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) November 21, 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
(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 November 21, 1995, Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership, specifically Series 24 thereof (the
"Partnership"), completed various agreements relating to Overton
Associates Limited Partnership, a Nevada limited partnership (the
"Operating Partnership"), including an Amended and Restated Agreement
and Certificate of Limited Partnership of the Operating Partnership
dated as of November 1, 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 an apartment complex
in Overton, Nevada which is known as Shadowcreek Apartments (the
"Apartment Complex"). The Apartment Complex consists of 4 one-bedroom
units, 16 two-bedroom units and 4 three-bedroom units. The Apartment
Complex was completed in September, 1996 and fully occupied as of
January 31, 1997.
Construction financing in the amount of $1,235,000 was provided
by Midland Mortgage Investment Corporation. Permanent mortgage
financing in the amount of $1,235,000 (the "Mortgage Loan") is being
provided by the Rural Housing Service of the United States Department
of Agriculture. The Mortgage Loan has a 50-year term and is payable in
600 monthly installments. As the result of an interest credit subsidy
received by the Operating Partnership from the Permanent Lender, the
effective interest rate on the Mortgage Loan is 1%.
100% of the apartment units (24 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 Partners are James L. and Holly B. Gregory of Elko,
Nevada.
Weststates Property Management Company, an affiliate of the
General Partners, serves as the management agent for the Apartment
Complex (the "Management Agent"). The Management Agent will receive a
monthly fee from the Operating Partnership in the maximum amount
permitted by the Permanent Lender.
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 $361,320 which has been
or will be payable to the Operating Partnership in four (4)
Installments as follows:
1. $212,536 on the latest of (i) the Admission Date, (ii) Tax
Credit Set Aside, (iii) Construction Mortgage Closing, or
(iv) Permanent Mortgage Commitment;
2. $75,310 on the latest of (i) the Completion Date, (ii) Cost
Certification, (iii) Compliance with Due Diligence
Recommendations satisfactory to the Investment Limited
Partner, (iv) receipt of an updated title insurance policy
satisfactory to the Investment Limited Partner, (v) receipt
of a payoff letter from the General Contractor stating that
all amounts payable to it have been paid in full and that
the Operating Partnership has complied with the terms of
the construction contract, or (vi) receipt by the
Investment Limited Partner of an estoppel letter from each
Lender satisfactory to it;
3. $31,738 on the latest of (i) Breakeven Point, (ii)
Permanent Mortgage Commencement, or (iii) Initial 100%
Occupancy Date;
4. $31,736 on the later of (i) receipt by the Investment
Limited Partner of Form 8609 or (ii) State Designation; and
5. $10,000 on the date on which the Partnership receives the
Operating Partnership's tax return and audited financial
statements for the year in which the Breakeven Point
occurred.
The total Capital Contribution of the Partnership to the
Operating Partnership is based on the Operating Partnership receiving
$559,740 of Tax Credits during the 10-year period commencing in 1996,
of which $554,140 will be allocated to the Partnership as the
Investment Limited Partner of the Operating Partnership. The Special
Limited Partner of the Operating Partnership is BCTC 94, Inc., an
affiliate of the Partnership.
The Partnership believes that the Apartment Complex is adequately
insured.
Ownership interests in the Operating Partnership are as follows,
subject in each case to certain priority allocations and distributions:
Normal Capital Cash
Operations Transactions Flow
General Partner 1% 50% 60%
Partnership 99% 49.999% 40%
Special Limited 0% 0.001% 0%
Partner
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 Communications Limited Partnership ("BCCLP"), an
affiliate of the general partner of the Partnership, or another
affiliate thereof, will receive an annual Asset Management Fee
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 will be in an annual amount equal to the lesser of (i)
$500 or (ii) one-half of one per cent (0.5%) of the Aggregate Cost of
the Apartment Complex. The Asset Management Fee for each fiscal year
will be payable from Cash Flow in the manner and priority set forth in
Article X 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 amount of such deficiency shall be paid directly by
the General Partner to BCCLP as an Affiliate thereof from its own
funds.
The Operating Partnership will pay a Construction and Development
Fee in the amount of $300,320 to the General Partner (or its designee)
for its service in connection with the construction and development of
the Apartment Complex payable $161,536 from the proceeds of the First
Installment of the Investment Limited Partner's Capital Contribution,
$75,310 from the proceeds of the Second Installment of the Investment
Limited Partner's Capital Contribution, $31,738 from the proceeds of
the Third Installment of the Investment Limited Partner's Capital
Contribution and $31,737 from the proceeds of the Fourth Installment of
the Investment Limited Partner's Capital Contribution. The Operating
Partnership will pay to the General Partner an Annual Partnership
Management Fee commencing in 1996 for its services in connection with
managing the day-to-day business of the Operating Partnership in an
amount equal to the lesser of (i) $500 per annum or (ii) the excess of
(A) one-half of one percent (0.5%) of the Aggregate Cost of the
Apartment Complex over (B) the amount of the Asset Management Fee
attributable to such year. The Annual Partnership Management Fee for
each fiscal year will be payable from Cash Flow in the manner and
priority set forth in Article X of the Operating Partnership Agreement.
Item 7. Exhibits.
(a) and (b) There is no meaningful current or historic financial
information is available at this time.
(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) Second Amended and Restated Agreement of Limited
Partnership of Overton Associates Limited Partnership.
(2)(b) Certification and Agreement of Overton Associates
Limited Partnership
(2)(c) First Amendment to Second Amended and Restated
Agreement of Limited Partnership of Overton Associates Limited
Partnership
(2)(d) Second Amendment to Second Amended and Restated
Agreement of Limited Partnership of Overton Associates Limited
Partnership
(2)(e) Consulting Agreement
(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. 33-99602 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 21, 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: 53263_1
17537/1229
OVERTON ASSOCIATES LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Dated as of November 1, 1995
OVERTON ASSOCIATES LIMITED PARTNERSHIP
TABLE OF CONTENTS
Page
Preliminary Statement ...................................
ARTICLE I Defined Terms ............................
ARTICLE II Name and Business ........................
2.1 Name; Continuation .......................
2.2 Office and Resident Agent ................
2.3 Purpose ..................................
2.4 Term and Dissolution .....................
ARTICLE III Mortgage, Refinancing and Disposition
of Property ............................
ARTICLE IV Partners; Capital ........................
4.1 Capital and Capital Accounts .............
4.2 General Partners .........................
4.3 Investment Limited Partner, Special Limited
Partner, and Original Limited Partner
4.4 Liability of the Limited Partners.........
4.5 Special Rights of the Investment
Limited Partner ........................
4.6 Meetings .................................
ARTICLE V Capital Contributions of the Investment
Limited Partner and the Special Limited
Partner.................................
5.1 Payments .................................
5.2 Return of Capital Contributions ..........
ARTICLE VI Rights, Powers and Duties of General
Partners ...............................
6.1 Authorized Acts ..........................
6.2 Restrictions on Authority ................
6.3 Personal Services ........................
6.4 Business Management and Control; Tax
Matters Partner ........................
6.5 Duties and Obligations ...................
6.6 Representations and Warranties ...........
6.7 Liability on the Permanent Mortgage ......
6.8 Indemnification of the General Partners ..
Page
6.9 Indemnification of the Partnership and the
Limited Partners .......................
6.10 Operating Deficits .......................
6.11 Obligation to Complete the Construction
of the Apartment Complex................
6.12 Certain Payments to the General Partner
and Others .............................
6.13 Delegation of General Partner Authority ..
6.14 Assignment to Partnership ................
ARTICLE VII Withdrawal of a General Partner; New
General Partner ........................
7.1 Withdrawal ...............................
7.2 Obligation to Continue ...................
7.3 Withdrawal of All General Partners .......
7.4 Interest of General Partner After
Permitted Withdrawal ...................
ARTICLE VIII Transferability of Limited Partner
Interests ..............................
8.1 Assignments ..............................
8.2 Substituted Limited Partner ..............
8.3 Restrictions .............................
ARTICLE IX Working Capital; Borrowings ..............
9.1 Working Capital Loan .....................
9.2 Borrowings ...............................
ARTICLE X Profits, Losses, Tax Credits, Distributions
and Capital Accounts ...................
10.1 Profits, Losses and Tax Credits ..........
10.2 Cash Distributions Prior to Dissolution ..
10.3 Distributions Upon Dissolution ...........
10.4 Special Provisions .......................
10.5 Authority of the General Partners to Vary
Allocations to Preserve and Protect the
Partners' Intent .......................
ARTICLE XI Management Agent .........................
Page
ARTICLE XII Books and Records, Accounting, Tax
Elections, Etc. ........................
12.1 Books and Records ........................
12.2 Bank Accounts ............................
12.3 Auditors .................................
12.4 Cost Recovery and Elections ..............
12.5 Special Basis Adjustments ................
12.6 Fiscal Year ..............................
12.7 Information to Partners ..................
12.8 Expenses of the Partnership ..............
ARTICLE XIII General Provisions .......................
13.1 Restrictions by Reason of Section 708 of
the Code ...............................
13.2 Amendments to Certificate ................
13.3 Notices ..................................
13.4 Word Meanings ............................
13.5 Binding Effect ...........................
13.6 Applicable Law ...........................
13.7 Counterparts .............................
13.8 Financing Regulations ....................
13.9 Separability of Provisions ...............
13.10 Paragraph Titles .........................
13.11 Extraordinary Investment Limited Partner
Expenses ...............................
13.12 Time of Admission ........................
Consent and Agreement ...................................
Schedule A ..............................................
OVERTON ASSOCIATES LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Preliminary Statement
Overton Associates Limited Partnership (the "Partnership") was
formed as a Nevada limited partnership pursuant to a Limited Partnership
Agreement dated as of June 1, 1992 (the "Original Agreement") by and
among James L. Gregory and Holly B. Gregory as General Partners and
James L. Gregory and Holly B. Gregory as Limited Partners (the "Original
Limited Partners"). A Certificate of Limited Partnership with respect
to the Original Agreement dated June 15, 1992 was recorded in the Filing
Office on August 18, 1993. An Amendment to Certificate of Limited
Partnership were filed in the Filing Office on July 3, 1995 for the
purpose of changing the name of the Partnership from Overton Associates,
A Nevada Limited Partnership to the herein captioned, Overton Associates
Limited Partnership (said Certificate, together with all amendments
hereinafter collectively referred to as the "Original Certificate").
Certain capitalized terms used herein shall have the respective meanings
specified in Article I.
In consideration of mutual agreements set forth herein, it is
agreed and certified, and the Original Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE I
Defined Terms
The defined terms used in this Agreement shall have the meanings
specified below:
Actual Credit means, with respect to a particular year, the total
amount of Tax Credit properly allocable by the Partnership to the
Investment Limited Partner for such year. The Actual Credit shall be
retroactively revised if the amount of Tax Credit properly allocable to
the Investment Limited Partner is revised after audit or recaptured.
Additional Limited Partner means any holder of an Interest
designated as an Additional Limited Partner pursuant to Section 4.5(b)
or Section 7.4.
Admission Date means the first date on which all parties hereto
shall have executed this Agreement, or, if, pursuant to the
Uniform Act, the Investment Limited Partner shall not be deemed admitted
to the Partnership on such date, then the next date thereafter on which
the Investment Limited Partner shall be deemed to be admitted to the
Partnership under the Uniform Act.
Affiliate means (A) as to the Investment Limited Partner, the
Investment General Partner or Boston Capital, (i) such Person; (ii) each
member of the Immediate Family of such Person; (iii) each legal
representative, successor or assignee of any Person referred to in the
preceding clauses (i) or (ii); (iv) each trustee of a trust for the
benefit of any Person referred to in the preceding clauses (i) or (ii);
or (v) any other Person (a) who directly or indirectly controls, is
controlled by, or is under common control with such Person, (b) who is
an officer of, director of, partner in or trustee of, or serves in a
similar capacity with respect to, such Person or of which such Person is
an officer, director, partner or trustee, or with respect to which such
Person serves in a similar capacity, (c) who, directly or indirectly, is
the beneficial owner of ten percent (10%) or more of any class of equity
securities of such Person or of which such Person is directly or
indirectly the owner of ten percent (10%) or more of any class of equity
securities, (d) who is an officer, director, general partner, trustee or
holder of ten percent (10%) or more of the voting securities or
beneficial interests of any Person referred to in the foregoing clauses
(v)(a), (v)(b) or (v)(c) or (e) who, whatever his title, performs
functions for such Person or any Affiliate of such Person similar to a
Chairman or member of the Board of Directors, or executive officer such
as the President, Executive Vice President or Senior Vice President,
Corporate Secretary, or Treasurer, or any Person holding a five percent
(5%) or more equity interest in such Person, or any Person having the
power to direct or cause the direction of such Person, whether through
the ownership of voting securities, by contract or otherwise; and (B) as
to any other named Person or Persons (i) such Person; (ii) each member
of the Immediate Family of such Person; (iii) each legal representative,
successor or assignee of any Person referred to in the preceding clauses
(i) or (ii); (iv) each trustee of a trust for the benefit of any Person
referred to in the preceding clauses (i) or (ii); or (v) any other
Person (a) who directly or indirectly controls, is controlled by, or is
under common control with such Person, (b) who owns or controls ten
percent (10%) or more of the outstanding voting securities of such
Person, (c) of which ten percent (10%) or more of the outstanding voting
securities is owned by such Person or any of the Persons referred to in
the foregoing clauses (i) through (iii), (d) who is an officer,
director, partner or trustee of such Person, or (e) for which such
Person acts in the capacity of officer, director, partner or trustee.
An Affiliate of the Investment Limited Partner or of the Investment
General Partner does not include a Person who is a partner in a
partnership or joint venture with the Investment Limited Partner or any
other Affiliate of the Investment Limited Partner if such Person is not
otherwise an Affiliate of the Investment Limited Partner or the
Investment General Partner. For purposes of this definition, the term
Affiliate shall not be deemed to include any law firm (or member or
associate thereof) providing legal services to the Investment Limited
Partner, the Investment General Partner or any Affiliate of either of
them.
Aggregate Cost means the sum of (i) the total Capital
Contributions made or anticipated to be made by the Investment Limited
Partner plus (ii) the proportionate amount of the mortgage loans on, and
other debts related to, the Apartment Complex, which proportionate
amount is equal to the Investment Limited Partner's initial pro rata
interest in the profits, losses, and tax credits of the Partnership. The
amount of the Aggregate Cost determined upon payment of the last of the
four Installments of the Capital Contribution of the Investment Limited
Partner shall not thereafter be reduced.
Agreement means this Amended and Restated Agreement of Limited
Partnership, including Schedule A, as amended from time to time.
Annual Partnership Management Fee means the fee payable to the
General Partners pursuant to the provisions of Section 6.12(a).
Apartment Complex means the real property located in Overton,
Clark County, Nevada as more fully described in the Mortgage, together
with (i) all buildings and other improvements constructed or to be
constructed thereon and (ii) all furnishings, equipment and personal
property covered by the Mortgage.
Applicable Federal Rate means the "applicable federal rate" as
defined in Section 1274(d) of the Code.
Applicable Percentage has the meaning given to it in Section 42(b)
of the Code.
Asset Management Fee means the fee payable to BCCLP or an
Affiliate thereof pursuant to Section 6.12(c).
Auditors means Bygee & Child of Bountiful, Utah or such other firm
of independent certified public accountants as may be engaged by the
General Partners with the consent of Boston Capital for the purposes of
preparing the Partnership income tax returns, auditing the books and
records of the Partnership and certifying financial reports of the
Partnership.
BCCLP means Boston Capital Communications Limited Partnership, a
Massachusetts limited partnership, and its successors and assigns.
Boston Capital means Boston Capital Partners, Inc., a Massachu-
setts corporation, its successors and assigns.
Breakeven Confirmation means the date upon which the Investment
Limited Partner receives a copy of the federal income tax return of the
Partnership for the Partnership fiscal year in which the Breakeven Point
shall have occurred.
Breakeven Point means thirty (30) days after the first time at
which, as certified by the General Partners, based upon six (6)
consecutive full calendar months of Partnership operation occurring
after the later to occur of (i) the Admission Date or (ii) Permanent
Mortgage Commencement, during which the rental income (including
government subsidies) of the Partnership actually received on a cash
basis (excluding prepaid rent) for each of such four (4) months shall
have exceeded all the Partnership's expenses for such month on an
accrual basis (including, but not limited to, (a) all operational costs
and expenses, (b) all items payable in connection with any Mortgage, and
(c) the funding of any reserves required by FmHA and/or pursuant to the
terms of this Agreement), except for depreciation, distributions of Cash
Flow and Capital Transaction proceeds to the Partners and the fees
payable pursuant to this Agreement. For purposes of the foregoing,
expenses shall (i) include monthly payments of principal and interest in
the amount specified in the Mortgage regardless of any forbearance
thereof, (ii) include a ratable portion of the annual amount (as
estimated by the General Partners) of those seasonal expenses (such as
utilities and maintenance expense) which might reasonably be expected to
be incurred on an unequal basis during a full annual period of
operation, and (iii) be adjusted, if necessary, so that the expenses of
real estate taxes and insurance are based on the General Partners'
estimate of the full value of the Apartment Complex after completion of
construction.
Capital Account has the meaning specified in Section 4.1(b).
Capital Contribution means the total value of cash or property
contributed and agreed to be contributed to the Partnership by each
Partner, as shown in Schedule A. Any reference in this Agreement to the
Capital Contribution of a then Partner shall include a Capital
Contribution previously made by any prior Partner for the Interest of
such then Partner.
Capital Transaction means any transaction the proceeds of which
are not includable in determining Cash Flow including, without
limitation, the sale or other disposition of all or substantially all of
the assets of the Partnership, but excluding the payment of Capital
Contributions.
Carryover Certification means the date upon which the Investment
Limited Partner shall have received, in a form and in substance
satisfactory to the Investment Limited Partner, the certification of the
Auditors 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 the profits or losses of the Partnership from and
after the Commencement Date subject to any applicable FmHA or Lender
requirements and to the following adjustments:
(a) Cost recovery deductions of buildings, improvements
and personal property and amortization of any financing fees shall
not be deducted;
(b) Mortgage amortization shall be deducted;
(c) Mortgage interest which is included in determining
profits and losses but which is not currently payable in cash
shall be deducted when actually paid;
(d) Payments to reserves under Section 6.5(e) shall be
deducted;
(e) Any amounts paid for capital expenditures shall be
deducted, unless paid from any replacement reserve or funded
through insurance;
(f) The proceeds of any Construction Mortgage or Permanent
Mortgage refinancing, any sale, exchange, eminent domain taking,
damage or destruction (whether insured or uninsured), or other
disposition, of all or any part of the Apartment Complex (other
than the proceeds of any business or rental interruption
insurance) shall not be included;
(g) Any rent or interest subsidy payments shall be
included;
(h) The fees set forth in Sections 6.12, any interest on
the Construction and Development Fee, and any fee payable in
connection with any transaction referred to in clause (f) above
shall not be deducted; and
(i) Prior to the later of Permanent Mortgage Commencement
or the Admission Date, an amount equal to the amount, if any, of
net rental income applied to complete the construction of the
Apartment Complex pursuant to Section 6.11(a) shall be deducted.
Class Contribution means the aggregate Capital Contributions of
all members of a particular class of Partners (i.e., the General
Partners, the Investment Limited Partner, the Special Limited Partner or
any Additional Limited Partner.)
Code means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations (permanent or temporary) issued thereunder.
References herein to any Code section shall include any successor
provisions.
Commencement Date means the first day of the month in which the
Admission Date occurs.
Competitive Real Estate Commission means that real estate or
brokerage commission paid for the purchase or sale of the Apartment
Complex or other Partnership property which is reasonable, customary and
competitive in light of the size, type and location of the Apartment
Complex or other property.
Completion Date means the date upon which the Apartment Complex
has been completed as evidenced by the issuance by the inspecting
architect and by each governmental agency having jurisdiction of
certificates of substantial completion or occupancy (or local
equivalents) with respect to all 24 apartment units in the Apartment
Complex.
Compliance Period means the fifteen (15)-year period commencing
with the first year of the Credit Period.
Consent of the Investment Limited Partner means the prior written
consent or approval of the Investment Limited Partner.
Construction Contract means the contract on AIA Form A101 by and
between the Partnership as "Owner" and the General Contractor as
"Contractor" setting forth the terms for the construction of the
Apartment Complex.
Construction and Development Fee means the fee described in
Section 6.12(b).
Construction Lender means Midland Mortgage Investment Corporation
of Clearwater, Florida, in its capacity as holder of the Construction
Mortgage, or its successors or assigns in such capacity.
Construction Mortgage means the financing for the construction of
the Apartment Complex provided by the Construction Lender in a principal
amount of up to $1,235,000.
Construction Mortgage Closing means the first date upon which the
Construction Mortgage shall have closed and the initial draw thereunder
shall have been disbursed.
Controlling Person has the meaning given to it in the context of
Section 15 of the Securities Act of 1933, as amended.
Cost Certification means the date upon which each Limited Partner
shall have received the written certification of the Auditors, in a form
and in substance satisfactory to Boston Capital, as to the itemized
amounts of the construction and development costs of the Apartment
Complex and the Eligible Basis and Applicable Percentage pertaining to
each building in the Apartment Complex.
Credit Period has the meaning given to it in Section 42(f)(1) of
the Code.
Credit Recovery Loan means a constructive interest-bearing advance
of the Investment Limited Partner as more fully described in Section
5.1(f). Credit Recovery Loans and interest thereon shall not be treated
as loans or interest, respectively, for accounting, tax or liability
purposes or for the purposes of Section 6.2(a)(1). For the purposes of
Article X, the term Credit Recovery Loan shall not include any portion
of such an advance which shall have theretofore been paid to the
Investment Limited Partner.
Credit Shortfall has the meaning given to it in Section 5.1(f).
Disposition (including the forms Dispose and Disposing) means, as
to a Limited Partner, the assignment, sale, transfer, exchange or other
disposition of all or any part of its Interest.
Economic Risk of Loss has the meaning set forth in Treasury
Regulation Section 1.752-2.
89-12 Requirements means the requirements set forth in Internal
Revenue Procedure 89-12 which are prerequisites to the issuance,
assuming that each General Partner is a corporation, by the 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.
Eligible Basis has the meaning given to it in Section 42(d) of the
Code.
Entity means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, cooperative or
association.
Event of Bankruptcy means with respect to any Person,
(i) the entry of a decree or order for relief by a court
having jurisdiction in respect of such Person or in respect of any
Controlling Person of such Person in a case under the federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other
similar law, or the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official)
of such Person or of any Controlling Person of such Person for any
substantial part of such Person's property or of the property of
any Controlling Person of such Person, or the issuance of an order
for the winding-up or liquidation of such Person's affairs and the
continuance of any such decree or order unstayed and in effect for
a period of sixty (60) consecutive days, or
(ii) the commencement by such Person or by any Controlling
Person of such Person of a proceeding seeking any decree, order or
appointment referred to in clause (i), the consent by such Person
to any such decree, order or the appointment, or taking of any
action by such Person in furtherance of any of the foregoing.
Filing Office means the Office of the Secretary of State of the
State.
FmHA means the Farmers Home Administration of the United States
Department of Agriculture.
FmHA Loan Agreement means the Loan Agreement by and between the
Partnership and FmHA, dated as of February 23, 1995 as amended from time
to time.
General Contractor means G & T Construction, Inc. of Elko, Nevada.
General Partners means the Persons designated as the General
Partners in Schedule A and any Persons who become General Partners as
provided herein, in their capacities as general partners of the
Partnership. At any and all times where there is only one General
Partner, the term General Partners shall mean such sole General Partner.
Hazardous Material shall have the collective meanings given to the
terms "hazardous material", "hazardous substances" and "hazardous
wastes" in the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sec. 9601 et seq., as
amended, and to the term "radioactive materials" in the context of the
Atomic Energy Act, 28 U.S.C. Sec. 2344, and also includes any meanings
given to such terms in any similar state or local statutes, ordinances,
regulations or by-laws. In addition, the term Hazardous Material also
includes oil and any other substance known to be hazardous.
HUD means the United States Department of Housing and Urban
Development.
Immediate Family means with respect to any Person, such Person's
spouse, parents, parents-in-law, descendants, nephews, nieces, brothers,
sisters, brothers-in-law, sisters-in-law, children-in-law and
grandchildren-in-law.
Initial 100% Occupancy Date means the first date upon which not
less than one hundred (100%) percent of the 24 apartment units in the
Apartment Complex shall have been leased to and physically occupied by
tenants on such date meeting the terms of the Minimum Set-Aside Test
under executed FmHA-approved leases at rentals meeting the requirements
of the Rent Restriction Test.
Installment means an installment of the Investment Limited
Partner's Capital Contribution paid or payable to the Partnership
pursuant to Section 5.1.
Interest means the entire interest of a Partner in the Partnership
at any particular time, including the right of such Partner to any and
all benefits to which a Partner may be entitled hereunder and the
obligation of such Partner to comply with the terms of this Agreement.
Invested Amount means (i) as to the Investment Limited Partner, an
amount equal to the Capital Contribution of the Investment Limited
Partner divided by .5825 and (ii) as to any other Partner, an amount
equal to its Capital Contribution.
Investment General Partner means Boston Capital Associates IV,
L.P., a Delaware limited partnership, in its capacity as general partner
of the Investment Limited Partner, and any other Person who may become a
successor or additional general partner of the Investment Limited
Partner.
Investment Limited Partner means Boston Capital Tax Credit Fund
IV, L.P., a Delaware limited partnership, specifically Series 24
thereof, and any Person or Persons who replace it as Substituted Limited
Partner, but shall not include any Special Limited Partner or Additional
Limited Partner.
Investment Partnership Agreement means the Agreement of Limited
Partnership of the Investment Limited Partner, as amended from time to
time.
Lender means the Construction Lender or FmHA, each in its capacity
as maker of a Mortgage loan, or its successors and assigns in such
capacity.
Limited Partners means the Investment Limited Partner, the Special
Limited Partner and any Additional Limited Partner.
Management Agent means the management and rental agent for the
Apartment Complex.
Management Agreement means the agreement between the Partnership
and the Management Agent providing for the management of the Apartment
Complex.
Management Fee means the Management Fee to which reference is made
in Article XI.A.
Minimum Set-Aside Test means the set aside test selected by the
Partnership pursuant to Section 42(g) of the Code whereby at least 40%
of the units in the Apartment Complex must be occupied by individuals
with incomes equal to 60% or less of area median income, as adjusted for
family size.
Mortgage means the mortgage indebtedness of the Partnership to the
Construction Lender and/or FmHA; and where the context admits Mortgage
shall mean and include the mortgage note evidencing such indebtedness,
the mortgage or deed of trust and security agreement securing such
indebtedness, the loan agreement and all other documentation related
thereto which evidence and secure such indebtedness, including any FmHA
documentation related thereto.
Original Agreement has the meaning specified in the Preliminary
Statement.
Original Certificate has the meaning specified in the Preliminary
Statement.
Original General Partner has the meaning specified in the
Preliminary Statement.
Original Limited Partner has the meaning specified in the
Preliminary Statement.
Partner means any General Partner or Limited Partner.
Partner Non-Recourse Debt means any Partnership liability (a) that
is considered non-recourse under Treasury Regulation Section 1.1001-2 or
for which the creditor's right to repayment is limited to one or more
assets of the Partnership and (b) for which any Partner or Related
Person bears the economic risk of loss.
Partner Non-Recourse Debt Minimum Gain means the amount of partner
nonrecourse debt minimum gain and the net increase or decrease in
partner nonrecourse debt minimum gain determined in a manner consistent
with Treasury Regulations Sections 1.704-2(d) and 1.704(g)(3).
Partnership means the limited partnership continued pursuant to
this Agreement.
Partnership Minimum Gain means the amount determined by computing,
with respect to each Partnership Non-Recourse Liability, the amount of
gain, if any, that would be realized by the Partnership if it disposed
of (in a taxable transaction) the property subject to such liability in
full satisfaction of such liability, and by then aggregating the amounts
so computed. Such computations shall be made in a manner consistent with
Treasury Regulation Section 1.704-2 (d).
Partnership Non-Recourse Liability means any Partnership liability
(or portion thereof) for which no Partner or Related Person bears the
Economic Risk of Loss.
Permanent Mortgage means the permanent financing provided, or to
be provided, by the FmHA for the Apartment Complex following the
completion thereof in the initial principal amount up to $1,235,000.
Permanent Mortgage Commencement means the first date on which all
of the following shall have occurred: (a) the Completion Date; (b) the
principal amount and maturity date of the Permanent Mortgage shall have
been finally determined; and (c) amortization of the Permanent Mortgage
shall have commenced.
Permanent Mortgage Commitment means the first date on which the
Partnership receives the written commitment of FmHA to make the
Permanent Mortgage.
Person means any individual or Entity.
Project Documents means and includes the Construction Mortgage and
the Permanent Mortgage, the FmHA Loan Agreement, the Rental Assistance
Agreement, the Management Agreement, all other instruments delivered to
(or required by) the Construction Lender and/or FmHA 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 $27,518 for 1996; $44,029 per annum for the
years 1997 through 2005 (inclusive); and $16,511 for 2006; provided,
however, that the Projected Credit for 2006 shall be reduced by the
amount, if any, by which the Actual Credit for 1996 exceeds $27,518 and
provided further that upon the occurrence of any of the events described
in clauses (i), (ii) and (iii) of Section 5.1(g), the Projected Credit
shall thereafter be the Revised Projected Credit.
Prospectus means the prospectus contained in the registration
statement (File No. 33-42999) filed with the Securities and Exchange
Commission on behalf of the Investment Limited Partner for the
registration of beneficial assignee certificates and/or limited
partnership interests under the Securities Act of 1933 in the final form
in which said prospectus is filed with said Commission and as thereafter
amended and/or supplemented from time to time pursuant to Rule 424 under
said Act, or otherwise.
Qualified Basis has the meaning given to it in Section 42(c) of
the Code.
Qualified Income Offset Item means (1) an allocation of loss or
deduction that, as of the end of each year, reasonably is expected to be
made (a) pursuant to Section 704(e)(2) of the Code to a donee of an
interest in the Partnership, (b) pursuant to Section 706(d) of the Code
as the result of a change in any Partner's Interest, or (c) pursuant to
Regulation Section 1.751-1(b)(2)(ii) as the result of a distribution by
the Partnership of unrealized receivables or inventory items and (2) a
distribution that, as of the end of such year, reasonably is expected to
be made to a Partner to the extent it exceeds offsetting increases to
such Partner's Capital Account which reasonably are expected to occur
during or prior to the Partnership taxable year in which such
distribution reasonably is expected to occur.
Related Person means a person related to a Partner within the
meaning of Treasury Regulation Section 1.752-4(b).
Rent Restriction Test means the test pursuant to Section 42 of the
Code whereby the gross rent charged to tenants of the low-income units
in the Apartment Complex may not exceed thirty percent (30%) of the
qualifying income levels.
Rental Assistance Agreement means the Rental Assistance Agreement
by and between the Partnership and FmHA, as it may be amended from time
to time, and any successor agreement.
Revised Projected Credit has the meaning given to it in Section
5.1(g).
Schedule A means Schedule A to this Agreement as amended from time
to time.
Service means the Internal Revenue Service.
Site has the meaning given to it in the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Sec. 9601 et seq., as amended, and shall also include any meaning
given to it in any similar state or local statutes, ordinances,
regulations or by-laws.
Special Limited Partner means BCTC 94, Inc., a Delaware
corporation, and any Person who becomes a Special Limited Partner as
provided herein, in its capacity as a special limited partner of the
Partnership.
State means the State of Nevada.
State Designation means the date upon which the Partnership
receives the allocation by the authorized agency of the State of a Tax
Credit for the building(s) constituting the Apartment Complex in an
annual dollar amount of not less than $44,474, as evidenced by the
execution by or on behalf of such agency of Form(s) 8609. For the
purposes of determining State Designation, each building in the
Apartment Complex shall be treated as having received an allocation of
Tax Credit in an amount equal to the lesser of (i) the amount of Tax
Credit carryover allocation received from the authorized agency of the
State as to such building or (ii) the amount of Tax Credit set forth on
the Form 8609 as to such building.
Subordinated Loan means any loan made by the General Partners to
the Partnership pursuant to Section 6.10.
Substituted Limited Partner means any Person who is admitted to
the Partnership as Limited Partner under Section 8.2 or acquires the
Interest of a Limited Partner pursuant to Section 5.2.
Tax Accountants means Reznick, Fedder & Silverman of Bethesda,
Maryland or such other firms of independent certified
public accountants as may be engaged by Boston Capital to review the
Partnership income tax returns.
Tax Credit means the low-income housing tax credit pursuant
to Section 42 of the Code.
Tax Credit Set-Aside means the date upon which the Partnership
receives a preliminary reservation, effective for the year 1995, the
year the Apartment Complex is expected to receive an allocation of Tax
Credit, by the authorized agency of the State of Tax Credit for the
building(s) constituting the Apartment Complex in an annual dollar
amount of not less than $44,474 which reservation shall not have expired
or been revoked prior to the date on which the First Installment is
paid.
Uniform Act means the Uniform Limited Partnership Act as adopted
by the State.
Vessel has the meaning given to it in the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Sec. 9601 et seq., as amended, and shall also include any meaning
given to it in any similar state or local statutes, ordinances,
regulations or by-laws.
Withdrawal (including the forms Withdraw, Withdrawing and
Withdrawn) means, as to a General Partner, the occurrence of death,
adjudication of insanity or incompetence, Event of Bankruptcy,
dissolution, liquidation, or voluntary or involuntary withdrawal or
retirement from the Partnership for any reason, including whenever a
General Partner may no longer continue as a General Partner by law or
pursuant to any terms of this Agreement. Withdrawal shall also mean the
sale, assignment, transfer or encumbrance by a General Partner of its
interest as a General Partner. A General Partner which is a corporation
or partnership shall be deemed to have sold, assigned, transferred or
encumbered its interest as a General Partner in the event (as a result
of one or more transactions) of any sale, assignment or other transfer
(but specifically excluding any transfer occurring pursuant to the laws
of descent and distribution) of a controlling interest in a corporate
General Partner or of a general partner interest in a General Partner
which is a partnership. For purposes of this definition of Withdrawal,
"controlling interest" shall mean the power to direct the management and
policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
Working Capital Loan means a loan made by the General Partners to
the Partnership as described in Section 9.1
ARTICLE II
Name and Business
2.1 Name; Continuation
The name of the Partnership is Overton Associates Limited
Partnership. The Partners agree to continue the Partnership which was
formed pursuant to the provisions of the Uniform Act.
2.2 Office and Resident Agent
(a) The principal office of the Partnership is 1188 Court Street,
Elko, Nevada 89803 at which office there shall be maintained those
records required by the Uniform Act to be kept by the Partnership. The
Partnership may have such other or additional offices as the General
Partners shall deem desirable. The General Partners may at any time
change the location of the principal office and shall give due notice
thereof to the Limited Partners.
(b) The resident agent in the State for the Partnership for
service of process is as follows:
Kelly J. Steninger
1188 Court Street
Elko, Nevada 89803
2.3 Purpose
The purpose of the Partnership is to acquire, hold, invest in,
construct, develop, improve, maintain, operate, lease and otherwise deal
with the Apartment Complex. The Partnership shall operate the Apartment
Complex in accordance with any applicable FmHA regulations and
requirements. The Partnership shall not engage in any other business or
activity.
2.4 Term and Dissolution
The Partnership shall continue in full force and effect until
December 31, 2048, except that the Partnership shall be dissolved and
its assets liquidated prior to such date upon:
(a) The sale or other disposition of all or substantially all of
the assets of the Partnership;
(b) A General Partner dying, being adjudicated bankrupt, insane
or incompetent, (if a corporation or partnership) being dissolved or
liquidated, or voluntarily or involuntarily withdrawing from the
Partnership for any reason, including an inability to continue serving
as a General Partner by law or pursuant to the terms of this Agreement,
if (i) the remaining General Partner(s), if any, shall fail to continue
the business of the Partnership and reconstitute the Partnership as a
successor limited partnership as provided in Section 7.2 and (ii) the
Investment Limited Partner shall fail to exercise the right provided in
Section 7.3;
(c) The election to dissolve the Partnership made in writing by
the General Partners with the Consent of the Investment Limited Partner
and the approval (if required) of FmHA;
(d) The entry of a final decree of dissolution of the
Partnership by a court of competent jurisdiction; or
(e) Any other event which causes the dissolution of the
Partnership under the Uniform Act if the Partnership is not
reconstituted pursuant to Section 7.2 or Section 7.3.
Upon dissolution of the Partnership, the General Partners (or for
purposes of this paragraph, their trustees, receivers or successors)
shall cause the cancellation of the Certificate, liquidate the
Partnership assets and apply and distribute the proceeds thereof in
accordance with Section 10.3. Notwithstanding the foregoing, if, during
liquidation, the General Partners shall determine that an immediate sale
of part or all of the Partnership's assets would be impermissible,
impractical or cause undue loss to the Partners, the General Partners
may defer liquidation of, and withhold from distribution for a
reasonable time, any assets of the Partnership except those necessary to
satisfy Partnership debts and obligations (except the Working Capital
Loan and Subordinated Loans).
ARTICLE III
Mortgage, Refinancing and Disposition of Property
A. The General Partners and their Affiliates, jointly and
severally, are hereby authorized to incur personal liability for the
repayment of funds advanced by the Construction Lender (and interest
thereon) pursuant to the Construction Mortgage. However, from and after
Permanent Mortgage Commencement, neither any General Partner nor any
Related Person shall at any time bear, nor shall the General Partners
permit any other Partner or any Related Person to bear, the Economic
Risk of Loss for the payment of any portion of any Mortgage. The
General Partners shall cause the Partnership to elect promptly, to the
extent permitted and in the manner prescribed by FmHA, that all debt
service payments made by the Partnership to FmHA shall be applied first
to interest determined at the stated rate set forth in the promissory
note to FmHA, all as provided under FmHA regulations, and then to
principal due under the Permanent Mortgage.
B. The Partnership may decrease, increase or refinance the
Permanent Mortgage and may make any required transfer or conveyance of
Partnership assets for security or mortgage purposes, provided, however,
any such decrease (except through the fifty-year amortization schedule
anticipated at Permanent Mortgage Commencement), increase or refinancing
of the Permanent Mortgage may be made by the General Partners only with
the Consent of the Investment Limited Partner.
C. The Partnership may sell, lease, exchange or otherwise
transfer or convey all or substantially all the assets of the
Partnership only with the Consent of the Investment Limited Partner.
Notwithstanding the foregoing and except as set forth in Section
6.2(a)(6), no Consent of the Investment Limited Partner shall be
required for the leasing of apartments to tenants in the normal course
of operations.
D. The total compensation to all Persons for the sale of the
Apartment Complex shall be limited to a Competitive Real Estate
Commission, not to exceed six percent (6%) of the contract price for the
sale of the Apartment Complex.
ARTICLE IV
Partners; Capital
4.1 Capital and Capital Accounts
(a) The Capital Contribution of each Partner shall be as set
forth on Schedule A. No interest shall be paid on any Capital
Contribution. No Partner shall have the right to withdraw its Capital
Contribution or to demand and receive property of the Partnership in
return for its Capital Contribution, except as may be specifically
provided in this Agreement or required by law.
(b) An individual Capital Account shall be established and
maintained on behalf of each Partner, including any additional or
substituted Partner who shall hereafter receive an interest in the
Partnership. In accordance with Treasury Regulation Section 1.704-1(b),
the Capital Account of each Partner shall consist of (i) the amount of
cash such Partner has contributed to the Partnership plus (ii) the fair
market value of any property such Partner has contributed to the
Partnership net of any liabilities assumed by the Partnership or to
which such property is subject plus (iii) the amount of profits or
income (including tax-exempt income) allocated to such Partner less (iv)
the amount of losses and deductions allocated to such Partner less (v)
the amount of all cash distributed to such Partner less (vi) the fair
market value of any property distributed to such Partner net of any
liabilities assumed by such Partner or to which such property is subject
less (vii) such Partner's share of any other expenditures which are not
deductible by the Partnership for Federal income tax purposes or which
are not allowable as additions to the basis of Partnership property and
shall be (viii) subject to such other adjustments as may be required
under the Code. The Capital Account of a Partner shall not be affected
by any adjustments to basis made pursuant to Section 743 of the Code but
shall be adjusted with respect to adjustments to basis made pursuant to
Section 734 of the Code.
The original Capital Account established for any Substituted
Partner (as hereinafter defined) shall be in the same amount as, and
shall replace, the Capital Account of the Partner which such Substituted
Partner succeeds, and, for the purposes of this
Agreement, such Substituted Partner shall be deemed to have made the
Capital Contribution, to the extent actually paid in, of the Partner
which such Substituted Partner succeeds. The term "Substituted Partner"
as used in this paragraph, shall mean a Person who shall become entitled
to receive a share of the allocations and distributions of the
Partnership by reason of such Person succeeding to all or any part of
the Interest of a Partner by assignment of all or any part of a
Partner's Interest. To the extent a Substituted Partner receives less
than 100% of the Interest of a Partner he succeeds, the original Capital
Account of such transferee Substituted Partner and his Capital
Contribution shall be in proportion to the portion of the transferor
Partner's Interest prior to the transfer which the transferee receives,
and the Capital Account of the transferor Partner who retains a portion
of his former Interest and his Capital Contribution shall continue, and
not be replaced, in proportion to the portion of the transferor
Partner's Interest prior to the transfer which the transferor Partner
retains. Nothing in this Section 4.1(b) shall affect the limitations on
transfer-ability of Interests set forth in Article VII or Article VIII.
4.2 General Partner
The name, address and Capital Contribution of each General Partner
are as set forth on Schedule A.
4.3 Investment Limited Partner, Special Limited Partner and
Original Limited Partner
The Original Limited Partners hereby withdraw as limited partners
of the Partnership and acknowledges that it no longer has any Interest
in, or rights or claims against, the Partnership as a Limited Partner as
of the Admission Date. The Investment Limited Partner and the Special
Limited Partner are hereby admitted to the Partnership as the sole
Limited Partners in substitution for the Original Limited Partner as of
the Admission Date and agree to be bound by the terms and provisions of
the Project Documents and this Agreement. The names and addresses of the
Investment Limited Partner and the Special Limited Partner are as set
forth on Schedule A. The General Partners shall have no authority to
admit additional Limited Partners without the Consent of the Investment
Limited Partner.
4.4 Liability of the Limited Partners
None of the Investment Limited Partner, the Special Limited
Partner and any Person who becomes an Additional Limited Partner shall
be liable for any debts, liabilities, contracts or obligations of the
Partnership and shall only be liable to pay their respective Capital
Contributions as and when the same are due hereunder and under the
Uniform Act.
4.5 Special Rights of the Investment Limited Partner
(a) Notwithstanding any other provision herein, to the extent
the law of the State is not inconsistent, each of the Investment Limited
Partner and the Special Limited Partner shall have the right, subject to
the prior written consent of FmHA (if such consent is required) to:
(i) amend this Agreement in any particular;
(ii) dissolve the Partnership;
(iii) remove any General Partner and elect a new General
Partner (A) on the basis of the performance and discharge of such
General Partner's obligations constituting fraud, bad faith,
negligence, misconduct or breach of fiduciary duty, or (B) upon
the occurrence of any of the following: (1) such General Partner
shall have violated any provisions of any Project Document or
other document required in connection with any Mortgage, or any
provisions of the FmHA regulations applicable to the Apartment
Complex; (2) such General Partner shall have violated any
provision of this Agreement, including, but not limited to, any
obligation to fund any Partnership expense under Section 6.10, or
such General Partner shall have violated any provision of
applicable law; (3) any Mortgage shall have gone into default; or
(4) such General Partner shall have conducted its own affairs or
the affairs of the Partnership in such a manner as would (a) cause
the termination of the Partnership for Federal income tax
purposes; or (b) cause the Partnership to be treated for Federal
income tax purposes as an association taxable as a corporation;
(iv) continue the business of the Partnership with a
substitute General Partner; and
(v) approve or disapprove the sale of all or substantially
all of the assets of the Partnership.
(b) Upon the removal of a General Partner, (i) without any
further action by any Partner, the Special Limited Partner or its
designee shall automatically become a General Partner and acquire in
consideration of a cash payment of $100 such portion of the Interest of
the removed General Partner as counsel to the Investment Limited Partner
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 Uniform 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 the Special Limited Partner as the Special
Limited Partner shall continue unaffected by the new status of the
Special Limited Partner or its designee as a General Partner, and (iv)
the new General Partners shall automatically and irrevocably be
delegated all of the powers and duties of the General Partners pursuant
to Section 6.13.
(c) In order to implement Section 4.5(a)(v), the General
Partners are hereby required, within five (5) days after their receipt
of any offer to purchase the Apartment Complex or all of the Interests
in the Partnership, to send a copy of such offer (or a written
description of any such oral offer) to each of the Limited Partners.
If, within thirty (30) days of its receipt of any such copy of such an
offer, the Special Limited Partner shall send notice to the General
Partners that the Special Limited Partner desires that the Partnership
accept such offer, then the General Partners shall be required to accept
such offer on behalf of the Partnership and proceed with all deliberate
speed to close such transaction unless otherwise instructed by the
Special Limited Partner at any point prior to the closing of such
transaction. To the extent, if any, that the Special Limited Partner
shall determine, in its discretion, that the General Partners are not
proceeding appropriately with respect to any such offer or closing, each
Partner hereby grants to the Special Limited Partner an irrevocable (to
the extent permitted by law) power of attorney coupled with an interest
to execute and deliver any and all documents and instruments on behalf
of the Partnership and any Partner as the Special Limited Partner may
deem to be necessary or appropriate in order to effect the acceptance of
and/or closing pursuant to any such offer in such a manner as the
Special Limited Partner shall, in its discretion, determine to be
appropriate.
4.6 Meetings
The General Partner or Limited Partners holding more than ten
percent (10%) of the then outstanding Limited Partner Interests may call
meetings of the Partnership for any matters for which the Limited
Partners may vote as set forth in this Agreement. A list of the names
and addresses of all Limited Partners shall be maintained as part of the
books and records of the Partnership and shall be made available upon
request to any Limited Partner or his representative at his cost. Upon
receipt of a written request either in person or by certified mail
stating the purpose(s) of the meeting, the General Partners shall
provide all Limited Partners within ten (10) days after receipt of said
request, written notice (either in person or by certified mail) of a
meeting and the purpose of such meeting to be held on a date not less
then fifteen (15) nor more than sixty (60) days after receipt of said
request, at a time convenient to the Limited Partners. All meetings
shall be held at the principal office of the Partnership.
ARTICLE V
Capital Contributions of the Investment Limited Partner
and the Special Limited Partner
5.1 Payments
(a) The Special Limited Partner's Capital Contribution of $10
shall be paid in full in cash on the Admission Date. The Investment
Limited Partner's Capital Contribution shall be paid in cash
installments (the "Installments"), as follows:
(1) $174,282 (the "First Installment") on the latest of(i)
the Admission Date, (ii) Tax Credit Set-Aside, (iii) Construction
Mortgage Closing, or (iv) Permanent Mortgage Commitment;
(2) $ 61,641 (the "Second Installment") on the latest of
(i) the Completion Date, (ii) Cost Certification, (iii) State
Designation, (iv) receipt of an updated title insurance policy
satisfactory to the Investment Limited Partner, (v) compliance
with Due Diligence Recommendations satisfactory to the Investment
Limited Partner, (vi) receipt of payoff letter from General
Contractor stating that all amounts payable to it have been paid
in full and that the Partnership has complied with the terms of
the Construction Contract, or (vii) receipt by the Investment
Limited Partner of an estoppel letter from each Lender
satisfactory to it;
(3) $ 25,821 (the "Third Installment") on the later of (i)
the Initial 100% Occupancy Date, (ii) Permanent Mortgage
Commencement, or (iii) Breakeven Point;
(4) $ 25,820 (the "Fourth Installment") upon receipt by
the Investment Limited Partner of Form 8609; and
(4) $ 10,000 (the "Fifth Installment") upon Breakeven
Confirmation and receipt of an audited financial statement for the
year in which the Breakeven Point occurs;
provided, however, that the General Partners shall give the Investment
Limited Partner not less than twenty-one (21) days' written notice prior
to the due date of each Installment subsequent to the First Installment.
(b) The obligation of the Investment Limited Partner to pay each
Installment is conditioned upon delivery by the General Partners to the
Investment Limited Partner of a written certificate (the "Payment
Certificate") stating that as of the date of such certificate (i) all
the conditions to the payment of such Installment have been satisfied
and (ii) all representations and warranties of the General Partners
contained in this Agreement are true and correct. Except as provided in
the final sentence of this Section 5.1(b), acceptance by the Partnership
of any Installment shall constitute a confirmation that, as of the date
of payment, all such conditions are satisfied and all such
representations and warranties are true and correct. The obligation of
the Investment Limited Partner to pay the First Installment is also
conditioned upon delivery by the General Partners to the Investment
Limited Partner of both (i) a legal opinion of independent counsel to
the Partnership, which opinion must be satisfactory to the Investment
Limited Partner as to form, content and identity of counsel and (ii) an
owner's title insurance policy issued to the Partnership in an amount
not less than $1,597,564, endorsed through the Admission Date, and
satisfactory to the Investment Limited Partner, in its sole discretion,
as to form, content, and identity of title insurance company. In no
event shall any Installment become due until all of the conditions for
all of the Installments listed prior to the Installment in question in
Section 5.1(a) shall have been satisfied and all of such prior
Installments shall have become due. Notwithstanding the foregoing,
however, if at any time prior to the date when an Installment becomes
due and payable, the Partnership has an "Operating Deficit" (expenses in
excess of revenues which the General Partners would be required to fund
pursuant to Section 6.10), then the Investment Limited Partner may, at
its option, waive the requirement of the delivery of the Payment
Certificate or any other condition with respect to part or all of such
Installment and pay such part or all of such Installment, provided that
the proceeds of the amount so paid are used by the Partnership to fully
fund such Operating Deficit; provided, however, that if the proceeds of
such amount so paid are designated in Section 6.12 to be used to pay
fee(s), then such proceeds shall be utilized to pay such fee(s) and the
recipient(s) thereof shall be required to, and hereby agree to, utilize
the proceeds of such fee(s) to fund such Operating Deficit, in which
case the Investment Limited Partner is hereby authorized to directly
fund such Operating Deficit with the funds so applied being deemed to
have been paid as aforesaid.
(c) The Payment Certificate for each Installment shall be dated
and delivered not less than ten (10) nor more than thirty (30) days
prior to the due date for such Installment.
(d) If, as of the date when an Installment would otherwise be
due, any statement required to be made in the Payment Certificate for
such Installment cannot be truthfully made, the General Partners shall
notify the Investment Limited Partner of the reason why such statement
would be untrue if made, and the Investment Limited Partner shall not be
required to pay such Installment; provided, however, that if (i) any
such statement can subsequently be truthfully made and (ii) the
Investment Limited Partner shall not have irrevocably lost, in the good
faith judgment of the Investment General Partner, any material tax or
other benefits hereunder, then the Investment Limited Partner shall pay
such Installment to the Partnership thirty (30) days after delivery by
the General Partners to the Investment Limited Partner of the Payment
Certificate together with an explanation of the manner in which each
such statement had become true.
(e) If with respect to any year all or a portion of which occurs
during the 60-month period commencing on the later of (i) the Admission
Date or (ii) the date on which the first building in the Apartment
Complex is placed in service for the purposes of Section 42 of the Code
(a "Reduction Year") the Actual Credit is or was less than the Projected
Credit, then the General Partners shall pay to the Investment Limited
Partner the Reduction Amount. The Reduction Amount shall be equal to the
sum of (A) the excess of the Projected Credit for such year over the
Actual Credit for such year multiplied by .986 plus (B) the amount of
any recapture, interest or penalty payable by the limited partners
and/or the holders of beneficial assignee certificates of the Investment
Limited Partner as a result of such shortfall, assuming that each
limited partner and/or each holder of a beneficial assignee certificate
in the Investment Limited Partner used all of the Tax Credits allocated
to him in the year of allocation and that such Person was subject to
interest at the rate set forth in Section 6621(a)(2) of the Code and to
the penalty for understatement of tax set forth in Section 6662(d) of
the Code. The Auditors shall make their determination of the amount of
the Actual Credit with respect to each Reduction Year within thirty (30)
days following the end of such year. The Investment Limited Partner
shall be eligible to be paid a Reduction Amount as hereinabove described
with respect to each Reduction Year. Any Reduction Amount shall, at the
option of the Investment Limited Partner, either (i) first be applied to
the Installment next due to be paid by the Investment Limited Partner,
with any portion of such Reduction Amount in excess of the amount of
such Installment then being applied to succeeding Installments,
provided, that if no further Installments remain to be paid or if the
Reduction Amount shall exceed the sum of the amounts of the remaining
Installments, then the entire Reduction Amount or the balance of the
Reduction Amount, as the case may be, shall be paid by the General
Partners to the Investment Limited Partner promptly after demand is made
therefor, as a payment of damages for breach of warranty, regardless of
the reason for the occurrence of such event or (ii) be paid in its
entirety by the General Partners to the Investment Limited Partner
promptly after demand is made therefor, as a payment of damages for
breach of warranty, regardless of the reason for the occurrence of such
event.
(f) In the event that, for any reason, at any time after the end
of the year during which there occurs the sixty (60)-month anniversary
of the later of (i) the Admission Date or (ii) the date on which the
first building in the Apartment Complex is placed in service for the
purposes of Section 42 of the Code, the amount of the Actual Credit
shall be less than the Projected Credit with respect to any fiscal year
of the Partnership (such difference being hereinafter referred to as a
"Credit Shortfall"), the Investment Limited Partner shall be treated as
having made a constructive advance to the Partnership 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 (i) the
Credit Shortfall for such year plus (ii) the amount of any recapture,
interest or penalty payable by the limited partners and/or the holders
of beneficial assignee certificates of the Investment Limited Partner as
a result of the Credit Shortfall for such year, assuming that each
limited partner and/or holder of a beneficial assignee certificate in
the Investment Limited Partner used all of the Tax Credits allocated to
him in the year of allocation and that each such Person was subject to
interest at the rate set forth in Section 6621(a)(s) of the Code and to
the penalty for understatement of tax set forth in Section 6662(d) of
the Code. Credit Recovery Loans shall be deemed to bear simple (not
compounded) interest from the respective dates on which such principal
advances shall have been deemed to have been made under this Section
5.1(f) at 9% per annum. Credit Recovery Loans shall be payable by the
Partnership as provided in Section 10.2(b), Clause Fourth.
(g) If, as of the Completion Date and based upon the Cost
Certification, it is determined that the Apartment Complex will not be
eligible to receive Tax Credits in an annual amount of at least $44,474;
or it is, at any time, determined by the Auditors, the Tax Accountants
or the Service that, for any other reason, the Apartment Complex will
not be eligible to receive Tax Credit in an annual dollar amount of at
least $44,474, then (a) the General Partners shall pay to the Investment
Limited Partner an amount equal to 99% of the product of: (A) difference
between (i) $44,474 and (ii) the annual amount of Tax Credit allocated
and available to the Partnership and (B) 9.86 and (b) the Projected
Credit for each year shall thereafter be redefined to mean 99% of the
total amount of Tax Credit actually so allocated and available to the
Partnership for such year (the "Revised Projected Credit"). Any amount
payable by the General Partners to the Investment Limited Partner
pursuant to this Section 5.1(g) shall, at the option of the Investment
Limited Partner, either (i) be applied to any amounts, if any, remaining
to be paid by the Investment Limited Partner pursuant to Section 5.1(a),
or (ii) be paid in its entirety by the General Partners to the
Investment Limited Partner promptly after demand is made therefor, as a
payment of damages for breach of warranty, regardless of the reason for
the occurrence of such event.
5.2 Return of Capital Contributions
(a) Failure to Achieve Development and/or Tax Credit Benchmarks
and Standards. If (i) all 24 apartment units in the Apartment Complex
shall not have been placed in service by October 1, 1996 (or any later
date fixed by the General Partners with the Consent of the Investment
Limited Partner) or (ii) Permanent Mortgage Commencement shall not have
occurred prior to October 1, 1996 (or any later date fixed by the
General Partners with the Consent of the Investment Limited Partner), or
(iii) State Designation shall not have occurred by December 1, 1996 (or
any later date fixed by the General Partner with the Consent of the
Investment Limited Partner), or (iv) the Partnership shall fail to meet
the Minimum Set-Aside Test or the Rent Restriction Test within 12 months
of the date upon which the final building in the Apartment Complex is
placed in service and/or fails to continue to meet either of those Tests
at any time during the sixty (60)-month period commencing on such date
or (v) prior to Permanent Mortgage Commencement, (a) foreclosure
proceedings shall have commenced under the Construction Mortgage and
such proceedings shall not have been dismissed within thirty (30) days,
(b) any of the commitments of FmHA to provide the Permanent Mortgage
and/or any subsidy financing shall be terminated or withdrawn and not
reinstated or replaced within sixty (60) days with terms equally or more
favorable to the Investment Limited Partner or terms for which the
Consent of the Investment Limited Partner and (if required) the approval
of FmHA shall have been obtained, or (c) the Construction Lender shall
have irrevocably refused to make any further advances under the
Construction Mortgage and such decision shall not have been reversed or
the Construction Lender replaced within thirty (30) days, or (vi) if by
December 31, 1995 (or any later date fixed by the General Partners with
the Consent of the Investment Limited Partner), the Investment Limited
Partner shall not have received, in form and substance satisfactory to
the Investment Limited Partner, the certification of the Auditors that
as of a date no later than December 31, 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 is a "qualified building" for the purposes of
Section 42 (h)(1)(E)(ii) of the Code, or (vii) if at any time it shall
be determined by the Service or by the Tax Accountants that as of
December 31, 1995 the Partnership had not 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, or (viii) if by January 15, 1996, the Partnership
shall not have received from the Nevada Department of Business and
Industry a "carryover allocation" of Tax Credit pursuant to Section
42(h)(1)(E) of the Code, or (ix) if the Completion Date shall not have
occurred by October 1, 1996, or (x) if by November 1, 1996 (or any later
date fixed by the General Partners with the Consent of the Investment
Limited Partner) Cost Certification shall not have occurred, or (xi) the
Breakeven Point shall not have occurred within twelve (12) months of the
Completion Date, or (xii) the General Partner shall, at any time, fail
to make any Subordinated Loan required to be made by it hereunder,or
fail to make any payment required to be made by it under any of Section
5.1(e), (f), or (g), then the General Partners shall, within five (5)
days of the occurrence thereof, send to the Investment Limited Partner
and the Special Limited Partner notice of such event and of the General
Partners' obligation to repurchase the Interests of the Investment
Limited Partner and the Special Limited Partner by paying to the
Investment Limited Partner and the Special Limited Partner an amount
(the "Repurchase Amount") equal to each such Partner's Invested Amount
minus the amount, if any, of such Partner's Capital Contribution which
shall not yet have been paid (or deemed to have been paid) to the
Partnership plus the amount of any third party costs, including, but not
limited to, attorney's fees incurred by or on behalf of such Partner in
implementing this Section 5.2(a) in the event the Investment Limited
Partner and/or the Special Limited Partner requires such a repurchase.
If either the Special Limited Partner or the Investment Limited Partner
elects to require a repurchase of its Interest and the payment to it of
an amount equal to its Repurchase Amount, it shall send notice thereof
to the Partnership within thirty (30) days after the mailing date of the
General Partners' notice, or at any time after the occurrence of any of
the foregoing if the General Partners shall not have sent such a notice
thereof, and the General Partners shall within ten (10) days after the
Partnership receives any such notice from a Partner requiring the
purchase of its Interest repurchase the Interest of such Partner and the
Special Limited Partner by paying to each such Partner an amount equal
to its Repurchase Amount.
(b) Lender Disapproval. If the Construction Lender and/or FmHA
shall disapprove, or fail to give any required approval of, the
Investment Limited Partner and/or the Special Limited Partner as a
Limited Partner hereunder within one hundred eighty (180) days of the
Admission Date, then the Partner being disapproved or not approved
shall, effective as of such time or such later time as may be selected
by the being disapproved or not approved (or such other time as may be
specified by the Construction Lender and/or FmHA in its disapproval), at
the option of the Partner being disapproved or not approved (if not
directed by the Construction Lender and/or FmHA not to withdraw), cease
to be a Limited Partner. The General Partners shall, within ten (10)
days of the effective date of such cessation, pay to the Partner being
disapproved or not approved an amount equal to its Invested Amount minus
the amount, if any, of such Partner's Capital Contribution which shall
not yet have been paid (or deemed to have been paid) to the Partnership
plus the amount of any third party costs, including, but not limited to
attorney's fees, incurred by or on behalf of such Partner in
implementing this Section 5.2(b).
(c) Substitution and Indemnification. Upon receipt by the
Investment Limited Partner and/or the Special Limited Partner of the
amount due to it pursuant to either Section 5.2(a) or Section 5.2(b),
the Interest of such Partner shall terminate, and the General Partners
shall indemnify and hold harmless such Partner from any losses, damages,
and liabilities to which such Partner (as a result of its participation
hereunder) may be subject.
(d) Waiver of Repurchase Right. The Investment Limited Partner
shall have the right to irrevocably waive its right to have its Interest
repurchased pursuant to any clause or clauses of Section 5.2(a), or any
portion thereof, at any time during which any of such rights shall be in
effect. Such a waiver shall be exercised by delivery to the General
Partners of a written notice stating that the rights being waived
pursuant to any specified clause or clauses of Section 5.2(a), or any
specified portion thereof, are thereby waived from that date forward.
(e) Additional General Partner. If the General Partners shall
fail to make on the due date therefor any payment required under Section
5.2(a) or Section 5.2(b), time being of the essence, at any time
thereafter the Special Limited Partner shall have the option,
exercisable in its sole discretion, to cause itself or its designee to
be admitted as an additional General Partner, receiving from the pre-
existing General Partners, proportionally out of their Interests, in
consideration of $10, a one percent (1%) interest in the profits,
losses, tax credits and distributions of the Partnership, with the
Special Limited Partner retaining its status as such and its economic
interest in the Partnership as the Special Limited Partner not being
affected thereby. Upon any such admission of the Special Limited
Partner or its designee as an additional General Partner, each of the
General Partners hereby agrees that all of its rights and powers
hereunder as a General Partner shall automatically be irrevocably
delegated to the Special Limited Partner pursuant to Section 6.13
without the necessity of any further action by any Partner. Each
Partner hereby grants to the Special Limited Partner an irrevocable (to
the extent permitted by applicable law) power of attorney coupled with
an interest to take any action and to execute, deliver and file or
record any and all documents and instruments on behalf of such Partner
and the Partnership as the Special Limited partner may deem necessary or
appropriate in order to effectuate the provisions of this Section 5.2(e)
and to allow the additional General Partner to manage the business of
the Partnership. The admission of the Special Limited Partner or its
designee as an additional General Partner shall not relieve any other
General Partner of any of its economic obligations hereunder, and each
other General Partner shall fully indemnify and hold harmless the
additional General Partner against any and all losses, judgments,
liabilities, expenses and amounts paid in settlement of any claims
sustained in connection with its capacity as a General Partner.
ARTICLE VI
Rights, Powers and Duties of General Partners
6.1 Authorized Acts
Subject to Section 6.2, Section 6.3, and all other provisions of
this Agreement, the General Partners for, in the name and on behalf of
the Partnership, are hereby authorized to do the following in
furtherance of the purposes of the Partnership:
(1) To acquire by purchase, lease, exchange or otherwise any
real or personal property;
(2) To construct, operate, maintain, finance and improve,
and to own, sell, convey, assign, mortgage or lease any real
estate and any personal property;
(3) To borrow money and issue evidences of indebtedness and
to secure the same by mortgage, pledge or other lien on the
Apartment Complex or any other assets of the Partnership;
(4) To execute the Construction and Permanent Mortgages, the
other Project Documents and all such other documents as the
General Partners deem necessary or appropriate in connection with
the acquisition, development and financing of the Apartment
Complex;
(5) To prepay in whole or in part, refinance or modify the
Construction and Permanent Mortgages or any other financing
affecting the Apartment Complex;
(6) To employ the Management Agent (which may be an
Affiliate of the General Partners) and to pay reasonable
compensation for its services;
(7) To employ their respective Affiliates to perform
services for, or sell goods to, the partnership;
(8) To execute contracts with FmHA, the State or any
subdivision or agency thereof or any other government agency to
make apartments or tenants in the Apartment Complex eligible for
any public-subsidy program;
(9) To execute leases of some or all of the apartment units
of the Apartment Complex to a public housing authority and/or to a
non-profit corporation, cooperative or other non-profit Entity;
and
(10) To enter into any kind of activity and to perform and
carry out contracts of any kind which may be lawfully carried on
or performed by a partnership and to file all certificates and
documents which may be required under the laws of the State.
6.2 Restrictions on Authority
(a) Notwithstanding any other Section of this Agreement, the
General Partners shall have no authority to perform any act in violation
of applicable law, FmHA or other government regulations, requirements of
any Lender, or the Project Documents. In the event of any conflict
between the terms of this Agreement and any applicable FmHA or other
government regulations or requirements of any Lender, the terms of such
regulations or requirements shall govern. Neither shall the General
Partners have any authority to do any of the following acts without the
Consent of the Investment Limited Partner and the prior written consent
of the Special Limited Partner:
(1) To 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 the Working
Capital Loan;
(2) To borrow from the Partnership or commingle Partnership
funds with funds of any other Person;
(3) Following the Completion Date, to construct any new or
replacement capital improvements on the Apartment Complex which
substantially alter the Apartment Complex or its use or which are
at a cost in excess of $10,000 in a single Partnership fiscal
year, except (a) replacements and remodeling in the ordinary
course of business or under emergency conditions or (b)
construction paid for from insurance proceeds;
(4) To acquire any real property in addition to the
Apartment Complex;
(5) Following Permanent Mortgage Commencement, to increase,
decrease (except through the fifty-year amortization provided for
in the Permanent Mortgage Commencement), modify the terms of or
refinance the Permanent Mortgage;
(6) To rent apartments in the Apartment Complex such that
the Apartment Complex would not meet the requirements of the
Minimum Set-Aside Test or the Rent Restriction Test;
(7) To sell, exchange or otherwise convey or transfer
the Apartment Complex or substantially all the assets of the
Partnership;
(8) To terminate any agreement with FmHA;
(9) To cause the Partnership to commence a proceeding
seeking any decree, relief, order or appointment in respect to the
Partnership under the federal bankruptcy laws, as now or hereafter
constituted, or under any other federal or state bankruptcy,
insolvency or similar law, or the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) for the Partnership or for any substantial part of the
Partnership's business or property, or to cause the Partnership to
consent to any such decree, relief, order or appointment initiated
by any Person other than the Partnership;
(10) To amend the Construction Contract, except for change
orders approved by the Lender;
(11) To pledge or assign any of the Capital Contribution of
the Investment Limited Partner or the proceeds thereof; or
(12) To do any act required to be approved or ratified by
all limited partners under the Uniform Act.
(b) In the event that any General Partner violates any provision
of Section 6.2(a), the Special Limited Partner, in its sole discretion,
may cause itself or its designee to be admitted as an additional General
Partner without any further action by any other Partner. Upon any such
admission of an additional General Partner, each pre-existing General
Partner shall be deemed to have assigned proportionally to the
additional General Partner, automatically and without further action,
such portion of its General Partner interest so that the additional
General Partner shall receive not less than one percent (1%) interest in
the profits, losses, tax credits and distributions of the Partnership in
consideration of $1.00 and any other consideration which may be agreed
upon. An additional General Partner so admitted shall automatically
become the Managing General Partner and be irrevocably delegated all of
the power and authority of all of the General Partners pursuant to
Section 6.13. Any such additional General Partner shall have the right
to withdraw as a General Partner at any time, leaving the pre-existing
General Partners once again as the only General Partners, the provisions
of Article VII notwith-standing. Each Partner hereby grants to the
Special Limited Partner a special power of attorney, irrevocable to the
extent permitted by law and coupled with an interest, to amend the
Certificate and this Agreement and to do anything else which, in the
view of the Special Limited Partner, may be necessary or appropriate to
accomplish the purposes of this Section 6.2(b) or to enable any
additional General Partner admitted pursuant to this Section 6.2(b) to
manage the business of the Partnership. The admission of an additional
General Partner shall not relieve any other General Partner of any of
its economic obligations hereunder, and each other General Partner shall
fully indemnify and hold harmless the additional General Partner from
and against any and all losses, judgments, liabilities, expenses and
amounts paid in settlement of any claims sustained in connection with
its capacity as a General Partner.
(c) Neither the Investment General Partner nor any Affiliate
thereof shall be given an exclusive right to sell, or exclusive
employment to sell, the Apartment Complex.
6.3 Personal Services
No General Partner or Affiliate thereof shall receive any salary
or other direct or indirect compensation for any services or goods
provided in connection with the Partnership or the Apartment Complex,
except as may be specifically provided in Section 6.12 and Article XI or
as to which the prior written consent of the Special Limited Partner
shall have been obtained to the precise terms thereof prior to the
commencement of such services or the provision of such goods. Any
Partner may engage independently or with others in other business
ventures of every nature and description including the ownership,
operation, management, syndication and development of competing real
estate; neither the Partnership nor any other Partner shall have any
rights in and to such independent ventures or the income or profits
derived therefrom.
6.4 Business Management and Control; Tax Matters Partner
Subject to the provisions of this Agreement, the General Partners
shall have the exclusive right to control the business of the
Partnership. The Investment Limited Partner shall have no right to take
part in the management or control of the business of the Partnership or
to transact any business in the name of the Partnership. No provision
of this Agreement which makes the Consent of the Investment Limited
Partner a condition for the effectiveness of an action taken by the
General Partners is intended, and no such provision shall be construed,
to give the Investment Limited Partner any participation in the control
of the Partnership business. Each of the Special Limited Partner and
the Investment Limited Partner hereby consents to the exercise by the
General Partners of the powers conferred on them by law and this
Agreement, and the General Partners agree to exercise control of the
business of the Partnership only in accordance with the provisions of
this Agreement. Notwithstanding the foregoing, in no event may the
provisions of this Section 6.4 be invoked by any General Partner or by
any other Person as an impediment to the ability of either the
Investment Limited Partner or the Special Limited Partner to take any
action hereunder. All Partners hereby agree that James Gregory shall
serve as the "Tax Matters Partner." In the case of litigation, the Tax
Matters Partner is required to file suit in the United States Tax Court
unless the Consent of the Investment Limited Partner is obtained to file
suit in the United States Claims Court or the United States District
Court. Nothing herein shall be construed to restrict the Partnership
from engaging the Auditors to assist the Tax Matters Partner in
discharging its duties hereunder.
6.5 Duties and Obligations
(a) The General Partners shall manage the affairs of the
Partnership to the best of their ability, shall use their best efforts
to carry out the purpose of the Partnership, and shall devote to the
Partnership such time as may be necessary for the proper performance of
their duties and the business of the Partnership. The General Partners
shall promptly take all action which may be necessary or appropriate for
the proper development, maintenance and operation of the Apartment
Complex in accordance with the provisions of this Agreement, the Project
Documents and applicable laws and regulations including, without
limitation, funding the Construction and Development Fee to the extent
Capital Contributions are insufficient. The General Partners are
responsible for the management and operation of the Partnership,
including the oversight of the rent-up and operational stages of the
Apartment Complex.
(b) The General Partners shall use their best efforts to cause the
Partnership to generate Cash Flow for distribution to the Partners at
the maximum realizable level in view of (i) any applicable FmHA and
other regulations, (ii) the Minimum Set-Aside Test and (iii) the Rent
Restriction Test, and, if necessary, the General Partners shall also use
their best efforts to obtain
approvals and implementation of appropriate adjustments in the rental
schedule of the Apartment Complex.
(c) The General Partners shall cause the Partnership to obtain and
keep in force, during the term of the Partnership, comprehensive
casualty insurance, including, but not limited to, fire and other risks
generally included under "extended coverage" policies, workmen's
compensation and public liability insurance in favor of the Partnership
(i) with such companies and in such amounts as shall be satisfactory to
FmHA, or, if the Apartment Complex is no longer subject to FmHA
regulation or requirements, as shall be customary for apartment
complexes similar to the Apartment Complex and (ii) in amounts which
shall be (A) no less than those amounts which are customary in the area
for apartment complexes similar to the Apartment Complex, (B) no less
than such amounts as may be reasonably requested by the Investment
Limited Partner and/or the Special Limited Partner from time to time,
and (C) in any event, sufficient to prevent the Partnership from
becoming a co-insurer under any such policies. No deductibles on such
policies may exceed $1,000. The public liability insurance in favor of
the Partnership shall be in an amount not less than $2,000,000. Through
the Completion Date, or such later date as may be required by the
Construction Lender or FmHA, the General Partners shall also cause the
Partnership to obtain and keep in force a builder's risk policy in favor
of the Partnership in an amount not less than the greater of (i) the
full replacement value of the Apartment Complex (excluding the value of
the underlying land, the site utilities and the foundations) or (ii)
such other amount as shall be required by FmHA or the Construction
Lender. Throughout the term of the Partnership, the General Partners
shall provide copies of all such policies (or binders) to the Investment
Limited Partner promptly after their receipt thereof. Upon the request
of the Investment Limited Partner to the General Partners, the General
Partners shall cause the applicable insurer to name the Investment
Limited Partner as an "additional insured" on each Partnership insurance
policy.
(d) The obligations of the General Partners hereunder shall be the
joint and several obligations of each General Partner. Except as
otherwise provided in Sections 4.5(b) and 7.1, such obligations shall
survive any Withdrawal of a General Partner from the Partnership.
(e) The General Partners shall establish and maintain reasonable
reserves to provide for working capital needs, improvements,
replacements and any other contingencies of the Partnership. At a
minimum, the General Partners shall cause the Partnership to annually
deposit up to $12,350 or such lesser amount as may be authorized by
FmHA, from its Cash Flow into replacement reserves; to the extent that
Cash Flow (as determined before deduction of this reserve deposit) for
any year shall be insufficient to make such deposit in full, the General
Partners shall fund such shortfall from their own funds as a
Subordinated Loan unless FmHA shall authorize the Partnership to suspend
deposits into replacement reserves. Funding of this account may be
suspended in any period during which this account has a balance of
$123,500 or ten times the annual amount authorized by FmHA, whichever is
lesser.
(f) Each General Partner shall be bound by the Project Documents,
and no additional General Partner shall be admitted if he, she or it has
not first agreed to be bound by this Agreement (and assume the
obligations of a General Partner hereunder) and by the Project Documents
to the same extent and under the same terms as the other General
Partners.
(g) The General Partners shall take all actions necessary to
ensure that the Investment Limited Partner receives the full amount of
the Projected Credit, including, without limitation, the rental of
apartments to appropriate tenants and the filing of annual
certifications as may be required. In this regard, the General Partners
shall, inter alia, cause (i) the Partnership to satisfy all requirements
imposed from time to time under the Code with respect to rental levels
and occupancy by qualified tenants by the close of the first year of the
Credit Period and throughout the Compliance Period so as to permit the
Partnership to be entitled to the Tax Credit throughout the Compliance
Period so as to permit the Partnership to be entitled to the maximum
available Tax Credit, (ii) the Partnership to comply with all State Tax
Credit monitoring procedures, (iii) all dwelling units in the Apartment
Complex to be leased for periods of not less than six months to persons
satisfying the Rent Restriction Test, (iv) the Partnership to make all
appropriate Tax Credit elections in a timely fashion, and (v) all rental
units in the Apartment Complex to be of equal quality with comparable
amenities available to low-income tenants on a comparable basis without
separate fees.
(h) On or before the Admission Date, the General Partners shall
provide to the Investment Limited Partner either (i) an appraisal of the
Apartment Complex prepared by a competent independent appraiser or (ii)
completed FmHA 1924-13 (estimate and certificate of actual cost) and
1930-7 (statement of budget, income and expense) or HUD project cost and
budget analysis on Form 2264, or any successor FmHA or HUD form, any
comparable form of a state or other governmental agency, including any
applicable Tax Credit allocation agency, setting forth estimates with
respect to construction and mortgage financing costs and initial rental
income and operating expense figures for the Apartment Complex.
(i) The General Partners shall (i) not store (except in compliance
with all laws, ordinances, and regulations pertaining thereto) or
dispose of any Hazardous Material at the Apartment Complex, or at or on
any other Site or Vessel owned, occupied, or operated either by any
General Partner, any Affiliate of a General Partner, or any Person for
whose conduct any General Partner is or was responsible; (ii) neither
directly nor indirectly transport or arrange for the transport of any
Hazardous Material (except in compliance with all laws, ordinances, and
regulations pertaining thereto); (iii) provide the Investment Limited
Partner with written notice (x) upon any General Partner's obtaining
knowledge of any potential or known release, or threat of release, of
any Hazardous Material at or from the Apartment Complex or any other
Site or Vessel owned, occupied, or operated by any General Partner, any
Affiliate of a General Partner or any Person for whose conduct any
General Partner is or was responsible or whose liability may result in a
lien on the Apartment Complex; (y) upon any General Partner's receipt of
any notice to such effect from any Federal, state, or other governmental
authority; and (z) upon any General Partner's obtaining knowledge of any
incurrence of any expense or loss by any such governmental authority in
connection with the assessment, containment, or removal of any Hazardous
Material for which expense or loss any General Partner may be liable or
for which expense or loss a lien may be imposed on the Apartment
Complex.
(j) The General Partners shall promptly request in writing of FmHA
that FmHA cause the Investment Limited Partner to be named as an
"interested party" in the Permanent Mortgage documents, so that FmHA
will notify the Investment Limited Partner of any default or other
problem under the Permanent Mortgage.
6.6 Representations and Warranties
The General Partners represent and warrant to the Investment
Limited Partner and the Special Limited Partner as follows:
(1) The Partnership is a duly organized limited partnership
validly existing and in good standing under the laws of the State
and has complied with all filing requirements necessary for its
existence and to preserve the limited liability of the Investment
Limited Partner and the Special Limited Partner.
(2) No event or proceeding has occurred or is pending or
threatened which would (a) materially adversely affect the
Partnership or its properties, or (b) materially adversely affect
the ability of the General Partners or any of their Affiliates to
perform their respective obligations hereunder or under any other
agreement with respect to the Apartment Complex, other than legal
proceedings which have been bonded against without recourse to
Partnership assets in such manner as to stay the effect of the
proceedings or otherwise have been adequately provided for. This
subparagraph shall be deemed to include, without limitation, the
following: (x) legal actions or proceedings before any court,
commission, administrative body or other governmental authority
having jurisdiction over the zoning applicable to the Apartment
Complex; (y) labor disputes; and (z) acts of any governmental
authority.
(3) No default (or event which, with the giving of notice or
the passage of time or both, would constitute a default) has
occurred and is continuing under this Agreement or under any
material provision of the Project Documents, and the same are in
full force and effect.
(4) No Partner or Related Person bears the economic risk of
loss with respect to the Permanent Mortgage. No General Partner
has, either on its own behalf or on behalf of the Partnership,
incurred any financial responsibility with respect to the
Partnership prior to the Admission Date, other than as disclosed
in writing to the Investment Limited Partner prior to the
Admission Date.
(5) The Apartment Complex is being or has been completed in
a timely manner in conformity with the Project Documents. There is
no violation by the Partnership or the General Partners of any
zoning, environmental or similar regulation applicable to the
Apartment Complex which could have a material adverse effect
thereon, and the Partnership has complied with all applicable
municipal and other laws, ordinances and regulations relating to
such construction and use of the Apartment Complex. All
appropriate public utilities, including, but not limited to,
water, electricity, gas (if called for in the plans and
specifications), and sanitary and storm sewers, are or will be
available and operating properly for each unit in the Apartment
Complex at the time of the first occupancy of such unit.
(6) The Partnership owns good and marketable fee simple
title to the Apartment Complex, subject to no material liens,
charges or encumbrances other than those which (a) are both
permitted by the Project Documents and are noted or excepted in
the title insurance policy submitted to the Investment Limited
Partner in satisfaction of the requirements of Section 5.1(b) and
(b) do not materially interfere with use of the Apartment Complex
(or any part thereof) for its intended purpose or have a material
adverse effect on the value of the Apartment Complex.
(7) The execution and delivery of all instruments and the
performance of all acts heretofore or hereafter made or taken
pertaining to the Partnership or the Apartment Complex by each
Affiliate of a General Partner which is a corporation have been or
will be duly authorized by all necessary corporate or other
action, and the consummation of any such transactions with or on
behalf of the Partnership will not constitute a breach or
violation of, or a default under, the charter or by-laws of such
Affiliate or any agreement by which such Affiliate or any of its
properties is bound, nor constitute a violation of any law,
administrative regulation or court decree.
(8) Any General Partner which is a corporation (a
"Corporation") has been duly organized, is validly existing and in
good standing under the laws of its state of incorporation and has
all requisite corporate power to be a General Partner and to
perform its duties and obligations as contemplated by this
Agreement and the Project Documents. Neither the execution and
delivery by any Corporation of this Agreement nor the performance
of any of the actions of any Corporation contemplated hereby has
constituted or will constitute a violation of (a) the articles of
organization or by-laws of such Corporation, (b) any agreement by
which such Corporation is bound or to which any of its property or
assets is subject, or (c) any law, administrative regulation or
court decree.
(9) No Event of Bankruptcy has occurred with respect to any
General Partner.
(10) All accounts of the Partnership required to be
maintained under the terms of the FmHA Loan Agreement, including,
but not necessarily limited to, any account for replacement
reserves, are currently funded to the levels required by FmHA.
(11) If the only General Partner(s) are one or more
corporations, then the General Partner(s) have a net worth which
satisfies the 89-12 Requirements.
(12) All payments and expenses required to be made or
incurred in order to complete construction of the Apartment
Complex in conformity with the Project Documents, to fund any
reserves hereunder or under any other Project Document required to
be funded at or prior to the later of the Admission Date or
Permanent Mortgage Commencement, to satisfy all requirements under
the Project Documents and/or which form the basis for determining
the principal sum of the Permanent Mortgage and to pay the
Construction and Development Fee have been or will be paid or
provided for utilizing only (a) the funds available from the
Construction Mortgage, (b) the Capital Contribution of the
Investment Limited Partner, (c) the Capital Contributions of the
General Partners in the amounts set forth on Schedule A as of the
Admission Date, (d) the available net rental income, if any,
earned by the Partnership prior to Permanent Mortgage Commencement
(to the extent that it is permitted to be used for such purposes
by FmHA), (e) any insurance proceeds and (f) the funds furnished
by the General Partners pursuant to Sections 6.5(a) and 6.11(a).
(13) The amount of Tax Credit which is expected to be
allocated by the Partnership to the Investment Limited Partner is
$27,518 for 1996; $44,029 per annum for each of the years 1997
through 2005 (inclusive); and $16,511 for 2006.
(14) 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 Tax Credits.
(15) No General Partner, Affiliate of a General Partner or
Person for whose conduct any General Partner is or was responsible
has ever: (i) owned, occupied, or operated a Site or Vessel on
which any Hazardous Material was or is stored, transported, or
disposed of, except if such storage, transport or disposition was
and is at all times in compliance with all laws, ordinances, and
regulations pertaining thereto; (ii) directly or indirectly
transported, or arranged for transport, of any Hazardous Material
(except if such transport was or is at all times in compliance
with all laws, ordinances and regulations pertaining thereto);
(iii) caused or was legally responsible for any release or threat
of release of any Hazardous Material; (iv) received notification
from any Federal, state or other governmental authority of (x) any
potential, known, or threat of release of any Hazardous Material
from the Apartment Complex or any other Site or Vessel owned,
occupied, or operated by any General Partner, by any Affiliate of
a General Partner, or any Person for whose conduct any General
Partner is or was responsible or whose liability may result in a
lien on the Apartment Complex; or (y) the incurrence of any
expense or loss by any such governmental authority or by any other
Person in connection with the assessment, containment, or removal
of any release or threat of release of any Hazardous Material from
the Apartment Complex or any such Site or Vessel.
(16) To the best of the General Partners' knowledge, no
Hazardous Material was ever or is now stored on, transported, or
disposed of on the land comprising the Apartment Complex, except
to the extent any such storage, transport or disposition was at
all times in compliance with all laws, ordinances, and regulations
pertaining thereto.
(17) The General Partners have fulfilled and will continue
to fulfill all of their duties and obligations under Section 6.5.
(18) On or before the Admission Date, the General Partners
shall have made capital contributions to the Partnership in the
aggregate amount of $65,000.
(19) To the best of the General Partners' knowledge, Rental
Assistance will be provided for 100% of the units in the Apartment
Complex by FmHA.
6.7 Liability on the Permanent Mortgage
Neither any General Partner nor any Related Person shall at any
time bear the Economic Risk of Loss for the payment of any portion of
any Mortgage, and the General Partners shall not permit any other
Partner or any Related Person to bear the Economic Risk of Loss for the
payment of any portion of any Mortgage, except as may be expressly
permitted with respect to the Construction Mortgage pursuant to Article
III.
6.8 Indemnification of the General Partners
(a) No General Partner nor any Affiliate thereof shall have
liability to the Partnership or to any Limited Partner for any loss
suffered by the Partnership which arises out of any action or inaction
of any General Partner or Affiliate thereof if such General Partner or
Affiliate thereof in good faith determined that such course of conduct
was in the best interest of the Partnership and such course of conduct
did not constitute negligence or misconduct of such General Partner or
Affiliate thereof.
(b) A General Partner or any Affiliate thereof may be indemnified
by the Partnership against losses, judgments, liabilities, expenses and
amounts paid in settlement of any claims sustained in connection with
the Partnership, provided that all of the following conditions are met:
(i) such General Partner has determined, in good faith, that the course
of conduct which caused the loss, judgment, liability, expense or amount
paid in settlement was in the best interests of the Partnership; and
(ii) such loss, judgment, liability, expense or amount paid in
settlement was not the result of negligence or misconduct on the part of
the General Partner or Affiliate thereof; and (iii) such indemnification
or agreement to hold harmless is recoverable only out of the assets of
the Partnership, and not from the Limited Partners.
(c) Notwithstanding the above, no General Partner or any Affiliate
thereof performing services for the Partnership or any broker-dealer
shall be indemnified for any losses, liabilities or expenses arising
from or out of an alleged violation of Federal or state securities laws
unless (i) there has been a successful adjudication on the merits of
each count involving securities laws violations as to the particular
indemnitee and, the court approves the indemnification of such
litigation costs, (ii) such claims have been dismissed with prejudice on
the merits by a court of competent jurisdiction as to the particular
indemnitee and, the court approves the indemnification of such
litigation costs or (iii) a court of competent jurisdiction approves a
settlement of the claims against a particular indemnitee and the court
finds that indemnification of the settlement and related costs should be
made. In any claim for indemnification for Federal or state securities
law violations, the party seeking indemnification shall, prior to
seeking court approval for such indemnification, place before the court
the positions of any applicable state securities administrator with
respect to the issue of indemnification for securities law violations.
(d) The Partnership shall not incur the cost of the portion of any
insurance, other than public liability insurance, which
insures any party against any liability as to which such party is herein
prohibited from being indemnified.
(e) The Partnership may indemnify Affiliates of the General
Partner under this Section 6.8 only if the loss involves activity in
which such Affiliates acted in the capacity of a General Partner.
(f) For purposes of this Section 6.8 only, the term "Affiliate"
shall mean any Person performing services on behalf of the Partnership
who (i) directly or indirectly controls, is controlled by or is under
common control with a General Partner; (ii) owns or controls ten percent
(10%) or more of the outstanding voting securities of a General Partner;
(iii) is an officer, director, partner or trustee of a General Partner;
or (iv) if a General Partner is an officer, director, partner or
trustee, is any company for which such General Partner acts in any such
capacity.
6.9 Indemnification of the Partnership and the Limited Partners
(a) The General Partners will indemnify and hold the Partnership
and the Limited Partners harmless from and against any and all losses,
damages and liabilities which the Partnership or
any Limited Partner may incur by reason of the (a) past, present or
future actions or omissions of the General Partner or any of their
Affiliates, or (b) any liabilities to which either the Partnership or
the Apartment Complex is subject; provided, however, that the foregoing
indemnification shall not apply to (i) any Mortgage or (ii) necessary
contractual obligations incurred pursuant to FmHA requirements in
connection with the operation of the Apartment Complex in the ordinary
course of business.
(b) Notwithstanding the foregoing, no General Partner shall be
liable to a Limited Partner or the Partnership for any act or omission
for which the Partnership is required to indemnify such General Partner
under Section 6.8.
(c) The General Partners shall indemnify, defend, and hold the
Investment Limited Partner harmless from and against any claim brought
or threatened against the Investment Limited Partner or loss (as well as
from any and all attorneys' fees and expenses incurred in connection
with any such claim or loss) on account of the presence of any Hazardous
Material at the Apartment Complex. Any claim or loss described in the
immediately preceding sentence may be defended, compromised, settled, or
pursued by the Investment Limited Partner with counsel of the Investment
Limited Partners' selection, but at the expense of the General Partners.
Notwithstanding anything else set forth herein, this indemnification
shall survive the withdrawal of any General Partner and/or the
termination of this Agreement.
6.10 Operating Deficits
Subject to the prior written consent of each FmHA (if such consent
shall be required under applicable FmHA regulations), the General
Partners shall be obligated from the later to occur of (i) Permanent
Mortgage Commencement or (ii) the Admission Date to advance funds to
meet operating expenses and debt service of the Partnership which exceed
operating income available for the payment thereof. In the event that
the General Partners shall fail to make any such advance as aforesaid,
the Partnership shall utilize amounts (the "Applied Fees") otherwise
payable to the General Partners or Affiliates thereof under Section 6.12
to meet the obligations of the General Partners pursuant to this Section
6.10. Such Applied Fees shall also constitute payment and satisfaction
of the corresponding amounts payable to the General Partners or
Affiliates thereof under Section 6.12 and/or Article X, with the
proceeds thereof being applied to such obligations, and the obligation
of the Partnership to make such installment payments to the General
Partners or the Affiliates thereof pursuant to Section 6.12 and/or
Article X being deemed satisfied to the extent thereof and (b) the
Special Limited Partner shall have the option, exercisable in its sole
discretion, to cause it or one or more of its designees to be admitted
to the Partnership as additional General Partners(s). An additional
General Partner so admitted shall automatically, without the need for
any further action by any Partner, become the Managing General Partner
and be delegated all of the power and authority of all of the General
Partners pursuant to Section 6.13, and each Partner hereby grants to any
such additional General Partner a power of attorney, coupled with an
interest and irrevocable to the extent permitted by law, to execute and
deliver any and all instruments and documents which it believes to be
necessary or appropriate in order to accomplish the purposes of this
Section 6.10 and to manage the business of the Partnership. The
admission of an additional General Partner shall not relieve any other
General Partner of any of its economic obligations hereunder, and each
other General Partner shall fully indemnify and hold harmless each
additional General Partner from and against any and all losses,
judgments, liabilities, expenses and amounts paid in settlement of any
claims sustained in connection with its capacity as a General Partner.
For the purpose of this Section 6.10, all expenses shall be paid on a
sixty (60)-day current basis. Moreover, the General Partners may in
their discretion at any time advance funds to the Partnership to pay
operating expenses and/or debt service of the Partnership in order to
facilitate the Partnership's compliance with the Rent Restriction Test.
All advances pursuant to this Section 6.10 (including any Applied Fees)
shall be Subordinated Loans repayable without interest in accordance
with the provisions of Article X. The form and provisions of all
Subordinated Loans shall conform to applicable rules and regulations.
6.11 Obligation to Complete the Construction of the Apartment
Complex
(a) The General Partners shall complete the construction of the
Apartment Complex substantially in accordance with the plans and
specifications approved by FmHA and the Lenders and all requirements
necessary to obtain the required certificates of occupancy for dwelling
units, or cause the same to be completed, in a good and workmanlike
manner, free and clear of all mechanics', materialmen's or similar
liens, and shall equip the Apartment Complex or cause the same to be
equipped with all necessary and appropriate fixtures, equipment and
articles of personal property, including refrigerators and ranges, and
shall cause all necessary certificates of occupancy for all apartment
units in the Apartment Complex to be obtained, all in accordance with
the Project Documents. If the proceeds of the Construction and
Permanent Mortgages, the net rental income, if any, of the Apartment
Complex generated prior to the later of Permanent Mortgage Commencement
or the Admission Date and which is permitted by FmHA to be utilized for
any of the purposes hereinafter set forth, the Capital Contribution of
the Investment Limited Partner, the Capital Contributions of the General
Partners in the amounts set forth on Schedule A as of the Admission
Date, and any insurance proceeds arising out of casualties prior to the
later of Permanent Mortgage Commencement or the Admission Date as
available from time to time are insufficient to (i) acquire and complete
the construction of the Apartment Complex and satisfy all other
obligations, all as provided in the first sentence of this Section
6.11(a), (ii) make the special distributions to the General Partners
described in Section 10.2(c), (iii) pay the Construction and Development
Fee, (iv) arrive at Permanent Mortgage Commencement in conformity with
the Project Documents, (v) discharge all Partnership liabilities and
obligations arising out of any casualty giving rise to any such
insurance proceeds, and (vi) provide for all other payments and expenses
required to be made or incurred through the later of Permanent Mortgage
Commencement or the Admission Date, including the funding of any
reserves required hereunder or under any other Project Document and the
repayment in full of all obligations under the Construction Mortgage,
the General Partners shall be responsible for and obligated to pay such
deficiencies and shall, to the extent permitted under the Project
Documents and any applicable regulations or requirements of FmHA, be
reimbursed at or prior to the later of Permanent Mortgage Commencement
or the Admission Date only out of the proceeds designated in this
sentence available from time to time after payment of all costs
described in this sentence. Any amounts not reimbursed through the
later of Permanent Mortgage Commencement or Admission Date only out of
the proceeds of the Capital Contribution of the Investment Limited
Partner as provided in Section 5.1 shall not be reimbursable or
otherwise change the Interest of any Person in the Partnership but shall
be borne by the General Partners; provided, however, that,
notwithstanding the foregoing, to the extent any such amounts represent
items which are properly included in the Partnership's Qualified Basis
and result in an increase in the amount of Tax Credit allocated and
available to the Partnership over and above the amount of Tax Credit
required in order to achieve State Designation ("Includable Items"), the
General Partners shall make an additional Capital Contribution in the
amount of the Includable Items and the Partnership shall utilize the
proceeds of such additional Capital Contribution to pay the Includable
Items. In the event that the General Partners shall fail to fund any
such deficiency as required by this Section 6.11(a), an amount not in
excess of the next installment of the Construction and Development Fee
due to the General Partners or any of their Affiliates under Section
6.12 or any other provision hereof shall be applied by the Partnership
to meet such obligation of the General Partners, and, to the extent
there may still be a deficiency, any amounts otherwise payable as the
Annual Partnership Management Fee or distributable to the General
Partners pursuant to Article X shall be so applied. Any such
application of funds as described in the immediately preceding sentence
shall constitute a payment of the amount of the Fee or such other item
which such funds had been earmarked to pay, and the obligation of the
General Partners to advance such amount under this Section 6.11(a) shall
be satisfied to the extent of such application.
(b) The completion of the Apartment Complex shall be secured by
security satisfactory to the Investment Limited Partner, which security
may include, but shall not be limited to, the following:
(i) a written guaranty of completion by a Person,
supported by financial statements demonstrating sufficient
net worth or adequately collateralized by other real or
personal properties or other Persons' guarantees; and/or
(ii) a retention of a reasonable portion of the
Capital Contribution of the Investment Limited Partner
and/or fees to the General Partner as a potential offset in
the event the General Partners do not perform in accordance
with this Agreement.
6.12 Certain Payments to the General Partners and Others
(a) The Partnership shall pay to the General Partners a non-
cumulative fee (the "Annual Partnership Management Fee") commencing in
1996 for their services in connection with the administration of the day
to day business of the Partnership in the annual amount of $500. The
Annual Partnership Management Fee for each fiscal year of the
Partnership shall be payable from Cash Flow in the manner and priority
set forth in Section 10.2(a) to the extent Cash Flow is available
therefor for such year.
(b) In consideration of their consultation, advice and other
services in connection with the construction and development of the
Apartment Complex and as consideration for the assignment described in
Section 6.14, the Partnership shall pay to the General Partners (or
their designee) a construction and development fee (the "Construction
and Development Fee") in the principal amount of $246,564 which fee
shall be earned in full as to each building in the Apartment Complex as
of the date such building is completed. The Construction and Development
Fee shall be payable $123,282 from the proceeds of the First
Installment, $61,641 from the proceeds of the Second Installment ,
$25,821 from the proceeds of the Third Installment, $25,820 from the
proceeds of the Fourth Installment and $10,000 from the proceeds of the
Fifth Installment. Any portion of the Construction and Development Fee
which shall not have been paid as of the date which is six months after
it shall have been earned shall accrue interest at the Applicable
Federal Rate in effect at the time earned from the date earned through
the date of payment; any such interest shall be payable in accordance
with the provisions of Article X.
(c) The Partnership shall pay to BCCLP or an Affiliate thereof a
fee (the "Asset Management Fee") commencing in 1996 for its services in
connection with the Partnership's accounting matters relating to the
Investment Limited Partner and assisting with the preparation of tax
returns and the reports required by Section 12.7 in the annual amount of
$500. The Asset Management Fee shall be payable from Cash Flow in the
manner and priority set forth in Section 10.2(a); provided, however,
that if in any fiscal year commencing with 1996, Cash Flow is
insufficient to pay the full amount of the Asset Management Fee, the
unpaid portion thereof shall accrue and be payable, on a cumulative
basis, from Cash Flow in the first year in which Cash Flow is available
for payment thereof, in the manner and priority set forth at Section
10.2(a).
(d) In consideration of its assistance in connection with the
development and syndication of the Project, the General Partners shall
pay to Boston Capital, or its designee, a consulting fee in the amount
of $51,000 in accordance with a consulting contract executed
contemporaneously herewith.
6.13 Delegation of General Partner Authority
If there shall be more than one General Partner serving hereunder,
each General Partner may from time to time, by an instrument in writing,
delegate all or any of his powers or duties hereunder to another General
Partner or General Partners.
Every contract, deed, mortgage, lease and other instrument
executed by any General Partner shall be conclusive evidence in favor of
every Person relying thereon or claiming thereunder that at the time of
the delivery thereof (a) the Partnership was in existence, (b) this
Agreement had not been amended in any manner so as to restrict the
delegation of authority among General Partners (except as shown in
certificates or other instruments duly filed in the Filing Office) and
(c) the execution and delivery of such instrument was duly authorized by
the General Partners. Any Person may always rely on a certificate
addressed to him and signed by any General Partner hereunder:
(1) As to who are the General Partners or Limited Partners
hereunder;
(2) As to the existence or nonexistence of any fact which
constitutes a condition precedent to acts by the General Partners
or in any other manner germane to the affairs of the Partnership;
(3) As to who is authorized to execute and deliver any
instrument or document of the Partnership;
(4) As to the authenticity of any copy of this Agreement and
amendments thereto; or
(5) As to any act or failure to act by the Partnership or as
to any other matter whatsoever involving the Partnership or any
Partner.
6.14 Assignment to Partnership
The General Partners hereby transfer and assign to the partnership
all of their right, title, and interest in and to the Apartment Complex
and in and to all of the Project Documents, including, but not limited
to, the following: (i) all contracts with architects, supervising
architects, engineers and contractors with respect to the development of
the Apartment Complex; (ii) all plans, specifications and working
drawings heretofore prepared or obtained in connection with the
Apartment Complex; (iii) all governmental commitments and approvals
obtained, and applications therefor, including, but not limited to,
those relating to planning, zoning, building permits and Tax Credit;
(iv) any and all commitments with respect to any Mortgage(s); (v) any
and all contracts or rights with respect to any agreements with the
Construction Lender or FmHA; and (vi) any other work product related to
the Apartment Complex and/or the Partnership.
ARTICLE VII
Withdrawal of a General Partner; New General Partners
7.1 Withdrawal
(a) No General Partner shall Withdraw from the Partnership (other
than by reason of death or adjudication of incompetence or insanity) or
sell, assign or encumber its Interest without the Consent of the
Investment Limited Partner and all the other General Partners except
that if the Special Limited Partner or a designee thereof becomes a
General Partner pursuant to Section 4.5(b), Section 5.2(e), Section 6.2
(b) or Section 6.10, it shall not require the consent of any other
General Partner to transfer all or any portion of its interest as a
General Partner, other than as may be required under the Uniform Act.
In the event of any Withdrawal by a General Partner in violation of this
Section 7.1, such General Partner, in addition to being subject to any
and all other legal remedies which may be pursued by the Partners, shall
forfeit to the Special Limited Partner or its designee, such General
Partner's Interest and all unpaid fees from the Partnership and shall
remain liable for all of the Withdrawing Partner's obligations under
this Agreement. In addition, upon such Withdrawal and transfer, the
Special Limited Partner or its designee shall automatically become a
General Partner without further action by the Withdrawing General
Partner or any other Partner, and each Partner hereby consents to such
transfer and to the admission of the Special Limited Partner or its
designee as a General Partner in such a situation. Such transfer shall
occur automatically upon such Withdrawal without further action by such
Withdrawing General Partner.
(b) If at any time the only General Partners of the Partnership
are corporations (partnerships with corporations as general partners),
they shall be obligated to have a net worth which meets the 89-12
Requirements. If the General Partners shall at any time fail to meet
the requirements of this Section 7.1(b), and no additional limited
partner is admitted pursuant to Section 7.5(b), then they shall be
deemed to have withdrawn from the Partnership in violation of the
provisions of this Section 7.1 and shall be subject to the provisions of
Section 7.1(a). Notwithstanding the foregoing, the provisions of this
Section 7.1(b) shall not apply to the Special Limited Partner or its
designee in the event it become the sole General Partner.
7.2 Obligation to Continue
Upon the Withdrawal of a General Partner, the remaining General
Partners shall have the right and obligation to continue the business of
the Partnership employing its assets and name, all as contemplated by
the Uniform Act. Within 30 days after they obtain knowledge of the
Withdrawal of a General Partner, the remaining General Partners shall
notify the Investment Limited Partner or its designee of such
Withdrawal.
7.3 Withdrawal of All General Partners
If, following the Withdrawal of a General Partner, there is no
remaining General Partner, the Investment Limited Partner and the
Special Limited Partner may elect to reconstitute the Partnership and
continue the business of the Partnership for the balance of the term
specified in Section 2.4 by selecting a successor General Partner. If
the Investment Limited Partner and the Special Limited Partner elect to
reconstitute the Partnership pursuant to this Section 7.3 and admit the
designated successor General Partner, the relationship among the then
Partners shall be governed by this Agreement.
7.4 Interest of General Partner After Permitted Withdrawal
In the event of the Withdrawal of a General Partner not in
violation of Section 7.1 and except as otherwise provided in Section
4.5(b), the Withdrawing General Partner hereby covenants and agrees to
transfer to the remaining General Partners or to a successor General
Partner selected in accordance with Section 7.3, as the case may be,
such portion of the Withdrawing General Partner's Interest as such
remaining or successor General Partners may designate, such transfer to
be made in consideration of the payment by the transferee of either the
agreed value of such Interest or, if such value is not agreed to, the
fair market value of such Interest as determined by a committee of three
qualified real estate appraisers, one selected by the Withdrawing
General Partner, one selected by the transferee and a third selected by
the other two. The portion of the Withdrawing General Partner's
Interest designated to be transferred in accordance with the provisions
of this Section 7.4 shall be sufficient to ensure the continued
treatment of the Partnership as a partnership under the Code and as a
limited partnership under the Uniform Act, and, for the purposes of
Article X, shall be deemed to be effective as of the date of Withdrawal,
but the Partnership shall not make any distributions to the designated
transferee until the transfer shall have been made. Any holder of any
portion of the Interest of a Withdrawing General Partner which is not
designated to be transferred to the remaining or successor General
Partners pursuant to the provisions of this Section 7.4 shall become an
Additional Limited Partner but (i) with the same share of the profits,
losses, tax credits, Cash Flow and other distributions to which the
holder of such Interest was entitled when held as a General Partner
Interest, and (ii) shall not participate in the votes or Consents of the
Investment Limited Partner hereunder. The admission of any successor or
additional General Partner shall be subject to the consent of FmHA (if
required) and the Consent of the Investment Limited Partner.
7.5 Admission of Additional General Partner(s) under Certain
Circumstances
In the event each of the General Partners is a corporation and the
General Partners at any time, or from time to time, fail to have a net
worth which satisfies the 89-12 Requirements, the Special Limited
Partner or its designee(s) shall be admitted (and each hereby agrees to
be admitted), automatically and without further action by them or any
Partner, as additional General Partner(s), notwithstanding any other
provision of this Agreement. The General Partners hereby agree to take
all action necessary to implement this Section 7.5. Further, the
General Partners agree in such event to give prompt written notice
thereof to each Lender and to FmHA. If any Lender or FmHA rejects the
admission of any additional General Partner so admitted as a General
Partner, then such additional General Partner shall withdraw as a
General Partner promptly after an additional General Partner acceptable
to each Lender and FmHA is admitted to the Partnership. Simultaneously
with such admission, each of the previously admitted General Partners
shall be deemed to have assigned proportionally to the additional
General Partner(s), automatically and without further action, such
portion of its General Partner Interest so that the additional General
Partner shall receive not less than a one percent (1%) interest (or such
greater percentage as may be required either (i) in the opinion of the
Tax Accountants, to assure the partnership status of the Partnership for
Federal income tax purposes or (ii) by FmHA) in the profits, losses, tax
credits and distributions of the Partnership in consideration of $1.00
and any other consideration which may be agreed upon. An additional
General Partner so admitted shall automatically become the Managing
General Partner and be irrevocably delegated all of the power and
authority of all of the General Partners pursuant to Section 6.13. Each
such additional General Partner shall remain a General Partner until a
Lender or FmHA shall object thereto in writing or until such time as, in
the opinion of the Tax Accountants, the Partnership would continue to be
treated as a partnership for Federal income tax purposes notwithstanding
their Withdrawal. At such time, each such additional General Partner
may, at its option, then Withdraw without the approval of the Limited
Partners upon reassignment of its entire Interest to the remaining
General Partners. Each partner hereby grants to the Special Limited
Partner a special power of attorney, irrevocable to the extent permitted
by law and coupled with an interest, to amend the Certificate and this
Agreement and to do anything else which, in the view of the Special
Limited Partner, may be necessary or appropriate to accomplish the
purposes of this Section 7.5 or to manage the business of the
Partnership. The admission of an additional General Partner shall not
relieve any other General Partner of any of its economic obligations
hereunder, and each other General Partner shall fully indemnify and hold
harmless the additional General Partner from and against any and all
losses, judgments liabilities, expenses and amounts paid in settlement
of any claims sustained in connection with its capacity as a General
Partner.
ARTICLE VIII
Transferability of Limited Partner Interests
8.1 Assignments
(a) Except by operation of law (including the laws of descent and
distribution) or Section 8.1(b), no Limited Partner may assign all or
any part of its Interest without the written consent of the General
Partners, the giving or withholding of which is exclusively within their
discretion.
(b) A Limited Partner, without the consent of the General
Partners, may assign to any Person all or any portion of the economic
benefits of the ownership of its Interest; provided, however, that such
assignment shall not be binding on the Partnership until there shall
have been filed with the Partnership by registered mail certified copies
of an executed and acknowledged assignment and the written acceptance by
the assignee of all the terms and provisions of this Agreement; if such
assignment and acceptance are not so filed, the Partnership need not
recognize such assignment for any purpose. An assignee of a Limited
Partner who does not become a Substituted Limited Partner shall have,
and shall only have, the right to receive the share of allocations and
distributions of the Partnership to which the assigning Limited Partner
would have been entitled with respect to the Interest (or portion
thereof) so assigned if no such assignment had been made by such Limited
Partner. Any assigning Limited Partner whose permitted assignee becomes
a Substituted Limited Partner shall thereupon cease to be a Limited
Partner and shall no longer have any of the rights or privileges of a
Limited Partner. Where the assignee does not become a Substituted
Limited Partner, the Partnership shall recognize such assignment not
later than the last day of the calendar month following receipt of
notice of assignment and all documentation required in connection
therewith.
(c) Every assignee of a Limited Partner Interest (or any portion
thereof) who desires to make a further assignment of its Interest shall
be subject to all the provisions of this Article VIII.
8.2 Substituted Limited Partner
No Limited Partner shall have the right to substitute an assignee
as Limited Partner in its place. Subject to Section 8.3, the General
Partners may, however, in their sole discretion, permit an assignee to
become a Substituted Limited Partner. The consent of the General
Partners to an assignment of a Limited Partner Interest under Section
8.1 shall not, in and of itself, constitute permission under this
Section 8.2.
Any Substituted Limited Partner shall execute such instrument or
instruments as shall be required by the General Partners to signify the
agreement of such Substituted Limited Partner to be bound by all the
provisions of this Agreement and shall pay the Partnership's reasonable
legal fees and filing costs in connection with its substitution as a
Limited Partner.
8.3 Restrictions
(a) No Disposition may be made if such Disposition would violate
Section 13.1.
(b) In no event shall all or any part of a Limited Partner
Interest be Disposed of to a minor (other than to a descendant by reason
of death) or to an incompetent.
(c) The General Partners may, in addition to any other requirement
they may impose, require as a condition of any Disposition that the
transferor (i) assume all costs incurred by the Partnership in
connection therewith and (ii) furnish the Partnership and the other
Partners with an opinion of counsel satisfactory to counsel to the
Partnership that such Disposition complies with applicable Federal and
state securities laws.
(d) Any sale, exchange, transfer or other Disposition in
contravention of any of the provisions of this Section 8.3 shall
be void and ineffectual and shall not bind or be recognized by the
Partnership.
ARTICLE IX
Working Capital; Borrowings
9.1 Working Capital Loan
In order to comply with Paragraph 5(a) of the FmHA Loan Agreement,
the General Partners have advanced to the Partnership $65,000, which
amount has been deposited by the Partnership in its general operating
account (the "Working Capital Loan"). The Working Capital Loan shall
not bear interest and shall be repaid (i) to the extent permitted by
FmHA, out of Partnership funds not required for other Partnership
purposes, (ii) out of any funds which FmHA designates as a return to the
Partnership of such deposit to the Partnership's general operating
account or (iii) as set forth in Article X.
9.2 Borrowings
All Partnership borrowings shall be subject to the terms of this
Agreement, including, but not limited to, the restrictions of Section
6.2, and may be made from any source, including Partners and their
Affiliates. Any Partnership borrowings from any Partner shall be
subject to the prior written consent of FmHA (if required under
applicable FmHA regulations or requirements). If any Partner shall lend
any monies to the Partnership, the amount of any such loan shall not be
an increase of such Partner's Capital Contribution. If any Partner
shall so lend monies, such loans shall be an obligation of the
Partnership and (except for advances required by Section 9.1 and
Subordinated Loans) shall be repayable to such Partner on the same basis
and with the same rate of interest as would be applicable to a
comparable loan to the Partnership from a third party. Funds provided
by the General Partners to the Partnership pursuant to Section 6.11(a)
shall not constitute borrowings for the purposes of this Section 9.2 or
for any other purposes.
ARTICLE X
Profits, Losses, Tax Credits, Distributions
and Capital Accounts
10.1 Profits, Losses and Tax Credits
(a) Subject to Section 10.1(c) and Section 10.4, for each Part-
nership fiscal year or portion thereof, all profits, tax-exempt income,
losses, non-deductible non-capitalizable expenditures, and tax credits
incurred or accrued on or after the Commencement Date, other than those
arising from a Capital Transaction, shall be allocated 99% to the
Investment Limited Partner and 1% to the General Partners.
(b) Except as otherwise specifically provided in this Article, all
profits and losses arising from a Capital Transaction shall be allocated
to the Partners as follows:
As to profits:
First, that portion of profits (including any profits
treated as ordinary income for Federal income tax purposes)
shall be allocated to the Partners who have negative Capital
Account balances in proportion to the amounts of such
balances, provided that no profits shall be allocated to a
Partner under this Clause First to increase any such
Partner's Capital Account above zero;
Second, profits in excess of the amounts allocated
under Clause First above shall be allocated to the General
Partners in an amount equal to the amount of cash
distributed or available to be distributed to them pursuant
to Clause Second of Section 10.2(b) as to the particular
Capital Transaction;
Third, profits in excess of the amounts allocated
under Clauses First and Second above shall be allocated to
the Investment Limited Partner in an amount equal to the
amount of cash required to pay to the Investment Limited
Partner the full amount (including interest) of the Credit
Recovery Loans;
Fourth, profits in excess of the amounts allocated
under Clauses First, Second and Third above shall be
allocated (i) to the Investment Limited Partner in an amount
equal to the sum of (a) its Invested Amount plus (b) the
full amount (including interest) of any Credit Recovery
Loans and (ii) to each other Limited Partner in an amount
equal to the amount of its respective Invested Amount,
reduced (but not below zero) in the case of each Limited
Partner (whether under clause (i) or clause (ii) by the sum
of (A) the total amount of all prior cash made to such
Limited Partner pursuant to Section 10.2(b), Clause Fifth
plus (B) the positive balance in the Capital Account of such
Limited Partner prior to the allocation made pursuant to
this Clause Fourth;
Fifth, profits in excess of the amounts allocated
under Clauses First, Second, Third and Fourth above shall be
allocated to each General Partner in the amount of its
respective paid-in Capital Contribution, reduced (but not
below zero) by the sum of (i) the total amount of
distributions previously made to it pursuant to Section
10.2(b), Clause Eighth after the application of the first
paragraph of Section 10.2(b) to credit amounts distributed
under Clause Second of Section 10.2(b) against amounts
distributable under Clause Eighth of Section 10.2(b) (and
not including the amounts so credited) plus (ii) the
positive balance in such General Partner's respective
Capital Accounts prior to the allocations made pursuant to
this Clause Fifth; and
Sixth, profits in excess of the amounts allocated
under Clauses First, Second, Third, Fourth, and Fifth above
shall be allocated to the Partners in the same percentages
as cash is distributed under Clause Tenth of Section 10.2(b)
after the application of the final sentence of Section
10.2(b) to credit amounts distributed under Clause Second of
Section 10.2(b) against amounts distributable under said
Clause Tenth (and not including the amounts so credited.)
As to losses:
First, an amount of losses shall be allocated to the
Partners to the extent and in such proportions as shall be
necessary such that, after giving effect thereto, the
respective balances in all Partners' Capital Accounts shall
be in the ratio of 99% for the Investment Limited Partner
and 1% for the General Partners;
Second, an amount of losses shall be allocated to the
Partners until the balance in each Partner's Capital Account
equals the amount of such Partner's Capital Contribution
(after the allocation under Clause First above);
Third, an amount of losses shall be allocated to the
Partners to the extent of and in proportion to such
Partners' Capital Account balances (after the allocations
under Clauses First and Second above); and
Fourth, any remaining amount of losses after the
allocations under Clauses First, Second and Third above
shall be allocated to the Partners in accordance with the
manner in which they bear the Economic Risk of Loss;
provided, however, that no Partner bears an Economic Risk of
Loss, then any remaining losses shall be allocated 99% to
the Investment Limited Partner and 1% to the General
Partners.
(c) Notwithstanding the foregoing provisions of Sections 10.1(a)
and 10.1(b), in no event shall any losses be allocated to the Investment
Limited Partner, the Special Limited Partner or any additional General
Partner admitted pursuant to any Section 4.5(b), Section 5.2(e), Section
6.2(b), Section 6.10 or Section 7.5, if and to the extent that such
allocation would cause, as of the end of the Partnership taxable year,
the negative balance in the Investment Limited Partner's Capital Account
to exceed such Partner's share of Partnership Minimum Gain plus such
Partner's share, if any of Partner Non-Recourse Debt Minimum Gain. Any
losses which are not allocated to a Partner by virtue of the application
of this Section 10.1(c) shall be allocated to the General Partners,
excluding any General Partner which shall have been admitted pursuant to
any of Section 4.5(b), Section 5.2(e), Section 6.2(b), Section 6.10 or
Section 7.5. For purposes of this Section 10.1(c), a Partner's Capital
Account shall be treated as reduced by Qualified Income Offset Items.
10.2 Cash Distributions Prior to Dissolution
(a) Cash Flow
Subject to FmHA approval (if required), Cash Flow for each fiscal
year or portion thereof of the Partnership shall be applied as follows:
First, to the payment of the Asset Management Fee for such year
and for any previous year(s) as to which the Asset Management Fee shall
not yet have been paid in full;
Second, to the repayment of any Subordinated Loans;
Third, in an amount not to exceed the difference between (i) $500
and (ii) the amount of Cash Flow for such year applied under Clause
Second above, to the payment of the Annual Partnership Management Fee
attributable to such year; and
Fourth, the balance thereof, if any, shall be distributed
annually, within seventy-five (75) days after the end of the fiscal
year, 40% to the Investment Limited Partner and 60% to the General
Partners; provided, however, that during such time as FmHA regulations
are applicable to the Apartment Complex, the total amount of Cash Flow
which may be so distributed to the Partners in respect to any fiscal
year shall not exceed such amounts as FmHA regulations permit to be
distributed.
(b) Distributions of other than Cash Flow
Prior to dissolution, if the General Partners shall determine from
time to time that cash is available for distribution from a Capital
Transaction, such cash shall be applied or distributed as follows:
First, to the payment of all matured debts and liabilities of the
Partnership (including, but not limited to, all expenses of the
Partnership incident to the Capital Transaction), excluding (i) debts
and liabilities of the Partnership to Partners or their Affiliates and
(ii) all unpaid fees owing to the General Partners or their Affiliates;
and to the establishment of any reserves which the General Partners and
the Auditors shall deem reasonably necessary for contingent, unmatured
or unforeseen liabilities or obligations of the Partnership;
Second, if the Permanent Mortgage is in place at the time of such
Capital Transaction of if such Capital Transaction constitutes a
refinancing of the Permanent Mortgage, to the General Partners in an
aggregate amount equal to 5% of the proceeds remaining after the payment
of the items set forth in Clause First of this Section 10.2(b);
Third, to the payment of any accrued and unpaid Asset Management
Fee;
Fourth, to the payment to the Investment Limited Partner of the
full amount (including interest) of any Credit Recovery Loans;
Fifth, to the repayment of any Subordinated Loans;
Sixth, to the repayment of any then-unpaid debts and liabilities
owed to Partners or Affiliates thereof by the Partnership for
Partnership obligations (exclusive of Credit Recovery Loans and
Subordinated Loans) to any of them, including, but not limited to,
accrued and unpaid Annual Partnership Management Fee for the fiscal year
of the Capital Transaction, but excluding the Working Capital Loan;
provided, however, that any debts or obligations to be repaid to any
Limited Partner or Affiliate thereof pursuant to this Clause Sixth shall
be repaid prior to the repayment of any such debts or obligations to any
General Partner or Affiliate thereof;
Seventh, to the Investment Limited Partner in an amount equal to
its Invested Amount;
Eighth, to the General Partners in amount equal to their Invested
Amounts, less any amounts paid out pursuant to Clause Second above;
Ninth, except in the case of a refinancing, to each partner in an
amount equal to the positive balance in his capital account after
adjustments pursuant to Clauses First through Ninth above;
Tenth, any balance 49.999% to the Investment Limited Partner,
.001% to the Special Limited Partner and 50% to the General Partners.
Notwithstanding the foregoing, however, for the purpose of
determining the amounts to be distributed under Clauses Sixth and Ninth
for a particular Capital Transaction, any distribution to the General
Partners under Clause Second for such Capital Transaction shall be
credited against and reduce any distributions which would otherwise be
made to the General Partners under Clauses Eighth and Tenth (with such
credit operating first against Clause Eighth distributions and then
against Clause Tenth distributions); and the amount not distributed to
the General Partners under Clauses Eighth and Tenth as a result thereof
shall be distributed as if it were additional proceeds of such Capital
Transaction. Any proceeds of a Capital Transaction distributed to the
General Partners under Clause Second which are not currently credited
against a distribution to the General Partners under either of Clause
Eighth or Clause Tenth from such Capital Transaction shall be applied as
additional credits against any distributions to the General Partners
under either Clauses Eighth and Tenth which may be the result of any
future Capital Transactions.
(c) Special Distributions
The Partnership shall make a special cash distribution in the
amount of $51,000, in the form of a return of capital to the General
Partners from the proceeds of the First Installment.
The special cash distribution shall be treated as a distribution
pursuant to Section 731 of the Code.
10.3 Distributions Upon Dissolution
(a) Upon dissolution and termination, after payment of, or
adequate provision for, the debts and obligations of the Partnership,
the remaining assets of the Partnership shall be distributed to the
Partners in accordance with the positive balances in their Capital
Accounts after taking into account all Capital Account adjustments for
the Partnership taxable year, including adjustments to Capital Accounts
pursuant to Sections 10.1(b) and 10.3(b). In the event that a General
Partner or Additional Limited Partner has a negative balance in its
Capital Account following the liquidation of the Partnership or such
Partner's Interest, after taking into account all Capital Account
adjustments for the Partnership taxable year in which such liquidation
occurs, such Partner shall pay to the Partnership in cash an amount
equal to the negative balance in such Partner's Capital Account. Such
payment shall be made by the end of such taxable year (or, if later,
within 90 days after the date of such liquidation) and shall, upon
liquidation of the Partnership, be paid to recourse creditors of the
Partnership or distributed to other Partners in accordance with the
positive balances in their Capital Accounts.
(b) With respect to assets distributed in kind to the Partners in
liquidation or otherwise, (i) any unrealized appreciation or unrealized
depreciation in the values of such assets shall be deemed to be profits
and losses realized by the Partnership immediately prior to the
liquidation or other distribution event; and (ii) such profits and
losses shall be allocated to the Partners in accordance with Section
10.1(b), and any property so distributed shall be treated as a
distribution of an amount in cash equal to the excess of such fair
market value over the outstanding principal balance of and accrued
interest on any debt by which the property is encumbered. For the
purposes of this Section 10.3(b), "unrealized appreciation" or
"unrealized depreciation" shall mean the difference between the fair
market value of such assets, taking into account the fair market value
of the associated financing (but subject to Section 7701(g) of the
Code), and the Partnership's adjusted basis for such assets as
determined under Regulation Section 1.704-1(b). This Section 10.3(b) is
merely intended to provide a rule for allocating unrealized gains and
losses upon liquidation or other distribution event, and nothing
contained in this Section 10.3(b) or elsewhere herein is intended to
treat or cause such distributions to be treated as sales for value. The
fair market value of such assets shall be determined by an appraiser to
be selected by the General Partner with the Consent of the Investment
Limited Partner.
10.4 Special Provisions
(a) Except as otherwise provided in this Agreement, all profits,
tax exempt income, losses, non-deductible non-capitalizable
expenditures, tax credits and cash distributions shared by a class of
Partners shall be shared by each Partner in such class in the ratio of
such Partner's paid-in Capital Contribution to the paid-in Class
Contribution of the class of Partners of which such Partner is a member.
(b) Notwithstanding the foregoing provisions of this Article X:
(i) If (a) the Partnership incurs recourse obligations or
Partner Non-Recourse Debt (including, without limitation,
Subordinated Loans) or (b) the Partnership incurs losses from
extraordinary events which are not recovered from insurance or
otherwise (collectively "Recourse Obligations") in respect of any
Partnership taxable year, then the calculation and allocation of
profits and losses shall be adjusted as follows: first, an amount
of deductions attributable to the Recourse Obligations shall be
allocated to the General Partners; and second, the balance of such
deductions shall be allocated as provided in Section 10.1(a).
(ii) If any profit arises from the sale or other disposition
of any Partnership asset which shall be treated as ordinary income
under the depreciation recapture provisions of the Code, then the
full amount of such ordinary income shall be allocated among the
Partners in the proportions that the Partnership deductions from
the depreciation giving rise to such recapture were actually
allocated. In the event that subsequently-enacted provisions of
the Code result in other recapture income, no allocation of such
recapture income shall
be made to any Partner who has not received the benefit of those
items giving rise to such other recapture income.
(iii) If the Partnership shall receive any purchase money
indebtedness in partial payment of the purchase price of the
Apartment Complex and such indebtedness is distributed to the
Partners pursuant to the provisions of Section 10.2(b) or Section
10.3, the distributions of the cash portion of such purchase price
and the principal amount of such purchase money indebtedness
hereunder shall be allocated among the Partners in the following
manner: On the basis of the sum of the principal amount of the
purchase money indebtedness and cash payments received on the sale
(net of amounts required to pay Partnership obligations and fund
reasonable reserves), there shall be calculated the percentage of
the total net proceeds distributable to each class of Partners
based on Section 10.2(b) or Section 10.3, as applicable, treating
cash payments and purchase money indebtedness principal
interchangeably for this purpose, and the respective classes shall
receive such respective percentages of the net cash purchase price
and purchase money principal. Payments on such purchase money
indebtedness retained by the Partnership shall be distributed in
accordance with the respective portions of principal allocated to
the respective classes of Partners in accordance with the
preceding sentence, and if any such purchase money indebtedness
shall be sold, the sale proceeds shall be allocated in the same
proportion.
(iv) Income, gain, loss and deduction with respect to any
asset which has a variation between its basis computed in
accordance with Treasury Regulation Section 1.704-1(b) and its
basis computed for Federal income tax purposes shall be shared
among the Partners so as to take account of such variation in a
manner consistent with the principles of Section 704(c) of the
Code and Treasury Regulation Section 1.704-1(b)(2)(iv)(g).
(v) The terms "profits" and "losses" used in this Agreement
shall mean income and losses, and each item of income, gain, loss,
deduction or credit entering into the computation thereof, as
determined in accordance with the accounting methods followed by
the Partnership and computed in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv). Profits and losses for
Federal income tax purposes shall be allocated in the same manner
as set forth in this Article X, except as provided in Section
10.4(b)(iv).
(vi) If there is a net decrease in Partnership Minimum Gain
during a Partnership taxable year, each Partner will be allocated
items of income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Partner's
share of the net decrease in Partnership Minimum Gain during the
year, before any other allocation of Partnership items for such
taxable year. A Partner shall not be subject to this mandatory
allocation of income or gain to the extent that any of the
exceptions provided in Treasury Regulation Section 1.704-2(f)(2)-
(5) applies. All allocations pursuant this Section 10.4(b)(vi)
shall be in accordance with Treasury Regulation Section 1.704-
2(f). This provision is a "minimum gain chargeback" within the
meaning of Treasury Regulation Section 1.704-2(f) and shall be
construed as such.
(vii) If there is a net decrease in Partner Non-Recourse
Debt Minimum Gain during a Partnership taxable year, then each
Partner with a share of the minimum gain attributable to such debt
at the beginning of such year will be allocated items of income
and gain for such year (and, if necessary, subsequent years) in an
amount equal to such Partner's share of the net decrease in
Partner Non-Recourse Debt Minimum Gain chargeback to the extent
that any of the exceptions provided in Treasury Regulation Section
1.704-2T(i)(4) applied consistently with Treasury Regulation
Section 1.704-2(f)(2)-(5) under Section 704 of the Code.
(viii) If a Limited Partner unexpectedly receives (a) an
allocation of loss or deduction or expenditures described in
Section 705(a)(2)(B) of the Code made (1) pursuant to Section
704(e)(2) of the Code to a donee of an Interest, (2) pursuant to
Section 706(d) of the Code as the result of a change in any
Partner's Interest, or (3) pursuant to Regulation Section
1.751-1(b)(2)(ii) as a result of a distribution by the Partnership
of unrealized receivables or inventory items or (b) a
distribution, and such allocation and/or distribution would cause
the negative balance in such Partner's Capital Account to exceed
(i) such Partner's share of Partnership Minimum Gain plus (ii) the
amount of such Partner's obligation, if any, to restore a negative
balance in such Partner's Capital Account, plus (iii) such
Partner's share of Partner Non-Recourse Debt Minimum Gain with
respect to which such partner or a Related Person or a Related
Person to such Partner bears the Economic Risk of Loss, then such
Partner shall be allocated items of income and gain in an amount
and manner sufficient to eliminate such negative balance as
quickly as possible. For purposes of this Section 10.4(b)(viii),
a Partner's Capital Account shall be treated as reduced by
Qualified Income Offset Items.
(ix) In the event that any fee payable to the General
Partner or any Affiliate thereof shall instead be determined to be
a non-deductible, non-capitalizable distribution from the
Partnership to a Partner for Federal income tax purposes, then
there shall be allocated to such General Partner an amount of
gross income equal to the amount of such distribution.
(x) In applying the provisions of Article X with respect to
distributions and allocations, the following ordering of
priorities shall apply:
(1) Capital Accounts shall be deemed to be reduced
by Qualified Income Offset Items.
(2) Capital Accounts shall be reduced by
distributions of Cash Flow under Section 10.2(a).
(3) Capital Accounts shall be reduced by
distributions from Capital Transactions under Section
10.2(b).
(4) Capital Accounts shall be increased by any
minimum gain chargeback under Section 10.4(b)(vi) or Section
10.4(b)(vii).
(5) Capital Accounts shall be increased by any
qualified income offset under Section 10.4(b)(viii).
(6) Capital Accounts shall be increased by
allocations of profits under Section 10.1(a).
(7) Capital Accounts shall be reduced by allocations
of losses under Section 10.1(a).
(8) Capital Accounts shall be reduced by allocations
of losses under Section 10.1(b).
(9) Capital Accounts shall be increased by
allocations of profits under Section 10.1(b).
(xi) To the maximum extent permitted under the Code,
allocations of profits and losses shall be modified so that the
Partners' Capital Accounts reflect the amounts they would have
reflected if adjustments required by Sections 10.4(b)(vi),
10.4(b)(vii) and 10.4(b)(viii) had not occurred.
10.5 Authority of the General Partners to Vary Allocations to
Preserve and Protect the Partners' Intent
(a) It is the intent of the Partners that each Partner's
distributive share of profits, tax-exempt income, losses, non-deductible
non-capitalizable expenditures and credits (and items thereof) shall be
determined and allocated in accordance with this Agreement to the
fullest extent permitted by Section 704(b) of the Code. In order to
preserve and protect the determinations and allocations provided for in
this Agreement, the General Partners are hereby authorized and directed
to allocate profits, tax-exempt income, losses, nondeductible
non-capitalizable expenditures and credits (and items thereof) arising
in any year differently than otherwise provided for in this Agreement to
the extent that allocating profits, tax-exempt income, losses,
nondeductible non-capitalizable expenditures or credits (or any item
thereof) in the manner provided for herein would cause the
determinations and allocations of each Partner's distributive share of
profits, tax-exempt income, losses, non-deductible non-capitalizable
expenditures, or credits (or any item thereof) not to be permitted by
Section 704(b) of the Code and the Treasury Regulations promulgated
thereunder. Any allocation made pursuant to this Section 10.5 shall be
deemed to be a complete substitute for any allocation otherwise provided
for in this Agreement, and no amendment of this Agreement or approval of
any Partner shall be required.
(b) In making any allocation (the "New Allocation") under Section
10.5(a), the General Partners are authorized to act only after having
been advised in writing by the Tax Accountants that, under Section
704(b) of the Code, (i) the New Allocation is necessary, and (ii) the
New Allocation is the minimum modification of the allocations otherwise
provided for in this Agreement necessary in order to assure that, either
in the then-current year or in any preceding year, each Partner's
distributive share of profits, tax-exempt income, losses, non-deductible
non-capitalizable expenditures, and credits (or any item thereof) is
determined and allocated in accordance with this Agreement to the
fullest extent permitted by Section 704(b) of the Code.
(c) If the General Partners are required by Section 10.5(a) to
make any New Allocation in a manner less favorable to the Limited
Partners than is otherwise provided for herein, then the General
Partners are authorized and directed, only after having been advised in
writing by the Tax Accountants that such an allocation is permitted by
Section 704(b) of the Code, to allocate profits, tax-exempt income,
losses, non-deductible non-capitalizable expenditures, and credits (and
any item thereof) arising in later years in such manner so as to bring
the allocations of profits, tax-exempt income, losses, non-deductible
non-capitalizable expenditures, and credits (and each item thereof) to
the Limited
Partners as nearly as possible to the allocations thereof otherwise
contemplated by this Agreement.
(d) New Allocations made by the General Partners under Section
10.5(a) and Section 10.5(c) in reliance upon the advice of the Tax
Accountants shall be deemed to be made pursuant to the fiduciary
obligation of the General Partners to the Partnership and the Limited
Partners, and no such allocation shall give rise to any claim or cause
of action by any Limited Partner.
ARTICLE XI
Management Agent
A. The General Partner shall engage the Management Agent to manage
the Apartment Complex pursuant to the Management Agreement. The
Management Agent shall receive a Management Fee of those amounts payable
from time to time by the Partnership to the Management Agent for
management services in accordance with a management contract approved by
FmHA or, when the Apartment Complex is not subject to FmHA regulation,
in accordance with a reasonable and competitive fee arrangement. From
and after the Admission Date, the Partnership shall not enter into any
Management Agreement or modify or extend any Management Agreement unless
(i) the General Partners shall have obtained the prior written consent
of the Special Limited Partner to the identity of the Management Agent
and the terms of the Management Agreement or the modification or
extension thereof and (ii) such new Management Agreement or modified or
extended Management Agreement provides that it is terminable by the
Partnership on thirty (30) days' notice by the Partnership in the event
of any change in the identity of the General Partners.
B. Notwithstanding the foregoing, however, should the Investment
General Partner or an Affiliate thereof perform property management
services for the Partnership, property management, rent-up or leasing
fees shall be paid to the Investment General Partner or such Affiliate
only for services actually rendered and shall be in an amount equal to
the lesser of (i) fees competitive in price and terms with those of
non-affiliated Persons rendering comparable services in the locality
where the Apartment Complex is located and which could reasonably be
available to the Partnership, or (ii) the maximum amount allowed by
FmHA. No duplicate property management fees shall be paid to any
Person.
C. If (i) the Management Agent is the General Partner or an
Affiliate of the General Partner, and (a) the Apartment Complex shall be
subject to a substantial building code violation which shall not have
been cured within six months after notice from the applicable
governmental agency or department or (b) the Partnership shall not have
Cash Flow of at least $500 during year after 1997, or (ii) an Event of
Bankruptcy shall occur with respect to the Management Agent, or (iii)
the Management Agent shall commit willful misconduct or gross negligence
in its conduct of its duties and obligations under the Management
Agreement or (iv) there is any change in the identity of the General
Partners, or (v) the Management Agent is cited by FmHA, any Tax Credit
monitoring or compliance agency of the State or any other governmental
agency for a violation or alleged violation of any applicable rules,
regulations or requirements, including, but not limited to, non-
compliance with the Minimum Set-Aside Test, the Rent Restriction Test or
any other Tax Credit-related provision, then upon request by the Special
Limited Partner and subject to FmHA approval, if required, the General
Partners must cause the Partnership to promptly terminate the Management
Agreement with the Management Agent and appoint a new Management Agent
selected by the Special Limited Partner, which new Management Agent
shall not be an Affiliate of the General Partner. Each General Partner
hereby grants to the Special Limited Partner an irrevocable (to the
extent permitted by applicable law) power of attorney coupled with an
interest to take any action and to execute and deliver any and all
documents and instruments on behalf of such General Partner and the
Partnership as the Special Limited Partner may deem to be necessary or
appropriate in order to effectuate the provisions of this Article XI.C.
Subject to FmHA approval, if required, the Partnership shall not enter
into any future management arrangement or renew or extend any existing
management arrangement unless such arrangement is terminable without
penalty upon the occurrence of the events described in this Article XI.
D. The General Partners shall have the duty to manage the
Apartment Complex during any period when there is no Management Agent.
ARTICLE XII
Books and Records, Accounting, Tax Elections, Etc.
12.1 Books and Records
The Partnership shall maintain all books and records which are
required under the Uniform Act or by any governmental agency having
jurisdiction and may maintain such other books and records as the
General Partners in their discretion deem advisable. Every Limited
Partner, or its duly authorized representatives, shall at all times have
access to the records of the Partnership at the principal office of the
Partnership at any and all reasonable times, and may inspect and copy
any of such records. A list of the names and addresses of all of the
Limited Partners shall be maintained as part of the books and records of
the Partnership and shall be mailed to any Limited Partner upon request.
A reasonable charge for copy work may be charged by the Partnership.
12.2 Bank Accounts
The bank accounts of the Partnership shall be maintained in the
Partnership's name with such financial institutions as the General
Partners shall determine. Withdrawals shall be made only in the regular
course of Partnership business on such signature or signatures as the
General Partners may determine. All deposits (including security
deposits and other funds required to be escrowed by FmHA) and other
funds not needed in the operation of the business shall be deposited, if
required by applicable law and to the extent permitted by FmHA or
Mortgage requirements, in interest-bearing accounts or invested in
United States Government obligations maturing within one year.
12.3 Auditors
(a) The Auditors shall prepare, for execution by the General
Partners, all tax returns of the Partnership. Prior to the filing of
the Partnership tax returns, and in no event later than February 1 of
each year, the Auditors shall deliver the tax returns for such year to
the Tax Accountants for their review and comment. If a dispute arises
between the Auditors and the Tax Accountants over the proper preparation
of the tax returns and such dispute cannot be resolved by the Auditors
and the Tax Accountants by March 1 of such year, then the Tax
Accountants shall make the final decision on whether any changes are
necessary.
(b) The Auditors shall audit and certify all annual financial
reports to the Partners in accordance with generally accepted auditing
standards.
(c) If the Partnership fails to fulfill any of its obligations
under Section 12.7(a)(i) and/or Section 12.7(a)(ii) within the time
periods set forth therein, at any time thereafter upon notice from the
Special Limited Partner that a change in the identity of the Auditors is
desired, the General Partners, on behalf of the Partnership, shall
promptly terminate the Partnership's engagement of the Auditors, and the
prior written consent of the Special Limited Partner must be received to
the appointment of replacement Auditors. If no such consent is received
to the appointment of replacement Auditors within thirty (30) days of
the notice from the Special Limited Partner to replace the Auditors,
then the Special Limited Partner shall appoint replacement Auditors of
its own choosing, the cost of which shall be borne by the Partnership as
a Partnership expense. All Partners hereby grant to the Special Limited
Partner a special power of attorney, irrevocable to the extent permitted
by law, coupled with an interest, to so appoint replacement Auditors and
to anything else which in the view of the Special Limited Partner may be
necessary or appropriate to accomplish the purposes of this Section
12.3(c).
12.4 Cost Recovery and Elections
(a) With respect to all depreciable assets for which cost recovery
deductions are permitted, the Partnership shall elect to use, so far as
permitted by the provisions of the Code, accelerated cost recovery
methods. However, the Partnership may change to another method of cost
recovery if such other method is, in the opinion of the Auditors, more
advantageous to the Investment Limited Partner and the limited partners
and/or holders of beneficial assignee certificates thereof.
(b) Subject to the provisions of Section 12.5, all other
elections required or permitted to be made by the Partnership under the
Code shall be made by the General Partners in such manner as will, in
the opinion of the Auditors, be most advantageous to the Investment
Limited Partner and the limited partners and/or holders of beneficial
assignee certificates thereof.
12.5 Special Basis Adjustments
In the event of a transfer of all or any part of the Interest of
the Investment Limited Partner or a transfer of all or any part of an
interest of a partner and/or holders of beneficial assignee certificates
of the Investment Limited Partner, the Partnership shall elect, upon the
request of the Investment Limited Partner, pursuant to Section 754 of
the Code, to adjust the basis of the Partnership property. Any
adjustments made pursuant to said Section 754 shall affect only the
successor in interest to the transferring Partner or partner or holder
of beneficial assignee certificate thereof. Each Partner will furnish
the Partnership all information necessary to give effect to such
election.
12.6 Fiscal Year
The fiscal and tax year of the Partnership shall be the calendar
year. The books of the Partnership shall be kept on an accrual basis.
12.7 Information to Partners
(a) The General Partners shall cause to be prepared and
distributed to all Persons who were Partners at any time during a fiscal
year of the Partnership:
(i) Within forty-five (45) days after the end of each fiscal
year of the Partnership, (A) a balance sheet as of the end of such
fiscal year, a statement of income, a statement of partners'
equity, and a statement of cash flows, each for the year then
ended, all of which, except the statement of cash flows, shall be
prepared in accordance with generally accepted accounting
principles and accompanied by a report of the Auditors containing
an opinion of the Auditors, and (B) a report of the activities of
the Partnership during the period covered by the report. With
respect to any distribution to the Investment Limited Partner, the
report called for shall separately identify distributions from (1)
Cash Flow from operations during the period, (2) Cash Flow from
operations during a prior period which had been held as reserves,
(3) proceeds from disposition of property and investments, (4)
lease payments on net leases with builders and sellers, (5)
reserves from the gross proceeds of the Capital Contribution of
the Investment Limited Partner, (6) borrowed monies, and (7)
transactions outside of the ordinary course of business with a
description thereof.
(ii) Within thirty (30) days after the end of each fiscal
year of the Partnership, all information relating to the
Partnership and/or the Apartment Complex which is necessary, in
the view of the Tax Accountants, for the preparation of the
Limited Partners' Federal income tax returns.
(iii) Within thirty (30) days after the end of each quarter
of a fiscal year of the Partnership, a report containing:
(A) a balance sheet, which may be unaudited;
(B) a statement of income for the quarter then ended,
which may be unaudited;
(C) a statement of cash flows for the quarter then
ended, which may be unaudited;
(D) a certification of the General Partners that the
Apartment Complex and its tenants are in compliance with all
applicable federal, state, and local requirements and
regulations;
(E) a low-income housing tax credit monitoring form, a
copy of the rent roll for the Apartment Complex, a statement
of income and expenses, an operating statement and an
Occupancy/Rental Report, all in the form specified by BCCLP;
(F) all other information which would be pertinent to
a reasonable investor regarding the Partnership and its
activities during the quarter covered by the report and
(b) Within sixty (60) days after the end of each fiscal year of
the Partnership 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 appropriate
state agency concerning the same.
(c) Upon the written request of the Investment Limited Partner for
further information with respect to any matter covered in item (a) or
item (b) above, the General Partners shall furnish such information
within thirty (30) days of receipt of such request.
(d) Prior to October 15 of each year, the Partnership shall send
to the Investment Limited Partner an estimate of the Investment Limited
Partner's share of the tax credits, profits and losses of the
Partnership for Federal income tax purposes for the current fiscal year.
Such estimate shall be prepared by the General Partners and the
Auditors.
(e) Within 15 days after the end of any calendar quarter during
which:
(i) there is a material default by the Partnership under the
Project Documents or in payment of any mortgage, taxes, interest
or other obligation on secured or unsecured debt,
(ii) any reserve has been reduced or terminated by
application of funds therein for purposes materially
different from those for which such reserve was established,
(iii) any General Partner has received any notice of a
material fact which may substantially affect further distributions
or Tax Credit allocations to any Limited Partner, or
(iv) any Partner has pledged or collateralized its Interest
in the Partnership,
the General Partner shall send the Investment Limited Partner a detailed
report of such event.
(f) After the Admission Date, the Partnership shall send to the
Investment Limited Partner, on or before the tenth day of each month,
the monthly housing credit monitoring form, and copies of all applicable
periodic reports covering the status of project operations from the
previous period, as may be required by FmHA.
(g) On or before May 1st of each of the Partnership's fiscal year,
the Partnership shall send to the Investment Limited Partner a report on
operations, in the form supplied by BCCLP.
(h) The General Partners shall cause the Partnership to send to
the Investment Limited Partner a copy of each Construction Mortgage draw
requisition and any notification or correspondence from the Construction
Lender indicating that any such draw will not be paid as requisitioned.
Upon receipt, the Partnership shall send to the Investment Limited
Partner copies of the Form(s) 8609 evidencing the Tax Credit allocation.
Promptly after Permanent Mortgage Commencement, the General Partners
shall send to BCCLP a closing binder containing photocopies of the
fully-executed versions of all documents signed in connection with the
Permanent Mortgage. The General Partners hereby consent to the relevant
FmHA District Office, as well as any other applicable FMHA office,
providing BCCLP with copies of all material communications between any
such office and the General Partners and/or the Partnership, including,
but not limited to, any notices of default. From and after any date
upon which the General Partners receive notice from the Investment
Limited Partner that the Investment Limited Partner would like copies of
the monthly rent rolls for the Apartment Complex to be sent to BCCLP,
the General Partners shall send copies of the rent rolls to BCCLP no
later than ten (10) days after the expiration of each month.
(i) If the earlier of (A) the Completion Date or (B) the date upon
which tenants first occupied apartment units in the Apartment Complex
shall have occurred six months or more prior to the date upon which the
Investment Limited Partner acquired its Interest in the Partnership,
then the General Partners shall cause to be prepared and delivered to
the Investment Limited Partner within sixty (60) days of the Admission
Date the following items:
(i) An unaudited statement of income of the Partnership for
the year (or such shorter period as there may be from the date of
the most recent audited statement of income of the Partnership)
ended on the date upon which the Investment Limited Partner
acquired its Interest in the Partnership; and
(ii) An audited statement of income of the Partnership for
any fiscal year of the Partnership ending between (A) the earlier
of (1) the Completion Date or (2) the date upon which tenants
first occupied apartment units in the Apartment Complex and (B)
the date upon which the Investment Limited Partner acquired its
Interest in the Partnership.
(j) Within thirty (30) days of the Completion Date, the General
Partners shall prepare, or cause the Auditors to prepare, and deliver to
each Limited Partner a Tax Credit basis worksheet for each building in
the Apartment Complex, all in a form specified by BCCLP.
(k) If the General Partners do not cause the Partnership to
fulfill its obligations under Section 12.7(a)(i) and/or Section
12.7(a)(ii) within the time periods set forth therein, the General
Partners may be required by the Investment Limited Partner to pay as
damages the sum of $500 per day (plus interest at a rate equal to the
general base rate of interest established by The First National Bank of
Boston or its successors and assigns and announced by it as the rate
charged by it to its prime commercial customers on short-term unsecured
borrowings as its "base rate" from time to time in effect plus 3%) to
the Investment Limited Partner until such obligations shall have been
fulfilled. Such damages shall be paid forthwith by the General
Partners, and failure to so pay shall constitute a material default of
the General Partners hereunder. In addition, if the General Partners
shall so fail to pay, the General Partners and their Affiliates shall
forthwith cease to be entitled to the Annual Partnership Management Fee,
and to the payment of any Cash Flow or Capital Transaction proceeds to
which they may otherwise be entitled hereunder. Such payments of the
Annual Partnership Management Fee, Cash Flow and Capital Transaction
proceeds shall be restored only upon the payment of such damages in
full, and any amount of such damages not so paid shall be deducted
against payments of the Annual Partnership Management Fee, Cash Flow and
Capital Transaction proceeds otherwise due to the General Partners or
their Affiliates.
12.8 Expenses of the Partnership
(a) All expenses of the Partnership shall be billed directly to
and paid by the Partnership.
(b) Except in extraordinary circumstances, neither the Investment
General Partner nor any Affiliate thereof shall be permitted to contract
or otherwise deal with the Partnership for the sale of goods or services
or the lending of money to the Partnership or the General Partners,
except for (i) management services, subject to the restrictions set
forth in Article XI.B., (ii) loans made by, or guaranteed by, the
Investment General Partner or any of its Affiliates, and (iii) those
dealings, contracts or provision of services described in the Investment
Partnership Agreement or in the Prospectus. Extraordinary circumstances
shall only be presumed to exist where there is an emergency situation
requiring immediate action and the services required are not immediately
available from unaffiliated parties. All services rendered under such
circumstances must be rendered pursuant to a written contract which must
contain a clause allowing termination without penalty on sixty (60)
days' notice. Goods and services provided under such circumstances must
be provided at the lesser of actual cost or the price charged for such
goods or services by independent parties.
(c) In the event extraordinary circumstances arise, the Investment
General Partner and its Affiliates may provide construction services in
connection with the Apartment Complex. Neither the Investment General
Partner nor any of its Affiliates shall provide such services unless it
believes it has an adequate staff to do so and unless such provision of
goods and construction services is part of its ordinary and ongoing
business in which it has previously engaged, independent of the
activities of the Investment Limited Partner. Any such services must be
reasonable for and necessary to the Investment Limited Partner, actually
furnished to the Investment Limited Partner, and provided at the lower
of ten percent (10%) of the construction contract rate with respect to
the Apartment Complex or ninety percent (90%) of the competitive price
charged for such services by independent parties for comparable goods
and services in the same geographic location (except that in the case of
transfer agent, custodial and similar banking-type fees, and insurance
fees, the compensation, price or fee shall be at the lesser of costs or
the compensation, price or fee of any other Person rendering comparable
services as aforesaid). Cost of services as used herein means the pro
rata cost of personnel, including an allocation of overhead directly
attributable to such personnel, based on the amount of time such
personnel spent on such services or other method of allocation
acceptable to the accountants for the Investment Limited Partner.
(d) All services provided by the Investment General Partner or any
Affiliate thereof pursuant to Section 12.8(c) must be rendered pursuant
to the Investment Partnership Agreement or a written contract which
precisely describes the services to be rendered and all compensation to
be paid and shall contain a clause allowing termination without penalty
upon sixty (60) days' notice to the Investment General Partner by a vote
of a majority in interest of the limited partners and assignees of
beneficial interests in the Investment Limited Partner.
(e) No compensation or fees may be paid by the Partnership to the
Investment General Partner or its Affiliates except as described in the
Investment Partnership Agreement or in the Prospectus.
ARTICLE XIII
General Provisions
13.1 Restrictions by Reason of Section 708 of the Code
No Disposition may be made if the Interest sought to be Disposed
of, when added to the total of all other Interests Disposed of within
the period of twelve consecutive months prior to the proposed date of
the Disposition, could, in the opinion of tax counsel to the
Partnership, result in the termination of the Partnership under Section
708 of the Code. This Section 13.1 shall have no application to any
required repurchase of the Investment Limited Partner's Interest. Any
Disposition in contravention of any of the provisions of this Section
13.1 shall be void ab initio and ineffectual and shall not bind or be
recognized by the Partnership. Notwithstanding the foregoing provisions
of this Section 13.1, however, the Investment Limited Partner may waive
the provisions of this Section 13.1 at any time as to a Disposition or
series of Dispositions, and in the event of such a waiver, this Section
13.1 shall have no force or effect upon such Disposition or series of
Dispositions.
13.2 Amendments to Certificate
Within one hundred twenty (120) days after the end of any
Partnership fiscal year in which the Investment Limited Partner shall
have received any distributions under Article X, the General Partners
shall file an amendment to this Agreement reducing by the amount of its
allocable share of such distribution the amount of Capital Contribution
of the Investment Limited Partner as stated in the last previous
amendment to this Agreement. However, Schedule A shall not be amended
on account of any such distribution.
The Partnership shall amend the Certificate at least once each
calendar quarter to effect the substitution of Substituted Limited
Partners, although the General Partners may elect to do so more
frequently. In the case of assignments, where the assignee does not
become a Substituted Limited Partner, the Partnership shall recognize
the assignment not later than the last day of the calendar month
following receipt of notice of assignment and all documentation required
in connection therewith hereunder.
Notwithstanding the foregoing provisions of this Section 13.2, no
such amendments to this Agreement need be filed by the General Partners
if the Certificate is not required to and does not identify the Limited
Partners or their Capital Contributions in such capacity.
13.3 Notices
Any notice called for under this Agreement shall be in writing and
shall be deemed adequately given if actually delivered or if sent by
registered or certified mail, postage prepaid, to the party for whom
such notice is intended at such party's last address of record on the
Partnership books.
13.4 Word Meanings
The words such as "herein," "hereinafter," "hereof" and
"hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise
requires. The singular shall include the plural, and vice versa, and
each gender (masculine, feminine and neuter) shall include the other
genders, unless the context requires otherwise. Each reference to a
"Section" or an "Article" refers to the corresponding Section or Article
of this Agreement, unless specified otherwise. References to Treasury
Regulations (permanent or temporary) or Revenue Procedures shall include
any successor provisions.
13.5 Binding Effect
The covenants and agreements contained herein shall be binding
upon and inure to the benefit of the heirs, executors, administra-tors,
successors and assigns of the respective parties hereto.
13.6 Applicable Law
This Agreement shall be construed and enforced in accordance with
the laws of the State.
13.7 Counterparts
This Agreement may be executed in several counterparts and all so
executed shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the original or the
same counterpart.
13.8 Financing Regulations
So long as any of the Project Documents are in effect, (a) each of
the provisions of this Agreement shall be subject to, and the General
Partners covenant to act in accordance with, the Project Documents; (b)
the Project Documents shall govern the rights and obligations of the
Partners, their heirs, executors, administrators, successors and assigns
to the extent expressly provided therein; (c) upon any dissolution of
the Partnership or any transfer of the Apartment Complex, no title or
right to the possession and control of the Apartment Complex and no
right to collect the rent therefrom shall pass to any Person who is not,
or does not become, bound by the Project Documents and other FmHA
documents in a manner satisfactory to the FmHA; (d) no amendment to any
provision of the Project Documents shall become effective without the
prior written consent of FmHA (if required); and (e) the affairs of the
Partnership shall be subject to FmHA regulation and no action shall be
taken which would require the consent or approval of FmHA unless the
same is first obtained. No new Partner shall be admitted to the
Partnership, and no Partner shall withdraw from the Partnership or be
substituted for without the consent of FmHA (if such consent is then
required). No amendment to this Agreement relating to matters governed
by FmHA regulations or requirements shall become effective until the
prior written consent of FmHA (if required) to such amendment shall have
been obtained.
Any conveyance or transfer of title to all or any portion of the
Apartment Complex required or permitted under this Agreement shall in
all respects be subject to all conditions, approvals and other
requirements of FmHA rules and regulations applicable thereto.
13.9 Separability of Provisions
Each provision of this Agreement shall be considered separable and
(a) if for any reason any provision is determined to be invalid, such
invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid, and (b) if for any reason any provision
would cause the Investment Limited Partner to be bound by the
obligations of the Partnership (other than the rules and regulations of
FmHA and the requirements of any other Lender), such provision or
provisions shall be deemed void and of no effect.
13.10 Paragraph Titles
All article and section headings in this Agreement are for
convenience of reference only and are not intended to qualify the
meaning of any article or section.
13.11 Amendment Procedure
This Agreement may be amended by the General Partners only with
the Consent of the Investment Limited Partner and the prior written
consent of the Special Limited Partner.
13.12 Extraordinary Limited Partner Expenses
Any and all costs and expenses incurred by the Investment Limited
Partner and/or the Special Limited Partner in connection with exercising
rights and remedies against the General Partners with respect to this
Agreement, including without limitation, reasonable attorneys' fees,
shall be paid by the General Partners on demand. All amounts due to the
Investment Limited Partner and/or the Special Limited Partner pursuant
to this provision shall bear interest from demand at a rate of 9%. If
any General Partner breaches any provision of this Agreement, the
Investment Limited Partner and/or the Special Limited Partner may employ
an attorney or attorneys to protect its rights hereunder, and the
General Partners shall pay on demand the reasonable attorneys' fees and
expenses incurred by the Investment Limited Partner and/or the Special
Limited Partner, whether or not a legal action is actually commenced
against any General Partner by reason of such breech. All amounts due
to the Investment Limited Partner and/or the Special Limited Partner
pursuant to this provision shall bear interest from demand at a rate
equal to 9%.
13.13 Time of Admission
The Investment Limited Partner shall be deemed to have been
admitted to the Partnership as of the Commencement Date for all purposes
of this Agreement, including Article X hereof; provided, however, that
if regulations are issued under the Code or an amendment to the Code is
adopted which would require, in the opinion of the Auditors, that the
Investment Limited Partner be deemed admitted on a date other than as of
the Commencement Date, then the General Partners shall select a
permitted admission date which is most favorable to the Investment
Limited Partner
WITNESS the execution hereof under seal as of the 1st day of
November, 1995.
ORIGINAL (WITHDRAWING)
LIMITED PARTNER(S):
/s/James L. Gregory
James L. Gregory
/s/Holly B. Gregory
Holly B. Gregory
INVESTMENT LIMITED PARTNER:
BOSTON CAPITAL TAX CREDIT
FUND IV, L.P., a Delaware
limited partnership
By: Boston Capital Associates
IV, L.P., its general
By: C & M Associates d/b/a
Boston Capital Associates
By: /s/Bonnie Kate Fox
Bonnie Kate Fox,
Attorney-In-Fact for
John P. Manning,
a general partner
GENERAL PARTNER(S):
/s/James L. Gregory
James L. Gregory
/s/Holly B. Gregory
Holly B. Gregory
SPECIAL LIMITED PARTNER:
BCTC 94, INC.
By: /s/Bonnie Kate Fox
Bonnie Kate Fox,
Attorney-In-Fact for
John P. Manning,
its President
CONSENT AND AGREEMENT
The undersigned hereby executes this Agreement for the sole
purpose of agreeing to the provisions of Article XI of the foregoing
Amended and Restated Agreement and Certificate of Limited Partnership
notwithstanding any provision of the Management Agreement to the
contrary.
Management Agent
Weststates Property Management Co.
By:____________________________
_______________________, its
____________________________
STATE OF Nevada )
) ss.
COUNTY OF Elko )
BEFORE ME, the undersigned Notary Public in and for said County
and State, personally appeared the above-named James L. Gregory, known
to me to be the person who executed the foregoing instrument, and, being
duly sworn, acknowledged that the statements therein contained are true
and that he did sign the same as his free act and deed.
WITNESS my hand and official seal this ______ day of _________,
1995.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF Nevada )
) ss.
COUNTY OF Elko )
BEFORE ME, the undersigned Notary Public in and for said County
and State, personally appeared the above-named Holly B. Gregory, known
to me to be the person who executed the foregoing instrument, and, being
duly sworn, acknowledged that the statements therein contained are true
and that she did sign the same as her free act and deed.
WITNESS my hand and official seal this ______ day of _________,
1995.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF Nevada )
) ss.
COUNTY OF Elko )
BEFORE ME, the undersigned Notary Public in and for said County
and State, personally appeared the above-named ____________________
known to me to be the ________________ of Weststates Property Management
Company, who, being duly sworn, acknowledged that the statements therein
contained are true and that he did sign the same is his free act and
deed and that the same is the duly authorized free act and deed of
Weststates Property Management Company.
WITNESS my hand and official seal this ______ day of _________,
1995.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named Bonnie Kate Fox,
Attorney-in-Fact for John P. Manning, known to me to be a general
partner of C & M Associates d/b/a Boston Capital Associates, which is a
general partner of Boston Capital Associates IV, L.P., which is the
general partner of Boston Capital Tax Credit Fund IV, L.P., who being
duly sworn, acknowledged that he did sign the foregoing instrument, that
the statements therein contained are true and that the same is the duly
authorized free act and deed of Boston Capital Tax Credit Fund IV, L.P..
WITNESS my hand and official seal this ______ day of _________,
1995.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named Bonnie Kate Fox,
Attorney-In-Fact for John P. Manning, known to me to be the President of
BCTC 94, Inc., who, being duly sworn, acknowledged that he did sign the
foregoing instrument and that the statements therein contained are true
and that the same is the duly authorized free act and deed of BCTC 94,
Inc.
WITNESS my hand and official seal this ______ day of _________,
1995.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
OVERTON ASSOCIATES LIMITED PARTNERSHIP
Schedule A
As of
November 1, 1995
General Partners Capital Contribution
James D. Gregory $14,000
Holly B. Gregory
1118 Court Street
Elko, NV 89803
Special Limited Partner Capital Contribution
BCTC 94, Inc. $10
c/o Boston Capital
Partners, Inc.
313 Congress Street
Boston, MA 02210-1232
Investment Total Agreed-to Paid-In
Limited Partner Capital Contribution Capital
Contribution*
Boston Capital Tax $297,564 $174,282
Credit Fund IV,
L.P.
c/o Boston Capital
Partners, Inc.
313 Congress Street
Boston, Massachusetts 02210-1232
____________________________
*Paid-in Capital Contribution as of the date of this Schedule A. Future
Installments of Capital Contribution are subject to adjustment and are
due at the times and subject to the conditions set forth in the
Agreement to which this Schedule is attached.
11022_1
BOSTON CAPITAL TAX CREDIT FUND IV, L.P.
OVERTON ASSOCIATES LIMITED PARTNERSHIP
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of November 1, 1995, by
OVERTON ASSOCIATES LIMITED PARTNERSHIP, a Nevada limited partnership
(the "Operating Partnership"); JAMES L. GREGORY and HOLLY B. GREGORY
(the "Operating General Partners) and JAMES L. GREGORY and HOLLY B.
GREGORY (the "Original Limited Partners") for the benefit of BOSTON
CAPITAL TAX CREDIT FUND IV, L.P., a Delaware limited partnership (the
"Investment Partnership"), BOSTON CAPITAL ASSOCIATES IV, L.P., a
Delaware limited partnership ("Boston Capital"), CROWE & CASEY, P.C.
and certain other persons or entities described herein.
WHEREAS, the Operating Partnership proposes to admit the
Investment Partnership as a limited partner thereof pursuant to the
Second Amended and Restated Agreement and Certificate of Limited
Partnership of the Operating Partnership dated as of November 1, 1995
(the "Operating Partnership Agreement"), in accordance with which the
Investment Partnership will make substantial capital contributions to
the Operating Partnership;
WHEREAS, the Investment Partnership and Boston Capital have
relied upon certain information and representations described herein
in evaluating the merits of investment by the Investment Partnership
in the Operating Partnership; and
WHEREAS, Crowe & Casey, P.C., as counsel for the Investment
Partnership, will rely upon such information and representations in
connection with its delivery of certain opinions with respect to this
transaction;
NOW, THEREFORE, to induce the Investment Partnership to enter
into the Operating Partnership Agreement and become a limited partner
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, the Operating General Partner
and the Original Limited Partner hereby agree as follows for the
benefit of the Investment Partnership, Boston Capital, Crowe & Casey,
P.C. and certain other persons hereinafter described.
1. Representations, Warranties and Covenants of the
Operating Partnership, the Operating General
Partner and the Limited Partner
The Operating Partnership, the Operating General Partner and the
Original Limited Partner jointly and severally represent, warrant and
certify to the Investment Partnership, Boston Capital, and Crowe &
Casey, P.C. 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 its
apartment complex (the "Apartment Complex") and conduct its business;
the Operating Partnership, the Operating General Partner and the
Original Limited 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, the Operating General Partner and the Original Limited
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 any Operating General Partner or Original
Limited Partner is bound or any law, regulation, judgment, decree or
order applicable to the Operating Partnership or any Operating General
Partner or the Original Limited Partner or any of their respective
properties; this Certification and Agreement constitutes the valid and
binding agreement of the Operating Partnership, the Operating General
Partner and the Original Limited Partner, enforceable against each of
them in accordance with its terms.
1.02 The Operating General Partner has delivered to
the Investment Partnership, Boston Capital or their affiliates all
documents and information which would be material to a prudent
investor in deciding whether to invest in the Operating Partnership.
All factual information, including without limitation the information
set forth in Exhibit A hereto, provided to the Investment Partnership,
Boston Capital 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. 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, depreciation 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 each of the Operating Partnership, the
Operating General Partner and the Original Limited 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
contained in the Operating Partnership Agreement is true and correct
as of the date hereof.
1.05 Each of the covenants and agreements of the
Operating Partnership and the Operating General Partner contained in
the Operating Partnership Agreement has been duly performed to the
extent that performance of any covenant or agreement is required on or
prior to the date hereof.
1.06 All conditions to admission of the Investment
Partnership as the investment limited partner of the Operating
Partnership contained in the Operating Partnership Agreement have been
satisfied.
1.07 No default has occurred and is continuing
under the Operating Partnership Agreement or any of the Project
Documents (as said term is defined in the Operating Partnership
Agreement) for the Operating Partnership.
1.08 The Operating General Partner agrees to take
all actions necessary to claim the Projected Credit, including,
without limitation, the filing of Form(s) 8609 with the Internal
Revenue Service.
1.09 No person or entity other than the Operating
Partnership holds any equity interest in the Apartment Complex.
1.10 The Operating Partnership has the sole
responsibility to pay all maintenance and operating costs, including
all taxes levied and all insurance costs, attributable to the
Apartment Complex.
1.11 The Operating Partnership, except to the
extent it is protected by insurance and excluding any risk borne by
lenders, bears the sole risk of loss if the Apartment Complex is
destroyed or condemned or there is a diminution in the value of the
Apartment Complex.
1.12 No person or entity except the Operating
Partnership has the right to any proceeds, after payment of all
indebtedness, from the sale, refinancing, or leasing of the Apartment
Complex.
1.13 No Operating General Partner is related in any
manner to the Investment Partnership, nor is the Operating General
Partner acting as an agent of the Investment Partnership.
1.14 The Apartment Complex contains no 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 biphenyls
(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 any Operating
General Partner or Original Limited 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 The fair market value of the Apartment Complex
exceeds the total amount of indebtedness encumbering the Apartment
Complex and is expected to continue to do so throughout the term of
such indebtedness.
2. Indemnification
2.01 The Operating General Partner (for purposes of
this Section 2.01, the "Indemnifying Parties" or, individually, an
"Indemnifying Party") agree to indemnify and hold harmless the
Investment Partnership and Boston Capital (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 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 Certification
and Agreement or (ii) liability 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,
leadbased paint, asbestos, methane gas, urea formaldehyde insulation,
oil, toxic substance, underground storage tanks, polychlorinated
biphenyls (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 investigating or defending against any such Liability
or action; provided, however, that the Indemnifying Party shall not be
required to indemnify any Indemnified Party or any such officer,
director, employee or controlling person for any payment made to any
claimant in settlement of any Liability or action unless such payment
is approved by the Indemnifying Party or by a court having
jurisdiction of the controversy. This indemnity agreement shall
remain in full force and effect notwithstanding any investigation made
by any party hereto, shall survive the termination of any agreement
which refers to this indemnity and shall be in addition to any
liability which the Indemnifying Party may otherwise have.
2.02 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 the other Indemnifying Party or
parties similarly notified, to assume the defense thereof, with
counsel who shall be satisfactory to such Indemnified Party or any
such of its officers, directors, employees or controlling persons and
any other Indemnified Parties who are defendants in such action; and
after notice from the Indemnifying Party to such Indemnified Party or
any such of its officers, directors, employees or controlling persons
of its election so to assume the defense thereof and the retaining of
such counsel by the Indemnifying Party, the Indemnifying Party shall
not be liable to such Indemnified Party or any such of its officers,
directors, employees or controlling persons for any legal or other
expenses subsequently incurred by such Indemnified Party or any such
of its officers, directors, employees or controlling persons in
connection with the defense thereof, other than the reasonable costs
of investigation.
3. Miscellaneous
3.01 This Certification and Agreement is made
solely for the benefit of the Operating Partnership, the Operating
General Partner, the Original Limited Partner, Boston Capital, Crowe &
Casey, P.C., and the Investment Partnership (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 and used but not otherwise defined herein shall have the
meanings given to 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:
OVERTON ASSOCIATES LIMITED PARTNERSHIP
By: /a/James L. Gregory
James L. Gregory,
Its General Partner
By: /s/Holly B. Gregory
Holly B. Gregory,
Its General Partner
OPERATING GENERAL PARTNERS:
By: /a/James L. Gregory
James L. Gregory,
Its General Partner
By: /s/Holly B. Gregory
Holly B. Gregory,
Its General Partner
ORIGINAL LIMITED PARTNERS:
By: /a/James L. Gregory
James L. Gregory,
Its General Partner
By: /s/Holly B. Gregory
Holly B. Gregory,
Its General Partner
3843_1
Exhibit A
OVERTON ASSOCIATES LIMITED PARTNERSHIP
FACT SHEET
1. Construction Financing
A. Lender: Midland Mortgage Investment
Corporation
B. Mortgage Amount: $1,235,000
C. Note Date:
D. Interest Rate:
E. Term:
2. Permanent Financing
A. Lender: FmHA
B. Mortgage Amount: $1,235,000
C. Obligation Date:
D. Note Date:
E. Interest Rate: 8.0%
F. Term: 50 years
G. Amortization: 50 years
3. Eligible Basis: $1,426,564
4. Qualified Basis: $1,426,564
5. Operating General Partner
Capital Contribution: $65,000 (initial, $51,000 repaid with
First Installment)
6. Working Capital Loan
Amount: $0
7. Type of Credit: 3.67%
8. Rent-up Schedule:
25% occupancy by May 1, 1996
50% occupancy by June 1, 1996
75% occupancy by July 1, 1996
100% occupancy by August 1, 1996
9. Projected Credit to the
Investment Partnership (99%) $440,293
A. $27,518 for 1996
B. $44,029 per annum for each of the
years 1997 through 2005
C. $16,511 for 2006 (provided,
however, that the projected credit
for 2005 shall be reduced by the
amount, if any, by which the
Actual Credit for 1996 exceeds
$27,518).
10. Total Projected Credit to the
Operating Partnership (100%) $444,740
A. $27,796 for 1996
B. $44,474 per annum for each of the
years 1997 through 2005
C. $16,678 for 2006.
11. Tax Credit Approval:
A. Application
1. Date: March 21, 1995
2. Amount requested: $ 55,000
B. Reservation
1. Date: July 21, 1995
2. Amount reserved: $ 44,474
12. Apartment Complex:
A. Name: Shadowcreek Apartments
B. Address: Overton, Nevada
C.. County: Clark
D. Type of Project: Elderly
13. Area Median Income: $ 41,100
14. Type of Apartments:
Unit Basic Utility Market
Number Sq. Ft. Rent Allowance Rent
1-Bedroom 4 688 $405 $37 $442
2-Bedroom 16 860 $450 $46 $496
3-Bedroom 4 553 $498 $55
$553
15. Annual Operating Expenses
(beginning 1997): $ 65,620
16. Reserve Account
A. Annual: $ 13,000
B. Total: $130,000
17. Amount of Annual Asset Management
Fee to Boston Capital: $500
18. Amount of Annual Partnership
Management Fee: $500
19. Amount of Total Depreciable
Base Allocated to Personal
Property: $0 (0%)
20. Completion Date:
21. Total Capital Contribution of
Investment Partnership: $297,564
22. Schedule of Capital Contributions
A. $174,282 on the latest to occur of (i) Admission Date,
(ii) Tax Credit Set Aside, (iii) Construction
Loan Closing; or (iv) Permanent Mortgage
Commitment.
B. $ 61,641 on the latest to occur of (i) Completion Date,
(ii) Cost Certification, (iii) State
Designation, (iv) receipt of an updated title
insurance policy satisfactory to the Investment
Limited Partner, (v) compliance with Due
Diligence Recommendations satisfactory to the
Investment Limited Partner, (vi) receipt of
payoff letters from General Contractor stating
that all amounts payable to it have been paid in
full and that the Partnership has complied with
the terms of the Construction Contract, or (vii)
receipt of the Investment Limited Partner of an
estoppel letter from each Lender satisfactory to
it.
C. $ 28,8215 on the latest to occur of (i) the Initial 100%
Occupancy Date, (ii) Permanent Mortgage Commencement, or (iii)
Breakeven Point.
D. $ 25,820 upon receipt by the Investment Limited Partner of Form 8609
E. $10,000 on Breakeven Confirmation and receipt of an
audited financial statement for the year in which the
breakeven point occurs.
23. Fees and Other Items to be paid from Capital Contributions
Construction and Development Fee: $246,564
Return of Capital: $51,000
Return of Working Capital: $0
Developer's Overhead: $0
24. Operating General Partners: James L. Gregory and
Holly B. Gregory
Address: P.O. Box 2688
Elko, NV 89803
Telephone: (702) 738-8000
25. Ownership Interests
Normal Capital Cash
Operations Transactions Flow
Operating General Partner: 1% 50% 50%
Investment Partnership: 99% 49.999% 50%
Special Limited Partner: 0% .001% 0%
26. Management Agent: Westsates Property Management Company
Contact Person: James L. Gregory
Address: P.O. Box 2688
Elko, NV 89803
Telephone Number: (702) 738-8000
Amount of Fees: Maximum allowed by FmHA
27. Builder: G & T Construction
Address: 1188 Court Street
Elko, NV 89801
Amount of Compensation: $______________
Builder's Profit: $ ____________
28. Auditor and Tax Return Preparer: Bygee & Child
Contact Person:
Address: Bountiful, Utah
Telephone Number:
Fax Number:
29. Federal Taxpayer ID Number: 88-0283493
30. Building Breakdown:
A. # of Units 24
B. # of Building 5
C. BIN #
cc: Boston Capital Communications Limited Partnership
Accounting Departmen
Exhibit B
Certificate of Operating Partnership,
Operating General Partner and Original Limited
Partner Re: Lack of Disqualifications
The Operating Partnership, its Operating General Partner and its
Original Limited Partner (as identified on the 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) any officer, director, principal, promoter or general
partner of the 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 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 enjoins such person from
activities subject to federal or state statutes designed to protect
consumers against unlawful or deceptive practices involving insurance,
banking, commodities, real estate, franchises, business opportunities,
consumer goods and services, or is subject to a United States Postal
Service false representation order entered within five years prior to
the 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, commanded, induced
or procured the violation by any other person of any of the statutes
or rules or regulations referred to in subsection (8) hereof;
(10) Has failed reasonably to supervise his agents, if he is a
broker-dealer, or his employees, if he is an investment adviser, but
no person shall be deemed to have failed in such supervision if there
have been established procedures, and a system for applying such
procedures, which would reasonably be expected to prevent and detect,
insofar as practicable, any violation of statutes, rules or orders
described in subsection (8) and if such person has reasonably
discharged the duties and obligations incumbent upon him by reason of
such procedures and system without reasonable cause to believe that
such procedures and system were not being complied with;
(11) Is subject to a currently effective state administrative
order or judgment procured by a state securities administrator within
five years prior to the 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 any State Securities
Act or for any broker-dealer or issuer with knowledge that such
broker-dealer or issuer had not or has not complied with any such 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).
11034_1
OVERTON ASSOCIATES LIMITED PARTNERSHIP
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT
AND CERTIFICATE OF LIMITED PARTNERSHIP
AND CERTIFICATION & AGREEMENT
DATED NOVEMBER 1, 1995
Reference is made to the Second Amended and Restated Agreement
of Limited Partnership of Overton Associates Limited Partnership, a
Nevada limited partnership (the "Partnership"), dated as of November
1, 1995 (hereinafter the "Partnership Agreement") and the
Certification & Agreement of even date therewith also pertaining to
the Partnership. All capitalized terms not herein defined shall have
the meanings attributed to them in the Partnership Agreement.
WHEREAS, upon the date of execution of the Partnership
Agreement, the Partnership had anticipated a lease up schedule which
would have produced Actual Credit to the Partnership in such amounts
and at such times as provided in the Partnership Agreement; and
WHEREAS, subsequent to the execution of the Partnership
Agreement, a more accurate depiction of the lease up schedule and flow
of Actual Credit has emerged; and
WHEREAS, the Partners wish to amend the Partnership Agreement
and Certification & Agreement to properly reflect the revised flow of
Actual Credit to the Partnership mandated by the actual lease up
schedule and to clarify the appropriate date of admission of the
Investment Limited Partner into the Partnership.
NOW, THEREFORE, the Partnership Agreement is hereby amended,
nunc pro tunc, in the following particulars:
PARTNERSHIP AGREEMENT
1. At page 5, the definition of Admission Date is stricken in
its entirety and replaced with the following:
"Admission Date means the later of: (i) the first date on which
all parties hereto shall have executed this Agreement or (ii) the date
on which the Investment Limited Partner shall have contributed the
First Installment to the Partnership, or, if, pursuant to the Uniform
Act, the Investment Limited Partner shall not be deemed admitted to
the Partnership on such date, then the date thereafter on which the
Investment Limited Partner shall be deemed to be admitted to the
Partnership under the Uniform Act."
2. At page 15, the definition of Projected Credit is stricken
in its entirety and replaced with the following:
"Projected Credit means $5,504 for 1996; $44,029 per annum for
the years 1997 through 2005 (inclusive); and $38,526 for 2006;
provided, however, that the Projected Credit for 2006 shall be reduced
by the amount, if any, by which the Actual Credit for 1996 exceeds
$5,504."
3. At page 40, Section 6.6(13) is deleted in its entirety and
replace with the following:
"(13) The amount of Tax Credit which is expected to be allocated
by the Partnership to the Investment Limited Partner is $5,504 for
1996; $44,029 per annum for each of the years 1997 through 2005
(inclusive); $38,526 for 2006."
4. In all other respects, the Partnership Agreement is hereby
ratified and confirmed.
CERTIFICATION & AGREEMENT
1. At Schedule A of the Certification & Agreement, the
following revisions are hereby agreed upon:
(a) Item #8 Rent-Up Schedule
25% by October 31, 1996
50% by November 30, 1996
75% by December 31, 1996
100% by January 31, 1997
(b) Item #9 Projected Credit to the
Investment Partnership (99%)
A. $5,504 for 1996;
B. $44,029 for each of the years 1997 through 2005; and
C. $38,526 for 2006 (provided, however, that the projected credit
for 2006 shall be reduced by the amount, if any, by which the Actual
Credit for 1996 exceeds $5,504.
(c) Item #10 Total Projected Credit to the
Operating Partnership (100%)
A. $5,559 for 1996;
B. $44,474 for each of the years 1997 through 2005; and
C. $38,915 for 2006 (provided, however, that the projected credit
for 2005 shall be reduced by the amount, if any, by which the Actual
Credit for 1996 exceeds $5,559.
(d) Item #12(D) Family
2. In all other respects, the Certification & Agreement is
hereby ratified and confirmed.
WITNESS the execution hereof under seal as of the _____ day of
__________, 1996.
GENERAL PARTNERS:
/s/James L. Gregory
James L. Gregory
/s/Holly B. Gregory
Holly B. Gregory
INVESTMENT LIMITED PARTNER:
BOSTON CAPITAL TAX CREDIT
FUND IV, L.P.,
a Delaware limited partnership
C & M Associates d/b/a
Boston Capital Associates,
its general partner
By: /s/John P. Manning
John P. Manning, a general partner
SPECIAL LIMITED PARTNER:
By: /s/John P. Manning
John P. Manning, President
STATE OF NEVADA )
) ss.
COUNTY OF ELKO )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named James L. Gregory
who, being duly sworn, acknowledged that he did sign the foregoing
instrument individually, that the statements therein contained are
true and that the same is the free act and deed of said James L.
Gregory.
WITNESS my hand and official seal this ______ day of _________,
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF NEVADA )
) ss.
COUNTY OF ELKO )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named Holly B. Gregory
who, being duly sworn, acknowledged that she did sign the foregoing
instrument individually, that the statements therein contained are
true and that the same is the free act and deed of said Holly B.
Gregory.
WITNESS my hand and official seal this ______ day of _________,
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
COMMONWEALTH OF MASSACHUSETTS )
)ss.
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named Bonnie Kate Fox,
Attorney-in-Fact for John P. Manning, known to me to be a general
partner of C & M Associates, which is the general partner of Boston
Capital Tax Credit Fund IV, L.P., who, being duly sworn, acknowledged
that she did sign the foregoing instrument, that the statements
therein contained are true and that the same is the duly authorized
free act and deed of Boston Capital Tax Credit Fund IV, L.P..
WITNESS my hand and official seal this ______ day of _________,
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned Notary Public in and for said county
and commonwealth, personally appeared the above-named Bonnie Kate Fox,
Attorney-in-Fact for John P. Manning, known to me to be the President
of BCTC 94, Inc., who, being duly sworn, acknowledged that she did
sign the foregoing instrument and that the same is the duly authorized
free act and deed of BCTC 94, Inc.
WITNESS my hand and official seal this ___ day of _____________
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
15246_1
OVERTON ASSOCIATES LIMITED PARTNERSHIP
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT
AND CERTIFICATE OF LIMITED PARTNERSHIP
AND CERTIFICATION & AGREEMENT
DATED NOVEMBER 1, 1995
Reference is made to the Second Amended and Restated Agreement
of Limited Partnership of Overton Associates Limited Partnership, a
Nevada limited partnership (the "Partnership"), dated as of November
1, 1995, as amended by a First Amendment dated _______ __, 1996 (as so
amended the "Partnership Agreement") and the Certification & Agreement
of even date, as amended by said First Amendment, also pertaining to
the Partnership. All capitalized terms not herein defined shall have
the meanings attributed to them in the Partnership Agreement.
WHEREAS, upon the Admission Date, as defined in the Partnership
Agreement, the Partnership had received a reservation of Tax Credits
in the annual amount of $44,474; and
WHEREAS, subsequent to the execution of the Partnership
Agreement, the Partnership revised reservation of Tax Credits from the
Authority in the annual amount of $55,974; and
WHEREAS, the Partners wish to amend the Partnership Agreement
and Certification & Agreement to account for the influx of additional
Tax Credit;
NOW THEREFORE, the Partnership Agreement is hereby amended, nunc
pro tunc, in the following particulars:
PARTNERSHIP AGREEMENT
1. At page 10, the definition of Projected Credit to the
Investment Limited Partner is stricken in its entirety and replaced
with the following:
"Projected Credit to the Investment Limited Partner means
$34,673 for 1996; $55,414 per annum for the years 1997 through 2005
(inclusive); and $20,741 for 2006; provided, how ever, that the
Projected Credit for 2006 shall be reduced by the amount, if any, by
which the Actual Credit for 1996 exceeds $34,673."
2. At pages 16 and 17, at the definitions for State
Designation and Tax Credit Set-Aside, "$55,974" shall be substituted
for $44,474.
3. At page 24, at Section 5.1(1)(1), "$212,536" shall be
substituted for $174,282, at Section 5.1(a)(2), "$75,310" shall be
substituted for $61,641, at Section 5.1(a)(3), "$31,738" shall be
substituted for $25,821, and at Section 5.1(a)(4), "$31,736" shall be
substituted for $25,820. Additionally, at page 24, "State
Designation" shall be deleted as a requirement to payment of the
Second Installment and added as a condition to payment of the Third
Installment.
4. At page 39, Section 6.6(13) is deleted in its entirety and
replaced with the following:
(13) The amount of Tax Credit which is expected to be allocated
by the Partnership to the Investment Limited Partner is $34,673 for
1996; $55,414 per annum for each of the years 1997 through 2005
(inclusive); $20,741 for 2006.
5. At page 46, the amount of the development fee payable at
Section 6.12(b) is increased by substituting "$310,320" for $246,564.
The amount of the development payable from the proceeds of the first
installment is increased by substituting "$161,536" for $123,282. The
amount of the development payable from the proceeds of the second
installment is increased by substituting "$75,310" for $61,641. The
amount of development fee payable from the proceeds of the third
installment is increased by substituting "$31,738" for $25,821. The
amount of development fee payable from the proceeds of the Fourth
Installment is increased by substituting "$31,737" for $25,820.
6. At Schedule A, the total expected capital contribution of
the Investment Limited Partner is increased by substituting "$361,320"
for $297,564.
7. It is the intention of the parties that these amendments
be effective immediately.
8. In all other respects, the Partnership Agreement is hereby
ratified and confirmed.
CERTIFICATION & AGREEMENT
1. At Schedule A of the Certification & Agreement, the
following revisions are hereby agreed upon:
(a) Item #9 Projected Credit to the
Investment Partnership (99%)
A. $34,673 for 1996;
B. $55,414 for each of the years 1997 through 2005; and
C. $20,741 for 2006 (provided, however, that the projected credit
for 2006 shall be reduced by the amount, if any, by which the Actual
Credit for 1996 exceeds $34,673.
(b) Item #10 - Total Projected Credit to the Operating
Partnership (100%)
A. $35,023 for 1996;
B. $55,974 for each of the years 1997 through 2005; and
C. $20,951 for 2006 (provided, however, that the projected credit
for 2006 shall be reduced by the amount, if any, by which the Actual
Credit for 1996 exceeds $35,023.
(c) Item #21 - $361,320
(d) Item #22
A. $212,536
B. $75,310
C. $31,738
D. $31,736
(e) Item #23 - Construction & Development Fee:
$300,320
2. In all other respects, the Certification & Agreement is
hereby ratified and confirmed
WITNESS the execution hereof under seal as of the _____ day of
__________, 1996.
GENERAL PARTNERS:
/S/James L. Gregory
James L. Gregory
/s/Holly B. Gregory
Holly B. Gregory
INVESTMENT LIMITED PARTNER:
BOSTON CAPITAL TAX CREDIT
FUND IV, L.P.,
a Delaware limited partnership
By:
C & M Associates d/b/a
Boston Capital Associates,
its general partner
By: /s/Bonnie Kate Fox
Bonnie Kate Fox,
Attorney-in-Fact for
John P. Manning,
a general partner
SPECIAL LIMITED PARTNER:
BCTC 94, INC.
By: /s/Bonnie Kate Fox
Bonnie Kate Fox,
Attorney-in-Fact for
John P. Manning,
Its President
STATE OF NEVADA )
) ss.
COUNTY OF ELKO )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named James L. Gregory
who, being duly sworn, acknowledged that he did sign the foregoing
instrument individually, that the statements therein contained are
true and that the same is the free act and deed of said James L.
Gregory.
WITNESS my hand and official seal this ______ day of _________,
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF NEVADA )
) ss.
COUNTY OF ELKO )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named Holly B. Gregory
who, being duly sworn, acknowledged that she did sign the foregoing
instrument individually, that the statements therein contained are
true and that the same is the free act and deed of said Holly B.
Gregory.
WITNESS my hand and official seal this ______ day of _________,
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
COMMONWEALTH OF MASSACHUSETTS )
)ss.
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned Notary Public in and for said County
and Commonwealth, personally appeared the above-named Bonnie Kate Fox,
Attorney-in-Fact for John P. Manning, known to me to be a general
partner of C & M Associates, which is the general partner of Boston
Capital Tax Credit Fund IV, L.P., who, being duly sworn, acknowledged
that she did sign the foregoing instrument, that the statements
therein contained are true and that the same is the duly authorized
free act and deed of Boston Capital Tax Credit Fund IV, L.P..
WITNESS my hand and official seal this ______ day of _________,
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
COMMONWEALTH OF MASSACHUSETTS )
)ss.
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned Notary Public in and for said county
and commonwealth, personally appeared the above-named Bonnie Kate Fox,
Attorney-in-Fact for John P. Manning, known to me to be the President
of BCTC 94, Inc., who, being duly sworn, acknowledged that she did
sign the foregoing instrument and that the same is the duly authorized
free act and deed of BCTC 94, Inc.
WITNESS my hand and official seal this ___ day of _____________
1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
16496_1
