SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 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) February 25, 1997
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
33-70564 04-3208648
(Commission File Number) (IRS Employer Identification No. )
c/o Boston Capital Partners, Inc.,
One Boston Place, Boston, Massachusetts 02108-4406
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 624-8900
None
(Former name or former address, if changed since last report)
Item 5. Other Events
On February 25, 1997, Boston Capital Tax Credit Fund IV L.P., a
Delaware
limited partnership, specifically Series 26 thereof (the "Partnership")
completed various agreements relating to Byam Limited Partnership, a
Connecticut limited partnership (the "Operating Partnership"), including
an
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership dated February 25, 1997 (the "Operating Partnership
Agreement"),
pursuant to which the Partnership acquired a limited partner interest in
the
Operating Partnership. Capitalized terms used and not otherwise defined
herein have their meanings set forth in the Operating Partnership
Agreement, a
copy of which is attached hereto as Exhibit (2)(a).
The Operating Partnership owns and is currently renovating an
apartment
complex located at 1782 Meriden Road in Waterbury, Connecticut, which is
known
as Byam Village Apartments (the "Apartment Complex"). The Apartment
Complex
will consist of eight (8) 1-bedroom apartment units, thirty (30) 2-
bedroom
apartment units and eight (8) 3-bedroom apartment units, for a total of
forty-
six (46) apartment units. Renovation of the Apartment Complex is
expected to
be substantially completed by March, 1998 and the Apartment Complex is
expected to achieve 100% occupancy by April, 1998.
The Operating Partnership acquired the Apartment Complex from Byam
Village Limited Partnership, a Connecticut limited partnership (the
"Seller")
in connection with a Chapter 11 bankruptcy proceeding involving
Carabetta
Enterprises, Inc., a Connecticut corporation ("Carabetta Enterprises"),
the
general partner of the Seller and Joseph F. Carabetta. The sale of the
Apartment Complex was approved pursuant to a consent order issued by the
United States Bankruptcy Court, District of Connecticut, Bridgeport
Division.
Carabetta Management, Inc., a subsidiary of Carabetta Enterprises, will
continue to serve as the Management Agent for the Apartment Complex and
Meriden Housing Preservation Limited Partnership, the Class A Limited
Partner
of the Operating Partnership, will be comprised of employees of
Carabetta
Enterprises and/or relatives of Mr. Carabetta. The General Partner does
not
believe that the ongoing bankruptcy proceeding involving Carabetta
Enterprises
and Mr. Carabetta will have any impact on the Operating Partnership or
the
Apartment Complex.
Financing for the Apartment Complex will consist of three
components,
each of which will be provided by the Connecticut Housing Finance
Authority
("CHFA"). The concurrent first mortgage provided by CHFA in the
aggregate
amount of $1,670,000 will have a portion ($900,000) which bears interest
at
6.75% over a 7-year term and the remaining portion ($770,000) which
bears
interest at 7.75% over a 30-year term. The final component of the CHFA
financing is a second mortgage (preservation loan) in the amount of
$80,000
which accrues interest for 30 years at a rate of 6% per annum over a 60-
year
term.
100% of the apartment units (46 units) in the Apartment Complex
are
believed to qualify for the low-income housing tax credit (the "Tax
Credits")
under Section 42 of the Internal Revenue Code of 1986, as amended (the
"Code").
The General Partner of the Operating Partnership is Byam Village
of
Massachusetts LLC, a Connecticut limited liability company (the "General
Partner") whose sole members are First Atlantic Housing, Inc., a
Massachusetts
corporation ("FAHI"), BCP Connecticut Properties Limited Partnership, a
Massachusetts limited partnership ("BCP") and American Housing
Preservation
Corporation, a Maine corporation ("AHPC"). FAHI, the Manager of the
General
Partner, is wholly-owned by Christopher W. Collins, who serves as its
President and Director. Mr. Collins has extensive experience in
developing
and financing affordable housing projects. He is an Executive Vice
President
and principal of Boston Capital Partners, Inc. ("Boston Capital"), an
affiliate of the Partnership. Mr. Collins is also the general partner
of BCP
and other employees of Boston Capital serve as the limited partners of
BCP.
AHPC is controlled by Michael Liberty who acts as its President and
Director.
Mr. Liberty is the founder of The Liberty Group which includes a
diversified
core of companies engaged in a wide range of real estate activities,
including
Equity Builders, Inc. which serves as the Contractor for the Apartment
Complex.
The Partnership acquired its interest in the Operating Partnership
directly from the Operating Partnership in consideration of an agreement
to
make a Capital Contribution of $426,008, which has been or will be
payable to
the Operating Partnership in four (4) Installments as follows:
1. $355,000 (the "First Installment") on the latest of (i)
Initial
Closing or (ii) Admission Date;
2. $45,000 (the "Second Installment") on the latest to occur of
(i)
Cost Certification, (ii) Initial 100% Occupancy Date, (iii)
receipt of an updated title insurance policy satisfactory to the
Special Limited Partner, (iv) Rental Achievement, (v) confirmation
by Boston Capital that outstanding due diligence items have been
completed by the General Partner to the reasonable satisfaction of
Boston Capital, if any, (v) receipt of a payoff letter from the
Contractor stating that all expenses payable to the Contractor
have been paid in full and that the Operating Partnership is not
in violation of the Construction Contract, (vi) receipt of a valid
and recorded Extended Use Commitment and receipt of a
subordination agreement subordinating the Mortgage Loans to the
Extended Use Commitment, or (vii) satisfaction of all of the
conditions to the payment of the First Installment;
3. $20,000 (the "Third Installment") on the latest to occur of
(i)
Final Closing, (ii) State Designation, (iii) Rental Achievement,
or (iv) satisfaction of all of the conditions to the payment of
the First and Second Installments; and
4. $6,008 (the "Fourth Installment") on the later to occur of
(i) the
receipt by the Partnership of the Operating Partnership's federal
tax return and an audited financial statement for the fiscal year
in which the Rental Achievement occurs or (ii) satisfaction of all
conditions to the payment of the First, Second and Third
Installments.
The total Capital Contribution of the Partnership to the Operating
Partnership
is based on the Operating Partnership receiving $672,360 of Tax Credits
during
the 10-year period commencing in 1998 of which 99% ($665,640) will be
allocated to the Partnership as the Investment Limited Partner of the
Operating Partnership. The Special Limited Partner of the Operating
Partnership is BCTC 94, Inc., an affiliate of the Partnership.
The Partnership believes that the Apartment Complex is adequately
insured.
Ownership interests in the Operating Partnership are as follows,
subject
in each case to certain priority allocations and distributions:
Normal Capital Cash
Operations Transactions Flow
General Partner 1% 65.1 70.1%
Partnership 98.99% 24.99% 19.99%
Special Limited Partnership 0.01% 0.01% 0.01%
Class A Limited Partner 0% 9.9% 9.9%
The Partnership used the funds obtained from the payments of the
holders
of its beneficial assignee certificates to make the acquisition of its
interest in the Operating Partnership.
Boston Capital, or an affiliate thereof, will receive an annual
Asset
Management Fee of $2,300 commencing in 1997 from the Operating
Partnership for
services in connection with the Operating Partnership's accounting
matters and
the preparation of tax returns and reports to the Partnership. The
Asset
Management Fee for each fiscal year will be payable from Cash Flow in
the
manner and priority set forth in Article XI of the Operating Partnership
Agreement; provided, however, that if in any fiscal year, Cash Flow is
insufficient to pay all or any portion of the Asset Management Fee), the
General Partner shall make a Subordinated Loan in the amount not to
exceed the
lesser of $1,000 per annum or that amount necessary to pay the unpaid
portion
of such fee. Any unpaid portion of such Asset Management Fee shall
accrue and
be payable on a cumulative basis in the first year in which there is
sufficient Cash Flow available for payment of such fee, or in the first
year
in which proceeds of a Capital Transaction are available.
The Operating Partnership shall pay to the General Partner a non-
cumulative fee (the "Incentive Management Fee") commencing in 1997 for
their
services in connection with the administration of the day to day
business of
the Operating Partnership in an annual amount equal to $2,300 per annum.
The
Partnership Management Fee for each fiscal year of the Operating
Partnership
shall be paid in the manner and priority set forth in Article XI of the
Operating Partnership Agreement.
The Operating Partnership will pay a Development Fee of $154,643
to the
Developer for its service in connection with the acquisition,
rehabilitation
and development of the Apartment Complex which fee will be paid as
provided in
Section 8.10 of the Operating Partnership.
Item 7. Exhibits.
(c) Exhibits. Page
(1) (a)1 Form of 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 of Limited
Partnership of Byam Limited Partnership
(2) (b) Certification and Agreement relating to Byam
Limited Partnership
(4) (a)2 Agreement of Limited Partnership of the
Partnership
(16) None
(17) None
(21) None
(24) None
(25) None
(28) None
_______________
1 Incorporated by reference to Exhibit (1) to Registration Statement
No. 33-70564 on Form S-11, as filed with the Securities and Exchange
Commission.
2 Incorporated by reference to Exhibit (4) to Registration Statement
No. 33-70564 on Form S-11, as filed with the Securities and Exchange
Commission.
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 hereto duly authorized.
Dated: July 15, 1997
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
By: Boston Capital Associates IV L.P.,
its General Partner
By: C&M Associates, d/b/a Boston
Capital Associates, its
General Partner
By: __/s/ Herbert F. Collins______
Herbert F. Collins, Partner
BOS2: 73727_1
BYAM LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
February 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I CONTINUATION OF PARTNERSHIP 2
1.01 Continuation
2
1.02 Name 2
1.03 Principal Executive Offices; Agent for
2
Service of Process
1.04 Term 2
1.05 Recording 2
ARTICLE II DEFINED TERMS 2
ARTICLE III PURPOSE AND BUSINESS OF THE PARTNERSHIP 14
3.01 Purpose of the Partnership
14
3.02 Authority of the Partnership
14
ARTICLE IV REPRESENTATIONS, WARRANTIES AND 15
COVENANTS; DUTIES AND OBLIGATIONS
4.01 Representations, Warranties and
15
Covenants Relating to the Apartment
Complex and the Partnership
4.02 Duties and Obligations Relating to the
18
Apartment Complex and the Partnership
ARTICLE V PARTNERS, PARTNERSHIP INTERESTS AND 20
OBLIGATIONS OF THE PARTNERSHIP
5.01 Partners, Capital Contributions
20
and Partnership Interests
5.02 Return of Capital Contribution
23
5.03 Withholding of Capital Contribution Upon
23
Default
5.04 Legal Opinions 24
5.05 Repurchase Obligation 24
ARTICLE VI CHANGES IN PARTNERS 25
6.01 Withdrawal of a General Partner
25
6.02 Admission of a Successor or Additional
25
General Partner
6.03 Effect of Bankruptcy, Death, Withdrawal,
26
Dissolution or Incompetence of a
General Partner
ARTICLE VII ASSIGNMENT TO THE PARTNERSHIP 27
7.01 Assignment of Contracts, etc.
27
ARTICLE VIII RIGHTS, OBLIGATIONS AND POWERS OF THE 27
GENERAL PARTNER
8.01 Management of the Partnership
27
8.02 Limitations Upon the Authority of the
28
General Partner
8.03 Management Purposes 29
8.04 Delegation of Authority
29
8.05 General Partner or Affiliates Dealing
30
with Partnership
8.06 Other Activities 30
8.07 Liability for Acts and Omissions
30
8.08 [Intentionally Omitted] 31
8.09 Rehabilitation of the Apartment Complex,
31
Construction Cost Overruns, Operating
Deficits
8.10 Development Fee 32
8.11 Incentive Partnership Management Fee
32
8.11.1 Asset Management Fee
33
8.12 Withholding of Fee Payments 33
8.13 Removal of the General Partner
33
8.14 Selection of Management Agent
35
8.15 [Intentionally Omitted] 35
8.16 [Intentionally Omitted] 35
8.17 Subordinated Loans to the Partnership
36
8.18 8.18 Reserve Fund for Replacements; Tenant Transition Fund;
Supplemental Replacement Reserve 36
ARTICLE IX TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS 37
OF INTERESTS OF LIMITED PARTNERS
9.01 Purchase for Investment
37
9.02 Restrictions on Transfer of Limited
37
Partner's Interests
9.03 Admission of Substitute Limited Partners
38
9.04 Rights of Assignee of Partnership Interest
39
ARTICLE X RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 39
10.01 Management of the Partnership
39
10.02 Limitation on Liability of Limited
39
Partners
10.03 Other Activities
39
10.04 Ownership by Limited Partner
40
of Corporate General Partners or Affiliate
ARTICLE XI ALLOCATION OF TAXABLE INCOME, 40
TAX LOSSES, TAX CREDITS AND CASH DISTRIBUTIONS
11.01 Allocation of Taxable Income, Tax Losses
40
and Tax Credits
11.02 Allocation of Taxable Income and Tax
41
Losses from Capital Transactions
11.03 Distribution of Cash Flow
41
11.04 Distributions of Distributable Proceeds
42
from Capital Transactions and
Distributable Proceeds from Refinancings
11.05 Allocations Among Partners
43
11.06 Qualified Income Offset
44
11.07 Minimum Gain Allocations
45
11.08 Regulatory Allocations
46
11.09 Partners' Partnership Non-recourse
46
Liabilities
11.10 Tax Allocations: Code Section 704(c)
46
11.11 Tax Matters Partner
47
11.12 Capital Accounts
48
11.13 Authority of General Partner to Vary
50
Allocations to Preserve and Protect
Partner's Intent
ARTICLE XII SALE, DISSOLUTION AND LIQUIDATION 51
12.01 Dissolution of the Partnership
51
12.02 Winding Up and Distribution
51
ARTICLE XIII BOOKS AND RECORDS, ACCOUNTING TAX 52
ELECTIONS, ETC.
13.01 Books and Records
52
13.02 Bank Accounts 53
13.03 Accountants
53
13.04 Reports to Partners
53
13.05 Section 754 Elections
56
13.06 Fiscal Year and Accounting Method
56
ARTICLE XIV AMENDMENTS 56
14.01 Proposal and Adoption of Amendments
57
ARTICLE XV CONSENTS, VOTING AND MEETINGS 57
15.01 Method of Giving Consent
57
15.02 Submissions to Limited Partners
57
15.03 Meetings; Submission of Matter for Voting
57
15.04 Appointment of General Partner as Attorney-in-Fact
57
ARTICLE XVI GENERAL PROVISIONS 58
16.01 Burden and Benefit
58
16.02 Applicable Law 58
16.03 Counterparts
58
16.04 Separability of Provisions
58
16.05 Entire Agreement
58
16.06 Liability of the Investment Partnership
58
16.07 Environmental Protection
59
16.08 Notices to the Investment Partnership
59
16.09 Notices to the General Partner
60
16.10 Withdrawal of Initial Limited Partner
60
16.11 Lender Requirements 60
BYAM LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
This Amended and Restated Agreement of Limited Partnership is made
and
entered into as of the 25th day of February, 1997, by and among the
undersigned parties.
WHEREAS, as of February 13, 1997, Byam Village of Massachusetts
LLC, a
Connecticut limited liability company whose sole members are First
Atlantic
Housing, Inc., a Massachusetts corporation, BCP Connecticut Properties
Limited
Partnership, a Massachusetts limited partnership, and American Housing
Preservation Corporation, a Maine corporation (the "General Partner"),
and
First Atlantic Housing, Inc., as initial limited partner (the "Initial
Limited
Partner"), executed an Agreement of Limited Partnership of Byam Limited
Partnership, a Connecticut limited partnership (the "Initial Agreement")
for
the formation of Byam Limited Partnership (the "Partnership") pursuant
to the
Connecticut Uniform Limited Partnership Act (the "Act");
WHEREAS, a Certificate of Limited Partnership was subsequently
filed
with the Secretary of State for the State of Connecticut on February
19,
1997;
WHEREAS, the Partnership has been formed to acquire, rehabilitate,
construct, own, maintain and operate a 46-unit apartment complex
intended for
rental to families of low and moderate income, known as Byam Village
Apartments, and located in Waterbury, Connecticut (the "Apartment
Complex");
WHEREAS, the Partnership has acquired or will acquire title to the
Apartment Complex and has or will enter into a mortgage and other liens
securing the permanent mortgage loan; and
WHEREAS, the parties hereto now desire to enter into this Amended
and
Restated Agreement of Limited Partnership to (i) continue the
Partnership;
(ii) admit Boston Capital Tax Credit Fund IV L.P., a Delaware limited
partnership, to the Partnership as a Limited Partner, and BCTC 94, Inc.,
a
Massachusetts corporation, to the Partnership as the Special Limited
Partner;
(iii) admit Meriden Housing Preservation Limited Partnership, a
Connecticut
limited partnership as the Class A Limited Partner; (iv) withdraw the
Initial
Limited Partner from the Partnership; (v) reassign Interests in the
Partnership; and (vi) set forth all of the provisions governing the
Partnership.
NOW, THEREFORE, in consideration of the foregoing, of mutual
promises of
the parties hereto and of other good and valuable consideration, the
receipt
and sufficiency of which hereby are acknowledged, the parties hereby
agree to
continue the Partnership pursuant to the Act, as set forth in this
Amended and
Restated Agreement of Limited Partnership, which reads in its entirety
as
follows:
ARTICLE I
CONTINUATION OF PARTNERSHIP
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 Byam 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
First
Atlantic Housing, Inc., One Boston Place, Suite 2100, Boston, MA 02108,
Attn.:
Christopher W. Collins. The Partnership may change the location of its
principal executive office to such other place or places as may
hereafter be
determined by the General Partner. The General Partner shall promptly
notify
all other Partners of any change in the principal executive office. The
Partnership may maintain such other offices at such other place or
places as
the General Partner may from time to time deem advisable. The resident
agent
in the State of Connecticut for the Partnership for service of process
is CT
Corporation System, One Commercial Plaza, Hartford, Connecticut 06103.
1.04. Term. The term of the Partnership commenced as of February
13,
1997 and shall continue until December 31, 2057, unless the Partnership
is
sooner dissolved in accordance with the provisions of this Agreement.
1.05. Recording. Upon the execution of this Amended and Restated
Agreement of Limited Partnership by the parties hereto, the General
Partner
shall take all necessary action required by law to perfect and maintain
the
Partnership as a limited partnership under the laws of the State; and to
effectuate the admission of the Investment Partnership, the Class A
Limited
Partner and BCTC 94, Inc. as Limited Partners and the withdrawal of the
Initial Limited Partner hereunder.
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 such firm of independent certified public
accountants as may be engaged by the General Partner, with the Consent
of BCTC 94, Inc., to prepare the Partnership income tax returns and to be
responsible for the Partnership's audit and tax matters reporting
obligations under Section 13.04 hereof.
"Act" means the Connecticut Uniform Limited Partnership Act, as
amended
from time to time during the term of the Partnership.
"Actual Credit" means as of any point in time, ninety-nine percent
(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 the Connecticut Housing Finance Authority in its
capacity
as the designated agency of the State of Connecticut to allocate Low-
Income
Housing Tax Credits, acting through any authorized representative.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as amended from time to time.
"American Housing" means American Housing Preservation
Corporation, a Maine corporation, and a member of the General Partner.
"Apartment Complex" means the land owned by the Partnership
located at
1782 Meriden Road, Waterbury, Connecticut and the 46-unit rental housing
development and other improvements constructed thereon, and to be owned
and
operated therein by the Partnership, and known as Byam Village
Apartments.
"Applicable Percentage" has the meaning given to it in Section
42(b) of
the Code.
"Asset Management Fee" means the fee payable by the Partnership to
Boston Capital, or an Affiliate thereof, pursuant to Section 8.11.1.
"Bankruptcy" or "Bankrupt" as to any Person means (a) the entry of
an
order for relief (or similar court order) against such Person which
authorizes
a case brought under Chapter 7, 11 or 13 of Title 11 of the United
States Code
to proceed; (b) the commencement of a federal, state or foreign
bankruptcy,
insolvency, reorganization, arrangement or liquidation proceeding by
such
Person; (c) the commencement of a federal, state or foreign bankruptcy,
insolvency, reorganization, arrangement or liquidation proceeding
against such
Person if such proceeding is not dismissed within sixty (60) days after
the
commencement thereof; (d) the entry of a court decree or court order
which
remains unstayed and in effect for a period of thirty (30) consecutive
days:
(i) adjudging such Person insolvent under any federal, state or foreign
law
relating to bankruptcy, insolvency, reorganization, arrangement,
liquidation,
receivership or the like; (ii) approving as properly filed a petition
seeking
reorganization, arrangement, adjustment or composition of, or in respect
of,
such Person or his properties under any federal, state or foreign law
relating
to insolvency, reorganization, arrangement, liquidation, receivership or
the
like; (iii) appointing a receiver, liquidator, assignee, trustee,
conservator,
or sequester (or other similar official) of such Person, or of all, or
of a
substantial part, of such Person's properties; or (iv) ordering the
winding
up, dissolution or liquidation of the affairs of such Person; (e) the
written
consent by such Person to the institution against it of any proceeding
of the
type described in subsection (a), (b), (c) and (d); (f) the written
consent by
such Person to the appointment of a receiver, liquidator, assignee,
trustee,
conservator or sequester (or other similar official) of such Person, or
of
all, or of a substantial part, of its properties; (g) the making by such
Person of an assignment for the benefit of creditors; (h) the admission
in
writing by such Person of its inability to pay its debts generally as
they
come due; (i) the taking of any corporate or other action by such Person
in
furtherance of any of the foregoing; or (j) if such Person becomes
insolvent
by the making of any act or the making of any transfer, or otherwise, as
"insolvency" is or may be defined pursuant to the Federal Bankruptcy
Code, the
Federal Bankruptcy Act, the Uniform Fraudulent Conveyances Act, any
state or
federal act or the ruling of any court.
"BCTC 94, Inc." means BCTC 94, Inc., a Delaware corporation, which
is
the Special Limited Partner of the Partnership.
"Book Depreciation" has the meaning set forth in Section 11.12C.
"Book Profits and Losses" means the Taxable Income or Tax Losses
of the
Partnership, adjusted for purposes of determining and maintaining the
Partners' Capital Accounts as provided in Section 11.12.
"Boston Capital" means Boston Capital Partners, Inc., a
Massachusetts
corporation.
"Capital Account" means the capital account of a Partner as
described in
Section 11.12.
"Capital Contribution" with respect to any Partner, means the
total
amount of money and the initial Gross Asset Value of any property (other
than
money) contributed or agreed to be contributed, as the context requires,
to
the Partnership by each Partner pursuant to the terms of this Agreement.
Any
reference to the Capital Contribution of a Partner shall include the
Capital
Contribution made by a predecessor holder of the Interest of such
Partner.
"Capital Transaction" means the sale, exchange or disposition
(other
than leasing in the ordinary course of business) of any Partnership
property
that is not in the ordinary course of business, or casualty damage to or
condemnation of any Partnership property, or any substantial interest
therein
or portion thereof.
"Cash Flow" means, with respect to any year or other applicable
period,
(a) all Revenues received by the Partnership during such period, plus
(b) any
amounts which the General Partner, acting jointly with BCTC 94, Inc.,
and
subject to the approval of the Lender and HUD, if required, releases
from the
Reserve Fund for Replacements as being no longer necessary to hold as
part of
the Reserve Fund for Replacements, less (i) all operating expenses and
obligations of the Partnership paid or payable (on a thirty-day current
basis)
during the applicable period, including without limitation escrow
deposits for
taxes and insurance, maintenance and repairs, (ii) all sums due or
currently
required to be paid under the terms of the Mortgage Loan or any other
third-
party indebtedness of the Partnership, and (iii) all amounts from
Revenues, if
any, added or required to be added to the Reserve Fund for Replacements
and/or
the Supplemental Replacement Reserve during such period. In no event
will
deductions in determining Cash Flow pursuant to clauses (i) and (ii)
above
include payments made on account of: the Asset Management Fee, amounts
due on
any Subordinated Loans, the Incentive Partnership Management Fee, the
subsequent annual funding of the Tenant Transition Fund, the Deferred
Development Fee and/or any Cash Flow only interest payments on the
Preservation Loan.
Cash Flow shall be determined separately for each fiscal year and
shall
not be cumulative.
"Certificate" means the Certificate of Limited Partnership for
Byam
Limited Partnership filed with the Secretary of State of Connecticut on
February 19, 1997, or any certificate of limited partnership or any
other
instrument or document which is required under the law of the State to
be
signed and 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.
"Class A Limited Partner" means Meriden Housing Preservation
Limited Partnership, a Connecticut limited partnership, or its successor
admitted to
the Partnership as a Substitute Class A Limited Partner pursuant to the
terms of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding provision or provisions of succeeding law.
"Compliance Period" has the meaning ascribed to such term in
Section 42
of the Code.
"Consent" means the prior written consent or approval of BCTC 94,
Inc.
and/or the Investment Partnership and/or any other Partner, as the
context may
require, to do the act or thing for which the consent is solicited.
"Construction Contract" means that certain construction contract
(including all exhibits and attachments thereto) to be entered into
between
the Partnership and the Contractor pursuant to which the Apartment
Complex is being rehabilitated.
"Contractor" means Equity Builders, Inc., in its capacity as the
general
construction contractor for the Apartment Complex.
"Cost Certification" means the date upon which each Limited
Partner
shall have received the written certification of the Accountants, in a
form
and in substance satisfactory to Boston Capital, as to the itemized
amounts of
the rehabilitation and development costs of the Apartment Complex and
the
Eligible Basis and Applicable Percentage (in each case, as defined in
Section
42(d) of the Code), pertaining to each building in the Apartment
Complex.
"Counsel" or "Counsel for the Partnership" shall mean Peabody &
Brown of
Boston, MA and Tobin, Carberry, O'Malley, Riley & Selinger, PC of New
London,
CT, or such other attorney or law firm upon which the Investment
Partnership
and the General Partner shall agree; provided, however, that if any
section of
this Agreement either (i) designates particular counsel for the purpose
described therein, or (ii) provides that counsel for the purpose
described
therein shall be chosen by another method or by another Person, then
such
designation or provision shall prevail over this general definition.
The
Limited Partners have been, and will continue to be, separately
represented by
Hinckley, Allen & Snyder or such other counsel as they may choose in
connection with all Partnership matters.
"Credit Shortfall" means the amount by which the Actual Credit is
less
than the Projected Credit (or Revised Projected Credit) for any year or
portion thereof.
"Debt Service" means scheduled principal and interest payments on
indebtedness under the Mortgage Loan, determined on an annual basis for
each
year of Partnership operations.
"Developer" means jointly, First Atlantic and American Housing, or
their
respective designees.
"Deferred Development Fee" means any portion of the Development
Fee not
actually paid to and received by the Developer from the Installments,
the
payment of which is deferred and payable only in accordance with
Sections
5.01(a), 11.03(A)(b) and 11.04(A)(c) hereof.
"Development Fee" means the fee payable by the Partnership to the
Developer pursuant to Section 8.10 of this Agreement.
"Development Sources" means the aggregate of: (a) the proceeds of
the
Mortgage Loan; (b) the Capital Contributions of the General Partner, as
set
forth in Section 5.01(a) of this Agreement; (c) not more than $426,008
less
the amount of the non-Deferred Development Fee of the Capital
Contributions of
the Investment Partnership to the Partnership; and (d) any rental income
of
the Partnership for the period prior to Final Closing.
"Distributable Proceeds from Capital Transactions" means the
excess of
all cash receipts and other consideration arising from the sale or other
disposition of all or any portion of the Apartment Complex or any
proceeds
realized from condemnation, casualty, or title defect, but excluding
proceeds,
if any, from rental interruption insurance or a temporary condemnation in the
nature of a lease, over the sum of the following, to the extent paid out of
such cash receipts or other consideration: (i) the amount of cash disbursed
or to be disbursed in connection with or as an expense of such sale orother
disposition, (ii) the amount necessary for the payment of all debts and
obligations of the Partnership arising from or otherwise related to such sale
or other disposition or to which the Apartment Complex is subject and which
are otherwise then due (other than debts and obligations owed to the
Partners and their Affiliates, which shall be satisfied in the order set
forth in Section 11.04), and (iii) any amounts set aside by the General
Partner for reserves which the General Partner deems reasonably necessary
for contingent,unmatured or unforeseen liabilities of the Partnership.
"Distributable Proceeds from Refinancings" means the excess of the
gross
proceeds of any borrowing by the Partnership over the sum of the
following, to
the extent paid out of such gross proceeds: (i) any amounts disbursed
to
repay then existing loans of the Partnership and to pay and provide for
all
debts and obligations of the Partnership then to be paid or which are
otherwise then due (other than debts and obligations owed to the
Partners and
their Affiliates, which shall be satisfied in the order set forth in
Section
11.04), (ii) all reasonable expenses of such borrowings, including,
without
limitation, all commitment fees, brokers' commissions, and attorneys'
fees,
(iii) all amounts paid to improve the Apartment Complex or for any other
purpose in order to satisfy conditions to or established in connection
with
such borrowings, and (iv) any amounts used to meet the operating
expenses of
the Apartment Complex or set aside by the General Partner for reserves
which
the General Partner deems reasonably necessary for contingent,
unmatured, or
unforeseen liabilities of the Partnership.
"Eligible Basis" has the meaning given to it in Section 42(d) of
the
Code.
"Excess Development Costs" means all funds in excess of the
Development
Sources which are required to (i) complete rehabilitation of the
Apartment
Complex, including paying any final cost overruns and the cost of any
change
orders which have been approved by the Lender and which are not funded
from
Development Sources, (ii) achieve Substantial Completion, (iii) achieve
Initial Closing and Final Closing and satisfy any escrow deposit
requirements
which are conditions to the Initial Closing and/or the Final Closing,
including without limitation, any amounts necessary for local taxes,
utilities, insurance premiums and other amounts which are required, (iv)
pay
any applicable loan assessment fees, discounts or other costs and
expenses
incurred by the Partnership as a result of the occurrence of the Initial
Closing and/or the Final Closing, (v) make the required deposit into the
Tenant Transition Fund, (vi) make the required deposit into the Reserve
Fund
for Replacements and the Supplemental Replacement Reserve and (vii) pay
any
Operating Deficits incurred by the Partnership prior to the occurrence
of
Rental Achievement. Excess Development Costs shall not include any
amounts
paid or to be paid in respect of the Development Fee.
"Extended Use Commitment" means the agreement between the
Partnership
and the Agency, which is intended to meet the definition of a "long term
commitment to low-income housing" as required by Section 42(h)(6) of the
Code
and the requirements of the Agency's Low-Income Housing Tax Credit
Program.
"Final Closing" means the occurrence of both of the following:
(i)
Substantial Completion and (ii) each of the Mortgage Loans (other than
the
Preservation Loan) is being amortized as a "permanent loan".
"First Atlantic" means First Atlantic Housing, Inc., a
Massachusetts
corporation, and a member of the General Partner.
"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 Byam Village of Massachusetts LLC, a
Connecticut
limited liability company, and any other Person or entity admitted as a
general partner pursuant to this Agreement, and their respective
successors
pursuant to this Agreement, including particularly the provisions of
Section
6.03 and 8.13.
"General Partner's Special Capital Contribution" has the meaning
ascribed to such term in Section 5.01 of this Agreement.
"Gross Asset Value" means, with respect to any asset, the assets
adjusted basis for federal income tax purposes, except as adjusted
pursuant to
Section 11.12B.
"HAP Contract" means that certain Housing Assistance Payments
Contract
dated July 20, 1983 by and between the Connecticut Housing Finance
Authority
and Byam Village Limited Partnership and approved by HUD, setting forth
the
Section 8 payments for the Apartment Complex, which Contract has been or
will
be assigned to the Partnership.
"HUD" means the United States Department of Housing and Urban
Development.
"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 the Mortgage Loan is
closed
and the first disbursement of proceeds of the Mortgage Loan are
authorized to
be made to the Partnership.
"Initial 100% Occupancy Date" means the first date, after the
completion
of construction, upon which 100% of the low-income apartment units in
the
Apartment Complex have been leased to and are occupied by, qualified
tenants
under executed Agency approved leases, if any such approval is
applicable.
"Installment" means an Installment of the Investment Partnership's
Capital Contribution paid or payable to the Partnership pursuant to
Section
5.01.
"Interest" or "Partnership Interest" means the ownership interest
of a
Partner in the Partnership at any particular time, including the right
of such
Partner to any and all benefits to which such Partner may be entitled as
provided in this Agreement and in the Act, together with the obligations
of
such Partner to comply with all the terms and provisions of this
Agreement and
of said Act. Such Interest of each Partner shall, except as otherwise
specifically provided herein, be that percentage of the aggregate of
such
benefit or obligation specified by Section 5.01 as such Partner's
Percentage
Interest.
"Invested Amount" means (i) as to the Investment Partnership, an
amount
equal to the paid-in Capital Contribution of the Investment Partnership
divided by .73 and (ii) as to any other Partner, an amount equal to its
paid-
in Capital Contribution.
"Investment Partnership" means Boston Capital Tax Credit Fund IV
L.P., a
Delaware limited partnership, which is a Limited Partner of the
Partnership.
"Land" means the property known as 1782 Meriden Road in Waterbury,
Connecticut, upon which the Apartment Complex is located.
"Lender" means the Connecticut Housing Finance Authority in its
capacity
as maker of the Mortgage Loan, or its successors and assigns in such
capacity,
including any substitute Lender permitted pursuant to Section 8.02(b)(v)
hereof, each acting through any authorized representative.
"Limited Partners" means the Investment Partnership and/or the Class A
Limited Partner and/or BCTC 94, Inc., or any other Limited Partner in
such
Person's capacity as a limited partner of the Partnership.
"Liquidator" means the General Partner or, if there is none at the
time
in question, such other Person who may be appointed in accordance with
applicable law and who shall be responsible for taking all action
necessary or
appropriate to wind up the affairs of, and distribute the assets of, the
Partnership upon its dissolution.
"Loan Documents" means, collectively, the Promissory Notes, the
Building
Loan Agreement, the Mortgage Deed, the Security Agreement, the
Collateral
Assignment of Leases and Rents, the Good Faith and Working Capital
Escrow
Deposit Agreement, the Minority Hiring Agreement, the Agreement and
Certification, the Affirmative Fair Marketing Contract, the Assignment
of
Proceeds, the Escrow and Disbursement Agreement and other documents
related to
the Mortgage Loan between the Partnership and the Lender.
"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.
"Management Agent" means the management and rental agent for the
Apartment Complex and/or its successors and/or assigns, as described in
Section 8.05 hereof.
"Management Agreement" means the agreement between the Partnership
and
the Management Agent providing for the management of the Apartment
Complex.
"Minimum Gain" means the amount determined by computing, with
respect to
each non-recourse liability of the Partnership, the amount of Taxable
Income,
if any, that would be realized by the Partnership if it disposed of (in
a
taxable transaction) the property subject to such liability in full
satisfaction thereof, and by then aggregating the amounts so computed,
in
accordance with Treasury Regulation 1.704-2(d). For purposes of
determining
the amount of such Taxable Income with respect to a liability, the
adjusted
basis, for federal income tax purposes, of the asset subject to the
liability
shall be allocated among all the liabilities that the asset secures in
the
manner set forth in Treasury Regulation 1.704-2(d)(2) (or successor
provisions). If Partnership property subject to one or more non-
recourse
liabilities of the Partnership is, under Treasury Regulation 1.704-
1(b)(2)(iv)(d),(f), or (r), properly reflected on the books of the
Partnership
at a book value that differs from the adjusted tax basis of such
property,
then the determination of Minimum Gain shall be made with reference to
such
book value.
"Minimum Set-Aside Test" means the set-aside test selected by the
Partnership pursuant to Section 42(g) of the Code with respect to the
percentage of units in its Apartment Complex to be occupied by tenants
with
incomes equal to no more than a certain percentage of area median
income. The
Partnership has selected or will select the 40-60 Set-Aside Test as the
Minimum Set-Aside Test.
"Mortgage" means, the Mortgage Deed given by the Partnership to
Lender
securing the Mortgage Loan.
"Mortgage Loan" means, collectively (i) the loan in the original
principal amount of approximately $900,000, bearing an interest rate of
6.75%,
having a term of 7 years and requiring regular principal and interest
payments
on the basis of a 7 year amortization schedule, (ii) the loan in the
original
principal amount of approximately $770,000, bearing an interest rate of
7.75%,
having a term of 30 years and requiring regular principal and interest
payments on the basis of a 30 year amortization schedule, and (iii) the
Preservation Loan, each made to the Partnership by the Lender pursuant
to the
Loan Documents.
"Net Capital Contribution" means an amount equal to a Partner's
paid-in
Capital Contribution, less the aggregate amount of cash distributions,
if any,
made to such Partner hereunder.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-
2(c) of the Treasury Regulations. The amount of Nonrecourse Deductions
for a
Fiscal Year of the Partnership equals the net increase, if any, in the
amount
of Minimum Gain during that Fiscal Year, determined according to the
provisions of Treasury Regulation Section 1.704-2(c).
"Notice" means a writing containing the information required by
this
Agreement to be communicated to a Partner and sent by registered or
certified
mail, postage prepaid, return receipt requested, to such Partner at the
last
known address of such Partner, the date of registry thereof or the date
of the
certification receipt therefor being deemed the date of such Notice;
provided,
however, that any written communication containing such information sent
to
such Partner actually received by such Partner shall constitute Notice
for all
purposes of this agreement.
"Operating Deficit " means the amount by which (i) the income of
the
Partnership from rental payments made by tenants of the Apartment
Complex and
all other income of the Partnership, including unrestricted earnings on
reserve or escrow funds (other than proceeds of any loans to the
Partnership
and investment earnings on funds on deposit in the Reserve Fund for
Replacements and the Tenant Transition Fund and the Supplemental
Replacement
Reserve) for a particular period of time, is exceeded by (ii) the sum of
all
the operating expenses, including all Debt Service payments, operating
and
maintenance expenses, deposits into the Reserve Fund for Replacements
and the
Supplemental Replacement Reserve, any Lender fee payments, and all other
Partnership obligations or expenditures, excluding payments for
rehabilitation
of the Apartment Complex and fees and other expenses and obligations of
the
Partnership to be paid from the Capital Contributions of the Investment
Partnership to the Partnership pursuant to this Agreement, during the
same
period of time. For the purposes of this definition, all expenses shall
be
paid on a sixty (60) day current basis.
"Operating Deficit Loan" means a loan made pursuant to Section
8.09(b).
"Partner" means any General Partner or any Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning attributed
to
"partner loan nonrecourse debt minimum gain" in Treasury Regulation
1.704-
2(i)(3).
"Partner Loan Nonrecourse Deductions" means any deductions of the
Partnership that are attributable to a nonrecourse liability for which a
Partner bears the risk of loss within the meaning of Treasury Regulation
Section 1.704-2(i).
"Partnership" means Byam Limited Partnership, a Connecticut
limited
partnership.
"Partnership Agreement" means this Amended and Restated Agreement
of
Limited Partnership, as amended from time to time.
"Percentage Interest" means the percentage Interest of each
Partner as
set forth in Section 5.01.
"Person" means any individual, partnership, corporation, trust or
other
entity.
"Plans and Specifications" means the plans and specifications for
rehabilitation of the Apartment Complex, referred to in the Construction
Contract and any changes thereto made in accordance with the terms of
this
Agreement.
"Preservation Loan" means that certain loan in the original
principal
amount of approximately $80,000, bearing an interest rate of 6%, which
interest accrues but the payment thereof is deferred for 30 years and
thereafter requiring regular principal and interest payments on the
basis of a
30 year amortization schedule.
"Project Documents" means and includes the Loan Documents, the
Extended
Use Commitment, the Regulatory Agreement, the Management Agreement and
all
other instruments delivered to (or required by) the Lender or the Agency
and
all other documents relating to the Apartment Complex and by which the
Partnership is bound, as amended or supplemented from time to time.
"Projected Credit" means Low-Income Housing Tax Credits in the
amount of
$44,375 for 1998, $66,564 per year for each of the years 1999 through
2007,
and $22,189 for 2008, constituting ninety-nine percent (99%) of the Tax
Credits which the General Partner has projected to be available to the
Partnership; provided, however, that if the Actual Credit for 1998 is
greater
than (or less than) $44,375, the Projected Credit for the year 2008
shall be
reduced (increased) by an amount equal to the amount by which the Actual
Credit for 1998 exceeds (or is less than) $44,375.
"Regulatory Agreement" means the Covenant of Compliance and
Regulatory
Agreement, to be entered into between the Partnership and the Lender
setting
forth certain terms and conditions under which the Apartment Complex is
to be
operated.
"Rent Restriction Test" means the test pursuant to Section 42 of
the
Code whereby the gross rent charged to tenants of the low-income units
in the
Apartment Complex cannot exceed 30% of the qualifying income levels of
those
units under Section 42.
"Rental Achievement" means the first time, based upon four (4)
consecutive full calendar months of operation after the first month in
which
the Partnership commences Debt Service payments on the Mortgage Loans
(other
than the Preservation Loan), on a fully amortized basis (i.e.,
amortization of
principal and interest amounts outstanding thereunder), with each month
taken
individually, that Cash Available for Debt Service Requirements (as
defined
below) equals or exceeds 1.10 times Debt Service requirements. "Cash
Available for Debt Service Requirements" for any period means the excess
of
(i) all cash actually received by the Partnership on a cash basis from
normal
operations during such period, but specifically excluding the proceeds
of
insurance (other than business or rental interruption insurance), loans,
Capital Transactions or Capital Contributions over (ii) all cash
requirements
of the Partnership properly allocable to such period of time on an
accrual
basis (not including distributions to Partners out of Cash Flow of the
Partnership or fees payable from Cash Flow) and, on an annualized basis,
all
projected expenditures, including those of a seasonal nature, which
might
reasonably be expected to be incurred on an unequal basis during a full
annual
period of operation, but specifically excluding Debt Service
requirements.
For purposes of this definition, cash requirements of the Partnership
shall
include to the extent not otherwise covered above, full funding of all
Partnership reserves, normal repairs, real estate taxes at fully
assessed
levels assuming a fully improved property, and necessary capital
improvements.
"Reserve Fund for Replacements" means the reserve fund for
replacements
with respect to the Apartment Complex as established pursuant to the
provisions of Section 8.18(a) of this Agreement.
"Revenues" means all cash receipts of the Partnership during any
period
except for Capital Contributions, proceeds from the liquidation, sale or
refinancing of Partnership property or of a Capital Transaction, or the
proceeds of any loan to the Partnership.
"Revised Projected Credit" has the meaning set forth in Section
5.01(d)(i).
"Share of Minimum Gain" means for each Partner, the excess of (1)
the
sum of (a) the aggregate Non-Recourse Deductions allocated to such
Partner
(and such Partner's predecessors in interest) up to that time and (b)
the
aggregate distributions to such Partner (and such Partner's predecessors
in
interest) up to that time of proceeds of a non-recourse liability that
are
allocable to an increase in Partnership Minimum Gain over (2) the sum of
(a)
such Partner's (and such Partner's predecessors in interest) aggregate
share
of the net decrease in Partnership Minimum Gain up to that time and (b)
such
Partner's (and such Partner's predecessors in interest) aggregate share
of the
decreases up to that time in Partnership Minimum Gain resulting from
revaluations of Partnership Property subject to one or more non-recourse
liabilities of the Partnership, as more fully set forth in Treasury
Regulation
1.704-2(g).
"State" means the State of Connecticut.
"State Designation" means, with respect to the Apartment Complex,
the
final allocation by the Agency of Low-Income Housing Tax Credits, as
evidenced
by the receipt by the Partnership of IRS Form 8609 executed by the
Agency as
to all buildings in the Apartment Complex. In the event State
Designation is
anticipated to occur more that sixty (60) days after the Agency's Cost
Certification, then, for purposes of Section 5.01(c) hereof, State
Designation
shall mean evidence of the Agency's receipt of Cost Certification.
"Subordinated Loan" means any loan made by the General Partner to
the
Partnership pursuant to Section 8.17.
"Substantial Completion" means the date upon which the Partnership
has
received (a) both a certificate of substantial completion from the
applicable
inspecting architect certifying that the rehabilitation has been
completed in
accordance with the Plans and Specifications and (b), if applicable,
certificates of substantial completion or certificates of occupancy from
the
applicable governmental jurisdiction(s) or authority(ies) for one
hundred
percent (100%) of the apartment units in the Apartment Complex;
provided,
however, that Substantial Completion shall not be deemed to have
occurred if
on such date any liens or other encumbrances as to title to the Land and
the
Apartment Complex exist (unless the General Partner shall have provided
lien
bonds or title insurance coverage satisfactory in amount and coverage to
BCTC
94, Inc.), other than those securing the Mortgage Loan and/or those
Consented
to by the Investment Partnership.
"Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03.
"Supplemental Replacement Reserve" means the supplemental
replacement
reserve account established pursuant to the provisions of Section
8.18(c) of
this Agreement.
"Syndication Expenses" means all expenditures classified as
syndication
expenses pursuant to Treasury Regulation Section 1.709-2(B).
Syndication
Expenses shall be taken into account in determining and maintaining
Capital
Accounts pursuant to Section 11.12 of this Agreement at the time they
would be
taken into account under the Partnership's method of accounting if they
were
deductible expenses.
"Taxable Income" and "Tax Losses" means the Partnership's taxable
income
or tax losses, respectively, for each fiscal year (or part thereof) as
determined for federal income tax purposes, including, where the context
requires, all items of income, gain, loss, deduction and credit which
enter
into the computation thereof.
"Tax Credit" means the Low-Income Housing Tax Credit.
"Tenant Transition Fund " means the tenant transition fund reserve
account established pursuant to the provisions of Section 8.18(b) of
this
Agreement.
"Tenant Transition Fund Loan" means a loan made pursuant to
Section8.18(b) of this Agreement.
ARTICLE III
PURPOSE AND BUSINESS OF THE PARTNERSHIP
3.01. Purpose of the Partnership. The Partnership has been
organized
to acquire the Land and the Apartment Complex located thereon and to
develop,
finance, own, rehabilitate, maintain, operate and sell or otherwise
dispose of
the Apartment Complex, in order to obtain long-term appreciation, cash
income,
Tax Credits and tax losses and to manage the Apartment Complex in a
manner
that provides and preserves safe, decent, affordable housing and needed
supportive services.
3.02. Authority of the Partnership. In order to carry out its
purpose,
the Partnership is empowered and authorized to do any and all acts and
things
necessary, appropriate, proper, advisable, incidental to or convenient
for the
furtherance and accomplishment of its purpose, and for the protection
and
benefit of the Partnership, including but not limited to the following:
(a) acquire ownership of the Land and the Apartment Complex
located
thereon;
(b) rehabilitate, operate, maintain, improve, buy, own, sell,
convey,
assign, mortgage, rent or lease any real estate and any personal
property
necessary to the operation of the Apartment Complex;
(c) provide housing, subject to the Minimum Set-Aside Test and
the
Rent Restriction Test and consistent with the requirements of the
Project
Documents so long as any Project Documents remain(s) in force;
(d) enter into any kind of activity, and perform and carry out
contracts of any kind necessary to, or in connection with, or incidental
to,
the accomplishment of the purposes of the Partnership;
(e) borrow money and issue evidences of indebtedness in
furtherance of
the Partnership business and secure any such indebtedness by mortgage,
pledge,
or other lien;
(f) maintain and operate the Apartment Complex, including hiring
the
Management Agent (which Management Agent may be any of the Partners or
an
Affiliate thereof) and entering into any agreement for the management of
the
Apartment Complex during its rent-up and after its rent-up period;
(g) subject to the approval of the Agency and/or the Lender, if
required, and to other limitations expressly set forth elsewhere in this
Agreement, negotiate for and conclude agreements for the sale, exchange,
lease
or other disposition of all or substantially all of the property of the
Partnership, or for the refinancing of any mortgage loan on the property
of
the Partnership;
(h) enter into the Loan Documents with the Lender and grant the
Mortgage, enter into the Mortgage Loan and all other documents required
by the
Lender with respect to the Mortgage Loan, and the Extended Use
Commitment and
Regulatory Agreement with the Agency, providing for regulations with
respect
to rents, profits, dividends and the disposition of the Apartment
Complex and
the long-term use of the Apartment Complex for low-income housing;
(i) rent dwelling units in the Apartment Complex from time to
time, in
accordance with the provisions of the Code applicable to Low-Income
Housing
Tax Credits and in accordance with applicable federal, state and local
regulations, collecting the rents therefrom, paying the expenses
incurred in
connection with the Apartment Complex, and distributing the net proceeds
to
the Partners, subject to any requirements which may be imposed by the
Extended
Use Commitment, the Regulatory Agreement, and the Loan Documents; and
(j) do any and all other acts and things necessary or proper in
furtherance of the Partnership business.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS;
DUTIES AND OBLIGATIONS
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:
(a) the rehabilitation and development of the Apartment Complex
shall
be completed in a timely and workmanlike manner in accordance with (i)
all
applicable requirements of the Construction Contract and the Project
Documents, (ii) all applicable requirements of all appropriate
governmental
entities, and (iii) the Plans and Specifications of the Apartment
Complex that
have been or shall be hereafter approved by the Lender and any
applicable
governmental entities, as such Plans and Specifications may be changed
from
time to time with the approval of the Lender and any applicable
governmental
entities, if such approval shall be required;
(b) at the Final Closing and at the time of commencement of
rehabilitation, the Land is and will be properly zoned for the Apartment
Complex, all consents, permissions and licenses required by all
applicable
governmental entities have been obtained (excepting however any
certificates
of occupancy which must be obtained prior to the occupancy of the
Apartment
Complex, which such certificates will be obtained by the General Partner
on
behalf of the Partnership), and the Apartment Complex conformed and
conforms
to all applicable federal, state and local land use, zoning,
environmental and
other governmental laws and regulations;
(c) all appropriate public utilities, including sanitary and
storm
sewers, water, gas and electricity, are currently available and will be
operating properly for all units in the Apartment Complex at the time of
first
occupancy of such units;
(d) as of the date hereof, at the Initial Closing and at the
Final
Closing, good and marketable fee simple title to the Apartment Complex
is and
will be held by the Partnership, and title insurance policies of a
financially-responsible institution acceptable to the Lender and to BCTC
94,
Inc., in the amount of the replacement cost of the Apartment Complex,
which
amount (as to the Partnership) shall not be less than the aggregate of
the
paid-in Capital Contributions of the General Partner and the Investment
Partnership plus the principal amount of the Mortgage Loan, in favor of
the
Partnership and Lender, respectively, were or will be issued on or
before the
Initial Closing, and shall remain in full force and effect, subject only
to
such easements, covenants, restrictions and such other standard
exceptions as
are normally included in owner's or mortgagee's title insurance policies
and
which are acceptable to BCTC 94, Inc. and the Lender and shall contain a
non-
imputation endorsement as to the Investment Partnership and BCTC 94,
Inc. and
such other endorsements as deemed reasonably necessary by the Lender and
BCTC
94, Inc.;
(e) the General Partner is not aware of any default under any
agreement, contract, lease, or other commitment, or of any claim,
demand,
litigation, proceedings or governmental investigation pending or
threatened
against it, the Apartment Complex or the Partnership, or related to the
business or assets of the Partnership or of the Apartment Complex, which
claim, demand, litigation, proceeding or governmental investigation
could
result in any judgment, order, decree, or settlement which would
materially
and adversely affect the business or assets of the Partnership, the
General
Partner, or of the Apartment Complex;
(f) except for the commitment fees paid to the Lender, neither
the
General Partner nor any Affiliate of the General Partner or the
Partnership,
has entered, or shall enter, into any agreement or contract for the
payment of
any Mortgage Loan discounts, additional interest, yield maintenance or
other
interest charges or financing fees or any agreement providing for the
guarantee of payment of any such interest charges or financing fees
relating
to the Mortgage Loan.
(g) the execution of this Agreement, the incurrence of the
obligations
set forth in this Agreement, and the consummation of the transactions
contemplated by this Agreement do not violate any provision of law, any
order,
judgment or decree of any court binding on the Partnership, the General
Partner or any of them or their Affiliates, any provision of any
indenture,
agreement, or other instrument to which the Partnership or they or
either of
them is a party or by which the Partnership or the Apartment Complex is
affected, and is not in conflict with, and will not result in a breach
of or
constitute a default under any such indenture, agreement, or other
instrument
or result in creating or imposing any lien, charge, or encumbrance of
any
nature whatsoever upon the Apartment Complex;
(h) the Construction Contract will be entered into between the
Partnership and the Contractor; no other consideration or fee shall be
paid to
the Contractor, in its capacity as the Contractor, other than the
amounts set
forth in the Construction Contract or as evidenced by change orders
approved
by the Lender or as otherwise disclosed in writing to and approved by
the
Investment Partnership; and all change orders that have been submitted
by the
Contractor to date have been paid in full;
(i) as of the date hereof, at the Initial Closing and at the
Final
Closing, a builder's risk insurance policy is and will be in full force
and
effect, and fire and extended coverage insurance and earthquake
insurance,
each for the full replacement value of the Apartment Complex (excluding
the
value of the Land, site utilities, landscaping and foundations) which
shall
include flood insurance, if the Apartment Complex is in a flood hazard
area
designated by HUD, worker's compensation insurance in amounts at least
equal
to the amounts required by law and the Loan Documents and public
liability
insurance in the amount of not less than $6,000,000 (of which up to
$5,000,000
may be provided under an umbrella policy), all in favor of the
Partnership and
naming the Investment Partner as an additional insured and loss payee,
are in
full force and effect and will be maintained in full force and effect
during
the term of the Partnership; all such policies shall be in amounts and
with
insurers satisfactory to BCTC 94, Inc., and shall be paid for out of
Partnership assets; following Substantial Completion, the General
Partner, on
behalf of the Partnership, will maintain $6,000,000 of liability
insurance
covering the Land and the Apartment Complex;
The term "full replacement value" as used herein shall mean and
include the total cost of replacement of the Apartment Complex at each
respective stage of rehabilitation thereof up to completion;
(j) neither the General Partner nor the Partnership has incurred
any
financial responsibility with respect to the Apartment Complex prior to
the
date of execution of this Agreement, other than that disclosed to the
Investment Partnership;
(k) at the time of execution of this Agreement, at the time of
Initial
Closing, at the time of Final Closing, and at Substantial Completion,
the
Partnership was, is and will continue to be a valid limited partnership,
duly
organized under the laws of the State, had, has and shall continue to
have
full power and authority to acquire the Land and to rehabilitate,
develop,
operate and maintain the Apartment Complex in accordance with the terms
of
this Agreement, and has taken and shall continue to take all action
under the
laws of the State and any other applicable jurisdiction that is
necessary to
protect the limited liability of the Limited Partners and to enable the
Partnership to engage in its business;
(l) no restrictions on the sale or refinancing of the Apartment
Complex, other than the restrictions set forth in the Loan Documents, in
the
Extended Use Commitment, the Regulatory Agreement, if any, and as set
forth in
this Agreement, exist as of the date hereof, and no such restrictions
shall,
at any time while the Investment Partnership is a Limited Partner, be
placed
upon the sale or refinancing of the Apartment Complex;
(m) the Apartment Complex is being developed in a manner which
satisfies, and shall continue to satisfy, all restrictions, including
tenant
income and rent restrictions, applicable to projects generating Low-
Income
Housing Tax Credits under Section 42 of the Code;
(n) the Projected Credits applicable to the Apartment Complex
are
$44,375 for 1998, $66,564 per year for each of the years 1999 through
2007,
and $22,189 for 2008, constituting ninety-nine percent (99%) of the Tax
Credits which the General Partner has projected to be available to the
Partnership; provided, however, that if the Actual Credit for 1998 is
greater
than (or less than) $44,375, the Projected Credit for the year 2008
shall be
reduced (increased) by an amount equal to the amount by which the Actual
Credit for 1998 exceeds (or is less than) $44,375;
(o) it is anticipated that the Partnership is entitled to
receive the
Tax Credits from the Agency in an annual dollar amount of not less than
$67,236 pursuant to Section 42(h)(4)(B) of the Code because the Mortgage
Loan
(exclusive of the Preservation Loan) is being financed by the proceeds
of tax-
exempt bonds, and the Apartment Complex meets the requirements set forth
in
Sections 42(m)(1)(D) and 42(m)(2)(D) of the Code;
(p) to the best of its knowledge after due inquiry, at the time
of the
execution of this Agreement, the General Partner has fully complied with
all
applicable material provisions and requirements of any and all purchase
and/or
lease agreements, loan agreements, Project Documents and other
agreements with
respect to the acquisition, development, financing, rehabilitation and
operation of the Apartment Complex; it shall take, and/or cause the
Partnership to take, all actions as shall be necessary to achieve and
maintain
continued compliance with the provisions, and fulfill all applicable
requirements, of such agreements;
(q) the obligations of the General Partner will be guaranteed by
First
Atlantic, by American Housing, and by Michael A. Liberty pursuant to the
terms
of a limited guaranty of even date by and between the Partnership, First
Atlantic, American Housing and Michael A. Liberty; and
(r) fifty percent (50%) or more of the aggregate basis of the
Apartment Complex and the Land is being financed by the proceeds of 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:
(a) all requirements shall be met which are necessary to obtain
or
achieve (i) compliance with the Minimum Set-Aside Test, the Rent
Restriction
Test, and any other requirements necessary for the Apartment Complex to
initially qualify, and to continue to qualify, for Tax Credits,
including all
requirements set forth in the Extended Use Commitment, (ii) issuance of
all
necessary certificates of occupancy, including all governmental
approvals
required to permit occupancy of all of the apartment units in the
Apartment
Complex, (iii) Initial Closing, (iv) Final Closing and (v) compliance
with all
provisions of the Project Documents;
(b) while conducting the business of the Partnership, the
General
Partner shall not act in any manner which it knows or should have known
after
due inquiry will (i) cause the termination of the Partnership for
federal
income tax purposes without the Consent of the Investment Partnership,
or (ii)
cause the Partnership to be treated for federal income tax purposes as
an
association taxable as a corporation;
(c) the Apartment Complex shall be managed upon Substantial
Completion
so that (i) 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, (ii) the rental of all units in the Apartment Complex complies
with the
tenant income limitations and other restrictions under the Rent
Restriction
Test and as set forth in the Extended Use Commitment and all applicable
documents entered into in connection with the Mortgage Loan, and (iii)
one
hundred percent (100%) of the units in the Apartment Complex are
occupied or
held for occupancy by individuals with incomes of sixty percent (60%) or
less
of area median income as adjusted for family size;
(d) the General Partner shall exercise good faith in all
activities
relating to the conduct of the business of the Partnership, including
the
development, operation and maintenance of the Apartment Complex, and
shall
take no action with respect to the business and property of the
Partnership
which is not reasonably related to the achievement of the purpose of the
Partnership;
(e) all of (i) the fixtures, maintenance supplies, tools,
equipment
and the like now and to be owned by the Partnership or to be appurtenant
to,
or to be used in the operation of the Apartment Complex, as well as (ii)
the
rents, revenues and profits earned from the operation of the Apartment
Complex, will be free and clear of all security interests and
encumbrances
except for the Mortgage Loan and the Mortgage, and any additional
security
agreements executed in connection therewith;
(f) the General Partner will execute on behalf of the
Partnership all
documents necessary to elect, pursuant to Sections 732, 743 and 754 of
the
Code, to adjust the basis of the Partnership's property upon the request
of
the Investment Partnership, if, in the sole opinion of the Investment
Partnership, such election would be advantageous to the Investment
Partnership
and any such elections (including elections made at the direction or
with the
consent of the Investment Partnership) shall not reduce the obligations
of the
General Partner pursuant to Section 5.01(d);
(g) the General Partner guarantees payment by the Partnership of
any
Credit Recovery Loan pursuant to 5.01(d) and the Asset Management Fee
pursuant
to Section 8.11.1 (as limited by such section), and payment by the
Partnership
of the Development Fee pursuant to Section 8.10;
(h) the General Partner shall comply and cause the Partnership
to
comply with the provisions of all applicable governmental and
contractual
obligations;
(i) the General Partner shall be responsible for the payment of
any
fines or penalties imposed by the Agency or the Lender pursuant to the
Project
Documents and any documents executed in connection with obtaining Tax
Credits
(other than with respect to payments of principal or interest under the
Mortgage Loan from and after Final Closing);
(j) the General Partner shall promptly notify the Investment
Partnership of any written or oral notice of (i) any default or failure
of
compliance with respect to the Mortgage Loan or any other financial,
contractual or governmental obligation of the Partnership or the General
Partner (in the case of the General Partner, if such default or failure
of
compliance may have a material adverse impact on the Partnership or its
operations), or (ii) any IRS proceeding regarding the Apartment Complex
or the
Partnership;
(k) the General Partner 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;
(l) within thirty (30) days following the Admission Date, the
General
Partner shall submit to Boston Capital evidence of the Partnership's
engagement of Accountants, who have been approved by BCTC 94, Inc., to
be
responsible for the Partnership's audit and tax matter reporting
obligations
under Section 13.04 hereof. BCTC 94, Inc. hereby acknowledges that the
accounting firm of Reznick, Fedder & Silverman of Bethesda, Maryland is
approved by BCTC 94, Inc. as the initial Accountant for the Partnership;
(m) the General Partner shall provide to BCTC 94, Inc., for its
approval and Consent, prior to execution, a copy of the Extended Use
Commitment to be entered into between the Partnership and the Agency and
shall
ensure that such Extended Use Commitment is executed and recorded no
later
than the end of the first taxable year in which any Tax Credit is
claimed by
the Partnership with respect to any building in the Apartment Complex;
and
(n) the General Partner shall establish and maintain all reserve
accounts required by the Lender pursuant to the Loan Documents.
ARTICLE V
PARTNERS, PARTNERSHIP INTERESTS
AND OBLIGATIONS OF THE PARTNERSHIP
5.01. Partners, Capital Contributions and Partnership Interests.
(a) The General Partner, its principal address or place of
business,
its Capital Contribution and Percentage Interest are as follows:
Byam Village of Massachusetts LLC $246,700 1.0%
One Boston Place, Suite 2100
Boston, MA 02110
In the event that the Partnership has not paid all or part of the
Deferred Development Fee when the final payment is due pursuant to the
Development Agreement and Section 8.10 hereof, the General Partner shall
contribute to the Partnership an amount equal to any such remaining
principal
balance (the "General Partner's Special Capital Contribution") and the
Partnership shall thereupon make a payment in an equal amount to pay off
the
principal balance due under the Development Agreement.
(b)(i) The Investment Partnership, its principal office or
place of
business, its Capital Contribution and its Percentage Interest is as
follows:
Boston Capital Tax $426,008 (as more 98.99%
Credit Fund IV L.P. specifically set
(Series 26) forth in subparagraph
c/o Boston Capital (c) immediately below)
Partners, Inc.
One Boston Place
21st Floor
Boston, MA 02110
(ii) The Special Limited Partner, its principal office or place
of
business, its Capital Contribution and its Percentage Interest is as
follows:
BCTC 94, Inc. $10.00 0.01%
c/o Boston Capital
Partners, Inc.
One Boston Place,
21st Floor
Boston, MA 02210
(c) Subject to the provisions of this Agreement, including,
without
limitation, the provisions of Sections 5.01(d) and 5.03, the Investment
Partnership shall be obligated to make Capital Contributions to the
Partnership in the aggregate amount of $426,008 in four (4) installments
(the
"Installments"), which Installments shall be due and payable in cash by
the
Investment Partnership within twenty-one (21) days after the Investment
Partnership shall have received evidence, reasonably satisfactory to
them, of
the occurrence of each of the conditions set forth below as to the
applicable
Installment, as follows:
(i) $355,000 on the latest to occur of (A) Initial Closing, or
(B) the
Admission Date, (the "First Installment");
(ii) $45,000 on the latest to occur of (A) Cost Certification,
(B)
receipt of an updated title insurance policy satisfactory to BCTC 94,
Inc.,
(C) Initial 100% Occupancy Date, (D) Rental Achievement, (E)
confirmation by
Boston Capital that outstanding due diligence items have been completed
by the
General Partner to the reasonable satisfaction of Boston Capital, if
any, (F)
receipt of a payoff letter from the Contractor stating that all amounts
payable to the Contractor have been paid in full and that the
Partnership is
not in violation of the Construction Contract, (G) receipt of a valid
and
recorded Extended Use Commitment and receipt of a subordination
agreement
subordinating the Mortgage Loans to the Extended Use Commitment or (H)
satisfaction of all of the conditions to the payment of the First
Installment
(the "Second Installment"); and
(iii) $20,000 on the latest to occur of (A) Final Closing, (B)
State
Designation, (C) Rental Achievement or (D) satisfaction of all of the
conditions to the payment of the Second Installment (the "Third
Installment:);
and
(iv) $6,008 on the latest to occur of (A) the receipt by the
Investment Partnership of the Partnership's federal income tax return
and an
audited financial statement for the year in which Rental Achievement
occurred
or (B) satisfaction of all of the conditions to the payment of the First
and
Second Installments (the "Fourth Installment").
As a condition precedent to each payment set forth above other than the
First
Installment, the General Partner shall, not less than twenty (20) days
nor
more than thirty (30) days prior to the time such Installment is due,
give the
Investment Partnership Notice in the form of a written certification
that: (A)
all conditions precedent to such Installment have been satisfied, (B)
the
representations, warranties and covenants given by the General Partner
in
Section 4.01(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 (C) to the best of its knowledge,
after due
inquiry, no condition exists which would, pursuant to Section 5.03,
entitle
the Investment Partnership to withhold the payment of such Installment.
Based
upon the giving of such Notice, such Installment shall be made on the
due date
therefor, or if such Notice is not timely given, then within twenty-one
(21)
days after receipt of such Notice.
(d) (i) Upon the occurrence of Cost Certification or State
Designation, if ninety-nine percent (99%) of the aggregate amount of Tax
Credits: (A) for which the Partnership would be eligible with respect to
the
Apartment Complex based upon the Cost Certification, and/or (B)
allocated by
the Agency with respect to the Apartment Complex, is less than the
aggregate
amount of the Projected Credit over the ten-year credit period (the
"Allocation Differential"), then the Capital Contribution of the
Investment
Partnership shall be reduced by the "Adjustment Amount". The Adjustment
Amount shall be equal to the Allocation Differential multiplied by 64%.
Any
such reduction in Capital Contribution shall be applied to reduce the
Second
Installment and if, and to the extent necessary, the Third Installment
and if,
and to the extent necessary, the Fourth Installment. If no further
Installments are due to be paid, then the entire amount of such
reduction
shall be repaid by the Partnership to the Investment Partnership
promptly
after demand is made therefor. The General Partner is obligated to
provide
such funds to the Partnership as shall be necessary to cause the
aforesaid
payment to be made by the Partnership to the Investment Partnership. In
the
event that there is a reduction in Capital Contributions equal to the
Adjustment Amount, then the amount of the Projected Credit shall be
proportionately reduced to reflect the Allocation Differential, and
thereafter
shall be referred to as the "Revised Projected Credit".
(ii) If at any time the Accountants determine that, for any
fiscal
year or portion thereof during the Partnership's operation, ending on
the date
five (5) years from and after the date of Substantial Completion (the
"Reduction Period"), the Actual Credit for such fiscal year or portion
thereof
is less than the Projected Credit (or Revised Projected Credit)
applicable to
such fiscal year or portion thereof, then the Capital Contribution of
the
Investment Partnership shall be reduced by the Reduction Amount. The
"Reduction Amount" shall be equal to the sum of (A) the Credit Shortfall
multiplied by 64% 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, there is a Credit Shortfall with respect to any fiscal
year
during the Partnership's operation, the Investment Partnership shall be
treated as having made a constructive advance to the Partnership with
respect
to such year (a "Credit Recovery Loan"), which shall be deemed to have
been
made on January 1 of such year, in an amount equal to the sum of (A) the
Credit Shortfall for such year, plus (B) the amount of any recapture,
interest
or penalty payable by the limited partners of the Investment Partnership
(assuming pass-through of all such liability in the year incurred and a
tax
rate equal to the maximum individual rate applicable in such year) as a
result
of the Credit Shortfall for such year. Credit Recovery Loans shall be
deemed
to bear simple (not compounded) interest, from the respective dates on
which
such principal advances are deemed to have been made under this Section
5.01(d) (iii) at 9% per annum. Credit Recovery Loans shall be repayable
by
the Partnership as provided in Section 11.04(A)(c).
(e) Without the Consent of the General Partner and the
Investment
Partnership, no additional Persons may be admitted as additional Limited
Partners and Capital Contributions may be accepted only as and to the
extent
expressly provided for in this Article V.
5.02. Return of Capital Contribution. 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,
after Notice from the Investment Partnership of such noncompliance and
failure
to cure such noncompliance within a period of thirty (30) days from and
after
the date of such Notice, or (b) Lender shall have declared the
Partnership to
be in default under the Mortgage Loan, or (c) foreclosure proceedings
shall
have been commenced against the Apartment Complex, or (d) the
Partnership
shall not have satisfied the post-closing conditions described on
Exhibit A
attached hereto within the timeframes designated therein, then the
Partnership
and the Investment Partnership, at its sole election, may cause the
withholding of payment of any Installment otherwise payable to the
Partnership. Notwithstanding the provisions herein, in the event that
an
Installment payment becomes due during the cure period stated in this
Section
5.03(a), the Investment Partnership, at its sole election, may cause the
withholding of any payment of any such Installment otherwise payable to
the
Partnership until the termination of such cure period, and then,
according to
the provisions herein.
All amounts so withheld by the Investment Partnership under this
Section
5.03 shall be promptly released to the Partnership only after the
General
Partner or the Partnership has cured the default justifying the
withholding,
as demonstrated by evidence reasonably acceptable to the Investment
Partnership.
5.04. Legal Opinions. As a condition precedent to payment of the
First
Installment, the Investment Partnership shall have received the opinions
of
Peabody & Brown of Boston, MA and Tobin, Carberry, O'Malley, Riley &
Selinger,
PC of New London, CT, which opinions shall be in form and substance
satisfactory to the Investment Partnership and shall explicitly state
that
Hinckley, Allen & Snyder, of Boston, Massachusetts, counsel to the
Limited
Partner, may explicitly rely upon them.
5.05. Repurchase Obligation.
(a) If (i) Substantial Completion has not occurred and/or the
Apartment Complex is not placed in service by December 31, 1998; (ii)
the
Partnership has not received State Designation for the year or years
that the
Apartment Complex is placed in service (for Tax Credit purposes); (iii)
Rental
Achievement does not occur within 12 months from and after the
occurrence of
Substantial Completion; (iv) the Partnership fails to initially meet the
Minimum Set-Aside Test or the Rent Restriction Test within 12 months of
the
date that the Apartment Complex is placed in service; (v) the
Partnership
fails to meet the Minimum Set-Aside Test or the Rent Restriction Test at
anytime during the first 60 months after initial achievement of the
Minimum
Set Aside and Rent Restriction Tests; (vi) Final Closing has not
occurred by
fourteen (14) months after Initial Closing; (vii) an event of default
described in Section 5.03(a), (b) (c) and/or (d) shall exist and shall
not
have been cured within 30 days after the occurrence of such default;
(viii)
the buildings comprising the Apartment Complex are not placed in service
prior
to December 31 in the year in which State Designation has occurred; (ix)
the
General Partner fails to make Subordinated Loans as required by this
Agreement; then the General Partner shall, within 30 days of the
occurrence
thereof, send to the Investment Partnership Notice of such event and of
its
obligation to purchase the Interest of the Investment Partnership
hereunder
and pay to the Investment Partnership its paid-in Capital Contribution
in the
event the Investment Partnership in its sole discretion requires such
purchase
of its Interest. Thereafter, the General Partner, within 30 days of
their
receipt of Notice from the Investment Partnership of such election,
shall
acquire the entire Interest of the Investment Partnership in the
Partnership
by making payment to the Investment Partnership, in cash, of an amount
equal
to its paid-in Capital Contribution.
(b) If the Lender and/or the Agency shall disapprove the
Investment
Partnership as a Partner hereunder within 180 days of its admission to
the
Partnership, then the Investment Partnership shall, effective as of such
time
(or such other time as may be specified by the Lender and/or the Agency
in its
disapproval), cease to be a Limited Partner. The General Partners
shall,
within 10 days of the effective date of such termination, purchase the
Interest of the Investment Partnership in the Partnership and pay to the
Investment Partnership an amount equal to its Net Capital Contribution.
(c) Upon receipt by the Investment Partnership of any such
payment of
its Net Capital Contribution or the Invested Amount, as applicable, the
Interest of the Investment Partnership shall terminate, the Investment
Partnership shall execute, acknowledge and deliver such documents of
assignment as the General Partner shall require and effectuate
termination or
transfer of its Interest, and the General Partner shall indemnify and
hold
harmless the Investment Partnership from any losses, damages, and/or
liabilities to which the Investment Partnership (as a result of its
participation hereunder) may be subject, except as and to the extent of
any
losses, damages and/or liabilities arising from the Investment
Partnership's
own negligence, misconduct or fraud.
ARTICLE VI
CHANGES IN PARTNERS
6.01. Withdrawal of a General Partner.
(a) A General Partner may withdraw from the Partnership or sell,
transfer or assign his or its Interest as General Partner only with the
prior
Consent of BCTC 94, Inc., and of the Lender, if required, and only after
being
given written approval by the necessary parties as provided in Section
6.02,
and by the Lender, if required, 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.
(b) In the event that a General Partner withdraws from the
Partnership
or sells, transfers or assigns his or its entire Interest pursuant to
Section
6.01(a), he or it shall be and shall remain liable for all obligations
and
liabilities incurred by him or it as General Partner, or arising out of
any
events occurring before such withdrawal, sale, transfer or assignment
shall
have become effective, but shall be free of any obligation or liability
incurred on account of the activities of the Partnership from and after
the
time such withdrawal, sale, transfer or assignment shall have become
effective.
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 satisfied:
(a) the withdrawal of any withdrawing General Partner and the
admission of such Person shall have been Consented to by the remaining
General
Partner or its successors and the Investment Partnership, and consented
to, if
required, by the Lender;
(b) the successor or additional Person shall have accepted and
agreed
to be bound by (i) all the terms and provisions of this Agreement, by
executing a counterpart hereof, and (ii) all the terms and provisions of
the
Loan Documents, including by executing a counterpart thereof to the
extent
required by a Lender, and (iii) all the terms and provisions of such
other
documents or instruments as may be required or appropriate in order to
effect
the admission of such Person as a General Partner, and an amendment to
this
Agreement and/or the Certificate, as applicable, evidencing the
admission of
such Person as a General Partner shall have been filed and all other
actions
required by Section 1.05 in connection with such admission shall have
been
performed;
(c) if the successor or additional Person is a corporation or a
limited liability company, it shall have provided the Partnership with
evidence satisfactory to counsel for the Partnership of its authority to
become a General Partner, to do business in the State and to be bound by
the
terms and provisions of this Agreement; and
(d) counsel for the Partnership shall have rendered an opinion
that
the admission of the successor or additional Person is in conformity
with the
Act and that none of the actions taken in connection with the admission
of the
successor Person will cause the termination or dissolution of the
Partnership
or will cause it to be classified other than as a partnership for
federal
income tax purposes.
6.03. Effect of Bankruptcy, Death, Withdrawal, Dissolution or
Incompetence of a
General Partner.
(a) In the event of the Bankruptcy of a General Partner or the
withdrawal, death or dissolution of a General Partner or an adjudication
that
a General Partner is incompetent (which term shall include, but not be
limited
to, insanity) the business of the Partnership shall be continued by the
other
General Partner, if any, (and the other General Partner, by execution of
this
Agreement, expressly so agrees to continue the business of the
Partnership);
provided, however, that if the withdrawn, Bankrupt, deceased, dissolved
or
incompetent General Partner is then the sole General Partner, unless the
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 Partner and continue the
Partnership
upon the admission of such successor General Partner to the Partnership,
the
Partnership shall be terminated.
(b) Upon the Bankruptcy, death, dissolution or adjudication of
incompetence of a General Partner, such General Partner shall
immediately
cease to be a General Partner and his or its Interest shall without
further
action be converted to a Limited Partner Interest; provided, however,
that if
such Bankrupt, dissolved, incompetent or deceased General Partner is the
sole
remaining General Partner, such General Partner shall cease to be a
General
Partner only upon the expiration of ninety (90) days after Notice to the
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 holds a 1% Percentage Interest (as
set
forth in Section 5.01) and will receive such percentage interest
distribution
of the General Partner's percentage pursuant to Section 11.04A(f), as is
deemed reasonable by the Limited Partners as a result of good faith
negotiations with such substitute General Partner; such replaced General
Partner whose Interest has been converted to that of a Limited Partner
shall
remain entitled to his or its proportionate share of the remainder of
the
distribution pursuant to Section 11.04A(f).
Except as set forth above, such conversion of a General Partner
Interest
to a Limited Partner Interest shall not affect any rights, obligations
or
liabilities (including without limitation, any of the General Partner's
obligations under Section 8.09 herein) of the Bankrupt, deceased,
dissolved or
incompetent General Partner existing prior to the Bankruptcy, death,
dissolution or incompetence of such person as a General Partner (whether
or
not such rights, obligations or liabilities were known or had matured).
(c) If, at the time of the withdrawal, Bankruptcy, death,
dissolution
or adjudication of incompetence of a General Partner, the Bankrupt,
deceased,
dissolved or incompetent General Partner was not the sole General
Partner of
the Partnership, the remaining General Partner or General Partners shall
promptly (i) give Notice to the Limited Partners of such Bankruptcy,
death,
dissolution or adjudication of incompetence, and (ii) make such
amendments to
this Agreement and execute and file such amendments or documents or
other
instruments as are necessary to reflect the conversion of the Interest
of the
Bankrupt, deceased, dissolved or incompetent General Partner and his
having
ceased to be a General Partner. The remaining General Partner or
General
Partners are hereby granted an irrevocable power of attorney to execute
any or
all documents on behalf of the Partners and the Partnership and to file
such
documents as may be required to effectuate the provisions of this
Section
6.03.
ARTICLE VII
ASSIGNMENT TO THE PARTNERSHIP
7.01. Assignment of Contracts, etc. The General Partner hereby
transfers and assigns to the Partnership all of its right, title and
interest
in and to the Apartment Complex, including the following:
(i) all contracts with architects, engineers, contractors and
supervising architects with respect to the rehabilitation or development
of
the Apartment Complex;
(ii) 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;
(iii) any and all commitments with respect to the Mortgage Loan;
and
(iv) any other work product related to the Apartment Complex.
ARTICLE VIII
RIGHTS, OBLIGATIONS AND POWERS
OF THE GENERAL PARTNER
8.01. Management of the Partnership.
(a) Except as otherwise set forth in this Agreement, the General
Partner, within the authority granted to it under this Agreement, shall
have
full, complete and exclusive discretion to manage and control the
business of
the Partnership for the purposes stated in Article III, shall make all
decisions affecting the business of the Partnership and shall manage and
control the affairs of the Partnership to the best of its ability and
use its
best efforts to carry out the purpose of the Partnership. In so doing,
the
General Partner shall take all actions necessary or appropriate to
protect the
interests of the Limited Partner and of the Partnership. The General
Partner
shall devote such of its time as is necessary to the affairs of the
Partnership.
(b) Except as otherwise set forth in this Agreement and subject
to the
applicable Lender rules and regulations and the provisions of the
Project
Documents, the General Partner (acting for and on behalf of the
Partnership),
in extension and not in limitation of the rights and powers given by law
or by
the other provisions of this Agreement, shall, in its sole discretion,
have
the full and entire right, power and authority in the management of the
Partnership business to do any and all acts and things necessary,
proper,
convenient or advisable to effectuate the purpose of the Partnership.
In
furtherance and not in limitation of the foregoing provisions, the
General
Partner is specifically authorized and empowered to execute and deliver,
on
behalf of the Partnership, the Project Documents and to execute any and
all
other instruments and documents, and amendments thereto, as shall be
required
in connection with the Mortgage Loan, including, but not limited to,
executing
any mortgage, note, contract, building loan agreement, bank resolution
and
signature card, release, discharge, or any other document or instrument
in any
way related thereto or necessary or appropriate in connection therewith;
provided, however, that copies of all applications for advances of
Mortgage
Loan proceeds which occur after the Admission Date shall be provided to
the
Investment Partnership prior to the disbursement of any funds pursuant
thereto. All decisions made for and on behalf of the Partnership by the
General Partner shall be binding upon the Partnership. No person
dealing with
the General Partner shall be required to determine its authority to make
any
undertaking on behalf of the Partnership, nor to determine any facts or
circumstances bearing upon the existence of such authority.
(c) Subject to the terms of this Partnership Agreement, the
General
Partner shall be responsible for the management and administration of
the
Partnership business and shall have all rights and authority generally
conferred by law or necessary, advisable or consistent with
accomplishing the
purpose of the Partnership. Subject to the consent of the Special
Limited
Partner, which consent shall not be unreasonably withheld, the General
Partner
shall have the power to assign duties and may delegate any of its
powers,
rights and obligations hereunder and may appoint, employ, contract or
otherwise deal with any person for the transaction of business of the
Partnership, which person may, but only under the supervision of the
General
Partner perform any acts or services for the Partnership as the General
Partner may approve.
8.02. Limitations Upon the Authority of the General Partner.
(a) The General Partner shall not have any authority to:
(i) perform any act in violation of any applicable law or
regulation thereunder;
(ii) perform any act in violation of the provisions of the
Extended Use Commitment, the Loan Documents, or any other Project
Documents;
(iii) do any act required to be approved or ratified in
writing by
all Limited Partners under the Act unless the right to do so is
expressly
otherwise given in this Agreement;
(iv) rent apartments in the Apartment Complex such that the
Apartment Complex would not meet the requirements of the Rent
Restriction Test
or Minimum Set-Aside Test or to rent units to any individuals where
income
exceeds 60% of area median income, as adjusted for family size; or
(v) borrow from the Partnership or commingle Partnership
funds
with funds of any other Person.
(b) The General Partner shall not, without the Consent of BCTC
94,
Inc. have any authority to:
(i) sell or otherwise dispose of, at any time, all or
substantially all of the assets of the Partnership;
(ii) borrow in excess of $10,000 in the aggregate at any
one time
outstanding on the general credit of the Partnership, except borrowings
constituting Subordinated Loans or Credit Recovery Loans;
(iii) following Substantial Completion, construct any new or
replacement capital improvements on the Apartment Complex which
substantially
alter the Apartment Complex or its use or which are at a cost in excess
of
$10,000 in a single Partnership fiscal year, except (a) replacements and
remodeling in the ordinary course of business or under emergency
conditions or
(b) construction paid for from insurance proceeds;
(iv) acquire any real property in addition to the Apartment
Complex; or
(v) refinance the Mortgage Loan, provided that, with the
Consent
of BCTC 94, Inc., the General Partner may substitute, in whole or in
part, the
Mortgage Loan with other permanent first mortgage financing, provided
such
financing (a) is without recourse to any Partner of the Partnership, (b)
has a
term that ends no earlier than the last day of the "Compliance Period"
as
defined in Code Section 42, (c) has fixed debt service no greater than
the
fixed debt service applicable to the Mortgage Loan during the term of
the
Mortgage Loan and (d) permits use of refinancing proceeds only for
Partnership
purposes approved by the Investment Partnership.
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. Subject to Section 8.05 hereof,
the
General Partner may employ, contract, or otherwise deal with any Person
in
connection with the performance of its management responsibilities
hereunder,
provided such Person acts only under the supervision of the General
Partner.
8.05. General Partner or Affiliates Dealing with Partnership.
(a) The General Partner or any Affiliate may act as
Management
Agent on such terms and conditions permitted by applicable regulations
of the
Lender and the Agency, and may receive compensation at the highest rates
approved and permitted by the Lender or the Agency at any time;
provided,
however, that the Management Agent may not receive compensation in
excess of
that permitted by HUD and the Lender; provided, further, that
notwithstanding
the foregoing, the Management Agent may not receive compensation in
excess of
five percent (5%) of gross rental receipts received from tenants of the
Apartment Complex without the prior approval of BCTC 94, Inc.
(b) The General Partner or any Affiliates thereof shall
have the
right to contract or otherwise deal with the Partnership for the sale of
goods
or services to the Partnership in addition to those set forth herein, if
(A)
compensation paid or promised for such goods or services is reasonable
(i.e.,
at fair market value) and is paid only for goods or services actually
furnished to the Partnership, (B) the goods or services to be furnished
shall
be reasonable for and necessary to the Partnership, (C) the fees, terms
and
conditions of such transaction are at least as favorable to the
Partnership as
would be obtainable in an arm's-length transaction, (D) no agent,
attorney,
accountant or other independent consultant or contractor who also is
employed
on a full-time basis by the General Partner or any Affiliate shall be
compensated by the Partnership for his services.
Any contract covering such transactions shall be in writing and
shall be
terminable without penalty on sixty (60) days Notice. Any payment made
to the
General Partner or any Affiliate for such goods or services shall be
fully
disclosed to all Limited Partners in the reports required under Section
13.04.
Neither the General Partner nor any Affiliate shall, by the making of
lump-sum
payments to any other Person for disbursement by such other Person,
circumvent
the provisions of this Section 8.05(b).
8.06. Other Activities. The General Partner and any Affiliates
thereof
may engage in or possess interests in other business ventures of every
kind
and description for their own account, including, without limitation,
serving
as general partner of other partnerships which own, either directly or
through
interests in other partnerships, government-assisted housing projects
similar
to the Apartment Complex. Neither the Partnership nor any of the
Partners
shall have any rights by virtue of this Agreement in or to such other
business
ventures or to the income or profits derived therefrom.
8.07. Liability for Acts and Omissions. No General Partner shall be
liable, responsible or accountable in damages or otherwise to any of the
Partners for any act or omission performed or omitted by him or it, or
any of
them, in good faith on behalf of the Partnership and in a manner
reasonably
believed by him or it or any of them to be within the scope of the
authority
granted to him or it or any of them by this Agreement and in the best
interest
of the Partnership, except for gross negligence, willful misconduct,
fraud or
any material breach of his or its or their fiduciary duty as General
Partner
with respect to such acts or omissions. Any loss or damage incurred by
any
General Partner by reason of any act or omission performed or omitted by
him
or it or any of them in good faith on behalf of the Partnership and in a
manner reasonably believed by him or it or any of them to be within the
scope
of the authority granted to him or it by this Agreement and in the best
interests of the Partnership (but not, in any event, any loss or damage
incurred by any General Partner by reason of gross negligence, willful
misconduct, fraud or any material breach of his or its or their
fiduciary duty
as General Partner with respect to such acts or omissions, or
liabilities of
the Partners chargeable to the General Partner) shall be paid from
Partnership
assets to the extent available, but the Limited Partners shall not have
any
personal liability to the General Partner under any circumstances on
account
of any such loss or damage incurred by the General Partner or on account
of
the payment thereof.
8.08. [Intentionally Omitted].
8.09. Rehabilitation of the Apartment Complex, Construction Cost
Overruns, Operating Deficits.
(a) (i) The Partnership will enter into the Construction
Contract.
The General Partner shall be responsible for:
(A) achieving completion of rehabilitation of the Apartment
Complex on a timely basis in accordance with the Plans and
Specifications,
this Agreement and the Project Documents;
(B) meeting all requirements for obtaining all necessary
permanent, unconditional certificates of occupancy for all the apartment
units
in the Apartment Complex;
(C) fulfilling all actions required of the Partnership to
assure
that the Apartment Complex satisfies the Minimum Set-Aside Test and the
Rent
Restriction Test; and
(D) causing the making of the Mortgage Loan by the Lender,
the
achievement of Initial Closing and the achievement of Final Closing.
(ii) The General Partner hereby is obligated to pay all Excess
Development Costs; the Partnership shall have no obligation to pay any
Excess
Development Costs.
(iii) In the event that the General Partner shall fail to pay any
such
Excess Development Costs as required in this Section 8.09(a), an amount
not in
excess of such Excess Development Costs shall be applied by the
Partnership
against the Development Fee due to the Developer as an offset against
such
obligations of the General Partner.
Any such direction and application of funds otherwise payable to
the
Developer as aforesaid shall be deemed to have been paid by the
Partnership to
the Developer and then applied to reduce the amount of the Excess
Development
Costs, and the Partnership's obligation to make installment payments to
the
Developer pursuant to Section 8.10(a), as well as the Investment
Partnership's
obligation to make future Installments, shall be deemed satisfied to the
extent of the funds applied to reduce the General Partner's obligation
to fund
Excess Development Costs, and the obligations of the General Partner
pursuant
to Sections 8.09(a) (i) or 8.09(a) (ii) shall be deemed satisfied to the
extent of the funds applied.
(b) In the event that, at any time prior to a date which is the
later
of (i) three (3) years from the date hereof or (ii) Rental Achievement,
an
Operating Deficit shall exist, the General Partner shall provide such
funds to
the Partnership as shall be necessary to pay such Operating Deficit(s)
in the
form of a loan to the Partnership (the "Operating Deficit Loan(s)");
provided,
however, that the General Partner's obligation to make Operating Deficit
Loans
shall not at any one time exceed an outstanding amount greater than
$100,000.
An Operating Deficit Loan shall be a Subordinated Loan payable in
accordance
with the provisions of Section 8.17; Operating Deficit Loans shall bear
no
interest.
In the event that the General Partner shall fail to make any such
Operating Deficit Loan as aforesaid, the Partnership shall utilize
amounts
otherwise payable to the Developer as installments of the Development
Fee
pursuant to Section 8.10 of this Agreement to meet the obligations of
the
General Partner pursuant to this Section 8.09(b). Amounts so utilized
shall
also constitute the payment and satisfaction of installments of the
Development Fee payable to the Developer under the aforesaid section of
this
Agreement, and the obligation of the Partnership to make such
installment
payments to the Developer, pursuant to such section, as well as the
Investment
Partnership's obligation to make future installments, shall be reduced
correspondingly.
8.10. Development Fee. The Partnership has entered into a
Development
Agreement of even date herewith with the Developer for its services in
connection with the development and rehabilitation of the Apartment
Complex.
In consideration for such services, a Development Fee in the total
amount of
$154,643 shall be payable by the Partnership to the Developer solely
from the
Capital Contributions by the Investment Partnership except as provided
in
Sections 4.02(g), 5.01(a), 11.03A(b) and 11.04(A)(c)(4).
The Development Fee shall be due and payable as follows:
(a) $7,938 upon receipt by the Partnership of the Second Installment;
(b) $20,000 upon receipt by the Partnership of the Third
Installment;
(c) The balance, less the Deferred Development Fee in the anticipated
amount of $120,697, upon receipt by the Partnership of the Fourth
Installment;
and
(d) the Deferred Development Fee shall be payable only in
accordance
with Sections 11.03A(b) and 11.04A(c) or, if not sooner paid, on
December 31,
2007.
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, commencing in 1997. 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 with respect to
the
financial and administrative affairs of the Partnership and the
Apartment
Complex, the Partnership shall pay to the General Partner, from the Cash
Flow
and/or from Proceeds of Capital Transactions of the Partnership
available for
distribution and in accordance with Section 11.03A(e) and 11.04(A)(c)(3)
an
annual Incentive Partnership Management Fee.
Such fee shall be payable in accordance with the provisions of any
applicable regulations of the Lender or the Agency and of the Project
Documents and shall be in an amount equal to $3,700 per year, commencing
in
1997 and payable from Cash Flow. Such fee shall not be cumulative from
year
to year and shall only be paid to the extent that Cash Flow or Proceeds
of
Capital Transaction are sufficient to make all or a portion of the then-
due
payments.
8.11.1 Asset Management Fee. The Partnership shall pay to Boston
Capital, or an Affiliate thereof, an annual Asset Management Fee in the
amount
of $3,700 per annum, commencing in 1997, for its services in assisting
with
the preparation of the reports required pursuant to Section 13.04, which
fee
shall be payable from Cash Flow; provided, however, that if in any
fiscal
year, Cash Flow is insufficient to pay all or any portion of the Asset
Management Fee, the General Partner shall make a Subordinated Loan to
the
Partnership in an amount not to exceed the lesser of $1,000 per annum or
that
amount necessary to pay the unpaid portion of such fee. Any unpaid
portion of
said Asset Management Fee shall accrue, without interest, and shall be
payable
on a cumulative basis in the first year in which there is sufficient
Cash Flow
available for the payment of such fee, or, in the first year in which
proceeds
of a Capital Transaction are available.
Such Deferred Development Fee shall be payable only in accordance with
Sections 11.03A(b) and 11.04A(c) or, if not sooner paid, on December 31,
2007.
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, commencing in 1997. 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 with respect to
the
financial and administrative affairs of the Partnership and the
Apartment
Complex, the Partnership shall pay to the General Partner, from the Cash
Flow
and/or from Proceeds of Capital Transactions of the Partnership
available for
distribution and in accordance with Section 11.03A(e) and 11.04(A)(c)(3)
an
annual Incentive Partnership Management Fee.
Such fee shall be payable in accordance with the provisions of any
applicable regulations of the Lender or the Agency and of the Project
Documents and shall be in an amount equal to $2,300 per year, commencing
in
1997 and payable from Cash Flow. Such fee shall not be cumulative from
year
to year and shall only be paid to the extent that Cash Flow or Proceeds
of
Capital Transaction are sufficient to make all or a portion of the then-
due
payments.
8.11.1 Asset Management Fee. The Partnership shall pay to Boston
Capital, or an Affiliate thereof, an annual Asset Management Fee in the
amount
of $2,300 per annum, commencing in 1997, for its services in assisting
with
the preparation of the reports required pursuant to Section 13.04, which
fee
shall be payable from Cash Flow; provided, however, that if in any
fiscal
year, Cash Flow is insufficient to pay all or any portion of the Asset
Management Fee, the General Partner shall make a Subordinated Loan to
the
Partnership in an amount not to exceed the lesser of $1,000 per annum or
that
amount necessary to pay the unpaid portion of such fee. Any unpaid
portion of
said Asset Management Fee shall accrue, without interest, and shall be
payable
on a cumulative basis in the first year in which there is sufficient
Cash Flow
available for the payment of such fee, or, in the first year in which
proceeds
of a Capital Transaction are available.
8.12. Withholding of Fee Payments. In the event that (a) a
General
Partner or any successor General Partner or the general partner of any
Affiliated Limited Partnership shall not have substantially complied
with any
material provisions under this Agreement or the applicable limited
partnership
agreement, or (b) any financing commitment of any lender, or any
agreement
entered into by the Partnership for financing related to the Apartment
Complex
or the property of any Affiliated Limited Partnership shall have
terminated
prior to their respective termination date(s), or (c) foreclosure
proceedings
shall have been commenced against the Apartment Complex or the property
of
such Affiliated Limited Partnership, then (i) such General Partner shall
be in
default of this Agreement, and the Partnership shall withhold payment of
any
installment of fees payable pursuant to Sections 8.10 and 8.11, and (ii)
the
General Partner shall be liable for the Partnership's payment of any and
all
installments of the Development Fee payable pursuant to Section 8.10, to
the
extent that the Investment Partnership has withheld any Installment(s)
pursuant to Section 5.03 as a result of the above-described default.
All amounts so withheld by the Partnership under this Section 8.12
shall
be promptly released only after the General Partner has cured the
default
justifying the withholding, as demonstrated by evidence reasonably
acceptable
to the Investment Partnership.
8.13. Removal of the General Partner.
(a) BCTC 94, Inc., acting on behalf of the Investment
Partnership, so
long as the Investment Partnership is a Partner, shall have the right to
remove any or all General Partners (i) for any intentional misconduct or
gross
negligence in the discharge of its duties and obligations as a General
Partner, or (ii) upon the occurrence of any of the following:
(A) such General Partner shall have violated any of the
material
provisions of the Extended Use Commitment, the Loan Documents, or any
provisions of any other Project Document or other document required in
connection with the Mortgage Loan, or any provisions of the Agency
regulations
applicable to the Apartment Complex;
(B) such General Partner shall have violated any material
provision of this Agreement or any provision of applicable law, which
violations shall include, without limitation (i) withdrawal of the
General
Partner without the Consent of the Investment Partnership pursuant to
the
Section 6.01(a), (ii) the failure of the General Partner to make
Subordinated
Loans required under this Agreement or (iii) the failure of a sole
General
Partner which is a corporation to satisfy the requirements of Section
8.08;
(C) such General Partner shall have caused the Mortgage
Loan to
go into default; or
(D) such General Partner shall have conducted its own
affairs or
the affairs of the Partnership in such manner as would: (1) cause the
termination of the Partnership for federal income tax purposes; or (2)
cause
the Partnership to be treated for federal income tax purposes as an
association, taxable as a corporation.
(b) BCTC 94, Inc. shall give Notice to all Partners of its
determination that any such General Partner shall be removed. The
General
Partner shall have thirty (30) days after receipt of such Notice to cure
any
default or other reason for such removal, in which event it shall remain
as
General Partner. If, at the end of such cure period such General
Partner has
not cured any default or other reason for such removal, (i) without any
further action by any Partner, BCTC 94, Inc. or its designee shall
automatically become a General Partner and acquire in consideration of a
cash
payment of $5 such portion of the Interest of the removed General
Partner as
counsel to the Investment Partnership shall determine is the minimum
appropriate interest in order to assure the continued status of the
Partnership as a partnership under the Code and under the Act, (ii) the
remaining portion of the economic Interest of the removed General
Partner
shall automatically be converted to an equal economic Interest as an
Additional Limited Partner, (iii) the economic Interest of BCTC 94, Inc.
as
the Special Limited Partner shall continue unaffected by the new status
of
BCTC 94, Inc. or its designee as a General Partner, and (iv) the new
General
Partner shall automatically be irrevocably delegated all of the powers
and
duties of the General Partners hereunder.
(c) BCTC 94, Inc. or any successor General Partner proposed by
the
Special Limited Partner shall have the option, exercisable in its sole
discretion, to acquire (i) the Additional Limited Partner Interest of
any
removed General Partner and/or (ii) the Class A Limited Partner
Interest, or
any portion thereof, upon payment of the agreed or then present fair
market
value of such Interest or portion thereof. Any dispute as to the value
of the
Interest or portion thereof to be acquired pursuant to the immediately
preceding sentence shall be submitted to a committee composed of three
qualified real estate appraisers, one chosen by the Partner whose
Interest is
to be purchased, one chosen by the General Partner, and the third chosen
by
the two so chosen. The proceedings of such committee shall conform to
the
rules of the American Arbitration Association, as far as appropriate,
and its
decision shall be final and binding. The expense of arbitration shall
be born
equally by the Partner whose Interest is to be purchased and the
Partnership.
The method of payment will be deemed presumptively fair where it
provides for
a promissory note bearing simple interest at eight percent (8%) per
annum
coming due in no less than five (5) years with equal installments each
year.
(d) Upon removal, no General Partner or any Affiliate thereof
shall be
entitled to receive any fee, compensation or other remuneration from the
Partnership, other than the above- described payment for the Interest,
or
portion thereof, of the Removed General Partner. The Partnership is not
authorized to enter into any arrangement whereby any fee, compensation
or
other remuneration could be payable directly or indirectly to any
General
Partner or Affiliate thereof in a manner inconsistent with the
immediately
preceding sentence unless the prior written consent of BCTC 94, Inc.
shall
have been obtained to such particular arrangement. The Partnership may
offset
against any payments to a General Partner removed under this Section
8.13 any
damages suffered by the Partnership as a result of any breach of the
obligations of such General Partner hereunder. A General Partner so
removed
will not be liable as a general partner for any obligations of the
Partnership
incurred after the effective date of its removal, but shall be and
remain
liable for all obligations and liabilities incurred by it as General
Partner
before such removal became effective, including, but not limited to, its
obligations set forth in Section 8.09 hereof.
(e) The General Partner and the Class A Limited Partner hereby
grants
to each of the Investment Partnership and BCTC 94, Inc. an irrevocable
power
of attorney, coupled with an interest, to execute any and all documents
on
behalf of the Partners and the Partnership as shall be legally necessary
and
sufficient to effect all of the foregoing provisions of this Section
8.13. The
election by the Investment Partnership to remove such General Partner
under
this Section shall not limit or restrict the availability and use of any
other
remedy which the Investment Partnership 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 the Lender and the Agency, if required, shall engage such
person,
firm or company as the General Partner may select, and as the Investment
Partnership may approve, which approval shall not be unreasonably
withheld
(hereinafter referred to as "Management Agent") to manage the operation
of the
Apartment Complex during the rent-up period and following Substantial
Completion for a period of one year, and thereafter such management
contract
may be extended on an annual basis unless terminated for cause. The
Management Agent shall be paid a management fee subject to the approval
of the
Lender and the Agency, if required. The contract between the
Partnership and
the Management Agent and the management plan for the Apartment Complex
shall
be in a form acceptable to the Lender and the Agency, if required.
Carabetta
Management Co. is hereby approved by the parties hereto as the initial
Management Agent.
8.15. [Intentionally Omitted].
8.16. [Intentionally Omitted]
8.17. Subordinated Loans to the Partnership. In the event that
additional funds are required by the Partnership for any purpose
relating to
the business of the Partnership or for any of its obligations, expenses,
costs
or expenditures, the Partnership may borrow such funds as are needed
from any
Partners or other Person or organization, including the General Partner,
for
such period of time and on such terms as the General Partner, the
Investment
Partnership 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 interest only
as
provided in Section 8.09(b)); provided however, that no such additional
loans
shall be secured by any mortgage or other encumbrance on the property of
the
Partnership without the prior approval of the Investment Partnership and
the
approval 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 Final Closing. Loans made under this Section
shall
be repaid as set forth in Section 11.01 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 11.04A(c)(5). The General Partner is obligated to make
Subordinated
Loans in accordance with Section 8.09 and Section 8.11.1.
8.18. Reserve Fund for Replacements; Tenant Transition Fund.
(a) Reserve Fund for Replacements. The Partnership shall
establish a Reserve Fund for Replacements with respect to the Apartment
Complex, as required by the Lender and BCTC 94, Inc. The Partnership
shall
make an initial deposit into the Reserve Fund for Replacements equal to
$23,000 not later than the making of the First Installment and shall
make
subsequent deposits into the Reserve Fund for Replacements equal to
$9,890
annually commencing in 1998; such deposits may be suspended only as
approved
by the Lender and/or BCTC 94, Inc. Funds in the Reserve Fund for
Replacements
are intended to be employed for the replacement as needed of fixtures,
equipment, structural elements and other components of the Apartment
Complex
of a capital nature. All interest earnings on funds on deposit in the
Reserve
Fund for Replacements shall be retained therein for the aforesaid
purposes.
The Reserve Fund for Replacement shall remain under the joint control of
the
Lender and, until the expiration of the HAP Contract, HUD. Withdrawals
from
the Reserve Fund for Replacements shall be made only with the consent,
or upon
the direction, of the Lender and, if required, HUD; provided, however,
if such
consent of the Lender is not required, such withdrawals may be made only
with
the Consent, or upon the direction, of the General Partner and BCTC 94,
Inc.
(b) Tenant Transition Fund. The Partnership shall
establish the
Tenant Transition Fund as a separate, interest bearing account with a
financial institution acceptable to the Lender and BCTC 94, Inc. and
shall
deposit therein funds in the amount of $75,000 from the Installments.
The
account shall be fully funded (less the amount of the Fourth
Installment) not
later than the making of the Third Installment. In the event of any
shortfall
in the funding of such account at the time of the Third Installment, the
General Partner shall provide such funds to the Partnership as shall be
necessary to eliminate such shortfall in the form of a loan to the
Partnership
(the "Tenant Transition Fund Loan"). The Partnership shall make
subsequent
deposits from Cash Flow into the Tenant Transition Fund equal to $10,000
annually commencing in 1998 and continuing through 2003. In the event
that
the account is not fully funded as of the making of the Third
Installment, the
Fourth Installment shall be used to fund the balance of the account and
the
Investment Partnership shall directly fund its Fourth Installment into
such
account. Funds in the Tenant Transition Fund are intended to be
employed
solely for the payment of Operating Deficits (including, without
limitation,
debt service, taxes and insurance), unless otherwise released from
escrow by
the Lender with the Consent of BCTC 94, Inc. All interest earnings on
funds
on deposit in the Tenant Transition Fund shall be retained therein for
the
aforesaid purposes. Withdrawals from the Tenant Transition Fund shall
be made
only with the consent, or upon the direction, of the Lender; provided,
however, if such consent of the Lender is not required, such withdrawals
may
be made only with the Consent, or upon the direction, of the General
Partner
and BCTC 94, Inc.
(c) Supplemental Replacement Reserve. The Partnership
shall
establish a Supplemental Replacement Reserve with respect to the
Apartment
Complex. The Partnership shall make deposits into the Supplemental
Replacement Reserve in an amount equal to $6,210 annually, commencing in
1998.
Funds in the Supplemental Replacement Reserve 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 Supplemental Replacement Reserve
shall be
retained therein for the aforesaid purposes. Withdrawals from the
Supplemental Replacement Reserve shall be made only with the Consent, or
upon
the direction, of the General Partner, BCTC 94, Inc. and the Lender.
ARTICLE IX
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS
OF INTERESTS OF LIMITED PARTNERS
9.01. Purchase for Investment.
(a) The Investment Partnership and the Class A Limited
Partner
hereby represent and warrant to the General Partner and to the
Partnership
that the acquisition of their respective Interest is made as principal
for
their respective 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.
(b) The Investment Partnership and the Class A Limited
Partner
agree that they will not sell, assign or otherwise transfer their
respective
Interest or any fraction thereof to any Person who does not similarly
represent and warrant and similarly agree not to sell, assign or
transfer such
Interest or fraction thereof to any Person who does not similarly
represent
and warrant and agree.
(c) Neither the Investment Partnership nor the Class A Limited
Partner shall sell, assign or otherwise transfer their respective
Interest or
any fraction thereof to any Person until the Investment Partnership or
the
Class A Limited Partner, as the case may be, has provided the
Partnership with
a legal opinion, reasonably satisfactory to the General Partner, that
such
sale, assignment or other transfer does not violate any state or federal
securities laws or require the Interest to be registered under any such
laws.
9.02. Restrictions on Transfer of Limited Partner's Interests.
(a) 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.
(b) The Limited Partner whose interest is being
transferred
shall pay such reasonable expenses as may be incurred by the Partnership
in
connection with such transfer.
9.03. Admission of Substitute Limited Partners.
(a) Subject to the other provisions of this Article IX, an
assignee of the Interest of a Limited Partner (which shall be understood
to
include any purchaser, transferee, donee, or other recipient of any
disposition of such Interest) shall be admitted as a Substitute Limited
Partner of the Partnership only upon the satisfactory completion of the
following:
(i) 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 Partners may be evidenced by the
execution
by the General Partners of an amended Agreement and/or Certificate
evidencing
the admission of such Person as a Limited Partner pursuant to the
requirements
to the Act;
(ii) the assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a counterpart
thereof
or an appropriate amendment hereto, and such other documents or
instruments as
the General Partner may require in order to effect the admission of such
Person as a Limited Partner;
(iii) an amended Agreement and/or Certificate evidencing the
admission of such Person as a Limited Partner shall have been filed for
recording pursuant to the requirements of the Act to the extent required
in
order to effectuate the admission of such Person as a Limited Partner;
(iv) the assignee shall have represented and agreed in writing as
required by Section 9.01;
(v) if the assignee is a corporation, the assignee shall have
provided the General Partner with evidence satisfactory to counsel for
the
Partnership of its authority to become a Limited Partner under the terms
and
provisions of this Agreement; and
(vi) the assignee or the assignor shall have reimbursed the
Partnership for all reasonable expenses, including all reasonable legal
fees
and recording charges, incurred by the Partnership in connection with
such
assignment.
(b) For the purpose of allocation of 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 seeking
to
become a Substitute Limited Partner by preparing the documentation
required by
this Section and making all official filings and publications. The
Partnership shall take all such action, including the filing of any
amended
Agreement and/or Certificate evidencing the admission of any Person as a
Limited Partner, and the making of any other official filings and
publications, as promptly as practicable after the satisfaction by the
assignee of the Interest of a Limited Partner of the conditions
contained in
this Article IX to the admission of such Person as a Limited Partner of
the
Partnership. Any cost or expense incurred in connection with such
admission
shall be borne by the Partnership to the extent of available Partnership
assets, and otherwise by such assignee.
9.04. Rights of Assignee of Partnership Interest.
(a) Except as provided in this Article and as required by
operation of
law, the Partnership shall not be obligated for any purpose whatsoever
to
recognize the assignment by any Limited Partner of his (its) Interest
until
the Partnership has received actual Notice thereof.
(b) Any Person who is the assignee of all or any portion of a
Limited
Partner's Interest, but does not become a Substitute Limited Partner and
desires to make a further assignment of such Interest, shall be subject
to all
the provisions of this Article IX to the same extent and in the same
manner as
any Limited Partner desiring to make an assignment of his its Interest.
ARTICLE X
RIGHTS AND OBLIGATIONS
OF LIMITED PARTNERS
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. 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
its own
account, including without limitation, serving as general or limited
partner
of other partnerships which own, either directly or through interests in
other
partnerships, government-assisted housing projects similar to the
Apartment
Complex. Neither the Partnership nor any of the Partners shall have any
right
by virtue of this Agreement in or to such other business ventures to the
income or profits derived therefrom.
10.04. Ownership by Limited Partner of Corporate General Partners
or
Affiliate. No Limited Partner shall, at any time, either directly or
indirectly, own any stock or other interest in any corporate General
Partner
if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of
Hinckley,
Allen & Snyder or other tax counsel to the Investment Partnership,
jeopardize
the classification of the Partnership as a partnership for federal
income tax
purposes. In the event of any violation of the provisions of this
Section by
any one or more Limited Partners, such Limited Partner or Limited
Partners
shall either dispose of their Interests in the Partnership (subject to
and in
compliance with the provisions of Article IX) or of their stock or other
interest in the corporate General Partner or Affiliates to the extent
necessary so that, in the opinion of counsel for the Partnership, the
classification of the Partnership as a partnership for federal income
tax
purposes is no longer in jeopardy. The obligation of any such
disposition
required of more than one Limited Partner shall be shared among them on
an
equitable basis. Notwithstanding the foregoing, neither the General
Partner
nor any Limited Partner shall be liable in damages to the Partnership or
to
any Partner by reason of any violation of this Section, except for
damages
arising (a) out of any material misrepresentation by any Limited Partner
relating to the ownership of stock or other interest in a corporate
General
Partner or any affiliate by him or by any member of his family (within
the
meaning of the attribution rules set forth in Section 318 of the Code),
or (b)
out of any failure by any Limited Partner to dispose of his Interest in
the
Partnership or of his stock or other interest in a corporate General
Partner
or Affiliate within a reasonable time after Notice to such Limited
Partner by
the Partnership of the obligations to make such disposition.
ARTICLE XI
ALLOCATION OF TAXABLE INCOME, TAX LOSSES, TAX CREDITS
AND CASH DISTRIBUTIONS
Section 11.01. Allocation of Taxable Income, Tax Losses and Tax
Credits.
A. General. Subject to the special allocations set forth in
this
Article XI, Taxable Income, Tax Credits and Tax Losses for each fiscal
year of
the Partnership (or part thereof) other than those to be allocated
pursuant to
Section 11.01B or Section 11.02 hereof, shall be allocated 99% to the
Investment Partnership and 1% to the General Partner.
B. Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal
year or other period shall be specially allocated 99% to the Investment
Partnership and 1% to the General Partner.
C. Partner Loan Nonrecourse Deductions. Any Partner Loan
Nonrecourse
Deductions for any Fiscal Year or other period shall be specially
allocated to
the Partner who bears the economic risk of loss with respect to the loan
to
which such Partner Loan Nonrecourse Deductions are attributable in
accordance
with Treasury Regulations Section 1.704-2(i).
Section 11.02. Allocation of Taxable Income and Tax Losses from
Capital
Transactions. Subject to the special allocations set forth in this
Article
XI, Taxable Income and Tax Losses from Capital Transactions shall be
allocated
to the Partners as follows:
(i) Taxable Income from Capital Transactions shall be allocated:
(a) first, to the Partners with negative Capital Accounts
pro
rata in such amounts as will result in the elimination of the negative
Capital
Accounts of such Partners; provided, however, that if Taxable Income to
be
allocated pursuant to this Section 11.02(i)(a) is insufficient to
eliminate
all negative Capital Accounts, such Taxable Income will be allocated to
Partners with negative Capital Accounts in the proportion that each such
Partner's negative Capital Account bears to the total of all such
Negative
Capital Accounts;
(b) second, in the amount and to the extent necessary to
increase the Partners' respective Capital Accounts to equal the amounts
distributable under Sections 11.04(d), then 11.04(e), then 11.04(A)(f);
(c) then, the balance, if any, of such Taxable Income
shall be
allocated 65.1% to the General Partner, 9.9% to the Class A Limited
Partner
and 25% to the Investment Partnership.
(ii) Tax Losses from Capital Transactions shall be allocated:
(a) first, to the extent of the respective positive
balances in
the Partners' Capital Accounts; and
(b) any balance, 99% to the Investment Partnership and 1%
to the
General Partner.
(iii) Notwithstanding the foregoing provisions, if Taxable
Income
to be allocated includes income treated as ordinary income for federal
income
tax purposes because such Taxable Income is attributable to the
recapture of
depreciation under Section 1245 or 1250 of the Code, such Taxable
Income, to
the extent treated as ordinary income, shall be allocated to and
reported by
the Partners in proportion to their accumulated depreciation
allocations.
The Partnership shall keep records of such allocations of depreciation
to the
Partners. In determining the accumulated depreciation allocations of
the
Partners, depreciation deductions for each taxable year shall be deemed
allocated to the Partners in the same proportion as the Taxable Income
or Tax
Losses in that particular taxable year were allocated to the Partners.
11.03. Distribution of Cash Flow.
A. Subject to Lender approval, if required, Cash Flow shall be
determined for each fiscal year and shall be applied or distributed at
such
time or times as the General Partner deems appropriate, but in no event
less
than once in each fiscal year, in the following order of priority:
(a) First, to making the required annual deposit into the
Tenant
Transition Fund under Section 8.18(b);
(b) Second, to payment to the Developer of the Deferred
Development Fee;
(c) Third, to repayment of any amounts due with respect to
any
Tenant Transition Fund Loans made under Section 8.18(b);
(d) Fourth, to payment of the Asset Management Fee
currently due;
(e) Fifth, to repayment of any amounts due with respect to
any
Subordinated Loans (including, without limitation, Operating Deficit
Loans
made under Section 8.09(b));
(f) Sixth to payment of the Partnership Incentive
Management Fee
currently due;
(g) Seventh, to make the required annual deposit into the
Supplemental Replacement Reserve under Section 8.18(c);
(h) Eighth, to discretionary payments on the Preservation
Loan;
(i) Ninth, to pay any accrued but unpaid Asset Management
Fees;
and
(j) Any balance, 70.1% to the General Partner and 20% to
the
Investment Partnership, and 9.9% to the Class A Limited Partner.
Section 11.04. Distributions of Distributable Proceeds from
Capital
Transactions and Distributable Proceeds from Refinancings.
A. Distributable Proceeds from Capital Transactions and
Distributable
Proceeds from Refinancings (other than liquidating distributions
pursuant to
Section 12.02) shall be distributed in the following order of priority:
(a) First, to the payment of any debts and liabilities
(including unpaid fees but excluding any debts, liabilities and/or fees
owed
to any Partners) and to the establishment of any required reserves;
(b) [Intentionally Omitted]
(c) Second, 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
Credit
Recovery Loans made pursuant to Section 5.01(d)(iii), any Operating
Deficit
Loans made pursuant to Section 8.09(b) or any Tenant Transition Fund
Loans
made pursuant to Section 8.18(b) and the funding of reserves under
Section
8.18; 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:
(1) The Asset Management Fees currently due, if any, together
with any
accrued and unpaid Asset Management Fees;
(2) The repayment of the Investment Partnership of any Reduction
Amount pursuant to Section 5.01(d)(ii) together with any accrued or
unpaid
interest or Credit Recovery Loan Pursuant to Section 5.01(d)(iii)
together
with any accrued or unpaid interest;
(3) The Partnership Incentive Management Fee currently due;
(4) The Deferred Development Fee, if any;
(5) Subordinated Loans to the General Partner; and
(6) Any other such debts and liabilities; provided, however,
that all
such other debts and liabilities owed to the Investment Partnership
shall be
paid prior to any such debts and liabilities owed to the General
Partner;
(d) then to the Investment Partnership in an amount equal
to its
paid in Capital Contribution;
(e) then to the General Partner in an amount equal to its
Invested Amount;
(f) the balance, if any, 65.1% to the General Partner,
9.9% to
the Class A Limited Partner and 25% to the Investment Partnership.
B. Distributable Proceeds from Capital Transactions and
Distributable
Proceeds from Refinancings shall be distributed within 90 days after the
end
of the fiscal quarter in which such Capital Transaction or Refinancing
occurs.
Distributions of Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings to the Partners shall be made
only
after Capital Accounts have been adjusted to reflect all previous
allocations
of Taxable Income and Tax losses to the Partners, for distributions of
Cash
Flow, and for any other distributions of Distributable Proceeds form
Capital
Transactions or Distributable Proceeds from Refinancings.
Section 11.05. Allocations Among Partners.
A. For purposes of determining the Taxable Income (or Tax
Losses) or
any other items allocable to any period, Taxable Income (or Tax Losses)
and
any such other items shall be determined on a daily, monthly, or other
basis,
as determined by the General Partner using any permissible method under
Code
Section 706 and the Treasury Regulations thereunder.
B. Taxable Income, Tax Losses, and Tax Credits for all purposes
of
this Agreement shall be determined in accordance with the accrual
accounting
method. Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss, deduction, and any other allocations,
including allocation of Book Profits and Losses, shall be divided among
the
Partners in the same proportions as they share Taxable Income, Tax
Credits,
and Taxable Losses, as the case may be, for such fiscal year.
C. In any year in which a Partner sells, assigns or transfers
all or
any portion of an Interest to any Person who during such year is
admitted as a
substitute Partner, the share of all Taxable Income, Tax Losses, and Tax
Credits, allocated to and of all Cash Flow and all cash proceeds
distributable
under Section 11.04 distributed to, all Partners which is attributable
to the
Interest sold, assigned or transferred shall be divided between the
assignor
and the assignee using any one of the following methods as determined by
agreement between the assignor and assignee: (i) ratably on the basis of
the
number of days in such year before, and the number of days on and after,
the
execution by the assignee of this Agreement, or (ii) by dividing the
Partnership fiscal year into two segments, the first segment being the
time
period in such year before the execution by the assignee of this
Agreement and
the second segment being the time period in such year beginning on the
date of
execution of this Agreement, and allocating Taxable Income, Tax Losses,
Tax
Credits, Cash Flow, and all cash proceeds distributable in each such
segment
among the persons who were Partners during that segment, or (iii) using
such
other method as provided by the Code or regulations thereunder.
D. In the event that there is a determination that there is any
original issue discount or imputed interest attributable to the Capital
Contribution of any Partner, or any loan between a Partner and the
Partnership, any income or deduction of the Partnership attributable to
such
imputed interest or original issue discount on such Capital Contribution
or
loan (whether stated or unstated) shall be allocated solely to such
Partner.
E. 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.
F. If any Partner's Interest in the Partnership is reduced but
not
eliminated because of the admission of new Partners or otherwise, or if
any
Partner is treated as receiving any items of property described in
Section
751(a) of the Code, the Partner's Interest in such items of Section
751(a)
property that was property of the Partnership while such Person was a
Partner
shall not be reduced, but shall be retained by the Partner so long as
the
Partner has an Interest in the Partnership and so long as the
Partnership has
an Interest in such property.
G. The Partners are aware of the income tax consequences of the
allocations made by this Article XI and hereby agree to be bound by the
provisions of this Article XI in reporting their shares of Partnership
income
and loss for income tax purposes.
Section 11.06. Qualified Income Offset.
(i) Notwithstanding any other provision of this Article XI,
in
the event any Partner unexpectedly receives (a) an adjustment to the
Capital
Account balance of such Partner as described in Section 1.704-
1(b)(2)(ii)(d)(4) of the Treasury Regulations, (b) an allocation to such
Partner of loss or deduction of the type described in Section 1.704-
1(b)(2)(ii)(d)(5) of the Treasury Regulations, or (c) a distribution to
such
Partner in excess of any offsetting increase in the Partner's Capital
Account
balance during or prior to the year of distribution, items of
Partnership
Taxable Income and of income that constitute a credit to such Partner's
Capital Account shall be specially allocated to such Partner in an
amount and
manner sufficient to eliminate, to the extent required by the Treasury
Regulations under Code Section 704(b), the Qualified Income Offset
Amount
(defined in Section 11.06(ii)) created by such adjustments, allocations,
or
distributions as quickly as possible, provided that an allocation
pursuant to
this Section 11.06(i) shall be made only if and to the extent that such
Partner would have a Qualified Income Offset Amount after all other
allocations provided for in this Article have been tentatively made as
if this
Section 11.06(i) were not in this Agreement.
(ii) Notwithstanding anything to the contrary contained in
this
Agreement, in no event shall Tax Losses of the Partnership be allocated
to a
Partner if such allocation would result in such Partner having a
"Qualified
Income Offset Amount" (as defined below). As used herein, the term
"Qualified
Income Offset Amount" for a Partner means the deficit balance, if any,
in such
Partner's Capital Account as of the end of the relevant fiscal year
after
giving effect to the following adjustments: (i) credit to such Capital
Account an amount equal to (a) the Partner's Share of Minimum Gain
immediately
prior to the allocation or distribution and (b) the sum of such
Partner's
allocable share of any recourse indebtedness of the Partnership as
determined
under Section 752 of the Code and any unconditional obligation of such
Partner
to contribute additional amounts to the capital of the Partnership in
the
future (to the extent not previously taken into account in determining
such
Partner's share of recourse liabilities of the Partnership) and (ii)
debit to
such Capital Account the allocations or distributions described in
Section
11.06(i) that, as of the end of the taxable year, are reasonably
expected to
be made to such Partner. All Tax Losses in excess of the limitation set
forth
in this Section 11.06(ii) shall be allocated to the General Partner.
Section 11.07. Minimum Gain Allocations.
A. Notwithstanding any other provisions of this Article XI, if
in any
year there is a net decrease in the amount of the Partnership's Minimum
Gain,
each Partner will be allocated items of Taxable Income and gain for such
year
equal to that Partner's share of the net decrease in Minimum Gain,
within the
meaning of Treasury Regulation 1.704-2(g)(2), and subject to the
exceptions
set forth in Treasury Regulation 1.704-2(f).
Allocations of Taxable Income and gain (hereinafter referred to as
a
"Minimum Gain Chargeback") required pursuant to this Section 11.07 shall
consist first of gains recognized from the disposition of items of
Partnership
property subject to one or more nonrecourse liabilities of the
Partnership to
the extent of the decrease in Minimum Gain attributable to the
disposition of
such items of property (or if such gains exceed the amount of the
Minimum Gain
Chargeback required for such taxable year, the Minimum Gain Chargeback
shall
consist of a proportionate share of each such gain), and the remainder
of such
Minimum Gain Chargeback shall consist of a pro-rata portion of the other
items
of Taxable Income and gain of the Partnership for that year. If the
amount of
the Minimum Gain Chargeback requirement exceeds the Partnership's
Taxable
Income and gains for the taxable year, the excess shall carry over to
subsequent years.
B. If in any year there is a net decrease (within the meaning
of
Treasury Regulations Section 1.704-2(i)(3) in Partner Nonrecourse Debt
Minimum
Gain, any Partner with a share of that Member Nonrecourse Debt Minimum
Gain
(determined under Treasury Regulation 1.704-2(i)(5)) as of the beginning
of
the year shall be allocated items of profits and gains for that year
(and if
necessary, subsequent years) equal to that Partner's share of the net
decrease
in Member Nonrecourse Debt Minimum Gain in accordance with Treasury
Regulation
Section 1.704-2(i)(4).
Section 11.08. Regulatory Allocations. The allocations set forth
in
Sections 11.01B, 11.01C, 11.06 and 11.07 (the "Regulatory Allocations")
are
intended to comply with certain requirements of Treasury Regulation
Section
1.704-1(b). It is the intent of the Partners that, to the extent
possible,
all Regulatory Allocations shall be offset either with other Regulatory
Allocations or with special allocations of other items of Taxable
Income, Tax
Losses and items of income, gain, loss, or deduction pursuant to this
Section
11.08. Therefore, notwithstanding any other provision of this Article
(other
than the Regulatory Allocations), the General Partners shall make such
offsetting special allocations of Taxable Income, Tax Losses, and items
of
income, gain, loss, or deduction in whatever manner it determines
appropriate
so that, after such offsetting allocations are made, each Capital
Account
balance is, to the extent possible, equal to the Capital Account balance
such
Partner would have had if the Regulatory Allocations were not part of
the
Agreement and all items were allocated pursuant to Sections 11.01A and
11.02.
In exercising its discretion under this Section 11.08, the General
Partners
shall take into account future Regulatory Allocations under Section
11.07
that, although not yet made, are likely to offset other Regulatory
Allocations
previously made under Sections 11.01B and 11.01C.
Section 11.09. Partners' Partnership Non-recourse Liabilities.
For
purposes of Code Section 752, each Partner's share of Partnership non-
recourse
liabilities shall be determined in accordance with Treasury Regulation
1.752-
3(a) or successor regulation. In this connection, for purposes of
determining
each Partner's proportionate share of the excess non-recourse
liabilities of
the Partnership pursuant to Treasury Regulation 1.752-3(a), the
Investment
Partnership shall have a 99% interest in Partnership Taxable Income or
profits
and the General Partner shall have a 1% interest in Partnership Taxable
Income
or profits.
Section 11.10. Tax Allocations: Code Section 704(c). In
accordance
with Code Section 704(c) and the Treasury Regulations thereunder,
income,
gain, loss, and deduction with respect to any property contributed to
the
capital of the Partnership shall be allocated among the Partners so as
to take
account of any variation between the adjusted basis of such property to
the
Partnership for federal income tax purposes and its initial Gross Asset
Value
(computed in accordance with Section 11.12 hereof).
In the event the Gross Asset Value of any Partnership properties
is
adjusted pursuant to Section 11.12 hereof, subsequent allocations of
income,
gain, loss, and deduction with respect to such asset shall take into
account
any variation between the adjusted basis of such asset for federal
income tax
purposes and its Gross Asset Value in the same manner as under Code
Section
704(c) and the Treasury Regulations thereunder.
Any elections or other decisions relating to such allocations
shall be
made by the Managing General Partner with the Consent of the Limited
Partner,
in any manner that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section are solely for purposes
of
federal, state, and local taxes and shall not affect, or in any way be
taken
into account in computing, any Partner's Capital Account or share of
Book
Profits and Losses, other items, or distributions pursuant to any
provision of
this Agreement.
11.11. Tax Matters Partner.
A. The General Partner is hereby designated as Tax Matters
Partner of
the Partnership, and shall engage in such undertakings as are required
of the
Tax Matters Partner of the Partnership, as provided in regulations
pursuant to
Section 6231 of the Code. Each Partner, by its execution of this
Agreement,
Consents to such designation of the Tax Matters Partner and agrees to
execute,
certify, acknowledge, deliver, swear to, file and record at the
appropriate
public offices such documents as may be necessary or appropriate to
evidence
such Consent.
B. The Tax Matters Partner is hereby authorized, but not
required:
(a) to enter into any settlement with the Internal Revenue
Service or the Secretary with respect to any tax audit or judicial
review, in
which agreement the Tax Matters Partner may expressly state that such
agreement shall bind the other Partners, except that such settlement
agreement
shall not bind any Partner who (within the time prescribed pursuant to
the
Code and regulations thereunder) files a statement with the Secretary
providing that the Tax Matters Partner shall not have the authority to
enter
into a settlement agreement on behalf of such Partner;
(b) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken
into
account by a Partner for tax purposes (a "final adjustment") is mailed
to the
Tax Matters Partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the Tax Court,
the
District Court of the United States for the district in which the
Partnership's principal place of business is located, or the United
States
Claims Court;
(c) to intervene in any action brought by any other
Partner for
judicial review of a final adjustment;
(d) to file a request for an administrative adjustment
with the
Internal Revenue Service at any time and, if any part of such request is
not
allowed by the Internal Revenue Service, to file a petition for judicial
review with respect to such request;
(e) to enter into an agreement with the Internal Revenue
Service
to extend the period for assessing any tax which is attributable to any
item
required to be taken into account by a Partner for tax purposes, or an
item
affected by such item; and
(f) to take any other action on behalf of the Partners or
the
Partnership in connection with any administrative or judicial tax
proceeding
to the extent permitted by applicable law or regulations.
C. The Partnership shall indemnify and reimburse the Tax
Matters
Partner for all expenses, including legal and accounting fees, claims,
liabilities, losses and damages incurred in connection with any
administrative
or judicial proceeding with respect to the tax liability of the
Partners. The
payment of all such expenses (including any reimbursement of the Tax
Matters
Partner for expenses that it may incur under the following sentence)
shall be
made before any distributions are made or any discretionary reserves are
set
aside by the General Partner. In the event that funds are not available
from
the Partnership for such expenses, the General Partner shall have the
obligation to provide funds for such purpose. The taking of any action
and
the incurring of any expense by the Tax Matters Partner in connection
with any
such proceeding, except to the extent required by law, is a matter in
the sole
discretion of the Tax Matters Partner and the provisions on limitations
of
liability of the General Partner and indemnification set forth in
Section 8.07
of this Agreement shall be fully applicable to the Tax Matters Partner
in its
capacity as such.
11.12. Capital Accounts.
A. A Capital Account shall be maintained on the books of the
Partnership for each Partner, which shall be (i) credited with its
Capital
Contributions and the amount of any Partnership liabilities that are
assumed
by such Partner or that are secured by any Partnership property
distributed to
such Partner; (ii) credited with its distributive share of Taxable
Income and
any income of the Partnership that is exempt from federal income tax and
not
otherwise taken into account in computing Taxable Income; (iii) charged
with
its distributive share of Tax Losses and any nondeductible expenditures
of the
Partnership (including Syndication Expenses) described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise taken
into
account under this Section 11.12; and (iv) charged with any
distributions to
it and with the amount of any liabilities of such Partner that are
assumed by
the Partnership or that are secured by any property contributed by such
Partner to the Partnership.
In the case of property other than cash contributed to the
Partnership
or distributed to a Partner, each Partner's Capital Account will be
credited
with the Gross Asset Value of property contributed to the Partnership
(net of
liabilities assumed by the Partnership and liabilities to which such
contributed property is subject) and shall be debited with the cash and
the
Gross Asset Value of property distributed to it (net of liabilities
assumed by
such Partner and liabilities to which such distributed property is
subject).
In the event the Gross Asset Values of Partnership assets are adjusted
pursuant to Section 11.12B hereof, the Capital Accounts of all Partners
shall
be adjusted simultaneously to reflect the aggregate net adjustment as if
the
Partnership recognized gain or loss equal to the amount of such
aggregate net
adjustment.
Upon the sale, exchange or other transfer of an Interest, or the
assignment of such Interest to a new Partner, the Capital Account of the
transferor Partner shall carry over to the transferee Partner.
B. For purposes of determining and maintaining the Partners'
Capital
Accounts, the Gross Asset Value of Partnership assets shall be adjusted
as
follows:
(i) The initial Gross Asset Value of any asset contributed
by a
Partner to the Partnership shall be the gross fair market value of such
asset,
as determined by the contributing Partner and the Partnership;
(ii) The Gross Asset Values of all Partnership assets shall
be
adjusted to equal their respective gross fair market values, as
determined by
the General Partners, as of the following times: (a) the acquisition of
an
additional Interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (b) upon
liquidation
of the Partnership, or upon the distribution by the Partnership to a
Partner
of more than a de minimis amount of money or other Partnership property
to a
retiring or continuing Partner as consideration for an Interest in the
Partnership; or (c) under generally accepted industry accounting
practices,
provided substantially all of the Partnership's property (excluding
money)
consists of stock, securities, commodities, options, warrants, futures,
or
similar instruments that are readily tradeable on an established
securities
market; and
(iii) If the Gross Asset Value of an asset has been
determined or
adjusted pursuant to subsection (i) or (ii) of this Section 11.12B, such
Gross
Asset Value shall thereafter be adjusted by the Book Depreciation taken
into
account with respect to such asset for purposes of computing Book
Profits and
Losses, as set forth in Section 11.12B.
C. For purposes of determining and maintaining the Partners'
Capital
Accounts and the computation of Book Profits and Losses only, the
following
adjustments shall be made to the calculation of Taxable Income and Tax
Losses
reflected in the Partners' Capital Accounts:
(i) Gain or loss resulting from any disposition of
Partnership
property with respect to which gain or loss is recognized for federal
income
tax purposes shall be computed by reference to the Gross Asset Value of
the
property disposed of, notwithstanding that the adjusted tax basis of
such
property differs from its Gross Asset Value;
(ii) In lieu of the depreciation, amortization, and other
cost
recovery deductions taken into account in computing such Taxable Income
or Tax
Losses, there shall be taken into account Book Depreciation for such
fiscal
year or other period, computed as hereinafter set forth;
(iii) For this purpose, "Book Depreciation" means, for each
fiscal
year or other period, an amount equal to the depreciation, amortization,
or
other cost recovery deduction allowable with respect to an asset for
such year
or other period, except that if the Gross Asset Value of an asset
differs from
its adjusted basis for federal income tax purposes at the beginning of
such
year or other period, Book Depreciation shall be an amount which bears
the
same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deductions for such
year or
other period bears to such beginning adjusted tax basis; and
(iv) Allocations of Book Profits and Losses among the
Partners
shall be made in accordance with the provisions of this Article XI
respecting
allocations of Taxable Income and Tax Losses among the Partners.
11.13. Authority of General Partner to Vary Allocations to
Preserve and
Protect Partner's Intent.
(a) It is the intent of the Partners that each Partner's
distributive share of income, gain, loss, deduction, or credit (or item
thereof) shall be determined and allocated in
accordance with this Article XI to the fullest extent permitted by
Section
704(b) of the Code. In order to preserve and protect the determinations
and
allocations provided for in this Article XI, the General Partner hereby
is
authorized and directed to allocate income, gain, loss, deduction, or
credit
(or item thereof) arising in any year differently than otherwise
provided for
in this Article XI to the extent that allocating income, gain, loss,
deduction
or credit (or item thereof) in the manner provided for in Article XI
would
cause the determinations and allocations of each Partner's distributive
share
of income, gain, loss, deduction, or credit (or item thereof) not to be
permitted by Section 704 (b) of the Code and Treasury Regulations
promulgated
thereunder. Any allocation made pursuant to this Section 11.13 shall be
deemed to be a complete substitute for any allocation otherwise provided
for
in this Article XI and no amendment of this Agreement or approval of any
Partner shall be required.
(b) In making any allocation (the "new allocation") under
Section 11.13(a), the General Partner is authorized to act only after
having
been advised by the Accountants that, under Section 704(b) of the Code
and the
Treasury Regulations thereunder, (i) the new allocation is necessary,
and (ii)
the new allocation is the minimum modification of the allocations
otherwise
provided for in this Article XI necessary in order to assure that,
either in
the then current year or in any preceding year, each Partner's
distributive
share of income, gain, loss, deduction, or credit (or item thereof) is
determined and allocated in accordance with this Article XI to the
fullest
extent permitted by Section 704(b) of the Code and the Treasury
Regulations
thereunder.
(c) If the General Partner is required by Section 11.13(a)
to
make any new allocation in a manner less favorable to any Partner than
is
otherwise provided for in this Article XI, then the General Partner is
authorized and directed, only after having been advised by the
Accountants
that it is permitted by Section 704(b) of the Code, to allocate income,
gain,
loss, deduction, or credit (or item thereof) arising in later years in
such
manner so as to bring the allocations of income, gain, loss, deduction,
or
credit (or item thereof) to such Partner as nearly as possible to the
allocations thereof otherwise contemplated by this Article XI.
(d) New allocations made by the General Partner under
Section
11.13(a) and Section 11.13(c) in reliance upon the advice of the
Accountants
shall be deemed to be made pursuant to the fiduciary obligation of the
General
Partner to the Partnership and the Limited Partners, and no such
allocation
shall give rise to any claim or cause of action by any Limited Partner.
ARTICLE XII
SALE, DISSOLUTION AND LIQUIDATION
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:
(a) subject to Section 6.03, the withdrawal, Bankruptcy, death,
dissolution or adjudication of incompetency of a General Partner who is
at
that time the sole General Partner;
(b) the sale or other disposition of all or substantially all of
the
assets of the Partnership;
(c) the election by the General Partner, with the Consent of
BCTC 94,
Inc; or
(d) any other event causing the dissolution of the Partnership
under
the laws of the State.
12.02. Winding Up and Distribution.
(a) In the event of dissolution and termination of the
Partnership, a full accounting of the assets and liabilities shall be
taken,
and the assets shall be distributed in accordance with this Section
12.02 as
follows, after taking into account all other allocations and
distributions
under this Agreement for the Fiscal Year, including, without limitation,
the
allocations under Article XI hereof:
(A) To the payment of all debts and liabilities of the
Partnership then due (including fees and loans payable to Partners);
(B) To the setting up of any reserves that the Liquidator
may
deem reasonably necessary for any contingent or unforeseen liabilities
or
obligations of the Partnership; and
(C) To the Partners, in an amount equal to the positive
balances
in their Capital Accounts.
If a General Partner has a negative Capital Account balance
following
the liquidation of the Partnership or of a General Partner's Interest in
the
Partnership within the meaning of Treasury Regulation Section 1.704-
1(b)(ii)(g), such General Partner shall pay to the Partnership in cash
an
amount equal to the lesser of (a) the negative balance in such General
Partner's Capital Account or (b) its ratable share (based on its share
of the
aggregate General Partner interest in the Partnership) of the excess of
1.01%
of the Capital Contributions of the Limited Partners over the Capital
Contributions previously made by the General Partners. ). Amounts
contributed
to the Partnership in respect of the General Partner's obligation to
restore
negative Capital Account balances shall be paid to creditors of the
Partnership or distributed to the other Partners in accordance with
their
positive Capital Account balances, if any, as of the date of
liquidation.
(b) The Liquidator shall file all certificates and notices
of
the dissolution of the Partnership required by law. The Liquidator shall
proceed without any unnecessary delay to sell and otherwise liquidate
the
Partnership's property and assets; provided, however, that if the
Liquidator
shall determine that an immediate sale of part or all of the Partnership
property would cause undue loss to the Partners, then in order to avoid
such
loss, the Liquidator may, except to the extent provided by the Act,
defer the
liquidation as may be necessary to satisfy the debts and liabilities of
the
Partnership to Persons other than the Partners. Upon the complete
liquidation
and distribution of the Partnership assets, the Partners shall cease to
be
Partners of the Partnership, and the Liquidator shall execute,
acknowledge and
cause to be filed all certificates and notices required by the law to
terminate the Partnership.
(c) Upon the dissolution of the Partnership pursuant to
Section
12.01, the Accountants shall promptly prepare, and the Liquidator shall
furnish to each Partner, a statement setting forth the assets and
liabilities
of the Partnership upon its dissolution. Promptly following the
complete
liquidation and distribution of the Partnership property and assets, the
Accountants shall prepare, and the Liquidator shall furnish to each
Partner, a
statement showing the manner in which the Partnership assets were
liquidated
and distributed.
ARTICLE XIII
BOOKS AND RECORDS, ACCOUNTING
TAX ELECTIONS, ETC.
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, information with respect to the sale by the General Partner or
any
Affiliate of goods or services to the Partnership, and any information
required to be maintained by the Act or any governmental agencies having
jurisdiction, shall be kept at the principal office of the Partnership
and
shall be available for examination there by any Partner, or his duly
authorized representative, at any and all reasonable times. Any
Partner, or
his duly authorized representative, upon paying the costs of collection,
duplication and mailing, shall be entitled to a copy of the list of
names and
addresses of the Limited Partners and of any of the books and records of
the
Partnership.
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
signatures as the General Partner may, from time to time, determine. No
funds
of the Partnership shall be deposited in any financial institution in
which
any Partner is an officer, director or holder of any proprietary
interest.
13.03. Accountants. 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 comments and/or changes in such proposed
tax
return reasonably recommended by the Investment Partnership's
accountants
shall be taken into account and made by the Accountants prior to the
completion of such tax return for execution by the General Partner. The
Partnership shall reimburse Boston Capital Communications Limited
Partnership,
an affiliate of the Investment Partnership, for its expenses incurred in
causing the Partnership's proposed tax return to be reviewed by the
Investment
Partnership's accountants, if and to the extent that such review results
in
material modifications to such proposed tax return. A full detailed
statement
shall be furnished to all Partners, showing such assets, properties, and
net
worth and the profits and losses of the Partnership for the preceding
fiscal
year. All Partners shall have the right and power to examine and copy,
at any
and all reasonable times, the books, records and accounts of the
Partnership.
13.04. Reports to Partners.
(a) Within thirty (30) days of the date of Substantial
Completion, the General Partner shall cause to be prepared and
distributed to
the Investment Partnership, a Credit Basis Worksheet for each building,
and in
the form specified by Boston Capital.
(b) 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; provided; however, that the Class A Limited Partner
shall
only be entitled to receive the report referenced in Section
13.04(b)(ii)
below and no other reports except as required by the Act.
(i) By March 1 of the year after the end of each fiscal
year of
the Partnership, (A) an audited financial statement which includes a
balance
sheet as of the end of such fiscal year and statements of income,
Partners'
equity, and changes in financial position and a Cash Flow statement, for
the
year then ended, all of which, except the Cash Flow statement, shall be
prepared in accordance with generally accepted accounting principles and
accompanied by an auditor's report containing an opinion of the
Accountants,
and (B) a report of the activities of the Partnership during the period
covered by the report. Such report shall set forth distributions to
Limited
Partners for the period covered thereby and shall separately identify
distributions from: (1) Cash Flow from operations during the period, (2)
Cash
Flow from operations during a prior period which had been held as
reserves,
(3) proceeds from disposition of the Apartment Complex or any other
investments of the Partnership, (4) lease payments on net leases with
builders
and sellers, and (5) reserves. With respect to any distribution to the
Investment Partnership, the report called for shall separately identify
distributions from (A) Cash Flow from operations during the period, (B)
Cash
Flow from operations during a prior period which had been held as
reserves,
(C) proceeds from disposition of property and investments, (D) lease
payments
on net leases with builders and sellers, (E) reserves from the gross
proceeds
of the offering originally obtained from the Investment Partnership, (F)
borrowed monies, (G) loans or contributions from the Investment
Partnership,
and (H) transactions outside of the ordinary course of business with a
description thereof. If the Completion Date had not yet occurred as of
December 31 in the year which is the subject of the report, then this
Section
13.04(a)(i) shall require only the balance sheet for the year then
ended.
(ii) By February 7 of the year after the end of each fiscal
year
of the Partnership, all information necessary for the preparation of the
Limited Partners' federal income tax returns, together with a draft of
the
Partnership's federal income tax return for such fiscal year.
(iii) Within thirty (30) days after the end of each calendar
quarter of a fiscal year of the Partnership, a report containing:
(A) A balance sheet, which may be unaudited; and
(B) a statement of income for the quarter then
ended,
which may be unaudited; and
(C) A Low Income Housing Credit Monitoring form,
Rent
Rolls, Statement of Income and Expenses, Operating Statement and
Occupancy
Rental Report, all in the form specified by Boston Capital; and
(D) A certification that the Apartment Complex and
its
tenants are in compliance with all applicable federal and state laws and
regulation; and
(E) other pertinent information regarding the
Partnership
and its activities during the quarter covered by the report.
(c) Within ninety (90) days after the end of each fiscal year of
the
Partnership the General Partner shall provide to the Investment
Partnership:
(i) A certification by the General Partner that (A) all
Mortgage
Loan payments and taxes and insurance payments with respect to the
Apartment
Complex are current as of the date of the year-end report, (B) to the
best of
the General Partner's knowledge and belief there is no default under the
Project Documents or this Agreement, or if there is any default, a
description
thereof, and (C) to the best of the General Partner's knowledge and
belief
there is no building, health or fire code violation or similar violation
of a
governmental law, ordinance or regulation against the Apartment Complex
or, if
there is any violation, a description thereof;
(ii) the information specified in Section 13.04(b);
(iii) to the extent not previously disclosed in a report
required
hereunder a descriptive statement of all transactions during the fiscal
year
between the Partnership and the General Partner and/or any Affiliates,
including the nature of the transaction and the payments involved
(including
accrued cash or other payments);
(iv) a Cash Flow statement; and
(v) if required, a copy of the annual report to be filed
with
the United States Treasury concerning the status of the Apartment
Complex as
low income housing and, if required, a certificate to the Agency
concerning
the same.
(d) Upon the written request of the Investment Partnership for
further
information with respect to any matter covered in items (a) or (b)
above, the
General Partner shall utilize its best efforts to furnish such
information
within thirty (30) days of receipt of such request.
(e) Prior to November 1 of each year commencing in 1998, the
General
Partner, on behalf of and at the expense of the Partnership, shall send
to the
Investment Partnership an estimate of the Investment Partnership's share
of
the Tax Credits, identified by building, and of profits and losses of
the
Partnership for federal income tax purposes for the current fiscal year,
all
in the form specified by Boston Capital. Such estimate shall be
prepared by
the General Partner and the Accountants.
(f) Within fifteen (15) days after the end of any calendar month
during which
(i) there is a material default by the Partnership under
the
Project Documents or in payment of any mortgage, taxes, interest or
other
obligation on secured or unsecured debt,
(ii) any reserve has been reduced or terminated by
application of
funds therein for purposes materially different from those for which
such
reserve was established,
(iii) the General Partner has received any notice of a
material
fact which may substantially affect further distributions, or
(iv) any Partner has pledged or collateralized his Interest
in
the Partnership, the General Partner shall send the Investment
Partnership a
detailed report of such event.
(g) On or before the Admission Date, the General Partner, on
behalf of
the Partnership, shall send to the Investment Partnership a copy of all
requests for disbursements or other extensions of credit under the
Mortgage
Loan which have been submitted to the Lender prior to the Admission
Date.
After the Admission Date, the General Partner, on behalf of the
Partnership,
shall send to the Investment Partnership, on or before the tenth day of
each
month, a copy of (i) all reports required by the Agency, filed the
previous
month and covering the status of project operations and (ii) each
request for
a disbursement or other extensions of credit under the Mortgage Loan
submitted
to the Lender during the previous month. In addition, within thirty
(30) days
after the occurrence of Substantial Completion, the General Partner, on
behalf
of the Partnership, shall prepare and send to the Investment Partnership
a
Credit Basis Worksheet for each building within the Apartment Complex,
in the
format provided by Boston Capital. The General Partner shall provide to
the
Investment Partnership such other reports from time to time as may be
reasonably required by the Investment Partnership with the reasonable
consent
of the General Partner or by federal or state agencies having
jurisdiction.
(h) (i) In the event that, and in such circumstances beyond the
control of the General Partner, the reports or information provided for
in
Sections 13.04 (b)(i) and/or 13.04(b)(ii) above are, at any time, not
provided
within the time period(s) specified in such Sections, the General
Partner
shall be obligated to pay to the Investment Partnership the sum of $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. This penalty, however, may be waived by the Investment
Partnership
in the event such failure is due to circumstances not within the General
Partner's control.
(ii) In the event that the reporting requirements set forth
in
any of the above provisions of this Section 13.04 are not met, the
Investment
Partnership, in its reasonable discretion, may direct the General
Partner to
dismiss the Accountants, and to designate successor Accountants, subject
to
the approval of the Investment Partnership; provided, however, that if
the
General Partner and the Investment Partnership cannot agree on the
designation
of successor Accountants, the successor Accountants shall be designated
by the
Investment Partnership in its sole discretion. These costs shall not
exceed
the average of three bids from qualified Accountants obtained by the
General
Partner. The Investment Partnership shall give the General Partner at
least
60 days' Notice of any material change in the reporting requirements set
forth
herein.
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 succeeding law), to adjust the basis of the
Partnership property if, in the opinion of the Investment Partnership,
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, after giving 20 days' Notice to the Partners hereunder (a) by
the
General Partner with the Consent of the Investment Partnership, which
Consent
(except in the case of any proposed amendment which the Investment
Partnership
reasonably determines to be adverse to their interests as Partners)
shall not
be unreasonably withheld or (b) by the Investment Partnership without
the
Consent of the General Partner, (except in the case of any proposed
amendment
which the General Partner reasonably determines to be adverse to its
interest
as Partner, and if such Consent is required by the foregoing, which
Consent
shall not be unreasonably withheld or delayed). In determining whether
or not
to give its Consent to an amendment prepared by the Investment
Partnership,
the General Partner agrees to take into account the investment
objectives of
the Investment Partnership.
ARTICLE XV
CONSENTS, VOTING AND MEETINGS
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.
15.04. Appointment of General Partner as Attorney-in-Fact.
A. The Class A Limited Partner hereby irrevocably appoints and
empowers
the General Partner, the manager of such General Partner, and the
President,
each Vice-President, the Treasurer and Clerk of any corporate manager,
as his
true and lawful attorney-in-fact, with full power of substitution, in
his
name, place and stead, to make, execute, sign, acknowledge, swear to,
verify,
deliver, file, record and publish the following documents:
(a) Any certificate, instrument or document which the
General
Partners believe is necessary or appropriate to be filed by the
Partnership
under the laws of any state or by any governmental agency;
(b) Any certificate, instrument or document which may be
required
to effect the continuation of the Partnership, the withdrawal of a
Limited
Partner, the admission of a Limited Partner or the dissolution and
termination
of the Partnership, provided such continuation, admission, dissolution
and
termination is in accordance with the terms of this Agreement; and
(c) Any amendment to this Agreement made in accordance with
Section 14.01.
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 and the ancillary
agreements
executed in connection herewith set forth all (and is intended by all
parties
to be an integration of all) of the representations, promises,
agreements and
understandings among the parties hereto with respect to the Partnership,
the
Partnership business and the property of the Partnership, and there are
no
representations, promises, agreements or understandings, oral or
written,
express or implied, among them other than as set forth or incorporated
herein.
16.06. Liability of the Investment Partnership. Notwithstanding
anything to the contrary contained herein, neither the Investment
Partnership
nor any of its partners, general or limited, shall have any personal
liability
to any of the parties to this Agreement with regard to the
representations and
covenants extended, or the obligations undertaken, by the Investment
Partnership under this Agreement. In the event that the Investment
Partnership shall be in default under any of the terms of this
Agreement, the
sole recourse of any party hereto for any indebtedness due hereunder, or
for
any damages resulting from any such default by the Investment
Partnership,
shall be against the capital contributions of the investor limited
partners of
the Investment Partnership allocated to, and remaining for investment
in, the
Partnership; provided however, that under no circumstances shall the
liability
of the Investment Partnership for any such default be in excess of the
aggregate of: (a) the amount of Capital Contribution payable by the
Investment
Partnership to the Partnership, under the terms of this Agreement, at
the time
of such default, and (b) an amount equal to reasonable attorneys' fees
reasonably and necessarily incurred by the General Partners in obtaining
payment of any Installment(s) not made by the Investment Partnership
when due
and payable pursuant to the provisions of this Agreement.
16.07. Environmental Protection.
(a) The General Partner represents and warrants that (i)
it has
no actual knowledge of any deposit, storage, disposal, burial,
discharge,
spillage, uncontrolled loss, seepage or filtration of any Hazardous
Substances
at, upon, under or within the Land or any contiguous real estate, and
(ii) it
has not caused or permitted to occur, and shall not permit to exist, any
condition which may cause a discharge of any Hazardous Substances at,
upon,
under or within the Land or on any contiguous real estate.
(b) The General Partner further represents and warrants
that
neither it nor any of its Affiliates (i) has been, or will be involved
in
operations at or, pursuant to its best efforts, near the Land, which
operations could lead to (A) the imposition of liability under the
Hazardous
Waste Laws on the Partnership or on any other subsequent or former owner
of
the Land or (B) the creation of a lien on the Land under the Hazardous
Waste
Laws or under any similar laws or regulations; and (ii) has permitted,
or will
permit, any tenant or occupant of the Apartment Complex to engage in any
activity that could impose liability under the Hazardous Waste Laws on
such
tenant or occupant, on the Land or on any other owner of the Apartment
Complex.
(c) The General Partner shall comply strictly and in all
respects with the requirements of the Hazardous Waste Laws and related
regulations and with all similar laws and regulations.
(d) The General Partner, shall at all times indemnify and
hold
harmless the Investment Partnership against and from any and all claims,
suits, actions, debts, damages, costs, charges, losses, obligations,
judgments, and expenses, of any nature whatsoever, suffered or incurred
by the
Investment Partnership, under or on account of the Hazardous Waste Laws
or any
similar laws or regulations, including the assertion of any lien
thereunder,
except for claims, suits, actions, debts, damages, costs, charges,
losses,
obligations, judgments, or expenses arising from the Investment
Partnership's
own gross negligence, willful misconduct or fraud.
(e) For purposes of this Section 16.07, "Hazardous
Substances"
means oil, petroleum or chemical liquids or solids, liquid or gaseous
products
or any hazardous wastes or hazardous substances, as those terms are used
in
the Hazardous Waste Laws; and "Hazardous Waste Laws" means the
Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, and any
other
federal, state or local law governing Hazardous Substances, as such laws
may
be amended from time to time.
16.08. Notices to the Investment Partnership. 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 02210
ATTN: Samuel F. Guagliano, Assistant Vice President,
Acquisitions
And a copy to: Hinckley, Allen & Snyder
One Financial Center
Suite 4600
Boston, MA 02111-2625
ATTN: Kristin A. DeKuiper, Esq.
16.09. Notices to the General Partner. Any Notice required by
the
provisions of this Agreement to be given to the General Partner shall be
addressed as follows:
Byam Village of Massachusetts LLC
One Boston Place
Suite 2100
Boston, MA 02108
ATTN: Christopher W. Collins
And a copy to: Peabody & Brown
101 Federal Street
Boston, MA 02110
ATTN: Paul E. Bouton, P.C.
16.10. Withdrawal of Initial Limited Partner. First Atlantic
hereby
withdraws as the Initial Limited Partner of the Partnership.
16.11. Lender Requirements. See Exhibit B attached hereto and
made a
part hereof.
IN WITNESS WHEREOF, the parties have affixed their signatures and
seals
to this Amended and Restated Agreement of Limited Partnership of Byam
Limited
Partnership as of the date first written above.
[SIGNATURES APPEAR ON NEXT PAGE
GENERAL PARTNER:
BYAM VILLAGE OF MASSACHUSETTS LLC
_______________________ By: FIRST ATLANTIC
Witness HOUSING, INC., its
Manager
By: __/s/ Elizabeth R. Collins
Elizabeth R. Collins
Vice President
INVESTMENT PARTNERSHIP:
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
By: Boston Capital Associates IV L.P.,
its General Partner
By: C&M Associates d/b/a Boston
Capital Associates, its
general partner
_________________________ By:_/s/ Bonnie Kate Fox_________
Witness Bonnie Kate Fox, as Attorney-
in-Fact of John P. Manning,
Partner
GUARANTORS:
FIRST ATLANTIC HOUSING, INC.
________________________ By: _/s/ Elizabeth R. Collins___
Witness Elizabeth R. Collins
Vice President
________________________ __/s/ Michael A. Liberty_______
Witness MICHAEL A. LIBERTY
AMERICAN HOUSING PRESERVATION
CORPORATION
________________________ By: ____________________________
Witness Name:
Title:
SPECIAL LIMITED PARTNER:
BCTC 94, INC.
___________________________ By: __/s/ Bonnie Kate Fox______
Witness Bonnie Kate Fox, Attorney-
in-Fact for John P. Manning,
President
CLASS A LIMITED PARTNER
MERIDEN HOUSING PRESERVATION LIMITED
PARTNERSHIP
By: MHP Corporation, its general partner
____________________________ By:___________________________
Witness Name:
Title:
WITHDRAWING LIMITED PARTNER:
FIRST ATLANTIC HOUSING, INC.
________________________ By: _/s/ Elizabeth R. Collins
Witness Elizabeth R. Collins
Vice President
EXHIBIT A
Post-Closing Conditions
[Refer to that certain Post-Closing Letter dated as of the date hereof,
which is incorporated herein by reference]
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
_______________________________________
CERTIFICATION AND AGREEMENT
for
BYAM LIMITED PARTNERSHIP
_______________________________________
CERTIFICATION AND AGREEMENT made as of February 25, 1997, by
Byam
Limited Partnership, a Connecticut limited partnership (the "Operating
Partnership"); Byam Village of Massachusetts LLC, a Connecticut limited
liability company (the "Operating General Partner"); for the benefit of
BOSTON
CAPITAL TAX CREDIT FUND IV L.P., a Delaware limited partnership (the
"Investment Partnership"), BCTC 94, Inc., a Delaware corporation (the
"Special
Limited Partner"), Hinckley, Allen & Snyder, Peabody & Brown, Tobin,
Carberry,
O'Malley, Riley & Selinger, PC and certain other persons or entities
described
herein. The Investment Partnership and the Special Limited Partner
shall
hereinafter be referred to as the "Limited Partners";
WHEREAS, the Operating Partnership proposes to admit the Limited
Partners as the additional limited partners thereof pursuant to the
Amended
and Restated Agreement of Limited Partnership of the Operating
Partnership
dated as of February __, 1997 (the "Operating Partnership Agreement"),
in
accordance with which the Special Limited Partner will make a capital
contribution of $10 to the Operating Partnership and the Investment
Partnership will make certain capital contributions to the Operating
Partnership;
WHEREAS, the Limited Partners have relied upon certain information
and
representations described herein in evaluating the merits of investment
by the
Limited Partners in the Operating Partnership;
WHEREAS, Hinckley, Allen & Snyder, as counsel for the Limited
Partners,
will rely upon such information and representations in connection with
its
delivery of certain opinions with respect to this transaction; and
WHEREAS, Peabody & Brown and Tobin, Carberry, O'Malley, Riley &
Selinger, PC, as counsel for the Operating Partnership and the Operating
General Partner, will rely upon such information and representations in
connection with its delivery of certain opinions with respect to this
transaction.
NOW, THEREFORE, to induce the Limited Partners to enter into the
Operating Partnership Agreement and become the limited partners of the
Operating Partnership, and for $1.00 and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the
Operating Partnership and the Operating General Partner hereby agree as
follows for the benefit of the Limited Partners, Hinckley, Allen &
Snyder,
Peabody & Brown, Tobin, Carberry, O'Malley, Riley & Selinger, PC and
certain
other persons hereinafter described.
1. Representations, Warranties and Covenants of the Operating
Partnership
and the Operating General Partner
The Operating Partnership and the Operating General Partner
jointly and
severally represent, warrant and certify to the Limited Partners,
Hinckley,
Allen & Snyder, Peabody & Brown and Tobin, Carberry, O'Malley, Riley &
Selinger, PC, that, with respect to the Operating Partnership, as of the
date
hereof:
1.01 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 own the 46-unit rental
housing
project located in Waterbury, Connecticut known as Byam Village
Apartments
(the "Apartment Complex") and conduct its business; the Operating
Partnership
and the Operating General Partner have 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 and the
Operating General Partner 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 or the
Operating
General Partner is bound or any law, regulation, judgment, decree or
order
applicable to the Operating Partnership or the Operating General Partner
or
any of their respective properties; this Certification and Agreement
constitutes the valid and binding agreement of the Operating Partnership
and
the Operating General Partner, enforceable against each of them in
accordance
with its terms.
1.02 All factual information, including without limitation
the
information set forth in Exhibit A hereto, provided to the Limited
Partners or
their affiliates either in writing or orally, did not, at the time
given, and
does not, on the date hereof, contain 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 Operating General Partner has also delivered
to the
Limited Partners or their affiliates all documents and other information
which
has been requested by such parties. Since the date of the financial
statements for the Operating General Partner previously delivered, there
has
been no material adverse change in the financial position of the
Operating
General Partner. The estimates of occupancy rates, operating expenses
and tax
credits set forth on Exhibit A are reasonable in light of the knowledge
and
experience of the Operating General Partner.
1.03 As of the date hereof, each of the representations
contained in Exhibit B attached hereto is true, accurate and complete as
to
both the Operating Partnership and the Operating General Partner and as
to any
of its affiliates, any of its predecessors and its affiliates'
predecessors,
any of its directors, officers, general partners and/or beneficial
owners of
ten percent (10%) or more of any class of its 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 it in any capacity.
1.04 Each of the representations and warranties contained in
the Operating Partnership Agreement is true and correct as of the date
hereof.
1.05 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 covenant or agreement is required on or prior to the date hereof.
1.06 All conditions to admission of the Limited Partners as
limited partners of the Operating Partnership contained in the Operating
Partnership Agreement have been satisfied.
1.07 No default has occurred and is continuing under the
Operating Partnership Agreement or any of the Project Documents (as such
term
is defined in the Operating Partnership Agreement) for the Operating
Partnership.
1.08 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.
1.09 No person or entity other than the Operating Partnership
holds any equity interest in the Apartment Complex.
1.10 The Operating Partnership has the sole responsibility to
pay all maintenance and operating costs, including all taxes levied and
all
insurance costs, attributable to the Apartment Complex.
1.11 The Operating Partnership, except to the extent it is
protected by insurance and excluding any risk borne by lenders, bears
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.
1.12 No person or entity except the Operating Partnership
has
the right to any proceeds, after payment of all indebtedness, from the
sale,
refinancing, or leasing of the Apartment Complex.
1.13 Except as previously disclosed to the Special Limited
Partner, the Operating General Partner is not related in any manner to
either
of the Limited Partners, nor is the Operating General Partner acting as
an
agent of the Limited Partners.
1.14 To the best of the undersigned's knowledge after due
inquiry, and excepts as may have been disclosed in that certain report
entitled "Environmental Site Assessment and Limited Environmental
Compliance
Review" by GZA GeoEnvironmental, Inc. of Vernon, Connecticut, dated
February
1997, the Apartment Complex does not contain in a level above that
deemed safe
by all applicable governmental agencies, any substance known to be
hazardous,
such as hazardous waste, lead-based paint, asbestos, methane gas, urea
formaldehyde insulation, oil, toxic substances, underground storage
tanks,
polychlorinated biphenals (PCBs), and radon; the Apartment Complex is
not
affected by the presence of oil, toxic substances, or other pollutants
that
could be a detriment to the Apartment Complex nor is the Operating
Partnership
in violation of any local, state, or federal law or regulation; and no
violation of the Clean Air Act, Clean Water Act, Resource Conservation
and
Recovery Act, Toxic Substance Control Act, Safe Drinking Water Control
Act,
Comprehensive Environmental Resource Compensation and Liability Act, or
Occupational Safety and Health Act has occurred or is continuing.
Neither the
Operating Partnership, nor the Operating General Partner have received
any
notice from any source whatsoever of the existence of any such hazardous
condition relating to the Apartment Complex or of any violation of any
local,
state or federal law or regulation with respect to the Apartment
Complex.
1.15 To the best of the undersigned's knowledge, based on
that
certain real estate appraisal prepared by Italia & Lemp, Inc. dated May
7,
1997 and based upon the level of permanent debt financing for the
Project,
there is a reasonable expectation that the fair market value of the
Operating
Partnership's building(s) at the end of each year will be greater than
the
total amount of the Operating Partnership's liabilities, including
accrued
interest on such liabilities.
1.16 [Intentionally Omitted].
1.17 First Atlantic Housing, Inc., a Massachusetts
corporation, BCP Connecticut Limited partnership, a Massachusetts
limited
partnership and American Housing Preservation Corporation, a Maine
corporation
are the sole members of the Operating General Partner. If any member or
other
affiliate of the Operating General Partner is a tax-exempt entity and
either
of such Operating General Partner is a "controlled entity" in relation
to such
tax-exempt entity, a timely election will be made under Code Section
168(h)(6)(F) so that no portion of the Apartment Complex will be treated
as
"tax exempt use property" as defined in Code Section 168(h).
1.18 All representations made by the Operating General
Partner
in the Operating Partnership Agreement are incorporated herein by
reference
and are confirmed.
1.19 There is a reasonable expectation that the Operating
Partnership will be able to repay, as due, the principal and interest on
the
projected loans to the Operating Partnership based on the projected
value of
the Operating Partnership's property and building(s).
1.20 An Extended Use Commitment (as defined in the
Operating
Partnership Agreement) within the meaning of Code Section 42(h)(6) will
be in
effect and recorded in the appropriate land evidence records with
respect to
the building(s) in the Apartment Complex not later than the end of the
taxable
year in which any Tax Credit is taken with respect to any building. If
not in
effect as of the date hereof, the Operating General Partner agree (i) to
deliver a valid and binding Extended Use Agreement and evidence that it
has
been recorded no later than the end of the first taxable year in which
any Tax
Credit is taken with regarding to any building and (ii) to ensure that
all
Partnership lenders subordinate their mortgage liens on the Apartment
Complex
to the Extended Use Agreement at the time it is recorded.
1.21 The amounts payable in development and property
management fees to the Operating General Partner and its affiliates are
fair
in light of the value and magnitude of the services rendered in
consideration
for such fees, and the services performed in consideration for the
development
fees relate solely to the acquisition or construction of the Apartment
Complex.
1.22 The Mortgage Loans (other than the Preservation Loan)
are
being financed through the issuance of tax-exempt bonds, the interest on
which
is exempt under Section 103 of the Code; the bonds are taken into
account
under Section 146 of the Code; and the principal payments on the
Mortgage
Loans (other than the Preservation Loan) will be applied within a
reasonable
period to redeem the bonds, the proceeds of which were used to provide
the
Mortgage Loans (other than the Preservation Loan).
1.23 The Low-Income Housing Tax Credits allocated to the
Apartment Complex will not exceed the amount the Agency determines is
necessary for the financial feasibility of the Apartment Complex and its
viability as a qualified low-income housing project throughout the
credit
period.
1.24 To the best of the Operating General Partner's
knowledge,
the proposed operations of the Apartment Complex and the Partnership
satisfy
the requirements of Connecticut's Qualified Allocation Plan, including
any
specific targeting, set-asides or other factors upon which the
Connecticut
Housing Finance Authority based its determination that the proposed
operations
of the Apartment Complex and the Partnership satisfy the Qualified
Allocation
Plan.
1.25 The Operating Partnership has elected pursuant to Code
Section 42 to lock in the applicable Tax Credit rate prior to placement
in
service of each building.
1.26 [Intentionally Omitted].
1.27 The Operating General Partner will not reduce its
aggregate interest, as Operating General Partner, in the Partnership
below 1%
of all material items of the Partnership income, gain, loss, deduction,
and
credit. The 1% interest will be calculated without regard to any
limited
partner interest or interests in the Partnership that the Operating
General
Partner have or may obtain.
1.28 The Operating General Partner and any entity that is
related to the Operating General Partner or to the Operating Partnership
and
that receives a fee from the Operating Partnership, directly or
indirectly, is
on the accrual method of accounting for tax purposes. If any fee
received by
the Operating General Partner is treated as a guaranteed payment under
Section
707(c) of the Code, the Operating General Partner will recognize such
fee as
income at the time such fee is accrued by the Operating Partnership.
1.29 The Operating General Partner will be actively
involved
in the management and operation of the Operating Partnership, will
devote
substantial and continuing attention to the activities of the Operating
Partnership, and will provide substantial services to the Operating
Partnership.
1.30 The development and leasing activity in which the
Operating Partnership will engage will not contain personal or
recreational
benefit for the partners of the Operating Partnership.
1.31 The Operating Partnership will keep active records and
carry out the proposed activity in a manner consistent with profitable
businesses in the same activity.
1.32 The Operating Partnership will have an objective to
carry
on businesses for profit and divide the gains therefrom.
1.33 The Operating Partnership may earn a profit, including
profit from appreciation in the value of the Apartment Complex.
1.34 The Mortgage Loans and all other debt financing of the
Apartment Complex require the noncontingent repayment of principal on or
before a fixed maturity date, and will be considered and treated as a
loan by
the Lenders.
1.35 None of the Operating Partnership's Lenders is a party
from whom the Operating Partnership acquired any portion of the
Apartment
Complex, and none of the financing was issued in exchange for any
portion of
the Apartment Complex. None of the Operating Partnership's Lenders will
receive a fee with respect to the Operating Partnership's investment in
the
Apartment.
1.36 Following is a description of any and all existing or
proposed financing of the Apartment Complex that involves any direct or
indirect grant or federal subsidy (including, without limitation,
federal
grants, below-market interest rate loans, and tax-exempt bonds): the
Connecticut Housing Finance Authority is making the Mortgage Loans,
which are
being funded by the issuance of Connecticut's 1996 Multi-Family Housing
Revenue Bonds.
1.37 The Project will not receive moderate rehabilitation
assistance under Section 8(e)(2) of the United States Housing Act of
1937
(unless pursuant to the Stewart B. McKinney Homeless Assistance Act of
1988).
1.38 If the Apartment Complex is a scattered site project
within the meaning of Code Section 42, 100% of the rental units in the
Apartment Complex will be rent-restricted within the meaning of Code
Section
42.
1.39 All Units in the Apartment Complex are to be of equal
quality and all Apartment Complex amenities are to be made available to
all
tenants on a comparable basis without separate fees except for one unit
in
which the on-site manager shall reside.
1.40 There will be no direct or indirect personal liability
of
the Operating Partnership or of any of the Partners for the repayment of
the
principal of and payment of interest on the Mortgage Loans, and the sole
recourse of the Lender under the Mortgage Loans, with respect to the
principal
thereof and interest thereon, shall be to the property securing the
indebtedness.
1.41 All representations and disclosures made by the
Operating
General Partner to the Agency with respect to the Project and the
Partnership
in connection with the Low Income Housing Tax Credit Allocation
Application
remain true and correct on the date hereof and the Partnership has
complied
with all conditions to the allocation of Tax Credits imposed by the
Agency.
1.42 At least 50% of the aggregate basis of the Land and
buildings comprising the Apartment Complex will be financed by the
Mortgage
Loans.
2. Indemnification
2.01 The Operating General Partner (for purposes of this
Section 2.01, the "Indemnifying Parties" or, individually, an
"Indemnifying
Party") agrees to indemnify and hold harmless the Limited Partners (for
purposes of this Section 2.01, the "Indemnified Parties" or,
individually, an
"Indemnified Party") and each officer, director, employee and person, if
any,
who controls any Indemnified Party 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, insofar as such Liabilities or actions in respect
thereof
arise out of or are based upon (i) a breach by such Indemnifying Party
of any
of its representations, warranties or covenants to such Indemnified
Party or
any such of its officers, directors, employees or controlling persons
under
this Certification and Agreement or (ii) liability in connection with
the Land
and/or the Apartment Complex, as each term is defined in the Operating
Partnership Agreement, under any statute, regulation, ordinance, or
other
provision of federal, state, or local law or any civil action pertaining
to
the protection of the environment or otherwise pertaining to public
health or
employee health and safety, including, without limitation, protection
from
hazardous waste, lead-based paint, methane gas, urea formaldehyde
insulation,
oil, toxic substance, underground storage tanks, polychlorinated
biphenals
(PCBs), and radon; 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 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.
2.02 No Indemnifying Party shall be liable under the
indemnity
agreements contained in Section 2.01 unless the Indemnified Party shall
have
notified the Indemnifying Party in writing within forty-five (45)
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 an 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 2.01. 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
reasonably
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.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for
the
benefit of the Operating Partnership, the Operating General Partner,
Hinckley,
Allen & Snyder, Peabody & Brown and Tobin, Carberry, O'Malley, Riley &
Selinger, PC, the Limited Partners (and, to the extent provided in
Section 2,
the 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.
3.02 This Certification and Agreement may be executed
in
several counterparts, each of which shall be deemed to be an original,
all of
which together shall constitute one and the same instrument.
3.03 Terms used in this Certification and Agreement
but not
otherwise defined herein shall have the meanings given them in the
Operating
Partnership Agreement.
IN WITNESS WHEREOF, the undersigned have set their hands and seals
as of
the date first above written.
OPERATING PARTNERSHIP:
BYAM LIMITED PARTNERSHIP
By: BYAM VILLAGE OF MASSACHUSETTS
LLC, its General Partner
By: FIRST ATLANTIC HOUSING, INC., its Manager
By: /s/ Elizabeth R. Collins
Elizabeth R. Collins, Vice President
OPERATING GENERAL PARTNER:
BYAM VILLAGE OF MASSACHUSETTS LLC
By: FIRST ATLANTIC HOUSING, INC., its Manager
By: /s/ Elizabeth R. Collins
Elizabeth R. Collins, Vice President
Exhibit A
Byam Limited Partnership Fact Sheet
1. Sources and Uses of Funds
Sources of Funds
First Mortgage Loans: $1,670,000
Second Mortgage Loan $80,000
General Partner Equity $246,700
Limited Partner Equity $426,008
Application of Funds
Total Construction Cost $294,030
Soft Costs $1,909,732
Land $185,000
Development Fee $154,643
2. Financing
A. Lender: Connecticut Housing Finance Authority
(i) Mortgage Amount: $900,000
(ii) Interest Rate: 6.75%
(iii) Term: 7.33 years
B. Lender: Connecticut Housing Finance Authority
(i) Mortgage Amount: $770,000
(ii) Interest Rate: 7.75%
(iii) Term: 30 years
C. Preservation Loan
(i) Mortgage Amount: $80,000
(ii) Interest Rate: 6.%
(accrual)
30 years)
(iii) Term: 60 years
3. Construction and Permanent Junior Financing: N/A
4. Eligible Basis:
Acquisition Rehabilitation
$1,466,084 $370,970
5. Qualified Basis:
Acquisition Rehabilitation
$1,466,084 $370,970
6. GP Capital Contribution: $246,700
8. Rent-up Schedule: 100% April 1998
9. Projected Credit to the
Investment Partnership (99%):
A. for year 1 $44,375 (1998)
B. for year 2 through 10 $66,564
C. for year 11 $22,189
10. Total Projected Credit to the
Operating Partnership (100%):
A. for year 1 $44,823 (1998)
B. for years 2 through 10 $67,236
C. for year 11 $22,413
11. Tax Credit Approval:
A. Application:
1. Date: October, 1996
2. Credit Amount Requested: $72,466 Annually
B. Credit Reservation: N/A (Tax Exempt Bonds)
1. Date: N/A
2. Estimated Credit Amount Reserved:
C. Carryover Allocation: N/A
1. Date: N/A
2. Credit Amount Allocated: N/A
D. Credit Rate Lock-in Agreement
1. Date: 1/2/97
2. Rate locked-in: 3.66%
E. Form 8609
1. Date: To be Determined
2. Credit Amount Allocated: To be Determined
12. Apartment Complex:
A. Name: Byam Village
B. Address: 1782 Meriden Road, Waterbury, CT 06702
C. County: New Haven
D. Type of Project: Family
13. 1996 Area Median Income:3 person very low income $23,400
14. Type of Units:
Unit Basic Utility
Number Square Ft. Rent Allowance
1-Bedroom 8 550 $410 $24
2-Bedroom 30 810 $440 $26
3-Bedroom 8 1110 $550 $28
15. Difference between rents allowed
by FmHA and rents allowed under
the Rent Restriction Test: N/A
16. Rental Assistance:
Section 8
17.
(Projected) Annual Operating Expenses
(year 1):
$211,983
(including
Replacement
Reserve Funding
and Supplemental
Replacement
Reserve Accounts)
18. Replacement Reserve Account
A. Initial $23,000
B. Annual: $9,890
19. Supplemental Replacement Account:
A. Annual commencing in 1998: $6,210
20. Tenant Transition Fund:
(from proceeds of Installments)
A. Initial: $75,000
B. Annual: $10,000 (Last year of funding: 2003)
21. Amount of Annual Asset Management Fee
to Boston Capital Communications
Limited Partnership: $2,300
A. Guaranteed Portion of Asset Management Fee: $1, 000
22. Amount of Annual Incentive Partnership
Management Fee: $2,300
23. Amount of Total Depreciable
Basis Allocated to Personal
Property: To Be Determined
24. Completion Date: March, 1998
25. Total Capital Contribution of
Investment Partnership: $426,008
26. Schedule of Capital Contributions
First Installment:
$335,000
Second Installment
$45,000
Third Installment $20,000
Final Installment $6,008
27. Fees, Special Distributions and Other Items to be paid from
Capital
Contributions
A. Development Fee:
$154,643
(total fee)
$120,697
(deferred
portion)
B. Special Return of GP Capital N/A
28. Consulting Fee to Boston Capital N/A
Partners, Inc.
29. A. General Partner: Byam Village of Massachusetts LLC
Attn: Christopher W. Collins
Elizabeth R. Collins
Address: One Boston Place
Suite 2100
Boston, MA 02108
Telephone Number: (617) 624-8900
30. Developer: (Joint)
A. First Atlantic Housing, Inc.
Attn: Christopher W. Collins
Elizabeth R. Collins
Address: One Boston Place
Suite 2100
Boston, MA 02108
Telephone Number: (617) 624-8900
B. American Housing, Inc.
100 Middle Street
Tower B
Portland, ME 04101
31. Ownership Interests Contribution Percentage
Interest
General Partner
$246,700
1.0%
Investment Partnership
$426,008
98.99%
Special Limited Partner
$10
0.01%
32. Management Agent: Carabetta Management Co.
Attn:
Address: 200 Pratt Street
Meriden, CT
Telephone Number: (203) 237-7400
Amount of Fee: 5%
33. Builder: Equity Builders, Inc.
Attn: Kirk Rogers
Address: 100 Middle Street, Portland, ME 04104
Telephone Number: (207) 772-9779
Amount of Compensation: To be determined
Builder's Profit: To be determined
34. Subcontractor: N/A
Attn:
Address:
Telephone Number:
34. Architect: Latrobe/Archimage Architects
Attn: Sheldon Crosby
Address: 16 Ensign Drive, Avon, CT 06001
Telephone Number: (860) 677-7676
Amount of Fee:
36. Auditor: Reznick, Fedder & Silverman
Attn:
Address:
Telephone Number:
37. Tax Return Preparer: Reznick, Fedder & Silverman
Attn:
Address:
Telephone Number:
38. Federal Taxpayer ID Number: Applied for
39. State Housing Credit Agency: Connecticut Housing Finance
Authority
40. State Housing Agency LIHTC Project Number: To be determined
41. Operating Deficit Guaranty 3 years - $100,000 cap
42. Guarantor: First Atlantic Housing Inc.,
American Housing Preservation
& Michael A. Liberty
cc: Boston Capital Communications Limited Partnership Accounting
Department
Exhibit B
Certificate of Operating Partnership and
Operating General Partner Re: Lack of Disqualifications
The Operating Partnership and its Operating General Partner (as
identified
on the Certification and Agreement to which this Certificate is attached
as
Exhibit B) hereby represent to you that none of (i) the Operating
Partnership,
(ii) any predecessor of the Operating Partnership, (iii) any of the
Operating
Partnership's affiliates ("affiliate" meaning a person that controls or
is
controlled by, or is under common control with, the Operating
Partnership), (iv)
any sponsor (meaning any person who (1) is directly or indirectly
instrumental
in organizing the Operating Partnership or (2) will directly or
indirectly
manage or participate in the management of the Operating Partnership or
(3) will
regularly perform, or select the person or entity who will regularly
perform,
the primary activities of the Operating Partnership), (v) any officer,
director,
principal or general partner of the Operating Partnership or of any
sponsor,
(vi) the officer, director, principal, promoter or general partner of
any
Operating General Partner, (vii) any beneficial owner of ten percent
(10%) or
more of any class of the equity securities of the Operating Partnership
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),
(viii) any promoter of the Operating Partnership (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 Operating Partnership or any person who, in connection
with the
founding and organizing of the business or enterprise of the Operating
Partnership, directly or indirectly receives in consideration of
services or
property, or both services and property, ten percent (10%) or more of
any class
of securities of the Operating Partnership or ten percent (10%) or more
of the
proceeds from the sale of any class of such securities; provided,
however, a
person who receives such securities or proceeds either solely as
underwriting
commissions or solely in consideration of property shall not be deemed a
promoter if such person does not otherwise take part in founding and
organizing
the enterprise) presently connected with the Operating Partnership 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 a any refusal order or stop
order
thereunder entered within five (5) years prior to the date hereof;
(2) Has been convicted of or pleaded nolo contendere to a
misdemeanor or felony or, within the last ten (10) 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 (5) 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 within five (5) years prior to the date hereof entered or
issued
by or procured from a state securities commission or administrator, the
Securities and Exchange Commission ("SEC"), 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
deceit,
theft, fraud or fraudulent conduct, or breach of fiduciary duty, or
which is
based upon a state banking, insurance, real estate or securities law or
(c) has
been the subject of any administrative order, judgment or decree in any
state 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 SEC
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 of competent jurisdiction entered within five (5)
years
prior to the date hereof, 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 en joins 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 (5) years prior to the date hereof, or is subject to a
temporary
restraining order or preliminary injunction with respect to conduct
alleged to
have violated Section 3005 of Title 39 of the 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 SEC, the
Commodity
Futures Trading Commission or any state securities administrator denying
regis-
tration 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 or associated person of
any of
the foregoing, or prohibiting 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 SEC 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 (5)
years prior to the date hereof 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
or is the subject of sanctions imposed by any state or federal
securities agency
or self-regulatory agency;
(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 has been
adjudged a
bankrupt or made a general assignment for the benefit of creditors; 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 Securities Act of the State or for any broker-
dealer or
issuer with knowledge that such broker-dealer or issuer had not or has
not
complied with the Securities Act of the State.
If the Operating Partnership is subject to the requirements of
Section 12,
14 or 15(d) of the Securities Exchange Act of 1934, then the Operating
Partnership has filed all reports required by those Sections to be filed
during
the twelve (12) calendar months preceding the date hereof (or for such
shorter
period that the Operating Partnership was required to file such
reports).
