AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
NEW DEVONSHIRE II LIMITED PARTNERSHIP
An Ohio Limited Partnership
By and Among
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Fairfield Homes, Inc.
as the General Partners
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Fairfield Homes, Inc.
as the Withdrawing Original Limited Partners
and
Boston Capital Tax Credit Fund IV, L.P. (Series 26)
as the Investment Limited Partner
and
BCTC 94, INC.
as the Special Limited Partner
Dated as of January 30, 1997
NEW DEVONSHIRE II LIMITED PARTNERSHIP
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS 1
ARTICLE II NAME AND BUSINESS 14
2.1 NAME; CONTINUATION 14
2.2 OFFICE AND RESIDENT AGENT 14
2.3 PURPOSE 15
2.4 TERM AND DISSOLUTION 15
ARTICLE III MORTGAGE, REFINANCING AND DISPOSITION OF PROPERTY 16
ARTICLE IV PARTNERS; CAPITAL 17
4.1 CAPITAL AND CAPITAL ACCOUNTS 17
4.2 GENERAL PARTNERS 18
4.3 INVESTMENT LIMITED PARTNER, SPECIAL LIMITED PARTNER AND WITHDRAWING
ORIGINAL
LIMITED PARTNERS 18
4.4 LIABILITY OF THE LIMITED PARTNERS 18
4.5 SPECIAL RIGHTS OF THE INVESTMENT LIMITED PARTNER AND THE SPECIAL 18
LIMITED PARTNER 18
4.6 MEETINGS 21
ARTICLE V CAPITAL CONTRIBUTIONS OF THE INVESTMENT LIMITED PARTNER AND
THE SPECIAL LIMITED PARTNER 21
5.1 PAYMENTS 21
5.2 RETURN OF CAPITAL CONTRIBUTIONS 23
ARTICLE VI RIGHTS, POWERS AND DUTIES OF GENERAL PARTNERS 26
6.1 AUTHORIZED ACTS 26
6.2 RESTRICTIONS ON AUTHORITY 27
6.3 PERSONAL SERVICES 29
6.4 BUSINESS MANAGEMENT AND CONTROL; TAX MATTERS PARTNER 29
6.5 DUTIES AND OBLIGATIONS OF THE GENERAL PARTNERS 29
6.6 REPRESENTATIONS AND WARRANTIES 32
6.7 LIABILITY ON THE PERMANENT MORTGAGES 35
6.8 INDEMNIFICATION OF THE GENERAL PARTNERS 35
6.9 INDEMNIFICATION OF THE PARTNERSHIP AND THE LIMITED PARTNERS 36
6.10 OPERATING DEFICITS 37
6.11 OBLIGATION TO COMPLETE THE CONSTRUCTION OF THE APARTMENT COMPLEX 37
6.12 CERTAIN PAYMENTS TO THE GENERAL PARTNERS AND OTHERS 39
6.13 DELEGATION OF GENERAL PARTNER AUTHORITY 39
6.14 ASSIGNMENT TO PARTNERSHIP 40
ARTICLE VII WITHDRAWAL OF GENERAL PARTNERS; NEW GENERAL PARTNERS 41
7.1 WITHDRAWAL 41
7.2 OBLIGATION TO CONTINUE 41
7.3 WITHDRAWAL OF ALL GENERAL PARTNERS 41
7.4 INTEREST OF GENERAL PARTNER AFTER PERMITTED WITHDRAWAL 42
7.5 ADMISSION OF ADDITIONAL GENERAL PARTNER(S) UNDER CERTAIN CIRCUMSTANCES
42
ARTICLE VIII TRANSFERABILITY OF LIMITED PARTNER INTERESTS 43
8.1 ASSIGNMENTS 43
8.2 SUBSTITUTED LIMITED PARTNER 44
8.3 RESTRICTIONS 44
ARTICLE IX BORROWINGS 44
BORROWINGS 45
ARTICLE X PROFITS, LOSSES, TAX CREDITS, DISTRIBUTIONS AND CAPITAL
ACCOUNTS 45
10.1 PROFITS, LOSSES AND TAX CREDITS 45
10.2 CASH DISTRIBUTIONS PRIOR TO DISSOLUTION 46
10.3 DISTRIBUTIONS UPON DISSOLUTION 48
10.4 SPECIAL PROVISIONS 49
10.5 AUTHORITY OF THE GENERAL PARTNERS TO VARY ALLOCATIONS TO PRESERVE AND
PROTECT
THE PARTNERS' INTENT 53
ARTICLE XI MANAGEMENT AGENT 54
ARTICLE XII BOOKS AND RECORDS, ACCOUNTING, TAX ELECTIONS, ETC. 55
12.1 BOOKS AND RECORDS 55
12.2 BANK ACCOUNTS 55
12.3 AUDITORS 56
12.4 COST RECOVERY AND ELECTIONS 56
12.5 SPECIAL BASIS ADJUSTMENTS 57
12.6 FISCAL YEAR 57
12.7 INFORMATION TO PARTNERS 57
ARTICLE XIII GENERAL PROVISIONS 61
13.1 RESTRICTIONS BY REASON OF SECTION 708 OF THE CODE 61
13.2 AMENDMENTS TO CERTIFICATE 61
13.3 NOTICES 62
13.4 WORD MEANINGS 62
13.5 BINDING EFFECT 62
13.6 APPLICABLE LAW 62
13.7 COUNTERPARTS 67
13.8 FINANCING REGULATIONS 67
13.9 SEPARABILITY OF PROVISIONS 68
13.10 PARAGRAPH TITLES 68
13.11 AMENDMENT PROCEDURE 68
13.12 EXTRAORDINARY LIMITED PARTNER EXPENSES 68
13.13 TIME OF ADMISSION 69
CONSENT AND AGREEMENT 72
SCHEDULE A 6
NEW DEVONSHIRE II LIMITED PARTNERSHIP,
An Ohio Limited Partnership
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
Preliminary Statement
New Devonshire, II, Limited Partnership, An Ohio Limited
Partnership (the "Partnership") was formed as an Ohio limited
partnership pursuant to a Certificate and Agreement of Limited
Partnership dated August 8, 1995 ("Original Agreement"), by and among
Fairfield Homes, Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as its general partners
(the "General Partners"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Fairfield Homes,
Inc., as its limited partners (the "Withdrawing Original Limited
Partners"). The Certificate of Limited Partnership was filed and
registered in the Filing Office on August 8, 1995 (the "Original
Certificate"). Certain capitalized terms used herein shall have the
respective meanings specified in Article I.
WHEREAS, the parties hereto now desire to enter into this
Amended and Restated Agreement of Limited Partnership to: (i) continue
the Partnership; (ii) admit Boston Capital Tax Credit Fund IV, A
Delaware Limited Partnership (specifically Series 26 thereof) to the
Partnership as its Investment Limited Partner; (iii) admit BCTC 94,
Inc., a Delaware corporation, as its Special Limited Partner; (iv)
acknowledge the withdrawal of the Withdrawing Original Limited
Partners; (v) reassign the Interests in the Partnership; and (vi) set
forth all of the provisions governing the Partnership and the Partners
herein.
In consideration of mutual agreements set forth herein, it is
agreed and certified, and the Original Agreement and the Original
Certificate are hereby amended and restated in their entireties, 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 or
recaptured.
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 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, (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 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 the officer,
director, partner or trustee. An Affiliate of the Investment Limited
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 is such Person is not
otherwise an Affiliate of the Investment Limited Partner. For the
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 or any Affiliate.
Agency means, as applicable, the Ohio Housing Finance Agency,
the Department of Rural and Economic Development and/or any other
governmental 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 Mortgages 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
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 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 City of
London, Madison County, Ohio, and more fully described in the
Mortgages, 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 Mortgages.
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 ▇▇▇▇▇ and London, CPAs, 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 Ohio Housing Finance Agency .
Boston Capital means Boston Capital Partners, Inc., a
Massachusetts corporation, and its successors and assigns.
Breakeven Confirmation means the date upon which the Investment
Limited Partner receives a copy of the federal income tax return of
the Partnership for the Partnership fiscal year in which the Breakeven
Point shall have occurred.
Breakeven Point means the first time at which, as certified by
the General Partners to the Investment Limited Partner in writing,
together with a statement fully disclosing the basis therefor and the
manner of calculation thereof, there have been four (4) consecutive
full calendar months of Partnership operation occurring after the
later to occur of (i) the Admission Date or (ii) Permanent Mortgage
Commencement, during which the rental income (including any government
subsidies) of the Partnership actually received on a cash basis
(excluding prepaid rent) for each of such four (4) months shall have
exceeded all the Partnership's expenses for such month on an accrual
basis (including, but not limited to, (a) all operational costs and
expenses, (b) all items payable in connection with the Mortgages, and
(c) the funding of any reserves required by the Lender or Agency
and/or pursuant to the terms of this Agreement), except for
depreciation, amortization and other non-cash charges, distributions
of Cash Flow and Capital Transaction proceeds to the Partners and the
fees payable pursuant to this Agreement. If free rent or other rental
concessions shall have been granted to tenants, the calculation of
income pursuant to the preceding sentence shall be adjusted so that
the effect of such concessions is amortized equally over the term of
all leases (excluding renewal periods) to which it applies. For
purposes of the foregoing, expenses shall (i) include monthly payments
of principal and interest in the amount specified in the Mortgages
regardless of any forbearance thereof, (ii) include a ratable portion
of the annual amount (as estimated by the General Partners) of those
seasonal expenses (such as utilities and maintenance expense) which
might reasonably be expected to be incurred on an unequal basis during
a full annual period of operation, and (iii) be adjusted, if
necessary, so that the expenses of real estate taxes and insurance are
based on the General Partners' estimate of the full value of the
Apartment Complex after completion of construction.
Capital Account has the meaning specified in Section 4.1(b).
Capital Contribution means the total value of cash or property
contributed and agreed to be contributed to the Partnership by each
Partner, as shown in Schedule A and paid pursuant to Section 5.1. Any
reference in this Agreement to the Capital Contribution 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 Partnership, but excluding the payment of Capital
Contributions and loans to the Partnership (other than a financing
pursuant to which funds are available for distribution to the
Partners.)
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, 1996, 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, 1998, so that each building in the Apartment Complex
constitutes a "qualified building" for the purposes of Section
42(h)(E)(ii) of the Code.
Cash Available for Debt Service Requirements for any period
means the excess of (i) all cash received by the Partnership on a cash
basis from normal operations during such period, excluding 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, 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 operations, but specifically during a full annual period of
operations, but specifically excluding debt service requirements. For
purposes of this definition, (i) cash requirements of the Partnership
shall include, to the extent not otherwise covered above, 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 Lender or
Agency requirements and to the following adjustments:
(a) cost recovery deductions of buildings, improvements and
personal property and amortization of any financing fees
shall not be deducted;
(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 Mortgage refinancing, loan, 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 received 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 be deducted; and
(i) prior to the later of Permanent Mortgage Commencement or
the Admission Date, an amount equal to the amount, if any,
of net rental income applied to complete the construction
of the Apartment Complex pursuant to Section 6.11(a) shall
be deducted.
Certificate means the Original Certificate as amended from time
to time (including any amendment thereto effected by or in connection
with this Agreement.)
Class Contribution means the aggregate Capital Contributions of
all members 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 28 apartment units in the
Apartment Complex.
Compliance Period means the fifteen-year (15) period commencing
with the first year of the Credit Period.
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 Fairfield National Bank, in Lancaster,
Ohio, 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 in the
principal amount of $274,310.
Construction Mortgage Closing means the first date upon which
the Construction Mortgage shall have closed and the initial draw there
made shall have been dispersed.
Construction Permitting Date means the first date upon which
the Partnership shall have received all necessary governmental and
other permits and approvals for the construction and operation of the
Apartment Complex in accordance with the plans and specifications
therefor.
Controlling Person has the meaning given to it in the context of
Section 15 of the Securities Act of 1933, as amended.
Cost Certification means the date upon which each Limited
Partner shall have received the written certification of the Auditors,
in a form and in substance satisfactory to Boston Capital, as to the
itemized amounts of the construction and development costs of the
Apartment Complex and the Eligible Basis and Applicable Percentage
pertaining to each building in the Apartment Complex.
Credit Period has the meaning given to it in Section 42(f)(1) of
the Code.
Credit Recovery means a constructive interest-bearing advance of
the Investment Limited Partner as more fully described in Section
5.1(d). 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(d).
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.
Economic Risk of Loss has the meaning set forth in Treasury
Regulation Section 1.752-2.
89-12 Requirements means the net worth 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.
Eligible Basis has the meaning given to it in Section 42(d) of
the Code.
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
Ohio.
General Partners means the Persons designated as the General
Partners in Schedule A and any other Person(s) who become a General
Partner as provided herein, in their capacity as a general partner of
the Partnership. Any sole General Partner shall be deemed the General
Partners. At any and all times when there is but one General Partner,
the term General Partners shall mean the 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.
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 one
hundred percent (100%) of the Low-Income 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 0.73 and (ii) as to any other Partner, an amount
equal to its Capital Contribution.
Investment General Partners means C & M Associates d/b/a Boston
Capital Associates, a Massachusetts general partnership, and Boston
Capital Associates IV, Limited Partnership, a Massachusetts limited
partnership in their capacity as the general partners 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, A Limited Partnership (specifically Series 26), 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 Partnership of the Investment Limited Partner, as amended from
time to time.
Lender mean the Permanent Lender, in its capacity as maker of a
Mortgage loans, or its successors and assigns in such capacity.
Limited Partners means the Investment Limited Partner, the
Special Limited Partner and any Additional Limited Partner.
Low-Income Apartment Units means the 28 units in the Project
with respect to which the Partnership has agreed to comply with the
requirements for the Tax Credit under Section 42 of the Code and any
additional units with respect to which the General Partners so agree.
Management Agent means the management and rental agent for the
Apartment Complex.
Management Agreement means the agreement between the Partnership
and ▇▇▇▇▇▇▇ Management, Inc. d/b/a Fairfield Homes, Inc., providing
for the management of the Apartment Complex.
Management Fee means the Management Fee to which reference is
made in Article XI.A.
General Partners means Fairfield Homes, Inc. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, together with their permitted successors and assigns in such
capacity.
Minimum Set-Aside Test means the set aside test selected by the
Partnership 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.
Mortgages mean the mortgage indebtedness of the Partnership to
Permanent Lender; and where the context admits Mortgages shall mean
the Construction Mortgage, the Permanent First Mortgage and the
Permanent Second Mortgage, 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
Statement.
Original Certificate has the meaning specified in the
Preliminary Statement.
Original Limited Partner has the meaning specified in the
Preliminary Statement.
Partner means any of the General Partners 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 non-recourse debt minimum gain and the net increase or
decrease in partner non-recourse 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 First Mortgage means the permanent financing provided
by the Permanent Lender for the Apartment Complex in the initial
principal amount of $507,669 and which is to be assumed by the
Partnership.
Permanent Lender means the United States Department of
Agriculture, Rural Development, in its capacity as maker and holder of
the Permanent First Mortgage and the Permanent Second Mortgage,
together with its successors and assigns in such capacity.
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 Mortgages
shall have been finally determined; and (c) amortization of the
Permanent Mortgages 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 Second Mortgage and transfer and assumption by the
Partnership of the Permanent First Mortgage.
Permanent Second Mortgage means the permanent financing
provided, or to be provided, by the Permanent Lender for the Apartment
Complex following the completion thereof in the initial principal
amount of $289,600.
Person means any individual or Entity.
Project Documents means and includes the Construction Mortgage,
the Permanent Mortgages, the Loan Agreement of the Permanent Lender,
the Management Agreement, and all other instruments delivered to (or
required by) the Permanent Lender and all other documents relating to
the Apartment Complex and by which the Partnership is bound, as
amended or supplemented from time to time.
Projected Credit to the Investment Limited Partner means
$31,171 per annum for the years 1997 through 2006 (inclusive);
provided, that upon the occurrence of any of the events described in
Section 5.1(g), the Projected Credit shall thereafter be the Revised
Projected Credit.
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 1.751l(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
reasonably 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 12 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 (as defined therein) charged to
tenants of the Low-Income Apartment Units may not exceed thirty
percent (30%) of the qualifying income levels.
Revised Projected Credit has the meaning given to it in Section
5.1(e).
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
Environmental 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 Ohio.
State Designation means the date upon which the Partnership
receives the allocation by the authorized agency of the State of a Tax
Credit for the buildings constituting the Apartment Complex in an
annual dollar amount of not less than $31,171 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
buildings constituting the Apartment Complex in an annual dollar
amount of not less than $31,171, 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
Environmental 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 the General Partners, 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
his interest as a General Partner. A General Partner which is a
corporation 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 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.
Withdrawing Original Limited Partners has the meaning specified
in the Preliminary Statement.
ARTICLE II Name and Business
2.1 Name; Continuation
The name of the Partnership is New Devonshire II Limited
Partnership, An Ohio 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, rehabilitate, 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, 2047, 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) the Withdrawal of a General Partner if the Investment
Limited Partner shall fail to exercise the right provided in Section
7.2;
(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. Upon dissolution of the
Partnership, the General Partners shall cause the cancellation of the
Certificate, liquidate the assets of the Partnership 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 for the Subordinated Loans).
ARTICLE III Mortgage, Refinancing and Disposition of Property
A. The Partnership shall be authorized to incur whatever
amounts may be required, subject to the provisions hereof, in
connection with the acquisition, development, and construction of and
to meet the expenses of operating the Apartment Complex (including
without limitation any items for which the Lender may provide Mortgage
funds) and shall secure the same by the Mortgages; provided, however,
that the Partnership shall not borrow in excess of $274,310 from the
Construction Lender, or $797,269 from the Permanent Lender without the
consent of the Investment Limited Partner. The General Partners,
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 the
General Partners 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 the Permanent Mortgages.
B. The Partnership may decrease, increase or refinance the
Mortgages and may make any required transfer or conveyance of
Partnership assets for security or mortgage purposes, provided,
however, any such decrease (except through the Permanent Mortgages
amortization schedule set forth at Permanent Mortgage Commencement),
increase or refinancing of the Mortgages 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 any substantial part of 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.
D. Unless otherwise agreed to by the parties, 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 three percent (3%) 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 Partner 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
Partnership 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 III.
4.2 General Partners
The Capital Contributions of the General Partners is set forth
in Schedule A.
4.3 Investment Limited Partner, Special Limited Partner and Withdrawing
Original Limited Partners
The Withdrawing Original Limited Partners hereby withdraw as
limited partners of the Partnership and acknowledge that they no
longer have 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 to the Partnership as the sole Limited Partners in
substitution for the Withdrawing Original Limited Partners as of the
Admission Date and agree to be bound by the terms and provisions of
the Project Documents and this Agreement. The name and address 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
The Investment Limited Partner, the Special Limited Partner and
any Person who becomes an Additional Limited Partner shall not 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 and the
Special
Limited Partner
(a) Notwithstanding any other provision herein, to the extent
the law of the State is not inconsistent, each of the Investment
Limited Partner and the Special Limited Partner shall have the right,
subject to the prior written consent any Agency (if such consent is
required) to:
(i) amend this Agreement in any particular;
(ii) dissolve the Partnership;
(iii) remove the General Partners or any General Partner
and elect a new General Partner (A) on the basis of the
performance and discharge of such General Partners' 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 Partners shall have materially
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 Partners shall have violated any
material provision of this Agreement, including, but not limited
to, any obligation to fund any Partnership expense under Section
6.10, or such General Partners shall have violated any material
provision of applicable law; (3) any Mortgage shall have gone
into default; or (4) such General Partners 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; provided, however, prior to any
removal under subsection (B) of this Section 4.5 (a)(iii), the
Partner seeking to effectuate such removal shall give notice to
the General Partners and the General Partners shall have a
period of thirty (30) days from the date of such notice, to cure
the event or condition giving rise to the removal to the
satisfaction of the Partner seeking the removal in its sole and
absolute discretion.
(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 the General Partners, (i) without any
further action by any Partner, the Special Limited Partner or its
designee 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 Partners 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 Uniform Act, (ii) the remaining portion of the Interest of
the removed General Partners shall automatically be converted to an
equal Interest as an Additional Limited Partner, (iii) the Interest of
the Special Limited Partner as the Special Limited Partner shall
continue unaffected by the new status of the Special Limited Partner
or its designee 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 Special Limited Partner or any
successor General Partner proposed by the Special Limited Partner
shall have the option, exercisable in its sole discretion, to acquire
the Additional Limited Partner Interest, or any portion thereof, of
any removed General Partner upon payment of the agreed or then present
fair market value of such Interest or portion thereof. Any dispute as
to the value of the Interest or portion thereof to be acquired
pursuant to the immediately preceding sentence shall be submitted to a
committee composed of three qualified real estate appraisers, one
chosen by the removed General Partners, one chosen by the successor
General Partner, and the third chosen by the two so chosen. The
proceedings of such committee shall conform to the rules of the
American Arbitration Association, as far as appropriate, and its
decision shall be final and binding. The expense of arbitration shall
be born equally by the removed General Partners and the Partnership.
The method of payment to the removed General Partners 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 not less than
five (5) years with equal installments each year. In addition, upon
removal, the Partnership must promptly pay to the removed General
Partners all amounts then accrued and owing to the removed General
Partners; provided, however, that notwithstanding the language of
Section 6.9, Article X, Article XI and any other provision hereof,
neither the removed General Partner nor any of his Affiliates 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 Partners, 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 the General Partners removed under this
Section 4.5 for any damages suffered by the Partnership as a result of
any breach of the obligations of the General Partners hereunder. The
General Partners so removed shall not be liable as General Partners
for any obligations of the Partnership incurred after the effective
date of its removal. The General Partners hereby grant 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 the General
Partners 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 and to enable the new General Partner to manage the
business of the Partnership.
(c) In order to implement Section 4.5(a)(v), the General
Partners are hereby required, within five (5) days after its receipt
of any offer to purchase the Apartment Complex or all of the Interests
in the Partnership, to send a copy of such offer (or a written
description of any such oral offer) to each of the Limited Partners.
If, within thirty (30) days of its receipt of any such copy of such an
offer, the Special Limited Partner shall send notice to the General
Partners that the Special Limited Partner desires that the Partnership
accept such offer, then the General Partners shall be required to
accept such offer on behalf of the Partnership and proceed promptly to
close such transaction unless otherwise instructed by the Special
Limited Partner at any point prior to the closing of such transaction.
To the extent, if any, that the Special Limited Partner shall
determine, in its discretion, that the General Partners are not
proceeding in a manner satisfactory to it with respect to any such
offer or closing, each Partner hereby grants to the Special Limited
Partner an irrevocable (to the extent permitted by law) power of
attorney coupled with an interest to execute and deliver any and all
documents and instruments on behalf of the Partnership and any Partner
as the Special Limited Partner may deem to be necessary or appropriate
in order to effect the acceptance of and/or closing pursuant to any
such offer in such a manner as the Special Limited Partner shall, in
its discretion, determine to be satisfactory.
4.6 Meetings
The General Partners or Limited Partners holding more than ten
percent (10%) of the then outstanding Limited Partner Interests may
call meetings of the Partnership for any matter 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 shall
be $10 payable in full in cash on the Admission Date. The Investment
Limited Partner shall pay on Admission Date the sum of $182,070 in
cash as its Capital Contribution.
(b) In addition, the obligation of the Investment Limited
Partner to pay the Capital Contribution is conditioned upon delivery
by the General Partners to the Investment Limited Partner of both (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
owner's title insurance policy, or an endorsement thereto, issued to
the Partnership with respect to the Apartment Complex, in an insured
amount not less than $1,060,985 from a title insurance company
reasonably satisfactory to the Investment Limited Partner 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.
(c) If, with respect to any fiscal year commencing 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 0.800 plus (B) the
amount of any recapture, interest or penalty payable by the limited
partners of the Investment Limited Partner as a result of such
shortfall, assuming that each limited partner 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 but such amount
shall be subject to later adjustment by the Auditors or by the Service
in connection with an audit. The Investment Limited Partner shall be
eligible to be paid a Reduction Amount as hereinabove described with
respect to each Reduction Year and may receive multiple payments of
Reduction Amounts in the event of multiple changes in the Actual
Credit. Any Reduction Amount shall be paid in its entirety by the
General Partners directly to the Investment Limited Partner promptly
after demand is made therefor, as a payment of damages for breach of
warranty, regardless of the reason for the occurrence of such event.
(d) In the event that, for any reason, with respect to any
fiscal year commencing after 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 (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 (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 in the Investment
Limited Partner used all of the Tax Credits allocated to it in the
year of allocation. Credit Recovery Loans shall be deemed to bear
simple (not compounded) interest from the respective dates on which
such constructive advances shall have been deemed to have been made
under this Section 5.1(d) at 9% per annum. Credit Recovery Loans
shall be payable by the Partnership as provided in Section 10.2 (b)
Clause Third.
(e) If, as of the Completion Date and based upon the Cost
Certification, it is determined that the Apartment Complex will not be
eligible to receive Tax Credits in an annual amount of at least
$31,171; or it is at any time determined by the Auditors, the Tax
Accountants or the Service that, for any reason, the Apartment Complex
will not be eligible to receive Tax Credit in an annual amount of at
least $31,171, then (a) the General Partners shall pay to the
Investment Limited Partner an amount equal to the product of (A)
difference between (i) $31,171 and (ii) the total amount of Tax Credit
allocated to the Partnership and (B) 8.0 and (b) the Projected Credit
for each year shall thereafter be redefined to mean 99% of the annual
amount of Tax Credit actually so allocated to the Partnership (the
"Revised Projected Credit"). Any amount payable by the General
Partners to the Investment Limited Partner pursuant to this Section
5.1(e) shall be paid in its entirety by the General Partners directly
to the Investment Limited Partner promptly after demand is made
therefor, as a payment of damages for breach of warranty, regardless
of the reason for the occurrence of such event.
5.2 Return of Capital Contributions
(a) Failure to Achieve Development and/or Tax Credit
Benchmarks and Standards. If (i) the buildings comprising the
Apartment Complex are not placed in service prior to January 31, 1997
(or any later date fixed by the General Partners with the Consent of
the Investment Limited Partner) or (ii) by December 31, 1997 (or any
later date fixed by the General Partners with the Consent of the
Investment Limited Partner) less than 100% of the Low-Income Apartment
Units shall have been occupied by Qualified Tenants, or (iii)
Permanent Mortgage Commencement shall not have occurred prior to March
1, 1997 (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 July 1, 1997 (or any later date fixed by
the General Partners 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 the Permanent Lender to
provide the Permanent Mortgage financing shall be terminated or
withdrawn and not reinstated or replaced within ninety (90) days with
terms equal 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 the Permanent Lender 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) after Permanent Mortgage
Commencement, (a) foreclosure proceedings shall have commenced and
such proceedings shall not have been dismissed within thirty (30)
days, (b) the commitments of Permanent Lender to provide the Permanent
Mortgage and/or any subsidy financing shall be terminated or withdrawn
and not reinstated or replaced within sixty (60) 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 Agency shall have been obtained, or
(viii) if by December 31, 1997 (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, in form and
substance satisfactory to the Investment Limited Partner, the
certification of the Auditors that as of a date no later than December
31, 1996, the Partnership 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, 1998, so that each building in the Apartment Complex is a
"qualified building" for the purposes of Section 42(h)(1)(E)(ii) of
the Code, or (ix) if at any time it shall be determined by the Service
or by the Tax Accountants that as of December 31, 1996 the Partnership
had not 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, 1998, or
(x) the Completion Date has not occurred by January 31, 1997, or (xi)
Breakeven Point has not been achieved within twelve (12) months after
the Completion Date (or any later date fixed by the General Partners
with the Consent of the Investment Limited Partner), or (xii) the
General Partners shall, at any time, fail to make any Subordinated
Loan required to be made by them hereunder, or fail to make any
payment required to be made by them under Sections 5.1(c) or (e),
then 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 (the "Repurchase Amount") equal to each such
Partner's Invested Amount minus the amount, if any, of such Partner's
Capital Contribution which shall not yet have been paid (or deemed to
have been paid) to the Partnership plus the amount of any third party
costs, including, but not limited to, attorney's fees incurred by or
on behalf of such Partner in implementing this Section 5.2(a) in the
event the Investment Limited Partner and/or the Special Limited
Partner requires such a repurchase. 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 Repurchase 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 ten (10) days after the
Partnership receives any such notice from a Partner requiring the
purchase of its Interest repurchase the Interest of such Partner and
the Special Limited Partner by paying to each such Partner an amount
equal to its Repurchase Amount.
(b) Lender Disapproval. If the Lender and/or Agency 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 Investment Limited 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 Lender and/or Agency in its
disapproval) , at the option of the Partner being disapproved or not
approved (if not directed by the Lender and/or Agency 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 minus the amount, if any, of such Partner's Capital
Contribution which shall not yet have been paid (or deemed to have
been paid) to the Partnership plus the amount of any third party
costs, including, but not limited to attorney's fees, 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),
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 Partners 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), then an additional General Partner
shall be admitted as follows. Time being of the essence, at any time
thereafter the Special Limited Partner shall have the option,
exercisable in its sole discretion, to cause itself or its designee to
be admitted as an additional General Partner, whereupon the interest
of the General Partners shall be automatically transferred from the
General Partners to the additional General Partner, in consideration
of $10, a one percent (1%) interest in the all profits, losses, tax
credits and distributions of the Partnership, such transfer
notwithstanding, the Special Limited Partner shall also retain its
status as such and its interest in the Partnership as the Special
Limited Partner shall not be affected. Upon any such admission of the
Special Limited Partner or its designee as an additional General
Partner, the General Partners hereby agree that all of their rights
and powers hereunder as General Partners 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. 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) and to allow the additional General
Partner to manage the business of the Partnership. The admission of
the Special Limited Partner or its designee as an additional General
Partner shall not relieve the General Partners of any of their
economic obligations hereunder, and the General Partners 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 Complex or any other assets of the Partnership;
(4) to execute the Mortgages and the other Project
Documents and all such other documents as the General Partners
deem necessary or appropriate in connection with the
acquisition, development and financing of the Apartment Complex;
(5) to prepay in whole or in part, refinance or modify
the 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 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 program;
(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 the 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 requirements of the 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
and the prior written consent of the Special 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 amortization schedules
provided for at the Permanent Mortgage Commencement), modify the
terms of or refinance the Permanent Mortgages;
(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 cause the Partnership to commence a proceeding
seeking any decree, relief, order or appointment in respect to
the Partnership under the federal bankruptcy laws, as now or
hereafter constituted, or under any other federal or state
bankruptcy, insolvency or similar law, or the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) for the Partnership or for any substantial
part of the Partnership's business or property, or to cause the
Partnership to consent to any such decree, relief, order or
appointment initiated by any Person other than the Partnership;
(10) to pledge or assign any of the Capital Contribution
of the Investment Limited Partner or the proceeds thereof; or
(11) To do any act required to be approved or ratified by
all limited partners under the Uniform Act.
(b) In the event that the General Partners violate any
provision of Section 6.2(a), the Special Limited Partner, in its sole
discretion, may cause itself or its designee to be admitted as an
additional General Partner without any further action by any other
Partner. Upon any such admission of an additional General Partner,
the existing General Partners shall be deemed to have conveyed to the
additional General Partner their interest so that the additional
General Partner shall receive not less than a one percent (1%)
interest in the profits, losses, tax credits and distributions of the
Partnership in consideration of the payment of $10. An additional
General Partner so admitted shall automatically become the General
Partner and be irrevocably delegated all of the power and authority of
the General Partners pursuant to Section 6.4. Any such additional
General Partner shall have the right to withdraw as a General Partner
at any time, leaving the pre-existing General Partners once again as
the General Partners, the provisions of Article VII notwithstanding.
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 6.2(b) or to enable any additional General Partner
admitted pursuant to this Section 6.2(b) to manage the business of the
Partnership. The admission of an additional General Partner shall not
relieve any other General Partners of any of their obligations
hereunder, and the General Partners 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.
6.3 Personal Services
Neither the General Partners nor any of their Affiliates 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. Notwithstanding the
foregoing, in no event may the provisions of this Section 6.4 be
invoked by the General Partners or by any other Person as an
impediment to the ability of either the Investment Limited Partner or
the Special Limited Partner to take any action hereunder. All
Partners hereby agree that the General Partners 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
their duties hereunder.
6.5 Duties and Obligations of the General Partners
(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 purposes 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.
The General Partners shall be 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 Partnership 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, worker'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) in the case of the
"extended coverage" portion, no less than the full original
replacement value of the Apartment Complex, (C) 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 (D)
in any event sufficient to prevent the Partnership from becoming a co-
insurer under any such policies. No deductibles on such policies may
exceed $5,000. The public liability insurance in favor of the
Partnership shall be in an amount not less than $2,000,000. Through
the Completion Date, or such later date as may be required by the
Lender or 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 the Lender and/or
any Agency. 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 his receipt thereof or upon
request but no less frequently than annually. 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) Except as otherwise provided in Sections 4.5(b) and 7.1,
such obligations shall survive any Withdrawal of the General Partners
from the Partnership.
(e) The General Partners shall establish and maintain
reasonable reserves to provide for working capital needs,
improvements, replacements and any other contingencies of the
Partnership. At a minimum, the General Partners shall, commencing in
1997, cause the Partnership to annually deposit $4,400 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.
(f) The General Partners 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 the General Partners hereunder) and by the
Project Documents to the same extent and under the same terms as the
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 and throughout the Compliance Period
so as to permit the Partnership to be entitled to the Tax Credit
throughout the Compliance Period specified in the Code, (ii) the
Partnership to comply with all State Tax Credit monitoring procedures,
(iii) all Low-Income Apartment Units to be leased to Qualified
Tenants, (iv) the Partnership to make all appropriate Tax Credit
elections in a timely fashion, and (v) all rental units in the
Apartment Complex to be available for rental by the general public and
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) a project cost and budget analysis on an Agency form
or any comparable form of a state or other governmental agency,
including any applicable Tax Credit allocation agency, setting forth
estimates with respect to 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 the General Partners, any Affiliate of the General
Partners, or any Person for whose conduct the General Partners are or
were 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 the General Partners' 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 the General Partners, any Affiliate of
the General Partners or any Person for whose conduct the General
Partners are or were responsible or whose liability may result in a
lien on the Apartment Complex; (y) upon the General Partners' receipt
of any notice to such effect from any Federal, state, or other
governmental authority; and (z) upon the General Partners' obtaining
knowledge of any expenditure or loss by any such governmental
authority in connection with the assessment, containment, or removal
of any Hazardous Material for which expense or loss the General
Partners 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 of
Ohio 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) disputes with suppliers of labor and/or
materials; 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 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 any Mortgage, except as expressly permitted by
Article III. The General Partners have not, either on their 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 is being or 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
encumbrances other than those which (a) are both permitted by the
Project Documents and are noted or excepted in the title insurance
policy number ________________, dated ________________ in the amount
of $1,061,795 issued by __________________________ to the Partnership,
as endorsed through the Admission Date and (b) do not materially
interfere with the 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
performance of all acts heretofore or hereafter made or taken
pertaining to the Partnership or the Apartment Complex by each
Affiliate of the General Partners 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) No Event of Bankruptcy has occurred with respect to the
General Partners.
(9) 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 Lender and/or any
Agency.
(10) The General Partners' net worth satisfies the 89-12
Requirements.
(11) 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 Mortgages and
to pay the Construction and Development Fee (to the extent payment is
not deferred in accordance with this Agreement) 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 amount 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 Lender 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.
(13) The amount of Tax Credit which is expected to be allocated
by the Partnership to the Investment Limited Partner is $31,171 per
annum for the years 1997 through 2006 (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 eligible
for Tax Credits and in accordance with the Agency Regulatory
Agreement.
(15) The General Partners have provided the Investment Limited
Partner with a complete copy of an environmental site assessment for
the Apartment Complex. Neither the General Partners, nor an Affiliate
of the General Partners or Person for whose conduct the General
Partners are or were responsible has never: (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 the General Partners, by any Affiliate of the
General Partners, or any Person for whose conduct the General Partners
was or were 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) The Construction Mortgage Closing has occurred, and the
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 an incentive for the Investment Limited Partner to make
the Capital Contribution as set forth in Section 5.1, the General
Partners agree to provide the Investment Limited Partner, the
following: (a) on or before July 1, 1997, Form(s) 8609 evidencing the
Tax Credit allocation; and (b) on or before March 1, 1997, (i) full
and final lien waivers accompanied by a payoff letter from the General
Contractor stating that all amounts payable to it have been paid in
full, and (ii) updated title policy after Permanent Mortgage
Commencement.
6.7 Liability on the Permanent Mortgages
Neither the General Partners nor any Related Person shall at any
time bear the Economic Risk of Loss for the payment of any portion of
the Permanent Mortgages, 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 pursuant to Article III.
6.8 Indemnification of the General Partners
(a) Neither the General Partners nor any of their Affiliates
shall have liability to the Partnership or to any Limited Partner for
any loss suffered by the Partnership which arises out of any action or
inaction of the General Partners or their Affiliates if the General
Partners or their Affiliates in good faith determined that such course
of conduct was in the best interest of the Partnership and such course
of conduct did not constitute negligence or misconduct of the General
Partners or their Affiliates.
(b) The General Partners or their Affiliates shall 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) the General Partners have 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 misconduct on the part of the General Partners 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, neither the General Partners
nor their Affiliates performing services for the Partnership or any
broker-dealer shall not 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
jurisdiction as to the particular indemnitee and, the court approves
the indemnification 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, and any 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 the Affiliates of the
General Partners under this Section 6.8 only if the loss involves
activity in which such Affiliates acted in the capacity as General
Partners.
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 Partners or any of their
Affiliates, 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) the Mortgages 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, the General Partners shall
not be liable to a Limited Partner or the Partnership for any act or
omission for which the Partnership is required to indemnify the
General Partners 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 the
General Partners and/or the termination of this Agreement.
6.10 Operating Deficits
Subject to the prior written consent of the Lender or Agency (if
such consent shall be required under applicable Agency regulations),
the General Partners shall have an obligation, commencing on the later
to occur of (i) Permanent Mortgage Commencement or (ii) the Admission
Date (the "Operating Deficit Commencement Date") to advance funds to
meet operating expenses and debt service of the Partnership which
exceed operating income available for the payment thereof. 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 Applied Fees shall also
constitute payment and satisfaction of the corresponding amounts
payable to the General Partners or their Affiliates 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 their Affiliates
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 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 accordance with the provisions of
Article X. The form and provisions of all Subordinated Loans shall
conform to any applicable rules and regulations.
6.11 Obligation to Complete the Construction of the Apartment
Complex
The General Partners shall complete the construction of the
Apartment Complex substantially in accordance with the plans and
specifications approved by the Lender 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 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
Lender 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 Contribution of the General Partners in
the amount set forth on Schedule A as of the Admission Date, and any
insurance proceeds arising out of casualties prior to 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, (ii) pay the Construction and Development Fee (to the
extent payment is not deferred in accordance with this Agreement),
(iii) arrive at Permanent Mortgage Commencement in conformity with the
Project Documents, (iv) discharge all Partnership liabilities and
obligations arising out of any casualty giving rise to any such
insurance proceeds, and (v) 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, 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 Lender and/or any Agency, be reimbursed at or
prior to 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 the 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 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 a fee
(the "Annual Partnership Management Fee") commencing in 1997 for their
services in connection with the administration of the day-to-day
business of the Partnership in an annual amount equal to $1,819 per
annum. The Annual Partnership 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 in 1997, Cash
Flow is insufficient to pay the full amount of the Annual Partnership
Management Fee, the unpaid portion thereof shall accrue and be payable
on a cumulative basis in the first year in which there is sufficient
Cash Flow or from the proceeds of a Capital Transaction as provided in
Article X.
(b) In consideration of their consultation, advice and other
services in connection with the construction and development of the
Apartment Complex and as consideration for the assignment described in
Section 6.14, the Partnership shall pay to the General Partners (or
their designee) a construction and development fee of $30,357 (the
"Construction and Development Fee"), which fee shall be earned in full
as to each building in the Apartment Complex as of the date such
building is completed and payable out of the Capital Contribution of
the Investment Limited Partner. A portion of the Construction and
Development Fee in the amount of $1,758 shall be deferred. The
deferred portion of the Construction and Development Fee which shall
not have been paid as of the date which is six months after it shall
have been earned shall accrue interest at the Applicable Federal Rate
in effect at the time earned from the date earned through the date of
payment; any such interest shall be payable in accordance with the
provisions of Article X.
(c) The Partnership shall pay to Boston Capital or an
Affiliate thereof a fee (the "Asset Management Fee") commencing in
1997 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 $1,819. 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 1997, Cash Flow is insufficient to pay the full amount
of the Asset Management Fee, the unpaid portion thereof shall accrue
and be payable on a cumulative basis in the first year in which there
is sufficient Cash Flow or from the proceeds of a Capital Transaction
as provided in Article X.
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 Partner. 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 hereunder;
(2) as to the existence or nonexistence of any fact
which constitutes a condition precedent to acts by the General
Partner 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
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 of the Mortgages; (v) any and all contracts or rights
with respect to any agreements with the Lender and/or Agency; and (vi)
any other work product related to the Apartment Complex and/or the
Partnership, all of which shall have an agreed to value of $100.00 for
purposes of determining the opening Capital Account of the General
Partners.
ARTICLE VII Withdrawal of General Partners; 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 his Interest without the Consent
of the Investment Limited Partner and all the other General Partners,
except that if the Special Limited Partner or a designee thereof
becomes a General Partner, 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 or its
designee, such General Partner's Interest and all unpaid fees from the
Partnership and shall remain liable for all of the Withdrawing
Partner's obligations under this Agreement. 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 each 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 Partner shall be one or
more corporations (or partnerships with corporations as sole General
Partner), they shall be obligated to have a net worth which satisfies
the 89-12 Requirements. If the General Partner shall at any time fail
to meet the requirements of this Section 7.1(b) and no additional
General Partner is admitted pursuant to Section 7.4, 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 or
its designee 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 Partnership 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 7.2 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 Partner or to a successor General
Partner selected in accordance with Section 7.2, as the case may be,
such portion of the Withdrawing General Partner's Interest as such
remaining or successor General Partner 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 provisions of this Section 7.4 shall be sufficient to ensure
the continued treatment of the Partnership as a partnership under the
Code and as a limited partnership 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 Partner pursuant to the provisions of this Section
7.3 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 the General Partner is a corporation and the
General Partner at any time, or from time to time, fails to have a net
worth which satisfies the 89-12 Requirements, the Special Limited
Partner, or its designees shall be admitted (and it hereby agrees to
be admitted), automatically and without further action by them or any
Partner, as additional General Partner, 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 the Lender and Agency. If the 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 Partner shall be deemed to have assigned proportionally to the
additional General Partner, automatically and without further action,
in consideration of $1.00 and any other consideration which may be
agreed upon, such portion of its General Partner Interest so that the
additional General Partner shall receive not less than a one percent
(1%) interest in the profits, losses, tax credits and distributions of
the Partnership, 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. An additional General Partner so admitted
shall automatically become the General Partner and be irrevocably
delegated all of the power and authority of all of the General
Partners pursuant to Section 6.13. The General Partners hereby grant
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 the General Partners of
any of their economic obligations hereunder, and the General Partners
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), 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 his discretion.
(b) 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 documentation 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 Substituted Limited Partner.
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 he 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 Article 8.3 shall be
void and ineffectual and shall not bind or be recognized by the
Partnership.
ARTICLE IX 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. Any Partnership borrowings from any Partner shall be
subject to the prior written consent of the Lender (if required under
applicable regulations or requirements). If any Partner shall lend any
moneys 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 moneys, each such loan 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. Funds provided by the General Partners to the Partnership
pursuant to Section 6.8(a) shall not constitute borrowings for the
purposes of this Section IX or for any other purpose.
ARTICLE X Profits, Losses, Tax Credits, Distributions
and Capital Accounts
10.1 Profits, Losses and Tax Credits
(a) Except as otherwise specifically provided in this Article,
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 l% to the General
Partners.
(b) Except as otherwise specifically provided in this Article,
all profits and losses arising from a Capital Transaction shall be
allocated to the Partners as follows:
As to profits:
First, an amount of profit equal to the aggregate negative
balances (if any) in the Capital Accounts of all Partners
having negative balance Capital Accounts shall be
allocated to such Partners in proportion to their negative
Capital Account balances until all such Capital Accounts
shall have zero balances; and
Second, an amount of profits shall be allocated to each of
the Partners until the positive balance in the Capital
Account of each Partner equals, as nearly as possible, the
amount of cash which would be distributed to such Partner
if the aggregate amount in the Capital Accounts of all
Partners were cash available to be distributed in
accordance with the provisions of Clauses Third, Sixth,
Seventh, Eighth and Ninth of Section 10.2(b).
As to losses:
First, an amount of losses equal to the aggregate positive
balances (if any) in the Capital Accounts of all Partners
having positive balance Capital Accounts shall be
allocated to such Partners in proportion to their positive
Capital Account balances until all such Capital Accounts
shall have zero balances; provided, however, that if the
amount of losses so to be allocated is less than the sum
of the positive balances in the Capital Accounts of those
Partners having positive balances in their Capital
Accounts, then such losses shall be allocated to the
Partners in such proportions and in such amounts so that
the Capital Account balances of each Partner shall equal,
as nearly as possible, the amount such Partner would
receive if an amount equal to the excess of (a) the sum of
all Partners' balances in their Capital Accounts computed
prior to the allocation of losses under this clause First
over (b) the aggregate amount of losses to be allocated to
the Partners pursuant to this clause First were
distributed to the Partners in accordance with the
provisions of Clauses Third, Sixth, Seventh, Eighth and
Ninth of Section 10.2(b).
Second, the balance of such losses shall be allocated 1%
to the General Partners and 99% to the Investment Limited
Partner.
(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 and 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 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 Lender and Agency 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 repayment of any Subordinated Loans;
Third, to the payment of the deferred Construction and
Development Fee;
Fourth, in an amount not to exceed the difference between (i)
$1,819 and (ii) the amount of Cash Flow for such year applied under
Clause Second above, to the payment of the Annual Partnership
Management Fee attributable to such year and then to any accrued
amounts from previous year(s) as to which the Annual Partnership
Management Fee shall not yet have been paid in full; and
Fifth, the balance thereof, if any, shall be distributed
annually, within seventy-five (75) days after the end of the fiscal
year, fifty percent (50%) to the Investment Limited Partner and fifty
percent (50%) to the General Partners;
provided, however, that during such time as Agency regulations are
applicable to the Apartment Complex, the total amount of Cash Flow
which may be so distributed to the Partners in respect to any fiscal
year shall not exceed such amounts as Agency regulations permit to be
distributed.
(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 Partnership (including, but not limited to, all expenses of the
Partnership incident 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, 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;
Third, to the payment to the Investment Limited Partner of the
full amount (including interest) of any Credit Recovery Loans;
Fourth, to the repayment of any Subordinated Loans;
Fifth, to the payment of the Annual Partnership Management Fee
for such year and for any previous year(s) as to which the Annual
Partnership Management Fee has not been paid in full;
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; 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 Partners or
his Affiliates;
Seventh, to the payment to the Investment Limited Partner of an
amount equal to its paid-in capital, less any prior distributions made
to such Investment Limited Partner under this Clause Sixth, but never
an amount less than zero;
Eighth, to the repayment to the General Partners of their paid-
in Capital Contribution minus any prior distributions made to his
under this Clause Seventh and under Section 10.1(b), but never an
amount less than zero; and
Ninth, any balance 50% to the Investment 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 his or 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 negative 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 liquidation or otherwise, (i) any unrealized appreciation or
unrealized depreciation 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 Partners 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 Partner or Partners that
bear the Economic Risk of Loss (within the meaning of Treasury
Regulation Section 1.704-T(b)(4)(iv)(k)(1) with respect to such
obligations in the ratio in which they bear the Economic Risk of
Loss (or to the General Partners in the case of extraordinary
events); and second, the balance of deductions (including all
cost recovery deductions) shall be allocated as provided in
Section 10.1(a). For purposes of this section, extraordinary
events include casualty losses, losses resulting from liability
to third parties for tortious injury, losses resulting from a
breach of legal duty by the Partnership or by the General
Partners, and losses resulting from other liabilities which are
not incurred in the ordinary course of business. Nothing in
this Section 10.4(b)(i) shall prevent the Partnership from
recovering an extraordinary loss from a General Partner who is
liable therefor by law or under this Agreement.
(ii) If any profit arises from the sale of 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 Partners 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 Partner based on Section 10.2(b) or
Section 10.3, as applicable, treating cash payments and purchase
money indebtedness principal interchangeably for this purpose,
and the respective Partners shall receive such respective
percentages 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 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 1.704-1
(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). Profits and losses for
Federal income tax purposes shall be computed and 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 the greater of (a) the portion of such
Partner's share of the net decrease in Partnership Minimum Gain
during the year that is allocable to the disposition of
Partnership property subject to one or more Partnership Non-
Recourse Liabilities or (b) the deficit balance in such
Partner's Capital Account at the end of such year. For purposes
of the foregoing clause (b), a Partner's Capital Account shall
be determined (A) prior to taking into account any other
allocations for the year, (B) by excluding from such negative
Capital Account balance the amount of such Partner's obligation,
if any, to restore a negative balance in such Partner's Capital
Account, (C) by treating each Partner's share of Partnership
Minimum Gain as an obligation to restore a negative balance in
such Partner's Capital Account and (D) by treating a Partner's
share of the minimum gain attributable to Partner Non-Recourse
Debt with respect to which such Partner or a Related Person
bears the economic risk of loss for such debt as an obligation
to restore a negative balance in such Partner's Capital Account.
Such allocations shall be made in a manner consistent with the
requirements of Treasury Regulation Section 1.704T(b)(4)(iv)(e)
under Section 704 of the Code. For purposes of this Section
10.4(b)(vi), a Partner's Capital Account shall be treated as
reduced by Qualified Income Offset items.
(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 proportion to, and to the extent of, an amount equal
to the greater of (a) the portion of such Partner's share of the
net decrease in Partnership Non-Recourse Debt Minimum Gain that
is allocable to the disposition of Partnership property subject
to such debt or (b) the negative balance in such Partner's
Capital Account at the end of such year. For purposes of the
foregoing clause (b), a Partner's Capital Account shall be
determined (A) prior to taking into account any other
allocations for the year, (B) by excluding from such deficit
Capital Account balance the amount of such Partner's obligation,
if any, to restore a negative balance in such Partner's Capital
Account, (C) by treating each Partner's share of Partnership
Minimum Gain as an obligation to restore a negative balance in
such Partner's Capital Account and (D) by treating a Partner's
share of the minimum gain attributable to Partner Non-Recourse
Debt with respect to which such Partner or a Related Person
bears the economic risk of loss for such debt as an obligation
to restore a negative balance in such Partner's Capital Account.
Such allocations shall be made in a manner consistent with the
requirements of Treasury Regulation Section 1.704T(b)(4)(iv)(h)
under Section 704 of the Code. For purposes of this Section
10.4(b)(vii), a Partner's Capital Account shall be treated as
reduced by Qualified Income Offset items.
(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 (actual or deemed), to restore a
negative balance in such Partner's Capital Account, plus (iii)
such Partner's share of Partner Non-Recourse Debt Minimum Gain,
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
Partners or their Affiliates 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 the General Partners in the year(s)
of payment an amount of gross income equal to the amount of such
distribution in such year.
(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, nondeductible 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, nondeductible 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 allocate 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 Partners to the Partnership and the Limited
Partners, and no such allocation shall give rise to any claim or cause
of action by any Limited Partner.
ARTICLE XI Management Agent
A. The General Partners shall engage the Management Agent,
who shall be ▇▇▇▇▇▇▇ Management, Inc., to manage the Apartment Complex
pursuant to the Management Agreement. The Management Agent shall
receive a Management Fee of 9.62% of gross rental receipts payable by
the Partnership for management services in accordance with a
management contract approved by the Lender or 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 (i) 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 and (ii) such new
Management Agreement or modified or extended Management Agreement
provides that it is terminable by the Partnership on thirty (30) days'
notice by the Partnership in the event of any change in the identity
of the General Partners. If the Management Agent obtains an increase
in the Management Fee through the approval of the Lender or Agency,
then the consent to such increase by the Special Limited Partner shall
not be unreasonably withheld.
B. No duplicate property management fees shall be paid to any
Person.
C. If (i) the General Partners are the Management Agent or
the Management Agent is an Affiliate of the General Partners, 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 $1,819 during any
year after 1997, or (ii) an Event of Bankruptcy shall occur with
respect to the Management Agent, or (iii) the Management Agent shall
commit willful misconduct or gross negligence in its conduct of its
duties and obligations under the Management Agreement or (iv) there is
any change in the identity of the General Partners, or (v) the
Management Agent is cited by the Lender or Agency, including any Tax
Credit monitoring or compliance agency of the State or any other
governmental agency for a material violation or alleged material
violation of any applicable rules, regulations or requirements,
including, but not limited to, non-compliance with the Minimum Set-
Aside Test, the Rent Restriction Test or any other Tax Credit-related
provision, 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 the General Partners acting as Management
Agent. With respect to any material violation or alleged violation in
subpart (v) above, the General Partners shall be given a period of
sixty (60) days of such notice of a material violation, to cure the
event or condition giving rise to the removal to the satisfaction of
the Special Limited Partner seeking the removal in its sole and
absolute discretion. The General Partners hereby grant 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 the General Partners 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 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 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 and all 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
Partnership's name with such financial institutions as the General
Partners shall determine. Withdrawals shall be made only in the
regular course of Partnership 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 the
Lender or the Agency ) 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 Boston Capital for all
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.
(c) If the Partnership fails to fulfill any of its obligations
under Section 12.7(a)(i) and/or Section 12.7(a)(ii) within the time
periods set forth therein, at any time thereafter upon notice from the
Special Limited Partner that a change in the identity of the Auditors
is desired, the General Partners, on behalf of the Partnership, shall
promptly terminate the Partnership's engagement of the Auditors, and
the prior written consent of the Special Limited Partner must be
received to the appointment of replacement Auditors. If no such
consent is received to the appointment of replacement Auditors within
thirty (30) days of the notice from the Special Limited Partner to
replace the Auditors, then the Special Limited Partner shall appoint
replacement Auditors of its own choosing, the cost of which shall be
borne by the Partnership as a Partnership expense. All Partners
hereby grant to the Special Limited Partner a special power of
attorney, irrevocable to the extent permitted by law, coupled with an
interest, to so appoint replacement Auditors and to anything else
which in the view of the Special Limited Partner may be necessary or
appropriate to accomplish the purposes of this Section 12.3(c).
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 permitted 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 beneficial assignee certificates
thereof. Notwithstanding the foregoing, however, unless the Consent of
the Investment Limited Partner is received permitting a different cost
recovery schedule, the Partnership shall depreciate its personal and
real property utilizing the alternative depreciation system of Section
168(g)(2)of the Code.
(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 forty-five (45) 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 moneys, 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 together with a
draft of the Partnership's Federal income tax return and,
promptly following the filing thereof with the Service, a final
copy of such return as filed.
(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, if available, which may be unaudited;
(C) a statement of cash flows for the quarter then
ended, which may be unaudited;
(D) a certification of the General Partners that
the Apartment Complex and its tenants are in compliance
with all applicable federal, state, and local requirements
and regulations;
(E) a low-income housing tax credit monitoring
form, a copy of the rent roll for the Apartment Complex, a
statement of income and expenses, an operating statement
and an Occupancy/Rental Report, all in the form specified
by Boston Capital;
(F) all other information which would be pertinent
to a reasonable investor regarding the Partnership and its
activities during the quarter covered by the report; and
(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
Department of the Treasury concerning the status of the Apartment
Complex as low-income housing and any reports filed in connection with
the compliance monitoring conducted by the Authority.
(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 prepared by the General Partners and the
Auditors.
(e) Within 15 days after the end of any calendar quarter
during which:
(i) there is a material default by the Partnership under
the Project Documents or in payment of any mortgage, taxes,
interest or other obligation on secured or unsecured debt,
(ii) any reserve has been reduced or terminated by
application of funds therein for purposes materially different
from those for which such reserve was established,
(iii) the General Partners have received any notice
of a material fact which may substantially affect further
distributions or Tax Credit allocations to any Limited Partner,
(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 the Lender or Agency
or the Authority.
(g) On or before May 1st of each of the Partnership's fiscal
year, the Partnership shall send to the Investment Limited Partner a
report on operations, in the form supplied by Boston Capital.
(h) The General Partners shall cause the Partnership to send
to the Investment Limited Partner a copy of each Construction Mortgage
draw requisition and any notification or correspondence from the
Construction Lender indicating that any such draw shall not be paid as
requisitioned. Upon receipt, the Partnership shall send to the
Investment Limited Partner copies of all documents evidencing any
"carryover allocation" pursuant to Section 42(h)(1)(E) of the Code and
the Form(s) 8609 evidencing the Tax Credit allocation. Promptly after
Permanent Mortgage Commencement, the General Partners shall send to
Boston Capital a closing binder containing photocopies of the fully-
executed versions of all documents signed in connection with the
Permanent Second Mortgage. The General Partners hereby consent to the
Lender's or Agency's providing Boston Capital with copies of all
material communications between any such office and the General
Partners and/or the Partnership, including, but not limited to, any
notices of default. From and after any date upon which the General
Partners receives notice from the Investment Limited Partner that the
Investment Limited Partner would like copies of the monthly rent rolls
for the Apartment Complex to be sent to Boston Capital, the General
Partners shall send copies of the rent rolls to Boston Capital no
later than ten (10) days after the expiration of each month.
(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) Within thirty (30) days of the Completion Date, the
General Partners shall prepare, or cause the Auditors to prepare, and
deliver to each Limited Partner a Tax Credit basis worksheet for each
building in the Apartment Complex, all in a form specified by Boston
Capital.
(k) 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. 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.
(1) On or before January 31 of each Partnership fiscal year,
the Partnership shall send to the Investment Limited Partner copies of
the certificates, memoranda of insurance or other evidence
satisfactory to the Investment Limited Partner that insurance policies
required to be maintained on the Apartment Complex pursuant to Section
6.5(c) are in force, accompanied by a certificate of the General
Partners stating that such insurance policies satisfy the requirements
of Section 6.5(c).
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 termination 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 provisions 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 this Agreement reducing by the amount of
their allocable share of such distribution the amount of Capital
Contribution of the Investment Limited Partner as stated in the last
previous amendment to this Agreement. However, Schedule A shall not
be amended on account of any such distribution. The Partnership shall
amend the Certificate as necessary to effect the substitution of
substituted Limited Partners.
Notwithstanding the foregoing provisions of this Section 13.2,
no such amendments to this Agreement 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 otherwise. Each reference to a
"Section" or an "Article" refers to the corresponding Section or
Article of this Agreement, unless specified otherwise. References to
Treasury Regulations (permanent or temporary) or Revenue Procedures
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 of Ohio.
13.7 Counterparts
This Agreement may be executed in several counterparts and all
so executed shall constitute one agreement binding on all parties
hereto, notwithstanding 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 expressly 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 Agency documents in a manner satisfactory
to the Lender and Agency; (d) no amendment to any provision of the
Project Documents shall become effective without the prior written
consent of the Lender and the Agency (if required); and (e) the
affairs of the Partnership shall be subject to Agency regulations and
no action shall be taken which would require the consent or approval
of the 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
and the Agency (if such consent is then required). No amendment to
this Agreement relating to matters governed by the 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
Apartment 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 Investment Limited Partner to be bound
by the obligations of the Partnership (other than the rules and
regulations of the Agency and the requirements of the Lender and/or
Agency), 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 Consent of the Investment Limited Partner and the prior written
consent of the Special Limited Partner.
13.12 Extraordinary Limited Partner Expenses
Any and all costs and expenses incurred by the Investment
Limited Partner and/or the Special Limited Partner in connection with
exercising rights and remedies against the General Partners with
respect to this Agreement, including without limitation, reasonable
attorneys' fees, shall be paid by the General Partners, if the
Investment Limited Partner and/or the Special Limited Partner are
found to be the prevailing party. All amounts due to the Investment
Limited Partner and/or the Special Limited Partner pursuant to this
provision shall bear interest from demand at a rate of 9%.
If the General Partners breach any provision of this Agreement,
the Investment Limited Partner and/or the Special Limited Partner may
employ an attorney or attorneys to protect its rights hereunder, and
the General Partners shall owe the reasonable attorneys' fees and
expenses incurred by the Investment Limited Partner and/or the Special
Limited Partner only if the Investment Limited Partner and/or Special
Limited Partner are found to be the prevailing party, whether or not a
legal action is actually commenced against the General Partners by
reason of such breach. All amounts due to the Investment Limited
Partner and/or the Special Limited Partner pursuant to this provision
shall bear interest from demand at a rate equal to 9%.
13.13 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 Agreement, 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 favorable to the
Investment Limited Partner.
WITNESS the execution hereof under seal as of the 30th day of
January, 1997.
PARTNERSHIP: NEW DEVONSHIRE II
LIMITED
PARTNERSHIP
By: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Its: General
Partner
/s/▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
By: Fairfield
Homes, Inc.
Its: General
Partner
By: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Its: President
/s/▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
GENERAL PARTNERS: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
FAIRFIELD
HOMES, INC.
By: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Its: President
/s/▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
WITHDRAWING ORIGINAL ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
LIMITED PARTNERS
/s/▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
FAIRFIELD
HOMES, INC.
By: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Its: President
/s/▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
INVESTMENT LIMITED BOSTON CAPITAL
PARTNER: TAX CREDIT FUND IV L.P.,
A Delaware Limited
Partnership
By: Boston
Capital Associates
IV, L.P., its general partner
By: C & M
Associates d/b/a
Boston
Capital Associates,
its
general partner
/s/▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
By: ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, Attorney in
fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
general partner
SPECIAL LIMITED PARTNER: BCTC 94, INC.
/s/▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
By: ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇, Attorney in
fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
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
Amended and Restated Agreement of Limited Partnership notwithstanding
any provision of the Management Agreement to the contrary.
Management Agent: ▇▇▇▇▇▇▇ MANAGEMENT, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NEW DEVONSHIRE II LIMITED PARTNERSHIP,
An Ohio Limited Partnership
Schedule A
As of January 30, 1997
General Partners Capital Contribution
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $7,645
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fairfield Homes, Inc. $7,645
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Special Limited Partner
BCTC 94, Inc. $10.00
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Investment Limited Partner
Boston Capital Tax
$182,
070
Credit Fund IV, A
Limited Partnership
c/o Boston Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇