SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 31, 1996
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
33-70564
04-3208648
(Commission File Number) (IRS Employer Identification No. )
c/o Boston Capital Partners, Inc.,
One Boston Place, Boston, Massachusetts 02108-4406
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code (617) 624-8900
None
(Former name or former address, if changed since last report)
Item 5. Other Events
On December 31, 1996, Boston Capital Tax Credit Fund IV L.P., a Delaware
limited partnership, specifically Series 22 thereof (the "Partnership")
completed various agreements relating to Roxbury Veterans Housing Limited
Partnership, a Massachusetts limited partnership (the "Operating
Partnership"), including an Amended and Restated Agreement of Limited
Partnership of the Operating Partnership dated as of December 31, 1996 (the
"Operating Partnership Agreement"), pursuant to which the Partnership acquired
a limited partner interest in the Operating Partnership. Capitalized terms
used and not otherwise defined herein have their meanings set forth in the
Operating Partnership Agreement, a copy of which is attached hereto as Exhibit
(2)(a).
The Operating Partnership owns and operates a recently renovated
apartment complex located on Warren Street in Boston (Roxbury), Massachusetts
which is known as Highland House (the "Apartment Complex"). The Apartment
Complex is designed to house homeless veterans and consists of two buildings
each containing 7 single-room occupancy units. The Apartment Complex is
expected to be 100% occupied by April 30, 1997.
The Operating Partnership is receiving first mortgage financing in the
amount of $115,700 (the "First Mortgage") from The Boston Bank of Commerce.
The First Mortgage bears interest at the Prime Rate plus 2% per annum and has
a 15-year term. The Operating Partnership is receiving second mortgage
financing in the amount of $600,000 (the "Second Mortgage") from Fleet
National Bank as agent for the City of Boston acting by and through its Public
Facilities Commission by the Director of the Public Facilities Department.
The Second Mortgage has a 30-year term and is funded with $300,000 of CDBG
Funds which bear interest at the rate of 1% per annum and with $300,000 of
HOME Funds which bear interest at the rate of 7.5% per annum.
100% of the apartment units (14 units) in the Apartment Complex are
believed to qualify for the low-income housing tax credit (the "Tax Credits")
under Section 42 of the Internal Revenue Code of 1986, as amended (the
"Code").
The General Partner of the Operating Partnership is Roxbury Veterans
Enterprise, Inc., a Massachusetts corporation, which is a wholly-owned
subsidiary of Veterans Benefits Clearinghouse, Inc., a non-profit organization
("VBC"). VBC was established in 1977 to help Vietnam-era veterans return to
civilian society and lead a sustainable quality of life. Ralph D. Cooper is
the Executive Director of VBC and is responsible for strategic long-range
planning and fund raising as well as the ongoing relationships with government
officers and organizations relating to legislative initiatives for veterans"
issues and concerns. Mr. Cooper received his Masters Degree in Education from
the University of Massachusetts and a Bachelor of Arts Degree in Psychology
from Boston State College. Ernest Branch is the Executive Director of the
Veterans Benefits Clearinghouse Development Corporation (the Developer of the
Apartment Complex). Mr. Branch has 18 years of experience in the housing
industry. His background includes the management of property, the
rehabilitation of real estate, the relocation of families, implementation of
support services, organization of youth programs, crime prevention, and the
establishment of proper security. He was formerly District Director of Field
Management for the Boston Housing Authority and served as Executive Director
of the Columbia Point Task Force. Mr. Branch received a Bachelor of Arts in
Behavioral Science from Shaw University and a Masters Degree in Education from
Cambridge College. He has received certificates as a Certified Housing
Manager, Certified Occupancy Specialist and Certified Public Housing Manager.
Mr. Branch has also received real estate certificates from Harvard University
and MIT.
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 $586,492 which has been or will be payable to
the Operating Partnership in five (5) Installments as follows:
(i) $351,895 (60%) on the latest to occur of (A) Tax Credit Set Aside,
(B) Initial Closing, (C) receipt by Boston Capital of an
acceptable commitment of the BBOC regarding the BBOC Loan, (D) the
Admission Date, (E) receipt by the Partnership of evidence
reasonably satisfactory to it that the Apartment Complex has been
placed in service, including without limitation, an opinion from a
certified public accountant hired by the General Partner and
approved by the Partnership as to the Operating Partnership"s
having incurred the requisite threshold amount of rehabilitation
expenses consisting of the greater of (1) the aggregate of $3,000
per Unit, or (2) 10% of the adjusted basis in the Apartment
Complex as of the first day of the twenty-four month period (the
"First Installment");
(ii) $58,649 (10%) on the latest to occur of (A) 50% Construction
Completion, (B) receipt of an owner"s title insurance policy
satisfactory to BCTC 94, Inc., (C) confirmation by Boston Capital
that each of the itemized outstanding due diligence matters
identified on Exhibit 5.01 have been completed by the General
Partner to the reasonable satisfaction of Boston Capital,
(D) receipt of a payoff letter from the Contractor stating that
all amounts payable to the Contractor have been paid in full and
that the Operating Partnership is not in violation of the
Construction Contract, or (E) satisfaction of all of the
conditions to the payment of the First Installment (the "Second
Installment");
(iii) $79,176 (13.5%) on the latest to occur of (A) Substantial
Completion or (B) satisfaction of all of the conditions to the
payment of the First and Second Installments (the "Third
Installment");
(iv) $82,109 (14%) on the latest to occur of (A) Initial 95% Occupancy
Date, (B) Final Closing, (C) Rental Achievement, (D) Cost
Certification, (E) State Designation or (F) satisfaction of all
conditions to the payment of the First, Second and Third
Installments (the "Fourth Installment"); and
(v) $14,663 (2.5%) on the later to occur of (A) the receipt by the
Partnership of the Operating Partnership"s federal income tax
return for the year in which Rental Achievement occurred or
(B) satisfaction of all conditions to the payment of the First,
Second, Third, and Fourth Installments (the "Fifth Installment").
The total Capital Contribution of the Partnership to the Operating
Partnership is based on the Operating Partnership receiving $987,360 of Tax
Credits during the 10-year period commencing in 1997, of which $977,490 will
be allocated to the Partnership as a Limited Partner in 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% 50%
Partnership 99% 50% 50%
The Partnership used the funds obtained from the payments of the holders
of its beneficial assignee certificates to make the acquisition of its
interest in the Operating Partnership.
Boston Capital Asset Management Limited Partnership ("BCAMLP"), an
affiliate of the general partner of the Partnership, or another affiliate
thereof, will receive an annual Asset Management Fee of $1,500 commencing in
1997 from the Operating Partnership for services in connection with the
Operating Partnership's accounting matters and the preparation of tax returns
and reports to the Partnership. The Asset Management Fee for each fiscal year
will be payable from Cash Flow in the manner and priority set forth in Article
XI of the Operating Partnership Agreement. 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 accrue and be payable on a cumulative basis in
the first year in which there is sufficient Cash Flow available for the
payment of such fee, or in the first year in which proceeds of a Capital
Transaction are available.
The Operating Partnership will pay a Development Fee to the Developer
for its service in connection with the construction and development of the
Apartment Complex in an amount equal to $50,000. The Development Fee will be
paid $38,250 from the proceeds of the Fourth Installment, $10,000 from the
proceeds of the Fifth Installment and the $1,750 balance shall be treated as a
Deferred Development Fee which will be paid in accordance with the provisions
of Article XI of the Operating Partnership Agreement, but in no event later
than ten years after the issuance of the Certificate of Occupancy for the
Apartment Complex. The Operating Partnership will pay to the General Partner
an annual Incentive Partnership Management Fee of $2,500 per annum commencing
in 1998 with a pro rata portion being paid in 1997 for its services in
connection with managing the day-to-day business of the Operating Partnership.
The Incentive Partnership Management Fee for each fiscal year will be payable
from Cash Flow in the manner and priority set forth in Article XI of the
Operating Partnership Agreement.
Item 7. Exhibits.
(c) Exhibits. Page
(1)(a)1 Form of Dealer-Manager Agreement between Boston
Capital Services, Inc. and the Registrant
(including, as an exhibit thereto, the form of
Soliciting Dealer Agreement)
(2)(a) Amended and Restated Agreement of Limited
Partnership of Roxbury Veterans Housing Limited
Partnership
(2)(b) Certification and Agreement of Roxbury Veterans
Housing Limited Partnership
(4)(a)2 Agreement of Limited Partnership of the
Partnership
(16) None
(17) None
(21) None
(24) None
(25) None
(28) None
_______________
1 Incorporated by reference to Exhibit (1) to Registration Statement
No. 33-70564 on Form S-11, as filed with the Securities and Exchange
Commission.
2 Incorporated by reference to Exhibit (4) to Registration Statement
No. 33-70564 on Form S-11, as filed with the Securities and Exchange
Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
Dated: March 20, 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
BOS2.53238
ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
December 31, 1996
TABLE OF CONTENTS
ARTICLE I CONTINUATION OF PARTNERSHIP
1.01 Continuation
1.02 Name
1.03 Principal Executive Offices; Agent for Service of Process
1.04 Term
1.05 Recording
ARTICLE II DEFINED TERMS
ARTICLE III PURPOSE AND BUSINESS OF THE PARTNERSHIP
3.01 Purpose of the Partnership
3.02 Authority of the Partnership
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS; DUTIES AND OBLIGATIONS
4.01 Representations, Warranties and Covenants Relating to the
Apartment Complex and the Partnership
4.02 Duties and Obligations Relating to the Apartment Complex and
the Partnership
ARTICLE V PARTNERS, PARTNERSHIP INTERESTS AND OBLIGATIONS OF THE PARTNERSHIP
5.01 Partners, Capital Contributions and Partnership Interests
5.02 Return of Capital Contribution
5.03 Withholding of Capital Contribution Upon Default
5.04 Legal Opinions
5.05 Repurchase Obligation
ARTICLE VI CHANGES IN PARTNERS
6.01 Withdrawal of a General Partner
6.02 Admission of a Successor or General Partner
6.03 Effect of Bankruptcy, Death, Withdrawal, Dissolution or
Incompetence of a General Partner
ARTICLE VII ASSIGNMENT TO THE PARTNERSHIP
7.01 Assignment of Contracts, etc
ARTICLE VIII RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
8.01 Management of the Partnership
8.02 Limitations Upon the Authority of the General Partner
8.03 Management Purposes
8.04 Delegation of Authority
8.05 General Partner or Affiliates Dealing with Partnership
8.06 Other Activities
8.07 Liability for Acts and Omissions
8.08 Partnership Status
8.09 Construction of the Apartment Complex, Construction
Cost Overruns, Operating Deficits
8.10 Development Fee
8.11 Incentive Partnership Management Fee
8.11.1 Asset Management Fee
8.12 Withholding of Fee Payments
8.13 Removal of the General Partner
8.14 Selection of Management Agent
8.15 Removal of the Management Agent
8.16 Replacement of the Management Agent
8.17 Subordinated Loans to the Partnership
8.18 Reserve Fund for Replacements
ARTICLE IX TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS OF INTERESTS OF
LIMITED PARTNERS
9.01 Purchase for Investment
9.02 Restrictions on Transfer of Limited Partner's Interests
9.03 Admission of Substitute Limited Partners
9.04 Rights of Assignee of Partnership Interest
ARTICLE X RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
10.01 Management of the Partnership
10.02 Limitation on Liability of Limited Partners
10.03 Other Activities
10.04 Ownership by Limited Partner of Corporate General
Partner or Affiliate
ARTICLE XI ALLOCATION OF TAXABLE INCOME, TAX LOSSES, TAX CREDITS AND CASH
DISTRIBUTIONS
11.01 Allocation of Taxable Income, Tax Losses and Tax Credits
11.02 Allocation of Taxable Income and Tax Losses from
Capital Transactions
11.03 Distribution of Cash Flow
11.04 Distributions of Distributable Proceeds from Capital
Transactions and Distributable Proceeds from Refinancings
11.05 Allocations Among Partners
11.06 Qualified Income Offset
11.07 Minimum Gain Allocations
11.08 Regulatory Allocations
11.09 Partners' Partnership Non-recourse Liabilities
11.10 Tax Allocations: Code Section 704(c)
11.11 Tax Matters Partner
11.12 Capital Accounts
11.13 Authority of General Partner to Vary Allocations to
Preserve and Protect Partner's Intent
ARTICLE XII SALE, DISSOLUTION AND LIQUIDATION
12.01 Dissolution of the Partnership
12.02 Winding Up and Distribution
ARTICLE XIII BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC.
13.01 Books and Records
13.02 Bank Accounts
13.03 Accountants
13.04 Reports to Partners
13.05 Section 754 Elections
13.06 Fiscal Year and Accounting Method
ARTICLE XIV AMENDMENTS
14.01 Proposal and Adoption of Amendments
ARTICLE XV CONSENTS, VOTING AND MEETINGS
15.01 Method of Giving Consent
15.02 Submissions to Limited Partners
15.03 Meetings; Submission of Matter for Voting
ARTICLE XVI GENERAL PROVISIONS
16.01 Burden and Benefit
16.02 Applicable Law
16.03 Counterparts
16.04 Separability of Provisions
16.05 Entire Agreement
16.06 Liability of the Investment Partnership
16.07 Environmental Protection
16.08 Notices to the Investment Partnership
16.09 Notices to the General Partner
16.10 Withdrawal of Initial Limited Partner
ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
This Amended and Restated Agreement of Limited Partnership is
made and entered into as of the 31st day of December, 1996, by and
among the undersigned parties.
WHEREAS, a Certificate of Limited Partnership for Roxbury
Veterans Housing Limited Partnership (the "Partnership") was filed
with the Secretary of State of Massachusetts December 31, 1994 (the
"Certificate"); and
WHEREAS, as of December 31, 1994, Roxbury Veterans Enterprise,
Inc., a Massachusetts corporation as the General Partner (the "General
Partner"), and Roxbury Veterans Enterprise, Inc., as initial limited
partner (the "Initial Limited Partner"), executed an Agreement of
Limited Partnership of Roxbury Veterans Housing Limited Partnership, a
Massachusetts limited partnership (the "Agreement") for the formation
of the Partnership pursuant to the Massachusetts Revised Uniform
Limited Partnership Act (the "Act").
WHEREAS, the Partnership has been formed to acquire, develop,
rehabilitate, construct, own, maintain and operate (2) three-story
(plus basement) buildings with a total of fourteen (14) efficiency-
type single room occupancy units ("SRO's") intended for rental to very
low and low income mentally-impaired veterans, to be known as Highland
House, and to be located in the Roxbury section of Boston,
Massachusetts (the "Apartment Complex"); and
WHEREAS, the Partnership has acquired title to the Apartment
Complex subject to mortgages and other liens securing construction and
BBOC Mortgage loans; and
WHEREAS, the parties hereto now desire to enter into this
Amended and Restated Agreement of Limited Partnership to (i) continue
the Partnership; (ii) admit Boston Capital Tax Credit Fund IV, L.P.,
a Delaware limited partnership, to the Partnership as a Limited
Partner, and BCTC 94, Inc., a Delaware corporation, to the Partnership
as the Special Limited Partner; (iii) withdraw the Initial Limited
Partner from the Partnership; (iv) reassign Interests in the
Partnership; and (v) set forth all of the provisions governing the
Partnership.
NOW, THEREFORE, in consideration of the foregoing, of mutual
promises of the parties hereto and of other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree to continue the Partnership
pursuant to the Act, as set forth in this Amended and Restated
Agreement of Limited Partnership, which reads in its entirety as
follows:
ARTICLE I
CONTINUATION OF PARTNERSHIP
1.01. Continuation. The undersigned hereby continue the
Partnership as a limited partnership under the Act.
1.02. Name. The name of the Partnership is ROXBURY VETERANS
HOUSING LIMITED PARTNERSHIP
1.03. Principal Executive Offices; Agent for Service of Process.
The principal executive and record office of the
Partnership and the resident agent for service of process
shall be Ralph Cooper, 495 Blue Hill Avenue, Dorchester,
Massachusetts 02121. The Partnership may change the
location of its principal executive office to such other
place or places as may hereafter be determined by the
General Partner. The General Partner shall promptly
notify all other Partners of any change in the principal
executive office. The Partnership may maintain such other
offices at such other place or places as the General
Partner may from time to time deem advisable.
1.04. Term. The term of the Partnership commenced as of
December 20, 1994 and shall continue until December 31,
2030, unless the Partnership is sooner dissolved in
accordance with the provisions of this Agreement.
1.05. Recording. Upon the execution of this Amended and
Restated Agreement of Limited Partnership by the parties
hereto, the General Partner shall take all necessary
action required by law to perfect and maintain the
Partnership as a limited partnership under the laws of the
State and to effectuate the admission of the Investment
Partnership and BCTC 94, Inc. as Limited Partners and the
withdrawal of the initial Limited Partner hereunder, and
shall register the Partnership under any assumed or
fictitious name statute or similar law in force and effect
in the State.
ARTICLE II
DEFINED TERMS
In addition to the abbreviations of the parties set forth in the
preamble to this Agreement, the following defined terms used in this
Agreement shall have the meanings specified below:
"Accountants" means such firm of independent certified public
accountants as may be engaged by the General Partner, with the Consent
of BCTC 94, Inc., to prepare the Partnership income tax returns and to
be responsible for the Partnership's audit and tax matters reporting
obligations under Section 13.04 hereof.
"Act" means the Revised Uniform Limited Partnership Act of
Massachusetts, as amended from time to time during the term of the
Partnership.
"Actual Credit" means as of any point in time, the total amount
of the Tax Credits actually allocated by the Partnership to the
Investment Partnership, representing ninety-nine percent (99%) of the
Tax Credits actually received by the Partnership, as shown on the
applicable tax return of the Partnership.
"Admission Date" means the date upon which the Investment
Partnership is admitted to the Partnership.
"Affiliate" means any Person that directly or indirectly,
through one or more intermediaries, controls or is controlled by or is
under common control with a General Partner, or with another
designated Person, as the context may require.
"Affiliated Limited Partnership" means any limited partnership,
other than the Partnership, in which the General Partner or an
Affiliate of a General Partner is a general partner and the Investment
Partnership or an Affiliate of the Investment Partnership is a limited
partner.
"Agency" means the Department of Communities and Development in
its capacity as the designated agency of The Commonwealth of
Massachusetts to allocate Low-Income Housing Tax Credits, acting
through any authorized representative.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as amended from time to time.
"Apartment Complex" means the land owned by the Partnership
located at 250 and 254 Warren Street, Boston, Massachusetts and the
14-unit multifamily rental housing development and other improvements
being constructed and/or rehabilitated thereon, and to be owned and
operated by the Partnership, and known as Highland House.
"Applicable Percentage" has the meaning given to it in Section
42(b) of the Code.
"Asset Management Fee" means the fee payable by the Partnership
to Boston Capital, or an Affiliate thereof, pursuant to Section
8.11.1.
"Bankruptcy" or "Bankrupt" as to any Person means the filing of
a petition for relief as to any such Person as debtor or bankrupt
under the Bankruptcy Act of 1898 or the Bankruptcy Code of 1978 or
like provision of law (except if such petition is contested by such
Person and has been dismissed within 90 days); insolvency of such
Person as finally determined by a court proceeding; filing by such
Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings
relating to such Person under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction,
whether now in existence or hereinafter in effect, either by such
Person or by another, provided that if such proceeding is commenced by
another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is
contested by such Person and has not been finally dismissed within 90
days.
"BCTC 94, Inc." means BCTC 94, 94, Inc., a Delaware corporation,
which is the Special Limited Partner of the Partnership.
"Book Depreciation" has the meaning set forth in Section 11.12C.
"Book Profits and Losses" means the Taxable Income or Tax Losses
of the Partnership, adjusted for purposes of determining and
maintaining the Partners' Capital Accounts as provided in Section
11.12.
"Boston Capital" means Boston Capital Partners, Inc., a
Massachusetts corporation.
"Capital Account" means the capital account of a Partner as
described in Section 11.12.
"Capital Contribution" with respect to any Partner, means the
total amount of money and the initial Gross Asset Value of any
property (other than money) contributed or agreed to be contributed,
as the context requires, to the Partnership by each Partner pursuant
to the terms of this Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made
by a predecessor holder of the Interest of such Partner.
"Capital Transaction" means the sale, exchange or disposition
(other than leasing in the ordinary course of business) of any
Partnership property that is not in the ordinary course of business,
or casualty damage to or condemnation of any Partnership property, or
any substantial interest therein or portion thereof.
"Carryover Certification" means December 30, 1994, the date upon
which the Partnership received, in a form and in substance
satisfactory to the Investment Partnership, the certification of the
Accountants that as of a date no later than December 31, 1994, the
Partnership 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,
1994, 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.
"Carrover Allocation" means the Carryover Allocation Agreement
from the Agency to the Partnership dated as of December 30, 1994
setting forth certain terms and conditions of the Partnership upon
which the tax credit allocation is contingent.
"Cash Flow" means, with respect to any year or other applicable
period, (a) all Revenues received by the Partnership during such
period, plus (b) any amounts which the General Partner, acting jointly
with BCTC 94, Inc., and subject to the approval of the Lender, if
required, releases from the Reserve Fund for Replacements as being no
longer necessary to hold as part of the Reserve Fund for Replacements,
less (i) all operating expenses and obligations of the Partnership
paid or payable (on a thirty-day current basis) during the applicable
period, including without limitation escrow deposits for taxes and
insurance, maintenance and repairs, (ii) all sums due or currently
required to be paid under the terms of the Mortgage Loans or any other
third-party indebtedness of the Partnership, and (iii) all amounts
from Revenues, if any, added or required to be added to the Reserve
Fund for Replacements during such period. In no event will deductions
in determining Cash Flow pursuant to clauses (i) and (ii) above
include payments made on account of: the Asset Management Fee, amounts
due on any Subordinated Loans, the Incentive Partnership Management
Fee, and/or the Deferred Development Fee.
Cash Flow shall be determined separately for each fiscal year
and shall not be cumulative.
"Certificate" means the Certificate of Limited Partnership for
ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP filed with the Secretary
of State of Massachusetts on December 31, 1994, or any certificate of
limited partnership or any other instrument or document which is
required under the law of the State to be signed and sworn to by the
Partners of the Partnership and filed in the appropriate public
offices within the State to perfect or maintain the Partnership as a
limited partnership under the laws of the State, to effect the
admission, withdrawal or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited
Partners as limited partners under the laws of the State.
"City Loan Agreement" means the Loan Agreement between the
Partnership and the Second Lender dated as of December 31, 1996
pursuant to which the proceeds of the Second Loan shall be advanced.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding provision or provisions of
succeeding law.
"Compliance Period" has the meaning ascribed to such term in
Section 42 of the Code.
"Consent" means the prior written consent or approval of BCTC
94, Inc. and/or the Investment Partnership and/or any other Partner,
as the context may require, to do the act or thing for which the
consent is solicited.
"Construction Contract" means that certain construction contract
dated December 30, 1996 in the amount of $675,000 (including all
exhibits and attachments thereto) entered into between the Partnership
and the Contractor pursuant to which the Apartment Complex is being
constructed.
"Contractor" means CWC Builders, Inc. in its capacity as the
general construction contractor for the Apartment Complex.
"Cost Certification" means the date upon which each Limited
Partner shall have received the written certification of the
Accountants, in a form and in substance satisfactory to Boston
Capital, as to the itemized amounts of the completed construction and
development costs of the Apartment Complex and the Eligible Basis and
Applicable Percentage (in each case, as defined in Section 42(d) of
the Code), pertaining to each building in the Apartment Complex.
"Counsel" or "Counsel for the Partnership" shall mean the law
office of McKenzie & Edwards, P.C., or such other attorney or law firm
upon which the Investment Partnership and the General Partner shall
agree; provided, however, that if any section of this Agreement either
(i) designates particular counsel for the purpose described therein,
or (ii) provides that counsel for the purpose described therein shall
be chosen by another method or by another Person, then such
designation or provision shall prevail over this general definition.
The General Partner shall not be deemed a client of Hinckley, Allen &
Snyder. The Limited Partners have been, and will continue to be,
separately represented by Hinckley, Allen & Snyder or such other
counsel as they may choose in connection with all Partnership matters,
and the Limited Partners shall not be deemed clients of McKenzie &
Edwards, P.C.
"Credit Recovery Loan" has the meaning set forth in Section
5.01(d)(iii).
"Credit Shortfall" means the amount by which the Actual Credit
is less than the Projected Credit (or Revised Projected Credit) for
any year or portion thereof.
"Debt Service" means scheduled principal and interest payments
on indebtedness under the Mortgage Loans determined on an annual basis
for each year of Partnership operations, but excluding (i) principal
and interest due on acceleration of the Mortgage Loans upon occurrence
of an event of default and (ii) balloon payments of principal and
interest due upon expiration of the term of the Mortgage Loans.
"Debt Service Coverage Ratio" means the ratio of (i) rental and
miscellaneous income of the Partnership from the operation of the
Apartment Complex in the ordinary course of business and all other
income of the Partnership including unrestricted earnings on reserve
or escrow funds other than proceeds of any loans to the Partnership
and investment earnings on funds on deposit in the Reserve Fund for
Replacements ("Gross Income") minus all accrued operational costs of
the Apartment Complex; including, but not limited to taxes,
assessments, Reserve Fund for Replacements deposits, maintenance and
repairs, fees due and payable (other than the Incentive Partnership
Management Fee, the Asset Management Fee and the Deferred Development
Fee), and a ratable portion of the annual amount (as reasonably
estimated by the General Partner) of those seasonal or periodic
expenses (such as utilities, maintenance expenses and real estate
taxes) which might reasonably be expected to be incurred on an unequal
basis during a full annual period of operations, but excluding amounts
due under Subordinated Loans to (ii) Debt Service.
"Developer" means Veterans Benefit Clearinghouse Development
Corporation.
"Deferred Development Fee" means any portion of the Development
Fee not actually paid to and received by the Developer from the
Installments, the payment of which is deferred and payable only in
accordance with Sections 5.01(a), 11.03(A)(b) and 11.04(A)(a) hereof.
"Development Fee" means the fee payable by the Partnership to
the Developer pursuant to Section 8.10 of this Agreement.
"Development Sources" means the aggregate of: (a) the proceeds
of the Mortgage Loans; (b) the Capital Contributions of the General
Partner, as set forth in Section 5.01(a) of this Agreement; (c) not
more than $537,972 ($586,492-$48,520 Development Fee paid from equity)
of the Capital Contributions of the Investment Partnership to the
Partnership; and (d) any rental income of the Partnership for the
period prior to Final Closing.
"Distributable Proceeds from Capital Transactions" means the
excess of all cash receipts and other consideration arising from the
sale or other disposition of all or any portion of the Apartment
Complex or any proceeds realized from condemnation, casualty, or title
defect, but excluding proceeds, if any, from rental interruption
insurance or a temporary condemnation in the nature of a lease, over
the sum of the following, to the extent paid out of such cash receipts
or other consideration: (i) the amount of cash disbursed or to be
disbursed in connection with or as an expense of such sale or other
disposition, (ii) the amount necessary for the payment of all debts
and obligations of the Partnership arising from or otherwise related
to such sale or other disposition or to which the Apartment Complex is
subject and which are otherwise then due (other than debts and
obligations owed to the Partners and their Affiliates, which shall be
satisfied in the order set forth in Section 11.04), and (iii) any
amounts set aside by the General Partner for reserves which the
General Partner deems reasonably necessary for contingent, unmatured
or unforeseen liabilities of the Partnership.
"Distributable Proceeds from Refinancings" means the excess of
the gross proceeds of any borrowing by the Partnership over the sum of
the following, to the extent paid out of such gross proceeds: (i) any
amounts disbursed to repay then existing loans of the Partnership and
to pay and provide for all debts and obligations of the Partnership
then to be paid or which are otherwise then due (other than debts and
obligations owed to the Partners and their Affiliates, which shall be
satisfied in the order set forth in Section 11.04), (ii) all
reasonable expenses of such borrowings, including, without limitation,
all commitment fees, brokers' commissions, and attorneys' fees, (iii)
all amounts paid to improve the Apartment Complex or for any other
purpose in order to satisfy conditions to or established in connection
with such borrowings, and (iv) any amounts used to meet the operating
expenses of the Apartment Complex or set aside by the General Partner
for reserves which the General Partner deems reasonably necessary for
contingent, unmatured, or unforeseen liabilities of the Partnership.
"Eligible Basis" has the meaning given to it in Section 42(d) of
the Code.
"Excess Development Costs" means all funds in excess of the
Development Sources which are required to (i) complete construction of
the Apartment Complex, including paying any final cost overruns and
the cost of any change orders which have been approved by the Lender
and which are not funded from Development Sources, (ii) achieve
Substantial Completion, (iii) achieve Initial Closing and Final
Closing and satisfy any escrow deposit requirements which are
conditions to the Final Closing, including without limitation, any
amounts necessary for local taxes, utilities, insurance premiums and
other amounts which are required, (iv) pay any applicable loan
assessment fees, discounts or other costs and expenses incurred by the
Partnership as a result of the occurrence of the Initial Closing or
the Final Closing, (v) make the required initial $50,000 deposit into
the Operating Deficit Reserve, (vi) make the required initial pro rata
deposit for 1997 into the Reserve Fund for Replacements, and (vii) pay
any Operating Deficits incurred by the Partnership prior to the
occurrence of Rental Achievement.
"Extended Use Commitment" means the agreement between the
Partnership and the Agency, which is intended to meet the definition
of a "long term commitment to low-income housing" as required by
Section 42(h)(6) of the Code and the requirements of the Agency's Low-
Income Housing Tax Credit Program.
"50% Construction Completion" means the date upon which the
Partnership has received all necessary certificates of substantial
completion or certificates of occupancy from the applicable
governmental jurisdiction(s) or authority(ies) and by the inspecting
architect for one hundred percent (100%) of the apartment units in one
of either 250 or 254 Warren Street; provided, however, that 50%
Construction Completion shall not be deemed to have occurred if on
such date any liens or other encumbrances as to title to the Land and
the Apartment Complex exist, other than those securing the Mortgage
Loans and/or those Consented to by the Investment Partnership.
"Final Closing" means the occurrence of all of the following:
(i) Substantial Completion, (ii) the commencement of the BBOC Loan
including any approvals necessary from the Second Lender as may be
required under the City Loan Agreement pursuant to the terms of the
Loan Documents and upon satisfaction or waiver of all conditions set
forth therein, and (iii) commencement of the Second Loan including any
approvals or agreements necessary from the BBOC pursuant to the terms
of the Loan Documents.
"40-60 Set-Aside Test" means the Minimum Set-Aside Test whereby
at least 40% of the units in the Apartment Complex must be occupied by
individuals, with incomes of 60% or less of area median income, as
adjusted for family size.
"General Partner" means Roxbury Veterans Enterprise, Inc., a
Massachusetts corporation and any other Person or entity admitted as a
general partner pursuant to this Agreement, and their respective
successors pursuant to this Agreement, including particularly the
provisions of Section 6.03 and 8.13.
"General Partner Special Capital Contribution" has the meaning
ascribed to such term in Section 5.01 of this Agreement.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as
adjusted pursuant to Section 11.12B.
"HOME Set-Aside Test" means the Minimum Set-Aside test whereby
at least 20% of the units in the Apartment Complex must be occupied by
individuals, with incomes of 50% or less of area medium income as
adjusted for family size.
"Incentive Partnership Management Fee" means the fee payable by
the Partnership to the General Partner pursuant to Section 8.11 of
this Agreement.
"Initial Closing" means the date upon which both of the
following conditions have been satisfied: (i) the first disbursement
of proceeds of the Mortgage Loans is authorized to be made to the
Partnership under the City Loan Agreement and (ii) the Limited
Partners are admitted to the Partnership.
"Initial 100% Occupancy Date" means the first date, after the
completion of rehabilitation, upon which 100% of the apartment units
in the Apartment Complex have been leased to, and fourteen (14) of the
units are currently occupied by, qualified tenants under executed
Agency and Second Lender approved leases, if any such approval is
applicable.
"Installment" means an Installment of the Investment
Partnership's Capital Contribution paid or payable to the Partnership
pursuant to Section 5.01.
"Interest" or "Partnership Interest" means the ownership
interest of a Partner in the Partnership at any particular time,
including the right of such Partner to any and all benefits to which
such Partner may be entitled as provided in this Agreement and in the
Act, together with the obligations of such Partner to comply with all
the terms and provisions of this Agreement and of said Act. Such
Interest of each Partner shall, except as otherwise specifically
provided herein, be that percentage of the aggregate of such benefit
or obligation specified by Section 5.01 as such Partner's Percentage
Interest.
"Invested Amount" means (i) as to the Investment Partnership, an
amount equal to the paid-in Capital Contribution of the Investment
Partnership divided by .73 and (ii) as to any other Partner, an amount
equal to its paid-in Capital Contribution.
"Investment Partnership" means Boston Capital Tax Credit Fund
IV, L.P., a Delaware limited partnership, which is a Limited Partner
of the Partnership.
"Land" means the tracts of land located on Warren Street in
Boston (Roxbury), Massachusetts, upon which the Apartment Complex will
be located.
"Lender(s)" shall mean the BBOC and/or the /Second Lender, as
applicable, or its/their successors and assigns in such capacity,
including any Substitute Lenders permitted pursuant to Section
8.02(b)(v) hereof, each acting through any authorized representative.
"Limited Partners" means the Investment Partnership and/or BCTC
94, Inc., or any other Limited Partner in such Person's capacity as a
limited partner of the Partnership.
"Liquidator" means the General Partner or, if there are none at
the time in question, such other Person who may be appointed in
accordance with applicable law and who shall be responsible for taking
all action necessary or appropriate to wind up the affairs of, and
distribute the assets of, the Partnership upon its dissolution.
"Loan Documents" means, collectively, the $115,700 Promissory
Note (the "$115,700 Note") secured inter alia, by a First Mortgage and
Security Instrument (the "BBOC Mortgage"), Permanent Collateral
Assignment of Leases and Rents, Collateral Assignment of Licenses,
Permits and Contracts, Hazardous Waste Indemnification, UCC-1
Financing Statements as to all personal property relating to the
Project, each dated as of December31, 1996, and any other instruments,
documents or agreements related to the BBOC Loan, from the Partnership
to the BBOC; the Pledge of Distributions, Indemnity Agreement,
Assignment of Project Documents, the City Loan Agreement, $600,000
Promissory Note (the "$600, 000 Note"), including any addendums
thereto, the Second Mortgage and Security Agreement, including any
Riders attached thereto (the "Second Mortgage"), Assignment of Leases
and Rents, all from the Partnership to the Second Lender dated as of
December 31, 1996, and any other documents from the Second Lender to
BBOC related to the Mortgage Loans(s), as the same may be assigned or
transferred; and the Affordable Housing Restriction Agreement from the
Partnership to the City of Boston, acting by and through its Public
Facilities Commission by the Director of the Public Facilities
Department dated as of December 31, 1996.
"Low-Income Housing Tax Credit" means the low-income housing tax
credit allowed for low-income housing projects pursuant to Section 42
of the Code.
"Management Agent" means Gilbraltar Associates, Inc., the
management and rental agent for the Apartment Complex and/or its
successors and/or assigns, as described in Section 8.05 hereof.
"Management Agreement" means the agreement between the
Partnership and the Management Agent providing for the management of
the Apartment Complex.
"Minimum Gain" means the amount determined by computing, with
respect to each non-recourse liability of the Partnership, the amount
of Taxable Income, if any, that would be realized by the Partnership
if it disposed of (in a taxable transaction) the property subject to
such liability in full satisfaction thereof, and by then aggregating
the amounts so computed, in accordance with Treasury Regulation 1.704-
2(d). For purposes of determining the amount of such Taxable Income
with respect to a liability, the adjusted basis, for federal income
tax purposes, of the asset subject to the liability shall be allocated
among all the liabilities that the asset secures in the manner set
forth in Treasury Regulation 1.704-2(d)(2) (or successor provisions).
If Partnership property subject to one or more non-recourse
liabilities of the Partnership is, under Treasury Regulation 1.704-
1(b)(2)(iv)(d),(f), or (r), properly reflected on the books of the
Partnership at a book value that differs from the adjusted tax basis
of such property, then the determination of Minimum Gain shall be made
with reference to such book value.
"Minimum Set-Aside Test" means the set-aside test selected by
the Partnership pursuant to Section 42(g) of the Code with respect to
the percentage of units in its Apartment Complex to be occupied by
tenants with incomes equal to no more than a certain percentage of
area median income. The Partnership has selected or will select the
HOME Set-Aside Test as the Minimum Set-Aside Test, but also must
comply with the 40-50 Set-Aside Test due to the existence of HOME
funds in the Project.
"Mortgage(s)" means, collectively, the BBOC Mortgage and the
Second Mortgage given by the Partnership to the respective Lenders
securing the Mortgage Loans.
"Mortgage Loan(s)" means, the Second Loan in the principal
amount of $600,000.00 made to the Partnership by the Second Lender, as
evidenced by the applicable Loan Documents including without
limitation a $600,000.00 Note, secured by the Second Mortgage and
other related security documents and financing statements, in addition
to the BBOC Loan in the principal amount of $115,700 made to the
Partnership by the BBOC, as evidenced by the applicable Loan Documents
including without limitation a $115,700 Note, secured by the BBOC
Mortgage, and all related security documents and financing statements,
as the same may be assigned or transferred.
"Net Capital Contribution" means an amount equal to a Partner's
paid-in Capital Contribution, less the aggregate amount of cash
distributions, if any, made to such Partner hereunder, excluding
repayment of loans or fees for services, as provided in the definition
of Cash Flow.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(c) of the Treasury Regulations. The amount of Nonrecourse
Deductions for a Fiscal Year of the Partnership equals the net
increase, if any, in the amount of Minimum Gain during that Fiscal
Year, determined according to the provisions of Treasury Regulation
Section 1.704-2(c).
"Notice" means a writing containing the information required by
this Agreement to be communicated to a Partner and sent by registered
or certified mail, postage prepaid, return receipt requested, to such
Partner at the last known address of such Partner, the date of
registry thereof or the date of the certification receipt therefor
being deemed the date of such Notice; provided, however, that any
written communication containing such information sent to such Partner
actually received by such Partner shall constitute Notice for all
purposes of this agreement.
"Operating Deficit" means the amount by which (i) the income of
the Partnership from rental payments made by tenants of the Apartment
Complex and all other income of the Partnership, including
unrestricted earnings on reserve or escrow funds (other than proceeds
of any loans to the Partnership and investment earnings on funds on
deposit in the Reserve Fund for Replacements) for a particular period
of time, is exceeded by (ii) the sum of all the operating expenses,
including all Debt Service payments, operating and maintenance
expenses, deposits into the Reserve Fund for Replacements, any Lender'
fee payments, and all other Partnership obligations or expenditures,
excluding payments to the General Partner, payments for construction
of the Apartment Complex and fees and other expenses and obligations
of the Partnership to be paid from the Capital Contributions of the
Investment Partnership to the Partnership pursuant to this Agreement,
during the same period of time.
"Operating Deficit Loan" means a loan made pursuant to Section
8.09(b).
"Operating Deficit Reserve" means the operating deficit reserve
account established pursuant to the provisions of Section 8.18(b) of
this Agreement.
"Partner" means any General Partner or any Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning
attributed to "partner loan nonrecourse debt minimum gain" in Treasury
Regulation 1.704-2(i)(3).
"Partner Loan Nonrecourse Deductions" means any deductions of
the Partnership that are attributable to a nonrecourse liability for
which a Partner bears the risk of loss within the meaning of Treasury
Regulation Section 1.704-2(i).
"Partnership" means ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP
"Partnership Agreement" means this Amended and Restated
Agreement of Limited Partnership, as amended from time to time.
"Percentage Interest" means the percentage Interest of each
Partner as set forth in
Section 5.01.
"BBOC" means The Boston Bank of Commerce, Massachusetts
corporation in its capacity as maker of the BBOC Loan, or its
successors and assigns in such capacity, including any substitute
Lenders permitted pursuant to Section 8.02(b)(v) hereof, each acting
through any authorized representative.
"BBOC Loan" means the Mortgage Loans to the Partnership in the
maximum principal amount of $115,700.00 as evidenced by, among other
things, the $115,700.00 Note and the BBOC Mortgage.
"Person" means any individual, partnership, corporation, trust
or other entity.
"Plans and Specifications" means the plans and specifications
(as applicable) for the rehabilitation and reconfiguration of the
Apartment Complex, referred to in the Construction Contract and any
changes thereto made in accordance with the terms of this Agreement.
"Pledge Agreement" means the Pledge and Security Agreement dated
as of the date herewith by and between the Developer and the
Partnership for the benefit of the Investment Partnership.
"Project Documents" means and includes the Loan Documents, the
Extended Use Commitment, the Management Agreement and all other
instruments delivered to (or required by) the Lender or the Agency and
all other documents relating to the Apartment Complex and by which the
Partnership is bound, as amended or supplemented from time to time.
"Projected Credit" means Low-Income Housing Tax Credits in the
amount of $80,875.00 for 1997, $97,749.00 per year for each of the
years 1998 through 2006, and $16,873.00 for 2007, which the General
Partner has projected to be the total amount of the Tax Credits which
will be allocated to the Investment Partnership by the Partnership,
constituting ninety-nine percent (99%) of the Tax Credits which are
projected to be available to the Partnership; provided, however, that
if the Actual Credit for 1997 is greater than (or less than)
$80,875.00 the Projected Credit for the year 2007 shall be reduced
(increased) by an amount equal to the amount by which the Actual
Credit for 1997 exceeds (or is less than) $80,875.00.
"Rent Restriction Test" means the test pursuant to Section 42 of
the Code whereby the gross rent charged to tenants of the low-income
units in the Apartment Complex cannot exceed 30% of the qualifying
income levels of those units under Section 42.
"Rental Achievement" means the date upon which the Partnership
shall have maintained a Debt Service Coverage Ratio of not less than
1.10 for any three consecutive full calendar months, with each such
calendar month taken individually, after Substantial Completion.
"Reserve Fund for Replacements" means the reserve fund for
replacements with respect to the Apartment Complex as established
pursuant to the provisions of Section 8.18(a) of this Agreement.
"Revenues" means all cash receipts of the Partnership during any
period except for Capital Contributions, proceeds from the
liquidation, sale or refinancing of Partnership property or of a
Capital Transaction, or the proceeds of any loan to the Partnership.
"Revised Projected Credit" has the meaning set forth in Section
5.01(d)(i).
"Second Lender" means Fleet National Bank, as agent for the City
of Boston acting by and through its Public Facilities Commission by
the Director of the Public Facilities Department ("PFD") in its
capacity as maker of the Second Loan.
"Second Loan" and/or "Second Mortgage Loans" means the portion
of the Mortgage Loans to the Partnership from the Second Lender
pursuant to the City Loan Agreement in the total maximum principal
amount of $600,000 of which (i) $300,000 shall be advanced from the
PFD"s Community Development Block Grant ("CDBG") Program funds (the
"CDBG Funds"), and (ii) $300,000 shall be advanced from The
Commonwealth"s Department of Housing and Community Development"s
("DHCD") HOME Investment Partnership loan program (the "HOME" Funds).
"Share of Minimum Gain" means for each Partner, the excess of
(1) the sum of (a) the aggregate Non-Recourse Deductions allocated to
such Partner (and such Partner's predecessors in interest) up to that
time and (b) the aggregate distributions to such Partner (and such
Partner's predecessors in interest) up to that time of proceeds of a
non-recourse liability that are allocable to an increase in
Partnership Minimum Gain over (2) the sum of (a) such Partner's (and
such Partner's predecessors' in interest) aggregate share of the net
decrease in Partnership Minimum Gain up to that time and (b) such
Partner's (and such Partner's predecessors' in interest) aggregate
share of the decreases up to that time in Partnership Minimum Gain
resulting from revaluations of Partnership Property subject to one or
more non-recourse liabilities of the Partnership, as more fully set
forth in Treasury Regulation 1.704-2(g).
"State" means The Commonwealth of Massachusetts.
"State Designation" means, with respect to the Apartment
Complex, the final allocation by the Agency of Low-Income Housing Tax
Credits, as evidenced by the receipt by the Partnership of IRS Form
8609 executed by the Agency as to all buildings in the Apartment
Complex. In the event that State Designation is anticipated to occur
more than 60 days after the Agency's receipt of Cost Certification,
then, for purposes of Section 5.01(c) hereof, State Designation shall
mean evidence of the Agency's receipt of Cost Certification, provided
that the Partnership"s Carryover Allocation of 1994 Tax Credits
remains valid and in full force and effect.
"Subordinated Loan" means any loan made by the General Partner
to the Partnership pursuant to Section 8.17.
"Substantial Completion" means the date upon which the
Partnership has received all necessary certificates of substantial
completion or certificates of occupancy from the applicable
governmental jurisdiction(s) or authority(ies) and by the inspecting
architect for one hundred percent (100%) of the apartment units in the
Apartment Complex; provided, however, that Substantial Completion
shall not be deemed to have occurred if on such date any liens or
other encumbrances as to title to the Land and the Apartment Complex
exist, other than those securing the Mortgage Loans and/or those
Consented to by the Investment Partnership.
"Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03.
"Syndication Expenses" means all expenditures classified as
syndication expenses pursuant to Treasury Regulation Section 1.709-
2(B). Syndication Expenses shall be taken into account in determining
and maintaining Capital Accounts pursuant to Section 11.12 of this
Agreement at the time they would be taken into account under the
Partnership's method of accounting if they were deductible expenses.
"Taxable Income" and "Tax Losses" means the Partnership's
taxable income or tax losses, respectively, for each fiscal year (or
part thereof) as determined for federal income tax purposes,
including, where the context requires, all items of income, gain,
loss, deduction and credit which enter into the computation thereof.
"Tax Credit" means the Low-Income Housing Tax Credit.
"Tax Credit Set Aside" means the date upon which the Partnership
received a reservation, effective for 1994, subject to a the Carryover
Allocation of Tax Credits meeting the requirements of Section
42(h)(1)(E) of the Code and Treasury Regulations for an allocation of
Tax Credit for the building(s) constituting the Apartment Complex in
an annual dollar amount of not less than $98,736, which reservation
shall not have expired or been revoked prior to the date on which the
First Installment is paid. The Tax Credit Set Aside for the
Partnership was issued by the Agency through a Preliminary Reservation
Letter to the Partnership dated November 9, 1994, and subsequently
superseded by the Carryover Allocation.
ARTICLE III
PURPOSE AND BUSINESS OF THE PARTNERSHIP
3.01. Purpose of the Partnership. The Partnership has been
organized to acquire the Land and to develop, finance, construct, own,
maintain, operate and sell or otherwise dispose of the Apartment
Complex, in order to obtain long-term appreciation, cash income, Tax
Credits and tax losses and to manage the Apartment Complex in a manner
that provides and preserves safe, decent, affordable housing and
needed supportive services.
3.02. Authority of the Partnership. In order to carry out its
purpose, the Partnership is empowered and authorized to do any and all
acts and things necessary, appropriate, proper, advisable, incidental
to or convenient for the furtherance and accomplishment of its
purpose, and for the protection and benefit of the Partnership,
including but not limited to the following:
(a) acquire ownership of the Land;
(b) construct, operate, maintain, improve, buy, own, sell,
convey, assign, mortgage, rent or lease any real estate and any
personal property necessary to the operation of the Apartment Complex;
(c) provide housing, subject to the Minimum Set-Aside Test and
the Rent Restriction Test and consistent with the requirements of the
Project Documents so long as any Project Documents remain(s) in force;
(d) enter into any kind of activity, and perform and carry out
contracts of any kind necessary to, or in connection with, or
incidental to, the accomplishment of the purposes of the Partnership;
(e) borrow money and issue evidences of indebtedness in
furtherance of the Partnership business and secure any such
indebtedness by mortgage, pledge, or other lien;
(f) maintain and operate the Apartment Complex, including
hiring the Management Agent (which Management Agent may be any of the
Partners or an Affiliate thereof) and entering into any agreement for
the management of the Apartment Complex during its rent-up and after
its rent-up period;
(g) subject to the approval of the Agency and/or the Lender,
if required, and to other limitations expressly set forth elsewhere in
this Agreement, negotiate for and conclude agreements for the sale,
exchange, lease or other disposition of all or substantially all of
the property of the Partnership, or for the refinancing of any
Mortgage Loans on the property of the Partnership;
(h) enter into the Loan Documents with the Lenders and grant
the Mortgages, enter into the Mortgage Loans and all other documents
required by the Lenders with respect to the Mortgage Loans, and the
Extended Use Commitment with the Agency, providing for regulations
with respect to rents, profits, dividends and the disposition of the
Apartment Complex and the long-term use of the Apartment Complex for
low-income housing;
(i) rent dwelling units in the Apartment Complex from time to
time, in accordance with the provisions of the Code applicable to Low-
Income Housing Tax Credits and in accordance with applicable federal,
state and local regulations, collecting the rents therefrom, paying
the expenses incurred in connection with the Apartment Complex, and
distributing the net proceeds to the Partners, subject to any
requirements which may be imposed by the Extended Use Commitment and
the Loan Documents; and
(j) do any and all other acts and things necessary or proper
in furtherance of the Partnership business.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS; DUTIES AND OBIGATIONS
4.01. Representations, Warranties and Covenants Relating to the
Apartment Complex and the Partnership. As of the date hereof, the
General Partner hereby represents, warrants and covenants to the
Partnership and to the Partners that:
(a) the construction and development of the Apartment Complex
has begun or shall commence within seven (7) business days from the
date of Initial Closing and shall be completed in a timely and
workmanlike manner in accordance with (i) all applicable requirements
of the Construction Contract and the Project Documents, (ii) all
applicable requirements of all appropriate governmental entities, and
(iii) the Plans and Specifications of the Apartment Complex that have
been or shall be hereafter approved by the Lender and any applicable
governmental entities, as such Plans and Specifications may be changed
from time to time with the approval of the Lender and any applicable
governmental entities, if such approval shall be required;
(b) at the time of commencement of construction, at Initial
Closing and as of the date hereof, the Land was, and is properly zoned
for the Apartment Complex, all consents, permissions and licenses
required by all applicable governmental entities have been obtained
(excepting however any certificates of occupancy which must be
obtained prior to the occupancy of the Apartment Complex, which such
certificates will be obtained by the General Partner on behalf of the
Partnership), and to the best of its knowledge, the Apartment Complex
conformed and conforms to all applicable federal, state and local land
use, zoning, environmental and other governmental laws and
regulations;
(c) all appropriate public utilities, including sanitary and
storm sewers, water, gas and electricity, are currently available and
will be operating properly for all units in the Apartment Complex at
the time of first occupancy of such units;
(d) at Initial Closing and as of the date hereof, good and
marketable fee simple title to the Apartment Complex was and is held
by the Partnership, and title insurance policies of a financially
responsible institution acceptable to the Lender and to BCTC 94, Inc.,
in the amount of the replacement cost of the Apartment Complex, which
amount shall not be less than the aggregate of the Capital
Contributions ($586,492) of the General Partner and the Investment
Partnership and the principal amount of the Mortgage Loans ($715,700),
in favor of the Partnership and Lender, respectively, were issued on
or before Initial Closing, and shall remain in full force and effect,
subject only to such easements, covenants, restrictions and such other
standard exceptions as are normally included in owner's or mortgagee's
title insurance policies and which are acceptable to BCTC 94, Inc. and
the Lender and shall contain a non-imputation endorsement as to the
Investment Partnership and BCTC 94, Inc. and such other endorsements
as deemed reasonably necessary by the Lender and BCTC 94, Inc.;
(e) other than that expressly disclosed to the Limited
Partners, the General Partner is not aware of any default under any
agreement, contract, lease, or other commitment, or of any claim,
demand, litigation, proceedings or governmental investigation pending
or threatened against it, the Apartment Complex or the Partnership, or
related to the business or assets of the Partnership or of the
Apartment Complex, which claim, demand, litigation, proceeding or
governmental investigation could result in any judgment, order,
decree, or settlement which would materially and adversely affect the
business or assets of the Partnership, the General Partner, or of the
Apartment Complex;
(f) except for the commitment fees paid to the Lender, neither
the General Partner nor any Affiliate of the General Partner or the
Partnership, has entered, or shall enter, into any agreement or
contract for the payment of any Mortgage Loans discounts, additional
interest, yield maintenance or other interest charges or financing
fees or any agreement providing for the guarantee of payment of any
such interest charges or financing fees relating to the Mortgage
Loans;
(g) the execution of this Agreement, the incurrence of the
obligations set forth in this Agreement, and the consummation of the
transactions contemplated by this Agreement do not violate any
provision of law, any order, judgment or decree of any court binding
on the Partnership, the General Partner or any of them or their
Affiliates, any provision of any indenture, agreement, or other
instrument to which the Partnership or they or either of them is a
party or by which the Partnership or the Apartment Complex is
affected, and is not in conflict with, and will not result in a breach
of or constitute a default under any such indenture, agreement, or
other instrument or result in creating or imposing any lien, charge,
or encumbrance of any nature whatsoever upon the Apartment Complex;
(h) the Construction Contract has been entered into between
the Partnership and the Contractor; no other consideration or fee
shall be paid to the Contractor, in its capacity as the Contractor,
other than the amounts set forth in the Construction Contract or as
evidenced by change orders approved by the Lender to the extent such
approvals are required, or as otherwise disclosed in writing to and
approved by the Investment Partnership; and all change orders that
have been submitted by the Contractor to date have been paid in full;
(i) at Initial Closing and as of the date hereof, a builder's
risk insurance policy was and is in full force and effect, and fire
and extended coverage insurance for the full replacement value of the
Apartment Complex (excluding the value of the Land, site utilities,
landscaping and foundations) which shall include flood insurance, if
the Apartment Complex is in a flood hazard area designated by the
United States Department of Housing and Urban Development, and public
liability insurance in the amount of not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, per location (with no
deductible for liability), and a $4,000,000 umbrella policy, all in
favor of the Partnership and naming the Investment Partner as an
additional insured and loss payee, are in full force and effect and
will be maintained in full force and effect during the term of the
Partnership; all such policies shall be in amounts set forth in this
Paragraph, and with insurers reasonably satisfactory to BCTC 94, Inc.,
and shall be paid for out of Partnership assets; following Substantial
Completion, the General Partner, on behalf of the Partnership, will
maintain $5,000,000 of liability insurance covering the Land and the
Apartment Complex;
The term "full replacement value" as used herein shall mean and
include the total cost of replacement of the Apartment Complex at each
respective stage of construction thereof up to completion.
(j) neither the General Partner nor the Partnership has
incurred any financial responsibility with respect to the Apartment
Complex prior to the date of execution of this Agreement, other than
that expressly disclosed to the Investment Partnership;
(k) at the time of Initial Closing and at Final Closing, at
the time of execution of this Agreement, and at Substantial
Completion, the Partnership was, is and will continue to be a valid
limited partnership, duly organized under the laws of the State, had,
has and shall continue to have full power and authority to acquire the
Land and to rehabilitate, construct, develop, operate and maintain the
Apartment Complex in accordance with the terms of this Agreement, and
has taken and shall continue to take all action under the laws of the
State and any other applicable jurisdiction that is necessary to
protect the limited liability of the Limited Partners and to enable
the Partnership to engage in its business;
(l) no restrictions on the sale or refinancing of the
Apartment Complex, other than the restrictions set forth in the Loan
Documents, in the Extended Use Commitment and as set forth in this
Agreement, exist as of the date hereof, and no such restrictions
shall, at any time while the Investment Partnership is a Limited
Partner, be placed upon the sale or refinancing of the Apartment
Complex;
(m) the Apartment Complex is being developed in a manner
which satisfies, and shall continue to satisfy, all restrictions,
including tenant income and rent restrictions, applicable to projects
generating Low-Income Housing Tax Credits under Section 42 of the
Code;
(n) the Projected Credits applicable to the Apartment Complex
are $80,875.00 for 1997, $97,419.00 per year for each of the years
1998 through 2006, and $16,873.00 for 2007, which the General Partner
has projected to be the total amount of the Tax Credits which will be
allocated to the Investment Partnership by the Partnership,
constituting ninety-nine percent (99%) of the Tax Credits which are
projected to be available to the Partnership; provided, however, that
if the Actual Credit for 1997 is greater than (or less than) $80,875,
the Projected Credit for the year 2007 shall be reduced (increased) by
an amount equal to the amount by which the Actual Credit for 1997
exceeds (or is less than) $80,875;
(o) the General Partner obtained from the Agency on December
30, 1994, a duly authorized, valid and binding carryover allocation
of Low-Income Housing Tax Credits in the name of the Partnership and
as to the Apartment Complex in an amount not less than $98,736 per
year.
(p) the Partnership shall satisfy satisfied all conditions to
the Agency's allocation of Tax Credits set forth in the Carryover
Allocation dated December 30, 1994 and all exhibits thereto and all
other documents entered into with the Agency, within the time periods
specified and in each case to the extent required to be satisfied as
of the date hereof, and shall be in full compliance with the Agency's
requirements;
(q) to the best of its knowledge after due inquiry, at the
time of the execution of this Agreement, the General Partner has fully
complied with all applicable material provisions and requirements of
any and all purchase and/or lease agreements, loan agreements, Project
Documents and other agreements with respect to the acquisition,
development, financing, rehabilitation, construction and operation of
the Apartment Complex; it shall take, and/or cause the Partnership to
take, all actions as shall be necessary to achieve and maintain
continued compliance with the provisions, and fulfill all applicable
requirements, of such agreements.
(r) the obligations of the General Partner shall be guaranteed
by Veterans Benefit Clearinghouse Development Corporation and/or
another person or entity approved by the Investment Partnership (the
"Guarantor"). Any payments made by the Guarantor directly to the
Partnership or the Investment Partnership pursuant to the ("Payment on
Guaranty") shall be deemed to relieve the General Partner of such
payment obligation.
4.02. Duties and Obligations Relating to the Apartment Complex
and the Partnership. The General Partner shall have the following
duties and obligations with respect to the Apartment Complex and the
Partnership:
(a) all requirements shall be met which are necessary to
obtain or achieve (i) compliance with the Minimum Set-Aside Test, the
Rent Restriction Test, and any other requirements necessary for the
Apartment Complex to initially qualify, and to continue to qualify,
for Tax Credits, including all requirements set forth in the Extended
Use Commitment, (ii) issuance of all necessary certificates of
occupancy, including all governmental approvals required to permit
occupancy of all of the apartment units in the Apartment Complex,
(iii) Initial Closing and Final Closing, and (iv) compliance with all
provisions of the Project Documents;
(b) while conducting the business of the Partnership, it shall
not act in any manner which it knows or should have known after due
inquiry will (i) cause the termination of the Partnership for federal
income tax purposes without the Consent of the Investment Partnership,
or (ii) cause the Partnership to be treated for federal income tax
purposes as an association taxable as a corporation;
(c) the Apartment Complex shall be managed upon Substantial
Completion so that (i) no less than eighty per cent (80%) of the gross
income from the Apartment Complex in every year is rental income from
dwelling units in the Apartment Complex used to provide living
accommodations not on a transient basis, (ii) the rental of all units
in the Apartment Complex complies with the tenant income limitations
and other restrictions under the Rent Restriction Test and as set
forth in the Extended Use Commitment and all applicable documents
entered into in connection with the Mortgage Loans, and (iii) one
hundred percent (100%) of the units in the Apartment Complex are
occupied or held for occupancy by individuals with incomes of sixty
percent (60%) or less of area median income as adjusted for family
size, and of that 100% at least forty percent (40%) of the units are
occupied or held for occupancy by individuals with incomes of fifty
percent (50%) or less of the area median income as adjusted for family
size;
(d) the General Partner shall exercise good faith in all
activities relating to the conduct of the business of the Partnership,
including the development, operation and maintenance of the Apartment
Complex, and shall take no action with respect to the business and
property of the Partnership which is not reasonably related to the
achievement of the purpose of the Partnership;
(e) all of (i) the fixtures, maintenance supplies, tools,
equipment and the like now and to be owned by the Partnership or to be
appurtenant to, or to be used in the operation of the Apartment
Complex, as well as (ii) the rents, revenues and profits earned from
the operation of the Apartment Complex, will be free and clear of all
security interests and encumbrances except for the Mortgage Loans and
the Mortgages, and any additional security agreements executed in
connection therewith;
(f) the General Partner will execute on behalf of the
Partnership all documents necessary to elect, pursuant to Sections
732, 743 and 754 of the Code, to adjust the basis of the Partnership's
property upon the request of the Investment Partnership, if, in the
sole opinion of the Investment Partnership, such election would be
advantageous to the Investment Partnership;
(g) the General Partner shall guarantee payment by the
Partnership of the Development Fee pursuant to Section 8.10;
(h) the General Partner shall comply and cause the Partnership
to comply with the provisions of all applicable governmental and
contractual obligations;
(i) the General Partner shall be responsible for the payment
of any fines or penalties imposed by the Agency or the Lender pursuant
to the Project Documents and any documents executed in connection with
obtaining Tax Credits (other than with respect to payments of
principal or interest under the Mortgage Loans from and after Final
Closing);
(j) the General Partner shall promptly notify the Investment
Partnership of any written or oral notice of (i) any default or
failure of compliance with respect to the Mortgage Loans or any other
financial, contractual or governmental obligation of the Partnership
or the General Partner (in the case of the General Partner, if such
default or failure of compliance may have a material adverse impact on
the Partnership or its operations), or (ii) any IRS proceeding
regarding the Apartment Complex or the Partnership;
(k) the General Partner shall, provide the Investment
Partnership and BCTC 94, Inc. with such information and sign such
documents as are necessary for the Investment Partnership and BCTC 94,
Inc. to make timely, accurate and complete submissions of federal and
state income tax returns;
(l) within thirty (30) days following the Admission Date, the
General Partner shall submit to Boston Capital evidence of the
Partnership's engagement of Accountants, who have been approved by
BCTC 94, Inc., to be responsible for the Partnership's audit and tax
matter reporting obligations under Section 13.04 hereof. BCTC 94,
Inc. hereby acknowledges that the accounting firm of Ziner & Company,
Inc. is approved by BCTC 94, Inc. as the initial Accountant for the
Partnership.
(m) the General Partner shall provide to BCTC 94, Inc., for
its approval and Consent, prior to execution and no later than the end
of the first year of the credit period as defined in Section 42 of the
Code, a copy of the Extended Use Commitment to be entered into between
the Partnership and the Agency.
ARTICLE V
PARTNERS, PARTNERSHIP INTERESTS AND OBLIGATIONS OF THE PARTNERSHIP
5.01. Partners, Capital Contributions and Partnership Interests.
(a) The General Partner, its principal address or place of
business, its Capital Contributions and Percentage Interests are as
follows:
Roxbury Veterans $100.00 1.00%
Enterprises, Inc.
495 Blue Hill Avenue
Dorchester, MA 02121
In the event that the Partnership that has not paid all or part
of the Deferred Development Fee when the final payment is due pursuant
to the Development Agreement and Section 8.10 hereof, the General
Partner shall contribute to the Partnership an amount equal to any
such remaining principal balance (the "General Partner' Special
Capital Contribution") and the Partnership shall thereupon make a
payment in an equal amount to pay off the principal balance due under
the Development Agreement.
(b) (i) The Investment Partnership, its principal office or
place of business, its Capital Contribution and its Percentage
Interest is as follows:
Boston Capital Corporate
Tax Credit Fund VI, A
Limited Partnership
c/o Boston Capital $586,492.00 98.99%
Partners, Inc. (as more
specifically set
One Boston Place forth in subparagraph
(c)
21st Floor immediately below)
Boston, MA 02110
(ii) The Special Limited Partner, its principal office or
place of business, its Capital Contribution and its Percentage
Interest is as follows:
BCTC 94, Inc. $10.00 0.01%
c/o Boston Capital
Partners, Inc.
One Boston Place,
21st Floor
Boston, MA 02210
(c) Subject to the provisions of this Agreement, including
without limitation, the provisions of Sections 5.01(d) and 5.03, the
Investment Partnership shall be obligated to make Capital
Contributions to the Partnership in the aggregate amount of $586,492
in six (6) installments (the "Installments"), which Installments
shall be due and payable in cash by the Investment Partnership to the
Investment Partnership, within twenty-one (21) days after the
Investment Partnership shall have received evidence, reasonably
satisfactory to them, of the occurrence of each of the conditions set
forth below as to the applicable Installment, as set forth below.
Notwithstanding anything to the contrary contained herein, the First
and Second Installments (as defined below) each shall be due and
payable within five (5) business days after the receipt by the
Investment Partnership of evidence reasonably satisfactory to them, of
the occurrence of each of the conditions of the First Installment, and
the Second Installment, respectively, shall be used for Project costs,
and shall be held in escrow by the Investment Partnership or the
Second Lender to be disbursed to the Partnership upon the submission
of draw requests, a satisfactory site inspection and satisfactory
title review by the Investment Partnership and/or the Second Lender.
(i) $351,895 (60%) on the latest to occur of (A) Tax Credit
Set Aside, (B) Initial Closing, (C) receipt by Boston Capital
of an acceptable commitment of the BBOC regarding the BBOC
Loan, (D) the Admission Date (E) receipt by Investment
Partnership of evidence reasonably satisfactory to it that
the Project has been placed in service, including without
limitation, an opinion from a certified public accountant
hired by the General Partner and approved by the Investment
Partnership as to the Partnership's having incurred the
requisite threshold amount of rehabilitation expenses
consisting of the greater of (1) the aggregate of $3,000 per
Unit, or (2) 10% of the adjusted basis in the Project as of
the first day of the twenty-four month period (the "First
Installment");
(ii) $58,649 (10%) on the latest to occur of (A) 50%
Construction Completion, (B) receipt of an owner"s title
insurance policy satisfactory to BCTC 94, Inc., (C)
confirmation by Boston Capital that each of the itemized
outstanding due diligence matters identified on Exhibit 5.01
have been completed by the General Partner to the reasonable
satisfaction of Boston Capital, (D) receipt of a payoff
letter from the Contractor stating that all amounts payable
to the Contractor have been paid in full and that the
Partnership is not in violation of the Construction Contract,
or (E) satisfaction of all of the conditions to the payment
of the First Installment (the "Second Installment");
(iii) $79,176 (13.5%) on the latest to occur of (A)
Substantial Completion or (B) satisfaction of all of the
conditions to the payment of the First, and Second
Installments (the "Third Installment");
(iv) $82,109 (14%) on the later to occur of (A) Initial 95%
Occupancy Date (B) Final Closing (C) Rental Achievement (D)
Cost Certification (E) State Designation or (F) satisfaction
of all conditions to the payment of the First, Second, and
Third Installments (the "Fourth Installment");
(v) $14,663 (2.5%) on the later to occur of (A) the receipt
by the Investment Partnership of the Partnership"s federal
income tax return for the year in which Rental Achievement
occurred or (B) satisfaction of all conditions to the payment
of the First, Second, Third, and Fourth Installments (the
"Fifth Installment").
As a condition precedent to each payment set forth above other than
the First Installment, the General Partner shall, not less than twenty
(20) days nor more than thirty (30) days prior to the time such
Installment is due, give the Investment Partnership Notice in the form
of a written certification that: (A) all conditions precedent to such
Installment have been satisfied, (B) the representations, warranties
and covenants given by the General Partner in Section 4.01(a) are
valid and accurate, where still applicable, with respect to the
General Partner, the Partnership and/or the Apartment Complex, as of
the date of such certificate, and (C) to the best of their knowledge,
after due inquiry, no condition exists which would, pursuant to
Section 5.03, entitle the Investment Partnership to withhold the
payment of such Installment. Based upon the giving of such Notice,
such Installment shall be made on the due date therefor, or if such
Notice is not timely given, then within twenty-one (21) days after
receipt of such Notice.
(d) (i) Upon the occurrence of Cost Certification and State
Designation, if ninety-nine percent (99%) of the aggregate amount of
Tax Credits: (A) for which the Partnership would be eligible with
respect to the Apartment Complex based upon the Cost Certification,
and/or (B) allocated by the Agency with respect to the Apartment
Complex, is less than the aggregate amount of the Projected Credit
(the "Allocation Differential"), then the Capital Contribution of the
Investment Partnership shall be reduced by the "Adjustment Amount".
The Adjustment Amount shall be equal to the Allocation Differential
multiplied by eighty-one and 40/100 percent (81.40%). Any such
reduction in Capital Contribution shall be applied to reduce the Third
Installment and if, and to the extent necessary, the Fourth
Installment and if, and to the extent necessary, the Fifth
Installment. If no further Installments are due to be paid, then the
entire amount of such reduction shall be repaid by the Partnership to
the Investment Partnership promptly after demand is made therefor.
The General Partner is obligated to provide such funds to the
Partnership as shall be necessary to cause the aforesaid payment to be
made by the Partnership to the Investment Partnership. In the event
that there is a reduction in Capital Contributions equal to the
Adjustment Amount, then the amount of the Projected Credit shall be
proportionately reduced to reflect the Allocation Differential, and
thereafter shall be referred to as the "Revised Projected Credit".
(ii) If at any time the Accountants determine that, for
any fiscal year or portion thereof during the Partnership's operation,
ending on the date five (5) years from and after the date of
Substantial Completion (the "Reduction Period"), the Actual Credit for
such fiscal year or portion thereof is less than the Projected Credit
(or Revised Projected Credit) applicable to such fiscal year or
portion thereof, then the Capital Contribution of the Investment
Partnership shall be reduced by the Reduction Amount. The "Reduction
Amount" shall be equal to the sum of (A) the Credit Shortfall
multiplied by eighty-one and 40/100 percent (81.4%), and (B) the
amount of any recapture, interest or penalty payable by the limited
partners of the Investment Partnership (assuming pass through of all
such liability in the year incurred and a tax rate equal to the
maximum individual rate applicable in such year) as a result of the
Credit Shortfall for such year. Any reduction in Capital Contribution
shall first be applied to reduce the Installment next due to be paid
by the Investment Partnership, and any portion of such reduction in
excess of such Installment shall be applied to reduce succeeding
Installments. If no further Installments are due to be paid, then the
entire amount of such reduction shall be repaid by the Partnership to
the Investment Partnership promptly after demand is made therefor. The
General Partner is obligated to provide such funds to the Partnership
as shall be necessary to cause the aforesaid payment to be made by the
Partnership to the Investment Partnership.
(iii) In the event that, for any reason, at any time
after the Reduction Period, there is a Credit Shortfall with respect
to any fiscal year during the Partnership's operation, the Investment
Partnership shall be treated as having made a constructive advance to
the Partnership with respect to such year (a "Credit Recovery Loan"),
which shall be deemed to have been made on January 1 of such year, in
an amount equal to the sum of (A) the Credit Shortfall for such year,
plus (B) the amount of any recapture, interest or penalty payable by
the limited partners of the Investment Partnership (assuming pass-
through of all such liability in the year incurred and a tax rate
equal to the maximum individual rate applicable in such year) as a
result of the Credit Shortfall for such year. Credit Recovery Loans
shall be deemed to bear simple (not compounded) interest, from the
respective dates on which such principal advances are deemed to have
been made under this Section 5.01(d) (iii) at 9% per annum. Credit
Recovery Loans shall be repayable by the Partnership as provided in
Sections 11.03(A)(c) and 11.04(A)(b).
(e) Without the Consent of all of the Partners, no additional
Persons may be admitted as additional Limited Partners and Capital
Contributions may be accepted only as and to the extent expressly
provided for in this Article V.
5.02. Return of Capital Contribution. Except as provided in
this Agreement, no Partner shall be entitled to demand or receive the
return of his Capital Contribution.
5.03. Withholding of Capital Contribution Upon Default. In the
event that: (a) either General Partner, or any successor General
Partner shall not have substantially complied with any material
provisions under this Agreement, after Notice from the Investment
Partnership of such noncompliance and failure to cure such
noncompliance within a period of sixty (60) days from and after the
date of such Notice, or (b) Lender shall have declared the Partnership
to be in default under the Mortgage Loans or (c) foreclosure
proceedings shall have been commenced against the Apartment Complex,
then the Partnership and the Investment Partnership, at its sole
election, may cause the withholding of payment of any Installment
otherwise payable to the Partnership. Notwithstanding the provisions
herein, in the event that an Installment payment becomes due during
the cure period stated in this Section 5.03(a), the Investment
Partnership, at its sole election, may cause the withholding of any
payment of any such Installment otherwise payable to the Partnership
until the termination of such cure period, and then, according to the
provisions herein.
All amounts so withheld by the Investment Partnership under this
Section 5.03 shall be promptly released to the Partnership only after
the General Partner or the Partnership has cured the default
justifying the withholding, as demonstrated by evidence reasonably
acceptable to the Investment Partnership.
5.04. Legal Opinions. As a condition precedent to payment of
the First Installment, the Investment Partnership shall have received
the opinion of McKenzie & Edwards, P.C., counsel to the Partnership
and to the General Partner, which opinion shall be in form and
substance satisfactory to the Investment Partnership and shall
explicitly state that Hinckley, Allen & Snyder, of Boston,
Massachusetts, counsel to the Limited Partner, may explicitly rely
upon them.
5.05. Repurchase Obligation.
(a) If (i) Substantial Completion has not occurred by June
30, 1997; (ii) the Partnership has not received State Designation by
December 31, 1997; (iii) Rental Achievement does not occur within 24
months from and after the occurrence of Substantial Completion; (iv)
the Partnership fails to meet the Minimum Set-Aside Test and the Rent
Restriction Test within 24 months of the date that the Apartment
Complex is placed in service; (v) the Partnership fails to meet either
the Minimum Set-Aside Test and the Rent Restriction Test at anytime
during the first 60 months after initial achievement of the Minimum
Set Aside and Rent Restriction Tests (vi) Final Closing has not
occurred by December 31,1997; (vii) an event of default described in
Section 5.03(a), (b) and/or (c) shall exist and shall not have been
cured within 30 days after the occurrence of such default; (viii) the
buildings comprising the Apartment Complex are not placed in service
prior to December 31, 1996; (ix) the General Partner fails to make
Subordinated Loans as required by this Agreement; then the General
Partner shall, within 30 days of the occurrence thereof, send to the
Investment Partnership Notice of such event and of its obligation to
purchase the Interest of the Investment Partnership hereunder and pay
to the Investment Partnership the Invested Amount in the event the
Investment Partnership in its sole discretion requires such purchase
of its Interest. Thereafter, the General Partner, within 30 days of
its receipt of Notice from the Investment Partnership of such
election, shall acquire the entire Interest of the Investment
Partnership in the Partnership by making payment to the Investment
Partnership, in cash, of an amount equal to the Invested Amount.
(b) If the Lender and/or the Agency shall disapprove the
Investment Partnership as a Partner hereunder within 180 days of its
admission to the Partnership, then the Investment Partnership shall,
effective as of such time (or such other time as may be specified by
the Lender and/or the Agency in its disapproval), cease to be a
Limited Partner. The General Partner shall, within 10 days of the
effective date of such termination, purchase the Interest of the
Investment Partnership in the Partnership and pay to the Investment
Partnership an amount equal to its Net Capital Contribution.
(c) Upon receipt by the Investment Partnership of any such
payment of its Net Capital Contribution or the Invested Amount, as
applicable, the Interest of the Investment Partnership shall
terminate, the Investment Partnership shall execute, acknowledge and
deliver such documents of assignment as the General Partner shall
require and effectuate the termination or transfer of its Interest,
and the General Partner shall indemnify and hold harmless the
Investment Partnership from any losses, damages, and/or liabilities to
which the Investment Partnership (as a result of its participation
hereunder) may be subject, except as and to the extent of any losses,
damages and/or liabilities arising from the Investment Partnership's
own negligence, misconduct or fraud.
ARTICLE VI
CHANGES IN PARTNERS
6.01. Withdrawal of a General Partner.
(a) A General Partner may withdraw from the Partnership or
sell, transfer or assign his or its Interest as General Partner only
with the prior Consent of BCTC 94, Inc., and of the Lender, if
required, and only after being given written approval by the necessary
parties as provided in Section 6.02, and by the Lender, if required,
of the General Partner(s) to be substituted for him or it or to
receive all or part of his or its Interest as General Partner.
(b) In the event that a General Partner withdraws from the
Partnership or sells, transfers or assigns his or its entire Interest
pursuant to Section 6.01(a), he or it shall be and shall remain liable
for all obligations and liabilities incurred by him or it as General
Partner, or arising out of any events occurring before such
withdrawal, sale, transfer or assignment shall have become effective,
but shall be free of any obligation or liability incurred on account
of the activities of the Partnership from and after the time such
withdrawal, sale, transfer or assignment shall have become effective,
including without limitation, liability for new advances in Operating
Deficit Loans, Subordinated Loans, Reserve Fund Replacements, payments
under Section 5.05, Asset Management Fees and Contributions for
Development Fees.
In the event that the General Partner withdraws from the
Partnership or sells, transfers or assigns its entire interest
pursuant to Section 6.01(a), the Guarantor shall remain liable for all
obligations and liabilities so long as, and to the extent of the
General Partner, and shall be free of any obligation or liability
similarly as the General Partner, hereunder.
In the event that the General Partner withdraws from the
Partnership or sells, transfers or assigns its entire Interest
pursuant to Section 6.01(a), such withdrawal shall not serve to
release the Guarantor from any obligations to the Operating
Partnership or the Investment Partnership or the General Partner,
unless provisions satisfactory to the Special Limited Partner in its
sole discretion, have been made for substantial payment of any such
obligations.
(c) Notwithstanding anything to the contrary contained in
this Agreement, in the event that the General Partner withdraws from
the Partnership or sells, transfers or assigns its entire Interests
pursuant to Section 6, then it shall at all times be the sole and
absolute obligation of the General Partner to successfully appoint a
substitute General Partner to the Partnership prior to the removal or
withdrawal from the Partnership of the General Partner; such
substitute General Partner shall (i) be a charitable entity which
qualifies for the same property tax abatement applicable to the
Apartment Complex as provided through the General Partner, (ii) be a
qualified nonprofit organization pursuant to IRC Sec. 42(h)(5) which
satisfies all requirements set forth under IRC 501(c)(3) or IRC
501(c)(4); (iii) be established as a nonprofit corporation under
Massachusetts law; (iv) have "housing" as one of its exempt purposes;
(v) materially participate, within the meaning of IRC Sect. 469(h), in
the development, operation and ownership of the project throughout the
compliance period; (vi) not be affiliated with or controlled by a for-
profit corporation; and (vii) be approved by the Limited Partnership
and if required pursuant to the Loan Documents, by the Second Lender
and BBOC which approval shall not be unreasonably withheld
(collectively, items i-vii hereof shall be referred to as the
"Substitute Non-Profit Conditions")
In the event that at any time the General Partner fails to
satisfy the Substitute Non-Profit Conditions, the Investment
Partnership, in its sole and absolute discretion, may declare the said
General Partner in default of its obligations under the Partnership
Agreement and may exercise any and all remedies under said Agreement,
as the same may be amended from time to time, including, without
limitation, the Remedies under Section 8.09(b), 8.12 and 8.13 of the
Partnership Agreement.
In the event that any party brings any suit or other proceeding
with respect to the subject matter or enforcement of this Section
6.01, the prevailing party (as determined by the court, agency or
other authority before which such suit or proceeding is commenced)
shall, in addition to such other relief as may be awarded, be entitled
to recover attorneys' fees, expenses and costs of investigation as
reasonably incurred.
6.02. Admission of a Successor or General Partner. A Person
shall be admitted as a General Partner of the Partnership only if the
following terms and conditions are satisfied:
(a) the withdrawal of any withdrawing General Partner and the
admission of such Person shall have been Consented to by the remaining
General Partner or its successors and the Investment Partnership, and
Consented to, if required, by the Lender;
(b) the successor or additional Person shall have accepted and
agreed to be bound by (i) all the terms and provisions of this
Agreement, by executing a counterpart hereof, and (ii) all the terms
and provisions of the Loan Documents, including by executing a
counterpart thereof to the extent required by a Lender, and (iii) all
the terms and provisions of such other documents or instruments as may
be required or appropriate in order to effect the admission of such
Person as a General Partner, and an amendment to this Agreement and/or
the Certificate, as applicable, evidencing the admission of such
Person as a General Partner shall have been filed and all other
actions required by Section 1.05 in connection with such admission
shall have been performed;
(c) if the successor or additional Person is a corporation or
a limited liability company, it shall have provided the Partnership
with evidence satisfactory to counsel for the Partnership of its
authority to become a General Partner, to do business in the State and
to be bound by the terms and provisions of this Agreement; and
(d) counsel for the Partnership shall have rendered an opinion
that the admission of the successor or additional Person is in
conformity with the Act and that none of the actions taken in
connection with the admission of the successor Person will cause the
termination or dissolution of the Partnership or will cause it to be
classified other than as a partnership for federal income tax
purposes.
6.03. Effect of Bankruptcy, Death, Withdrawal, Dissolution or
Incompetence of a General Partner.
(a) In the event of the Bankruptcy of a General Partner or the
withdrawal, death or dissolution of a General Partner or an
adjudication that a General Partner is incompetent (which term shall
include, but not be limited to, insanity) the business of the
Partnership shall be continued by the other General Partner, if any,
(and the other General Partner, by execution of this Agreement,
expressly so agrees to continue the business of the Partnership);
provided, however, that if the withdrawn, Bankrupt, deceased,
dissolved or incompetent General Partner is then the sole General
Partner, unless the Investment Partnership within ninety (90) days
after receiving Notice of such Bankruptcy, withdrawal, death,
dissolution or adjudication of incompetence elects to designate a
successor General Partner and continue the Partnership upon the
admission of such successor General Partner to the Partnership, the
Partnership shall be terminated.
(b) Upon the Bankruptcy, death, dissolution or adjudication of
incompetence of a General Partner, such General Partner shall
immediately cease to be a General Partner and his or its Interest
shall without further action be converted to a Limited Partner
Interest; provided, however, that if such Bankrupt, dissolved,
incompetent or deceased General Partner is the sole remaining General
Partner, such General Partner shall cease to be a General Partner only
upon the expiration of ninety (90) days after Notice to the Investment
Partnership of the Bankruptcy, death, dissolution or declaration of
incompetence of such General Partner; and provided further that if
such Bankrupt, dissolved, incompetent or deceased General Partner is
the sole remaining General Partner, the converted Partnership Interest
of such replaced General Partner shall be ratably reduced to the
extent necessary to insure that the substitute General Partner holds a
1% Percentage Interest (as set forth in Section 5.01) and will receive
such percentage interest distribution of the General Partner's
percentage pursuant to Section 11.04A(f), as is deemed reasonable by
the Limited Partners as a result of good faith negotiations with such
substitute General Partner; such replaced General Partner whose
Interest has been converted to that of a Limited Partner shall remain
entitled to his or its proportionate share of the remainder of the
distribution pursuant to Section 11.04A(f), and shall be entitled to
repayment of all loans previously made and fees accrued but not paid,
up to such time of conversion, but shall not be entitled to repayment
of any loans made or fees accrued subsequent to such time of
conversion, and shall be released from liabilities incurred after
conversion, as provided in Section 6.01(b).
Except as set forth above, such conversion of a General Partner
Interest to a Limited Partner Interest shall not affect any rights,
obligations or liabilities (including without limitation, any of the
General Partner's obligations under Section 8.09 herein) of the
Bankrupt, deceased, dissolved or incompetent General Partner existing
prior to the Bankruptcy, death, dissolution or incompetence of such
person as a General Partner (whether or not such rights, obligations
or liabilities were known or had matured).
(c) If, at the time of the withdrawal, Bankruptcy, death,
dissolution or adjudication of incompetence of a General Partner, the
Bankrupt, deceased, dissolved or incompetent General Partner was not
the sole General Partner of the Partnership, the remaining General
Partner or General Partner shall promptly (i) give Notice to the
Limited Partners of such Bankruptcy, death, dissolution or
adjudication of incompetence, and (ii) make such amendments to this
Agreement and execute and file such amendments or documents or other
instruments as are necessary to reflect the continuation of the
Partnership and the conversion of the Interest of the Bankrupt,
deceased, dissolved or incompetent General Partner and his having
ceased to be a General Partner. The remaining General Partner or
General Partner are hereby granted an irrevocable power of attorney to
execute any or all documents on behalf of the Partners and the
Partnership and to file such documents as may be required to
effectuate the provisions of this Section 6.03.
ARTICLE VII
ASSIGNMENT TO THE PARTNERSHIP
7.01 Assignment of Contracts, etc. The General Partner hereby
transfers and assigns to the Partnership all of its right, title and
interest in and to the Apartment Complex, including the following:
(i) all contracts with architects, engineers,
contractors and supervising architects with respect to the
construction or development of the Apartment Complex;
(ii) all plans, specifications and working drawings,
heretofore prepared or obtained in connection with the Apartment
Complex and all governmental approvals obtained, including planning,
zoning and building permits;
(iii) any and all commitments with respect to the Mortgage
Loans; and
(iv) any other work product related to the Apartment
Complex.
ARTICLE VIII
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
801. Management of the Partnership.
(a) Except as otherwise set forth in this Agreement, the
General Partner, within the authority granted to it under this
Agreement, shall have full, complete and exclusive discretion to
manage and control the business of the Partnership for the purposes
stated in Article III, shall make all decisions affecting the business
of the Partnership and shall manage and control the affairs of the
Partnership to the best of its ability and use its best efforts to
carry out the purpose of the Partnership. In so doing, the General
Partner shall take all actions necessary or appropriate to protect the
interests of the Limited Partners and of the Partnership. The General
Partner shall devote such of its time as is necessary to the affairs
of the Partnership.
(b) Except as otherwise set forth in this Agreement and
subject to the applicable Lender' rules and regulations and the
provisions of the Project Documents, the General Partner (acting for
and on behalf of the Partnership), in extension and not in limitation
of the rights and powers given by law or by the other provisions of
this Agreement, shall, in their sole discretion, have the full and
entire right, power and authority in the management of the Partnership
business to do any and all acts and things necessary, proper,
convenient or advisable to effectuate the purpose of the Partnership.
In furtherance and not in limitation of the foregoing provisions, the
General Partner is specifically authorized and empowered to execute
and deliver, on behalf of the Partnership, the Project Documents and
to execute any and all other instruments and documents, and amendments
thereto, as shall be required in connection with the Mortgage Loans,
including, but not limited to, executing any mortgage, note, contract,
building loan agreement, bank resolution and signature card, release,
discharge, or any other document or instrument in any way related
thereto or necessary or appropriate in connection therewith; provided,
however, that copies of all applications for advances of Mortgage
Loans proceeds which occur after the Admission Date shall be provided
to the Investment Partnership prior to the disbursement of any funds
pursuant thereto. All decisions made for and on behalf of the
Partnership by the General Partner shall be binding upon the
Partnership. No person dealing with the General Partner shall be
required to determine their authority to make any undertaking on
behalf of the Partnership, nor to determine any facts or circumstances
bearing upon the existence of such authority.
(c) Subject to the terms of this Partnership Agreement, the
General Partner shall be responsible for the management and
administration of the Partnership business and shall have all rights
and authority generally conferred by law or necessary, advisable or
consistent with accomplishing the purpose of the Partnership. Subject
to the consent of the Special Limited Partner, which consent shall not
be unreasonably withheld, the General Partner shall have the power to
assign duties and may delegate any of its powers, rights and
obligations hereunder and may appoint, employ, contract or otherwise
deal with any person for the transaction of business of the
Partnership, which person may, but only under the supervision of the
General Partner perform any acts or services for the Partnership as
the General Partner may approve.
The General Partner shall provide regular, continuous and
substantial services to the Partnership and shall materially
participate (within the meaning of Section 469(h) of the Code) in the
development of the Apartment Complex and the operations and
administration of the Partnership. In addition to any other duties
and obligations specifically assigned or reserved to the General
Partner under this Agreement, the General Partner may perform the
following services on behalf of the Partnership:
(i) advise the Partnership concerning particular
requirements of low income housing rules and regulations;
(ii) facilitate operation of the Apartment Complex by
appearances or corresponding with lenders and governmental bodies;
(iii) provide local service agencies, that may include
housing authorities, welfare and social service departments, churches
and other organizations operating for the purpose of assisting the
needy, with sufficient information and documentation to advise such
agencies about the availability of the Apartment Complex as described
housing for low income families, and promote and encourage such
agencies to refer potential residents to the Apartment Complex;
(iv) advise the property manager concerning ways in which
the availability of the Apartment Complex as suitable housing for low
income families may be made more widely known in the community;
(v) obtain information from and consult with low income
residents in the Apartment Complex as to services which might be
provided to such residents by the Partnership;
(vi) obtain information from and consult with residents
concerning social and educational services from the community which
might be provided to residents at the Apartment Complex;
(vii) use its best efforts to effect and monitor
compliance of the Partnership and the Apartment Complex with all
governmental regulations applicable thereto (including without
limitation making appropriate administrative filings).
In addition, the General Partner shall be responsible for
insuring the Apartment Complex and the operation thereof at all times
comply and are in conformance with Section 4(b) and Section 5 of
Article XIII of the Constitution of the State of Massachusetts and
Sections 214, 254.5 and 259.5 of the Massachusetts Revenue and
Taxation Code as amended.
The General Partner shall obtain and maintain a welfare tax
exempt status or similar status for the Apartment Complex (the "Tax
Exemption") if such Tax Exemption is available and provided for
according to governmental ruling and/or legislation. Any saving to
the Partnership and the Apartment Complex attributable to the Tax
Exemption shall be used to maintain the affordability of, or reduce
rents otherwise necessary for, the units occupied by lower income
individuals or otherwise in a charitable manner to be passed on to the
low income residents at the Apartment Complex. With prior consent of
the Special Limited Partner, which consent shall not be unreasonably
withheld, a specific plan for using those savings may be established
by the General Partner. That plan would provide low income
individuals living within the Apartment Complex with additional
programs, supportive services or activities which may, but shall not
be required to, include any or all of the following:
(i) teaching residents life and job skills (e.g.,
English language, job interviewing techniques, resume writing) so that
they may obtain better jobs;
(ii) tutoring children in their school lessons;
(iii) subsidizing child care or transportation to assist
residents in going to school or work;
(iv) repair physical deterioration problems unique to an
underprivileged area, including graffiti removal and security;
(v) rental assistance to make direct payment of utility
bills during unusually high utility usage months;
(vi) conduct surveys, need assessments and evaluation of
the Property to determine how the lives and general environment of the
residents can be improved.
(vii) contract with existing counseling services to
provide counseling services for residents.
The General Partner may interface with appropriate state
departments empowered to allocate and administer Tax Credits, and
shall supervise all activities with the state reasonably necessary to
enjoyment of the Tax Credits for the Apartment Complex.
The General Partner may effect and monitor the compliance of the
Partnership and the Apartment Complex with governmental regulations
applicable thereto. Those efforts may include making appropriate
administrative filings and monitoring the income and other
qualifications of residents.
The General Partner is also primarily responsible for the
rehabilitation and construction of the Apartment Complex.
(d) Notwithstanding anything to the contrary contained herein,
the Limited Partners reserve the right, at their option to conduct a
lease audit on twenty five (25%) percent of the initial leases
executed in connection with the Apartment Complex in order to ensure
compliance with the applicable Rent Restriction Test, Minimum Set
Aside Test, or any other applicable tenant restriction test ("Lease
Audit"). The Limited Partners shall select at their option, any
combination of leases which shall comprise the Lease Audit (the
"Selected Leases"). The Lease Audit shall consist of a review of the
complete tenant files in connection with the Selected Leases,
including but not limited to any tenant financial information.
Further, the Lease Audit shall be conducted with the cooperation of,
and at the sole cost and expense of the General Partner if the Lease
Audit reveals a material noncompliance. A material noncompliance
shall be deemed to exist if at least five (5) leases reveal
noncompliance or violations of any applicable tenant restriction test.
If the Lease Audit does not reveal a material noncompliance the
Limited Partners shall bear the cost of such audit.
8.02. Limitations Upon the Authority of the General Partner.
(a) The General Partner shall not have any authority to:
(i) perform any act in violation of any applicable law
or regulation thereunder;
(ii) perform any act in violation of the provisions of
the Extended Use Commitment, the Loan Documents, or any other Project
Documents;
(iii) do any act required to be approved or ratified
in writing by all Limited Partners under the Act unless the right to
do so is expressly otherwise given in this Agreement;
(iv) rent apartments in the Apartment Complex such that
the Apartment Complex would not meet the requirements of the Rent
Restriction Test or Minimum Set-Aside Tests or to any individuals
where income exceeds 60% (or 50%, as applicable) of area median
income, as adjusted for family size; or
(v) borrow from the Partnership or commingle Partnership
funds with funds of any other Person.
(b) The General Partner shall not, without the Consent of BCTC
94, Inc., have any authority to:
(i) sell or otherwise dispose of, at any time, all or
substantially all of the assets of the Partnership;
(ii) borrow in excess of $10,000 in the aggregate at any
one time outstanding on the general credit of the Partnership, except
borrowings constituting Subordinated Loans or Credit Recovery Loans;
(iii) following Substantial Completion, construct any new
or replacement capital improvements on the Apartment Complex which
substantially alter the Apartment Complex or its use or which are at a
cost in excess of $10,000 in a single Partnership fiscal year, except
(a) replacements and remodeling in the ordinary course of business or
under emergency conditions or (b) construction paid for from insurance
proceeds;
(iv) acquire any real property on behalf of the
Partnership in addition to the Apartment Complex; or
(v) refinance the Mortgage Loan(s), provided that, with
the Consent of BCTC 94, Inc. the General Partner may substitute, in
whole or in part, the Mortgage Loans with other permanent first
mortgage financing, provided such financing (a) is without recourse to
any Partner of the Partnership, (b) has a term that ends no earlier
than the last day of the "Compliance Period" as defined in Code
Section 42, (c) has fixed debt service no greater than the fixed debt
service applicable to the Mortgage Loans during the Permanent Term and
(d) permits use of refinancing proceeds only for Partnership purposes
approved by the Investment Partnership.
8.03. Management Purposes. In conducting the business of the
Partnership, the General Partner shall be bound by the Partnership's
purpose(s) set forth in Article III.
8.04. Delegation of Authority. Subject to Section 8.05 hereof,
the General Partner may employ, contract, or otherwise deal with any
Person in connection with the performance of its management
responsibilities hereunder, provided such Person acts only under the
supervision of the General Partner.
8.05. General Partner or Affiliates Dealing with Partnership.
(a) Gilbraltar Associates, Inc. shall be the Management Agent
for a one year term after Substantial Completion. Thereafter, any
contract with Gilbraltar Associates, Inc. may be renewable on an
annual basis as approved by the Investment Partnership. In the event
that said management contract is not renewed, the General Partner or
any Affiliate may act as Management Agent on a temporary basis for the
interim period pending selection of a replacement Management Agent
reasonably acceptable to Boston Capital and the Second Lender and on
such terms and conditions permitted by applicable regulations of the
Lender and the Agency, and may receive compensation at the highest
rates approved and permitted by the Lender or the Agency at any time
subject to the terms herein; provided, however, that the Management
Agent may not receive compensation in excess of six percent (6%) of
gross rental receipts received from tenants of the Apartment Complex
(the "Rental Receipt Cap").
(b) The General Partner or any Affiliates thereof shall have
the right to contract or otherwise deal with the Partnership for the
sale of goods or services to the Partnership in addition to those set
forth herein, including the Construction Contract which is excluded
from this Section 8.05, if (A) compensation paid or promised for such
goods or services is reasonable (i.e., at fair market value) and is
paid only for goods or services actually furnished to the Partnership,
(B) the goods or services to be furnished shall be reasonable for and
necessary to the Partnership, (C) the fees, terms and conditions of
such transaction are at least as favorable to the Partnership as would
be obtainable in an arm's-length transaction, (D) no agent, attorney,
accountant or other independent consultant or contractor who also is
employed on a full-time basis by the General Partner or any Affiliate
shall be compensated by the Partnership for his services.
Any contract covering such transactions shall be in writing and
(other than the Development Agreement) shall be terminable without
penalty on sixty (60) days Notice. Any payment made to the General
Partner or any Affiliate for such goods or services shall be fully
disclosed to all Limited Partners in the reports required under
Section 13.04. Neither the General Partner nor any Affiliate shall,
by the making of lump-sum payments to any other Person for
disbursement by such other Person, circumvent the provisions of this
Section 8.05(b).
8.06. Other Activities. The General Partner and any Affiliates
thereof may engage in or possess interests in other business ventures
of every kind and description for their own account, including,
without limitation, serving as general partner of other partnerships
which own, either directly or through interests in other partnerships,
government-assisted housing projects similar to the Apartment Complex.
Neither the Partnership nor any of the Partners shall have any rights
by virtue of this Agreement in or to such other business ventures or
to the income or profits derived therefrom.
8.07. Liability for Acts and Omissions. No General Partner
shall be liable, responsible or accountable in damages or otherwise to
any of the Partners for any act or omission performed or omitted by
him or it, or any of them, in good faith on behalf of the Partnership
and in a manner reasonably believed by him or it or any of them to be
within the scope of the authority granted to him or it or any of them
by this Agreement and in the best interest of the Partnership, except
for gross negligence, willful misconduct, fraud or any material breach
of his or its or their fiduciary duty as General Partner with respect
to such acts or omissions. Any loss or damage incurred by any General
Partner by reason of any act or omission performed or omitted by him
or it or any of them in good faith on behalf of the Partnership and in
a manner reasonably believed by him or it or any of them to be within
the scope of the authority granted to him or it by this Agreement and
in the best interests of the Partnership (but not, in any event, any
loss or damage incurred by any General Partner by reason of gross
negligence, willful misconduct, fraud or any material breach of his or
its or their fiduciary duty as General Partner with respect to such
acts or omissions, or liabilities of the Partners chargeable to the
General Partner) shall be paid from Partnership assets to the extent
available (but the Limited Partners shall not have any personal
liability to the General Partner under any circumstances on account of
any such loss or damage incurred by the General Partner or on account
of the payment thereof).
8.08. Partnership Status. In the event that the sole General
Partner is a corporation, or in the event that all General Partners
are corporations, such General Partner(s) shall satisfy at least one
of the requirements set forth in the last sentence of Section 4.07 of
Internal Revenue Service Procedure 89-12, as the same may be modified
from time to time, which requirements are prerequisites to the
issuance by the Internal Revenue Service of an advance ruling that the
Partnership will be taxed as a partnership, and not as an association
taxable as a corporation, for federal income tax purposes.
8.09. Construction of the Apartment Complex, Construction Cost
Overuns, Operating Deficits.
(a) (i) The Partnership has entered into the Construction
Contract. The General Partner shall be responsible for:
(A) achieving completion of construction of
the Apartment Complex on a timely basis
in accordance with the Plans and
Specifications, this Agreement and the
Project Documents;
(B) meeting all requirements for obtaining
all necessary
permanent, unconditional certificates of
occupancy for all the apartment units in
the Apartment Complex;
(C) fulfilling all actions required of the
Partnership to assure that the Apartment
Complex satisfies the Minimum Set-Aside
Test and the Rent Restriction Test; and
(D) causing the making of the Mortgage Loans
by the Lender and the achievement of
Initial Closing and Final Closing.
(ii) The General Partner hereby is obligated to pay all
Excess Development Costs; the Partnership shall have no obligation to
pay any Excess Development Costs.
(iii) In the event that the General Partner shall fail to
pay any such Excess Development Costs as required in this Section
8.09(a), an amount not in excess of the next installment of the
Development Fee due to the Developer shall be applied by the
Partnership as an offset against such obligations of the General
Partner.
Any such direction and application of funds otherwise payable to
the Developer as aforesaid shall be deemed to have been paid by the
Partnership to the Developer and then applied to reduce the amount of
the Excess Development Costs, and the Partnership's obligation to make
installment payments to the Developer pursuant to Section 8.10(a), as
well as the Investment Partnership's obligation to make future
Installments, shall be deemed satisfied to the extent of the funds
applied to reduce the General Partner's obligation to fund Excess
Development Costs, and the obligations of the General Partner pursuant
to Sections 8.09(a) (i) or 8.09(a) (ii) shall be deemed satisfied to
the extent of the funds applied.
(iv) The General Partner's obligations under this
Section 8.09(a) shall be guaranteed by Veterans Benefits Clearinghouse
Development Corp. pursuant to a Guaranty of even date herewith.
(b) In the event that, at any time (subject to the hereinafter
set forth limitations), an Operating Deficit shall exist, the General
Partner shall provide such funds to the Partnership as shall be
necessary to pay such Operating Deficit(s) in the form of a loan to
the Partnership (the "Operating Deficit Loan(s)"). An Operating
Deficit Loan shall be a Subordinated Loan payable in accordance with
the provisions of Section 8.17; Operating Deficit Loans shall bear no
interest.
In the event that the General Partner shall fail to make any
such Operating Deficit Loan as aforesaid, the Partnership shall
utilize amounts otherwise payable to the Developer as installments of
the Development Fee pursuant to Section 8.10 of this Agreement to meet
the obligations of the General Partner pursuant to this Section
8.09(b). Amounts so utilized shall also constitute the payment and
satisfaction of installments of the Development Fee payable to the
Developer under the aforesaid section of this Agreement, and the
obligation of the Partnership to make such installment payments to the
Developer, pursuant to such section, as well as the Investment
Partnership's obligation to make future installments, shall be reduced
correspondingly. For the purposes of this Section 8.09(b), all
expenses shall be paid on a sixty (60) day current basis. The
obligation of the General Partner to make Operating Deficit Loans
shall be secured by an Unlimited Guaranty from Veterans Benefits
Clearinghouse Development Corp.
8.10. Development Fee. The Partnership has entered into a
Development Agreement of even date herewith with the Developer for its
services in connection with the development and construction of the
Apartment Complex. In consideration for such services, a Development
Fee in the total amount of $50,000 shall be payable by the Partnership
to the Developer, solely from the Capital Contributions by the
Investment Partnership except as provided in Sections 4.02(g),
5.01(a), 11.03A(b) and 11.04(A)(b)(6), and pledged to the Partnership
for the benefit of the Investment Partnership pursuant to the Pledge
Agreement..
The Development Fee shall be due and payable by the Partnership
to the Developer as follows:
(a) $38,520 upon receipt by the Partnership of the Fourth
Installment;
(b) $10,000 upon receipt by the Partnership of the Fifth
Installment; and
(c) the Deferred Development Fee, if any, shall be payable
only in accordance with Sections 11.03(a)(b) and 11.04(a) or, if
not sooner paid, on the last day of the period ending ten years
after the issuance of the Certificate of Occupancy.
.
8.11. Incentive Partnership Management Fee. The Partnership has
entered into a Partnership Management Services Agreement with the
General Partner of even date herewith for its services in managing the
business of the Partnership for the period from the date hereof
throughout the term of the Partnership, an annual Incentive
Partnership Management Fee in the amount of $2,500 per annum if
available from Cash Flow, commencing in 1998 with a pro rata portion
of the Incentive Partnership Management Fee for 1997 pursuant to the
Partnership Management Services Agreement. Such agreement includes
provisions to the effect that in return for its services in
administering and directing the business of the Partnership,
maintaining appropriate books and records relating to all financial
affairs of the Partnership, and reporting periodically to the
Partners, the Lender and the Agency with respect to the financial and
administrative affairs of the Partnership and the Apartment Complex,
the Partnership shall pay to the General Partner, from the Cash Flow
and/or from Proceeds of Capital Transactions of the Partnership
available for distribution and in accordance with Section 11.03A(e)
and 11.04(b)(4) an annual Incentive Partnership Management Fee.
Such fee shall be payable in accordance with the provisions of
any applicable regulations of the Lender or the Agency and of the
Project Documents and shall be in an amount equal to $2,500 per year,
commencing in 1998 with a pro rata portion of the Incentive
Partnership Management Fee for 1997 pursuant to the Partnership
Management Services Agreement, and payable from Cash Flow in
accordance with Section 11.03A(e) and 11.04(b)(4).
8.11.1 Asset Management Fee. The Partnership shall pay to
Boston Capital, or an Affiliate thereof, an annual Asset Management
Fee in the amount of $1,500 per annum, commencing in 1997, for its
services in assisting with the preparation of the reports required
pursuant to Section 13.04. The Asset Management Fee shall be payable
from Cash Flow as provided in Section 11.03A(a) and from proceeds from
Capital Transaction as provided in Section 11.04 A(b)(1). If in any
Fiscal Year, Cash Flow and/or proceeds from Capital Transactions are
insufficient to pay the Asset Management Fee, any unpaid portion of
said Asset Management Fee shall accrue, without interest, and shall be
payable on a cumulative basis in the first year in which there is
sufficient Cash Flow available for the payment of such fee, or, in the
first year in which proceeds of a Capital Transaction are available.
8.12. Withholding of Fee Payments. In the event that (a) a
General Partner or any successor General Partner shall not have
substantially complied with any material provisions under this
Agreement or the applicable limited partnership agreement, or (b) any
financing commitment of any lender, or any agreement entered into by
the Partnership for financing related to the Apartment Complex shall
have terminated prior to their respective termination date(s), or (c)
foreclosure proceedings shall have been commenced against the
Apartment Complex then (i) such General Partner shall be in default of
this Agreement, and the Partnership shall withhold payment of any
installment of fees payable pursuant to Sections 8.10 and 8.11, and
(ii) the General Partner shall be liable for the Partnership's payment
of any and all installments of the Development Fee payable pursuant to
Section 8.10, to the extent that the Investment Partnership has
withheld any Installment(s) pursuant to Section 5.03 as a result of
the above-described default.
All amounts so withheld by the Partnership under this Section
8.12 shall be promptly released only after the General Partner has
cured the default justifying the withholding, as demonstrated by
evidence reasonably acceptable to the Investment Partnership.
8.13. Removal of the General Partner.
(a) BCTC 94, Inc., acting on behalf of the Investment
Partnership, so long as the Investment Partnership is a Partner, shall
have the right to remove any or all General Partner (i) for any
intentional misconduct or gross negligence in the discharge of its
duties and obligations as a General Partner (provided that such
misconduct or failure results in, or is likely to result in, a
material detriment to or an impairment of the Apartment Complex or
assets of the Partnership), or (ii) upon the occurrence of any of the
following:
(A) such General Partner shall have violated any of the
material provisions of the Extended Use Commitment, the Loan
Documents, or any provisions of any other Project Document or other
document required in connection with the Mortgage Loans, or any
provisions of the Agency regulations applicable to the Apartment
Complex;
(B) such General Partner shall have violated any
material provision of this Agreement or any provision of applicable
law, which violations shall include, without limitation (i) withdrawal
of the General Partner without the Consent of the Investment
Partnership pursuant to the Section 6.01(a), (ii) the failure of the
General Partner to make Subordinated Loans required under this
Agreement or (iii) the failure of a sole General Partner which is a
corporation to satisfy the requirements of Section 8.08;
(C) such General Partner shall have caused either
Mortgage Loans to go into default; or
(D) such General Partner shall have conducted its own
affairs or the affairs of the Partnership in such manner as would:
(1) cause the termination of the Partnership for federal income tax
purposes; or (2) cause the Partnership to be treated for federal
income tax purposes as an association, taxable as a corporation.
(b) BCTC 94, Inc. shall give Notice to all Partners of its
determination that any such General Partner shall be removed. The
General Partner shall have sixty (60) days after receipt of such
Notice to cure any default or other reason for such removal, in which
event it shall remain as General Partner. If, at the end of such cure
period such General Partner has not cured any default or other reason
for such removal, (i) without any further action by any Partner, BCTC
94, Inc. or its designee shall automatically become a General Partner
and acquire in consideration of a cash payment of $5 such portion of
the Interest of the removed General Partner as counsel to the
Investment Partnership shall determine is the minimum appropriate
interest in order to assure the continued status of the Partnership as
a partnership under the Code and under the Act, (ii) the remaining
portion of the economic Interest of the removed General Partner shall
automatically be converted to an equal economic Interest as an
Additional Limited Partner, provided that such removed General Partner
and any guarantor of its obligations shall have no further liability
to the Partnership or the Partners for liabilities incurred after the
date of withdrawal, but shall be and remain liable for all obligations
and liabilities incurred by such removed General Partner, or arising
out of any events occurring before such removal became effective,
including but not limited to its obligations set forth in Section 8.09
hereof. Additionally, the loans previously made to the Partnership by
the removed General Partner will be paid when properly due and payable
according to their respective loan terms, except that the Partnership
may offset against any payments due thereunder to a General Partner
removed under this Section 8.13, any damages suffered by the
Partnership as a result of any breach of the obligations of such
General Partner hereunder, (iii) the economic Interest of BCTC 94,
Inc. as the Special Limited Partner shall continue unaffected by the
new status of BCTC 94, Inc. or its designee as a General Partner, and
(iv) the new General Partner shall automatically be irrevocably
delegated all of the powers and duties of the General Partner
hereunder.
(c) BCTC 94, Inc. or any successor General Partner proposed by
the Special Limited Partner shall have the option, exercisable in its
sole discretion, to acquire the Additional Limited Partner Interest,
or any portion thereof, of any removed General Partner upon payment of
the agreed or then present fair market value of such Interest or
portion thereof. Any dispute as to the value of the Interest or
portion thereof to be acquired pursuant to the immediately preceding
sentence shall be submitted to a committee composed of three qualified
real estate appraisers, one chosen by the removed General Partner, one
chosen by the successor General Partner, and the third chosen by the
two so chosen. The proceedings of such committee shall conform to the
rules of the American Arbitration Association, as far as appropriate,
and its decision shall be final and binding. The expense of
arbitration shall be born equally by the removed General Partner and
the Partnership. The method of payment will be deemed presumptively
fair where it provides for a promissory note bearing simple interest
at nine percent (9%) per annum coming due in no less than five (5)
years with equal installments each year, and a cash down payment of
fifteen percent (15%).
(d) Upon removal, no General Partner or any Affiliate thereof
shall be entitled to receive any fee, compensation or other
remuneration from the Partnership, other than the above-described
payment for the Interest, or portion thereof, of the Removed General
Partner or pursuant to Section 8.13(b) above. The Partnership is not
authorized to enter into any arrangement whereby any fee, compensation
or other remuneration could be payable directly or indirectly to any
General Partner or Affiliate thereof in a manner inconsistent with the
immediately preceding sentence unless the prior written consent of
BCTC 94, Inc. shall have been obtained to such particular arrangement.
The Partnership may offset against any payments to a General Partner
removed under this Section 8.13 any damages suffered by the
Partnership as a result of any breach of the obligations of such
General Partner hereunder. A General Partner so removed will not be
liable as a general partner for any obligations of the Partnership
incurred after the effective date of its removal, but shall be and
remain liable for all obligations and liabilities incurred by it as
General Partner before such removal became effective, including, but
not limited to, its obligations set forth in Section 8.09 hereof.
(e) The General Partner hereby grants to each of the
Investment Partnership and BCTC 94, Inc. an irrevocable power of
attorney, coupled with an interest, to execute any and all documents
on behalf of the Partners and the Partnership as shall be legally
necessary and sufficient to effect all of the foregoing provisions of
this Section 8.13. The election by the Investment Partnership to
remove such General Partner under this Section shall not limit or
restrict the availability and use of any other remedy which the
Investment Partnership or any other Partner might have with respect to
the General Partner in connection with their undertakings and
responsibilities under this Agreement.
8.14. Selection of Management Agent. The Partnership, with the
approval of the Lenders and the Agency, if required, shall engage such
person, firm or company as the General Partner may select, and as the
Investment Partnership may approve, which approval shall not be
unreasonably withheld (hereinafter referred to as "Management Agent")
to manage the operation of the Apartment Complex during the rent-up
period and following Substantial Completion for a period of one year,
and thereafter such management contract may be extended on an annual
basis unless terminated for cause. The Management Agent shall be paid
a management fee subject to the approval of the Lender and the Agency,
if required. The contract between the Partnership and the Management
Agent and the management plan for the Apartment Complex shall be in a
form acceptable to the Lender and the Agency, if required. Gilbraltar
Associates, Inc. hereby is approved by the parties hereto as the
initial Management Agent.
8.15. Removal of the Management Agent. The General Partner,
(i) may, upon receiving any required approval of the Lender and the
Agency, dismiss the Management Agent as the entity responsible for the
Apartment Complex under the terms of the contract between the
Partnership and the Management Agent, and (ii) at the request of the
Investment Partnership, shall remove the Management Agent in the event
that (A) the Investment Partnership, in its reasonable discretion,
determines that the Management Agent does not possess the necessary
experience to properly manage the Apartment Complex or (B) the
Management Agent is declared Bankrupt, is dissolved, or makes an
assignment for the benefit of its creditors, or for any intentional
misconduct by the Management Agent or gross negligence in the
discharge of its duties and obligations as Management Agent,
including, without limitation, for any action or failure to take any
action which:
(1) violates in any material respect any provision
of the Management Agreement entered into with the Partnership
and approved by the Lender, and/or any provision of the Extended
Use Commitment and/or the Loan Documents applicable to the
Apartment Complex, or the Lender approved management plan for
the Apartment Complex, or
(2) violates in any material respect any provision
of this Agreement or provision of applicable law.
8.16. Replacement of the Management Agent. Upon the removal of
the Management Agent as the entity responsible for the management of
the Apartment Complex, a substitute Management Agent, which may be an
Affiliate of the General Partner, shall be named by the General
Partner, subject to the approval of the Lender, if required, and the
approval of BCTC 94, Inc.
8.17. Subordinated Loans to the Partnership. In the event that
additional funds are required by the Partnership for any purpose
relating to the business of the Partnership or for any of its
obligations, expenses, costs or expenditures, the Partnership may
borrow such funds as are needed from any Partners or other Person or
organization, including the General Partner, for such period of time
and on such terms as the General Partner, the Investment Partnership
and the Lender, if so required, may agree and at the rate of interest
then prevailing for comparable loans (except for Operating Deficit
Loans made pursuant to Section 8.09(b), which shall bear interest only
as provided in Section 8.09(b)); provided however, that no such
additional loans shall be secured by any mortgage or other encumbrance
on the property of the Partnership without the prior approval of the
Investment Partnership and the approval of the Lender, if required;
except that such approvals shall not be required in the case of the
hypothecation of personal property purchased by the Partnership and
not included in the security agreements executed by the Partnership at
the time of Initial Closing. Loans made under this Section shall be
repaid as set forth in Section 11.01 of this Agreement, but any amount
of any such loan that is outstanding at the time of the occurrence of
any of the events described in Sections 11.04 or 12.01 shall be repaid
as provided in Section 11.04A(b)(3). A General Partner is not
obligated to make any Subordinated Loans except as provided for in
Section 8.11.1.
8.18. Reserve Fund for Replacements.
(a) Reserve Fund for Replacements. The Partnership shall
establish a Reserve Fund for Replacements with respect to the
Apartment Complex, as required by the Lender and BCTC 94, Inc. The
Partnership shall make deposits into the Reserve Fund equal to
$4,200.00 annually commencing in 1998 with a pro rata share to be paid
for 1997 (the "Required Deposit"); such deposits may be suspended in
any period during which such account has a balance of $42,000, as
approved by the Lender and/or BCTC 94, Inc. Funds in the Reserve Fund
for Replacements are intended to be employed for the replacement as
needed of fixtures, equipment, structural elements and other
components of the Apartment Complex of a capital nature. All interest
earnings on funds on deposit in the Reserve Fund for Replacements
shall be retained therein for the aforesaid purposes. The Reserve
Fund for Replacement shall remain under the joint control of the
General Partner and BCTC 94, Inc. Withdrawals from the Reserve Fund
for Replacements shall be made only with the Consent, or upon the
direction, of the Lender; provided, however, if such Consent of the
Lender is not required, such withdrawals may be made only with the
Consent, or upon the direction, of the General Partner and BCTC 94,
Inc.
(b) Operating Deficit Reserve. Upon receipt by the
Partnership of the First Installment, the Partnership shall establish
the Operating Deficit Reserve as a separate, interest-bearing account
with a financial institution acceptable to BCTC 94, Inc. and shall
deposit therein funds in the amount of $52,118.00 from the proceeds of
the First Installment. Funds in the Operating Deficit Reserve are
intended to be employed solely for the payment of Operating Deficits.
All interest earnings on funds on deposit in the Operating Deficit
Reserve shall be retained therein for the aforesaid purposes. The
Operating Deficit Reserve shall remain under joint control of the
General Partner and BCTC 94, Inc. Withdrawals from the Operating
Deficit Reserve shall be made only with the Consent, or upon the
direction, of the General Partner and BCTC 94, Inc.
The Operating Deficit Reserve shall be released to the
Partnership upon the later to occur of (i) the termination of the "tax
credit compliance period" and/or the "extended use period" as such
term is defined pursuant to IRC Sec. 42(h)(6), or (ii) the termination,
release or discharge of the Second Loan.
(c) Partnership Cash Reserve Fund. The Partnership shall
establish and fund a Partnership Cash Reserve Fund from Distributions
of Cash Flow pursuant to Section 11.03 hereof, until such time as said
fund equals or exceeds the greater of (i) one year"s operating
expenses, or (ii) $69,491 (the "Required Minimum Balance"). All
interest earnings on the funds on deposit in the Partnership Cash
Reserve Fund shall be retained therein and released to the General
Partner upon the release of the Partnership Cash Reserve Fund. The
Partnership Cash Reserve Fund shall remain under the joint control of
the General Partner and BCTC 94, Inc. In the event the balance of the
Partnership Cash Reserve Fund falls below the Required Minimum
Balance, then the Partnership shall fund the Partnership Cash Reserve
Fund from Distributions of Cash Flow, as available pursuant to Section
11.03 hereof, in such amounts as are necessary to attain the Required
Minimum Balance (the "Required Amounts"). In the event that the
combined total balance of the Operating Deficit Reserve and the
Partnership Cash Reserve Fund exceeds $72,000 on or after the later to
occur of (i) a period of five (5) years subsequent to Rental
Achievement, (ii) the achievement of twelve (12) consecutive months as
a minimum 93% occupancy and twelve (12) consecutive months where gross
income exceeds operating expenses and replacement reserves by 1.1,
then the excess amount (over $72,000) shall be released to the General
Partner. The Partnership shall maintain the Partnership Cash Reserve
Fund and such portion of the Operating Deficit Reserve as is required
to maintain a minimum aggregate balance of $72,000 for a period of the
last to occur of (i) thirty (30) years subsequent to Rental
Achievement, or (ii) at such time as the Second Loan shall be
released, terminated or discharged, at which time the balance of the
Partnership Cash Reserve Fund shall be released to the General
Partner.
ARTICLE IX
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS OF INTERESTS OF
LIMITED PARTNERS
9.01. Purchase for Investment.
(a) The Investment Partnership hereby represents and warrants
to the General Partner and to the Partnership that the acquisition of
its Interest is made as principal for its account for investment
purposes only and not with a view to the resale or distribution of
such Interest, except insofar as the Securities Act of 1933 and any
applicable securities law of any state or other jurisdiction permit
such acquisitions to be made for the account of others or with a view
to the resale or distribution of such Interest without requiring that
such Interest, or the acquisition, resale or distribution thereof, be
registered under the Securities Act of 1933 or any applicable
securities law of any state or other jurisdiction.
(b) The Investment Partnership agrees that it will not sell,
assign or otherwise transfer its Interest or any fraction thereof to
any Person who does not similarly represent and warrant and similarly
agree not to sell, assign or transfer such Interest or fraction
thereof to any Person who does not similarly represent and warrant and
agree.
(c) The Investment Partnership shall not sell, assign or
otherwise transfer its Interest or any fraction thereof to any Person
until the Investment Partnership has provided the Partnership with a
legal opinion, reasonably satisfactory to the General Partner, that
such sale, assignment or other transfer does not violate any state or
federal securities laws or require the Interest to be registered under
any such laws.
9.02. Restrictions on Transfer of Limited Partner's Interests.
(a) Under no circumstances will any offer, sale, transfer,
assignment, hypothecation or pledge of any Limited Partner Interest be
permitted unless the General Partner, in its sole discretion, shall
have Consented.
(b) The Limited Partner whose interest is being transferred
shall pay such reasonable expenses as may be incurred by the
Partnership in connection with such transfer.
9.03. Admission of Substitute Limited Partners.
(a) Subject to the other provisions of this Article IX, an
assignee of the Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee, or other
recipient of any disposition of such Interest) shall be admitted as a
Substitute Limited Partner of the Partnership only upon the
satisfactory completion of the following:
(i) Consent of the General Partner (which may be
withheld in its sole discretion) and the consent of the Lender, if
required, shall have been given, which Consent of the General Partner
may be evidenced by the execution by the General Partner of an amended
Agreement and/or Certificate evidencing the admission of such Person as
a Limited Partner pursuant to the requirements to the Act;
(ii) the assignee shall have accepted and agreed to be
bound by the terms and provisions of this Agreement by executing a
counterpart thereof or an appropriate amendment hereto, and such other
documents or instruments as the General Partner may require in order
to effect the admission of such Person as a Limited Partner;
(iii) an amended Agreement and/or Certificate evidencing
the admission of such Person as a Limited Partner shall have been
filed for recording pursuant to the requirements of the Act to the
extent required in order to effectuate the admission of such Person as
a Limited Partner;
(iv) the assignee shall have represented and agreed in
writing as required by Section 9.01;
(v) if the assignee is a corporation, the assignee shall
have provided the General Partner with evidence satisfactory to
counsel for the Partnership of its authority to become a Limited
Partner under the terms and provisions of this Agreement; and
(vi) the assignee or the assignor shall have reimbursed
the Partnership for all reasonable expenses, including all reasonable
legal fees and recording charges, incurred by the Partnership in
connection with such assignment.
(b) For the purpose of allocation of profits, losses and
credits, and for the purpose of distributing cash of the Partnership,
a Substitute Limited Partner shall be treated as having become, and as
appearing in, the records of the Partnership as a Partner upon his
signing of an amendment to this Agreement, agreeing to be bound
hereby.
(c) The General Partner shall cooperate with the Person
seeking to become a Substitute Limited Partner by preparing the
documentation required by this Section and making all official filings
and publications. The Partnership shall take all such action,
including the filing of any amended Agreement and/or Certificate
evidencing the admission of any Person as a Limited Partner, and the
making of any other official filings and publications, as promptly as
practicable after the satisfaction by the assignee of the Interest of
a Limited Partner of the conditions contained in this Article IX to
the admission of such Person as a Limited Partner of the Partnership.
Any cost or expense incurred in connection with such admission shall
be borne by the Partnership to the extent of available Partnership
assets, and otherwise by such assignee.
9.04. Rights of Assignee of Partnership Interest.
(a) Except as provided in this Article and as required by
operation of law, the Partnership shall not be obligated for any
purpose whatsoever to recognize the assignment by any Limited Partner
of his (its) Interest until the Partnership has received actual Notice
thereof.
(b) Any Person who is the assignee of all or any portion of a
Limited Partner's Interest, but does not become a Substitute Limited
Partner and desires to make a further assignment of such Interest,
shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make
an assignment of his (its) Interest.
ARTICLE X
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
10.01. Management of the Partnership. No Limited Partner
shall take part in the management or control of the business of the
Partnership nor transact any business in the name of the Partnership.
Except as otherwise expressly provided in this Agreement, no Limited
Partner shall have the power or authority to bind the partnership or
to sign any agreement or document in the name of the Partnership. No
Limited Partner shall have any power or authority with respect to the
Partnership except insofar as the consent of any Limited Partner shall
be expressly required and except as otherwise expressly provided in
this Agreement.
10.02. Limitation on Liability of Limited Partners. The
liability of each Limited Partner shall be limited to its Capital
Contribution as and when payable under the provisions of this
Agreement. No Limited Partner shall have any other liability to
contribute money to, or in respect of the liabilities or obligations
of, the Partnership, nor shall any Limited Partner be personally
liable for any obligations of the Partnership. No Limited Partner
shall be obligated to make loans to the Partnership.
10.03. Other Activities. Any Limited Partner may engage in
or possess interests in other business ventures of every kind and
description for its own account, including without limitation, serving
as general or limited partner of other partnerships which own, either
directly or through interests in other partnerships, government-
assisted housing projects similar to the Apartment Complex. Neither
the Partnership nor any of the Partners shall have any right by virtue
of this Agreement in or to such other business ventures to the income
or profits derived therefrom.
10.04. Ownership by Limited Partner of Corporate General
Partner or Affiliate. No Limited Partner shall, at any time, either
directly or indirectly, own any stock or other interest in any
corporate General Partner if such ownership by itself or in
conjunction with other stock or other interests owned by other Limited
Partners would, in the opinion of Hinckley, Allen & Snyder or other
tax counsel to the Investment Partnership, jeopardize the
classification of the Partnership as a partnership for federal income
tax purposes. In the event of any violation of the provisions of this
Section by any one or more Limited Partners, such Limited Partner or
Limited Partners shall either dispose of their Interests in the
Partnership (subject to and in compliance with the provisions of
Article IX) or of their stock or other interest in the corporate
General Partner or Affiliates to the extent necessary so that, in the
opinion of counsel for the Partnership, the classification of the
Partnership as a partnership for federal income tax purposes is no
longer in jeopardy. The obligation of any such disposition required
of more than one Limited Partner shall be shared among them on an
equitable basis. Notwithstanding the foregoing, neither the General
Partner nor any Limited Partner shall be liable in damages to the
Partnership or to any Partner by reason of any violation of this
Section, except for damages arising (a) out of any material
misrepresentation by any Limited Partner relating to the ownership of
stock or other interest in a corporate General Partner or any
affiliate by him or by any member of his family (within the meaning of
the attribution rules set forth in Section 318 of the Code), or (b)
out of any failure by any Limited Partner to dispose of his Interest
in the Partnership or of his stock or other interest in a corporate
General Partner or Affiliate within a reasonable time after Notice to
such Limited Partner by the Partnership of the obligations to make
such disposition.
ARTICLE XI
ALLOCATION OF TAXABLE INCOME, TAX LOSSES, TAX CREDITS AND CASH
DISTRIBUTIONS
Section 11.01. Allocation of Taxable Income, Tax Losses and
Tax Credits.
A. General. Subject to the special allocations set forth in
this Article XI, Taxable Income, Tax Credits and Tax Losses for each
fiscal year of the Partnership (or part thereof) other than those to
be allocated pursuant to Section 11.01B, Section 11.01C, or Section
11.02 hereof, shall be allocated 99% to the Investment Partnership and
1% to the General Partner.
B. Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be specially allocated 99% to the
Investment Partnership and 1% to the General Partner.
C. Partner Loan Nonrecourse Deductions. Any Partner Loan
Nonrecourse Deductions for any Fiscal Year or other period shall be
specially allocated to the Partner who bears the economic risk of loss
with respect to the loan to which such Partner Loan Nonrecourse
Deductions are attributable in accordance with Treasury Regulations
Section 1.704-2(i).
Section 11.02. Allocation of Taxable Income and Tax Losses
from Capital Transactions. Subject to the special allocations set
forth in this Article XI, Taxable Income and Tax Losses from Capital
Transactions shall be allocated to the Partners as follows:
(i) Taxable Income from Capital Transactions shall be
allocated:
(a) first, to the Partners with negative Capital Accounts
pro rata in such amounts as will result in the elimination of the
negative Capital Accounts of such Partners; provided, however, that if
Taxable Income to be allocated pursuant to this Section 11.02(i)(a) is
insufficient to eliminate all negative Capital Accounts, such Taxable
Income will be allocated to Partners with negative Capital Accounts in
the proportion that each such Partner's negative Capital Account bears
to the total of all such Negative Capital Accounts;
(b) second, in the amount and to the extent necessary to
increase the Partners' respective Capital Accounts to equal the
amounts distributable under Sections 11.04 A (c) and 11.04A(d);
(c) then, the balance, if any, of such Taxable Income
shall be allocated 75% to the General Partner and 25% to the
Investment Partnership.
(ii) Tax Losses from Capital Transactions shall be allocated:
(a) first, to the extent of the respective positive
balances in the Partners' Capital Accounts; and
(b) any balance, 99% to the Limited Partner and 1% to the
General Partner.
(iii) Notwithstanding the foregoing provisions, if Taxable
Income to be allocated includes income treated as ordinary income for
federal income tax purposes because such Taxable Income is
attributable to the recapture of depreciation under Section 1245 or
1250 of the Code, such Taxable Income, to the extent treated as
ordinary income, shall be allocated to and reported by the Partners in
proportion to their accumulated depreciation allocations. The
Partnership shall keep records of such allocations of depreciation to
the Partners. In determining the accumulated depreciation allocations
of the Partners, depreciation deductions for each taxable year shall
be deemed allocated to the Partners in the same proportion as the
Taxable Income or Tax Losses in that particular taxable year were
allocated to the Partners.
11.03 Distribution of Cash Flow.
A. Subject to Lender approval, if required, Cash Flow shall
be determined for each fiscal year and shall be applied or distributed
at such time or times as the General Partner deem appropriate, but in
no event less than once in each fiscal year, in the following order of
priority:
(a) First, to payment of operating expenses of the
Apartment Complex and funding of the Reserve Fund for Replacements;
(b) Second, to payment of the Asset Management Fee
currently due, together with any accrued but unpaid Asset Management
Fees;
(c) Third, to payment of the Incentive Partnership
Management Fee currently due;
(d) Fourth, to the payment of any Required Amounts into
the Partnership Cash Reserve Fund; and
(e) Fifth, to the repayment of debt service pursuant to
the terms of the BBOC Loan;
(f) Sixth, to the repayment of debt service pursuant to
the terms of the Second Loan;
(g) Seventh, to the repayment of any amounts due with
respect to any Subordinate Loans (including without limitations,
Operating Deficit Loans made under Section 8.09(b);
(h) Eighth, to the payment to the Developer of the
Deferred Development Fee;
(i) Any balance, split 50% to the General Partner and
50% to the Investment Partnership.
Section 11.04 Distributions of Distributable Proceeds from
Capital Transactions and Distributable Proceeds from Refinancings.
A. Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings (other than liquidating
distributions pursuant to Section 12.02) shall be distributed in the
following order of priority:
(a) First, to the payment of any debts and liabilities
(including unpaid fees but excluding any debts, liabilities and/or
fees owed to any Partners) and to the establishment of any required
reserves;
(b) Second, to the payment of any debts and liabilities
(including unpaid fees) owed to the Partners or any Affiliates by the
Partnership for Partnership obligations, including the repayment of
any Credit Recovery Loans made pursuant to Section 5.01(d)(iii) or any
Operating Deficit Loans made pursuant to Section 8.09(b) and the
funding of reserves under Section 8.18; provided, however, that the
foregoing debts and liabilities owed to Partners and their Affiliates
shall be paid or repaid, as applicable, in the following order of
priority if and to the extent applicable:
(1) The Asset Management Fees currently due,
together with any accrued and unpaid Asset Management
Fees, if any,
(2) The repayment of the Investment Partnership of
any Reduction Amount pursuant to Section 5.01(d)(ii)
together with any accrued or unpaid interest or Credit
Recovery Loan Pursuant to Section 5.01(d)(iii) together
with any accrued or unpaid interest;
(3) Subordinated Loans to the General Partner;
(4) Any other such debts and liabilities; provided,
however, that all such other debts and liabilities owed to
the Investment Partnership shall be paid prior to any such
debts and liabilities owed to the General Partner; and
(c) then, except in the case of a refinancing of the
Mortgage Loans, to the Investment Partner in an amount equal to the
positive balance in the Investment Partner's Capital Account following
adjustments made pursuant to this Section 11.04A.
(d) then, except in the case of a refinancing of the
Mortgage Loans to the Investment Partner in an amount equal to the
positive balance in the General Partner"s Capital Account following
adjustments made pursuant to this Section 11.04A.
(e) the balance, if any, 50% to the General Partner and
50% to the Investment Partnership.
B. Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings shall be distributed
within 90 days after the end of the fiscal quarter in which such
Capital Transaction or Refinancing occurs. Distributions of
Distributable Proceeds from Capital Transactions and
Distributable Proceeds from Refinancings to the Partners shall
be made only after Capital Accounts have been adjusted to
reflect all previous allocations of Taxable Income and Tax
losses to the Partners, for distributions of Cash Flow, and for
any other distributions of Distributable Proceeds form Capital
Transactions or Distributable Proceeds from Refinancings.
C. Amounts remaining in the Operating Deficit Reserve at the
time of any of the foregoing distributions shall be utilized by
the Partnership to reduce any amounts which remain outstanding
under the Development Agreement, and if no such amounts remain
outstanding, then to the General Partner.
Section 11.05 Allocations Among Partners.
A. For purposes of determining the Taxable Income (or Tax
Losses) or any other items allocable to any period, Taxable Income (or
Tax Losses) and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using
any permissible method under Code Section 706 and the Treasury
Regulations thereunder.
B. Taxable Income, Tax Losses, and Tax Credits for all
purposes of this Agreement shall be determined in accordance with the
accrual accounting method. Except as otherwise provided in this
Agreement, all items of Partnership income, gain, loss, deduction, and
any other allocations, including allocation of Book Profits and
Losses, shall be divided among the Partners in the same proportions as
they share Taxable Income, Tax Credits, and Taxable Losses, as the
case may be, for such fiscal year.
C. In any year in which a Partner sells, assigns or transfers
all or any portion of an Interest to any Person who during such year
is admitted as a substitute Partner, the share of all Taxable Income,
Tax Losses, and Tax Credits, allocated to and of all Cash Flow and all
cash proceeds distributable under Section 11.04 distributed to, all
Partners which is attributable to the Interest sold, assigned or
transferred shall be divided between the assignor and the assignee
using any one of the following methods as determined by agreement
between the assignor and assignee: (i) ratably on the basis of the
number of days in such year before, and the number of days on and
after, the execution by the assignee of this Agreement, or (ii) by
dividing the Partnership fiscal year into two segments, the first
segment being the time period in such year before the execution by the
assignee of this Agreement and the second segment being the time
period in such year beginning on the date of execution of this
Agreement, and allocating Taxable Income, Tax Losses, Tax Credits,
Cash Flow, and all cash proceeds distributable in each such segment
among the persons who were Partners during that segment, or (iii)
using such other method as provided by the Code or regulations
thereunder.
D. In the event that there is a determination that there is
any original issue discount or imputed interest attributable to the
Capital Contribution of any Partner, or any loan between a Partner and
the Partnership, any income or deduction of the Partnership
attributable to such imputed interest or original issue discount on
such Capital Contribution or loan (whether stated or unstated) shall
be allocated solely to such Partner.
E. In the event that the deduction of all or a portion of any
fee paid or incurred by the Partnership to a Partner or an Affiliate
of a Partner is disallowed for federal income tax purposes by the
Internal Revenue Service with respect to a taxable year of the
Partnership, the Partnership shall then allocate to such Partner an
amount of gross income of the Partnership for such year equal to the
amount of such fee as to which the deduction is disallowed.
F. If any Partner's Interest in the Partnership is reduced
but not eliminated because of the admission of new Partners or
otherwise, or if any Partner is treated as receiving any items of
property described in Section 751(a) of the Code, the Partner's
Interest in such items of Section 751(a) property that was property of
the Partnership while such Person was a Partner shall not be reduced,
but shall be retained by the Partner so long as the Partner has an
Interest in the Partnership and so long as the Partnership has an
Interest in such property.
G. The Partners are aware of the income tax consequences of
the allocations made by this Article XI and hereby agree to be bound
by the provisions of this Article XI in reporting their shares of
Partnership income and loss for income tax purposes.
Section 11.06 Qualified Income Offset.
(i) Notwithstanding any other provision of this Article
XI, in the event any Partner unexpectedly receives (a) an adjustment
to the Capital Account balance of such Partner as described in Section
1.704-1(b)(2)(ii)(d)(4) of the Treasury Regulations, (b) an allocation
to such Partner of loss or deduction of the type described in Section
1.704-1(b)(2)(ii)(d)(5) of the Treasury Regulations, or (c) a
distribution to such Partner in excess of any offsetting increase in
the Partner's Capital Account balance during or prior to the year of
distribution, items of Partnership Taxable Income and of income that
constitute a credit to such Partner's Capital Account shall be
specially allocated to such Partner in an amount and manner sufficient
to eliminate, to the extent required by the Treasury Regulations under
Code Section 704(b), the Qualified Income Offset Amount (defined in
Section 11.06(ii)) created by such adjustments, allocations, or
distributions as quickly as possible, provided that an allocation
pursuant to this Section 11.06(i) shall be made only if and to the
extent that such Partner would have a Qualified Income Offset Amount
after all other allocations provided for in this Article have been
tentatively made as if this Section 11.06(i) were not in this
Agreement.
(ii) Notwithstanding anything to the contrary contained
in this Agreement, in no event shall Tax Losses of the Partnership be
allocated to a Partner if such allocation would result in such Partner
having a "Qualified Income Offset Amount" (as defined below). As used
herein, the term "Qualified Income Offset Amount" for a Partner means
the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant fiscal year after giving effect to the
following adjustments: (i) credit to such Capital Account an amount
equal to (a) the Partner's Share of Minimum Gain immediately prior to
the allocation or distribution and (b) the sum of such Partner's
allocable share of any recourse indebtedness of the Partnership as
determined under Section 752 of the Code and any unconditional
obligation of such Partner to contribute additional amounts to the
capital of the Partnership in the future (to the extent not previously
taken into account in determining such Partner's share of recourse
liabilities of the Partnership) and (ii) debit to such Capital Account
the allocations or distributions described in Section 11.06(i) that,
as of the end of the taxable year, are reasonably expected to be made
to such Partner. All Tax Losses in excess of the limitation set forth
in this Section 11.06(ii) shall be allocated to the General Partner.
Section 11.07. Minimum Gain Allocations.
A. Notwithstanding any other provisions of this Article XI,
if in any year there is a net decrease in the amount of the
Partnership's Minimum Gain, each Partner will be allocated items of
Taxable Income and gain for such year equal to that Partner's share of
the net decrease in Minimum Gain, within the meaning of Treasury
Regulation 1.704-2(g)(2), and subject to the exceptions set forth in
Treasury Regulation 1.704-2(f).
Allocations of Taxable Income and gain (hereinafter referred to
as a "Minimum Gain Chargeback") required pursuant to this Section
11.07 shall consist first of gains recognized from the disposition of
items of Partnership property subject to one or more nonrecourse
liabilities of the Partnership to the extent of the decrease in
Minimum Gain attributable to the disposition of such items of property
(or if such gains exceed the amount of the Minimum Gain Chargeback
required for such taxable year, the Minimum Gain Chargeback shall
consist of a proportionate share of each such gain), and the remainder
of such Minimum Gain Chargeback shall consist of a pro-rata portion of
the other items of Taxable Income and gain of the Partnership for that
year. If the amount of the Minimum Gain Chargeback requirement
exceeds the Partnership's Taxable Income and gains for the taxable
year, the excess shall carry over to subsequent years.
B. If in any year there is a net decrease (within the meaning
of Treasury Regulations Section 1.704-2(i)(3) in Partner Nonrecourse
Debt Minimum Gain, any Partner with a share of that Member Nonrecourse
Debt Minimum Gain (determined under Treasury Regulation 1.704-2(i)(5))
as of the beginning of the year shall be allocated items of profits
and gains for that year (and if necessary, subsequent years) equal to
that Partner's share of the net decrease in Member Nonrecourse Debt
Minimum Gain in accordance with Treasury Regulation Section 1.704-
2(i)(4).
Section 11.08 Regulatory Allocations. The allocations set
forth in Sections 11.01B, 11.01C, 11.06 and 11.07 (the "Regulatory
Allocations") are intended to comply with certain requirements of
Treasury Regulation Section 1.704-1(b). It is the intent of the
Partners that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with
special allocations of other items of Taxable Income, Tax Losses and
items of income, gain, loss, or deduction pursuant to this Section
11.08. Therefore, notwithstanding any other provision of this Article
(other than the Regulatory Allocations), the General Partner shall
make such offsetting special allocations of Taxable Income, Tax
Losses, and items of income, gain, loss, or deduction in whatever
manner it determines appropriate so that, after such offsetting
allocations are made, each Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would have
had if the Regulatory Allocations were not part of the Agreement and
all items were allocated pursuant to Sections 11.01A and 11.02. In
exercising its discretion under this Section 11.08, the General
Partner shall take into account future Regulatory Allocations under
Section 11.07 that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Sections 11.01B and
11.01C.
Section 11.09 Partners' Partnership Non-recourse
Liabilities. For purposes of Code Section 752, each Partner's share
of Partnership non-recourse liabilities shall be determined in
accordance with Treasury Regulation 1.752-3(a) or successor
regulation. In this connection, for purposes of determining each
Partner's proportionate share of the excess non-recourse liabilities
of the Partnership pursuant to Treasury Regulation 1.752-3(a), the
Investment Partnership shall have a 99% interest in Partnership
Taxable Income or profits and the General Partner shall have a 1%
interest in Partnership Taxable Income or profits.
Section 11.10 Tax Allocations: Code Section 704(c). In
accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall be
allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Gross Asset Value
(computed in accordance with Section 11.12 hereof).
In the event the Gross Asset Value of any Partnership properties
is adjusted pursuant to Section 11.12 hereof, subsequent allocations
of income, gain, loss, and deduction with respect to such asset shall
take into account any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in the
same manner as under Code Section 704(c) and the Treasury Regulations
thereunder.
Any elections or other decisions relating to such allocations
shall be made by the General Partner with the Consent of the Limited
Partner, in any manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this Section are
solely for purposes of federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any
Partner's Capital Account or share of Book Profits and Losses, other
items, or distributions pursuant to any provision of this Agreement.
11.11. Tax Matters Partner.
A. The General Partner is hereby designated as Tax Matters
Partner of the Partnership, and shall engage in such undertakings as
are required of the Tax Matters Partner of the Partnership, as
provided in regulations pursuant to Section 6231 of the Code. Each
Partner, by its execution of this Agreement, Consents to such
designation of the Tax Matters Partner and agrees to execute, certify,
acknowledge, deliver, swear to, file and record at the appropriate
public offices such documents as may be necessary or appropriate to
evidence such Consent.
B. The Tax Matters Partner is hereby authorized, but not
required:
(a) to enter into any settlement with the Internal Revenue
Service or the Secretary with respect to any tax audit or judicial
review, in which agreement the Tax Matters Partner may expressly state
that such agreement shall bind the other Partners, except that such
settlement agreement shall not bind any Partner who (within the time
prescribed pursuant to the Code and regulations thereunder) files a
statement with the Secretary providing that the Tax Matters Partner
shall not have the authority to enter into a settlement agreement on
behalf of such Partner;
(b) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken
into account by a Partner for tax purposes (a "final adjustment") is
mailed to the Tax Matters Partner, to seek judicial review of such
final adjustment, including the filing of a petition for readjustment
with the Tax Court, the District Court of the United States for the
district in which the Partnership's principal place of business is
located, or the United States Claims Court;
(c) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(d) to file a request for an administrative adjustment
with the Internal Revenue Service at any time and, if any part of such
request is not allowed by the Internal Revenue Service, to file a
petition for judicial review with respect to such request;
(e) to enter into an agreement with the Internal Revenue
Service to extend the period for assessing any tax which is
attributable to any item required to be taken into account by a
Partner for tax purposes, or an item affected by such item; and
(f) to take any other action on behalf of the Partners or
the Partnership in connection with any administrative or judicial tax
proceeding to the extent permitted by applicable law or regulations.
C. The Partnership shall indemnify and reimburse the Tax
Matters Partner for all expenses, including legal and accounting fees,
claims, liabilities, losses and damages incurred in connection with
any administrative or judicial proceeding with respect to the tax
liability of the Partners. The payment of all such expenses shall be
made before any distributions are made or any discretionary reserves
are set aside by the General Partner. In the event that funds are not
available from the Partnership for such expenses, the General Partner
shall have the obligation to provide funds for such purpose. The
taking of any action and the incurring of any expense by the Tax
Matters Partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole discretion of the Tax
Matters Partner and the provisions on limitations of liability of the
General Partner and indemnification set forth in Section 8.07 of this
Agreement shall be fully applicable to the Tax Matters Partner in its
capacity as such.
11.12 Capital Accounts
A. A Capital Account shall be maintained on the books of the
Partnership for each Partner, which shall be (i) credited with its
Capital Contributions and the amount of any Partnership liabilities
that are assumed by such Partner or that are secured by any
Partnership property distributed to such Partner; (ii) credited with
its distributive share of Taxable Income and any income of the
Partnership that is exempt from federal income tax and not otherwise
taken into account in computing Taxable Income; (iii) charged with its
distributive share of Tax Losses and any nondeductible expenditures of
the Partnership (including Syndication Expenses) described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulation Section 1.704-
1(b)(2)(iv)(i) and not otherwise taken into account under this Section
11.12; and (iv) charged with any distributions to it and with the
amount of any liabilities of such Partner that are assumed by the
Partnership or that are secured by any property contributed by such
Partner to the Partnership.
In the case of property other than cash contributed to the
Partnership or distributed to a Partner, each Partner's Capital
Account will be credited with the Gross Asset Value of property
contributed to the Partnership (net of liabilities assumed by the
Partnership and liabilities to which such contributed property is
subject) and shall be debited with the cash and the Gross Asset Value
of property distributed to it (net of liabilities assumed by such
Partner and liabilities to which such distributed property is
subject). In the event the Gross Asset Values of Partnership assets
are adjusted pursuant to Section 11.12B hereof, the Capital Accounts
of all Partners shall be adjusted simultaneously to reflect the
aggregate net adjustment as if the Partnership recognized gain or loss
equal to the amount of such aggregate net adjustment.
Upon the sale, exchange or other transfer of an Interest, or the
assignment of such Interest to a new Partner, the Capital Account of
the transferor Partner shall carry over to the transferee Partner.
B. For purposes of determining and maintaining the Partners'
Capital Accounts, the Gross Asset Value of Partnership assets shall be
adjusted as follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross fair
market value of such asset, as determined by the contributing Partner
and the Partnership;
(ii) The Gross Asset Values of all Partnership assets
shall be adjusted to equal their respective gross fair market values,
as determined by the General Partner, as of the following times: (a)
the acquisition of an additional Interest in the Partnership by any
new or existing Partner in exchange for more than a de minimis Capital
Contribution; (b) upon liquidation of the Partnership, or upon the
distribution by the Partnership to a Partner of more than a de minimis
amount of money or other Partnership property to a retiring or
continuing Partner as consideration for an Interest in the Partnership
or (c) under generally accepted industry accounting practices,
provided substantially all of the Partnership's property (excluding
money) consists of stock, securities, commodities, options, warrants,
futures, or similar instruments that are readily tradable on an
established securities market; and
(iii) If the Gross Asset Value of an asset has been
determined or adjusted pursuant to subsection (i) or (ii) of this
Section 11.12B, such Gross Asset Value shall thereafter be adjusted by
the Book Depreciation taken into account with respect to such asset
for purposes of computing Book Profits and Losses, as set forth in
Section 11.12B.
C. For purposes of determining and maintaining the Partners'
Capital Accounts and the computation of Book Profits and Losses only,
the following adjustments shall be made to the calculation of Taxable
Income and Tax Losses reflected in the Partners' Capital Accounts:
(i) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized
for federal income tax purposes shall be computed by reference to the
Gross Asset Value of the property disposed of, notwithstanding that
the adjusted tax basis of such property differs from its Gross Asset
Value; and
(ii) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such Taxable
Income or Tax Losses, there shall be taken into account Book
Depreciation for such fiscal year or other period, computed as
hereinafter set forth.
(iii) For this purpose, "Book Depreciation" means, for
each fiscal year or other period, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect
to an asset for such year or other period, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period,
Book Depreciation shall be an amount which bears the same ratio to
such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deductions for such
year or other period bears to such beginning adjusted tax basis.
(iv) Allocations of Book Profits and Losses among the
Partners shall be made in accordance with the provisions of this
Article XI respecting allocations of Taxable Income and Tax Losses
among the Partners.
11.13. Authority of General Partner to Vary Allocations to
Preserve and Protect Partner's Intent.
(a) It is the intent of the Partners that each Partner's
distributive share of income, gain, loss, deduction, or credit (or
item thereof) shall be determined and allocated in accordance with
this Article XI to the fullest extent permitted by Section 704(b) of
the Code. In order to preserve and protect the determinations and
allocations provided for in this Article XI, the General Partner
hereby are authorized and directed to allocate income, gain, loss,
deduction, or credit (or item thereof) arising in any year differently
than otherwise provided for in this Article XI to the extent that
allocating income, gain, loss, deduction or credit (or item thereof)
in the manner provided for in Article XI would cause the
determinations and allocations of each Partner's distributive share of
income, gain, loss, deduction, or credit (or item thereof) not to be
permitted by Section 704 (b) of the Code and Treasury Regulations
promulgated thereunder. Any allocation made pursuant to this Section
11.13 shall be deemed to be a complete substitute for any allocation
otherwise provided for in this Article XI and no amendment of this
Agreement or approval of any Partner shall be required.
(b) In making any allocation (the "new allocation") under
Section 11.13(a), the General Partner is authorized to act only after
having been advised by the Accountants that, under Section 704(b) of
the Code and the Treasury Regulations thereunder, (i) the new
allocation is necessary, and (ii) the new allocation is the minimum
modification of the allocations otherwise provided for in this Article
XI necessary in order to assure that, either in the then current year
or in any preceding year, each Partner's distributive share of income,
gain, loss, deduction, or credit (or item thereof) is determined and
allocated in accordance with this Article XI to the fullest extent
permitted by Section 704(b) of the Code and the Treasury Regulations
thereunder.
(c) If the General Partner is required by Section 11.13(a) to
make any new allocation in a manner less favorable to any Partner than
is otherwise provided for in this Article XI, then the General Partner
are authorized and directed, only after having been advised by the
Accountants that it is permitted by Section 704(b) of the Code, to
allocate income, gain, loss, deduction, or credit (or item thereof)
arising in later years in such manner so as to bring the allocations
of income, gain, loss, deduction, or credit (or item thereof) to such
Partner as nearly as possible to the allocations thereof otherwise
contemplated by this Article XI.
(d) New allocations made by the General Partner under Section
11.13(a) and Section 11.13(c) in reliance upon the advice of the
Accountants shall be deemed to be made pursuant to the fiduciary
obligation of the General Partner to the Partnership and the Limited
Partners, and no such allocation shall give rise to any claim or cause
of action by any Limited Partner.
ARTICLE XII
SALE, DISSOLUTION AND LIQUIDATION
12.01. Dissolution of The Partnership. The Partnership
shall be dissolved upon the earlier
of expiration of the terms of the Partnership, or upon:
(a) subject to Section 6.03, the withdrawal, Bankruptcy,
death, dissolution or adjudication of incompetency of a General
Partner who is at that time the sole General Partner;
(b) the sale or other disposition of all or substantially all
of the assets of the Partnership;
(c) the election by the General Partner, with the Consent of
BCTC 94, Inc.; or
(d) any other event causing the dissolution of the Partnership
under the laws of the State.
12.02. Winding Up and Distribution.
(a) In the event of dissolution and termination of the
Partnership, a full accounting of the assets and liabilities shall be
taken, and the assets shall be distributed in accordance with this
Section 12.02 as follows, after taking into account all other
allocations and distributions under this Agreement for the Fiscal
Year, including, without limitation, the allocations under Article XI
hereof;
(A) To the payment of all debts and liabilities of the
Partnership then due (including fees and loans payable to Partners);
(B) To the setting up of any reserves that the Liquidator
may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership;
(C) To the Partners, in an amount equal to the positive
balances in their Capital Accounts.
If a General Partner has a negative Capital Account balance
following the liquidation of the Partnership or of a General Partner's
Interest in the Partnership within the meaning of Treasury Regulation
Section 1.704-1(b)(ii)(g), excluding from such General Partner's
negative Capital Account balance, (a) such General Partner's Share of
Minimum Gain, and (b) any other amount that such General Partner is
deemed to be obligated to restore to the Partnership under Treasury
Regulation Section 1.704-1(b)(2)(ii)(c) or otherwise under the
Treasury Regulations promulgated under Code Section 704(b), and after
taking into account all Capital Account adjustments (including
adjustments arising from the liquidation) for the Partnership taxable
year during which such liquidation occurs, other than those made
pursuant to this Section, such General Partner shall be
unconditionally obligated to restore the amount of such negative
Capital Account balance to the Partnership by the end of such taxable
year (or, if later, within 90 days after the date of liquidation).
Amounts contributed to the Partnership in respect of the General
Partner' obligation to restore negative Capital Account balances shall
be paid to creditors of the Partnership or distributed to the other
Partners in accordance with their positive Capital Account balances,
if any, as of the date of liquidation.
(b) The Liquidator shall file all certificates and notices of
the dissolution of the Partnership required by law. The Liquidator
shall proceed without any unnecessary delay to sell and otherwise
liquidate the Partnership's property and assets; provided, however,
that if the Liquidator shall determine that an immediate sale of part
or all of the Partnership property would cause undue loss to the
Partners, then in order to avoid such loss, the Liquidator may, except
to the extent provided by the Act, defer the liquidation as may be
necessary to satisfy the debts and liabilities of the Partnership to
Persons other than the Partners. Upon the complete liquidation and
distribution of the Partnership assets, the Partners shall cease to be
Partners of the Partnership, and the Liquidator shall execute,
acknowledge and cause to be filed all certificates and notices
required by the law to terminate the Partnership.
(c) Upon the dissolution of the Partnership pursuant to
Section 12.01, the Accountants shall promptly prepare, and the
Liquidator shall furnish to each Partner, a statement setting forth
the assets and liabilities of the Partnership upon its dissolution.
Promptly following the complete liquidation and distribution of the
Partnership property and assets, the Accountants shall prepare, and
the Liquidator shall furnish to each Partner, a statement showing the
manner in which the Partnership assets were liquidated and
distributed.
ARTICLE XIII
BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC.
13.01 Books and Records. The books and records of the
Partnership shall be maintained on an accrual basis in accordance with
sound federal income tax accounting principles. These and all other
records of the Partnership, including information relating to the
status of the Apartment Complex, information with respect to the sale
by the General Partner or any Affiliate of goods or services to the
Partnership, and any information required to be maintained by the Act
or any governmental agencies having jurisdiction, shall be kept at the
principal office of the Partnership and shall be available for
examination there by any Partner, or his duly authorized
representative, at any and all reasonable times. Any Partner, or his
duly authorized representative, upon paying the costs of collection,
duplication and mailing, shall be entitled to a copy of the list of
names and addresses of the Limited Partners and of any of the books
and records of the Partnership.
13.02. Bank Accounts. All funds of the Partnership not
otherwise invested shall be deposited in one or more accounts
maintained in such banking institutions as the General Partner shall
determine, and withdrawals shall be made only in the regular course of
Partnership business on such signature or signatures as the General
Partner may, from time to time, determine. No funds of the
Partnership shall be deposited in any financial institution in which
any Partner is an officer, director or holder of any proprietary
interest.
13.03. Accountants. The Accountants shall annually prepare
for execution by the General Partner all tax returns of the
Partnership, shall annually audit the books of the Partnership, and
shall certify, in accordance with generally accepted accounting
principles, a balance sheet, a profit and loss statement, and a cash
flow statement. With respect to each fiscal year during the
Partnership's operations, at such time as the Accountants shall have
prepared the proposed tax return for such year, the Accountants shall
provide copies of such proposed tax return to the Investment
Partnership and to its accountants, Reznick, Fedder & Silverman, of
Bethesda, Maryland, or such other accountant as approved by the
Investment Partnership or their review and comment. Any comments
and/or changes in such proposed tax return reasonably recommended by
the Investment Partnership's accountants shall be taken into account
and made by the Accountants prior to the completion of such tax return
for execution by the General Partner. The Partnership shall reimburse
Boston Capital Communications Limited Partnership, an affiliate of the
Investment Partnership, for its expenses incurred in causing the
Partnership's proposed tax return to be reviewed by the Investment
Partnership's accountants, if and to the extent that such review
results in material modifications to such proposed tax return. A full
detailed statement shall be furnished to all Partners, showing such
assets, properties, and net worth and the profits and losses of the
Partnership for the preceding fiscal year. All Partners shall have
the right and power to examine and copy, at any and all reasonable
times, the books, records and accounts of the Partnership.
13.04. Reports to Partners.
(a) Within 30 days of the date of Substantial Completion, the
General Partner shall cause to be prepared and distributed to the
Investment Partnership, a Credit Basis Worksheet for each building,
and in the form specified by Boston Capital.
(b) The General Partner shall cause to be prepared and
distributed to all persons who were Partners at any time during a
fiscal year of the Partnership:
(i) By March 1 of the year after the end of
each fiscal year of the Partnership, (A) an audited
financial statement which includes a balance sheet as of
the end of such fiscal year and statements of income,
Partners' equity, and changes in financial position and a
Cash Flow statement, for the year then ended, all of
which, except the Cash Flow statement, shall be prepared
in accordance with generally accepted accounting
principles and accompanied by an auditor's report
containing an opinion of the Accountants, and (B) a report
of the activities of the Partnership during the period
covered by the report. Such report shall set forth
distributions to Limited Partners for the period covered
thereby and shall separately identify distributions from:
(1) Cash Flow from operations during the period, (2) Cash
Flow from operations during a prior period which had been
held as reserves, (3) proceeds from disposition of the
Apartment Complex or any other investments of the
Partnership, (4) lease payments on net leases with
builders and sellers, and (5) reserves. With respect to
any distribution to the Investment Partnership, the report
called for shall separately identify distributions from
(A) Cash Flow from operations during the period, (B) Cash
Flow from operations during a prior period which had been
held as reserves, (C) proceeds from disposition of
property and investments, (D) lease payments on net leases
with builders and sellers, (E) reserves from the gross
proceeds of the offering originally obtained from the
Investment Partnership, (F) borrowed monies, (G) loans or
contributions from the Investment Partnership, and (H)
transactions outside of the ordinary course of business
with a description thereof. If the Completion Date had
not yet occurred as of December 31 in the year which is
the subject of the report, then this Section 13.04(a)(i)
shall require only the balance sheet for the year then
ended.
(ii) By February 15 of the year after the end
of each fiscal year of the Partnership, all information
necessary for the preparation of the Limited Partners'
federal income tax returns, together with a draft of the
Partnership's federal income tax return for such fiscal
year.
(iii) Within thirty (30) days after the end
of each calendar quarter of a fiscal year of the
Partnership, a report containing:
(A) A balance sheet, which may be
unaudited; and
(B) a statement of income for the
quarter then ended, which may be unaudited; and
(C) A Low Income Housing Credit
Monitoring form, Rent Rolls, Statement of Income and
Expenses, Operating Statement and Occupancy Rental Report,
all in the form specified by Boston Capital; and
(D) A certification that the Apartment
Complex and its tenants are in compliance with all
applicable federal and state laws and regulation; and
(E) other pertinent information
regarding the Partnership and its activities during the
quarter covered by the report.
(c) Within ninety (90) days after the end of each fiscal year
of the Partnership the General Partner shall provide to the Investment
Partnership:
(i) A certification by the General Partner
that (A) all Mortgage Loans payments and taxes and
insurance payments with respect to the Apartment Complex
are current as of the date of the year-end report, (B) to
the best of the General Partner's knowledge and belief
there is no default under the Project Documents or this
Agreement, or if there is any default, a description
thereof, and (C) to the best of the General Partner's
knowledge and belief there is no building, health or fire
code violation or similar violation of a governmental law,
ordinance or regulation against the Apartment Complex or,
if there is any violation, a description thereof;
(ii) the information specified in Section
13.04(b);
(iii) to the extent not previously disclosed
in a report required hereunder a descriptive statement of
all transactions during the fiscal year between the
Partnership and the General Partner and/or any Affiliate,
including the nature of the transaction and the payments
involved (including accrued cash or other payments);
(iv) a Cash Flow statement; and
(v) if required, a copy of the annual report
to be filed with the United States Treasury concerning the
status of the Apartment Complex as low income housing and,
if required, a certificate to the Agency concerning the
same.
(d) Upon the written request of the Investment Partnership for
further information with respect to any matter covered in items (a) or
(b) above, the General Partner shall utilize its best efforts to
furnish such information within 30 days of receipt of such request.
(e) Prior to November 1 of each year, the General Partner, on
behalf of and at the expense of the Partnership, shall send to the
Investment Partnership an estimate of the Investment Partnership's
share of the Tax Credits, identified by building, and of profits and
losses of the Partnership for federal income tax purposes for the
current fiscal year, all in the form specified by Boston Capital.
Such estimate shall be prepared by the General Partner and the
Accountants.
(f) Within 15 days after the end of any calendar month during
which
(i) there is a material default by the
Partnership under the Project Documents or in payment of
any mortgage, taxes, interest or other obligation on
secured or unsecured debt,
(ii) any reserve has been reduced or
terminated by application of funds therein for purposes
materially different from those for which such reserve was
established,
(iii) the General Partner has received any
notice of a material fact which may substantially affect
further distributions, or
(iv) any Partner has pledged or
collateralized his Interest in the Partnership, the
General Partner shall send the Investment Partnership a
detailed report of such event.
(g) On or before the Admission Date, the General Partner, on
behalf of the Partnership, shall send to the Investment Partnership a
copy of all requests for disbursements or other extensions of credit
under the Second Loan which have been submitted to the Second Lender
prior to the Admission Date. After the Admission Date, the General
Partner, on behalf of the Partnership, shall send to the Investment
Partnership, on or before the tenth day of each month, a copy of (i)
all reports required by the Agency, filed the previous month and
covering the status of project operations and (ii) each request for a
disbursement or other extensions of credit under the Second Loan
submitted to the Second Lender during the previous month. In
addition, within thirty (30) days after the occurrence of Substantial
Completion, the General Partner, on behalf of the Partnership, shall
prepare and send to the Investment Partnership a Credit Basis
Worksheet for each building within the Apartment Complex, in the
format provided by Boston Capital. The General Partner shall provide
to the Investment Partnership such other reports from time to time as
may be reasonably required by the Investment Partnership with the
reasonable consent of the General Partner or by federal or state
agencies having jurisdiction.
(h) (i) In the event that, and in such circumstances beyond
the control of the General Partner, the reports or information
provided for in Sections 13.04 (b)(i) and/or 13.04(b)(ii) above are,
at any time, not provided within the time period(s) specified in such
Sections, the General Partner shall be obligated to pay to the
Investment Partnership the sum of $100 per day, as liquidated damages,
for each day from the date upon which such reports or information
is(are) due pursuant to the provisions of the aforesaid Sections until
the date upon which such reports or information is (are) provided.
(ii) In the event that the reporting requirements
set forth in any of the above provisions of this Section 13.04 are not
met, the Investment Partnership, in its reasonable discretion, may
direct the General Partner to dismiss the Accountants, and to
designate successor Accountants, subject to the approval of the
Investment Partnership; provided, however, that if the General Partner
and the Investment Partnership cannot agree on the designation of
successor Accountants, the successor Accountants shall be designated
by the Investment Partnership in its sole discretion. These costs
shall not exceed the average of three bids from qualified Accountants
obtained by the General Partner. The Investment Partnership shall
give the General Partner at least 60 days' Notice of any material
change in the reporting requirements set forth herein.
13.05. Section 754 Elections. In the event of a transfer
of all or any part of the Interest of a General Partner or of a
Limited Partner, the Partnership may elect, pursuant to Sections 743
and 754 of the Code (or any corresponding provision of succeeding
law), to adjust the basis of the Partnership property if, in the
opinion of the Investment Partnership, based upon the advice of the
Accountants, such election would be most advantageous to the
Investment Partnership. Each Partner agrees to furnish the
Partnership with all information necessary to give effect to such
election.
13.06. Fiscal Year and Accounting Method. The fiscal year
of the Partnership shall be the calendar year. All Partnership
accounts shall be determined on the accrual basis.
ARTICLE XIV
AMENDMENTS
14.01. Proposal and Adoption of Amendments. This Agreement
may be amended, after giving 20 days' Notice to the Partners, the
Second Lender and BBOC (the "Amendment Notice Period") hereunder (a)
by the General Partner with the Consent of the Investment Partnership,
which Consent (except in the case of any proposed amendment which the
Investment Partnership reasonably determines to be adverse to their
interests as Partners) shall not be unreasonably withheld or (b) by
the Investment Partnership with the consent of the General Partner
which Consent (except in the case of any proposed amendment which the
General Partner reasonably determine to be adverse to their interests
as Partners) shall not be unreasonably withheld or delayed. In
determining whether or not to give its Consent to an amendment
prepared by the Investment Partnership, the General Partner agrees to
take into account the investment objectives of the Investment
Partnership. Additionally, Consent under this Article XIV must be
obtained from the Second Lender and BBOC, which Consent shall not be
unreasonably withheld or delayed. In the event that the Second Lender
and/or the BBOC has not provided a written response to the Partnership
as to its Consent within the Amendment Notice Period, then said non-
responding party shall be deemed to have given its Consent to such
proposed amendment.
ARTICLE XV
CONSENTS, VOTING AND MEETINGS
.
15.01 Method of Giving Consent. Any Consent required by this
Agreement may be given by a written Consent given by the consenting
Partner and received by the General Partner at or prior to the doing
of the act or thing for which the Consent is solicited.
15.02. Submissions to Limited Partners. The General Partner
shall give the Limited Partners Notice of any proposal or other matter
required by any provision of this Agreement or by law to be submitted
for consideration and approval of the Limited Partners. Such Notice
shall include any information required by the relevant provision or by
law.
15.03. Meetings; Submission of Matter for Voting. Subject
to the provisions of Section 10.01, a majority in Interest of the
Limited Partners shall have the authority to convene meetings of the
Partnership and to submit matters to a vote of the Partners.
ARTICLE XVI
GENERAL PROVISIONS
16.01. Burden and Benefit. The covenants and agreements
contained herein shall be binding upon and inure to the benefit of the
heirs, executors, administrators, successors and assigns of the
respective parties hereto.
16.02. Applicable Law. This Agreement shall be construed
and enforced in accordance with the laws of the State.
16.03. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original
copy and all of which together shall constitute one agreement binding
on all parties hereto, notwithstanding that all the parties shall not
have signed the same counterpart.
16.04. Separability of Provisions. Each provision of this
Agreement shall be considered separable and if for any reason any
provision which is not essential to the effectuation of the basic
purposes of this Agreement is determined to be invalid and contrary to
any existing or future law, such invalidity shall not impair the
operation of or affect those provisions of this Agreement which are
valid.
16.05. Entire Agreement. This Agreement and the ancillary
agreements executed in connection herewith set forth all (and is
intended by all parties to be an integration of all) of the
representations, promises, agreements and understandings among the
parties hereto with respect to the Partnership, the Partnership
business and the property of the Partnership, and there are no
representations, promises, agreements or understandings, oral or
written, express or implied, among them other than as set forth or
incorporated herein.
16.06. Liability of the Investment Partnership.
Notwithstanding anything to the contrary contained herein, neither the
Investment Partnership nor any of its partners, general or limited,
shall have any personal liability to any of the parties to this
Agreement with regard to the representations and covenants extended,
or the obligations undertaken, by the Investment Partnership under
this Agreement. In the event that the Investment Partnership shall be
in default under any of the terms of this Agreement, the sole recourse
of any party hereto for any indebtedness due hereunder, or for any
damages resulting from any such default by the Investment Partnership,
shall be against the capital contributions of the investor limited
partners of the Investment Partnership allocated to, and remaining for
investment in, the Partnership; provided however, that under no
circumstances shall the liability of the Investment Partnership for
any such default be in excess of the aggregate of: (a) the amount of
Capital Contribution payable by the Investment Partnership to the
Partnership, under the terms of this Agreement, at the time of such
default, and (b) an amount equal to reasonable attorneys' fees
reasonably and necessarily incurred by the General Partner in
obtaining payment of any Installment(s) not made by the Investment
Partnership when due and payable pursuant to the provisions of this
Agreement, provided that if the Investment Partnership wrongfully does
not make its required Capital Contribution when due, as provided
hereunder, its allocation of Tax Credits, Losses and distributions
shall be proportionately reduced in favor of the General Partner.
16.07. Environmental Protection.
(a) Except as otherwise expressly disclosed to the Limited
Partners, the General Partner represents and warrants that (i) it has
no actual knowledge of any deposit, storage, disposal, burial,
discharge, spillage, uncontrolled loss, seepage or filtration of any
Hazardous Substances at, upon, under or within the Land or any
contiguous real estate, and (ii) it has not caused, nor permitted to
occur, and it shall not permit to exist, any condition which may cause
a discharge of any Hazardous Substances at, upon, under or within the
Land or on any contiguous real estate.
(b) The General Partner further represents and warrants that
neither it nor any of its Affiliates (i) has been, or will be involved
in operations at or, pursuant to its best efforts, near the Land,
which operations could lead to (A) the imposition of liability under
the Hazardous Waste Laws on the Partnership or on any other subsequent
or former owner of the Land or (B) the creation of a lien on the Land
under the Hazardous Waste Laws or under any similar laws or
regulations; and (ii) has permitted, or will permit, any tenant or
occupant of the Apartment Complex to engage in any activity that could
impose liability under the Hazardous Waste Laws on such tenant or
occupant, on the Land or on any other owner of the Apartment Complex.
(c) The General Partner shall comply strictly and in all
respects with the requirements of the Hazardous Waste Laws and related
regulations and with all similar laws and regulations.
(d) The General Partner shall at all times indemnify and hold
harmless the Investment Partnership against and from any and all
claims, suits, actions, debts, damages, costs, charges, losses,
obligations, judgments, and expenses, of any nature whatsoever,
suffered or incurred by the Investment Partnership, under or on
account of the Hazardous Waste Laws or any similar laws or
regulations, including the assertion of any lien thereunder, except
for claims, suits, actions, debts, damages, costs, charges, losses,
obligations, judgments, or expenses arising from the Investment
Partnership's own negligence, misconduct or fraud.
(e) For purposes of this Section 16.07, "Hazardous Substances"
means oil, petroleum or chemical liquids or solids, liquid or gaseous
products or any hazardous wastes or hazardous substances, as those
terms are used in the Hazardous Waste Laws; and "Hazardous Waste Laws"
means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, and any other federal, state or local law
governing Hazardous Substances, as such laws may be amended from time
to time.
16.08. Notices to the Investment Partnership. Any Notice
required by the provisions of this Agreement to be given to the
Investment Partnership shall be addressed as follows:
Boston Capital Tax Credit Fund IV, L.P.
c/o Boston Capital Partners, Inc.
One Boston Place, 21st Floor
Boston, Massachusetts 02108
ATTN: Frances L. James, Vice President,
Acquisitions
And a copy to: Hinckley, Allen & Snyder
One Financial Center
Suite 4600
Boston, MA 02111-2625
ATTN: Kristin A. DeKuiper, Esq.
16.09. Notices to the General Partner. Any Notice required
by the provisions of this Agreement to be given to the General Partner
shall be addressed as follows:
Roxbury Veterans Housing Limited Partnership
495 Blue Hill Avenue
Dorchester, MA 02121
ATTN: Mr. Ernest Branch
And a copy to: McKenzie & Edwards, P.C..
1 Bulfinch Place
Boston, MA 02114
ATTN: Wilbur Edwards, Esq.
16.10. Withdrawal of Initial Limited Partner. Roxbury
Veterans Enterprise, Inc. hereby withdraws as the Initial Limited
Partner of the Partnership.
IN WITNESS WHEREOF, the parties have affixed their signatures
and seals to this Amended and Restated Agreement of Limited
Partnership of ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP, as of the
date first written above.
WITNESS: GENERAL PARTNER:
ROXBURY VETERANS ENTERPRISE,
INC., a Massachusetts corporation
________________________ By: /s/Ernest Branch
Witness Name: Ernest Branch
Title: Treasurer
LIMITED PARTNER:
BOSTON CAPITAL TAX CREDIT FUND
IV, L.P., a Delaware limited
Partnership
By: Boston Capital Associates IV,
L.P., a Massachusetts limited
partnership its
general partner
By: C&M Associates d/b/a
Boston Capital Associates,
its general partner
_______________________ By: /s/ Bonnie Kate Fox
Witness: Bonnie Kate Fox, as
Attorney-in-Fact for
John P. Manning,
Partner
SPECIAL LIMITED PARTNER:
BCTC 94, INC., a Delaware
corporation
___________________________ /s/ Bonnie Kate Fox
Witness: By: Bonnie Kate Fax, Attorney-
in-Fact
for John P. Manning,
President
GUARANTOR:
VETERAN BENEFIT CLEARINGHOUSE
DEVELOPMENT CORPORATION, a
Massachusetts non-profit public
benefit corporation
_________________________ /s/ Ernest Branch
By: Ernest Branch
Its: Treasurer
WITHDRAWING LIMITED
PARTNER:
ROXBURY VETERANS ENTERPRISE, INC.
____________________________ By: /s/ Ernest Branch
Witness Name: Ernest Branch
Title: Treasurer
COUNTY OF SUFFOLK, ss )
COMMONWEALTH OF MASSACHUSETTS )
Before me, the undersigned Notary Public in and for the
aforesaid County and State, then personally appeared Bonnie Kate Fox,
in her capacities as (i) Attorney-in-Fact of John P. Manning, in his
capacity as a general partner of C&M Associates d/b/a Boston Capital
Associates and President of Boston Capital Partners Corporation, as
the general partner of Boston Capital Tax Credit Fund IV, L.P. as
Limited Partner of Roxbury Veterans Housing Limited Partnership, and
(ii) Attorney-in-Fact for John P. Manning of BCTC 94, Inc., as a
Special Limited Partner of Roxbury Veterans Housing Limited
Partnership, and being duly sworn, acknowledged the execution of the
foregoing Amended and Restated Agreement of Limited Partnership.
Witness my hand and notarial seal this ____ day of December,
1996.
____________________
__
Notary Public
My Commission
Expires:
COUNTY OF SUFFOLK, ss )
COMMONWEALTH OF MASSACHUSETTS )
Before me, the undersigned Notary Public in and for the
aforesaid County and State, then personally appeared Ernest Branch,
(i) in his capacity as Treasurer of the Withdrawing Initial Limited
Partner of ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP, and being
duly sworn, acknowledged the execution of the foregoing Amended and
Restated Agreement of Limited Partnership.
Witness my hand and notarial seal this _____ day of December,
1996.
____________________
___
Notary Public
My Commission
Expires:
COUNTY OF SUFFOLK, ss )
COMMONWEALTH OF MASSACHUSETTS)
Before me, the undersigned Notary Public in and for the
aforesaid County and State, then personally appeared Ernest Branch in
his capacities as aforesaid as the Treasurer of Roxbury Veterans
Enterprise, Inc., in its capacity as a General Partner of Roxbury
Veterans Housing Limited Partnership, and as President of Veterans
Benefit Clearinghouse Development corporation, in its capacity as
Guarantor and being duly sworn, acknowledged the execution of the
foregoing Amended and Restated Agreement of Limited Partnership.
Witness my hand and notarial seal this _______ day of December,
1996.
____________________
___
Notary Public
My Commission
Expires:
BOSTON CAPITAL TAX CREDIT FUND IV L.P.
_______________________________________
CERTIFICATION AND AGREEMENT
for
ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP
_______________________________________
CERTIFICATION AND AGREEMENT made as of December31,1996, by
ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP, a Massachusetts limited
partnership (the "Operating Partnership"); Roxbury Veterans
Enterprise, Inc., as General Partner (the "General Partner") for the
benefit of BOSTON CAPITAL TAX CREDIT FUND IV L.P., a Delaware limited
partnership (the "Investment Partner"), BCTC 94, INC., a Delaware
corporation (the "Special Limited Partner") and Hinckley, Allen &
Snyder and certain other persons or entities described herein. The
Investment Partner and the Special Limited Partner shall hereinafter
be referred to as the "Limited Partners."
WHEREAS, the Operating Partnership proposes to admit the
Limited Partners as members thereof pursuant to the Amended and
Restated Partnership Agreement of Limited Partnership of the Operating
Partnership dated as of December31, 1996 (the "Partnership
Agreement"), in accordance with which the Special Limited Partner will
make a capital contribution of $10 to the Operating Partnership and
the Investment Partner will make certain capital contributions to the
Operating Partnership.
WHEREAS, the Limited Partners have relied upon certain
information and representations described herein in evaluating the
merits of investment by the Limited Partners in the Operating
Partnership;
WHEREAS, Hinckley, Allen & Snyder, as counsel for the
Limited Partners will rely upon such information and representations
in connection with its delivery of certain opinions with respect to
this transaction; and
WHEREAS, McKenzie & Edwards, P.C., as counsel for
the Operating Partnership and the General Partner, will rely on such
information and representations in connection with its delivery of
certain opinions with respect to this transaction.
NOW, THEREFORE, to induce the Limited Partners to enter
into the Partnership Agreement and become members of the Operating
Partnership and for $1.00 and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
Operating Partnership and the General Partner hereby agree as follows
for the benefit of the Limited Partners and Hinckley, Allen & Snyder
and certain other persons hereinafter described.
1. Representations, Warranties and Covenants of the
Operating Partnership and the General Partners.
The Operating Partnership and the General Partner jointly
and severally represent, warrant and certify to the Limited Partners
and Hinckley, Allen & Snyder 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 Highland
House (the "Project") and conduct its business; the Operating
Partnership and the General Partner have the power and authority to
enter into and perform this Certification and Agreement; the execution
and delivery of this Certification and Agreement by the Operating
Partnership or the General Partner has been duly and validly
authorized by all necessary action; the execution and delivery of this
Certification and Agreement, the fulfillment of its terms and
consummation of the transactions contemplated hereunder do not and
will not conflict with or result in a violation, breach or termination
of or constitute a default under (or would not result in such a
conflict, violation, breach, termination or default with the giving of
notice or passage of time or both) any other agreement, indenture or
instrument by which the Operating Partnership or the General Partner
is bound or any law, regulation, judgment, decree or order applicable
to the Operating Partnership, the General Partner any of their
respective properties; this Certification and Agreement constitutes
the valid and binding agreement of the Operating Partnership and the
General Partner enforceable against each of them in accordance with
its terms.
1.02 All factual information, including without
limitation the information set forth in Exhibit A hereto, provided to
the Limited Partners or their affiliates either in writing or orally,
did not, at the time given, and does not, on the date hereof, contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
are made. The General Partner has also delivered to the Limited
Partners or their affiliates all documents and other information which
has been requested by such parties. Since the date of the financial
statements for the General Partner previously delivered, there has
been no material adverse change in the financial position of said
General Partner. The estimates of occupancy rates, operating expenses
and tax credits set forth on Exhibit A are reasonable in light of the
knowledge and experience of the 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 General Partner and as to
any of their affiliates, any of their predecessors and their
affiliates' predecessors, any of their directors, officers, general
partners and/or beneficial owners of ten per cent (10%) or more of any
class of their equity securities (beneficial ownership meaning the
power to vote or direct the vote and/or the power to dispose or direct
the disposition of such securities), as the case may be, and any
promoters presently connected with them in any capacity.
1.04 Each of the representations and warranties contained
in the 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 General Partner contained in the
Partnership Agreement has been duly performed to the extent that
performance of any covenant or agreement is required on or prior to
the date hereof.
1.06 All conditions to admission of the Limited Partners
as members of the Operating Partnership contained in the Partnership
Agreement have been satisfied.
1.07 No default has occurred and is continuing under the
Partnership Agreement or any of the Project Documents (as such term is
defined in the Partnership Agreement) for the Operating Partnership.
1.08 The General Partner agrees to take all actions
necessary to claim the Projected Credit, including, without
limitation, satisfying the conditions to the Carryover Allocation
Agreement with the Agency dated as of December 30, 1994 (the
"Carryover Allocation Agreement"), placing the Project in service no
later than December 31, 1996, filing of Forms 8609 with the Internal
Revenue Service, incurring the requisite threshold amount of
rehabilitation expenses consisting of the greater of (i) $3,000 per
unit or (ii) 10% of the adjusted basis in the project as of the first
day of the twenty-four month period and providing to Boston Capital an
accountant"s certification as to items (i) and (ii) herein.
1.09 No person or entity other than the Operating
Partnership holds any equity interest in the Project.
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 Project.
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 Project is destroyed or condemned
or there is a diminution in the value of the Project.
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 Project.
1.13 The General Partner is not related in any manner to
the Limited Partners, nor is the General Partner acting as an agent of
the Limited Partners.
1.14 To the best of the undersigned's current knowledge
after due inquiry, and except as expressly disclosed to the Limited
Partners of which the Limited Partners have actual knowledge, the
Project does not contain in a level above that deemed safe by all
applicable governmental agencies, any substance known to be hazardous,
such as hazardous waste, lead-based paint, asbestos, methane gas, urea
formaldehyde insulation, oil, toxic substances, underground storage
tanks, polychlorinated biphenals (PCBs), and radon; the Project is not
affected by the presence of oil, toxic substances, or other pollutants
that could be a detriment to the Project except for those conditions
expressly disclosed to the Limited Partners and of which the Limited
Partners have actual knowledge nor is the Operating Partnership in
violation of any local, state, or federal law or regulation; and no
violation of the Clean Air Act, Clean Water Act, Resource Conservation
and Recovery Act, Toxic Substance Control Act, Safe Drinking Water
Control Act, Comprehensive Environmental Resource Compensation and
Liability Act, or Occupational Safety and Health Act has occurred or
is continuing. Neither the Operating Partnership nor the General
Partner has received any notice from any source whatsoever of the
existence of any such hazardous condition relating to the Project or
of any violation of any local, state or federal law or regulation with
respect to the Project except for those notices expressly disclosed to
the Limited Partners of which the Limited Partners have actual
knowledge.
1.15 At the time of completion of rehabilitation of the
Project, the Project will not contain in a level above that deemed
safe by all applicable governmental agencies, any substance known to
be hazardous, such as hazardous waste, lead-based paint, asbestos,
methane gas, urea formaldehyde insulation, oil, toxic substances,
underground storage tanks, polychlorinated biphenals (PCBs), and
radon; the Project is not affected by the presence of oil, toxic
substances, or other pollutants that could be a detriment to the
Project nor will 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 shall be present or continuing. Neither the
Operating Partnership nor the General Partner shall be in receipt of
any notice from any source whatsoever of the existence of any such
hazardous condition relating to the Project or of any violation of any
local, state or federal law or regulation with respect to the Project
which such hazardous condition or violation has not been cured.
1.16 To the best of the undersigned's current knowledge
of property values in the area where the Project is located, and based
upon the level of permanent debt financing for the Project reflect in
Exhibit A, and that certain operating Pro-Forma dated as of December
31, 1996, attached as Exhibit A-1 (the "Pro-Forma"), it is expected
that the fair market value of the Operating Partnership's building(s)
at the end of each year taking into account value attributable to a
reservation of low income housing tax credits and/or below market
financing, as well as the use restrictions imposed on the Project,
will be greater than the total amount of the Operating Partnership's
liabilities, including accrued interest on such liabilities.
1.17 The General Partner of the Operating Partnership is
not a tax-exempt entity.
1.18 If any shareholder or other affiliate of the General
Partner is a tax-exempt entity and the General Partner is a
"controlled entity" in relation to such tax-exempt entity, a timely
election will be made under Code Section 168(h)(6)(F) so that no
portion of the Project will be treated as "tax exempt use property" as
defined in Code Section 168(h).
1.19 All representations made by the General Partner in
the Partnership Agreement are incorporated herein by reference and are
confirmed.
1.20 There is a reasonable expectation that the Operating
Partnership will be able to repay, as due, the principal and interest on
the projected loans to the Operating Partnership based on the projected
value of the Operating Partnership's property and building(s) and the
projection of income and expenses reflected in the pro-forma attached as
Exhibit A-1.
1.21 An Extended Use Commitment (as defined in the
Partnership Agreement) within the meaning of Code Section 42(h)(6)
will be in effect with respect to the building(s) not later than the
end of the taxable year in which any credit is taken with respect to
any building.
1.22 The Project is located in a qualified census tract
which qualifies the Project for the 130% basis boost pursuant to Code
Section 42. The Project meets all other requirements for satisfying
the 130% basis boost, and any HOME funding being loaned to the
Partnership bears interest at no less than the "applicable federal
rate" so that it does not meet the definition of a "below market
federal loan" under Code Section 42 and will therefore not prohibit
the Partnership from taking advantage of the 130% basis boost.
1.23 The amounts payable in development and property
management fees to Veterans Benefits Clearinghouse Development
Corporation and Gibraltar Associates, respectively, are fair in light
of the value and magnitude of the services rendered in consideration
for such fees, and the services performed in consideration for the
development fees relate solely to the acquisition or construction of
the Project.
1.24 For any building(s) not placed in service prior to
December 31, 1994, (i) the Operating Partnership's basis in such
building (including its respective lot) as of the close of 1994 was at
least 10% of the Operating Partnership's reasonably expected basis in
such building as of the close of calendar year 1996 and (ii) the
Operating Partnership entered into a Carryover Allocation Agreement
with the Agency dated as of December 30, 1994.
1.25 The Operating Partnership shall elect to defer the
start of the Credit Period pursuant to Code Section 42(f) until 1997
and include in eligible basis those additional rehabilitation expenses
incurred in the first year of the Credit Period.
1.26 Each of the representations made by the General
Partner in the Conditional Reservation of Low Income Housing Tax
Credits between the Agency and the Operating Partnership dated as of
November 9, 1996 (the "Credit Reservation Agreement") is true and
correct as of the date hereof.
1.27 Each of the covenants, agreements, and conditions
contained in the Credit Reservation Agreement has been duly performed
or satisfied by the Operating Partnership or its General Partner, as
applicable, to the extent that performance of any such covenant or
agreement or satisfaction of any condition is required on or prior to
the date hereof, and the General Partner has no reason to believe that
the covenants, agreements, and conditions of such Credit Reservation
Agreement and the Carryover Agreement required to be performed or
satisfied after the date hereof will not be performed or satisfied in
a timely manner.
1.28 The General Partner has not received from the Agency
any notice of default or of withdrawal or cancellation of the Tax
Credit reservation or allocation to the Operating Partnership as
described in the Credit Reservation Agreement.
1.29 At the time the Limited Partners are admitted into
the Operating Partnership, the General Partner will have an aggregate
net worth calculated in accordance with generally accepted accounting
principals but not including the value of any equity or debt interest
such General Partner as in the Operating Partnership, equal to at
least ten percent (10%) of the Capital Contributions to the Operating
Partnership, or in the alternative the General Partner shall at the
time the Limited Partners are admitted into the Operating Partnership,
satisfy at least one of the requirements set forth in the last
sentence of Section 4.07 of Internal Revenue Service Procedure 89-12,
as the same may be modified from time to time.
1.30 The General Partner will not reduce its aggregate
interest, as General Partner, in the Operating Partnership below 1% of
all material items of the Operating Partnership income, gain, loss,
deduction, and credit.
1.31 The General Partner and any entity that is related
to such General Partner, or to the Operating Partnership and that
receives a fee from the Operating Partnership, directly or indirectly,
is on the accrual method of accounting for tax purposes.
1.32 Veterans Benefits Clearinghouse Development
Corporation is the developer of the Project pursuant to the
Development Agreement by and between the Operating Partnership and
Veterans Benefits Clearinghouse Development Corporation dated as of
December 31, 1996 (the "Development Agreement"), and is on a cash-
basis method of accounting for tax purposes.
1.33 The General Partner will be actively involved in the
management and operation of the Operating Partnership, will devote
substantial and continuing attention to the activities of the
Operating Partnership, and will provide substantial services to the
Operating Partnership.
1.34 The development and leasing activity in which the
Operating Partnership will engage will not contain any material
personal or recreational benefit for the members of the Operating
Partnership.
1.35 The Operating Partnership will keep active records
and carry out the proposed activity in a manner consistent with
profitable businesses in the same activity.
1.36 The Operating Partnership will have an objective to
carry on business for profit and divide the gains therefrom.
1.37 The Operating Partnership may earn a profit,
including profit from appreciation in the value of the Project.
1.38 The Mortgage Loans and all other debt financing of
the Project requires the noncontingent repayment of principal on or
before a fixed maturity date, and will be considered and treated as a
loans by Lenders.
1.39 None of the Operating Partnership's Lenders is a
party from whom the Operating Partnership acquired any portion of the
Project, and none of the financing was issued in exchange for any
portion of the Project. None of the Operating Partnership's Lenders
will receive a fee with respect to the Operating Partnership's
investment in the Apartment.
1.40 Following is a description of any and all existing
or proposed financing of the Project that involves any direct or
indirect grant or federal subsidy (including without limitation
federal grants, below-market interest rate loans, and tax-exempt
bonds):
$600,000 Loan from Fleet National Bank, as agent for the
city of Boston acting by and through its Public Facilities Commission
by the Director of the Public Facilities Department ("PFD") and
allocated as follows:
a) $300,000 from PFD"s Community Development Block
Grant funds at one percent (1%) per annum interest
rate; and
b) $300,000 from Commonwealth of Massachusetts
Department of Housing and Community Development"s
HOME funds at seven and one-half (7-1/2%) per annum
interest rate.
1.41 The Project will not receive moderate rehabilitation
assistance under Section 8(e)(2) of the United States Housing Act of
1937 other than that pursuant to the Stewart B. McKinney Homeless
Assistance Act of 1988.
1.42 If the Project is a scattered site project within
the meaning of Code Section 42, 100% of the rental units in the
Project will be rent-restricted within the meaning of Code Section 42.
1.43 All Units in the Project are to be of equal quality
and all Project amenities are to be made available to all tenants on a
comparable basis without separate fees.
2. Indemnification
2.01 The General Partner (for purposes of this Section
2.01, an "Indemnifying Party") agrees to indemnify and hold harmless
the Limited Partners (for purposes of this Section 2.01, the
"Indemnified Parties" or, individually, an "Indemnified Party") and
each officer, director, employee and person, if any, who controls any
Indemnified Party against and from any and all claims, suits, actions,
debts, damages, costs, charges, losses, obligations, judgments, and
expenses, of any nature whatsoever, suffered or incurred by the
Investment Partner, under or on
account of the Hazardous Waste Laws or any similar laws or
regulations, including the assertion of any lien thereunder, except
for claims, suits, actions, debts, damages, costs, charges, losses,
obligations, judgments, or expenses arising from the Investment
Partner's own negligence, misconduct or fraud. For purposes of this
Certification and Agreement, "Hazardous Substances" means oil,
petroleum or chemical liquids or solids, liquid or gaseous products or
any hazardous wastes or hazardous substances, as those terms are used
in the Hazardous Waste Laws; and "Hazardous Waste Laws" means the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, and any other federal, state or local law governing Hazardous
Substances, as such laws may be amended from time to time.
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 herein 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 herein. In case any
action is brought against any Indemnified Party or any such of its
officers, directors, employees or controlling persons upon any such
claim, and it notifies the Indemnifying Party of the commencement
thereof as aforesaid, the Indemnifying Party shall be entitled to
participate at its own expense in the defense, or, if it so elects, in
accordance with arrangements satisfactory to any other Indemnifying
Party or parties similarly notified, to assume the defense thereof,
with counsel who shall be reasonably satisfactory to such Indemnified
Party or any such of its officers, directors, employees or controlling
persons and any other Indemnified Parties who are defendants in such
action; and after notice from the Indemnifying Party to such
Indemnified Party or any such of its officers, directors, employees or
controlling persons of its election so to assume the defense thereof
and the retaining of such counsel by the Indemnifying Party, the
Indemnifying Party shall not be liable to such Indemnified Party or
any such of its officers, directors, employees or controlling persons
for any legal or other expenses subsequently incurred by such
Indemnified Party or any such of its officers, directors, employees or
controlling persons in connection with the defense thereof.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for
the benefit of the Operating Partnership, the General Partner,
Hinckley, Allen & Snyder and the Limited Partners (and, to the extent
provided in Section 2, the officers, directors, partners, employees
and controlling persons referred to therein), and their respective
successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement.
3.02 This Certification and Agreement may be executed in
several counterparts, each of which shall be deemed to be an original,
all of which together shall constitute one and the same instrument.
3.03 Terms defined in the Partnership Agreement but not
otherwise defined herein shall have the meanings given them in the
Partnership Agreement.
IN WITNESS WHEREOF, the undersigned have set their hands
and seals as of the date first above written.
Operating Partnership:
ROXBURY VETERANS HOUSING LIMITED
PARTNERSHIP
By: Roxbury Veterans Enterprise,
Inc.,
its general partner
By:/s/ Ernest Branch
Name: Ernest Branch
Title: Treasurer
EXHIBIT A
ROXBURY VETERANS HOUSING LIMITED PARTNERSHIP
FACT SHEET
1. Projected Sources and Uses of Funds
Sources of Funds
Perm. First Mort. Loan - BBOC 115,700.00
Perm. Second Mort. Loan
CDBBG 300,000.00
HOME 300,000.00
Deferred Development Fee
Obligation 1,408.00
Capital Contributions:
General Partner 100.00
Investment Partner 586,492.00
$1,303,700.00
Application of Funds
Total Construction Cost 675,000.00
Architectural Fees 60,000.00
Survey & Permits/Engineering 10,250.00
Land Cost or Value 27,500.00
Acquisition/Building 247,500.00
Profit Overhead & Expenses 36,156.00
Interest During construction 500.00
Contribution Loan Fees & Title 3,027.00
Legal/Accounting 60,142.00
Marketing/Rent Up 5,000.00
Construction and Soft Costs Contingency 42,500.00
Constr. Insurance 10,000.00
Taxes During Construction 5,000.00
Perm. Loan Fees & Title 6,597.00
Performance Bond Premium 7,910.00
Environmental & Appraisal 5,000.00
Operating Reserve 52,118.00
Development Fee 50,000.00
$1,303,700.00
2. Construction/Permanent Financing
(i) First Mortgage
A. Lender: The Boston Bank of Commerce ("BBOC")
B. Mortgage Amount $115,700.00
C. Note Date: December 31, 1996
D. Interest Rate: Prime Rate Plus two (2%) percent per annum
E. Term: 180 months
(ii) Second Mortgage
A. Lender: Fleet National Bank as agent for the City of Boston
acting by and through its Public Facilities Commission by the
Director of the Public Facilities Department
B. Mortgage Amount: $300,000.00 from HOME Funds, $300,000.00 from
CDBBG Funds
C. Note Date: December 31, 1996
D. Interest Rate: 1% on the CDBBG Funds; 7.5% on the Home Funds
E. Term: 360 months
3 Eligible Basis: $914,985.00
4. Qualified Basis: $1,204,481.00
5. General Partner Capital Contribution: $100
6. Type of Credit:
7. Rent-up Schedule:
50% by March 31, 1997 7 units
50% by April 30, 1997 7 units
8. Projected Credit to the Investment Partner (99%):
A. $80,875.00 for 1997
B. $98,736.00 per annum for each of the years 1998 through 2006
C. $17,044.00 for 2007
9. Tax Credit Approval:
A. Application:
1. Date: September , 1994
2. Credit Amount Requested: $572,670 (annual)
B. Credit Reservation (Conditional)
1. Date: November 1, 1994
2. Credit Amount Reserved: $98,736.00 (annual)
C. Carryover Allocation:
1. Date: December 31, 1994
2. Credit Amount Allocated: $98,736.00
D. Credit Rate Lock-in Agreement
1. Date: December __, 1994
2. Rate locked-in: _____% (list the Rate)
E. Form 8609
1. Date: Post Construction
2. Credit Amount Allocated:
10. Project:
A. Name: Highland House
B. Address: 250 and 254 Warren Street, Boston (Roxbury),
Massachusetts
C. County: Suffolk
D. Type of Project: Fourteen (14) efficiency-type single-room-
occupancy (SRO) units
11. 1994 Boston Metropolitan Area (Suffolk County) Median Income:
$51,300
12. Type of Apartments: Singe Room Occupancy
Unit Basic Utility Total Monthly
Number Square Ft. Rent Allowance Rent
Single Room 14 Approx. 259 535.00
$53
5.00
13. Difference between rents allowed
by FMHA and rents allowed under
the Rent Restriction Test: ____________________
14. Rental Assistance: Stewart B. McKinney Homeless Assistance Act
of 1988
15. Annual Operating Expenses: $71,990.00 (1998 first full year)
16. Replacement Reserve Account: $300/unit = $4,200.00
17. Operating Reserve Account: $ 52,118.00
18. Amount of Annual Asset Management Fee to Boston Capital
Communications Limited Partnership: $1,500.00
19. Amount of Annual Incentive Partnership Management Fee:
$1,500.00
20. Amount of Total Depreciable Basis Allocated to Personal
Property: $23,900.00
21. Completion Date: April 30, 1997
22. Total Capital Contribution of Investment Partner: $586,492.00
23. Schedule of Capital Contributions:
A. $351,895.00 on latest to occur of:
(i) Tax Credit Set Aside,
(ii) Initial Closing,
(iii) Closing of Construction Mortgage Loan,
(iv) Permanent Mortgage Loan Commitment,
(v) Admission Date, or
(vi) Receipt of Accountant Certification re: Preservation
of Tax Credits and Tax Credit Carryover Allocation
B. $58,649.00 on the latest to occur of:
(i) 50% Completion Date,
(ii) Receipt of updated title insurance policy,
(v) Compliance with due diligence recommendations,
(vi) Receipt of payoff letter from contractor,
(vii) Receipt of estoppel letter from lender, or
(viii) Satisfaction of all prior conditions.
C. $79,176.00 on latest to occur of:
(i) Substantial Completion,
(ii) Satisfaction of all prior conditions.
D. $82,109.00 on the latest to occur of:
(i) Initial 95% Occupancy Date,
(ii) Permanent Mortgage Commencement,
(iii) Rental Achievement,
(iv) Cost Certification,
(v) State Designation,
(vi) Satisfaction of all prior conditions.
E. $14,663.00 on the latest to occur of:
(i) Receipt of tax return and audited financial,
statements for the year in which rental achievement
occurs, or
(ii) Satisfaction of all prior conditions.
24. Fees, Special Distributions and Other Items to be paid from
Capital Contributions
A. Development Fee: $50,000 ($1,408.00 of which is a
Deferred Development Fee)
B. Special Return of General Partner Capital N/A
25. Consulting Fee to Boston Capital Partners, Inc. N/A
26. General Partner: Roxbury Veterans Enterprise, Inc.
Address: 495 Blue Hills Avenue
Dorchester, MA 02121
Telephone Number: (617) 445-6135
27. Developer: Veterans Benefits Clearinghouse Development
Corporation
Contact Person: Ernest Branch
Address: 495 Blue Hills Avenue
Dorchester, MA 02121
Telephone Number: (617) 445-6135
28. Ownership Interests
Operating
Tax Credit Capital
Cash
Allocations
Transactions Flow
General Partner: 10.00% 50.00% 50.00%
Investment Partner: 99.00% 50.00% 50.00%
Special Limited Partner: 0.00% 0.00% 0.00%
29. Management Agent: Gibraltar Associates, Inc.
Contact Person: Carolyn Gibson
Address: 51A Humbolt Avenue
Roxbury, MA
Telephone Number: (617) 445-2297
Amount of Fee: Maximum of 6% of Gross Receipts
30. Builder: CWC Builders, Inc.
Contact Person: Bruce Polishook
Address: 7 Wells Avenue
Newton, MA 02159
Telephone Number: (617) 965-2800
Amount of Compensation: Contract sum of $675,000.00 a subject
to additions and deductions as provided in the Contract
Documents
Builder's Profit: $0.00
Builder's Overhead: $36,156.00
31. Architect: Chisolm Washington Architect, Inc.
Contact Person: Micheal Washington, AIA
Address: 675 Massachusetts Avenue
Cambridge, MA
Telephone Number: (617) 876-7930
Amount of Fee: $60,000.00
32. Auditor: Ziner & Company, Inc.
Contact Person: John Mackey
Address: 7 Winthrop Square
Boston, MA 02110
Telephone Number: (617) 542-8880
33. Tax Return Preparer: Ziner & Company, Inc.
Contact Person: John Mackey
Address: 7 Winthrop Square
Boston, MA 02110
Telephone Number: (617) 542-8880
34. Federal Taxpayer ID Number for Roxbury Veterans Housing Limited
Partnership: 04-3255637
Federal Taxpayer ID Number for Roxbury Veterans Enterprise,
Inc.: 04-84987
35. State Housing Credit Agency: Department of Housing and
Community Development
36. State Housing Agency LIHTC Number: 046-002-284
37. Operating Deficit Guaranty The General Partner shall have an
unlimited operating deficit guarantee; additionally the General
Partner shall provide funds as necessary to pay Operating Deficits;
but in the event that such loans are not made, the Operating Partnership
shall utilize amounts otherwise payable to the Developer as installments
of the Development Fee, as applicable.
38. Guarantor(s): Veterans Benefit Clearinghouse Development
Corporation guarantees all obligations and duties of the General
Partner
cc: Boston Capital Communications Limited Partnership Accounting
Department
Exhibit B
Certificate of Operating Partnership
and General Partner
Re: Lack of Disqualifications
The Operating Partnership and its General Partner (as identified on
the Amended and Restated Certification and Agreement to which this
Certificate is attached as Exhibit B) hereby represent to you that
none of (i) the Operating Partnership, (ii) any predecessor of the
Operating Partnership, (iii) any of the Operating Partnership's
affiliates ("affiliate" meaning a person that controls or is
controlled by, or is under common control with, the Operating
Partnership), (iv) any sponsor (meaning any person who (1) is directly
or indirectly instrumental in organizing the Operating Partnership or
(2) will directly or indirectly manage or participate in the
management of the Operating Partnership or (3) will regularly perform,
or select the person or entity who will regularly perform, the
primary activities of the Operating Partnership), (v) any General
Partner, manager, officer, director, principal or general partner of
the Operating Partnership or of any sponsor, (vi) the officer,
director, principal, promoter or general partner of any General
Partner or Manager, (vii) any beneficial owner of ten percent or more
of any class of the equity securities of the Operating Partnership or
of any sponsor (beneficial ownership meaning the power to vote or
direct the vote and/or the power to dispose or direct the disposition
of such securities), (viii) any promoter of the Operating
Partnership(meaning any person who, acting alone or in conjunction
with one or more other persons, directly or indirectly has taken, is
taking or will take the initiative in founding and organizing the
business of the Operating Partnership or any person who, in connection
with the founding and organizing of the business or enterprise of the
Operating Partnership, directly or indirectly receives in
consideration of services or property, or both services and property,
ten percent or more of any class of securities of the Operating
Partnership or ten percent 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 en joins such person from
activities subject to federal or state statutes designed to protect
consumers against unlawful or deceptive practices involving insurance,
banking, commodities, real estate, franchises, business opportunities,
consumer goods and services, or is subject to a United States Postal
Service false representation order entered within five years prior to
the date hereof, or is subject to a temporary restraining order or
preliminary injunction with respect to conduct alleged to have
violated Section 3005 of Title 39, United States Code;
(6) Is suspended or expelled from membership in, or suspended or
barred from association with a member of, an exchange registered as a
national securities exchange, an association registered as a national
securities association, or any self-regulatory organization registered
pursuant to the Securities Exchange Act of 1934, or a Canadian
securities exchange, or association or self-regulatory organization
operating under the authority of the Commodity Futures Trading
Commission, or is subject to any currently effective order or order
entered within the past five years of the SEC, the Commodity Futures
Trading Commission or any state securities administrator denying
registration to, or revoking or suspending the registration of, such
person as a broker-dealer, agent, futures commission merchant,
commodity pool operator, commodity trading adviser or investment
adviser or associated person of any of the foregoing, or prohibiting
the transaction of business as a broker-dealer or agent;
(7) Has, in any application for registration or in any report
required to be filed with, or in any proceeding before the SEC or any
state securities commission or any regulatory authority willfully made
or caused to be made any statement which was at the time and in the
light of the circumstances under which it was made false or misleading
with respect to any material fact, or has willfully omitted to state
in any such application, report or proceeding any material fact which
is required to be stated therein or necessary in order to make the
statements made,
in the light of the circumstances under which they are made, not
misleading, or has willfully failed to make any required amendment to
or supplement to such an application, report or statement in a timely
manner;
(8) Has willfully violated any provision of the Securities Act of
1933, the Securities Exchange Act of 1934, the Trust Indenture Act of
1939, the Investment Advisers Act of 1940, the Investment Operating
Partnership 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 the Massachusetts Securities Law, as amended
(the "Massachusetts Act") or for any broker-dealer or issuer with
knowledge that such broker- dealer or issuer had not or has not
complied with the Massachusetts 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).
