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) December 29, 1995
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 December 29, 1995, Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership, specifically Series 24 thereof (the
"Partnership") completed various agreements relating to Elm Street
Associates, L.P., a New York limited partnership (the "Operating
Partnership"), including an Amended and Restated Agreement of Limited
Partnership of the Operating Partnership dated as of December 29, 1995 (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 operates a recently renovated
apartment complex located on Elm Street in Yonkers, New York which is known
as Elm Street Apartments (the "Apartment Complex"). The Apartment Complex
consists of two 1-bedroom apartment units, thirty 2-bedroom apartment units,
and three 3-bedroom apartment units, for a total of 35 apartment units.
Renovation of the Apartment Complex was substantially completed by January
1996 and the Apartment Complex is currently 100% occupied (as of December 31,
1996).
The Operating Partnership received construction financing in the amount
of $1,400,000 (the "Senior Construction Loan") from The Community
Preservation Corporation. The Senior Construction Loan was a floating
variable rate loan with an 18-month term. The Operating Partnership also
received construction financing from the City of Yonkers, New York, acting
through its Bureau of Community Development, in the amount of $1,250,000 (the
"Junior Construction Loan"). The Junior Construction Loan had a 1% interest
rate and a 30-year term. The Senior Construction Loan and the Junior
Construction Loan were both converted to permanent loans called the Senior
Mortgage Loan and the Junior Mortgage Loan, respectively. The Senior
Mortgage Loan is in the amount of $1,087,000, bears a fixed interest rate of
8.01% and has a 15-year term and a 15-year amortization period. The Junior
Mortgage Loan is in the amount of $400,000 (after Capital Contribution
paydown of $125,000), bears interest at 7% per annum, has a 30-year term and
is repayable from Cash Flow as described in the Operating Partnership
Agreement. The Junior Mortgage Loan is funded through the HOME Investment
Partnership Program. The Operating Partnership has also received a $600,000
grant from Yonkers Community Development under the HOME Investment
Partnership Program.
100% of the apartment units (35 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 Punt Corporation, a
New York corporation which was specifically formed for the purpose of
developing the Apartment Complex. The President and 100% stockholder of the
General Partner is Michael F. Puntillo, Jr. Mr. Puntillo has been involved
in many facets of the real estate and construction industry. He began his
career as a commercial broker with the real estate brokerage firm of Cushman
and Wakefield. In 1982, he began working for his family's firm, the Jobco
Organization, in the development and construction divisions. He has been
involved in twenty residential multi-family housing projects with over 1,000
units in total. Mr. Puntillo holds a B.S. degree in Business Finance from
Ithaca College and an M.S. in Real Estate Development from New York
University.
The Contractor for the Apartment Complex, Jobco Realty & Construction,
Inc., and the Management Agent for the Apartment Complex, Jobco Management,
Inc., are both affiliated with the General Partner. The Jobco organization
was founded in 1950 and specializes in general construction and construction
management and consulting. Since its inception, Jobco has produced over
5,000 units of housing. Jobco Management, Inc. is a professional real estate
property management company that currently owns and manages approximately
400,000 square feet of office properties and 500 units of residential
apartments. The Contractor received total compensation of $1,875,000
(including 10% builder's profit) for the rehabilitation work on the Apartment
Complex and the Management Agent is receiving a management fee equal to 6% of
gross rental receipts.
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 $408,390 which has been or will be payable to
the Operating Partnership in four (4) Installments as follows:
1. $25 on the latest of (i) Tax Credit Set Aside, (ii) Initial
Closing, (iii) receipt by Boston Capital of an acceptable
commitment of the Permanent Lender regarding the Permanent Loan,
(iv) Receipt and approval by Boston Capital of an acceptable form
of tenant lease for the Apartment Complex or (v) Admission Date
(the "First Installment");
2. $306,268 on the latest to occur of (i) Substantial Completion,
(ii) Cost Certification, (iii) receipt of an updated title
insurance policy satisfactory to BCCC, Inc., (iv) confirmation
by Boston Capital that each of the itemized matters identified
on Exhibit 5.01 have been completed by the General Partner to
the reasonable satisfaction of Boston Capital, or (v)
satisfaction of all of the conditions to the payment of the
First Installment (the "Second Installment");
3. $95,847 on the latest to occur of (i) Initial 100% Occupancy
Date, (ii) Final Closing, (iii) State Designation, (iv) Rental
Achievement, or (v) satisfaction of all of the conditions to the
payment of the First and Second Installments (the "Third
Installment"); and
4. $6,250 on the latest to occur of (i) the receipt by the
Partnership of the Operating Partnership's federal income tax
return for the year in which Rental Achievement occurred or (ii)
satisfaction of all conditions to the payment of the First,
Second and Third Installments (the "Fourth Installment").
The total Capital Contribution of the Partnership to the Operating
Partnership is based on the Operating Partnership receiving $3,000,110 of Tax
Credits during the 10-year period commencing in 1996, of which $742,527 will
be allocated to the Partnership as a Limited Partner holding a 24.7475%
interest in the Operating Partnership. Boston Capital Corporate Tax Credit
Fund, A Limited Partnership which is an affiliate of the Partnership is also
a Limited Partner (the "Affiliated Partnership") and holds a 74.2425%
interest in the Operating Partnership. The Special Limited Partner of the
Operating Partnership is BCCC, Inc., which is also 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% 75% 70%
Partnership 74.25% 18.75% 22.5%
Affiliated
Partnership 24.75% 6.25% 7.5%
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 Asset Management Limited Partnership ("BCAMLP"), an
affiliate of the general partner of the Partnership, or another affiliate
thereof, will receive an annual Asset Management Fee of $5,000 commencing in
1996 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. To the extent Cash Flow
in any year is insufficient to pay the entire amount of the Asset Management
Fee, the General Partner shall make a Subordinated Loan to the Partnership in
the amount of such deficiency. If the General Partner fails to make a
Subordinated Loan, the amount of such deficiency shall accrue and 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.
The Operating Partnership will pay a Development Fee to the Developer
for its service in connection with the construction and development of the
Apartment Complex in an amount equal to $408,468. The Development Fee will
be paid $191,753 from the proceeds of the Third Installment, $25,000 from the
proceeds of the Fourth Installment and the $191,715 balance shall be treated
as a Deferred Development Fee which will be paid in accordance with the
provisions of Article XI of the Operating Partnership Agreement, but in no
event later than December 31, 2005. The Operating Partnership will pay to
the General Partner an annual Incentive Partnership Management Fee of $5,000
per annum commencing in 1996 for its services in connection with managing the
day-to-day business of the Operating Partnership. The Incentive Partnership
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.
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 Elm Street Associates, L.P.
(2) (b) Certification and Agreement of Elm Street
Associates, L.P.
(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: March 18, 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. 52694_1
ELM STREET ASSOCIATES, L.P.
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
As of December 29, 1995
TABLE OF CONTENTS
Page
ARTICLE I CONTINUATION OF PARTNERSHIP
1.01 Continuation
1.02 Name
1.03. Principal Executive Offices; Agent for Service of Process
1.04 Term
1.05 Recording of Certificate
ARTICLE II DEFINED TERMS
ARTICLE III PURPOSE AND BUSINESS OF THE PARTNERSHIP
3.01 Purpose of the Partnership
3.02 Authority of the Partnership
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS; DUTIES AND OBLIGATIONS
4.01. Representations, Warranties & Covenants Relating to the
Apartment Complex and the Partnership
4.02. Duties and Obligations Relating to the Apartment Complex and the
Partnership
ARTICLE V PARTNERS, PARTNERSHIP INTERESTS AND OBLIGATIONS OF THE PARTNERSHIP
5.01. Partners, Capital Contributions and Partnership Interests
5.02 Return of Capital Contribution
5.03. Withholding of Capital Contributions Upon Default..
5.04 Legal Opinions
5.05 Repurchase Obligation
5.06 Closing Bridge Loan
ARTICLE VI CHANGES IN PARTNERS
6..01 Withdrawal of a General Partner
6.02. Admission of a Successor or Additional General Partner
6.03. Effect of Bankruptcy, Death, Withdrawal, Dissolution or
Incompetence of a General Partner..
ARTICLE VII ASSIGNMENT TO THE PARTNERSHIP
7.01 Assignment of Contracts, etc.
ARTICLE VIII RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
8.01 Management of the Partnership
8.02. Limitations Upon the Authority of the General Partner
8.03 Management Purposes
8.04 Delegation of Authority
8.05. General Partner or Affiliates Dealing with Partnership
8.06 Other Activities
8.07 Liability for Acts and Omissions
8.08 Partnership Status
8.09. Construction of the Apartment Complex, Construction Cost
Overruns, Operating Deficits
8.10 Development Fee
8.11 Incentive Partnership Management Fee
8.11.1 Asset Management Fee
8.12 Withholding of Fee Payments
8.13. Removal of the General Partner
8.14. Selection of Management Agent
8.15. Removal of the Management Agent
8.16. Replacement of the Management Agent
8.17. Subordinated Loans to the Partnership
8.18. Reserve Fund for Replacements; Operating Deficit Reserve
ARTICLE IX TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS OF INTERESTS OF
LIMITED PARTNERS
9.01. Purchase for Investment
9.02. Restrictions on Transfer of Limited Partners' Interests
9.03. Admission of Substitute Limited Partners
9.04. Rights of Assignee of Partnership Interest
ARTICLE X RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
10.01. Management of the Partnership
10.02. Limitation on Liability of Limited Partners
10.03. Other Activities
10.04. Ownership by Limited Partner of Corporate General Partner or
Affiliate
ARTICLE XI ALLOCATION OF TAXABLE INCOME, TAX LOSSES, TAX CREDITS AND CASH
DISTRIBUTIONS
11.01. Allocation of Taxable Income, Tax Losses and Tax Credits
11.02. Allocation of Taxable Income and Tax Losses from Capital
Transactions
11.03. Distribution of Cash Flow
11.04. Distributions of Distributable Proceeds from Capital
Transactions and Distributable Proceeds from Refinancings
11.05. Allocations Among Partners
11.06. Qualified Income Offset
11.07. Minimum Gain Allocation
11.08. Regulatory Allocations
11.09. Partners' Partnership Non-recourse Liabilities
11.10. Tax Allocations: Code Section 704(c)
11.11. Tax Matters Partner
11.12. Capital Accounts
11.13. Authority of General Partner to Vary Allocations to Preserve and
Protect Partner's Intent
ARTICLE XII SALE, DISSOLUTION AND LIQUIDATION
12.01. Dissolution of the Partnership
12.02. Winding Up and Distribution
ARTICLE XIII BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC.
13.01. Books and Records
13.02. Bank Accounts
13.03. Accountants
13.04. Reports to Partners
13.05. Section 754 Elections
13.06. Fiscal Year and Accounting Method
ARTICLE XIV AMENDMENTS
14.01. Proposal and Adoption of Amendments
ARTICLE XV CONSENTS, VOTING AND MEETINGS
15.01. Method of Giving Consent
15.02. Submissions to Limited Partners
15.03. Meetings; Submissions of Matters for Voting
\
ARTICLE XVI GENERAL PROVISIONS
16.01. Burden and Benefit
16.02. Applicable Law
16.03. Counterparts
16.04. Separability of Provisions
16.05. Entire Agreement
16.06. Liability of the Investment Partnership
16.07 Environmental Protection
16.08. Notices to the Investment Partnership
16.09. Notices to the General Partner
EXHIBIT A - CLOSING BRIDGE LOAN NOTE
ELM STREET ASSOCIATES, L.P.
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
This Amended and Restated Agreement of Limited Partnership is made
and entered into as of the 29th day of December, 1995, by and among the
undersigned parties.
WHEREAS, as of December 22, 1993, Punt Corporation, as the General
Partner (the "General Partner") and Michael F. Puntillo, an individual
resident of the State of New York as the Limited Partner (the "Withdrawing
Limited Partner"), executed a Limited Partnership Agreement of Elm Street
Associates, L.P. (the "Agreement") for the formation of Elm Street
Associates, L.P. (the "Partnership"), pursuant to the New York Revised
Uniform Limited Partnership Act (the "Act"). A Certificate of Limited
Partnership was filed with the Secretary of State of New York on December 2,
1993 (the "Certificate"); and
WHEREAS, the Partnership has been formed to develop, construct, own,
maintain and operate a 35-unit multifamily apartment complex intended for
rental to individuals and families of low and moderate income, known as Elm
Street Apartments, and to be located in Yonkers, New York (the "Apartment
Complex"); and
WHEREAS, the Partnership has acquired title to the Apartment Complex
subject to mortgages and other liens securing construction and permanent
mortgage loans; 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 Corporate Tax Credit Fund,
A Limited Partnership, a Massachusetts limited partnership, and Boston
Capital Tax Credit Fund IV L.P., a Delaware limited partnership, to
the Partnership as Limited Partners, and BCCC, Inc., a Massachusetts
corporation, to the Partnership as the Special Limited Partner; (iii)
withdraw the Withdrawing Limited Partner from the Partnership; (iv)
reassign Interests in the Partnership; and (v) 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 Elm Street
Associates, L.P.
1.03. Principal Executive Offices; Agent for Service of
Process. The principal executive and record office of the Partnership
and the resident agent for service of process shall be Michael F.
Puntillo, 277 Northern Boulevard, Great Neck, New York 11021. 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.
1.04. Term. The term of the Partnership commenced as of
December 2, 1993 and shall continue until December 31, 2042, 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 and BCCC, Inc. as Limited Partners and the
withdrawal of the Withdrawing Limited Partner hereunder, and shall
register the Partnership under any assumed or fictitious name statute
or similar law in force and effect in the State.
ARTICLE II
DEFINED TERMS
In addition to the abbreviations of the parties set forth in
the preamble to this Agreement, the following defined terms used in
this Agreement shall have the meanings specified below:
"Accountants" means such firm of independent certified public
accountants as may be engaged by the General Partner, with the Consent
of BCCC, 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 Revised Uniform Limited Partnership Act of the
State of New York, as amended from time to time during the term of the
Partnership.
"Actual Credit" means as of any point in time, the total
amount of the Tax Credits actually allocated by the Partnership to the
Investment Partnership, representing ninety-nine 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.
"Affiliated Limited Partnership" means any limited
partnership, other than the Partnership, in which the General Partner
or an Affiliate of the General Partner is a general partner and the
Investment Partnership or an Affiliate of the Investment Partnership
is a limited partner.
"Agency" means the State of New York, Division of Housing and
Community Renewal in its capacity as the designated agency of the
State of New York to allocate Low-Income Housing Tax Credits, acting
through any authorized representative.
"Agreement" means this Amended and Restated Agreement of
Limited Partnership, as amended from time to time.
"Apartment Complex" means the land owned by the Partnership
located at 125, 129, 139, 141 and 145 Elm Street in Yonkers, New York
and the 35-unit multifamily rental housing development and other
improvements being constructed thereon, and to be owned and operated
therein by the Partnership, and known as Elm Street 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 the filing
of a petition for relief as to any such Person as debtor or bankrupt
under the Bankruptcy Act of 1898 or the Bankruptcy Code of 1978 or
like provision of law (except if such petition is contested by such
Person and has been dismissed within 90 days); insolvency of such
Person as finally determined by a court proceeding; filing by such
Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings
relating to such Person under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction,
whether now in existence or hereinafter in effect, either by such
Person or by another, provided that if such proceeding is commenced by
another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is
contested by such Person and has not been finally dismissed within 90
days.
"BCCC, Inc." means BCCC, Inc., a Massachusetts 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.
"Carryover Certification" means the date upon which the
Investment Partnership shall have received, in a form and in substance
satisfactory to the Investment Partnership, the certification of the
Accountants that as of a date no later than December 31, 1995, the
Partnership had incurred capitalizable costs with respect to the
Apartment Complex of at least ten percent (10%) of the Partnership's
reasonably expected basis in the Apartment Complex as of December 31,
1997, so that each building in the Apartment Complex constitutes a
"qualified building" for the purposes of Section 42(h)(1)(E)(ii) of
the Code.
"Cash Flow" means, with respect to any year or other
applicable period, (a) all Revenues received by the Partnership during
such period, plus (b) any amounts which the General Partner, with the
Consent of BCCC, Inc., and subject to the approval of the Lenders, if
required, releases from the Reserve Fund for Replacements as being no
longer necessary to hold as part of the Reserve Fund for Replacements
(excepting those releases approved by BCCC, Inc. for the purpose of
performing repairs or replacements on the Apartment Complex), 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, but excepting, however, any such expenses or
obligations paid for by funds released from the Reserve Fund for
Replacements, (ii) all sums due or currently required to be paid under
the terms of the Mortgage Loan or any other third-party indebtedness
of the Partnership, and (iii) all amounts from Revenues, if any, added
or required to be added to the Reserve Fund for Replacements during
such period. In no event will deductions in determining Cash Flow
pursuant to clauses (i) and (ii) above include payments made on
account of: the Asset Management Fee, amounts due on any Subordinated
Loans, the Incentive Partnership Management Fee, and/or the Deferred
Development Fee.
Cash Flow shall be determined separately for each fiscal year
and shall not be cumulative.
"Certificate" means the Certificate of Limited Partnership
dated November 22, 1992 and filed with the Secretary of State of New
York on December 2, 1993, 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.
"Closing Bridge Loan" means the loan to the Partnership made
by the Investment Partnership in accordance with the terms of Section
5.06 hereof.
"Closing Bridge Loan Documents" means the Closing Bridge Loan
Note.
"Closing Bridge Loan Note" means the $816,680 promissory note
in substantially the form attached as Exhibit A, evidencing the
Partnership's obligation to pay the Closing Bridge Loan.
"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 BCCC,
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 dated December 27, 1993 in the amount of $1,875,000
(including all exhibits and attachments thereto) entered into between
the Partnership and the Contractor pursuant to which the Apartment
Complex is being constructed.
"Construction Loan Agreement" means the Building Loan
Agreement between the Partnership and the Senior Lender dated
September 7, 1994 pursuant to which the proceeds of the Senior
Mortgage Loan will be or was advanced.
"Contractor" means Jobco Realty & Construction, 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 construction 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 the Law
Offices of Ronald J. Rosenberg or such other attorney or law firm upon
which the Investment Partnership and the General Partners 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.
"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 Loans.
"Debt Service Coverage Ratio" means the ratio of (i) rental
and miscellaneous income of the Partnership from the operation of the
Apartment Complex in the ordinary course of business 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 minus all accrued operational costs of the Apartment
Complex; including, but not limited to taxes, assessments, Reserve
Fund for Replacements deposits, maintenance and repairs, fees due and
payable (other than the Incentive Partnership Management Fee, the
Asset Management Fee and the Deferred Development Fee), and a ratable
portion of the annual amount (as reasonably estimated by the General
Partner) of those seasonal or periodic expenses (such as utilities,
maintenance expenses and real estate taxes) which might reasonably be
expected to be incurred on an unequal basis during a full annual
period of operations to (ii) Debt Service.
"Developer" means the General Partner.
"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)(a)
hereof.
"Development Fee" means the fee payable by the Partnership to
the Developer pursuant to Section 8.10 of this Agreement.
"Development Sources" means the aggregate of: (a) the proceeds
of the Mortgage Loans; (b) the Capital Contributions of the General
Partner, as set forth in Section 5.01(a) of this Agreement; (c) not
more than $1,299,980 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 or other
disposition, (ii) the amount necessary for the payment of all debts
and obligations of the Partnership arising from or otherwise related
to such sale or other disposition or to which the Apartment Complex is
subject and which are otherwise then due (other than debts and
obligations owed to the Partners and their Affiliates, which shall be
satisfied in the order set forth in Section 11.04), and (iii) any
amounts set aside by the General Partner for reserves which the
General Partner deems reasonably necessary for contingent, unmatured
or unforeseen liabilities of the Partnership.
"Distributable Proceeds from Refinancings" means the excess of
the gross proceeds of any borrowing by the Partnership over the sum of
the following, to the extent paid out of such gross proceeds: (i) any
amounts disbursed to repay then existing loans of the Partnership and
to pay and provide for all debts and obligations of the Partnership
then to be paid or which are otherwise then due (other than debts and
obligations owed to the Partners and their Affiliates, which shall be
satisfied in the order set forth in Section 11.04), (ii) all
reasonable expenses of such borrowings, including, without limitation,
all commitment fees, brokers' commissions, and attorneys' fees, (iii)
all amounts paid to improve the Apartment Complex or for any other
purpose in order to satisfy conditions to or established in connection
with such borrowings, and (iv) any amounts used to meet the operating
expenses of the Apartment Complex or set aside by the General Partner
for reserves which the General Partner deems reasonably necessary for
contingent, unmatured, or unforeseen liabilities of the Partnership.
"Eligible Basis" has the meaning given to it in Section 42(b)
of the Code.
"Excess Development Costs" means all funds in excess of the
Development Sources which are required to (i) complete construction of
the Apartment Complex, including paying any final cost overruns and
the cost of any change orders which have been approved by the Lenders
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 Final Closing, including without limitation, any
amounts necessary for local taxes, utilities, insurance premiums and
other amounts which are required (provided, however, that if any such
deposits are made by the General Partner and the funds, or any portion
thereof, subsequently are released from such deposit, the funds so
released shall be paid to the General Partner), (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 or the Final Closing, (v) make the required $100,000
deposit into the Operating Deficit Reserve, (vi) make the required
initial deposit of $8,960 into the Reserve Fund for Replacements, and
(vii) pay any Operating Deficits incurred by the Partnership prior to
the occurrence of Rental Achievement.
"Extended Use Commitment" means the agreement between the
Partnership and the Agency, which is intended to meet the definition
of a "long term commitment to low-income housing" as required by
Section 42(h)(6) of the Code and the requirements of the Agency's Low-
Income Housing Tax Credit Program.
"Final Closing" means the occurrence of both of the following:
(i) Substantial Completion, and (ii) the conversion of the Mortgage
Loans from construction loan to permanent loan status pursuant to the
terms of the Loan Documents and upon satisfaction or waiver of all
conditions to such conversion set forth therein.
"40-60 Set-Aside Test" means the Minimum Set-Aside Test
whereby at least 40% of the units in the Apartment Complex must be
occupied by individuals, with incomes of 60% or less of area median
income, as adjusted for family size.
"General Partner" means Punt Corporation, a New York
corporation and any other Person or entity admitted as a general
partner pursuant to this Agreement, and their respective successors
pursuant to this Agreement, including particularly the provisions of
Section 6.03 and 8.13.
"General Partner's Special Capital Contribution" has the
meaning ascribed to such term in Section 5.01 of this Agreement.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as
adjusted pursuant to Section 11.12B.
"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 the first disbursement of
proceeds of the Senior Mortgage Loan was authorized to be made to the
Partnership under the Construction Loan Agreement.
"Initial 100% Occupancy Date" means the first date, after the
completion of construction, upon which 100% of the apartment units in
the Apartment Complex have been leased to, and thirty four of the
units are currently 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 collectively, (i) Boston
Capital Corporate Tax Credit Fund A Limited Partnership, a
Massachusetts limited partnership, and (ii) Boston Capital Corporate
Tax Credit Fund IV L.P., a Delaware limited partnership, each of which
are Limited Partners of the Partnership.
"Junior Lender" means the City of Yonkers, New York, acting
through its Bureau of Community Development, in its capacity as maker
of the Junior Mortgage Loan, or its successors and assigns in such
capacity, including any Substitute Lenders permitted pursuant to
Section 8.02(b)(v) hereof, each acting through any authorized
representative.
"Junior Loan Documents" means, collectively, that certain
financing approval letter dated November 19, 1993 by and between the
Junior Lender and the Partnership, the Junior Mortgage and that
certain Building Loan Contract dated as of December 30, 1993 by and
between the Partnership and the Junior Lender, that certain Building
Loan Mortgage Note dated as of December 30, 1993 by the Partnership in
favor of the Junior Lender, as each of the foregoing have been amended
by that certain First Amendment to Building Loan Contract dated as of
December 27, 1995 by and between the Partnership and the Junior Lender
and that certain Building Loan Mortgage Note Modification Agreement
dated as of December 27, 1995 by and between the Partnership and the
Junior Lender.
"Junior Mortgage" means, the Building Loan Mortgage HOME
Investment Partnership Program given by the Partnership to Junior
Lender and dated December 30, 1993, securing the Junior Mortgage Loan.
"Junior Mortgage Loan" means the construction and permanent
loan in an aggregate principal amount of $1,125,000 made to the
Partnership by the Junior Lender on December 30, 1993, evidenced by
the Junior Loan Documents.
"Land" means the tracts of land located on Elm Street in
Yonkers, New York, upon which the Apartment Complex will be located.
"Lenders" means, collectively, the Junior Lender and the
Senior Lender.
"Limited Partner(s)" means the Investment Partnership and/or
BCCC, Inc., or any other Limited Partner in such Person's capacity as
a limited partner of the Partnership.
"Liquidator" means the General Partners or, if there are 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 Junior Loan
Documents and the Senior Loan Documents.
"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.
"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, collectively, the Junior Mortgage and the
Senior Mortgage.
"Mortgage Loans" means, collectively, the Junior Mortgage Loan
and the Senior Mortgage Loan.
"Net Capital Contribution" means an amount equal to a
Partner's paid-in Capital Contribution, less the aggregate amount of
cash distributions, if any, made to such Partner hereunder.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(c) of the Treasury Regulations. The amount of Nonrecourse
Deductions for a Fiscal Year of the Partnership equals the net
increase, if any, in the amount of Minimum Gain during that Fiscal
Year, determined according to the provisions of Treasury Regulation
Section 1.704-2(c).
"Notice" means a writing containing the information required
by this Agreement to be communicated to a Partner and sent by
registered or certified mail, postage prepaid, return receipt
requested, to such Partner at the last known address of such Partner,
the date of registry thereof or the date of the certification receipt
therefor being deemed the date of such Notice; provided, however, that
any written communication containing such information sent to such
Partner actually received by such Partner shall constitute Notice for
all purposes of this agreement.
"Operating Deficit" means the amount by which the income of
the Partnership from rental payments made by tenants of the Apartment
Complex and all other income of the Partnership, including
unrestricted earnings on reserve or escrow funds (other than proceeds
of any loans to the Partnership and investment earnings on funds on
deposit in the Reserve Fund for Replacements) for a particular period
of time, is exceeded by the sum of all the operating expenses,
including all Debt Service payments, operating and maintenance
expenses, deposits into the Reserve Fund for Replacements, any
Lenders' fee payments, and all other Partnership obligations or
expenditures, excluding payments for construction 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.
"Operating Deficit Loan" means a loan made pursuant to Section
8.09(b).
"Operating Deficit Reserve" means the operating deficit
reserve account established pursuant to the provisions of Section
8.18(b) of this Agreement.
"Partner" means any General Partner or any Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning
attributed to "partner loan nonrecourse debt minimum gain" in Treasury
Regulation 1.704-2(i)(3).
"Partner Loan Nonrecourse Deductions" means any deductions of
the Partnership that are attributable to a nonrecourse liability for
which a Partner bears the risk of loss within the meaning of Treasury
Regulation Section 1.704-2(i).
"Partnership" means Elm Street Associates, L.P.
"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 construction of the Apartment Complex, referred to in the
Construction Contract and any changes thereto made in accordance with
the terms of this Agreement.
"Pre-Admission Bridge Loan" means that certain $235,000 pre-
admission bridge loan by Boston Capital Corporate Tax Credit Fund, A
Limited Partnership to the Partnership on September 5, 1995, as
evidenced by that certain demand promissory note of Partnership also
dated as of September 5, 1995, which loan shall be repaid by the
Partnership from the proceeds of the Closing Bridge Loan.
"Project Documents" means and includes the Loan Documents, the
Extended Use Commitment, the Management Agreement and all other
instruments delivered to (or required by) the Lenders 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 $0 for 1995, $259,531 for 1996, $297,011 per year for each
of the years 1997 through 2005, and $37,480 for 2006, which the
General Partner has projected to be the total amount of the Tax
Credits which will be allocated to the Investment Partnership by the
Partnership, constituting ninety-nine percent (99%) of the Tax Credits
which are projected to be available to the Partnership; provided,
however, that if the Actual Credit for 1996 is greater than (or less
than) $259,531, the Projected Credit for the year 2006 shall be
reduced (increased) by an amount equal to the amount by which the
Actual Credit for 1996 exceeds (or is less than) $259,531.
"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, provided
that for Very Low-Income Tenants, the gross rent charged cannot exceed
30% of the product of (i) area median income, adjusted for family
size, and (ii) 50%.
"Rental Achievement" means the date upon which the Partnership
shall have maintained a Debt Service Coverage Ratio of not less than
1.15 for any six consecutive full calendar months, with each such
calendar month taken individually, after Substantial Completion.
"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).
"Senior Lender" means The Community Preservations Corporation,
in its capacity as maker of the Senior Mortgage Loan, or its
successors and assigns in such capacity, including any Substitute
Lenders permitted pursuant to Section 8.02(b)(v) hereof, each acting
through any authorized representative.
"Senior Loan Documents" means, collectively, the Building Loan
Agreement, Building Loan Note, Mortgage, Collateral Assignment of
Construction Agreement, Assignment of Leases and Rents, Irrevocable
Letter of Credit and Subordination Agreement, and any other documents
related to the Senior Mortgage Loan by and between the Partnership and
the Senior Lender.
"Senior Mortgage" means, collectively, the Building Loan
Mortgage, Assignment of Leases and Rents and Security Agreement given
by the Partnership to Senior Lender and dated September 7, 1994,
securing the Senior Mortgage Loan.
"Senior Mortgage Loan" means, the construction and permanent
loan in the principal amount of up to $1,400,000 made to the
Partnership by the Senior Lender on September 7, 1994, evidenced by a
mortgage note given by the Partnership to the Senior Lender, secured
by the Senior Mortgage and other related security documents and
financing statements.
"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 New York.
"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 that State Designation is anticipated to occur
more than 60 days after the Agency's receipt of Cost Certification,
then, for purposes of Section 5.01(c) hereof, State Designation shall
mean evidence of the Agency's receipt of Cost Certification, provided
that the Partnership has received a valid Carryover Allocation of 1993
Tax Credits which remains in full force and effect.
"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 all necessary certificates of occupancy from
the applicable governmental jurisdiction(s) or authority(ies) for one
hundred percent (100%) of the apartment units in the Apartment
Complex; provided, however, that Substantial Completion shall not be
deemed to have occurred if on such date any liens or other
encumbrances as to title to the Land and the Apartment Complex exist,
other than those securing the Mortgage Loans and/or those Consented to
by the Investment Partnership.
"Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03.
"Syndication Expenses" means all expenditures classified as
syndication expenses pursuant to Treasury Regulation Section 1.709-
2(B). Syndication Expenses shall be taken into account in determining
and maintaining Capital Accounts pursuant to Section 11.12 of this
Agreement at the time they would be taken into account under the
Partnership's method of accounting if they were deductible expenses.
"Taxable Income" and "Tax Losses" means the Partnership's
taxable income or tax losses, respectively, for each fiscal year (or
part thereof) as determined for federal income tax purposes,
including, where the context requires, all items of income, gain,
loss, deduction and credit which enter into the computation thereof.
"Tax Credit" means the Low-Income Housing Tax Credit.
"Tax Credit Set Aside" means the date upon which the
Partnership receives a reservation, effective for a year no earlier
than 1995, and subject to a carryover allocation of Tax Credits
meeting the requirements of Section 42(b)(1)(E) of the Code and
Treasury Regulations for an allocation of Tax Credit for the
building(s) constituting the Apartment Complex in an annual dollar
amount of not less than $300,011, which reservation shall not have
expired or been revoked prior to the date on which the First
Installment is paid. The Tax Credit Set Aside for the Partnership was
issued by the Agency through a Carryover Allocation Agreement between
the Agency and the Partnership dated April 28, 1995.
"Very-Low Income Tenants" means individuals with incomes of
fifty percent (50%) or less of area median income, as adjusted for
family size.
ARTICLE III
PURPOSE AND BUSINESS OF THE PARTNERSHIP
3.01. Purpose of the Partnership. The Partnership has been
organized principally to acquire the Land and to develop, finance,
construct, own, maintain, operate and sell or otherwise dispose of the
Apartment Complex, in order to obtain long-term appreciation, cash
income, Tax Credits and tax losses.
3.02. Authority of the Partnership. In order to carry out
its purpose, the Partnership is empowered and authorized to do any and
all acts and things necessary, appropriate, proper, advisable,
incidental to or convenient for the furtherance and accomplishment of
its purpose, and for the protection and benefit of the Partnership,
including but not limited to the following:
(a) acquire ownership of the Land;
(b) construct, 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
Lenders, 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 Lenders and grant
the Mortgages, enter into the Mortgage Loans and all other documents
required by the Lenders with respect to the Mortgage Loans, and the
Extended Use Commitment 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 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 construction and development of the Apartment
Complex has begun and 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 Lenders and any applicable
governmental entities, as such Plans and Specifications may be changed
from time to time with the approval of the Lenders and any applicable
governmental entities, if such approval shall be required;
(b) at the time of commencement of construction, at Initial
Closing and as of the date hereof, the Land was, and is 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) at Initial Closing and as of the date hereof, good and
marketable fee simple title to the Apartment Complex was and is held
by the Partnership, and title insurance policies of a financially
responsible institution acceptable to the Lenders and to BCCC, Inc.,
in the amount of the replacement cost of the Apartment Complex, which
amount shall not be less than the aggregate of the Capital
Contributions of the General Partner and the Investment Partnership
(as to the Partnership) and the principal amount of the Mortgage Loans
(as to the Lenders), in favor of the Partnership and Lenders,
respectively, were issued on or before 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 BCCC, Inc. and the Lenders and shall
contain a non-imputation endorsement as to the Investment Partnership
and BCCC, 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 Lenders, and
fees paid to the State of New York Mortgage Agency, 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
Loans;
(g) the execution of this Agreement and the Bridge Loan
Documents, 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 has been 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 Lenders 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) at Initial Closing and as of the date hereof, a builder's
risk insurance policy was and is in full force and effect, and fire
and extended coverage insurance for the full replacement value of the
Apartment Complex (excluding the value of the Land, site utilities,
landscaping and foundations) which shall include flood insurance, if
the Apartment Complex is in a flood hazard area designated by the
United States Department of Housing and Urban Development and worker's
compensation (as of the date the Partnership hires its initial
employee(s)) and public liability insurance in the amount of at least
$2,800,000 (together with $10,000,000 umbrella coverage), all in favor
of the Partnership and naming Investment Partnership as an additional
insured or 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 BCCC, 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;
(j) neither the General Partner nor the Partnership have
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 Initial Closing and at Final Closing, at
the time of execution of this Agreement, 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 construct, develop, operate and maintain the Apartment
Complex in accordance with the terms of this Agreement, and had taken
and shall continue to take all action under the laws of the State and
any other applicable jurisdiction that is necessary to protect the
limited liability of the Limited Partners and to enable the
Partnership to engage in its business;
(l) no restrictions on the sale or refinancing of the
Apartment Complex, other than the restrictions set forth in the the
Loan Documents, in the Extended Use Commitment, 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 $0 for 1995, $259,531 for 1996, $297,011 per year for each of the
years 1997 through 2005, and $37,480 for 2006, which the General
Partner has projected to be the total amount of the Tax Credits which
will be allocated to the Investment Partnership by the Partnership,
constituting ninety-nine percent (99%) of the Tax Credits which are
projected to be available to the Partnership; provided, however, that
if the Actual Credit for 1996 is greater than (or less than) $259,531,
the Projected Credit for the year 2006 shall be reduced (increased) by
an amount equal to the amount by which the Actual Credit for 1996
exceeds (or is less than) $259,531;
(o) the General Partner has obtained from the Agency, dated
not later than December 31, 1995, a duly authorized, valid and binding
carryover allocation of Low-Income Housing Tax Credits as to the
Apartment Complex in an amount not less than $300,011 per year.
(p) the Partnership has satisfied all conditions to the
Agency's allocation of Tax Credits set forth in the Carryover
Allocation dated April 28, 1995 and all exhibits thereto and all other
documents entered into with the Agency, within the time periods
specified and in each case to the extent required to be satisfied as
of the date hereof, and is in full compliance with the Agency's
requirements;
(q) 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, construction 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.
(r) the obligations of the General Partner will be
guaranteed by Michael F. Puntillo or another person approved by the
Investment Partnership.
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 and Final Closing, and (iv) compliance with all
provisions of the Project Documents;
(b) while conducting the business of the Partnership, it
shall not act in any manner which it knows or should have known after
due inquiry will (i) cause the termination of the Partnership for
federal income tax purposes without the Consent of 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 Loans, 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, provided, further that not less than twenty percent (20%) of the
units in the Apartment Complex are occupied by or set aside for
individuals with incomes of fifty percent (50%) or less of area median
income, as adjusted for family size (the "Very Low-Income Tenants");
(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 Loans and
the Mortgages, 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 the Asset Management Fee pursuant to Section 8.11.1,
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 Lenders
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 Loans from and
after Final Closing) which are attributable to any negligent or
wrongful action or inaction of it or its affiliates;
(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 Loans 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
BCCC, Inc., to be responsible for the Partnership's audit and tax
matter reporting obligations under Section 13.04 hereof. BCCC, Inc.
hereby acknowledges that the accounting firm of Rosenberg, Newirth &
Kuchner is approved by BCCC, Inc. as the initial Accountant for the
Partnership.
(m) the General Partner shall provide to BCCC, 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. So long as such Extended Use Commitment conforms to the
requirements of Section 42(h)(6) of the Code, BCCC, Inc. agrees to
provide its approval and Consent not later than thirty (30) days after
its receipt of same.
(n) the General Partner shall cause the Partnership to
reduce the outstanding balance of the Junior Mortgage Loan to $400,000
by making a prepayment to the Junior Lender from the proceeds of the
Second Installment.
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:
Punt Corporation $100.00 1.0%
277 Northern Boulevard
Great Neck, NY 11021
In the event that the Partnership that 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, their principal office or
place of business, their Capital Contributions and their Percentage
Interests are as follows:
Boston Capital Corporate Tax 74.2425 %
Credit Fund, A
Limited $1,225,170 (plus accrued
Partnership interest on the Closing Bridge
c/o Boston Capital Loan) as more specifically
Partners, Inc. set forth in
313 Congress Street subparagraph (c)
Boston, MA 02210 immediately below
Boston Capital Tax 24.7475%
Credit Fund IV L.P.
(Series 24) $408,390 (as more
c/o Boston Capital specifically set
Partners, Inc. forth in subparagraph
313 Congress Street (c) immediately below)
Boston, MA 02210
(ii) The Special Limited Partner, its principal office
or place of business, its Capital Contribution and its Percentage
Interest is as follows:
BCCC, Inc. $ 10.00 0.01%
c/o Boston Capital
Partners, Inc.
313 Congress Street
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 $1,633,560
(plus accrued interest on the Bridge Loan) in four (4) installments
(the "Installments"), which Installments shall be due and payable in
cash by the Investment Partnership, solely from capital contributions
of their investor limited partners to 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) $100 on the latest to occur of (A) Tax Credit Set Aside, (B)
Initial Closing, (C) receipt by Boston Capital of an
acceptable commitment of the Permanent Lenders regarding the
Permanent Loan, (D) Receipt and approval by Boston Capital of
an acceptable form of tenant lease for the Apartment Complex
or (E) the Admission Date (the "First Installment");
(ii) $1,225,070 (plus an amount equal to all accrued
interest on the Closing Bridge Loan) on the latest to occur
of (A) Substantial Completion, (B) Cost Certification, (C)
receipt of an updated title insurance policy satisfactory to
BCCC, Inc., (D) confirmation by Boston Capital that each of
the itemized outstanding matters identified on Exhibit 5.01
have been completed by the General Partner to the reasonable
satisfactin of Boston Capital, or (E) satisfaction of all of
the conditions to the payment of the First Installment (the
"Second Installment");
(iii) $383,390 on the latest to occur of (A) Initial 100%
Occupancy Date, (B) Final Closing, (C) State Designation, (D)
Rental Achievement, or (E) satisfaction of all of the
conditions to the payment of the First and Second
Installments (the "Third Installment"); and
(iv) $25,000 on the later to occur of (A) the receipt by the
Investment Partnership of the Partnership's federal income
tax return for the year in which Rental Achievement occurred
or (B) satisfaction of all conditions to the payment of the
First, Second and Third Installments (the "Fourth
Installment").
As a condition precedent to each payment set forth above other than
the First Installment, the General Partner shall, not less than twenty
(20) days nor more than thirty (30) days prior to the time such
Installment is due, give the Investment Partnership Notice in the form
of a written certification that: (A) all conditions precedent to such
Installment have been satisfied, (B) the representations, warranties
and covenants given by the General Partners 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 their 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 ten (10) days after receipt of
such Notice.
$235,000 of the Closing Bridge Loan shall be used for
repayment in full of the Pre-Admission Bridge Loan.
The payment of the Second Installment shall be subject to the
further conditions that the Closing Bridge Loan shall have been funded
and the General Partner shall have provided evidence satisfactory to
the Investment Partnership that the full principal amount of the
Closing Bridge Loan, together with all accrued interest thereon, shall
have been paid in full or will be paid in full from the proceeds of
and immediately upon the funding of the Second Installment.
(d) (i) Upon the occurrence of Cost Certification and 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
(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 fifty-four and five-tenths percent (54.5%). 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
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 seventy-six and four-tenths percent (76.4%), 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 8% per annum. Credit
Recovery Loans shall be repayable by the Partnership as provided in
Sections 11.03(A)(c) and 11.04(A)(b).
(e) Without the Consent of all of the Partners, no
additional Persons may be admitted as additional Limited Partners and
Capital Contributions may be accepted only as and to the extent
expressly provided for in this Article V.
5.02. Return of Capital Contribution. Except as provided in
this Agreement, no Partner shall be entitled to demand or receive the
return of his Capital Contribution.
5.03. Withholding of Capital Contribution Upon Default. In
the event that: (a) the General Partner, or any successor General
Partner shall not have substantially complied with any material
provisions under this Agreement or the partnership agreement as to an
Affiliated Limited Partnership, 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) either Lender shall have declared the
Partnership to be in default under the Mortgage Loans or under any of
the mortgage loans as to an Affiliated Partnership, or (c) foreclosure
proceedings shall have been commenced against the Apartment Complex or
against the apartment complex owned by an Affiliated Limited
Partnership, 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.
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 and to the funding of the Bridge Loan, the
Investment Partnership shall have received the opinions of the Law
Offices of Ronald J. Rosenberg, counsel to the Partnership and to the
General Partners, 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 Investment Partnership, 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 January 31, 1996;
(ii) the Partnership has not received State Designation by April 15,
1996; (iii) Rental Achievement does not occur within 12 months from
and after the occurrence of Substantial Completion; (iv) the
Partnership fails to meet the Minimum Set-Aside Test and the Rent
Restriction Test within 12 months of the date that the Apartment
Complex is placed in service; (v) Final Closing has not occurred by
March 31, 1996; (vi) an event of default described in Section 5.03(a),
(b) and/or (c) shall exist and shall not have been cured within 30
days after the occurrence of such default; (vii) the buildings
comprising the Apartment Complex are not placed in service prior to
December 31 in the year in which the Tax Credits were allocated and
the Partnership does not receive a Carryover Allocation; (viii) 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 the
Invested Amount in the event the Investment Partnership in its sole
discretion requires such purchase of its Interest. Thereafter, the
General Partner, within 30 days of its 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
the Invested Amount.
(b) If the Lenders 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 Lenders and/or the Agency in its disapproval), cease to be a
Limited Partner. The General Partner shall, within 10 days of the
effective date of such termination, purchase the Interest of the
Investment Partnership in the Partnership and pay to the Investment
Partnership an amount equal to its Net Capital Contribution.
(c) Upon receipt by the Investment Partnership of any such
payment of its Net Capital Contribution or the Invested Amount, as
applicable, the Interest of the Investment Partnership shall
terminate, the Investment Partnership shall execute, acknowledge and
deliver such documents of assignment as the General Partner shall
require and effectuate the 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.
5.06. Closing Bridge Loan. The Investment Partnership shall
make the Closing Bridge Loan to the Partnership. The Closing Bridge
Loan shall be on the following terms and conditions:
(a) the Closing Bridge Loan shall be an unsecured, non-
recourse obligation of the Partnership in the original principal
amount of $816,680;
(i) a portion of the Closing Bridge Loan equal to the amount
approved by the Investment Partnership may be advanced at the
discretion of the Investment Partnership upon the making of the First
Installment and after receipt of the legal opinion required pursuant
to Section 5.04 and satisfactory completion of the Investment
Partnership's due diligence as to the Partnership, the General
Partner, the financial and future operation of the Apartment Complex.
(ii) the remaining amount of the Closing Bridge Loan, if any,
shall be advanced by the Investment Partnership in accordance with the
procedures attached hereto as Exhibit A.
(b) interest shall accrue on the Closing Bridge Loan at an
interest rate equal to 5.57%;
(c) on the date of the Second Installment, the Partnership
shall make a principal payment equal to the outstanding principal
balance of the Closing Bridge Loan and shall make a payment equal to
any accrued but unpaid interest on the Closing Bridge Loan;
(d) the promissory note evidencing the Closing Bridge Loan
(the "Closing Bridge Loan Note") shall be substantially in the form
attached hereto as Exhibit A; and
(e) the proceeds of the Closing Bridge Loan shall be used
solely for Partnership purposes in accordance with a Development
Budget approved by the Investment Partnership and the terms of this
Agreement.
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 BCCC, Inc., and of the Lenders, if required,
and only after being given written approval by the necessary parties
as provided in Section 6.02, and by the Lenders, 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 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 Lenders;
(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
a 70% distribution of the General Partner's percentage pursuant to
Section 11.04A(d); 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(d).
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 or 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 construction 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
Loans; 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 Partners 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 Lenders' 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 Loans, 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 their
authority to make any undertaking on behalf of the Partnership, nor to
determine any facts or circumstances bearing upon the existence of
such authority.
8.02. Limitations Upon the Authority of the General Partner.
(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 any individuals where
income exceeds 60% of area median income, as adjusted for family size
or fail to rent at least 20% of the apartments to Very Low-Income
Tenants and to comply with the Rent Restriction Test applicable to
such tenants; 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 BCCC,
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 Loans, provided that, with the
Consent of BCCC, Inc., which shall not be unreasonably withheld
(taking into account the investment objectives of the Investment
Partnership), the General Partner may substitute, in whole or in part,
the Mortgage Loans 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 Loans during the Permanent Term 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 Lenders and the Agency, and may receive
compensation at the highest rates approved and permitted by the
Lenders or the Agency at any time; provided, however, that the
Management Agent may not receive compensation in excess of six percent
(6%) of gross rental receipts received from tenants of the Apartment
Complex.
(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) shall be paid from Partnership assets to the extent
available (but the Limited Partners shall not have any personal
liability to the General Partner under any circumstances on account of
any such loss or damage incurred by the General Partner or on account
of the payment thereof).
8.08. Partnership Status. In the event that the sole General
Partner is a corporation, or in the event that all General Partners
are corporations, such General Partner(s) shall satisfy at least the
requirements set forth in the last sentence of Section 4.07 of
Internal Revenue Service Procedure 89-12, as the same may be modified
from time to time, which requirements are prerequisites to the
issuance by the Internal Revenue Service of an advance ruling that the
Partnership will be taxed as a partnership, and not as an association
taxable as a corporation, for federal income tax purposes.
8.09. Construction of the Apartment Complex, Construction Cost
Overruns, Operating Deficits.
(a) (i) The Partnership has entered into the Construction
Contract. The General Partner shall be responsible for:
(A) achieving completion of construction 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 Loans by the
Lenders and the achievement of Initial Closing and 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 the next installment of the
Development Fee due to the Developer shall be applied by the
Partnership 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.
(iv) The General Partner's obligations under this Section
8.09(a) shall be guaranteed by Michael F. Puntillo pursuant to a
Guaranty of even date herewith.
(b) In the event that, at any time (subject to the hereinafter
set forth limitations), 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)"). Notwithstanding
the foregoing, commencing on the date of Rental Achievement, and until
a date sixty (60) months from the date of Rental Achievement, the
aggregate liability of the General Partner to fund Operating Deficit
Loans shall not exceed an amount equal to $400,000. Such aggregate
liability shall be reduced by $50,000 on the seventy-second month
after the date of Rental Achievement; shall be reduced by an
additional $50,000 on the eighty-fourth month after the date of Rental
Achievement; and shall be reduced by an additional $50,000 on the
ninety-sixth month after the date of Rental Achievement. From and
after such date, the General Partner shall have no further liability
to fund Operating Deficit Loans. 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. For the purposes of this Section 8.09(b), all
expenses shall be paid on a sixty (60) day current basis.
8.10. Development Fee. (i) The Partnership has entered into a
Development Agreement of even date herewith with the Developer for its
services in connection with the development and construction of the
Apartment Complex. In consideration for such services, a Development
Fee in the total amount of $408,468 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)(a).
The Development Fee shall be due and payable as follows:
(a) $191,753 upon receipt by the Partnership of the Third
Installment;
(b) $25,000 upon receipt by the Partnership of the Fourth
Installment; and
(c) the Deferred Development Fee shall be payable only in
accordance with Sections 11.03A(b) and 11.04A(a) or, if not sooner
paid, on December 31, 2005.
8.11. Incentive Partnership Management Fee. The Partnership
has entered into a Partnership Management Services Agreement with the
General Partner of even date herewith for its services in managing the
business of the Partnership for the period from the date hereof
throughout the term of the Partnership. Such agreement includes
provisions to the effect that in return for its services in
administering and directing the business of the Partnership,
maintaining appropriate books and records relating to all financial
affairs of the Partnership, and reporting periodically to the
Partners, the Lenders 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, solely from the Cash
Flow of the Partnership available for distribution and in accordance
with Section 11.03A(d), an annual Incentive Partnership Management
Fee.
Such fee shall be payable in accordance with the provisions of
any applicable regulations of the Lenders or the Agency and of the
Project Documents and shall be in an amount equal to $5,000 per year,
commencing in 1996.
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 $5,000 per annum, commencing in 1996, for its
services in assisting with the preparation of the reports required
pursuant to Section 13.04. The Asset Management Fee shall be payable
solely from Cash Flow and as provided in Section 11.03A(a); provided,
however, that if in any Fiscal Year, Cash Flow is insufficient to pay
the Asset Management Fee, the General Partner shall make a
Subordinated Loan to the Partnership in an amount sufficient to pay
such fee. If the General Partner fails to make such Subordinated
Loans, 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) the
General Partner, 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) the
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) BCCC, Inc., acting on behalf of the Investment Partnership,
so long as the Investment Partnership is a Partner, shall have the
right to remove the General Partner (i) for any intentional misconduct
or gross negligence in the discharge of its duties and obligations as
General Partner (provided that such misconduct or failure results in,
or is likely to result in, a material detriment to or an impairment of
the Apartment Complex or assets of the Partnership), or (ii) upon the
occurrence of any of the following:
(A) the 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 Loans, or any
provisions of the Agency regulations applicable to the Apartment
Complex;
(B) the 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) the General Partner shall have caused either
Mortgage Loan to go into default; or
(D) the General Partner shall have conducted its own
affairs or the affairs of the Partnership in such manner as would:
(1) cause the termination of the Partnership for federal income tax
purposes; or (2) cause the Partnership to be treated for federal
income tax purposes as an association, taxable as a corporation.
(b) BCCC, Inc. shall give Notice to all Partners of its
determination that the 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, or if such noncompliance is of a
nature that it cannot reasonably be cured within thirty (30) days of
such Notice, and there is no reasonable likelihood that the
Partnership or any Limited Partner will suffer a material loss,
liability or prejudice to its interest or other rights during an
extended cure period, then a default shall not be deemed to have
occurred as long as the General Partner commences to cure the default
within thirty (30) days of written Notice thereof and thereafter
diligently completes all actions necessary to cure the default as long
as such cure is completed no later than ninety (90) days after such
Notice. If, at the end of such cure period the General Partner has not
cured any default or other reason for such removal, (i) without any
further action by any Partner, BCCC, Inc. or its designee shall
automatically become a General Partner and acquire in consideration of
a cash payment of $100 such portion of the Interest of the removed
General Partner as counsel to the Investment 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 BCCC, Inc. as the Special Limited Partner shall
continue unaffected by the new status of BCCC, 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 Partner hereunder.
(c) BCCC, Inc. or any successor General Partner proposed by the
Special Limited Partner shall have the option, exercisable in its sole
discretion, to acquire the Additional Limited Partner Interest, or any
portion thereof, of any removed General Partner upon payment of the
agreed or then present fair market value of such Interest or portion
thereof. Any dispute as to the value of the Interest or portion
thereof to be acquired pursuant to the immediately preceding sentence
shall be submitted to a committee composed of three qualified real
estate appraisers, one chosen by the removed General Partner, one
chosen by the successor General Partner, and the third chosen by the
two so chosen. The proceedings of such committee shall conform to the
rules of the American Arbitration Association, as far as appropriate,
and its decision shall be final and binding. The expense of
arbitration shall be born equally by the removed General Partner and
the Partnership. The method of payment will be deemed presumptively
fair where it provides for a promissory note bearing simple interest
at eight percent (8%) per annum coming due in no less than five (5)
years with equal installments each year.
(d)(i) 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 BCCC, Inc. shall have
been obtained to such particular arrangement. The Partnership may
offset against any payments to a General Partner removed under this
Section 4.5 any damages suffered by the Partnership as a result of any
breach of the obligations of such General Partner hereunder. A
General Partner so removed will not be liable as a general partner for
any obligations of the Partnership incurred after the effective date
of its removal, but shall be and remain liable for all obligations and
liabilities incurred by it as General Partner before such removal
became effective, including, but not limited to, its obligations set
forth in Section 8.09 hereof.
(e) The General Partner hereby grants to each of the Investment
Partnership and BCCC, 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 the 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 their undertakings and
responsibilities under this Agreement.
8.14. Selection of Management Agent. The Partnership, with the
approval of the Lenders 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. The Management Agent
shall be paid a management fee subject to the approval of the Lenders
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 Lenders and the Agency, if
required. Jobco Management, Inc. hereby is approved by the parties
hereto as the initial Management Agent.
8.15. Removal of the Management Agent. The General Partner (i)
may, upon receiving any required approval of the Lenders and the
Agency, dismiss the Management Agent as the entity responsible for the
Apartment Complex under the terms of the contract between the
Partnership and the Management Agent, and (ii) at the request of the
Investment Partnership, shall remove the Management Agent in the event
that (A) the Investment Partnership, in its reasonable discretion,
determines that the Management Agent does not possess the necessary
experience to properly manage the Apartment Complex or (B) the
Management Agent is declared Bankrupt, is dissolved, or makes an
assignment for the benefit of its creditors, or for any intentional
misconduct by the Management Agent or gross negligence in the
discharge of its duties and obligations as Management Agent,
including, without limitation, for any action or failure to take any
action which:
(1) violates in any material respect any provision
of the Management Agreement entered into with the Partnership
and approved by the Lenders, and/or any provision of the
Extended Use Commitment and/or the Loan Documents applicable to
the Apartment Complex, or the Lenders approved management plan
for the Apartment Complex, or
(2) violates in any material respect any provision
of this Agreement or provision of applicable law.
8.16. Replacement of the Management Agent. Upon the removal of
the Management Agent as the entity responsible for the management of
the Apartment Complex, a substitute Management Agent, which may be an
Affiliate of the General Partner, shall be named by the General
Partner, subject to the approval of the Lenders, if required, and the
approval of BCCC, Inc.
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 Partner 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 Lenders, 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 Lenders, if required;
except that such approvals shall not be required in the case of the
hypothecation of personal property purchased by the Partnership and
not included in the security agreements executed by the Partnership at
the time of Initial Closing. Loans made under this Section shall be
repaid as set forth in Section 11.01 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(b)(3).
8.18. Reserve Fund for Replacements.
(a) Reserve Fund for Replacements. The Partnership
shall establish a Reserve Fund for Replacements with respect to the
Apartment Complex, as required by the Lenders and BCCC, Inc. The
Partnership shall make deposits into the Reserve Fund equal to $8,960
annually for so long as the balance in the Reserve Fund for
Replacements shall be less than $50,000 (the "Required Deposit") or
such greater amount as shall be required by the Lenders; such deposits
may be suspended only as approved by the Lenders and/or BCCC, 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.
Withdrawals from the Reserve Fund for Replacements shall be made only
with the Consent, or upon the direction, of the Lenders; provided,
however, if such Consent of the Lenders is not required, such
withdrawals may be made only with the Consent, or upon the direction,
of BCCC, Inc.
(b) Operating Deficit Reserve. Upon receipt by the
Partnership of the First Installment, the Partnership shall establish
the Operating Deficit Reserve as a separate, interest bearing account
with a financial institution acceptable to BCCC, Inc. and shall
deposit therein funds in the amount of $100,000 from the proceeds of
the Second Installment. Funds in the Operating Deficit Reserve are
intended to be employed solely for the payment of Operating Deficits.
All interest earnings on funds on deposit in the Operating Deficit
Reserve shall be retained therein for the aforesaid purposes.
Withdrawals from the Operating Deficit Reserve shall be made only with
the Consent, or upon the direction, of BCCC, Inc. At such time after
or at a date three (3) years after Substantial Completion, based upon
three (3) consecutive full calendar months with each month taken
individually, that the Debt Service Coverage Ratio equals or exceeds
1.15 times Debt Service, $50,000 of the Operating Deficit Reserve
shall be released to the Partnership, which amounts shall be utilized
by the Partnership to reduce any amounts which remain outstanding
under the Development Agreement, and if no such amounts remain
outstanding, then such release of the Operating Deficit Reserve shall
be made directly to the General Partner. At such time after or at a
date six (6) years after Substantial Completion, based upon three (3)
consecutive full calendar months with each month taken individually,
that the Debt Service Coverage Ratio equals or exceeds 1.25 times Debt
Service, the remaining balance of the Operating Deficit Reserve shall
be released to the Partnership, which amounts shall be utilized by the
Partnership to reduce any amounts which remain outstanding under the
Development Agreement, and if no such amounts remain outstanding, then
such release of the Operating Deficit Reserve shall be made directly
to the General Partner.
ARTICLE IX
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS
OF INTERESTS OF LIMITED PARTNERS
9.01. Purchase for Investment.
(a) The Investment Partnership hereby represents and
warrants to the General Partner and to the Partnership that the
acquisition of its Interest is made as principal for its account for
investment purposes only and not with a view to the resale or
distribution of such Interest, except insofar as the Securities Act of
1933 and any applicable securities law of any state or other
jurisdiction permit such acquisitions to be made for the account of
others or with a view to the resale or distribution of such Interest
without requiring that such Interest, or the acquisition, resale or
distribution thereof, be registered under the Securities Act of 1933
or any applicable securities law of any state or other jurisdiction.
(b) The Investment Partnership agrees that it will not
sell, assign or otherwise transfer its Interest or any fraction
thereof to any Person who does not similarly represent and warrant and
similarly agree not to sell, assign or transfer such Interest or
fraction thereof to any Person who does not similarly represent and
warrant and agree.
(c) The Investment Partnership shall not sell, assign or
otherwise transfer its Interest or any fraction thereof to any Person
until the Investment Partnership has provided the Partnership with a
legal opinion, reasonably satisfactory to the General Partner, that
such sale, assignment or other transfer does not violate any state or
federal securities laws or require the Interest to be registered under
any such laws.
9.02. Restrictions on Transfer of Limited Partner's
Interests.
(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
Lenders, if required, shall have been given, which Consent
of the General Partner may be evidenced by the execution
by the General Partner of an amended 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
Partner 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 11.04A(c);
(c) then, the balance, if any, of such Taxable Income
shall be allocated 70% to the General Partner and 30% 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 Limited Partner 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 time as the General Partner deems appropriate, but in
no event less than once in each fiscal year, in the following order of
priority:
(a) First, to payment of the Asset Management Fee
currently due, together with any accrued but unpaid Asset Management
Fees;
(b) Second, to payment to the General Partner of the
Deferred Development Fee;
(c) Third, to repayment of the Investment Partnership of
any Reduction Amount pursuant to Section 5.01(d)(ii) or Credit
Recovery Loan pursuant to Section 5.01(d)(iii);
(d) Fourth, up to 50% of remaining Cash Flow, to
repayment of any amounts due with respect to any Subordinated Loans
(including, without limitation, Operating Deficit Loans made under
Section 8.09(b);
(e) Fifth, to payment of the Partnership Management Fee;
and
(f) Any balance, 75% to the General Partner and 25% to
the Investment Partnership.
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 General Partner, an amount equal to the
Deferred Development Fee;
(b) 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) or any
Operating Deficit Loans made pursuant to Section 8.09(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) Credit Recovery Loans to the Investment Partnership,
(3) Subordinated Loans to the General Partner,
(4) The Partnership Management Fee currently due, if any; and
(5) 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;
(c) Then, 70% to the Investment Partnership and 30% to
the General Partner until such time as the Investment Partnership
shall have received an amount equal to its Invested Amount; and
(d) the balance, 70% to the General Partner and 30% 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.
C. Amounts remaining in the Operating Deficit Reserve at the
time of any of the foregoing distributions shall be utilized by the
Partnership to reduce any amounts which remain outstanding under the
Development Agreement, and if no such amounts remain outstanding, then
to the General Partner.
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 Partner 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
Partner 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 General Partners 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 hereby is designated as Tax Matters
Partner of the Partnership, and shall engage in such undertakings as
are required of the Tax Matters Partner of the Partnership, as
provided in regulations pursuant to Section 6231 of the Code. 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 General Partner for expenses that
it may incur under the following sentence) shall be made before any
distributions are made from Cash Flow or any discretionary reserves
are set aside by the General Partner. The General Partner shall have
the obligation to provide funds for such purpose. The taking of any
action and the incurring of any expense by the Tax Matters Partner in
connection with any such proceeding, except to the extent required by
law, is a matter in the sole discretion of the Tax Matters Partner and
the provisions on limitations of liability of 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 Partner, 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; and
(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.
(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 BCCC, Inc.; or
(d) the election by BCCC, Inc., without the Consent of the
General Partner; or
(e) any other event causing the dissolution of the
Partnership under the laws of the State.
12.02. Winding Up and Distribution.
(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;
(C) To the Partners, in an amount equal to the positive
balances in their Capital Accounts.
If the General Partner has a negative Capital Account balance
following the liquidation of the Partnership or of the General
Partner's Interest in the Partnership within the meaning of Treasury
Regulation Section 1.704-1(b)(ii)(g), excluding from such General
Partner's negative Capital Account balance, (a) such General Partner's
Share of Minimum Gain, and (b) any other amount that such General
Partner is deemed to be obligated to restore to the Partnership under
Treasury Regulation Section 1.704-1(b)(iv)(4)(h)(5) or otherwise under
the Treasury Regulations promulgated under Code Section 704(b), and
after taking into account all Capital Account adjustments (including
adjustments arising from the liquidation) for the Partnership taxable
year during which such liquidation occurs, other than those made
pursuant to this Section, the General Partner shall be unconditionally
obligated to restore the amount of such negative Capital Account
balance to the Partnership by the end of such taxable year (or, if
later, within 90 days after the date of liquidation). Amounts
contributed to the Partnership in respect of 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 Partners 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 modifications to such proposed tax return. A full detailed
statement shall be furnished to all Partners, showing such assets,
properties, and net worth and the profits and losses of the
Partnership for the preceding fiscal year. All Partners shall have
the right and power to examine and copy, at any and all reasonable
times, the books, records and accounts of the Partnership.
13.04. Reports to Partners.
(a) The General Partner shall cause to be prepared and
distributed to all persons who were Partners at any time during a
fiscal year of the Partnership:
(i) By February 28 of the year after the end
of each fiscal year of the Partnership, (A) a balance
sheet as of the end of such fiscal year and statements of
income, Partners' equity, and changes in financial
position and a Cash Flow 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 28 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 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.
(b) Within ninety (90) days after the end of each fiscal
year of the Partnership the General Partner shall provide to the
Investment Partnership:
(i) A certification by the General Partner
that (A) all 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(c);
(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
Affiliate, including the nature of the transaction and
the payments involved (including accrued cash or other
payments);
(iv) a Cash Flow statement; and
(v) a copy of the annual report to be filed
with the United States Treasury concerning the status
of the Apartment Complex as low income housing and, if
required, a certificate to the Agency concerning the
same.
(c) Upon the written request of 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 30 days of receipt of such request.
(d) Prior to October 15 of each year, 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.
(e) Within 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.
(f) 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 Construction Loan which have been submitted to the
Construction Lenders 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
Construction Loan submitted to the Construction Lenders 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.
(g) (i) In the event that the reports or information
provided for in Sections 13.04 (a)(i) and/or 13.04(a)(ii) above are,
at any time, not provided within the time period(s) specified in such
Sections, the General Partner shall be obligated to pay to the
Investment Partnership the sum of $500 per day, as liquidated damages,
for each day from the date upon which such reports or information
is(are) due pursuant to the provisions of the aforesaid Sections until
the date upon which such reports or information is (are) provided.
(ii) In the event that the reporting requirements set
forth in any of the above provisions of this Section 13.04 are not
met, 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, and the fees of
such successor Accountants shall be paid by the General Partner.
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 its
interests as a Partner) 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 interests as a
Partner). 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.
ARTICLE XVI
GENERAL PROVISIONS
16.01. Burden and Benefit. The covenants and agreements
contained herein shall be binding upon and inure to the benefit of the
heirs, executors, administrators, successors and assigns of the
respective parties hereto.
16.02. Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the State.
16.03. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and
all of which together shall constitute one agreement binding on all
parties hereto, notwithstanding that all the parties shall not have
signed the same counterpart.
16.04. Separability of Provisions. Each provision of this
Agreement shall be considered separable and if for any reason any
provision which is not essential to the effectuation of the basic
purposes of this Agreement is determined to be invalid and contrary to
any existing or future law, such invalidity shall not impair the
operation of or affect those provisions of this Agreement which are
valid.
16.05. Entire Agreement. This Agreement sets forth all (and is
intended by all parties to be an integration of all) of the
representations, promises, agreements and understandings among the
parties hereto with respect to the Partnership, the Partnership
business and the property of the Partnership, and there are no
representations, promises, agreements or 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) neither of them has caused or
permitted to occur, and neither of them shall 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 negligence, 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 Corporate Tax Credit Fund,
A Limited Partnership and Boston Capital Tax
Credit Fund IV L.P.
c/o Boston Capital Partners, Inc.
313 Congress Street
Boston, Massachusetts 02210
Attention: Neil Opper
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:
Punt Corporation
277 Northern Boulevard
Great Neck, NY 11021
ATTN: Mr. Michael F. Puntillo
And a copy to: The Law Offices of Ronald J. Rosenberg
100 Garden City Plaza
Garden City, NY 11530-3200
ATTN: Ronald J. Rosenberg
IN WITNESS WHEREOF, the parties have affixed their signatures
and seals to this Amended and Restated Agreement of Limited
Partnership of Elm Street Associates, L.P., as of the date first
written above.
WITNESS: GENERAL PARTNER:
Punt Corporation
_________________________ By: /a/ Michael F. Puntillo
Name: Michael F. Puntillo
Title: President
LIMITED PARTNERS:
BOSTON CAPITAL CORPORATE TAX
CREDIT FUND, A LIMITED
PARTNERSHIP
By: Boston Capital Partners
Corporation, its general
WITNESS: partner
_________________________ By: /s/ Bonnie Kate Fox
Bonnie Kate Fox, Attorney-in-
Fact for John P. Manning,
President
WITNESS: By: C&M Associates d/b/a Boston
Capital Associates, its
general partner
_________________________ By: /s/ Bonnie Kate Fox
Bonnie Kate Fox, as Attorney-
in-Fact of John P. Manning,
Partner
BOSTON CAPITAL TAX CREDIT FUND IV
L.P.
By: Boston Capital Associates IV
L.P., its General Partner
WITNESS: By: C&M Associates d/b/a Boston
Capital Associates, its
general partner
_________________________ By: /s/ Bonnie Kate Fox
Bonnie Kate Fox, as Attorney-
in-Fact of John P. Manning,
Partner
SPECIAL LIMITED PARTNER:
ATTEST: BCCC, Inc.
____________________________ By: /s/ Bonnie Kate Fox
Bonnie Kate Fox, Attorney-
in-Fact for John P. Manning,
President
WITHDRAWING LIMITED
PARTNER:
ATTEST:
____________________________ /s/ Michael F. Puntillo
Michael F. Puntillo, Individually
COUNTY OF SUFFOLK )
: ss
COMMONWEALTH OF MASSACHUSETTS )
Before me, the undersigned Notary Public in and for the
aforesaid County and State, personally appeared Bonnie Kate Fox, in
her capacities as (i) Attorney-in-Fact of John P. Manning, in his
capacity as a general partner of C&M Associates d/b/a Boston Capital
Associates and President of Boston Capital Partners Corporation, as
the general partners of Boston Capital Corporate Tax Credit Fund, A
Limited Partnership, and Boston Capital Tax Credit Fund IV L.P. as
Limited Partners of Elm Street Associates, L.P., and (ii) Attorney-in-
Fact for John P. Manning of BCCC, Inc., as a Special Limited Partner
of Elm Street Associates, L.P., and being duly sworn, acknowledged the
execution of the foregoing Amended and Restated Agreement of Limited
Partnership.
Witness my hand and notarial seal this ____ day of
_____________, 1995.
Notary Public
My Commission
Expires:
COUNTY OF _________ )
ss
STATE OF )
Before me, the undersigned Notary Public in and for the
aforesaid County and State, personally appeared Michael F. Puntillo in
his capacity as the Withdrawing Initial Limited Partner of Elm Street
Associates, L.P., (ii) in his capacity as the President of Punt
Corporation in its capacity as the General Partner of Elm Street
Associates, L.P., and being duly sworn, acknowledged the execution of
the foregoing Amended and Restated Agreement of Limited Partnership.
Witness my hand and notarial seal this day of
, 1995.
____________________
___
Notary Public
My Commission
Expires:
EXHIBIT A
BRIDGE LOAN NOTE
$816,680 December ___, 1995
Great Neck, New York
FOR VALUE RECEIVED, the undersigned ELM STREET ASSOCIATES, L.P., a
New York limited partnership (the "Borrower"), hereby promises to pay
to the order of BOSTON CAPITAL CORPORATE TAX CREDIT FUND, A LIMITED
PARTNERSHIP, a Massachusetts limited partnership (together with any
successor holders of this Note, the "Lender"), at Lender's office at
313 Congress Street, Boston, Massachusetts 02210 or at such other
place or places as the Lenders from time to time may designate in
writing, the principal sum of
EIGHT HUNDRED SIXTEEN THOUSAND SIX HUNDRED AND EIGHTY AND
00/100 DOLLARS
($816,680), in lawful money of the United States of America and in
immediately available funds together with interest thereon and such
additional sums as hereinafter provided.
Except as otherwise provided herein all payments shall be applied
first to interest due hereunder, and any balance shall be applied in
reduction of principal. In the absence of demonstrable error, the
books and records of the Lenders shall constitute presumptive evidence
of the unpaid principal balance hereof from time to time. All terms
defined in the Amended and Restated Agreement of Limited Partnership
of the Borrower dated as of September , 1995 (the "Partnership
Agreement") and used but not otherwise defined herein shall have the
meanings given them in the Partnership Agreement.
1. Maturity Date. If not sooner paid, all outstanding
principal and accrued and unpaid interest thereon shall be paid to the
Lender on the earlier of the payment of the Second Installment of the
Investment Partnership's Capital Contribution or March 31, 1996.
2. Interest. The outstanding unpaid principal balance
hereunder shall bear interest compounded semi-annually at a per annum
rate equal to five and fifty-seven one-hundredths percent (5.57%).
Such interest shall accrue and shall be due and payable upon the
maturity of the principal amount hereof, whether by acceleration,
prepayment or otherwise. In the event of a partial maturity of the
principal amount hereof whether by acceleration, prepayment or
otherwise, a ratable portion of any accrued but unpaid interest shall
be due and payable.
3. Prepayments. The loan evidenced by this Note shall be
subject to prepayment as follows:
(a) Optional Prepayments. The Borrower may prepay at any time
or from time to time the principal amount of the Note in whole
or in part together with all accrued but unpaid interest on the
principal amount so prepaid.
(b) Required Prepayments.
(i) The Borrower shall prepay, from and to the extent of
any Capital Contributions received by it from the Lender after
the date hereof, all unpaid principal under this Note together
with all accrued but unpaid interest on the principal amount so
prepaid.
(ii) All unpaid principal under this Note together with all
accrued but unpaid interest on such principal may, at the
election of the Lender, be applied to payment of a portion of
the Second Installment of the Capital Contribution which the
Lender has agreed to contribute to the Borrower pursuant to
Section 5.01(c) of the Partnership Agreement.
4. Right of Set Off. Upon the maturity of all or any portion
of the amounts due herein, whether by acceleration, prepayment or
otherwise, Lender is hereby authorized at any time and from time to
time, without notice to Borrower (any such notice being hereby
expressly waived by Borrower) to set off and apply any Capital
Contributions or other payments payable to the Borrower by the Lender
and other indebtedness at any time owing by Lender to or for the
credit or the account of Borrower against any and all of the
obligations of Borrower now or hereafter existing under this Note.
The rights of Lender under this subsection are in addition to other
rights and remedies (including, without limitation, other rights of
setoff) which Lender may have.
5. Defaults. It is expressly agreed that the occurrence of any
one or more of the following defaults, together with the failure of
the Borrower to cure any such default within ten (10) days after the
giving of written notice of such default by the Lender to the
Borrower, shall constitute an "Event of Default" hereunder: (i) any
failure to pay any amount or installment of principal and/or interest
on any day whereon the same is payable as above expressed; or (ii) an
event has occurred under Section 5.05 of the Partnership Agreement
under which the Lender is entitled to demand the repurchase of its
Interest under the terms of the Partnership Agreement; (iii) an event
has occurred under Section 8.13 of the Partnership Agreement which
permits the Lenders or its affiliate to remove the General Partner, or
the General Partner otherwise ceases to be the General Partner of the
Partnership; or (iv) any failure of the General Partner to advance any
funds pursuant to the provisions of Section 8.09 of the Partnership
Agreement. If any such Event of Default hereunder shall occur, the
Lender may, at its option, declare to be immediately due and payable
the then outstanding principal balance under this Note, with all
accrued and unpaid interest hereon, and all other amounts payable to
the Lenders hereunder, whereupon all such amounts shall become and be
due and payable immediately. The failure of the Lender to exercise
said option to accelerate shall not constitute a waiver of the right
to exercise the same at any other time.
6. Interest Limitation. This Note is subject to the express
condition that at no time shall the Borrower be obligated or be
required to pay interest on the unpaid principal amount of this Note
at a rate which could subject the Lender either to civil or to
criminal penalty as a result of being in excess of the maximum rate
which the Borrower is permitted by law to contract or agree to pay.
If by the terms of this Note the Borrower at any time is required or
obligated to pay interest on the unpaid principal amount of this Note
at a rate in excess of such maximum rate, then the rate of interest
under this Note shall be deemed to be immediately reduced to such
maximum rate and the interest payable hereunder shall be computed at
such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been
payments made in reduction of the principal amount of this Note and
any balance shall be refunded to the Borrower by the Lender. The
terms and provisions of this paragraph shall control all other terms
and provisions contained herein.
7. Waivers and Continued Liability. The granting to the
Borrower or any other party of an extension or extensions of time for
the payment of any sum or sums due under this Note or for the
performance of any term, provision, covenant or agreement under this
Note or any other agreement between Borrower, Lender and their
respective Affiliates, the taking or releasing of security or
collateral for payment of the indebtedness under this Note, or the
exercise or failure to exercise of any right or power under this Note
or any other agreement between Borrower, Lender and their respective
Affiliates, shall not in any way release or affect the liability of
the Borrower and any guarantor hereof or any other party obligated to
pay the indebtedness evidenced by this Note.
8. Amendments and Modifications. This Note may not be amended
or modified except by a written instrument signed by the Lender, nor
shall any revision hereof be effective, unless in writing and signed
by the Lenders.
9. Binding Effect. Wherever the term "the Borrower" is used in
this Note, the term shall include (unless otherwise expressly
indicated) all of the Borrower's successors and assigns, as the case
may be. This Note shall be binding upon the Borrower and shall inure
to the benefit of the Lender and its successors and assigns.
10. Severability. In the event that any provision of this Note
is unenforceable or contrary to law, or in the event that the
inclusion of such provision would adversely affect the validity,
legality or enforcement of this Note, such provision shall be of no
force and effect, and in such case all the remaining terms and
provisions of this Note shall be fully effective, the same as though
no such invalid provision had ever been included herein. If any
provision of this Note or the application thereof to any party or
circumstance is held invalid or unenforceable, the remainder of this
Note and the application of such provision to other parties or
circumstances shall not be affected thereby, the provisions of the
Note being severable in any such instance.
11. Waiver of Presentment, Etc. The Borrower hereby waives
presentment, demand, protest or notice (other than as and to the
extent set forth in Section 5 hereof) of any kind in connection with
this Note.
12. Governing Law; Jurisdiction, Service of Process. This Note
and the rights and obligations of the Lender and the Borrower
hereunder shall be construed in accordance with and governed by the
law of the Commonwealth of Massachusetts (without giving effect to the
conflict of law principles thereof).
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be sent
by registered or certified mail, return receipt requested, postage and
fees prepaid, or delivered personally, in each case addressed to the
party hereto to receive such notice or other communication (i) if to
the Lender, at 313 Congress Street, Boston, MA 02210, Attention of
John P. Manning, and (ii) if to the Borrower, at Punt Corporation, 277
Northern Blvd., Great Neck, NY 11021, Attention of Michael F.
Puntillo. Any party may, by notice to the others, change its address
for any subsequent notice.
14. Non-recourse. Notwithstanding anything to the contrary
herein, no Partner of Borrower shall have any personal liability for
repayment of principal or interest hereunder, except in the case of
fraud or misrepresentations made in connection with the Loan evidenced
hereby, and the Lender's remedies upon default hereunder shall be
limited to the Partnership's assets.
IN WITNESS WHEREOF, the Borrower has duly executed, or caused to
be duly executed, this Note as a sealed instrument, in its name and on
its behalf, as of the day and year first above written.
ELM STREET ASSOCIATES, L.P.
By: Punt Corporation
General Partner
By:______________________
Michael F. Puntillo
President
BOSTON CAPITAL CORPORATE TAX CREDIT FUND,
A LIMITED PARTNERSHIP
AND
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
_______________________________________
CERTIFICATION AND AGREEMENT
for
ELM STREET ASSOCIATES, L.P.
_______________________________________
CERTIFICATION AND AGREEMENT made as of __________ ___, 1995, by
ELM STREET ASSOCIATES, L.P., a New York limited partnership (the
"Operating Partnership"); and PUNT CORPORATION, a New York corporation
(the "Operating General Partner"); for the benefit of BOSTON CAPITAL
CORPORATE TAX CREDIT FUND, A LIMITED PARTNERSHIP, a Massachusetts
limited partnership, BOSTON CAPITAL TAX CREDIT FUND IV L.P., a
Delaware limited partnership (collectively, the "Investment
Partnership"), BCCC, INC., a Massachusetts corporation (the "Special
Limited Partner") and Hinckley, Allen & Snyder 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 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 _________, 1995 (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, Law Offices of Ronald J. Rosenberg, 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; and
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 and Hinckley, Allen & Snyder, Law Offices of Ronald J.
Rosenberg 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 and Hinckley, Allen & Snyder and Law Offices of Ronald J.
Rosenberg 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 Elm
Street 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 have 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 their affiliates, any of their predecessors and their
affiliates' predecessors, any of their directors, officers, general
partners and/or beneficial owners of ten per cent (10%) or more of any
class of their equity securities (beneficial ownership meaning the
power to vote or direct the vote and/or the power to dispose or direct
the disposition of such securities), as the case may be, and any
promoters presently connected with them in any capacity.
1.04 Each of the representations and warranties con-
tained 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 Part-
ners as limited partners of the Operating Partnership contained in the
Operating Partnership Agreement has 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 Forms 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 responsi-
bility 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 Part-
nership has the right to any proceeds, after payment of all
indebtedness, from the sale, refinancing, or leasing of the Apartment
Complex.
1.13 The Operating General Partner is not related in
any manner to 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 based
on environmental and hazardouse waste assessments of the Apartment
Complex completed on behalf of the Operating General Partner, 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
has 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 Lane Appraisals,
Inc., dated December 7, 1993, 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 None of the partners of the Operating Partnership
is a tax-exempt entity.
1.17 The Operating General Partner is a taxable
corporation, the sole shareholder of which is Michael F. Puntillo. If
any shareholder or other affiliate of the Operating General Partner is
a tax-exempt entity and the 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) shall be in effect and recorded in the appropriate land
evidence records with respect to the building(s) not later than the
end of the taxable year in which any credit is taken with respect to
any building. If not in effect as of the date hereof, the Operating
General Partner agrees 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.
1.21 The Operating Partnership expects to incur within
a 24-month period expenditures equal to at least the greater of (i)
$3,000 per residential unit or (ii) 10% of the unadjusted basis of the
building(s).
1.22 The amounts payable in development and property
management fees to Jobco Management Inc. and the Operating General
Partner 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.
1.23 For any building(s) not placed in service prior to
December 31, 1995, (i) the Operating Partnership's basis in such
building as of the close of 1995 will be more than 10% of the
Operating Partnership's reasonably expected basis in such building as
of the close of calender year 1995 and (ii) the Operating Partnership
will enter into a Carryover Allocation agreement with the State of New
York, Division of Housing and Community Renewal no later than December
31, 1995.
1.24 Each of the representations made by the Operating
General Partner in the Carryover Allocation Agreement between the
Agency and the Operating Partnership dated as of April 28, 1995 (the
"Carryover Allocation Agreement") is true and correct as of the date
hereof.
1.25 Each of the covenants, agreements, and conditions
contained in the Carryover Allocation Agreement has been duly
performed or satisfied by the Operating Partnership or its Operating
General Partner, as applicable, to the extent that performance of any
such covenant or agreement or satisfaction of any condition is
required on or prior to the date hereof, and the Operating General
Partner has no reason to believe that covenants, agreements, and
conditions required to be performed or satisfied after the date hereof
will not be performed or satisfied in a timely manner.
1.26 The Operating General Partner has received from
the Agency no notice of default or of withdrawal or cancellation of
the Tax Credit reservation or allocation to the Operating Partnership
as described in the Carryover Allocation Agreement.
1.27 The Operating Partnership has not irrevocably
elect pursuant to Code Section 42 to lock in the applicable Tax Credit
rate prior to placement in service of each building.
1.28 At the time the Limited Partners are admitted into
the Partnership, the Operating General Partner will have an aggregate
net worth calculated in accordance with generally accepted accounting
principals but not including the value of any equity or debt interest
such Operating General Partner has in the Partnership, equal to at
least ten percent (10%) of the Capital Contributions to the
Partnership.
1.29 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 has or may obtain.
1.30 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.
1.31 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.
1.32 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.
1.33 The Operating Partnership will keep active records
and carry out the proposed activity in a manner consistent with
profitable businesses in the same activity.
1.34 The Operating Partnership will have an objective
to carry on businesses for profit and divide the gains therefrom.
1.35 The Operating Partnership may earn a profit,
including profit from appreciation in the value of the Apartment
Complex.
1.36 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 lender.
1.37 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.
1.38 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): 10 year deferred and forgiven loan in the amount of
$600,000 from Yonkers Community Development Administration (the "HOME
Grant").
1.39 The HOME Grant was allocated to the Partnership
for the purpose of providing the Partnership with financing to acquire
the land and buildings comprising the Project. The entire amount of
the HOME Grant was used solely for acquisition of the land and
buildings comprising the Project and certain other acquisition related
expenses.
1.39 The Project will not receive moderate rehabili-
tation 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).
1.40 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.
1.41 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.
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 his representations, warranties or
covenants to such Indemnified Party or any such of its officers,
directors, employees or controlling persons under this Amended and
Restated 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, Law Offices of Ronald J. Rosenberg
and 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 defined in the Operating Partnership
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:
ELM STREET ASSOCIATES, L.P.
By: PUNT CORPORATION
its general partner
By: /s/ Michael F. Puntillo
Name: Michael F. Puntillo
Title: President
OPERATING GENERAL PARTNER:
PUNT CORPORATION
By: /s/Michael F. Puntillo
Name: Michael F. Puntillo
Title: President
EXHIBIT A
ELM STREET ASSOCIATES L.P.
FACT SHEET
1. Sources and Uses of Funds
Sources of Funds
1. Perm. Mort. Loan - The Community
Preservation Corporation $1,087,000
2. Perm. Junior Mort. Loan $ 400,000
3. Grant - Yonkers Community Development $ 600,000
4. General Partners Capital Contributions $ 100
5. Investment Partnership Capital Contribution $1,633,560
6. Deferred Development Fee Obligation $ 127,860
$3,848,520
Application of Funds
Total Construction Cost $2,039,500
Soft Costs $ 620,000
Land $ 727,500
Development Fee $ 461,520
$3,848,520
2. Construction and Permanent Senior Financing
A. Lender: The Community Preservation Corporation
B. Mortgage Amount: $1,400,000
C. Note Date: September 7, 1994
D. Interest Rate: Floating
E. Term: 18 months
3. Construction and Permanent Junior Financing
A. Lender: City of Yonkers, New York, acting through its
Bureau of Community Development
B. Mortgage Amount: $1,125,000
C. Note Date: December 30, 1993, amended December ___, 1995
D. Interest Rate: 1% originally, AFR interest following
conversion to permanent financing facility
E. Term: 30 years
4. Eligible Basis: $3,015,853
5. Qualified Basis: $3,920,609
6. GP Capital Contribution: $100
7. Type of Credit: Acquisition and Rehabilitation (9%)
8. Rent-up Schedule:
100% by December 1996
10. Projected Credit to the
Investment Partnership (99%):
A. $0 for 1995,
B. $259,531 for 1996
C. $297,011 per annum for each of the years 1997 through 2005,
and
D. $37,480 for 2006.
11. Total Projected Credit to the Operating Partnership
(100%):
A. $0 for 1995,
B. $262,152 for 1996,
C. $300,011 per annum for each of the years 1997 through 2005,
and
D. $37,859 for 2006.
12. Tax Credit Approval:
A. Application:
1. Date:
2. Credit Amount Requested:
B. Credit Reservation (Carryover Allocation Agreement):
1. Date: April 28, 1995
2. Credit Amount Reserved: $300,011
C. Carryover Allocation: N/A
1. Date:
2. Credit Amount Allocated: $300,011
D. Credit Rate Lock-in Agreement
1. Date: Placement in Service
2. Rate locked-in: To be determined
E. Form 8609
1. Date: To be Determined
2. Credit Amount Allocated: To be Determined
13. Apartment Complex:
A. Name: Elm Street Apartments
B. Address: 125, 129, 139, 140, 141 and 145 Elm Street,
Yonkers, New York
C. County:
D. Type of Project: Single Family/Rehab.
14. 1994 Area Median Income: $65,400
15. Type of Apartments:
Unit Basic Utilit
y
Number Square Ft. Rent Allowance
1-Bedroom 2 _____ $579
$20
2-Bedroom 5 _____ $700
$25
2-Bedroom 25 _____ $777 $25
3-Bedroom 3 _____ $943 $30
16. Difference between rents allowed
by FmHA and rents allowed under
the Rent Restriction Test: N/A
17. Rental Assistance: None
18. Annual Operating Expenses: $138,000 (Year 2)
19. Replacement Reserve Account
A. Annual: $ 8,960
B. Total: $50,000
20. Operating Reserve Account:$100,000
(from proceeds of Second Installment)
21. Amount of Annual Asset Management Fee
to Boston Capital Communications
Limited Partnership: $5,000
22. Amount of Annual Partnership
Management Fee: $5,000
23. Amount of Total Depreciable
Basis Allocated to Personal
Property: $70,000
24. Completion Date: January, 1996
25. Total Capital Contribution of
Investment Partnership: $1,633,560
26. Schedule of Capital Contributions:
A. $100 upon the latest to occur of:
(i) Admission Date,
(ii) Tax Credit Set Aside,
(iii) Initial Closing
(iv) Permanent Mortgage Loan Commitment
B. $1,225,070 (plus amount equal to all accrued interest on
Bridge Loan) upon the latest to occur of:
(i) Receipt of Satisfactory Title Policy
(ii) Substantial Completion,
(iii) Cost Certification, or
(iv) Satisfaction of conditions of First Installment
C. $383,390 upon the latest to occur of
(i) Initial 100% Occupancy Date,
(ii) Permanent Mortgage Commencement,
(iii) Rental Achievement,
(iv) State Designation, or
(v) Satisfaction of conditions of First and Second
Installments
D. $25,000 upon later of (i) receipt of Federal Tax Return or
(ii) Satisfaction of conditions of First, Second and Third
Installments
26. Fees, Special Distributions and Other Items to be paid from Capital
Contributions
A. Development
Fee: $408,468*
(*of which $191,715 is
deferred)
B. Special Return of GP Capital N/A
27. Consulting Fee to Boston Capital N/A
Partners, Inc.
28. Operating General Partner:Punt Corporation
Address: 277 Northern Boulevard
Great Neck, NY 11021
Telephone Number: (516) 487-0050
29. Developer: Punt Corporation
Address: 277 Northern Boulevard
Great Neck, NY 11021
Telephone Number: (516) 487-0050
30. Ownership Interests
Normal Capital Cash
Operations Transactions
Flow
Operating General
Partner: 1% 70.00% 75.00%
Investment Partnership: 99% 30.00% 25.00%
Special Limited Partner: 0% 0.00% 0.00%
31. Management Agent:Jobco Management Inc.
Contact Person: Michael F. Puntillo
Address: 277 Northern Boulevard
Great Neck, NY 11021
Telephone Number: (516) 487-0050
Amount of Fee: 6% of gross rental receipts
32. Builder: Jobco Realty & Construction Co., Inc.
Address: same as Management Agent
Amount of Compensation: 1,875,000, plus approved extras
Builder's Profit: 10%
33. Architect:Tast & Clemency
Address: 11 Village Square
Glen Cove, NY 11542
Amount of Fee: $50,000
34. Auditor:Rosenberg, Newirth & Kuchner
Contact Person: Sam Sotorio
Address: 7 Penn Plaza
New York, NY 10001
Telephone Number: (212) 330-6025
35. Tax Return Preparer: Same as Auditor
Contact Persons:
Address:
Telephone Number:
36. Federal Taxpayer ID Number: 11-3187306
37. State Housing Credit Agency: State of New York,
Division of Housing
and Community Rental
38. State Housing Agency LIHTC Number:93-N-01100/93001084
39. Operating Deficit Guaranty The General Partner
shall be obligated to
make Subordinated
Loans to the Partner-
ship to cover debt
service, operating
expenses and the
Replacement Reserve
Fund to the extent
these exceed available
operating income.
40. Guarantor(s): Michael F. Puntillo
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 Amended and Restated Certification and Agreement to
which this Certificate is attached as Exhibit B) hereby represent to
you that neither (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 per cent 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 per cent or more of any class of securities of the
Operating Partnership or ten per cent 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 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 years, been held
liable in a civil action by final judgment of a court based upon
conduct showing moral turpitude in connection with the offer, purchase
or sale of any security, franchise or commodity (which term, for the
purposes of this Certificate shall hereinafter include commodity
futures contracts) or any other aspect of the securities or
commodities business, or involving racketeering, the making of a false
filing or a violation of Sections 1341, 1342 or 1343 of Title 18 of
the United States Code or arising out of the conduct of the business
of an issuer, underwriter, broker, dealer, municipal securities
dealer, or investment adviser, or involving theft, conversion,
misappropriation, fraud, breach of fiduciary duty, deceit or
intentional wrongdoing including, but not limited to, forgery,
embezzlement, obtaining money under false pretenses, larceny
fraudulent conversion or misappropriation of property or conspiracy to
defraud, or which is a crime involving moral turpitude, or within the
last five years of a misdemeanor or felony which is a criminal
violation of statutes designed to protect consumers against unlawful
practices involving insurance, securities, commodities, real estate,
franchises, business opportunities, consumer goods or other goods and
services;
(3) Is subject to (a) any administrative order,
judgment or decree entered within five 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 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 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, 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 registration to, or revoking or suspending the
registration of, such person as a broker-dealer, agent, futures
commission merchant, commodity pool operator, commodity trading
adviser or investment adviser 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, com-
manded, 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 admini-
strative order or judgment procured by a state securities admini-
strator within five 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 New York Securities Act of
1972, as amended (the "New York Act") or for any broker-dealer or
issuer with knowledge that such broker- dealer or issuer had not or
has not complied with the New York Act.
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 12 calendar months preceding the date
hereof (or for such shorter period that the Operating Partnership was
required to file such reports).
