and interest on the
Second Loan are to be made as a first priority from Net Cash
Flow. The entire outstanding balance of principal of and
interest on the Second Loan shall be due and payable upon
maturity of the Second Loan.
In addition, permanent financing was received by MP IV
in the form of a grant in the amount of $300,000 awarded to
Lower Roxbury Community Corporation, a non-profit
corporation which is an Affiliate of the Operating General
Partner (LRCC), by the Boston Bank of Commerce (the
Bank) with funds received by the Bank from the Federal
Home Loan Bank of Boston (FHLBB), pursuant to the
FHLBB's Affordable Housing Program (the FHLB Grant). The
proceeds of the FHLB Grant were assigned by LRCC to MP IV
at the Initial Closing.
The Operating General Partner of MP IV is New Madison
IV, Inc., a Massachusetts corporation. The property
management agent for the Apartment Complex is Madison Park
Village Associates (MPVA), a joint venture of Madison Park
Properties, Inc. and Maloney Properties, Inc.; for its
property management services, initially it shall receive a
management fee in an amount equal to four per cent (4%) of
the gross rent collections per year. In addition, the
Management Agent shall be entitled to receive a data
processing fee in the amount of three dollars ($3.00) per
unit per month, which will be treated as an operating
expense of MP IV. MPVA also is serving as the construction
manager with respect to the rehabilitation of the Apartment
Complex and in such capacity will be entitled to receive a
five percent (5%) construction management fee.
The Partnership acquired its interest in MP IV directly
from MP IV in consideration of its agreement to make capital
contributions to MP IV in the aggregate amount of
$3,567,542, payable in three installments as follows: (i) a
first installment of $3,210,788, which was paid upon the
Partnership's admission to MP IV and the completion of the
Initial Closing; (ii) a second installment of $267,566,
which is conditional upon the achievement of Substantial
Completion, State Designation, and receipt of the Operating
General Partner's certification of the rehabilitation and
development costs, and the eligible basis of the Apartment
Complex, together with an accountants' report thereon; and
(iii) a third installment of $89,188, which is conditional
upon receipt by the Partnership of MP IV's federal income
tax return for the year in which breakeven operations
occurred. The Partnership's total capital contribution of
$3,567,542 was determined based on MP IV achieving
$6,434,960 of Federal Housing Tax Credits over the eleven-
year period consisting of the years 1996 through 2006.
The Partnership's interest in MP IV constitutes a 99%
interest in allocations of profits, losses and tax credits
from normal operations of MP IV, a 40% interest in
distributions of cash flow from normal operations, and a 50%
interest in allocations of profits and distributions from
the sale or refinancing of the Apartment Complex. In
conjunction with the admission of the Partnership to MP IV,
BCTC 94, Inc., a Delaware corporation and a designee of the
Partnership, also was admitted to MP IV as a special limited
partner; in the event of the removal by the Partnership of
the Operating General Partner pursuant to the MP IV
Operating Partnership Agreement, the interest of BCTC 94,
Inc. would be converted to a general partnership interest in
MP IV. The Operating General Partner has made capital
contributions to MP IV in the aggregate amount of $100, and
has retained a 1% interest in allocations of profits, losses
and tax credits from normal operations of MP IV, a 60%
interest in distributions of cash from normal operations,
and a 50% interest in allocations of profits and
distributions from the sale or refinancing of the Apartment
Complex. The proceeds of the capital contributions of the
Partnership will be used by MP IV to: (i) pay a development
fee to Lower Roxbury Community Corporation (LRCC), a
Massachusetts non-profit corporation and an Affiliate of the
Operating General Partner, in its capacity as the Developer,
in the total amount of $1,144,721, and (ii) pay direct
development and rehabilitation costs of the Apartment
Complex in the amount of $2,422,821.
Boston Capital Partners, Inc. will receive an annual
Asset Management Fee in the amount of $7,500, commencing in
1997, from the Cash Flow of MP IV, for its services in
connection with MP IV's accounting matters relating to the
Partnership and the preparation of tax returns and reports
for the Partnership. The Operating General Partner will
receive a partnership management fee from the Net Cash Flow
of MP IV in the annual amount of $7,500, commencing in 1997.
The Operating General Partner has agreed to provide all
funds necessary to pay any excess development costs which
may arise in connection with the development and
rehabilitation of the Apartment Complex and the completion
of the Initial Closing and the Final Closing. The Operating
General Partner also has agreed to loan to MP IV such
amounts as shall be necessary to pay all operating deficits
of MP IV which may arise during the period from and after
the Final Closing. (The Final Closing as used herein
shall refer to the occurrence of all of the following: (i)
the occurrence of completion of the rehabilitation of the
Apartment Complex and receipt of permanent certificates of
occupancy from the applicable governmental jurisdiction or
authority for one hundred per cent (100%) of the dwelling
units in the Apartment Complex (Substantial Completion);
(ii) approval by Fleet Bank and HUD, as and to the extent
required, of MP IV's certification of actual costs as to the
development and rehabilitation of the Apartment Complex;
(iii) closing of the Mortgage Loan, the Second Loan and the
FHLB Grant; and (iv) payment or provision for payment, of
all acquisition, development and rehabilitation costs of the
Apartment Complex including all excess development costs).
Commencing January 1, 1996, MP IV will establish
and fund from its operating income a Reserve Fund for
Replacements as to the Apartment Complex as required by HUD
in the approximate amount of $3,867 per month. Additional
funds shall be deposited into the Reserve Fund for
Replacements on an annual basis in amounts equal to any and
all amounts received by the Operating General Partner as
distributions of Net Cash Flow with respect to all fiscal
years of MP IV through the fiscal year ending December 31,
2002. Funds in the Reserve Fund for Replacements are
intended to be employed for the replacement as needed of
fixtures, equipment, structural elements and other
components of the Apartment Complex of a capital nature.
All interest earnings on funds on deposit in the Reserve
Fund for Replacements shall be retained therein for the
aforesaid purposes, and all withdrawals shall be made only
with the consent or upon the direction of Fleet Bank.
An operating reserve account shall be established and
funded by LRCC at or prior to Substantial Completion in the
amount of $350,000 (the Operating Reserve Account). The
Operating Reserve Account shall be established from the
proceeds of the second and third installments of capital
contributions made by the Partnership and shall be funded by
two deposits, of which $267,566 shall be deposited upon the
receipt of the Partnership's second installment of capital
contributions, and $82,434 shall be deposited upon the
receipt of the Partnership's third installment of capital
contributions. Such funds and all interest earnings on such
funds shall be employed solely for the payment of operating
deficits. Withdrawals from the Operating Reserve Account
shall be made only with the consent or upon the direction of
BCTC 94, Inc. and Fleet Bank. All interest earnings on
funds on deposit in the Operating Reserve Account shall be
used to subsidize rents at Madison Park Village, and to
support the charitable activities of LRCC and its affiliated
non-profit entities.
Pursuant to the MP IV Operating Partnership Agreement,
LRCC has a certain right of first refusal to acquire the
Apartment Complex from the MP IV Operating Partnership
subsequent to the expiration of the Low-Income Housing Tax
Credit compliance period. Such right of first refusal shall
be prepared by or on behalf of the Operating General Partner
and shall: (i) comply with the provisions of Section
42(i)(7) of the Code, and (ii) be subject to the approval of
BCTC 94, Inc.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
(i) There are no meaningful financial statements
for MP IV for any relevant time period, since there have not
yet been any substantial operations subsequent to the
rehabilitation.
(b) Pro forma financial information.
(i) No pro forma statements of operations of
MP IV have been prepared since there are no meaningful
historical numbers which are affected by the acquisition.
(c) Exhibits.
(1) (a)
Form of proposed Dealer-Manager Agreement
between Boston Capital Services, Inc.
and the Registrant (including, as an
exhibit thereto, the form of
Soliciting Dealer Agreement).
(2) (a) Amended and Restated Agreement and
Certificate of
Limited Partnership of MP IV.
(b) Certification and Agreement for MP IV.
(4) (a)
Agreement of Limited
Partnership of Boston
Capital Tax Credit Fund IV L.P.
(16) None
(17) None
(21) None
(24) None
(25) None
(28) None
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
BOSTON CAPITAL TAX CREDIT
FUND IV L.P.
By: Boston Capital
Associates IV L.P.,
General Partner
By: Boston Capital
Associates,
General Partner
By: /s/ John P.
Manning
Partner
Date: August __, 1996
Exhibit (2)(a)
Exhibit (2)(b)
NEW MADISON PARK IV
LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT AND
CERTIFICATE OF LIMITED PARTNERSHIP
As of May 1, 1996
NEW MADISON PARK IV
LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT AND
CERTIFICATE OF LIMITED PARTNERSHIP
This Amended and Restated Agreement and Certificate of
Limited Partnership is made and entered into as of the 1st day of
May, 1996 by and among the undersigned parties.
WHEREAS, as of November 2, 1995, New Madison IV, Inc., a
Massachusetts corporation (Madison IV), as the General Partner,
and Danette Jones, an individual resident of Massachusetts
(Jones), as the Initial Limited Partner, executed an Agreement
of Limited Partnership (the Partnership Agreement) of New
Madison Park IV Limited Partnership (the Partnership); and
WHEREAS, as of November 17, 1995, Madison IV, as the General
Partner executed, and subsequently filed in the Office of the
Secretary of State of Massachusetts on December 1, 1995, a
Certificate of Limited Partnership for the formation of the
Partnership; and
WHEREAS, the Partnership has been formed to acquire an
existing structure located in Boston, Massachusetts, and to
develop, rehabilitate, own, maintain and operate a 143-unit
townhouse complex intended for rental to individuals of low and
moderate income, known as Madison Park IV Apartments (the
Apartment Complex); and
WHEREAS, on December 28, 1995, the Partnership acquired an
ownership interest in the Land and existing structure from
Madison Park IV Associates, a Massachusetts limited partnership,
by quit claim deed, which deed was subsequently recorded in the
Suffolk County, Massachusetts, Registry District of the Land
Court, on December 28, 1995; and
WHEREAS, the parties hereto now desire to enter into this
Amended and Restated Agreement and Certificate of Limited
Partnership to (i) continue the Partnership; (ii) admit Boston
Capital Tax Credit Fund IV L.P. (BCTC IV), a Delaware limited
partnership, to the Partnership as a Limited Partner; (iii)
withdraw the Initial Limited Partner from the Partnership; (iv)
admit BCTC 94, Inc., a Delaware corporation (BCTC 94), to the
Partnership as the Special Limited Partner; (v) recognize Lower
Roxbury Community Corporation (LRCC) as the guarantor (the
Guarantor) of the obligations and duties of the General Partner
as set forth in this Partnership Agreement; (vi) reassign
Interests in the Partnership; and (vii) set forth all of the
provisions governing the Partnership.
NOW, THEREFORE, in consideration of the foregoing, of mutual
promises of the parties hereto and of other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree to continue the
Partnership pursuant to the Act, as set forth in this Amended and
Restated Agreement and Certificate of Limited Partnership, which
reads in its entirety as follows:
TABLE OF CONTENTS
Page
ARTICLE I CONTINUATION OF PARTNERSHIP 1
1.01. Continuation 1
1.02. Name 1
1.03. Principal Executive Offices;
Agent for Service of Process 1
1.04. Term 1
1.05. Recording of Certificate 1
ARTICLE II DEFINED TERMS 2
ARTICLE III PURPOSE AND BUSINESS OF THE PARTNERSHIP 13
3.01. Purpose of the Partnership 13
3.02. Authority of the Partnership 13
3.03. HUD Provisions 14
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS;
DUTIES AND OBLIGATIONS 16
4.01. Representations, Warranties & Covenants Relating
to the Apartment Complex and the Partnership 16
4.02. Duties and Obligations Relating to the
Apartment Complex and the Partnership 19
ARTICLE V PARTNERS, PARTNERSHIP INTERESTS AND
OBLIGATIONS OF THE PARTNERSHIP 21
5.01. Partners, Capital Contributions
and Partnership Interests 21
5.02. Return of Capital Contribution 24
5.03. Withholding of Capital Contributions Upon Default 24
5.04. Legal Opinions 25
5.05. Repurchase Obligation 26
5.06. Asset Management Fee 27
ARTICLE VI CHANGES IN PARTNERS 28
6.01. Withdrawal of a General Partner 28
6.02. Admission of a Successor or Additional
General Partners 28
6.03. Effect of Bankruptcy, Death, Withdrawal, Dissolu-
tion or Incompetence of a General Partner 29
ARTICLE VII ASSIGNMENT TO THE PARTNERSHIP 31
ARTICLE VIII RIGHTS, OBLIGATIONS AND POWERS OF THE
GENERAL PARTNER 32
8.01. Management of the Partnership 32
8.02. Limitations Upon the Authority of the
General Partner 33
8.03. Management Purposes 34
8.04. Delegation of Authority 34
8.05. General Partner or Affiliates Dealing wit4
Partnership 34
8.06. Other Activities 35
8.07. Liability for Acts and Omissions 35
8.08. [Intentionally Omitted] 35
8.09. Rehabilitation of the Apartment Complex;
Rehabilitation Cost Overruns, Operating Deficits 35
8.10. Development Fee 36
8.11. Incentive Partnership Management Fee 37
8.12. Withholding of Fee Payments 37
8.13. Removal of the General Partner 37
8.14. Selection of Management Agent 40
8.15. Removal of the Management Agent 40
8.16. Replacement of the Management Agent 40
8.17. Loans to the Partnership 41
8.18. Reserve Funds and Operating Assurances 41
8.19. Option to Purchase; Right of First Refusal 42
8.20. Operating and Capital Budgets 43
ARTICLE IX TRANSFERS OF, AND RESTRICTIONS ON
TRANSFERS OF INTERESTS OF LIMITED PARTNERS 44
9.01. Acquisition for Investment 44
9.02. Restrictions on Transfer of Limited Partners'
Interests 44
9.03. Admission of Substitute Limited Partners 44
9.04. Rights of Assignee of Partnership Interest 46
ARTICLE X RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 47
10.01. Management of the Partnership 47
10.02. Limitation on Liability of Limited Partners 47
10.03. Other Activities 47
ARTICLE XI PROFITS, LOSSES AND DISTRIBUTIONS 48
11.01. Allocation of Profits, Losses, Credits and
and Cash Distributions 48
11.02. Determination of Profits, Losses and Credits 49
11.03. Allocation of Gains and Losses 49
11.04. Distribution of Proceeds from Sale and
Liquidation of Partnership Property 50
11.05. Capital Accounts 51
11.06. Authority of General Partner to Vary Allocations
to Preserve and Protect Partners' Interest 52
11.07. Designation of Tax Matters Partner 53
11.08. Authority of Tax Matters Partner 53
11.09. Expenses of Tax Matters Partner 54
11.10. Minimum Gain Provisions 54
ARTICLE XII SALE, DISSOLUTION AND LIQUIDATION 56
12.01. Dissolution of the Partnership 56
12.02. Winding Up and Distribution 56
ARTICLE XIII BOOKS AND RECORDS, ACCOUNTING
58
TAX ELECTIONS, ETC.
13.01. Books and Records 58
13.02. Bank Accounts 58
13.03. Accountants 58
13.04. Reports to Partners 59
13.05. Section 754 Elections 62
13.06. Fiscal Year and Accounting Method 62
ARTICLE XIV AMENDMENTS 63
14.01. Proposal and Adoption of Amendments 63
ARTICLE XV CONSENTS, VOTING AND MEETINGS 64
15.01. Method of Giving Consent 64
15.02. Submissions to Limited Partners 64
15.03. Meetings; Submissions of Matters for Voting 64
ARTICLE XVI GENERAL PROVISIONS 65
16.01. Burden and Benefit 65
16.02. Applicable Law 65
16.03. Counterparts 65
16.04. Separability of Provisions 65
16.05. Entire Agreement 65
16.06. Liability of the Investment Partnership 65
16.07. Environmental Protection 66
16.08. Notices 67
16.09. Continuing Guarantee of Financial Obligations
of the General Partner by the Guarantor 67
ARTICLE I
CONTINUATION OF PARTNERSHIP
1.01. Continuation. The undersigned hereby continue the
Partnership as a limited partnership under the Act.
1.02. Name. The name of the Partnership is New Madison
Park IV Limited Partnership.
1.03. Principal Executive Offices; Agent for Service of
Process. The principal executive and record office of the
Partnership shall be c/o New Madison IV, Inc., 122 DeWitt Drive,
Roxbury, Massachusetts 02120. The Partnership may change the
location of its principal executive office to such other place or
places as may hereafter be determined by the General Partner.
The General Partner shall promptly notify all other Partners of
any change in the principal executive office. The Partnership
may maintain such other offices at such other place or places as
the General Partner may from time to time deem advisable.
The name of the registered agent for service of process and
the address of the Registered Office of the Partnership in
Massachusetts is Danette Jones, 122 DeWitt Drive, Roxbury,
Massachusetts 02120.
1.04. Term. The term of the Partnership commenced as of
December 1, 1995, and shall continue until December 31, 2035,
unless the Partnership is sooner dissolved in accordance with the
provisions of this Agreement.
1.05. Recording of Certificate. Upon the execution of
this Amended and Restated Agreement and Certificate of Limited
Partnership by the parties hereto, the General Partner shall take
all actions necessary to assure the prompt recording hereof as
required by the Act, including filing with the Secretary of State
of the Commonwealth of Massachusetts. All fees for filing shall
be paid out of the Partnership's assets. The General Partner
shall take all other necessary action required by law to perfect
and maintain the Partnership as a limited partnership under the
laws of the State, and shall register the Partnership under any
assumed or fictitious name statute or similar law in force and
effect in the State.
ARTICLE II
DEFINED TERMS
In addition to the abbreviations of the parties set forth in
the preamble to this Agreement, the following defined terms used
in this Agreement shall have the meanings specified below:
Accountants means Ziner & Company, of Boston,
Massachusetts, or such other firm of independent certified public
accountants as may be engaged by the General Partner, with the
Consent of BCTC 94, to prepare the Partnership income tax
returns.
Act means the Uniform Limited Partnership Act of the Com-
monwealth of Massachusetts, as amended from time to time during
the term of the Partnership.
"Actual Credit" means as of any point in time, the total
amount of the Tax Credits actually allocated by the Partnership
to the Investment Partnership, representing ninety-nine per cent
(99%) of the Tax Credits actually received by the Partnership, as
shown on the applicable tax return of the Partnership.
"Admission Date" means the date upon which the Investment
Partnership is admitted to the Partnership.
"Affiliate" means any Person that directly or indirectly,
through one or more intermediaries, controls or is controlled by
or is under common control with a General Partner, or with
another designated Person, as the context may require.
"Agency" means EOCD, in its capacity as the designated
agency of the Commonwealth of Massachusetts to allocate
Low-Income Housing Tax Credits, acting through any authorized
representative.
"Agreement" means this Amended and Restated Agreement and
Certificate of Limited Partnership, as amended from time to time.
"Apartment Complex" means the Land owned by the Partnership
in Boston, Massachusetts, and the 143-unit townhouse development
and other improvements located thereon, owned and to be
rehabilitated and operated thereon by the Partnership.
"Asset Management Fee" means the fee payable by the Partner-
ship to Boston Capital, or an Affiliate thereof, pursuant to Sec-
tion 5.06.
"Bankruptcy" or "Bankrupt" as to any Person means the filing
of a petition for relief as to any such Person as debtor or bank-
rupt under the Bankruptcy Act of 1898 or the Bankruptcy Code of
1978 or like provision of law (except if such petition is con-
tested by such Person and has been dismissed within 60 days);
insolvency of such Person as finally determined by a court pro-
ceeding; filing by such Person of a petition or application to
accomplish the same or for the appointment of a receiver or a
trustee for such Person or a substantial part of his assets; com-
mencement of any proceedings relating to such Person under any
other reorganization, arrangement, insolvency, adjustment of debt
or liquidation law of any jurisdiction, whether now in existence
or hereinafter in effect, either by such Person or by another,
provided that if such proceeding is commenced by another, such
Person indicates his approval of such proceeding, consents
thereto or acquiesces therein, or such proceeding is contested by
such Person and has not been finally dismissed within 60 days.
"BCTC IV" means Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership, which is a Limited Partner of the
Partnership.
"BCTC 94" means BCTC 94, Inc., a Delaware corporation, which
is the Special Limited Partner of the Partnership.
"Bonds" means the $17,990,000 Boston Housing Development
Corporation Mortgage Revenue Refunding Bonds Series 1994A (FHA
Insured Mortgage Loans - Section 8 Assisted Projects), a portion
of the proceeds of which have been used to refund the bonds
previously issued to provide funds to make the Mortgage Loan.
"Boston Capital" means Boston Capital Partners, Inc., a
Massachusetts corporation.
"Breakeven Operations" means the date upon which the
aggregate of the rental and miscellaneous income from the normal
operation of the Apartment Complex and payments received by the
Partnership pursuant to the HAP Contract, received on a cash
basis for a period of six (6) consecutive calendar months after
the Final Closing, equals or exceeds all accrued operational
costs of the Apartment Complex, including but not limited to
taxes, assessments, Reserve Fund for Replacements deposits,
scheduled and required debt service payments, the Asset
Management Fee, and a ratable portion of the annual amount (as
reasonably estimated by the General Partner) of those seasonal
and/or periodic expenses (such as utilities, maintenance expenses
and real estate taxes) which might reasonably be expected to be
incurred on an unequal basis during a full annual period of
operation, for such period of six (6) consecutive calendar
months, with each such calendar month taken individually.
"Capital Account" means the capital account of a Partner as
described in Section 11.05.
"Capital Contribution" means the total amount of money or
other property contributed or agreed to be contributed, as the
context requires, to the Partnership by each Partner pursuant to
the terms of this Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution
made by a predecessor holder of the Interest of such Partner.
"Capital Transaction" means any transaction the proceeds of
which are not includable in determining Cash Flow, including
without limitation the disposition, whether by partial sale
(except when such sale proceeds are to be used pursuant to a plan
or budget approved by all of the Partners), casualty (where the
proceeds are not to be used for reconstruction), condemnation,
refinancing or similar event of any part of the Apartment
Complex, prior to the sale of the Apartment Complex, where the
gross proceeds from such sale or event exceed $50,000.
"Cash Flow" means, with respect to any year or other
applicable period, (a) all Revenues received by the Partnership
during such period, plus (b) any amounts which the General
Partner, with the Consent of BCTC 94, and subject to the approval
of the Lender, releases from the Reserve Fund for Replacements as
being no longer necessary to hold as part of the Reserve Fund for
Replacements, less (i) operating expenses of the Partnership paid
from Revenues during the applicable period, (ii) all cash
payments made from Revenues during such period with respect to
the Mortgage Loan, and (iii) all amounts from Revenues, if any,
added to the Reserve Fund for Replacements, as may be required
from time to time by the Lender pursuant to the Project
Documents, during such period. In no event will deductions in
determining Cash Flow pursuant to clauses (i) and (ii) above
include payments made on account of amounts due on any
Subordinated Loans, the Asset Management Fee and/or the Incentive
Partnership Management Fee.
Cash Flow shall be determined separately for each fiscal
year and shall not be cumulative. Wherever there is a reference
to the distribution of Cash Flow pursuant to the provisions of
this Agreement, Cash Flow shall be deemed to be limited to
Surplus Cash available for distribution.
"Certificate" means this Agreement or any certificate of
limited partnership or any other instrument or document which is
required under the laws of the State to be signed and sworn to by
the Partners of the Partnership and filed in the appropriate
public offices within the State to perfect or maintain the
Partnership as a limited partnership under the laws of the State,
to effect the admission, withdrawal or substitution of any
Partner of the Partnership, or to protect the limited liability
of the Limited Partners as limited partners under the laws of the
State.
"Chapter 121A Regulatory Agreement" means that certain
agreement among the Partnership, the Seller and the Boston
Redevelopment Authority, dated as of November 16, 1995.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any corresponding provision or provisions
of succeeding law.
"Consent" means the prior written consent or approval of
BCTC 94 and/or the Investment Partnership and/or any other
Partner, as the context may require, to do the act or thing for
which the consent is solicited.
"Counsel" or "Counsel for the Partnership" shall mean Hale
and Dorr, of Boston, Massachusetts, or such other attorney or law
firm upon which BCTC 94 and the General Partner shall agree;
provided, however, that if any section of this Agreement either
(i) designates particular counsel for the purpose described
therein, or (ii) provides that counsel for the purpose described
therein shall be chosen by another method or by another Person,
then such designation or provision shall prevail over this
general definition.
"Declaration of Covenants" means the Tax Credit Regulatory
Agreement and Declaration of Restrictive Covenants to be entered
into between the Agency and the Partnership at or prior to the
Final Closing, setting forth certain terms and conditions
pursuant to which the Apartment Complex is to be operated.
"Developer" means LRCC, in its capacity as the developer of
the Apartment Complex.
"Development Fee" means the fee payable by the Partnership
to the Developer pursuant to Section 8.10 of this Agreement.
"Development Sources" means the aggregate of: (a) the
proceeds of the Mortgage Loan, the Second Loan and the FHLB
Grant, and (b) the Capital Contributions of the Investment
Partnership to the Partnership.
"EOCD" means the Executive Office of Communities and
Development of the Commonwealth of Massachusetts.
"Excess Development Costs" means all funds in excess of the
Development Sources which are required to (i) complete
rehabilitation of the Apartment Complex, including paying any
cost overruns and the cost of any change orders which have been
approved by the Lender and BCTC 94, as and to the extent
required, and which are not funded from proceeds of the
Development Sources; (ii) achieve Substantial Completion, (iii)
achieve Initial Closing and Final Closing, and satisfy any escrow
deposit requirements which are conditions to the Final Closing,
including, without limitation, any amounts necessary for local
taxes, utilities, insurance premiums and other amounts which are
required (provided, however, that if any such deposits are made
by the General Partner, and the funds, or any portion thereof,
subsequently are released from such deposit, the funds so
released shall not constitute Partnership property and shall be
paid to the General Partner); (iv) pay any applicable loan
assessment fees, discounts or other costs or expenses incurred by
the Partnership as a result of the occurrence of the Initial
Closing and/or the Final Closing; (v) pay any Operating Deficits
incurred by the Partnership prior to the Final Closing; and (vi)
pay the Development Fee as provided in Section 8.10 of this
Agreement.
"FHLB Grant" means the grant in the amount of $300,000
awarded to LRCC, with respect to the Apartment Complex, by the
Boston Bank of Commerce (the "Bank"), with funds received by the
Bank from the Federal Home Loan Bank of Boston ("FHLBB"),
pursuant to the FHLBB's Affordable Housing Program; the FHLB
Grant is to be assigned by LRCC to the Partnership at or prior to
the Initial Closing.
"FHLB Grant Agreement" means the Agreement Regarding
Affordable Housing Program Subsidy to be entered into among
FHLBB, the Bank and LRCC with respect to the FHLB Grant, which
will set forth certain terms and conditions under which the
Apartment Complex is to be operated.
"Final Closing" means the occurrence of all of the
following: (i) Substantial Completion; (ii) approval by the
Lender and HUD, as and to the extent required, of the
Partnership's certification of actual costs as to the development
and rehabilitation of the Apartment Complex; (iii) closing of the
Mortgage Loan, the Second Loan, and the FHLB Grant; and (iv)
payment, or provision for payment, of all acquisition,
development and rehabilitation costs of the Apartment Complex,
including all Excess Development Costs.
"Fleet Bank" means Fleet Bank of Massachusetts, N.A.
"40-60 Set-Aside Test" means the Minimum Set-Aside Test
whereby at least 40% of the units in the Apartment Complex must
be occupied by individuals with incomes of 60% or less of area
median income, as adjusted for family size.
"General Partner" means Madison IV, and any other Person
admitted as a general partner pursuant to this Agreement, and
their respective successors pursuant to this Agreement, including
particularly the provisions of Sections 6.03 and 8.13.
"Gross Receipts" means: (i) receipts derived from the
operation of the Apartment Complex, (ii) resident fees,
(iii) payments from third parties, (iv) payments for occupancy or
other services, (v) payment made in consideration of the
cancellation of leases, or (vi) the application of security
deposits upon monetary default.
"Guarantor" means LRCC, in its capacity as Guarantor
pursuant to this Agreement.
"HAP Contract" means the Section 8 Housing Assistance
Payments Contract entered into between the Partnership and HUD
providing rental assistance payments to all units in the
Apartment Complex until the year 2003.
"HUD" means the United States Department of Housing and
Urban Development, acting through any authorized representative.
"Incentive Partnership Management Fee" means the fee payable
by the Partnership to the General Partner pursuant to Section
8.11 of this Agreement.
"Initial Closing" means the date upon which: (i) the
Partnership acquires the entire ownership of the Land and the
improvements thereon from the Seller; (ii) the Partnership
assumes and agrees to perform the Seller's obligations with
respect to the Mortgage Loan and the Second Loan; (iii) HUD
approves the Transfer of Physical Assets in connection with this
transaction; and (iv) the FHLB Grant is closed and the proceeds
of the FHLB Grant are received by LRCC and are contributed to the
General Partner and to the Partnership; the Initial Closing is
expected to occur on or about May 10, 1996.
"Initial 100% Occupancy Date" means the first date upon
which 100% of the apartment units in the Apartment Complex have
been leased to and have been occupied by, qualified tenants under
executed Lender-approved leases, if any such approval is
applicable.
"Installment" means an Installment of the Investment
Partnership's Capital Contributions paid or payable to the
Partnership pursuant to Section 5.01.
"Interest" or "Partnership Interest" means the ownership
interest of a Partner in the Partnership at any particular time,
including the right of such Partner to any and all benefits to
which such Partner may be entitled as provided in this Agreement
and in the Act, together with the obligations of such Partner to
comply with all the terms and provisions of this Agreement and of
said Act. Such Interest of each Partner shall, except as other-
wise specifically provided herein, be that percentage of the
aggregate of such benefit or obligation specified by Section 5.01
as such Partner's Percentage Interest.
"Invested Amount" means, as to the Investment Partnership,
an amount equal to the Investment Partnership's paid-in Capital
Contributions, divided by 73%.
"Investment Partnership" means BCTC IV.
"Land" means the tract of land upon which the Apartment
Complex is located.
"Lender" means Fleet Bank, in its capacity as trustee with
respect to the Bonds.
"Limited Partner(s)" means the Investment Partnership and/or
BCTC 94, or any other Limited Partner in such Person's capacity
as a limited partner of the Partnership.
"Liquidator" means the General Partner or, if there is none
at the time in question, such other Person who may be appointed
in accordance with applicable law and who shall be responsible
for taking all action necessary or appropriate to wind up the
affairs of, and distribute the assets of, the Partnership upon
its dissolution.
"Low-Income Housing Tax Credit" means the low-income housing
tax credit allowed for low-income housing projects pursuant to
Section 42 of the Code.
"LRCC" means Lower Roxbury Community Corporation, a
Massachusetts non-profit corporation, which is an Affiliate of
the General Partner.
"Madison IV" means New Madison IV, Inc., a Massachusetts
corporation.
"Management Agent" means the management and rental agent for
the Apartment Complex.
"Management Agreement" means the agreement between the Part-
nership and the Management Agent providing for the marketing and
management of the Apartment Complex by the Management Agent.
"Minimum Set-Aside Test" means the set-aside test selected
by the Partnership pursuant to Section 42(g) of the Code with
respect to the percentage of units in the Apartment Complex to be
occupied by tenants with incomes equal to no more than a certain
percentage of area median income. The Partnership has selected
or will select the 40-60 Set-Aside Test as the Minimum Set-Aside
Test.
"Mortgage" means the mortgage, together with all amendments
thereto, given by the Seller in favor of the Lender as maker of
the Mortgage Loan, which constitutes a first lien on the
Apartment Complex and which secures the Mortgage Loan.
"Mortgage Loan" means the non-recourse permanent mortgage
loan made by PNB to the Seller with respect to the Apartment
Complex in the original principal amount of $8,162,700, and
subsequently assigned by PNB to Fleet Bank by the Assignment of
Madison Park Note and Mortgage and Other Documents, and as
evidenced by an endorsement to the promissory note, each dated
January 27, 1994, executed in connection with the refunding by
the Bonds of the bonds which had provided funds to make the
Mortgage Loan; the Mortgage Loan will be assumed by the
Partnership at the Initial Closing; the outstanding balance of
the Mortgage Loan as of the Initial Closing is expected to be
$7,711,122. The Mortgage Loan: (i) is evidenced by (A) a
promissory note given by the Seller to PNB, and subsequently to
Fleet Bank by assignment, and (B) an Allonge to Mortgage Note of
the Seller, dated December 21, 1981; (ii) is insured by HUD under
Section 221(d)(4) of the National Housing Act; and (iv) is
secured by the Mortgage and other related security documents and
financing statements. The Mortgage Loan bears interest at the
rate of 12% per annum up to and including January 31, 2003, and
thereafter, at the rate of 5.725% per annum until February 1,
2024 at which time the Mortgage Loan shall be due and payable in
full. Monthly payments on account of interest and principal,
based upon a level annuity amortization schedule over the
remaining term of the Mortgage Loan, and based upon interest
rates as aforesaid, are due and payable until the maturity date
of the Mortgage Loan.
"MPHC" means Madison Park Housing Corporation, a
Massachusetts corporation, and an Affiliate of the General
Partner.
"Net Cash Flow" means, with respect to any year or other
applicable period, Cash Flow with respect to such period, less
payments from first available Cash Flow of the Asset Management
Fee.
"Notice" means a writing containing the information required
by this Agreement to be communicated to a Partner and sent by
registered or certified mail, postage prepaid, return receipt
requested, to such Partner at the last known address of such
Partner, the date of registry thereof or the date of the
certification receipt therefor being deemed the date of such
Notice; provided, however, that any written communication
containing such information sent to such Partner actually
received by such Partner shall constitute Notice for all purposes
of this agreement.
"Operating Deficit" means the amount by which the aggregate
of the income of the Partnership from rental payments made by
tenants of the Apartment Complex and all other income of the
Partnership (other than proceeds of any loans to the Partnership
and investment earnings on funds on deposit in the Reserve Fund
for Replacements and other such reserve or escrow funds or
accounts), for a particular period of time, is exceeded by the
sum of: (i) all the operating expenses; all debt service payments
due and payable with respect to the Mortgage Loan, and the Second
Loan, as applicable (excluding any permitted accruals as to any
of such loans); operating and maintenance expenses; deposits into
the Reserve Fund for Replacements and any other reserves required
by the Lender and/or HUD; any Lender and/or Second Lender fee
payments; and all other Partnership obligations or expenditures
as and to the extent provided for in an approved budget pursuant
to Section 8.20 of this Agreement, excluding payments for
rehabilitation of the Apartment Complex and fees and other
expenses and obligations of the Partnership to be paid from the
Capital Contributions of the Investment Partnership to the
Partnership pursuant to this Agreement; and (ii) commencing in
1997, the Asset Management Fee.
"Operating Reserve Account" means the account to be
established pursuant to the requirements of the Lender and the
Investment Partnership, and described in Section 8.18(b) of this
Agreement.
"Partner" means any General Partner and any Limited Partner.
"Partnership" means New Madison Park IV Limited Partnership.
"Partnership Agreement" means this Amended and Restated
Agreement and Certificate of Limited Partnership, as amended from
time to time.
"Percentage Interest" means the percentage Interest of each
Partner as set forth in Section 5.01.
"Person" means any individual, partnership, corporation,
trust or other entity.
"PNB" means Philadelphia National Bank, as trustee of the
bonds originally issued to provide funds to make the Mortgage
Loan and as succeeded by CoreStates in such capacity.
"Project Documents" means and includes the Mortgage, the
Declaration of Covenants, the Regulatory Agreement, the FHLB
Grant Agreement, the Management Agreement, the Chapter 121A
Regulatory Agreement, and all other documents and instruments
delivered to (or required by) the Lender, the Second Lender, or
the Agency, and all other documents relating to the Apartment
Complex and by which the Partnership is bound, as amended or
supplemented from time to time.
"Projected Credit" means Low-Income Housing Tax Credits in
the amount of $220,918 for 1996, $637,061 per year for each of
the years 1997 through 2005, and $416,143 for 2006, which the
General Partner has projected to be the total amount of the Tax
Credits which will be allocated to the Investment Partnership by
the Partnership, constituting ninety-nine per cent (99%) of the
aggregate amount of Tax Credits which are projected to be
available to the Partnership; provided, however, that if the
Actual Credit for 1996 is greater than (or less than) $220,918,
the Projected Credit for the year 2006 shall be reduced
(increased) by an amount equal to the amount by which the Actual
Credit for 1996 exceeds (is less than) $220,918.
"Regulatory Agreement" means the regulatory agreement
entered into between the Seller and HUD, and assumed by the
Partnership pursuant to an Assumption Agreement, with respect to
the Mortgage Loan, which sets forth certain terms and conditions
under which the Apartment Complex is to be operated.
"Rent Restriction Test" means the test pursuant to Section
42 of the Code whereby the gross rent charged to tenants of the
low-income units in the Apartment Complex cannot exceed 30% of
the qualifying income levels of those units.
"Reserve Fund for Replacements" means the reserve fund for
replacements with respect to the Apartment Complex as required by
HUD, and as is described in Section 8.18(a) of this Agreement.
"Revenues" means all cash receipts of the Partnership during
any period except for Capital Contributions, proceeds from the
liquidation, sale or refinancing of Partnership property or of a
Capital Transaction, or the proceeds of any loan to the Partner-
ship.
"Second Lender" means MPHC as maker of the Second Loan.
"Second Loan" means the unsecured nonrecourse loan made to
the Seller by the Second Lender with respect to the Apartment
Complex, in the original principal amount of $648,902; the Second
Loan will be assumed by the Partnership at the Initial Closing;
the outstanding balance of the Second Loan as of the Initial
Closing is expected to be $648,902. The Second Loan (i) is
evidenced by a certain promissory note dated as of May 9, 1996;
(ii) bears interest at six and fifty-one one-hundredths per cent
(6.51%) per annum; and (iii) is to mature on April 30, 2026.
Payments on account of principal of and interest on the Second
Loan are to be made as a first priority from Net Cash Flow
pursuant to Section 11.01 herein. The entire outstanding balance
of principal of and interest on the Second Loan shall be due and
payable upon maturity of the Second Loan.
"Seller" means Madison Park IV Associates, a Massachusetts
limited partnership, which owns an interest in the Apartment
Complex, which interest will be conveyed to the Partnership at
the Initial Closing.
"State" means the Commonwealth of Massachusetts.
"State Designation" means, with respect to the Apartment
Complex, the allocation by the Agency of Low-Income Housing Tax
Credits, as evidenced by the receipt by the Partnership of an IRS
Form 8609 executed by the Agency as to each of the buildings
constituting the Apartment Complex.
"Subordinated Loan" means any loan made by the General Part-
ner to the Partnership pursuant to Section 8.16.
"Substantial Completion" means the date upon which all of
the following have occurred: (i) the rehabilitation of the
Apartment Complex has been completed as evidenced by the
Partnership's receipt of the certification of the inspecting
architect as to the satisfactory substantial completion of all
rehabilitation and construction work as to the Apartment Complex,
and by the receipt by BCTC 94 of a certification as to such
satisfactory substantial completion of rehabilitation from the
reviewing architect retained by BCTC 94; (ii) the Partnership
shall have received an updated owner's title insurance policy (or
endorsement thereto) satisfactory to BCTC 94; (iii) BCTC 94 shall
have received evidence satisfactory to it that all amounts
payable to the construction manager and all subcontractors have
been paid in full (other than agreed-upon retainage amounts
payable at the Final Closing), and that the Partnership is not in
violation of the construction management agreement or any
subcontracts; and (iv) BCTC 94 shall have received evidence
satisfactory to it that all due diligence recommendations as to
the Apartment Complex remaining unresolved as of the Initial
Closing (if any), have been fully resolved and/or performed in
accordance with a separate letter agreement to be entered into
between the Partnership and BCTC 94 as of the Initial Closing (as
and to the extent applicable).
"Substitute Limited Partner" means any Person admitted to
the Partnership as a Limited Partner pursuant to Section 9.03.
"Surplus Cash" means, for the period from and after the
Final Closing, any cash from all sources remaining at the end of
an annual fiscal period (a) after the payment (on a thirty day
current basis) of (i) all sums due and currently required to be
paid under the terms of the Mortgage Loan, (ii) any amounts
required by the Lender and/or HUD to be deposited in the Reserve
Fund for Replacements, and (iii) all obligations of or with
respect to the Apartment Complex, including operating expenses
and escrow deposits for taxes and insurance, other than the
Mortgage Loan and the Second Loan; and (b) after the segregation
of all tenant security deposits held, together with accrued
interest thereon payable to the tenant(s) pursuant to the laws of
the State.
"Tax Credit" means the Low-Income Housing Tax Credit.
ARTICLE III
PURPOSE AND BUSINESS OF THE PARTNERSHIP
3.01. Purpose of the Partnership. The Partnership has
been organized exclusively to acquire the Apartment Complex, and
to develop, finance, rehabilitate, own, maintain, operate and
sell or otherwise dispose of the Apartment Complex, in order to
obtain long-term appreciation, cash income, Tax Credits and tax
losses.
3.02. Authority of the Partnership. In order to carry
out its purpose, the Partnership is empowered and authorized to
do any and all acts and things necessary, appropriate, proper,
advisable, incidental to or convenient for the furtherance and
accomplishment of its purpose, and for the protection and benefit
of the Partnership, including but not limited to the following:
acquire ownership of the Apartment Complex;
rehabilitate, operate, maintain, improve, buy, own,
sell, convey, assign, mortgage, rent or lease any real estate and
any personal property necessary to the operation of the Apartment
Complex;
provide housing, subject to the Minimum Set-Aside Test
and the Rent Restriction Test and consistent with the
requirements of the FHLB Grant Agreement, the Declaration of
Covenants and the Regulatory Agreement, so long as the FHLB Grant
Agreement, the Declaration of Covenants and the Regulatory
Agreement, as applicable, remain(s) in force;
enter into any kind of activity, and perform and carry
out contracts of any kind necessary to, or in connection with, or
incidental to, the accomplishment of the purposes of the
Partnership;
borrow money and issue evidences of indebtedness in
furtherance of the Partnership business and secure any such
indebtedness by mortgage, pledge, or other lien, provided,
however, that the Mortgage Loan, the Second Loan, and any
evidences of indebtedness thereof and any documents amending,
modifying or replacing them shall have the legal effect that the
Partnership and the Partners shall have no personal liability for
the repayment of the principal of or payment of interest on the
Mortgage Loan, the Second Loan, or other such indebtedness, and
that the sole recourse of any lender with respect to the
principal thereof and interest thereon shall be to the property
securing the Mortgage Loan, or the Second loan, as applicable;
except that any Partner shall be personally responsible (i) for
funds or property of the Apartment Complex coming into such
party's hands, which it is not entitled to retain, and (ii) for
such party's own acts and deeds, or the acts and deeds of others
which it has authorized, in violation of the provisions of any of
the Project Documents;
maintain and operate the Apartment Complex, including
hiring the Management Agent (which Management Agent may be any of
the Partners or an Affiliate thereof) and entering into any
agreement for the management of the Apartment Complex during its
rent-up and after its rent-up period;
subject to the approval of the Agency and/or the
Lender, if required, and to other limitations expressly set forth
elsewhere in this Agreement, negotiate and conclude agreements
for the sale, exchange, lease or other disposition of all or
substantially all of the property of the Partnership, or for the
refinancing of any mortgage loan on the property of the
Partnership;
enter into the Declaration of Covenants with the Agency
and the Regulatory Agreement with HUD providing for regulations
with respect to rents, profits, dividends and the disposition of
property;
rent dwelling units in the Apartment Complex from time
to time, in accordance with the provisions of the Code applicable
to Low-Income Housing Tax Credits and in accordance with
applicable federal, state and local regulations, collecting the
rents therefrom, paying the expenses incurred in connection with
the Apartment Complex, and distributing the net proceeds to the
Partners, subject to any requirements which may be imposed by the
FHLB Grant Agreement, the Declaration of Covenants and/or the
Regulatory Agreement; and
do any and all other acts and things necessary or
proper in furtherance of the Partnership business.
3.03. HUD Provisions. In the event that any of the
provisions of this Agreement conflict with any provision of the
Regulatory Agreement or any other agreement between the
Partnership and HUD with respect to the Apartment Complex, or any
regulations of HUD binding upon the Partnership, the provisions,
shall supersede said conflicting provisions of this Agreement.
In addition, the Partnership shall be operated subject to the
following provisions with regard to HUD: the Partnership, and
the General Partner on its behalf, is authorized to execute an
assignment and assumption agreement with respect to the Mortgage
Loan insured by the Secretary of the Housing and Urban
Development and to execute an assignment and assumption agreement
with respect to the Regulatory Agreement between the Partnership
and HUD and other documents required by HUD in connection with
such loan. Upon execution, the Regulatory Agreement shall be
binding upon the Partnership and the Partners so long as the
Property is encumbered by a mortgage insured by HUD and during
such time as HUD shall be the owner, holder, or reinsurer of any
such mortgage or is obligated to reinsure any such mortgage. Any
incoming Partner shall, as a condition of receiving an Interest
in the Partnership, agree to be bound by the Mortgage Note,
Mortgage and Regulatory Agreement and other documents require in
connection with the HUD insured loan to the same extent and on
the same terms as the other Partners. Any other provision of the
Agreement to the contrary notwithstanding, upon any dissolution,
no title or right to collect the rents therefrom shall pass to
any person who is not bound by the Regulatory Agreement in manner
satisfactory to HUD. Any other provisions of this Agreement to
the contrary notwithstanding, in the event that any provision of
this Agreement in any way tends to contradict, modify, or in any
way change the terms of the above mentioned Regulatory Agreement,
the terms of the Regulatory Agreement shall prevail and govern;
or if any provision hereof in any way tends to limit HUD in its
administration of the National Housing Act, as amended, or the
regulation or instructions thereunder, this Agreement shall be
deemed amended so as to comply with the requirements of HUD.
This paragraph will automatically become void at such time as the
Mortgage Loan is no longer insured or held by HUD. Compliance
with the Regulatory Agreement shall not affect a Limited
Partner's limited liability and shall not require contributions
inconsistent with the provisions in Article V herein. Any other
provisions of this Agreement to the contrary notwithstanding, no
distribution (as defined in the Regulatory Agreement) shall be
made except in conformance with the requirements of the
Regulatory Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS;
DUTIES AND OBLIGATIONS
4.01. Representations, Warranties and Covenants Relating
to the Apartment Complex and the Partnership. As of the date
hereof, the General Partner hereby represents, warrants and
covenants to the Partnership and to the Partners that:
the rehabilitation of the Apartment Complex shall be
undertaken and completed in a timely and workmanlike manner in
accordance with (i) all applicable requirements of the Lender and
HUD, (ii) all applicable requirements of all appropriate
governmental entities, and (iii) the plans and specifications of
the Apartment Complex that have been or shall be hereafter
approved by the Lender and/or HUD, if required and any applicable
governmental entities, as such plans and specifications may be
changed from time to time with the approval of the Lender and/or
HUD, if required and any applicable governmental entities, if
such approval shall be required;
at the Initial Closing and as of the date hereof, the
Land is and will be properly zoned for the Apartment Complex, it
has obtained all consents, permissions and licenses required by
all applicable governmental entities, and the Apartment Complex
conformed and conforms to all applicable federal, state and local
land use, zoning, environmental and other governmental laws and
regulations;
all appropriate public utilities, including sanitary
and storm sewers, water, gas and electricity, are currently
available and are operating properly for all dwelling units in
the Apartment Complex;
at the Initial Closing, good and marketable fee simple
title to the Apartment Complex will be acquired and held by the
Partnership, and title insurance policies of a financially
responsible institution acceptable to the Lender: (i) as to the
Partnership, in the amount of the replacement cost of the
Apartment Complex, which amount shall not be less than the total
of (A) the aggregate of the principal amounts of the Mortgage
Loan, the Second Loan, and the FHLB Grant, and (B) the Capital
Contributions of the Investment Partnership; and (ii) as to the
Lender, in an amount equal to the principal amount of the
Mortgage Loan, shall be issued in favor of the Partnership and
the Lender, respectively;
there shall be no direct or indirect personal liability
of the Partnership or of any of the Partners for the repayment of
the principal of or payment of interest on either the Mortgage
Loan or the Second Loan and the sole recourse of the Lender and
the Second Lender, respectively, under the Mortgage Loan and the
Second Loan, respectively, with respect to the principal thereof
and interest thereon, shall be to the property securing the
indebtedness;
it is not aware of any default under any agreement,
contract, lease, or other commitment, or of any claim, demand,
litigation, proceedings or governmental investigation pending or
threatened against it, the Apartment Complex or the Partnership,
or related to the business or assets of the Partnership or of the
Apartment Complex, which claim, demand, litigation, proceeding or
governmental investigation could result in any judgment, order,
decree, or settlement would materially and adversely affect the
business or assets of the Partnership or of the Apartment
Complex;
neither it nor any of its Affiliates nor the
Partnership, has entered, or shall enter, into any agreement or
contract for the payment of any Mortgage Loan or Second Loan
discounts, additional interest, yield maintenance or other
interest charges or financing fees or any agreement providing for
the guarantee of payment of any such interest charges or
financing fees relating to the Mortgage Loan or the Second Loan;
in no event will it or the Partnership enter into any such
agreement or guaranty of any kind whatsoever (such as an escrow
arrangement or letter of credit arrangement) which would subject
the Partnership or any of the Partners to personal liability with
respect to the repayment of the principal of the Mortgage Loan or
the Second Loan;
the execution of this Agreement, the incurrence of the
obligations set forth in this Agreement, and the consummation of
the transactions contemplated by this Agreement do not violate
any provision of law, any order, judgment or decree of any court
binding on the Partnership, the General Partner or its
Affiliates, any provision of any indenture, agreement, or other
instrument to which the Partnership or it or any of its
Affiliates is a party or by which the Partnership or the
Apartment Complex is affected, and is not in conflict with, and
will not result in a breach of or constitute a default under any
such indenture, agreement, or other instrument or result in
creating or imposing any lien, charge, or encumbrance of any
nature whatsoever upon the Apartment Complex;
at the Initial Closing, fire and extended coverage
insurance for the full replacement value of the Apartment Complex
(excluding the value of the Land, site utilities, landscaping and
foundations) and worker's compensation and public liability
insurance, all in favor of the Partnership, will be in full force
and effect and will be kept in full force and effect during the
term of the Partnership; all such policies shall be in amounts
and with insurers satisfactory to the Lender, and shall be paid
for out of Partnership assets; until Final Closing, it, on behalf
of the Partnership, will maintain not less than $6,000,000 of
liability insurance covering the Land and the Apartment Complex;
neither it, on behalf of the Partnership, nor the
Partnership has incurred any financial responsibility with
respect to the Apartment Complex prior to the date of execution
of this Agreement, other than that disclosed to the Investment
Partnership;
at the Initial Closing, as of the date hereof and at
the Final Closing, the Partnership is and will continue to be a
valid limited partnership, duly organized under the laws of the
State, has and shall continue to have full power and authority to
acquire the Apartment Complex and to develop, rehabilitate,
operate and maintain the Apartment Complex in accordance with the
terms of this Agreement, and had taken and shall continue to take
all action under the laws of the State and any other applicable
jurisdiction that is necessary to protect the limited liability
of the Limited Partners and to enable the Partnership to engage
in its business;
no restrictions on the sale or refinancing of the
Apartment Complex, other than the restrictions set forth or to be
set forth in the Declaration of Covenants, the Regulatory
Agreement and the other Project Documents, exist as of the date
hereof, and no such restrictions shall, at any time while the
Investment Partnership is a Limited Partner, be placed upon the
sale or refinancing of the Apartment Complex;
the Apartment Complex is being developed and operated
in a manner which satisfies, and shall continue to satisfy, all
restrictions, including tenant income and rent restrictions,
applicable to projects generating Low-Income Housing Tax Credits
under Section 42 of the Code;
the Projected Credits applicable to the Apartment
Complex are $220,918 of Low-Income Housing Tax Credits for 1996,
$637,061 per year of Low-Income Housing Tax Credits for each of
the years 1997 through 2005, and $416,143 of Low-Income Housing
Tax Credits for 2006; provided, however, that if the Actual
Credit for 1996 is greater than (is less than) $220,918, the
Projected Credit for the year 2006 shall be reduced (increased)
by an amount equal to the amount by which the Actual Credit for
1996 exceeds (is less than) $220,918;
it shall use its best efforts to ensure that the
Management Agent adequately fulfills its obligations to the
Partnership as construction manager for the performance of the
rehabilitation work with respect to the Apartment Complex; and
in anticipation of the expiration of the existing HAP
Contract in the year 2003, the General Partner and the Guarantor
shall use their best efforts to (i) obtain alternative rental
subsidies for the tenants of the Apartment Complex, and/or (ii)
reduce the operating expenses of the Apartment Complex to the
extent necessary to allow for the continued payment of required
debt service on the Mortgage Loan.
4.02. Duties and Obligations Relating to the Apartment
Complex and the Partnership.
The General Partner shall have the following duties and
obligations with respect to the Apartment Complex and the
Partnership:
all requirements shall be met which are necessary to
obtain or achieve (i) compliance with the Minimum Set-Aside Test,
the Rent Restriction Test, and any other requirements necessary
for the Apartment Complex to initially qualify, and to continue
to qualify, for Tax Credits, including all requirements set forth
in the Declaration of Covenants and the Regulatory Agreement,
(ii) issuance of all necessary certificates of occupancy,
including all governmental approvals required to permit occupancy
of all of the apartment units in the Apartment Complex,
subsequent to the rehabilitation of the Apartment Complex,
(iii) the Final Closing, and (iv) compliance with all provisions
of the Project Documents;
while conducting the business of the Partnership, it
shall not act in any manner which it knows or should have known
after due inquiry will (i) cause the termination of the
Partnership for federal income tax purposes without the Consent
of BCTC 94, or (ii) cause the Partnership to be treated for
federal income tax purposes as an association taxable as a
corporation;
the Apartment Complex shall be managed upon Substantial
Completion so that (i) no less than eighty per cent (80%) of the
gross income from the Apartment Complex in every year is rental
income from dwelling units in the Apartment Complex used to
provide living accommodations not on a transient basis and (ii)
the rental of all units in the Apartment Complex comply with the
tenant income limitations and other restrictions under the Rent
Restriction Test and as set forth in the FHLB Grant Agreement,
the Declaration of Covenants and the Regulatory Agreements;
it shall exercise good faith in all activities relating
to the conduct of the business of the Partnership, including the
development, operation and maintenance of the Apartment Complex,
and it shall take no action with respect to the business and
property of the Partnership which is not reasonably related to
the achievement of the purpose of the Partnership;
all of (i) the fixtures, maintenance supplies, tools,
equipment and the like now and to be owned by the Partnership or
to be appurtenant to, or to be used in the operation of the
Apartment Complex, as well as (ii) the rents, revenues and
profits earned from the operation of the Apartment Complex, will
be free and clear of all security interests and encumbrances
except those established pursuant to the Mortgage Loan, and any
additional security agreements executed in connection therewith;
it will execute on behalf of the Partnership all
documents necessary to elect, pursuant to Sections 732, 743 and
754 of the Code, to adjust the basis of the Partnership's
property upon the request of BCTC 94, if, in the sole opinion of
BCTC 94, such election would be advantageous to the Investment
Partnership;
it guarantees the repayment by the Partnership of any
Credit Recovery Loan from the Investment Partnership to the
Partnership made pursuant to Section 5.01(d)(iii), and it
guarantees payment by the Partnership of the Development Fee
pursuant to the terms of Section 8.10;
it shall, during and after the period in which it is a
Partner, provide the Partnership with such information and sign
such documents as are necessary for the Partnership to make
timely, accurate and complete submissions of federal and state
income tax returns; and
it guarantees the completion of rehabilitation of the
Apartment Complex and the assumption and receipt of the funding
provided by the Mortgage Loan and the Second Loan.
ARTICLE V
PARTNERS, PARTNERSHIP INTERESTS
AND OBLIGATIONS OF THE PARTNERSHIP
5.01. Partners, Capital Contributions and Partnership
Interests.
(a) The General Partner, its principal address or
place
of business, its Capital Contributions and its Percentage
Interest
are as follows:
New Madison IV, Inc. $100 1.00%
122 DeWitt Drive
Roxbury, MA 02120
(b) (i) The Limited Partner, its principal office or
place of business, its Capital Contribution and its Percentage
Interest is as follows:
Boston Capital Tax 98.99%
Credit Fund IV L.P.
c/o Boston Capital $3,567,542, as more
Partners, Inc. specifically set forth
One Boston Place in subparagraph (c)
Boston, MA 02108 immediately below
(ii) The Special Limited Partner, its principal
office or place of business, its Capital Contribution and its
Percentage Interest is as follows:
BCTC 94, Inc. $ 1.00 0.01%
c/o Boston Capital
Partners, Inc.
One Boston Place
Boston, MA 02108
(c) Subject to the provisions of this Agreement,
including without limitation, the provisions of Sections 5.01(d),
5.01(e) and 5.03, the Investment Partnership shall be obligated
to make Capital Contributions to the Partnership in the aggregate
amount of $3,567,542 in three (3) installments (the
"Installments"), which Installments shall be due and payable in
cash by the Investment Partnership, solely from Capital
Contributions of its investor limited partners to the Investment
Partnership, within ten (10) days after BCTC 94 shall have
received evidence, reasonably satisfactory to it, of the
occurrence of each of the conditions set forth below as to the
applicable Installment, as follows:
(i) $3,210,788, upon the later to occur of (A)
the Admission Date, or (B) the Initial Closing, or (C)
receipt by the Investment Partnership of local counsel
opinion, as set forth in Section 5.04 (the "First
Installment");
(ii) $267,566, upon the later to occur of (A)
Substantial Completion, (B) State Designation, (C)
receipt by the Investment Partnership of a
certification by the General Partner, in form and
substance acceptable to BCTC 94, of the construction
and development costs of the Apartment Complex and the
Eligible Basis of the Apartment Complex for purposes of
Tax Credits, together with an accountants' report
thereon issued by the Accountants (the "Cost
Certification"), or (D) satisfaction of the conditions
to the making of the First Installment (the "Second
Installment"); and
(iii) $89,188, upon the later to occur of
(A) the Initial 100% Occupancy Date, (B) Final Closing,
(C) the occurrence of Breakeven Operations, (D) receipt
by the Investment Partnership of the federal income tax
return and audited financial statements, of the
Partnership for the fiscal year in which Breakeven
Operations occurred, or (E) satisfaction of all of the
conditions to the payment of the First and Second
Installments (the "Third Installment").
As a condition precedent to each payment set forth above,
the General Partner shall, not less than ten (10) days nor more
than twenty (20) days prior to the time the applicable
Installment is due, give BCTC 94 and the Investment Partnership
Notice in the form of a written certification that: [A] the
representations, warranties and covenants given by the General
Partner in Section 4.01(a) are valid and accurate, where still
applicable, with respect to the General Partner, the Partnership
and/or the Apartment Complex, as of the date of such certificate,
and [B] to the best of its knowledge, after due inquiry, no
condition exists which would, pursuant to Section 5.03, entitle
the Investment Partnership to withhold the payment of such
Installment. Based upon the giving of such Notice, such
Installment shall be made on the due date therefor, or if such
Notice is not timely given, then within twenty (20) days after
receipt of such Notice.
At such time as the conditions for the making of the First
Installment are satisfied, such amount (estimated to be
$1,390,435) as shall be necessary to achieve Initial Closing,
shall be paid by the Investment Partnership to, or pursuant to
the direction of the Partnership. The balance of the First
Installment (in the amount of approximately $1,820,353) shall be
disbursed to the Partnership on the basis of draw requests as and
to the extent approved by or on behalf of BCTC 94. The draw
requests shall include, or be subject to, as applicable: (i)
certification by the project architect as to the progress of the
rehabilitation, (ii) performance of a physical site inspection by
or on behalf of BCTC 94 or its engineering/construction
consultant, and (iii) receipt of an endorsement to the owner's
title insurance policy with respect to such draw or alternative
evidence of the lien-free status of title reasonably acceptable
to BCTC 94. The parties hereto acknowledge and understand that
the foregoing draw process is part of a process for the
preparation, review and approval of all draws with respect to the
rehabilitation of the Apartment Complex, and with respect to the
advance of all funds for such rehabilitation (including both the
Capital Contributions of the Investment Partnership and of the
General Partner, and the proceeds of the FHLB Grant), and that
all such draws are to be subject to review and approval by the
Lender (if required) and by BCTC 94.
(d) (i) Upon the occurrence of Cost Certification and
State Designation, if ninety-nine per cent (99%) of the aggregate
amount of Tax Credits: (A) for which the Partnership would be
eligible with respect to the Apartment Complex based upon the
Cost Certification, and/or (B) allocated by the Agency with
respect to the Apartment Complex, is less than the amount of the
Projected Credits attributable to Low-Income Housing Tax Credits
(the "Allocation Differential"), then the Capital Contribution of
the Investment Partnership shall be reduced by the "Adjustment
Amount." The Adjustment Amount shall be equal to the Allocation
Differential multiplied by seventy-five and ninety-five
one-hundredths per cent (75.95%) and any such reduction in
Capital Contribution shall be applied to reduce the Second
Installment. In the event that there is a reduction in Capital
Contributions equal to the Adjustment Amount, then the amount of
the Projected Credits shall be reduced to reflect the Allocation
Differential, and thereafter shall be referred to as the "Revised
Projected Credits."
(ii) If at any time the Accountants determine that, for
any fiscal year or portion thereof during the Partnership's
operation, ending on the date five (5) years from and after the
date of Substantial Completion (the "Reduction Period"), the
Actual Credit for such fiscal year or portion thereof is less
than the Projected Credit, or the Revised Projected Credit, if
applicable, applicable to such fiscal year or portion thereof,
then the Capital Contribution of the Investment Partnership shall
be reduced by the Reduction Amount. The "Reduction Amount" shall
be equal to the sum of (A) the product of the difference between
the Projected Credit, or the Revised Projected Credit, if
applicable, and the Actual Credit multiplied by seventy-five and
ninety-five one-hundredths per cent (75.95%) and (B) the amount
of any recapture, interest or penalty payable by the limited
partners of the Investment Partnership (assuming pass-through of
all such liability in the year incurred and a tax rate equal to
the maximum individual rate applicable in such year) as a result
of the Credit Shortfall for such year. Any reduction in Capital
Contribution shall first be applied to reduce the Installment
next due to be paid by the Investment Partnership, and any
portion of such reduction in excess of such Installment shall be
applied to reduce succeeding Installments. If no further
Installments are due to be paid, then the entire amount of such
reduction shall be repaid by the Partnership to the Investment
Partnership promptly after demand is made therefor. The General
Partner is obligated to provide such funds to the Partnership as
shall be necessary to cause the aforesaid payment to be made by
the Partnership to the Investment Partnership.
(iii) In the event that, for any reason, at any
time after the Reduction Period, the amount of the Actual Credit
shall be less than the Projected Credit (or the Revised Projected
Credit, if applicable) with respect to any fiscal year during the
Partnership's operation (such difference being hereinafter
referred to as a "Credit Shortfall"), the Investment Partnership
shall be treated as having made a constructive advance to the
Partnership with respect to such year (a "Credit Recovery Loan"),
which shall be deemed to have been made on January 1 of such
year, in an amount equal to the sum of (A) the Credit Shortfall
for such year, plus (B) the amount of any recapture, interest or
penalty payable by the limited partners of the Investment
Partnership (assuming pass-through of all such liability in the
year incurred and a federal tax rate equal to the maximum
individual rate applicable in such year) as a result of the
Credit Shortfall for such year. Credit Recovery Loans shall be
deemed to bear simple (not compounded) interest, from the
respective dates on which such principal advances are deemed to
have been made under this Section 5.01(d)(iv) at 9% per annum.
Credit Recovery Loans shall be repayable by the Partnership as
provided in Section 11.04(c).
(e) Without the Consent of all of the Partners, no
additional Persons may be admitted as additional Limited Partners
and Capital Contributions may be accepted only as and to the
extent expressly provided for in this Article V.
5.02. Return of Capital Contribution. Except as
provided in this Agreement, no Partner shall be entitled to
demand or receive the return of his Capital Contribution.
5.03. Withholding of Capital Contribution Upon Default.
In the event that: (a) the General Partner or any successor
General Partner shall not have substantially complied with any
material provisions under this Agreement, or (b) any financing
commitment of the Lender, the Second Lender or any other lender,
or any agreement entered into by the Partnership for financing
related to the Apartment Complex shall have terminated prior to
their respective termination date(s), or (c) foreclosure
proceedings shall have been commenced against the Apartment
Complex or any portion thereof, then the Partnership and the
General Partner shall be in default of this Agreement, and
BCTC 94, at its sole election, may cause the withholding of
payment of any Installment otherwise payable to the Partnership.
All amounts so withheld by the Investment Partnership under
this Section 5.03 shall be promptly released to the Partnership
only after the General Partner or the Partnership has cured the
default justifying the withholding, as demonstrated by evidence
reasonably acceptable to BCTC 94.
5.04. Legal Opinions. As a condition precedent to
payment of the First Installment, the Investment Partnership
shall have received the opinion of Hale and Dorr, of Boston,
Massachusetts, counsel to the Partnership, to the General
Partner, to the Guarantor, and to the Developer, which opinion
shall explicitly state that Peabody & Brown, of Washington, D.C.,
counsel to the Investment Partnership, may explicitly rely upon
them, that:
the Partnership is a duly formed and validly existing
limited partnership under the Act, and the Partnership has
full power and authority to acquire, own and operate the
Apartment Complex and to conduct its business hereunder; the
Investment Partnership has been validly admitted as a
Limited Partner of the Partnership entitled to all the
benefits of a Limited Partner under this Agreement, and the
Interest of the Investment Partnership in the Partnership is
the Interest of a limited partner, with no personal
liability for the obligations of the Partnership;
Madison IV is duly and validly organized and is validly
existing in good standing as a corporation under the laws of
the State, and is validly authorized to transact business in
the State and is in good standing in the State, with full
power and authority to enter into and perform its
obligations hereunder;
LRCC is a duly formed and validly existing non-profit
corporation in good standing under the laws of the State,
and has the full power and authority to enter into and
perform the obligations of the Developer under and pursuant
to this Agreement, and to act in the capacity of Guarantor
of the General Partner's obligations pursuant to the terms
of this Agreement;
execution of this Agreement by the General Partner, the
Guarantor and the Developer has been duly and validly
authorized by or on behalf of each of them and, having been
executed and delivered in accordance with its terms, this
Agreement constitutes the valid and binding agreement of
each of the General Partner, the Guarantor and the
Developer, enforceable in accordance with its terms;
there is no direct or indirect personal liability of
the Partnership or of any of the Partners for the repayment
of the principal of or payment of interest on the Mortgage
Loan or the Second Loan, and the sole recourse of the Lender
and the Second Lender, respectively, under the Mortgage Loan
and the Second Loan, respectively, with respect to the
principal thereof and interest thereon, shall be to the
property securing the indebtedness; under the laws of the
State, the Mortgage Loan and the Second Loan each
constitutes a valid debt obligation;
the Partnership owns fee simple, good and marketable
legal title to the Apartment Complex, subject only to the
liens, charges, easements, restrictions and encumbrances as
are set forth in the title insurance policy issued to the
Partnership, none of which materially interfere with or
adversely affect the development or operation of the
Apartment Complex;
there are no defaults existing with respect to any of
the Project Documents; and
no event of Bankruptcy has occurred with respect to the
Partnership, the General Partner, the Guarantor and/or the
Developer.
5.05. Repurchase Obligation.
If (i) Substantial Completion has not occurred by
December 31, 1996; (ii) State Designation has not occurred by
July 31, 1997; (ii) foreclosure proceedings have been commenced
against the Apartment Complex prior to the Final Closing; (iv)
the Final Closing has not occurred by July 31, 1997 (or such
later date as may be consented to by BCTC 94); (v) the
Partnership fails to meet the Minimum Set-Aside Test and the Rent
Restriction Test within 12 months of the occurrence of
Substantial Completion, or at any time prior to the date which is
five (5) years from and after the date upon which the Minimum
Set-Aside Test and the Rent Restriction Test are initially
achieved; (vi) at any time the General Partner and/or the
Guarantor fail to make any Operating Deficit Loan(s) as and to
the extent required pursuant to Section 8.09(b); (vii) an event
of default described in Section 5.03(a) and/or (b) shall exist;
then the General Partner shall, within 15 days of the occurrence
thereof, send to BCTC 94 Notice of such event and of its
obligation to purchase the Interest of the Investment Partnership
hereunder and return to the Investment Partnership the Invested
Amount in the event BCTC 94 in its sole discretion requires such
purchase of the Interest of the Investment Partnership.
Thereafter, the General Partner, within 30 days of the mailing
date of Notice by BCTC 94 of such election, shall acquire the
entire Interest of the Investment Partnership in the Partnership
by making payment to the Investment Partnership, in cash, of an
amount equal to the Invested Amount.
Upon receipt by the Investment Partnership of any such
payment of the Invested Amount, the Interest of the Investment
Partnership shall terminate, and the General Partner shall
indemnify and hold harmless the Investment Partnership from any
losses, damages, and/or liabilities to which the Investment
Partnership (as a result of its participation hereunder) may be
subject.
5.06. Asset Management Fee. The Partnership shall pay
to Boston Capital, or an Affiliate thereof, an annual Asset
Management Fee in the amount of $7,500 per annum, commencing in
1997, for its services in assisting with the preparation of the
reports required pursuant to Section 13.04. The Asset Management
Fee shall be payable from first available Cash Flow; provided,
however, that if in any fiscal year commencing with 1997, Cash
Flow is insufficient to pay the full amount of the Asset
Management Fee, the General Partner is obligated to provide such
funds to the Partnership as shall be necessary to pay the full
amount of the Asset Management Fee for such fiscal year, as an
Operating Deficit Loan pursuant to the provisions of Section
8.09(b) of this Agreement.
ARTICLE VI
CHANGES IN PARTNERS
6.01. Withdrawal of a General Partner.
A General Partner may withdraw from the Partnership or
sell, transfer or assign his or its Interest as General Partner
only with the prior Consent of BCTC 94, of HUD, and of the
Lender, if required, and only after being given written approval
by the necessary parties as provided in Section 6.02, of the
General Partner(s) to be substituted for him or it or to receive
all or part of his or its Interest as General Partner.
In the event that a General Partner withdraws from the
Partnership or sells, transfers or assigns his or its entire
Interest pursuant to Section 6.01(a), he or it shall be and shall
remain liable for all obligations and liabilities incurred by him
or it as General Partner before such withdrawal, sale, transfer
or assignment shall have become effective, but shall be free of
any obligation or liability incurred on account of the activities
of the Partnership from and after the time such withdrawal, sale,
transfer or assignment shall have become effective.
6.02. Admission of a Successor or Additional General
Partner. A Person shall be admitted as a General Partner of the
Partnership only if the following terms and conditions are satis-
fied:
the admission of such Person shall have been Consented
to by the General Partner or its successors and by BCTC 94,
and consented to by HUD and, if required, by the Lender;
the successor or additional Person shall have accepted
and agreed to be bound by (i) all the terms and provisions
of this Agreement, by executing a counterpart thereof, and
(ii) all the terms and provisions of the Regulatory
Agreement and other applicable Lender documents, by
executing a counterpart(s) thereof, if and to the extent
required by the Lender, and (iii) all the terms and
provisions of such other documents or instruments as may be
required or appropriate in order to effect the admission of
such Person as a General Partner, and the amendment to this
Agreement evidencing the admission of such Person as a
General Partner shall have been filed and all other actions
required by Section 1.05 in connection with such admission
shall have been performed;
if the successor or additional Person is a corporation,
it shall have provided the Partnership with evidence
satisfactory to counsel for the Partnership of its authority
to become a General Partner, to do business in the State and
to be bound by the terms and provisions of this Agreement;
and
counsel for the Partnership shall have rendered an
opinion that the admission of the successor or additional
Person is in conformity with the Act and that none of the
actions taken in connection with the admission of the
successor Person will cause the termination or dissolution
of the Partnership or will cause it to be classified other
than as a partnership for federal income tax purposes.
6.03. Effect of Bankruptcy, Death, Withdrawal,
Dissolution
or Incompetence of a General Partner.
In the event of the Bankruptcy of a General Partner or
the withdrawal, death or dissolution of a General Partner or an
adjudication that a General Partner is incompetent (which term
shall include, but not be limited to, insanity) the business of
the Partnership shall be continued by the other General
Partner(s) if any, (and the other General Partner, if any, by
execution of this Agreement, expressly so agrees to continue the
business of the Partnership); provided, however, that if the
withdrawn, Bankrupt, deceased, dissolved or incompetent General
Partner is then the sole General Partner, unless the Investment
Partnership, within ninety (90) days after receiving Notice of
such Bankruptcy, withdrawal, death, dissolution or adjudication
of incompetence, elects to designate a successor General Part-
ner(s) and continue the Partnership upon the admission of such
successor General Partner(s) to the Partnership, the Partnership
shall be terminated.
Upon the Bankruptcy, death, dissolution or adjudication
of incompetence of a General Partner, such General Partner shall
immediately cease to be a General Partner and his Interest shall
without further action be converted to a Limited Partner
Interest; provided, however, that if such Bankrupt, dissolved,
incompetent or deceased General Partner is the sole remaining
General Partner, such General Partner shall cease, to the extent
permitted by the Act, to be a General Partner only upon the
expiration of ninety (90) days after Notice to the Investment
Partnership of the Bankruptcy, death, dissolution or declaration
of incompetence of such General Partner; and provided further
that if such Bankrupt, dissolved, incompetent or deceased General
Partner is the sole remaining General Partner, the converted
Partnership Interest of such replaced General Partner shall be
ratably reduced to the extent necessary to insure that the
substitute General Partner(s) holds a 1% Percentage Interest (as
set forth in Section 5.01) and will receive a 5% distribution
pursuant to Section 11.04(f).
Except as set forth above, such conversion of a General
Partner Interest to a Limited Partner Interest shall not affect
any rights, obligations or liabilities (including without
limitation, any of the General Partner's obligations under
Section 8.09 herein) of the Bankrupt, deceased, dissolved or
incompetent General Partner existing prior to the Bankruptcy,
death, dissolution or incompetence of such person as a General
Partner (whether or not such rights, obligations or liabilities
were known or had matured).
(c) If, at the time of the withdrawal, Bankruptcy,
death, dissolution or adjudication of incompetence of a General
Partner, the Bankrupt, deceased, dissolved or incompetent General
Partner was not the sole General Partner of the Partnership, the
remaining General Partner or General Partners shall immediately
(i) give Notice to the Limited Partners of such Bankruptcy,
death, dissolution or adjudication of incompetence, (ii) make
such amendments to this Agreement and execute and file such
amendments or documents or other instruments as are necessary to
reflect the conversion of the Interest of the Bankrupt, deceased,
dissolved or incompetent General Partner and his or its having
ceased to be a General Partner, and (iii) elect to continue the
business of the Partnership. The remaining General Partner or
General Partners are hereby granted an irrevocable power of
attorney to execute any or all documents on behalf of the
Partners and the Partnership and to file such documents as may be
required to effectuate the provisions of this Section 6.03.
ARTICLE VII
ASSIGNMENT TO THE PARTNERSHIP
The General Partner hereby transfers and assigns to the
Partnership all of its right, title and interest in and to the
Apartment Complex, if any, including the following:
all contracts with architects, contractors and
supervising architects with respect to the rehabilitation
and development of the Apartment Complex;
all plans, specifications and working drawings,
heretofore prepared or obtained in connection with the
Apartment Complex and all governmental approvals obtained,
including planning, zoning and building permits;
any and all commitments with respect to the Mortgage
Loan, the Second Loan, and the FHLB Grant; and
any other work product related to the Apartment
Complex.
ARTICLE VIII
RIGHTS, OBLIGATIONS AND POWERS
OF THE GENERAL PARTNER
8.01. Management of the Partnership.
Except as otherwise set forth in this Agreement, the
General Partner, within the authority granted to it under this
Agreement, shall have full, complete and exclusive discretion to
manage and control the business of the Partnership for the
purposes stated in Article III, shall make all decisions
affecting the business of the Partnership and shall manage and
control the affairs of the Partnership to the best of its ability
and use its best efforts to carry out the purpose of the
Partnership. In so doing, the General Partner shall take all
actions necessary or appropriate to protect the interests of the
Limited Partners and of the Partnership. The General Partner
shall devote such of its time as is necessary to the affairs of
the Partnership.
Except as otherwise set forth in this Agreement and
subject to the applicable Lender and/or Agency rules and
regulations and the provisions of the Regulatory Agreement, the
General Partner (acting for and on behalf of the Partnership), in
extension and not in limitation of the rights and powers given by
law or by the other provisions of this Agreement, shall, in its
sole discretion, have the full and entire right, power and
authority in the management of the Partnership business to do any
and all acts and things necessary, proper, convenient or
advisable to effectuate the purpose of the Partnership. In
furtherance and not in limitation of the foregoing provisions,
the General Partner is specifically authorized and empowered to
execute and deliver, on behalf of the Partnership, the Regulatory
Agreement, the Declaration of Covenants, the FHLB Grant
Agreement, and the Mortgage, and to execute any and all other
instruments and documents, and amendments thereto, as shall be
required in connection with the Mortgage Loan, the Second Loan,
and the FHLB Grant, including, but not limited to, executing any
mortgage, note, contract, building loan agreement, bank
resolution and signature card, release, discharge, hazardous
indemnity agreement, separate assignment of leases and rents, or
any other document or instrument in any way related thereto or
necessary or appropriate in connection therewith. All decisions
made for and on behalf of the Partnership by the General Partner
shall be binding upon the Partnership. No person dealing with
the General Partner shall be required to determine its authority
to make any undertaking on behalf of the Partnership, nor to
determine any facts or circumstances bearing upon the existence
of such authority.
8.02. Limitations Upon the Authority of the General
Partner.
The General Partner shall not have any authority to:
perform any act in violation of any applicable law
or regulation thereunder;
perform any act in violation of the provisions of
the Regulatory Agreement, the Declaration of Covenants,
the FHLB Grant Agreement, or any other Project
Documents;
do any act required to be approved or ratified in
writing by all Limited Partners under the Act unless
the right to do so is expressly otherwise given in this
Agreement;
rent apartments in the Apartment Complex such that
the Apartment Complex would not meet the requirements
of the Rent Restriction Test or Minimum Set-Aside Test;
or
borrow from the Partnership or commingle
Partnership funds with funds of any other Person.
The General Partner shall not, without the Consent of
BCTC 94, have any authority to:
sell or otherwise dispose of, at any time, all or
substantially all of the assets of the Partnership;
make application(s) for an increase or increases
in the Mortgage Loan or the Second Loan;
borrow in excess of $10,000 in the aggregate at
any one time outstanding on the general credit of the
Partnership, except borrowings constituting
Subordinated Loans or Credit Recovery Loans;
following Final Closing, construct any new or
replacement capital improvements on the Apartment
Complex which substantially alter the Apartment Complex
or its use or which are at a cost in excess of $10,000
in a single Partnership fiscal year, except
(A) replacements and remodeling in the ordinary course
of business or under emergency conditions or, (B)
construction paid for from insurance proceeds, or
(C) as and to the extent provided in an approved budget
pursuant to Section 8.20;
acquire any real property in addition to the
Apartment Complex; or
refinance the Mortgage Loan or the Second Loan.
8.03. Management Purposes. In conducting the business
of the Partnership, the General Partner shall be bound by the
Partnership's purpose(s) set forth in Article III.
8.04. Delegation of Authority. The General Partner may
delegate all or any of its powers, rights and obligations here-
under, and may appoint, employ, contract or otherwise deal with
any Person for the transaction of the business of the Partner-
ship, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General
Partner may approve.
8.05. General Partner or Affiliates Dealing with
Partnership.
The General Partner or any Affiliate may act as
Management Agent on such terms and conditions permitted by
applicable Lender regulations, and may receive compensation at
the highest rates approved and permitted by the Lender at any
time.
The General Partner or any Affiliates thereof shall
have the right to contract or otherwise deal with the Partnership
for the sale of goods or services to the Partnership in addition
to those set forth herein, if (i) compensation paid or promised
for such goods or services is reasonable (i.e., at fair market
value) and is paid only for goods or services actually furnished
to the Partnership, (ii) the goods or services to be furnished
shall be reasonable for and necessary to the Partnership, (iii)
the fees, terms and conditions of such transaction are at least
as favorable to the Partnership as would be obtainable in an
arm's-length transaction, (iv) no agent, attorney, accountant or
other independent consultant or contractor who also is employed
on a full-time basis by the General Partner or any Affiliate
shall be compensated by the Partnership for his services.
Any contract covering such transactions shall be in
writing and shall be terminable without penalty on sixty (60)
days Notice. Any payment made to the General Partner or any
Affiliate for such goods or services shall be fully disclosed to
all Limited Partners in the reports required under Section 13.04.
Neither the General Partner nor any Affiliate shall, by the
making of lump-sum payments to any other Person for disbursement
by such other Person, circumvent the provisions of this Section
8.05(b).
8.06. Other Activities. The General Partner and any
Affiliates thereof may engage in or possess interests in other
business ventures of every kind and description for their own
account, including, without limitation, serving as general part-
ner of other partnerships which own, either directly or through
interests in other partnerships, government-assisted housing
projects similar to the Apartment Complex. Neither the Partner-
ship nor any of the Partners shall have any rights by virtue of
this Agreement in or to such other business ventures or to the
income or profits derived therefrom.
8.07. Liability for Acts and Omissions. No General
Partner shall be liable, responsible or accountable in damages or
otherwise to any of the Partners for any act or omission per-
formed or omitted by him or it in good faith on behalf of the
Partnership and in a manner reasonably believed by him or it to
be within the scope of the authority granted to him or it by this
Agreement and in the best interest of the Partnership, except for
negligence, misconduct, fraud or any breach of his or its
fiduciary duty as General Partner with respect to such acts or
omissions. Any loss or damage incurred by any General Partner by
reason of any act or omission performed or omitted by him or it
in good faith on behalf of the Partnership and in a manner
reasonably believed by him or it to be within the scope of the
authority granted to him or it by this Agreement and in the best
interests of the Partnership (but not, in any event, any loss or
damage incurred by any General Partner by reason of negligence,
misconduct, fraud or any breach of his or its fiduciary duty as
General Partner with respect to such acts or omissions) shall be
paid from Partnership assets to the extent available (but the
Limited Partners shall not have any personal liability to the
General Partner under any circumstances on account of any such
loss or damage incurred by the General Partner or on account of
the payment thereof).
8.08. [Intentionally Omitted.]
8.09. Rehabilitation of the Apartment Complex,
Rehabilitation Cost Overruns, Operating Deficits.
(a) (i) The General Partner shall be responsible for:
(A) achieving completion of
rehabilitation
of the Apartment Complex in accordance with the Project
Documents;
(B) meeting all requirements for
obtaining
all necessary certificates of occupancy for all the
apartment units in the Apartment Complex; and
(C) fulfilling all actions required of
the
Partnership to assure that the Apartment Complex
satisfies the Minimum Set-Aside Test and the Rent
Restriction Test.
(ii) The General Partner hereby is obligated to
pay all Excess Development Costs.
(iii) In the event that the General Partner
shall fail to pay any such Excess Development Costs as required
in this Section 8.09(a), an amount not in excess of the total of
any remaining installments of the Development Fee due to the
Developer, less such amount(s) as shall be necessary to provide
for the deposits contemplated by Section 8.18(b) of this
Agreement, shall be applied by the Partnership to meet such
obligations of the General Partner.
Any such direction and application of funds otherwise
payable to the Developer as aforesaid shall constitute reductions
in the Development Fee, and the Partnership's obligation to make
such installment payments to the Developer pursuant to
Section 8.10, as well as the Investment Partnership's obligation
to make future Installments, shall be reduced correspondingly,
and the obligations of the General Partner pursuant to Sections
8.09(a)(i) or 8.09(a)(ii) shall be satisfied to the extent of the
funds applied.
(b) In the event that, at any time from and after the
Final Closing, an Operating Deficit shall exist, after all funds
available for the payment of Operating Deficits pursuant to
Section 8.18(b) of this Agreement have been exhausted, the
General Partner shall provide such funds to the Partnership as
shall be necessary to pay such Operating Deficit(s), in the form
of a loan to the Partnership (the "Operating Deficit Loan(s)").
An Operating Deficit Loan shall be a Subordinated Loan in
accordance with the provisions of Section 8.17; provided,
however, that an Operating Deficit Loan shall bear no interest,
and shall be repayable to the General Partner from Cash Flow or
from the proceeds from a Capital Transaction. For the purpose of
this Section 8.09(b), all expenses shall be paid on a sixty (60)
day current basis.
8.10. Development Fee.
(a) The Partnership has entered into a Development
Agreement dated December 28, 1995 with the Developer for its
services in connection with the development and construction of
the Apartment Complex. In consideration for such services, a
Development Fee in the total amount of $1,144,721 shall be
payable by the Partnership to the Developer, solely from the
Capital Contributions by the Investment Partnership as follows:
$787,967 upon receipt by the Partnership of the
First Installment;
$267,566 upon receipt by the Partnership of the
Second Installment; and
$89,188 upon receipt by the Partnership of the
Third Installment.
8.11. Incentive Partnership Management Fee. The
Partnership has entered into a Partnership Management Services
Agreement with the General Partner of even date herewith for its
services in managing the business of the Partnership for the
period from the date hereof throughout the term of the
Partnership. Such agreement includes provisions to the effect
that in return for its services in administering and directing
the business of the Partnership, maintaining appropriate books
and records relating to all financial affairs of the Partnership,
and reporting periodically to the Partners, the Lender and the
Agency, as applicable, with respect to the financial and
administrative affairs of the Partnership and the Apartment
Complex, the Partnership shall pay to the General Partner, solely
from the Net Cash Flow of the Partnership available for
distribution and in accordance with Section 11.01(a), an annual
Incentive Partnership Management Fee.
Such fee shall be in accordance with the provisions of any
applicable Lender regulations and of the Project Documents, and
shall be in an amount equal to $7,500 per year, commencing in
1997.
8.12. Withholding of Fee Payments. In the event that
(a) the General Partner or any successor General Partner shall
not have substantially complied with any material provisions
under this Agreement, or (b) any financing commitment of the
Lender, the Second Lender, or any other lender, or any agreement
entered into by the Partnership for financing related to the
Apartment Complex shall have terminated prior to their respective
termination date(s), or (c) foreclosure proceedings shall have
been commenced against the Apartment Complex, then (i) the
General Partner shall be in default of this Agreement, and the
Partnership shall withhold payment of any installment of fees
payable to the Developer, pursuant to Section 8.10, and to the
General Partner, pursuant to Section 8.11, and (ii) the General
Partner shall be liable for the Partnership's payment of any and
all installments of the Development Fee payable pursuant to
Section 8.10, to the extent that the Investment Partnership has
withheld any Installment(s) pursuant to Section 5.03 as a result
of the above-described default.
All amounts so withheld by the Partnership under this Sec-
tion 8.12 shall be promptly released only after the General
Partner has cured the default justifying the withholding, as
demonstrated by evidence reasonably acceptable to BCTC 94.
8.13. Removal of the General Partner.
(a) BCTC 94, acting on behalf of the Investment
Partnership, so long as the Investment Partnership is a Partner,
shall have the right to remove the General Partner (i) for any
intentional misconduct or failure to exercise reasonable care
with respect to any material matter in the discharge of its
duties and obligations as General Partner (provided that such
misconduct or failure results in, or is likely to result in, a
material detriment to or an impairment of the Apartment Complex
or assets of the Partnership), or (ii) upon the occurrence of any
of the following (except to the extent that any such violation or
action described in (A) or (C) below is a result of events beyond
the General Partner's reasonable control):
(A) the General Partner shall have materially
violated any provisions of the FHLB Grant Agreement and/or
the Regulatory Agreement and/or the Declaration of
Covenants, or any provisions of any other Project Document
or other document required in connection with the Mortgage
Loan, the Second Loan, or the FHLB Grant, or any provisions
of HUD, Lender and/or Agency regulations applicable to the
Apartment Complex;
(B) the General Partner shall have materially
violated any provision of this Agreement, or materially
violated any provision of applicable law, which violation,
in either case, results in a material adverse effect on the
Partnership and/or its operations;
(C) the General Partner shall have caused the
Mortgage Loan or the Second Loan to go into default and such
default remains uncured beyond the time provided for cure
thereof by the terms of the applicable Project Documents; or
(D) the General Partner shall have conducted its
own affairs or the affairs of the Partnership in such manner
as would:
(1) cause the termination of the Partnership
for federal income tax purposes; or
(2) cause the Partnership to be treated for
federal income tax purposes as an association,
taxable as a corporation.
(b) BCTC 94 shall give Notice to all Partners and to
the Lender and the Second Lender of its determination that the
General Partner shall be removed and of the reasons for such
determination. The General Partner shall have thirty (30) days
after receipt of such Notice to cure any default or other reason
for such removal, in which event it shall remain as General
Partner. If, at the end of such thirty (30) day period, the
General Partner has not cured any default or other reason for
such removal, it shall cease to be General Partner and the powers
and authorities conferred on it as General Partner under this
Agreement shall cease and the Interest of such General Partner
shall be transferred to BCTC 94 which, without further action,
shall become a General Partner.
(c) (i) In the event that the General Partner is
removed as aforesaid prior to the Final Closing, it shall be and
shall remain liable for all obligations and liabilities incurred
by it as General Partner of the Partnership before such removal
shall become effective, including but not limited to the
obligations and liabilities of the General Partner with respect
to its obligations set forth in Section 8.09 of this Agreement
with regard to Excess Development Costs; provided however, that
if amounts otherwise payable as fees are applied to meet the
General Partner's obligations stated in Sections 5.03 and 8.09 of
this Agreement, such application shall serve to reduce any such
liabilities of the General Partner or any successor, except for
any liability incurred as the result of its negligence,
misconduct, fraud or breach of its fiduciary duties as General
Partner of the Partnership.
If the General Partner is removed as a Partner of the
Partnership prior to the Final Closing as aforesaid, neither the
Developer nor the General Partner shall be entitled to payment of
any further installments of the Development Fee or other fees
which otherwise would have been due and payable under various
Sections of this Article VIII.
(ii) In the event that the General Partner is removed
as aforesaid after the Final Closing, it shall be and shall
remain liable for all obligations and liabilities incurred by it
as General Partner of the Partnership before such removal shall
become effective, including but not limited to the General
Partner's obligations and liabilities under Section 8.09(b) of
this Agreement; provided, however, that if amounts otherwise
payable to the General Partner or the Developer as fees are
applied by the Partnership to pay Operating Deficits, such
application shall serve to reduce any such liabilities after the
Final Closing, except for any liability incurred as the result of
its negligence, misconduct, fraud or breach of its fiduciary duty
as the General Partner of the Partnership. If the General
Partner is removed as a Partner of the Partnership at any time
after the Final Closing, the Developer shall continue to be paid
subsequent to such removal, in accordance with the terms and
conditions of this Agreement, any installments of the Development
Fee which would otherwise have been due and payable to it
pursuant to Section 8.10, and which are not otherwise being
withheld; provided, however, upon any such removal of the General
Partner after the Final Closing, no further installments of the
Incentive Partnership Management Fee shall be paid which are
attributable to any period after such removal.
(d) BCTC 94 hereby is granted an irrevocable power of
attorney, coupled with an interest, to execute any and all
documents on behalf of the Partners and the Partnership as shall
be legally necessary and sufficient to effect all of the
foregoing provisions of this Section 8.13. The election by BCTC
94 to remove the General Partner under this Section shall not
limit or restrict the availability and use of any other remedy
which the Investment Partnership, BCTC 94 or any other Partner
might have with respect to the General Partner in connection with
its undertakings and responsibilities under this Agreement.
8.14. Selection of Management Agent. The Partnership,
with the approval of HUD, and of the Lender, if required, shall
engage such person, firm or company as the General Partner may
select, and as BCTC 94 may approve, which approval shall not be
unreasonably withheld (hereinafter referred to as "Management
Agent") to manage the operation of the Apartment Complex. The
Management Agent shall be paid a management fee subject to the
approval of HUD, and of the Lender, if required. Such management
fee shall not exceed four per cent (4%) of the Gross Receipts
derived from the operation of the Apartment Complex. The
contract between the Partnership and the Management Agent and the
management plan for the Apartment Complex shall be in a form
acceptable to HUD, and to the Lender, if required. Madison Park
Village Associates (a joint venture of Madison Park Properties,
Inc. and Maloney Properties, Inc.), hereby is approved by the
parties hereto as the Management Agent. In addition, the
Management Agent shall be entitled to receive a data processing
fee in the amount of three dollars ($3.00) per unit per month,
which will be treated as an operating expense of the Partnership,
and the Management Agent, in its capacity as construction manager
will be entitled to receive a five percent (5%) construction
management fee.
8.15. Removal of the Management Agent. The General
Partner (a) may, upon receiving any required approval of HUD
and/or the Lender, dismiss the Management Agent as the entity
responsible for the Apartment Complex under the terms of the
contract between the Partnership and the Management Agent, and
(b) at the request of BCTC 94, shall remove the Management Agent
in the event that the Management Agent is declared Bankrupt, is
dissolved, or makes an assignment for the benefit of its
creditors, or for any intentional misconduct by the Management
Agent or failure to exercise reasonable care in the discharge of
its duties and obligations as Management Agent, including,
without limitation, for any action or failure to take any action
which:
(i) violates in any material respect any provi-
sion of the Management Agreement entered into with the
Partnership and approved by the Lender, and/or any
provision of the Project Documents applicable to the
Apartment Complex, or the Lender-approved management
plan for the Apartment Complex, or
(ii) violates in any material respect any provi-
sion of this Agreement or provision of applicable law.
8.16. Replacement of the Management Agent. Upon the
removal of the Management Agent as the entity responsible for the
management of the Apartment Complex, a substitute Management
Agent, which shall not be an Affiliate of the General Partner,
shall be named by the General Partner, subject to the approval of
HUD, and of the Lender, if required, and the approval of BCTC 94.
8.17. Loans to the Partnership. In the event that addi-
tional funds are required by the Partnership for any purpose
relating to the business of the Partnership or for any of its
obligations, expenses, costs or expenditures, the Partnership may
borrow such funds as are needed from any Partner or other Person
or organization, including the General Partner, for such period
of time and on such terms as the General Partner, BCTC 94 and of
HUD and the Lender, if so required, may agree and at the rate of
interest then prevailing for comparable loans (except for
Operating Deficit Loans made pursuant to Section 8.09(b), which
shall bear no interest); provided however, that no such
additional loans shall be secured by any mortgage or other
encumbrance on the property of the Partnership without the prior
approval of BCTC 94 and the approval of HUD and of the Lender, if
required; except that such approvals shall not be required in the
case of the hypothecation of personal property purchased by the
Partnership and not included in the security agreements executed
by the Partnership at the time of Initial Closing. Loans made
under this Section shall be repaid as set forth in Section
11.01(a) of this Agreement, but any amount of any such loan that
is outstanding at the time of the occurrence of any of the events
described in Sections 11.04 or 12.01 shall be repaid as provided
in Section 11.04.
8.18. Reserve Funds and Operating Assurances.
Reserve Fund for Replacements. The Partnership shall
satisfy HUD's requirements as to the Reserve Fund for
Replacements as to the Apartment Complex by making monthly
deposits into the Reserve Fund for Replacements in an amount
equal to $3,867 per month, or such other amount as the Lender
shall require pursuant to the Project Documents, commencing
January 1, 1996. In addition, the General Partner hereby
acknowledges and agrees that it shall deposit additional funds
into the Reserve Fund for Replacements, on an annual basis, in
amounts equal to any and all amounts which it receives as
distributions of Net Cash Flow pursuant to Section 11.01(a) of
this Agreement with respect to all fiscal years of the
Partnership through the fiscal year ending December 31, 2002.
Funds in the Reserve Fund for Replacements are intended to be
employed for the replacement as needed of fixtures, equipment,
structural elements and other components of the Apartment Complex
of a capital nature. All interest earnings on funds on deposit
in the Reserve Fund for Replacements shall be retained therein
for the aforesaid purposes. Withdrawals from the Reserve Fund
for Replacements shall be made only with the Consent, or upon the
direction, of the Lender.
Operating Reserve Account. At or prior to Substantial
Completion, the Developer shall satisfy the requirements of the
Lender and the Investment Partnership by establishing an
Operating Reserve Account, in the amount of $350,000 as a
separate interest-bearing account in a financial institution
designated by the General Partner, subject to the reasonable
approval of the Lender and of BCTC 94. Such Operating Reserve
Account shall be established from the proceeds of the Second and
Third Installments and shall be funded by two deposits, of which
$267,566 shall be deposited upon the receipt of the Second
Installment, and $82,434 shall be deposited upon the receipt of
the Third Installment. Funds on deposit in the Operating Reserve
Account shall be employed solely for the payment of Operating
Deficits (which are defined as existing when the total of all
operating and other income is insufficient to pay all Apartment
Complex operating expenses, debt service payments with respect to
the Mortgage Loan, and all other expenditures provided for in the
then-applicable operating budget approved pursuant to Section
8.20 of this Agreement, specifically including the Asset
Management Fee, and specifically excluding the Incentive
Partnership Management Fee). All interest earnings on funds on
deposit in the Operating Reserve Account shall be used to
subsidize rents at Madison Park Village, and to support the
charitable activities of LRCC and its affiliated non-profit
entities. Withdrawals from the Operating Reserve Account (other
than transfers of interest earnings as aforesaid) shall be made
only with the Consent, or upon the direction, of BCTC 94 and the
Lender.
8.19. Option to Purchase; Right of First Refusal
(a) Option to Purchase Interests of the Investment
Partnership and BCTC 94. LRCC shall have the option, exercisable
at any time after the date which is fifteen (15) years from and
after the date of Substantial Completion, to acquire the
Interests of the Investment Partnership and BCTC 94 in the
Partnership for an amount equal to the lesser of: (i) the
aggregate of all income tax liability of the partners of
(including the investors in) the Investment Partnership arising
from such purchase of the Interest of the Investment Partnership
in the Partnership, as determined by the Investment Partnership
or its accountants, or (ii) the Invested Amount (the "Purchase
Price"). In no event will the Purchase Price be less than the
fair market value of the Apartment Complex, taking into account
any restriction on use in the Declaration of Covenants, the
Regulatory Agreement, the Chapter 121A Regulatory Agreement and
the FHLB Grant Agreement. In the event the aforesaid option is
exercised, the closing of the purchase of the Interests of the
Investment Partnership and BCTC 94 shall occur within sixty (60)
days after the date upon which the Purchase Price is determined
as set forth above; at such closing the Investment Partnership
and BCTC 94 each shall withdraw from the Partnership and
thereafter shall have no further rights, duties, obligations or
liabilities hereunder or with respect to the Partnership. The
rights of LRCC pursuant to this Section 8.19 may not be sold,
assigned or transferred, in whole or in part, by LRCC without the
prior written Consent of the Investment Partnership.
(b) Right of First Refusal. The Partners acknowledge
and agree that, subsequent to the execution of this Agreement,
the Partnership shall enter into an agreement with LRCC (the
"Right of First Refusal Agreement"), pursuant to which the
Partnership will grant to LRCC a right of first refusal to
acquire the Apartment Complex from the Partnership subsequent to
the expiration of the Low-Income Housing Tax Credit compliance
period. Such Right of First Refusal Agreement shall be prepared
by or on behalf of the General Partner, and shall: (i) comply
with the provisions of Section 42(i)(7) of the Code, and (ii) be
subject to the reasonable approval of BCTC 94.
8.20. Operating and Capital Budgets. Not less than
seventy-five (75) days prior to the commencement of each fiscal
year, the General Partner shall transmit to the Lender and to
BCTC 94, proposed operating and capital budgets for the Apartment
Complex and the Partnership for the next fiscal year. Such
budgets shall specifically list all budgeted expenses in all
major categories including, but not limited to, administration,
operation, repairs and maintenance, utilities, taxes, insurance,
interest, Mortgage Loan debt service, capital improvements, and
all budgeted expenses which are to be paid to the General Partner
or its Affiliates. Any such proposed operating budget also shall
include the Asset Management Fee and all other Partnership
obligations or expenditures which: (a) are reasonable and
necessary for the proper operation of the Partnership, (b) are
currently and unconditionally due and payable, and (c) are not
payable from Net Cash Flow; thus, no provision for payment(s)
with respect to the Incentive Partnership Management Fee or debt
service on the Second Loan is to be included in any such proposed
operating budget. Any such proposed operating budget shall be
subject to review and approval by the Lender, prior to its
effectiveness, if: (i) the Partnership is requesting the
Lender's approval of an increase in the rents of units within the
Apartment Complex; or (ii) an Operating Deficit existed with
respect to the previous fiscal year of the Partnership.
ARTICLE IX
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS
OF INTERESTS OF LIMITED PARTNERS
9.01. Purchase for Investment.
The Investment Partnership hereby represents and
warrants to the General Partner and to the Partnership that the
acquisition of its Interest is made as principal for its account
for investment purposes only and not with a view to the resale or
distribution of such Interest, except insofar as the Securities
Act of 1933 and any applicable securities law of any state or
other jurisdiction permit such acquisitions to be made for the
account of others or with a view to the resale or distribution of
such Interest without requiring that such Interest, or the
acquisition, resale or distribution thereof, be registered under
the Securities Act of 1933 or any applicable securities law of
any state or other jurisdiction.
The Investment Partnership agrees that it will not
sell, assign or otherwise transfer its Interest or any fraction
thereof to any Person who does not similarly represent and
warrant and similarly agree not to sell, assign or transfer such
Interest or fraction thereof to any Person who does not similarly
represent and warrant and agree.
The Investment Partnership shall not sell, assign or
otherwise transfer its Interest or any fraction thereof to any
Person until the Investment Partnership has provided the
Partnership with a legal opinion, reasonably satisfactory to the
General Partner, that such sale, assignment or other transfer
does not violate any state or federal securities laws or require
the Interest to be registered under any such laws.
9.02. Restrictions on Transfer of Limited Partners'
Interests.
Under no circumstances will any offer, sale, transfer,
assignment, hypothecation or pledge of any Limited Partner
Interest be permitted unless the General Partner, in its sole
discretion, shall have Consented.
The Limited Partner whose interest is being transferred
shall pay such reasonable expenses as may be incurred by the
Partnership in connection with such transfer.
9.03. Admission of Substitute Limited Partners.
Subject to the other provisions of this Article IX, an
assignee of the Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee, or other
recipient of any disposition of such Interest) shall be deemed
admitted as a Substitute Limited Partner of the Partnership only
upon the satisfactory completion of the following:
(i) Consent of the General Partner (which may be
withheld in its sole discretion) and the consent of the
Lender, if required, shall have been given, which Consent of
the General Partner may be evidenced by the execution by the
General Partner of an amended Certificate evidencing the
admission of such Person as a Limited Partner pursuant to
the requirements of the Act;
(ii) the assignee shall have accepted and agreed
to be bound by the terms and provisions of this Agreement by
executing a counterpart thereof or an appropriate amendment
hereto, and such other documents or instruments as the
General Partner may require in order to effect the admission
of such Person as a Limited Partner;
(iii) an amended Agreement and/or Certificate
evidencing the admission of such Person as a Limited Partner
shall have been filed for recording pursuant to the
requirements of the Act;
(iv) the assignee shall have represented and
agreed in writing as required by Section 9.01;
(v) if the assignee is a corporation, the
assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of its
authority to become a Limited Partner under the terms and
provisions of this Agreement; and
(vi) the assignee or the assignor shall have reim-
bursed the Partnership for all reasonable expenses,
including all reasonable legal fees and recording charges,
incurred by the Partnership in connection with such
assignment, to the extent Partnership assets are not
available for such purpose.
(b) For the purpose of allocation of profits, losses
and credits, and for the purpose of distributing cash of the
Partnership, a Substitute Limited Partner shall be treated as
having become, and as appearing in, the records of the
Partnership as a Partner upon his signing of an amendment to this
Agreement, agreeing to be bound hereby.
(c) The General Partner shall cooperate with the
Person approved to become a Substitute Limited Partner by
preparing the documentation required by this Section and making
all official filings and publications. The Partnership shall
take all such action, including the filing of any amended
Agreement and/or Certificate evidencing the admission of any
Person as a Limited Partner, and the making of any other official
filings and publications, as promptly as practicable after the
satisfaction by the assignee of the Interest of a Limited Partner
of the conditions contained in this Article IX to the admission
of such Person as a Limited Partner of the Partnership.
9.04. Rights of Assignee of Partnership Interest.
Except as provided in this Article and as required by
operation of law, the Partnership shall not be obligated for any
purpose whatsoever to recognize the assignment by any Limited
Partner of his (its) Interest until the Partnership has received
actual Notice thereof.
Any Person who is the assignee of all or any portion of
a Limited Partner's Interest, but does not become a Substitute
Limited Partner and desires to make a further assignment of such
Interest, shall be subject to all the provisions of this Article
IX to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of his (its) Interest.
ARTICLE X
RIGHTS AND OBLIGATIONS
OF LIMITED PARTNERS
10.01. Management of the Partnership. No Limited Partner
shall take part in the management or control of the business of
the Partnership nor transact any business in the name of the
Partnership. Except as otherwise expressly provided in this
Agreement, no Limited Partner shall have the power or authority
to bind the Partnership or to sign any agreement or document in
the name of the Partnership. No Limited Partner shall have any
power or authority with respect to the Partnership except insofar
as the Consent of any Limited Partner shall be expressly required
and except as otherwise expressly provided in this Agreement.
10.02. Limitation on Liability of Limited Partners.
Except as otherwise provided in the Act, the liability of each
Limited Partner shall be limited to its Capital Contribution as
and when payable under the provisions of this Agreement. No
Limited Partner shall have any other liability to contribute
money to, or in respect of the liabilities or obligations of, the
Partnership, nor shall any Limited Partner be personally liable
for any obligations of the Partnership. No Limited Partner shall
be obligated to make loans to the Partnership.
10.03. Other Activities. Any Limited Partner may engage
in or possess interests in other business ventures of every kind
and description for their own accounts, including without
limitation, serving as general or limited partner of other
partnerships which own, either directly or through interests in
other partnerships, government-assisted housing projects similar
to the Apartment Complex. Neither the Partnership nor any of the
Partners shall have any right by virtue of this Agreement in or
to such other business ventures to the income or profits derived
therefrom.
ARTICLE XI
PROFITS, LOSSES AND DISTRIBUTIONS
11.01. Allocation of Profits, Losses, Credits and Cash
Distributions.
All profits, losses and credits, except those gains and
losses referred to in Sections 11.03 and 11.10, shall be
allocated one percent (1%) to the General Partner and ninety-nine
percent (99%) to the Investment Partnership; provided, however,
that all losses, if any, in excess of the losses projected in the
Partnership Projections prepared on behalf of the Investment
Partnership and agreed to by the Partners as of the Initial
Closing, shall be allocated to the General Partner. Subject to
Lender approval, if required, Net Cash Flow shall be applied
and/or distributed in the following priority: (i) payment to the
Second Lender of all sums currently due and payable with respect
to the Second Loan; (ii) repayment of any amounts due with
respect to any Subordinated Loans; (iii) payment of the Incentive
Partnership Management Fee for the current year pursuant to
Section 8.11; and (iv) of any remaining sum, sixty per cent (60%)
thereof to the General Partner, and forty per cent (40%) thereof
to the Investment Partnership; provided, however, that during
such time as HUD regulations are applicable to the Apartment
Complex, the total amount of Net Cash Flow which may be so
distributed to the Partners with respect to any fiscal year shall
not exceed such amounts as HUD regulations permit to be
distributed.
In any year in which a Partner sells, assigns or
transfers all or any portion of an Interest to any Person who
during such year is admitted as a substitute Partner, the share
of all profits and losses allocated to, and of all Net Cash Flow
and of all cash proceeds distributable under Section 11.04
distributed to, all Partners which is attributable to the
Interest sold, assigned or transferred shall be divided between
the assignor and the assignee using any one of the following
methods as determined by agreement between the assignor and
assignee: (i) ratably on the basis of the number of days in such
year before, and the number of days on and after, the execution
by the assignee of this Agreement, or (ii) by dividing the
Partnership fiscal year into two segments, the first segment
being the time period in such year before the execution by the
assignee of this Agreement and the second segment being the time
period in such year beginning on the date of execution of this
Agreement, and allocating profits and losses, Net Cash Flow, and
all cash proceeds distributable in each such segment among the
persons who were Partners during that segment, or (iii) such
other method as provided by the Code or regulations thereunder.
The Partnership shall, subject to the limitations set
forth in the Chapter 121A Regulatory Agreement, any applicable
limitation on the distribution of Surplus Cash and any required
approval by HUD and/or the Lender, distribute Surplus Cash not
less frequently than annually in the manner provided in Section
11.01(a).
In the event there is a determination that there is any
original issue discount or imputed interest attributable to the
Capital Contribution of any Partner, or any loan between a
Partner and the Partnership, any income or deduction of the
Partnership attributable to such imputed interest or original
issue discount on such Capital Contribution or loan (whether
stated or unstated) shall be allocated solely to such Partner.
In the event that the deduction of all or a portion of
any fee paid or incurred by the Partnership to a Partner or an
Affiliate of a Partner is disallowed for federal income tax
purposes by the Internal Revenue Service with respect to a
taxable year of the Partnership, the Partnership shall then
allocate to such Partner an amount of gross income of the
Partnership for such year equal to the amount of such fee as to
which the deduction is disallowed.
If any Partner's Interest in the Partnership is reduced
but not eliminated because of the admission of new Partners or
otherwise, or if any Partner is treated as receiving any items of
property described in Section 751(a) of the Code, the Partner's
Interest in such items of Section 751(a) property that was
property of the Partnership while such Person was a Partner shall
not be reduced, but shall be retained by the Partner so long as
the Partner has an Interest in the Partnership and so long as the
Partnership has an Interest in such property.
11.02. Determination of Profits, Losses and Credits.
Profits, losses and credits for all purposes of this Agreement
shall be determined in accordance with the accrual accounting
method, except that any adjustments made pursuant to Section 754
of the Code, other than the adjustments made with respect to the
admission of the Investment Partnership to the Partnership, shall
not be taken into account. Every item of income, gain, loss,
deduction, credit or tax preference entering into the computation
of such profits or losses, or applicable to the period during
which such profits and losses were realized, shall be considered
allocated to each Partner in the same proportion as profits and
losses are allocated to such Partner.
11.03. Allocation of Gains and Losses. Gains and losses
recognized by the Partnership upon the sale, exchange or other
disposition of all or substantially all of the property owned by
the Partnership shall be allocated in the following manner:
gains shall be allocated (i) first, to the Partners
with negative Capital Account balances, that portion of gains
(including any gains treated as ordinary income for federal
income tax purposes) which is equal in amount to and in
proportion to, such Partners' respective negative Capital
Accounts in the Partnership; provided, that no gain shall be
allocated to a Partner under this clause (i) once such Partner's
Capital Account is brought to zero; and (ii) second, gain in
excess of the amount allocated under (i) shall be allocated to
the Partners in the amount and to the extent necessary to
increase the Partners' respective Capital Accounts so that the
proceeds distributed under Sections 11.04(d), (e) and (f) will be
distributed in accordance with the Partners' respective Capital
Accounts.
Losses shall be allocated (i) first, to the extent and
in such proportions as the respective positive balances in all
Partners' Capital Accounts; and (ii) second, any remaining loss
to the Partners in accordance with the manner in which they bear
the economic risk of loss associated with such loss or, if none,
as follows: 1.00% thereof to the General Partner, and 99.00%
thereof to the Investment Partnership.
Any portion of the gains treated as ordinary income for
federal income tax purposes under Sections 1245 and 1250 of the
Code ("Recapture Amount") shall be allocated on a dollar for
dollar basis to those Partners to whom the items of Partnership
deduction or loss giving rise to the Recapture Amount had been
previously allocated.
11.04. Distribution of Proceeds from Sale and Liquidation
of Partnership Property. Except as may be required under Section
12.02(b), the proceeds resulting from the liquidation of the
Partnership assets pursuant to Section 12.02, and the net
proceeds resulting from any sale of the property of the Partner-
ship or refinancing of the Apartment Complex or a Capital
Transaction, as the case may be, shall be distributed and applied
in the following order of priority:
to the payment of all matured debts and liabilities of
the Partnership (including amounts due pursuant to the
Mortgage Loan and the Second Loan, and all expenses of the
Partnership incident to any such sale or refinancing),
excluding (1) debts and liabilities of the Partnership to
Partners or any Affiliates, and (2) all unpaid fees owing to
the General Partner and/or its Affiliate(s) under this
Agreement;
to the setting up of any reserves which the Liquidator
(or the General Partner if the distribution is not pursuant
to the liquidation of the Partnership) deems reasonably
necessary for contingent, unmatured or unforeseen
liabilities or obligations of the Partnership;
to the payment of any debts and liabilities (including
unpaid fees) owed to the Partners or any Affiliates by the
Partnership for Partnership obligations, including the
repayment of any loans made pursuant to Sections
5.01(d)(iii), 8.09(b) or 8.17; provided, however, that the
foregoing debts and liabilities owed to Partners and their
Affiliates shall be paid or repaid, as applicable, in the
following order of priority, if and to the extent
applicable: (i) the Asset Management Fee currently due, if
any, together with any accrued and unpaid Asset Management
Fees, (ii) Credit Recovery Loans to the Investment
Partnership, (iii) Operating Deficit Loans to the General
Partner, and (iv) any other such debts and liabilities;
to the Investment Partnership in an amount equal to the
Invested Amount, reduced (but not below zero) by all cash
distributions previously distributed to the Investment
Partnership pursuant to this Section 11.04;
to the General Partner in the total amount of its
Capital Contributions paid to or on behalf of the
Partnership, reduced by all cash distributions previously
distributed to them pursuant to this Section 11.04; and
the balance of such remaining sum, fifty per cent (50%)
thereof to the General Partner, and fifty per cent (50%)
thereof to the Investment Partnership.
11.05. Capital Accounts. A separate Capital Account
shall be maintained and adjusted for each Partner. There shall
be credited to each Partner's Capital Account the amount of his
Capital Contribution, the fair market value of any property
contributed to the Partnership (net of any liabilities secured by
such property) and such Partner's distributive share of the
profits for tax purposes of the Partnership; and there shall be
charged against each Partner's Capital Account the amount of all
Cash Flow distributed to such Partner, the fair market value of
any property distributed to such Partner (net of any liabilities
secured by such property), the net proceeds resulting from the
liquidation of the Partnership's assets or from any sale or
refinancing of the Apartment Complex distributed to such Partner,
and such Partner's distributive share of the losses for tax pur-
poses of the Partnership. Each Partner's Capital Account shall
be maintained and adjusted in accordance with the Code and the
Treasury Regulations thereunder. The foregoing provisions and
the other provisions of this Agreement relating to the main-
tenance of Capital Accounts are intended to comply with Treas.
Reg. Section 1.704-1(b), and shall be interpreted and applied in
a man-
ner consistent with such regulations. It is the intention of the
Partners that the Capital Accounts maintained under this
Agreement be determined and maintained throughout the full term
of this Agreement in accordance with the accounting rules of
Treas. Reg. Section 1.704-1(b)(2)(iv), as amended from time to
time.
11.06. Authority of General Partner to Vary Allocations
to Preserve and Protect Partners' Intent.
It is the intent of the Partners that each Partner's
distributive share of income, gain, loss, deduction, or credit
(or item thereof) shall be determined and allocated in accordance
with this Article XI and Section 5.01 to the fullest extent
permitted by Section 704(b) of the Code. In order to preserve
and protect the determinations and allocations provided for in
this Article XI and Section 5.01, the General Partner hereby is
authorized and directed to allocate income, gain, loss,
deduction, or credit (or item thereof) arising in any year
differently than otherwise provided for in this Article XI and
Section 5.01 to the extent that allocating income, gain, loss,
deduction or credit (or item thereof) in the manner provided for
in Article XI and Section 5.01 would cause the determinations and
allocations of each Partner's distributive share of income, gain,
loss, deduction, or credit (or item thereof) not to be permitted
by Section 704(b) of the Code and Treasury Regulations
promulgated thereunder. Any allocation made pursuant to this
Section 11.06 shall be deemed to be a complete substitute for any
allocation otherwise provided for in this Article XI and Section
5.01 and no amendment of this Agreement or approval of any
Partner shall be required.
In making any allocation (the "new allocation") under
Section 11.06(a), the General Partner is authorized to act only
after: (i) having been advised by the Accountants that, under
Section 704(b) of the Code and the Treasury Regulations
thereunder, (A) the new allocation is necessary, and (B) the new
allocation is the minimum modification of the allocations
otherwise provided for in this Article XI and Section 5.01
necessary in order to assure that, either in the then current
year or in any preceding year, each Partner's distributive share
of income, gain, loss, deduction, or credit (or item thereof) is
determined and allocated in accordance with this Article XI and
Section 5.01 to the fullest extent permitted by Section 704(b) of
the Code and the Treasury Regulations thereunder; and (ii) having
received the approval of BCTC 94 to such proposed new allocation.
If the General Partner is required by Section 11.06(a)
to make any new allocation in a manner less favorable to the
Limited Partners than is otherwise provided for in this Article
XI and Section 5.01, then the General Partner is authorized and
directed, only after having been advised by the Accountants that
it is permitted by Section 704(b) of the Code, to allocate
income, gain, loss, deduction, or credit (or item thereof)
arising in later years in such manner so as to bring the
allocations of income, gain, loss, deduction, or credit (or item
thereof) to the Limited Partners as nearly as possible to the
allocations thereof otherwise contemplated by this Article XI and
Section 5.01.
New allocations made by the General Partner under
Section 11.06(a) and Section 11.06(c) in reliance upon the advice
of the Accountants shall be deemed to be made pursuant to the
fiduciary obligation of the General Partner to the Partnership
and the Limited Partners, and no such allocation shall give rise
to any claim or cause of action by any Limited Partner.
11.07. Designation of Tax Matters Partner. New
Madison IV, Inc. hereby is designated as Tax Matters Partner of
the Partnership, and shall engage in such undertakings as are
required of the Tax Matters Partner of the Partnership, as
provided in regulations pursuant to Section 6231 of the Code. If
the General Partner designated as the Tax Matters Partner of the
Partnership withdraws from the Partnership, the Partnership shall
designate a successor Tax Matters Partner, in accordance with
Treasury Regulations Section 301.6231(a)(7)-1(T), or any
successor Regulation. The Partnership shall notify the Internal
Revenue Service of the designation of a successor Tax Matters
Partner for such year, as well as for all prior years that the
withdrawn General Partner was serving as Tax Matters Partner.
Each Partner, by its execution of this Agreement, Consents to
such designation of the Tax Matters Partner and agrees to
execute, certify, acknowledge, deliver, swear to, file and record
at the appropriate public offices such documents as may be
necessary or appropriate to evidence such Consent.
11.08. Authority of Tax Matters Partner. The Tax Matters
Partner hereby is authorized, but not required:
to enter into any settlement with the Internal Revenue
Service or the Secretary of the Treasury (the "Secretary") with
respect to any tax audit or judicial review, in which agreement
the Tax Matters Partner may expressly state that such agreement
shall bind the other Partners, except that such settlement
agreement shall not bind any Partner who (within the time
prescribed pursuant to the Code and regulations thereunder) files
a statement with the Secretary providing that the Tax Matters
Partner shall not have the authority to enter into a settlement
agreement on behalf of such Partner;
in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be
taken into account by a Partner for tax purposes (a "final
adjustment") is mailed to the Tax Matters Partner, to seek
judicial review of such final adjustment, including the filing of
a petition for readjustment with the Tax Court, the District
Court of the United States for the district in which the
Partnership's principal place of business is located, or the
United States Claims Court;
to intervene in any action brought by any other Partner
for judicial review of a final adjustment;
to file a request for an administrative adjustment with
the Internal Revenue Service at any time and, if any part of such
request is not allowed by the Internal Revenue Service, to file a
petition for judicial review with respect to such request;
to enter into an agreement with the Internal Revenue
Service to extend the period for assessing any tax which is
attributable to any item required to be taken into account by a
Partner for tax purposes, or an item affected by such item; and
to take any other action on behalf of the Partners or
the Partnership in connection with any administrative or judicial
tax proceeding to the extent permitted by applicable law or
regulations.
11.09. Expenses of Tax Matters Partner. The Partnership
shall indemnify and reimburse the Tax Matters Partner for all
expenses, including legal and accounting fees, claims,
liabilities, losses and damages incurred in connection with any
administrative or judicial proceeding with respect to the tax
liability of the Partners. The payment of all such expenses
shall be made before any distributions are made from Cash Flow or
any discretionary reserves are set aside by the General Partner.
The General Partner shall have the obligation to provide funds
for such purpose. The taking of any action and the incurring of
any expense by the Tax Matters Partner in connection with any
such proceeding, except to the extent required by law, is a
matter in the sole discretion of the Tax Matters Partner and the
provisions on limitations of liability of General Partner and
indemnification set forth in Section 8.07 of this Agreement shall
be fully applicable to the Tax Matters Partner in its capacity as
such.
11.10. Minimum Gain Provisions.
Notwithstanding any other provision of this Agreement,
no allocation of loss or deduction (or item thereof) attributable
to any nonrecourse debt of the Partnership shall be made by the
Partnership to a Partner if such allocation would cause the sum
of the deficit capital account balances of such Partner otherwise
receiving such allocation (excluding the portion of such deficit
balances that must be restored to the Partnership upon
liquidation, if any) to exceed such Partner's share of
Partnership "Minimum Gain" (as defined in Treas. Reg.
Section 1.704-2(b)(2) and determined at the end of the
Partnership
taxable year to which the allocation relates).
Notwithstanding any other provision of this Agreement,
if there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, all Partners with deficit Capital
Account balances at the end of such year (reduced by the portion
of such deficit balances (i) that must be restored upon
liquidation, if any, and (ii) that would be eliminated under
applicable Regulations if the Partnership were liquidated at such
time, and increased by the items described in Treas. Reg.
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) shall be allocated
items
of income and gain for such year in the amount and in the
proportions needed to eliminate such deficits, before any other
allocation is made under this Agreement.
In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treas.
Reg. Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Partnership income and gain shall be specially allocated to each
such Partner
in an amount and manner sufficient to eliminate (to the extent
required by the Regulations under Code Section 704(b)) to the
deficit balance in each such Partner's Capital Account as quickly
as possible, provided that an allocation pursuant to this Section
11.10(c) shall be made if and only to the extent that such
Partner would have a deficit Capital Account after all other
allocations provided for in this Article XI have been tentatively
made as if this Section 11.10(c) were not in the Agreement.
In the event any Partner has a deficit Capital Account
at the end of any fiscal year in excess of the sum of (i) the
amount that such Partner must restore to the Partnership upon
liquidation, if any, and (ii) the amount such Partner is deemed
obligated to restore pursuant to the penultimate sentence of
Treas. Reg. Section 1.704-2(g)(1) and Section 1.704-2(i)(5), such
Partner shall
be specially allocated items of Partnership income and gain in
the amount of such excess as quickly as possible, provided that
an allocation pursuant to this Section 11.10(d) shall be made if
and only to the extent that such Partner would have a deficit
Capital Account in excess of such sum after all other allocations
provided for in this Article XI has been tentatively made as if
this Section 11.10(d) and Section 11.10(c) hereof were not in the
Agreement.
In the event that income, loss or items thereof are
allocated to one or more Partners pursuant to Sections 11.10(b),
(c) or (d), subsequent income, loss or items thereof shall be
allocated (subject to the provisions of Sections 11.10(b), (c) or
(d)) to the Partners so that, to the extent possible in the
judgment of the General Partner, the net amount of allocations
shall be equal to the amount that would have been allocated had
Section 11.10 not been applied.
Nonrecourse deductions as defined in Treas. Reg.
Section 1.704-2(b) shall be allocated one per cent (1%) to the
General
Partner, and ninety-nine per cent (99%) in the aggregate to the
Investment Partnership, in the proportions set forth in Section
11.01(a).
ARTICLE XII
SALE, DISSOLUTION AND LIQUIDATION
12.01. Dissolution of the Partnership. The Partnership
shall be dissolved upon the earlier of the expiration of the term
of the Partnership, or upon:
the withdrawal, Bankruptcy, death, dissolution or
adjudication of incompetency of a General Partner who is at
that time the sole General Partner without the election of
the remaining Partners, pursuant to Section 6.03, to
continue the Partnership;
the sale or other disposition of all or substantially
all of the assets of the Partnership;
the election by the General Partner, with the Consent
of BCTC 94; or
any other event causing the dissolution of the
Partnership under the laws of the State.
12.0. Winding Up and Distribution.
Upon the dissolution of the Partnership pursuant to
Section 12.01, (i) a Certificate of Cancellation shall be filed
in such offices within the State as may be required or
appropriate, and (ii) the Partnership business shall be wound up
and its assets liquidated as provided in this Section 12.02 and
the net proceeds of such liquidation, except as provided in
Section 12.02(b) below, shall be distributed in accordance with
Section 11.04.
It is the intent of the Partners that, upon liquidation
of the Partnership, any liquidation proceeds available for
distribution to the Partners be distributed in accordance with
the Partners' respective positive Capital Account balances and
the Partners believe that distributions under Section 11.04 will
effectuate such intent. In the event that, upon liquidation,
there is any conflict between a distribution pursuant to the
Partners' respective Capital Account balances and the intent of
the Partners with respect to distribution of proceeds as provided
in Section 11.04, the Liquidator shall, notwithstanding the
provisions of Sections 11.01, 11.02 and 11.03, allocate the
Partnership's gains, profits and losses in a manner that will
cause the distribution of liquidation proceeds to the Partners to
be in accordance with the Partners' respective positive Capital
Account balances.
The Liquidator shall file all certificates and notices
of the dissolution of the Partnership required by law. The
Liquidator shall proceed without any unnecessary delay to sell
and otherwise liquidate the Partnership's property and assets;
provided, however, that if the Liquidator shall determine that an
immediate sale of part or all of the Partnership property would
cause undue loss to the Partners, then in order to avoid such
loss, the Liquidator may, except to the extent provided by the
Act, defer the liquidation as may be necessary to satisfy the
debts and liabilities of the Partnership to Persons other than
the Partners. Upon the complete liquidation and distribution of
the Partnership assets, the Partners shall cease to be Partners
of the Partnership, and the Liquidator shall execute, acknowledge
and cause to be filed all certificates and notices required by
the law to terminate the Partnership.
Upon the dissolution of the Partnership pursuant to
Section 12.01, the Accountants shall promptly prepare, and the
Liquidator shall furnish to each Partner, a statement setting
forth the assets and liabilities of the Partnership upon its
dissolution. Promptly following the complete liquidation and
distribution of the Partnership property and assets, the
Accountants shall prepare, and the Liquidator shall furnish to
each Partner, a statement showing the manner in which the
Partnership assets were liquidated and distributed.
ARTICLE XIII
BOOKS AND RECORDS, ACCOUNTING
TAX ELECTIONS, ETC.
13.01. Books and Records. The books and records of the
Partnership shall be maintained on an accrual basis in accordance
with sound federal income tax accounting principles. These and
all other records of the Partnership, including information
relating to the status of the Apartment Complex and information
with respect to the sale by the General Partner or any Affiliate
of goods or services to the Partnership, shall be kept at the
principal office of the Partnership and shall be available for
examination there by any Partner, or his duly authorized repre-
sentative, at any and all reasonable times. Any Partner, or his
duly authorized representative, upon paying the costs of collec-
tion, duplication and mailing, shall be entitled to a copy of the
list of names and addresses of the Limited Partners.
13.02. Bank Accounts. All funds of the Partnership not
otherwise invested shall be deposited in one or more accounts
maintained in such banking institutions as the General Partner
shall determine, and withdrawals shall be made only in the
regular course of Partnership business on such signature or sig-
natures as the General Partner may, from time to time, determine.
No funds of the Partnership shall be deposited in any financial
institution in which any Partner is an officer, director or
holder of any proprietary interest.
13.03. Accountants. The Accountants shall annually
prepare for execution by the General Partner all tax returns of
the Partnership, shall annually audit the books of the
Partnership, and shall certify, in accordance with generally
accepted accounting principles, a balance sheet, a profit and
loss statement, and a cash flow statement. With respect to each
fiscal year during the Partnership's operations, at such time as
the Accountants shall have prepared the proposed tax return for
such year, the Accountants shall provide copies of such proposed
tax return to the Investment Partnership and to its accountants,
Reznick, Fedder & Silverman, of Bethesda, Maryland, for their
review and comment. Any changes in such proposed tax return
recommended by the Investment Partnership's accountants shall be
made by the Accountants prior to the completion of such tax
return for execution by the General Partner. The Partnership
shall reimburse Boston Capital Communications Limited Partner-
ship, an affiliate of the Investment Partnership, for its
expenses incurred in causing the Partnership's proposed tax
return to be reviewed by the Investment Partnership's accountants
if and to the extent that such review results in modifications to
such proposed tax return. A full detailed statement shall be
furnished to all Partners, showing such assets, properties, and
net worth and the profits and losses of the Partnership for the
preceding fiscal year. All Partners shall have the right and
power to examine and copy, at any and all reasonable times, the
books, records and accounts of the Partnership.
13.04. Reports to Partners.
(a) The General Partner shall cause to be prepared and
distributed to all persons who were Partners at any time during a
fiscal year of the Partnership:
(i) By February 22 of the year after the end
of each fiscal year of the Partnership, (A) a balance
sheet as of the end of such fiscal year and statements
of income, Partners' equity, and changes in financial
position and a Cash Flow and Net Cash Flow statement,
for the year then ended, all of which, except the Cash
Flow and Net Cash Flow statement, shall be prepared in
accordance with generally accepted accounting
principles and accompanied by an auditor's report
containing an opinion of the Accountants, and (B) a
report of the activities of the Partnership during the
period covered by the report. Such report shall set
forth distributions to Limited Partners for the period
covered thereby and shall separately identify
distributions from: (1) Cash Flow and Net Cash Flow
from operations during the period, (2) Cash Flow and
Net Cash Flow from operations during a prior period
which had been held as reserves, (3) proceeds from
disposition of the Apartment Complex or any other
investments of the Partnership, (4) lease payments on
net leases with builders and sellers, and (5) reserves.
With respect to any distribution to the Investment
Partnership, the report called for shall separately
identify distributions from (A) Cash Flow and Net Cash
Flow from operations during the period, (B) Cash Flow
and Net Cash Flow from operations during a prior period
which had been held as reserves, (C) proceeds from
disposition of property and investments, (D) reserves
from the gross proceeds of the offering originally
obtained from the Investment Partnership, (E) borrowed
monies, (F) loans or contributions from the Investment
Partnership, and (G) transactions outside of the
ordinary course of business with a description thereof.
(ii) By February 8 of the year after the end
of each fiscal year of the Partnership, all information
necessary for the preparation of the Limited Partners'
federal income tax returns.
(iii) Within forty (40) 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; and
(B) a statement of income and expenses
for the quarter then ended, which may be
unaudited;
(C) a Low-Income Housing Tax Credit
monitoring form, as specified by Boston
Capital;
(D) a rent roll and occupancy/rental
report for the quarter then ended, each in
the form specified by Boston Capital; and
(E) other pertinent information
regarding the Partnership and its activities
during the quarter covered by the report.
(b) Within ninety (90) days after the end of each
fiscal year of the Partnership the General Partner shall provide
to the Investment Partnership:
(i) A certification by the General Partner
that (A) all required Mortgage Loan payments, and
tax and insurance payments 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 default, a 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 violation, a
description thereof;
(ii) the information specified in Section
13.04(c);
(iii) a descriptive statement of all
transactions during the fiscal year between the
Partnership and the General Partner and/or any
Affiliate, including the nature of the transaction
and the payments involved (including accrued cash
or other payments);
(iv) a Cash Flow and Net Cash Flow statement;
and
(v) a copy of the annual report to be filed
with the United States Treasury concerning the
status of the Apartment Complex as low-income
housing and, if required, a certificate to the
Agency concerning the same.
(c) Upon the written request of BCTC 94 for
further information with respect to any matter covered in items
(a) or (b) above, the General Partner shall utilize its best
efforts to furnish such information within 30 days of receipt of
such request.
(d) The General Partner, on behalf of the
Partnership, shall send to the Investment Partnership, on or
before July 31 in each year, a report which shall state:
(i) the then occupancy level of the
Apartment Complex;
(ii) if there are any Operating Deficits or
anticipated Operating Deficits, the manner in
which such deficits will be funded; and
(iii) such other matters as shall be
material to the operation of the Partnership,
including, without limitation, any building,
health or fire code violation or similar violation
of a governmental law, ordinance or regulation by
the Apartment Complex of which the General Partner
is aware.
(e) Prior to October 22 of each year, the General
Partner, on behalf of the Partnership, shall send to the
Investment Partnership an estimate of the Investment Part-
nership's share of the Tax Credits, profits and losses of the
Partnership for federal income tax purposes for the current
fiscal year. Such estimate shall be prepared by the General
Partner and the Accountants.
(f) Within 15 days after the end of any calendar
quarter during which
(i) there is a material default by the
Partnership under the Project Documents or in
payment of any mortgage, taxes, interest or other
obligation on secured or unsecured debt,
(ii) any reserve has been reduced or
terminated by application of funds therein for
purposes materially different from those for which
such reserve was established,
(iii) the General Partner has received
any notice of a material fact which may
substantially affect further distributions, or
(iv) any Partner has pledged or
collateralized his Interest in the Partnership,
the General Partner shall send the Investment
Partnership a detailed report of such event.,
(g) After the Admission Date, the General
Partner, on behalf of the Partnership, shall send to the
Investment Partnership, on or before the tenth day of each month,
a copy of all applicable periodic reports covering the status of
project operations from the previous period, as may be required
by the Agency. In addition, within thirty (30) days after the
occurrence of Substantial Completion, the General Partner, on
behalf of the Partnership, shall prepare and send to the
Investment Partnership a Credit Basis Worksheet for each building
within the Apartment Complex, in the format provided by Boston
Capital.
(h) (i) In the event that the reports or
information provided for in Sections 13.04(a)(i) and/or
13.04(a)(ii) above are, at any time, not provided within the time
period(s) specified in such Sections, the General Partner shall
be obligated to pay to the Investment Partnership the sum of $100
per day, as liquidated damages, for each day from the date upon
which such reports or information is(are) due pursuant to the
provisions of the aforesaid Sections until the date upon which
such reports or information is(are) provided.
(ii) In the event that the reporting requirements
set forth in any of the above provisions of this Section 13.04
are not met, BCTC 94, in its sole discretion, may direct the
General Partner to dismiss the Accountants, and to designate
successor Accountants, subject to the approval of BCTC 94;
provided, however, that if the General Partner and BCTC 94 cannot
agree on the designation of successor Accountants, the successor
Accountants shall be designated by BCTC 94 in its sole
discretion, and the fees of such successor Accountants shall be
paid by the Partnership.
13.05. Section 754 Elections. In the event of a transfer
of all or any part of the Interest of a General Partner or of a
Limited Partner, the Partnership may elect, pursuant to Sections
743 and 754 of the Code (or any corresponding provision of suc-
ceeding law), to adjust the basis of the Partnership property if,
in the opinion of BCTC 94, based upon the advice of the
Accountants, such election would be most advantageous to the
Investment Partnership. Each Partner agrees to furnish the
Partnership with all information necessary to give effect to such
election.
13.06. Fiscal Year and Accounting Method. The fiscal
year of the Partnership shall be the calendar year. All
Partnership accounts shall be determined on the accrual basis.
ARTICLE XIV
AMENDMENTS
14.01. Proposal and Adoption of Amendments. This
Agreement may be amended by the General Partner with the Consent
of BCTC 94.
ARTICLE XV
CONSENTS, VOTING AND MEETINGS
15.01. Method of Giving Consent. Any Consent required by
this Agreement may be given by a written Consent given by the
consenting Partner and received by the General Partner at or
prior to the doing of the act or thing for which the Consent is
solicited.
15.02. Submissions to Limited Partners. The General
Partner shall give the Limited Partners Notice of any proposal or
other matter required by any provision of this Agreement or by
law to be submitted for consideration and approval of the Limited
Partners. Such Notice shall include any information required by
the relevant provision or by law.
15.03. Meetings; Submission of Matter for Voting.
Subject to the provisions of Section 10.01, a majority in
Interest of the Limited Partners shall have the authority to
convene meetings of the Partnership and to submit matters to a
vote of the Partners.
ARTICLE XVI
GENERAL PROVISIONS
16.01. Burden and Benefit. The covenants and agreements
contained herein shall be binding upon and inure to the benefit
of the heirs, executors, administrators, successors and assigns
of the respective parties hereto.
16.02. Applicable Law. This Agreement shall be construed
and enforced in accordance with the laws of the State.
16.03. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original copy and all of which together shall constitute one
agreement binding on all parties hereto, notwithstanding that all
the parties shall not have signed the same counterpart.
16.04. Separability of Provisions. Each provision of
this Agreement shall be considered separable and if for any
reason any provision which is not essential to the effectuation
of the basic purposes of this Agreement is determined to be
invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those
provisions of this Agreement which are valid.
16.05. Entire Agreement. This Agreement sets forth all
(and is intended by all parties to be an integration of all) of
the representations, promises, agreements and understandings
among the parties hereto with respect to the Partnership, the
Partnership business and the property of the Partnership, and
there are no representations, promises, agreements or under-
standings, oral or written, express or implied, among them other
than as set forth or incorporated herein.
16.06. Liability of the Investment Partnership. Notwith-
standing anything to the contrary contained herein, neither the
Investment Partnership nor any of its partners, general or
limited, shall have any personal liability to any of the parties
to this Agreement with regard to the representations and
covenants extended, or the obligations undertaken, by the Invest-
ment Partnership under this Agreement. In the event that the
Investment Partnership shall be in default under any of the terms
of this Agreement, the sole recourse of any party hereto for any
indebtedness due hereunder, or for any damages resulting from any
such default by the Investment Partnership, shall be against the
capital contributions of the investor limited partners of the
Investment Partnership allocated to, and remaining for investment
in, the Partnership; provided however, that under no circum-
stances shall the liability of the Investment Partnership for any
such default be in excess of the aggregate of: (a) the amount of
Capital Contribution payable by the Investment Partnership to the
Partnership, under the terms of this Agreement, at the time of
such default, and (b) an amount equal to reasonable attorneys'
fees reasonably and necessarily incurred by the General Partner
in obtaining payment of any Installment(s) not made by the
Investment Partnership when due and payable pursuant to the
provisions of this Agreement.
16.07. Environmental Protection.
The General Partner represents and warrants that (i)
except as and to the extent disclosed in reports regarding the
Land and the Apartment Complex commissioned by the General
Partner or its Affiliate(s) or agents, copies of all of which
have been supplied to BCTC 94 or its Affiliates, it has no
knowledge of any deposit, storage, disposal, burial, discharge,
spillage, uncontrolled loss, seepage or filtration of any
Hazardous Substances at, upon, under or within the Land or any
contiguous real estate, and (ii) it has not caused or permitted
to occur, and it shall not permit to exist, any condition which
may cause a discharge of any Hazardous Substances at, upon, under
or within the Land or on any contiguous real estate.
The General Partner further represents and warrants
that (i) it has not been, is not and will not be involved in
operations at or, pursuant to its best efforts, near the Land,
which operations could lead to (A) the imposition of liability
under the Hazardous Waste Laws on the Partnership or on any other
subsequent or former owner of the Land or (B) the creation of a
lien on the Land under the Hazardous Waste Laws or under any
similar laws or regulations; and (ii) the General Partner has not
permitted, and will not permit, any tenant or occupant of the
Apartment Complex to engage in any activity that could impose
liability under the Hazardous Waste Laws on such tenant or occu-
pant, on the Land or on any other owner of the Apartment Complex.
The General Partner shall comply strictly and in all
respects with the requirements of the Hazardous Waste Laws and
related regulations and with all similar laws and regulations.
The General Partner shall at all times indemnify and
hold harmless the Investment Partnership against and from any and
all claims, suits, actions, debts, damages, costs, charges,
losses, obligations, judgments, and expenses, of any nature
whatsoever, suffered or incurred by the Investment Partnership,
under or on account of the Hazardous Waste Laws or any similar
laws or regulations, including the assertion of any lien
thereunder, except for claims, suits, actions, debts, damages,
costs, charges, losses, obligations, judgments, or expenses
arising from the Investment Partnership's own negligence,
misconduct or fraud.
For purposes of this Section 16.07, "Hazardous
Substances" means oil, petroleum or chemical liquids or solids,
liquid or gaseous products or any hazardous wastes or hazardous
substances, as those terms are used in the Hazardous Waste Laws;
and "Hazardous Waste Laws" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, and any other
federal, state or local law governing Hazardous Substances, as
such laws may be amended from time to time.
16.0. Notices.
(a) Any Notice required by the provisions of this
Agreement to be given to the Investment Partnership shall be
addressed as follows:
Boston Capital Tax Credit Fund IV L.P.,
c/o Boston Capital Partners, Inc.
One Boston Place, 21st Floor
Boston, Massachusetts 02108
Attention: Jeffrey H. Goldstein
Senior Vice President
And a copy to:
Peabody & Brown
1255 23rd Street, N.W.
Suite 800
Washington, D.C. 20037
Attention: Kenneth G. Hance, Jr.
(b) Any Notice required by the provisions of this
Agreement to be given to the General Partner shall be addressed
as follows:
New Madison IV, Inc.
122 DeWitt Drive
Roxbury, MA 02120
Attn: Danette Jones
And a copy to:
Hale and Dorr
60 State Street
Boston, MA 02109
Attn: Katharine E. Bachman
16.09. Continuing Guarantee of Financial Obligations of
the General Partner by the Guarantor. The Guarantor hereby
unconditionally and irrevocably guarantees to the Partnership and
to the Investment Partnership the full and timely performance by
Madison IV of all of its financial obligations as General Partner
under and pursuant to the provisions of Sections 4.01(p),
4.02(g), 5.01(d), 5.05, 5.06 and 8.09 of this Agreement, all in
accordance with the provisions hereof. Any payment made by the
Guarantor pursuant to this Guarantee shall satisfy the obligation
of the General Partner to make such payment as if the General
Partner had made such payment itself.
Neither the Guarantor's obligations to make payment in
accordance with the terms of this guarantee, nor any remedy for
enforcement thereof shall be impaired, modified, changed,
released, or limited in any manner whatsoever by any impairment,
modification, change, release or limitation of the liability of
the General Partner, or any remedy for the enforcement thereof,
resulting from the operation of any present or future provision
of the Bankruptcy Reform Act of 1978 or other applicable statute,
nor shall such obligation or remedy for enforcement be impaired,
modified, changed, released or limited in any manner by such
event of bankruptcy.
The Guarantor's obligations as specified in this Partnership
Agreement constitute a continuing guarantee, such that any claim
made by the Partnership or the Investment Partnership against the
Guarantor, pursuant to this Section 16.09, shall not preclude the
Partnership or the Investment Partnership from making a claim
against the Guarantor for future payments.
The obligations of the Guarantor, as set forth in this
Section 16.09, shall not be transferred or assigned to a third
party without the Consent of BCTC 94.
IN WITNESS WHEREOF, the parties have affixed their
signatures and seals to this Amended and Restated Agreement
and Certificate of Limited Partnership of New Madison Park
IV Limited Partnership, as of the date first written above.
GENERAL PARTNER:
ATTEST: NEW MADISON IV, INC.
____________________ By: /s/Danette Jones
Danette Jones
President
LIMITED PARTNER:
BOSTON CAPITAL TAX CREDIT
FUND IV L.P.
WITNESS: By: Boston Capital
Associates IV
L.P., its general partner
By: C & M Associates d/b/a
Boston Capital Associates,
its general partner
____________________ By:/s/ Bonnie Kate Fox
Bonnie Kate Fox, as
Attorney-in-fact of
John P. Manning,
Partner
SPECIAL LIMITED PARTNER:
ATTEST: BCTC 94, INC.
_______________________ By: /s/ Bonnie Kate Fox
Bonnie Kate Fox, as
Attorney-
in-Fact of John P.
Manning,
President
WITNESS: WITHDRAWING INITIAL
LIMITED
PARTNER:
________________________ /s/Danette Jones
Danette Jones
WITH RESPECT TO THE
PROVISIONS OF SECTIONS
8.10,
8.18 and 8.19:
ATTEST: LOWER ROXBURY COMMUNITY
CORPORATION
________________________ By: /s/Danette Jones
Danette Jones
President
GUARANTOR:
ATTEST: LOWER ROXBURY COMMUNITY
CORPORATION
_______________________ By: /s/Danette Jones
COUNTY OF SUFFOLK )
: ss )
COMMONWEALTH OF MASSACHUSETTS )
Before me, the undersigned Notary Public in and for the
aforesaid County and State, personally appeared Bonnie Kate Fox,
in her capacity as attorney-in-fact of John P. Manning, in his
capacities as: (i) a general partner of C & M Associates d/b/a
Boston Capital Associates, in its capacities as the general
partner of Boston Capital Associates IV L.P., as the general
partner of Boston Capital Tax Credit Fund IV L.P., as a Limited
Partner of New Madison Park IV Limited Partnership; and
(ii) President of BCTC 94, Inc., as the Special Limited Partner
of New Madison Park IV Limited Partnership, and being duly sworn,
acknowledged the execution of the foregoing Amended and Restated
Agreement and Certificate of Limited Partnership.
Witness my hand and notarial seal this ____ day of May,
1996.
Notary Public
My Commission Expires: ______, 199_
COUNTY OF SUFFOLK )
: ss )
COMMONWEALTH OF MASSACHUSETTS )
Before me, the undersigned Notary Public in and for the
aforesaid County and State, personally appeared Danette Jones,
in: (i) her capacities as: (a) President of New Madison IV, Inc.,
in its capacity as the General Partner of New Madison Park IV
Limited Partnership, and (b) President of Lower Roxbury Community
Corporation, as Consenting Party with respect to Sections 8.10,
8.18 and 8.19 of the foregoing Amended and Restated Agreement and
Certificate of Limited Partnership, and as the Guarantor under
and pursuant to the provisions of the foregoing Amended and
Restated Agreement and Certificate of Limited Partnership; and
(ii) her individual capacity as the Withdrawing Initial Limited
Partner of New Madison Park IV Limited Partnership, being duly
sworn, acknowledged the execution of the foregoing Amended and
Restated Agreement and Certificate of Limited Partnership.
Witness my hand and notarial seal this ____ day of May,
1996.
Notary Public
My Commission Expires: , 199
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
___________________________________
CERTIFICATION AND AGREEMENT
___________________________________
CERTIFICATION AND AGREEMENT made as of May 9, 1996, by
and among NEW MADISON PARK IV LIMITED PARTNERSHIP, a
Massachusetts limited partnership (the "Operating
Partnership"), NEW MADISON IV, INC., a Massachusetts
corporation (the "Operating General Partner"), and LOWER
ROXBURY COMMUNITY CORPORATION, a Massachusetts non-profit
corporation (the "Guarantor"), for the benefit of BOSTON
CAPITAL TAX CREDIT FUND IV L.P., a Delaware limited
partnership ("BCTC IV"), BOSTON CAPITAL ASSOCIATES IV L.P.,
a Delaware limited partnership ("BCA IV"), PEABODY & BROWN
and certain other persons or entities described herein.
WHEREAS, the Operating Partnership has admitted BCTC IV
as a limited partner thereof, and proposes to set forth all
of the terms and conditions of the investment by BCTC IV
pursuant to an Amended and Restated Agreement and
Certificate of Limited Partnership of the Operating
Partnership dated as of May 1, 1996 (the "Operating
Partnership Agreement"), in accordance with which BCTC IV
will make substantial capital contributions to the Operating
Partnership; and
WHEREAS, BCTC IV and BCA IV have relied upon certain
information and representations described herein in
evaluating the merits of investment by BCTC IV in the
Operating Partnership; and
WHEREAS, Peabody & Brown, as counsel for BCTC IV, will
rely upon such information and representations in connection
with its delivery of certain opinions with respect to this
transaction.
NOW, THEREFORE, for $1.00 and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Operating Partnership, the Operating
General Partner and the Guarantor hereby agree as follows
for the benefit of BCTC IV, BCA IV, Peabody & Brown and
certain other persons hereinafter described.
1. Representations, Warranties and Covenants
of the Operating Partnership, the
Operating General Partner and the Guarantor
The Operating Partnership, the Operating General
Partner and the Guarantor jointly and severally represent,
warrant and certify to BCTC IV, BCA IV and Peabody & Brown
that, with respect to the Operating Partnership, as of the
date hereof:
1.1. The Operating Partnership is duly organized
and in good standing as a limited partnership pursuant to
the laws of the state of its formation with full power and
authority to acquire and own its apartment complex (the
"Apartment Complex") and conduct its business; the Operating
Partnership, the Operating General Partner and the Guarantor
each has the power and authority to enter into and perform
this Certification and Agreement; the execution and delivery
of this Certification and Agreement by the Operating
Partnership, the Operating General Partner and the Guarantor
has been duly and validly authorized by all necessary
action; the execution and delivery of this Certification and
Agreement, the fulfillment of its terms and consummation of
the transactions contemplated hereunder do not and will not
conflict with or result in a violation, breach or
termination of or constitute a default under (or would not
result in such a conflict, violation, breach, termination or
default with the giving of notice or passage of time or
both) any other agreement, indenture or instrument by which
the Operating Partnership, the Operating General Partner, or
the Guarantor is bound or any law, regulation, judgment,
decree or order applicable to the Operating Partnership, the
Operating General Partner, the Guarantor or any of their
respective properties; this Certification and Agreement
constitutes the valid and binding agreement of the Operating
Partnership, the Operating General Partner and the
Guarantor, enforceable against each of them in accordance
with its terms.
1.2. The Operating General Partner has delivered
to BCTC IV, BCA IV or their affiliates, all documents and
information in its possession which are material to a
decision by BCTC IV to invest in the Operating Partnership.
All factual information, including without limitation the
information set forth in Exhibit A hereto, provided by the
Operating General Partner to BCTC IV and/or BCA IV and/or
their affiliates, either in writing or orally, did not
contain at the time given and does not contain on the date
hereof, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances under which they are made. The
estimates of occupancy rates, operating expenses, cash flow
and tax credits set forth on Exhibit A are reasonable in
light of the knowledge and experience of the Operating
General Partner.
1.3. Neither the Operating Partnership, the
Operating General Partner, the Guarantor nor any affiliate
or anyone acting on behalf of any of the foregoing has,
either directly or indirectly or through any agent, sold,
offered for sale, solicited offers to buy, or otherwise
approached offerees for, or negotiated in respect of, any
interest in the Operating Partnership or the Apartment
Complex; neither the Operating Partnership, the Operating
General Partner, the Guarantor nor any affiliate thereof,
has previously dealt with, nor is presently under commitment
to, any real estate, securities or other broker, rental
agent, finder or other intermediary with respect to the
interests being acquired by BCTC IV in the Operating
Partnership and in the Apartment Complex or any portion
thereof, except for their arrangements with BCTC IV and BCA
IV; and the Operating General Partner and the Guarantor,
jointly and severally, shall indemnify and hold harmless
BCTC IV, BCA IV and their respective affiliates, agents and
assignees from any and all claims of any real estate,
securities or other broker, rental agent, finder or other
intermediary with respect to the acquisition by BCTC IV of
its interest in the Operating Partnership and in the
Apartment Complex, and, at the request of BCTC IV, the
Operating General Partner and the Guarantor shall assume the
defense of any judicial action(s) that might arise in
connection with any such claim(s).
1.4. Neither the Operating Partnership, the
Operating General Partner, the Guarantor nor any affiliate
nor anyone acting on behalf of any of the foregoing has,
either directly or indirectly or through any agent, sold,
offered for sale, solicited offers to buy, or otherwise
approached offerees for, or negotiated in respect of, or
will, either directly or indirectly or through any agent,
sell, offer for sale, solicit offers to buy, or otherwise
approach offerees for, or negotiate in respect of, the
purchase of interests in real estate projects or entities
which are or will be integrated with the Apartment Complex
or the Operating Partnership and treated as a single
offering under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and any
applicable state securities or Blue Sky Laws (collectively
"Applicable Securities Laws").
1.5. As of the date hereof, the Operating
Partnership and the Operating General Partner make each of
the representations contained in Exhibit B attached hereto
which are required to be made under the state securities or
Blue Sky laws of the jurisdictions in which Beneficial
Assignee Certificates in BCTC IV (the "BACs") were offered
and sold, both as to themselves and as to any of their
affiliates, any of their predecessors and their affiliates'
predecessors, any of their general partners and/or
beneficial owners of ten per cent (10%) or more of any class
of their equity securities (beneficial ownership meaning the
power to vote or direct the vote and/or the power to dispose
or direct the disposition of such securities), as the case
may be, and any promoters presently connected with them in
any capacity.
1.6. Each of the representations and warranties
of the Operating General Partner contained in the Operating
Partnership Agreement is true and correct as of the date
hereof.
1.7. Each of the covenants and agreements of the
Operating Partnership and the Operating General Partner
contained in the Operating Partnership Agreement has been
duly performed to the extent that performance of any such
covenant and agreement is required on or prior to the date
hereof.
1.8. No default has occurred and is continuing
under the Operating Partnership Agreement or the Project
Documents.
1.9. The Operating General Partner agrees to take
all actions necessary to claim the Projected Credit,
including, without limitation, the filing of Form 8609 with
the Internal Revenue Service.
1.10. No person or entity other than the Operating
Partnership will hold any equity interest in the Apartment
Complex after the Initial Closing.
1.11. The Operating Partnership will have the sole
responsibility to pay all maintenance and operating costs,
including all taxes levied and all insurance costs,
attributable to the Apartment Complex after the Initial
Closing.
1.12. The Operating Partnership, except to the
extent it is protected by insurance and excluding any risk
borne by lenders, will bear the sole risk of loss if the
Apartment Complex is destroyed or condemned or there is a
diminution in the value of the Apartment Complex after the
Initial Closing.
1.13. No person or entity except the Operating
Partnership will have the right to any proceeds, after
payment of all indebtedness, from the sale, refinancing or
leasing of the Apartment Complex after the Initial Closing.
1.14. The Operating General Partner is not related
in any manner to BCTC IV, nor is the Operating General
Partner acting as an agent of BCTC IV.
2. Indemnification and Contribution With Respect to
Securities Matters
2.1. The Operating General Partner and the
Guarantor, jointly and severally (for purposes of this
Section 2.1, the "Indemnifying Party"), agree to indemnify
and hold harmless BCTC IV, BCA IV and their respective
affiliates (for purposes of this Section 2.1, the
"Indemnified Parties" or, individually, an "Indemnified
Party") and each officer, director, employee and person, if
any, who controls any Indemnified Party within the meaning
of the Applicable Securities Laws against any losses,
claims, damages or liabilities (collectively "Liabilities"),
joint or several, to which any Indemnified Party or such
officer, director, employee or controlling person may become
subject, under the Applicable Securities Laws or otherwise,
insofar as such Liabilities or actions in respect thereof
arise out of or are based upon a breach by such Indemnifying
Party of any of his representations, warranties or covenants
to such Indemnified Party or any such of its officers,
directors, employees or controlling persons under this
Certification and Agreement; and to reimburse each such
Indemnified Party and each such officer, director, employee
or controlling person for any legal or other expenses
reasonably incurred by it or them in connection with
investigating or defending against any such Liability or
action; provided, however, that the Indemnifying Party shall
not be required to indemnify any Indemnified Party or any
such officer, director, employee or controlling person for
any payment made to any claimant in settlement of any
Liability or action unless such payment is approved by the
Indemnifying Party or by a court having jurisdiction of the
controversy. This indemnity agreement shall remain in full
force and effect notwithstanding any investigation made by
any party hereto, shall survive the termination of any
agreement which refers to this indemnity and shall be in
addition to any liability which the Indemnifying Party may
otherwise have.
2.2. The Indemnifying Party shall not be liable
under the indemnity agreements contained in Section 2.1
unless the Indemnified Party shall have notified such
Indemnifying Party in writing within ten (10) business days
after the summons or other first legal process giving
information of the nature of the claim shall have been
served upon the Indemnified Party or any such of its
officers, directors, employees or controlling persons, but
failure to notify the Indemnifying Party of any such claim
shall not relieve it from any liability which it may have to
the Indemnified Party or any such of its officers,
directors, employees or controlling persons against whom
action is brought otherwise than on account of its indemnity
agreement contained in Section 2.1. In case any action is
brought against any Indemnified Party or any such of its
officers, directors, employees or controlling persons upon
any such claim, and it notifies the Indemnifying Party of
the commencement thereof as aforesaid, the Indemnifying
Party shall be entitled to participate at its own expense in
the defense, or, if it so elects, in accordance with
arrangements satisfactory to any other Indemnifying Party or
parties similarly notified, to assume the defense thereof,
with counsel who shall be satisfactory to such Indemnified
Party or any such of its officers, directors, employees or
controlling persons and any other Indemnified Parties who
are defendants in such action; and after notice from the
Indemnifying Party to such Indemnified Party or any such of
its officers, directors, employees or controlling persons of
its election so to assume the defense thereof and the
retaining of such counsel by the Indemnifying Party, the
Indemnifying Party shall not be liable to such Indemnified
Party or any such of its officers, directors, employees or
controlling persons for any legal or other expenses
subsequently incurred by such Indemnified Party or any such
of its officers, directors, employees or controlling persons
in connection with the defense thereof, other than the
reasonable costs of investigation.
2.3. If the right to indemnification provided for
in Section 2.1 of this Certification and Agreement would by
its terms be available to a party or parties hereunder, but
is determined by a court of competent jurisdiction to be
unenforceable under Applicable Securities Laws, then, in
that event, the Operating General Partner shall contribute
to the aggregate of such losses, claims, damages and
liabilities as are contemplated in such Section 2.1
(including, but not limited to, any investigation, legal and
other expenses incurred in connection with, and any amount
paid in settlement of, any claim, action, suit or
proceeding) to the extent of ninety per cent (90%) of the
aggregate of such losses, claims, damages and liabilities
incurred by a party(ies) who otherwise would be an
Indemnified Party(ies) under and pursuant to the provisions
of such Section 2.1; provided, however, that no person
guilty of fraudulent misrepresentations within the meaning
of Section 11(f) of the Securities Act of 1933, as amended,
shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or
proceeding against him or it in respect of which a claim for
contribution may be made against another party or parties,
notify such other party or parties. Failure so to notify
such other party or parties shall not relieve such other
party or parties from any other obligation it or they may
have hereunder or otherwise. If such other party or parties
are so notified, such other party or parties shall be
entitled to participate in the defense of such action, suit,
proceeding or claim at their own expense or in accordance
with arrangements satisfactory to all parties who may be
required to contribute. After notice from such other party
or parties to the party entitled to contribution of its or
their own defense, the party or parties so electing shall
not be liable for any legal or other expenses of litigation
subsequently incurred by the party entitled to contribution
in connection with the defense thereof, other than the
reasonable costs of investigation. No party shall be
required to contribute with respect to any action or claim
settled without its consent.
3. Miscellaneous
3.1. This Certification and Agreement is made
solely for the benefit of Peabody & Brown, BCTC IV and BCA
IV (and, to the extent provided in Section 2, the
affiliates, officers, directors, partners, employees and
controlling persons referred to therein), and their
respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this
Agreement, and the term "successors and assigns" as used
herein shall not include any purchaser, as such, of any of
the BACs.
3.2. This Certification and Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original, and all of which together shall
constitute one and the same Certification and Agreement.
3.3. Terms defined in the Operating Partnership
Agreement and used but not otherwise defined herein shall
have the meanings given to them in the Operating Partnership
Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have set their
hands and seals as of the date first above written.
NEW MADISON PARK IV LIMITED PARTNERSHIP
By: New Madison IV, Inc.
as General Partner
By: /s/Danette Jones
Danette Jones
President
NEW MADISON IV, INC.
By: /s/Danette Jones
Danette Jones
President
LOWER ROXBURY COMMUNITY
CORPORATION
By: /s/Danette Jones
Danette Jones
President
EXHIBIT B
CERTIFICATE OF ISSUER AND GENERAL PARTNER(S)
RE: LACK OF DISQUALIFICATIONS
The Issuer (for the purposes of this Exhibit B the term
"Issuer" shall be taken to refer to the "Operating
Partnership" as identified in the Certification and
Agreement to which this document is attached as Exhibit B)
and its general partner (the "General Partner") hereby
represent to you that neither (i) the Issuer, (ii) any
predecessor Issuer, (iii) any of the Issuer's affiliates
("affiliate" meaning a person that controls or is controlled
by, or is under common control with, the Issuer), (iv) any
sponsor (meaning any person who (1) is directly or
indirectly instrumental in organizing the investment
program, or (2) will directly or indirectly manage or
participate in the management of the investment program, or
(3) will regularly perform, or select the person or entity
who will regularly perform, the primary activities of the
investment program), (v) any officer, director, principal or
general partner of the Issuer or of any sponsor, (vi) any
officer, director, principal, promoter or general partner of
the General Partner, (vii) any beneficial owner of ten per
cent or more of any class of the equity securities of the
Issuer or of any sponsor (beneficial ownership meaning the
power to vote or direct the vote and/or the power to dispose
or direct the disposition of such securities), or (viii) any
promoter of the Issuer (meaning any person who, acting alone
or in conjunction with one or more other persons, directly
or indirectly has taken, is taking or will take the
initiative in founding and organizing the business of the
Issuer or any person who, in connection with the founding
and organizing of the business or enterprise of the Issuer,
directly or indirectly receives in consideration of services
or property, or both services and property, ten per cent or
more of any class of securities of the Issuer or ten per
cent or more of the proceeds from the sale of any class of
such securities; however, a person who receives such
securities or proceeds either solely as underwriting
commissions or solely in consideration of property shall not
be deemed to be a promoter if such person does not otherwise
take part in founding and organizing the enterprise)
presently connected with the Issuer in any capacity:
(1) has filed a registration statement which is
the subject of any pending proceeding or examination under
the securities laws of any jurisdiction, or which is the
subject of any refusal order or stop order;
(2) has been convicted of or pleaded nolo
contendere to a misdemeanor or felony or, within the last
ten years, been held liable in a civil action by final
judgment of a court based upon conduct showing moral
turpitude in connection with the offer, purchase or sale of
any security, franchise or commodity (which term, for the
purposes of this Certificate shall hereinafter include
commodity futures contracts) or any other aspect of the
securities or commodities business, or involving
racketeering, the making of a false filing or a violation of
Sections 1341, 1342 or 1343 of Title 18 of the United States
Code or arising out of the conduct of the business of an
issuer, underwriter, broker, dealer, municipal securities
dealer, or investment adviser, or involving theft,
conversion, misappropriation, fraud, breach of fiduciary
duty, deceit or intentional wrongdoing including, but not
limited to, forgery, embezzlement, obtaining money under
false pretenses, larceny, fraudulent conversion or
misappropriation of property or conspiracy to defraud, or
which is a crime involving moral turpitude, or within the
last five years of a misdemeanor or felony which is a
criminal violation of statutes designed to protect consumers
against unlawful practices involving insurance, securities,
commodities, real estate, franchises, business
opportunities, consumer goods or other goods and services;
(3) is subject to (a) any administrative order,
judgment or decree entered or issued by or procured from a
state securities commission or administrator, the Securities
and Exchange ("S.E.C."), the Commodities Futures Trading
Commission or the U.S. Postal Service, or to (b) any
administrative order or judgment arising out of the conduct
of the business of an underwriter, broker, dealer, municipal
securities dealer, or investment adviser, or involving
theft, fraud or fraudulent conduct, or breach of fiduciary
duty, or (c) has been the subject in any state of any
administrative order, judgment, or decree in which fraud,
deceit, or intentional wrongdoing, including but not limited
to making untrue statements of material fact or omitting to
state material facts, was found;
(4) is subject to any pending proceeding in any
jurisdiction relating to the exemption from registration of
any security or offering, or to any order, judgment or
decree in which registration violations were found or which
prohibits, denies or revokes the use of any exemption from
registration in connection with the offer, purchase or sale
of securities, or to an S.E.C. censure or other order based
on a finding of false filing;
(5) is subject to any order, judgment or decree
of any court or regulatory authority or competent
jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to any order, judgment or decree of
any court or regulatory authority of competent jurisdiction,
temporarily, preliminarily or permanently restraining or
enjoining, such persons from engaging in or continuing any
conduct or practice in connection with any aspect of the
securities or commodities business or involving the making
of any false filing or arising out of the conduct of the
business of an underwriter, broker, dealer, municipal
securities dealer, or investment adviser, or which restrains
or enjoins such person from activities subject to federal or
state statutes designed to protect consumers against
unlawful or deceptive practices involving insurance,
banking, commodities, real estate, franchises, business
opportunities, consumer goods and services, or is subject to
a United States Postal Service false representation order
entered within five years prior to the commencement of the
Offering or is subject to a temporary restraining order or
preliminary injunction with respect to conduct alleged to
have violated section 3005 of Title 39, United States Code;
(6) is suspended or expelled from membership in,
or suspended or barred from association with a member of, an
exchange registered as a national securities exchange, an
association registered as a national securities association,
or any self regulatory organization registered pursuant to
the Securities Exchange Act of 1934 or a Canadian securities
exchange or association or self-regulatory organization
operating under the authority of the Commodity Futures
Trading Commission or is subject to any currently effective
order or order entered within the past five years of the
S.E.C., the Commodity Futures Trading Commission or any
state securities administrator denying registration to or
revoking or suspending the registration of such person as a
broker-dealer, agent, futures commission merchant, commodity
pool operator, commodity trading adviser or investment
adviser and associated persons of any of the foregoing, or
prohibits the transaction of business as a broker-dealer or
agent;
(7) has, in any application for registration or
in any report required to be filed with or in any proceeding
before the S.E.C. or any state securities commission or any
regulatory authority, willfully made or caused to be made
any statement which was at the time and in the light of the
circumstances under which it was made false or misleading
with respect to any material fact, or has willfully omitted
to state in any such application, report or proceeding any
material fact which is required to be stated therein or
necessary in order to make the statements made, in the light
of the circumstances under which they are made, not
misleading, or has willfully failed to make any required
amendment to or supplement to such an application, report or
statement in a timely manner;
(8) has willfully violated any provision of the
Securities Act of 1933, the Securities Exchange Act of 1934,
the Trust Indenture Act of 1939, the Investment Advisers Act
of 1940, the Investment Company Act of 1940, the Commodity
Exchange Act of 1974 or the securities laws of any state, or
any predecessor law, or of any rule or regulation under any
of such statutes;
(9) has willfully aided, abetted, counseled,
commanded, induced or procured the violation by any other
person of any of the statutes or rules or regulations
referred to in subsection (8) hereof;
(10) has failed reasonably to supervise his
agents, if he is a broker-dealer, or his employees, if he is
an investment adviser, but no person shall be deemed to have
failed in such supervision if there have been established
procedures, and a system for applying such procedures, which
would reasonably be expected to prevent and detect, insofar
as practicable, any violation of statutes, rules or orders
described in subsection (8) and if such person has
reasonably discharged the duties and obligations incumbent
upon him by reason of such procedures and system without
reasonable cause to believe that such procedures and system
were not being complied with;
(11) is subject to a currently effective state
administrative order or judgment procured by a state
securities administrator within five years prior to the
commencement of the Offering or is subject to a currently
effective United States Postal Service fraud order or has
engaged in dishonest or unethical practices in the
securities business or has taken unfair advantage of a
customer;
(12) is insolvent, either in the sense that his
liabilities exceed his assets or in the sense that he cannot
meet his obligations as they mature, or is in such financial
condition that he cannot continue his business with safety
to his customers, or has not sufficient financial
responsibility to carry out the obligations incident to his
operations; or
(13) is selling or has sold, or is offering or has
offered for sale, in any state, securities through any
unregistered agent required to be registered under the
Pennsylvania Securities Act of 1972, as amended (the
"Pennsylvania Act") or for any broker-dealer or issuer with
knowledge that such broker-dealer or issuer had not or has
not complied with the Pennsylvania Act.
If the Issuer is subject to the requirements of
Sections 12, 14, or 15(d) of the Securities Exchange Act of
1934, then, the Issuer has filed all reports required by
those Sections to be filed during the 12 calendar months
preceding the first sale of the Issuer's securities under
Rule 505 (or for such shorter period that the Issuer was
required to file such reports).
EXHIBIT A
NEW MADISON PARK IV
LIMITED PARTNERSHIP
FACT SHEET
1. Rehabilitation Financing:
A. First Mortgage Loan:
(i) Lender: Philadelphia National
Bank ("PNB"), and
subsequently assigned
by CoreStates Bank
(successor to PNB) to
Fleet Bank of
Massachusetts, N.A.
(ii) Mortgage Amount: Original principal of
$8,162,700, of which
the outstanding
balance of
$7,833,585.06 will be
assumed by the
Partnership as of the
Initial Closing
(iii) Note Date: Original Note:
December 21, 1981
Allonge: January 27,
1994
(iv) Interest Rate: 12% per annum through
January 31, 2003;
thereafter, 5.725% per
annum
(v) Maturity Date: February 1, 2024
(vi) Amortization: Monthly payments of
interest and principal
(on level-annuity
amortization schedule)
over remainder of loan
term
(vii) Guarantor: N/A
(viii) Recourse/Non Recourse: Nonrecourse
B. Second Loan:
(i) Lender: Madison Park Housing
Corporation
(ii) Mortgage Amount: Original principal
amount of $648,902;
outstanding balance of
$648,902 will be
assumed by the
Partnership at the
Initial Closing
(iii) Note Date: As of May 9, 1996
(iv) Interest Rate: 6.51%
(v) Maturity Date: April 30, 2026
(vi) Amortization: Payments on account of
interest and principal
from and to the extent
of Net Cash Flow;
entire outstanding
balance due and
payable at maturity
(vii) Guarantor: N/A
(viii) Recourse/Nonrecourse: Nonrecourse
C. FHLB Grant:
(i) Grantor: Boston Bank of
Commerce (Affordable
Housing Program funds
from Federal Home Loan
Bank of Boston); grant
to Lower Roxbury
Community Corporation
("LRCC"), and assigned
by LRCC to the
Operating Partnership
(ii) Amount: $300,000
2. Eligible Basis: $11,293,997
3. Qualified Basis: $12,269,296
4. GP Capital Contribution: $100
5. Type of Credit:
LIHC: 9% (rehabilitation)
4% (acquisition)
6. Rent-up Schedule:
100% occupancy by December, 1996
7. Projected Credit to the
Investment Partnership: $6,370,610
A. $220,918 in 1996
B. $637,061 per annum for each of
the years 1997 through 2005, and
C. $416,143 for 2006.
8. Total Projected Credit: $6,434,960
A. $247,367 in 1996,
B. $643,496 per annum for each of
the years 1997 through 2005, and
C. $396,129 for 2006.
9. Tax Credit Application
A. Reservation Date
B. Reservation Amount
C. Allocation Date: 12/29/95
D. Allocation Amount $643,496 per year
10. Apartment Complex:
A. Name: Madison Park IV
Apartments
B. Address: Boston, Massachusetts
C. County: Suffolk
D. MSA: Boston
E. Type of Project: Family
11. Median Income: $53,100
12. Kind of Apartments: Unit Basic Utility
Number Sq ft Rent Allowance
2 Bedroom 126 ___ $1,156 - $1,222 $-0-
3 Bedroom 17 ___ $1,376 $-0-
13. Rental Assistance:
A. Type: N/A
B. Number of Units:
C. Term:
D. Amount:
14. Annual Operating Expense: $919,949 in 1997;
inflated 3% per year
thereafter
15. Replacement Reserve Account: $46,404 per year.
16. Amount of Annual Asset Management Fee to Boston
Capital: $7,500,
commencing in 1997
17. Amount of Incentive Management Fee: $7,500 per year,
commencing in 1997
18. Amount of Total Depreciable Base Allocated to Personal
Property:
$328,334
19. Completion Date: November, 1996 (Anticipated)
20. Total Capital Contribution of Investment Partnership:
$3,567,542
21. Conditions
on Capital
Amount Installment Contributions
$3,210,788 First Latest of:(i)
Admission Date; (ii)
Initial Closing; and
(iii) receipt by the
Investment
Partnership of local
counsel opinion as
set forth in Section
5.04(a) of the
Partnership
Agreement;
$267,566 Second Latest of: (i)
Substantial
Completion; (ii)
State Designation or
(iii) receipt of
General Partner
Certification of the
construction,
development costs,
and Eligible Basis
of the Apartment
Complex, together
with Accountants'
report thereon; or
(iv) satisfaction of
all of the
conditions to the
payment of the First
Installment; and
$89,188 Third Latest of: (i)
Initial 100%
Occupancy Date; (ii)
Final Closing; (iii)
the occurrence of
Breakeven
Operations;
(iv) receipt by the
Investment
Partnership of the
federal income tax
return and audited
financial statements
for the Partnership
for the year in
which Breakeven
occurred; or (v)
satisfaction of all
of the conditions to
the payment of the
First and Second
Installments.
22. Fees, Special Distributions and other items to be paid
from Capital Contributions
A. Development Fee: $1,144,721
B. Special Distributions: $-0-
23. Development Services Fee paid to Boston Capital
Partners: $-0-
24. General Partner: New Madison IV, Inc.
Address: 122 DeWitt Drive
Roxbury, MA 02120
Telephone: (617) 445-1061
FAX: (617) 427-7030
Contact: Danette Jones
Primary Contact: (i) Through Initial
Closing: Trinity
Financial
(Consultant)
40 Broad Street,
Suite 905
Boston, MA 02109
Patrick Lee
(617) 482-0230
(ii) After Initial
Closing: Maloney
Properties, Inc.
200 Reservoir Street,
Suite 200
Needham, MA 02194
Contact: Susan
Stockard
Phone: (617) 449-
7887, Ext. 208
25. Ownership Interests: Profits,
Losses, and Capital
Cash
Credits Transactions
Flow
General Partner 1% 50%
60%
Investment Partnership 99% 50%
40%
26. Management Agent: Madison Park Village
Associates (a joint
venture of Madison
Park Properties, Inc.
and Maloney
Properties, Inc.)
Contact: Mark Maloney
President (of Maloney Properties, Inc.)
Address: 200 Reservoir Street
Suite 200
Needham, MA 02194
Telephone: (617) 449-7887
Amount of Fee: 4% of gross
collections
27. Tax Return Preparer/Auditor: Ziner & Company
Contact: Eric Darling/John
Mackey
Address: 7 Winthrop Square
Boston, MA 02110
Telephone: (617) 542-8880
28. Federal ID Number: __________________
29. Operating Deficit Guarantees: Unlimited as to time
and amount (also see
Section 8.18 of
Operating Partnership
Agreement)
30. Building Breakdown
#1
# of Units: 143
Bin #'s: MA95-10045 through MA95-10059
cc: Boston Capital Communications Limited Partnership
Accounting Department
