FORT BEND NHC, L.P.
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
As of April 1, 1998
FORT BEND NHC, L.P.
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
This Amended and Restated Agreement of Limited
Partnership is made and entered into as of the 1st day of
April, 1998, by and among the undersigned parties.
WHEREAS, on June, 12, 1997, ▇▇▇▇▇▇▇ Realty, Inc., a
Virginia corporation ("HRI"), and Fort Bend National Housing,
L.L.C., a Virginia limited liability company ("FBNH"), as the
original General Partners, executed a Certificate of Limited
Partnership (the "Certificate"), pursuant to the Virginia
Revised Uniform Limited Partnership Act (the "Act"), for the
formation of Fort Bend NHC, L.P. (the "Partnership"), which
Certificate subsequently was filed in the Office of the
Virginia State Corporation Commission, on June 16, 1997; and
WHEREAS, as of June 16, 1997, HRI and FBNH, as the
General Partners and FBNH as the Initial Limited Partner,
executed an Agreement of Limited Partnership of the
Partnership (the "Original Agreement"); and
WHEREAS, on February 3, 1998, the Partnership was issued
a Certificate of Authority to transact business in the State
of Texas by the Secretary of State of the State of Texas; and
WHEREAS, the Partnership has been formed to develop,
construct, own, maintain and operate a 112-unit apartment
complex of which 84 units are intended for rental to
individuals and families of low and moderate income and 28
units are to be rented to tenants at market rates, to be known
as Falcon Pointe Apartments, and to be located in the City of
Rosenberg, Texas (the "Apartment Complex"); and
WHEREAS, the Partnership has received a commitment for a
construction mortgage loan for the Apartment Complex from ▇▇▇▇
Terrace Realty Investors, Inc. (the "Construction Lender"), in
the maximum principal amount of $3,274,282 (the "Construction
Loan"); and
WHEREAS, the parties hereto now desire to enter into this
Amended and Restated Agreement of Limited Partnership to
(i) continue the Partnership; (ii) admit Boston Capital Tax
Credit Fund IV L.P., a Delaware limited partnership, to the
Partnership as a Limited Partner, and BCTC 94, Inc., a
Delaware corporation, to the Partnership as the Special
Limited Partner; (iii) withdraw FBNH as the Initial Limited
Partner of 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 1
CONTINUATION OF PARTNERSHIP 1
1.01. Continuation 1
1.02. Name 1
1.03. Principal Executive Offices; Agent for Service of
Process 1
1.04. Term 1
1.05. Recording of Amendment to Certificate 1
ARTICLE II. 2
DEFINED TERMS 2
ARTICLE III 14
PURPOSE AND BUSINESS OF THE PARTNERSHIP 14
3.01. Purpose of the Partnership 14
3.02. Authority of the Partnership 14
ARTICLE IV. 16
REPRESENTATIONS, WARRANTIES AND COVENANTS;
DUTIES AND OBLIGATIONS 16
4.01. Representations, Warranties and Covenants Relating to
the
Apartment Complex and the Partnership 16
4.02. Duties and Obligations Relating to the Apartment
Complex and
the Partnership 21
ARTICLE V. 24
PARTNERS, PARTNERSHIP INTERESTS AND OBLIGATIONS
OF THE PARTNERSHIP 24
5.01. Partners, Capital Contributions and Partnership
Interests 22
5.02. Return of Capital Contribution 22
5.03. Withholding of Capital Contributions Upon Default 23
5.04. Legal Opinions 30
5.05. Repurchase Obligation 32
5.06. Asset Management Fee 33
5.07. BCTC IV Loan 33
5.08. Default by Investment Partnership in Making Capital
Contributions. 33
ARTICLE VI. 35
CHANGES IN PARTNERS 35
6.01. Withdrawal of a General Partner 35
6.02. Admission of a Successor or Additional General
Partners 35
6.03. Effect of Bankruptcy, Death, Withdrawal, Dissolution
or
Incompetence of a General Partner 36
ARTICLE VII. 38
ASSIGNMENT TO THE PARTNERSHIP 38
ARTICLE VIII. 39
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNERS 39
8.01. Management of the Partnership 39
8.02. Limitations Upon the Authority of the General
Partners 40
8.03. Management Purposes 41
8.04. Delegation of Authority 32
8.05. General Partners or Affiliates Dealing
with Partnership 42
8.06. Other Activities 42
8.07. Liability for Acts and Omissions 43
8.08. Disposition Fee 44
8.09. Construction of the Apartment Complex, Construction
Cost Overruns,
Operating Deficits 44
8.10. Development Fee 35
8.11. Partnership Management Fee 46
8.12. Withholding of Fee Payments 36
8.13. Removal of Any General Partner 48
8.14. Selection of the Management Agent 50
8.15. Removal of the Management Agent 51
8.16. Replacement of the Management Agent 51
8.17. Loans to the Partnership 40
8.18. Reserve Fund for Replacements; Operating
Reserve Account 40
8.19. Operating and Capital Budgets. 41
8.20. Sale of the Apartment Complex. 54
ARTICLE IX. 56
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS OF INTERESTS
OF LIMITED PARTNERS 56
9.01. Acquisition for Investment 56
9.02. Transfer of Limited Partners' Interests 56
9.03. Admission of Substitute Limited Partners 56
9.04. Rights of Assignee of Partnership Interest 58
ARTICLE X. 45
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 45
10.01. Management of the Partnership 45
10.02. Limitation on Liability of Limited Partners 45
10.03. Other Activities 45
ARTICLE XI. 46
PROFITS, LOSSES AND DISTRIBUTIONS 46
11.01. Allocation of Profits, Losses, Credits and Cash
Distributions 60
11.02. Determination of Profits, Losses and Credits 47
11.03. Allocation of Gains and Losses 47
11.04. Distribution of Proceeds from Sale and Liquidation
of Partnership Property 48
11.05. Capital Accounts 49
11.06. Authority of General Partners to Vary Allocations to
Preserve and
Protect Partners' Intent. 49
11.07. Designation of Tax Matters Partner 66
11.08. Rights and Obligations of Tax Matters Partner 66
11.09. Expenses of Tax Matters Partner 67
11.10. Minimum Gain Provisions 53
ARTICLE XII. 71
SALE, DISSOLUTION AND LIQUIDATION 71
12.01. Dissolution of the Partnership 71
12.02. Winding Up and Distribution. 71
ARTICLE XIII. 73
BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC. 73
13.01. Books and Records 73
13.02. Bank Accounts 73
13.03. Accountants 73
13.04. Reports to Partners 74
13.05. Section 754 Elections 78
13.06. Fiscal Year and Accounting Method 78
ARTICLE XIV. 79
AMENDMENTS 79
14.01. Proposal and Adoption of Amendments 79
ARTICLE XV. 79
CONSENTS, VOTING AND MEETINGS 79
15.01. Method of Giving Consent 79
15.02. Submissions to Limited Partners 79
15.03. Meetings; Submission of Matters for Voting 79
ARTICLE XVI. 79
GENERAL PROVISIONS 79
16.01. Burden and Benefit 79
16.02. Applicable Law 79
16.03. Counterparts 80
16.04. Separability of Provisions 62
16.05. Entire Agreement 80
16.06. Liability of the Investment Partnership 80
16.07. Environmental Protection 80
16.08. Continuing Guarantee by the Guarantors of Certain
Obligations of the
General Partners and the Developer 64
16.09. Notices. 83
ARTICLE I TC "ARTICLE I" \f C \l "1"
CONTINUATION OF PARTNERSHIP TC "CONTINUATION OF PARTNERSHIP"
\f C \l "1"
1.01. Continuation TC "1.01. Continuation" \f C \l
"2" . The undersigned hereby continue the Partnership as a
limited partnership under the Act.
1.02. Name TC "1.02. Name" \f C \l "2" . The
name of the Partnership is FORT BEND NHC, L.P.
1.03. Principal Executive Offices; Agent for Service
of Process TC "1.03. Principal Executive Offices; Agent
for Service of Process" \f C \l "2" . The principal
executive office of the Partnership shall be c/o National
Housing Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. 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
Partners. The General Partners 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 Partners may from
time to time deem advisable.
The name and address of the Agent for service of process
is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a member of the Virginia State Bar,
1700 Dominion Tower, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
1.04. Term TC "1.04. Term" \f C \l "2" . The
term of the Partnership commenced as of June 12, 1997, and
shall continue until December 31, 2037, unless the Partnership
is sooner dissolved in accordance with the provisions of this
Agreement.
1.05. Recording of Amendment to Certificate TC
"1.05. Recording of Amendment to Certificate" \f C \l "2"
. Upon the execution of this Amended and Restated Agreement
of Limited Partnership by the parties hereto, the General
Partners shall take all actions necessary to assure the prompt
recording of any Amendment(s) to the Certificate as required
by the Act, including filing with the Virginia State
Corporation Commission. All fees for filing shall be paid out
of the Partnership's assets. The General Partners shall take
all other necessary action required by law to perfect and
maintain the Partnership as a limited partnership under the
laws of the Commonwealth of Virginia authorized to do business
in the State, and shall register the Partnership under any
assumed or fictitious name statute or similar law in force and
effect in the Commonwealth of Virginia and in the State.
ARTICLE II. TC "ARTICLE II." \f C \l "1"
DEFINED TERMS TC "DEFINED TERMS" \f C \l "1"
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 ▇▇▇▇▇▇▇▇▇▇, Melvoin and ▇▇▇▇▇▇▇ LLP,
of Chicago, Illinois, or such other firm of independent
certified public accountants as may be engaged by the General
Partner, with the Consent of BCTC 94 (which Consent shall not
be unreasonably withheld), to prepare the Partnership income
tax returns.
"Act" means the Revised Uniform Limited Partnership Act
of the Commonwealth of Virginia, 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 and nine tenths per cent (99.9%) of the Tax
Credits actually received by the Partnership and not
disallowed by any taxing authority.
"Admission Date" means the date upon which the Investment
Partnership is admitted to the Partnership.
"Affiliate" means any Person that directly or indirectly,
through one or more intermediaries, controls or is controlled
by or is under common control with a General Partner, or with
another designated Person, as the context may require.
"Agency" means the Texas Department of Housing and
Community Affairs, in its capacity as the designated agency of
the State 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 in the City of Rosenberg, Texas, and the 112-unit
multi-family rental housing development and other improvements
to be constructed, owned and operated thereon by the
Partnership, and to be known as Falcon Pointe Apartments.
"Asset Management Fee" means the fee payable by the
Partnership to Boston Capital, or an affiliate thereof,
pursuant to Section 5.06.
"Bankruptcy" or "Bankrupt" as to any Person means the
filing of a petition for relief as to any such Person as
debtor or 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 60 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 60
days.
"BCTC 94" means BCTC 94, Inc., a Delaware corporation,
which is the Special Limited Partner of the Partnership.
"BCTC IV" means Boston Capital Tax Credit Fund IV L.P., a
Delaware limited partnership, which is a Limited Partner of
the Partnership.
"BCTC IV Loan" means the loan to be made to the
Partnership by BCTC IV upon the occurrence of the Admission
Date, in the principal amount of $2,954,917, as described in
Section 5.07.
"Boston Capital" means Boston Capital Partners, Inc., a
Massachusetts corporation.
"Capital Account" means the capital account of a Partner
as described in Section 11.05.
"Capital Contribution" means the total amount of money or
other property contributed or agreed to be contributed, as the
context requires, to the Partnership by each Partner pursuant
to the terms of this Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital
Contribution made by a predecessor holder of the Interest of
such Partner.
"Capital Transaction" means any transaction the proceeds
of which are not includable in determining Cash Flow,
including without limitation the disposition, whether by
partial sale (except when such sale proceeds are to be used
pursuant to a plan or budget approved by all of the Partners),
casualty (where the proceeds are not to be used for
reconstruction), condemnation, refinancing or similar event of
any part of the Apartment Complex, prior to the sale of the
Apartment Complex, where the gross proceeds from such sale or
event exceed $50,000 (with such amount adjusted annually based
on the Consumer Price Index).
"Cash Flow" means, with respect to any year or other
applicable period, (a) all Revenues received by the
Partnership during such period, plus (b) any amounts which the
General Partner, with the Consent of the Lender, and the
Consent of BCTC 94, releases from the Reserve Fund for
Replacements as being no longer necessary to hold as part of
the Reserve Fund for Replacements, less (i) operating expenses
of the Partnership paid from Revenues during the applicable
period, (ii) all cash payments made from Revenues during such
period as mandatory debt service payments with respect to the
Construction Loan or the Mortgage Loan, and (iii) all amounts
from Revenues, if any, 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; the deferred portion of the Development Fee
pursuant to Section 8.10(a)(ii); amounts due on any
Subordinated Loans; and/or the Partnership Management Fee.
Cash Flow shall be determined separately for each fiscal
year and shall not be cumulative. Wherever there is a
reference to the distribution of Cash Flow pursuant to the
provisions of this Agreement, Cash Flow shall be deemed to be
limited to Surplus Cash available for distribution.
"Certificate" means the Certificate, or any amendment
thereto or any other instrument or document which is required
under the laws of the State to be signed and sworn to by the
Partners of the Partnership and filed in the appropriate
public offices within the State to perfect or maintain the
Partnership as a limited partnership under the laws of the
State, to effect the admission, withdrawal or substitution of
any Partner of the Partnership, or to protect the limited
liability of the Limited Partners as limited partners under
the laws of the State.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any corresponding provision or
provisions of succeeding law.
"Consent" means the prior written consent or approval of
the Investment Partnership and/or BCTC 94 and/or any other
Partner, as the context may require, to do the act or thing
for which the consent is solicited, which Consent shall not be
unreasonably withheld or delayed. In such instances where
consent is required from the Limited Partners, such Consent
shall be given by BCTC 94 (unless such Consent is specifically
required in this Agreement by all of the Limited Partners).
"Construction Contract" means the maximum upset price
construction contract in the amount of $5,500,000 (including
all exhibits, attachments and change orders thereto) entered
into between the Partnership and the Contractor under date of
September 24, 1997, pursuant to which the Apartment Complex is
to be constructed.
"Construction Lender" means ▇▇▇▇ Terrace Realty
Investors, Inc., in its capacity as the maker of the
Construction Loan, or its successor or assign in such
capacity, acting through any authorized representative.
"Construction Loan" means the construction mortgage loan
to be made by the Construction Lender to the Partnership at
the Initial Closing, pursuant to the Construction Lender's
commitment letter to the Partnership dated April 28, 1998.
The Construction Loan has a principal amount of $3,274,282
(subject to increase or decrease in accordance with the
provisions of the Construction Loan Commitment), is evidenced
by a deed of trust note given by the Partnership to the
Construction Lender at the Initial Closing, and is secured by
the Construction Mortgage and other related security documents
and financing statements. The Construction Loan bears
interest at a rate equal to the prime rate as published by
Signet Bank of Norfolk, Virginia, plus four per cent (4%).
Payments on account of interest only at the aforesaid rate
shall be due and payable on a monthly basis during the period
from the Initial Closing until the maturity date of the
Construction Loan, which is to be eighteen (18) months from
Initial Closing (the "Maturity Date"). At the Maturity Date,
the entire outstanding balance of principal of, and any unpaid
interest on, the Construction Loan shall be due and payable.
"Construction Mortgage" means the deed of trust to be
given by the Partnership at the Initial Closing in favor of
certain trustees for the benefit of the Construction Lender as
maker of the Construction Loan, constituting a first lien on
the Apartment Complex and securing the Construction Loan.
"Contractor" means National Housing Building Corporation,
a Virginia corporation, which is an Affiliate of the Managing
General Partner and which is the general construction
contractor for the Apartment Complex.
"Counsel" or "Counsel for the Partnership" shall mean
such attorney or law firm upon which BCTC 94 and the General
Partners shall agree; provided, however, that if any section
of this Agreement either (i) designates particular counsel for
the purpose described therein, or (ii) provides that counsel
for the purpose described therein shall be chosen by another
method or by another Person, then such designation or
provision shall prevail over this general definition.
"Credit Period" means, with respect to the Apartment
Complex and the Partnership, the credit period as defined in
Section 42(f)(1) of the Code.
"Debt Service Coverage Ratio" means the ratio between:
(i) all Revenues remaining with respect to any year after
payment in full, in each case for such year, of all operating
expenses of the Apartment Complex and the Partnership; and
(ii) the scheduled mandatory debt service payments with
respect to the Mortgage Loan for such year.
"Developer" means National Housing Development
Corporation, in its capacity as the developer of the Apartment
Complex.
"Development Fee" means the fee payable by the
Partnership to the Developer pursuant to Section 8.10(a) of
this Agreement.
"Development Sources" means the aggregate of: (i) the
proceeds of the Construction Loan and the Mortgage Loan, and
(ii) the Capital Contributions of the Investment Partnership
to the Partnership.
"Disposition Fee" means the fee payable by the
Partnership to the General Partners pursuant to Section 8.08
of this Agreement.
"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
construction cost overruns and the cost of any change orders
which have been approved by the Construction Lender and/or the
Lender, as required, and which are not funded from the
Development Sources; (ii) achieve Substantial Completion;
(iii) achieve Initial Closing and Final Closing, effect
funding of the Mortgage Loan, and satisfy any escrow deposit
requirements which are conditions to the Final Closing,
including, without limitation, any amounts necessary for local
taxes, utilities, insurance premiums, and other amounts which
are required (provided, however, that if any such deposits are
made by the General Partner, and the funds, or any portion
thereof, subsequently are released from such deposit, the
funds so released shall be paid to the General Partner);
(iv) pay any applicable loan assessment fees, discounts or
other expenses incurred by the Partnership as a result of the
occurrence of the Initial Closing and/or the Final Closing;
(v) pay the entire outstanding balance of principal of and
interest on the Construction Loan; (vi) pay any Operating
Deficits incurred by the Partnership prior to the Final
Closing; and (viii) pay not less than $316,408 on account of
the Development Fee pursuant to Section 8.10(a) of this
Agreement.
"Extended Use Agreement" means the Extended Use
Regulatory Agreement and Declaration of Restrictive Covenants
to be entered into between the Partnership and the Agency at
or prior to State Designation, and properly recorded in the
appropriate land records of the jurisdiction in which the
Apartment Complex is located, setting forth certain terms and
conditions under which the Apartment Complex is to be
operated.
"FBNH" means Fort Bend National Housing, L.L.C. in its
capacity as a General Partner of the Partnership.
"Final Closing" means the occurrence of all of the
following: (i) Substantial Completion, (ii) closing of the
Mortgage Loan and disbursement of the proceeds thereof, and
(iii) payment of the entire outstanding balance of principal
of and interest on the Construction Loan, and discharge of
record of the Construction Mortgage.
"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 Partners" means, collectively, FBNH and HRI and
any other Person admitted as a general partner pursuant to
this Agreement, and their respective successors pursuant to
this Agreement, including particularly the provisions of
Sections 6.03, 8.01 and 8.13.
"Guarantors" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, each an individual resident of the
Commonwealth of Virginia, in their capacities as Guarantors.
"HRI" means ▇▇▇▇▇▇▇ Realty, Inc. in its capacity as the
Managing General Partner of the Partnership.
"Initial Closing" means the date upon which the
Construction Loan is closed and the first disbursement of
proceeds of the Construction Loan was authorized to be made to
the Partnership, subject to the approval of the Construction
Lender. Initial Closing is anticipated to occur on June 30,
1998.
"Initial 100% Occupancy Date" means the first date upon
which not less than 100% of the apartment units in the
Apartment Complex have been leased to, and are occupied by,
qualified tenants under executed Lender-approved leases, if
any such approval is applicable.
"Installment" means an Installment of the Investment
Partnership's Capital 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 the 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, as to the Investment
Partnership, the aggregate amount of capital contributions
made to the Investment Partnership by its investors and
attributable to the Partnership, which is an amount equal to
the Investment Partnership's paid-in Capital Contributions
divided by 86%.
"Investment Partnership" means BCTC IV.
"Land" means the tract of land in the City of Rosenberg,
Texas, upon which the Apartment Complex is to be located, as
more fully described in Exhibit A attached hereto.
"Lender" means ▇▇▇▇ Terrace Realty Investors, Inc., a
Virginia corporation, pursuant to the Mortgage Loan
Commitment, or such other Person which is the maker of the
Mortgage Loan, or its successor and assigns in such capacity,
acting through any authorized representative.
"Limited Partner(s)" means the Investment Partnership
and/or BCTC 94, or any other Limited Partner in such Person's
capacity as a limited partner of the Partnership.
"Liquidator" means the General Partners or, if there are
none at the time in question, such other Person who may be
appointed in accordance with applicable law and who shall be
responsible for taking all action necessary or appropriate to
wind up the affairs of, and distribute the assets of, the
Partnership upon its dissolution.
"Low-Income Housing Tax Credit" means the low-income
housing tax credit allowed for low-income housing projects
pursuant to Section 42 of the Code.
"Management Agent" means the management and rental agent
for the Apartment Complex.
"Management Agreement" means the agreement between the
Partnership and the Management Agent providing for the
management of the Apartment Complex.
"Managing General Partner" means HRI in its capacity as
Managing General Partner of the Partnership.
"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 the 40-60 Set-Aside Test as the
Minimum Set-Aside Test.
"Mortgage" means the deed of trust to be given by the
Partnership at the Final Closing in favor of certain trustees
for the benefit of the Lender as maker of the Mortgage Loan,
constituting a first lien on the Apartment Complex and
securing the Mortgage Loan.
"Mortgage Loan" means the non-recourse permanent mortgage
loan to be made by the Lender to the Partnership at the Final
Closing, which will be evidenced by the deed of trust note
given by the Partnership to the Lender at the Final Closing,
and which will be secured by the Mortgage and other related
security documents and financing statements. Except as and to
the extent otherwise Consented to by BCTC 94, the Mortgage
Loan shall: (i) be made by a lender Consented to by the
Investment Partnership; (ii) be in a principal amount of not
more than $3,274,282; and (iii) have terms and conditions no
less favorable to the Partnership than: (a) a 30-year term,
(b) a 30-year amortization schedule, (c) be non-recourse to
all the Partners, (d) a fixed interest rate of not more than
nine and one-half per cent (9.5%) per annum, and (e) debt
service payments such as to provide a minimum Debt Service
Coverage Ratio of 1.10 to 1.00.
"Mortgage Loan Commitment" means the standby commitment
issued to the Partnership by the Lender under date of April
22, 1998, with respect to the Mortgage Loan.
"NHDC" means National Housing Development Corporation, a
Virginia corporation.
"Net Capital Contribution" means an amount equal to a
Partner's paid-in Capital Contribution (but not including any
Capital Contribution of any prior Partner), less the aggregate
amount of cash distributions, if any, made to such Partner
hereunder.
"Notice" means a writing containing the information
required by this Agreement to be communicated to a Partner and
sent by express courier, telephone facsimile transmission, or
registered or certified mail, postage prepaid, return receipt
requested, to such Partner at the last known address of such
Partner, the date of receipt thereof (or the next business
day, if the date of receipt is not a business day) (or, in the
case of registered or certified mail, the date of registry
thereof or the date of the certification receipt therefor, as
applicable) being deemed the date of such Notice; provided,
however, that any written communication containing such
information sent to such Partner actually received by such
Partner shall constitute Notice for all purposes of this
Agreement.
"Operating Deficit" means the amount by which the income
of the Partnership from rental payments made by tenants of the
Apartment Complex, and all other income of the Partnership
(other than proceeds of any loans to the Partnership and
investment earnings on funds on deposit in the Reserve Fund
for Replacements and other such reserve or escrow funds or
accounts) for a particular period of time, is exceeded by the
sum of 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 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 Guaranty Period" means the period beginning
with the date upon which the Final Closing occurs and ending
on the date which is five (5) years from and after the date
upon which Rental Achievement occurs.
"Operating Reserve Account" means the operating reserve
account with respect to the Apartment Complex as is described
in Section 8.18(b) of this Agreement.
"Partner" means any General Partner and any Limited
Partner.
"Partnership" means Fort Bend NHC, L.P.
"Partnership Agreement" means this Amended and Restated
Agreement of Limited Partnership, as amended from time to
time.
"Partnership Management Fee" means the fee payable by the
Partnership to FBNH and to HRI pursuant to Section 8.11 of
this Agreement.
"Percentage Interest" means the percentage Interest of
each Partner as set forth in Section 5.01.
"Person" means any individual, partnership, corporation,
trust, limited liability company or other entity.
"Project Documents" means and includes the Construction
Mortgage, the Mortgage, the Extended Use Agreement, the
Management Agreement, and all other instruments delivered to
(or required by) the Construction Lender, 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 $340,387 for 1999, $547,225 per year for each
of the years 2000 through 2008 and $206,838 for 2009, which
the General Partners have projected to be the total amount of
the Tax Credits which will be allocated to the Investment
Partnership by the Partnership, constituting ninety-nine and
nine tenths per cent (99.9%) of the Tax Credits which are
projected to be available to the Partnership; provided,
however, that if the Actual Credit for 1999 is greater than
(or less than) $340,387, the Projected Credit for the year
2009 shall be reduced (increased) by an amount equal to the
amount by which the Actual Credit for 1999 exceeds (is less
than) $340,387.
"Rental Achievement" means the date upon which, the
average Debt Service Coverage Ratio for six (6) consecutive
full calendar months subsequent to the Final Closing is at
least 1.15 to 1.00.
"Rent Restriction Test" means the test pursuant to
Section 42(g) of the Code whereby the gross rent charged to
tenants of the low-income units in the Apartment Complex
cannot exceed 30% of the qualifying income levels of those
units.
"Reserve Fund for Replacements" means the reserve fund
for replacements with respect to the Apartment Complex as is
described in Section 8.18(a) of this Agreement.
"Revenues" means all cash receipts of the Partnership
during any period, except for Capital Contributions, proceeds
from the liquidation, sale or refinancing of Partnership
property or of a Capital Transaction, or the proceeds of any
loan to the Partnership.
"Special Limited Partner" means BCTC 94.
"State" means the State of Texas.
"State Designation" means, with respect to the Apartment
Complex, the allocation by the Agency of Low-Income Housing
Tax Credits, as evidenced by the receipt by the Partnership of
IRS Form 8609s executed by the Agency as to each of the
buildings constituting the Apartment Complex.
"Subordinated Loan" means any loan made by the General
Partners to the Partnership pursuant to Section 8.17.
"Substantial Completion" means the date that the
Partnership receives certificates of substantial completion
issued by the inspecting architect, and all necessary
permanent certificates of occupancy from the applicable
governmental jurisdiction(s) or authority(ies), in each case
for one hundred per cent (100%) of the apartment units in the
Apartment Complex.
"Substitute Limited Partner" means any Person admitted to
the Partnership as a Limited Partner pursuant to Section 9.03.
"Surplus Cash" means any cash from all sources remaining
at the end of an annual fiscal period (i) after the payment
(on a thirty day current basis) of (a) all sums due or
currently required to be paid under the terms of the Mortgage
Loan, (b) any amounts required to be deposited in the Reserve
Fund for Replacements, and (c) all obligations of the
Apartment Complex, including operating expenses and escrow
deposits for taxes and insurance, other than the Mortgage
Loan; and (ii) after the segregation of (a) an amount equal to
the aggregate of all special funds required to be maintained
by the Apartment Complex, and (b) all tenant security deposits
held, together with accrued interest thereon payable to the
tenant pursuant to the laws of the State.
"Tax Credit" means the Low-Income Housing Tax Credit.
ARTICLE III TC "ARTICLE III" \f C \l "1" .
PURPOSE AND BUSINESS OF THE PARTNERSHIP TC "PURPOSE AND
BUSINESS OF THE PARTNERSHIP" \f C \l "1"
3.01. Purpose of the Partnership TC "3.01. Purpose
of the Partnership" \f C \l "2" . The Partnership has been
organized exclusively to acquire the Land, and to develop,
finance, construct, own, maintain, operate and sell or
otherwise dispose of the Apartment Complex, in order to obtain
long-term appreciation, cash income, Tax Credits and tax
losses.
3.02. Authority of the Partnership TC "3.02.
Authority of the Partnership" \f C \l "2" . 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 Extended Use Agreement and
the other Project Documents, so long as the Extended Use
Agreement and the other Project Documents, as applicable,
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, provided, however, that the Mortgage Loan and
any evidences of indebtedness thereof and any documents
amending, modifying or replacing it, shall have the legal
effect that the Partnership and the Partners shall have
no personal liability for the repayment of the principal
of or payment of interest on the Mortgage Loan or other
such indebtedness, and that the sole recourse of any
lender with respect to the principal thereof and interest
thereon shall be to the property securing the Mortgage
Loan or other such indebtedness; except that the
Partnership and any Partner shall be personally
responsible (i) for funds or property of the Apartment
Complex coming into such party's hands, which, by the
terms of the Project Documents it is not entitled to
retain, and (ii) for such party's own acts and deeds, or
the acts and deeds of others which it has authorized, in
violation of the provisions of the Project Documents;
(f) maintain and operate the Apartment Complex,
including hiring the Management Agent (which Management
Agent may be any of the Partners or an Affiliate thereof)
and entering into any agreement for the management of the
Apartment Complex during its rent-up and after its rent-
up period;
(g) subject to the approval of the Agency and/or
the Lender, if required, and to other limitations
expressly set forth elsewhere in this Agreement,
negotiate for and conclude agreements for the sale,
exchange, lease or other disposition of all or
substantially all of the property of the Partnership, or
for the refinancing of any mortgage loan on the property
of the Partnership;
(h) enter into the Extended Use Agreement with the
Agency, providing for regulations with respect to rents,
profits, dividends and the disposition of property;
(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 Agreement; and
(j) do any and all other acts and things necessary
or proper in furtherance of the Partnership business.
ARTICLE IV. TC "ARTICLE IV." \f C \l "1"
REPRESENTATIONS, WARRANTIES AND COVENANTS;
DUTIES AND OBLIGATIONS TC "REPRESENTATIONS, WARRANTIES AND
COVENANTS; DUTIES AND OBLIGATIONS" \f C \l "1"
4.01. Representations, Warranties and Covenants Relating
to the Apartment Complex and the Partnership TC "4.01.
Representations, Warranties and Covenants Relating to the
Apartment Complex and the Partnership" \f C \l "2" . As of
the Admission Date, the General Partners hereby represent,
warrant and covenant to the Partnership and to the Partners
that:
(a) the construction and development of the
Apartment Complex has been undertaken and shall be completed
in a timely and workmanlike manner in accordance with (i) all
applicable requirements of the Construction Loan and the
Mortgage Loan, (ii) all applicable requirements of all
appropriate governmental entities, the violation of which
would have, or would be likely to have, a material adverse
effect on the Apartment Complex or the Partnership, and (iii)
the plans and specifications of the Apartment Complex that
have been or shall be hereafter approved by the Construction
Lender and any applicable governmental entities, as such plans
and specifications may be changed from time to time with the
approval of the Construction Lender and any applicable
governmental entities, if such approval shall be required;
(b) to the best of their knowledge after due
inquiry, at the time of commencement of construction, at the
Initial Closing and on the Admission Date, the Land was, is
and will be properly zoned for the Apartment Complex, they
have obtained all consents, permissions and licenses required
by all applicable governmental entities, and the Apartment
Complex conforms and will conform to all applicable federal,
state and local land use, zoning, environmental and other
governmental laws and regulations, the violation of which
would have, or would be likely to have, a material adverse
effect on the Apartment Complex or the Partnership;
(c) all appropriate public utilities, including
sanitary and storm sewers, water, gas and electricity, are or
will be available and will be operating properly for all units
in the Apartment Complex at the time of first occupancy of
such units;
(d) at the Initial Closing and at the Admission
Date, good and marketable fee simple title to the Apartment
Complex was, is and will be held by the Partnership, and title
insurance policies acceptable to the Construction Lender, in
the amount of the replacement cost of the Apartment Complex,
which amount shall not be less than the aggregate of the
principal amount of the Mortgage Loan and the Capital
Contributions of the Partners (as to the Partnership) and the
principal amount of the Construction Loan (as to the Lender),
in favor of the Partnership and the Construction Lender,
respectively, will be or were issued at or prior to the
Admission Date or the Initial Closing, as applicable, and
shall remain in full force and effect, subject only to such
easements, covenants, restrictions and such other exceptions
which are acceptable to the Construction Lender and the
Special Limited Partner; at the Final Closing, a title
insurance policy or endorsement thereto, acceptable to the
Lender, in the principal amount of the Mortgage Loan, shall be
issued in favor of the Lender;
(e) at and after the Final Closing, there is and
shall be no direct or indirect personal liability of the
Partnership or of any of the Partners for the repayment of the
principal of or payment of interest on the Mortgage Loan, and
the sole recourse of the Lender under the Mortgage Loan, with
respect to the principal thereof and interest thereon, shall
be to the property securing the indebtedness;
the Partners hereby acknowledge and agree that
under the circumstances and to the extent provided for in the
provisions of the Project Documents which have been approved
by the Investment Partnership, the Partnership and any Partner
may be liable for some acts and shall be personally
responsible for such party's own fraudulent acts and deeds, or
the acts and deeds of others which it has authorized, in
violation of the provisions of the Project Documents;
(f) they are 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 any of them, 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 or
of the Apartment Complex;
(g) other than as previously disclosed to the
Investment Partnership, neither they nor any Affiliate of any
of them nor the Partnership, have entered, or shall enter,
into any agreement or contract for the payment of any Mortgage
Loan discounts, additional interest, yield maintenance or
other interest charges or financing fees or any agreement
providing for the guarantee of payment of any such interest
charges or financing fees relating to the Mortgage Loan; in no
event will it or the Partnership enter into any such agreement
or guaranty of any kind whatsoever (such as an escrow
arrangement or letter of credit arrangement) which would
subject the Partnership or any of the Partners to personal
liability as to the Mortgage Loan;
(h) to the best of their knowledge after due
inquiry, 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 or
it or its Affiliates, any provision of any indenture,
agreement, or other instrument to which the Partnership or
they are 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;
(i) the Construction Contract has been entered into
between the Partnership and the Contractor; no other
consideration or fee shall be paid to the Contractor other
than the amounts set forth in the Construction Contract or as
evidenced by change orders approved by the Lender, and as
otherwise disclosed in writing to and approved by the Special
Limited Partner;
(j) they shall cause all completion assurance
requirements of the Construction Lender to be satisfied by
them and/or the Contractor;
(k) they shall cause the following insurance
coverages insuring the Partnership and covering the Land and
the Apartment Complex, to be established and maintained in
full force and effect during the term of the Partnership,
except as otherwise provided below:
(i) at the Initial Closing; (A) a builder's
risk policy, on a completed value form based on the
full replacement cost of the Apartment Complex with
a maximum deductible of $10,000; and (B) public and
general liability insurance (on the "Commercial
General Liability" form) with limits of not less
than $1,000,000 per occurrence and $2,000,000 in the
aggregate, on an occurrence basis form, with not
less than $4,000,000 per occurrence umbrella
coverage;
(ii) during construction and upon completion of
the Apartment Complex, hail, wind or hurricane
insurance coverage;
(iii) upon completion of the Apartment
Complex and at the time of the initial occupancy:
(A) all risks insurance (including ordinance or law
coverage) for the full replacement value of the
Apartment Complex (excluding the value of the Land,
site utilities, landscaping and foundations); such
all risks coverage shall replace the builder's risk
policy described in (i)(A) above and shall have a
maximum deductible of $10,000; (B) business
interruption/loss of rents insurance, in an amount
equal to not less than nine (9) months' scheduled
rents as to the Apartment Complex; (C) boiler and
machinery coverage of $2,000,000 or the insurable
value of the improvements, whichever is lesser; (D)
motor vehicle liability insurance (covering non-
owned and hired automobile, as well as any owned
vehicles) with a limit of not less than $1,000,000
liability coverage per occurrence for bodily injury
and not less than $250,000 for property damage; (E)
worker's compensation insurance in accordance with
state statute; and (F) crime and dishonesty
insurance coverage with respect to any employee of
the Partnership or the Management Agent as required
by state statute;
(iv) at all times, in addition to and not in
substitution of any of the coverages provided for in
(i), (ii) and (iii) above, all such other or
additional coverages as shall be required by the
Lender; all of the aforesaid insurance policies
shall be: (x) with insurers, and on terms and
conditions, satisfactory to the Lender, and to the
Investment Partnership; and (y) paid for out of
assets of the Partnership; and
(v) The Investment Partnership will be named
as an additional insured and certificate holder with
respect to each above-described insurance policy,
and such insurance shall not be subject to
cancellation without thirty (30) days prior written
notice to the Investment Partnership; each insurance
policy hereunder shall be from an insurance company
rated A+ (Superior) or higher by A.M. Best, and
certificates of insurance on Accord 27 must be
provided to the Investment Partnership annually.
(l) neither they on behalf of the Partnership, nor
the Partnership, has incurred any financial responsibility
with respect to the Apartment Complex prior to the date of
execution of this Agreement, other than that disclosed to the
Investment Partnership or obligations which will be fully
satisfied at or prior to the Initial Closing;
(m) at the Admission Date, at the Initial Closing
and at the Final Closing, the Partnership was, is and will
continue to be a valid limited partnership, duly organized
under the laws of the Commonwealth of Virginia and duly
authorized by the State of Texas to transact business therein,
had, has and shall continue to have full power and authority
to acquire the Land and the Apartment Complex, and to develop,
construct, 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;
(n) no restrictions on the sale or refinancing of
the Apartment Complex, other than the restrictions to be set
forth in the Extended Use Agreement, and the limitations
applicable under the Low-Income Housing Tax Credit program
pursuant to Section 42 of the Code, 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;
(o) 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;
(p) the Projected Credits applicable to the
Apartment Complex are as set forth in the definition of the
term "Projected Credit";
(q) to the best of their knowledge after due
inquiry, no event of Bankruptcy has occurred with respect to
either of the General Partners, any of the Guarantors or any
of their respective Affiliates;
(r) no event has occurred which has caused, and the
General Partners have not acted in any manner which will
cause: (i) the Partnership to be treated for federal income
tax purposes as an association taxable as a corporation,
(ii) the Partnership to fail to qualify as a limited
partnership under the Act, or (iii) the Investment Partnership
to be liable for Partnership obligations; and
(s) they have not sold, transferred, assigned or
pledged the Limited Partnership Interests to any other
Person(s), and it is under no obligation or agreement to sell,
transfer, assign or pledge such Limited Partnership Interests
to any Persons except BCTC IV or BCTC 94.
4.02. Duties and Obligations Relating to the Apartment
Complex and the Partnership TC "4.02. Duties and Obligations
Relating to the Apartment Complex and the Partnership" \f C \l
"2" . The General Partners shall have the following duties
and obligations with respect to the Apartment Complex and the
Partnership:
(a) they shall use their best efforts to ensure
that 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 Agreement,
(ii) issuance of all necessary certificates of occupancy,
including all governmental approvals required to permit
occupancy of all of the apartment units in the Apartment
Complex, (iii) Initial Closing and Final Closing,
(iv) compliance with obligations arising from representations
made in the Tax Credit application, including (A) reserving 18
units for handicapped or developmentally disabled households;
and (B) reserving 34 units for households earning no more than
50% of area median gross income; and (C) providing supportive
services to tenants through local tax-exempt organizations;
and (v) compliance with all provisions of the Project
Documents;
(b) while conducting the business of the
Partnership, they shall not act in any manner which they know
or should have known after due inquiry will (i) cause the
termination of the Partnership for federal income tax purposes
without the Consent of BCTC 94, or (ii) cause the Partnership
to be treated for federal income tax purposes as an
association taxable as a corporation;
(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, and (ii) the rental of all units in the
Apartment Complex comply with the tenant income limitations
and other restrictions under the Rent Restriction Test and as
set forth in the Extended Use Agreement;
(d) they 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 they 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 Construction Loan
and the Construction Mortgage, or the Mortgage Loan and the
Mortgage, and any additional security agreements executed in
connection therewith;
(f) they will execute on behalf of the Partnership
all documents necessary to elect, pursuant to Sections 732,
743 and 754 of the Code, to adjust the basis of the
Partnership's property upon the request of BCTC 94, if, in the
opinion of BCTC 94, such election would be advantageous to the
Investment Partnership;
(g) they guaranty the payment by the Partnership of
the Development Fee pursuant to the terms of Section 8.10; and
(h) they shall, during and after the period in
which they are a Partner, provide the Partnership with such
information and sign such documents as are necessary for the
Partnership to make timely, accurate and complete submissions
of federal and state income tax returns; and
(i) they shall cause the Partnership to obtain,
within sixty (60) days after the occurrence of Substantial
Completion: (i) an up-to-date Phase I environmental survey
with respect to the Land; and (ii) such further environmental
reports or analyses as may be necessary or appropriate to
address any environmental matters disclosed by the Phase I
survey (the survey, reports and analyses described in clauses
(i) and (ii) above are hereinafter referred to collectively as
the "Updated Environmental Report"); preparation of the
Updated Environmental Report shall be an expense of the
Partnership, and a copy thereof shall be furnished promptly to
BCTC 94.
ARTICLE V. TC "ARTICLE V." \f C \l "1"
PARTNERS, PARTNERSHIP INTERESTS AND OBLIGATIONS
OF THE PARTNERSHIP TC "PARTNERS, PARTNERSHIP INTERESTS AND
OBLIGATIONS OF THE PARTNERSHIP" \f C \l "1"
5.01. Partners, Capital Contributions and Partnership
Interests TC "5.01. Partners, Capital Contributions and
Partnership ▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) The General Partners, their principal addresses
or places of business, their Capital Contributions and
Percentage Interests are as follows:
Fort Bend National Housing, L.L.C. $ 49
0.49%
c/o National Housing Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Realty, Inc. $ 51
0.51%
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) (i) The Limited Partner, its principal office
or place of business, its Capital Contributions and its
Percentage Interest are as follows:
Boston Capital Tax
98.99%
Credit Fund IV L.P. $3, 940,022, as more
specifically set forth
c/o Boston Capital Partners, Inc. in
subparagraph (c)
One Boston Place, 21st Floor immediately below
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(ii) The Special Limited Partner, its principal
office or place of business, its Capital Contribution and its
Percentage Interest are as follows:
BCTC 94, Inc. $ 10.00
0.01%
c/o Boston Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) Subject to the provisions of this Agreement,
including without limitation, the provisions of Sections
5.01(d), 5.01(e) and 5.03, the Investment Partnership shall be
obligated to make Capital Contributions to the Partnership in
the aggregate amount of $3,940,022, in four installments (the
"Installments"), which Installments shall be due and payable
in cash by the Investment Partnership, solely from Capital
Contributions of its investor limited partners to the
Investment Partnership, as follows:
(i) $100 upon the latest to occur of (A) the
Admission Date, or (B) receipt by BCTC 94 of the Mortgage Loan
Commitment, or (C) receipt by BCTC 94 of the legal opinion
provided for in Section 5.04(a) of this Agreement, or (D) the
making by BCTC IV to the Partnership of the BCTC IV Loan (the
"First Installment");
(ii) $1,477,459 (plus an amount equal to all
interest accrued on the BCTC IV Loan through the date on which
the Second Installment is made) upon the later of (A) the
Initial Closing, or (B) issuance to the Partnership of all
required and necessary building permits as to the Apartment
Complex by the appropriate governmental instrumentality(ies),
and receipt by BCTC 94 of copies thereof, or (C) repayment by
the Partnership of $1,477,459 of the principal balance of the
BCTC IV Loan and all interest accrued thereon to date (it
being understood that this principal amount is to be repaid
from the proceeds of the Second Installment (the "Second
Installment");
(iii) $1,871,460 (plus an amount equal to all
accrued and previously unpaid interest on the BCTC IV Loan)
upon the latest to occur of (A) Substantial Completion, or
(B) receipt by BCTC 94 of a certification by the Accountants
of the construction and development costs of the Apartment
Complex and the Eligible Basis of the Apartment Complex for
purposes of Tax Credits ("Cost Certification"), or
(C) repayment by the Partnership of the entire outstanding
balance of principal and interest on the BCTC IV Loan (it
being understood that the principal of the BCTC IV Loan is to
be repaid by the Partnership from the proceeds of this Third
Installment), or (D) receipt by BCTC 94 of reports of radon
tests as to the Land which reports are acceptable to BCTC 94
in the exercise of its reasonable judgment, or
(E) satisfaction of all of the conditions to payment of the
Second Installment (the Third Installment"); and
(iv) $591,003 upon the latest to occur of
(A) the Initial 100% Occupancy Date, or (B) the occurrence of
Rental Achievement, or (C) the Final Closing, or (D) receipt
by BCTC 94 of the legal opinion provided for in
Section 5.04(b) of this Agreement, or (E) achievement of State
Designation, or (F) satisfaction of all conditions to the
payment of the First Installment, the Second Installment, and
the Third Installment (the "Fourth Installment").
As an additional condition precedent to each payment set
forth above other than the First Installment, the General
Partners shall, not less than ten (10) days prior to the time
any Installment is due, give BCTC 94 Notice in the form of a
written certification (the "Payment Certificate") that:
[A] the representations, warranties and covenants given by the
General Partners in Section 4.01(a) are valid and accurate,
where still applicable, with respect to the General Partner,
the Partnership and/or the Apartment Complex, as of the date
of such certificate, and [B] to the best of its knowledge,
after due inquiry, no condition exists which would, pursuant
to Section 5.03, entitle the Investment Partnership to
withhold the payment of such Installment. Based upon the
giving of such Payment Certificate, such Installment shall be
made on the due date therefor, or if such Payment Certificate
is not timely given, then within fourteen (14) days after
receipt of such Payment Certificate.
(d) (i) Upon the occurrence of Cost Certification
and State Designation, if ninety-nine and nine tenths per cent
(99.9%) 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
Credits (the "Allocation Differential"), then unless such
reduction is a result of a transfer by the Investment
Partnership of its interest, the Capital Contributions
of the Investment Partnership shall be reduced by the
"Adjustment Amount". The Adjustment Amount shall be equal to
the Allocation Differential multiplied by seventy-four and
fifteen one-hundredths per cent (74.15%). Any such reduction
in Capital Contributions shall be applied to reduce the Second
Installment, the Third Installment, or the Fourth Installment,
as applicable. In the event that there is a reduction in
Capital Contributions equal to the Adjustment Amount, then the
amount of the Projected Credits shall be reduced to reflect
the Allocation Differential, and thereafter shall be referred
to as the "Revised Projected Credits".
(ii) If at any time the Accountants determine
that, for any fiscal year or portion thereof during the
Partnership's operation, and ending on the date five (5) years
from and after the date of Substantial Completion (the
"Reduction Period"), the Actual Credit for such fiscal year or
portion thereof is less than the Projected Credit, or the
Revised Projected Credit, if applicable, applicable to such
fiscal year or portion thereof, then (unless such reduction is
a result of the transfer by the Investment Partnership of its
Interest) 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
difference between the Projected Credit, or the Revised
Projected Credit, if applicable, and the Actual Credit
multiplied by eighty per cent (80%), 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. In the event that State Designation
occurs in a year in which a Credit Shortfall occurs pursuant
to this Section 5.01(d)(ii), the Adjustment Amount pursuant to
Section 5.01(d)(i) shall be taken into account prior to any
reductions are made pursuant to this Section 5.01(d)(ii).
(iii) In the event that, for any reason, at
any time after the Reduction Period, the amount of the Actual
Credit shall be less than the Projected Credit (or the Revised
Projected Credit, if applicable) with respect to any fiscal
year during the Partnership's operation by an amount which is
greater than five per cent (5%) of such applicable Projected
Credit (or the applicable Revised Projected Credit, if
applicable) (such difference being hereinafter referred to as
a "Credit Shortfall") (unless such reduction is a result of
the transfer by the Investment Partnership of its Interest),
the Investment Partnership shall be treated as having made a
constructive advance to the Partnership with respect to such
year (a "Credit Recovery Loan"), which shall be deemed to have
been made on January 1 of such year, in an amount equal to the
sum of (A) the Credit Shortfall for such year plus (B) the
amount of any recapture, interest or penalty payable by the
limited partners of the Investment Partnership (assuming pass-
through of all such liability in the year incurred and a tax
rate equal to the maximum individual rate applicable in such
year) as a result of the Credit Shortfall for such year.
Credit Recovery Loans shall be deemed to bear simple (not
compounded) interest, from the respective dates on which such
principal advances are deemed to have been made under this
Section 5.01(d)(iii) at 9% per annum. Credit Recovery Loans
shall be repayable by the Partnership as provided in Section
11.04(c).
(iv) In the event that the amount of the Actual
Credit for 1999 is greater than the Projected Credit for 1999,
the Capital Contribution of the Investment Partnership shall
be increased by an amount equal to seventy per cent (70%) of
the amount by which the Actual Credit for 1999 exceeds the
Projected Credit for 1999 (but not in excess of $50,000) (the
"Additional Capital Contribution"). Any such Additional
Capital Contribution shall be due and payable by the
Investment Partnership within thirty (30) days of its receipt
of Notice thereof (together with appropriate supporting
documentation).
(v) In the event that, as a result of an
increase in the Qualified Basis and the Eligible Basis of the
Apartment Complex for purposes of Tax Credits (which increase
is verified by the Accountants to the reasonable satisfaction
of the Investment Partnership), the Partnership receives a
duly-authorized, valid and binding allocation, from the
Agency, of an additional amount of Tax Credits with respect to
the Apartment Complex (the "Additional Credits"), the
Investment Partnership agrees that it will either, in its sole
and absolute discretion: (A) make additional Capital
Contributions to the Partnership in an amount determined on
the same terms and conditions as are applicable to the
investment being made by the Investment Partnership pursuant
to this Agreement, applied to the increase in the amount of
the Projected Low-Income Tax Credit resulting from the
Additional Credits (the "Additional Capital Contributions");
or (B) reduce its allocation of profits, losses and credits
from the Partnership, pursuant to Section 11.01(a), to such
percentage as shall permit it to realize its proportionate
share of the full amount of the Projected Credit, but no
portion of the Additional Credits. Any Additional Capital
Contributions payable as aforesaid shall be included ratably
over the remaining Installments due to be paid by the
Investment Partnership, unless otherwise determined by the
Investment Partnership in its sole discretion; provided,
however, that if no further Installments remain to be paid,
then the entire amount of such Additional Capital
Contributions shall be paid by the Investment Partnership to
the Partnership within thirty (30) days after the
determination of the amount thereof by the Investment
Partnership as aforesaid. The General Partners agree that, in
the situation described above in this Section 5.01(d)(v), it
shall pay all costs associated with the preparation of
documents necessary or desirable to implement the foregoing
provisions of this Section 5.01(d)(v), including the
reasonable fees and expenses of Peabody & ▇▇▇▇▇, as counsel to
the Investment Partnership.
(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 TC "5.02. Return
of Capital Contribution" \f C \l "2" . Except as provided in
this Agreement, no Partner shall be entitled to demand or
receive the return of its Capital Contribution.
5.03. Withholding of Capital Contributions Upon Default
TC "5.03. Withholding of Capital Contributions Upon Default"
\f C \l "2" . In the event that: (a) the General Partners
or any successor General Partners shall not have substantially
complied with any material provisions under this Agreement,
after Notice from BCTC 94 of such noncompliance and failure to
cure such noncompliance within a period of thirty (30) days
(or such longer period of time as shall be reasonably
necessary to effect such cure, if such cure cannot be effected
within thirty (30) days and the General Partners are
diligently pursuing such cure) from and after the date of such
Notice, or (b) the Construction Lender or the Lender shall
have declared the Partnership to be in default under the
Construction Loan or the Mortgage Loan, as applicable, or
(c) foreclosure proceedings shall have been commenced against
the Apartment Complex, then the Partnership and the General
Partners shall be in default of this Agreement, and the
Investment Partnership, at its sole election and upon written
Notice to the General Partners, may withhold payment of any
Installment otherwise payable to the Partnership.
All amounts so withheld by the Investment Partnership
under this Section 5.03 shall be promptly released to the
Partnership only after the General Partners or the Partnership
have cured the default justifying the withholding, as
demonstrated by evidence reasonably acceptable to BCTC 94.
5.04. Legal Opinions TC "5.04. Legal ▇▇▇▇▇▇▇▇" \▇ ▇ \▇
"▇" . (▇) As a condition precedent to payment of the First
Installment, the Investment Partnership shall have received
the opinions of ▇▇▇▇▇▇▇, Delafield & Wood, of Washington,
D.C., and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esquire, of Houston, Texas, special
counsel to the Partnership, the General Partners, the
Developer and the Guarantors, which opinions shall explicitly
state that Peabody & ▇▇▇▇▇, of Washington, D.C., counsel to
the Investment Partnership, may explicitly rely upon them,
that:
(i) the Partnership is a duly formed and validly
existing limited partnership under the Act, is duly authorized
to do business in the State, and the Partnership has full
power and authority to own and operate the Apartment Complex
and to conduct its business hereunder; the Investment
Partnership has been validly admitted as a Limited Partner of
the Partnership entitled to all the benefits of a Limited
Partner under this Agreement, and the Interest of the
Investment Partnership in the Partnership is the Interest of a
limited partner with no personal liability for the obligations
of the Partnership;
(ii) HRI, FBNH and NHDC each is duly and validly
organized; HRI and NHDC each is validly existing in good
standing as a corporation and FBNH is validly existing in good
standing as a limited liability company, all under the laws of
the Commonwealth of Virginia; and HRI, FBNH and NHDC each is
duly authorized to do business in the State, with full power
and authority to enter into and perform its respective
obligations hereunder;
(iii) each of the Guarantors: (A) is an individual
resident of the Commonwealth of Virginia, (B) is not a minor,
(C) has not been judicially declared incompetent, and (D) has
the full power and authority to enter into and perform his
respective obligations hereunder;
(iv) execution of this Agreement by the General
Partners, by the Developer and by each of the Guarantors has
been duly and validly authorized by or on behalf of each of
them and, having been executed and delivered in accordance
with its terms, this Agreement constitutes the valid and
binding agreement of the General Partners, the Developer and
each of the Guarantors, enforceable in accordance with its
terms;
(v) based solely on the owner's title insurance
policy issued to the Partnership as to the Apartment Complex
and referred to in Section 4.01(d) (the "Title Policy") and
the certification of the General Partners attached to
counsel's opinion, none of the liens, charges, easements,
restrictions and encumbrances as are set forth in the Title
Policy materially interfere with or adversely affect the
development or operation of the Apartment Complex;
(vi) to the best of their knowledge, there are no
defaults existing with respect to any of the Project
Documents; and
(vii) to the best of their knowledge, no event of
Bankruptcy has occurred with respect to the Partnership,
either of the General Partners, the Developer or any of the
Guarantors.
(b) As a condition precedent to payment of the Third
Installment, the Investment Partnership shall have received
the opinions of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, of Washington,
D.C., and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esquire, of Houston, Texas, special
counsel to the Partnership, the Developer and the Guarantors,
which opinions shall explicitly state that Peabody & ▇▇▇▇▇, of
Washington, D.C., counsel to the Investment Partnership, may
explicitly rely upon them, that:
(i) there is no direct or indirect personal
liability of the Partnership or of any of the Partners for the
repayment of the principal of and payment of interest on the
Mortgage Loan, and the sole recourse of the Lender under the
Mortgage Loan, with respect to the principal thereof and
interest thereon, shall be to the property securing the
indebtedness;
(ii) none of the liens, charges, easements,
restrictions and encumbrances as are set forth in the title
insurance policy issued to the Partnership as to the Apartment
Complex materially interfere with or adversely affect the
development or operation of the Apartment Complex;
(iii) to the best of their knowledge, there are no
defaults existing with respect to any of the Project
Documents; and
(iv) to the best of their knowledge, no event of
Bankruptcy has occurred with respect to the Partnership,
either of the General Partners, the Developer or any of the
Guarantors.
5.05. Repurchase Obligation TC "5.05. Repurchase
▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) If (i) the Partnership has not received State
Designation effective as of the year that the Apartment
Complex is placed in service; (ii) Substantial Completion has
not occurred by December 31, 1999; (iii) Final Closing has not
occurred by the maturity date of the Construction Loan;
(iv) the Partnership fails to meet the Minimum Set-Aside Test
and the Rent Restriction Test by the end of the first year of
the Credit Period, or at any time prior to the date which is
five (5) years from and after the date upon which the
Partnership initially met the Minimum Set-Aside Test and the
Rent Restriction Test, and such failure is not cured within
any applicable cure period; or (v) an event of default
described in Section 5.03(c) shall exist, then the General
Partners shall, within 15 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 return 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 the mailing
date of Notice by 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) Upon receipt by the Investment Partnership of
any such payment of the Invested Amount, the Interest of the
Investment Partnership shall terminate, and the General
Partners shall indemnify and hold harmless the Investment
Partnership from any losses, damages, and/or liabilities to
which the Investment Partnership (as a result of its
participation hereunder) may be subject.
5.06. Asset Management Fee TC "5.06. Asset Management
Fee" \f C \l "2" . The Partnership shall pay to Boston
Capital, or an affiliate thereof, an Asset Management Fee in
the amount of $5,000 per annum commencing in 1999 for its
services in assisting with the preparation of the reports
required pursuant to Section 13.04. The Asset Management Fee
shall be payable from first available Cash Flow and as
provided in Section 11.01(a); provided, however, that if in
any fiscal year commencing with 1999, Cash Flow is
insufficient to pay the full amount of the Asset Management
Fee, the unpaid portion thereof shall accrue and be payable on
a cumulative basis in the first year in which there is
sufficient Cash Flow, or from the proceeds of a Capital
Transaction, as provided in Sections 11.01 and 11.04.
5.07. BCTC IV Loan. TC "5.07. BCTC IV Loan" \f C \l
"2" Upon the occurrence of the Admission Date, BCTC IV
shall make the BCTC IV Loan to the Partnership in the
principal amount of $2,954,917. Concurrently with the making
of the Second Installment by the Investment Partnership, the
Partnership shall repay the entire outstanding balance of
principal of the BCTC IV Loan from the proceeds of the Second
Installment, and the entire amount of accrued and unpaid
interest on the BCTC IV Loan from funds supplied by the
General Partner.
5.08. Default by Investment Partnership in Making
Capital Contributions. TC "5.08. Default by Investment
Partnership in Making Capital Contributions." \f C \l "2"
If the Investment Partnership fails to pay any Installment of
its Capital Contributions, or any portion thereof, as and when
due pursuant to the terms and conditions of this Agreement,
the General Partners shall give Notice to the Investment
Partnership that it is in default under this Agreement. If
the default is not cured within a period of thirty (30) days
after the receipt by the Investment Partnership of the
aforesaid Notice, the General Partners shall have the option
to: (a) purchase, or cause a third party to purchase, the
Investment Partnership's Interest within ninety (90) days
following the expiration of the aforesaid thirty (30)-day cure
period, for an amount equal to the Investment Partnership's
paid-in Capital Contributions (with the payment of such amount
to be made upon the transfer of the Investment Partnership's
Interest); or (b) reduce the Investment Partnership's Interest
by an amount determined by multiplying the Interest of the
Investment Partnership by a fraction, the numerator of which
is one hundred fifty per cent (150%) of the amount of the
Installment or portion thereof due from the Investment
Partnership and then in default, and the denominator of which
is the originally agreed-upon Capital Contributions of the
Investment Partnership (as adjusted pursuant to the provisions
of Section 5.01(d), as and to the extent applicable), and the
General Partners shall thereafter be authorized to admit one
or more additional limited partners for the remaining
Interest(s). In the event that the General Partners shall
elect to reduce the Investment Partnership's Interest as
provided in clause (b) above in this Section 5.08, nothing
herein shall preclude a damage remedy being available to the
General Partners, with respect to the default of the
Investment Partnership, in the amount of the difference, if
any, between the amount of any unpaid Capital Contributions of
the Investment Partnership, and the amount realized by the
Partnership upon the sale by the General Partners of the
Interest(s) created by such reduction in the Investment
Partnership's Interest; provided, however, that the amount of
such damages shall not exceed the difference between the then-
current fair market value of the remaining Interest and the
original agreed-upon Capital Contributions of the Investment
Partnership (as adjusted pursuant to the provisions of
Section 5.01(d), as and to the extent applicable); and,
provided, further, that under no circumstances shall the
liability of the Investment Partnership for any such default
be in excess of the amount of Capital Contributions payable by
the Investment Partnership to the Partnership, under the terms
of this Agreement, at the time of such default.
ARTICLE VI. TC "ARTICLE VI." \f C \l "1"
CHANGES IN PARTNERS TC "CHANGES IN PARTNERS" \f C \l "1"
6.01. Withdrawal of a General Partner TC "6.01.
Withdrawal of a General ▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) 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, 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 before such
withdrawal, sale, transfer or assignment shall have become
effective, but shall be free of any obligation or liability
incurred on account of the activities of the Partnership from
and after the time such withdrawal, sale, transfer or
assignment shall have become effective.
6.02. Admission of a Successor or Additional General
Partners TC "6.02. Admission of a Successor or Additional
General Partners" \f C \l "2" . A Person shall be admitted
as a General Partner of the Partnership only if the following
terms and conditions are satisfied:
(a) the admission of such Person shall have been
Consented to by the General Partners or its successors and by
BCTC 94, and consented to, if required, by the Lender;
provided, however, that BCTC 94 hereby Consents to the
designation by HRI and FBNH, at any time subsequent to State
Designation, of an additional General Partner which is an
Affiliate of the Guarantors, or any of them;
(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
thereof, and (ii) 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 this Agreement evidencing the admission of such
Person as a General Partner shall have been filed and all
other actions required by Section 1.05 in connection with such
admission shall have been performed;
(c) if the successor or additional Person is a
corporation, it shall have provided the Partnership with
evidence satisfactory to counsel for the Partnership of its
authority to become a General Partner, to do business in the
State and to be bound by the terms and provisions of this
Agreement; and
(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 TC "6.03.
Effect of Bankruptcy, Death, Withdrawal, Dissolution or
Incompetence of a General ▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) In the event of the Bankruptcy of a General
Partner or the withdrawal, death or dissolution of a General
Partner or an adjudication that a General Partner is
incompetent (which term shall include, but not be limited to,
insanity) the business of the Partnership shall be continued
by the other General Partner(s) (and the other General
Partners, by execution of this Agreement, expressly so agree
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 all remaining Partners, within ninety (90)
days after receiving Notice of such Bankruptcy, withdrawal,
death, dissolution or adjudication of incompetence, elects to
designate a successor General Partner(s) and continue the
Partnership upon the admission of such successor General
Partner(s) 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 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 all
remaining Partners of the Bankruptcy, death, dissolution or
declaration of incompetence of such General Partner; and
provided further that if such Bankrupt, dissolved, incompetent
or deceased General Partner is the sole remaining General
Partner, the converted Partnership Interest of such replaced
General Partner shall be ratably reduced to the extent
necessary to insure that the substitute General Partner(s)
holds a 1% Percentage Interest (as set forth in Section 5.01)
and will receive a 5% distribution pursuant to Section
11.04(g).
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 Partners' obligations
under Section 8.09 herein) of the Bankrupt, deceased,
dissolved or incompetent General Partner existing prior to the
Bankruptcy, death, dissolution or incompetence of such person
as a General Partner (whether or not such rights, obligations
or liabilities were known or had matured).
(c) If, at the time of the withdrawal, Bankruptcy,
death, dissolution or adjudication of incompetence of a
General Partner, the Bankrupt, deceased, dissolved or
incompetent General Partner was not the sole General Partner
of the Partnership, the remaining General Partner or General
Partners shall immediately (i) give Notice to the Limited
Partners of such Bankruptcy, death, dissolution or
adjudication of incompetence, and (ii) make such amendments to
this Agreement and execute and file such amendments or
documents or other instruments as are necessary to reflect the
conversion of the Interest of the Bankrupt, deceased,
dissolved or incompetent General Partner and his having ceased
to be a General Partner. The remaining General Partner or
General Partners are hereby granted an irrevocable power of
attorney to execute any or all documents on behalf of the
Partners and the Partnership and to file such documents as may
be required to effectuate the provisions of this Section 6.03.
ARTICLE VII. TC "ARTICLE VII." \f C \l "1"
ASSIGNMENT TO THE PARTNERSHIP TC "ASSIGNMENT TO THE
▇▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇"
▇▇▇ and FBNH hereby transfer and assign to the
Partnership all of their right, title and interest in and to
the Apartment Complex, including the following:
(i) all contracts with architects, contractors and
supervising architects with respect to the development of the
Apartment Complex;
(ii) all plans, specifications and working drawings,
heretofore prepared or obtained in connection with the
Apartment Complex and all governmental approvals obtained,
including planning, zoning and building permits;
(iii) any and all commitments with respect to the
Construction Loan and the Mortgage Loan; and
(iv) any other work product related to the Apartment
Complex.
ARTICLE VIII. TC "ARTICLE VIII." \f C \l "1"
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNERS TC
"RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNERS" \f C
\l "1"
8.01. Management of the Partnership TC "8.01.
Management of the ▇▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) Except as otherwise set forth in this
Agreement, the General Partners, 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 their abilities and use their best efforts to carry
out the purpose of the Partnership. In so doing, the General
Partners shall take all actions necessary or appropriate to
protect the interests of the Limited Partners and of the
Partnership. The General Partners shall devote such of their
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 and/or Agency rules and
regulations, the General Partners (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 Partners
are specifically authorized and empowered to execute and
deliver, on behalf of the Partnership, the Extended Use
Agreement, the Construction Mortgage and the Mortgage, and to
execute any and all other instruments and documents, and
amendments thereto, as shall be required in connection with
the Mortgage Loan, 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. All
decisions made for and on behalf of the Partnership by the
General Partners shall be binding upon the Partnership. No
person dealing with the General Partners shall be required to
determine their authority to make any undertaking on behalf of
the Partnership, nor to determine any facts or circumstances
bearing upon the existence of such authority.
8.02. Limitations Upon the Authority of the General
Partners TC "8.02. Limitations Upon the Authority of the
General ▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) The General Partners 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 Agreement, or any other Project
Documents;
(iii) do any act required to be approved or
ratified in writing by all Limited Partners under the Act
unless the right to do so is expressly otherwise given in this
Agreement;
(iv) rent apartments in the Apartment Complex
such that the Apartment Complex would not meet the
requirements of the Rent Restriction Test or Minimum Set-Aside
Test; or
(v) borrow from the Partnership or commingle
Partnership funds with funds of any other Person.
(b) The General Partners shall not, without the
Consent of BCTC 94, have any authority to:
(i) sell or otherwise dispose of, at any time,
all or substantially all of the assets of the Partnership,
except as and to the extent provided in Section 8.20 of this
Agreement;
(ii) make application(s) for an increase or
increases in the Mortgage Loan;
(iii) borrow in excess of $10,000 (with such
amount adjusted annually based on the Consumer Price Index) in
the aggregate at any one time outstanding on the general
credit of the Partnership, except borrowings constituting
Subordinated Loans or Credit Recovery Loans, and except as and
to the extent provided for in an approved budget pursuant to
Section 8.19 of this Agreement;
(iv) following Final Closing, construct any new
or replacement capital improvements on the Apartment Complex
which substantially alter the Apartment Complex or its use or
which are at a cost in excess of $10,000 (with such amount
adjusted annually based on the Consumer Price Index) in a
single Partnership fiscal year, except (a) replacements and
remodeling in the ordinary course of business or under
emergency conditions, or (b) construction paid for from
insurance proceeds, or (c) as and to the extent provided for
in an approved budget pursuant to Section 8.19 of this
Agreement;
(v) acquire any real property in addition to
the Apartment Complex other than easements reasonable and
necessary for the operation of the Apartment Complex; or
(vi) refinance the Mortgage Loan.
8.03. Management Purposes TC "8.03. Management
Purposes" \f C \l "2" . In conducting the business of the
Partnership, the General Partners shall be bound by the
Partnership's purpose(s) set forth in Article III.
8.04. Delegation of Authority TC "8.04. Delegation of
Authority" \f C \l "2" . The General Partners may delegate
all or any of their powers, rights and obligations hereunder,
and may appoint, employ, contract or otherwise deal with any
Person for the transaction of the business of the Partnership,
which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the
General Partners may approve.
8.05. General Partners or Affiliates Dealing with
Partnership TC "8.05. General Partners or Affiliates
Dealing with ▇▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) The General Partners or any Affiliate may act
as Management Agent on such terms and conditions permitted by
applicable Lender regulations, and may receive compensation at
the highest rates approved and permitted by the Lender at any
time.
(b) The General Partners or any Affiliates thereof
shall have the right to contract or otherwise deal with the
Partnership for the sale of goods or services to the
Partnership in addition to those set forth herein, if (A)
compensation paid or promised for such goods or services is
reasonable (i.e., at fair market value) and is paid only for
goods or services actually furnished to the Partnership, (B)
the goods or services to be furnished shall be reasonable for
and necessary to the Partnership, (C) the fees, terms and
conditions of such transaction are at least as favorable to
the Partnership as would be obtainable in an arm's-length
transaction, and (D) no agent, attorney, accountant or other
independent consultant or contractor who also is employed on a
full-time basis by the General Partners or any Affiliate shall
be compensated by the Partnership for his services.
Any contract covering such transactions shall be in
writing and shall be terminable without penalty on sixty (60)
days Notice. Any payment made to the General Partners 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 Partners 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 TC "8.06. Other Activities" \f
C \l "2" . The General Partners 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 TC "8.07.
Liability for Acts and Omissions" \f C \l "2" . No General
Partner or Affiliate thereof, or any of their officers,
directors or employees, 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 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 breach of his or its or their fiduciary duty as
General Partner with respect to such acts or omissions) shall
be paid from Partnership assets to the extent available (but
the Limited Partners shall not have any personal liability to
the General Partners under any circumstances on account of any
such loss or damage incurred by the General Partners or on
account of the payment thereof).
The General Partners, when entitled to indemnification
pursuant to this article 8.07, shall be entitled to receive,
upon application therefor, reasonable advances from the
Partnership to cover the costs of defending any proceedings
against it; provided, however, that such advances shall be
repaid to the Partnership, if the General Partners are
determined not to be entitled to indemnification under this
Article 8.07. All rights of the General Partners to
indemnification shall survive the dissolution of the
Partnership and the death, retirement, incompetency,
insolvency, bankruptcy, or withdrawal of any of the General
Partners.
The indemnification authorized by this Article 8.07 shall
include, but not be limited to, the costs and expenses
(including reasonable attorneys' fees) of the removal of any
liens affecting any property of the indemnitee as a result of
such legal action.
8.08. Disposition Fee TC "8.08. Disposition Fee" \f C
\l "2" . Upon any sale of the Apartment Complex, the
Partnership shall pay a Disposition Fee to the General
Partners, in consideration of their services to the
Partnership in arranging for and negotiating such sale, in an
amount equal to five per cent (5%) of the gross proceeds to
the Partnership of such sale of the Apartment Complex, payable
by the Partnership as provided in Section 11.04 of this
Agreement.
8.09. Construction of the Apartment Complex,
Construction Cost Overruns, Operating Deficits TC
"8.09. Construction of the Apartment Complex,
Construction Cost Overruns, Operating Deficits" \f C
\l "2"
(a) (i) The Partnership has entered into the
Construction Contract. The Managing General Partner and the
Developer, jointly and severally, shall be responsible for:
(A) achieving completion of construction of
the Apartment Complex in accordance with 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; and
(C) causing the making of the Mortgage Loan
by the Lender.
(ii) The Managing General Partner and the
Developer, jointly and severally, hereby are obligated to pay
all Excess Development Costs; the Partnership shall have no
obligation to pay any Excess Development Costs. Any funds
required by the Partnership to pay any such Excess Development
Costs shall be paid by the Managing General Partner and/or the
Developer to the Partnership for such purpose, and shall be
deemed to be, and recorded in the books and records of the
Partnership as, additional Capital Contributions by the
Managing General Partner to the Partnership; provided,
however, that if the amount of the Mortgage Loan exceeds the
amount of the Construction Loan, to the extent such excess is
not otherwise needed to pay the expenses of the Partnership,
such excess may be utilized to reimburse the Managing General
Partner for payment of Excess Development Costs.
(b) In the event that (i) at any time during the
Operating Guaranty Period an Operating Deficit shall exist,
the Managing General Partner shall provide such funds to the
Partnership as shall be necessary to pay such Operating
Deficit(s), in an aggregate amount not exceeding $196,000, in
the form of a loan to the Partnership (the "Operating Deficit
Loan(s)"); provided, however, that any funds withdrawn from
the Capital Portion of the Operating Reserve Account pursuant
to Section 8.18(b) of this Agreement and applied to pay any
Operating Deficit(s) existing during the Operating Guaranty
Period (and any amounts paid by the Guarantors pursuant to the
provisions of Section 16.08), shall reduce on a dollar-for-
dollar basis the obligation of the Managing General Partner
pursuant to this clause (i); and (ii) at any time from and
after the termination of the Operating Guaranty Period, an
Operating Deficit shall exist, the Managing General Partner
shall provide such funds to the Partnership, in a maximum
aggregate amount of $75,000, as shall be necessary to pay such
Operating Deficit(s), in the form of an Operating Deficit
Loan(s); provided, however, that any funds withdrawn from the
Cash Flow Portion of the Operating Reserve Account pursuant to
Section 8.18(b) of this Agreement and applied to pay any
Operating Deficit(s) existing after the termination of the
Operating Guaranty Period (and any amounts paid by the
Guarantors pursuant to the provisions of Section 16.08), shall
reduce on a dollar-for-dollar basis the obligation of the
Managing General Partner pursuant to this clause (ii). An
Operating Deficit Loan shall be a Subordinated Loan in
accordance with the provisions of Section 8.17; provided,
however, that an Operating Deficit Loan shall bear interest at
a rate equal to the prime rate of interest, as published in
the Wall Street Journal, plus one per cent (1%), per annum.
In the event that the Managing 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 Development Fee pursuant to
Section 8.10 of this Agreement to meet the obligations of the
Managing General Partner pursuant to this Section 8.09(b).
For the purpose of this Section 8.09(b), all expenses shall be
paid on a sixty (60) day current basis.
8.10. Development Fee TC "8.10. Development ▇▇▇" \▇ ▇
\▇ "▇" .
(▇) The Partnership has entered into a Development
Services 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 fee in the total amount of $840,588, shall be
payable by the Partnership to the Developer from the Capital
Contributions of the Investment Partnership, from any funds
released from the Operating Reserve Account pursuant to
Section 8.18(b), and from all Cash Flow remaining after
payment of all current obligations with respect to the Asset
Management Fee and the Incentive Partnership Management
Services Fee, as provided in Section 11.01(a), as follows:
(i) $316,408 from the Capital Contributions of
the Investment Partnership, payable upon receipt by the
Partnership of the Fourth Installment; and:
(ii) $524,180 together with interest thereon at
the rate of five and sixty-two one-hundredths per cent (5.62%)
per annum, from and after the occurrence of Substantial
Completion, pursuant to the promissory note to be executed by
the Partnership in favor of the Developer, from any funds
released from the Operating Reserve Account pursuant to
Section 8.18(b), and from all Cash Flow remaining after
payment of all current obligations with respect to the Asset
Management Fee and the Incentive Partnership Management
Services Fee, as provided in Section 11.01(a).
(b) In the event that, as of December 31, 2008, any
portion of the Development Fee pursuant to Section 8.10(a)
shall be unpaid for any reason, the General Partners shall
provide funds to the Partnership on such date in an amount
equal to the amount of such unpaid portion of the Development
Fee; immediately upon receipt by the Partnership of such funds
from the General Partner, the Partnership shall pay such
unpaid portion of the Development Fee to the Developer,
pursuant to Section 8.10(a). Any such funds provided to the
Partnership by the General Partners pursuant to this
Section 8.10(b) shall be deemed to be Capital Contributions by
the General Partners.
8.11. Partnership Management Fee TC "8.11. Partnership
Management Fee" \f C \l "2" . The Partnership has entered
into a Partnership Management Services Agreement with FBNH and
HRI of even date herewith for their services in managing the
business of the Partnership for the period from the date
hereof throughout the term of the Partnership. Such agreement
includes provisions to the effect that in return for their
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 FBNH and HRI, solely from the Cash
Flow of the Partnership available for distribution, and in
accordance with Section 11.01(a), an annual Partnership
Management Fee.
Such fee shall be in accordance with the provisions
of any applicable Lender regulations and shall be in an amount
equal to $32,000 per year, commencing in 2000.
8.12. Withholding of Fee Payments TC "8.12.
Withholding of Fee Payments" \f C \l "2" . In the event that
(a) the General Partners, or any successor General Partners
shall not have substantially complied with any material
provisions under this Agreement, after Notice from BCTC 94 of
such noncompliance and failure to cure such noncompliance
within a period of thirty (30) days (or such longer period of
time as shall be reasonably necessary to effect such cure, if
such cure cannot be effected within thirty (30) days and the
General Partners are diligently pursuing such cure) from and
after the date of such Notice, or (b) the Construction Lender
and/or the Lender, as applicable, shall have declared the
Partnership to be in default under the Construction Loan
and/or the Mortgage Loan, or (c) foreclosure proceedings shall
have been commenced against the Apartment Complex, then
(i) the General Partners shall be in default of this
Agreement, and the Partnership shall withhold payment of any
installment of the Development Fee payable to the Developer
and the Partnership Management Fee payable to FBNH and HRI
pursuant to Sections 8.10 and/or 8.11, and (ii) the General
Partners 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 to the Developer
and/or FBNH and HRI only after the General Partners have cured
the default justifying the withholding, as demonstrated by
evidence reasonably acceptable to BCTC 94.
8.13. Removal of Any General Partner TC "8.13. Removal
of Any General ▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) BCTC 94, acting on behalf of the Investment
Partnership, so long as the Investment Partnership is a
Partner, shall have the right to remove any General Partner
(i) for any intentional misconduct or failure to exercise
reasonable care with respect to any material matter in the
discharge of its duties and obligations as a General Partner
(provided that such violation results in a material detriment
to or an impairment of the Apartment Complex or assets of the
Partnership), or (ii) upon the occurrence of any of the
following:
(A) the General Partner shall have violated any
material provisions of the Extended Use Agreement,
or any material provisions of any other Project
Document or other document required in connection
with the Mortgage Loan, or any material provisions
of the Lender and/or Agency regulations applicable
to the Apartment Complex, which violation has not
been cured within any applicable cure period
contained in the applicable Project Document(s), and
which violation has not been explicitly waived in
writing by the Lender or the Agency, as applicable;
(B) the General Partner shall have violated any
material provision of this Agreement, or violated
any material provision of applicable law; provided,
however, that (except in the case of the
applicability of Section 8.13(a)(ii)(D) below), if
the sole violation of this Agreement is the failure
of the Investment Partnership to receive the full
amount of the Projected Credits, and any Adjustment
Amount(s) pursuant to Section 5.01(d) shall have
been paid in full in accordance with the terms
thereof, such violation shall not constitute a
material violation of this Agreement;
(C) the General Partner shall have caused the
Mortgage Loan to go into default, which default
remains uncured after the expiration of any
applicable cure period;
(D) the Actual Credit for any year of the
Partnership's operation shall be less than fifty per
cent (50%) of the Projected Credit for such year
(unless the Investment Partnership is fully
compensated in accordance with Section 5.01(d)); or
(E) the General Partner shall have conducted
its own affairs or the affairs of the Partnership in
such manner as would:
(1) cause the termination of the
Partnership for federal income tax purposes; or
(2) cause the Partnership to be treated
for federal income tax purposes as an
association, taxable as a corporation.
(b) BCTC 94 shall give Notice to all Partners of
its determination that a General Partner shall be removed.
The General Partner shall have thirty (30) days (or such
longer period as shall be reasonably necessary to effect such
cure, if such cure cannot be effected within thirty (30) days
and the General Partner is diligently pursuing such cure)
after receipt of such Notice to cure any default or other
reason for such removal, in which event it shall remain as a
General Partner. If, at the end of the applicable cure period
as aforesaid, the General Partner has not cured any default or
other reason for such removal, it shall cease to be a General
Partner, and the powers and authorities conferred on it as a
General Partner under this Agreement shall cease and the
Interest of such General Partner shall be transferred to BCTC
94 which, without further action, shall become a General
Partner; in such event, upon becoming a General Partner, such
designee shall be bound by all applicable terms and conditions
of this Agreement and the Project Documents.
(c) (i) In the event that a General Partner is
removed as aforesaid prior to the Final Closing, it shall be
and shall remain liable for all obligations and liabilities
incurred by it as a General Partner of the Partnership before
such removal shall become effective, including but not limited
to, in the case of the Managing General Partner, the
obligations and liabilities of the Managing General Partner
with respect to its obligations set forth in Section 8.09 of
this Agreement with regard to Excess Development Costs;
provided, however, that if amounts otherwise payable to the
General Partners as fees are applied to meet the obligations
of any General Partner as stated in Sections 5.03 and/or 8.09
of this Agreement, such application shall serve to reduce any
such liabilities of the General Partners or any successor,
except for any liability incurred as the result of its gross
negligence, willful misconduct, fraud or breach of its
fiduciary duties as a General Partner of the Partnership.
If a General Partner is removed as a Partner of the
Partnership prior to the Final Closing as aforesaid, neither
the Developer nor FBNH nor HRI shall be entitled to payment of
any further installments of the Development Fee or the
Partnership Management Fee which otherwise would have been due
and payable under Sections 8.10(a) and/or 8.11(a).
(ii) In the event that a General Partner is
removed as aforesaid after the Final Closing, it shall be and
shall remain liable for all obligations and liabilities
incurred by it as a General Partner of the Partnership before
such removal shall become effective, including but not limited
to a General Partner's obligations and liabilities under
Section 8.09(b) of this Agreement. If a General Partner is
removed as a Partner of the Partnership at any time after the
Final Closing, the Developer or its successor(s) shall
continue to be paid subsequent to such removal, in accordance
with the terms and conditions of this Agreement, any
installments of the Development Fee which would have otherwise
been due and payable to it pursuant to Section 8.10(a) and
which are not otherwise being withheld; provided however, upon
any such removal of a General Partner after the Final Closing,
no further installments of the Partnership Management Fee
shall be paid which are attributable to any period after such
removal.
(d) BCTC 94 hereby is granted an irrevocable power
of attorney, coupled with an interest, to execute any and all
documents on behalf of the Partners and the Partnership as
shall be legally necessary and sufficient to effect all of the
foregoing provisions of this Section 8.13. The election by
BCTC 94 to remove any General Partner under this Section shall
not limit or restrict the availability and use of any other
remedy which BCTC 94, the Investment Partnership or any other
Partner might have with respect to the General Partners in
connection with their undertakings and responsibilities under
this Agreement.
8.14. Selection of the Management Agent TC "8.14.
Selection of the Management Agent" \f C \l "2" . The
Partnership, with the approval of the Lender, if required,
shall engage such person, firm or company as the General
Partners may select, and as BCTC 94 may approve, which
approval shall not be unreasonably withheld, as the Management
Agent to manage the operation of the Apartment Complex during
the rent-up period and following Final Closing. The
Management Agent shall be paid a management fee subject to the
approval of the Lender, if required. The Management Agreement
and the management plan for the Apartment Complex shall be in
a form acceptable to the Agency and/or the Lender, if
required, and reasonably acceptable to BCTC 94. Housing
Management Services, Inc. is approved by the parties hereto as
the initial Management Agent.
8.15. Removal of the Management Agent TC "8.15.
Removal of the Management Agent" \f C \l "2" . The General
Partners (i) may, upon receiving any required approval of the
Lender, dismiss the Management Agent as the entity responsible
for the Apartment Complex under the terms of the Management
Agreement, and (ii) at the request of BCTC 94, shall remove
the Management Agent in the event that the Management Agent is
declared Bankrupt, is dissolved, or makes an assignment for
the benefit of its creditors, or for any intentional
misconduct by the Management Agent or failure to exercise
reasonable care in the discharge of its duties and obligations
as Management Agent (subject to the fulfillment and expiration
of any notice and/or opportunity to cure provisions of the
Management Agreement), including, without limitation, for any
action or failure to take any action which:
(a) violates in any material respect any provision
of the Management Agreement, and/or any provision of the
Extended Use Agreement applicable to the Apartment Complex, or
the Lender-approved management plan for the Apartment Complex,
or
(b) violates in any material respect any provision
of this Agreement or provision of applicable law, or
(c) causes the Apartment Complex to be operated in
a manner which, if continued, would give rise to an event
which would cause a recapture of Tax Credits.
8.16. Replacement of the Management Agent TC "8.16.
Replacement of the Management Agent" \f C \l "2" . Upon the
removal of the Management Agent as the entity responsible for
the management of the Apartment Complex, a substitute
Management Agent shall be named by the General Partners,
subject to the approval of the Lender, if required, and the
approval of BCTC 94.
8.17. Loans to the Partnership TC "8.17. Loans to the
Partnership" \f C \l "2" . In the event that additional
funds are required by the Partnership for any purpose relating
to the business of the Partnership or for any of its
obligations, expenses, costs or expenditures, the Partnership
may borrow such funds as are needed from any Partner or other
Person or organization, including the General Partners, for
such period of time and on such terms as the General Partners,
BCTC 94 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 as provided in such
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
BCTC 94 which approval shall not be unreasonably withheld 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(a) of this Agreement, but any amount of any such
loan that is outstanding at the time of the occurrence of any
of the events described in Sections 11.04 or 12.01 shall be
repaid as provided in Section 11.04.
8.18. Reserve Fund for Replacements; Operating Reserve
Account TC "8.18. Reserve Fund for Replacements; Operating
Reserve Account" \f C \l "2" .
(a) Reserve Fund for Replacements. Upon the
earlier of: (i) the Final Closing, or (ii) the date four (4)
months from and after the occurrence of Substantial
Completion, the General Partners shall satisfy BCTC 94's
requirements by establishing the Reserve Fund for Replacements
as a separate interest-bearing account in an FDIC-insured
financial institution. Thereafter, the General Partners shall
cause deposits to be made into the Reserve Fund for
Replacements in an annual amount of $22,400, to be paid in
monthly installments of not less than $1,866.66; provided,
however, that the parties hereto acknowledge and agree that
if, upon the occurrence of the Final Closing, the Lender shall
require deposits into the Reserve Fund for Replacements in
amounts greater than those set forth above in this
Section 8.18(a) and/or other changes in the terms and
conditions applicable to the funding, maintenance, and/or
employment of the Reserve Fund for Replacements, such
requirements of the Lender shall control. Funds in the
Reserve Fund for Replacements are intended to be employed only
for the replacement as needed of fixtures, equipment,
structural elements and other components of the Apartment
Complex of a capital nature, and not for any items considered
normal operating expenses. All interest earnings on the
Reserve Fund for Replacements shall be retained therein for
the aforesaid purposes. Withdrawals from the Reserve Fund for
Replacements shall: (i) be made not more frequently than
quarterly, unless specifically Consented to by BCTC 94;
(ii) be reported to BCTC 94 by written Notice within two (2)
business days of their making; and (iii) be made only with the
Consent of BCTC 94 in the event that the aggregate amount of
such withdrawals (excluding withdrawals in accordance with a
budget approved pursuant to Section 8.19 below) exceeds $2,500
in any calendar quarter.
(b) Operating Reserve Account. Upon receipt by the
Partnership of the Third Installment, the General Partners
shall cause the Partnership to establish the Operating Reserve
Account as a separate interest-bearing account in an FDIC-
insured financial institution designated by the General
Partners, subject to the reasonable approval of BCTC 94, and
may cause funds of the Partnership in the amount of up to
$196,000 to be deposited therein (which deposit may be known
as the "Capital Portion" of the Operating Reserve Account).
Funds on deposit in the Operating Reserve Account may be
withdrawn therefrom by the General Partners only for the
payment of Operating Deficits, as and to the extent necessary,
subject to the Consent of BCTC 94 to any such withdrawal,
which Consent shall not be unreasonably withheld. All
interest earnings on funds on deposit in the Operating Reserve
Account shall be retained therein for the aforesaid purpose.
Upon the termination of the Operating Guaranty Period, all
funds then remaining in the Operating Reserve Account may be
withdrawn therefrom, and paid to the Developer: (i) on
account of the Development Fee payable pursuant to
Section 8.10(a)(ii); or (ii) as an Incentive Fee, to the
extent such remaining funds exceed the unpaid balance of the
Development Fee payable pursuant to Section 8.10(a)(ii). In
addition, on an annual basis commencing upon the termination
of the Operating Guaranty Period, ten per cent (10%) of all
Cash Flow available for distribution and remaining after
payment in full of: (A) the Asset Management Fee currently
due, together with any accrued and unpaid Asset Management
Fee, and the Partnership Management Fee currently due; (B) the
Development Fee payable pursuant to Section 8.10(a)(ii); and
(C) any outstanding Subordinated Loans, shall be deposited in
the Operating Reserve Account (which deposits shall be known
as the "Cash Flow Portion" of the Operating Reserve Account),
until such time as the balance of funds on deposit in the
Operating Reserve Account reaches $75,000, at which time such
funding may be suspended until and unless the balance in the
Operating Reserve Account falls below $75,000, in which event
such funding from Cash Flow shall resume until such time as
the balance in the Operating Reserve Account has been restored
to $75,000. Such funds comprising the Cash Flow Portion of
the Operating Reserve Account are to be employed for the same
purpose, and on the same terms and conditions, as are set
forth above in this Section 8.18(b) with respect to funds
comprising the Capital Portion of the Operating Reserve
Account. If no Operating Deficit has occurred during the
applicable preceding twelve (12)-month periods, funds
remaining in the Operating Reserve Account may be withdrawn
therefrom and paid to the General Partners, as follows:
(x) one-third (1/3) of the balance of funds on deposit in the
Operating Reserve Account, as of January 1, 2009; (y) one-half
(1/2) of the balance of funds then on deposit in the Operating
Reserve Account, as of January 1, 2010; and (z) the entire
balance of funds then on deposit in the Operating Reserve
Account, as of January 1, 2011.
8.19. Operating and Capital Budgets. TC "8.19.
Operating and Capital Budgets." \f C \l "2" Not less
than seventy-five (75) days prior to the commencement of each
fiscal year, the General Partners shall submit to BCTC 94 for
its review and approval (which approval shall not be
unreasonably withheld), proposed operating and capital budgets
for the Apartment Complex and the Partnership for the next
fiscal year. Such budgets shall specifically list all
budgeted expenses in all major categories including, but not
limited to, administration, operation, repairs and
maintenance, utilities, taxes, insurance, interest, Mortgage
Loan debt service, capital improvements, and all budgeted
expenses which are to be paid to the General Partners or their
Affiliates. BCTC 94 shall submit its response to such
proposed budgets, in writing, to the General Partners within
forty-five (45) days after its receipt of such proposed
budgets; such response shall either evidence its approval of
the proposed budgets or shall contain specific comments and
recommendations with respect thereto. If no such response is
submitted to the General Partners within such time period,
BCTC 94 will be deemed to have approved such proposed budget.
8.20. Sale of the Apartment Complex. TC "8.20.
Sale of the Apartment Complex." \f C \l "2" At any
time after the expiration of the Tax Credit Compliance Period,
the General Partners may undertake the sale of the Apartment
Complex on behalf of the Partnership, on such terms and
conditions as it deems reasonable and in the best interests of
the Partnership. Any such proposed sale may be consummated by
the General Partners on behalf of the Partnership, without the
necessity of obtaining the Consent of any other Partner, if
the sales price to be received by the Partnership pursuant to
such proposed sale is equal to or greater than the then fair
market value of the Apartment Complex determined in the manner
set forth below in this Section 8.20. In such event, the fair
market value of the Apartment Complex shall be deemed to be
the average of the fair market values determined by three (3)
MAI or SRE appraisers, one of such appraisers selected by the
General Partners, one of such appraisers selected by BCTC 94,
and the third of such appraisers selected by the two other
appraisers previously selected as aforesaid.
ARTICLE IX. TC "ARTICLE IX." \f C \l "1"
TRANSFERS OF, AND RESTRICTIONS ON TRANSFERS
OF INTERESTS OF LIMITED PARTNERS TC "TRANSFERS OF, AND
RESTRICTIONS ON TRANSFERS OF INTERESTS OF LIMITED PARTNERS" \f
C \l "1"
9.01. Acquisition for Investment TC "9.01. Acquisition
for ▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇"
(▇) The Investment Partnership hereby represents
and warrants to the General Partners 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.
9.02. Transfer of Limited Partners' Interests TC
"9.02. Transfer of Limited Partners' ▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇"
.
(▇) A Limited Partner may offer, sell, transfer,
assign, hypothecate or pledge any of its Limited Partner
Interest, subject to the approval of the Lender, if required,
and to the Consent of the General Partners.
(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 TC
"9.03. Admission of Substitute Limited ▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇"
.
(▇) Subject to the other provisions of this Article
IX, an assignee of the Interest of a Limited Partner (which
shall be understood to include any purchaser, transferee,
donee, or other recipient of any disposition of such Interest)
shall be deemed admitted as a Substitute Limited Partner of
the Partnership only upon the satisfactory completion of the
following:
(i) Consent of the General Partners (which may
be withheld in their sole and absolute discretion) and of the
Construction Lender and/or the Lender, if required, shall have
been given, which consent may be evidenced by the execution of
an amended Agreement and/or amended 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 Partners 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 to the Act;
(iv) the assignee shall have represented and
agreed in writing as required by Section 9.01;
(v) if the assignee is a corporation, the
assignee shall have provided the General Partners 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 Partners shall cooperate with the
Person approved to become a Substitute Limited Partner by
preparing the documentation required by this Section and
making all official filings and publications. The Partnership
shall take all such action, including the filing of any
amended Agreement and/or Certificate evidencing the admission
of any Person as a Limited Partner, and the making of any
other official filings and publications, as promptly as
practicable after the satisfaction by the assignee of the
Interest of a Limited Partner of the conditions contained in
this Article IX to the admission of such Person as a Limited
Partner of the Partnership. Any cost or expense incurred in
connection with such admission shall be borne by the
Substitute Limited Partner.
9.04. Rights of Assignee of Partnership Interest TC
"9.04. Rights of Assignee of Partnership ▇▇▇▇▇▇▇▇" \▇ ▇ \▇
"▇" .
(▇) 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. TC "ARTICLE X." \f C \l "1"
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS TC "RIGHTS AND
OBLIGATIONS OF LIMITED PARTNERS" \f C \l "1"
10.01. Management of the Partnership TC "10.01.
Management of the Partnership" \f C \l "2" . 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 TC
"10.02. Limitation on Liability of Limited Partners" \f C \l
"2" . 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, except as and to the extent provided in
the Act. No Limited Partner shall be obligated to make loans
to the Partnership.
10.03. Other Activities TC "10.03. Other Activities"
\f C \l "2" . Any Limited Partner may engage in or possess
interests in other business ventures of every kind and
description for their own accounts, including without
limitation, serving as general or limited partner of other
partnerships which own, either directly or through interests
in other partnerships, government-assisted housing projects
similar to the Apartment Complex. Neither the Partnership nor
any of the Partners shall have any right by virtue of this
Agreement in or to such other business ventures to the income
or profits derived therefrom.
ARTICLE XI. TC "ARTICLE XI." \f C \l "1"
PROFITS, LOSSES AND DISTRIBUTIONS TC "PROFITS, LOSSES AND
DISTRIBUTIONS" \f C \l "1"
11.01. Allocation of Profits, Losses, Credits and Cash
Distributions TC "11.01. Allocation of Profits, Losses,
Credits and Cash ▇▇▇▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) All profits, losses and credits, except those
gains and losses referred to in Section 11.03, shall be
allocated one tenth per cent (.1%) to the General Partner, and
ninety-nine and nine tenths per cent (99.9%) to the Investment
Partnership. Cash Flow shall be applied and/or distributed in
the following priority: (i) during the period until the date
one (1) year from and after the occurrence of Substantial
Completion, and subject to Construction Lender approval, as
and to the extent applicable: (A) payment of the Asset
Management Fee currently due; and (B) any remaining sum to the
General Partners; and (ii) during the period from and after
the date one (1) year from and after the occurrence of
Substantial Completion: (A) payment, pari passu, of: (1) the
Asset Management Fee currently due, together with any accrued
and unpaid Asset Management Fee, and (2) the Partnership
Management Fee currently due; (B) payment on account of any
outstanding balance of the Development Fee pursuant to
Section 8.10(a), until the Development Fee is paid in full;
(C) repayment of any amounts due with respect to any
Subordinated Loans; (D) from and after the expiration of the
Operating Guaranty Period, funding of the Cash Flow Portion of
the Operating Reserve Account, as and to the extent required
pursuant to Section 8.18(b) of this Agreement; and (E) of any
remaining sum, ninety per cent (90%) thereof to the General
Partners, and ten per cent (10%) thereof to the Investment
Partnership.
(b) In any year in which a Partner sells, assigns
or transfers all or any portion of an Interest to any Person
who during such year is admitted as a substitute Partner, the
share of all profits and losses allocated to, and of all Cash
Flow and of all cash proceeds distributable under
Section 11.04 distributed to, all Partners which is
attributable to the Interest sold, assigned or transferred
shall be divided between the assignor and the assignee using
any one of the following methods as determined by agreement
between the assignor and assignee: (i) ratably on the basis
of the number of days in such year before, and the number of
days on and after, the execution by the assignee of this
Agreement, or (ii) by dividing the Partnership fiscal year
into two segments, the first segment being the time period in
such year before the execution by the assignee of this
Agreement and the second segment being the time period in such
year beginning on the date of execution of this Agreement, and
allocating profits and losses, Cash Flow, and all cash
proceeds distributable in each such segment among the persons
who were Partners during that segment, or (iii) such other
method as provided by the Code or regulations thereunder.
(c) The Partnership shall, subject to any
applicable limitation on the distribution of Cash Flow and any
required approval of the Lender, distribute Cash Flow not less
frequently than annually in the manner provided in
Section 11.01(a).
(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.
11.02. Determination of Profits, Losses and Credits TC
"11.02. Determination of Profits, Losses and Credits" \f C \l
"2" . Profits, losses and credits for all purposes of this
Agreement shall be determined in accordance with the accrual
accounting method, except that any adjustments made pursuant
to Section 754 of the Code, other than the adjustments made
with respect to the admission of the Investment Partnership to
the Partnership, shall not be taken into account. Every item
of income, gain, loss, deduction, credit or tax preference
entering into the computation of such profits or losses, or
applicable to the period during which such profits and losses
were realized, shall be considered allocated to each Partner
in the same proportion as profits and losses are allocated to
such Partner.
11.03. Allocation of Gains and Losses TC "11.03.
Allocation of Gains and Losses" \f C \l "2" . Gains and
losses recognized by the Partnership upon the sale, exchange
or other disposition of all or substantially all of the
property owned by the Partnership shall be allocated in the
following manner:
(a) gains shall be allocated (i) first, to the
Partners with negative Capital Account balances, that portion
of gains (including any gains treated as ordinary income for
federal income tax purposes) which is equal in amount to, and
in proportion to, such Partners' respective negative Capital
Accounts in the Partnership; provided, that no gain shall be
allocated to a Partner once such Partner's Capital Account is
brought to zero; and (ii) second, gain in excess of the amount
allocated under (i) shall be allocated to the Partners in the
amount and to the extent necessary to increase the Partners'
respective Capital Accounts so that the proceeds distributed
under Sections 11.04(d), (f) and (g) will be distributed in
accordance with the Partners' respective Capital Accounts.
(b) Losses shall be allocated (i) first, to the
extent and in such proportions as the respective balances in
all Partners' Capital Accounts; and (ii) second, any remaining
loss to the Partners in accordance with the manner in which
they bear the economic risk of loss associated with such loss
or, if none, in accordance with their Partnership Interests.
(c) Any portion of the gains treated as ordinary
income for federal income tax purposes under Sections 1245 and
1250 of the Code ("Recapture Amount") shall be allocated on a
dollar for dollar basis to those Partners to whom the items of
Partnership deduction or loss giving rise to the Recapture
Amount had been previously allocated.
11.04. Distribution of Proceeds from Sale and
Liquidation of Partnership Property TC "11.04. Distribution
of Proceeds from Sale and Liquidation of Partnership Property"
\f C \l "2" . Except as may be required under Section
12.02(b), the proceeds resulting from the liquidation of the
Partnership assets pursuant to Section 12.02, and the net
proceeds resulting from any sale or refinancing of the
Apartment Complex or a Capital Transaction, as the case may
be, shall be distributed and applied in the following order of
priority:
(a) to the payment of all matured debts and
liabilities of the Partnership (including amounts due pursuant
to the Mortgage Loan, and all expenses of the Partnership
incident to any such sale, refinancing or other Capital
Transaction), excluding (1) debts and liabilities of the
Partnership to Partners or any Affiliates, and (2) all unpaid
fees owing to the General Partners or Affiliates thereof under
this Agreement;
(b) to the setting up of any reserves which the
Liquidator (or the General Partners if the distribution is not
pursuant to the liquidation of the Partnership) deems
reasonably necessary for contingent, unmatured or unforeseen
liabilities or obligations of the Partnership;
(c) to the payment of any debts and liabilities
(including unpaid fees) owed to the Partners or any Affiliates
by the Partnership for Partnership obligations, including the
repayment of any loans made pursuant to Sections 5.01(d)(iii),
8.09(b) or 8.17; provided, however, that the foregoing debts
and liabilities owed to Partners and their Affiliates shall be
paid or repaid, as applicable, in the following order of
priority, if and to the extent applicable: (i) the Asset
Management Fee currently due, if any, together with any
accrued and unpaid Asset Management Fees, (ii) any unpaid
portion of the Development Fee pursuant to Section 8.10(a),
(iii) the Partnership Management Fee currently due, if any,
(iv) Credit Recovery Loans to the Investment Partnership,
(v) Subordinated Loans to the General Partners, and (vi) any
other such debts and liabilities;
(d) to the Investment Partnership in an amount
equal to the positive balance in its Capital Account at such
time;
(e) to the payment of the Disposition Fee, if
applicable;
(f) to the General Partners in the amount of their
Capital Contributions paid to or on behalf of the Partnership,
reduced by all cash distributions previously distributed to it
pursuant to this Section 11.04; and
(g) the balance of such remaining sum, eighty per
cent (80%) thereof to the General Partners and twenty per cent
(20%) thereof to the Investment Partnership.
11.05. Capital Accounts TC "11.05. Capital Accounts"
\f C \l "2" . A separate Capital Account shall be maintained
and adjusted for each Partner. There shall be credited to
each Partner's Capital Account the amount of his Capital
Contribution, the fair market value of any property
contributed to the Partnership (net of any liabilities secured
by such property) and such Partner's distributive share of the
profits for tax purposes of the Partnership; and there shall
be charged against each Partner's Capital Account the amount
of all Cash Flow distributed to such Partner, the fair market
value of any property distributed to such Partner (net of any
liabilities secured by such property), the net proceeds
resulting from the liquidation of the Partnership's assets or
from any sale or refinancing of the Apartment Complex
distributed to such Partner, and such Partner's distributive
share of the losses for tax purposes of the Partnership. Each
Partner's Capital Account shall be maintained and adjusted in
accordance with the Code and the Treasury Regulations
thereunder. The foregoing provisions and the other provisions
of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Treas. Reg. Section 1.704-1(b),
and shall be interpreted and applied in a manner consistent
with such regulations. It is the intention of the Partners
that the Capital Accounts maintained under this Agreement be
determined and maintained throughout the full term of this
Agreement in accordance with the accounting rules of Treas.
Reg. Section 1.704-1(b)(2)(iv).
11.06. Authority of General Partners to Vary
Allocations to Preserve and Protect Partners' Intent. TC
"11.06. Authority of General Partners to Vary Allocations to
Preserve and Protect Partners' Intent." \f C \l "2"
(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 and Section 5.01 to the
fullest extent permitted by Section 704(b) of the Code. In
order to preserve and protect the determinations and
allocations provided for in this Article XI and Section 5.01,
the General Partners 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 and Section 5.01 to the extent
that allocating income, gain, loss, deduction or credit (or
item thereof) in the manner provided for in Article XI and
Section 5.01 would cause the determinations and allocations of
each Partner's distributive share of income, gain, loss,
deduction, or credit (or item thereof) not to be permitted by
Section 704(b) of the Code and Treasury Regulations
promulgated thereunder. Any allocation made pursuant to this
Section 11.06 shall be deemed to be a complete substitute for
any allocation otherwise provided for in this Article XI and
Section 5.01 and no amendment of this Agreement or approval of
any Partner shall be required.
(b) In making any allocation (the "new allocation")
under Section 11.06(a), the General Partners are authorized to
act only after: (i) having been advised by the Accountants
that, under Section 704(b) of the Code and the Treasury
Regulations thereunder, (A) the new allocation is necessary,
and (B) the new allocation is the minimum modification of the
allocations otherwise provided for in this Article XI and
Section 5.01 necessary in order to assure that, either in the
then current year or in any preceding year, each Partner's
distributive share of income, gain, loss, deduction, or credit
(or item thereof) is determined and allocated in accordance
with this Article XI and Section 5.01 to the fullest extent
permitted by Section 704(b) of the Code and the Treasury
Regulations thereunder; and (ii) having received the approval
of BCTC 94 to such proposed new allocation.
(c) If the General Partners are required by Section
11.06(a) to make any new allocation in a manner less favorable
to the Limited Partners than is otherwise provided for in this
Article XI and Section 5.01, then the General Partners 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 the Limited Partners as nearly as
possible to the allocations thereof otherwise contemplated by
this Article XI and Section 5.01.
(d) New allocations made by the General Partners
under Section 11.06(a) and Section 11.06(c) in reliance upon
the advice of the Accountants shall be deemed to be made
pursuant to the fiduciary obligation of the General Partners
to the Partnership and the Limited Partners, and no such
allocation shall give rise to any claim or cause of action by
any Limited Partner.
11.07. Designation of Tax Matters Partner TC "11.07.
Designation of Tax Matters ▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" . ▇▇▇ hereby
is designated as Tax Matters Partner of the Partnership, and
shall engage in such undertakings as are required of the Tax
Matters Partner of the Partnership, as provided in regulations
pursuant to Section 6231 of the Code. If the General Partner
designated as the Tax Matters Partner of the Partnership
withdraws from the Partnership, the Partnership shall
designate a successor Tax Matters Partner, in accordance with
Treasury Regulations Section 301.6231(a)(7)-1(T), or any
successor Regulation. The Partnership shall notify the
Internal Revenue Service of the designation of a successor Tax
Matters Partner for such year, as well as for all prior years
that the withdrawn General Partner was serving as Tax Matters
Partner. Each Partner, by its execution of this Agreement,
Consents to such designation of the Tax Matters Partner and
agrees to execute, certify, acknowledge, deliver, swear to,
file and record at the appropriate public offices such
documents as may be necessary or appropriate to evidence such
Consent.
11.08. Rights and Obligations of Tax Matters Partner TC
"11.08. Rights and Obligations of Tax Matters ▇▇▇▇▇▇▇" \▇ ▇
\▇ "▇" .
(▇) The Tax Matters Partner shall have and perform
all of the duties required under the Code, including the
following duties:
(i) furnish the name, address, profits
interest, and taxpayer identification number of each
Partner to the Internal Revenue Service (the "Service") ;
and
(ii) within five calendar days after the
receipt of any correspondence or communication relating
to the Partnership or a Partner from the Service, the Tax
Matters Partner shall forward to each Partner a photocopy
of all such correspondence or communication(s). The Tax
Matters Partner shall, within five calendar days
thereafter, advise each Partner in writing of the
substance and form of any conversation or communication
held with any representative of the Service.
(b) The Tax Matters Partner shall not, without the
Consent of the Investment Partnership:
(i) extend the statute of limitations for
assessing or computing any tax liability against the
Partnership (or the amount of character of any
Partnership tax items);
(ii) settle any audit with the Service
concerning the adjustment or readjustment of any
partnership item(s) (within the meaning of Section
6231(a)(3) of the Code);
(iii) file a request for an administrative
adjustment with the Service at any time or file a
petition for judicial review with respect to any such
request;
(iv) initiate or settle any judicial review or
action concerning the amount or character of any
partnership tax item(s) (within the meaning of Section
6231(a)(3) of the Code);
(v) intervene in any action brought by any
other Partner for judicial review of a final adjustment;
or
(vi) take any other action not expressly
permitted by this Section 11.08 on behalf of the Partners
of the Partnership in connection with any administrative
or judicial tax proceeding.
(c) In the event of any Partnership-level
proceeding instituted by the Service pursuant to Sections 6221
through 6233 of the Code, the Tax Matters Partner shall
consult with the Investment Partnership regarding the nature
and content of all action and defense to be taken by the
Partnership in response to such proceeding. The Tax Matters
Partner also shall consult with the Investment Partnership
regarding the nature and content of any proceeding pursuant to
Sections 6221 through 6233 of the Code instituted by or on
behalf of the Partnership (including the decision to institute
proceedings, whether administrative or judicial, and whether
in response to a previous Service proceeding against the
Partnership or otherwise).
11.09. Expenses of Tax Matters Partner TC "11.09.
Expenses of Tax Matters Partner" \f C \l "2" . The
Partnership shall indemnify and reimburse the Tax Matters
Partner for all expenses, including legal and accounting fees,
claims, liabilities, losses and damages incurred in connection
with any administrative or judicial proceeding with respect to
the tax liability of the Partners. The payment of all such
expenses shall be made before any distributions are made from
Cash Flow or any discretionary reserves are set aside by the
General Partners. The General Partners shall have the
obligation to provide funds for such purpose. The taking of
any action and the incurring of any expense by the Tax Matters
Partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole discretion of
the Tax Matters Partner and the provisions on limitations of
liability of General Partners and indemnification set forth in
Section 8.07 of this Agreement shall be fully applicable to
the Tax Matters Partner in its capacity as such.
11.10. Minimum Gain Provisions TC "11.10. Minimum Gain
▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) Notwithstanding any other provision of this
Agreement, no allocation of loss or deduction (or item
thereof) attributable to any nonrecourse debt of the
Partnership shall be made by the Partnership to a Partner if
such allocation would cause the sum of the deficit capital
account balances of the Partner or Partners otherwise
receiving such allocation (excluding the portion of such
deficit balances that must be restored to the Partnership upon
liquidation, if any) to exceed the "Minimum Gain" (as defined
in Treas. Reg. Section 1.704-1(b)(4)(iv)(f) and determined at the
end of the Partnership taxable year to which the allocation
relates).
(b) Notwithstanding any other provision of this
Agreement, if there is a net decrease in Partnership Minimum
Gain during a Partnership taxable year, all Partners with
deficit Capital Account balances at the end of such year
(reduced by the portion of such deficit balances (i) that must
be restored upon liquidation, if any, and (ii) that would be
eliminated under applicable Regulations if the Partnership
were liquidated at such time, and increased by the items
described in Treas. Reg. Sections 1.704-1(b)(2)(ii)(d)(4), (5) and
(6)) shall be allocated items of income and gain for such year
in the amount and in the proportions needed to eliminate such
deficits, before any other allocation is made under this
Agreement.
(c) In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in
Treas. Reg. Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Partnership income and gain shall be specially allocated to
each such Partner in an amount and manner sufficient to
eliminate (to the extent required by the Regulations under
Code Section 704(b)) to the deficit balance in each such
Partner's Capital Account as quickly as possible, provided
that an allocation pursuant to this Section 11.10(c) shall be
made if and only to the extent that such Partner would have a
deficit Capital Account after all other allocations provided
for in this Article XI have been tentatively made as if this
Section 11.10(c) were not in the Agreement.
(d) In the event any Partner has a deficit Capital
Account at the end of any fiscal year in excess of the sum of
(i) the amount that such Partner must restore to the
Partnership upon liquidation, if any, and (ii) the amount such
Partner is deemed obligated to restore pursuant to the
penultimate sentence of Treas. Reg. Sections 1.704-2(g) and Section 1.704-
2(i)(5), such Partner shall be specially allocated items of
Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to
this Section 11.10(d) shall be made if and only to the extent
that such Partner would have a deficit Capital Account in
excess of such sum after all other allocations provided for in
this Article XI has been tentatively made as if this Section
11.10(d) and Section 11.10(c) hereof were not in the
Agreement.
(e) In the event that income, loss or items thereof
are allocated to one or more Partners pursuant to Sections
11.10(b), (c) or (d), subsequent income, loss or items thereof
shall be allocated (subject to the provisions of Sections
11.10(b), (c) or (d)) to the Partners so that, to the extent
possible in the judgment of the Managing General Partner, the
net amount of allocations shall be equal to the amount that
would have been allocated had Section 11.10 not been applied.
ARTICLE XII. TC "ARTICLE XII." \f C \l "1"
SALE, DISSOLUTION AND LIQUIDATION TC "SALE, DISSOLUTION AND
LIQUIDATION" \f C \l "1"
12.01. Dissolution of the Partnership TC "12.01.
Dissolution of the Partnership" \f C \l "2" . The
Partnership shall be dissolved upon the earlier of the
expiration of the term of the Partnership, or upon:
(a) the withdrawal, Bankruptcy, death, dissolution
or adjudication of incompetency of a General Partner who is at
that time the sole General Partner without the election of the
remaining Partner(s), pursuant to Section 6.03, to continue
the Partnership;
(b) the sale or other disposition of all or
substantially all of the assets of the Partnership;
(c) the election by the General Partners, with the
Consent of BCTC 94; or
(d) any other event causing the dissolution of the
Partnership under the laws of the State.
12.02. Winding Up and Distribution. TC "12.02. Winding
Up and Distribution." \f C \l "2"
(a) Upon the dissolution of the Partnership
pursuant to Section 12.01, (i) a Certificate of Cancellation
shall be filed in such offices within the Commonwealth of
Virginia and the State as may be required or appropriate, and
(ii) the Partnership business shall be wound up and its assets
liquidated as provided in this Section 12.02 and the net
proceeds of such liquidation, except as provided in Section
12.02(b) below, shall be distributed in accordance with
Section 11.04.
(b) It is the intent of the Partners that, upon
liquidation of the Partnership, any liquidation proceeds
available for distribution to the Partners be distributed in
accordance with the Partners' respective Capital Account
balances and the Partners believe that distributions under
Section 11.04 will effectuate such intent. In the event that,
upon liquidation, there is any conflict between a distribution
pursuant to the Partners' respective Capital Account balances
and the intent of the Partners with respect to distribution of
proceeds as provided in Section 11.04, the Liquidator shall,
notwithstanding the provisions of Sections 11.01, 11.02 and
11.03, allocate the Partnership's gains, profits and losses in
a manner that will cause the distribution of liquidation
proceeds to the Partners to be in accordance with the
Partners' respective Capital Account balances.
(c) 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.
(d) 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. TC "ARTICLE XIII." \f C \l "1"
BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC. TC "BOOKS
AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC." \f C \l "1"
13.01. Books and Records TC "13.01. Books and Records"
\f C \l "2" . The books and records of the Partnership shall
be maintained on an accrual basis in accordance with sound
federal income tax accounting principles. These and all other
records of the Partnership, including information relating to
the status of the Apartment Complex and information with
respect to the sale by the General Partners or any Affiliate
of goods or services to the Partnership, shall be kept at the
principal office of the Partnership and shall be available for
examination there by any Partner, or his duly authorized
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.
13.02. Bank Accounts TC "13.02. Bank Accounts" \f C \l
"2" . All funds of the Partnership not otherwise invested
shall be deposited in one or more accounts maintained in such
banking institutions as the General Partners shall determine,
and withdrawals shall be made only in the regular course of
Partnership business on such signature or signatures as the
General Partners 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 TC "13.03. Accountants" \f C \l "2"
. The Accountants shall annually prepare or review for
execution by the General Partners 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, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, of Bethesda,
Maryland, for their review and comment. Any changes in such
proposed tax return recommended by the Investment
Partnership's accountants shall be made by the Accountants
prior to the completion of such tax return for execution by
the General Partners. The Partnership shall reimburse Boston
Capital Asset Management Limited Partnership, an affiliate of
the Investment Partnership, for its reasonable expenses
incurred in causing the Partnership's proposed tax return to
be reviewed by the Investment Partnership's accountants, if
and to the extent that such review results in modifications to
such proposed tax return. A full detailed statement shall be
furnished to all Partners, showing such assets, properties,
and net worth and the profits and losses of the Partnership
for the preceding fiscal year. All Partners shall have the
right and power to examine and copy, at any and all reasonable
times, the books, records and accounts of the Partnership.
13.04. Reports to Partners TC "13.04. Reports to
▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) The General Partners shall cause to be prepared
and distributed to all persons who were Partners at any time
during a fiscal year of the Partnership:
(i) By February 15 of each calendar year, and
with respect to the previous fiscal year of the Partnership,
(A) a balance sheet as of the end of such fiscal year and
statements of income, Partners' equity, and changes in
financial position and a Cash Flow statement, for the year
then ended, all of which, except the Cash Flow statement,
shall be prepared in accordance with generally accepted
accounting principles and accompanied by an auditor's report
containing an opinion of the Accountants, and (B) a report of
the activities of the Partnership during the period covered by
the report. Such report shall set forth distributions to
Limited Partners for the period covered thereby and shall
separately identify distributions from: (1) Cash Flow from
operations during the period, (2) Cash Flow from operations
during a prior period which had been held as reserves,
(3) proceeds from disposition of the Apartment Complex or any
other investments of the Partnership, (4) lease payments on
net leases with builders and sellers, and (5) reserves. With
respect to any distribution to the Investment Partnership, the
report called for shall separately identify distributions from
(A) Cash Flow from operations during the period, (B) Cash Flow
from operations during a prior period which had been held as
reserves, (C) proceeds from disposition of property and
investments, (D) lease payments on net leases with builders
and sellers, (E) reserves from the gross proceeds of the
offering originally obtained from the Investment Partnership,
(F) borrowed monies, (G) loans or contributions from the
Investment Partnership, and (H) transactions outside of the
ordinary course of business with a description thereof.
(ii) By February 7 of each calendar year, and
with respect to the previous fiscal year of the Partnership,
all information necessary for the preparation of the Limited
Partners' federal income tax returns.
(iii) Within thirty (30) days after the end of
each quarter of a fiscal year of the Partnership, a report
containing:
(A) A balance sheet, which may be
unaudited; and
(B) a statement of income and
expenses for the quarter then ended, which may be unaudited;
(C) the certification by the General
Partners that the Apartment Complex and all tenants thereof
are in compliance with all requirements and regulations
applicable to Low-Income Housing Tax Credits; and
(D) other pertinent information
regarding the Partnership and its activities during the
quarter covered by the report, including Low Income Housing
Credit Monitoring Forms, Rent Rolls, Operating Statement and
Occupancy/Rental Report, each in a form acceptable to the
Investment Partnership.
(b) Within ninety (90) days after the end of each
fiscal year of the Partnership the General Partners shall
provide to the Investment Partnership:
(i) A certification by the General Partners
that (A) all Mortgage Loan payments and taxes and insurance
payments with respect to the Apartment Complex are current as
of the date of the year-end report, (B) there is no default
under the Project Documents or this Agreement, or if there is
any default, a description thereof, and (C) there is no
building, health or fire code violation or similar violation
of a governmental law, ordinance or regulation against the
Apartment Complex or, if there is any violation, a description
thereof;
(ii) the information specified in Section
13.04(c);
(iii) a descriptive statement of all
transactions during the fiscal year between the Partnership
and the General Partners and/or any Affiliate, including the
nature of the transaction and the payments involved; and
(iv) a copy of the annual report to be filed
with the United States Treasury concerning the status of the
Apartment Complex as low-income housing and, if required, a
certificate to the Agency concerning the same.
(c) Upon the written request of BCTC 94 for further
information with respect to any matter covered in items (a) or
(b) above, the General Partners shall furnish such reasonable
information within 30 days of receipt of such request.
(d) The General Partners, on behalf of the
Partnership, shall send to the Investment Partnership, on or
before July 31 in each year, a report which shall state:
(i) the then occupancy level of the Apartment
Complex;
(ii) if there are any Operating Deficits or
anticipated Operating Deficits, the manner in which such
deficits will be funded; and
(iii) such other matters as shall be material to
the operation of the Partnership, including, without
limitation, any building, health or fire code violation or
similar violation of a governmental law, ordinance or
regulation by the Apartment Complex of which the General
Partners, or any of them, is (are) aware.
(e) Prior to October 15 of each year, the General
Partners, on behalf of the Partnership, shall send to the
Investment Partnership an estimate of the Investment
Partnership's share of the Tax Credits, profits and losses of
the Partnership for federal income tax purposes for the
current fiscal year. Such estimate shall be prepared by the
General Partners and the Accountants.
(f) Within 15 days after the end of any calendar
quarter during which
(i) there is a material default by the
Partnership under the Project Documents or in payment of any
mortgage, taxes, interest or other obligation on secured or
unsecured debt,
(ii) any reserve has been reduced or terminated
by application of funds therein for purposes materially
different from those for which such reserve was established,
(iii) the General Partners have 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 Partners shall
send the Investment Partnership a detailed report of such
event.
(g) After the Admission Date, the General
Partners, on behalf of the Partnership, shall send to the
Investment Partnership a copy of all applicable periodic
reports covering the status of project operations from the
previous period, as may be required by the Lender, within ten
(10) days of the submission of such reports to the Lender. In
addition, within thirty (30) days after the occurrence of
Substantial Completion, the General Partners, on behalf of the
Partnership, shall prepare and send to the Investment
Partnership a Credit Basis Worksheet for each of the buildings
comprising the Apartment Complex, in the format provided by
Boston Capital.
(h) (i) In the event that the reports or
information provided for in Sections 13.04(a)(i) and/or
13.04(a)(ii) above are, at any time, not provided within the
time period(s) specified in such Sections, the General
Partners 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; provided, however, that any
delays , beyond the applicable due dates as aforesaid, in the
provision of the applicable reports or information due to
factors beyond the control of the General Partners and the
Accountants may be a cause for waiver of the aforesaid
liquidated damages, but only if the delayed reports or
information were supplied by the applicable due date in a
draft or estimated form.
(ii) In the event that the reporting
requirements set forth in any of the above provisions of this
Section 13.04 are not met, BCTC 94, in its sole reasonable
discretion, may direct the General Partners to dismiss the
Accountants, and to designate successor Accountants, subject
to the approval of BCTC 94; provided, however, that if the
General Partners and BCTC 94 cannot agree on the designation
of successor Accountants, the successor Accountants shall be
designated by BCTC 94 in its sole discretion, and the fees of
such successor Accountants shall be paid by the General
Partners, if and to the extent that such fees exceed the
amount budgeted therefor in the applicable Operating Budget
pursuant to Section 8.19 of this Agreement.
13.05. Section 754 Elections TC "13.05. Section ▇▇▇
▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" . ▇▇ the event of a transfer of all
or any part of the Interest of a General Partners 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 TC "13.06.
Fiscal Year and Accounting Method" \f C \l "2" . The fiscal
year of the Partnership shall be the calendar year. All
Partnership accounts shall be determined on the accrual basis.
ARTICLE XIV. TC "ARTICLE XIV." \f C \l "1"
AMENDMENTS TC "AMENDMENTS" \f C \l "1"
14.01. Proposal and Adoption of Amendments TC "14.01.
Proposal and Adoption of Amendments" \f C \l "2" . This
Agreement may be amended by the General Partners with the
Consent of BCTC 94; provided, however, that such Consent shall
not be unreasonably withheld as to any proposed amendment
which does not affect the obligations of the General Partners
or the rights of any of the Partners under this Agreement.
ARTICLE XV. TC "ARTICLE XV." \f C \l "1"
CONSENTS, VOTING AND MEETINGS TC "CONSENTS, VOTING AND
MEETINGS" \f C \l "1"
15.01. Method of Giving Consent TC "15.01. Method of
Giving Consent" \f C \l "2" . Any Consent required by this
Agreement may be given by a written Consent given by the
consenting Partner and received by the General Partners at or
prior to the doing of the act or thing for which the Consent
is solicited.
15.02. Submissions to Limited Partners TC "15.02.
Submissions to Limited Partners" \f C \l "2" . The General
Partners 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 Matters for Voting TC
"15.03. Meetings; Submission of Matters for Voting" \f C \l
"2" . 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. TC "ARTICLE XVI." \f C \l "1"
GENERAL PROVISIONS TC "GENERAL PROVISIONS" \f C \l "1"
16.01. Burden and Benefit TC "16.01. Burden and
Benefit" \f C \l "2" . 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 TC "16.02. Applicable Law" \f C
\l "2" . This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Virginia.
16.03. Counterparts TC "16.03. Counterparts" \f C \l
"2" . 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 TC "16.04.
Separability of Provisions" \f C \l "2" . 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 TC "16.05. Entire Agreement"
\f C \l "2" . This Agreement sets forth all (and is intended
by all parties to be an integration of all) of the
representations, promises, agreements and understandings among
the parties hereto with respect to the Partnership, the
Partnership business and the property of the Partnership, and
there are no representations, promises, agreements or
understandings, oral or written, express or implied, among
them other than as set forth or incorporated herein.
16.06. Liability of the Investment Partnership TC
"16.06. Liability of the Investment Partnership" \f C \l "2"
. 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 amount of
Capital Contribution payable by the Investment Partnership to
the Partnership, under the terms of this Agreement, at the
time of such default.
16.07. Environmental Protection TC "16.07.
Environmental ▇▇▇▇▇▇▇▇▇▇" \▇ ▇ \▇ "▇" .
(▇) The General Partners represent and warrant
that: (i) they have no knowledge of any deposit, storage,
disposal, burial, discharge, spillage, uncontrolled loss,
seepage or filtration of any Hazardous Substances at, upon,
under or within the Land or any contiguous real estate, other
than as described in the Phase I Environmental Report as to
the Land supplied to BCTC 94, and (ii) it has not caused or
knowingly 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 Partners further represent and
warrant that (i) neither they nor, to the best of their
knowledge, any other party has been, is or will be involved in
operations at or, pursuant to their 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) to
the best of their knowledge, the creation of a lien on the
Land under the Hazardous Waste Laws or under any similar laws
or regulations; and (ii) the General Partners have not
permitted, and will use their best efforts not to 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 Partners shall use their best
efforts to 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 Partners 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, arising with respect to the
Land or the Apartment Complex; provided, however, that the
foregoing indemnification shall apply only if the
circumstances giving rise thereto: (i) is described in or
results from environmental conditions described in the Updated
Environmental Report; (ii) constitutes or results from a
violation by the General Partners of their covenants set forth
above in this Section 16.07; or (iii) otherwise results from
the gross negligence or willful misconduct of the General
Partners or an Affiliate thereof. Any such claims, losses,
damages, costs, expenses or liabilities may be defended,
compromised, settled or pursued by the Investment Partnership
or BCTC 94 with counsel of their selection, but at the expense
of the General Partner. BCTC 94 shall notify the General
Partners of any matter for which indemnification is sought
hereunder and shall permit the General Partners, at their own
expense, to join in the defense thereof. Notwithstanding
anything else set forth in this Agreement, this
indemnification shall survive the withdrawal of any General
Partner and/or the termination of this Agreement.
(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. Continuing Guarantee by the Guarantors of
Certain Obligations of the General Partners and the Developer
TC "16.08. Continuing Guarantee by the Guarantors of
Certain Obligations of the General Partners and the Developer"
\f C \l "2" . The Guarantors, jointly and severally,
unconditionally guarantee to the Partnership and to the
Investment Partnership the full and timely performance by the
General Partners and the Developer of all of their respective
duties and obligations, as the Managing General Partner,
General Partners and the Developer, respectively, under and
pursuant to (as applicable) the provisions of
Sections 8.09(a), 8.09(b), 8.10(b) and 16.07(d) of this
Agreement, all in accordance with the provisions hereof. Any
payment made by the Guarantors pursuant to this Guarantee
shall satisfy the applicable obligation of the General
Partners and/or the Developer to make such payment as if the
General Partners and/or the Developer had made such payment
itself.
Neither the Guarantors' obligations to make payment in
accordance with the terms of this Guarantee, nor any remedy
for enforcement thereof, shall be impaired, modified, changed,
released or limited in any manner whatsoever by any
impairment, modification, change, release or limitation of the
liability of the General Partners, or any remedy for the
enforcement thereof, resulting from the operation of any
present or future provision of the Bankruptcy Reform Act of
1978 or other applicable statute, nor shall such obligation or
remedy for enforcement be impaired, modified, changed,
released or limited in any manner by such event of bankruptcy.
The Guarantors' obligations as specified in this
Agreement constitute a continuing guarantee, such that any
claim made by the Partnership or the Investment Partnership
against the Guarantors, or any of them, pursuant to this
Section 16.08, shall not preclude the Partnership or the
Investment Partnership from making a claim against the
Guarantors, or any of them, for future payments.
The obligations of the Guarantors, as set forth in this
Section 16.08, shall not be transferred or assigned to a third
party without the Consent of BCTC 94.
16.09. Notices. TC "16.09. Notices." \f C \l "2" Any
Notice required by the provisions of this Agreement to be
given shall be addressed as follows:
(a) To the Investment Partnership and/or BCTC
94:
Boston Capital Tax Credit Fund IV L.P.
BCTC 94, Inc.
c/o Boston Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
And a copy to: Peabody & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
(b) To the General Partner:
Fort Bend National Housing, L.L.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
▇▇▇▇▇▇▇ Realty, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
And a copy to: ▇▇▇▇▇▇▇, Delafield & Wood
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the parties have affixed their
signatures and seals to this Amended and Restated Agreement of
Limited Partnership of Fort Bend NHC, L.P. as of the date
first written above.
GENERAL PARTNERS:
WITNESS: ▇▇▇▇▇▇▇ REALTY, INC., a Virginia
corporation, as the Managing
General Partner
_____________________ By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
FORT BEND NATIONAL HOUSING,
L.L.C.,
a Virginia limited liability
company,
as a General Partner
WITNESS:
_____________________ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Manager
LIMITED PARTNER:
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
WITNESS:
_________________________ By:/s/▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, as
Attorney-in-Fact of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General
Partner
SPECIAL LIMITED PARTNER:
WITNESS: BCTC 94, INC.
________________________ By: /s/▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, as
Attorney-in-Fact of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
GUARANTORS (as and to the extent
set forth in Section 16.08 and
not otherwise pursuant to this
Agreement):
WITNESS:
________________________ /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________ /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________ /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
DEVELOPER:
WITNESS: NATIONAL HOUSING DEVELOPMENT
CORPORATION
_______________________ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
WITHDRAWING INITIAL LIMITED
PARTNER:
WITNESS: FORT BEND NATIONAL HOUSING,
L.L.C.
_____________________ By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, its
Manage
COUNTY OF SUFFOLK )
: ss
COMMONWEALTH OF MASSACHUSETTS )
Before me, the undersigned Notary Public in and for the
aforesaid jurisdiction, personally appeared ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇,
in her capacity as Attorney-in-Fact of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, in his
capacities as: (i) a Partner of C&M Associates, d/b/a Boston
Capital Associates IV L.P., as the General Partner of Boston
Capital Tax Credit Fund IV L.P., as a Limited Partner of Fort
Bend NHC, L.P., and (ii) President of BCTC 94, Inc., as the
Special Limited Partner of Fort Bend NHC, L.P., and being duly
sworn, acknowledged the execution of the foregoing Amended and
Restated Agreement of Limited Partnership.
Witness my hand and notarial seal this ____ day of April,
1998.
___________________________
Notary Public
My Commission Expires: ______, 199_
CITY OF VIRGINIA BEACH )
: ss
COMMONWEALTH OF VIRGINIA )
Before me, the undersigned Notary Public in and for the
aforesaid jurisdiction, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
in his capacity as a Guarantor under and pursuant to the
provisions of Section 16.08 of the foregoing Amended and
Restated Agreement of 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 April,
1998.
___________________________
Notary Public
My Commission Expires:
CITY OF VIRGINIA BEACH )
:ss
COMMONWEALTH OF VIRGINIA )
Before me, the undersigned Notary Public in and for the
aforesaid jurisdiction, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
in his individual capacity as a Guarantor under and pursuant
to the provisions of Section 16.08 of the foregoing Amended
and Restated Agreement of 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 April,
1998.
___________________________
Notary Public
My Commission Expires: _____________________________
CITY OF VIRGINIA BEACH )
:ss
COMMONWEALTH OF VIRGINIA )
Before me, the undersigned Notary Public in and for the
aforesaid jurisdiction, personally appeared ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, in his individual capacity as a Guarantor under
and pursuant to the provisions of Section 16.08 of the
foregoing Amended and Restated Agreement of 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 April,
1998.
___________________________
Notary Public
My Commission Expires: _____________________________
CITY OF VIRGINIA BEACH )
:ss
COMMONWEALTH OF VIRGINIA )
Before me, the undersigned Notary Public in and for the
aforesaid jurisdiction, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
in his capacities as: (i) Manager of Fort Bend National
Housing, L.L.C., in its capacities as the General Partner and
Withdrawing Limited Partner of Fort Bend NHC, L.P.; and
(ii) Vice President of National Housing Development
Corporation, in its capacity as the Developer under and
pursuant to the provisions of the foregoing Amended and
Restated Agreement of 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 April,
1998.
____________________________
Notary Public
My Commission Expires: ___________________
CITY OF VIRGINIA BEACH )
: ss
COMMONWEALTH OF VIRGINIA )
Before me, the undersigned Notary Public in and for the
aforesaid jurisdiction, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in
her capacity as President of ▇▇▇▇▇▇▇ Realty, Inc., Managing
General Partner of Fort Bend NHC, L.P., and being duly sworn,
acknowledged the execution of the foregoing Amended and
Restated Agreement of Limited Partnership.
Witness my hand and notarial seal this ____ day of April,
1998.
___________________________
Notary Public
My Commission Expires: