LOMBARD HEIGHTS APARTMENTS
DEVELOPMENT AGREEMENT
This Development Agreement is made and entered into as of
October __, 1998 between Lombard Partners, L.P., a Missouri
limited partnership (the "Partnership"), and ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Properties, L.L.C., a Kansas limited liability company (the
"Developer").
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties, L.L.C., a State of Missouri
limited liability company, and (the "General Partner") and BCTC
94, Inc., a Massachusetts corporation (the "Special Limited
Partner") and Boston Capital Tax Credit Fund IV, L.P. a
Massachusetts limited partnership (the "Investment Partnership or
the Fund"), have entered into that certain Lombard Partners, L.P.
Amended and Restated Agreement of Limited Partnership of the
Partnership (the "Partnership Agreement"), to (i) continue the
Partnership; (ii) admit the Special Limited Partner as the
Special Limited Partner and the Fund as a Limited Partner of the
Partnership; (iii) reassign Interests in the Partnership; (iv)
provide for the withdrawal of the withdrawing limited partner;
and (v) set forth all of the provisions governing the
Partnership; and
WHEREAS, the Partnership has been formed to acquire,
construct, rehabilitate, develop, own, maintain, and operate a
24-unit multi-family rental housing development intended for
rental to individuals of low and moderate income, known as
Lombard Heights Apartments and located in Springfield, Missouri
(the "Apartment Complex"); and
WHEREAS, the Partnership desires to appoint the Developer
to provide certain services for the Partnership with respect to
overseeing the acquisition, construction, development and/or
rehabilitation of the Apartment Complex until the acquisition,
construction, development and/or rehabilitation work is
completed, including ratifying and confirming certain services
provided by the Developer prior to the date of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the
mutual promises of the parties hereto and of other good and
valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, it is agreed as follows:
1. APPOINTMENT. The Partnership hereby appoints the
Developer to render services for the Partnership in supervising
and overseeing the acquisition, construction, development and/or
rehabilitation of the Apartment Complex as herein contemplated,
and ratifies and confirms the services of such nature performed
by the Developer for the Partnership prior to the date of this
Agreement.
2. AUTHORITY AND OBLIGATIONS.
(a) In conformity with the provisions of the
Partnership Agreement, the Developer has performed certain
services related to the acquisition, construction, development
and/or rehabilitation of the Apartment Complex and shall oversee
the acquisition, construction, development and/or rehabilitation
of the Apartment Complex, and shall perform the services and
carry out the responsibilities with respect to the Apartment
Complex as are set forth herein, and such additional duties and
responsibilities and are designated from time to time by the
General Partner.
(b) The Developer's services shall be performed in
the name and on behalf of the Partnership and shall consist of
the duties set forth in the following subparagraphs of this
Section 2(b) and as provided elsewhere in this Agreement;
provided, however, that if the performance of any duty of the
Developer set forth in this Agreement is beyond the reasonable
control of the Developer, the Developer shall nonetheless be
obligated to (i) use its best efforts to perform such duty and
(ii) promptly notify the Partnership that the performance of such
duty is beyond its reasonable control. The Developer has
performed or shall perform the following:
(i) Negotiate and assist the structuring of the
Apartment Complex by the Partnership;
(ii) Negotiate and cause to be executed in the name
and on behalf of the Partnership agreements for
architectural, engineering, testing or consulting services
for the Apartment Complex, and any agreements for the
construction and/or rehabilitation of any improvement or
tenant improvements to be constructed and/or rehabilitated
or installed by the Partnership or the furnishing of any
supplies, materials, machinery or equipment therefor, or
any amendments thereof, provided that no agreement shall be
executed nor binding commitment made until the terms and
conditions thereof and the party with whom the agreement is
to be made shall have been approved by the Partnership
unless the terms, conditions, and parties comply with
guidelines issued by the General Partner concerning such
agreements;
(iii) Assist the Partnership in dealing with
neighborhood groups, local organizations, abutters and
other parties in interest in the development of the
Apartment Complex;
(iv) Provide the initial equity funding for the
construction and/or rehabilitation of the Apartment
Complex;
(v) Establish and implement appropriate
administrative and financial controls for the design and
construction and/or rehabilitation of the Apartment
Complex, including but not limited to:
(A) coordination and administration of the
Apartment Complex by the architect, general contractor, and
other contractors, professionals and consultants employed
in connection with the design and construction and/or
rehabilitation of the Apartment Complex:
(B) administration of any construction and/or
rehabilitation contracts on behalf of the Partnership;
(C) participation in conferences and the rendering
of such advice and assistance as will aid in developing
economical, efficient and desirable design and construction
and/or rehabilitation procedures;
(D) the rendering of advice and recommendations as
to the selection procedures for the selection of
subcontractors and suppliers;
(E) the review and submission to the Partnership
for approval of all requests for payments under any
architectural agreement, general contractor's agreement, or
any loan agreements with any lending institutions providing
funds for the benefit of the Partnership for the design or
construction and/or rehabilitation of any improvement;
(F) the submission of any suggestions or request
for changes which could in any reasonable manner improve
the design, efficiency or cost of the Apartment Complex;
(G) applying for and maintaining in full force and
effect any and all governmental permits and approvals
required for the lawful construction and/or rehabilitation
of the Apartment Complex;
(H) compliance with all terms and conditions
applicable to the Partnership or the Apartment Complex
contained in any governmental permit or approval required
or obtained for the lawful construction and/or
rehabilitation of the Apartment Complex, or in any
insurance policy affecting or covering the Apartment
Complex;
(I) furnishing such consultation and advice
relating to the construction, rehabilitation and/or
development of the Apartment Complex as may be reasonably
requested from time to time by the Partnership;
(J) keeping the Partnership fully informed on a
regular basis of the progress of the design and
construction and/or rehabilitation of the Apartment
Complex, including the preparation of such reports as are
provided for herein or as may be reasonably be requested by
the Partnership;
(K) giving or making the Partnership's
instructions, requirements, approvals and payments provided
for in the agreements with the Apartment Complex architect,
general contractor, and other contractors, professionals
and consultants retained for the Apartment Complex; and
(L) at the Partnership's expense, on behalf of, and
as the attorney-in-fact for, the Partnership, filing any
notices of completion required or permitted to be filed
upon the completion of any improvement(s) and taking such
actions as may be required to obtain a certificate of
substantial completion;
(vi) Assist the Partnership in obtaining access to
utilities and required zoning approvals;
(vii) Inspect the progress of the course of
construction and/or rehabilitation of the Apartment
Complex, including verification of the materials and labor
being furnished to and on such construction, so as to be
fully competent to approve or disapprove requests for
payment made by the Apartment Complex architect and the
general contractor, or by any other parties with respect to
the design and construction and/or rehabilitation of the
Apartment Complex, and in addition to verify that the same
is being carried out substantially in accordance with the
plans and specifications approved by the Partnership or, in
the event that the same is not being so carried out, to
promptly so notify the Partnership;
(viii) If requested to do so by the Partnership,
perform on behalf of the Partnership all obligations of the
Partnership with respect to the design and construction
and/or rehabilitation of the Apartment Complex contained in
any loan agreement or security agreement entered into in
connection with any financing for the Apartment Complex, or
in any lease or rental agreement relating to the space in
the Apartment Complex, or in any agreement entered into
with any governmental body or agency relating to the terms
and conditions of such constructions, provided that copies
of such agreements have been provided by the Partnership to
the Developer or the Partnership has otherwise notified the
Developer in writing of such obligations;
(ix) To the extent requested to do so by the
Partnership, prepare and distribute to the Partnership a
critical path schedule, and periodic updates thereto as
necessary to reflect any material changes, but in any event
not less frequently than quarterly, other design or
construction and/or rehabilitation cost estimates as
required by the Partnership, and financial accounting
reports, including monthly progress reports on the quality,
progress and cost of construction and/or rehabilitation and
recommendations as to the drawing of funds from any loans
arranged by the Partnership to cover the cost of design and
construction and/or rehabilitation of the Apartment
Complex;
(x) Assist the Partnership in obtaining and
maintaining insurance coverage for the Apartment Complex,
the Partnership and its employees during the development
phase of the Apartment Complex, in accordance with an
insurance schedule approved by the Partnership, which
insurance shall include general public liability insurance
covering claims for personal injury, including but not
limited to bodily injury, or property damage, occurring in
or upon the Property or the streets, passageways, curbs and
vaults adjoining the Property. Such insurance shall be in
a liability amount approved by the Partnership;
(xi) During the construction and/or rehabilitation
and development period of the Apartment Complex, comply
with all applicable present and future laws, ordinances,
orders, rules, regulations and requirement (hereinafter
called "laws) of all federal, state and municipal
governments, courts, departments, commissions, boards and
offices, any national or local Board of Fire Underwriters
or Insurance Services Offices having jurisdiction in the
county in which the Apartment Complex is located or any
other body exercising functions similar to those of any of
the foregoing, or any insurance carriers providing any
insurance coverage for the Partnership or the Apartment
Complex, which will be applicable to the Apartment Complex
or any part thereof. Any such compliance undertaken by the
Developer on behalf of and in the name of the Partnership,
in accordance with the provisions of this Agreement, shall
be at the Partnership's expense. The Developer shall
likewise ensure that all agreements between the Partnership
and independent contractors comply with all such applicable
laws;
(xii) Assemble and retain all contracts, agreements
and other records and data as may be necessary to carry out
the Developer's functions hereunder. Without limiting the
foregoing, the Developer will prepare, accumulate and
furnish to the General Partner and the appropriate
governmental authorities, as necessary, data and
information sufficient to identify the market value of
improvement in place as of each real property tax lien
date, and will make application for appropriate exclusions
from the capital costs of the Apartment Complex for
purposes of real property ad valorem taxes;
(xiii) Coordinate and administer the design and
construction and/or rehabilitation of all interior tenant
improvements to the extent required under any leases or
other occupancy agreements to be constructed and/or
rehabilitated or furnished by the Partnership with respect
to the initial leasing of space in the Apartment Complex,
whether involving building standard or non-building
standard work;
(xiv) Use its best efforts to accomplish the timely
completion of the Apartment Complex in accordance with the
approved plans and specifications and the time schedules
for such completion approved by the Partnership;
(xv) At the direction of the Partnership, implement
any decisions of the Partnership made in connection with
the design, development and construction and/or
rehabilitation of the Apartment Complex or any policies and
procedures relating thereto, exclusive of leasing
activities; and
(xvi) Perform and administer any and all other
services and responsibilities of the Developer which are
set forth in any other provisions of this Agreement, or
which are requested to be performed by the Partnership and
are within the general scope of the services described
herein.
(c) Notwithstanding any provisions of this Agreement,
the Developer shall not take any action, expend any sum,
make any decision, give any consent, approval, or
authorization or incur any obligation with respect to any
of the following matters unless and until the same has
been approved by the General Partner:
(i) Approval of all construction and/or
rehabilitation and architectural contracts and all
architectural plans, specifications and drawings prior to
the construction and/or rehabilitation and/or alteration of
any improvements contemplated thereby, except for such
matters as may be expressly delegated in writing to the
Developer by the General Partner;
(ii) Any proposed change in the work of the
construction and/or rehabilitation of the Apartment
Complex, or in the plans and specifications therefor as
previously approved by the General Partner, or in the cost
thereof, or any change which would affect the design, cost,
value or quality of the Apartment Complex, except for such
matters as may be expressly delegated in writing to the
Developer by the General Partner; or
(iii) Expending an amount greater than the amount
which the Developer in good faith believes to be fair and
reasonable market value at the time and place of
contracting for any good purchased or leased or services
engaged on behalf of the Partnership or otherwise in
connection with the Apartment Complex.
3. ACCOUNTS AND RECORDS.
(a) The Developer, on behalf of the Partnership, shall
keep such books of account and other records as may be required
and approved by the General Partner, including, but not limited
to, records relating to the costs for which construction and/or
rehabilitation advances have been requested and/or received. The
Developer shall keep vouchers, statements, receipted bills and
invoices and all other records, in the form approved by the
General Partner, covering all collections, if any, disbursements
and other data in connection with the Apartment Complex prior to
final completion of construction and/or rehabilitation. All
accounts and records relating to the Apartment Complex, including
all correspondence, shall be surrendered to the Partnership upon
demand without charge therefor.
(b) All books and records prepared or maintained by the
Developer shall be kept and maintained at all times at the place
or places approved by the General Partner, and shall be available
for the subject to audit, inspection and copying by the
management agent for the Apartment Complex, the General Partner
or any representative or auditor therefor or supervisory or
regulatory authority, at the times and in the manner set forth in
the Partnership Agreement of the Partnership.
4. DEVELOPMENT FEE. For services performed and to be
performed under Sections 1 and 2 of this Agreement, the
Partnership agrees to pay the Developer a Development Fee in the
amount of $213,185, in accordance with Section 8.10 of the
Partnership Agreement. The entire Development Fee shall be
deemed earned as and when the services specified herein shall
have been rendered and in any event shall have been earned upon
the latest to occur of: (i) Substantial Completion, (ii) Cost
Certification and (iii) Final Closing. The Development Fee shall
be deferred and paid in accordance with Section 11.03A or Section
11.04A of the Partnership Agreement; or, if not sooner paid, on
October 1, 2008. In the event the Development Fee is not paid in
full by October 1, 2008, then the General Partner shall make a
Special Capital Contribution to the Partnership in accordance
with Section 5.01 of the Partnership Agreement.
5. WITHHOLDING OF FEE PAYMENTS. In the event that (a) the
General Partner or any successor General Partner shall not have
substantially complied with any material provisions under this
Agreement or the Partnership Agreement, or (b) any financing
commitment of any lender of the Partnership, or any agreement
entered into by the Partnership for financing related to the
Apartment Complex, shall have terminated prior to their
respective termination date(s), or (c) foreclosure proceedings
shall have been commenced against the Apartment Complex, then (i)
the Developer shall be in default under this Agreement and the
General Partner shall be in default under the Partnership
Agreement, and the Partnership shall withhold payment of any
installment of the Development Fee payable pursuant to Section 4
of this Agreement and Section 8.10 of the Partnership Agreement,
and (ii) the General Partner shall be liable for the
Partnership's payment of any and all installments of the
Development Fee payable pursuant to Section 4 of this Agreement
and Section 8.10 of the Partnership Agreement, to the extent that
the Fund has withheld any Installment(s) pursuant to Section 5.03
of the Partnership Agreement as a result of any default as
described above.
All amounts so withheld by the Partnership under this
Section 5 or Section 8.12 of the Partnership Agreement shall be
promptly released only after the Developer and/or the General
Partner has cured the default justifying the withholding, as
demonstrated by evidence reasonably acceptable to the Special
Limited Partner.
6. ASSIGNMENT OF FEES. The Developer shall not assign,
pledge or otherwise encumber, for security or otherwise, the
Development Fee set forth above to be made by the Partnership, or
any portion(s) thereof or any of their right(s) thereto, without
prior Notice to the Fund.
7. SUCCESSORS AND ASSIGNS, TERMINATION. This Agreement
shall be binding on the parties hereto, their heirs, successors,
and assigns. However, this Agreement may not be assigned by any
party hereto without the Consent of the Special Limited Partner,
nor may it be terminated without the Consent of the Special
Limited Partner. In the event that (a) the Interests of the
General Partner as General Partner is converted, transferred or
reduced, pursuant to Section 6.03 of the Partnership Agreement,
or (b) the General Partner or its successor(s) is removed from
the Partnership pursuant to Section 8.13 of the Partnership
Agreement, any further payment of installments of the Development
Fee pursuant to Section 4 above shall be governed by such
Sections 6.03 and 8.13, as applicable.
8. DEFINED TERMS. Capitalized terms used in this
Agreement and not specifically defined herein shall have the same
meanings assigned to them as in the Partnership Agreement.
9. SEPARABILITY OF PROVISIONS. Each provision of this
Agreement shall be considered separable and if for any reason any
provision which is not essential to the effectuation of the basic
purposes of this Agreement is determined to be invalid and
contrary to any existing or future law, such invalidity shall not
impair the operation of or affect those provisions of this
Agreement which are valid.
10. NO CONTINUING WAIVER. The waiver by any party of any
breach of this Agreement shall not operate or be construed to be
a waiver of any subsequent breach.
11. APPLICABLE LAW. This Agreement shall be construed and
enforced in accordance with the laws of the state of Missouri.
12. NOTICES. Any notice required to be given to the
parties under this Agreement shall be sent to the addresses set
forth in the first paragraph hereof.
IN WITNESS WHEREOF, the parties have caused this
Development Agreement to be duly executed as of the date first
written above.
PARTNERSHIP:
LOMBARD PARTNERS, ▇.▇.
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ PROPERTIES, L.L.C.
as General Partner
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Manager
DEVELOPER:
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
PROPERTIES, L.L.C.
BY:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Manager