EXHIBIT 99.2
ALLOCATION AGREEMENT
NEW MARKETS TAX CREDIT PROGRAM
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
ALLOCATEE: NMTC PROGRAM CONTROL NUMBER: 03NMA001435
Rockland Trust Community Development LLC
EMPLOYER IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
ADDRESS: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
DATE OF APPLICABLE NOTICE OF ALLOCATION AUTHORITY: DATE OF NOTICE OF ALLOCATION:4/26/04
July 18, 2003
ALLOCATEE'S FISCAL YEAR END: 12/31
NMTC ALLOCATION AMOUNT: $30,000,000
By signing this Allocation Agreement and in consideration of the mutual
covenants, conditions and agreements hereinafter set forth, the parties hereto,
by their respective Authorized Representatives, agree that the NMTC Allocation
provided hereunder shall be administered pursuant to the Organization Specific
Terms and Conditions attached hereto as Schedule 1 and the General Allocation
Terms and Conditions, attached hereto as Schedule 2, and made a material part
hereof.
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS ROCKLAND TRUST COMMUNITY DEVELOPMENT LLC
FUND
By:____________________________________ By:_____________________________________
Authorized Representative: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Authorized Representative: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Deputy Director for Policy and Programs Title: General Counsel
NMTC ALLOCATION EFFECTIVE DATE:
THIS ALLOCATION AGREEMENT COMPRISES:
SCHEDULE 1 - ORGANIZATION SPECIFIC TERMS AND CONDITIONS
SCHEDULE 2 - GENERAL ALLOCATION TERMS AND CONDITIONS
SCHEDULE 3 - OPINION OF COUNSEL
SCHEDULE 1
ALLOCATEE:ROCKLAND TRUST COMMUNITY DEVELOPMENT LLC
CONTROL NO.: 03NMA001435
NEW MARKETS TAX CREDIT PROGRAM
ORGANIZATION SPECIFIC TERMS AND CONDITIONS
SCHEDULE 1
ALLOCATEE: ROCKLAND TRUST COMMUNITY DEVELOPMENT LLC
Control No.: 03NMA001435
THE PROVISIONS SET FORTH BELOW CORRESPOND TO THE SPECIFIED SECTIONS IN SCHEDULE
2 (GENERAL ALLOCATION TERMS AND CONDITIONS) OF THIS ALLOCATION AGREEMENT.
SECTION 3.2(a): ELIGIBLE ACTIVITIES
Non-Real Estate QALICBs: X
Real Estate QALICBs: X
Capitalization of other CDEs:
Purchase of loans from other CDEs:
Financial Counseling and other Services: X
SECTION 3.2(b): SERVICE AREA: Local
STATE STATE FIPS COUNTY COUNTY FIPS
----- ---------- ------ -----------
MA 25 ▇▇▇▇▇ County 25007
MA 25 Barnstable County 25001
MA 25 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
MA 25 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
MA 25 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
MA 25 Nantucket County 25019
SECTION 3.2(c): SUBSIDIARY ALLOCATEES : Not applicable.
SECTION 3.2(d): UNRELATED ACTIVITIES
Unrelated Activities Clause: [X] Applicable [ ] Not Applicable
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SCHEDULE 1
ALLOCATEE: ROCKLAND TRUST COMMUNITY DEVELOPMENT LLC
Control No.: 03NMA001435
SECTION 3.2(f): FLEXIBLE PRODUCTS
Flexible Products Percentage: 100 %
SECTION 3.2(g): REQUIRED TRANSACTIONS: Not applicable.
SECTION 3.2(h): TARGETED DISTRESSED COMMUNITIES
Targeted Distressed Communities Percentage: 95 %
SECTION 3.2(i): LOAN PURCHASES REINVESTMENT: Not applicable.
SECTION 3.3(b): INELIGIBLE ACTIVITIES
Ineligible Activities Clause: [ ] Applicable [X] Not Applicable
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SCHEDULE 2
ALLOCATEE: ROCKLAND TRUST COMMUNITY DEVELOPMENT LLC
CONTROL NO.: 03NMA001435
NEW MARKETS TAX CREDIT PROGRAM
GENERAL ALLOCATION TERMS AND CONDITIONS
TABLE OF CONTENTS
Page
I. Incorporation by Reference ............................................... 1
II. Definitions .............................................................. 1
2.1 Act ................................................................ 1
2.2 Affiliate .......................................................... 1
2.3 Allocation Agreement ............................................... 1
2.4 Allocation Application ............................................. 1
2.5 Allocation Date .................................................... 1
2.6 Control ............................................................ 2
2.7 Equity Investment .................................................. 2
2.8 Financial Counseling and Other Services ............................ 2
2.9 Low-Income Community ............................................... 2
2.10 Low-Income Person .................................................. 2
2.11 Metropolitan Area .................................................. 2
2.12 NMTC Allocation .................................................... 2
2.13 NMTC Program ....................................................... 3
2.14 Notice of Allocation ............................................... 3
2.15 Qualified Active Low-Income Community Business ..................... 3
2.16 Qualified Community Development Entity ............................. 3
2.17 Qualified Equity Investment ........................................ 3
2.18 Qualified Low-Income Community Investment .......................... 3
2.19 Service Area ....................................................... 3
2.20 Subsidiary ......................................................... 3
2.21 Subsidiary Allocatee ............................................... 3
2.22 Temporary and Proposed Income Tax Regulations ...................... 4
2.23 Voting Securities .................................................. 4
III. The NMTC Allocation ...................................................... 4
3.1 NMTC Allocation .................................................... 4
3.2 Authorized Uses of NMTC Allocation ................................. 5
3.3 Restrictions on the Use of NMTC Allocation ......................... 7
3.4 Availability of NMTC Allocation............ ........................ 8
3.5 Notice to Taxpayers of Qualified Equity Investment ................. 8
IV. Representations and Warranties ........................................... 8
4.1 Organization, Standing and Powers .................................. 8
4.2 Qualification ...................................................... 8
4.3 Authorization; Consents ............................................ 8
4.4 Execution and Delivery; Binding Agreement .......................... 9
4.5 No Conflicts ....................................................... 9
4.6 Litigation ......................................................... 9
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4.7 Compliance with Other Instruments .................................. 9
4.8 Disclosure ......................................................... 9
4.9 Taxes; Debts; Bankruptcy ........................................... 10
4.10 Debarment, Suspension and Other Responsibility Matters ............. 10
4.11 Status as a CDE .................................................... 10
V. Conditions Precedent to NMTC Allocation .................................. 10
5.1 Performance ........................................................ 10
5.2 Opinion of Allocatee Counsel ....................................... 10
5.3 Representations and Warranties ..................................... 11
5.4 Proceedings and Documents .......................................... 11
VI. Covenants and Agreements of the Allocatee ................................ 11
6.1 Compliance with Government Requirements ............................ 11
6.2 Fraud, Waste, and Abuse ............................................ 11
6.3 Right to Inspect and Audit ......................................... 11
6.4 Retention of Records ............................................... 12
6.5 Reports ............................................................ 12
6.6 Equal Credit Opportunity Act ....................................... 13
6.7 Use of Allocation .................................................. 13
6.8 Maintain Existence as a CDE ........................................ 14
6.9 Advise the Fund of Certain Material Events ......................... 14
6.10 Disclosure to Potential Investors .................................. 14
VII. Monitoring Fee ........................................................... 14
7.1 Monitoring/Compliance Fee ............................................ 14
VIII. Events of Default, Events of Recapture and Remedies ...................... 15
8.1 Events of Default .................................................. 15
8.2 Events of Recapture ................................................ 15
8.3 Remedies ........................................................... 16
8.4 Referral to IRS .................................................... 16
8.5 No Waiver .......................................................... 16
8.6 Prior Notice to Allocatee of Sanctions ............................. 17
8.7 Joint and Several Liability ........................................ 17
IX. Miscellaneous ............................................................ 17
9.1 Notices ............................................................ 17
9.2 Entire Agreement ................................................... 18
9.3 Assignment ......................................................... 18
9.4 Successors ......................................................... 18
9.5 Severability ....................................................... 18
9.6 No Waiver .......................................................... 19
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9.7 Applicable Law ........................................................... 19
9.8 Disclaimer of Relationships .............................................. 19
9.9 Counterparts ............................................................. 19
9.10 Headings ................................................................. 19
9.11 Amendments ............................................................... 19
9.12 Survival of Representations and Warranties ............................... 19
9.13 Termination .............................................................. 20
9.14 Disclosure of Allocatee Reports by Fund .................................. 20
9.15 Compliance with Non-Discrimination Statutes .............................. 20
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ARTICLE I
INCORPORATION BY REFERENCE
26 C.F.R. Part 1, section 1.45D-1T, as from time to time amended, the Act
(as hereinafter defined), and any regulations for the NMTC Program which may be
later promulgated by the Fund, are incorporated by reference and given the same
force and effect as if set out in full text herein. In the event of any
inconsistency between 26 C.F.R. Part 1, section 1.45D-1T, the Act, or any
applicable Fund regulations and the terms of this Allocation Agreement, and any
amendments thereto, the provisions of 26 C.F.R. Part 1, section 1.45D-1T, the
Act, and the applicable Fund regulations shall govern.
ARTICLE II
DEFINITIONS
When used in this Allocation Agreement, the following terms shall have the
meanings specified below. Capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Act and/or the Temporary
and Proposed Income Tax Regulations (as hereinafter defined).
2.1 Act. "Act" shall mean Section 121 of the Community Renewal Tax Relief Act of
2000, which includes Section 45D of the Internal Revenue Code (IRC) as enacted
by section 1 (a)(7) of the Consolidated Appropriations ▇▇▇, ▇▇▇▇, Pub. L. No.
106-554 (December 21, 2000).
2.2 Affiliate. " Affiliate" shall mean any legal entity that Controls, is
Controlled by, or is under common Control with the Allocatee.
2.3 Allocation Agreement. "Allocation Agreement" or "Agreement" shall mean this
NMTC Program Allocation Agreement between the Fund and the Allocatee and
Subsidiary Allocatee, as the case may be, including the Organization Specific
Terms and Conditions (Schedule 1) and the General Allocation Terms and
Conditions (Schedule 2) and any attachments hereto, as such Agreement may, from
time to time, be amended in accordance with its terms.
2.4 Allocation Application. "Allocation Application" or "Application" shall mean
the NMTC Program Application Form, together with any permitted attachments
submitted (either in electronic or hard-copy format) by the Allocatee to the
Fund, in response to the Notice of Allocation Availability (NOAA) inviting
applications for the NMTC Program that was published in the Federal Register on
July 18, 2003 and as amended on September 12, 2003.
2.5 Allocation Date. "Allocation Date" shall mean the date, as determined by the
Fund, that the Allocatee has returned to the Fund an executed copy of this
Allocation Agreement along with an acceptable opinion of counsel as set forth in
Attachment A attached hereto. Once the Fund has determined the Allocation Date,
the Fund will insert such date on the signature page of the
Allocation Agreement and provide the Allocatee with notification of the
Allocation Date and a copy of the signature page.
2.6 Control. "Control" shall mean:
(a) Ownership, control, or power to vote more than 50 percent of the
outstanding shares of any class of Voting Securities of any entity,
directly or indirectly or acting through one or more other persons;
(b) Control in any manner over the election of a majority of the
directors, trustees, or general partners (or individuals exercising
similar functions) of any other entity; or
(c) Power to exercise, directly or indirectly, a controlling influence
over the management policies or investment decisions of another entity, as
determined by the Fund.
For purposes of this Allocation Agreement, the term "Control" does not
include an investor's contractual right to remove a general partner of an
Allocatee.
2.7 Equity Investment. "Equity Investment" shall mean pursuant to IRC Section
45D(b)(6) and 26 C.F.R. 1.45D-1T(c)(2), any stock (other than nonqualified
preferred stock as defined in IRC Section 351(g)(2)) in an entity that is a
corporation and any capital interest in an entity that is a partnership for
federal tax purposes.
2.8 Financial Counseling and Other Services. "Financial Counseling and Other
Services" shall mean, pursuant to 26 C.F.R. 1.45D-1T(d)(7), advice provided by a
Qualified Community Development Entity relating to the organization or operation
of a trade or business.
2.9 Low-Income Community. "Low-Income Community" shall mean any area as defined
in accordance with IRC Section 45D(e).
2.10 Low-Income Person. "Low-Income Person" shall mean individuals having an
income of not more than (a) for non-Metropolitan Areas, 80 percent of the
statewide median family income; and (b) for Metropolitan Areas, the greater of
(i) 80 percent of the statewide median family income or (ii) 80 percent of the
Metropolitan Area median family income.
2.11 Metropolitan Area. "Metropolitan Area" shall mean an area designated as
such by the Office of Management and Budget pursuant to 44 U.S.C. 3504(e) and 31
U.S.C. 1104(d) and Executive Order 10253 (3 CFR 1949-1953 Comp., p.758), as
amended.
2.12 NMTC Allocation. "NMTC Allocation" shall mean an allocation of tax credit
authority pursuant to the NMTC Program.
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2.13 NMTC Program. "NMTC Program" shall mean the program authorized by the Act
and implemented pursuant to guidance published by the Fund at 66 Federal
Register 21846 and 66 Federal Register 65806, the Temporary and Proposed Income
Tax Regulations (as hereinafter defined) promulgated by the Internal Revenue
Service, and applicable Notice of Allocation Availability.
2.14 Notice of Allocation. "Notice of Allocation" shall mean a notification to
the Allocatee from the Fund which informs the Allocatee that it has been
approved by the Fund to receive a NMTC Allocation subject to the terms and
conditions set forth in the Notice of Allocation.
2.15 Qualified Active Low-Income Community Business. "Qualified Active
Low-Income Community Business" or "QALICB" shall mean any corporation (including
a nonprofit corporation), partnership or other business that meets the
requirements set forth in IRC Section 45D(d)(2) and 26 C.F.R. 1.45D-1T(d)(4).
2.16 Qualified Community Development Entity. "Qualified Community Development
Entity" or "CDE" shall mean any domestic corporation or partnership, for Federal
tax purposes, certified as a CDE by the Fund pursuant to IRC Section 45D(c).
2.17 Qualified Equity Investment. "Qualified Equity Investment" shall mean an
Equity Investment in a CDE that meets the requirements of IRC Section 45D(b) and
26 C.F.R. 1.45D-1T(c).
2.18 Qualified Low-Income Community Investment. "Qualified Low-Income Community
Investment" or "QLICI" shall have the same meaning as set forth in IRC Section
45D(d) and 26 C.F.R. 1.45D-1T(d).
2.19 Service Area. "Service Area" shall mean, for the purposes of this
Allocation Agreement, the geographic area encompassing Low-Income Communities in
which the Allocatee is authorized to make Qualified Low-Income Community
Investments using the proceeds of Qualified Equity Investments. The Allocatee's
authorized Service Area is set forth in Section 3.2(b) of this Allocation
Agreement.
2.20 Subsidiary. "Subsidiary" shall mean any legal entity that is owned or
Controlled directly or indirectly by the Allocatee. This term includes series
funds, which are separate investment funds Controlled by the Allocatee.
2.21 Subsidiary Allocatee. "Subsidiary Allocatee" shall mean a Subsidiary of the
Allocatee to which the Fund has authorized the Allocatee to transfer all or a
portion of its NMTC Allocation, pursuant to Section 3.2(c) of this Allocation
Agreement. A Subsidiary Allocatee must be a CDE and must agree to abide by all
of the terms and conditions contained in this Allocation Agreement as such terms
and conditions apply to the Allocatee.
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2.22 Temporary and Proposed Income Tax Regulations. "Temporary and Proposed
Income Tax Regulations" shall mean the temporary and proposed regulations
promulgated by the Internal Revenue Service at 26 C.F.R. 1.45D-1T, together with
any amendment or interpretation of those regulations as may be promulgated by
the Internal Revenue Service through guidance published in the Internal Revenue
Bulletin or the Federal Register, which provide guidance for taxpayers claiming
the New Markets Tax Credit under IRC Section 45D.
2.23 Voting Securities. "Voting Securities" shall mean (a) shares of common or
preferred stock, general or limited partnership shares or interests, or similar
interests if the shares or interest, by statute, charter, or in any manner,
entitle the holder:
(i) To vote for or select directors, trustees, or partners (or persons
exercising similar functions of the issuing company); or
(ii) To vote on or to direct the conduct of the operations or other
significant policies of the issuing company.
(b) Nonvoting shares. Preferred shares, limited partnership shares or
interests, or similar interests are not Voting Securities if:
(i) Any voting rights associated with the shares or interest are limited
solely to the type customarily provided by statute with regard to
matters that would significantly and adversely affect the rights or
preference of the security or other interest, such as the issuance
of additional amounts or classes of senior securities, the
modification of the terms of the security or interest, the
dissolution of the issuing company, or the payment of dividends by
the issuing company when preferred dividends are in arrears;
(ii) The shares or interest represent an essentially passive investment
or financing device and do not otherwise provide the holder with
Control over the issuing company; and
(iii) The shares or interest do not entitle the holder, by statute,
charter, or in any manner, to select or to vote for the selection of
directors, trustees, or partners (or persons exercising similar
functions) of the issuing company.
ARTICLE III
THE NMTC ALLOCATION
3.1 NMTC Allocation. Subject to all of the terms and conditions hereof and in
reliance upon all representations, warranties, assurances, certifications and
agreements contained herein, the Fund hereby agrees to allocate to the Allocatee
and the Allocatee hereby agrees to accept from
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the Fund an NMTC Allocation. The amount of the NMTC Allocation represents the
amount of Qualified Equity Investments which may be issued by the Allocatee, and
as to which NMTCs may be claimed. If any of the conditions specified herein or
in any document connected herewith, including the Notice of Allocation, have not
been fulfilled to the satisfaction of the Fund, the Fund will, in its sole
discretion, elect not to effectuate the NMTC Allocation until such time as said
conditions shall be fulfilled to the satisfaction of the Fund. Once the Fund has
determined that the conditions required herein, including the Notice of
Allocation, have been met and the Allocatee has returned to the Fund an executed
copy of the Allocation Agreement along with an acceptable opinion of counsel,
the Fund will set the Allocation Date. This Allocation Agreement will be
effective as of the Allocation Date.
3.2 Authorized Uses of NMTC Allocation. The Allocatee shall use the NMTC
Allocation only as follows:
(a) The Allocatee shall make at least 85 percent of its QLICIs (in terms
of the aggregate dollar amount of the QLICIs) in the types of
activities listed in Schedule 1 of this Allocation Agreement.
(b) The Allocatee shall make at least 85 percent of the authorized
QLICIs (in terms of the aggregate dollar amount of the QLICIs) set
forth in Section 3.2(a) hereof in the Service Area(s) listed in
Schedule 1 of this Allocation Agreement.
(c) If applicable, the Allocatee may transfer all or part of its NMTC
Allocation to the Subsidiary Allocatees listed in Schedule 1 of this
Allocation Agreement.
(d) If applicable, as listed in Schedule 1 of this Allocation Agreement,
the Allocatee shall satisfy the requirements of IRC Section
45D(b)(1)(B) and 26 C.F.R. 1.45D-1T(c)(5) with respect to the
Qualified Equity Investments it receives by making QLICIs in
businesses in which persons unrelated to the Allocatee hold the
majority equity interest (as defined in IRC Section 45D(f)(2)(B)),
and as determined subsequent to the Allocatee making the QLICI. At
no time shall the aggregate dollar amount of QLICIs made to related
entities exceed 15 percent of the Allocatee's total NMTC Allocation;
(e) By September 30, 2007, the Allocatee shall issue at least 60 percent
of its Qualified Equity Investments related to its NMTC Allocation;
(f) If applicable, at such time that the Allocatee has made 100 percent
of its QLICIs or September 30, 2007, whichever date is earlier, and
until the Allocatee redeems its first Qualified Equity Investment
related to its NMTC Allocation, the Allocatee shall demonstrate that
it has made at least the designated percent of such QLICIs as listed
in Schedule 1 of this Allocation Agreement (in terms of the
aggregate dollar amount of the QLICIs) that are in the form of loans
to or investments in CDEs or QALICBs (as opposed to loan purchases
or the provision of Financial Counseling and Other Services) using
terms and conditions that, at
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the time each of the QLICIs was made, were flexible,
non-conventional, or non-conforming with reference to either the
Allocatee's underwriting guidelines or standard practice in the
marketplace as documented by the Allocatee, including one or more of
the following criteria as is appropriate for the type of borrower or
investee, use of loan or equity investment proceeds and transaction
type, provided nothing in this Allocation Agreement shall be
construed to require the Allocatee to engage in unsafe or unsound
underwriting practices:
(i) Equity products;
(ii) Equity-equivalent terms and conditions;
(iii) Debt with equity features (i.e., debt with royalties; debt
with warrants; convertible debt);
(iv) Subordinated debt;
(v) Below market interest rates;
(vi) Lower than standard origination fees;
(vii) A longer than standard period of interest only loan payments;
(viii) Higher than standard loan to value ratio;
(ix) A longer than standard amortization period;
(x) More flexible borrower credit standards;
(xi) Nontraditional forms of collateral;
(xii) Lower than standard debt service coverage ratio; or
(xiii) Loan loss reserve requirements that are less than standard.
(g) If applicable, the Allocatee shall use the proceeds of its Qualified
Equity Investments minimally or solely to make QLICIs in the
project(s) listed in Schedule 1 of this Allocation Agreement.
(h) If applicable, at such time that the Allocatee has made 100 percent
of its QLICIs or September 30, 2007, whichever date is earlier, the
Allocatee shall have made at least the designated percent of the
total dollar amount of its QLICIs, as listed in Schedule 1 of this
Allocation Agreement, in areas within its Service Area with one or
more of the following criteria or programs, as of the date the
Allocatee closed the QLICI transaction:
(i) Poverty rates greater than 30 percent;
(ii) If located within a non-Metropolitan Area, median family
income does not exceed 60 percent of statewide median
family income or if located within a Metropolitan Area,
median family income does not exceed 60 percent of the
greater of statewide median family income or the
Metropolitan Area median family;
(iii) Unemployment rates at least 1.5 times the national
average;
(iv) Designated for redevelopment by a governmental agency;
6
(v) Federally designated Empowerment Zones, Enterprise
Communities, or Renewal Communities;
(vi) SBA designated HUB Zones;
(vii) Designated as Native American or Alaskan Native areas,
Hawaiian Homelands, or redevelopment areas by the
appropriate Tribal or other authority;
(viii) Brownfields redevelopment areas;
(ix) Encompassed by a HOPE VI redevelopment plan; or
(x) Located in a Hot Zone (defined as geographic areas
designated by the Fund as having greater levels of
economic distress).
(i) If applicable, the Allocatee shall require CDEs from which it
purchases loans to reinvest at least the designated percent of the
proceeds of such loan sales, as listed in Schedule 1 of this
Allocation Agreement, in the form of QLICIs.
3.3 Restrictions on the Use of NMTC Allocation.
(a) The Allocatee shall not use its NMTC Allocation in a manner other
than as authorized herein, unless the Allocatee consults with and
obtains the prior written approval of the Fund, which approval shall
not be unreasonably withheld.
(b) If applicable, the Allocatee shall not use the proceeds of its
Qualified Equity Investments for the activities listed in Schedule 1
of this Allocation Agreement.
(c) The Allocatee shall not transfer any portion of a NMTC Allocation to
any Subsidiary, except those Subsidiaries listed in Section 3.2(c)
of this Allocation Agreement, without the Fund's prior written
approval.
(d) Pursuant to IRC Section 45D(b)(2) and 26 C.F.R. 1.45D-1T(c)(4)(ii),
the Allocatee may not designate Equity Investments that it issues as
Qualified Equity Investments in an amount that exceeds the total
amount of its NMTC Allocation.
(e) Pursuant to IRC Section 45D(b)(1) and 26 C.F.R.
1.45D-1T(c)(4)(i)(A), the Allocatee may not designate any Equity
Investment that it issues as a Qualified Equity Investment if such
investment is issued by the Allocatee more than five (5) years after
the Allocation Date.
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(f) Pursuant to 26 C.F.R. 1.45D-1T(c)(4)(i)(B), the Allocatee may not
designate an Equity Investment that it issues to another CDE as a
Qualified Equity Investment if the CDE making the investment has
received an NMTC Allocation.
(g) A taxpayer that makes a Qualified Equity Investment in the Allocatee
may not receive a Bank Enterprise Award Program award in addition to
NMTCs for making the same Equity Investment in the Allocatee.
3.4 Availability of NMTC Allocation. On or after the Allocation Date, the
Allocatee may designate Qualified Equity Investments as to which NMTCs may be
claimed with respect to Equity Investments made on or after that date. An
Allocatee may also designate as a Qualified Equity Investment such Equity
Investments in the Allocatee made pursuant to the requirements set forth in 26
C.F.R. 1.45D-1T(c)(3)(ii)(B).
3.5 Notice to Taxpayers of Qualified Equity Investment. In accordance with 26
C.F.R. 1.45D-1T(g)(2), the Allocatee shall provide notice to any taxpayer who
makes a Qualified Equity Investment in the Allocatee at its original issue that
the Equity Investment is a Qualified Equity Investment entitling the taxpayer to
claim a NMTC. The Allocatee shall provide such notice to the taxpayer no later
than 60 days after the date the taxpayer makes the Qualified Equity Investment
in the Allocatee. The notice shall contain the amount paid to the Allocatee for
the Qualified Equity Investment at its original issue and the taxpayer
identification number of the Allocatee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
As of Allocation Date, the Allocatee hereby represents and warrants to the Fund
the following:
4.1 Organization, Standing and Powers. The Allocatee is a domestic corporation
or partnership for Federal tax purposes. In addition, the Allocatee validly
exists and is in good standing (if applicable) under the laws of the State of
its formation, and has all requisite organizational power and authority to own
and operate its assets and properties, to carry on its business as it is now
being conducted and to carry out the authorized use(s) of the NMTC Allocation
provided hereunder.
4.2 Qualification. The Allocatee is duly qualified, in good standing (if
applicable) and authorized to transact business in each jurisdiction where the
conduct of the Allocatee's business, the carrying out of the authorized use(s)
of the NMTC Allocation to be provided hereunder or the ownership of its assets
and properties requires such qualification, or, if not so qualified, the
Allocatee's failure so to qualify shall not reasonably be expected to: (i) have
a material adverse effect on the financial condition or business operations of
the Allocatee; (ii) impair the Allocatee's ability to carry out the authorized
use(s) of the NMTC Allocation to be provided hereunder; or (iii) impair the
Allocatee's right to enforce any material agreement to which it is a party.
8
4.3 Authorization; Consents. The execution, delivery and performance by the
Allocatee of the Allocation Agreement and the carrying out of the authorized
use(s) of the NMTC Allocation provided hereunder are within the Allocatee's
powers and have been duly authorized by all necessary corporate, partnership or
limited liability company action and no consent, approval, authorization or
order of, notice to and filing with, any third party including, without
limitation, any governmental entity which has not been previously obtained, is
required in connection with such execution, delivery and performance. The
Allocatee will make all such notices or filings that may be required after the
Allocation Date in accordance with the applicable time periods for such notices
or filings.
4.4 Execution and Delivery; Binding Agreement. This Allocation Agreement and all
documents connected herewith have been or will be, on or before the Allocation
Date, duly authorized, executed and delivered on behalf of the Allocatee and
constitute, on the Allocation Date, the legal, valid and binding obligations of
the Allocatee enforceable in accordance with their respective terms.
4.5 No Conflicts. The execution, delivery and performance by the Allocatee of
this Allocation Agreement and the carrying out of the authorized uses(s) of the
NMTC Allocation provided hereunder shall not result in any material violation of
and shall not materially conflict with, or result in a material breach of any of
the terms of, or constitute a material default under, any provision of Federal
or State law to which the Allocatee is subject, the Allocatee's incorporation,
charter, organization, formation or otherwise establishing documentation, bylaws
or any agreement, judgment, writ, injunction, decree, order, rule or regulation
to which the Allocatee is a party or by which it is bound.
4.6 Litigation. The Allocatee has neither actual nor constructive knowledge of
any suit, action, proceeding or investigation pending or threatened that
questions the validity of this Allocation Agreement or any action taken or to be
taken pursuant hereto or contemplated hereby including, but not limited to, the
carrying out of the authorized use(s) of the NMTC Allocation to be provided
hereunder.
4.7 Compliance with Other Instruments. The Allocatee is not in material
violation of any provision of its incorporation, charter, organization,
formation or otherwise establishing documents, or in material violation of any
loan agreement or other material agreement to which it is a party. The Allocatee
is not in material violation of any instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to it, the violation of
which might have a material adverse effect on the business, affairs, operations,
or condition of the Allocatee.
4.8 Disclosure. Neither this Allocation Agreement, the Allocation Application
nor any attachment hereto, nor any certification or other document referenced or
incorporated herein or therein and furnished to the Fund by the Allocatee
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading. The
Allocatee has disclosed, in writing, to the Fund all facts that might reasonably
be expected to result in a material adverse effect upon the Allocatee's ability
either to conduct its principal
9
business or to carry out its proposed and herein authorized uses of the NMTC
Allocation to be provided hereunder. The Allocatee has not knowingly and
willfully made or used a document or writing containing any false, fictitious or
fraudulent statement or entry as part of its correspondence or communication
with the Fund. The Allocatee acknowledges, under 18 U.S.C. Section 1001, that if
it knowingly and willfully makes or uses such document or writing, it or its
employee(s) or agents may be fined or imprisoned for not more than five years,
or both.
4.9 Taxes; Debts; Bankruptcy. The Allocatee is not delinquent on any debts owed
to Federal, State or local governments including, but not limited to, amounts
due under the Internal Revenue Code. The Allocatee has never filed for
bankruptcy and has neither actual nor constructive knowledge of any pending or
anticipated bankruptcy filings on its behalf.
4.10 Debarment, Suspension and Other Responsibility Matters. Neither the
Allocatee nor any of its principals (as defined by 31 C.F.R. 19.105): (a) are
presently debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded from covered transactions by any Federal department or
agency; (b) within a three-year period prior to the Allocation Date, have been
convicted of or had a civil judgment rendered against them for commission of
fraud or a criminal offense in connection with obtaining, attempting to obtain,
or performing a public (Federal, State or local) transaction or contract under a
public transaction, violation of Federal or State antitrust statutes or
commission of embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements, or receiving stolen property;
(c) are presently indicted for or otherwise criminally or civilly charged by a
governmental entity (Federal, State or local) with commission of any of the
offenses enumerated in (b) above; or (d) within a three-year period prior to the
Allocation Date, have had one or more public transactions (Federal, State, or
local) terminated for cause or default.
4.11 Status as a CDE. Since its certification as a CDE by the Fund, the
Allocatee has neither actual nor constructive knowledge of any changes that may
adversely affect its (or any of its Subsidiary Allocatees') status as a
certified CDE.
ARTICLE V
CONDITIONS PRECEDENT TO NMTC ALLOCATION
The obligation of the Fund to provide a NMTC Allocation to the Allocatee
is subject to the fulfillment, as determined by the Fund, in its sole
discretion, of the following conditions precedent, each of which shall be
fulfilled prior to or as of the Allocation Date.
5.1 Performance. The Allocatee shall have performed and complied with all
applicable agreements and conditions contained herein required to be performed
or complied with by it before or on the Allocation Date.
5.2 Opinion of Allocatee Counsel. Unless otherwise determined by mutual
agreement of the Fund and the Allocatee, the Fund shall have received from the
counsel for the Allocatee, an acceptable opinion or acceptable opinions, as
determined by the Fund, substantially in the form set forth in Attachment A
attached hereto.
10
5.3 Representations and Warranties. The representations and warranties set forth
in this Agreement, the Allocation Application and the Assurances and
Certifications contained in the Allocation Application are true and correct in
all material respects as of the Allocation Date.
5.4 Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated by this Allocation Agreement and all
documents and instruments incident to such transactions which are necessary for
the Allocatee's execution and delivery of the Allocation Agreement shall be
satisfactory in substance and form to the Fund, and the Fund shall have received
from the Allocatee all such counterpart originals or certified or other
documents as the Fund may reasonably request.
ARTICLE VI
COVENANTS AND AGREEMENTS OF THE ALLOCATEE
The Allocatee shall duly perform and observe each and all of the following
covenants and agreements:
6.1 Compliance with Government Requirements. In carrying out its
responsibilities pursuant to this Allocation Agreement, the Allocatee shall
comply with all applicable Federal, State and local laws, regulations,
ordinances, Office of Management and Budget (OMB) Circulars, and Executive
Orders.
6.2 Fraud, Waste and Abuse. If the Allocatee becomes aware at any time of the
existence of fraud, waste or abuse of the NMTC Allocation allocated pursuant to
this Allocation Agreement, the Allocatee shall promptly report such incidence(s)
to the Office of Inspector General of the U.S. Department of the Treasury.
6.3 Right to Inspect and Audit. The Allocatee shall submit such financial and
activity reports, records, statements, documents, and other information as may
be requested by the Fund and the U.S. Department of the Treasury to ensure
compliance with this Allocation Agreement, the provisions of the Internal
Revenue Code and the Temporary and Proposed Income Tax Regulations. The United
States Government including, but not limited to, the U.S. Department of the
Treasury, the Internal Revenue Service and the Comptroller General, and their
duly authorized representatives, shall have full and free access during
reasonable business hours to the Allocatee's offices and facilities and all
books, documents, records and financial statements relevant to the NMTC
Allocation provided hereunder. The Allocatee shall permit any of these
authorities to copy such documents as they deem appropriate. The purposes of
such inspections and/or audits will include, but not be limited to, ensuring
that representations, warranties, covenants, and/or certifications provided by
the Allocatee are accurate. Such inspections and/or audits may also be conducted
to investigate a taxpayer's claim for a New Markets Tax Credit, including a
potential event of recapture pursuant to IRC Section 45D(g) and 26 C.F.R.
1.45D-1T(e)(2). The Fund will, consistent with applicable law, including the
Freedom of Information Act (5 U.S.C. Section 552) and the Privacy Act (5 U.S.C.
Section 552a), maintain the confidentiality of all financial and other
proprietary information disclosed to the Fund pursuant to this section.
11
Furthermore, the Fund will, consistent with IRC Section 6103, maintain the
confidentiality of, and adequately safeguard, return information as provided to
the Fund pursuant to this section.
6.4 Retention of Records. The Allocatee shall retain all financial records,
supporting documents, and any other records pertinent to the NMTC Allocation
(including the Allocatee's designation of Qualified Equity Investments and
making of QLICIs) as may be reasonably necessary to demonstrate, among other
things, the following:
(a) the manner in which the NMTC Allocation provided hereunder is used;
(b) compliance with the requirements of IRC Section 45D, the Temporary
and Proposed Income Tax Regulations and this Allocation Agreement;
and
(c) information to evaluate the results of the NMTC Program.
6.5 Reports. The Allocatee will be required to report on its compliance with the
requirements of the NMTC Program and this Allocation Agreement and to assist the
Fund in evaluating the results of the NMTC Program. Unless otherwise instructed
by the Fund, the Allocatee will submit its reports, except for audited financial
statements, to the Fund electronically using the Fund's electronic data
collection and Allocation Tracking Systems. The reports are as follows:
(a) Notice of Receipt of Qualified Equity Investment. Within 60 days after
the Allocatee designates an Equity Investment that it issues to a taxpayer
as a Qualified Equity Investment, the Allocatee shall notify the Fund
using the Fund's electronic Allocation Tracking System. Such notice shall
contain, but not be limited to, the following:
(i) The identification of each taxpayer (including, but not limited to,
the name, taxpayer identification number, and address of the
investment entity and any partners, members, or other legal entities
comprising such investment entity) entitled to claim a NMTC as the
result of a Qualified Equity Investment designated by the Allocatee;
and
(ii) The form, date and dollar amount of Qualified Equity Investments
issued by the Allocatee.
(b) Institution-Level Report: The institution-level report shall be
submitted annually and may include, but not be limited to, organizational,
financial, portfolio and impact information, as well as:
(i) Certifications and business activity data related to the
Allocatee's (and any of its Subsidiary Allocatees') maintenance of
its status as a CDE; and
12
(ii) Any other information that the Fund deems appropriate to ensure
compliance with this Allocation Agreement and to evaluate the
results of the NMTC Program.
No later than 180 days after the end of the Allocatee's first fiscal year ending
after the Allocation Date and each fiscal year of the Allocatee thereafter, the
Allocatee shall deliver to the Fund the Allocatee's institution-level report.
(c) Audited Financial Statements. No later than 180 days after the end of
the Allocatee's first fiscal year ending after the Allocation Date and
each fiscal year of the Allocatee thereafter, the Allocatee shall deliver
to the Fund copies of the Allocatee's most recent statements of financial
condition audited by an independent certified public accountant covering
the Allocatee's fiscal year end .
(d) Transaction-Level Report: The transaction-level report shall include:
(i) specific data elements on each of the Allocatee's QLICIs,
including, but not limited to, the location, type and amount of the
QLICIs, and information on the use of the proceeds of QLICIs by CDEs
receiving Equity Investments or loans from the Allocatee or CDEs
selling loans to the Allocatee;
(ii) with respect to each Equity Investment that the Allocatee
designates as a Qualified Equity Investment, a certification that
the requirements of IRC Section 45D(b)(1)(B) and 26 C.F.R.
1.45D-1T(c)(5) are met and that no recapture event within the
meaning of IRC Section 45D(g) and 26 C.F.R. 1.45D-1T(e)(2) has
occurred; and
(iii) any other information required to confirm the Allocatee's
compliance with the terms of this Allocation Agreement, IRC Section
45D and the Temporary and Proposed Income Tax Regulations.
The Allocatee shall be required to submit this report at least annually, due no
later than 180 days after the end of the Allocatee's first fiscal year ending
after the Allocation Date and each fiscal year thereafter. In addition, the Fund
reserves the right to require additional submissions of information related to
this report, but not more frequently than quarterly. If additional submissions
are required, the Allocatee will be notified of the specific due date for each
additional submission of information related to the transaction-level report at
least 60 days prior to the respective due date.
6.6 Equal Credit Opportunity Act. The Allocatee shall provide its products and
services in a manner that is consistent with the Equal Credit Opportunity Act
(15 U.S.C. Section 1691), to the extent that the Allocatee is subject to the
requirements of such Act.
6.7 Use of Allocation. The Allocatee shall use its NMTC Allocation provided
hereunder only as permitted hereby.
13
6.8 Maintain Existence as a CDE. The Allocatee shall do all things reasonably
necessary to preserve, renew and keep in full force and effect its existence as
a CDE.
6.9 Advise the Fund of Certain Material Events. The Allocatee shall advise the
Fund in writing in reasonable detail of any of the following events, within 20
calendar days of the occurrence of such events:
(a) any proceeding instituted against the Allocatee or its Affiliates
in, by or before any court, governmental or administrative body or
agency, which proceeding or its outcome could reasonably be expected
to have a material adverse effect upon the financial condition or
business operations, of the Allocatee;
(b) any material adverse change in the condition, financial or
otherwise, or operations of the Allocatee which would impair the
Allocatee's ability to carry out the authorized uses of the NMTC
Allocation to be provided hereunder;
(c) the occurrence of any Event of Default, as that term is defined in
Section 8.1 hereof, or any event which upon notice or lapse of time,
or both, would constitute an Event of Default;
(d) the occurrence of any event that may be a recapture event pursuant
to IRC Section 45D(g) and 26 C.F.R. 1.45D-1T(e)(2); or
(e) the merger or acquisition of the Allocatee by or with another
entity.
6.10 Disclosure to Potential Investors. The Allocatee will make all disclosures
required by Federal or State law, including applicable securities laws, to
taxpayers to whom the Allocatee issues Qualified Equity Investments and will
advise all such taxpayers to perform all necessary due diligence prior to making
an Equity Investment in the Allocatee. The Allocatee will also inform all such
taxpayers that the receipt of a NMTC Allocation from the Fund shall not be
deemed to be an assurance of any kind by the Fund regarding the taxpayer's
Equity Investment in the Allocatee.
ARTICLE VII
MONITORING FEE
7.1 Monitoring/Compliance Fee. The Allocatee agrees to pay to the Fund an annual
fee as may be assessed by the Fund, to cover the full cost (as defined in OMB
Circular A-25) to the Fund associated with monitoring the Allocatee's compliance
with the requirements of the NMTC Program. The Fund will provide the Allocatee
with due dates and instructions for payment of such fee at a later date.
14
ARTICLE VIII
EVENTS OF DEFAULT, EVENTS OF RECAPTURE AND REMEDIES
8.1 Events of Default. If any one or more of the following events occurs, the
Fund, in its sole discretion, may find the Allocatee to be in default
(a) any representation, warranty, certification, assurance or any other
statement of fact set forth in the Allocation Application of the
Allocatee including, but not limited to, the Assurances and
Certifications contained in the Application, is found by the Fund to
be inaccurate, false, or incomplete when made, in any material
respect;
(b) any representation, warranty, certification, assurance or any other
statement of fact set forth in this Allocation Agreement as of the
Allocation Date or any representation or warranty set forth in any
document, report, certificate, financial statement or instrument now
or hereafter furnished in connection with this Allocation Agreement
as of the Allocation Date or thereafter, is found by the Fund to be
inaccurate, false, or incomplete when made, in any material respect;
(c) the failure of the Allocatee to observe, comply with or perform any
term, covenant, agreement or other provision contained in IRC
Section 45D, the Temporary and Proposed Income Tax Regulations, the
Allocation Agreement or any instrument, note or any other document
delivered to the Fund in connection with or pursuant to this
Allocation Agreement; or
(d) the failure of the Allocatee to conduct its business in the usual
and ordinary course or to maintain its existence and right to carry
on its business and duly obtain all necessary renewals and
extensions thereof and to maintain, preserve and renew all such
rights, powers, privileges and franchises to the extent that such
failure has a material adverse effect on the Allocatee, its
financial condition or business operations and impairs the
Allocatee's ability to carry out the authorized use(s) of the NMTC
Allocation to be provided hereunder; provided, however, that no
default will be deemed to occur in the event that the Allocatee
ceases or omits to exercise any rights, powers, privileges, or
franchises that in the judgment of its board of directors may no
longer be exercised in the best interests of the Allocatee.
8.2 Events of Recapture. If any one of the following events occurs, a Qualified
Equity Investment issued by the Allocatee is subject to a recapture event as
further defined in IRC Section 45D(g) and 26 C.F.R. 1.45D-1T(e):
(a) the Allocatee ceases to be a certified CDE;
(b) the proceeds of a Qualified Equity Investment issued by the
Allocatee ceases to be used as required by IRC Section 45D(b)(1)(B);
or
15
(c) a Qualified Equity Investment issued by the Allocatee is redeemed by
the Allocatee.
The Internal Revenue Service will determine all such events of recapture.
8.3 Remedies. If the Fund finds the Allocatee to be in default under Section 8.1
of this Allocation Agreement, the Fund may, in its sole discretion, take any one
or more of the following actions, subject to Section 8.6 of this Agreement:
(a) revoke approval of any other applications submitted to and declare
as ineligible any other applications pending before the Fund by the
Allocatee or any of its Affiliates under any of the Fund's programs;
(b) terminate or reallocate any unused portion of the NMTC Allocation
authorized hereunder;
(c) bar the Allocatee or any of its Affiliates from applying for a NMTC
Allocation from the Fund or to any of the Fund's programs;
(d) require the Allocatee to convene a meeting(s) of its board of
directors or other governing body at which meeting(s) the Fund will
be given the opportunity to address the attendees with respect to
the Fund's evaluations and concerns regarding the performance of the
Allocatee under this Allocation Agreement;
(e) notify taxpayers (as identified in Section 6.5 of this Allocation
Agreement) of the Allocatee's default under this Allocation
Agreement; and
(f) take any other action permitted by the terms of this Allocation
Agreement or available at law or in equity (except for recapture
events as set forth in Section 8.2 of this Allocation Agreement).
8.4 Referral to IRS. The Fund may provide reports to the Internal Revenue
Service on the activities of each Allocatee based on the Allocatee's reports to
the Fund. The Internal Revenue Service may use such reports to, among other
things, aid in its determination of whether: (i) a Qualified Equity Investment
issued by the Allocatee is subject to a recapture event as defined in IRC
Section 45D(g) and 26 C.F.R. 1.45D-1T(e)(2); (ii) a QLICI made by an Allocatee
meets the requirements of IRC Section 45D and 26 C.F.R 1.45D-1T; and (iii) an
Allocatee continues otherwise to meet the requirements of IRC Section 45D and 26
C.F.R. 1.45D-1T. The Fund may share with the IRS any other information that it
obtains, in such manner and at such times, as it deems appropriate, consistent
with IRC Section 6103.
8.5 No Waiver. No course of dealing on the part of the Fund or any delay or
failure on the part of the Fund to exercise any right herein will operate as a
waiver of the right or otherwise prejudice the Fund's rights, powers and
remedies under this Allocation Agreement, the Notice of
16
Allocation, the NOAA, any guidance documents published by the Fund, the Act, the
Temporary and Proposed Income Tax Regulations or any other applicable law or
regulation.
8.6 Prior Notice to Allocatee of Sanctions. Prior to exercising or imposing any
remedy contained herein, the Fund will provide the Allocatee with written notice
of the incident(s) giving rise to the default and the proposed remedy (or
remedies). The Fund's written notice will give the Allocatee up to 90 calendar
days from the date of the notice to respond to and to cure the incident(s)
giving rise to the default. If the Allocatee fails to respond or correct the
incident(s) giving rise to the default within the time period provided in the
written notice, the Fund may, in its sole discretion, impose or exercise the
remedy (or remedies) set forth in its written notice. Nothing in this Allocation
Agreement, however, will provide the Allocatee with any right to any formal or
informal hearing or comparable proceeding not otherwise required by law. In the
event of a recapture event under IRC Section 45D(g) and 26 C.F.R.
1.45D-1T(e)(2), this Section does not apply.
8.7 Joint and Several Liability. The Allocatee and each of its Subsidiary
Allocatees are hereby jointly and severally liable for any event of default
under Section 8.1 of this Allocation Agreement whether the Allocatee or any of
its Subsidiary Allocatees incurs such default. If such an event of default
occurs, the Fund may, in its sole discretion, subject to Section 8.6 of this
Allocation Agreement, impose any of the remedies listed in Section 8.3 of this
Allocation Agreement jointly or severally upon the Allocatee and its Subsidiary
Allocatees, except that Section 8.3(b) of this Allocation Agreement shall not be
imposed with respect to any investment commitments related to a NMTC Allocation
made to a non-defaulting Allocatee or Subsidiary Allocatee, as determined by the
Fund. For purposes of this section, an investment commitment must be evidenced
by a written, signed document in which: (i) an investor commits to make an
investment in the Allocatee or Subsidiary Allocatee in a specified amount and on
specified terms; (ii) an investor has made an initial disbursement of investment
proceeds related to such investment commitment to the Allocatee or Subsidiary
Allocatee; and (iii) the investor commits to disburse the remaining investment
proceeds based on specified amounts and payment dates.
ARTICLE IX
MISCELLANEOUS
9.1 Notices. All notices, requests, demands, consents, waivers and other
communications given under any provision of this Allocation Agreement shall be
in writing and shall be delivered by electronic mail or the Fund's electronic
data collection and Allocation Tracking System, by hand, mailed by
postage-prepaid first-class mail or delivered by overnight courier service, to
the addresses and individuals indicated below, or to such different address or
addresses as the addressee may have specified in a notice duly given to the
sender:
if to the Fund:
Community Development Financial Institutions Fund
Department of the Treasury
Attention: Grants Management and Compliance Manager
17
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇@▇▇▇▇.▇▇▇▇▇.▇▇▇
if to the Allocatee:
Allocatee's physical or electronic mailing address as listed in the
Fund's electronic database.
Attention: Authorized Representative
All such notices shall be deemed as received on the date of actual receipt by
the Fund or the Allocatee.
9.2 Entire Agreement. This Allocation Agreement, the Schedules, the material
provisions of the Allocation Application and the attachments, exhibits,
appendices and supplements to the Application, and the Notice of Allocation
between the Allocatee and the Fund with respect to the NMTC Allocation contain
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior agreements or understandings, written or oral, in
respect thereof, and no change, modification or waiver of any provision hereof
shall be valid unless in writing and signed by the party to be bound. The
Allocation Application, including any attachments, exhibits, appendices and
supplements thereto, any Schedules, attachments, exhibits, appendices and
supplements to this Allocation Agreement, and said Notice of Allocation are
incorporated in and made a part of this Allocation Agreement.
9.3 Assignment. The Allocatee may not assign, pledge or otherwise transfer any
rights, benefits or responsibilities of the Allocatee under this Allocation
Agreement except as set forth in Section 3.2(c) of this Allocation Agreement,
without the prior written consent of the Fund.
9.4 Successors. The rights, benefits and responsibilities of each of the parties
hereto shall inure to their respective successors, subject to this Section 9.4.
If the Allocatee merges with or is acquired by another entity, the Fund reserves
the right to examine the new entity, which acquired or merged with the
Allocatee, to determine its acceptability as an Allocatee. If the Fund
determines that the new entity is not eligible or acceptable as an Allocatee, or
if the new entity does not agree to abide by all the provisions of this
Allocation Agreement and shall continue operations and performance as if there
were no interruption in the parties to this Agreement, the Fund may terminate
the continued provision of the NMTC Allocation under this Allocation Agreement
and take any or all remedies it deems appropriate in accordance with Sections
8.3 and 8.6 herein.
9.5 Severability. If any provision of this Allocation Agreement shall for any
reason be held to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall not affect any other provision of this
Allocation Agreement, and this Allocation Agreement shall be construed as if
such illegal, invalid or unenforceable provision had never been contained
herein.
18
9.6 No Waiver. No delay or failure on the part of either party in exercising any
rights hereunder, and no partial or single exercise thereof, shall constitute a
waiver of such rights or of any other rights hereunder.
9.7 Applicable Law. This Allocation Agreement shall be governed by and construed
in accordance with Federal law to the extent such Federal law is applicable, and
to the extent Federal law is not applicable, this Allocation Agreement shall be
governed by and construed in accordance with the law of the State of formation
of the Allocatee or its Subsidiary Allocatees, as the case may be.
9.8 Disclaimer of Relationships.
(a) The Allocatee shall not be deemed to be an agency, department or
instrumentality of the United States merely by virtue of it being an
Allocatee.
(b) Nothing in this Allocation Agreement, nor any act of the Fund or the
Allocatee, shall be construed by either of them, or by a third
party, to create any relationship of third-party beneficiary,
principal and agent, limited or general partner or joint venture, or
of any association or relationship whatsoever involving the Fund and
the Allocatee.
(c) Notwithstanding any other provision of law, the Fund shall not be
deemed to control the Allocatee by reason of any NMTC Allocation
provided hereunder for the purpose of any other applicable law.
(d) The Allocatee's receipt of a NMTC Allocation from the Fund shall not
be deemed to be an assurance of any kind by the Fund regarding a
taxpayer's Equity Investment in the Allocatee.
9.9 Counterparts. This Allocation Agreement may be executed in counterparts,
each of which shall constitute an original but all of which together shall
constitute one and the same instrument.
9.10 Headings. The headings contained in this Allocation Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Allocation Agreement.
9.11 Amendments. The terms of this Allocation Agreement may be amended,
modified, or supplemented by the mutual written consent of the parties hereto.
All amendment requests must be directed to the Grants Management and Compliance
Manager at ▇▇▇@▇▇▇▇.▇▇▇▇▇.▇▇▇.
9.12 Survival of Representations and Warranties. All representations,
warranties, covenants, and agreements made by the Allocatee in this Allocation
Agreement or the Application, including, without limitation, all Assurances and
Certifications contained in the Application, or in any document, report,
certificate, financial statement, note or instrument now or hereafter furnished
in connection with this Allocation Agreement shall survive the execution and
delivery
19
of this Allocation Agreement and the provision of any NMTC Allocation pursuant
hereto, except as otherwise agreed to by the Fund.
9.13 Termination. Unless otherwise mutually agreed upon in writing by the
parties hereto, this Allocation Agreement shall terminate at such time that:
(a) the Fund determines that the Allocatee has submitted to the Fund all
reports required by this Allocation Agreement covering the 7-year
credit period (as defined in 26 C.F.R. 1.45D-1T(c)(5)(i)) after the
Allocatee issues its last Qualified Equity Investment related to its
NMTC Allocation; and
(b) the Fund determines that the NMTC Allocation has been used as
permitted hereby or two years after the 7-year credit period (as
defined in 26 C.F.R. 1.45D-1T(c)(5)(i)) after the Allocatee issues
its last Qualified Equity Investment related to its NMTC Allocation,
whichever date is earlier.
This Section 9.13 shall not, in any manner, waive or supersede any rights,
powers, or remedies available to the Department of the Treasury or the Internal
Revenue Service pursuant to the Act, the Internal Revenue Code or any other
applicable law or regulation.
9.14 Disclosure of Allocatee Reports by Fund. The Fund will, consistent with
applicable law (including IRC Section 6103), make reports described in Article
VI hereof available for public inspection after deleting any materials necessary
to protect privacy or proprietary interests. The Fund will also make reports
described in Article VI hereof available to the Internal Revenue Service for the
purpose of determining the Allocatee's and its investors' compliance with the
requirements of IRC Section 45D and the Temporary and Proposed Income Tax
Regulations.
9.15 Compliance with Non-Discrimination Statutes. The Allocatee shall comply, to
the extent applicable, with all Federal statutes relating to non-discrimination,
including, but not limited to: Title VI of the Civil Rights Act of 1964; Title
IX of the Education Amendments of 1972; Section 504 of the Rehabilitation Act of
1973; the Age Discrimination Act of 1975; the Drug Abuse Office and Treatment
Act of 1972; the Comprehensive Alcohol Abuse and Alcoholism Prevention,
Treatment and Rehabilitation Act of 1970; Sections 523 and 527 of the Public
Health Service Act of 1912; and Title VIII of the Civil Rights Act of 1968.
20
SCHEDULE 3
ALLOCATEE: ROCKLAND TRUST COMMUNITY DEVELOPMENT LLC
CONTROL NO.: 03NMA001435
FORM OF OPINION OF COUNSEL
[THIS FORM MUST BE SUBMITTED ON THE COUNSEL'S LETTERHEAD]
[Date]
TO: Community Development Financial Institutions Fund
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▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Grants Management and Compliance Manager
RE: New Markets Tax Credit Program Allocation
[Name of Allocatee] [Control No. 03NMA00]
[If applicable][Name of Each Subsidiary Allocatee and the respective CDE
No.]
Dear Ladies and Gentlemen:
The undersigned counsel represents the above-referenced [Allocatee] and
[Subsidiary Allocatees] as counsel in connection with an allocation of New
Markets Tax Credits (NMTC) to [Allocatee] from the Community Development
Financial Institutions (CDFI) Fund in the second round of the NMTC Program. We
have reviewed the General Guidance (66 FR 21846); the CDE Certification Guidance
(66 FR 65806); the Notice of Allocation Availability for the NMTC Program (68 FR
42806) and as amended (68 FR 53780); Section 45D of the Internal Revenue Code
and the regulations issued pursuant thereto; and made such other investigations
of law as we have deemed appropriate. We have also reviewed the Allocation
Agreement and such other documents and records as we have deemed necessary to
render this opinion. Capitalized terms contained herein shall have the same
meaning assigned to them in the Allocation Agreement.
Based upon the foregoing, the undersigned is of the opinion that:
a. The Allocatee is a domestic [corporation] [partnership] for
Federal tax purposes. [The Subsidiary Allocatee is a domestic
corporation/ partnership for Federal tax purposes]. The
Allocatee is a [insert corporate form] and is validly existing
and in good standing (if applicable) under the laws of the
State of ___________ and it is
legally authorized to transact business in each jurisdiction
in which it is authorized to use its NMTC Allocation to the
extent such authorization is required to undertake the
activities related to its NMTC Allocation. [The Subsidiary
Allocatee is a [insert corporate form] and is validly existing
and in good standing (if applicable) under the laws of the
State of ___________ and it is legally authorized to transact
business in each jurisdiction in which it is authorized to use
the NMTC Allocation to the extent such authorization is
required to undertake the activities related to the NMTC
Allocation.]
b. The execution, delivery and performance by the Allocatee [and
the Subsidiary Allocatees] of the Allocation Agreement are
within the Allocatee's [and Subsidiary Allocatees']corporate
[partnership] powers and have been duly authorized by all
requisite corporate [partnership] action and no additional
authorizations are required which have not been previously
obtained.
c. The execution, delivery and performance by the Allocatee [and
the Subsidiary Allocatees] of the Allocation Agreement shall
not result in any violation of and shall not conflict with, or
result in a breach of any of the terms of, or constitute a
default under any provision of the Allocatee's [and the
Subsidiary Allocatees'] incorporation, charter, organization,
bylaws or other establishing documents or to our knowledge any
provision of Federal or State law to which the Allocatee [or
the Subsidiary Allocatees] is subject, or any agreement,
judgment, writ, injunction, decree, order, rule or regulation
to which the Allocatee [or the Subsidiary Allocatees] is a
party or by which it is bound. The Subsidiary Allocatee(s)
listed in Section 3.2(c) of the Allocation Agreement are
Subsidiaries of the Allocatee.
d. The Allocation Agreement and all documents related thereto to
which the Allocatee or the Subsidiary Allocatee is a party and
executed and delivered by the Allocatee or Subsidiary
Allocatee as of the date hereof constitute the legal, valid
and binding obligations of the Allocatee [and the Subsidiary
Allocatees] enforceable in accordance with their respective
terms.
e. To our knowledge, there is no suit, action, proceeding, or
investigation, pending or threatened against the Allocatee [or
the Subsidiary Allocatees] that questions the validity of the
Allocation Agreement or any actions taken or to be taken
pursuant thereto.
2
This opinion is based upon the laws of the State(s) of _______ and the Federal
laws of the United States. This opinion is rendered solely in connection with
the CDFI Fund's provision of the NMTC Allocation to the Allocatee [and the
Subsidiary Allocatees]. Accordingly, it may be relied upon only by the CDFI Fund
and may not be relied upon by any other party for any other purpose.
__________________________
Name of Counsel
By:____________________
3