CENTURY EAST APARTMENTS II LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED
AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP
Dated as of December 1, 1996
CENTURY EAST APARTMENTS II LIMITED PARTNERSHIP
TABLE OF CONTENTS
Page
Preliminary Statement ................................... 5
ARTICLE I Defined Terms ............................ 5
ARTICLE II Name and Business ........................ 17
2.1 Name; Continuation ....................... 17
2.2 Office and Resident Agent ................ 17
2.3 Purpose .................................. 18
2.4 Term and Dissolution ..................... 18
ARTICLE III Mortgage, Refinancing and Disposition
of Property ............................ 19
ARTICLE IV Partners; Capital ........................ 20
4.1 Capital and Capital Accounts ............. 20
4.2 General Partners ......................... 21
4.3 Investment Limited Partner, Special Limited
Partner, and Original Limited Partner... 21
4.4 Liability of the Limited Partners......... 21
4.5 Special Rights of the Investment
Limited Partner ........................ 21
4.6 Meetings ................................. 23
ARTICLE V Capital Contributions of the Investment
Limited Partner and the Special Limited
Partner................................. 24
5.1 Payments ................................. 24
5.2 Return of Capital Contributions .......... 28
ARTICLE VI Rights, Powers and Duties of General
Partners ............................... 30
6.1 Authorized Acts .......................... 31
6.2 Restrictions on Authority ................ 31
6.3 Personal Services ........................ 33
6.4 Business Management and Control; Tax
Matters Partner ........................ 33
6.5 Duties and Obligations ................... 34
6.6 Representations and Warranties ........... 37
6.7 Liability on the Permanent Mortgage ...... 41
6.8 Indemnification of the General Partners .. 41
Page
6.9 Indemnification of the Partnership and the
Limited Partners ....................... 42
6.10 Operating Deficits ....................... 43
6.11 Obligation to Complete the Construction
of the Apartment Complex .............. 43
6.12 Certain Payments to the General Partner
and Others ............................. 45
6.13 Delegation of General Partner Authority .. 46
6.14 Assignment to Partnership ................ 46
ARTICLE VII Withdrawal of a General Partner; New
General Partner ........................ 47
7.1 Withdrawal ............................... 47
7.2 Obligation to Continue ................... 47
7.3 Withdrawal of All General Partners ....... 47
7.4 Interest of General Partner After
Permitted Withdrawal ................... 47
7.5 Admission of Additional General Partner(s)
under Certain Circumstances.............. 49
ARTICLE VIII Transferability of Limited Partner
Interests .............................. 50
8.1 Assignments .............................. 50
8.2 Substituted Limited Partner .............. 50
8.3 Restrictions ............................. 50
ARTICLE IX Borrowings................................ 50
9.1 Borrowings ............................... 50
ARTICLE X Profits, Losses, Tax Credits, Distributions
and Capital Accounts ................... 52
10.1 Profits, Losses and Tax Credits .......... 52
10.2 Cash Distributions Prior to Dissolution .. 54
10.3 Distributions Upon Dissolution ........... 56
10.4 Special Provisions ....................... 57
10.5 Authority of the General Partners to Vary
Allocations to Preserve and Protect the
Partners' Intent ....................... 60
ARTICLE XI Management Agent ......................... 61
Page
ARTICLE XII Books and Records, Accounting, Tax
Elections, Etc. ........................ 63
12.1 Books and Records ........................ 63
12.2 Bank Accounts ............................ 63
12.3 Auditors ................................. 63
12.4 Cost Recovery and Elections .............. 64
12.5 Special Basis Adjustments ................ 64
12.6 Fiscal Year .............................. 64
12.7 Information to Partners .................. 64
12.8 Expenses of the Partnership .............. 67
ARTICLE XIII General Provisions ....................... 69
13.1 Restrictions by Reason of Section 708 of
the Code ............................... 69
13.2 Amendments to Certificate ................ 69
13.3 Notices .................................. 70
13.4 Word Meanings ............................ 70
13.5 Binding Effect ........................... 70
13.6 Applicable Law ........................... 70
13.7 Counterparts ............................. 70
13.8 Financing Regulations .................... 70
13.9 Separability of Provisions ............... 71
13.10 Paragraph Titles ......................... 71
13.11 Amendment Procedure....................... 71
13.12 Time of Admission ........................ 71
Schedule A .......................................... 78
CENTURY EAST APARTMENTS II LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED
AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP
Preliminary Statement
Century East Apartments II Limited Partnership (the "Partnership") was
formed as a North Dakota limited partnership pursuant to an Agreement
and
Certificate of Limited Partnership (the "Original Agreement") dated
November
10, 1992 by and between R.S., Inc. as General Partner and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ as
the Limited Partner (the "Original Limited Partner"). The Original
Agreement
was filed in the Filing Office on December 2, 1992. The Original
Agreement
was amended by an Amended and Restated Agreement and Certificate of
Limited
Partnership dated September 6, 1994 (the "Amended Agreement"). The
Amended
Agreement was filed with the Filing Office on September 7, 1994. The
Amended
Agreement were further amended by a Restated Agreement of Limited
partnership
on August 1, 1996.
WHEREAS, the parties hereto now desire to enter into this Second Amended
and Restated Agreement of Limited Partnership to: (i) continue the
Partnership, (ii) acknowledge the withdrawal of the Original Limited
Partner,
(iii) reaffirm the admission of Boston Capital Tax Credit Fund IV, L.P.
to the
Partnership as Investment Limited Partner, (iv) to admit BCTC 94, Inc.
as
Special Limited Partner, (v) reassign the Interests in the Partnership
and
(vi) set forth all of the provisions governing the Partnership and the
Partners herein.
NOW, THEREFORE, in consideration of mutual agreements set forth herein,
it is agreed and certified, and the Original Agreement, the Amended
Agreement
and the Restated Agreement are hereby amended and restated in their
entirety,
as follows:
ARTICLE I
Defined Terms
The defined terms used in this Agreement shall have the meanings
specified below:
Actual Credit means, with respect to a particular year, the total amount
of Tax Credit properly allocable by the Partnership to the Investment
Limited
Partner for such year. The Actual Credit shall be retroactively revised
if
the amount of Tax Credit properly allocable to the Investment Limited
Partner
is revised after audit.
Additional Limited Partner means any holder of an Interest designated as
an Additional Limited Partner pursuant to Section 4.5(b) or Section 7.4.
Admission Date means the first date on which all parties hereto shall
have executed this Agreement, or, if, pursuant to the
Uniform Act, the Investment Limited Partner shall not be deemed admitted
to
the Partnership on such date, then the next date thereafter on which the
Investment Limited Partner shall be deemed to be admitted to the
Partnership
under the Uniform Act.
Affiliate means (A) as to the Investment Limited Partner, the Investment
General Partner or Boston Capital, (i) such Person; (ii) each member of
the
Immediate Family of such Person; (iii) each legal representative,
successor or
assignee of any Person referred to in the preceding clauses (i) or (ii);
(iv)
each trustee of a trust for the benefit of any Person referred to in the
preceding clauses (i) or (ii); or (v) any other Person (a) who directly
or
indirectly controls, is controlled by, or is under common control with
such
Person, (b) who is an officer of, director of, partner in or trustee of,
or
serves in a similar capacity with respect to, such Person or of which
such
Person is an officer, director, partner or trustee, or with respect to
which
such Person serves in a similar capacity, (c) who, directly or
indirectly, is
the beneficial owner of ten percent (10%) or more of any class of equity
securities of such Person or of which such Person is directly or
indirectly
the owner of ten percent (10%) or more of any class of equity
securities, (d)
who is an officer, director, general partner, trustee or holder of ten
percent
(10%) or more of the voting securities or beneficial interests of any
Person
referred to in the foregoing clauses (v)(a), (v)(b) or (v)(c) or (e)
who,
whatever his title, performs functions for such Person or any Affiliate
of
such Person similar to a Chairman or member of the Board of Directors,
or
executive officer such as the President, Executive Vice President or
Senior
Vice President, Corporate Secretary, or Treasurer, or any Person holding
a
five percent (5%) or more equity interest in such Person, or any Person
having
the power to direct or cause the direction of such Person, whether
through the
ownership of voting securities, by contract or otherwise; and (B) as to
any
other named Person or Persons (i) such Person; (ii) each member of the
Immediate Family of such Person; (iii) each legal representative,
successor or
assignee of any Person referred to in the preceding clauses (i) or (ii);
(iv)
each trustee of a trust for the benefit of any Person referred to in the
preceding clauses (i) or (ii); or (v) any other Person (a) who directly
or
indirectly controls, is controlled by, or is under common control with
such
Person, (b) who owns or controls ten percent (10%) or more of the
outstanding
voting securities of such Person, (c) of which ten percent (10%) or more
of
the outstanding voting securities is owned by such Person or any of the
Persons referred to in the foregoing clauses (i) through (iii), (d) who
is an
officer, director, partner or trustee of such Person, or (e) for which
such
Person acts in the capacity of officer, director, partner or trustee.
An
Affiliate of the Investment Limited Partner or of the Investment General
Partner does not include a Person who is a partner in a partnership or
joint
venture with the Investment Limited Partner or any other Affiliate of
the
Investment Limited Partner if such Person is not otherwise an Affiliate
of the
Investment Limited Partner or the Investment General Partner. For
purposes of
this definition, the term Affiliate shall not be deemed to include any
law
firm (or member or associate thereof) providing legal services to the
Investment Limited Partner, the Investment General Partner or any
Affiliate of
either of them.
Agency means, as applicable, HUD, the Authority, and/or any other
government agency having jurisdiction over the particular matter to
which
reference is being made.
Aggregate Cost means the sum of (i) the total Capital Contributions made
or anticipated to be made by the Investment Limited Partner plus (ii)
the
proportionate amount of the mortgage loans on, and other debts related
to, the
Apartment Complex, which proportionate amount is equal to the Investment
Limited Partner's initial pro rata interest in the profits, losses, and
tax
credits of the Partnership. The amount of the Aggregate Cost determined
upon
payment of the last of the four Installments of the Capital Contribution
of
the Investment Limited Partner shall not thereafter be reduced.
Agreement means this Second Amended and Restated Agreement of Limited
Partnership, including Schedule A, as amended from time to time.
Annual Partnership Management Fee means the fee payable to the General
Partners pursuant to the provisions of Section 6.12(a).
Apartment Complex means the real property located in Bismark, Burleigh
County, North Dakota as more fully described in the Mortgage, together
with
(i) all buildings and other improvements constructed or to be
constructed
thereon and (ii) all furnishings, equipment and personal property
covered by
the Mortgage.
Applicable Federal Rate means the "applicable federal rate" as defined
in Section 1274(d) of the Code.
Applicable Percentage has the meaning given to it in Section 42(b) of
the Code.
Asset Management Fee means the fee payable to Boston Capital or an
Affiliate thereof pursuant to Section 6.12(c).
Auditors means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or such other firm of independent
certified public accountants as may be engaged by the General Partners
with
the consent of Boston Capital for the purposes of preparing the
Partnership
income tax returns, auditing the books and records of the Partnership
and
certifying financial reports of the Partnership.
Authority means the North Dakota Housing Finance Agency.
BCCLP means Boston Capital Communications Limited Partnership, a
Massachusetts limited partnership, and its successors and assigns.
Boston Capital means Boston Capital Partners, Inc., a Massachusetts
corporation, its successors and assigns.
Capital Account has the meaning specified in Section 4.1(b).
Capital Contribution means the total value of cash or property contri-
buted and agreed to be contributed to the Partnership by each Partner,
as
shown in Schedule A. Any reference in this Agreement to the Capital
Contri-
bution of a then Partner shall include a Capital Contribution previously
made
by any prior Partner for the Interest of such then Partner.
Capital Transaction means any transaction the proceeds of which are not
includable in determining Cash Flow including, without limitation, the
sale or
other disposition of all or substantially all of the assets of the
Partner-
ship, but excluding the payment of Capital Contributions.
Carryover Certification means the date upon which the Investment Limited
Partner shall have received, in a form and in substance satisfactory to
the
Investment Limited Partner, the certification of the Auditors that as of
a
date no later than December 31, 1994, the Partnership had owned land or
depreciable property constituting part of the Apartment Complex and had
incurred capitalizable costs with respect to the Apartment Complex of at
least
ten percent (10%) of the Partnership's reasonably expected basis in the
Apartment Complex as of December 31, 1996, so that each building in the
Apartment Complex constitutes a "qualified building" for the purposes of
Section 42(h)(1)(E)(ii) of the Code.
Cash Available Debt For Service Requirements for any period means the
excess of (i) all cash actually received by the Partnership on a cash
basis
from normal operations during such period and funds available in
Partnership
reserves to fund the cash requirements of the Partnership, but shall
exclude
the proceeds of insurance (other than business or rental interruption
insurance), loans, capital transactions or capital contributions over
(ii) all
cash requirements of the Partnership properly allocable to such period
of time
on an accrual basis (not including distributions to partners out of Cash
Flow
of the Partnership or fees payable from Cash Flow) and, on an annualized
basis, the pro rata portion of all projected expenditures, including
those of
a seasonal nature, which might reasonably be expected to be incurred on
an
unequal basis during a full annual period of operation, but specifically
excluding all debt service requirements (including principal payments).
For
purposes of this definition, "cash requirements of the Partnership" (as
the
term is used in clause (ii) in the preceding sentence), shall include,
to the
extent not otherwise covered therein , full funding of all partnership
reserves, normal repairs, real estate taxes at fully assessed levels
assuming
a fully improved property, and necessary capital improvements.
Cash Flow means the profits or losses of the Partnership from and after
the Commencement Date subject to any applicable Agency or Lender
requirements
and to the following adjustments:
(a) Cost recovery deductions of buildings, improvements and per-
▇▇▇▇▇ property and amortization of any financing fees shall not be de-
ducted;
(b) Mortgage amortization shall be deducted;
(c) Mortgage interest which is included in determining profits
and losses but which is not currently payable in cash shall be deducted
when actually paid;
(d) Payments to reserves under Section 6.5(e) shall be deducted;
(e) Any amounts paid for capital expenditures shall be deducted,
unless paid from any replacement reserve or funded through insurance;
(f) The proceeds of any Construction Mortgage or Permanent
Mortgage refinancing, any sale, exchange, eminent domain taking, damage
or destruction (whether insured or uninsured), or other disposition, of
all or any part of the Apartment Complex (other than the proceeds of any
business or rental interruption insurance) shall not be included;
(g) Any rent or interest subsidy payments shall be included;
(h) The fees set forth in Sections 6.12, any interest on the
Construction and Development Fee, and any fee payable in connection with
any transaction referred to in clause (f) above shall not be deducted;
and
(i) Prior to Permanent Mortgage Commencement, an amount equal to
the amount, if any, of net rental income applied to complete the con-
struction of the Apartment Complex pursuant to Section 6.11 shall be
deducted.
Certificate means the Original Certificate of Limited Partnership as
amended from time to time.
Class Contribution means the aggregate Capital Contributions of all mem-
bers of a particular class of Partners (i.e., the General Partners, the
Investment Limited Partner, the Special Limited Partner or any
Additional
Limited Partner.)
Code means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations (permanent or temporary) issued thereunder.
References herein to any Code section shall include any successor
provisions.
Commencement Date means the first day of the month in which the
Admission Date occurs.
Competitive Real Estate Commission means that real estate or brokerage
commission paid for the purchase or sale of the Apartment Complex or
other
Partnership property which is reasonable, customary and competitive in
light
of the size, type and location of the Apartment Complex or other
property.
Completion Date means the date upon which the Apartment Complex has been
completed as evidenced by the issuance by the inspecting architect and
by each
governmental agency having jurisdiction of certificates of substantial
completion or occupancy (or local equivalents) with respect to all of
the 24
apartment units in the Apartment Complex.
Consent of the Investment Limited Partner means the prior written
consent or approval of the Investment Limited Partner.
Construction and Development Fee means the fee described in Section
6.12(b).
Construction Lender means the Northwestern Savings Bank, f.s.b., in its
capacity as holder of the Construction Mortgage, or its successors or
assigns
in such capacity.
Construction Mortgage means the financing for the construction of the
Apartment Complex provided by the Construction Lender dated March 4,
1996, in
a principal amount of up to $549,008.
Controlling Person has the meaning given to it in the context of Section
15 of the Securities Act of 1933, as amended.
Credit Period has the meaning given to it in Section 42(f)(1) of the
Code.
Credit Recovery Loan means a constructive interest-bearing advance of
the Investment Limited Partner as more fully described in Section
5.1(f).
Credit Recovery Loans and interest thereon shall not be treated as loans
or
interest, respectively, for accounting, tax or liability purposes or for
the
purposes of Section 6.2(a)(1). For the purposes of Article X, the term
Credit
Recovery Loan shall not include any portion of such an advance which
shall
have theretofore been paid to the Investment Limited Partner.
Credit Shortfall has the meaning given to it in Section 5.1(f).
Disposition (including the forms Dispose and Disposing) means, as to a
Limited Partner, the assignment, sale, transfer, exchange or other
disposition
of all or any part of its Interest.
89-12 Requirements means the requirements set forth in Internal Revenue
Procedure 89-12 which are prerequisites to the issuance, assuming that
each
General Partner is a corporation, by the Service of an advance ruling
that the
Partnership will be taxed as a partnership and not as an association
taxable
as a corporation for Federal income tax purposes.
Entity means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, cooperative or
association.
Event of Bankruptcy means with respect to any Person,
(i) the entry of a decree or order for relief by a court having
jurisdiction in respect of such Person or in respect of any Controlling
Person of such Person in a case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or of any Controlling Person of such
Person for any substantial part of such Person's property or of the
property of any Controlling Person of such Person, or the issuance of an
order for the winding-up or liquidation of such Person's affairs and the
continuance of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive days, or
(ii) the commencement by such Person or by any Controlling Person
of such Person of a proceeding seeking any decree, order or appointment
referred to in clause (i), the consent by such Person to any such
decree, order or the appointment, or taking of any action by such Person
in furtherance of any of the foregoing.
Filing Office means the Office of the Secretary of State of the State.
General Partners means the Persons designated as the General Partners in
Schedule A and any Persons who become General Partners as provided
herein, in
their capacities as general partners of the Partnership. At any and all
times
where there is only one General Partner, the term General Partners shall
mean
such sole General Partner.
Hazardous Material shall have the collective meanings given to the terms
"hazardous material", "hazardous substances" and "hazardous wastes" in
the
Federal Comprehensive Environmental Response, Compensation and Liability
Act
of 1980, 42 U.S.C. Sec. 9601 et seq., as amended, and to the term
"radioactive
materials" in the context of the Atomic Energy Act, 28 U.S.C. Sec. 2344,
and
also includes any meanings given to such terms in any similar state or
local
statutes, ordinances, regulations or by-laws. In addition, the term
Hazardous
Material also includes oil and any other substance known to be
hazardous.
HUD means the United States Department of Housing and Urban Development.
Immediate Family means with respect to any Person, such Person's spouse,
parents, parents-in-law, descendants, nephews, nieces, brothers,
sisters,
brothers-in-law, sisters-in-law, children-in-law and grandchildren-in-
law.
Initial 100% Occupancy Date means the first date upon which not less
than one hundred percent (100%) of the apartment units in the Apartment
Complex shall have been leased to and physically occupied by Qualified
Tenants
.
Installment means an installment of the Investment Limited Partner's
Capital Contribution paid or payable to the Partnership pursuant to
Section
5.1.
Interest means the entire interest of a Partner in the Partnership at
any particular time, including the right of such Partner to any and all
benefits to which a Partner may be entitled hereunder and the obligation
of
such Partner to comply with the terms of this Agreement.
Invested Amount means (i) as to the Investment Limited Partner, an
amount equal to the Capital Contribution of the Investment Limited
Partner
divided by 73% and (ii) as to any other Partner, an amount equal to its
Capital Contribution.
Investment General Partner means Boston Capital Associates IV L.P., a
Delaware limited partnership, in its capacity as the general partner of
the
Investment Limited Partner, and any other Person who may become a
successor or
additional general partner of the Investment Limited Partner.
Investment Limited Partner means Boston Capital Tax Credit Fund IV L.P.,
specifically Series 25 thereof, a Delaware limited partnership, and any
Person
or Persons who replace it as Substituted Limited Partner, but shall not
include any Special Limited Partner or Additional Limited Partner.
Investment Partnership Agreement means the Agreement of Limited Partner-
ship of the Investment Limited Partner, as amended from time to time.
Lender means the Construction Lender or Permanent Lender , each in its
capacity as maker of a Mortgage loan, or its successors and assigns in
such
capacity.
Limited Partners means the Investment Limited Partner, the Special
Limited Partner and any Additional Limited Partner.
Management Agent means the management and rental agent for the Apartment
Complex.
Management Agreement means the agreement between the Partnership and the
Management Agent providing for the management of the Apartment Complex.
Management Fee means the Management Fee to which reference is made in
Article XI.A.
Minimum Set-Aside Test means the set aside test selected by the Partner-
ship pursuant to Section 42(g) of the Code whereby at least 40% of the
units
in the Apartment Complex must be occupied by individuals with incomes
equal to
60% or less of area median income, as adjusted for family size.
Mortgage means the mortgage indebtedness of the Partnership to the Con-
struction Lender and/or the Permanent Lender ; and where the context
admits
Mortgage shall mean and include the mortgage note evidencing such
indebtedness, the mortgage or deed of trust and security agreement
securing
such indebtedness, the loan agreement and all other documentation
related
thereto which evidence and secure such indebtedness, including any
Agency
documentation related thereto.
Original Agreement has the meaning specified in the Preliminary State-
ment.
Original Certificate of Limited Partnership has the meaning specified in
the Preliminary Statement.
Original Limited Partner has the meaning specified in the Preliminary
Statement.
Partner means any General Partner or Limited Partner.
Partner Non-Recourse Debt means any Partnership liability (a) that is
considered non-recourse under Treasury Regulation Section 1.1001-2 or
for
which the creditor's right to repayment is limited to one or more assets
of
the Partnership and (b) for which any Partner or Related Person bears
the
economic risk of loss.
Partner Non-Recourse Debt Minimum Gain means the amount of partner
nonrecourse debt minimum gain and the net increase or decrease in
partner
nonrecourse debt minimum gain determined in a manner consistent with
Treasury
Regulations Sections 1.704-2(d) and 1.704(g)(3).
Partnership means the limited partnership continued pursuant to this
Agreement.
Partnership Minimum Gain means the amount determined by computing, with
respect to each Partnership Non-Recourse Liability, the amount of gain,
if
any, that would be realized by the Partnership if it disposed of (in a
taxable
transaction) the property subject to such liability in full satisfaction
of
such liability, and by then aggregating the amounts so computed. Such
computations shall be made in a manner consistent with Treasury
Regulation
Section 1.704-2 (d).
Partnership Non-Recourse Liability means any Partnership liability (or
portion thereof) for which no Partner or Related Person bears the
Economic
Risk of Loss.
Permanent Lender means Northwestern Savings Bank, f.s.b., in its
capacity as holder of the Permanent Mortgage, or its successors and/or
assigns
in such capacity.
Permanent Mortgage means the permanent financing provided, or to be pro-
vided, by the Permanent Lender for the Apartment Complex following the
comple-
tion thereof in the initial principal amount of $549,008.
Permanent Mortgage Commencement means the first date on which all of the
following shall have occurred: (a) the Completion Date; (b) the
principal
amount and maturity date of the Permanent Mortgage shall have been
finally
determined; and (c) amortization of the Permanent Mortgage shall have
commenced.
Permanent Mortgage Commitment means the first date on which the
Partnership receives the written commitment of the Permanent Lender to
make
the Permanent Mortgage.
Person means any individual or Entity.
Project Documents means and includes the Construction Mortgage and the
Permanent Mortgage , the Management Agreement, all other instruments
delivered to (or required by) the Construction Lender and/or the
Permanent
Lender and all other documents relating to the Apartment Complex or the
Tax
Credit and by which the Partnership is bound, as amended or supplemented
from
time to time.
Projected Credit to the Investment Limited Partner means $30,626 for
1996; and $73,502 per annum for the years 1997 through 2004 (inclusive);
provided, however, that the Projected Credit for 2004 shall be reduced
by the
amount, if any, by which the Actual Credit for 1996 exceeds $30,626 and
provided further that upon the occurrence of any of the events described
in
clauses (i), (ii) and (iii) of Section 5.1(g), the Projected Credit
shall
thereafter be the Revised Projected Credit.
Prospectus means the prospectus contained in the registration statement
(File No. 33-70564) filed with the Securities and Exchange Commission on
behalf of the Investment Limited Partner for the registration of
beneficial
assignee certificates and/or limited partnership interests under the
Securities Act of 1933, as amended, in the final form in which said
prospectus
is filed with said Commission and as thereafter amended and/or
supplemented
from time to time pursuant to Rule 424 under said Act, or otherwise.
Qualified Basis has the meaning given to it in Section 42(c) of the
Code.
Qualified Income Offset Item means (1) an allocation of loss or
deduction that, as of the end of each year, reasonably is expected to be
made
(a) pursuant to Section 704(e)(2) of the Code to a donee of an interest
in the
Partnership, (b) pursuant to Section 706(d) of the Code as the result of
a
change in any Partner's Interest, or (c) pursuant to Regulation Section
1.751-
1(b)(2)(ii) as the result of a distribution by the Partnership of
unrealized
receivables or inventory items and (2) a distribution that, as of the
end of
such year, reasonably is expected to be made to a Partner to the extent
it
exceeds offsetting increases to such Partner's Capital Account which
reason-
ably are expected to occur during or prior to the Partnership taxable
year in
which such distribution reasonably is expected to occur.
Qualified Tenant means a tenant (i) with income not exceeding that
permitted by the Minimum Set-Aside Test who leases a Low-Income
Apartment Unit
in the Project under a lease having an original term of not less than 6
months
at a rent which satisfies the Rent Restriction Test and (ii) complying
with
any other requirements imposed by the Project Documents.
Related Person means a person related to a Partner within the meaning of
Treasury Regulation Section 1.752-4(b).
Rent Restriction Test means the test pursuant to Section 42 of the Code
whereby the gross rent charged to tenants of the low-income units in the
Apartment Complex may not exceed thirty percent (30%) of the qualifying
income
levels.
Rental Achievement means the first time, based upon four consecutive
full calendar months of operation after Permanent Mortgage Commencement,
with
each month taken individually, that Cash Available for Debt Service
Requirements (as defined below) equals or exceeds 1.15 times debt
service
requirements.
Revised Projected Credit has the meaning given to it in Section 5.1(g).
Schedule A means Schedule A to this Agreement as amended from time to
time.
Service means the Internal Revenue Service.
Site has the meaning given to it in the Federal Comprehensive Environ-
mental Response, Compensation and Liability Act of 1980, 42 U.S.C. Sec.
9601
et seq., as amended, and shall also include any meaning given to it in
any
similar state or local statutes, ordinances, regulations or by-laws.
Special Limited Partner means BCTC 94, Inc., a Delaware corporation, and
any Person who becomes a Special Limited Partner as provided herein, in
its
capacity as a special limited partner of the Partnership.
State means the State of North Dakota.
State Designation means the date upon which the Partnership receives the
allocation by the authorized agency of the State of Tax Credit for the
building(s) constituting the Apartment Complex in an annual dollar
amount of
not less than $74,244 as evidenced by the execution by or on behalf of
such
agency of Form(s) 8609. For the purposes of determining State
Designation,
each building in the Apartment Complex shall be treated as having
received an
allocation of Tax Credit in an amount equal to the lesser of (i) the
amount of
Tax Credit carryover allocation received from the authorized agency of
the
State as to such building or (ii) the amount of Tax Credit set forth on
the
Form 8609 as to such building.
Subordinated Loan means any loan made by the General Partners to the
Partnership pursuant to Section 6.10.
Substituted Limited Partner means any Person who is admitted to the
Partnership as Limited Partner under Section 8.2 or acquires the
Interest of a
Limited Partner pursuant to Section 5.2.
Tax Accountants means ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of Bethesda, Maryland
or such other firms of independent certified
public accountants as may be engaged by Boston Capital to review the
Partnership income tax returns.
Tax Credit means the low-income housing tax credit pursuant
to Section 42 of the Code.
Tax Credit Set-Aside means the date upon which the Partnership receives
a preliminary reservation, effective for the year 1996, the year the
Apartment
Complex is expected to receive an allocation of Tax Credit, by the
authorized
agency of the State of Tax Credit for the building(s) constituting the
Apartment Complex in an annual dollar amount of not less than $74,244,
which
reservation shall not have expired or been revoked prior to the date on
which
the First Installment is paid.
Uniform Act means the Uniform Limited Partnership Act as adopted by the
State.
Vessel has the meaning given to it in the Federal Comprehensive Environ-
mental Response, Compensation and Liability Act of 1980, 42 U.S.C. Sec.
9601
et seq., as amended, and shall also include any meaning given to it in
any
similar state or local statutes, ordinances, regulations or by-laws.
Withdrawal (including the forms Withdraw, Withdrawing and Withdrawn)
means, as to a General Partner, the occurrence of death, adjudication of
insanity or incompetence, Event of Bankruptcy, dissolution, liquidation,
or
voluntary or involuntary withdrawal or retirement from the Partnership
for any
reason, including whenever a General Partner may no longer continue as a
General Partner by law or pursuant to any terms of this Agreement.
Withdrawal
shall also mean the sale, assignment, transfer or encumbrance by a
General
Partner of its interest as a General Partner. A General Partner which
is a
corporation, limited liability company or partnership shall be deemed to
have
sold, assigned, transferred or encumbered its interest as a General
Partner in
the event (as a result of one or more transactions) of any sale,
assignment or
other transfer (but specifically excluding any transfer occurring
pursuant to
the laws of descent and distribution) of a controlling interest in a
corporate
or limited liability company General Partner or of a general partner
interest
in a General Partner which is a partnership. For purposes of this
definition
of Withdrawal, "controlling interest" shall mean the power to direct the
management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
ARTICLE II
Name and Business
2.1 Name; Continuation
The name of the Partnership is Century East Apartments II Limited
Partnership. The Partners agree to continue the Partnership which was
formed
pursuant to the provisions of the Uniform Act.
2.2 Office and Resident Agent
(a) The principal office of the Partnership is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ at which office there
shall be
maintained those records required by the Uniform Act to be kept by the
Partnership. The Partnership may have such other or additional offices
as the
General Partners shall deem desirable. The General Partners may at any
time
change the location of the principal office and shall give due notice
thereof
to the Limited Partners.
(b) The resident agent in the State for the Partnership for service of
process is as follows:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
2.3 Purpose
The purpose of the Partnership is to acquire, hold, invest in,
construct, develop, improve, maintain, operate, lease and otherwise deal
with
the Apartment Complex. The Partnership shall operate the Apartment
Complex in
accordance with any applicable Agency regulations and requirements.
The
Partnership shall not engage in any other business or activity.
2.4 Term and Dissolution
The Partnership shall continue in full force and effect until December
31, 2040, except that the Partnership shall be dissolved and its assets
liquidated prior to such date upon:
(a) The sale or other disposition of all or substantially all of the
assets of the Partnership;
(b) A General Partner dying, being adjudicated bankrupt, insane or in-
competent, (if a corporation, limited liability company or partnership)
being
dissolved or liquidated, or voluntarily or involuntarily withdrawing
from the
Partnership for any reason, including an inability to continue serving
as a
General Partner by law or pursuant to the terms of this Agreement, if
(i) the
remaining General Partner(s), if any, shall fail to continue the
business of
the Partnership and reconstitute the Partnership as a successor limited
partnership as provided in Section 7.2 and (ii) the Investment Limited
Partner
shall fail to exercise the right provided in Section 7.3;
(c) The election to dissolve the Partnership made in writing by the
General Partners with the Consent of the Investment Limited Partner and
the
approval (if required) of any Agency ;
(d) The entry of a final decree of dissolution of the Partnership by a
court of competent jurisdiction; or
(e) Any other event which causes the dissolution of the Partnership
under the Uniform Act if the Partnership is not reconstituted pursuant
to
Section 7.2 or Section 7.3.
Upon dissolution of the Partnership, the General Partners (or for
purposes of this paragraph, their trustees, receivers or successors)
shall cause the cancellation of the Certificate, liquidate the Partnership
assets and apply and distribute the proceeds thereof in accordance with Section
10.3. Notwithstanding the foregoing, if, during liquidation, the General
Partners shall determine that an immediate sale of part or all of the
Partnership's assets would be impermissible, impractical or cause undue
loss to the Partners, the General Partners may defer liquidation of,
and withhold
from distribution for a reasonable time, any assets of the Partnership except
those necessary to satisfy Partnership debts and obligations (except
Subordinated Loans).
ARTICLE III
Mortgage, Refinancing and Disposition of Property
A. The General Partners and their Affiliates, jointly and severally,
are hereby authorized to incur personal liability for the repayment of
funds advanced by the Construction Lender (and interest thereon) pursuant to
the Construction Mortgage. However, from and after Permanent Mortgage
Commencement, neither any General Partner nor any Related Person shall
at any time bear, nor shall the General Partners permit any other Partner or
any Related Person to bear, the Economic Risk of Loss for the payment of any
portion of any Mortgage.
B. The Partnership may decrease, increase or refinance the Permanent
Mortgage and may make any required transfer or conveyance of Partnership
assets for security or mortgage purposes, provided, however, any such
decrease (except through the thirty year amortization schedule anticipated at
Permanent Mortgage Commencement), increase or refinancing of the Permanent
Mortgage may be made by the General Partners only with the Consent of
the Investment
Limited Partner.
C. The Partnership may sell, lease, exchange or otherwise transfer or
convey all or substantially all the assets of the Partnership only with
the Consent of the Investment Limited Partner. Notwithstanding the foregoing
and except as set forth in Section 6.2(a)(6), no Consent of the Investment
Limited Partner shall be required for the leasing of apartments to tenants in
the normal course of operations or the leasing of all or substantially all
the apartments to a public housing authority at rents satisfactory to each
Agency as expressed in writing.
D. The total compensation to all Persons for the sale of the
Apartment Complex shall be limited to a Competitive Real Estate
Commission,
not to exceed six percent (6%) of the contract price for the sale of the
Apartment Complex.
ARTICLE IV
Partners; Capital
4.1 Capital and Capital Accounts
(a) The Capital Contribution of each Partner shall be as set forth on
Schedule A. No interest shall be paid on any Capital Contribution. No
Part-
ner shall have the right to withdraw its Capital Contribution or to
demand and
receive property of the Partnership in return for its Capital
Contribution,
except as may be specifically provided in this Agreement or required by
law.
(b) An individual Capital Account shall be established and maintained
on behalf of each Partner, including any additional or substituted
Partner who
shall hereafter receive an interest in the Partnership. In accordance
with
Treasury Regulation Section 1.704-1(b), the Capital Account of each
Partner
shall consist of (i) the amount of cash such Partner has contributed to
the
Partnership plus (ii) the fair market value of any property such Partner
has
contributed to the Partnership net of any liabilities assumed by the
Partner-
ship or to which such property is subject plus (iii) the amount of
profits or
income (including tax-exempt income) allocated to such Partner less (iv)
the
amount of losses and deductions allocated to such Partner less (v) the
amount
of all cash distributed to such Partner less (vi) the fair market value
of any
property distributed to such Partner net of any liabilities assumed by
such
Partner or to which such property is subject less (vii) such Partner's
share
of any other expenditures which are not deductible by the Partnership
for
Federal income tax purposes or which are not allowable as additions to
the
basis of Partnership property and shall be (viii) subject to such other
adjustments as may be required under the Code. The Capital Account of a
Partner shall not be affected by any adjustments to basis made pursuant
to
Section 743 of the Code but shall be adjusted with respect to
adjustments to
basis made pursuant to Section 734 of the Code.
The original Capital Account established for any Substituted Partner (as
hereinafter defined) shall be in the same amount as, and shall replace,
the
Capital Account of the Partner which such Substituted Partner succeeds,
and,
for the purposes of this Agreement, such Substituted Partner shall be
deemed
to have made the Capital Contribution, to the extent actually paid in,
of the
Partner which such Substituted Partner succeeds. The term "Substituted
Partner" as used in this paragraph, shall mean a Person who shall become
entitled to receive a share of the allocations and distributions of the
Partnership by reason of such Person succeeding to all or any part of
the
Interest of a Partner by assignment of all or any part of a Partner's
Interest. To the extent a Substituted Partner receives less than 100%
of the
Interest of a Partner he succeeds, the original Capital Account of such
transferee Substituted Partner and his Capital Contribution shall be in
proportion to the portion of the transferor Partner's Interest prior to
the
transfer which the transferee receives, and the Capital Account of the
transferor Partner who retains a portion of his former Interest and his
Capital Contribution shall continue, and not be replaced, in proportion
to the
portion of the transferor Partner's Interest prior to the transfer which
the
transferor Partner retains. Nothing in this Section 4.1(b) shall affect
the
limitations on transferability of Interests set forth in Article VII or
Article VIII.
4.2 General Partners
The name, address and Capital Contribution of each General Partner are
as set
forth on Schedule A.
4.3 Investment Limited Partner, Special Limited Partner and Original
Limited Partner
The Original Limited Partner hereby withdraws as a limited partner of
the Partnership and acknowledges that he no longer has any Interest in,
or
rights or claims against, the Partnership as a Limited Partner as of the
Admission Date. The Investment Limited Partner and the Special Limited
Partner
are hereby admitted as the sole Limited Partners in substitution for the
Original Limited Partner as of the Admission Date and agree to be bound
by the
terms and provisions of the Project Documents and this Agreement. The
names
and addresses of the Investment Limited Partner and the Special Limited
Partner are as set forth on Schedule A. The General Partners shall have
no
authority to admit additional Limited Partners without the Consent of
the
Investment Limited Partner.
4.4 Liability of the Limited Partners
None of the Investment Limited Partner, the Special Limited Partner and
any Person who becomes an Additional Limited Partner shall be liable for
any
debts, liabilities, contracts or obligations of the Partnership and
shall only
be liable to pay their respective Capital Contributions as and when the
same
are due hereunder and under the Uniform Act.
4.5 Special Rights of the Investment Limited Partner
(a) Notwithstanding any other provision herein, to the extent the law
of the State is not inconsistent, the Investment Limited Partner shall
have
the right, subject to the prior written consent of any Agency (if such
consent is required) to:
(i) amend this Agreement in any particular;
(ii) dissolve the Partnership;
(iii) remove any General Partner and elect a new General Partner
(A) on the basis of the performance and discharge of such General
Partner's obligations constituting fraud, bad faith, negligence,
misconduct or breach of fiduciary duty, or (B) upon the occurrence of
any of the following: (1) such General Partner shall have violated any
provisions of any Project Document or other document required in
connection with any Mortgage, or any provisions of any Agency
regulations applicable to the Apartment Complex; (2) such General
Partner shall have violated any provision of this Agreement, including,
but not limited to, any obligation to fund any Partnership expense under
Section 6.10, or such General Partner shall have violated any provision
of applicable law; (3) any Mortgage shall have gone into default; or (4)
such General Partner shall have conducted its own affairs or the affairs
of the Partnership in such a manner as would (a) cause the termination
of the Partnership for Federal income tax purposes; or (b) cause the
Partnership to be treated for Federal income tax purposes as an
association taxable as a corporation;
(iv) continue the business of the Partnership with a substitute
General Partner; and
(v) approve or disapprove the sale of all or substantially all of
the assets of the Partnership.
(b) Upon the removal of a General Partner, (i) without any further
action by any Partner, the Special Limited Partner shall automatically
become
a General Partner and acquire in consideration of a cash payment of $100
such
portion of the Interest of the removed General Partner as counsel to the
Investment Limited Partner shall determine is the minimum appropriate
interest
in order to assure the continued status of the Partnership as a
partnership
under the Code and under the Uniform Act, (ii) such portion of the
economic
Interest as an Additional Limited Partner, (iii) the economic Interest
of the
Special Limited Partner as the Special Limited Partner shall continue
unaffected by the new status of the Special Limited Partner as a General
Partner, and (iv) the new General Partner (which shall also continue to
be the
Special Limited Partner) shall automatically be delegated all of the
powers
and duties of the General Partners pursuant to Section 6.13. The former
Special Limited Partner of any successor General Partner proposed by the
former Special Limited Partner shall have the option, exercisable in its
sole
discretion, to acquire the remainder of the Additional Limited Partner
Interest, or any portion thereof, of any removed General Partner upon
payment
of the agreed or then present fair market value of such interest or
portion
thereof. Any dispute as to the value of the Interest or portion thereof
to be
acquired pursuant to the immediately preceding sentence shall be
submitted to
a committee composed of three qualified real estate appraisers, one
chosen by
the removed General Partner, one chosen by the successor General Partner
or
the Investment Limited Partner, as the case may be, and the third chosen
by
the two so chosen. The proceedings of such committee shall conform to
the
rules of the American Arbitration Association, as far as appropriate,
and its
decision shall be final and binding. The expense of arbitration shall
be born
equally by the removed General Partner and the Partnership. The method
of
payment to the removed General Partner shall be fair and must protect
the
solvency and liquidity of the Partnership. The method of payment will
be
deemed presumptively fair where it provides for an interest-bearing
promissory
note coming due in no less than five (5) years with equal installments
each
year. In addition, upon removal, the Partnership must promptly pay to
the
removed General Partner all amounts then accrued and owing to the
removed
General Partner; provided, however, that notwithstanding the language of
Section 6.12, Article X, Article XI and any other provision hereof, no
removed
General Partner or any Affiliate thereof shall be entitled to receive
any fee,
compensation or other remuneration from the Partnership, other than (i)
the
above-described payment for the Interest, or portion thereof, of the
removed
General Partner, and (ii) any such fee, compensation or other
remuneration
which had already been earned in full prior the date of such removal.
The
Partnership is not authorized to enter into any arrangement whereby any
fee,
compensation or other remuneration could be payable directly or
indirectly to
any General Partner or Affiliate thereof in a manner inconsistent with
the
immediately preceding sentence unless the prior written consent of the
Special
Limited Partner shall have been obtained to such particular agreement.
The
Partnership may offset against any payments to a General Partner removed
under
this Section 4.5 any damages suffered by the Partnership as a result of
any
breach of the obligations of such General Partner hereunder. A General
Partner so removed will not be liable as a General Partner for any
obligations
of the Partnership after the effective date of its removal. Each
General
Partner hereby grants to the Special Limited Partner an irrevocable (to
the
extent permitted by applicable law) power of attorney coupled with an
interest
to execute and deliver any and all documents and instruments on behalf
of such
General Partner and the Partnership as the Special Limited Partner may
deem to
be necessary or appropriate in order to effect the provisions of this
Section 4.5.
4.6 Meetings
The General Partner or Limited Partners holding more than ten percent
(10%) of the then outstanding Limited Partner Interests may call
meetings of
the Partnership for any matters for which the Limited Partners may vote
as set
forth in this Agreement. A list of the names and addresses of all
Limited
Partners shall be maintained as part of the books and records of the
Partnership and shall be made available upon request to any Limited
Partner or
his representative at his cost. Upon receipt of a written request
either in
person or by certified mail stating the purpose(s) of the meeting, the
General
Partners shall provide all Limited Partners within ten (10) days after
receipt
of said request, written notice (either in person or by certified mail)
of a
meeting and the purpose of such meeting to be held on a date not less
then
fifteen (15) nor more than sixty (60) days after receipt of said
request, at a
time convenient to the Limited Partners. All meetings shall be held at
the
principal office of the Partnership.
ARTICLE V
Capital Contributions of the Investment Limited Partner
and the Special Limited Partner
5.1 Payments
(a) The Special Limited Partner's Capital Contribution of $10 shall be
paid in full in cash on the Admission Date. The Investment Limited
Partner's
Capital Contribution shall be paid in cash installments (the
"Installments"),
as follows:
(1) $185,592 (the "First Installment") on the latest of (i) the
Admission Date, (ii) Tax Credit Set-Aside, (iii) Closing of the
Construction Mortgage; or (iv) Permanent Mortgage Commitment;
(2) $92,796 (the "Second Installment") on the latest to occur of
(i) State Designation; (ii) the Completion date; (iii) Cost
Certification; (iv) receipt of an updated title policy satisfactory to
the Investment Limited Partner, (v) receipt of a payoff letter from the
Project's general contractor stating that all amounts payable to it have
been paid in full and that the Partnership has complied with the terms
of the Construction Contract or (vi) receipt by the Investment Limited
Partner of an estoppel letter from the Construction Lender in form
satisfactory to the Investment Limited Partner; and
(3) $74,236 (the "Third Installment") on the latest of (i) the
Initial 100% Occupancy Date, (ii) Permanent Mortgage Commencement; (iii)
Rental Achievement; or (iv) satisfaction of all of the conditions to the
payment of the First Installment; and
(4) $18,559 (the "Fourth Installment") upon receipt of a tax
return for the year in which Rental Achievement occurs;
provided, however, that the General Partner shall give the Investment
Limited Partner not less than twenty-one (21) days' written notice prior
to the due date of each Installment subsequent to the First Installment.
(b) The obligation of the Investment Limited Partner to pay each In-
stallment is conditioned upon delivery by the General Partners to the
Invest-
ment Limited Partner of a written certificate (the "Payment
Certificate")
stating that as of the date of such certificate (i) all the conditions
to the
payment of such Installment have been satisfied and (ii) all
representations
and warranties of the General Partner contained in this Agreement are
true and
correct. Except as provided in the final sentence of this Section
5.1(b),
acceptance by the Partnership of any Installment shall constitute a
confirma-
tion that, as of the date of payment, all such conditions are satisfied
and
all such representations and warranties are true and correct. The
obligation
of the Investment Limited Partner to pay the First Installment is also
con-
ditioned upon delivery by the General Partner to the Investment Limited
Partner of (i) a legal opinion of independent counsel to the
Partnership,
which opinion must be satisfactory to the Investment Limited Partner as
to
form, content and identity of counsel and (ii) a photocopy of an ATLA
Owner's
Policy of Title or an endorsement thereto, issued to the Partnership
with
respect to the Apartment Complex with an effective date on or after the
Admission Date, in an insured amount of not less than the appraised
value of
the Property, but in no event less than the sum of all Permanent
Mortgage
loans and the Invested Amount of the Investment Limited Partner and the
General Partner from a title insurance company reasonably satisfactory
to the
Investment Limited Partner containing, inter alia, "Fairways", "Non-
Imputation", "Date Down" and "Zoning" endorsements and evidencing the
Partnership's ownership of the Apartment Complex, subject only to such
exclusions, exceptions, conditions and stipulations as shall be
acceptable to
the Investment Limited Partner, in its sole discretion. In no event
shall any
Installment become due until all of the conditions for all of the
Installments
listed prior to the Installment in question in Section 5.1(a) shall have
been
satisfied and all of such prior Installments shall have become due.
Notwith-
standing the foregoing, however, if at any time prior to the date when
an
Installment becomes due and payable, the Partnership has an "Operating
Deficit" (expenses in excess of revenues which the General Partners
would be
required to fund pursuant to Section 6.10), then the Investment Limited
Partner may, at its option, waive the requirement of the delivery of the
Payment Certificate or any other condition with respect to part or all
of such
Installment and pay such part or all of such Installment, provided that
the
proceeds of the amount so paid are used by the Partnership to fully fund
such
Operating Deficit; provided, however, that if the proceeds of such
amount so
paid are designated in Section 6.12 or Section 10.2(c) to be used to pay
fees
or special distributions, then such proceeds shall be utilized to pay
such
fees or special distributions and the recipients thereof shall be
required to,
and hereby agree to, utilize the proceeds of such fees or special
distributions to fund such Operating Deficit, in which case the
Investment
Limited Partner is hereby authorized to directly fund such Operating
Deficit
with the funds so applied being deemed to have been paid as aforesaid.
(c) The Payment Certificate for each Installment shall be dated and
delivered not less than ten (10) nor more than thirty (30) days prior to
the
due date for such Installment.
(d) If, as of the date when an Installment would otherwise be due, any
statement required to be made in the Payment Certificate for such
Installment
cannot be truthfully made, the General Partners shall notify the
Investment
Limited Partner of the reason why such statement would be untrue if
made, and
the Investment Limited Partner shall not be required to pay such
Installment;
provided, however, that if (i) any such statement can subsequently be
truthfully made and (ii) the Investment Limited Partner shall not have
irrevocably lost, in the good faith judgment of the Investment General
Partner, any material tax or other benefits hereunder, then the
Investment
Limited Partner shall pay such Installment to the Partnership thirty
(30) days
after delivery by the General Partners to the Investment Limited Partner
of
the Payment Certificate together with an explanation of the manner in
which
each such statement had become true.
(e) If with respect to any year all or a portion of which occurs
during the 60-month period commencing on the later of (i) the Admission
Date
or (ii) the date on which the first building in the Apartment Complex is
placed in service for the purposes of Section 42 of the Code (a
"Reduction
Year") the Actual Credit is or was less than the Projected Credit, then
the
General Partners shall pay to the Investment Limited Partner the
Reduction
Amount. The Reduction Amount shall be equal to the sum of (A) the excess
of
the Projected Credit for such year over the Actual Credit for such year
multiplied by .81 plus (B) the amount of any recapture, interest or
penalty
payable by the limited partners and/or the holders of beneficial
assignee
certificates of the Investment Limited Partner as a result of such
shortfall,
assuming that each limited partner and/or each holder of a beneficial
assignee
certificate in the Investment Limited Partner used all of the Tax
Credits
allocated to him in the year of allocation. The Auditors shall make
their
determination of the amount of the Actual Credit with respect to each
Reduction Year within thirty (30) days following the end of such year.
The
Capital Contribution of the Investment Limited Partner shall be subject
to
reduction as hereinabove described with respect to each Reduction Year.
Any
reduction in the Capital Contribution of the Investment Limited Partner
shall,
at the option of the Investment Limited Partner, either (i) first be
applied
to reduce the Installment next due to be paid by the Investment Limited
Partner, with any portion of such Reduction Amount in excess of the
amount of
such Installment then being applied to reduce succeeding Installments,
provided, that if no further Installments remain to be paid or if the
Reduction Amount shall exceed the sum of the amounts of the remaining
Installments, then the entire Reduction Amount or the balance of the
Reduction Amount, as the case may be, shall be paid by the General
Partners to
the Investment Limited Partner promptly after demand is made therefor,
as a
payment of damages for breach of warranty or (ii) be paid in its
entirety by
the General Partners to the Investment Limited Partner promptly after
demand
is made therefor, as a payment of damages for breach of warranty.
(f) In the event that, for any reason, at any time after the end of
the year during which there occurs the sixty (60)-month anniversary of
the
later of (i) the Admission Date or (ii) the date on which the first
building
in the Apartment Complex is placed in service for the purposes of
Section 42
of the Code, the amount of the Actual Credit shall be less than the
Projected
Credit with respect to any fiscal year of the Partnership (such
difference
being hereinafter referred to as a "Credit Shortfall"), the Investment
Limited
Partner shall be treated as having made a constructive advance to the
Partnership with respect to such year (a "Credit Recovery Loan"), which
shall
be deemed to have been made on January 1 of such year in an amount equal
to
the sum of (i) the Credit Shortfall for such year plus (ii) the amount
of any
recapture, interest or penalty payable by the limited partners and/or
the
holders of beneficial assignee certificates of the Investment Limited
Partner
as a result of the Credit Shortfall for such year, assuming that each
limited
partner and/or holder of a beneficial assignee certificate in the
Investment
Limited Partner used all of the Tax Credits allocated to him in the year
of
allocation. Credit Recovery Loans shall be deemed to bear simple (not
compounded) interest from the respective dates on which such principal
advances shall have been deemed to have been made under this Section
5.1(f) at
9% per annum. Credit Recovery Loans shall be payable by the Partnership
as
provided in Section 10.2(b), Clause Third.
(g) If, as of the Completion Date and based upon the Cost
Certification, it is determined that the Apartment Complex will be
eligible to
receive Tax Credits in an annual amount of less than $74,244, or as of
the
Completion Date the product of the Apartment Complex's Eligible Basis
and its
Applicable Percentage is determined by the Auditors or the Service to be
such
that the Apartment Complex will not be eligible to receive Tax Credits
in an
annual dollar amount of at least $74,244, then there shall be a
reduction in
the Investment Limited Partner's Capital Contribution in an amount equal
to
the product of (A) difference between (i) $74,244 and (ii) the annual
amount
of Tax Credit allocated and available to the Partnership and (B) 8.1.
(h) In the event that (i) State Designation does not occur by
Admission, or (ii) by Admission, the Limited Partners shall not have
received
a written certification of the Auditors in a form and in substance
satisfactory for the purpose of achieving Cost Certification and
indicating
that the product of the Apartment Complex's Eligible Basis and its
Applicable
Percentage is such that the Apartment Complex will be eligible to
receive Tax
Credit in an annual amount of at least $74,244 or (iii) at any time
after the
Completion Date the product of the Apartment Complex's Eligible Basis
and its
Applicable Percentage is determined by the Auditors, the Tax Accountants
or
the Service to be such that the Apartment Complex will not be eligible
to
receive Tax Credit in an annual dollar amount of at least $74,244, then
(a)
the General Partners shall pay to the Investment Limited Partner an
amount
equal to 99% of the product of (A) difference between (i)$74,244 and
(ii) the
total amount of Tax Credit allocated and available to the Partnership
and (B)
.75 and (b) the Projected Credit for each year shall thereafter be
redefined
to mean 99% of the total amount of Tax Credit actually so allocated and
available to the Partnership for such year (the "Revised Projected
Credit").
5.2 Return of Capital Contributions
(a) Failure to Achieve Development and/or Tax Credit Benchmarks and
Standards. If (i) all of the apartment units in the Apartment Complex
shall
not have been placed in service by Admission (or any later date fixed by
the
General Partners with the Consent of the Investment Limited Partner) or
(ii)
by July 1, 1997 (or any later date fixed by the General Partners with
the
Consent of the Investment Limited Partner) less than 100% apartment
units in
the Apartment Complex shall have been occupied by Qualified Tenants, or
(iii)
Permanent Mortgage Commencement shall not have occurred prior to
Admission (or
any later date fixed by the General Partners with the Consent of the
Investment Limited Partner), or (iv) State Designation shall not have
occurred
by Admission (or any later date fixed by the General Partner with the
Consent
of the Investment Limited Partner), or (v) the Partnership shall fail to
meet
the Minimum Set-Aside Test or the Rent Restriction Test by the close of
the
first year of the Credit Period and/or fails to continue to meet either
of
those Tests at any time during the sixty (60)-month period commencing on
such
date or (vi) prior to Permanent Mortgage Commencement, (a) foreclosure
proceedings shall have commenced under the Construction Mortgage and
such
proceedings shall not have been dismissed within sixty (60) days, (b)
any of
the commitments of any Lender or Agency to provide the Permanent
Mortgage
and/or any subsidy financing shall be terminated or withdrawn and not
reinstated or replaced within ninety (90) days with terms equally or
more
favorable to the Investment Limited Partner or terms for which the
Consent of
the Investment Limited Partner and (if required) the approval of any
Lender or
Agency shall have been obtained, or (c) the Construction Lender shall
have
irrevocably refused to make any further advances under the Construction
Mortgage and such decision shall not have been reversed or the
Construction
Lender replaced within sixty (60) days, or (vii) if by Admission (or any
later
date fixed by the General Partners with the Consent of the Investment
Limited
Partner), the Investment Limited Partner shall not have received a
written
certification of the Auditors, in a form and in substance satisfactory
to
Boston Capital, as to the respective amounts of the Qualified Basis and
the
Applicable Percentage pertaining to each building in the Apartment
Complex, or
(viii) if by July 1, 1997, Rental Achievement has not been achieved or,
(ix)
Carryover Certification has not been achieved by December 31, 1996, or
(x) if
at any time it is determined by the Auditors, the Tax Accountants, or
the
Service that as of December 31, 1994, the Partnership did not own land
or
depreciable property constituting part of the Apartment Complex and/or
had not
incurred capitalizable costs with respect to the Apartment Complex of at
least
ten percent (10%) of the Partnership's reasonable expected basis in the
Apartment Complex as of December 31, 1995, then the General Partners
shall,
within fifteen (15) days of the occurrence thereof, send to the
Investment
Limited Partner and the Special Limited Partner notice of such event and
of
the General Partners' obligation to repurchase the Interests of the
Investment
Limited Partner and the Special Limited Partner by paying to the
Investment
Limited Partner and the Special Limited Partner an amount equal to each
such
Partner's Invested Amount in the event the Investment Limited Partner
and/or
the Special Limited Partner so require. If either the Special Limited
Partner
or the Investment Limited Partner elects to require a repurchase of its
Interest and the payment to it of an amount equal to its Invested
Amount, it
shall send notice thereof to the Partnership within thirty (30) days
after the
mailing date of the General Partners' notice (or at any time after the
occurrence of any of the foregoing if the General Partners shall not
have sent
such a notice thereof) and the General Partners shall within thirty (30)
days
thereafter repurchase the Interest of such Partner by paying to each
such
Partner an amount equal to its Invested Amount plus the amount of any
third
party costs incurred by or on behalf of such Partner in implementing
this
Section 5.2(a).
(b) Lender Disapproval. If the Construction Lender and/or the
Permanent Lender shall disapprove, or fail to give any required
approval of,
the Investment Limited Partner and/or the Special Limited Partner as a
Limited
Partner hereunder within one hundred eighty (180) days of the Admission
Date,
then the Partner being disapproved or not approved shall, effective as
of such
time or such later time as may be selected by the Partner being
disapproved or
not approved shall, effective as of such time or such later time as may
be
selected by the Partner being disapproved or not approved (or such other
time
as may be specified by the Construction Lender and/or the Permanent
Lender in
its disapproval),at the option of the Partner being disapproved or not
approved (if not directed by the Construction Lender and/or the
Permanent
Lender in to withdraw), cease to be a Limited Partner. The General
Partners
shall, within ten (10) days of the effective date of such cessation, pay
to
the Partner being disapproved or not approved an amount equal to its
Invested
Amount plus the amount of any third party costs, incurred by or on
behalf of
such Partner in implementing this Section 5.2(b).
(c) Substitution and Indemnification. Upon receipt by the Investment
Limited Partner and/or the Special Limited Partner of the amount due to
it
pursuant to either Section 5.2(a) or Section 5.2(b) of an amount equal
to the
sum of its Investment Amount plus the amount of any third party costs,
the
Interest of such Partner shall terminate, and the General Partners shall
indemnify and hold harmless such Partner from any losses, damages, and
liabilities to which such Partner (as a result of its participation
hereunder)
may be subject.
(d) Waiver of Repurchase Right. The Investment Limited Partner shall
have the right to irrevocably waive its right to have its Interest
repurchased
pursuant to any clause or clauses of Section 5.2(a), or any portion
thereof,
at any time during which any of such rights shall be in effect. Such a
waiver
shall be exercised by delivery to the General Partner of a written
notice
stating that the rights being waived pursuant to any specified clause or
clauses of Section 5.2(a), or any specified portion thereof, are thereby
waived from that date forward.
(e) Additional General Partner. If the General Partners shall fail to
make on the due date therefor any payment required under Section 5.2(a)
or
Section 5.2(b), time being of the essence, at any time thereafter the
Special
Limited Partner shall have the option, exercisable in its sole
discretion, to
be admitted as an additional General Partner, with the same collective
economic interest in the Partnership as a General Partner and a Special
Limited Partner as the economic interest in the Partnership which it
formerly
held as a Special Limited Partner. Upon any such admission of the
Special
Limited Partner as an additional General Partner, each of the other
General
Partners hereby agrees that all of its rights and powers hereunder as a
General Partner shall automatically be irrevocably delegated to the
Special
Limited Partner pursuant to Section 6.13 without the necessity of any
further
action by any Partner, except as required by the Uniform Act. Each
Partner
hereby grants to the Special Limited Partner an irrevocable (to the
extent
permitted by applicable law) power of attorney coupled with an interest
to
take any action and to execute, deliver and file or record any and all
documents and instruments on behalf of such Partner and the Partnership
as the
Special Limited Partner may deem necessary or appropriate in order to
effectuate the provisions of this Section 5.2(e); provided, however,
this
power of attorney shall be limited to the execution, delivery, filing
and
recording of documents and instruments pertaining to the Partnership and
Partnership property, and shall not extend to unrelated business affairs
or
property of the General Partner. The admission of the Special Limited
Partner
as an additional General Partner shall not relieve any other General
Partner
of any of its economic obligations hereunder, and each other General
Partner
shall fully indemnify and hold harmless the additional General Partner
against
any and all losses, judgments, liabilities, expenses and amounts paid in
settlement of any claims sustained in connection with its capacity as a
General Partner.
ARTICLE VI
Rights, Powers and Duties of General Partners
6.1 Authorized Acts
Subject to Section 6.2, Section 6.3, and all other provisions of this
Agreement, the General Partners for, in the name and on behalf of the
Partnership, are hereby authorized to do the following in furtherance of
the
purposes of the Partnership:
(1) To acquire by purchase, lease, exchange or otherwise any real
or personal property;
(2) To construct, rehabilitate, operate, maintain, finance and
improve, and to own, sell, convey, assign, mortgage or lease any real
estate and any personal property;
(3) To borrow money and issue evidences of indebtedness and to
secure the same by mortgage, pledge or other lien on the Apartment Com-
plex or any other assets of the Partnership;
(4) To execute the Construction and Permanent Mortgages, the other
Project Documents and all such other documents as the General Partners
deem necessary or appropriate in connection with the acquisition, devel-
opment and financing of the Apartment Complex;
(5) To prepay in whole or in part, refinance or modify the Con-
struction and Permanent Mortgages or any other financing affecting the
Apartment Complex;
(6) To employ the Management Agent (which may be an Affiliate of
the General Partners) and to pay reasonable compensation for its
services;
(7) To employ their respective Affiliates to perform services
for, or sell goods to, the Partnership;
(8) To execute contracts with the State or any subdivision or
agency thereof or any other government agency to make apartments or
tenants in the Apartment Complex eligible for any public-subsidy pro-
gram;
(9) To execute leases of some or all of the apartment units of the
Apartment Complex to a public housing authority and/or to a non-profit
corporation, cooperative or other non-profit Entity; and
(10) To enter into any kind of activity and to perform and carry
out contracts of any kind which may be lawfully carried on or performed
by a partnership and to file all certificates and documents which may be
required under the laws of the State.
6.2 Restrictions on Authority
(a) Notwithstanding any other Section of this Agreement, the General
Partners shall have no authority to perform any act in violation of
applicable
law, Agency or other government regulations, requirements of any
Lender, or
the Project Documents. In the event of any conflict between the terms of
this
Agreement and any applicable Agency or other government regulations or
re-
quirements of any Lender, the terms of such regulations or requirements
shall
govern. Neither shall the General Partners have any authority to do any
of
the following acts without the Consent of the Investment Limited
Partner:
(1) To borrow in excess of $10,000 in the aggregate at any one
time outstanding on the general credit of the Partnership, except
borrowings constituting Subordinated Loans ;
(2) To borrow from the Partnership or commingle Partnership funds
with funds of any other Person;
(3) Following the Completion Date, to construct any new or
replacement capital improvements on the Apartment Complex which
substantially alter the Apartment Complex or its use or which are at a
cost in excess of $10,000 in a single Partnership fiscal year, except
(a) replacements and remodeling in the ordinary course of business or
under emergency conditions or (b) construction paid for from insurance
proceeds;
(4) To acquire any real property in addition to the Apartment
Complex;
(5) Following Permanent Mortgage Commencement, to increase,
decrease (except through the twenty-two-year amortization provided for
in the Permanent Mortgage Commencement), modify the terms of or
refinance the Permanent Mortgage;
(6) To rent apartments in the Apartment Complex such that the
Apartment Complex would not meet the requirements of the Minimum Set--
Aside Test or the Rent Restriction Test;
(7) To sell, exchange or otherwise convey or transfer the
Apartment Complex or substantially all the assets of the
Partnership;
(8) To terminate any agreement with any Agency ;
(9) To execute contracts with any Agency, the State or any
subdivision or agency thereof or any other government agency to make
apartments or tenants in the Apartment Complex eligible for any public-
subsidy program;
(10) To execute leases of some or all of the apartment units of
the Apartment Complex to a public housing authority and/or to a non-
profit corporation, cooperative or other non-profit Entity;
(11) To amend the Construction Contract, except for change orders
approved by the Lender;
(12) To pledge or assign any of the Capital Contribution of the
Investment Limited Partner or the proceeds thereof; or
(13) To do any act required to be approved or ratified by all
limited partners under the Uniform Act.
(b) Neither the Investment General Partner nor any Affiliate thereof
shall be given an exclusive right to sell, or exclusive employment to
sell,
the Apartment Complex.
6.3 Personal Services
No General Partner or Affiliate thereof shall receive any salary or
other direct or indirect compensation for any services or goods provided
in
connection with the Partnership or the Apartment Complex, except as may
be
specifically provided in Section 6.12 and Article XI or as to which the
prior
written consent of the Special Limited Partner shall have been obtained
to the
precise terms thereof prior to the commencement of such services or the
provision of such goods. Any Partner may engage independently or with
others
in other business ventures of every nature and description including the
ownership, operation, management, syndication and development of
competing
real estate; neither the Partnership nor any other Partner shall have
any
rights in and to such independent ventures or the income or profits
derived
therefrom.
6.4 Business Management and Control; Tax Matters Partner
Subject to the provisions of this Agreement, the General Partners shall
have the exclusive right to control the business of the Partnership. The
Investment Limited Partner shall have no right to take part in the
management
or control of the business of the Partnership or to transact any
business in
the name of the Partnership. No provision of this Agreement which makes
the
Consent of the Investment Limited Partner a condition for the
effectiveness of
an action taken by the General Partners is intended, and no such
provision
shall be construed, to give the Investment Limited Partner any
participation
in the control of the Partnership business. Each of the Special Limited
Partner and the Investment Limited Partner hereby consents to the
exercise by
the General Partners of the powers conferred on them by law and this
Agreement, and the General Partners agree to exercise control of the
business
of the Partnership only in accordance with the provisions of this
Agreement.
All Partners hereby agree that R.S., Inc. shall serve as the "Tax
Matters
Partner." In the case of litigation, the Tax Matters Partner is
required to
file suit in the United States Tax Court unless the Consent of the
Investment
Limited Partner is obtained to file suit in the United States Claims
Court or
the United States District Court. Nothing herein shall be construed to
restrict the Partnership from engaging the Auditors to assist the Tax
Matters
Partner in discharging its duties hereunder.
6.5 Duties and Obligations
(a) The General Partners shall manage the affairs of the Partnership to
the best of their ability, shall use their best efforts to carry out the
purpose of the Partnership, and shall devote to the Partnership such
time as
may be necessary for the proper performance of their duties and the
business
of the Partnership. The General Partners shall promptly take all action
which
may be necessary or appropriate for the proper development, maintenance
and
operation of the Apartment Complex in accordance with the provisions of
this
Agreement, the Project Documents and applicable laws and regulations
including, without limitation, funding the Construction and Development
Fee to
the extent Capital Contributions and Cash Flow are insufficient. The
General
Partners are responsible for the management and operation of the
Partnership,
including the oversight of the rent-up and operational stages of the
Apartment
Complex.
(b) The General Partners shall use their best efforts to cause the Part-
nership to generate Cash Flow for distribution to the Partners at the
maximum
realizable level in view of (i) any applicable Agency and other
regulations,
(ii) the Minimum Set-Aside Test and (iii) the Rent Restriction Test,
and, if
necessary, the General Partners shall also use their best efforts to
obtain
approvals and implementation of appropriate adjustments in the rental
schedule
of the Apartment Complex.
(c) The General Partners shall cause the Partnership to obtain and keep
in force, during the term of the Partnership, comprehensive casualty
insurance, including, but not limited to, fire and other risks generally
included under "extended coverage" policies, workmen's compensation and
public
liability insurance in favor of the Partnership (i) with such companies
and in
such amounts as shall be satisfactory to the Lenders and any Agency, or,
if
the Apartment Complex is no longer subject to Lender or Agency
regulation or
requirements, as shall be customary for apartment complexes similar to
the
Apartment Complex and (ii) in amounts which shall be (A) no less than
those
amounts which are customary in the area for apartment complexes similar
to the
Apartment Complex, (B) no less than such amounts as may be reasonably
requested by the Investment Limited Partner and/or the Special Limited
Partner
from time to time, and (C) in any event, sufficient to prevent the
Partnership
from becoming a co-insurer under any such policies. No deductibles on
such
policies may exceed $1,000, without the prior written consent of the
Investment Limited Partner. The Partnership's fire and other casualty
insurance shall be in an amount at least equal to the full replacement
value
of the Apartment Complex. The General Partner shall cause the
Partnership and
all Partners to be named as additional insured parties on a combined
single
limit bodily injury and property damage liability insurance policy in
the
amount of not less than $6,000,000 (of which up to $5,000,000 may be
provided
under an umbrella policy). Through the Completion Date, or such later
date as
may be required by the Construction Lender or any Agency , the General
Partners shall also cause the Partnership to obtain and keep in force a
builder's risk policy in favor of the Partnership in an amount not less
than
the greater of (i) the full replacement value of the Apartment Complex
(excluding the value of the underlying land, the site utilities and the
foundations) or (ii) such other amount as shall be required by any
Agency or
the Construction Lender. Throughout the term of the Partnership, the
General
Partners shall provide copies of all such policies (or binders) to the
Investment Limited Partner promptly after their receipt thereof. Upon
the
request of the Investment Limited Partner to the General Partners, the
General
Partners shall cause the applicable insurer to name the Investment
Limited
Partner as an "additional insured" on each Partnership insurance policy.
(d) The obligations of the General Partners hereunder shall be the joint
and several obligations of each General Partner. Except as otherwise
provided
in Sections 4.5(b) and 7.1, such obligations shall survive any
Withdrawal of a
General Partner from the Partnership.
(e)(1) The General Partners shall establish and maintain reasonable re-
serves to provide for working capital needs, improvements, replacements
and
any other contingencies of the Partnership. At a minimum, the General
Partners shall cause the Partnership to annually deposit $4,800 from its
Cash
Flow into replacement reserves. To the extent that Cash Flow (as
determined
before deduction of this reserve deposit) for any year shall be
insufficient
to make such deposit in full, the General Partners shall fund such
shortfall
from their own funds as a Subordinated Loan.
(e)(2) In addition to the requirements of Section 6.5(e)(1), in order
to meet operating expenses of the Partnership which exceed operating
income
available for the payment thereof, the General Partner shall deposit
$7,500
from the proceeds of Cash Flow (pursuant to Clause Three of Section
10.2(a)
hereof) into a segregated operating reserve account to secure the
General
Partner's obligation to fund operating expenses. To the extent Cash Flow
is
insufficient to fund such operating reserve, the Management Agent agrees
to
subordinate up to fifty (50%) of its contracted management compensation
for
that purpose pursuant to Article 11.D until such time as the above
stated
reserve is funded. Notwithstanding and in addition to the foregoing,
however,
if, at any time, the rate of interest charged on the Permanent Loan
equals or
exceeds ten and 75/100 (10.75%) percent per annum, the General Partner
shall
deliver to the Special Limited Partner, as an additional operating
reserve, an
irrevocable, unconditional letter of credit from a recognized commercial
lending institution in the amount of $27,000. The aforesaid operating
reserve
funds and the letter of credit may only be released upon the approval of
the
Special Limited Partner.
(f) Each General Partner shall be bound by the Project Documents, and no
additional General Partner shall be admitted if he, she or it has not
first
agreed to be bound by this Agreement (and assume the obligations of a
General
Partner hereunder) and by the Project Documents to the same extent and
under
the same terms as the other General Partners.
(g) The General Partners shall take all actions necessary to ensure that
the Investment Limited Partner receives the full amount of the Projected
Credit, including, without limitation, the rental of apartments to
Qualified
Tenants and the filing of annual certifications as may be required. In
this
regard, the General Partners shall, inter alia, cause (i) the
Partnership to
satisfy all requirements imposed from time to time under the Code with
respect
to rental levels and occupancy by Qualified Tenants by the close of the
first
year of the Credit Period so as to permit the Partnership to be entitled
to
the Tax Credit throughout the compliance period specified in the Code,
(ii)
all dwelling units in the Apartment Complex to be leased for periods of
not
less than six months to persons satisfying the Rent Restriction Test,
(iii)
the Partnership to make all appropriate Tax Credit elections in a timely
fashion, and (iv) all rental units in the Apartment Complex to be of
equal
quality with comparable amenities available to low-income tenants on a
comparable basis without separate fees.
(h) On or before the Admission Date, the General Partners shall provide
to the Investment Limited Partner either (i) an appraisal of the
Apartment
Complex prepared by a competent independent appraiser or (ii) completed
FmHA
1924-13 (estimate and certificate of actual cost) and 1930-7 (statement
of
budget, income and expense) or HUD project cost and budget analysis on
Form
2264, or any successor FmHA or HUD form, any comparable form of a state
or
other governmental agency, including any applicable Tax Credit
allocation
agency, setting forth estimates with respect to construction and
mortgage
financing costs and initial rental income and operating expense figures
for
the Apartment Complex.
(i) The General Partners shall (i) not store (except in compliance with
all laws, ordinances, and regulations pertaining thereto) or dispose of
any
Hazardous Material at the Apartment Complex, or at or on any other Site
or
Vessel owned, occupied, or operated either by any General Partner, any
Affiliate of a General Partner, or any Person for whose conduct any
General
Partner is or was responsible; (ii) neither directly nor indirectly
transport
or arrange for the transport of any Hazardous Material (except in
compliance
with all laws, ordinances, and regulations pertaining thereto); (iii)
provide
the Investment Limited Partner with written notice (x) upon any General
Partner's obtaining knowledge of any potential or known release, or
threat of
release, of any Hazardous Material at or from the Apartment Complex or
any
other Site or Vessel owned, occupied, or operated by any General
Partner, any
Affiliate of a General Partner or any Person for whose conduct any
General
Partner is or was responsible or whose liability may result in a lien on
the
Apartment Complex; (y) upon any General Partner's receipt of any notice
to
such effect from any Federal, state, or other governmental authority;
and (z)
upon any General Partner's obtaining knowledge of any incurrence of any
expense or loss by any such governmental authority in connection with
the
assessment, containment, or removal of any Hazardous Material for which
expense or loss any General Partner may be liable or for which expense
or loss
a lien may be imposed on the Apartment Complex.
6.6 Representations and Warranties
The General Partners represent and warrant to the Investment Limited
Partner and the Special Limited Partner as follows:
(1) The Partnership is a duly organized limited partnership
validly existing and in good standing under the laws of the State and
has complied with all filing requirements necessary for its existence
and to preserve the limited liability of the Investment Limited Partner
and the Special Limited Partner.
(2) No event or proceeding has occurred or is pending or
threatened which would (a) materially adversely affect the Partnership
or its properties, or (b) materially adversely affect the ability of the
General Partners or any of their Affiliates to perform their respective
obligations hereunder or under any other agreement with respect to the
Apartment Complex, other than legal proceedings which have been bonded
against without recourse to Partnership assets in such manner as to stay
the effect of the proceedings or otherwise have been adequately provided
for. This subparagraph shall be deemed to include, without limitation,
the following: (x) legal actions or proceedings before any court,
commission, administrative body or other governmental authority having
jurisdiction over the zoning applicable to the Apartment Complex; (y)
labor disputes; and (z) acts of any governmental authority.
(3) No default (or event which, with the giving of notice or the
passage of time or both, would constitute a default) has occurred and is
continuing under this Agreement or under any material provision of the
Project Documents, and the same are in full force and effect.
(4) No Partner or Related Person bears the economic risk of loss
with respect to the Permanent Mortgage. No General Partner has, either
on its own behalf or on behalf of the Partnership, incurred any
financial responsibility with respect to the Partnership prior to the
Admission Date, other than as disclosed in writing to the Investment
Limited Partner prior to the Admission Date.
(5) The Apartment Complex will be completed in a timely manner in
conformity with the Project Documents. There is no violation by the
Partnership or the General Partners of any zoning, environmental or
similar regulation applicable to the Apartment Complex which could have
a material adverse effect thereon, and the Partnership has complied with
all applicable municipal and other laws, ordinances and regulations
relating to such construction and use of the Apartment Complex. All
appropriate public utilities, including, but not limited to, water,
electricity, gas (if called for in the plans and specifications), and
sanitary and storm sewers, are or will be available and operating
properly for each unit in the Apartment Complex at the time of the first
occupancy of such unit.
(6) The Partnership owns good and marketable fee simple title to
the Apartment Complex, subject to no material liens, charges or encum-
brances other than those which (a) are both permitted by the Project
Documents and are noted or excepted in the title insurance policy number
delivered to the Partnership pursuant to section 5.1(b) to the
Partnership, as endorsed through and (b) do not materially interfere
with use of the Apartment Complex (or any part thereof) for its intended
purpose or have a material adverse effect on the value of the Apartment
Complex.
(7) The execution and delivery of all instruments and the perform-
ance of all acts heretofore or hereafter made or taken pertaining to the
Partnership or the Apartment Complex by each Affiliate of a General
Partner which is a corporation have been or will be duly authorized by
all necessary corporate or other action, and the consummation of any
such transactions with or on behalf of the Partnership will not
constitute a breach or violation of, or a default under, the charter or
by-laws of such Affiliate or any agreement by which such Affiliate or
any of its properties is bound, nor constitute a violation of any law,
administrative regulation or court decree.
(8) Any General Partner which is a corporation (a "Corporation")
or a limited liability company ("LLC") has been duly organized, is
validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power to be a General
Partner and to perform its duties and obligations as contemplated by
this Agreement and the Project Documents. Neither the execution and
delivery by any Corporation of this Agreement nor the performance of any
of the actions of any Corporation contemplated hereby has constituted or
will constitute a violation of (a) the articles of organization; by-laws
operating agreement or other controlling document of such Corporation or
LLC, (b) any agreement by which such Corporation is bound or to which
any of its property or assets is subject, or (c) any law, administrative
regulation or court decree.
(9) No Event of Bankruptcy has occurred with respect to any
General Partner.
(10) All accounts of the Partnership required to be maintained
under the terms of the Project Documents, including, but not necessarily
limited to, any account for replacement reserves, are currently funded
to the levels required by the Lenders and/or any Agency .
(11) If the only General Partner(s) are one or more corporations,
then the General Partner(s) have a net worth which satisfies the 89-12
Requirements.
(12) All payments and expenses required to be made or incurred in
order to complete construction of the Apartment Complex in conformity
with the Project Documents, to fund any reserves hereunder or under any
other Project Document required to be funded at or prior to the later of
the Admission Date or Permanent Mortgage Commencement, to satisfy all
requirements under the Project Documents and/or which form the basis for
determining the principal sum of the Permanent Mortgage and to pay the
Construction and Development Fee have been or will be paid or provided
for utilizing only (a) the funds available from the Construction
Mortgage, (b) the Capital Contribution of the Investment Limited
Partner, (c) the Capital Contributions of the General Partners in the
amounts set forth on Schedule A as of the Admission Date, (d) the
available net rental income, if any, earned by the Partnership prior to
Permanent Mortgage Commencement (to the extent that it is permitted to
be used for such purposes by the Lenders and/or any Agency ), (e) any
insurance proceeds and (f) the funds furnished by the General Partners
pursuant to Sections 6.5(a) and 6.11(a).
(13) The amount of Tax Credit which is expected to be allocated by
the Partnership to the Investment Limited Partner is $30,626 for 1996;
$73,502 per annum for each of the years 1997 through 2004 (inclusive).
(14) The Apartment Complex is being developed in a manner which
satisfies and shall continue to satisfy, all restrictions, including
tenant income and rent restrictions, applicable to projects generating
Tax Credits.
(15) The General Partners have provided the Investment Limited
Partner with a complete copy of "Phase I" hazardous waste site
assessment report for the Apartment Complex. No General Partner,
Affiliate of a General Partner or Person for whose conduct any General
Partner is or was responsible has ever: (i) owned, occupied, or operated
a Site or Vessel on which any Hazardous Material was or is stored,
transported, or disposed of, except if such storage, transport or
disposition was and is at all times in compliance with all laws,
ordinances, and regulations pertaining thereto; (ii) directly or
indirectly transported, or arranged for transport, of any Hazardous
Material (except if such transport was or is at all times in compliance
with all laws, ordinances and regulations pertaining thereto); (iii)
caused or was legally responsible for any release or threat of release
of any Hazardous Material; (iv) received notification from any Federal,
state or other governmental authority of (x) any potential, known, or
threat of release of any Hazardous Material from the Apartment Complex
or any other Site or Vessel owned, occupied, or operated by any General
Partner, by any Affiliate of a General Partner, or any Person for whose
conduct any General Partner is or was responsible or whose liability may
result in a lien on the Apartment Complex; or (y) the incurrence of any
expense or loss by any such governmental authority or by any other
Person in connection with the assessment, containment, or removal of any
release or threat of release of any Hazardous Material from the
Apartment Complex or any such Site or Vessel.
(16) To the best of the General Partners' knowledge, no Hazardous
Material was ever or is now stored on, transported, or disposed of on
the land comprising the Apartment Complex, except to the extent any such
storage, transport or disposition was at all times in compliance with
all laws, ordinances, and regulations pertaining thereto.
(17) The General Partners have fulfilled and will continue to
fulfill all of their duties and obligations under Section 6.5.
(18) As of the due date of the First Installment and at all times
thereafter, the Construction Mortgage Closing has occurred, and
construction of the Apartment Complex is being completed (and as of the
Completion Date will have been completed) in conformity with the
requirements hereof and of the Project Documents.
(19) As of the Admission Date, the General Partner shall have made
Capital Contributions to the Partnership in the amount of $3,750.
(20) As of December 31, 1994, the Partnership had owned land or
depreciable property constituting part of the Apartment Complex and had
incurred capitalizable costs with respect to the Apartment Complex of at
least ten percent (10%) of the Partnership's reasonably expected basis
as of December 31, 1995 so that each building in the Apartment Complex
constitutes a "qualified building" for purposes of Section 42
(h)(1)(E)(ii) of the code.
6.7 Liability on the Permanent Mortgage
Neither any General Partner nor any Related Person shall at any time
bear the Economic Risk of Loss for the payment of any portion of any
Mortgage,
and the General Partners shall not permit any other Partner or any
Related
Person to bear the Economic Risk of Loss for the payment of any portion
of any
Mortgage, except as may be expressly permitted with respect to the
Construction Mortgage pursuant to Article III.
6.8 Indemnification of the General Partners
(a) No General Partner nor any Affiliate thereof shall have liability to
the Partnership or to any Limited Partner for any loss suffered by the
Part-
nership which arises out of any action or inaction of any General
Partner or
Affiliate thereof if such General Partner or Affiliate thereof in good
faith
determined that such course of conduct was in the best interest of the
Part-
nership and such course of conduct did not constitute negligence or
misconduct
of such General Partner or Affiliate thereof.
(b) A General Partner or any Affiliate thereof may be indemnified by the
Partnership against losses, judgments, liabilities, expenses and amounts
paid
in settlement of any claims sustained in connection with the
Partnership,
provided that all of the following conditions are met: (i) such General
Part-
ner has determined, in good faith, that the course of conduct which
caused the
loss, judgment, liability, expense or amount paid in settlement was in
the
best interests of the Partnership; and (ii) such loss, judgment,
liability,
expense or amount paid in settlement was not the result of negligence or
mis-
conduct on the part of the General Partner or Affiliate thereof; and
(iii)
such indemnification or agreement to hold harmless is recoverable only
out of
the assets of the Partnership, and not from the Limited Partners.
(c) Notwithstanding the above, no General Partner or any Affiliate
thereof performing services for the Partnership or any broker-dealer
shall be
indemnified for any losses, liabilities or expenses arising from or out
of an
alleged violation of Federal or state securities laws unless (i) there
has
been a successful adjudication on the merits of each count involving
securities laws violations as to the particular indemnitee and, the
court
approves the indemnification of such litigation costs, (ii) such claims
have
been dismissed with prejudice on the merits by a court of competent
juris-
diction as to the particular indemnitee and, the court approves the
indemnifi-
cation of such litigation costs or (iii) a court of competent
jurisdiction
approves a settlement of the claims against a particular indemnitee and
the
court finds that indemnification of the settlement and related costs
should be
made. In any claim for indemnification for Federal or state securities
law
violations, the party seeking indemnification shall, prior to seeking
court
approval for such indemnification, place before the court the positions
of the
Securities and Exchange Commission, the Massachusetts Securities
Division, the
North Dakota Securities Division, and any other applicable state
securities
administrator with respect to the issue of indemnification for
securities law
violations.
(d) The Partnership shall not incur the cost of the portion of any
insurance, other than public liability insurance, which
insures any party against any liability as to which such party is herein
prohibited from being indemnified.
(e) The Partnership may indemnify Affiliates of the General Partner
under this Section 6.8 only if the loss involves activity in which such
Affiliates acted in the capacity of a General Partner.
(f) For purposes of this Section 6.8 only, the term "Affiliate" shall
mean any Person performing services on behalf of the Partnership who (i)
directly or indirectly controls, is controlled by or is under common
control
with a General Partner; (ii) owns or controls ten percent (10%) or more
of the
outstanding voting securities of a General Partner; (iii) is an officer,
director, partner or trustee of a General Partner; or (iv) if a General
Partner is an officer, director, partner or trustee, is any company for
which
such General Partner acts in any such capacity.
6.9 Indemnification of the Partnership and the Limited Partners
(a) The General Partners will indemnify and hold the Partnership and the
Limited Partners harmless from and against any and all losses, damages
and
liabilities which the Partnership or any Limited Partner may incur by
reason
of the (a) past, present or future actions or omissions of the General
Partner
or any of their Affiliates, except acts undertaken in their capacity as
General Partner of the Partnership or (b) any liabilities to which
either the
Partnership or the Apartment Complex is subject; provided, however, that
the
foregoing indemnification shall not apply to (i) any Mortgage or (ii)
necessary contractual obligations incurred pursuant to Agency or Lender
requirements in connection with the operation of the Apartment Complex
in the
ordinary course of business.
(b) Notwithstanding the foregoing, no General Partner shall be liable to
a Limited Partner or the Partnership for any act or omission for which
the
Partnership is required to indemnify such General Partner under Section
6.8.
(c) The General Partners shall indemnify, defend, and hold the
Investment Limited Partner harmless from and against any claim brought
or
threatened against the Investment Limited Partner or loss (as well as
from any
and all attorneys' fees and expenses incurred in connection with any
such
claim or loss) on account of the presence of any Hazardous Material at
the
Apartment Complex. Any claim or loss described in the immediately
preceding
sentence may be defended, compromised, settled, or pursued by the
Investment
Limited Partner with counsel of the Investment Limited Partners'
selection,
but at the expense of the General Partners. Notwithstanding anything
else set
forth herein, this indemnification shall survive the withdrawal of any
General
Partner and/or the termination of this Agreement.
6.10 Operating Deficits
Subject to the prior written consent of any Agency (if such consent
shall be required under applicable Agency regulations), the General
Partners
shall be obligated from the later to occur of (i) Permanent Mortgage
Commencement or (ii) the Admission Date to advance funds to meet
operating
expenses, debt service and the Replacement Reserve Fund of the
Partnership
which exceed operating income available for the payment thereof. For
Purposes
of this Section 6.10, "operating expenses" shall expressly include the
Asset
Management Fee. In the event that the General Partners shall fail to
make any
such advance as aforesaid, the Partnership shall utilize amounts (the
"Applied
Fees") otherwise payable to the General Partners or Affiliates thereof
under
Section 6.12 and/or Article X to meet the obligations of the General
Partners
pursuant to this Section 6.10. Such utilization of Applied Fees shall
also
constitute payment and satisfaction of the corresponding amounts payable
to
the General Partners or Affiliates thereof under Section 6.12 and/or
Article
X, with the proceeds thereof being applied to such obligations, and the
obligation of the Partnership to make such installment payments to the
General
Partners or the Affiliates thereof pursuant to Section 6.12 and/or
Article X
being deemed satisfied to the extent thereof. For the purpose of this
Section
6.10, all expenses shall be paid on a sixty (60)-day current basis.
Moreover,
the General Partners may in their sole discretion at any time advance
funds to
the Partnership to pay operating expenses and/or debt service of the
Partnership in order to facilitate the Partnership's compliance with the
Rent
Restriction Test. All advances pursuant to this Section 6.10 (including
any
Applied Fees) shall be Subordinated Loans repayable without interest in
accor-
dance with the provisions of Article X. The form and provisions of all
Subor-
dinated Loans shall conform to applicable rules and regulations.
6.11 Obligation to Complete the Construction and Rehabilitation
of the Apartment Complex
(a) The General Partners shall complete the construction and
rehabilitation of the Apartment Complex substantially in accordance with
the
plans and specifications approved by the Lenders and/or any Agency and
all
requirements necessary to obtain the required certificates of occupancy
for
dwelling units, or cause the same to be completed, in a good and
workmanlike
manner, free and clear of all mechanics', materialmen's or similar
liens, and
shall equip the Apartment Complex or cause the same to be equipped with
all
necessary and appropriate fixtures, equipment and articles of personal
property, including refrigerators and ranges, and shall cause all
necessary
certificates of occupancy for all apartment units in the Apartment
Complex to
be obtained, all in accordance with the Project Documents. If the
proceeds of
the Construction and Permanent Mortgages, the net rental income, if any,
of
the Apartment Complex generated prior to the later of Permanent Mortgage
Commencement or the Admission Date and which is permitted by the Lenders
and/or any Agency to be utilized for any of the purposes hereinafter
set
forth, the Capital Contribution of the Investment Limited Partner, the
Capital
Contributions of the General Partners in the amounts set forth on
Schedule A
as of the Admission Date, and any insurance proceeds arising out of
casualties
prior to the later of Permanent Mortgage Commencement or the Admission
Date as
available from time to time are insufficient to (i) acquire and complete
the
construction of the Apartment Complex and satisfy all other obligations,
all
as provided in the first sentence of this Section 6.11(a), (ii) make the
special distributions to the General Partners described in Section
10.2(c),
(iii) pay the Construction and Development Fee, (iv) arrive at Permanent
Mortgage Commencement in conformity with the Project Documents, (v)
discharge
all Partnership liabilities and obligations arising out of any casualty
giving
rise to any such insurance proceeds, and (vi) provide for all other
payments
and expenses required to be made or incurred through the later of
Permanent
Mortgage Commencement or the Admission Date, including the funding of
any
reserves required hereunder or under any other Project Document and the
repayment in full of all obligations under the Construction Mortgage,
the
General Partners shall be responsible for and obligated to pay such
deficiencies and shall, to the extent permitted under the Project
Documents
and any applicable regulations or requirements of the Lenders and/or any
Agency, be reimbursed at or prior to the later of Permanent Mortgage
Commencement or the Admission Date only out of the proceeds designated
in this
sentence available from time to time after payment of all costs
described in
this sentence. Any amounts not reimbursed through the later of
Permanent
Mortgage Commencement or Admission Date only out of the proceeds of the
Capital Contribution of the Investment Limited Partner as provided in
Section
5.1 shall not be reimbursable or otherwise change the Interest of any
Person
in the Partnership but shall be borne by the General Partners; provided,
however, that, notwithstanding the foregoing, to the extent any such
amounts
represent items which are properly included in the Partnership's
Qualified
Basis for purposes of Section 42 of the Code and result in an increase
in the
amount of Tax Credit allocated and available to the Partnership over and
above
the amount of Tax Credit required in order to achieve State Designation
("Includable Items"), the General Partners shall make an additional
Capital
Contribution in the amount of the Includable Items and the Partnership
shall
utilize the proceeds of such additional Capital Contribution to pay the
Includable Items. In the event that the General Partners shall fail to
fund
any such deficiency as required by this Section 6.11, an amount not in
excess
of the next installment of the Construction and Development Fee due to
the
General Partners or any of their Affiliates under Section 6.12 or any
other
provision hereof shall be applied by the Partnership to meet such
obligation
of the General Partners, and, to the extent there may still be a
deficiency,
any amounts otherwise payable as the Annual Partnership Management Fee
or
distributable to the General Partners pursuant to Article X shall be so
applied. Any such application of funds as described in the immediately
preceding sentence shall constitute a payment of the amount of the Fee
or such
other item which such funds had been earmarked to pay, and the
obligation of
the General Partners to advance such amount under this Section 6.11
shall be
satisfied to the extent of such application.
6.12 Certain Payments to the General Partners and Others
(a) The Partnership shall pay to the General Partners, or their
designee, a non-cumulative fee (the "Annual Partnership Management Fee")
commencing in 1996 for services in connection with the administration of
the
day to day business of the Partnership in an annual amount of $3,000.
The
Annual Partnership Management Fee for each fiscal year of the
Partnership
shall be payable from Cash Flow in the manner and priority set forth in
Section 10.2(a) to the extent Cash Flow is available therefor for such
year.
(b) INTENTIONALLY OMITTED.
(c) The Partnership shall pay to BCCLP or an Affiliate thereof a fee
(the "Asset Management Fee ") commencing in 1996 for its services in
connection with the Partnership's accounting matters relating to the
Investment Limited Partner and assisting with the preparation of tax
returns
and the reports required by Section 12.7 in the annual amount of $3,000,
earned pro-rata for 1996. The Asset Management Fee shall be payable
from
Cash Flow in the manner and priority set forth in Section 10.2(a);
provided,
however, that if in any fiscal year commencing with 1996, Cash Flow is
insufficient to pay the full amount of the Asset Management Fee, the
General
Partner shall be obligated to make Subordinated Loans to the Partnership
to
cover $3,000 of the Asset Management Fee in any such year.
6.13 Delegation of General Partner Authority
If there shall be more than one General Partner serving hereunder, each
General Partner may from time to time, by an instrument in writing,
delegate
all or any of his powers or duties hereunder to another General Partner
or
General Partners.
Every contract, deed, mortgage, lease and other instrument executed by
any General Partner shall be conclusive evidence in favor of every
Person
relying thereon or claiming thereunder that at the time of the delivery
thereof (a) the Partnership was in existence, (b) this Agreement had not
been
amended in any manner so as to restrict the delegation of authority
among
General Partners (except as shown in certificates or other instruments
duly
filed in the Filing Office) and (c) the execution and delivery of such
instrument was duly authorized by the General Partners. Any Person may
always
rely on a certificate addressed to him and signed by any General Partner
hereunder:
(1) As to who are the General Partners or Limited Partners here-
under;
(2) As to the existence or nonexistence of any fact which consti-
tutes a condition precedent to acts by the General Partners or in any
other manner germane to the affairs of the Partnership;
(3) As to who is authorized to execute and deliver any instrument
or document of the Partnership;
(4) As to the authenticity of any copy of this Agreement, the
Certificate, and amendments thereto; or
(5) As to any act or failure to act by the Partnership or as to
any other matter whatsoever involving the Partnership or any Partner.
6.14 Assignment to Partnership
The General Partners hereby transfer and assign to the Partnership all
of their right, title, and interest in and to the Apartment Complex and
in and
to all of the Project Documents, including, but not limited to, the
following:
(i) all contracts with architects, supervising architects, engineers and
contractors with respect to the development of the Apartment Complex;
(ii) all
plans, specifications and working drawings heretofore prepared or
obtained in
connection with the Apartment Complex; (iii) all governmental
commitments and
approvals obtained, and applications therefor, including, but not
limited to,
those relating to planning, zoning, building permits and Tax Credit;
(iv) any
and all commitments with respect to any Mortgage(s); (v) any and all
contracts
or rights with respect to any agreements with any Lender; and (vi) any
other
work product related to the Apartment Complex and/or the Partnership.
ARTICLE VII
Withdrawal of a General Partner; New General Partners
7.1 Withdrawal
(a) No General Partner shall Withdraw from the Partnership (other than
by reason of death or adjudication of incompetence or insanity) or sell,
assign or encumber its Interest without the Consent of the Investment
Limited
Partner and all the other General Partners, except that if the Special
Limited
Partner becomes a General Partner pursuant to Section 4.5(b), it shall
not
require the consent of any other General Partner to transfer all or any
portion of its interest as a General Partner, other than as may be
required
under the Uniform Act. In the event of any Withdrawal by a General
Partner in
violation of this Section 7.1, such General Partner, in addition to
being
subject to any and all other legal remedies which may be pursued by the
Partners, shall forfeit to the Special Limited Partner, such General
Partner's
Interest and all unpaid fees from the Partnership and shall remain
liable for
all of the Withdrawing General Partner's obligations under this
Agreement;
provided, however, that the Withdrawing General Partner's liability
hereunder
shall be limited to obligations arising prior to his Withdrawal, and
shall
include no obligations arising after such Withdrawal. In addition, upon
such
Withdrawal and transfer, the Special Limited Partner or its designee
shall
automatically become a General Partner without further action by the
Withdrawing General Partner or any other Partner, and the Investment
Limited
Partner hereby consents to such transfer and to the admission of the
Special
Limited Partner or its designee as a General Partner in such a
situation.
Such transfer shall occur automatically upon such Withdrawal without
further
action by such Withdrawing General Partner.
(b) If at any time the only General Partners shall be one or more
corporations (or partnerships with corporations as sole general
partners),
they shall be obligated to have a net worth which satisfies the 89-12
Requirements. If the General Partners shall at any time fail to meet
the
requirements of this Section 7.1(b), then they shall be deemed to have
withdrawn from the Partnership in violation of the provisions of this
Section
7.1 and shall be subject to the provisions of Section 7.1(a).
Notwithstanding
the foregoing, the provisions of this Section 7.1(b) shall not apply to
the
Special Limited Partner in the event it becomes the sole General
Partner.
7.2 Obligation to Continue
Upon the Withdrawal of a General Partner, the remaining General Partners
shall have the right and obligation to continue the business of the
Partner-
ship employing its assets and name, all as contemplated by the Uniform
Act.
Within thirty (30) days after they obtain knowledge of the Withdrawal of
a
General Partner, the remaining General Partners shall notify the
Investment
Limited Partner or its designee of such Withdrawal.
7.3 Withdrawal of All General Partners
If, following the Withdrawal of a General Partner, there is no remaining
General Partner, the Investment Limited Partner and the Special Limited
Partner may elect to reconstitute the Partnership and continue the
business of
the Partnership for the balance of the term specified in Section 2.4 by
selecting a successor General Partner. If the Investment Limited
Partner and
the Special Limited Partner elect to reconstitute the Partnership
pursuant to
this Section 7.3 and admit the designated successor General Partner, the
relationship among the then Partners shall be governed by this
Agreement.
7.4 Interest of General Partner After Permitted Withdrawal
In the event of the Withdrawal of a General Partner not in violation of
Section 7.1 and except as otherwise provided in Section 4.5(b), the
Withdrawing General Partner hereby covenants and agrees to transfer to
the
remaining General Partners or to a successor General Partner selected in
accordance with Section 7.3, as the case may be, such portion of the
Withdrawing General Partner's Interest as such remaining or successor
General
Partners may designate, such transfer to be made in consideration of the
payment by the transferee of either the agreed value of such Interest
or, if
such value is not agreed to, the fair market value of such Interest as
determined by a committee of three qualified real estate appraisers, one
selected by the Withdrawing General Partner, one selected by the
transferee
and a third selected by the other two. The portion of the Withdrawing
General
Partner's Interest designated to be transferred in accordance with the
pro-
visions of this Section 7.4 shall be sufficient to ensure the continued
treat-
ment of the Partnership as a partnership under the Code and as a limited
part-
nership under the Uniform Act, and, for the purposes of Article X, shall
be
deemed to be effective as of the date of Withdrawal, but the Partnership
shall
not make any distributions to the designated transferee until the
transfer
shall have been made. Any holder of any portion of the Interest of a
Withdrawing General Partner which is not designated to be transferred to
the
remaining or successor General Partners pursuant to the provisions of
this
Section 7.4 shall become an Additional Limited Partner but (i) with the
same
share of the profits, losses, tax credits, Cash Flow and other
distributions
to which the holder of such Interest was entitled when held as a General
Partner Interest, and (ii) shall not participate in the votes or
Consents of
the Investment Limited Partner hereunder. The admission of any
successor or
additional General Partner shall be subject to the consent of the
Lenders and
any Agency (if required) and the Consent of the Investment Limited
Partner.
7.5 Admission of Additional General Partner(s) under Certain
Circumstances
In the event each of the General Partners is a corporation and the
General Partners at any time, or from time to time, fail to have a net
worth
which satisfies the 89-12 Requirements, the Special Limited Partner or
its
designee(s) shall be admitted (and each hereby agrees to be admitted],
automatically and without further action by them or any Partner, as
additional
General Partner(s), notwithstanding any other provision of this
Agreement.
The General Partners hereby agree to take all action necessary to
implement
this Section 7.5. Further, the General Partners agree in such event to
give
prompt written notice thereof to each Lender and Agency. If any Lender
or
Agency rejects the admission of any additional General Partner so
admitted as
a General Partner, then such additional General Partner shall withdraw
as a
General Partner promptly after an additional General Partner acceptable
to
each Lender and Agency is admitted to the Partnership. Simultaneously
with
such admission, each of the previously admitted General Partners shall
be
deemed to have assigned proportionally to the additional General
Partner(s),
automatically and without further action, such portion of its General
Partner
Interest so that the additional General Partner shall receive not less
than a
one percent (1%) interest (or such greater percentage as may be required
either (i) in the opinion of the Tax Accountants, to assure the
partnership
status of the Partnership for Federal income tax purposes or (ii) by any
Agency in the profits, losses, tax credits and distributions of the
Partnership in consideration of $1.00 and any other consideration which
may be
agreed upon. An additional General Partner so admitted shall
automatically
become the Managing General Partner and be irrevocably delegated all of
the
power and authority of all of the General Partners pursuant to Section
6.13.
Each such additional General Partner shall remain a General Partner
until a
Lender or Agency shall object thereto in writing or until such time as,
in the
opinion of the Tax Accountants, the Partnership would continue to be
treated
as a partnership for Federal income tax purposes notwithstanding their
Withdrawal. At such time, each such additional General Partner may, at
its
option, then Withdraw without the approval of the Limited Partners upon
reassignment of its entire Interest to the remaining General Partners.
Each
partner hereby grants to the Special Limited Partner a special power of
attorney, irrevocable to the extent permitted by law and coupled with an
interest, to amend the Certificate and this Agreement and to do anything
else
which, in the view of the Special Limited Partner, may be necessary or
appropriate to accomplish the purposes of this Section 7.5 or to manage
the
business of the Partnership. The admission of an additional General
Partner
shall not relieve any other General Partner of any of its obligations
hereunder, and each other General Partner shall fully indemnify and hold
harmless the additional General Partner from and against any and all
losses,
judgments liabilities, expenses and amounts paid in settlement of any
claims
sustained in connection with its capacity as a General Partner.
ARTICLE VIII
Transferability of Limited Partner Interests
8.1 Assignments
(a) Except by operation of law (including the laws of descent and
distribution) or Section 8.1(b), no Limited Partner may assign all or
any part
of its Interest without the written consent of the General Partners, the
giving or withholding of which is exclusively within their discretion.
(b) A Limited Partner, without the consent of the General Partners, may
assign to any Person all or any portion of the economic benefits of the
owner-
ship of its Interest; provided, however, that such assignment shall not
be
binding on the Partnership until there shall have been filed with the
Partner-
ship by registered mail certified copies of an executed and acknowledged
assignment and the written acceptance by the assignee of all the terms
and
provisions of this Agreement; if such assignment and acceptance are not
so
filed, the Partnership need not recognize such assignment for any
purpose. An
assignee of a Limited Partner who does not become a Substituted Limited
Partner shall have, and shall only have, the right to receive the share
of
allocations and distributions of the Partnership to which the assigning
Limited Partner would have been entitled with respect to the Interest
(or
portion thereof) so assigned if no such assignment had been made by such
Limited Partner. Any assigning Limited Partner whose permitted assignee
becomes a Substituted Limited Partner shall thereupon cease to be a
Limited
Partner and shall no longer have any of the rights or privileges of a
Limited
Partner. Where the assignee does not become a Substituted Limited
Partner,
the Partnership shall recognize such assignment not later than the last
day of
the calendar month following receipt of notice of assignment and all
docu-
mentation required in connection therewith.
(c) Every assignee of a Limited Partner Interest (or any portion
thereof) who desires to make a further assignment of its Interest shall
be
subject to all the provisions of this Article VIII.
8.2 Substituted Limited Partner
No Limited Partner shall have the right to substitute an assignee as
Limited Partner in its place. Subject to Section 8.3, the General
Partners
may, however, in their sole discretion, permit an assignee to become a
Sub-
stituted Limited Partner. The consent of the General Partners to an
assignment of a Limited Partner Interest under Section 8.1 shall not, in
and
of itself, constitute permission under this Section 8.2.
Any Substituted Limited Partner shall execute such instrument or
instruments as shall be required by the General Partners to signify the
agreement of such Substituted Limited Partner to be bound by all the
provisions of this Agreement and shall pay the Partnership's reasonable
legal
fees and filing costs in connection with its substitution as a Limited
Partner.
8.3 Restrictions
(a) No Disposition may be made if such Disposition would violate Section
13.1.
(b) In no event shall all or any part of a Limited Partner Interest be
Disposed of to a minor (other than to a descendant by reason of death)
or to
an incompetent.
(c) The General Partners may, in addition to any other requirement they
may impose, require as a condition of any Disposition that the
transferor (i)
assume all costs incurred by the Partnership in connection therewith and
(ii)
furnish the Partnership and the other Partners with an opinion of
counsel
satisfactory to counsel to the Partnership that such Disposition
complies with
applicable Federal and state securities laws.
(d) Any sale, exchange, transfer or other Disposition in contravention
of any of the provisions of this Section 8.3 shall be void and
ineffectual and
shall not bind or be recognized by the Partnership.
ARTICLE IX
Borrowings; Operating Reserves
9.1 Borrowings
All Partnership borrowings shall be subject to the terms of this
Agreement, including, but not limited to, the restrictions of Section
6.2, and
may be made from any source, including Partners and their Affiliates.
If any
Partner shall lend any monies to the Partnership, the amount of any such
loan
shall not be an increase of such Partner's Capital Contribution. If any
Partner shall so lend monies, such loans shall be an obligation of the
Partnership and (except for Subordinated Loans) shall be repayable to
such
Partner on the same basis and with the same rate of interest as would be
applicable to a comparable loan to the Partnership from a third party.
ARTICLE X
Profits, Losses, Tax Credits, Distributions
and Capital Accounts
10.1 Profits, Losses and Tax Credits
(a) Subject to Section 10.1(c) and Section 10.4, for each Partnership
fiscal year or portion thereof, all profits, tax-exempt income, losses,
non-deductible non-capitalizable expenditures, and tax credits incurred
or
accrued on or after the Commencement Date, other than those arising from
a
Capital Transaction, shall be allocated 99% to the Investment Limited
Partner
and 1% to the General Partners.
(b) Except as otherwise specifically provided in this Article, all pro-
fits and losses arising from a Capital Transaction shall be allocated to
the
Partners as follows:
As to profits:
First, that portion of profits (including any profits
treated as ordinary income for Federal income tax purposes) shall
be allocated to the Partners who have negative Capital Account
balances in proportion to the amounts of such balances, provided
that no profits shall be allocated to a Partner under this Clause
First to increase any such Partner's Capital Account above zero;
Second, profits in excess of the amounts allocated under
Clause First above shall be allocated to the General Partners in
an amount equal to the amount of cash distributed or available to
be distributed to them pursuant to Clause Second of Section
10.2(b) as to the particular Capital Transaction;
Third, profits in excess of the amounts allocated under
Clauses First and Second above shall be allocated to the
Investment Limited Partner in an amount equal to the amount of
cash required to pay to the Investment Limited Partner the full
amount (including interest) of the Credit Recovery Loans;
Fourth, profits in excess of the amounts allocated under
Clauses First, Second and Third above shall be allocated (i) to
the Investment Limited Partner in an amount equal to the sum of
(a) its Invested Amount plus (b) the full amount (including
interest) of any Credit Recovery Loans and (ii) to each other
Limited Partner in an amount equal to the amount of its respective
Invested Amount, reduced (but not below zero) in the case of each
Limited Partner (whether under clause (i) or clause (ii)) by the
sum of (A) the total amount of all prior cash made to such Limited
Partner pursuant to Section 10.2(b), Clause Sixth plus (B) the
positive balance in the Capital Account of such Limited Partner
prior to the allocation made pursuant to this Clause Fourth;
Fifth, profits in excess of the amounts allocated under
Clauses First, Second, Third and Fourth above shall be allocated
to each General Partner in the amount of its respective paid-in
Capital Contribution, reduced (but not below zero) by the sum of
(i) the total amount of distributions previously made to it
pursuant to Section 10.2(b), Clause Eighth to credit amounts
distributed under Clause Second of Section 10.2(b) against amounts
distributable under Clause Eighth of Section 10.2(b) (and not
including the amounts so credited) plus (ii) the positive balance
in such General Partner's respective Capital Accounts prior to the
allocations made pursuant to this Clause Fifth; and
Sixth, profits in excess of the amounts allocated under
Clauses First, Second, Third, Fourth, and Fifth above shall be
allocated to the Partners in the same percentages as cash is
distributed under Clause Ninth of Section 10.2(b) to credit
amounts distributed under Clause Second of Section 10.2(b) against
amounts distributable under said Clause Ninth (and not including
the amounts so credited.)
As to losses:
First, an amount of losses shall be allocated to the
Partners to the extent and in such proportions as shall be
necessary such that, after giving effect thereto, the respective
balances in all Partners' Capital Accounts shall be in the ratio
of 99% for the Investment Limited Partner and 1% for the General
Partners;
Second, an amount of losses shall be allocated to the
Partners until the balance in each Partner's Capital Account
equals the amount of such Partner's Capital Contribution (after
the allocation under Clause First above);
Third, an amount of losses shall be allocated to the
Partners to the extent of and in proportion to such Partners'
Capital Account balances (after the allocations under Clauses
First and Second above); and
Fourth, any remaining amount of losses after the allocations
under Clauses First, Second and Third above shall be allocated to
the Partners in accordance with the manner in which they bear the
Economic Risk of Loss; provided, however, that in the event that
no Partner bears an Economic Risk of Loss, then any remaining
losses shall be allocated 99% to the Investment Limited Partner
and 1% to the General Partners.
(c) Notwithstanding the foregoing provisions of Sections 10.1(a) and
10.1(b), in no event shall any losses be allocated to the Investment
Limited
Partner or the Special Limited Partner if an to the extent that such
allocation would cause, as of the end of the Partnership taxable year,
the
negative balance in the Investment Limited Partner's Capital Account to
exceed
such Partner's share of Partnership Minimum Gain plus such Partner's
share, if
any of Partner Non-Recourse Debt Minimum Gain. Any losses which are not
allocated to a Partner by virtue of the application of this Section
10.1(c)
shall be allocated to the General Partners. For the purposes of this
Section
10.1(c), a Partner's Capital Account shall be treated as reduced by
Qualified
Income Offset Items.
10.2 Cash Distributions Prior to Dissolution
(a) Cash Flow
Subject to Agency and Lender approval (if required), Cash Flow for each
fiscal year or portion thereof of the Partnership shall be applied as
follows:
First, to the payment of the Asset Management Fee for such year and for
any previous year(s) as to which the Asset Management Fee shall not yet
have
been paid in full;
Second, to the payment of any unpaid Construction and Development Fee;
Third, to fund the operating reserve account to the extent that its
balance does not equal $7,500;
Fourth, to the repayment of any Subordinated Loans;
Fifth, to the payment of the Annual Partnership Management Fee
attributable to such year; and
Sixth, the balance thereof, if any, shall be distributed annually,
within seventy-five (75) days after the end of the fiscal year, 20% to
the
Investment Limited Partner and 80% to the General Partners.
(b) Distributions of other than Cash Flow
Prior to dissolution, if the General Partners shall determine from time
to time that cash is available for distribution from a Capital
Transaction,
such cash shall be applied or distributed as follows:
First, to the payment of all matured debts and liabilities of the Part-
nership (including, but not limited to, all expenses of the Partnership
inci-
dent to the Capital Transaction), excluding (i) debts and liabilities of
the
Partnership to Partners or their Affiliates and (ii) all unpaid fees
owing to
the General Partners or their Affiliates; and to the establishment of
any
reserves which the General Partners and the Auditors shall deem
reasonably
necessary for contingent, unmatured or unforeseen liabilities or
obligations
of the Partnership;
Second, if the Permanent Mortgage is in place at the time of such
Capital Transaction of if such Capital Transaction constitutes a
refinancing
of the Permanent Mortgage, to the General Partners in an aggregate
amount
equal to 5% of the proceeds remaining after the payment of the items set
forth
in Clause First of this Section 10.2(b);
Third, to the payment of the Asset Management Fee for such year and for
any previous year as to which the Asset Management Fee has not been paid
in
full ;
Fourth, to the payment to the Investment Limited Partner of the full
amount (including interest) of any Credit Recovery Loans;
Fifth, to the repayment of any Subordinated Loans;
Sixth, to the repayment of any then-unpaid debts and liabilities owed to
Partners or Affiliates thereof by the Partnership for Partnership
obligations
(exclusive of Credit Recovery Loans and Subordinated Loans) to any of
them,
including, but not limited to, accrued and unpaid Annual Partnership
Management Fee for the fiscal year of the Capital Transaction; provided,
however, that any debts or obligations to be repaid to any Limited
Partner or
Affiliate thereof pursuant to this Clause Fifth shall be repaid prior to
the
repayment of any such debts or obligations to any General Partner or
Affiliate
thereof;
Seventh, to the Investment Limited Partner in an amount equal to its
Invested Amount;
Eighth, to the repayment to the General Partners of their paid-in
Capital Contributions minus any prior distributions made to them under
this
Clause Eighth and Clause Second above, but never an amount less than
zero;
Ninth, except in the case of a refinancing, to each Partner in an amount
equal to the positive balance in his/her/its capital account, after
distributions to each Partner under Clauses First through Eighth, above
; and
Tenth, any balance 49.99% to the Investment Limited Partner, .01% to the
Special Limited Partner and 50% to the General Partners.
10.3 Distributions Upon Dissolution
(a) Upon dissolution and termination, after payment of, or adequate
provision for, the debts and obligations of the Partnership, the
remaining
assets of the Partnership shall be distributed to the Partners in
accordance
with the positive balances in their Capital Accounts after taking into
account
all Capital Account adjustments for the Partnership taxable year,
including
adjustments to Capital Accounts pursuant to Sections 10.1(b) and
10.3(b). In
the event that a General Partner or Additional Limited Partner has a
negative
balance in its Capital Account following the liquidation of the
Partnership or
such Partner's Interest, after taking into account all Capital Account
adjustments for the Partnership taxable year in which such liquidation
occurs,
such Partner shall pay to the Partnership in cash an amount equal to the
nega-
tive balance in such Partner's Capital Account. Such payment shall be
made by
the end of such taxable year (or, if later, within 90 days after the
date of
such liquidation) and shall, upon liquidation of the Partnership, be
paid to
recourse creditors of the Partnership or distributed to other Partners
in
accordance with the positive balances in their Capital Accounts.
(b) With respect to assets distributed in kind to the Partners in liqui-
dation or otherwise, (i) any unrealized appreciation or unrealized
deprecia-
tion in the values of such assets shall be deemed to be profits and
losses
realized by the Partnership immediately prior to the liquidation or
other
distribution event; and (ii) such profits and losses shall be allocated
to the
Partners in accordance with Section 10.1(b), and any property so
distributed
shall be treated as a distribution of an amount in cash equal to the
excess of
such fair market value over the outstanding principal balance of and
accrued
interest on any debt by which the property is encumbered. For the
purposes of
this Section 10.3(b), "unrealized appreciation" or "unrealized
depreciation"
shall mean the difference between the fair market value of such assets,
taking
into account the fair market value of the associated financing (but
subject to
Section 7701(g) of the Code), and the Partnership's adjusted basis for
such
assets as determined under Regulation Section 1.704-1(b). This Section
10.3(b)
is merely intended to provide a rule for allocating unrealized gains and
losses upon liquidation or other distribution event, and nothing
contained in
this Section 10.3(b) or elsewhere herein is intended to treat or cause
such
distributions to be treated as sales for value. The fair market value
of such
assets shall be determined by an appraiser to be selected by the General
Partner with the Consent of the Investment Limited Partner.
10.4 Special Provisions
(a) Except as otherwise provided in this Agreement, all profits, tax -
exempt income, losses, non-deductible non-capitalizable expenditures,
tax
credits and cash distributions shared by a class of Partners shall be
shared
by each Partner in such class in the ratio of such Partner's paid-in
Capital
Contribution to the paid-in Class Contribution of the class of Partners
of
which such Partner is a member.
(b) Notwithstanding the foregoing provisions of this Article X:
(i) If (a) the Partnership incurs recourse obligations or Partner
Non-Recourse Debt (including, without limitation, Subordinated Loans) or
(b) the Partnership incurs losses from extraordinary events which are
not recovered from insurance or otherwise (collectively "Recourse
Obligations") in respect of any Partnership taxable year, then the
calculation and allocation of profits and losses shall be adjusted as
follows: first, an amount of deductions attributable to the Recourse
Obligations shall be allocated to the General Partner; and second, the
balance of such deductions shall be allocated as provided in Section
10.1(a).
(ii) If any profit arises from the sale or other disposition of
any Partnership asset which shall be treated as ordinary income under
the depreciation recapture provisions of the Code, then the full amount
of such ordinary income shall be allocated among the Partners in the
proportions that the Partnership deductions from the depreciation giving
rise to such recapture were actually allocated. In the event that
subsequently-enacted provisions of the Code result in other recapture
income, no allocation of such recapture income shall
be made to any Partner who has not received the benefit of those items
giving rise to such other recapture income.
(iii) If the Partnership shall receive any purchase money
indebtedness in partial payment of the purchase price of the Apartment
Complex and such indebtedness is distributed to the Partners pursuant to
the provisions of Section 10.2(b) or Section 10.3, the distributions of
the cash portion of such purchase price and the principal amount of such
purchase money indebtedness hereunder shall be allocated among the Part-
ners in the following manner: On the basis of the sum of the principal
amount of the purchase money indebtedness and cash payments received on
the sale (net of amounts required to pay Partnership obligations and
fund reasonable reserves), there shall be calculated the percentage of
the total net proceeds distributable to each class of Partners based on
Section 10.2(b) or Section 10.3, as applicable, treating cash payments
and purchase money indebtedness principal interchangeably for this pur-
pose, and the respective classes shall receive such respective per-
centages of the net cash purchase price and purchase money principal.
Payments on such purchase money indebtedness retained by the Partnership
shall be distributed in accordance with the respective portions of prin-
cipal allocated to the respective classes of Partners in accordance with
the preceding sentence, and if any such purchase money indebtedness
shall be sold, the sale proceeds shall be allocated in the same
proportion.
(iv) Income, gain, loss and deduction with respect to any asset
which has a variation between its basis computed in accordance with
Treasury Regulation Section 1.704-1(b) and its basis computed for
Federal income tax purposes shall be shared among the Partners so as to
take account of such variation in a manner consistent with the
principles of Section 704(c) of the Code and Treasury Regulation Section
1.704-l(b)(2)(iv)(g).
(v) The terms "profits" and "losses" used in this Agreement shall
mean income and losses, and each item of income, gain, loss, deduction
or credit entering into the computation thereof, as determined in
accordance with the accounting methods followed by the Partnership and
computed in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv). Profits and losses for Federal income tax purposes
shall be allocated in the same manner as set forth in this Article X,
except as provided in Section 10.4(b)(iv).
(vi) If there is a net decrease in Partnership Minimum Gain during
a Partnership taxable year, each Partner will be allocated items of
income and gain for such year (and, if
necessary, subsequent years) in proportion to, and to the extent of, an
amount equal to such Partner's share of the net decrease in Partnership
Minimum Gain during the year before any other allocation of Partnership
items for such taxable year. A Partner shall not be subject to this
mandatory allocation of in come or gain to the extent that any of the
exceptions provided in Treasury Regulation Section 1.704-2(f)(2)-1
applies. All allocations pursuant to this Section 10.4(b)(vi) shall be
in accordance with Treasury Regulations Section 1.704-2(f). This
provision is a "minimum gain chargeback" within the meaning of Treasury
Regulation Section 1.704-2(f) and shall be construed as such.
(vii) If there is a net decrease in Partner Non-Recourse Debt
Minimum Gain during a Partnership taxable year, then each Partner with a
share of the minimum gain attributable to such debt at the beginning of
such year will be allocated items of income and gain for such year (and,
if necessary, subsequent years) in an amount equal to such Partner's
share of the net decrease in Partnership Non-Recourse Debt Minimum Gain
during the year. A Partner is not subject to this Partner Non-recourse
Debt Minimum Gain chargeback to the extent that any of the exceptions
provided in Treasury Regulations Section 1.704-2(i)(4) applied
consistently with Treasury Regulation Section 1.704-2(f)(2)-(5) applies.
Such allocations shall be made in a manner consistent with the
requirements of Treasury Regulation Section 1.704 and under Section 704
of the Code.
(viii) If a Limited Partner unexpectedly receives (a) an
allocation of loss or deduction or expenditures described in Section
705(a)(2)(B) of the Code made (1) pursuant to Section 704(e)(2) of the
Code to a donee of an Interest, (2) pursuant to Section 706(d) of the
Code as the result of a change in any Partner's Interest, or (3)
pursuant to Regulation Section 1.751-1(b)(2)(ii) as a result of a
distribution by the Partnership of unrealized receivables or inventory
items or (b) a distribution, and such allocation and/or distribution
would cause the negative balance in such Partner's Capital Account to
exceed (i) such Partner's share of Partnership Minimum Gain plus (ii)
the amount of such Partner's obligation, if any, to restore a negative
balance in such Partner's Capital Account plus (iii) such Partner's
share of Partner Non-recourse Debt Minimum Gain with respect to which
such Partner or a Related Person to such Partner bears the Economic Risk
of Loss, then such Partner shall be allocated items of income and gain
in an amount and manner sufficient to eliminate such negative balance as
quickly as possible. For purposes of this Section 10.4(b)(viii), a
Partner's Capital Account shall be treated as reduced by Qualified
Income Offset Items.
(ix) In the event that any fee payable to the General Partner or
any Affiliate thereof shall instead be determined to be a
non-deductible, non-capitalizable distribution from the Partnership to a
Partner for Federal income tax purposes, then there shall be allocated
to such General Partner an amount of gross income equal to the amount of
such distribution.
(x) In applying the provisions of Article X with respect to
distributions and allocations, the following ordering of priorities
shall apply:
(1) Capital Accounts shall be deemed to be reduced by
Qualified Income Offset Items.
(2) Capital Accounts shall be reduced by distributions of
Cash Flow under Section 10.2(a).
(3) Capital Accounts shall be reduced by distributions
from Capital Transactions under Section 10.2(b).
(4) Capital Accounts shall be increased by any minimum
gain chargeback under Section 10.4(b)(vi) or Section 10.4(b)(vii).
(5) Capital Accounts shall be increased by any
qualified income offset under Section 10.4(b)(viii).
(6) Capital Accounts shall be increased by allocations of
profits under Section 10.1(a).
(7) Capital Accounts shall be reduced by allocations of
losses under Section 10.1(a).
(8) Capital Accounts shall be reduced by allocations of
losses under Section 10.1(b).
(9) Capital Accounts shall be increased by allocations of
profits under Section 10.1(b).
(xi) To the maximum extent permitted under the Code, allocations
of profits and losses shall be modified so that the Partners' Capital
Accounts reflect the amounts they would have reflected if adjustments
required by Sections 10.4(b)(vi), 10.4(b)(vii) and 10.4(b)(viii) had not
occurred.
10.5 Authority of the General Partners to Vary Allocations to Preserve
and Protect the Partners' Intent
(a) It is the intent of the Partners that each Partner's distributive
share of profits, tax-exempt income, losses, non-deductible non-
capitalizable
expenditures and credits (and items thereof) shall be determined and
allocated
in accordance with this Agreement to the fullest extent permitted by
Section
704(b) of the Code. In order to preserve and protect the determinations
and
allocations provided for in this Agreement, the General Partners are
hereby
authorized and directed to allocate profits, tax-exempt income, losses,
non-
deductible non-capitalizable expenditures and credits (and items
thereof)
arising in any year differently than otherwise provided for in this
Agreement
to the extent that allocating profits, tax-exempt income, losses, non-
deductible non-capitalizable expenditures or credits (or any item
thereof) in
the manner provided for herein would cause the determinations and
allocations
of each Partner's distributive share of profits, tax-exempt income,
losses,
non-deductible non-capitalizable expenditures, or credits (or any item
thereof) not to be permitted by Section 704(b) of the Code and the
Treasury
Regulations promulgated thereunder. Any allocation made pursuant to
this
Section 10.5 shall be deemed to be a complete substitute for any
allocation
otherwise provided for in this Agreement, and no amendment of this
Agreement
or approval of any Partner shall be required.
(b) In making any allocation (the "New Allocation") under Section
10.5(a), the General Partners are authorized to act only after having
been
advised in writing by the Tax Accountants that, under Section 704(b) of
the
Code, (i) the New Allocation is necessary, and (ii) the New Allocation
is the
minimum modification of the allocations otherwise provided for in this
Agreement necessary in order to assure that, either in the then-current
year
or in any preceding year, each Partner's distributive share of profits,
tax-exempt income, losses, non-deductible non-capitalizable
expenditures, and
credits (or any item thereof) is determined and allocated in accordance
with
this Agreement to the fullest extent permitted by Section 704(b) of the
Code.
(c) If the General Partners are required by Section 10.5(a) to make any
New Allocation in a manner less favorable to the Limited Partners than
is
otherwise provided for herein, then the General Partners are authorized
and
directed, only after having been advised in writing by the Tax
Accountants
that such an allocation is permitted by Section 704(b) of the Code, to
allo-
cate profits, tax-exempt income, losses, non-deductible non-
capitalizable
expenditures, and credits (and any item thereof) arising in later years
in
such manner so as to bring the allocations of profits, tax-exempt
income,
losses, non-deductible non-capitalizable expenditures, and credits (and
each
item thereof) to the Limited
Partners as nearly as possible to the allocations thereof otherwise
contemplated by this Agreement.
(d) New Allocations made by the General Partners under Section 10.5(a)
and Section 10.5(c) in reliance upon the advice of the Tax Accountants
shall
be deemed to be made pursuant to the fiduciary obligation of the General
Part-
ners to the Partnership and the Limited Partners, and no such allocation
shall
give rise to any claim or cause of action by any Limited Partner.
ARTICLE XI
Management Agent
A. The General Partner shall engage the Management Agent to manage the
Apartment Complex pursuant to the Management Agreement. The Management
Agent
shall receive a Management Fee of those amounts payable from time to
time by
the Partnership to the Management Agent for management services in
accordance
with a management contract approved by the Agency (if such approval is
required) or, when the Apartment Complex is not subject to Agency
regulation, in accordance with a reasonable and competitive fee
arrangement.
From and after the Admission Date, the Partnership shall not enter into
any
Management Agreement or modify or extend any Management Agreement unless
the
General Partners shall have obtained the prior written consent of the
Special
Limited Partner to the identity of the Management Agent and the terms of
the
Management Agreement or the modification or extension thereof.
B. Notwithstanding the foregoing, however, should the Investment General
Partner or an Affiliate thereof perform property management services for
the
Partnership, property management, rent-up or leasing fees shall be paid
to the
Investment General Partner or such Affiliate only for services actually
rendered and shall be in an amount equal to the lesser of (i) fees
competitive
in price and terms with those of non-affiliated Persons rendering
comparable
services in the locality where the Apartment Complex is located and
which
could reasonably be available to the Partnership, or (ii) five percent
(5%) of
the gross revenues of the Apartment Complex. No duplicate property
management
fees shall be paid to any Person.
C. If (i) the Management Agent is the General Partner or an Affiliate of
the General Partner, and (a) the Apartment Complex shall be subject to a
substantial building code violation which shall not have been cured
within six
months after notice from the applicable governmental agency or
department or
(b) the Partnership shall not have Cash Flow of at least $1,000 each
during
year after 1995, or (ii) an Event of Bankruptcy shall occur with respect
to
the Management Agent, or (iii) the Management Agent shall commit willful
mis-
conduct or gross negligence in its conduct of its duties and obligations
under
the Management Agreement, then upon request by the Special Limited
Partner and
subject to Agency approval, if required, the General Partners must cause
the
Partnership to promptly terminate the Management Agreement with the
Management
Agent and appoint a new Management Agent selected by the Special Limited
Partner, which new Management Agent shall not be not an Affiliate of a
General
Partner. Each General Partner hereby grants to the Special Limited
Partner an
irrevocable (to the extent permitted by applicable law) power of
attorney
coupled with an interest to take any action and to execute and deliver
any and
all documents and instruments on behalf of such General Partner and the
Partnership as the Special Limited Partner may deem to be necessary or
appropriate in order to effectuate the provisions of this Article XI.C.
Subject to Agency approval, if required, the Partnership shall not
enter into
any future management arrangement or renew or extend any existing
management
arrangement unless such arrangement is terminable without penalty upon
the
occurrence of the events described in this Article XI.
D. The Management Agent shall receive reasonable compensation in
accordance with the Management Agreement submitted to, and approved by,
the
Investment Limited Partner and the Special Limited Partner. Provided,
however, that for any period during which the Partnership fails to
generate
Cash Flow, the Management Agent shall receive compensation in an amount
not to
exceed one half the ordinary compensation provided for in the Management
Agreement. Further, the Management Agent shall waive up to one half of
its
compensation in the event Cash Flow is insufficient to fund the
operating
reserve account as required by Section 6.2(e)(2).
E. The General Partners shall have the duty to manage the Apartment
Complex during any period when there is no Management Agent.
ARTICLE XII
Books and Records, Accounting, Tax Elections, Etc.
12.1 Books and Records
The Partnership shall maintain all books and records which are required
under the Uniform Act under the Code for the Tax Credit, or by any
governmental agency having jurisdiction and may maintain such other
books and
records as the General Partners in their discretion deem advisable.
Every
Limited Partner, or its duly authorized representatives, shall at all
times
have access to the records of the Partnership at the principal office of
the
Partnership at any reasonable times, and may inspect and copy any of
such
records. A list of the names and addresses of all of the Limited
Partners
shall be maintained as part of the books and records of the Partnership
and
shall be mailed to any Limited Partner upon request. A reasonable
charge for
copy work may be charged by the Partnership.
12.2 Bank Accounts
The bank accounts of the Partnership shall be maintained in the Partner-
ship's name with such financial institutions as the General Partners
shall
determine. Withdrawals shall be made only in the regular course of
Partner-
ship business on such signature or signatures as the General Partners
may
determine. All deposits (including security deposits and other funds
required
to be escrowed by any Lender ) and other funds not needed in the
operation of
the business shall be deposited, if required by applicable law and to
the
extent permitted by applicable Agency or Mortgage requirements, in
interest-bearing accounts or invested in United States Government
obligations
maturing within one year.
12.3 Auditors
(a) The Auditors shall prepare, for execution by the General Partners,
all tax returns of the Partnership. Prior to the filing of the
Partnership
tax returns, and in no event later than February 1 of each year, the
Auditors
shall deliver the tax returns for such year to the Tax Accountants for
their
review and comment. If a dispute arises between the Auditors and the
Tax
Accountants over the proper preparation of the tax returns and such
dispute
cannot be resolved by the Auditors and the Tax Accountants by March 1 of
such
year, then the Tax Accountants shall make the final decision on whether
any
changes are necessary. The Partnership shall reimburse BCCLP for all
reasonable costs and expenses paid to the Tax Accountants for the
aforementioned services.
(b) The Auditors shall audit and certify all annual financial reports to
the Partners in accordance with generally accepted auditing standards.
12.4 Cost Recovery and Elections
(a) With respect to all depreciable assets for which cost recovery
deductions are permitted, the Partnership shall elect to use, so far as
per-
mitted by the provisions of the Code, accelerated cost recovery methods.
However, the Partnership may change to another method of cost recovery
if such
other method is, in the opinion of the Auditors, more advantageous to
the
Investment Limited Partner and the Limited Partners and/or holders of
bene-
ficial assignee certificates thereof.
(b) Subject to the provisions of Section 12.5, all other elections
required or permitted to be made by the Partnership under the Code shall
be
made by the General Partners in such manner as will, in the opinion of
the
Auditors, be most advantageous to the Investment Limited Partner and the
limited partners and/or holders of beneficial assignee certificates
thereof.
12.5 Special Basis Adjustments
In the event of a transfer of all or any part of the Interest of the
Investment Limited Partner or a transfer of all or any part of an
interest of
a partner and/or holders of beneficial assignee certificates of the
Investment
Limited Partner, the Partnership shall elect, upon the request of the
Investment Limited Partner, pursuant to Section 754 of the Code, to
adjust the
basis of the Partnership property. Any adjustments made pursuant to
said
Section 754 shall affect only the successor in interest to the
transferring
Partner or partner or holder of beneficial assignee certificate thereof.
Each
Partner will furnish the Partnership all information necessary to give
effect
to such election.
12.6 Fiscal Year
The fiscal and tax year of the Partnership shall be the calendar year.
The books of the Partnership shall be kept on an accrual basis.
12.7 Information to Partners
(a) The General Partners shall cause to be prepared and distributed to
all Persons who were Partners at any time during a fiscal year of the
Partnership:
(i) Within sixty (60) days after the end of each fiscal year of
the Partnership, (A) a balance sheet as of the end of such fiscal year,
a statement of income, a statement of partners' equity, and a statement
of cash flows, each for the year then ended, all of which, except the
statement of cash flows, shall be prepared in accordance with generally
accepted accounting principles and accompanied by a report of the
Auditors containing an opinion of the Auditors, and (B) a report of the
activities of the Partnership during the period covered by the report.
With respect to any distribution to the Investment Limited Partner, the
report called for shall separately identify distributions from (1) Cash
Flow from operations during the period, (2) Cash Flow from operations
during a prior period which had been held as reserves, (3) proceeds from
disposition of property and investments, (4) lease payments on net
leases with builders and sellers, (5) reserves from the gross proceeds
of the Capital Contribution of the Investment Limited Partner, (6)
borrowed monies, and (7) transactions outside of the ordinary course of
business with a description thereof.
(ii) Within thirty (30) days after the end of each fiscal year of
the Partnership, all information relating to the Partnership and/or the
Apartment Complex which is necessary, in the view of the Tax
Accountants, for the preparation of the Limited Partners' Federal income
tax returns.
(iii) Within thirty (30) days after the end of each quarter of a
fiscal year of the Partnership, a report containing:
(A) a balance sheet, which may be unaudited;
(B) a statement of income for the quarter then ended, which
may be unaudited;
(C) a statement of cash flows for the quarter then ended,
which may be unaudited;
(D) all other information which would be pertinent to a
reasonable investor regarding the Partnership and its activities
during the quarter covered by the report.
(b) Within sixty (60) days after the end of each fiscal year of the
Partnership a copy of the annual report to be filed with the United
States
Treasury concerning the status of the Apartment Complex as low-income
housing
and, if required, a certificate to the appropriate state agency
concerning the
same.
(c) Upon the written request of the Investment Limited Partner for
further information with respect to any matter covered in item (a) or
item (b)
above, the General Partners shall furnish such information within thirty
(30)
days of receipt of such request.
(d) Prior to October 15 of each year, the Partnership shall send to the
Investment Limited Partner an estimate of the Investment Limited
Partner's
share of the tax credits, profits and losses of the Partnership for
Federal
income tax purposes for the current fiscal year. Such estimate shall be
pre-
pared by the General Partners and the Auditors.
(e) Within fifteen (15) days after the end of any calendar quarter
during which:
(i) there is a material default by the Partnership under the
Project Documents or in payment of any mortgage, taxes, interest or
other obligation on secured or unsecured debt,
(ii) any reserve has been reduced or terminated by application of
funds therein for purposes materially different from those for which
such reserve was established,
(iii) any General Partner has received any notice of a material
fact which may substantially affect further distributions or Tax Credit
allocations to any Limited Partner, or
(iv) any Partner has pledged or collateralized its Interest in the
Partnership,
the General Partners shall send the Investment Limited Partner a
detailed
report of such event.
(f) After the Admission Date, the Partnership shall send to the
Investment Limited Partner, on or before the tenth day of each month,
the
monthly housing credit monitoring form, and copies of all applicable
periodic
reports covering the status of project operations from the previous
period, as
may be required by any Agency or the Authority .
(g) Within fifteen (15) days after the end of each quarter of the
Partnership's fiscal year, the Partnership shall send to the Investment
Limited Partner a report on operations, in the form supplied by the
Investment
Limited Partner.
(h) The General Partners shall cause the Partnership to send to the
Investment Limited Partner a copy of each Construction Mortgage draw
requisi-
tion and any notification or correspondence from the Construction Lender
indi-
cating that any such draw will not be paid as requisitioned. Upon
receipt,
the Partnership shall send to the Investment Limited Partner copies of
the
Form(s) 8609 evidencing the Tax Credit allocation.
(i) If the earlier of (A) the Completion Date or (B) the date upon which
tenants first occupied apartment units in the Apartment Complex shall
have
occurred six months or more prior to the date upon which the Investment
Limited Partner acquired its Interest in the Partnership, then the
General
Partners shall cause to be prepared and delivered to the Investment
Limited
Partner within sixty (60) days of the Admission Date the following
items:
(i) An unaudited statement of income of the Partnership for the
year (or such shorter period as there may be from the date of the most
recent audited statement of income of the Partnership) ended on the date
upon which the Investment Limited Partner acquired its Interest in the
Partnership; and
(ii) An audited statement of income of the Partnership for any
fiscal year of the Partnership ending between (A) the earlier of (1) the
Completion Date or (2) the date upon which tenants first occupied
apartment units in the Apartment Complex and (B) the date upon which the
Investment Limited Partner acquired its Interest in the Partnership.
(j) If the General Partners do not cause the Partnership to fulfill its
obligations under Section 12.7(a)(i) and/or Section 12.7(a)(ii) within
the
time periods set forth therein, the General Partners may be required by
the
Investment Limited Partner to pay as damages the sum of $100 per day
(plus
interest at a rate equal to the general base rate of interest
established by
The First National Bank of Boston or its successors and assigns and
announced
by it as the rate charged by it to its prime commercial customers on
short-term unsecured borrowings as its "base rate" from time to time in
effect
plus 3%) to the Investment Limited Partner until such obligations shall
have
been fulfilled; provided, however, that said penalty shall not be
applied
should the failure to provide such reports and information be beyond the
control of the General Partner. Such damages shall be paid forthwith by
the
General Partners, and failure to so pay shall constitute a material
default of
the General Partners hereunder. In addition, if the General Partners
shall so
fail to pay, the General Partners and their Affiliates shall forthwith
cease
to be entitled to the Annual Partnership Management Fee, and to the
payment of
any Cash Flow or Capital Transaction proceeds to which they may
otherwise be
entitled hereunder. Such payments of the Annual Partnership Management
Fee,
Cash Flow and Capital Transaction proceeds shall be restored only upon
the
payment of such damages in full, and any amount of such damages not so
paid
shall be deducted against payments of the Annual Partnership Management
Fee,
Cash Flow and Capital Transaction proceeds otherwise due to the General
Partners or their affiliates.
12.8 Expenses of the Partnership
(a) All expenses of the Partnership shall be billed directly to and paid
by the Partnership.
(b) Except in extraordinary circumstances, neither the Investment
General Partner nor any Affiliate thereof shall be permitted to contract
or
otherwise deal with the Partnership for the sale of goods or services or
the
lending of money to the Partnership or the General Partners, except for
(i)
management services, subject to the restrictions set forth in Article
XI.B.,
(ii) loans made by, or guaranteed by, the Investment General Partner or
any of
its Affiliates, and (iii) those dealings, contracts or provision of
services
described in the Investment Partnership Agreement or in the Prospectus.
Extraordinary circumstances shall only be presumed to exist where there
is an
emergency situation requiring immediate action and the services required
are
not immediately available from unaffiliated parties. All services
rendered
under such circumstances must be rendered pursuant to a written contract
which
must contain a clause allowing termination without penalty on sixty (60)
days'
notice. Goods and services provided under such circumstances must be
provided
at the lesser of actual cost or the price charged for such goods or
services
by independent parties.
(c) In the event extraordinary circumstances arise, the Investment
General Partner and its Affiliates may provide construction services in
con-
nection with the Apartment Complex. Neither the Investment General
Partner nor
any of its Affiliates shall provide such services unless it believes it
has an
adequate staff to do so and unless such provision of goods and
construction
services is part of its ordinary and ongoing business in which it has
previously engaged, independent of the activities of the Investment
Limited
Partner. Any such services must be reasonable for and necessary to the
Investment Limited Partner, actually furnished to the Investment Limited
Partner, and provided at the lower of ten percent (10%) of the
construction
contract rate with respect to the Apartment Complex or ninety percent
(90%) of
the competitive price charged for such services by independent parties
for
comparable goods and services in the same geographic location (except
that in
the case of transfer agent, custodial and similar banking-type fees, and
insurance fees, the compensation, price or fee shall be at the lesser of
costs
or the compensation, price or fee of any other Person rendering
comparable
services as aforesaid). Cost of services as used herein means the pro
rata
cost of personnel, including an allocation of overhead directly
attributable
to such personnel, based on the amount of time such personnel spent on
such
services or other method of allocation acceptable to the accountants for
the
Investment Limited Partner.
(d) All services provided by the Investment General Partner or any
Affiliate thereof pursuant to Section 12.8(c) must be rendered pursuant
to the
Investment Partnership Agreement or a written contract which precisely
des-
cribes the services to be rendered and all compensation to be paid and
shall
contain a clause allowing termination without penalty upon sixty (60)
days'
notice to the Investment General Partner by a vote of a majority in
interest
of the limited partners and assignees of beneficial interests in the
Invest-
ment Limited Partner.
(e) No compensation or fees may be paid by the Partnership to the
Investment General Partner or its Affiliates except as described in the
Investment Partnership Agreement or in the Prospectus.
ARTICLE XIII
General Provisions
13.1 Restrictions by Reason of Section 708 of the Code
No Disposition may be made if the Interest sought to be Disposed of,
when added to the total of all other Interests Disposed of within the
period
of twelve consecutive months prior to the proposed date of the
Disposition,
could, in the opinion of tax counsel to the Partnership, result in the
ter-
mination of the Partnership under Section 708 of the Code. This Section
13.1
shall have no application to any required repurchase of the Investment
Limited
Partner's Interest. Any Disposition in contravention of any of the
provisions
of this Section 13.1 shall be void ab initio and ineffectual and shall
not
bind or be recognized by the Partnership. Notwithstanding the foregoing
pro-
visions of this Section 13.1, however, the Investment Limited Partner
may
waive the provisions of this Section 13.1 at any time as to a
Disposition or
series of Dispositions, and in the event of such a waiver, this Section
13.1
shall have no force or effect upon such Disposition or series of
Dispositions.
13.2 Amendments to Certificate
Within one hundred twenty (120) days after the end of any Partnership
fiscal year in which the Investment Limited Partner shall have received
any
distributions under Article X, the General Partners shall file an
amendment to
the Certificate reducing by the amount of its allocable share of such
distri-
bution the amount of Capital Contribution of the Investment Limited
Partner as
stated in the last previous amendment to the Certificate if such
Amendment is
required under the Uniform Act to reduce any liability of the Investment
Limited Partner to partnership creditors. However, Schedule A shall not
be
amended on account of any such distribution.
The Partnership shall amend the Certificate at least once each calendar
quarter to effect the substitution of Substituted Limited Partners,
although
the General Partners may elect to do so more frequently. In the case of
assignments, where the assignee does not become a Substituted Limited
Partner,
the Partnership shall recognize the assignment not later than the last
day of
the calendar month following receipt of notice of assignment and all
docu-
mentation required in connection therewith hereunder.
Notwithstanding the foregoing provisions of this Section 13.2, no such
amendments to the Certificate need be filed by the General Partners if
the
Certificate is not required to and does not identify the Limited
Partners or
their Capital Contributions in such capacity.
13.3 Notices
Any notice called for under this Agreement shall be in writing and shall
be deemed adequately given if actually delivered or if sent by
registered or
certified mail, postage prepaid, to the party for whom such notice is
intended
at such party's last address of record on the Partnership books.
13.4 Word Meanings
The words such as "herein," "hereinafter," "hereof" and "hereunder"
refer to this Agreement as a whole and not merely to a subdivision in
which
such words appear unless the context otherwise requires. The singular
shall
include the plural, and vice versa, and each gender (masculine, feminine
and
neuter) shall include the other genders, unless the context requires
other-
wise. Each reference to a "Section" or an "Article" refers to the
corres-
ponding Section or Article of this Agreement, unless specified
otherwise.
References to Treasury Regulations (permanent or temporary) or Revenue
Pro-
cedures shall include any successor provisions.
13.5 Binding Effect
The covenants and agreements contained herein shall be binding upon and
inure to the benefit of the heirs, executors, administrators, successors
and
assigns of the respective parties hereto.
13.6 Applicable Law
This Agreement shall be construed and enforced in accordance with the
laws of the State.
13.7 Counterparts
This Agreement may be executed in several counterparts and all so exe-
cuted shall constitute one agreement binding on all parties hereto,
notwith-
standing that all the parties have not signed the original or the same
counterpart.
13.8 Financing Regulations
So long as any of the Project Documents are in effect, (a) each of the
provisions of this Agreement shall be subject to, and the General
Partners
covenant to act in accordance with, the Project Documents; (b) the
Project
Documents shall govern the rights and obligations of the Partners, their
heirs, executors, administrators, successors and assigns to the extent
ex-
pressly provided therein; (c) upon any dissolution of the Partnership or
any
transfer of the Apartment Complex, no title or right to the possession
and
control of the Apartment Complex and no right to collect the rent
therefrom
shall pass to any Person who is not, or does not become, bound by the
Project
Documents and other Project Documents in a manner satisfactory to the
Lender
or any Agency ; (d) no amendment to any provision of the Project
Documents
shall become effective without the prior written consent of the Lender
or any
Agency (if required); and (e) the affairs of the Partnership shall be
subject
to Agency regulation and no action shall be taken which would require
the
consent or approval of any Agency unless the same is first obtained.
No new
Partner shall be admitted to the Partnership, and no Partner shall
withdraw
from the Partnership or be substituted for without the consent of the
Lender
or any Agency (if such consent is then required). No amendment to this
Agreement relating to matters governed by Agency regulations or
requirements
shall become effective until the prior written consent of the Agency
(if
required) to such amendment shall have been obtained.
Any conveyance or transfer of title to all or any portion of the Apart-
ment Complex required or permitted under this Agreement shall in all
respects
be subject to all conditions, approvals and other requirements of Agency
rules
and regulations applicable thereto.
13.9 Separability of Provisions
Each provision of this Agreement shall be considered separable and (a)
if for any reason any provision is determined to be invalid, such
invalidity
shall not impair the operation of or affect those portions of this
Agreement
which are valid, and (b) if for any reason any provision would cause the
In-
vestment Limited Partner to be bound by the obligations of the
Partnership
(other than the rules and regulations of any Lender and the
requirements of
any other Lender), such provision or provisions shall be deemed void and
of no
effect.
13.10 Paragraph Titles
All article and section headings in this Agreement are for convenience
of reference only and are not intended to qualify the meaning of any
article
or section.
13.11 Amendment Procedure
This Agreement may be amended by the General Partners only with the Con-
sent of the Investment Limited Partner and the prior written consent of
the
Special Limited Partner.
13.12 Time of Admission
The Investment Limited Partner shall be deemed to have been admitted to
the Partnership as of the Commencement Date for all purposes of this
Agree-
ment, including Article X hereof; provided, however, that if regulations
are
issued under the Code or an amendment to the Code is adopted which would
require, in the opinion of the Auditors, that the Investment Limited
Partner
be deemed admitted on a date other than as of the Commencement Date,
then the
General Partners shall select a permitted admission date which is most
favor-
able to the Investment Limited Partner.
WITNESS the execution hereof under seal as of the 1st day of December,
1996.
ORIGINAL (WITHDRAWING)
LIMITED PARTNER(S):
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GENERAL PARTNER(S):
R.S., INC.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ its President
INVESTMENT LIMITED PARTNER:
BOSTON CAPITAL
TAX CREDIT FUND L.P.,
a Delaware
limited partnership
By: Boston Capital Associates,
its general partner
By: /s/▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇,
Attorney-In-Fact for
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
a general partner
By: Boston Capital Partners
Corporation
By: /s/▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇,
Attorney-In-Fact for
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
a general partner
SPECIAL LIMITED PARTNER:
BCTC 94, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney-
in-Fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
its duly authorized President
CONSENT AND AGREEMENT
The undersigned hereby executes this Agreement for the sole purpose of
agreeing to the provisions of Article XI of the foregoing Second Amended
and
Restated Agreement and Certificate of Limited Partnership
notwithstanding any
provision of the Management Agreement to the contrary.
Management Agent
VALLEY RENTAL SERVICE
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, its
President
GUARANTY
The undersigned unconditionally guarantees the performance by the
General
Partner of all of its obligations under Sections 5.1, 5.2, 6.5, 6.10,
6.11(a)
and 12.7(j) of this Second Amended and Restated Agreement and
Certificate of
Limited Partnership and hereby waive any right to require that any
action be
brought against any other Person or to require that resort be made to
any
security prior to enforcement of this guaranty. The obligations of the
undersigned hereunder shall be binding upon the respective heirs,
executors and
legal representatives of the undersigned. Execution of this Agreement
by the
undersigned is solely for the purposes of undertaking this guaranty and
shall
not be deemed to make the undersigned a partner of the partnership.
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Individually
STATE OF North Dakota )
)ss.
COUNTY OF ▇▇▇▇▇▇ )
BEFORE ME, the undersigned Notary Public in and for said County and
State, personally appeared the above-named ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me
to be
the person who executed the foregoing instrument, and, being duly sworn,
acknowledged that the statements therein contained are true and that he
did
sign the same as his free act and deed.
WITNESS my hand and official seal this 26th day of December, 1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF North Dakota )
)ss.
COUNTY OF ▇▇▇▇▇▇ )
BEFORE ME, the undersigned Notary Public in and for said County and
State, personally appeared the above-named ▇▇▇▇▇▇▇ ▇▇▇▇, known to me to
be the
President of R.S., Inc., who being duly sworn, acknowledged that the
statements therein contained are true and that he did sign the same as
his
free act and deed and that the same is the duly authorized free act and
deed
of R.S., Inc.
WITNESS my hand and official seal this 26th day of December, 1996.
_________________________
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF North Dakota )
)ss.
COUNTY OF ▇▇▇▇▇▇ )
BEFORE ME, the undersigned Notary Public in and for said County and
State, personally appeared the above-named ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually,
known
to me to be the person who executed the foregoing instrument, and, being
duly
sworn, acknowledged that the statements therein contained are true and
that he
did sign the same as his free act and deed.
WITNESS my hand and official seal this 26th day of December, 1996.
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF North Dakota )
)ss.
COUNTY OF ▇▇▇▇▇▇ )
BEFORE ME, the undersigned Notary Public in and for said County and
State, personally appeared the above-named ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, known to me
to be
the President of Valley Rental Service, who, being duly sworn,
acknowledged
that the statements therein contained are true and that he did sign the
same
as his free act and deed and that the same is the duly authorized free
act and
deed of Valley Rental Service.
WITNESS my hand and official seal this 26th day of December, 1996.
_________________________
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
Personally appeared before me, the undersigned authority in and for said
County and State, on this 2nd day of January, 1997, within my
jurisdiction, the
within named ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney in Fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who
acknowledged that he is a general partner of Boston Capital Associates,
which
is the general partner of Boston Capital Associates, and the President
of
Boston Capital Partners Corporation, which are the general partners of
Boston
Capital Tax Credit Fund IV, L.P., and that in said representative
capacity she
executed the above and foregoing instrument, after first having been
duly
authorized to do so.
(Notary Public)
My Commission Expires:
___________________________
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
Personally appeared before me, the undersigned authority in and for said
County and State, on this 2nd day of January, 1997, within my
jurisdiction, the
within named ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney in Fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who
acknowledged that he is the President of BCTC 94, Inc., a Massachusetts
corporation, and that for and on behalf of the said corporation, and as
its act
and deed she executed the above and foregoing instrument, after first
having
been duly authorized by said corporation to do so.
(Notary Public)
My Commission Expires:
___________________________
Century East Apartments II Limited Partnership
Schedule A
As of
December 1, 1996
General Partners Capital Contribution
R.S., Inc. $3,750
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Special Limited Partner Capital Contribution
BCTC 94, Inc. $10
c/o Boston Capital
Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Investment Total Agreed-to Paid-In
Limited Partner Capital Contribution Capital Contribution
Boston Capital $371,183 $185,592
Tax Credit Fund IV, L.P.
A Limited Partnership
c/o Boston Capital
Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
____________________________
*Paid-in Capital Contribution as of the date of this Schedule A. Future
Installments of Capital Contribution are subject to adjustment and are
due at
the times and subject to the conditions set forth in the Agreement to
which
this Schedule is attached.
17220_1