98. Officer's Certificate (including Organizational Documents and Amended and Restated Agreement of Limiated Partnership))1
KH 1103816
Vista Breeze, Ltd.
APC Vista Breeze, LLC
APCHD MM II Inc.
APC Vista Breeze Development, LLC
Atlantic Pacific Communities, LLC
OFFICER’S CERTIFICATE
(ORGANIZATIONAL DOCUMENTS AND INCUMBENCY)
This Certificate is being furnished by Kenneth Naylor as of December 15, 2023, in his capacity as (i) vice
president of APCHD MM II Inc., a Delaware corporation (the “Manager”), on its own and in its capacity
as manager of APC Vista Breeze, LLC, a Florida limited liability company (the “General Partner”), which
is the managing general partner of Vista Breeze, Ltd., a Florida limited partnership (the “Partnership”); (ii)
Secretary and Vice President of APC Vista Breeze Development, LLC, a Florida limited liability company
(the “Developer”), and (iii) authorized signatory for Atlantic Pacific Communities, LLC, a Delaware
limited liability company (“APC”). The Manager, the General Partner, the Partnership, the Developer, and
APC are sometimes collectively referred to as the “Project Entities,” and each as a “Project Entity.”
The undersigned certifies that he is authorized to execute this certificate on behalf of the Manager and on
behalf of the General Partner, the Partnership, the Developer, and APC in the capacities heretofore
described:
1.Attached hereto as Exhibit A is a true and complete copy of resolutions duly adopted by the
Project Entities on December 15, 2023, which resolutions have not been rescinded or revoked
and remain in full force and effect on the date of this certificate, and which resolutions are the
only currently effective consents, votes or resolutions relating to the subject matter thereof
adopted by the Project Entities and are not inconsistent or in conflict with any other currently
effective consents, votes or resolutions adopted by the Project Entities.
2.Partnership:
a.Attached hereto as Exhibit B-1 is a true, correct, complete and certified copy of the
Certificate of Limited Partnership of the Partnership, as filed with the Secretary of State
of the State of Florida on October 20, 2020. No further proceedings for the amendment,
modification or rescission thereof are pending or contemplated and no action has been
taken by the Partnership or its General Partner in contemplation of the liquidation or
dissolution of the Partnership.
b.Attached hereto as Exhibit B-2 is the Partnership’s Amended and Restated Agreement
of Limited Partnership entered into as of December 15, 2023, which remains in full
force and effect as of the date hereof.
KH 1103816
c. Attached hereto as Exhibit B-3is a true, correct and complete copy of the Certificate of
Status for the Partnership issued by the Secretary of State of the State of Florida.
3. General Partner:
a. Attached hereto as Exhibit C-1 is a true, correct, and complete copy of the General
Partner’s Articles of Organization, as filed with the Secretary of State of the State of
Florida on October 6, 2020, and which has not been amended, modified or rescinded in
any manner. No proceedings for the amendment, modification or rescission thereof
are pending or contemplated.
b. Attached hereto as Exhibit C-2 is a true, correct and complete copy of the General
Partner’s Operating Agreement which was entered into as of August 18, 2022, and
which has not been amended, modified or rescinded since the date thereof, and remains
in full force and effect as of the date hereof.
c. Attached hereto as Exhibit C-3 is a true, correct and complete copy of the Certificate of
Status for the General Partner issued by the Secretary of State of the State of Florida.
4. Manager:
a. Attached hereto as Exhibit D-1 is a true, correct and complete copy of the Articles of
Incorporation of the Manager, as filed with the Division of Corporations of the State of
Delaware on October 7, 2016, and which has not been amended, modified or rescinded
in any manner. No proceedings for the amendment, modification or rescission thereof
are pending or contemplated.
b. Attached hereto as Exhibit D-2 is a true, correct and complete copy of the Application
by Foreign Corporation for Authorization to Transact Business in Florida of the
Manager, as filed with the Secretary of State of the State of Florida on April 18, 2018.
c. Attached hereto Exhibit D-3 is a true, correct and complete copy of the Bylaws of the
Manager, certified as true and correct by the Vice President of the Manager, which has
not been amended, modified or rescinded in any manner. No proceedings for the
amendment, modification or rescission thereof are pending or contemplated.
d. Attached hereto as Exhibit D-4 is a true, correct and complete copy of the Certificate of
Good Standing for the Manager issued by the Secretary of State of the State of
Delaware.
e. Attached hereto as Exhibit D-5 is a true, correct and complete copy of the Certificate of
Status for the Manager issued by the Secretary of State of the State of Florida.
KH 1103816
5.Developer:
a.Attached hereto as Exhibit E-1 is a true, correct, and complete copy of the Developer’s
Articles of Organization, as filed with the Secretary of State of the State of Florida on
October 6, 2020; and which has not been further amended, modified or rescinded in any
manner. No proceedings for the amendment, modification or rescission thereof are
pending or contemplated.
b.Attached hereto as Exhibit E-2 is a true, correct and complete copy of the Developer’s
Operating Agreement entered into as of August 18, 2022, which has not been amended,
modified or rescinded in any manner. No proceedings for the amendment, modification
or rescission thereof are pending or contemplated.
c.Attached hereto as Exhibit E-3 is a true, correct and complete copy of the Certificate of
Status for the Developer issued by the Secretary of State of the State of Florida.
6.APC:
a.Attached hereto as Exhibit F-1 is a true, correct and complete copy of the Certificate of
Formation of APC, as filed with the Division of Corporations of the State of Delaware on
July 29, 2013, as amended by the Certificate of Amendment filed with the Division of
Corporations of the State of Delaware on September 12, 2013; and which has not been
further amended, modified or rescinded in any manner. No proceedings for the
amendment, modification or rescission thereof are pending or contemplated.
b.Attached hereto as Exhibit F-2 is a true, correct and complete copy of the Application by
Foreign Limited Liability Company for Authorization to Transact Business in Florida of
APC, as filed with the Secretary of State of the State of Florida on September 18, 2013.
c.Attached hereto Exhibit F-3 is a true, correct and complete copy of APC’s Operating
Agreement entered into as of September 11, 2013, as amended by the First Amendment
to Operating Agreement entered into as of September 20, 2013; and which has not been
further amended, modified or rescinded in any manner. No proceedings for the
amendment, modification or rescission thereof are pending or contemplated.
d.Attached hereto as Exhibit F-4 is a true, correct and complete copy of the Certificate of
Good Standing for APC issued by the Secretary of State of the State of Delaware.
e.Attached hereto as Exhibit F-5 is a true, correct and complete copy of the Certificate of
Status for the APC issued by the Secretary of State of the State of Florida.
7.The following is a complete list of the general partners and investor limited partners of the
Partnership at the time of the adoption of the resolutions mentioned above:
KH 1103816
APC Vista Breeze, LLC, a Florida limited liability company – Managing General Partner
Vista Breeze HACMB Inc., a Florida corporation – Co-General Partner Howard D.
Cohen Revocable Trust u/a/d 4/6/1993 – Limited Partner
8.The following persons were and are the duly elected, qualified and acting officers of the
respective entities below at the time of and all times since the date of adoption of the resolutions
mentioned above:
For General Partner:
Name Title
Howard D. Cohen Chief Executive Officer
Randy Weisburd President
Kenneth Cohen Vice President
Stanley Cohen Vice President
Kenneth Naylor Secretary and Vice President
For Manager:
Name Title
Howard D. Cohen Chief Executive Officer
Randy Weisburd President
Kenneth Cohen Vice President, Treasurer and Secretary
Stanley Cohen Vice President
Kenneth Naylor Vice President
For Developer:
Name Title
Howard D. Cohen Chief Executive Officer
Randy Weisburd President
Kenneth Cohen Vice President
Stanley Cohen Vice President
Kenneth Naylor Secretary and Vice President
For APC:
Name Title
Howard D. Cohen Chairperson and Chief Executive Officer
Randy K. Weisburd President
Stanley Cohen Vice President
Kenneth Cohen Vice President, Treasurer and Secretary
KH 1103816
Kenneth Naylor Vice President and Authorized Signatory
[signatures follow]
KH 1103816
EXHIBIT A TO CERTIFICATE
Resolutions of the Project Entities
1
KH 1103541.8
WRITTEN CONSENT
OF
Vista Breeze, Ltd.
APC Vista Breeze, LLC,
APCHD MM II Inc.,
APC Vista Breeze Development, LLC,
Atlantic Pacific Communities, LLC
(each a “Project Entity” and collectively the “Project Entities”)
And
Vista Breeze HACMB, Inc.
(the “Consenting Entity”)
The undersigned hereby adopt the following resolutions by written consent:
Definitions:
Development:
Owner:
Investor:
Admission:
Ownership Documents:
New Construction of 119 units of low-income housing located
in Miami Beach, Miami-Dade County, Florida and commonly
known as Vista Breeze.
Vista Breeze, Ltd., a Florida limited partnership
Bank of America, N.A. (“BoA”)
Investor will become a limited partner of Owner and pursuant
thereto, make a series of capital contributions in the aggregate
amount of approximately $26,310,928. HACMB—Vista
Breeze, LLC will withdraw from the Owner and Vista Breeze
HACMB, Inc. will be admitted in its stead as administrative
general partner.
All documents to be executed in connection with the
Admission, including, without limitation, the amended and
restated partnership agreement; guaranty agreement; and
development agreement.
Lenders: 1.BoA; Citibank, N.A. (“Citi”), Housing Finance Authority of
Miami-Dade County (“HFA/MDC”), Florida Housing
Finance Corporation (“FHFC”), Miami-Dade County
(“County Lender”); City of Miami Beach (“City Lender”);
and Housing Authority of the City of Miami Beach
(“Sponsor Lender”).
Loans: All of the following loans made by the Lenders:
2.HFA/MDC will make a construction loan to Owner financed
by the proceeds received from a funding loan made by BoA
to HFA/MDC (“Bonds”), in a principal amount not to
exceed $32,500,000 (“Bond Loan”)
3.Citi will commit to acquire the BoA funding loan (in part)
and thereby enable a permanent loan in a principal amount
2
KH 1103541.8
in the expected amount of $11,875,000 (“Permanent
Loan”)
4. FHFC will make a mortgage loan to Owner in a principal
amount of $4,300,000 (“Viability Loan”) using funds from
the Viability Loan Program.
5. FHFC will make a mortgage loan to Owner in a principal
amount of $3,000,000 (“SAIL Loan”) using funds from the
State Apartment Incentive Loan Program.
6. FHFC will make a mortgage loan to Owner in a principal
amount of $600,000 (“ELI Loan”).
7. FHFC will make a mortgage loan to Owner in a principal
amount of approximately $1,301,500 (“NHTF Loan”) using
funds from the National Housing Trust Fund.
8. County Lender will make a mortgage loan to Owner in a
principal amount of $5,950,000 (“Surtax Loan”).
9. City Lender will make a mortgage loan to Owner in a
principal amount of $1,003,969 (“HOME Loan”) using
funds from the HOME Investment Partnerships Program.
10. Sponsor Lender will take back a loan in connection with the
Ground Lease in a principal amount of $8,800,000
(“Sponsor Loan”)
Finance Documents: All documents to be executed by any Project Entity in
connection with:
1. the Bond Loan, including, without limitation, a commitment
letter; land use restriction agreement; subordination
agreements; construction phase borrower loan agreement;
construction phase project loan note; leasehold mortgage,
assignment of rents, security agreement and fixture filing;
guaranty agreement; fee guaranty and environmental
indemnity agreement; absolute and unconditional guaranty
of recourse obligations; absolute and unconditional guaranty
of operating deficits; absolute and unconditional guaranty of
completion; construction loan servicing agreement;
construction disbursement agreement; environmental
indemnification and release agreement; assignment of
management agreement and subordination of management
agreement and fees; consent to assignment of AHAP
contract as security for financing; assignment of agreement
to enter into a housing assistance payments agreement;
collateral assignment and pledge of partnership interests and
security agreement; collateral assignment and pledge of
developer fees and security agreement; investor equity
assignment and security agreement; assignment of contracts;
insurance anti-coercion statement; environmental
3
KH 1103541.8
indemnification and release agreement; development budget
certification; borrower and managing general partner’s
affidavit;
2. the Permanent Loan including, without limitation, an
amended and restated borrower loan agreement; a Forward
Purchase Agreement and all documents referenced therein
or to be executed in connection therewith;
3. the SAIL Loan including, without limitation, a commitment
letter; promissory note; construction loan agreement;
mortgage; security agreement; land use restriction
agreement; subordination agreements; assignment of
permits, agreements, approvals, fees and deposits;
compliance monitoring and servicing agreement;
environmental indemnity agreement; further assurance
agreement; guaranty of recourse obligations; completion and
operating deficit guaranty; and financing statements;
4. the ELI Loan including, without limitation, a commitment
letter; promissory note; construction loan agreement;
mortgage; security agreement; land use restriction
agreement; subordination agreements; assignment of
permits, agreements, approvals, fees and deposits;
compliance monitoring and servicing agreement;
environmental indemnity agreement; further assurance
agreement; guaranty of recourse obligations; completion and
operating deficit guaranty; and financing statements;
5. the NHTF Loan, including, without limitation, a
commitment letter; promissory note; construction loan
agreement; mortgage and security agreement; land use
restriction agreement; assignment of leases, rents and
contract rights; subordination agreements; environmental
indemnity agreement; further assurance agreement;
assignment of permits, agreements, approvals, fees and
deposits; completion and operating deficit guaranty;
compliance monitoring and servicing agreement; guaranty
of recourse obligations; and financing statements;
6. the Surtax Loan including, without limitation, a commitment
letter; loan agreement; mortgage, security agreement and
assignments of leases, rents and profits; rental regulatory
agreement; subordination agreements; assignment of leases,
rents and contract rights; promissory note; environmental
indemnity agreement; and financing statements;
7. the HOME Loan, including, without limitation, a
commitment letter; a promissory note; program
development agreement; declaration of restrictive
covenants; and mortgage and security agreement; and
4
KH 1103541.8
8. the Sponsor Loan including, without limitation, a
promissory note, note covenant agreement, and leasehold
mortgage and security agreement.
Real Estate Documents:
All documents to be executed or recorded by any Project Entity
in connection with the acquisition of the leasehold interest in
real property upon which the Development is to be constructed
(the “Land”), and the development and operating of the
Development, including, without limitation: a second amended
and restated ground lease agreement and a property management
agreement.
LIHTC Documents:
Construction Documents:
All documents to be executed or recorded by any Project Entity
in connection with the award of low-income housing tax credits
(“Credits”) by the allocating agency of Florida, including,
without limitation, a tax credit reservation letter; 42(m) letters;
and (at placement in service) an extended use agreement.
All documents to be executed by any Project Entity in
connection with the construction of the Development, including,
without limitation, a construction contract and an architect
agreement.
Transaction Documents: The Ownership Documents, Finance Documents, Real Estate
Documents, LIHTC Documents, and Construction Documents.
RESOLVED, that each of the Project Entities (i) in its own capacity, and (ii) in its capacity as the
director(s), officer(s), shareholder(s), partners(s), member(s), managing member(s), and/or manager(s) of
the other Project Entities, as applicable, are hereby authorized, empowered, and directed to take all
actions necessary or desirable to (a) complete the Admission; (b) enable Owner to obtain the Bond Loan,
Permanent Loan, NHTF Loan, SAIL Loan, ELI Loan, Surtax Loan, HOME Loan; and Sponsor Loan; (c)
acquire an interest in the Development; (d) cause the Development to be constructed and operated, on
such terms and conditions that the applicable authorized representative (identified below) deems
appropriate, and (e) allow the Owner to become and to remain eligible to claim the Credits in connection
with the Development;
FURTHER RESOLVED, that each of the Project Entities (i) in its own capacity, and (ii) in its
capacity as the director(s), officer(s), shareholder(s), partner(s), member(s), managing member(s), and/or
manager(s) of the other Project Entities, as applicable, are hereby authorized, empowered, and directed to
5
KH 1103541.8
execute, deliver, and perform under each of the Transaction Documents to which it is a party, on such
terms and conditions that the applicable authorized representative (identified below) deems appropriate;
FURTHER RESOLVED, that Kenneth Naylor and Randy Weisburd (each an “Authorized
Representative” and whose specimen signatures are attached hereto as Exhibit A) are individually
authorized and directed on behalf of each of the Project Entities to (i) take all other actions necessary to
carry out the intent and purposes of the foregoing resolutions, (ii) enter into, execute, and deliver on
behalf of each of the Project Entities, as applicable, the Transaction Documents to which they are a party
and any and all other documents that the Authorized Representative deems necessary or appropriate for
the consummation of the transactions contemplated herein, and (iii) as may be necessary for the benefit of
each of the Project Entities, to supplement, reaffirm, amend or modify the Transaction Documents to
which they are a party, at any time;
FURTHER RESOLVED, that all acts, actions, or agreements undertaken prior to the adoption of
these resolutions by any of the Project Entities or any of its representatives in connection with matters of
the type set forth in the foregoing resolutions are hereby ratified, confirmed, and adopted by each of the
Project Entities;
FURTHER RESOLVED, that the Consenting Entity consents (pursuant to, but only to the extent
required by, the initial partnership agreement of Vista Breeze, Ltd., and that certain Master Development
Agreement between the Housing Authority of the City of Miami Beach and Atlantic Pacific
Communities, LLC) to the acts, actions, or agreements authorized hereunder to be taken by any Project
Entity.
FURTHER RESOLVED, that the foregoing resolutions are intended to be and may be relied
upon by any person or entity involved in any one or more of the actions comprising the above-described
transactions.
The undersigned hereby adopt the foregoing resolutions and have executed this written consent
effective as of December 15, 2023.
[signature pages follows]
KH 1103541.8
Exhibit A
Specimen Signatures of the Authorized Representatives
KH 1103816
EXHIBIT B-1 TO CERTIFICATE
Certificate of Limited Partnership of the Partnership
850-617-6381 10/21/2020 12:49:38 PM PAGE 2/002 Fax Server
October 21, 2020
VISTA BREEZE, LTD.
161 NW 6TH ST., STE. 1020
MIAMI, FL 33136
FLORIDA DEPARTMENT OF STAII,
Division of Corporations
The Certificate of Limited Partnership of VISTA BREEZE, LTD., a Florida
Limited Partnership or Limited Liability Limited Partnership was filed on
October 20, 2020 and assigned document number A20000000470. Please refer
to this number whenever corresponding with this office.
The certification you requested is enclosed. To be official, the
certification for a certified copy must be attached to the original
document that was electronically submitted and filed under FAX audit
number H20000365234.
To maintain "active" status with the Division of Corporations, an annual
report must be filed yearly between January 1st and May 1st beginning in
the year following the file date or effective date indicated above. If
the annual report is not filed by May 1st, a $400 late fee will be added.
It is your responsibility to remember to file your annual report in a
timely manner.
A Federal Employer Identification Number (FEI/EIN) will be required when
this report is filed. Apply today with the IRS online at:
https://sa.www4.irs.gov/modiein/individual/index.jsp
Please be aware if this entity's address changes, it is the responsibility
of the entity to notify this office.
Should you have any further questions concerning this matter, please
contact this office at the address given below.
KYLE D BRUMBLEY
Regulatory Specialist II Supervisor
Registration Section
Division of Corporations Letter Number: 220A00020865
P.O BOX 6327 — Tallahassee, Flonda 32314
850-617-6381 10/21/2020 12:49:38 PM PAGE 1/002 Fax Server
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I certify the attached is a true and correct copy of the Certificate of
Limited Partnership of VISTA BREEZE, LTD., a Limited Partnership or
Limited Liability Limited Partnership organized under the laws of the
state of Florida, filed on October 20, 2020, as shown by the records of
this office.
I further certify the document was electronically received and filed under
7: FAX audit number H20000365234. This certificate is issued in accordance
with section 15.16, Florida Statutes, and authenticated by the code noted
below.
C
,0 The document number of this limited partnership is A20000000470.
V 9C
Authentication Code: 220A00020865-102120-A20000000470-1/1
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Twenty-first day of October, 2020
Secretary of State
xxxxonaingownximgen
XD C
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JI
CERTIFICATE OF LIMITED PARTNERSHIP
OF
VISTA BREEZE, LTD.
Pursuant to the Florida Revised Uniform Limited Partnership Act of 2005, the
undersigned General Partners of Vista Breeze, Ltd., a Florida limited partnership (the
"Partnership"), hereby execute and submit for filing with the Florida Department of State this
Certificate of Limited Partnership, to read as follows:
1. The name of the Limited Partnership is:
VISTA BREEZE, LTD.
2. The mailing address and street address of the Partnership currently is:
161 NW 6TH St., Suite 1020
Miami, Florida 33136
3. The name and address of the agent for service of process on the
Partnership are:
Brian J. McDonough
2200 Museum Tower
150 West Flagler Street
Miami, Florida 33130
4. The name and address of the General Partner of the Partnership is:
Document No: L20000304327
APC Vista Breeze, LLC
161 NW 6TH St., Suite 1020
Miami, Florida 33136
Document No. L20000314784
HACMB — Vista Breeze, LLC
200 Alton Road
Miami Beach, FL 33139
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Limited Partnership as General Partners, pursuant to the provisions of Section 620.1204 of the
Florida Revised Uniform Limited Partnership Act of 2005.
DATED: October 20 , 2020 GENERAL PARTNERS:
APC VISTA BREEZE, LLC, a Florida
limited liability company
By:
Name: Howard D. Cohen
Title: Chief Executive Officer
HACMB — VISTA BREEZE, LLC
By:
Name:
Title:
ACCEPTANCE OF APPOINTMENT OF REGISTERED AGENT
I, Brian J. McDonough, hereby accept my appointment as registered agent for
Vista Breeze, Ltd., a Florida limited partnership. I further agree to comply with the provisions of
all statutes relative to the proper and complete performance of my duties, and I am familiar with
and accept the obligations of my position as registered agent.
DATED: ()e Jo , 2020
-2-
#8923667 vl
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Limited Partnership as General Partners, pursuant to the provisions of Section 620.1204 of the
Florida Revised Uniform Limited Partnership Act of 2005.
October 20 , 2020DATED: GENERAL PARTNERS:
APC VISTA BREEZE, LLC, a Florida
limited liability company
By:
Name: Howard D. Cohen
Title: Chief Executive Officer
A BREEZE, LLC
By:
Name: Miguell Del Ca • 1
Title: Executive Director
ACCEPTANCE OF APPOINTMENT OF REGISTERED AGENT
I, Brian J. McDonough, hereby accept my appointment as registered agent for
Vista Breeze, Ltd., a Florida limited partnership. I further agree to comply with the provisions of
all statutes relative to the proper and complete performance of my duties, and I am familiar with
and accept the obligations of my position as registered agent.
DATED: (9‘.-bher , 2020
#8923667 vl
KH 1103816
EXHIBIT B-2 TO CERTIFICATE
Amended and Restated Agreement of Limited Partnership of the Partnership
EXECUTION VERSION
#231323409_v6
___________________
VISTA BREEZE, LTD.
___________________
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
Dated as of December 15, 2023
#231323409_v6
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS ......................................................................................................1
ARTICLE II CONTINUATION, NAME AND PURPOSE ..........................................................27
Section 2.1 Continuation ...............................................................................................27
Section 2.2 Name and Office; Agent for Service .........................................................27
Section 2.3 Purpose .......................................................................................................28
Section 2.4 Authorized Acts .........................................................................................28
ARTICLE III TERM AND DISSOLUTION ................................................................................29
ARTICLE IV PARTNERS; CAPITAL .........................................................................................30
Section 4.1 General Partners .........................................................................................30
Section 4.2 Limited Partners .........................................................................................30
Section 4.3 Partnership Capital and Capital Accounts .................................................31
Section 4.4 Withdrawal of Capital ................................................................................32
Section 4.5 Liability of Limited Partners ......................................................................33
Section 4.6 Additional Limited Partners .......................................................................33
Section 4.7 Agreement to be Bound by Documents .....................................................33
ARTICLE V CAPITAL CONTRIBUTIONS OF INVESTOR LIMITED PARTNER ................33
Section 5.1 Installments of Capital Contributions ........................................................33
Section 5.2 Adjustment to Capital Contributions of Investor Limited Partner .............36
Section 5.3 Repurchase of Investor Limited Partner’s Interest ....................................39
Section 5.4 Redemption of Partnership Interest ...........................................................41
ARTICLE VI RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNERS ...............43
Section 6.1 Restrictions on Authority ...........................................................................43
Section 6.2 Partnership Audits ......................................................................................45
Section 6.3 Business Management and Control; Designation of Managing
General Partner; Certain Rights of the Special Limited Partner ................53
Section 6.4 Duties and Obligations of the General Partners .........................................54
Section 6.5 Representations, Warranties and Covenants ..............................................61
Section 6.6 Indemnification ..........................................................................................69
Section 6.7 Obligation to Complete Construction and to Pay Development Costs
....................................................................................................................70
Section 6.8 Obligation to Provide for Operating Expenses ..........................................71
Section 6.9 Certain Payments to the General Partners and Affiliates ...........................71
Section 6.10 Joint and Several Obligations ....................................................................72
Section 6.11 Reserve Accounts .......................................................................................72
ARTICLE VII WITHDRAWAL AND REMOVAL OF A GENERAL PARTNER ....................73
Section 7.1 Voluntary Withdrawal ...............................................................................73
Section 7.2 Obligation to Continue ...............................................................................74
Section 7.3 Successor General Partner .........................................................................75
Section 7.4 Interest of Predecessor General Partner .....................................................75
ii
#231323409_v6
Section 7.5 Designation of New General Partners ........................................................75
Section 7.6 Amendment of Certificate; Approval of Certain Events ...........................76
Section 7.7 Removal or Nonconsensual Retirement of the General Partners...............76
ARTICLE VIII TRANSFER OF LIMITED PARTNER INTERESTS ........................................81
Section 8.1 Right to Assign ..........................................................................................81
Section 8.2 Substitute Limited Partners ........................................................................82
Section 8.3 Assignees ...................................................................................................82
ARTICLE IX LOANS; MORTGAGE REFINANCING; PROPERTY DISPOSITION ..............83
Section 9.1 General .......................................................................................................83
Section 9.2 Refinancing and Sale .................................................................................84
Section 9.3 Sales Commissions ....................................................................................84
ARTICLE X PROFITS, LOSSES AND DISTRIBUTIONS ........................................................85
Section 10.1 Distributions Prior to Dissolution ..............................................................85
Section 10.2 Distributions Upon Dissolution .................................................................87
Section 10.3 Profits and Losses ......................................................................................88
Section 10.4 Special Allocation Provisions ....................................................................88
Section 10.5 Allocations for Income Tax Purposes ........................................................90
Section 10.6 General Rules .............................................................................................91
Section 10.7 Order of Application ..................................................................................91
ARTICLE XI MANAGEMENT AGENT .....................................................................................91
Section 11.1 Management Agent ....................................................................................91
Section 11.2 Special Power of Attorney .........................................................................93
ARTICLE XII BOOKS AND REPORTING, ACCOUNTING, TAX ELECTION, ETC. ...........94
Section 12.1 Books, Records and Reporting ..................................................................94
Section 12.2 Bank Accounts ...........................................................................................96
Section 12.3 Elections .....................................................................................................96
Section 12.4 Special Adjustments...................................................................................97
Section 12.5 Fiscal Year .................................................................................................97
Section 12.6 Inspections, Cooperation............................................................................97
ARTICLE XIII GENERAL PROVISIONS ...................................................................................98
Section 13.1 Notices .......................................................................................................98
Section 13.2 Word Meanings ..........................................................................................98
Section 13.3 Binding Provisions .....................................................................................98
Section 13.4 Applicable Law ..........................................................................................98
Section 13.5 Counterparts ...............................................................................................98
Section 13.6 Paragraph Titles .........................................................................................98
Section 13.7 Separability of Provisions; Rights and Remedies ......................................99
Section 13.8 Effective Date of Admission ......................................................................99
Section 13.9 Delivery of Certificate .............................................................................100
Section 13.10 Additional Information ............................................................................100
Section 13.11 Further Documents and Actions ..............................................................100
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Section 13.12 Brokers or Finders....................................................................................100
Section 13.13 Amendment ..............................................................................................100
Section 13.14 Publicity Rights ........................................................................................100
ARTICLE XIV ANTI-BRIBERY/ANTI-CORRUPTION ..........................................................101
Section 14.1 Anti-Bribery/Anti-Corruption Representations and Warranties. .............101
Exhibit A: Schedule of Partners
Exhibit B: Related Agreements
Exhibit C: Insurance Requirements
Exhibit D: Form of Guaranty Agreement of HACMB
Exhibit E: Second Installment Payment Certificate
Attachment A, 100% Completion Certificate
Exhibit F: Third Installment Payment Certificate
Attachment A, Determination of Debt Service Coverage Ratio
Exhibit G: Fourth Installment Payment Certificate
Attachment A, Determination of Tax Credit
Exhibit H: Certificate of Achievement of Development Obligation Date
Exhibit I: Environmental Reports
Exhibit J: Initial Economic Projections
Exhibit K: Tax Credit Management Requirements
Attachment A, Certification Regarding Vista Breeze
Exhibit L: Initial Unit Designations
Exhibit N: Summary of Partnership Elections and Special Allocations
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VISTA BREEZE, LTD.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP dated as of
December 15, 2023, among APC VISTA BREEZE, LLC, a Florida limited liability company, as
Managing General Partner (the “Managing General Partner”); VISTA BREEZE HACMB, INC.,
a Florida nonprofit corporation, as Administrative General Partner (the “Administrative General
Partner”); BANK OF AMERICA, N.A., a national banking association, as Investor Limited
Partner (the “Investor Limited Partner”); BANC OF AMERICA CDC SPECIAL HOLDING
COMPANY, INC., a North Carolina corporation, as Special Limited Partner (the “Special Limited
Partner”); HACMB – VISTA BREEZE, LLC, a Florida limited liability company, as the
Withdrawing Administrative General Partner (“Withdrawing Administrative General Partner”)
and HOWARD D. COHEN REVOCABLE TRUST U/A/D 4/6/1993, as the Withdrawing Limited
Partner (the “Withdrawing Limited Partner”).
Preliminary Statement
The Partnership was formed as a limited partnership under the Uniform Act pursuant to a
Limited Partnership Agreement dated as of August 22, 2022, (the “Original Partnership
Agreement”) and a Certificate of Limited Partnership dated as of October 20, 2022 (the
“Certificate”) filed with the Office of the Secretary of State of the State of Florida (the “Filing
Office”) on October 20, 2022.
The purposes of this amendment to, and restatement of, the Original Partnership
Agreement are to (i) admit the Investor Limited Partner and the Special Limited Partner as
Partners; (ii) provide for the withdrawal of the Withdrawing Limited Partner as Limited Partner
and the withdrawal of the Administrative General Partner as Administrative General Partner; and
(iii) to set out more fully the rights, obligations and duties of the Partners.
Now, therefore, it is agreed and certified, and the Original Partnership Agreement is hereby
amended and restated in its entirety, as follows:
ARTICLE I
DEFINED TERMS
The defined terms used in this Agreement shall have the meanings specified below:
“40-60 Test” means the method for complying with the Minimum Set-Aside Test set forth
in Section 42(g)(1)(B) of the Code.
“Accountants” means Novogradac, Tidwell Group LLC, CohnReznick LLP or any other
firm of certified public accountants as may be engaged by the General Partners with the Consent
of the Investor Limited Partner.
“Adjusted Aggregate Federal Low Income Tax Credit Amount” means the product of (i)
99.99% and (ii) the aggregate amount of Federal Low Income Tax Credits that is determined by
the Accountants, at Cost Certification, to be available to the Property (and is reflected in the final
IRS Form(s) 8609 for the Property) for the entire Credit Period, as such amount may be increased
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or decreased as a result of a subsequent determination by the Accountants, a Final Determination
or a Recapture Event.
“Adjusted Capital Account” means, with respect to any Partner, the Capital Account of
such Partner as of the end of the relevant Taxable Year, after giving effect to the adjustments
described in the definition of “Adjusted Capital Account Deficit.”
“Adjusted Capital Account Deficit” of any Partner means, as of any particular date, the
deficit balance, if any, in such Partner’s Capital Account as of such date, as determined in the
manner provided in Section 4.3B and by then adjusting such Capital Account as so determined as
follows:
(i) Such Capital Account shall be increased to reflect any amounts which such Partner
is obligated to restore to the Partnership under any provision of this Agreement or is treated as
being obligated to restore under Treas. Reg. § 81.704-1(b)(2)(ii)(c) or is deemed to be obligated
to restore pursuant Treas. Reg. §§ 1.704-2(g)(l) and 1.704-2(i)(5); and
(ii) Such Capital Account shall be reduced to reflect any items described in Treas. Reg.
§ 1.704-l(b)(2)(ii)(d)(4), (5) and (6).
“Administrative General Partner” means, Vista Breeze HACMB, Inc., a Florida nonprofit
corporation.
“Admission Date” means the date on which the Investor Limited Partner is admitted to the
Partnership pursuant to Section 13.8.
“Adverse Consequences” means (i) all damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses and fees, including
court costs and reasonable attorneys’ fees and expenses actually paid, or reasonably expected to
be paid, by the party suffering the Adverse Consequences in connection with any and all actions,
suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, and rulings and (ii) the costs of any fees or other compensation to third
parties reasonably required in connection with replacement of a General Partner.
“Affiliate” means, when used with reference to a specified Person: (i) any Person that,
directly or indirectly, through one or more intermediaries, controls or is controlled by or is under
common control with the specified Person; (ii) any Person that is an officer of, partner in, or trustee
of, or serves in a similar capacity with respect to the specified Person or of which the specified
Person is an officer, partner, or trustee, or with respect to which the specified Person serves in a
similar capacity; (iii) any Person that, directly or indirectly, is the beneficial owner of, or controls,
10% or more of any class of equity securities of, or otherwise has a substantial beneficial interest
(10% or more) in, the specified Person, or of which the specified Person is directly or indirectly
the owner of 10% or more of any class of equity securities, or in which the specified Person has a
substantial beneficial interest (10% or more); and (iv) any relative or spouse of the specified
Person. Affiliate of the Partnership or a General Partner does not include a Person who is a partner
in a partnership or joint venture with the Partnership unless that Person is an Affiliate of the
Partnership or General Partner.
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“After-Tax Basis” means with respect to any payment to be received by a Person (or, in the
case of a passthrough entity, the partners or members of such Person), the amount of such payment
supplemented by a further payment or payments so that, after deducting from such payments the
amount of all Taxes (net of any current credits, deductions or other tax benefits arising from the
payment by such Person (or its partners or members) of any amount, including Taxes, for which
the payment to be received is made) imposed currently on such Person by any Governmental
Agency or other taxing authority with respect to such payments, the balance of such payments
shall be equal to the original payment received; provided, however, for the purposes of this
definition, and for purposes of any payment to be made to a Person (or its partners or members)
on an After-Tax Basis, it shall be assumed that federal, state and local taxes are payable at the
actual marginal federal and state statutory income tax rate (taking into account the deductibility of
state income taxes for federal income tax purposes) applicable to such Person.
“Agreement” means this Amended and Restated Agreement of Limited Partnership, as
amended from time to time.
“Allocation Regulations” means the Treasury Regulations promulgated under Section
704(b) of the Code, as the same may be amended or restated from time to time. In the event that
the Allocation Regulations are amended or restated subsequent to the Admission Date, references
herein to sections or paragraphs of the Allocation Regulations shall be deemed to be references to
the applicable sections or paragraphs of the Allocation Regulations as then in effect.
“Appraised Value” means, as of the Determination Date, the estimated fair market value
of an asset determined by an Independent Appraiser in accordance with the procedures set forth in
Section 7.7F. In determining the Appraised Value of the real estate comprising the Property, such
Independent Appraiser shall take into account the rent and occupancy restrictions affecting the
Project which are set forth in the Code or in the Project Documents, as well as any increase in real
estate taxes which is triggered by the removal of a General Partner.
“Architect” means Brooks + Scarpa Architects, Inc., a Florida corporation, and its
successors.
“Asset Management Fee” means an annual fee payable to the Special Limited Partner equal
to $10,000 per year, earned on an annual basis, beginning on the first day of the first month
following Permanent Mortgage Commencement (with a pro-rata share of such fee earned for any
partial calendar year) and increasing annually at a rate of 3%. The Asset Management Fee is
payable solely from available Cash Flow and Capital Proceeds as provided in Section 10.1A and
10.1B and shall accrue, without interest, until there is sufficient cash available to pay accrued Asset
Management Fee as set forth in Section 10.1A and 10.1B.
“Bank of America” means Bank of America, N.A, a national banking association.
“Average Income Test” means the method for complying with the Minimum Set-Aside
Test set forth in Section 42(g)(1)(C) of the Code.
“Borrower Equity Account” shall mean the Borrower Equity Account of the Project Loan
Fund as such terms are defined in the Funding Loan Agreement.
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“Builder” means Atlantic Pacific Community Builders, LLC, a Delaware limited liability
company, and its successors.
“Building” or “Buildings” means the two (2) buildings to be located on the Land which
will, upon completion of construction, contain 119 dwelling units for seniors (ages 55 years and
older).
“Capital Account” means, with respect to any Partner, the individual capital account
maintained by the Partnership with respect to such Partner, in accordance with the provisions of
Section 4.3.
“Capital Contribution” means the total amount of cash contributed or agreed to be
contributed to the Partnership by each Partner as shown in the Schedule. Any reference in this
Agreement to the Capital Contribution of a then Partner shall include a Capital Contribution
previously made by any prior Partner in respect to the Partnership interest of such then Partner.
The term “Capital Contribution” shall include any Special Capital Contribution.
“Capital Proceeds” means the proceeds of a Capital Transaction.
“Capital Transaction” means any transaction the proceeds of which are not includable in
determining Cash Flow, including without limitation the sale, refinancing or other disposition of
all or substantially all of the assets of the Partnership, but excluding loans to the Partnership (other
than a refinancing of any Mortgage Loan) and contributions of capital to the Partnership by the
Partners.
“Cash Available for Debt Service Requirements” means, for any specified period of
consecutive months beginning not earlier than the Completion Date, the excess of (i) all Cash
Receipts during such period over (ii) all cash requirements of the Partnership properly allocable to
such period of time on an accrual basis (not including distributions or fees to Partners payable
solely out of Cash Flow of the Partnership) 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 operation, as determined by the Accountants 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 reserves, normal repairs and necessary capital improvements and (ii) if free rent or other
rental concessions shall have been granted to tenants, the calculation of rental revenues under
clause (i) of 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 they apply.
“Cash Flow” means the excess of Cash Receipts over Operating Expenses. Cash Flow shall
be determined separately for each Fiscal Year or portion thereof.
“Cash Receipts” means with respect to a Fiscal Year or other applicable period, all rental
revenue including income from any governmental subsidies, laundry income, parking revenue, and
other incidental revenues which are received by the Partnership on a cash basis during such period
and arise from normal operations of the Project but specifically excluding interest on Partnership
reserves, proceeds from insurance (other than business or rental interruption insurance), loans,
Capital Proceeds or Capital Contributions. In addition, any amount released without restriction
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from any escrow account in a Fiscal Year shall be considered a cash receipt of the Partnership for
such Fiscal Year.
“Certificate” means the certificate of limited partnership of the Partnership under the
Uniform Act, as amended from time to time in accordance with the terms hereof and the Uniform
Act.
“Change in Law” means an amendment to the Code or the Treasury Regulations that occurs
after the date of Investment Closing, which change provides for or results in the reduction or
elimination of the Projected Tax Credits available to the Partnership and allocable to the Investor
Limited Partner or substantially changes the requirements for qualifying for the Tax Credits in a
manner which the Partners agree cannot be reasonably satisfied. A Change in Law does not include
any change in the Regulations merely to conform the Regulations to changes in the Code occurring
prior to the date hereof where such Regulations had not been previously amended to reflect such
Code changes. As used herein, Change in Law shall not apply to any amendment to the Code or
Treasury Regulations pertaining to the use of the Average Income Test as a mechanism to meet
the Minimum Set-Aside Test.
“Citibank” means Citibank, N.A., a national banking association.
“City” means the City of Miami Beach, Florida.
“City HOME Loan” means the construction and permanent loan in the amount of up to
$1,003,969 made by the City to the Partnership from funds allocated to the City through the HOME
Investment Partnerships Program, which will have a term of thirty (30) years from the Project’s
receipt of a temporary certificate of occupancy and will not bear interest. All outstanding principal
and interest shall be due and payable by the Partnership upon maturity of the City HOME Loan.
$500,000 of the City HOME Loan was loaned to the Partnership on September 21, 2023 to finance
the restoration of a sea wall.
“City HOME Loan Documents” means the City HOME Loan Mortgage, City HOME Loan
Note, City HOME Loan Commitment, the City HOME Loan Restrictive Covenant, the City
HOME Loan Development Agreement and all other documents evidencing and securing the City
HOME Loan or otherwise entered into connection therewith.
“City HOME Loan Commitment” means the commitment of the City to make the City
HOME Loan to the Partnership dated July 6, 2023.
“City HOME Loan Development Agreement” means the Amended and Restated HOME
Program Agreement between the City and the Partnership of even date herewith.
“City HOME Loan Mortgage” means the Amended and Restated Leasehold Mortgage,
Security Agreement and Fixture Filing, which will be recorded as seventh-priority leasehold
mortgage, securing the obligations of the Partnership under the City HOME Loan Note.
“City HOME Loan Note” means the Amended, Restated, Renewal and Consolidated
Promissory Note in the principal amount of $1,003,969 to be executed by the Partnership in favor
of the City as evidence of its obligation to repay the City HOME Loan.
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“City HOME Loan Restrictive Covenant” means the Amended and Restated Declaration
of Restrictive Covenants that imposes certain affordability covenants and restrictions on the
Project for a period of thirty (30) years, as a condition of receiving the City HOME Loan.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Completion Date” means the latest of: (i) the date on which the Investor Limited Partner
shall have received copies of all requisite certificates or permits permitting occupancy of 100% of
the Units in the Project as issued by each Governmental Agency having jurisdiction; provided,
however, that if such certificates or permits are of a temporary nature, the “Completion Date” shall
not be deemed to have occurred unless that work remaining to be done is of a nature which would
not impair the permanent occupancy of any of such Units; (ii) the date as of which the Construction
Inspector certifies that the work to be performed by the Builder under the Construction Contract
is substantially complete, subject only to punch list items not in excess of $100,000 in the
aggregate, and that such work has been performed in a good and workmanlike manner in
accordance with applicable requirements of all Governmental Agencies having jurisdiction over
the Project and the Construction Documents; (iii) the date on which the Builder has delivered a
lien waiver with respect to work performed and/or materials supplied through the Completion Date
and for which it has been paid to date, and (iv) environmental remediation of the Property, if any,
has been completed in accordance with the requirements of any Governmental Agency having
jurisdiction over the Project. Any representation by any General Partner under this Agreement that
the Completion Date has occurred shall be subject to confirmation by the Investor Limited Partner
pursuant to a physical inspection of the Property; provided, however, that in the event that the
Investor Limited Partner does not make such physical inspection of the Property within fifteen
(15) business days after having received any such General Partner’s representation, then the
Investor Limited Partner will be deemed to have waived the physical inspection requirement.
“Compliance Period” means the entire period during which the “compliance period”
described in Section 42(i)(1) of the Code shall be applicable to any Building.
“Condemnation Awards” means any and all judgments, awards of damages (including
severance and consequential damages), payments, proceeds, settlements, amounts paid for a taking
in lieu of condemnation of the Property, or other compensation heretofore or hereafter made,
including interest thereon, and the right to receive the same, as a result of, or in connection with,
any condemnation or threatened condemnation of the Property.
“Consent of the Investor Limited Partner” means the prior written consent or approval of
the Investor Limited Partner, or, if at any time there is more than one Investor Limited Partner, the
prior written consent or approval of at least 51% in interest of the Investor Limited Partners.
“Construction Contract” means the construction contract between the Partnership and the
Builder providing for the construction of the Improvements, as amended from time to time.
“Construction Documents” means the Construction Contract, including, without limitation,
the general conditions, project manual (including general requirements and technical
specifications, drawings or sketches), the Plans and Specifications, and any addenda thereto,
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together with all trade contracts pursuant to which construction of the Improvements will be
accomplished.
“Construction Inspector” means the Person performing construction review services for
the Funding Lender, or such other Person designated from time to time by the Investor Limited
Partner. At any time that the Funding Lender is the Investor Limited Partner or an Affiliate thereof,
then the Construction Inspector will be the Person designated by the Funding Lender to perform
the acts described in the preceding sentence.
“Consumer Price Index” means the Consumer Price Index for All Urban Consumers, All
Cities, for All Items (base 1982-84 = 100) published by the United States Bureau of Labor
Statistics. In the event such index is not in existence when any determination relying on such index
under this Agreement is to be made, the most comparable governmental index published in lieu
thereof shall be substituted therefor.
“Continuing Covenant Agreement” means, initially, the Construction Disbursement
Agreement between the Partnership and Bank of America and, after the purchase of the Funding
Loan by Citibank, N.A. the Continuing Covenants Agreement between the Partnership and
Citibank, N.A. in the form attached to the Forward Loan Purchase Agreement.
“Cost Certification” means the submission to, and acceptance by, the Credit Agency of a
certified audit by the Accountants of the Partnership’s development and related costs for purposes
of establishing the amount of Federal Low Income Tax Credits available to the Project. A draft of
the audit described in the preceding sentence shall be submitted to the Investor Limited Partner for
approval prior to submission to the Credit Agency.
“County” means Miami-Dade County, Florida.
“Credit Agency” means FHFC.
“Credit Approval” means the written determination of FHFC pursuant to Section
42(m)(1)(D) of the Code approving Tax Credits for the Project in an annual amount of not less
than $2,585,299 and the Certificate of the Governmental Lender pursuant to Section 42(m)(2)(D)
of the Code approving Tax Credits for the Project in an amount of not less than $2,655,034.
“Credit Period” means the entire period during which the “credit period” described in
Section 42(f)(1) shall be applicable to any Building.
“Credit Underwriting Report” means the report commissioned by the Credit Agency
prepared by Amerinat setting forth the financial and legal structure of the transaction.
“Debt Service Coverage Ratio” means, for any specified period of consecutive calendar
months beginning not earlier than the Completion Date, a fraction, the numerator of which is the
Cash Available for Debt Service Requirements with respect to such period and the denominator of
which is the Debt Service Requirements for such period. The achievement by the Partnership of a
specified Debt Service Coverage Ratio shall be confirmed by the Accountants and shall be subject
to independent confirmation by the Investor Limited Partner pursuant to a physical inspection of
the Property for the purpose of confirming that the Property is in good condition and repair
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(ordinary wear and tear excepted); provided, however, that (i) no objection by the Investor Limited
Partner to the determination of the Accountants based on its physical inspection of the Property
shall be valid unless the General Partners are notified of such objection, and the specific reasons
therefor, within seven (7) business days following the completion of such inspection and (ii) in the
event that the Investor Limited Partner does not make such physical inspection of the Property
within fifteen (15) business days after having received the Accountants’ determination letter, then
the Investor Limited Partner will be deemed to have waived the physical inspection requirement.
“Debt Service Requirements” means, for any specified period of consecutive calendar
months beginning not earlier than the Completion Date, all mandatory debt service, mortgage
insurance premium and/or other cash requirements imposed by the Mortgage Loan Documents or
any other indebtedness properly allocable to such period of time on an annualized accrual basis as
determined by the Accountants.
“Deferred Development Fee” has the meaning attributed thereto in the Development
Agreement.
“Depreciation” means, for each Taxable Year or other period, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for
such Taxable Year or other period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such Taxable Year or other
period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or other cost recovery deduction for
such Taxable Year or other period bears to such beginning adjusted tax basis; provided, however,
that if the adjusted basis for federal income tax purposes of an asset at the beginning of such
Taxable Year is zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partners.
“Designated Prime Rate” means the annual rate of interest which is at all times equal to
the lesser of (i) the highest prime rate as published in the Wall Street Journal (or any comparable
publication selected by the Investor Limited Partner in its reasonable discretion if the Wall Street
Journal ceases to publish such index), with calculations of interest to be made on a daily basis and
on the basis of a three hundred sixty (360)-day year and (ii) the maximum rate permitted by law
in the applicable context.
“Designated Proceeds” means the proceeds of the Mortgage Loans, any net rental or other
miscellaneous income of the Partnership as of the Completion Date (to the extent not otherwise
covered by this Designated Proceeds definition) which is permitted by this Agreement or any
applicable Lender or Governmental Agency to be utilized for Development Costs, the Capital
Contributions (excluding any Special Capital Contributions and Capital Contributions of the
General Partners in excess of the amounts permitted under Section 4.1), and any insurance
proceeds arising out of casualties prior to the Development Obligation Date.
“Determination Date” means the last day of the month preceding the month in which the
Removal Notice Date occurs.
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“Developer” means APC Vista Breeze Development, LLC, a Florida limited liability
company, and HACMB Development, LLC, a Florida limited liability company.
“Development Advances” has the meaning set forth in Section 6.7.
“Development Agreement” means the Development Agreement of even date herewith
between the Partnership and the Developer, as amended.
“Development Amount” has the meaning attributed thereto in the Development Agreement.
“Development Costs” means all costs (including the Development Amount net of the
Deferred Development Fee) incurred to (i) acquire the Land, (ii) complete the construction of the
Improvements 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 equip the Improvements or cause the
same to be equipped, all substantially in accordance with the Project Documents and the drawings
and specifications forming a part of the Construction Contract, (iii) arrive at Final Closing in
substantial conformity with the Project Documents, (iv) discharge all Partnership liabilities and
obligations arising out of any casualty giving rise to the receipt of insurance proceeds, (v) pay or
provide for all other payments, expenses, escrows or reserves required by this Agreement or by
any Lender, Governmental Agency or Partnership creditor to be made, incurred or funded through
the Development Obligation Date (other than Operating Expenses incurred through the
Development Obligation Date and reserves which are to be funded from other sources) and (vi)
pay all Environmental Compliance Costs and all costs associated with the performance of any
radon remediation activities which may be required pursuant to Section 12.1F.
“Development Deficit Loans” shall have the meaning ascribed thereto in Section 6.7.
“Development Obligation Date” means the latest to occur of (i) three (3) consecutive
calendar months of not less than 90% occupancy of the Units, (ii) the Completion Date, (iii) the
Initial Occupancy Date, (iv) Final Closing, and (v) delivery of the Certificate of Achievement of
Development Obligation Date in the form attached to Exhibit H.
“Document Schedule” means the Related Agreements identified in Exhibit B.
“Economic Risk of Loss” has the meaning set forth in Treas. Reg. § 1.752-2.
“Election Notice” has the meaning given to it in Section 5.3B.
“ELI Loan” means the construction and permanent loan in the amount of up to $600,000
made by FHFC to the Partnership from proceeds of FHFC’s ELI program, which loan will have a
term of 20.5 years, will be non-amortizing, and will not bear interest. All unpaid principal and
interest on the ELI Loan will be due and payable at maturity.
“ELI Loan Agreement” means the Construction Loan Agreement by and among FHFC, the
Partnership and Amerinat which sets forth the terms and conditions upon which the ELI Loan is
being made to the Partnership.
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“ELI Loan Documents” means the ELI Loan Agreement, ELI Loan Mortgage, ELI Loan
Note, and all other documents evidencing and securing the ELI Loan or otherwise entered into
connection therewith.
“ELI Loan Mortgage” means the fourth-priority Leasehold Mortgage and Security
Agreement securing the obligations of the Partnership under the ELI Loan Note.
“ELI Loan Note” means the Promissory Note in the original principal amount of $600,000
executed by the Partnership in favor of FHFC as evidence of its obligation to repay the ELI Loan.
“Eligible Basis” has the meaning set forth in Section 42(d) of the Code and the Treasury
Regulations thereunder.
“Entity” means any general partnership, limited partnership, limited liability company or
partnership, corporation, joint venture, trust, business trust, cooperative or association.
“Environmental Compliance Costs” means all costs necessary to bring the Land and the
Project into compliance with all Hazardous Waste Laws.
“Environmental Reports” means the environmental reports listed in Exhibit I.
“Event of Bankruptcy” means, as to a specified Person:
(i) the entry of a decree or order for relief by a court having jurisdiction
in the premises in respect of such Person in an involuntary 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 appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or for any substantial
part of his property, or ordering the winding-up or liquidation of his 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 of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or the consent by him to the
appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or similar official) of such Person or for any substantial part of his property,
or the making by him of any assignment for the benefit of creditors, or the failure of such
Person generally to pay his debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing; or
(iii) in the case of a Person who is a General Partner, the voluntary
withdrawal of such Person as a General Partner in violation of the terms of this Agreement.
“Expense Reimbursement Contribution” means a Special Capital Contribution in the
amount of the actual legal and other professional costs of the Investor Limited Partner incurred in
connection with the Investor Limited Partner’s admission to the Partnership, in an amount up to
$102,900. The Investor Limited Partner will make the Expense Reimbursement Contribution
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concurrent with the payment of the First Installment of its Capital Contribution. The proceeds of
the Expense Reimbursement Contribution will be immediately disbursed by the Partnership to pay
or to reimburse such expenses of the Investor Limited Partner.
“Extended Use Agreement” means the agreement required to be entered into between the
Credit Agency and the Partnership respecting long-term use restrictions and satisfying all of the
requirements of Section 42(h)(6) of the Code.
“Federal Low Income Tax Credits” means the tax credits for which the Project is eligible
under Section 42 of the Code.
“FHFC” means the Florida Housing Finance Corporation.
“Final Closing” means the date upon which all of the following events have occurred: (i)
the Completion Date and receipt of the final (non-temporary) certificates of occupancy permitting
occupancy of 100% of the Units in the Project, (ii) Permanent Mortgage Commencement, (iii) the
Project’s being free of any mechanics’ or other liens (except for the Mortgages and liens either
bonded against in such a manner as to preclude the holder thereof from having any recourse to the
Project or the Partnership for payment of any debt secured thereby or affirmatively insured against
(in such manner as precludes recourse to the Partnership for any loss incurred by the insurer) by
the Title Policy or by another policy of title insurance issued to the Partnership by a reputable title
insurance company in an amount satisfactory to Investor Tax Counsel (or by an endorsement of
either such title policy)), (iv) a draft Cost Certification has been prepared by the Accountants and
provided to the Investor Limited Partner for review, (v) the disbursement of proceeds under the
Mortgage Loans has been made in the full amount permitted by such Cost Certification, (vi)
delivery to the Investor Limited Partner of permanent Mortgage Loan Documents, including
without limitation the Permanent Loan Documents, in form and substance reasonably acceptable
to the Investor Limited Partner (to the extent not previously delivered in connection with
Investment Closing), (vii) all amounts due in connection with the construction of the Project have
been paid or provided for, including payment of all expenses associated with completing any punch
list items outstanding as of the Completion Date, (viii) the date of delivery to the Investor Limited
Partner of an ALTA “as-built” survey sufficient to allow delivery of an updated title report without
a survey exception and otherwise in compliance with the requirement of Section 6.5A(viii), and
(ix) the full funding of any reserves required under the Mortgage Loan Documents and this
Agreement.
“Final Determination” means the earliest to occur of (i) the date on which a decision,
judgment, decree or other order has been issued by any court of competent jurisdiction, which
decision, judgment, decree or other order has become final (i.e., all allowable appeals requested
by the parties to the action have been exhausted), (ii) the date on which the Service has entered
into a binding agreement with the Partnership with respect to such issue or on which the Service
has reached a final administrative determination with respect to such issue which, whether by law
or agreement, is not subject to appeal, (iii) the date on which the time for instituting a claim for
refund has expired, or if a claim was filed the time for instituting suit with respect thereto has
expired, or (iv) the date on which the applicable statute of limitations for raising an issue regarding
a federal income tax matter with respect to the Partnership has expired.
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“Final Tax Credit Amount” means the amount of Federal Low Income Tax Credits
determined by the Accountants promptly following the receipt of Form 8609 with respect to the
Project and prior to the Fourth Installment based on all information available at such time
including, but not limited to, the Cost Certification prepared by the Accountants in connection
with obtaining Form 8609.
“First Full Credit Year” means the first calendar year with respect to which the Partnership
actually receives the full (twelve-month) amount of Federal Low Income Tax Credits then
reasonably anticipated with respect to all Buildings constituting the Project.
“Fiscal Agent” means The Bank of New York Mellon Trust Company, N.A., a national
banking association, its successors and assigns.
“Fiscal Year” means the twelve-month period which begins on the first day of January and
ends on the thirty-first day of December of each calendar year (or ends on the date of final
dissolution for the year in which the Partnership is wound up and dissolved).
“Forms 8609 Receipt Date” means the date on which the Partnership has received properly
executed IRS Form 8609 with respect to the Building constituting the Project and delivered copies
thereof to the Investor Limited Partner.
“Forward Loan Purchase Agreement” means the Forward Loan Purchase Agreement by
and among the Partnership, the initial Funding Lender and Citibank, N.A. pursuant to which
Citibank, N.A. has agreed to purchase the Funding Loan from the initial Funding Lender.
“Funding Lender” means initially, Bank of America, as maker of the Funding Loan during
the construction phase, then Citibank, N.A., as maker of the Funding Loan during the permanent
phase.
“Funding Loan” means the loan made by the Funding Lender to the Governmental Lender,
the proceeds of which will be used to make the Project Loan to the Partnership pursuant to the
terms of the Project Loan Documents. The Governmental Lender’s obligation to repay the Funding
Loan is evidenced by the Governmental Note.
“Funding Loan Agreement” means the agreement by and among the Funding Lender, the
Governmental Lender, and the Fiscal Agent setting forth the terms and conditions upon which the
Funding Loan is being made by the Funding Lender.
“Governmental Lender” means the Housing Finance Authority of Miami-Dade County,
Florida.
“Governmental Note” means that certain Multifamily Housing Revenue Note, Series 2023
(Vista Breeze) in the amount of $32,500,000 executed by the Governmental Lender to evidence
its obligations to repay the Funding Loan, as amended.
“General Partners” means the Managing General Partner, the Administrative General
Partner, and any Person who becomes a General Partner as provided herein. If at any time the
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Partnership shall have a sole General Partner, the term “General Partners” shall be construed as
singular.
“Governmental Agency” means, as applicable, HUD, the Credit Agency, the County and/or
any other government agency having jurisdiction over the particular matter to which reference is
being made.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal
income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset on the date of contribution, as
determined by the General Partners with the Consent of the Investor Limited Partner;
(b) The Gross Asset Values of all Partnership assets shall be adjusted to equal
their respective gross fair market values, as determined by the General Partners, with the Consent
of the Investor Limited Partner, as of the following times: (i) the acquisition of an additional
interest in the Partnership by any new or existing Partner in exchange for more than a de minimis
capital contribution; (ii) the distribution by the Partnership to a Partner of more than a de minimis
amount of property in retirement of all or any portion of its interest in the Partnership; (iii) the
liquidation of the Partnership within the meaning of Treas. Reg. §1.704-1(b)(2)(ii)(g); and (iv) in
connection with the grant of an interest in the Partnership (other than a de minimis interest) in
consideration for the provision of services to or for the benefit of the Partnership by an existing
Partner acting in a partner capacity or by a new Partner acting in a partner capacity in anticipation
of becoming a Partner; provided, however that adjustments pursuant to clauses (i), (ii) and (iv)
above shall be made only if the General Partners with the Consent of the Investor Limited Partner
reasonably determine that such adjustments are necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership;
(c) The Gross Asset Value of any Partnership asset distributed to any Partner
shall be the gross fair market value of such asset on the date of distribution, as determined by the
distributee and the General Partner, provided that if the distributee is the General Partner, the
determination of fair market value of the distributed asset shall require the written consent of a
majority in interest of the Limited Partners; and
(d) The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account
in determining Capital Accounts pursuant to Treas. Reg. § 1.704-1(b)(2)(iv)(m) and subparagraph
(i) of the definition of “Profits and Losses” or Section 4.3 hereof; provided, however, that Gross
Asset Values shall not be adjusted pursuant to this clause (d) to the extent the Partners determine
that an adjustment pursuant to clause (b) of this definition is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment pursuant to this clause (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to clauses
(a), (b) or (d) of this definition, such Gross Asset Value shall thereafter be adjusted by the
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Depreciation taken into account with respect to such asset for purposes of computing Profits and
Losses.
“Ground Lease” means that certain Second Amended and Restated Ground Lease
Agreement by and among the Partnership and HACMB, pursuant to which the Partnership leases
the Land, as may be amended from time to time.
“Guarantors” means Howard D. Cohen Revocable Trust U/A/D 4/6/1993. From and after
the withdrawal of the Managing General Partner in accordance with Section 7.1, the term
“Guarantors” shall automatically refer to HACMB.
“Guaranty Agreement” means the joint and several guaranty of even date herewith, made
by the Guarantors in favor of the Investor Limited Partner. From and after the withdrawal of the
Managing General Partner in accordance with Section 7.1, the term “Guaranty Agreement” shall
automatically refer to the agreement executed by HACMB in favor of the Limited Partners.
“HACMB” means the Housing Authority of the City of Miami Beach, a public body
corporate and politic.
“HACMB Documents” means the HACMB Note Covenant Agreement, HACMB
Mortgage, HACMB Note, and all other documents evidencing and securing the HACMB
Obligations or otherwise entered into in connection therewith.
“HACMB Mortgage” means the Open-End Leasehold Mortgage and Security Agreement
securing the Partnership’s obligation to make payments under the HACMB Note.
“HACMB Note” means the promissory note given by the Partnership to HACMB, to
evidence the Partnership’s obligation to pay the principal sum of $8,800,000, upon the terms and
conditions set forth in the HACMB Note.
“HACMB Note Covenant Agreement” means the agreement between HACMB and the
Partnership regarding the terms upon which the Land is being leased to the Partnership and the
financing therefor.
“HACMB Obligations” means the obligation to pay the principal sum of $8,800,000 and
any interest thereon, upon the terms and conditions set forth in the HACMB Note and as secured
by the HACMB Mortgage and governed by the HACMB Note Covenant Agreement.
“Hazardous Material” means and includes any pollutant or contaminant or any hazardous,
toxic or radioactive waste, substance or material, including without limitation those listed in or
regulated under any Hazardous Waste Laws, polychlorinated biphenyls, petroleum, petroleum-
based or petroleum-derived products, toxic mold, and asbestos or asbestos-containing materials.
“Hazardous Waste Laws” means and includes the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980; the Resource Conservation and Recovery Act;
the Toxic Substances Control Act and any other federal, state or local statutes, ordinances,
regulations or by-laws dealing with Hazardous Material, as the same may be amended from time
to time and including any regulations promulgated thereunder.
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“HUD” means the Department of Housing and Urban Development of the United States of
America and its successors.
“Improvements” means the Buildings and any related facilities to be constructed in
accordance with the Project Documents.
“Independent Appraiser” means a firm which is generally qualified to render opinions as
to the fair market value of assets such as those owned by the Partnership, which is mutually
acceptable to the General Partners and the Special Limited Partner and which satisfies the
following criteria:
(i) such firm is not a Partner, or an Affiliate of the Partnership or any
Partner;
(ii) such firm (or a predecessor in interest to the assets and business of
such firm) has been in business for at least five (5) years, and at least one of the principals
of such firm has been in the active business of appraising substantially similar assets for at
least ten (10) years;
(iii) such firm has regularly rendered appraisals of substantially similar
assets for at least five (5) years on behalf of a reasonable number of unrelated clients, so as
to demonstrate reasonable market acceptance of the valuation opinions of such firm;
(iv) one or more of the principals or appraisers of such firm are members
in good standing of an appropriate professional association or group which establishes and
maintains professional standards for its members; and
(v) such firm renders an appraisal to the Partnership only after entering
into a contract that specifies the compensation payable for such appraisal.
“Initial Economic Projections” means the economic projections for the Project attached as
Exhibit J.
“Initial Occupancy Date” shall mean the first date upon which not less than 100% of the
Low Income Units in the Project are occupied by Qualified Tenants at least one time under bona
fide written leases satisfying the requirements of Section 42 of the Code with terms of not less
than one year. The achievement of the Initial Occupancy Date shall be confirmed by the
Management Agent and certified by the Managing General Partner with a copy of such
confirmation and certification, together with the rent roll and Tenant Income Certifications for
each of the Qualified Tenants, forwarded to the Special Limited Partner and the Administrative
General Partner. The Initial Occupancy Date will be deemed to have been achieved upon written
acknowledgment of such confirmation to the Partnership from the Special Limited Partner. The
Special Limited Partner shall have seven (7) Business Days after receipt of the written
confirmation from the Management Agent and the Managing General Partner to acknowledge or
object to the achievement of the Initial Occupancy Date, and the failure to acknowledge or object
to the calculation within such seven (7)-Business Day period shall be deemed to be an acceptance
of the calculation by the Special Limited Partner. All objections must be commercially reasonable,
and shall be delivered in writing to the Managing General Partner (with a copy to the
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Administrative General Partner), and the Managing General Partner shall have a reasonable time
to cure such objections to the calculations received from the Special Limited Partner.
“Installment” means any Installment of the Capital Contributions of the Investor Limited
Partner referred to in Section 5.1.
“Insurance Proceeds” means the insurance claims under and the proceeds of any and all
policies of insurance covering the Property or any part thereof, including all returned and unearned
premiums with respect to any insurance relating to such Property, in each case whether now or
hereafter existing or arising.
“Interest,” or words of like import, shall mean all the interest of a Partner in Cash Flow,
Capital Proceeds, and any other distributions, capital, Profits and Losses, Tax Credits, and
otherwise in the Partnership, including all allocations and distributions and all rights under this
Agreement, and also shall include such interests and rights of such Partner in any successor Entity
formed pursuant to this Agreement.
“Investment Closing” means the date on which an executed version of this Agreement is
delivered by all of the parties hereto.
“Investor Limited Partner” means, initially, Bank of America, N.A., and shall include any
other Persons admitted as an Investor Limited Partner pursuant to Section 4.6 or admitted as a
Substitute Limited Partner pursuant to Section 8.2, and their respective successors in such capacity.
“Investor Tax Counsel” means Holland & Knight LLP of Boston, Massachusetts or other
counsel acceptable to the Investor Limited Partner.
“Land” means the parcels of land on which the Improvements are located in Miami Beach,
Florida, as described in Schedule A of the Title Policy.
“Lender” means the Funding Lender and any lender under any Mortgage Loan together
with its respective successors and assigns in such capacity.
“Limited Partner” or “Limited Partners” mean any or all of those Persons designated as
Limited Partners in the Schedule, any Person admitted as a Limited Partner pursuant to Section
4.6, or any Person who becomes a Substitute Limited Partner as provided herein, in each such
Person’s capacity as a Limited Partner of the Partnership. Such terms shall include the Special
Limited Partner, the Investor Limited Partner and any Persons who may succeed to the Interests
of such Limited Partners.
“LOMA-R” means a letter of map revision from the Federal Emergency Management
Agency reflecting a change in the base flood elevation of each site such that mandatory flood
insurance is not required for either Building in the Project.
“Low Income Unit” means any of the 119 Units in the Project which are to be held for
occupancy by the Partnership in such manner as to qualify such units as qualified low-income
housing units under Section 42(i)(3) of the Code.
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“Management Agent” means Atlantic Pacific Community Management LLC, a Florida
limited liability company, or any successor thereto engaged by the General Partners as the
management agent for the Project with the Consent of the Investor Limited Partner.
“Management Agreement” means the management contract or agreement by and between
the Partnership and the Management Agent which has received all Requisite Approvals.
“Management Fee” means the amount payable from time to time by the Partnership to the
Management Agent for management services in accordance with the Management Agreement
which shall be subject to any Requisite Approvals.
“Managing General Partner” means APC Vista Breeze, LLC, a Florida limited liability
company. The term “Managing General Partner”, wherever used herein, shall mean and refer to
the Class B Limited Partner, following the conversion of the interest described in Section 4.3(E).
“Material Default” has the meaning set forth in Section 7.7B.
“Minimum Operating Reserve Balance” means the amount of the Operating Reserve
required to be initially funded pursuant to Section 6.11B.
“Mortgage” means any mortgage indebtedness of the Partnership evidenced by any Note
and secured by any mortgage on the Property from the Partnership to any Lender; and, where the
context admits, “Mortgage” shall mean and include any of the mortgages securing said
indebtedness and any other documents pertaining to said indebtedness which were required by the
Lender as a condition to making such Mortgage Loan. In case any Mortgage is replaced by any
subsequent mortgage or mortgages, such term shall refer to any such subsequent mortgage or
mortgages. The term “mortgage” means any mortgage, mortgage deed, deed of trust, deed to secure
debt or any similar security instrument, and “foreclose” and words of like import include the
exercise of a power of sale under a mortgage or comparable remedies.
“Mortgage Loan” means the Project Loan, the Viability Loan, the SAIL Loan, the ELI
Loan, the NHTF Loan, the Surtax Loan, the City HOME Loan and the HACMB Obligations.
“Mortgage Loan Commitments” means and includes the commitment of (i) the Funding
Lender to make the Funding Loan of up to $32,500,000, (ii) Citibank, N.A. to purchase the Project
Loan in an amount up to $11,875,000, (iii) FHFC to make the Viability Loan ($4,300,000), the
SAIL Loan ($3,000,000), the ELI Loan ($600,000) and the NHTF Loan ($1,301,500), (iv) the
County to make the Surtax Loan of up to $5,950,000, and (v) the City to make the City HOME
Loan of up to $1,003,969.
“Mortgage Loan Documents” means the loan agreements, Notes, Mortgages and other
documents evidencing and securing any Mortgage Loan or otherwise entered into connection
therewith.
“Net Capital Contribution” means $26,310,928.
“Net Proceeds” means, when used with respect to any Condemnation Awards or Insurance
Proceeds, the gross proceeds from any condemnation or casualty of the Property remaining after
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payment of all expenses, including reasonable attorneys’ fees, incurred in the collection of such
gross proceeds.
“NHTF Loan” means the construction and permanent loan in the amount of up to
$1,301,500 made by FHFC to the Partnership from proceeds of FHFC’s National Housing Trust
Fund Program, which loan will have a term of 30 years, will be non-amortizing, and will not bear
interest. All unpaid principal and interest on the NHTF Loan will be due and payable at maturity.
“NHTF Loan Agreement” means the Construction Loan Agreement by and among FHFC,
the Partnership and Amerinat which sets forth the terms and conditions upon which the NHTF
Loan is being made to the Partnership.
“NHTF Loan Documents” means the NHTF Loan Agreement, NHTF Loan Mortgage,
NHTF Loan Note, and all other documents evidencing and securing the NHTF Loan or otherwise
entered into connection therewith.
“NHTF Loan Mortgage” means the fifth-priority leasehold mortgage securing the
obligations of the Partnership under the NHTF Loan Note.
“NHTF Loan Note” means the promissory note in the original principal amount of
$1,301,500 executed by the Company in favor of FHFC as evidence of its obligation to repay the
NHTF Loan.
“Note” means and includes any promissory note from the Partnership to a Lender
evidencing a Mortgage Loan, and shall also mean and include any note supplemental to said
original note issued to a Lender or any note issued to a Lender in substitution for any such original
note.
“Operating Deficit” means the amount by which Operating Expenses exceed Cash
Receipts.
“Operating Expense Loan” means a loan to the Partnership pursuant to Section 6.8A which
is repayable without interest and only as provided in Article X.
“Operating Expenses” means (i) up to and including the Development Obligation Date,
those expenses, properly accruable through such date which may be properly charged as operating
expenses of the Project under standard accounting procedures and which are allocable, in
accordance with generally accepted accounting principles, to Units for which all requisite
approvals for occupancy have been obtained; such operating expenses may include real estate taxes
and debt service and mortgage insurance premiums, if any, with respect to the Mortgage Loans (to
the extent such operating expenses are not funded out of Designated Proceeds) and any payments
due under the Ground Lease, but shall not include any costs required to be capitalized in
accordance with generally accepted accounting principles; and (ii) after the Development
Obligation Date, all the costs and expenses of any type incurred incidental to the ownership and
operation of the Project, including, without limitation, any payments due under the Ground Lease,
taxes, capital improvements reasonably deemed necessary by the General Partners and not funded
out of any reserves for such, mortgage and bond insurance premiums, if any, and the cost of
operations, debt service, maintenance and repairs, and the funding of any reserves required to be
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maintained by any Lender or Governmental Agency or pursuant to this Agreement, but shall not
include (i) repayments of Operating Expense Loans made pursuant to Section 6.8A or (ii)
distributions or payments to Partners pursuant to Article X.
“Operating Reserve” means the operating reserve described in Section 6.11B.
“Partner” means any General Partner or Limited Partner.
“Partner Nonrecourse Debt” shall have the meaning set forth in Treas. Reg. §
1.704-2(b)(4).
“Partner Nonrecourse Debt Minimum Gain” shall have the meaning set forth in Treas.
Reg. § 1.704-2(i)(2) and (3).
“Partner Nonrecourse Deductions” shall have the meaning set forth in Treas. Reg. §§
1.704-2(i)(1) and 1.704-2(i)(2).
“Partnership” means the limited partnership governed by this Agreement as said limited
partnership may from time to time be constituted.
“Partnership Counsel” means Klein Hornig LLP of Washington, DC and Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A. of Miami, Florida and, after the withdrawal of APC
Vista Breeze, LLC from the Partnership, Fox Rothschild LLP of Pittsburgh, PA or such other
counsel as the General Partners may designate from time to time as counsel for the Partnership.
“Partnership Management Agreement” means the Partnership Management Agreement
among the Partnership, the Administrative General Partner and the Managing General Partner
pursuant to which the Administrative General Partner and the Managing General Partner are to
provide certain management services to the Partnership.
“Partnership Management Fee” means the fee payable from time to time by the Partnership
to the Administrative General Partner and the Managing General Partner for their management
services to the Partnership pursuant to the Partnership Management Agreement.
“Partnership Minimum Gain” shall have the meaning set forth in Treas. Reg. § 1.704-2(d).
“Payment Certificate” has the meaning given it in Section 5.1B(i).
“Permanent Loans” means the Project Loan after all of the conditions to conversion have
been fulfilled, the Viability Loan, the SAIL Loan, the ELI Loan, the NHTF Loan, the Surtax Loan,
the City HOME Loan, and the HACMB Obligations.
“Permanent Loan Documents” means the Viability Loan Documents, the SAIL Loan
Documents, the ELI Loan Documents, the NHTF Loan Documents, the Surtax Loan Documents
the City HOME Loan Documents and the HACMB Documents.
“Permanent Mortgage Commencement” means the latest to occur of: (i) satisfaction of all
conditions to conversion in the Forward Loan Purchase Agreement and the purchase of the
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Funding Loan by Citibank, (ii) termination of any construction phase guarantees granted in
connection with any Mortgage Loan, (iii) full disbursement of the principal amount of the Viability
Loan, the SAIL Loan, the ELI Loan, the NHTF Loan, the Surtax Loan and the City HOME Loan
(to the extent any such loan was not fully funded as of Investment Closing) and (iv)
commencement of monthly amortization of principal and interest under the Mortgage Loan
Documents (to the extent the Mortgage Loan Documents provide for principal amortization).
“Person” means any individual or Entity, and the heirs, executors, administrators, legal
representatives, successors and assigns of such Person where the context so admits.
“Plans and Specifications” means the plans and specifications for the construction of the
Property approved by the Funding Lender, the Credit Agency, and the Special Limited Partner,
including, without limitation, specifications for materials, and all amendments and modifications
thereof, as the same may from time to time be amended with the prior written approval of the
Special Limited Partner, provided, however, if the Funding Lender is the Investor Limited Partner
or an Affiliate thereof, no such approval by the Special Limited Partner will be required if such
changes are approved by the Funding Lender.
“Profits and Losses” means, for each Taxable Year (or portion thereof), the Partnership’s
taxable income or taxable loss for such Taxable Year (or portion thereof), as determined under
Section 703(a) of the Code, and Section 1.703-1 of the Regulations (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(l) of
the Code shall be included in taxable income or taxable loss), but with the following adjustments:
(i) Any tax-exempt income, as described in Section 705(a)(l)(B) of the
Code, realized by the Partnership during such Taxable Year (or portion thereof), and not
otherwise taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses,” shall be taken into account in computing such taxable income or
taxable loss as if it were taxable income;
(ii) Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code for such Taxable Year (or portion thereof), including any items
treated under Section 1.704-1(b)(2)(iv)(i) of the Allocation Regulations as items described
in Section 705(a)(2)(B) of the Code, and not otherwise taken into account in computing
Profits or Losses pursuant to this definition of “Profits” and “Losses,” shall be taken into
account in computing such taxable income or taxable loss as if they were deductible items;
(iii) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clauses (c) or (e) of the definition of “Gross Asset Value,” the amount
of such adjustment shall be taken into account as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses;
(iv) In the event the Gross Liability Value of any liability of the
Partnership described in Treas. Reg. § 1.752-7(b)(3)(i) is adjusted as required by this
Agreement, the amount of such adjustment shall be treated as an item of loss (if the
adjustment increases the Gross Liability Value of such liability of the Partnership) or an
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item of gain (if the adjustment decreases the Gross Liability Value of such liability of the
Partnership) and shall be taken into account for purposes of computing Profits or Losses;
(v) Gain or loss resulting from any disposition of property with respect
to which gain or loss is recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
(vi) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such Allocation Period or other period;
(vii) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) is required, pursuant to Treas. Reg. §
1.704-1(b)(2)(iv)(m)(4) of the Allocation Regulations, to be taken into account in
determining Capital Accounts as a result of a distribution other than in liquidation of a
Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) from the disposition of such asset and shall be taken into account for
purposes of computing Profits or Losses; and
(viii) Notwithstanding any other provision of this definition, any items
that are specially allocated pursuant to Section 10.4 shall not be taken into account in
computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss, or deduction available to be
specially allocated pursuant to Section 10.4 shall be determined by applying rules analogous to
those set forth in subparagraphs (i) through (vi) above.
If the Partnership’s taxable income or taxable loss for such Taxable Year (or portion
thereof), as adjusted in the manner provided in clauses (i) through (vi) above, is a positive amount,
such amount shall be the Partnership’s Profits for such Taxable Year; and, if negative, such amount
shall be the Partnership’s Losses for such Taxable Year (or portion thereof) Period.
“Prohibited Party” means Wentwood Companies, Wentwood Capital Advisors,
Wentwood Property Management, Alden Torch Financial LLC (f/k/a Hunt Capital Partners LLC)
or Heartland Properties, or any affiliate, parent organization, parent of a parent organization or
subsidiary of any of the foregoing; provided that the Investor Limited Partner and Special Limited
Partner shall be required to make only commercially reasonable efforts to determine, at the time
any contractual agreement is entered into, whether an Entity is a Prohibited Party.
“Project” or “Property” means the Land and the Improvements.
“Project Documents” means and includes this Agreement, the Ground Lease, the
Construction Contract, the Guaranty Agreement, the Purchase Option Agreement, the Right of
First Refusal Agreement, the Mortgage Loan Documents, the Tax Credit Application, the Credit
Approval, the Extended Use Agreement, the Development Agreement, any Regulatory
Agreement, the Management Agreement, the Mortgage Loan Commitments, the City Loan
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Commitment, the HACMB Note, the HACMB Mortgage, the HACMB Note Covenant and all
other documents relating to the Project which are required by, or have been executed in connection
with, any of the foregoing documents.
“Project Loan” means the construction and permanent loan from the Governmental Lender
to the Partnership in the initial amount of $32,500,000, which is made from the proceeds of the
Funding Loan. The Project Loan shall have an initial term of 30 months, with two as of right 6-
month extensions, and bear interest at a variable rate as described in the Project Note. In connection
with the purchase of the Funding Loan by Citibank, N.A., the principal balance of the Project Loan
will be reduced to $11,875,000 (or such greater amount as permitted pursuant to Section 9.1A),
will have a term of 18 years, amortizing over a 40-year schedule, and will bear a fixed annual rate
of interest equal to 6.27% (inclusive of all servicing fees).
“Project Loan Agreement” means the Construction Phase Project Loan Agreement and the
Permanent Phase Project Loan each dated as of December 1, 2023 by and among the Governmental
Lender, the Partnership and the Fiscal Agent setting forth the terms and conditions upon which the
Project Loan is being made to the Partnership. The Construction Phase Project Loan Agreement
will be released and the Permanent Phase Project Loan Agreement will become effective upon
conversion of the Project Loan from its construction to permanent phase.
“Project Loan Documents” means the Continuing Covenant Agreement, the Project Loan
Agreement, the Project Loan Mortgage, the Project Note, the Project Loan Regulatory Agreement,
the Forward Loan Purchase Agreement and any other documents, instruments, indenture or
agreements pertaining to the making of the Project Loan by the Governmental Lender and the
making of the Funding Loan by the Funding Lender.
“Project Loan Mortgage” means the first-priority Leasehold Mortgage, Assignment of
Rents, Security Agreement and Fixture Filing securing the obligations of the Partnership under the
Project Note. After the purchase of the Funding Loan by Citibank, N.A., the Project Loan
Mortgage will be amended and restated pursuant to the form attached to the Forward Loan
Purchase Agreement.
“Project Loan Regulatory Agreement” means the Land Use Restriction Agreement dated
as of December 1, 2023 by and among the Governmental Lender, the Partnership and the Fiscal
Agent, describing the long term restrictions to which the Project shall be subject.
“Project Note” means the Construction Phase Project Loan Note in the original principal
amount of $32,500,000 executed by the Partnership in favor of the Governmental Lender and
endorsed by the Governmental Lender to the Fiscal Agent. After the purchase of the Funding Loan
by Citibank, N.A., the Project Note shall be amended and restated pursuant to the form attached
to the Forward Loan Purchase Agreement. The amended and restated Project Note will be reduced
to the principal amount of $11,875,000 and will be executed by the Partnership in favor of Fiscal
Agent, as fiscal agent for Citibank, N.A., as evidence of its obligation to repay the Project Loan.
“Projected Aggregate Federal Low Income Tax Credit Amount” means $26,711,602 which
is the product of (i) 99.99% and (ii) the aggregate amount of Federal Low Income Tax Credits
expected to be available to the Property during the Credit Period. If, following any determination
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or redetermination of the Adjusted Aggregate Federal Low Income Tax Credit Amount pursuant
to Section 5.2, such amount is different than the Projected Aggregate Federal Low Income Tax
Credit Amount, then, for purposes of any subsequent application of Section 5.2, the term
“Projected Aggregate Federal Low Income Tax Credit Amount” shall mean the Adjusted
Aggregate Federal Low Income Tax Credit Amount, provided that any required adjustment(s),
payment(s) or Tax Credit Shortfall Payments have been made pursuant to the provisions of Section
5.2 on account of such difference.
“Property Tax Exemption” means the unit by unit exemption (which requires a minimum
of seventy-five percent (75%) of units to qualify as exempt) for the Project from annual ad valorem
real estate taxation under the laws of the State of Florida pursuant to Section 196.1975 of the
Florida Statutes.
“Purchase Option Agreement” means the Purchase Option Agreement of even date
herewith between the Partnership and the Administrative General Partner.
“Qualified Tenant” means a tenant (i) with income not exceeding the percentage of area
gross median income set forth in Section 42(g)(1)(A) or (B) of the Code (whichever is applicable)
who leases an apartment unit in the Project under a lease having an original term of not less than
twelve (12) months at a rent not in excess of that specified in Section 42(g)(2) of the Code, and
(ii) complying with any other requirements imposed by the Project Documents.
“Recapture Event” means an event, as evidenced by a determination thereof by the
Accountants or as a result of a Final Determination, which results in a recapture with respect to all
or any portion of the Partnership’s Tax Credits and/or which results in a disallowance of any Tax
Credits previously claimed by the Partnership. Notwithstanding the foregoing, a Recapture Event
shall not include:
A. the inability of the Investor Limited Partner to utilize the Tax Credits allocated to
it for any reason, including the lack of sufficient taxable income; or
B. a loss or reduction of the Tax Credits to the extent cause by (i) actions or inactions
of the Investor Limited Partner or its agents or employees, (ii) a sale or assignment or transfer of
the Investor Limited Partner's Interest, or (iii) a Change in Law.
“Regulations,” “Treasury Regulations,” or “Treas. Reg.” means the Income Tax
Regulations promulgated under the Code, as such Regulations may be amended from time to time.
All references herein to specific Sections of the Regulations shall be deemed to refer also to
corresponding provisions of any succeeding regulations.
“Regulatory Agreement” means the Extended Use Agreement and any regulatory
agreements, affordability restrictions, restrictive covenants or other similar documents entered or
to be entered into between or by the Partnership and/or for the benefit of any Lender or
Governmental Agency with respect to the Project, as amended from time to time.
“Related Agreements” means each agreement, document and certificate referred to in the
Document Schedule.
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“Related Person” has the meaning set forth in Treas. Reg. § 1.752-4(b) or any successor
regulation thereto.
“Removal Notice” shall have the meaning set forth in Section 7.7.
“Removal Notice Date” shall have the meaning set forth in Section 7.7.
“Requisite Approvals” means any required approvals of the Lender and each Governmental
Agency to an action proposed to be taken by the Partnership.
“Retirement” (including the forms “Retire” and “Retired”) means, as to a General Partner,
and shall be deemed to have occurred automatically upon, the occurrence of death, adjudication of
insanity or incompetence, Event of Bankruptcy, dissolution or voluntary or involuntary withdrawal
from the Partnership for any reason. Involuntary withdrawal shall occur whenever a General
Partner may no longer continue as a General Partner by law, death, incapacity or pursuant to any
terms of this Agreement. A General Partner which is an Entity (an “Entity General Partner”) also
will be deemed to have Retired upon the sale or other disposition of a controlling interest in such
Entity General Partner. Without limitation of the foregoing, any of the foregoing events occurring
as to an individual or Entity which directly or indirectly holds a controlling interest in an Entity
General Partner shall also be deemed to constitute the Retirement of any such Entity General
Partner. For purposes of this definition, “controlling interest” shall mean the power to direct the
management and policies of such Entity, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.
“Revised Economic Projections” means the economic projections calculated immediately
prior to payment of the Fourth Installment using the same assumptions and methodology as the
Initial Economic Projections, revised to reflect the actual construction costs and available Federal
Low Income Tax Credits at such time and taking into account all other changes from the Initial
Economic Projections which affect the amount and timing of benefits, including the month the
Project is placed into service for purposes of Section 42 of the Code, the actual rate of lease-up for
the Low Income Units, and the actual operating history of the Project.
“Right of First Refusal Agreement” means the Right of First Refusal Agreement of even
date herewith between the Partnership and HACMB.
“SAIL Loan” means the construction and permanent loan in the principal amount of up to
$3,000,000 made to the Partnership by FHFC from proceeds of FHFC’s SAIL program. The SAIL
loan will mature June 15, 2044, will be non-amortizing, and will bear simple interest at the rate of
1.00% per annum. Interest payments on the SAIL Loan will be made from available Cash Flow as
set forth in Section 10.1A of this Agreement.
“SAIL Loan Documents” means the SAIL Loan Mortgage, the SAIL Loan Note and all
other documents executed and/or delivered in connection with, evidencing or securing the SAIL
Loan.
“SAIL Loan Mortgage” means the third-priority Leasehold Mortgage and Security
Agreement and Assignment of Leases, Rents and Profits granted by the Partnership to secure the
SAIL Loan.
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“SAIL Loan Note” means the Promissory Note in the original principal amount of
$3,000,000 executed by the Partnership to evidence its obligation to repay the SAIL Loan.
“Schedule” means the Schedule of Partners annexed hereto as Exhibit A as amended from
time to time and as so amended at the time of reference thereto.
“Service” or “IRS” means the Internal Revenue Service.
“Special Capital Contribution” means a capital contribution described in and made
pursuant to Section 6.8A or Section 6.11 and the Expense Reimbursement Contribution.
“Special Endorsements” means, collectively (but only to the extent available in Florida),
(i) a non-imputation endorsement, (ii) a comprehensive endorsement, (iii) a contiguity
endorsement (if the Land consists of more than one parcel), (iv) an access endorsement, (v) a
zoning endorsement for improved land (including any applicable parking provisions), (vi) a
Fairways endorsement (unless substantially similar coverage is provided under the general policy),
(vii) a blanket easement endorsement, (viii) a subdivision endorsement, (ix) a same as survey
endorsement, (x) a separate tax lot endorsement, (xi) a maximum loss endorsement, (xii) a
restriction, encroachment, minerals endorsement, (xiii) a condominium endorsement (if
applicable), and (xiv) any other endorsements reasonably requested by the Special Limited Partner
to the extent available in the State, each in a form reasonably acceptable to the Special Limited
Partner.
“Special Limited Partner” means Banc of America CDC Special Holding Company, Inc.,
a North Carolina corporation, and its successors.
“State” means the State of Florida.
“Substitute Limited Partner” means any Person who is admitted to the Partnership as a
Limited Partner under the provisions of Section 8.2.
“Supervisory Management Agreement” means the Supervisory Management Agreement of
even date herewith among the Partnership, the Managing General Partner and the Administrative
General Partner pursuant to which the Managing General Partner and the Administrative General
Partner are to provide certain supplemental management and oversight services with respect to the
Project.
“Supervisory Management Fee” means the fee payable to the Managing General Partner
and the Administrative General Partner under the Supervisory Management Agreement for their
services thereunder.
“Surtax Loan” means the loan in the principal amount of $5,950,000 made by the County
to the Partnership from the proceeds of funds made available to the County from County
Documentary Stamp Surtax Program funds. The Surtax Loan does not bear interest during the
construction period for years one through two (1-2) and will bear interest at the annual rate of one
percent (1%) (simple) thereafter with additional interest at the annual rate of one percent (1%)
simple that will accrue and not be payable until maturity. Commencing on March 15, 2025 and
each March 15th thereafter until the maturity date, the Partnership will make annual interest only
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payments of $59,500 on the Surtax Loan, subject to available Cash Flow. The Surtax Loan will
mature in 30 years from Investment Closing and any outstanding principal and interest on the
Surtax Loan shall be paid by the Partnership at that time.
“Surtax Loan Documents” means the Surtax Loan Mortgage, the Surtax Loan Note, and all
other documents and instruments executed and delivered in connection with the Surtax Loan.
“Surtax Loan Mortgage” means the sixth-priority Leasehold Mortgage and Security
Agreement and Assignment of Leases, Rents and Profits recorded as a lien against the Project as
security for the Partnership’s obligations under the Surtax Loan Documents.
“Surtax Loan Note” means the Promissory Note in the original principal amount of
$5,950,000 executed by the Partnership in favor of the County as evidence of the Partnership’s
obligations under the Surtax Loan Documents.
“Taxable Year” means the taxable year of the Partnership, which is expected to be the
calendar year.
“Tax Credit Application” means the application submitted to the Credit Agency to obtain
the Credit Approval, as amended from time to time, including all documentation submitted to the
Credit Agency concurrently therewith or pursuant thereto.
“Tax Credit Shortfall Loan” has the meaning attributed thereto in Section 5.2E.
“Tax Credit Shortfall Payments” has the meaning attributed thereto in Section 5.2E.
“Tax Credits” means the Federal Low Income Tax Credits.
“Tenant Income Certification” means a tenant’s initial tax credit certification, including
the tenant income certification/certificate of resident eligibility, all sources used in verifying
income and assets (including, but not limited to, third party verification, checking and savings
accounts, pay stubs, verification of assets, etc.), a copy of one completed lease signed and dated
for each building in the Property, and a copy of the first and last page of each lease of each Low
Income Unit, showing the start date of the lease and signature of the resident(s) and owner.
“Ten Percent Test Qualification” means receipt by the Special Limited Partner of evidence
satisfactory to the Special Limited Partner demonstrating that the Partnership has met the “ten
percent test” set forth in Section 42(h)(1)(E)(ii) of the Code with respect to the Project.
“Title Policy” means the ALTA owner’s leasehold policy of title insurance issued to the
Partnership by Fidelity National Title Insurance Company as endorsed to include the Special
Endorsements in the amount of $54,341,397 (which represents the sum of the Investor Limited
Partner’s Net Capital Contributions and the maximum principal amount of the permanent
Mortgage Loans) and dated not more than ten (10) days prior to Investment Closing.
“Transfer” means any sale, exchange, assignment, encumbrance, hypothecation, pledge,
foreclosure, conveyance, gift or other transfer of any kind, whether direct or indirect, voluntary or
involuntary. When used as a verb, such term shall mean, voluntarily or involuntarily, to sell,
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exchange, assign, encumber, hypothecate, pledge, foreclose, convey in trust, give or otherwise
transfer.
“Uniform Act” means the Revised Uniform Limited Partnership Act as in effect under the
laws of the State, as amended from time to time.
“Units” means any of the Low Income Units in the Project.
“Viability Loan” means the construction and permanent loan in the amount of up to
$4,300,000 made by FHFC to the Partnership, which loan will mature June 15, 2044. The Viability
Loan is non-amortizing and will bear simple interest at the annual rate of 1%. All unpaid principal
and interest on the Viability Loan will be due and payable at maturity except for annual interest
payments from available Cash Flow as set forth in the Viability Loan Documents.
“Viability Loan Agreement” means the Construction Loan Agreement by and between
FHFC and the Partnership which sets forth the terms and conditions upon which the Viability Loan
is being made to the Partnership.
“Viability Loan Documents” means the Viability Loan Agreement, Viability Loan
Mortgage, Viability Loan Note, and all other documents evidencing and securing the Viability
Loan or otherwise entered into connection therewith.
“Viability Loan Mortgage” means the second-priority leasehold mortgage securing the
obligations of the Partnership under the Viability Loan Note.
“Viability Loan Note” means the promissory note in the original principal amount of
$4,300,000 executed by the Partnership in favor of FHFC as evidence of its obligation to repay the
Viability Loan.
“Withdrawing Administrative General Partner” means HACMB-Vista Breeze, LLC, a
Florida limited liability company.
“Withdrawal Purchase Price” shall have the meaning set forth in Section 7.7D.
“Withdrawing Limited Partner” means Howard D. Cohen Revocable Trust U/A/D
4/6/1993.
ARTICLE II
CONTINUATION, NAME AND PURPOSE
Section 2.1 Continuation. The parties hereto hereby agree to continue the limited partnership
known as Vista Breeze, Ltd., which was formed pursuant to the provisions of the Uniform Act.
Section 2.2 Name and Office; Agent for Service
A. The Partnership shall continue to be conducted under the name and style set
forth in Section 2.1. The principal office of the Partnership shall be at 161 NW 6th Street, Suite
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1020, Miami, Florida 33136. The General Partners may at any time change the location of such
principal office and shall give prompt notice of any such change to the Limited Partners.
B. The name and address of the agent of the Partnership for service of process
shall be: Brian J. McDonough, 2200 Museum Tower, 150 West Flagler Street, Miami, Florida,
33130.
Section 2.3 Purpose. The purpose of the Partnership is to acquire, construct, develop, repair,
improve, maintain, operate, manage, lease, dispose of and otherwise deal with the Project, which
shall be known as Vista Breeze, in accordance with any applicable Regulations and the provisions
of this Agreement. The Partnership shall not engage in any other business or activity.
Section 2.4 Authorized Acts. In furtherance of its purposes, but subject to all other provisions
of this Agreement including, but not limited to, Article VI, the Partnership is, and the General
Partners acting on its behalf are, hereby authorized:
(i) To acquire by purchase, lease or otherwise any real or personal
property which may be necessary, convenient or incidental to the accomplishment of the
purposes of the Partnership.
(ii) To acquire, construct, rehabilitate, operate, maintain, finance and
improve, and to own, sell, convey, assign, mortgage or lease the Project and any other real
estate and any personal property necessary, convenient or incidental to the accomplishment
of the purposes of the Partnership.
(iii) To borrow money and issue evidences of indebtedness in
furtherance of any or all of the purposes of the Partnership and to secure the same by
mortgage, deed of trust, security interest, pledge or other lien on the Property or any other
assets of the Partnership, to the extent permitted by the Project Documents.
(iv) To prepay in whole or in part, refinance, renew, recast, increase,
modify or extend any Mortgage and in connection therewith to execute any extensions,
renewals, or modifications of such Mortgage.
(v) To employ any Person, including any Affiliate, to perform services
for, or to sell goods to, the Partnership and to pay for such goods and services; provided
that (except with respect to any contract specifically authorized by this Agreement) the
terms of any such transaction with an Affiliate shall not be less favorable to the Partnership
than would be arrived at by unaffiliated parties dealing at arms’ length.
(vi) To execute any and all Notes, Mortgages and security agreements in
order to secure loans from any Lender and any and all other documents, including but not
limited to the Project Documents, required by any Lender or any Governmental Agency in
connection with each Mortgage and the acquisition, construction, rehabilitation, repair,
development, improvement, maintenance and operation of the Property.
(vii) To execute agreements with any Governmental Agency.
(viii) To execute leases of the Units in the Project.
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(ix) To modify or amend the terms of any agreement or contract which
the General Partners are authorized to enter into on behalf of the Partnership; provided,
however, that such terms as amended shall not (1) materially adversely affect the
Partnership or the Limited Partners, or (2) be in contravention of any of the terms or
conditions of this Agreement.
(x) To enter into any kind of activity and to perform and carry out
contracts of any kind necessary to, or in connection with, or incidental to, the
accomplishment of the purposes of the Partnership, so long as said activities and contracts
may be lawfully carried on or performed by a partnership under the laws of the State.
(xi) To execute the Related Agreements and any notices, documents or
instruments permitted or required to be executed or delivered in connection therewith or
pursuant thereto.
ARTICLE III
TERM AND DISSOLUTION
A. The Partnership shall continue in full force and effect until
December 31, 2099, except that the Partnership shall be dissolved prior to such date upon the
happening of any of the following events:
(i) the sale or other disposition of all or substantially all the assets of
the Partnership;
(ii) the Retirement of a General Partner unless the business of the
Partnership is continued pursuant to Article VII;
(iii) the election to dissolve the Partnership made in writing by the
General Partners with the Consent of the Investor Limited Partner and any Requisite
Approvals; or
(iv) the entry of a final decree of dissolution of the Partnership by a court
of competent jurisdiction.
B. Upon dissolution of the Partnership (unless the business of the Partnership
is continued pursuant to Article VII), the Managing General Partner (or for purposes of this
paragraph its trustees, receivers, successors or legal representatives) with the consent of the
Administrative General Partner (such consent not to be unreasonably withheld, conditioned or
delayed) shall cause the cancellation of the Certificate, liquidate the Partnership assets and apply
and distribute the proceeds thereof in accordance with Section 10.2. Notwithstanding the
foregoing, in the event the Managing General Partner shall determine that an immediate sale of
part or all of the Partnership’s assets would cause undue loss to the Partners, the Managing General
Partner may, with the consent of the Administrative General Partner (such consent not to be
unreasonably withheld, conditioned or delayed), in order to avoid such loss, defer liquidation of,
and withhold from distribution for a reasonable time, any assets of the Partnership except those
necessary to satisfy the Partnership debts and obligations (other than Operating Expense Loans).
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ARTICLE IV
PARTNERS; CAPITAL
Section 4.1 General Partners
A. The initial Managing General Partner of the Partnership is APC Vista
Breeze, LLC, and its address and Capital Contributions are set forth in the Schedule. In no event
shall the aggregate Capital Contributions of the Managing General Partner (excluding any Special
Capital Contributions, Capital Contributions made pursuant to Section 4.1C below and amounts,
if any, paid pursuant to Section 10.2A) exceed $100 without the Consent of the Investor Limited
Partner.
B. The Administrative General Partner, which is hereby admitted to the
Partnership, is Vista Breeze HACMB, Inc., and its address and Capital Contributions are set forth
in the Schedule. In no event shall the aggregate Capital Contributions of the Administrative
General Partner (excluding any Special Capital Contributions and amounts, if any, paid pursuant
to Section 10.2A) exceed $100 without the Consent of the Investor Limited Partner.
C. In the event the entire Development Amount and accrued but unpaid interest
thereon has not been paid by the fifteenth (15th) anniversary of the Completion Date, the Managing
General Partner shall make a Capital Contribution to the Partnership in the amount necessary to
pay the balance of the Development Amount and the Managing General Partner shall cause the
Partnership to immediately apply such proceeds to the discharge of such obligation in full.
Section 4.2 Limited Partners
A. The Special Limited Partner is hereby admitted to the Partnership. Its
address and Capital Contribution are set forth in the Schedule.
B. The Investor Limited Partner is hereby admitted to the Partnership. Its
address and Capital Contributions are set forth in the Schedule. The payment of its Capital
Contribution is governed by Section 5.1.
C. The Withdrawing Limited Partner is Howard D. Cohen Revocable Trust
U/A/D 4/6/1993. By its execution of this Agreement, the Withdrawing Limited Partner hereby
withdraws as a Limited Partner, and the Withdrawing Limited Partner, as such, shall have no
further rights with respect to the Partnership as of the Admission Date.
D. The Withdrawing Administrative General Partner is HACMB-Vista Breeze,
LLC. By its execution of this Agreement, the Withdrawing Administrative General Partner hereby
withdraws as an Administrative General Partner, and the Withdrawing Administrative General
Partner, as such, shall have no further rights with respect to the Partnership as of the Admission
Date.
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Section 4.3 Partnership Capital and Capital Accounts
A. The capital of the Partnership shall be the aggregate amount contributed by
the Partners as set forth in the Schedule. No interest shall be paid by the Partnership on any Capital
Contribution. If necessary or appropriate, amendments to the Certificate shall be filed from time
to time to reflect the withdrawal or admission of Partners. The Schedule may be amended from
time to time to reflect any changes in the Interest held or amount contributed or agreed to be
contributed by any Partner.
B. A separate Capital Account shall be maintained for each Partner in
accordance with the following provisions:
(i) To each Partner’s Capital Account there shall be added (a) the
amount of money and the initial Gross Asset Value of any property other than money
contributed (or deemed contributed) to the capital of the Partnership by such Partner, (b)
such Partner’s distributive share of Profits and any items in the nature of income or gain
that are specially allocated to such Partner pursuant to Section 10.4, and (c) the amount of
any Partnership liabilities assumed by such Partner or that are secured by any property
distributed to such Partner.
(ii) From each Partner’s Capital Account there shall be subtracted (a)
the amount of money and the Gross Asset Value of any property distributed by the
Partnership to such Partner, (b) such Partner’s distributive share of Losses and any items
in the nature of expense or loss that are specially allocated to such Partner pursuant to
Section 10.4, and (c) the amount of any liabilities of such Partner assumed by the
Partnership or that are secured by any property contributed by such Partner to the
Partnership.
(iii) In the event all or a portion of an Interest in the Partnership is
Transferred in accordance with the terms of this Agreement, the transferee shall succeed
to the Capital Account of the transferor to the extent it relates to the transferred Interest.
(iv) In determining the amount of any liability for purposes of
subparagraphs (i) and (ii) hereof, there shall be taken into account Code Section 752(c) and
any other applicable provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Section 1.704-1(b) of the Allocation
Regulations, and shall be interpreted and applied in a manner consistent with such Regulations. In
the event the General Partners shall determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits
relating to liabilities that are secured by contributed or distributed property or that are assumed by
the Partnership or any Partners) are kept, the General Partner may make such modification. The
General Partners also shall (a) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of capital reflected on the
Partnership’s balance sheet, as computed for book purposes, in accordance with Treas. Reg. §
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1.704-1(b)(2)(iv)(q) and (b) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Treas. Reg. § 1.704-(b).
C. The original Capital Account established for any substituted Partner 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 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 it succeeds, the original Capital Account of such substituted Partner and
its Capital Contribution shall be acquired in such proportion or amount as agreed to by the
substituted Partner and assigning Partner and the assigning Partner who retains a partial Interest in
the Partnership shall retain the remainder of its Capital Contribution and Capital Account. Any
special basis adjustments under Section 743 of the Code resulting from an election by the
Partnership pursuant to Section 754 of the Code shall not be taken into account for any purpose in
establishing and maintaining Capital Accounts for the Partners pursuant to this Section 4.3.
D. Nothing in this Section 4.3 shall affect any limitations on the transferability
of Interests set forth in this Agreement.
E. Subject to the condition precedent that the Completion Date has occurred,
then upon notice from the Managing General Partner to all other Partners, the Interest of the
Managing General Partner will convert to that of a special limited partner, thereafter to be referred
to as the "Class B Limited Partner", on or before December 31 of the calendar year in which a
certificate of occupancy is first issued for any Building in the Project. The Class B Limited Partner
will have the identical economic and managerial rights, duties and obligations subsequent to such
conversion that it had while it was the Managing General Partner, except as may be circumscribed
by the Act. In particular, and not in limitation of the foregoing, the Class B Limited Partner will
continue to have all managerial rights it had as Managing General Partner, and nothing herein shall
be construed as the Administrative General Partner becoming the Managing General Partner. In
addition, the Investor Limited Partner will have the same rights against the Class B Limited Partner
including, without limitation, the right to remove it from the Partnership, as it had against the
Managing General Partner. No amendment of this Agreement will be necessary to effectuate such
conversion and no Guarantor will be required to consent to or ratify such conversion. All
Guarantors have been advised of this Section 4.1E and consent to its implementation, if and when
conversion of the Interest of the Managing General Partner to that of a Class B Limited Partner
occurs.
Section 4.4 Withdrawal of Capital. Except as may be specifically provided in this Agreement,
no Partner shall have the right to (i) withdraw from the Partnership all or any part of its Capital
Contribution or (ii) demand and receive property of the Partnership in return for its Capital Con-
tribution or in respect of its Interest.
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Section 4.5 Liability of Limited Partners
A. No Limited Partner shall be liable for any debts, liabilities, contracts, or
obligations of the Partnership. A Limited Partner shall be liable only to make payments of its
Capital Contribution as and when due hereunder. After its Capital Contribution shall be fully paid,
no Limited Partner shall, except as otherwise required by the Uniform Act or Section 10.2A, be
required to make any further capital contributions or payments or lend any funds to the Partnership.
B. In no event shall any Person who is at any time a member or manager of the
Investor Limited Partner, or any partner, member or Affiliate of any such Person, have any
personal liability for the payment or performance of any obligation of the Investor Limited Partner
under the provisions of this Agreement or any document or instrument to be delivered in
connection with this Agreement, including, without limitation, the obligations of the Investor
Limited Partner to contribute capital to the Partnership. All parties dealing with the Investor
Limited Partner shall look solely to the assets of the Investor Limited Partner for the satisfaction
of any such obligation.
Section 4.6 Additional Limited Partners. The General Partners may admit additional Limited
Partners only with the Consent of the Investor Limited Partner.
Section 4.7 Agreement to be Bound by Documents. Each General Partner and Limited
Partner shall be bound by the terms of this Agreement and the Project Documents. Any incoming
General Partner and Limited Partner, as a condition of receiving any Interest, shall agree to be
bound by this Agreement and the Project Documents to the same extent and on the same terms as
the other General Partners and Limited Partners, respectively. Upon any dissolution of the
Partnership or any Transfer of the Property while any Mortgage is held by any Lender, no title or
right to the possession and control of the Property and no right to collect the rents therefrom shall
pass to any Person who is not, or does not become, bound in a manner satisfactory to the Lender
and the Governmental Agency to the Project Documents and the provisions of this Agreement.
The Project Documents shall be binding upon and shall govern the rights and obligations of the
Partners, their heirs, executors, administrators, successors and assigns as long as the corresponding
Mortgage Loans shall be outstanding.
ARTICLE V
CAPITAL CONTRIBUTIONS OF INVESTOR LIMITED PARTNER
Section 5.1 Installments of Capital Contributions
A. The Investor Limited Partner shall contribute as its Capital Contribution the
sum of $26,310,928, payable in four (4) installments (the “Installments”) as follows:
(i) the first Installment (the “First Installment”) in the amount of $5,262,186
plus the Expense Reimbursement Contribution shall be paid on the latest to occur of (a)
the date of Investment Closing, (b) closing and the initial funding of the Project Loan and
the closing of the Permanent Loans and receipt of the executed Project Loan Documents
and Permanent Loan Documents in form and substance reasonably satisfactory to the
Investor Limited Partner (which may occur concurrently with the payment of this First
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Installment), (c) receipt of the Mortgage Loan Commitments, (d) receipt of the executed
Ground Lease, (e) receipt of the Credit Approval, (f) receipt by the Investor Limited Partner
of the initial Unit Designations and Investor Limited Partner approval of the software
program that will be used by the Management Agent to monitor compliance with the
Minimum Set-Aside Test, or (g) satisfactory completion of the Investor Limited Partner’s
due diligence requirements.
(ii) the second Installment (the “Second Installment”) in the amount of
$10,524,371 shall be payable on the latest to occur of (a) the Completion Date (including
receipt by the Investor Limited Partner of copies of all certificates or permits permitting
occupancy of the Project and a current title search report demonstrating that the Project is
free of any mechanics’ or other liens (except for liens which are bonded against in a manner
as to preclude the holder thereof from having any recourse to the Property or the
Partnership for payment of any debt secured thereby)), (b) receipt of evidence of insurance
for the Management Agent in accordance with the requirement of Exhibit C, or (c) receipt
by the Investor Limited Partner of an opinion rendered by Partnership Counsel regarding
the Project’s qualification for the Property Tax Exemption,
(iii) the third Installment (“Third Installment”) in the amount of $9,866,598 shall
be payable on the latest to occur of (a) achievement of at least an average 115% Debt
Service Coverage Ratio for a period of three (3) consecutive calendar months (which period
must include the last day of the month immediately preceding the month in which this
Third Installment is to be paid), (b) the Initial Occupancy Date, (c) physical occupancy of
at least 90% of the Units, (d) Final Closing, including, without limitation, Permanent
Mortgage Commencement (which may occur simultaneously with the payment of this
Third Installment), (e) receipt of permanent certificates of occupancy for the Project, (f)
delivery of a copy of Exhibit H, evidencing the Partnership’s achievement of the
Development Obligation Date, or (g) delivery of evidence that radon mitigation measures
required pursuant to Section 12.1F of this Agreement, if any, have been implemented at
the Project or (h) receipt of a LOMA-R for each Building in the Project, indicating that
each Building is located in a zone that does not require the mandatory purchase of flood
insurance.
(iv) the fourth Installment (the “Fourth Installment”) in the amount of $657,773
shall be payable on the latest to occur of (a) the Forms 8609 Receipt Date, (b) receipt of a
recorded copy of the Extended Use Agreement, (c) determination by the Accountants of
the Final Tax Credit Amount and the calculation of any adjustment required pursuant to
Section 5.2 reasonably satisfactory to the Investor Limited Partner and agreed to by the
Managing General Partner, or (d) receipt by the Investor Limited Partner of a copy of the
tax credit compliance audit report of initial tenant files conducted by a qualified third-party
firm reasonably approved by the Investor Limited Partner.
B. The Partners and the Partnership hereby authorize and direct the Investor
Limited Partner to pay and remit directly to the Fiscal Agent for deposit into the Borrower Equity
Account for disbursement in accordance with the Project Loan Documents, (a) the First Installment
and the Second Installment for disbursement in accordance with the terms of the Project Loan
Documents, and (b) such portion of the Third Installment as is necessary to pay down the Project
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Loan to its permanent phase amount of $11,875,000 (or such greater amount as permitted pursuant
to Section 9.1A). The amount of any Installments paid directly to the Fiscal Agent or into the
Borrower Equity Account for disbursement in accordance with the Project Loan Documents will
be deemed to have been contributed by the Investor Limited Partner to the Partnership in
satisfaction of its obligations under Section 5.1A.
C. The obligation of the Investor Limited Partner to make each Installment
(except as otherwise provided) is subject to each of the following conditions:
(i) The Managing General Partner shall have properly completed,
executed and delivered to the Investor Limited Partner (with a copy to be sent to the
Administrative General Partner) a certificate relating to the appropriate remaining
Installments (the “Payment Certificate”), in the forms attached hereto as Exhibit E,
Exhibit F and Exhibit G relating to the appropriate remaining Installments, dated the date
such Installment is to be paid to the Partnership and attaching the Title Policy endorsement
and any other materials referred to therein. In connection with the payment of each
Installment, the Investor Limited Partner shall have the right to conduct a physical
inspection of the Property to confirm the status of construction or rehabilitation thereof or
to determine that the condition of the Project is consistent with sound business practices in
the geographic area in which the Project is located, including no deferred maintenance. The
Investor Limited Partner shall conduct such inspection within ten (10) business days of
being requested to do so by the Managing General Partner, provided, however, that the
Investor Limited Partner will be deemed to waive such physical inspection requirement if
it does not make such inspection within ten (10) business days of receipt of a written request
by the Managing General Partner to do so (which may be sent prior to the date of the
Payment Certificate, but not more than ten (10) business days prior to the date of the
Payment Certificate).
(ii) In the case of the First Installment, all Requisite Approvals to the
admission of the Investor Limited Partner pursuant to this Agreement shall have been
obtained and the Project shall have received the Credit Approval in the amount of at least
$2,585,299 per annum.
(iii) Each of the representations and warranties set forth in Section 6.5
shall be true and correct in all material respects.
(iv) No event shall have occurred which would permit the Investor
Limited Partner to give an Election Notice under Section 5.3.
(v) From and after the date of the occurrence of an Event of Bankruptcy
as to any General Partner, any Guarantor or the Developer, the obligation of the Investor
Limited Partner to pay the Installments shall be suspended, and such obligation shall be
reinstated only when such Event of Bankruptcy shall have been cured in a manner approved
in writing by the Investor Limited Partner.
(vi) No Installment shall be payable unless all conditions for all prior
Installments have been satisfied.
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Section 5.2 Adjustment to Capital Contributions of Investor Limited Partner. The Capital
Contribution of the Investor Limited Partner shall be subject to adjustment in the manner provided
in this Section 5.2.
A. Federal Low Income Tax Credit Downward Basis Adjuster. If at any time
and from time to time for any reason the Accountants shall determine that, or there shall be a Final
Determination or Recapture Event pursuant to which, the Adjusted Aggregate Federal Low Income
Tax Credit Amount properly allocable to the Investor Limited Partner during the Credit Period for
all of the Buildings in the Project is or will be less than the Projected Aggregate Federal Low
Income Tax Credit Amount, then the Capital Contribution of the Investor Limited Partner shall be
reduced in the aggregate by the sum of (i) $0.985 (the “Federal Low Income Tax Credit Downward
Basis Adjustment Factor”) for each $1.00 that the Adjusted Aggregate Federal Low Income Tax
Credit Amount is less than the Projected Aggregate Federal Low Income Tax Credit Amount
(except to the extent such shortfall is attributable to the recapture of Federal Low Income Tax
Credits previously reported on a Partnership tax return, in which event the Federal Low Income
Tax Credit Downward Basis Adjustment Factor shall be $1.00 with respect to the portion of such
shortfall attributable to such recapture), (ii) the amount of any interest and/or penalties paid or
payable by the Investor Limited Partner (or its participants) as a result of any Recapture Event
affecting the foregoing calculation and (iii) 5% per annum commencing on the Admission Date
and continuing until the payment of the amount of such reduction in full (for purposes of this
clause (iii), any reduction effected by reduction in the amount of an Installment as provided in
Section 5.2E shall be deemed to have been paid on the date on which such Installment shall actually
become payable hereunder).
B. Federal Low Income Tax Credit Downward Timing Adjuster. If at any time
and from time to time for any reason the Accountants shall determine that, or there shall be a Final
Determination pursuant to which, the amount of the Federal Low Income Tax Credits properly
allocable to the Investor Limited Partner is less than $1,669,475 in 2025 or $2,671,160 in 2026
(the “Federal Downward Timing Adjuster Target Amounts”), then the Capital Contribution of the
Investor Limited Partner shall be reduced by $0.65 for each $1.00 that the Federal Low Income
Tax Credits properly allocable to the Investor Limited Partner is less than $1,669,475 in 2025 or
$2,671,160 in 2026. Notwithstanding the foregoing, however, (i) in the event that the Adjusted
Aggregate Federal Low Income Tax Credit Amount shall vary from the Projected Aggregate
Federal Low Income Tax Credit Amount in effect on the date of the Investment Closing, the
Federal Downward Timing Adjuster Target Amounts for purposes of the preceding sentence shall
be adjusted by the same percentage by which the Adjusted Aggregate Federal Low Income Tax
Credit Amount varies from the Projected Aggregate Federal Low Income Tax Credit Amount and
(ii) if 2026 is not the First Full Credit Year, comparable adjustments shall be made for any
subsequent year which precedes the First Full Credit Year.
C. Federal Low Income Tax Credit Upward Basis Adjuster. If at any time and
from time to time the Accountants shall determine or there shall be a Final Determination that the
Adjusted Aggregate Federal Low Income Tax Credit Amount properly allocable to the Investor
Limited Partner during the Credit Period is greater than the Projected Aggregate Federal Low
Income Tax Credit Amount, then the Capital Contribution of the Investor Limited Partner shall be
increased, subject to the provisions of Section 5.2E below, by $0.985 for each $1.00 that the
Adjusted Aggregate Federal Low Income Tax Credit Amount properly allocable to the Investor
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Limited Partner during the Credit Period is greater than the Projected Aggregate Federal Low
Income Tax Credit Amount.
D. Federal Low Income Tax Credit Upward Timing Adjuster. If there shall be a Final
Determination pursuant to which, the amount of the Federal Low Income Tax Credits properly
allocable to the Investor Limited Partner is greater than $1,669,475 in 2025 (the “Federal Upward
Timing Adjuster Target Amount”), then the Capital Contribution of the Investor Limited Partner
shall be increased, subject to the provisions of Section 5.2E below, by $0.65 for each $1.00 that
the Federal Low Income Tax Credits properly allocable to the Investor Limited Partner is greater
than $1,669,475 in 2025. Notwithstanding the foregoing, however, in the event that the Adjusted
Aggregate Federal Low Income Tax Credit Amount shall vary from the Projected Aggregate
Federal Low Income Tax Credit Amount in effect on the date of the Investment Closing, the
Federal Upward Timing Adjuster Target Amount for purposes of the preceding sentence shall be
adjusted by the same percentage by which the Adjusted Aggregate Federal Low Income Tax Credit
Amount varies from the Projected Aggregate Federal Low Income Tax Credit Amount.
E. Application of Adjustments.
(i) If, upon the occurrence of any determination or event giving rise to
an adjustment in the Capital Contribution of the Investor Limited Partner under this Section
5.2 (aggregating and/or netting, as applicable, all concurrent adjustments applicable to the
Investor Limited Partner under this Section 5.2), there is a net reduction in such Capital
Contribution, then such net reduction shall be applied first to reduce the amount of any
unpaid Installments of the Capital Contribution of the Investor Limited Partner, in order,
by a corresponding amount. If the net reduction exceeds the amount of such unpaid
Installments or if all Installments have previously been contributed, then the Managing
General Partner shall make a payment (a “Tax Credit Shortfall Payment”) to the Investor
Limited Partner in the amount of such excess, on an After-Tax Basis, within seventy-five
(75) days of the end of the calendar year in which the determination is made. Unless the
treatment thereof as a Capital Contribution is approved in writing by the Investor Limited
Partner (which approval shall be withheld by it only in cases where, in its reasonable
discretion, it determines that such treatment could reduce the amount of Federal Low
Income Tax Credits which would otherwise be allocable to the Investor Limited Partner
under this Agreement), any such Tax Credit Shortfall Payment by the Managing General
Partner shall not constitute a Capital Contribution to the Partnership but shall be treated as
a loan by the Managing General Partner to the Partnership which shall be repaid in
accordance with Section 10.1A and 10.1B (the “Tax Credit Shortfall Loan”). If full
payment of such excess amount is not received within such seventy-five (75) day period,
the unpaid balance shall thereafter bear interest at the Designated Prime Rate. In the event
any such Tax Credit Shortfall Payment is treated as a Capital Contribution in accordance
with this paragraph, the payment thereof to the Investor Limited Partner shall be treated as
a distribution by the Partnership to the Investor Limited Partner of the proceeds of such
Capital Contribution. Notwithstanding anything to the contrary herein, to the extent any
Tax Credit Shortfall Payment owed to the Investor Limited Partner is solely attributable to
a Change in Law, the transfer of the Investor Limited Partner’s Interest or an action or
inaction by the Investor Limited Partner, then such resulting Tax Credit Shortfall Payment
to be made under this Section 5.2E shall only be payable to the Investor Limited Partner
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from available Cash Flow pursuant to Section 10.1A or the proceeds of a Capital
Transaction pursuant to Section 10.1B.
(ii) If, upon the occurrence of any determination or event giving rise to
an adjustment in the Capital Contribution of the Investor Limited Partner under this Section
5.2 (aggregating and/or netting, as applicable, all concurrent adjustments under this Section
5.2), there is a net increase in such Capital Contribution, then such net increase shall be
paid at the time of the Fourth Installment, and if the Fourth Installment has already been
paid, shall be paid by the Investor Limited Partner within sixty (60) days of the date of the
determination in question. If full payment of such net increase is not received within such
sixty (60) day period, the unpaid balance shall thereafter bear interest at the Designated
Prime Rate. Notwithstanding the foregoing, however, the cumulative amount of any
increases to the Capital Contribution of the Investor Limited Partner shall not exceed ten
percent (10%) of the Investor Limited Partner’s Net Capital Contribution. To the extent the
cumulative amount of any increases to the Capital Contribution of the Investor Limited
Partner would exceed ten percent (10%) of the Investor Limited Partner’s Net Capital
Contribution, and the Investor Limited Partner does not elect to contribute an amount in
excess of such cap, the Interest of the Investor Limited Partner shall be reduced and the
Interest of the Managing General Partner shall be increased so that the Tax Credits
allocated to the Investor Limited Partner will be equal to the Capital Contribution of the
Investor Limited Partner divided by $0.985, the price per dollar of Tax Credit contributed
by the Investor Limited Partner.
F. Provisional Adjustments. If, upon receipt by the Investor Limited Partner of
a Payment Certificate with respect to any Installment, the Investor Limited Partner shall have a
reasonable basis to believe that the amount of such Installment would have been subject to
reduction if the Accountants had made a current determination or projection under any of the
preceding provisions of this Section 5.2, the Investor Limited Partner may so notify the General
Partners within seven (7) business days of receipt of such Payment Certificate, and the Managing
General Partner shall thereupon engage the Accountants to make such determination or projection
(unless the Managing General Partner and Investor Limited Partner shall mutually agree upon the
adjustments to be made). The amount of the Installment in question shall then be provisionally
reduced in accordance with such projection or agreement; provided, however, that if the
Accountants’ subsequent determinations with respect to matters provisionally reduced under this
paragraph shall vary from the determinations or mutual agreements described herein, then either
(i) the Investor Limited Partner shall promptly pay to the Partnership the amounts, if any, by which
the provisional reduction exceeded the reduction as subsequently determined or (ii) the amount, if
any, by which the reduction as subsequently determined exceeded the provisional reduction shall
be applied against future Installments or refunded as provided in Section 5.2E above. The due date
for payment by the Investor Limited Partner of any Installment or any portion of an Installment
held back pursuant to this section shall be suspended until the Accountant's determination of the
provisional reduction (if any) as provided herein.
G. The obligations of the Managing General Partner set forth in this Section
5.2 shall expire at the end of the Compliance Period and shall be guaranteed pursuant to that certain
Guaranty Agreement of even date herewith. The obligations of the Managing General Partner set
forth in Section 6.8 of this Agreement expire upon the fifth (5th) anniversary of the Development
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Obligation Date and are limited in amount. The limitations imposed in Section 6.8 are separate
and distinct from the obligations imposed under this Section 5.2 and should not be construed as
limiting in any manner the duration or amount of the obligations described in this Section 5.2.
Section 5.3 Repurchase of Investor Limited Partner’s Interest
A. The Managing General Partner hereby agrees to purchase the Interest of the
Investor Limited Partner if any of the following events shall occur:
(i) Final Closing shall not have taken place on or before the date of
maturity of the construction phase of the Project Loan, provided, however, that such date
may be automatically extended for a period of up to twelve (12) months to the extent the
expiration dates set forth in the Mortgage Loan Commitments shall have been extended
beyond such date and provided, further, that the failure to achieve Final Closing is not due
to the bad faith or willful misconduct of any Affiliate of the Investor Limited Partner; or
(ii) at any time prior to the Development Obligation Date, (1) any action
to foreclose any Mortgage shall have been commenced and such action is not terminated
or withdrawn within ninety (90) days or a binding agreement with the holder(s) thereof to
effect the same entered into within such period, and any notice of acceleration of
indebtedness waived or withdrawn; (2) any action is commenced to foreclose any
mechanics’ or any other lien (other than the lien of any Mortgage) against the Project and
such action has not within ninety (90) days been either bonded against in such a manner as
to preclude the holder of such lien from having any recourse to the Property or to the
Partnership for payment of any debt secured thereby, or affirmatively insured against by
the title insurance policy or an endorsement thereto issued to the Partnership by a reputable
title insurance company (which insurance company will not have indemnity from or
recourse against Partnership assets by reason of any loss it may suffer by reason of such
insurance) in an amount satisfactory to Investor Tax Counsel; or (3) construction or
operation of the Project shall have been enjoined by a final order (from which no further
appeals are possible) of a court having jurisdiction and such injunction shall continue for a
period of thirty (30) days; or
(iii) any of the Mortgage Loan Commitments is terminated, withdrawn
or becomes unenforceable (except as a result of full performance thereof in accordance
with its terms or the bad faith or willful misconduct of any Affiliate of the Investor Limited
Partner) and such Commitment is not reinstated (or replaced on terms at least as favorable
to the Partnership) within ninety (90) days; or
(iv) a casualty occurs resulting in substantial destruction of more than
50% of the Project, or there is substantial destruction of less than 50% of the Project and
either the sum of the insurance proceeds (if any) and any additional monies made available
by the Managing General Partner and/or Investor Limited Partner are insufficient to restore
the Project or the Project is not so restored within twenty-four (24) months following such
casualty; or
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(v) the Project shall become ineligible for 30% or more of the Projected
Aggregate Federal Low Income Tax Credit Amount; or
(vi) the Partnership shall fail to achieve the Development Obligation
Date within 36 months following the Completion Date; provided, however, the Investor
Limited Partner shall not exercise its right to be repurchased for the Partnership’s failure
to achieve the Development Obligation Date within 36 months following the Completion
Date as long as the Managing General Partner funds all Operating Deficits that the Project
incurs. Such funding by the General Partners to prevent the exercise of the Investor Limited
Partner’s rights under this Section 5.3A(vi) shall not count toward the fulfillment of the
Managing General Partner’s obligation to make Operating Expense Loans under Section
6.8; or
(vii) the Partnership shall fail to achieve Fifty Percent Test Qualification
prior to the end of the first year of the Credit Period; or
(viii) the Forms 8609 Receipt Date shall not have occurred by the due date
(as the same may have been properly extended, if applicable) for filing of the Partnership’s
federal income tax returns for the first year of the Credit Period (unless such delay is, in
the judgment of the Special Limited Partner, beyond the reasonable control of the
Managing General Partner); or
(ix) any Lender other than an Affiliate of the Investor Limited Partner or
any Governmental Agency shall disapprove, or fail to give a required approval of, the
Investor Limited Partner as a Partner of the Partnership; or
(x) termination of the Ground Lease during the Compliance Period; or
(xi) the Completion Date shall not have occurred on or before May 31,
2026.
B. If any such event set forth in Section 5.3A shall occur, the Managing
General Partner shall give notice to the Investor Limited Partner (with a copy to the Administrative
General Partner) of the obligations of the Managing General Partner hereunder to purchase its
Interest (such obligation being herein called a “Purchase Obligation” and such notice the “Purchase
Obligation Notice”) within fifteen (15) days after the occurrence of any event giving rise to such
obligation. If the Investor Limited Partner elects to sell its Interest hereunder, it shall give the
Managing General Partner notice of such election (an “Election Notice”) within thirty (30) days
after such Purchase Obligation Notice from the Managing General Partner is received by the
Investor Limited Partner (or, in the event that such Purchase Obligation Notice from the Managing
General Partner is not given, at any time after the occurrence of such event). The Investor Limited
Partner will provide a copy of the Election Notice to the Administrative General Partner.
C. Within fifteen (15) business days after delivery to the Managing General
Partner of an Election Notice from the Investor Limited Partner, the Managing General Partner
shall pay the Investor Limited Partner a purchase price (the “Purchase Price”) in cash (with interest
thereon at an annual rate one percentage point above the Designated Prime Rate commencing on
the fifth (5th) day following the date of such delivery) equal to (i) the sum of (a) that portion of
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the Investor Limited Partner’s Net Capital Contribution (which has thereto been paid-in to the
Partnership), increasing 7% per annum commencing on the date the Investor Limited Partner’s
Capital Contribution was made through the fifth (5th) day following the date of such delivery, plus
(b) the actual out-of-pocket costs (including any legal, accounting and consulting fees and any
interest or penalties) paid by the Investor Limited Partner in connection with any recapture of Tax
Credits allocated to the Investor Limited Partner pursuant to this Agreement less (ii) the sum of
(a) the amount of Cash Flow theretofore distributed by the Partnership in respect of the Investor
Limited Partner’s Interest and (b) the amount of any Tax Credits allocable to the Interest which
will not be recaptured as a result of the disposition of said Interest or otherwise.
D. Upon the giving of its Election Notice, the Investor Limited Partner shall
have no further obligations under this Agreement, and the Managing General Partner shall
indemnify and defend the Investor Limited Partner and hold it harmless against any such
obligations. The Managing General Partner shall take all action and shall pay all costs necessary
to enable the Investor Limited Partner to receive and retain the Purchase Price as against any
creditor of the Managing General Partner or the Partnership. Notwithstanding the purchase by the
Managing General Partner of the Interest of the Investor Limited Partner pursuant to Section 5.3A,
to the extent permitted under the applicable provisions of the Code, the Investor Limited Partner
shall be allocated any profits or losses and tax credits in respect of said Interest for the period prior
to the date of the receipt by the Investor Limited Partner of payment therefor. Anything herein to
the contrary notwithstanding, title to the Interest of the Investor Limited Partner shall not vest in
the Managing General Partner until payment in full of the Purchase Price therefor. Upon such
payment, the Managing General Partner shall forthwith cause an amendment hereto and to the
Certificate and any other necessary papers to be executed, filed, recorded and published wherever
required showing such substitution. The Investor Limited Partner shall transfer its Interest to the
Managing General Partner or its designee free and clear of any Liens, charges, encumbrances or
interests of any third party and shall execute or cause to be executed any documents reasonably
required to fully transfer such Interest.
E. No agreement affecting the Project shall prevent the exercise by the Investor
Limited Partner of its right to require the purchase by the Managing General Partner of its Interest
in the manner described in this Section 5.3.
F. The Investor Limited Partner shall have the right to waive its right to have
its Interest repurchased at any time during which any of such rights shall be in effect. Any such
waiver shall be exercised by delivery to the Managing General Partner of a written notice stating
under which clause(s) of this Section it is waiving its right to have its Interest repurchased and that
its rights under such specified clause(s) are thereby irrevocably waived from that date forward.
G. Should the Managing General Partner repurchase the Interest of the Investor
Limited Partner pursuant to this Section 5.3, then the Special Limited Partner agrees to withdraw
from the Partnership at the same time as the Investor Limited Partner’s withdrawal is effective.
Section 5.4 Redemption of Partnership Interest. At any time after the end of the Credit
Period and prior to one hundred and eighty (180) days after the Compliance Period, Investor
Limited Partner may require that the Partnership purchase the Investor Limited Partner’s Interest
and the Special Limited Partner’s Interest, subject to all then existing liens and encumbrances to
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title, for an amount equal to $100 (the “Put Option”). To exercise the Put Option, the Investor
Limited Partner must deliver to the Managing General Partner and the Administrative General
Partner an irrevocable written notice of such exercise. The purchase by the Partnership will be
closed within 60 days after the later of (i) the Investor Limited Partner’s exercise of such right, or
(ii) the receipt of all required consents, if any. Any conveyance from the Investor Limited Partner
and the Special Limited Partner to the Partnership under this Section 5.4 will be made by quitclaim
transfer, without representation or warranty of any kind by the Investor Limited Partner or the
Special Limited Partner except that the Investor Limited Partner and the Special Limited Partner
will represent that such Partner has not previously transferred its Interest and such Partner’s
Interest is free of liens or encumbrances other than those contemplated by the Partnership’s
Mortgage Loans and/or by this Agreement. The Investor Limited Partner and the Special Limited
Partner agree that the Partnership will have no liability for any Adverse Consequences to the
Investor Limited Partner or the Special Limited Partner as a result of the exercise of the Put Option,
including, but not limited to, recapture or lost Federal Low Income Tax Credits.
Section 5.5 Special Procedures for Disputes Concerning Payment of Second, Third
and Fourth Installments
A. If the Investor Limited Partner and Managing General Partner are unable to
resolve a dispute that may arise concerning whether or not the conditions to the payment of the
Second Installment, Third Installment and/or Fourth Installment have been met and, despite good
faith negotiations between the Managing General Partner and the Investor Limited Partner, such
dispute remains unresolved, either the Managing General Partner or the Investor Limited Partner
may submit such matter to arbitration pursuant to this Section 5.5 provided that the following
provisions shall apply:
(i) All arbitration hearings will be commenced within sixty (60) days
of the demand for arbitration and completed within thirty (30) days of commencement.
(ii) The judgment and the award, if any, of the arbitrator will be issued
within fifteen (15) days of the close of the hearing.
(iii) If the judgment and award is in favor of the Managing General
Partner, the arbitrator shall retain jurisdiction of the matter to resolve any further disputes
concerning the “Purchase Price Reductions” as defined below.
If the judgment and award of the arbitrator is in favor of the Managing General Partner,
the Investor Limited Partner shall have fifteen (15) days following the Investor Limited Partner’s
receipt of the arbitrator’s award to pay all or that portion of the Installment in question found to be
due by the arbitrator’s judgment and award. If the Investor Limited Partner fails to make such
payment on such date, at the Managing General Partner’s sole option to be exercised within 365
days of the date of the arbitrator’s judgment and order, if the Managing General Partner is able to
obtain a replacement equity commitment for the Partnership, the Investor Limited Partner and
Special Limited Partner shall transfer their entire Interests in the Partnership to the Managing
General Partner or its designee, without warranty, for a purchase price equal to the amount of
Capital Contributions theretofore contributed to the Partnership by the Investor Limited Partner
less the “Purchase Price Reductions”. As used herein, the term “Purchase Price Reductions” shall
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mean the aggregate of the amount by which the total contributions made or to be made by the
Investor Limited Partner to the Partnership exceeds the amount of total contributions agreed to be
made by such replacement limited partner and all other reasonable out-of-pocket expenses incurred
by the Managing General Partner in connection with the arbitrations and the solicitation of and
negotiations with such replacement limited partner. The purchase price for the interest of the
Investor Limited Partner and Special Limited Partner shall be payable to the Investor Limited
Partner by the Partnership on a date determined by the Managing General Partner in a written
notice to the Investor Limited Partner, which dates shall not be more than 410 days following the
judgment and award of the arbitrator. Except as provided for in this Section 5.5A, each party will
bear its own costs and legal fees for any dispute that arises.
B. The Investor Limited Partner and Managing General Partner agree that all
disputes described in Section 5.5A above shall be submitted to arbitration with a mutually agreed
upon arbitrator in Boston, Massachusetts, unless the Investor Limited Partner and Managing
General Partner mutually agree otherwise. If the Investor Limited Partner and Managing General
Partner fail to agree on an arbitrator within thirty (30) days of the respective party’s demand, then
the arbitrator shall be selected by the Judicial Arbitration and Mediation Services, Inc. (“JAMS”).
If there is no JAMS in the Greater Boston, Massachusetts area, then the arbitration shall be
administered by and in accordance with the applicable rules of the American Arbitration
Association, and the laws of the State.
ARTICLE VI
RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNERS
Section 6.1 Restrictions on Authority
A. Notwithstanding any other provisions of this Agreement, the General
Partners shall have no authority to perform any act in respect of the Partnership or the Project in
violation of (i) any applicable law or regulation or (ii) any agreement between the Partnership and
any Lender or Governmental Agency.
B. The General Partners shall not have any authority to do any of the following
acts without the Consent of the Investor Limited Partner and any Requisite Approvals:
(i) to incur indebtedness for money borrowed on the general credit of
the Partnership, except as specifically permitted by Article IX, or
(ii) following completion of construction of the Improvements, to
construct any new capital improvements, or to replace any existing capital improvements
if construction or replacement would substantially alter the use of the Property, or
(iii) to acquire any real property in addition to the Property (other than
easements or similar rights necessary or convenient for the operation of the Project), or
(iv) to cause the Partnership to make any loan or advance to any Person
(for purposes of this clause 6.1B(iv), accounts receivable in the ordinary course of business
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from Persons other than the General Partners or their Affiliates shall not be deemed to be
advances or loans), or
(v) to amend, modify, or waive any term of the Mortgage Loan
Documents, except non-material modifications of the Mortgage Loan Documents or other
modifications that will not have an adverse effect on the General Partners' or the
Partnership’s ability to perform its obligations hereunder and under the Mortgage Loan
Documents, or
(vi) to lease any Low Income Unit to other than Qualified Tenants or
otherwise operate the Project in such a manner or take any action which could cause any
Low Income Unit to fail to be treated as a qualified low-income housing unit under Section
42(i)(3) of the Code or which would cause the recapture by the Partnership of any
low-income housing credit under Section 42 of the Code, or
(vii) after the Investment Closing, to enter into any material Project
Document or to amend any Project Document, or to permit any party thereunder to waive
any provision thereof, to the extent that the effect of such amendment or waiver would be
to eliminate, diminish or defer any obligation or undertaking of the Partnership, the General
Partners or their Affiliates which accrues, directly or indirectly, to the benefit of, or
provides additional security or protection to, the Investor Limited Partner (notwithstanding
that the Investor Limited Partner is neither a party to nor express beneficiary of such
provision or was not a Partner when such provision became effective), or
(viii) to obtain, increase, refinance or materially modify any Mortgage
Loan after Investment Closing, except that after the expiration of the Compliance Period,
the Consent of the Investor Limited Partner shall no longer be required for the refinance of
any Mortgage Loan, or to sell or convey the Property or any substantial portion thereof,
except as provided in Article IX, and except that the General Partners may cause the
Partnership to grant easements and similar rights affecting the Land to obtain utility
services for the Project or for other purposes necessary or convenient for the operation of
the Project, or
(ix) 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, or
(x) to cause the Partnership to accept or receive any grant (unless
otherwise expressly contemplated under the terms of this Agreement); or
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(xi) to pledge or assign any of the Capital Contribution of the Investor
Limited Partner or the proceeds thereof, except as set forth in the Project Loan Documents,
or
(xii) to amend any of the Related Agreements, or
(xiii) to permit the merger, termination or dissolution of the Partnership,
or
(xiv) to dismiss the Accountants or to engage a new firm as Accountants,
or
(xv) to approve any changes to the Plans and Specifications for the
Project which would result, either individually in an overall development cost increase or
decrease of $200,000 or in the aggregate, in an overall development cost increase or
decrease in excess of $500,000 (provided, however, that any Consent of the Investor
Limited Partner required under this clause (xv) shall not be unreasonably withheld,
conditioned or delayed), or
(xvi) to take any action which would cause more than nine percent (9%)
of the Property or any part thereof to be treated as tax exempt use property within the
meaning of Section 168(h) of the Code, or
(xvii) to take any action outside of the ordinary course of business of the
Partnership.
C. The General Partners shall not (a) cause the Partnership to utilize Cash Flow
to acquire interests in other Entities or (b) cause the Partnership to invest the proceeds of any sale
or refinancing of the Project without the Consent of the Investor Limited Partner.
D. Any Partner may engage independently or with others in other business
ventures of every nature and description including, without limitation, the ownership, operation,
management, and development of real estate, regardless of whether such real estate directly
competes with the Project, and neither the Partnership nor any Partner shall have any rights by
reason of this Agreement in and to such independent ventures.
Section 6.2 Partnership Audits
A. Defined Terms. For purposes of this Section 6.2, the following terms shall
have the meanings set forth below:
“Adjustment Year” means the Taxable Year in which (i) in the case of an adjustment
pursuant to the decision of a court in a proceeding brought under Code Section 6234, such decision
becomes final, (ii) in the case of an Administrative Adjustment Request, such Administrative
Adjustment Request is made, or (iii) in any other case, a notice of final Partnership Adjustment is
mailed under Code Section 6231 or, if the Partnership waives the restrictions under Code Section
6232(b) (regarding limitations on assessment), the date the waiver is executed by the IRS.
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“Adjustment Year Partner” means any Person who held an interest in the Partnership at
any time during an Adjustment Year.
“Administrative Adjustment Request” means an administrative adjustment request under
Code Section 6227.
“Former Partner” means any Person who was a Reviewed Year Partner but is not an
Adjustment Year Partner.
“Imputed Underpayment” has the meaning set forth in Section 6225 of the Code.
“Indirect Partner” means any Person who has an interest in the Partnership through its
interest in one or more Pass-through Partners.
“Partnership Adjustment” means any adjustment to any item of income, gain, loss,
deduction, or credit of the Partnership, or any Partner’s distributive share thereof, in either case as
described in any applicable Treasury Regulations or other guidance prescribed by the IRS.
“Pass-through Partner” means a pass-through entity that holds an interest in the
Partnership, including a partnership (as described in Treas. Reg. § 301.7701-2(c)(1)), including a
foreign entity that is classified as a partnership under Treas. Reg. § 301.7701-3(b)(2)(i)(A) or (C),
an S corporation, a trust (other than a trust described in the next sentence) and a decedent’s estate.
For purposes of this definition, a pass-through entity does not include a disregarded entity
described in Treas. Reg. § 301.7701-2(c)(2)(i) or a trust that is wholly owned by only one Person,
whether the grantor or another Person, and the trust reports the owner’s information to payors
under Treas. Reg. § 1.671-4(b)(2)(i)(A).
“Reviewed Year” means the Taxable Year to which a Partnership Adjustment relates.
“Reviewed Year Partner” means any Person who held an interest in the Partnership at any
time during the Reviewed Year.
“Revised Partnership Audit Rules” means Subchapter 63C of the Code (as amended by the
Bipartisan Budget Act of 2015, P.L. 114-74, the Protecting Americans from Tax Hikes Act of
2015, P.L. 114-113 and the Consolidated Appropriations Act of 2018, P.L. 155-141), and the
Treasury Regulations promulgated thereunder, as amended from time to time.
“Taxes” means any tax, penalties, additions to tax, additional amounts, and interest as
described in Section 6226 of the Code.
B. Partnership Representative
(i) Appointment and Designation. The Partners hereby authorize the
Partnership to appoint the General Partner as the initial partnership representative of the
Partnership pursuant to Section 6223(a) of the Code (the “Partnership Representative”). The
General Partner shall be appointed the Partnership Representative for each Taxable Year provided
that if an event or circumstance has occurred which, with the giving of notice or the passage of
time, would constitute a default under Section 7.7 hereunder or a default by the Partnership
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Representative or Designated Individual (as hereinafter defined) of its/his/her duties and
obligations under this Section 6.2, the Consent of the Investor Limited Partner must be obtained
before the Partnership Representative is appointed for any Taxable Year. The Partnership
Representative shall timely designate an individual to serve as the sole individual through whom
the Partnership Representative will act for purposes of the Revised Partnership Audit Rules (the
“Designated Individual”) with the Consent of the Investor Limited Partner. No later than the
effective date of the designation of the Designated Individual or the Partnership Representative,
such Designated Individual or Partnership Representative, as applicable, must agree in writing to
be bound by the same obligations and restrictions imposed on the Partnership Representative under
this Section 6.2 prior to and as a condition of such designation.
(ii) Resignation; Revocation. The General Partner (and any successor
Partnership Representative) may resign as the Partnership Representative by written notice to the
Partnership, the Investor Limited Partner, and the IRS. Notice of such resignation shall be given
to the IRS in the time and manner prescribed by the IRS. Upon removal of the General Partner for
any reason pursuant to the provisions of Section 7.7 of this Agreement or, with the Consent of the
Investor Limited Partner, in the event of a default by the Partnership Representative or Designated
Individual of its/his/her duties and obligations under this Section 6.2, the Partnership shall revoke
the designation of the General Partner as the Partnership Representative for all Taxable Years
during which such designation was in effect by written notice to the Partnership Representative
and the IRS. The designation of the Designated Individual as the Designated Individual shall
automatically terminate on the effective date of the resignation or revocation of the applicable
entity as Partnership Representative. If a Designated Individual becomes unable to perform the
tasks required of a Designated Individual, no longer has the “capacity to act” within the meaning
of the Revised Partnership Audit Rules, or the Partnership Representative otherwise determines
that the Designated Individual should no longer serve as a Designated Individual, the Partnership
Representative shall promptly notify the Investor Limited Partner of such determination and take
all necessary actions to effectuate the revocation of such individual as the Designated Individual
for all applicable Taxable Years. Notice of such revocation shall be given to the IRS in the time
and manner prescribed by the IRS and shall include the designation of another Person selected by
the Investor Limited Partner as the successor Partnership Representative for the Taxable Year for
which the designation was in effect and the designation of another Person selected by the
Partnership Representative (with the Consent of the Investor Limited Partner) as the successor
Designated Individual for the Taxable Year for which the designation was in effect. The resigning
or removed Partnership Representative or Designated Individual shall remain obligated hereunder
in such capacity (including the requirement to forward any notices received from the IRS) until
the IRS agrees to provide such notices to a replacement Partnership Representative or Designated
Individual during the audit process. In furtherance hereof, the General Partner hereby constitutes
and appoints the Investor Limited Partner, with full power of substitution, its true and lawful
attorney-in-fact in its name, place and stead to carry out fully the provisions of this Section 6.2B(ii)
and take any action which the Investor Limited Partner may deem necessary or appropriate in
connection herewith. The power of attorney hereby granted shall be deemed to be coupled with an
interest, shall be irrevocable and shall survive and shall not be affected by the subsequent
incapacity, dissolution, resignation, revocation or other termination of the General Partner as the
Partnership Representative.
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(iii) Successor Partnership Representative. Any successor Partnership
Representative must have a substantial presence in the United States, have received the Consent
of the Investor Limited Partner, and otherwise satisfy all statutory and regulatory requirements
imposed by the Revised Partnership Audit Rules. The Person so designated must agree in writing
to be bound by the terms of this Section 6.2 and shall not take any action in its capacity as
Partnership Representative until the resignation and/or revocation of the prior Partnership
Representative becomes effective under the Code or Treasury Regulations.
(iv) Notice of Communications. The Partnership Representative shall (1)
give the Partners prompt notice of any inquiry, notice, or other communication received from the
IRS or other applicable tax authority regarding the tax treatment of the Partnership or the Partners,
(2) consult with the Investor Limited Partner in good faith on the strategy and substance of any tax
audit or contest and (3) give, to the extent possible, the Partners prior notice of and a reasonable
opportunity to review and comment upon any written communication the Partnership
Representative intends to make to any taxing authority in connection with any examination, audit
or other inquiry involving the Partnership. Without limiting the generality of the foregoing, the
Partnership immediately shall send to all of the Partners copies of any notice of a proposed or final
Partnership Adjustment received by the Partnership and/or the Partnership Representative from
the IRS. To the extent requested by the Investor Limited Partner and permitted under Treasury
Regulations or by the IRS or other taxing authority in a particular tax audit or contest, the
Partnership Representative shall cooperate in allowing the Investor Limited Partner or its
representative to participate, at its own expense, in such tax audit or contest.
(v) Duties and Limitations on Authority. The Partnership
Representative and any Designated Individual shall have all power and authority of a partnership
representative and designated individual, respectively, as set forth in Section 6223 of the Code,
and shall represent the Partnership and its Partners in all dealings with the IRS and state and local
taxing authorities, provided, however, that, except as specifically provided in Section 6.2C below,
the Partnership Representative shall not, without the Consent of the Investor Limited Partner, have
any power or authority to do any or all of the following:
(A) make an election to opt out of the application of the Revised Partnership
Audit Rules to the Partnership;
(B) make a Push-Out Election (as defined in Section 6.2C(iv) below) or
request a modification to an Imputed Underpayment, except pursuant to
6.2C;
(C) file an Administrative Adjustment Request;
(D) select any judicial forum for the litigation of any Partnership tax dispute;
(E) take any other action (or fail to take any action) that would have the
effect of finally determining any tax audit or contest; or
(F) extend the statute of limitations.
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(vi) Fiduciary Relationship. The relationship of the Partnership
Representative to the Partnership and the Partners shall be that of a fiduciary, and the Partnership
Representative shall have a fiduciary obligation to perform its duties in such manner as will serve
the best interests of the Partnership and its Partners.
(vii) Indemnification. To the extent of available funds, the Partnership
shall indemnify the Partnership Representative against judgments, fines, amounts paid in
settlement and expenses (including attorneys’ fees) reasonably incurred by the Partnership
Representative in its capacity as the Partnership Representative, and not its capacity as a Partner
or a Former Partner, in connection with any audit or administrative or judicial proceeding in which
the Partnership Representative is involved solely by reason of being the Partnership Representative
of the Partnership, provided that the same were not the result of negligence, misconduct, fraud,
breach of fiduciary duty or breach of this Agreement on the part of the Partnership Representative
and were the result of a course of conduct which the Partnership Representative reasonably
believed to be in the best interests of the Partnership and its Partners within the scope of its
authority under this Section 6.2.
C. Modifications and Partnership Elections
(i) Modifications to Imputed Underpayment. If the Partnership and/or
Partnership Representative receives notice of a proposed Partnership Adjustment from the IRS,
the Partnership Representative shall so notify the Partners in accordance with the provisions of
Section 6.2B(iv) above and, if requested to do so by the Investor Limited Partner, shall request
modification of the Imputed Underpayment proposed in such notice in accordance with any
applicable Treasury Regulations, forms, instructions, and other guidance prescribed by the IRS.
Any such request by the Investor Limited Partner shall describe the modifications or adjustment
factors that the Investor Limited Partner believes affect the calculation of the Imputed
Underpayment in sufficient detail to substantiate the request for modification. Unless an extension
of time is granted by the IRS, all information required to support a requested modification shall be
submitted by the Investor Limited Partner to the Partnership Representative no later than one
hundred eighty (180) days after the Investor Limited Partner receives notice of the proposed
Partnership Adjustment from the Partnership Representative, and the Partnership Representative
shall submit such information to the IRS no later than two hundred seventy (270) days after the
date the proposed Partnership Adjustment notice was mailed by the IRS.
(ii) Amended Returns; Alternative Procedure to Amended Returns. If
requested to do by the Investor Limited Partner, the Partnership Representative shall request a
modification of an Imputed Underpayment based on an amended return filed by a Partner (or
Indirect Partner) which takes account of all of the Partnership Adjustments properly allocable to
such Partner (or Indirect Partner). Any such request shall be accompanied by an affidavit from the
requesting Partner (or Indirect Partner) signed under penalties of perjury that the requesting Partner
(or Indirect Partner) has filed each required amended return or, in the case of a Pull-In Election (as
hereinafter defined), such information, in the form and manner specified by the IRS, as it requires,
and paid all Taxes due as a result of taking into account the adjustments in the first affected year
and all modification years, as such terms are defined and applied in any applicable Treasury
Regulations, forms, instructions, and other guidance prescribed by the IRS. In lieu of filing an
amended return in accordance with Section 6.2C(ii) above, any Reviewed Year Partner may elect
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to comply with the “pull-in” procedure described in Section 6225(c)(2)(B) of the Code (a “Pull-In
Election”). In such event, such Reviewed Year Partner shall (1) pay all amounts due under Section
6225(c)(2)(A)(iii) of the Code, (2) take into account, in the form and manner set forth in any
applicable IRS guidance, the adjustments to the tax attributes of such Reviewed Year Partner, and
(3) provide, in the form and manner specified by the IRS (including, if so specified, in the same
form as on an amended return), such information as the IRS may require to carry out the terms and
intent of a Pull-In Election described in Section 6225(c)(2)(B) of the Code. Copies of all notices
and filings made pursuant to this Section 6.2C(iii) shall be provided by the Reviewed Year Partner
to the Partnership Representative.
(iii) Reallocation Adjustment. In the case of a Partnership Adjustment
that reallocates the distributive share of any tax item from one Partner to another, the Partnership
Representative shall be required to submit the modification request to the IRS under this Section
6.2C only if all Partners (or Indirect Partners) affected by such adjustment (“Affected Partners”)
provide the affidavit(s) described in clause (ii) above or the Partnership Representative is notified
by the IRS that one or more Affected Partners have taken (or will take) into account their allocable
share of the adjustment through other modifications approved by the IRS (such as, but not limited
to, a closing agreement).
(iv) Push-Out Election. If the Partnership receives notice of a final
Partnership Adjustment from the IRS, the Partnership Representative shall so notify the Partners
and any Former Partners in accordance with the provisions of Section 6.2B(iv) above and, if
requested to do so by the Investor Limited Partner, shall make an election (a “Push-Out Election”)
under Section 6226 of the Code with respect to one or more Imputed Underpayments set forth in
the final Partnership Adjustment notice. Except as hereinafter provided, if a Push-Out Election is
made, each Reviewed Year Partner shall take into account its allocable share of the Partnership
Adjustments that relate to the specified Imputed Underpayment (as determined with the Consent
of the Investor Limited Partner for such Reviewed Year) and shall be liable for any Taxes as
described in Section 6226 of the Code and any applicable Treasury Regulations or other guidance
prescribed by the IRS. Notwithstanding the foregoing, to the extent permitted by law, any
Reviewed Year Partner that is a partnership or S corporation may, at its option and in accordance
with any applicable Treasury Regulations or other guidance prescribed by the IRS, elect (in lieu
of paying its allocable share of such Partnership Adjustments) to push out the liability for Taxes
attributable to such Partnership Adjustments to its Partners (including Indirect Partners). Any
Push-Out Election shall be filed within forty-five (45) days of the date the notice of final
Partnership Adjustment is mailed by the IRS (or such later date as permitted by Treasury
Regulations or IRS guidance) and shall be in such form, and shall contain such information, as
required by any applicable Treasury Regulations, forms, instructions and other guidance
prescribed by the IRS. If a Push-Out Election is made, the Partnership Representative shall furnish
to each Reviewed Year Partner and the IRS, for each Reviewed Year within sixty (60) days after
the date all of the Partnership Adjustments to which the statement relates are finally determined, a
statement that includes all items and information required under any applicable Treasury
Regulations, forms, instructions, and other guidance prescribed by the IRS.
(v) Reimbursement of Allocable Share of Imputed Underpayment. If
the Partnership becomes obligated to make an Imputed Underpayment under Code Section 6225,
each of the Partners (including any Former Partner) to whom such liability relates (as determined
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with the Consent of the Investor Limited Partner) shall be obligated, within thirty (30) days after
written notice from the General Partner, to pay an amount that, on an after-tax basis if such
payment is treated as an indemnity payment under this Section 6.2C(v), is equal to its allocable
share of such amount to the Partnership; provided, however, that if and to the extent that the
Partnership’s liability results from a loss, disallowance or recapture of Tax Credits for which a
payment to such Person is due under Section 5.2 and has not been paid, the amount otherwise
payable by such Person to the Partnership under this Section 6.2C(v) shall be reduced by such
unpaid amounts so that the Partnership will bear the portion of the Imputed Underpayment equal
to such reduction and the General Partner shall advance such unpaid amounts to pay the Imputed
Underpayment. Any amount not paid by a Partner (or Former Partner) within such 30-day period
shall accrue interest at the Designated Prime Rate plus 2% until paid. Any such payment made by
any Partner shall be treated as a Capital Contribution and, if and to the extent permitted by the
Code and Treasury Regulations, any Capital Account reduction attributable to the Imputed
Underpayment shall be allocated to the Partners in proportion to such Capital Contributions;
provided that, such payment will be treated as an indemnity payment if the Investor Limited
Partner determines in its sole discretion that treatment as a Capital Contribution would result in a
reallocation of Losses or Tax Credits. Any such payment made by any Former Partner shall be
treated as an indemnity payment and not as a Capital Contribution or loan to the Partnership.
(vi) Withholding. Notwithstanding anything to the contrary contained
herein, the General Partner shall cause the Partnership to withhold from any distribution or
payment due to any Partner (or Former Partner) under this Agreement any amount due to the
Partnership from such Partner (or Former Partner) under clause (v) above. Any amount(s) so
withheld shall be applied by the Partnership to discharge the obligation in respect of which such
amount was withheld. All amounts withheld pursuant to the provisions of this Section 6.2C(vi)
with respect to a Partner (or Former Partner) shall be treated as if such amounts were distributed
or paid, as applicable, to such Partner (or Former Partner).
(vii) Indemnity. To the extent that a portion of the Taxes imposed under
Code Section 6225 relates to a Former Partner, the General Partner shall require such Former
Partner to indemnify the Partnership for its allocable portion of such tax (including any penalties,
additions to tax, additional amounts, and interest) to the extent such amounts have not been
withheld pursuant to the provisions of Section 6.2C(vi). Each Partner acknowledges that,
notwithstanding the transfer or liquidation of all or any portion of its Interest in the Partnership, it
shall remain liable for Taxes with respect to its allocable share of income and gain of the
Partnership for the Taxable Years (or portions thereof) prior to such transfer or liquidation unless
otherwise agreed to in writing by the Partners during the Taxable Year(s) (or portion thereof) to
which the Taxes relate and all Former Partners during the Taxable Year(s) (or portion(s) thereof)
to which the Taxes relate.
(viii) Continuing Obligations. Whether the liability is assessed to the
Partnership or the Partners (or Former Partners), the parties hereto acknowledge and agree that
nothing in this Section 6.2C is intended, nor shall it be construed, to modify or waive any
obligations of the General Partner under this Agreement including, without limitation, the
obligation to make a payment pursuant to the provisions of Section 5.2.
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D. Consistent Tax Treatment
Except as hereinafter provided, each Partner agrees that its treatment on its own federal
income tax return of each item of income, gain, loss, deduction, or credit attributable to the
Partnership shall be consistent with the treatment of such items on the Partnership return, including
the amount, timing, and characterization of such items. Notwithstanding the foregoing general
requirement, any Partner may file a statement identifying certain items that are inconsistent (or
that may be inconsistent) in accordance with any applicable Treasury Regulations, forms,
instructions, or other guidance provided by the IRS. Any such statement shall be attached to the
Partner’s tax return on which the item is treated inconsistently.
E. Tax Counsel or Accountants
The Partnership Representative, with the Consent of the Investor Limited Partner, shall
employ experienced tax counsel and/or accountants to represent the Partnership in connection with
any audit or investigation of the Partnership by the IRS or any other taxing authority and in
connection with all subsequent administrative and judicial proceedings arising out of such audit.
Such counsel and/or accountants shall be responsible for representing the Partnership; it shall be
the responsibility of the Partners, at their expense, to employ tax counsel or accountants to
represent their respective separate interests.
F. Survival
The obligations of each Partner or Former Partner under this Section shall survive the
transfer, redemption or liquidation by such Partner of its Interest and the termination of this
Agreement or the dissolution of the Partnership.
G. Amendments
Upon the promulgation of revised Treasury Regulations implementing the Revised
Partnership Audit Rules or upon further amendment of the Revised Partnership Audit Rules, the
Partners will evaluate and consider options available with respect to preserving the allocation of
responsibility and authority described in this Section 6.2, while conforming with the applicable
provisions of the revised partnership audit procedures. The Partners agree to work together in good
faith to make elections and amend this Agreement (if any party determines that an amendment is
required) to maintain the intent of the parties with respect to the obligations and limitations of the
Partnership Representative.
H. State and Local Income Tax Matters
The provisions of this Section 6.2 shall also apply to state and local income tax matters
affecting the Partnership to the extent the terms and conditions hereof have any application to audit
procedures at the state and local level.
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Section 6.3 Business Management and Control; Designation of Managing General
Partner; Certain Rights of the Special Limited Partner
A. The General Partners shall have the exclusive right to manage the business
of the Partnership in accordance with this Agreement. No Limited Partner shall have any authority
or right to act for or bind the Partnership.
B. The powers and duties of the General Partners hereunder may be exercised
in the first instance by one or more Managing General Partners. Each Managing General Partner
is hereby authorized to execute and deliver in the name and on behalf of the Partnership all such
documents and papers (including any required by any Lender or Governmental Agency) as such
Managing General Partner deems necessary or desirable in carrying out such duties hereunder.
APC Vista Breeze, LLC is hereby designated as the initial Managing General Partner; if such
Person shall become unable to serve in such capacity or shall cease to be a General Partner, the
remaining General Partners may from time to time designate from among themselves by consent
one or more substitute or additional Managing General Partners with the Consent of the Investor
Limited Partner. If for any reason no designation is in effect, the powers of the Managing General
Partners shall be exercised by the majority consent of the remaining General Partners. A
designation of a successor as Managing General Partner or the designation of an additional
Managing General Partner pursuant to Section 7.3 or 7.5 shall supersede any designation or other
exercise of rights pursuant to this Section 6.3B.
C. In the event that (i) the Partnership is in material default of any of its
obligations under the Project Documents, (ii) any General Partner, Developer or Guarantor is in
default in any material respect under any of its obligations under this Agreement or any of the
Related Agreements, (iii) a Recapture Event shall have occurred, (iv) a sole General Partner shall
Retire, (v) an Event of Bankruptcy shall have occurred as to a General Partner, the Developer or
any Guarantor or (vi) a General Partner or an Affiliate of a General Partner shall have committed
fraud or breach of fiduciary duty, the Special Limited Partner may, at its election, give notice of
such default or event to the then General Partners, if any, and, (a) in the case of a default, if such
default is not cured within ten (10) business days (or cured within a reasonable time (not to exceed
the lesser of ninety (90) days or such cure period as may be available to the Partnership or any
General Partner under any applicable Project Document) in the event it is impossible to cure such
default within such ten (10)-day period, provided that the General Partners (or the non-defaulting
General Partner) are diligently and in good faith seeking to cure such default and there has been
no assignment of or institution of proceedings to foreclose any Mortgage), or (b) in the event of
such Retirement, Recapture Event, Event of Bankruptcy, fraudulent act or fiduciary breach,
promptly after the occurrence of such event, the Special Limited Partner or any Entity of which a
majority of the stock or beneficial interest is owned, directly or indirectly, by the Special Limited
Partner or Bank of America, N.A. may, with the Consent of the Investor Limited Partner, elect to
become an additional General Partner with all the rights and privileges of a General Partner. The
Special Limited Partner shall provide the General Partners with true and correct copies of the
written instruments evidencing such Consent of the Investor Limited Partner within ten (10) days
after the Special Limited Partner’s receipt thereof. Upon such election by the Special Limited
Partner or such Entity and such Consent, the Special Limited Partner or such Entity shall
automatically become and shall be deemed a General Partner and each Partner hereby irrevocably
appoints the Special Limited Partner (with full power of substitution) as the attorney-in-fact of
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such Partner for the purpose of executing, acknowledging, swearing to, recording and/or filing any
amendment to this Agreement and the Certificate necessary or appropriate to confirm the
foregoing. If the Special Limited Partner or such Entity shall become an additional General Partner
as herein stated, its Interest shall not be increased thereby (except that the Special Limited Partner
may assign its Interest to such Entity). In the event of the admission of the Special Limited Partner
or such Entity as a General Partner pursuant to this Section 6.3, and if there are then any other
General Partners, the Special Limited Partner or such Entity shall have managerial rights, authority
and voting rights of 51% on any matters to be decided or voted upon by the General Partners or
the Managing General Partner, as the case may be, and the rights and authority of the remaining
General Partners or the Managing General Partner, as the case may be, shall be deemed equally
divided among them. Further, if the event giving rise to the rights of the Special Limited Partner
to become an additional General Partner occurs prior to the withdrawal of APC Vista Breeze, LLC
as Managing General Partner pursuant to Section 7.1 of this Agreement, and such event relates
solely to the actions of either the Administrative General Partner or the Managing General Partner,
but not both, then the non-defaulting General Partner shall have the right to cure the default of the
defaulting General Partner and remove such General Partner prior to the exercise by the Special
Limited Partner of its rights to become an additional General Partner. In addition, the non-
defaulting General Partner shall have the ability concurrently to cure the default of the then
defaulting General Partner, within the time frames set forth above.
Section 6.4 Duties and Obligations of the General Partners
A. The Managing General Partner (and the Administrative General Partner to
the extent specifically delineated below) shall use its reasonable best efforts to carry out the
purposes, business and objectives of the Partnership, and shall devote to Partnership business such
time and effort as may be reasonably necessary to (i) supervise the activities of the Management
Agent, (ii) make inspections of the Project to determine if the Project is being properly maintained
and that necessary repairs are being made thereto, (iii) prepare or cause to be prepared all reports
of operations which are to be furnished to the Partners or to any Lender or Governmental Agency,
(iv) with the Consent of the Investor Limited Partner, elect to defer the commencement of the
Credit Period for all or any portion of the low-income housing tax credit allowable to the Partners
under Section 42(g) of the Code, to the extent that any such deferral may be in the best economic
interest of the Investor Limited Partner, (v) cause the Project to be insured in accordance with the
requirements set forth in Exhibit C, and (vi) cause the Partnership and the Project to comply in all
material respects with each of the representations and covenants of the applicant set forth in the
Tax Credit Application.
B. Subject to the Project Documents and the requirements of Section 42 of the
Code, the General Partners shall use reasonable efforts consistent with sound management practice
to maximize income produced by the Project, including, if necessary, seeking any necessary
approvals of, and implementing, appropriate adjustments in the rent schedule of the Project.
C. The Managing General Partner shall timely execute and record in the
appropriate filing office an Extended Use Agreement. The Managing General Partner shall hold
for occupancy such percentage of the apartments in the Project in such a manner as to qualify the
entire Project as a qualified low income housing project under Section 42(g) of the Code as
interpreted from time to time in regulations and rulings promulgated thereunder. The General
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Partners shall not take any action which would cause the termination or discontinuance of the
qualification of the Project as a “qualified low income housing project” under Section 42(g) of the
Code or which would cause the recapture of any Tax Credits without the Consent of the Investor
Limited Partner.
D. The Managing General Partner shall prepare and submit to the Secretary of
the Treasury (or any other Governmental Agency designated for such purpose), on a timely basis,
any and all annual reports, information returns and other certifications and information and shall
take any and all other action required (i) to insure that the Partnership (and its Partners) will
continue to qualify for Tax Credits to the extent contemplated under this Agreement and (ii) unless
the Consent of the Investor Limited Partner is received to act otherwise in a particular instance, to
avoid recapture of Tax Credits for failure to comply with the requirements of Section 42 of the
Code or other applicable law.
E. Except as provided in or contemplated by the Project Documents and the
Mortgage Commitments in existence at Investment Closing, the General Partners agree that neither
they nor any Related Person will at any time bear the Economic Risk of Loss for payment or
performance of any Mortgage Loan. Each General Partner agrees that it will not cause any Limited
Partner at any time to bear the Economic Risk of Loss for payment or performance under any Note
or Mortgage. Each Limited Partner agrees not to take any action which would cause it to bear the
Economic Risk of Loss for payment of any Mortgage Loan.
F. The General Partners shall have fiduciary responsibility for the safekeeping
and use of all funds and assets of the Partnership, whether or not in their immediate possession or
control. The General Partners shall not employ, or permit another to employ, such funds or assets
in any manner except for the exclusive benefit of the Partnership.
G. No General Partner shall contract away the fiduciary duty owed at common
law to the Limited Partners.
H. The Managing General Partner shall be solely responsible for the following:
(i) analyzing the Qualified Allocation Plan (“QAP”) for targeted areas
within a state;
(ii) identifying potential land sites and analyzing the demographics of
potential sites;
(iii) analyzing a site’s economy and forecasting future growth potential;
(iv) determining the site’s zoning status and possible rezoning strategies;
(v) contacting local government officials concerning access to utilities,
public transportation and local ordinances;
(vi) performing environmental tests;
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(vii) negotiating the acquisition and long-term lease of the Land and the
financing therefor;
(viii) causing the Partnership to acquire leasehold rights in the Land;
(ix) processing necessary documentation with the Credit Agency in
connection with the Tax Credits;
(x) arranging the permanent mortgage financing for the Project; and
(xi) arranging for the admission to the Partnership of the Investor
Limited Partner and the Special Limited Partner.
In consideration for their services set forth in this Section 6.4H, the General
Partners have received their interests in the profits of the Partnership as set forth in Section 10.3.
The General Partners shall not assign any of these duties to the Developer.
I. The General Partners shall (i) not store (except in compliance with
applicable Hazardous Waste Laws) or dispose of any Hazardous Material at the Project; (ii) neither
directly nor indirectly transport or arrange for the transport of any Hazardous Material to, at or
from the Project (except in compliance with applicable Hazardous Waste Laws); (iii) provide the
Limited Partners with written notice (x) upon any General Partner’s obtaining knowledge of any
potential or known release, or threat of release, of any Hazardous Material at or from the Project;
(y) upon any General Partner’s receipt of any notice to such effect from any federal, state, or other
Governmental Agency and (z) upon any General Partner’s obtaining knowledge of any incurrence
of any expense or loss by any such Governmental Agency in connection with the assessment,
containment, or removal of any Hazardous Material for which expense or loss any General Partner
may be liable or for which expense or loss a lien may be imposed on the Project.
J. Subject to the terms and conditions of the rights of HACMB under the Right
of First Refusal Agreement and the Administrative General Partner under the Purchase Option, if
requested to do so by the Investor Limited Partner at any time after the Compliance Period, the
General Partners shall use their best efforts to sell or refinance the Project on terms acceptable to
the Investor Limited Partner. One such action may be to submit a written request to the Credit
Agency of the State to find a Person to acquire the Partnership’s interest in the Project and/or take
such other action permitted or required by the Code as the Investor Limited Partner may reasonably
request to effect a sale of the Project pursuant to a “qualified contract” under Section 42(h)(6)(F)
of the Code or to terminate the Extended Use Agreement. Any proposal either from the Credit
Agency or from another buyer of the Project which is acceptable to the Investor Limited Partner
and the General Partners shall be accepted by the Partnership.
K. The General Partners shall take all actions necessary to maintain the
Property Tax Exemption during the Compliance Period. The Managing General Partner shall cause
the Partnership to comply with the terms and conditions of the Property Tax Exemption, including,
without limitation, filing appropriate annual applications and audits and timely payment of any
required amounts, to the extent required by the applicable taxing authorities and the Administrative
General Partner will promptly notify the Managing General Partner, Class B Limited Partner and
Investor Limited Partner if its 501(c))(3) status is ever lost.
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L. In the event that the Investor Limited Partner shall give notice to the General
Partners that in the reasonable judgment of the Investor Limited Partner depreciation deductions
will no longer be allocated to the Investor Limited Partner as a result of the treatment of the
Development Amount and accrued interest thereon or any other Partnership indebtedness as a
recourse obligation (“Related Party Financing”), then the Managing General Partner (with the
advice and consent of the Administrative General Partner as to any Related Party Financing in
which the lender is the Administrative General Partner or an Affiliate thereof, such consent not to
be unreasonably withheld, conditioned or delayed) shall take all such action as may be necessary
to assure that any outstanding balance of such Related Party Financing shall constitute a
Partnership Nonrecourse Liability and the Investor Limited Partner shall give its Consent to allow
the Managing General Partner to take all necessary action, provided such action does not have any
negative tax consequences for the Partnership or the Investor Limited Partner. One such action
may be the assignment of the outstanding balance of such Related Party Financing to an Entity
which is not a Related Person.
M. The Managing General Partner shall cause all leases of Units in the Project
to contain a provision obligating tenants to notify the Management Agent immediately of any
suspected water leaks, moisture problems or mold in Units or common areas of the Project. In
addition, the Managing General Partner shall furnish such reports and implement such actions, if
any, required under the provisions of Section 12.1F.
N. No more than nine percent (9%) of the Project shall constitute “tax-exempt
use property” within the meaning of Section 168(h) of the Code.
O. At the sole cost and expense of the Partnership, the Managing General
Partner shall cause the Project to be insured in accordance with the requirements set forth below
and in Exhibit C and shall cause the Partnership to obtain and maintain such other coverage as
may be required from time to time by any Lender under the Mortgage Loan Documents or as may
be reasonably required from time to time by the Limited Partners in order to comply with regular
requirements and practices of the Limited Partners in similar transactions including, without
limitation if and to the extent required by the Limited Partners, wind insurance and earthquake
insurance, so long as any such insurance is generally available at commercially reasonable
premiums as determined by the Limited Partners from time to time. Such policies shall include, at
a minimum, the following:
(i) Insurance against casualty to the Property under a policy or policies
covering such risks as are presently included in “special form” (also known as “all risk”)
coverage, including such risks as are ordinarily insured against by similar businesses, but
in any event including fire, lightning, windstorm, hail, explosion, riot, riot attending a
strike, civil commotion, damage from aircraft, smoke, vandalism, malicious mischief and
acts of terrorism. Such insurance will list “Bank of America, N.A., a national banking
association, as Investor Limited Partner, Banc of America CDC Special Holding
Company, Inc., a North Carolina corporation, as Special Limited Partner, and each of
their successors and assigns, as their interests may appear” as additional named insured’s
and loss payees. Unless otherwise agreed in writing by Limited Partner, such insurance
will be for the full insurable value of the Property, with a deductible amount, if any, in
accordance with the standards set forth on Exhibit C and satisfactory to the Investor
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Limited Partner. No policy of insurance will be written such that the proceeds thereof will
produce less than the minimum coverage required hereunder by reason of co-insurance
provisions or otherwise. The term “full insurable value” means 100% of the actual
replacement cost of the Property (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items). Such insurance will also
include:
(a) personal property coverage for building and contents owned
by the Partnership, all subject to a maximum $25,000 deductible amount;
(b) rent loss insurance in an amount equal to annual rental
income; and
(c) boiler and machinery insurance on a comprehensive form
basis, including repair and replacement coverage and rent loss coverage meeting
the requirements of subparagraph (b) above with mechanical breakdown extension,
provided that such boiler and machinery insurance is not necessary if the Project
does not contain a boiler or other machinery which is covered by such insurance,
or the perils which are insured by such boiler and machinery insurance are covered
by other insurance maintained by the Partnership and such coverage is
demonstrated to Investor Limited Partner’s reasonable satisfaction.
(ii) Comprehensive (also known as commercial) general liability
insurance on an “occurrence” basis against claims for “personal injury” liability and
liability for death, bodily injury and damage to property, products and completed
operations, in limits satisfactory to Lender with respect to any one occurrence and the
aggregate of all occurrences during any given annual policy period, with a minimum
combined single limit of $5,000,000. Such insurance will list “Bank of America, N.A., a
national banking association, as Investor Limited Partner, Banc of America CDC Special
Holding Company, Inc., a North Carolina corporation, as Special Limited Partner, and
each of their successors and assigns, as their interests may appear” as additional named
insured’s and loss payees.
(iii) During any period of construction upon the Property, the Managing
General Partner will cause the Partnership to maintain, or cause others to maintain,
builder’s risk insurance (non-reporting form) of the type customarily carried in the case of
similar construction for 100% of the full replacement cost of work in place and materials
stored at or upon the Property.
(iv) If at any time any portion of any structure on the Property is
insurable against casualty by flood and is located in a Special Flood Hazard Area under the
Flood Disaster Protection Act of 1973, as amended, a flood insurance policy in form and
amount acceptable to Limited Partner but in no amount less than the amount sufficient to
meet the requirements of applicable Law as such requirements may from time to time be
in effect.
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(v) Loss of rental value insurance or business interruption insurance in
an amount acceptable to Limited Partner, for a minimum 12 month period, or until the
Units have been brought back to their original state, plus an extended period of indemnity
for at least three (3) additional months to re-lease the repaired Units.
(vi) In addition to the foregoing, the Managing General Partner will
cause the Builder to provide and maintain comprehensive (commercial) general liability
insurance and workers’ compensation insurance for all employees of the Builder meeting,
respectively, the requirements hereunder.
Each policy of insurance (i) must be issued by one or more insurance companies each of which
must have an A.M. Best’s Company financial and performance rating of A-IX or better and be
qualified or authorized by the Laws of the State to assume the risks covered by such policy, (ii)
must provide that such policy will not be canceled or modified without at least 30 days prior written
notice to Investor Limited Partner and the Administrative General Partner, and (iii) will provide
that any loss otherwise payable thereunder will be payable notwithstanding any act or negligence
of the Partnership, the Administrative General Partner or the Managing General Partner which
might, absent such agreement, result in a forfeiture of all or a part of such insurance payment. The
Managing General Partner may satisfy any insurance requirement hereunder by providing one or
more “blanket” insurance policies, subject to the Investor Limited Partner’s and the Administrative
General Partner’s approval in each instance as to limits, coverages, forms, deductibles, inception
and expiration dates, and cancellation provisions.
P. The Managing General Partner shall review regularly all of the insurance
coverages to insure that all such policies are in effect and in compliance with the terms of this
Agreement and the Mortgage Loan Documents. The Managing General Partner will cause the
Partnership to promptly pay all premiums when due on such insurance and, not less than 15 days
prior to the expiration dates of each such policy, the Managing General Partner will deliver to the
Investor Limited Partner and the Administrative General Partner acceptable evidence of insurance,
such as a renewal policy or policies marked “premium paid” or other evidence satisfactory to the
Investor Limited Partner reflecting that all required insurance is current and in force. The
Managing General Partner will immediately give written notice to the Investor Limited Partner
and the Administrative General Partner of any cancellation of, or change in, any insurance policy.
From time to time following the Admission Date, the Managing General Partner shall deliver to
the Special Limited Partner and the Administrative General Partner such further certificates or
memoranda of insurance as the Special Limited Partner or the Administrative General Partner,
respectively, may reasonably require to confirm that such insurance and notice provisions with
respect to insurance under this Agreement have been complied with. The Investor Limited Partner
and the Administrative General Partner will not, because of accepting, rejecting, approving or
obtaining insurance, incur any liability for (i) the existence, nonexistence, form or legal sufficiency
thereof, (ii) the solvency of any insurer, or (iii) the payment of losses.
Q. The Managing General Partner shall have the following duties and
obligations with respect to a casualty or condemnation affecting all or a portion of the Project:
(i) In the event of any fire or other casualty to the Project (or any
portion thereof) or any eminent domain or similar proceedings resulting in any
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condemnation or taking of the Project (or any portion thereof), the Managing General
Partner will promptly give the Investor Limited Partner written notice thereof (with a copy
sent to the Administrative General Partner). To the extent Net Proceeds are available for
rebuilding or restoration (net of expenses reasonably incurred in obtaining such proceeds
and subject to the rights and any applicable approval of the Lenders), the Managing General
Partner will rebuild or restore the Project, as the case may be, in such a manner as will as
fully as possible implement the Initial Economic Projections. Any Net Proceeds that are
not fully expended in such rebuilding or restoring will constitute Capital Proceeds. In
connection with any such rebuilding or restoring, the Managing General Partner will seek
legal, tax, and accounting counsel and take all necessary or advisable steps to preserve as
fully as possible the Initial Economic Projections.
(ii) Notwithstanding the provisions of subparagraph (i) above, if it is
impossible or unlikely that rebuilding or restoring the Project (or the affected portion
thereof) can be accomplished with the Insurance Proceeds or Condemnation Awards
available therefor, or if the projected tax benefits to the Investor Limited Partner from
rebuilding or restoring the Project would be substantially equivalent to or less than the tax
benefits to Investor Limited Partner without rebuilding or restoring the Project, then,
subject to the provisions of subparagraph (iii) below, the Managing General Partner will
refrain from rebuilding or restoring the Project and proceed to utilize any Net Proceeds as
Capital Proceeds.
(iii) The Investor Limited Partner, by written notice to the Managing
General Partner (with a copy sent to the Administrative General Partner), may elect to
cause the Partnership to rebuild or restore the Project (or the affected portion thereof) under
the circumstances described in subparagraph (ii) if the reason that subparagraph (ii) is
applicable is because it is impossible or unlikely that rebuilding of the Project can be
accomplished with the amount of the Insurance Proceeds or Condemnation Proceeds
available therefor provided and on the condition that the Investor Limited Partner agrees
to provide such additional amounts as the Investor Limited Partner may deem necessary to
cover such deficit. In such event, the Managing General Partner will rebuild or restore the
Project as provided in subparagraph (i) above to the extent feasible given the amount of
funds available for such rebuilding or restoring. Any funds provided by the Investor
Limited Partner under this subparagraph (iii) will be deemed to be additional Capital
Contributions to the Partnership by the Investor Limited Partner which will have a priority
return as set forth in Sections 10.1A and 10.1B.
(iv) In the event of any casualty or taking of the Project or any portion
thereof, except under circumstances in which portions of the Project are unaffected by the
casualty or condemnation or are rebuilt or restored as contemplated under this Section
6.4Q, the Managing General Partner will, unless the Investor Limited Partner consents in
writing to an alternative proposal, proceed to terminate and liquidate the Partnership, sell
Partnership assets, repay indebtedness, and distribute Capital Proceeds to the Partners as
provided in Section 10.2. In the event of a rebuilding or restoration, the Managing General
Partner will have no obligation to enter into construction or rehabilitation contracts at a
price exceeding the amount of the Net Proceeds available for rebuilding or restoring.
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(v) Nothing contained in this Section 6.4Q will be construed to affect
the Managing General Partner’s liability for any failure to provide insurance to the full
extent required under this Agreement. Notwithstanding the provisions of this Section 6.4Q,
the Managing General Partner and Guarantor shall be responsible for the costs of rebuilding
or restoring the Project as a result of any uninsured casualty. For purposes of this Section
6.4Q(v), any casualty loss which is uninsured because the Managing General Partner
requested and the Investor Limited Partner approved a waiver from the insurance
requirements set forth in this Agreement, shall be deemed to be an uninsured casualty for
which the Managing General Partner and Guarantor bear sole responsibility.
(vi) The Managing General Partner acknowledges that the Investor
Limited Partner will not be obligated to approve any Mortgage Loan Document which
restricts the use of Insurance Proceeds and Condemnation Awards regarding restoration
and reconstruction of the Project in a manner which is inconsistent with the provisions of
this Section 6.4Q.
R. The Managing General Partner will make the election under Section
168(k)(7) of the Code to elect out of “bonus depreciation” for any personal property and site work
costs which are placed in service in any year.
S. The Managing General Partner shall comply with any and all related
guidance and Regulations adopted by the Credit Agency and/or published by the Service related
to the Average Income Test to allow 100% of the Units in the Project to qualify for Tax Credits
(the “Income Averaging Election”). If at any time the Project receives a notice from the Credit
Agency that it is not in compliance with the Income Averaging Election or if the Managing General
Partner is aware that any Unit at or below the 60% AMI designation is out of compliance, the
Managing General Partner shall promptly notify the Special Limited Partner of such event and the
Special Limited Partner must approve the proposed remedy before any actions to correct such
noncompliance are taken. The Managing General Partner shall at no time take corrective actions
for such noncompliance without the prior consent of the Special Limited Partner. In meeting the
Minimum Set-Aside Test and Income Averaging Election, the Managing General Partner shall
comply with any and all related guidance and Regulations adopted by the Credit Agency and/or
the Service related to Code Section 42(g)(1)(C), and in all instances shall meet the more restrictive
requirements.
Section 6.5 Representations, Warranties and Covenants
A. The Managing General Partner hereby represents and warrants to the
Investor Limited Partner that the following are true as of Investment Closing, will be true on the
due date for payment of each Installment and at all times hereafter:
(i) The Partnership is a duly organized limited partnership validly
existing under the laws of the State and has complied with all recording requirements with
each proper Governmental Agency necessary to establish the limited liability of the
Limited Partners as provided herein.
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(ii) No litigation or proceeding against the Partnership, any Managing
General Partner, Guarantor, the Builder or APC Vista Breeze Development, LLC, nor any
other litigation or proceeding directly affecting the Project, is pending before any court,
administrative agency or other Governmental Agency which would, if adversely
determined, have a material adverse effect on the Partnership, the Managing General
Partner, Guarantor, the Builder, APC Vista Breeze Development, LLC or their respective
businesses or operations, except for such matters as to which the likelihood of such a
determination adverse to the Partnership is, in the opinion of Partnership Counsel or other
counsel acceptable to the Investor Limited Partner, remote.
(iii) No default by the Managing General Partner, any Affiliate thereof
having any relationship with the Project, or the Partnership, in any material respect has
occurred or is continuing (nor has there occurred any continuing event which, with the
giving of notice or the passage of time or both, would constitute such a default in any
material respect) under any of the Project Documents.
(iv) The Project Documents are in full force and effect (except to the
extent fully performed in accordance with their respective terms).
(v) All accounts and reserves are fully funded to the extent currently
required by the Project Documents and this Agreement.
(vi) Except for carve-outs in the Mortgage Loan Documents related to
situations involving fraud or willful misrepresentation, the failure to pay taxes, the
misappropriation of funds, and similar commercially reasonable exceptions that are
standard in transactions of this type, no Partner, nor any related person, bears any Economic
Risk of Loss with respect to any of the Mortgage Loans or, with the exception of any
Deferred Development Amount, any other indebtedness incurred by the Partnership.
(vii) All building, zoning and other applicable certificates, permits,
approvals and licenses necessary to permit the construction, rehabilitation, repair, use,
occupancy and operation of the Project have been obtained (other than prior to completion
of the Project or a specified portion thereof, such as will be issued only after the completion
of the Project or such specified portion thereof) and neither the Partnership nor the
Managing General Partner has received any notice or has any knowledge of any violation
with respect to the Project of any law, rule, regulation, order or decree of any Governmental
Agency having jurisdiction which would have a material adverse effect on the Project or
the construction, use or occupancy thereof, except for violations which have been cured
and notices or citations which have been withdrawn or set aside by the issuing agency or
by an order of a court of competent jurisdiction.
(viii) The Partnership has a leasehold interest in the Land. At all times
throughout the term of the Ground Lease, the Partnership will be considered the exclusive
owner of the Improvements for federal income tax purposes. The Partnership owns the
Project free and clear of any liens, charges or encumbrances other than the Mortgages,
matters set forth in the Title Policy delivered at Investment Closing, encumbrances the
Partnership is permitted to create under Sections 2.4 and 6.1, and mechanics’ or other liens
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which have been bonded or insured against in such a manner as to preclude the holder of
such lien or such surety or insurer from having any recourse to the Property or the
Partnership for payment of any debt secured thereby. None of the liens, charges,
encumbrances or exceptions set forth in the Title Policy delivered at Investment Closing
has or will have a material adverse effect upon the construction or operation of the Project.
(ix) The execution and delivery of all instruments and the performance
of all acts heretofore or hereafter made or taken or to be made or taken, pertaining to the
Partnership or the Property by the Managing General Partner or an Affiliate thereof which
is an Entity have been or will be duly authorized by all necessary 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 organizational documents of any
such Entity or any agreement by which any such Entity or any of its properties is bound,
nor constitute a violation of any law, administrative regulation or court decree. Each such
Entity is duly organized and validly existing under the law of the state of its organization.
(x) The Managing General Partner is not in default in any material
respect in the observance or performance of any provision of this Agreement to be observed
or performed by such Managing General Partner.
(xi) The Related Agreements are in full force and effect and no default
by any party thereto (other than the Investor Limited Partner or its Affiliates) has occurred
or is continuing thereunder (nor has there occurred any event which, with the giving of
notice or the passage of time, or both, would constitute such a default in any material
respect thereunder).
(xii) No Event of Bankruptcy has occurred and is continuing with respect
to the Partnership, the Managing General Partner, any Guarantor or APC Vista Breeze
Development, LLC.
(xiii) The Project will qualify, on and after the Completion Date, as a
“qualified low-income housing project” under Section 42(g) of the Code and all Low
Income Units in the Project will qualify as “low income units” under Section 42(i)(3) of
the Code.
(xiv) The Project will be operated so that it will meet the Minimum Set-
Aside Test. The Company has elected the Average Income Test as the Minimum Set-Aside
Test. The Partnership will elect to treat the Building comprising the Project as a single
project for purposes of satisfying the Minimum Set-Aside Test.
(b) The initial Unit Designations for the Project are attached hereto as
Exhibit N. The initial Unit Designations are approved by the Investor Limited
Partner and the Credit Agency. If any changes to the initial Unit Designations are
required by the Credit Agency, the Consent of the Investor Limited Partner shall be
obtained prior to finalizing the Unit Designations for submission to the Credit
Agency as required by the Extended Use Agreement.
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(c) If and to the extent that Service regulations or guidance is received
from the Service and/or the Credit Agency with respect to the Average Income Test
that requires a change to the Extended Use Agreement, the Managing General
Partner shall work with the Credit Agency to determine the necessary changes and
will obtain the Consent of the Investor Limited Partner prior to making any
changes.
(d) Notwithstanding the fact that the Partnership has elected to use the
Average Income Test to satisfy the Minimum Set-Aside Test, the Managing
General Partner shall also cause the Partnership to satisfy the 40-60 Test unless the
Consent of the Investor Limited Partner is obtained to waive the requirements of
this Section 6.5A(xiv). If the Service and/or Credit Agency issues regulations or
guidance making the simultaneous compliance with the Average Income Test and
the 40-60 Test impossible, the Consent of the Investor Limited Partner to the waiver
described herein will not be unreasonably delayed or withheld.
(e) As part of its Quarterly Reporting, the Managing General Partner
will provide the Investor Limited Partner with an updated “Unit Mapping” report
in the format attached hereto as Exhibit L. The Members acknowledge and agree
that the “Unit Mapping” report is intended to meet the requirements of Section
42(g)(1)(C) of the Code to evidence the “income limitation designated by the
taxpayer with respect to the respective unit”.
(xv) All tax returns, financial statements, Schedules K-1 and reports due
under Section 12 and Exhibit K have been properly filed and/or transmitted, as applicable.
(xvi) No Managing General Partner, Affiliate of the Managing General
Partner, or Person for whose conduct the Managing General Partner is or was responsible
has ever: (i) directly or indirectly transported, or arranged for transport, of any Hazardous
Material to, at or from the Project (except if such transport was or is at all times in
compliance with applicable Hazardous Waste Laws); (ii) caused or was legally responsible
for any release or threat of release of any Hazardous Material at the Project; (iii) received
notification from any federal, state or other Governmental Agency of (x) any potential,
known, or threat of release of any Hazardous Material from the Project; or (y) the
incurrence of any expense or loss by any such Governmental Agency 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 Project.
(xvii) To the best of the Managing General Partner’s knowledge, no
Hazardous Material was ever or is now stored on, transported or disposed of on the Land
(except as disclosed in the Environmental Reports and to the extent any such storage,
transport or disposition was at all times in compliance with all Hazardous Waste Laws).
(xviii) No Managing General Partner, Affiliate of the Managing General
Partner, shareholder of the Managing General Partner, director of the Managing General
Partner, officer of the Managing General Partner or manager of the Managing General
Partner has ever (i) been convicted of a crime; (ii) had a judgment entered against them for
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fraud, willful misconduct or breach of fiduciary duty; or (iii) been sanctioned by HUD, the
Securities and Exchange Commission or any other government agency.
(xix) There are currently no criminal or civil actions or administrative
proceedings pending against the Managing General Partner or its Affiliates, shareholders,
directors, officers or managers.
(xx) The Adjusted Aggregate Federal Low Income Tax Credit Amount
shall be at least $26,711,602.
(xxi) Each of the representations and disclosures made by the Partnership
to the Credit Agency in the Tax Credit Application upon which the Credit Agency’s Credit
Approval were based, is true and correct as of the date hereof. Each of the covenants,
agreements, and conditions contained in the Credit Application and the Credit Approval
have been duly performed or satisfied by the Partnership or the Managing General Partner,
as applicable, to the extent that performance of any such covenant or agreement or
satisfaction of any conditions is required on or prior to the date hereof, and the Managing
General Partner has no reason to believe that the covenants, agreements, and conditions
required to be performed or satisfied after the date hereof will not be performed or satisfied
in a timely manner.
(xxii) The Managing General Partner represents that fifty percent (50%)
or more of the aggregate basis of the Buildings and the Land attributable thereto will be
financed with an obligation the interest on which is exempt from tax under Section 103 of
the Code and which is within the State’s volume cap as provided in Section 146 of the
Code and the General Partners have not and will not redeem any portion of the Project
Loan until the Completion Date has occurred and the Partnership has achieved the Fifty
Percent Test Qualification.
(xxiii) No employees shall be engaged by the Partnership.
(xxiv) The fees payable by the Partnership to the Managing General
Partner or its Affiliates, as set forth herein or the other Project Documents, are reasonable
in amount and ordinary and customary in nature for the services to be provided, reflect the
value of the services to which the fees relate, and are consistent with those paid in other
similar projects of which the Managing General Partner and its Affiliates have knowledge.
Such fees have been or will be disclosed to the Credit Agency for the purpose of the
determination by the Credit Agency of the financial feasibility and viability of the Property
pursuant to Section 42(m)(2) of the Code.
(xxv) None of the Mortgage Loans are subject to covenants requiring
maintenance of specified debt service coverage or loan-to-value ratios.
(xxvi) Neither the Managing General Partner nor any of its controlling
principals are on the list of Specially Designated Nationals and Blocked Persons
promulgated by the U.S. Department of Treasury.
(xxvii) The Managing General Partner shall cause the Partnership to:
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(a) maintain its books and records separate from those of any
other Person or Entity, including the General Partners or any Affiliates of the
Partnership;
(b) except as specifically permitted by the Project Documents,
not commingle assets with those of any other Entity, including its General Partners
or any Affiliates of the Partnership;
(c) conduct its own business in its own name or the name of the
Project so as not to mislead others as to the identity of such Entity;
(d) maintain separate financial statements from any other Person
or Entity, including the General Partners or any Affiliates of the Partnership;
(e) except as specifically permitted by the Project Documents or
this Agreement, pay its own liabilities out of its own funds;
(f) observe all partnership formalities including without
limitation holding all meetings and obtaining all consents required by this
Agreement;
(g) maintain an arm’s-length relationship with its Affiliates;
(h) except as specifically permitted by the Project Documents,
not guarantee or become obligated for the debts of any other Entity or hold out its
credit as being available to satisfy the obligations of others, including the General
Partners or any Affiliates of the Partnership;
(i) allocate fairly and reasonably any overhead for shared office
space or other similar expenses;
(j) use invoices and checks separate from any other Person or
Entity, including the General Partners or any Affiliates of the Partnership; and
(k) hold itself out as and operate as an Entity separate and apart
from any other Entity, including the General Partners or any Affiliates of the
Partnership.
(xxviii)There will be no real estate transfer taxes due to the State or any
other Governmental Agency as a result of the admission of the Investor Limited Partner to
the Partnership or, based on the law in effect as of the date of Investment Closing, any
subsequent direct or indirect Transfer of ownership interests in the Investor Limited
Partner.
(xxix) The Managing General Partner represents that the land that is the
subject of the Environmental Reports is the same land that is described in Schedule A of
the Title Policy.
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(xxx) The Managing General Partner will give prompt notice to the
Investor Limited Partner and the Administrative General Partner of any casualty or any
condemnation or threatened condemnation of the Property. The Managing General Partner
will diligently assert the Partnership’s rights and remedies with respect to each claim and
to promptly pursue the settlement and compromise of each claim subject to the Consent of
the Investor Limited Partner, which Consent will not be unreasonably withheld or delayed.
(xxxi) Except with the Consent of the Limited Partner, and subject to the
rights of any Lender, Net Proceeds will be utilized for the restoration of the Property.
Unless otherwise required by Lender, Net Proceeds pending the restoration of the Property,
together with any other funds deposited with the Investor Limited Partner for that purpose,
must be deposited in an interest-bearing account approved of by the Investor Limited
Partner.
(xxxii) Neither the Managing General Partner nor the Partnership will do or
permit to be done anything that would affect the coverage or indemnities provided for
pursuant to the provisions of any insurance policy, performance bond, labor and material
payment bond or any other bond given in connection with the construction of the
Improvements.
(xxxiii) All of the representations and warranties set forth in the Closing
Certificate are true and correct.
B. The Administrative General Partner hereby represents and warrants to the
Investor Limited Partner that the following are true as of Investment Closing, will be true on the
due date for payment of each Installment and at all times hereafter:
(i) No litigation or proceeding against the Administrative General
Partner or HACMB Development LLC, nor any other litigation or proceeding directly
affecting the Project, is pending before any court, administrative agency or other
Governmental Agency which would, if adversely determined, have a material adverse
effect on the Administrative General Partner or HACMB Development LLC, or their
respective businesses or operations, except for such matters as to which the likelihood of
such a determination adverse to the Partnership is, in the opinion of Partnership Counsel
or other counsel acceptable to the Investor Limited Partner, remote.
(ii) No default by the Administrative General Partner, any Affiliate
thereof having any relationship with the Project, or the Partnership, in any material respect
has occurred or is continuing (nor has there occurred any continuing event which, with the
giving of notice or the passage of time or both, would constitute such a default in any
material respect) under any of the Project Documents.
(iii) The Administrative General Partner is not in default in any material
respect in the observance or performance of any provision of this Agreement to be observed
or performed by such Administrative General Partner.
(iv) No Event of Bankruptcy has occurred and is continuing with respect
to the Administrative General Partner or HACMB Development LLC.
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(v) No Administrative General Partner, Affiliate of the Administrative
General Partner, or to the knowledge of any officer, director or employee of the
Administrative General Partner, Person for whose conduct the Administrative General
Partner is or was responsible has ever: (i) directly or indirectly transported, or arranged for
transport, of any Hazardous Material to, at or from the Project (except if such transport was
or is at all times in compliance with applicable Hazardous Waste Laws); (ii) caused or was
legally responsible for any release or threat of release of any Hazardous Material at the
Project; (iii) received notification from any federal, state or other Governmental Agency
of (x) any potential, known, or threat of release of any Hazardous Material from the Project;
or (y) the incurrence of any expense or loss by any such Governmental Agency 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 Project.
(vi) No Administrative General Partner, Affiliate of Administrative
General Partner, shareholder of Administrative General Partner, director of Administrative
General Partner, officer of Administrative General Partner or manager of Administrative
General Partner has ever (i) been convicted of a crime; (ii) had a judgment entered against
them for fraud, willful misconduct or breach of fiduciary duty; or (iii) been sanctioned by
HUD, the Securities and Exchange Commission or any other government agency.
(vii) There are currently no criminal or civil actions or administrative
proceedings pending against the Administrative General Partner or its Affiliates,
shareholders, directors, officers or managers.
(viii) The fees payable by the Partnership to the Administrative General
Partner or its Affiliates, as set forth herein or the other Project Documents, are reasonable
in amount and ordinary and customary in nature for the services to be provided, reflect the
value of the services to which the fees relate, and are consistent with those paid in other
similar projects of which the Administrative General Partner and its Affiliates have
knowledge. Such fees have been or will be disclosed to the Credit Agency for the purpose
of the determination by the Credit Agency of the financial feasibility and viability of the
Property pursuant to Section 42(m)(2) of the Code.
(ix) Neither the Administrative General Partner nor any of its controlling
principals are on the list of Specially Designated Nationals and Blocked Persons
promulgated by the U.S. Department of Treasury.
(x) To the best of the Administrative General Partner’s knowledge, no
Hazardous Material was ever or is now stored on, transported or disposed of on the Land
(except as disclosed in the Environmental Reports and to the extent any such storage,
transport or disposition was at all times in compliance with all Hazardous Waste Laws).
(xi) The Administrative General Partner will be (A) a nonprofit
corporation, and (B) a qualifying corporation under Section 501(c)(3) of the Code and is
exempt from tax under Section 501(a) of the Code. One of the stated tax-exempt purposes
of the Administrative General Partner is the fostering of affordable housing in the
geographic area in which the Project is located.
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(xii) The Administrative General Partner represents that fifty percent
(50%) or more of the aggregate basis of the Buildings and the Land attributable thereto will
be financed with an obligation the interest on which is exempt from tax under Section 103
of the Code and which is within the State’s volume cap as provided in Section 146 of the
Code and the General Partners have not and will not redeem any portion of the Project
Loan until the Completion Date has occurred and the Partnership has achieved the Fifty
Percent Test Qualification.
Section 6.6 Indemnification
A. Each General Partner (including any Retired General Partner) shall be
indemnified by the Partnership against any losses, judgments, liabilities, expenses and amounts
paid in settlement of any claims sustained by him or it in connection with the Partnership, provided
that the same were not the result of negligence or misconduct on the part of any General Partner
or any of its Affiliates and were the result of a course of conduct which such General Partner, in
good faith, determined was in the best interest of the Partnership. Any indemnity under this Section
6.6A shall be provided out of and to the extent of Partnership assets only, and no Limited Partner
shall have any personal liability on account thereof; provided, however, that no indemnification
shall be provided for any losses, liabilities or expenses arising from or out of any alleged violation
of federal or state securities laws unless (i) there has been a successful adjudication on the merits
of each count involving alleged securities law violations as to the particular indemnitee and the
court approves indemnification of 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 indemnification of litigation costs; or (iii) a court of competent jurisdiction
approves a settlement of the claims against a particular indemnitee and finds that indemnification
of the settlement and related costs should be made.
B. The Partnership shall not incur the cost of that portion of any insurance
which insures any party against any liability as to which such party is herein prohibited from being
indemnified.
C. The General Partners agree promptly to indemnify, defend and hold
harmless the Partnership and the Limited Partners from and against any and all claims, losses,
damages, costs, expenses and liabilities which the Partnership and the Limited Partners may incur
by reason of any liabilities to which either the Partnership or the Project is subject at the Investment
Closing; provided, however, that the foregoing indemnification shall not apply to any Mortgage,
necessary contractual obligations normally incurred in connection with the Property, or to acts for
which such General Partners are entitled to indemnification under Section 6.6A.
D. Each of the General Partners agrees to promptly indemnify, defend, and
hold harmless the Partnership and the Limited Partners from and against any claims, losses,
damages, costs, expenses or liabilities which the Partnership and the Limited Partners may incur
on account of the presence or escape of any Hazardous Material at or from the Property (or at any
other location). Any such claims, losses, damages, costs, expenses or liabilities may be defended,
compromised, settled, or pursued by the Limited Partners with counsel of the Limited Partners’
selection, but at the expense of the General Partners. The foregoing indemnification shall be a
recourse obligation of the General Partners (and with regard to the Administrative General Partner,
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shall be limited to the assets of the Administrative General Partner and shall specifically exclude
the assets of any Affiliate of the Administrative General Partner) and shall survive the dissolution
of the Partnership and/or the death, retirement, incompetency, bankruptcy or withdrawal of such
General Partner.
E. Each of the General Partners shall defend, indemnify and hold harmless the
Partnership and the Limited Partners from any liability, loss, damage, fees, costs and expenses,
judgments or amounts paid in settlement incurred by reason of any demands, claims, suits, actions
or proceedings arising out of such General Partners’ or its Designated Affiliate’s negligence,
misconduct, fraud, breach of fiduciary duty or breach of this Agreement, including without
limitation any breach by any General Partner or its Designated Affiliate of any representation,
warranty, covenant or agreement set forth in Section 6.5 or elsewhere in this Agreement, including
all reasonable legal fees and costs incurred in defending against any claim or liability or protecting
itself or the Partnership from, or lessening the effect of, any such breach. The foregoing
indemnification shall be a recourse obligation of the General Partners (and with regard to the
Administrative General Partner, shall be limited to the assets of the Administrative General Partner
and shall specifically exclude the assets of any Affiliate of the Administrative General Partner)
and shall survive the dissolution of the Partnership and/or the death, retirement, incompetency,
bankruptcy or withdrawal of such General Partner.
F. Each Limited Partner shall be indemnified by the Partnership against any
third-party claims or costs sustained or incurred by it in connection with its involvement in the
Partnership, provided that the same were not the result of any improper action or omission on the
part of such Limited Partner or any Affiliate thereof; and provided further that the General Partners
shall be ratably and concurrently liable for any matter within the ambit of both Sections 6.6E and
6.6F.
Section 6.7 Obligation to Complete Construction and to Pay Development Costs. The
Managing General Partner shall (i) complete the construction of the Improvements or cause the
same to be completed in a good and workmanlike manner, free and clear of all mechanics’,
materialmen’s or similar liens other than liens bonded or insured against in such a manner as to
preclude the holder of such lien or such surety or insurer from having any recourse to the Property
or the Partnership for payment of any debt secured thereby, and shall equip the Improvements or
cause the same to be equipped with all necessary and appropriate fixtures, equipment and articles
of personal property, including refrigerators and ranges, all in accordance with the Project
Documents and the drawings and specifications forming a part of the Construction Contract on or
before May 31, 2025 and (ii) cause the Partnership to satisfy any other requirements necessary to
achieve Final Closing in accordance with the Project Documents. If the Designated Proceeds as
available from time to time are insufficient to pay all Development Costs, the Managing General
Partner shall advance or cause to be advanced to the Partnership from time to time as needed all
such funds as are required to pay such deficiencies. Any such advances (“Development
Advances”) shall, to the extent permitted under the Project Documents and any applicable
Regulations or requirements of the Lenders and the Credit Agency (or otherwise with any
Requisite Approvals), be reimbursed by the Partnership at or prior to the Development Obligation
Date (or, in the case of proceeds of Capital Contributions, through the date on which such Capital
Contributions are received by the Partnership) only out of Designated Proceeds available from
time to time after payment of all Development Costs. Development Advances made by the
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Managing General Partner prior to the Development Obligation Date under this Section 6.7 and
Section 6.8 below, shall be deemed “Development Deficit Loans”. Development Deficit Loans
shall not bear interest and shall be repayable only as provided in Article X.
Section 6.8 Obligation to Provide for Operating Expenses
A. During the period commencing on the Admission Date and ending on the
later to occur of the fifth (5th) anniversary of the Development Obligation Date or the date on
which the Project has achieved a 115% Debt Service Coverage Ratio for a period of twelve (12)
consecutive calendar months, which period must occur during the fifth (5th) year after
achievement of the Development Obligation Date or, if not, during any subsequent twelve (12)-
month period and provided that the Operating Reserve has been replenished to the Minimum
Operating Reserve Balance (the “Operating Deficit Guaranty Period”), the Managing General
Partner agrees that if the Partnership requires funds to discharge Operating Expenses (other than
to make payments to Partners, payments of any outstanding Operating Expense Loans or other
obligations herein provided to be payable solely out of Cash Flow or distributions of Capital
Proceeds), the Managing General Partner shall furnish to the Partnership the funds required.
Amounts so furnished to fund Operating Expenses incurred prior to the Development Obligation
Date, in excess of the Development Deficit Loans, shall be deemed Special Capital Contributions.
Amounts furnished to fund Operating Expenses incurred on or after the Development Obligation
Date shall constitute Operating Expense Loans. Operating Expense Loans shall not bear interest
and will be repayable only as provided in Article X. Notwithstanding the foregoing, however, the
Managing General Partner shall not be obligated to make Operating Expense Loans under this
Section 6.8A to the extent that the outstanding aggregate principal amount of such Operating
Expense Loans would exceed $859,382. Operating Expense Loans may be funded and
subsequently repaid in whole or in part by the Partnership, and the Managing General Partner’s
obligation to make additional Operating Expense Loans will be reinstated to the extent that any
Operating Expense Loans have been repaid. Funds held in the Operating Reserve may be used to
pay Operating Deficits during the period described in this Section 6.8A prior to the obligation of
the Managing General Partner to make an Operating Expense Loan. Notwithstanding the
foregoing, the Operating Deficit Guaranty Period shall expire, and the Managing General Partner’s
obligation to make Operating Expense Loans under this Section 6.8A shall terminate, only if the
amount of funds available in the Operating Reserve equals or exceeds the Minimum Operating
Reserve Balance.
Section 6.9 Certain Payments to the General Partners and Affiliates
A. For its services in connection with the development of the Property and the
supervision to completion of the construction of the Improvements, the Developer shall be entitled
to receive the amounts set forth in the Development Agreement.
B. In consideration of its services in the day-to-day administration of the
business affairs of the Partnership, the Managing General Partner and the Administrative General
Partner shall each receive a Partnership Management Fee in an amount equal to $2,500 per annum
increasing 3% per year. Such fee shall be payable in accordance with the Partnership Management
Agreement and Article X.
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C. All of the Partnership’s expenses shall be billed directly to, and paid by, the
Partnership to the extent practicable. Subject to the terms of this Agreement, reimbursements to a
General Partner or any of its Affiliates by the Partnership shall be allowed subject to the following
conditions:
(i) such goods or services must be necessary for the prudent formation,
development, organization or operation of the Partnership;
(ii) reimbursement for goods or services provided by Persons who are
not affiliated with a General Partner shall not exceed the cost to a General Partner or its
Affiliates of obtaining such goods or services; and
(iii) reimbursement for goods and services obtained directly from a
General Partner or its Affiliates shall not exceed the amount the Partnership would be
required to pay independent parties for comparable goods and services in the same
geographic location and shall not include reimbursement for the general overhead of the
General Partners or their Affiliates (including salaries and benefits of employees thereof).
D. Neither the General Partners nor any of their Affiliates shall be entitled to
any compensation, fees or profits from the Partnership in connection with the acquisition,
construction, development or rent-up of the Land or Improvements or for the administration of the
Partnership’s business or otherwise, except for (i) payments provided for or referred to in Sections
2.4(v) or 6.9, (ii) payments of the Management Fee, the Partnership Management Fee and
Supervisory Management Fee, (iii) fees and distributions under Article X, (iv) such other fees and
distributions as may be permitted to be paid by any Lender or the Governmental Agency out of
the proceeds of any Mortgage Loan, (v) payments to the Builder under the Construction Contract,
and (vi) payments or rent under the terms of the Ground Lease.
Section 6.10 Joint and Several Obligations. If there is more than one Managing General
Partner, all obligations of the Managing General Partners hereunder shall be joint and several
obligations of the Managing General Partners, except as herein expressly provided to the contrary.
The obligations of the Administrative General Partner and the Managing General Partner shall not
be joint and several unless explicitly set forth herein.
Section 6.11 Reserve Accounts
A. The Managing General Partner shall establish a reserve account for capital
replacements (the “Replacement Reserve”), which account shall be funded by monthly deposits of
$2,975, which amount equals $300 per unit per year (or such greater amount as may be required
by any Lender or, subject to any Requisite Approvals, such lesser amount as shall be approved in
writing by the Special Limited Partner from time to time), increasing 3% per year, commencing
upon Permanent Mortgage Commencement. Withdrawals from such reserve shall be utilized
solely to fund capital repairs and improvements deemed necessary by the General Partners.
B. The Managing General Partner shall cause the Partnership to establish a
reserve account for Operating Deficits (the “Operating Reserve”) in the initial amount of $463,580.
The Operating Reserve shall be funded in the first instance from the proceeds of the Third
Installment of the Capital Contributions of the Investor Limited Partner; provided, however, that
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if for any reason such proceeds shall be insufficient to fully fund the Operating Reserve at such
time, the Managing General Partner shall promptly fund any such shortfall. Any amount so
furnished by the Managing General Partner shall constitute a Special Capital Contribution. Funds
in the Operating Reserve may be used to pay, to the extent required, Operating Expenses, subject
to any Requisite Approvals and the Consent of the Investor Limited Partner. These funds may be
used to pay Operating Deficits during the period described in Section 6.8A prior to the obligation
of the Managing General Partner to make an Operating Expense Loan. The Operating Reserve
shall be maintained throughout the Compliance Period. Upon expiration of the Compliance Period,
any funds remaining in the Operating Reserve shall be released in accordance with Section 10.1A,
subject to the Consent of the Credit Agency. At the end of the Compliance Period, any remaining
balance in the Operating Reserve less amounts that may be permitted to be drawn (which includes
Deferred Developer Fee and reimbursements for General Partner loans pursuant to this
Agreement) will be used to pay the Viability Loan, the SAIL Loan, the ELI Loan or the NHTF
Loan, or to pay any then-existing arrearage of rent under the Ground Lease or to prepay any
remaining future rent under the Ground Lease, as the lenders may require, or as the General Partner
determines to be most advantageous to the Partnership. If there is no outstanding debt from FHFC
on the Project at the end of the Compliance Period, any remaining balance in the Operating Reserve
shall be used to pay any outstanding FHFC fees. If any balance remains in the Operating Reserve
after the payments listed above, the amount should be placed in the Replacement Reserve for the
Project. In no event shall the payments of amounts to the Partnership or the Developer from the
Operating Reserve cause the Deferred Development Fee or payments to the Contractor to exceed
the applicable percentage limitations provided for in the Rule. Any and all terms and conditions
of the Operating Reserve must be acceptable to FHFC, Amerinat and their legal counsel.
C. Notwithstanding anything to the contrary in this Section 6.11, all funds in the
Replacement Reserve and the Operating Reserve shall be deposited into an interest bearing
account. The interest earnings on such account shall, subject to the consent of any Lenders, if
applicable, be included in Cash Receipts following the end of each Fiscal Year, provided that
interest earnings shall not be so included if doing so would cause the applicable reserve to fall
below any applicable required minimum balance.
ARTICLE VII
WITHDRAWAL AND REMOVAL OF A GENERAL PARTNER
Section 7.1 Voluntary Withdrawal.
No General Partner shall have the right to withdraw or Retire voluntarily from the
Partnership or sell, assign or encumber its Interest without the Consent of the Investor Limited
Partner, any Requisite Approvals and the consent of any other General Partner, including, without
limitation, the Administrative General Partner. Notwithstanding the foregoing, once Permanent
Mortgage Commencement and the Forms 8609 Receipt Date have occurred, the Managing General
Partner may, at the written request of the Administrative General Partner, voluntarily withdraw
and the Administrative General Partner may become the Managing General Partner and an
Affiliate of the Administrative General Partner, HACMB or, at HACMB’s election, its Affiliate
may become the Guarantor, subject to the Consent of the Investor Limited Partner, which Consent
may be given or withheld in the sole but reasonable discretion of the Investor Limited Partner. If
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the Managing General Partner interest in the Partnership has converted to that of a Class B Limited
Partner prior to the achievement of Permanent Mortgage Commencement and the occurrence of
the Forms 8609 Receipt Date, then such voluntary withdrawal provisions set forth in this Section
7.1 shall apply to the Class B Limited Partner interest, to the same extent as if such interest were
a Managing General Partner interest. The criteria that the Investor Limited Partner shall consider
in making its determination shall include, but not be limited to, the following: (i) prior to the
voluntary withdrawal, the withdrawing Managing General Partner shall have obtained the Consent
of the Investor Limited Partner, in its sole but reasonable discretion, the consent of any other
General Partner including, without limitation, the Administrative General Partner, all Requisite
Approvals to such transfer and withdrawal and no Material Default under Section 7.7 shall have
occurred and be continuing or be pending or threatened; (ii) the withdrawing Managing General
Partner and the Guarantors shall have fully satisfied their obligations under this Agreement and
the Guaranty Agreement, respectively; (iii) HACMB or, at HACMB’s election, its Affiliate that
will become a substitute Guarantor must enter into a guaranty agreement, the form of which is
attached hereto as Exhibit D, shall maintain a cash liquidity (including all Project reserve
accounts) to contingent liability ratio of 1.5:1.0, with no less than one million dollars ($1,000,000)
in cash held by such substitute Guarantor; (iv) the Managing General Partner has received all fees
or payments owed to it under the terms of this Agreement; and (v) an Affiliate of the withdrawn
Managing General Partner (or other third party compliance manager approved by the Investor
Limited Partner) must serve as a compliance manager, working with the Management Agent to
oversee the Project’s compliance with Section 42 of the Code, for a period of twenty-four (24)
months after the Forms 8609 Receipt Date has occurred, and a copy of such compliance
management agreement will be provided to the Investor Limited Partner. Further, as a condition
of the withdrawal of the Managing General Partner from the Partnership, the interest of the
Administrative General Partner in all Profits, Losses, Credits, Cash Flow, and Capital Proceeds
may not exceed nine percent (9%). From and after the voluntary withdrawal of the Managing
General Partner and replacement of the Guarantor with HACMB, with the Consent of the Investor
Limited Partner, the Managing General Partner and the Guarantors shall have no further liability
for obligations which arise after the date of their withdrawal or substitution, respectively; provided,
however, that any responsibilities, obligations, duties or liabilities which accrue directly or
indirectly out of acts or omissions of such parties while they were acting in their respective
capacities (irrespective of whether the same accrue prior to or after such parties’ withdrawal) shall
be and remain the responsibilities, obligations, duties or liabilities of such parties, so long as a
demand for performance stating with reasonable specificity the responsibility, obligation, duty or
liability is made to the applicable party within three (3) years of the withdrawal of the Managing
General Partner. Notwithstanding the foregoing, the three (3) year limitation expressed in the prior
sentence shall only apply if the replacement guarantor agrees to guaranty the obligations of the
withdrawn Managing General Partner, after such three (3) year period has elapsed.
Section 7.2 Obligation to Continue. In the event of the Retirement of any General Partner, the
remaining General Partners, if any, and any successor General Partner shall have the obligation to
continue the business of the Partnership employing its assets and name. Immediately after the
occurrence of such Retirement, the remaining General Partners, if any, shall notify the Investor
Limited Partner thereof.
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Section 7.3 Successor General Partner
A. Upon the occurrence of any Retirement, the remaining General Partners
may designate a Person to become a successor General Partner to the Retired General Partner. Any
Person so designated, subject to any Requisite Approvals, the Consent of the Investor Limited
Partner and, if required by the Uniform Act or any other applicable law, the consent of any other
Partner so required, shall become a successor General Partner.
B. If any Retirement shall occur at a time when there is no remaining General
Partner and no successor General Partner is to be admitted pursuant to Section 7.3A or the
remaining General Partners do not elect to continue the business of the Partnership pursuant to
Section 7.2, then the Investor Limited Partner shall have the right, subject to any Requisite
Approvals and Section 6.3C, to designate a Person to become a successor General Partner.
C. If the Investor Limited Partner elects to reconstitute the Partnership and
admit a successor General Partner pursuant to this Section 7.3, the relationship of the Partners in
the reconstituted Partnership shall be governed by this Agreement.
Section 7.4 Interest of Predecessor General Partner
A. Except as provided in Section 7.3A, no assignee or transferee of all or any
part of the Interest of a General Partner shall have any automatic right to become a General Partner.
Until the acquisition of the Interest of a Retiring General Partner pursuant to Section 7.4C or 7.7,
such Interest shall be deemed to be that of an assignee and the holder thereof shall be entitled only
to such rights as an assignee may have as such under the laws of the State.
B. Anything herein contained to the contrary notwithstanding, any General
Partner withdrawing voluntarily in violation of Section 7.1 shall remain liable for all of its
obligations under this Agreement, for all its other obligations and liabilities hereunder incurred or
accrued prior to the date of its withdrawal and for any loss or damage which the Partnership or any
of its Partners may incur as a result of such withdrawal (except as provided in Section 6.7), except
for any loss or damage attributable to the default, negligence or misconduct of a successor General
Partner admitted in its place under this Agreement.
C. The disposition of the General Partner Interest of a General Partner Retiring
voluntarily in compliance with this Agreement shall be accomplished in such manner as shall be
acceptable to the remaining General Partners, shall be approved by Consent of the Investor Limited
Partner and shall have obtained any Requisite Approvals. Any other Retirement of a General
Partner shall be governed by Section 7.7D.
Section 7.5 Designation of New General Partners. The General Partners may, with the
written consent of all Partners, at any time designate new General Partners, each with such Interest
as a General Partner in the Partnership as the General Partners may specify, subject to any
Requisite Approvals.
Any new General Partner shall, as a condition of receiving any interest in the Partnership
property, agree to be bound by the Project Documents and any other documents required in
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connection therewith and by the provisions of this Agreement, to the same extent and on the same
terms as any other General Partner.
Section 7.6 Amendment of Certificate; Approval of Certain Events. Upon the admission of
a new General Partner, the Schedule shall be amended to reflect such admission and an amendment
to the Certificate, also reflecting such admission, shall be filed as required by the Uniform Act.
Each Partner hereby consents to and authorizes any admission or substitution of a General
Partner or any other transaction, including, without limitation, the continuation of the Partnership
business, which has been authorized under the provisions of this Agreement, and hereby ratifies
and confirms each amendment of this Agreement necessary or appropriate to give effect to any
such transaction.
Section 7.7 Removal or Nonconsensual Retirement of the General Partners
A. In addition to any other rights granted to the Limited Partners hereunder,
the Special Limited Partner shall have the right to remove and replace the General Partners in
accordance with the provisions of this Section 7.7 if a Material Default occurs and is not cured
within the time period set forth in this Section 7.7. If at any time there is more than one General
Partner, all General Partners may be removed and replaced in accordance with the provisions of
this Section 7.7 in the event of a Material Default by the General Partners. Prior to the withdrawal
of the Managing General Partner as contemplated by Section 7.1 of this Agreement, the Special
Limited Partner agrees that if the Material Default, as defined below, pertains to the Managing
General Partner but not the Administrative General Partner, or vice versa, then the Special Limited
Partner agrees to exercise its rights of removal as set forth in this Section 7.7 only with regard to
the then defaulting General Partner.
B. As used in this Section 7.7, “Material Default” means the occurrence of any
of the following events:
(i) a breach by any General Partner (or any of its Affiliates) of any of
its representations or warranties contained herein or in the performance of any of its
obligations under this Agreement or any Related Agreement if such breach has or could
have a material, adverse impact upon the Project, the Partnership or the Investor Limited
Partner;
(ii) a violation by any General Partner of any law, regulation or order
applicable to the Partnership which has or may have a material adverse effect on the
Partnership, the Investor Limited Partner or the Project, or a material breach by the
Partnership or any General Partner under any Project Document or other material
agreement or document affecting the Partnership or the Project which has or may have a
material adverse effect on the Partnership, the Investor Limited Partner or the Project;
(iii) an Event of Bankruptcy as to any General Partner, any Guarantor or
the Partnership;
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(iv) the commencement of foreclosure proceedings with respect to any
Mortgage which have not been withdrawn or dismissed within thirty (30) days after the
date of such commencement; or
(v) gross negligence, fraud, willful misconduct, misappropriation of
Partnership funds, or a breach of fiduciary duty by a General Partner or any Affiliate of a
General Partner providing services to or in connection with the Partnership or the Project.
C. In the event that the Special Limited Partner determines to remove any
General Partner pursuant to the provisions of this Section 7.7, the Special Limited Partner shall
notify the General Partners in writing of the Material Default that is the cause for the removal of
the General Partner (any such notice being referred to herein as a “Removal Notice” and the date
of such Removal Notice being referred to herein as the “Removal Notice Date”). In the case of
any Material Default described in clauses (i) or (ii) of Section 7.7B above, the General Partners
shall have ten (10) business days (or thirty (30) business days if it is a non-monetary default) from
the Removal Notice Date to cure the Material Default; provided, however, that if a non-monetary
Material Default cannot be reasonably cured within thirty (30) business days, the General Partner
that is the recipient of the Removal Notice shall not be removed if such General Partner
commences such cure within thirty (30) business days and proceeds in good faith to cure diligently
thereafter, provided that the cure is completed within ninety (90) business days following the
Removal Notice Date (or such lesser period as is required to cure the Material Default), and the
failure to cure such Material Default within a shorter period does not have a material adverse effect
on the Partnership, the Property, the Investor Limited Partner or any General Partner that is not
subject to the Removal Notice. For purposes of this paragraph, the failure to provide or maintain
any insurance required by this Agreement shall be deemed to be a monetary default. If the General
Partners fail to cure within the specified time period, or if no cure right is afforded under the terms
hereof, the removal of such General Partner shall be deemed to be effective as of the expiration of
any applicable cure period described above; otherwise, such removal shall be effective upon the
conclusion of the applicable cure period without a cure of such Material Default reasonably
acceptable to the Investor Limited Partner and any General Partner that is not subject to the
Removal Notice. The General Partners shall have no right to cure any Material Default described
in clause (v) of Section 7.7B above. Each Partner hereby irrevocably appoints the Special Limited
Partner (with full power of substitution) as the attorney-in-fact of such Partner for the purpose of
executing, acknowledging, swearing to, recording and/or filing any amendment to this Agreement
and the Certificate necessary or appropriate to confirm the foregoing.
D. If a General Partner is removed pursuant to this Section 7.7, Retires
voluntarily in violation of this Agreement or involuntarily Retires, the Partnership shall pay to
such General Partner in the manner set forth in Section 7.7G an amount equal to (x) the sum of (i)
an amount equal to the General Partner’s positive Capital Account balance, if any, following a
deemed sale of all Partnership property and a deemed liquidation of the Partnership (but prior to
any deemed distributions upon liquidation), (ii) the unpaid principal balance of any Operating
Expense Loans, and (iii) any fees owed to the General Partner and/or its Affiliates in the manner
described in Section 7.7E below minus (y) an amount equal to any Adverse Consequences suffered
by the Partnership or the Limited Partners as a result of the acts or omissions of the General Partner
prior to its removal or Retirement, including, without limitation, any Material Default creating the
right of the Special Limited Partner to remove the General Partner pursuant to the provisions of
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this Section 7.7. Any transfer taxes that are triggered by the removal or Retirement and the cost of
any additional title insurance or title endorsements deemed to be necessary by the Special Limited
Partner as a result of such removal or Retirement shall be paid by the removed or Retired General
Partner. The resulting amount is referred to herein as the “Withdrawal Purchase Price.”
Notwithstanding the foregoing, the Withdrawal Purchase Price shall not exceed the amount which
the removed or Retired General Partner would have received under Section 10.1B from a deemed
sale of the Project on the Removal Notice Date or the date of Retirement (as applicable), based on
the Appraised Value of the Project determined under Section 7.7F below.
E. In the event of the removal of a General Partner pursuant to the provisions
of this Section 7.7, voluntary Retirement of the General Partner in violation of this Agreement or
involuntary Retirement of a General Partner, any fees owed to such General Partner or its Affiliates
(including, without limitation, any unpaid Development Amount) for services performed prior to
the Removal Notice Date or date of Retirement, as applicable, shall be part of the Withdrawal
Purchase Price as described above, provided, however, that (i) if any Adverse Consequences
suffered by the Partnership or the Limited Partners exceed the Withdrawal Purchase Price as
calculated pursuant to the provisions of Section 7.7D above, or (ii) there exist any unpaid
obligations or liabilities of the General Partner that relate to the period up to and including the
effective date of the removal or Retirement of the General Partner, any such unpaid fees owed to
the General Partner or its Affiliates shall, to the extent of any such Adverse Consequences or
obligations or liabilities, as the case may be, be treated as if they were paid to the General Partner
(or such Affiliates) and applied by the General Partner (or such Affiliates) to the payment or
satisfaction of such Adverse Consequences, obligations or liabilities, and, to the extent of such
application, the obligation of the Partnership to make actual cash payments of such fees to the
General Partner (or such Affiliates) shall be reduced or eliminated, as the case may be.
F. The Appraised Value of the Property shall be determined as follows. As
soon as practicable and in any event within ten business days following the effective date of
removal as specified in Section 7.7C above or the date of Retirement (as applicable), the General
Partner that is the subject of the Removal Notice and the Special Limited Partner shall select a
mutually acceptable Independent Appraiser that is also acceptable to any remaining General
Partner. In the event that the parties are unable to agree upon an Independent Appraiser within
such ten business day period, the General Partner and the Special Limited Partner each shall select
an Independent Appraiser. If either party fails to select an Independent Appraiser within the time
period described above, the determination of the other Independent Appraiser shall control. If the
difference between the Appraised Values set forth in the two appraisals is not more than ten percent
(10%) of the Appraised Value set forth in the lower of the two appraisals, the fair market value
shall be the average of the two appraisals. If the difference between the two appraisals is greater
than ten percent (10%) of the lower of the two appraisals, then the two Independent Appraisers
shall jointly select a third Independent Appraiser whose determination of Appraised Value shall
be deemed to be binding on all parties as long as the third determination is between the other two
determinations. If the third determination is either lower or higher than both of the other two
appraisers, then the average of all three appraisers shall be the fair market value. The Partnership
and the removed or Retiring General Partner shall each pay one-half of the fees and expenses of
any Independent Appraiser(s) selected pursuant to this Section 7.7F.
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G. In the event of the removal of a General Partner pursuant to the provisions
of this Section 7.7, voluntary Retirement of a General Partner in violation of this Agreement or
involuntary Retirement of a General Partner, any Withdrawal Purchase Price due to the General
Partner pursuant to the provisions of Section 7.7D above shall be payable from the first available
Capital Proceeds prior to any other distributions or payments to the Partners under Section 10.1B
hereof except for those items listed in clauses First and Second of Section 10.1B.
H. Upon determination of the Withdrawal Purchase Price under the provisions
of this Section 7.7, the Partnership and its remaining Partners shall be deemed to be completely
released from all liability to such General Partner and its Affiliates generally and to any others
claiming by or through the General Partner to whom any distributions or loan, fee or other
payments are to be made under Article X or otherwise, and the General Partner shall be released
from any and all obligations to the Partnership and the Partners which arise after the Removal
Notice Date or date of Retirement, as applicable. Concurrently with the determination of the
Withdrawal Purchase Price, each General Partner shall provide the Partnership, the successor
General Partner(s) and the Investor Limited Partner with additional written releases from the
General Partner (and any Affiliates to whom obligations of any kind are owed by the Partnership,
the successor General Partner(s), the Limited Partners or any of their respective Affiliates)
confirming such releases.
I. In the event that a General Partner is removed pursuant to the provisions of
this Section 7.7, voluntarily Retires in violation of this Agreement or involuntarily Retires, (i) all
agreements between the Partnership and the General Partner and/or its Affiliates may, at the
election of the Partnership, be terminated and, except for payment of the Withdrawal Purchase
Price due to the General Partner (or such Affiliates), the Partnership shall have no further
obligations under such agreements, and (ii) the removed or Retired General Partner shall be liable
for all costs and expenses incurred by the Partnership or the Limited Partners in connection with
the admission to the Partnership of a successor General Partner, which shall be considered Adverse
Consequences for a purpose of this Section. From and after the effective date of its removal or
Retirement, the removed or Retiring General Partner shall not be liable for obligations of the
Partnership incurred subsequent to such effective date unless such obligations arise out of acts or
omissions of the removed or Retiring General Partner prior to such effective date. The removed or
Retiring General Partner shall continue to be liable for all obligations, liabilities, and guarantees
incurred by it in its capacity as the General Partner and any Partnership obligations not listed in
the prior year’s financial statements or otherwise described in writing to the Special Limited
Partner, and for any Adverse Consequences caused by or arising out of its acts or omissions, prior
to the effective date of its removal or Retirement. Without limiting the generality of the foregoing,
and in addition to any of its other obligations hereunder, the removed or Retiring General Partner
shall continue to be liable for any payments or advances due to the Limited Partners or the
Partnership pursuant to the Capital Contribution adjustment provisions of Article V as a result of
any adjustments determined thereunder, other than adjustments arising from a Recapture Event or
the acts or omissions of any replacement or successor General Partner, in either case subsequent
to the effective date of the removal or Retirement of the removed or Retiring General Partner.
J. In the event that a General Partner is removed pursuant to the provisions of
this Section 7.7, voluntarily Retires in violation of this Agreement or involuntarily Retires, the
Special Limited Partner may designate a Person or Persons, including, without limitation, an
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Affiliate of the Special Limited Partner, to become a successor General Partner or Partners
replacing the removed or Retired General Partner, subject to any Requisite Approvals and to the
terms of the Project Documents.
K. The election by the Special Limited Partner to remove any General Partner
pursuant to the provisions of this Section 7.7 shall not limit or restrict the availability and use of
any other remedy that the Special Limited Partner or the Investor Limited Partner may have with
respect to any General Partner in connection with its undertakings and responsibilities under this
Agreement, and the exercise by the Special Limited Partner of the rights granted to it in this Section
7.7 is understood by the parties hereto to be permitted by the Uniform Act as the exercise of powers
not constituting participation in the control of the business so as to cause the Special Limited
Partner (or the Investor Limited Partner) to be liable for Partnership obligations as a general
partner.
L. In the event that a General Partner is removed pursuant to the provisions of
this Section 7.7, voluntarily Retires in violation of this Agreement or involuntarily Retires, such
removed or Retired General Partner shall immediately deliver to the Special Limited Partner all
books, records, tax and financial information relating to the Partnership and the Property that are
in the possession or under the control of such General Partner or any of its Affiliates. Such General
Partner agrees that if it fails to comply with the provisions of this Section 7.7L, the Limited
Partners may enforce such provisions by specific performance, and no portion of the Withdrawal
Purchase Price shall be payable unless the provisions of this Section are fully and promptly
complied with.
M. If a General Partner fails to comply with any of its obligations under this
Section 7.7 or contests the right of the Special Limited Partner to exercise the removal or other
rights described in this Section 7.7, any costs and expenses incurred by the Limited Partners in
enforcing their rights in this Section 7.7, including, without limitation, legal fees and expenses,
shall be paid by such General Partner upon presentation of an itemized statement describing the
same, which costs shall be deemed to be Adverse Consequences for purposes of this Section.
N. In the event that the Special Limited Partner sends a Removal Notice, the
Special Limited Partner may, as of such date, elect to become, or to designate another Person,
including, without limitation, an Affiliate of the Investor Limited Partner or the Special Limited
Partner, to become, an additional General Partner with all the rights and privileges of a General
Partner. Upon such election by the Special Limited Partner, the Special Limited Partner or such
other Entity shall automatically become and shall be deemed to be a General Partner and each
Partner hereby irrevocably appoints the Special Limited Partner (with full power of substitution)
as the attorney-in-fact of such Partner for the purpose of executing, acknowledging, swearing to,
recording and/or filing any amendment to this Agreement and the Certificate necessary or
appropriate to confirm the foregoing. If the Special Limited Partner or such other Person shall
become an additional General Partner as herein stated, its interest in the Partnership shall not be
increased as a result thereof. In the event of the admission of the Special Limited Partner or such
Person as a General Partner pursuant to this Section 7.7N, and if there are then any other General
Partners, the Special Limited Partner or such other Person shall have managerial rights, authority
and voting rights of 51% on any matters to be decided or voted upon by the General Partners or
the Managing General Partner, as the case may be, and the rights and authority of the remaining
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General Partners or the Managing General Partner, as the case may be, shall be deemed equally
divided among them. The Special Limited Partner shall be entitled to receive reasonable
compensation for serving as a General Partner under this Section, and any such compensation shall
be a reduction of the Withdrawal Purchase Price.
O. If the Special Limited Partner elects to remove the Administrative General
Partner for a Material Default under this Section 7.7B and selects a replacement general partner
that is not an entity which is exempt from income taxes for federal tax purposes and, as a result,
the Property is no longer eligible for the Property Tax Exemption, the Managing General Partner
will not be responsible for any Operating Deficits caused by or attributable to the loss of the
Property Tax Exemption.
ARTICLE VIII
TRANSFER OF LIMITED PARTNER INTERESTS
Section 8.1 Right to Assign
A. Except as restricted in this Article VIII or by operation of law, and subject
to the Regulations and to the terms of the Project Loan Documents and the Permanent Loan
Documents, each Limited Partner shall have the right to assign its Interest to and substitute in its
place as a Substitute Limited Partner:
(i) any Affiliate of the Investor Limited Partner with notice to the
General Partners;
(ii) any Person provided that the net worth of the proposed assignee is
acceptable to the General Partners in their reasonable discretion;
(iii) any partnership or limited liability company in which the Investor
Limited Partner, or an Affiliate of the Investor Limited Partner, is the general partner or
managing member; or
(iv) any other Person with the consent of the General Partners which may
be given or withheld in their sole but reasonable discretion.
provided, however, that in no event shall a Limited Partner knowingly transfer all
or any portion of its Interest to any Prohibited Party. In addition, any Substitute
Limited Partner must be a nationally recognized syndicator or direct investor in
Federal Low Income Tax Credits.
B. The General Partners, at the sole expense of the assigning Limited Partner,
shall cooperate in good faith to effect such assignment as expeditiously as possible, including
without limitation the execution of appropriate amendments to, or updates of, the Related
Agreements and/or any other documents which the assigning Limited Partner reasonably
determines necessary or appropriate to accomplish such assignment, including, but not limited to,
any amendments, updated opinion of Partnership Counsel, authorizing resolutions of the General
Partners and Developer and any other documents reasonably deemed necessary and appropriate
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by the Investor Limited Partner. In addition, in the event of a Transfer of any interest in the Investor
Limited Partner, the General Partners agree to make such changes to this Agreement and the
Related Agreements as the Investor Limited Partner may reasonably request.
C. The assignor shall assume any costs incurred by the Partnership in
connection with an assignment of its Interest including, without limitation, costs associated with
preparation and execution of appropriate amendments to, or updates of, the Related Agreements
and/or any other documents in connection therewith.
Section 8.2 Substitute Limited Partners. Each Limited Partner shall have the right to
substitute an assignee as a Limited Partner in its place, subject to Section 8.1 and any Requisite
Approvals. Any Substitute Limited Partner shall agree to be bound (to the same extent to which
its predecessor in interest was so bound) by the Project Documents and this Agreement as a
condition to its being admitted to the Partnership.
Section 8.3 Assignees
A. Any permitted assignee of a Limited Partner which does not become a
Substitute Limited Partner shall have the right to receive the same share of profits, losses and
distributions of the Partnership to which the assigning Limited Partner would have been entitled.
B. Any assigning Limited Partner shall cease to be a Limited Partner and shall
no longer have any rights or obligations of a Limited Partner except that, unless and until the
assignee of such Limited Partner is admitted to the Partnership as a Substitute Limited Partner,
said assigning Limited Partner shall retain the statutory rights and be subject to the statutory
obligations of an assignor limited partner under the Uniform Act as well as the obligation to make
the Capital Contributions attributable to the Interest in question, if any portion thereof remains
unpaid.
C. There shall be filed with the Partnership a duly executed and acknowledged
counterpart of the instrument making each assignment; such instrument must evidence the written
acceptance of the assignee to this Agreement and the Project Documents. If such an instrument is
not so filed, the Partnership need not recognize any such assignment for any purpose.
D. In the case of any assignment of a Limited Partner’s Interest as a Limited
Partner, where the assignee does not become a Substitute Limited Partner, the Partnership shall
recognize the assignment not later than the last day of the calendar month following receipt of
notice of assignment and required documentation.
E. An assignee of a Limited Partner’s Interest who does not become a
Substitute Limited Partner and who desires to make a further assignment of its Interest shall also
be subject to the provisions of this Article VIII.
Section 8.4 No Transfer of Limited Partner Interest to Forward Loan Purchaser. After
satisfaction of all conditions to conversion in the Forward Loan Purchase Agreement and the
purchase of the Funding Loan by Citibank, N.A., the Limited Partner many not (i) transfer more
than forty-nine percent (49%) of its direct or indirect Interest in the Partnership to Citibank, N.A.,
or to any successor purchaser of the Funding Loan, or to any Person that is a party to any
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agreement, formal or informal, pursuant to which such Person will purchase the Funding Loan nor
(ii) become a party to any agreement, formal or informal, pursuant to which the Limited Partner
or an Affiliate of the Limited Partner will purchase the Funding Loan.
ARTICLE IX
LOANS; MORTGAGE REFINANCING; PROPERTY DISPOSITION
Section 9.1 General
A. The Partnership shall be authorized to obtain the Mortgage Loans to finance
the acquisition, development and construction of the Property and (to the extent permitted by the
Lender) shall secure the same by the Mortgages. Except as set forth in the Project Documents
(which includes the Mortgage Loan Documents) as they exist on the date of Investment Closing,
each Mortgage shall provide that no Partner or Related Person shall bear the Economic Risk of
Loss for all or any part of such Mortgage Loans. Notwithstanding anything to the contrary herein,
the General Partners shall have no authority to enter into the permanent phase of the Project Loan
without the Consent of the Special Limited Partner to the extent the amount thereof exceeds
$11,875,000. All material Mortgage Loan Documents not approved by the Investor Limited
Partner as of Investment Closing shall be submitted to and approved by the Investor Limited
Partner prior to execution and delivery thereof by the Partnership.
B. Subject to Section 6.1, the Managing General Partner is specifically
authorized, for and on behalf of the Partnership, to execute the Project Documents and any
permitted amendments thereto and, subject to the limitations set forth herein, such other documents
as they deem necessary or appropriate in connection with the acquisition, development, operation
and financing of the Property.
C. All Partnership borrowings shall be subject to Section 6.1, this Article, the
Project Documents and the Regulations. To the extent borrowings are permitted, they may be made
from any source, including Partners and Affiliates. The Partnership may accept Development
Advances as and when permitted pursuant to Section 6.7, and may issue instruments evidencing
Operating Expense Loans.
D. If any Partner shall lend any monies to the Partnership, any such loan shall
be unsecured and the amount of any such additional loan from a Partner shall not be an increase
of its Capital Contribution. Until such time as the General Partners shall have performed fully their
obligations to make Operating Expense Loans and Development Advances, any loan from a
General Partner or an Affiliate of a General Partner shall be an obligation of the Partnership to the
Partner or Affiliate only if it constitutes an Operating Expense Loan or Development Advance in
accordance with the provisions of this Agreement, and shall be repayable as herein provided.
Subject to the preceding sentence, any loans to the Partnership by a General Partner or an Affiliate
of a General Partner may be made on such terms and conditions as may be agreed on by the
Partnership, consistent with good business practices.
E. Subject to the provisions of this Agreement with respect to related party
loans, the Investor Limited Partner or an Affiliate thereof (the Investor Limited Partner or its
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Affiliate being referred to herein as a “Mortgagee Limited Partner”) at any time may make,
guarantee, own, acquire or otherwise credit enhance, in whole or in part, a loan secured by a
mortgage, deed of trust, trust deed, or other security instrument encumbering the Property owned
by the Partnership (any such loan being referred to as a “Related Mortgage Loan”). Under no
circumstances will a Mortgagee Limited Partner be considered to be acting on behalf or as an agent
or the alter ego of the Investor Limited Partner. A Mortgagee Limited Partner may take any actions
that the Mortgagee Limited Partner, in its discretion, determines to be advisable in connection with
its Related Mortgage Loan (including in connection with the enforcement of its Related Mortgage
Loan). Each Partner agrees, to the extent permitted by applicable law, that no Mortgagee Limited
Partner owes the Partnership or any Partner any fiduciary duty or other duty or obligation
whatsoever by virtue of such Mortgagee Limited Partner being a limited partner or member in the
Investor Limited Partner. Neither the Partnership nor any Partner will make any claim against a
Mortgagee Limited Partner, or against the Investor Limited Partner in which the Mortgagee
Limited Partner is a partner or member, relating to a Related Mortgage Loan and alleging any
breach of any fiduciary duty, duty of care, or other duty whatsoever to the Partnership or to any
Partner based in any way upon the Mortgagee Limited Partner’s status as a limited partner or
member of the Investor Limited Partner. Notwithstanding any provision to the contrary in this
Section 9.1E, the General Partners shall not obtain or consent to any Related Mortgage Loan unless
(i) they have obtained the prior Consent of the Investor Limited Partner and (ii) they have
determined, based on the financial projections prepared at the time of requesting such Consent and
the advice of Investor Tax Counsel, that the Related Mortgage Loan will not result in any
reallocation of Tax Credits or other tax benefits among the Partners.
Section 9.2 Refinancing and Sale. The Partnership may not increase the amount of or
otherwise materially modify any Mortgage Loan, obtain any new Mortgage Loan or refinance
(except as permitted by Section 6.1B(viii) any Mortgage Loan (other than pursuant to and
substantially in accordance with a Commitment in existence at Investment Closing) including any
required Transfer of Partnership assets for security or mortgage purposes, and may not sell, lease,
exchange or otherwise Transfer all or substantially all the assets of the Partnership without the
Consent of the Investor Limited Partner. In the event that an Affiliate of Bank of America, N.A.
shall be ready, willing and able to furnish financing on substantially equivalent terms, the Consent
of the Investor Limited Partner to any proposed refinancing of a Mortgage Loan may be
conditioned upon the substitution of such Affiliate as the maker of such refinanced Mortgage Loan.
Notwithstanding the foregoing, no such Consent shall be required for the leasing of apartments to
tenants in the normal course of operations; provided, however, unless such Consent is obtained the
Partnership shall lease the Project in such a manner as to qualify as a “qualified low-income
housing project” under Section 42(g)(1) of the Code, and shall lease all of the Low Income Units
to Qualified Tenants.
Section 9.3 Sales Commissions. In connection with the sale of the Property or sale of the
Partnership’s leasehold interest in the Property, no Person may receive real estate commissions in
excess of that which is reasonable, customary, and competitive with those paid in similar
transactions in the same geographic area. Real estate commissions may be paid to an Affiliate of
a General Partner.
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ARTICLE X
PROFITS, LOSSES AND DISTRIBUTIONS
Section 10.1 Distributions Prior to Dissolution
A. Distribution of Cash Flow.
Subject to any Requisite Approvals (including any interest payments required under the
Viability Loan Documents and the SAIL Loan Documents), (i) net rental income generated
through the Completion Date shall be includable in Designated Proceeds and shall be available to
the General Partners for the purposes and subject to the conditions set forth in Section 6.7 hereof.
From and after the Completion Date, Cash Flow for each Fiscal Year (or fractional portion thereof)
shall be distributed within ninety (90) days after the end of each Fiscal Year, in the following order
of priority:
First, to pay the Asset Management Fee to the Special Limited Partner;
Second, to the Investor Limited Partner an amount equal to any amounts contributed
by the Investor Limited Partner pursuant to Section 6.4Q(iii)(if any) and to the Investor
Limited Partner an amount equal to any theretofore unpaid Tax Credit Shortfall Payments;
Third, to the repayment of any Operating Expense Loans, Development Deficit
Loans or Tax Credit Shortfall Loans then outstanding;
Fourth, to the payment of any Deferred Development Fee and any accrued interest
thereon;
Fifth, to payment of interest on the Surtax Loan in accordance with the terms of the
Surtax Loan Documents;
Sixth, to the payment of the Partnership Management Fee;
Seventh, to the replenishment of the Operating Reserve;
Eighth, from 45% of remaining Cash Flow up until the date that the Managing
General Partner withdraws from the Partnership, as set forth in Section 7.1, and thereafter,
without limitation, to make annual payments of rent, as required by the Ground Lease and
once payments of rent under the Ground Lease are brought current, to the payment of the
HACMB Note; and
Ninth, any balance shall be distributed 89.99% to the Managing General Partner
(first as payment of its portion of the Supervisory Management Fee and then as a
distribution), 0.01% to the Administrative General Partner (first as payment of its portion
of the Supervisory Management Fee and then as a distribution), and 10% to the Investor
Limited Partner. Further, from and after the date that the Managing General Partner
withdraws from the Partnership, as set forth in Section 7.1 of this Agreement, any balance
shall be distributed 9% to the Administrative General Partner (first as payment of its
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portion of the Supervisory Management Fee and then as a distribution), and 91% to the
Investor Limited Partner.
B. Distributions of Capital Transaction Proceeds
Prior to dissolution, if the General Partners shall determine that there are proceeds available
for distribution from a Capital Transaction, such proceeds shall be applied and distributed as
follows:
First, to discharge, to the extent required by any lender or creditor, the debts and
obligations of the Partnership (other than items listed in the ensuing clauses of this Section
10.1B);
Second, to fund reserves for contingent liabilities to the extent deemed reasonable
by the General Partners (other than items listed in the ensuing clauses of this Section
10.1B);
Third, to the Limited Partners in an amount equal to, on an After-Tax Basis, the
taxes (if any) owed by it (or them) as a result of any income allocation arising out of the
Capital Transaction plus any amounts contributed by the Investor Limited Partner pursuant
to Section 6.4Q(iii)(if any);
Fourth, to the Special Limited Partner any unpaid Asset Management Fee;
Fifth, to the Investor Limited Partner an amount equal to any theretofore unpaid
Tax Credit Shortfall Payments;
Sixth, to the payment of any outstanding Operating Expense Loans, Development
Deficit Loans and Tax Credit Shortfall Loans;
Seventh, to the repayment of any outstanding Deferred Development Fee and any
accrued interest thereon;
Eighth, to the General Partners an amount equal to any unpaid Partnership
Management Fee;
Ninth, to the payment of any unpaid and accrued rent under the Ground Lease and
HACMB Note; and
Tenth, the balance of such proceeds shall be distributed 10% to the Investor Limited
Partner, 89.99% to the Managing General Partner and 0.01% to the Administrative General
Partner. Further, from and after the date that the Managing General Partner withdraws from
the Partnership, as set forth in Section 7.1 of this Agreement, any balance shall be
distributed 9% to the Administrative General Partner and 91% to the Investor Limited
Partner.
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C. Sharing of Distributions
All distributions to the respective classes of the Partners shall be shared by the members of
such classes in accordance with the percentages set forth opposite their respective names on the
Schedule, except as otherwise provided in this Agreement.
D. Proceeds from Insurance
Notwithstanding the provisions of Sections 10.1A or 10.1B, if the Partnership receives
proceeds from the Title Policy, an insurance policy, or as the result of a casualty or condemnation
after payment of debts and obligations of the Partnership, and such proceeds are not used for
rebuilding, then such proceeds shall be applied and distributed to the payment to the Investor
Limited Partner of an amount equal to 100% of its Net Capital Contribution less the sum of all Tax
Credits received by the Investor Limited Partner and not subject to a Recapture Event; and the
balance to the General Partners.
Section 10.2 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 Taxable Year, including adjustments
to Capital Accounts pursuant to Sections 10.2B and 10.3B. Liquidation distributions shall be made
by the end of the Taxable Year in which the liquidation occurs or, if later, within ninety (90) days
after the date of liquidation. In the event that a General Partner or Investor Limited Partner has a
negative balance in its Capital Account following the liquidation of the Partnership or its Interest
after taking into account all Capital Account adjustments for the Taxable Year in which the
liquidation occurs, such Partner shall pay to the Partnership in cash an amount equal to the negative
balance in its Capital Account. Such payment shall be made by the end of such Taxable Year (or,
if later, within ninety (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. Notwithstanding the foregoing,
the obligation of the Investor Limited Partner to contribute such deficit shall be zero unless and
until it shall notify the Partnership in writing of its election to have a different amount (the
“Designated Amount”) apply, which Designated Amount may be increased or reduced (subject to
the provisions of the following sentence) by similar written notice from the Investor Limited
Partner at any subsequent date. No such notice shall be effective with respect to any Fiscal Year
unless the same shall be given prior to the end of such Fiscal Year. No subsequent reduction to the
Designated Amount shall be permitted if such reduction would cause the Designated Amount to
be less than the Investor Limited Partner's deficit balance in its Capital Account (as such Capital
Account is increased by the Investor Limited Partner’s share of Partnership Minimum Gain) at the
end of the Partnership’s immediately preceding tax year.
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
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Partners in accordance with Section 10.3B, 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 10.2B, “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 Section 1.704-1(b). This Section
10.2B 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 10.2B 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 Investor Limited Partner.
Section 10.3 Profits and Losses
A. After giving effect to the special allocation provisions of Section 10.4, and
subject to the provisions of Section 6.1B, Profits and Losses for any Taxable Year shall be
allocated to the Partners as follows: 99.99% to Investor Limited Partner, 0.0049% to the Managing
General Partner and 0.0051% to the Administrative General Partner.
B. After giving effect to the special allocation provisions of Section 10.4,
Profits and Losses from a Capital Transaction in any Taxable Year (and, if necessary, items of
gain or loss from such Capital Transaction) shall be allocated to and among the Partners so as to
cause (as nearly as possible) the Adjusted Capital Accounts of the Partners to equal the amounts
to which each Partner would be entitled if all remaining assets of the Partnership were sold for
their Gross Asset Values, all obligations of the Partnership were paid and all remaining amounts
distributed as provided in Section 10.2.
Section 10.4 Special Allocation Provisions. Prior to making any allocations pursuant to Section
10.3, the allocations below shall be made in the following order:
A. Nonrecourse Deductions shall be allocated among the Partners for any
Taxable Year in the same manner as Losses are generally allocated for such Taxable Year.
B. Partner Nonrecourse Deductions shall be allocated to and among the
Partners in the manner provided in the Allocation Regulations.
C. Subject to the provisions of Section 10.4H, if there is a net decrease in
Partnership Minimum Gain for a Taxable Year, the Partners shall be allocated items of Partnership
income and gain in accordance with the provisions of Treas. Reg. § 1.704-2(f).
D. Subject to the provisions of Section 10.4H, if there is a net decrease in
Partner Nonrecourse Debt Minimum Gain for a Taxable Year, then any Partner with a Share of
such Partner Nonrecourse Debt Minimum Gain shall be allocated items of Partnership income and
gain in accordance with the provisions of Treas. Reg. § 1.704-2(i)(4).
E. Subject to the provisions of Sections 10.4A through 10.4D above, in the
event that any Partner unexpectedly receives any adjustments, allocations or distributions
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described in Treas. Reg. §§ 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be specially allocated to each such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Allocation Regulations, the Adjusted Capital Account
Deficit of such Partner as quickly as possible. This Section 10.4E is intended to constitute a
“qualified income offset” provision within the meaning of the Allocation Regulations and shall be
interpreted consistently therewith.
F. Subject to the provisions of Sections 10.4A through 10.4E above, in no
event shall any Partners be allocated Losses that would cause it to have an Adjusted Capital
Account Deficit as of the end of any Taxable Year. Any Losses that are not allocated to a Partner
by reason of the application of the provisions of this Section 10.4F shall be allocated to the other
Partners (to the extent otherwise permitted under the terms of this Section 10.4) until each Partner’s
Capital Account equals zero, with all remaining Losses allocated to the Partners in accordance
with Section 10.1A.
G. Subject to the provisions of Sections 10.4A through 10.4F above, in the
event that any Partner has an Adjusted Capital Account Deficit at the end of any Taxable Year,
items of Partnership income and gain shall be specially allocated to each such Partner in the amount
of such Adjusted Capital Account Deficit as quickly as possible.
H. If for any Taxable Year the application of the minimum gain chargeback
provisions of Section 10.4C or Section 10.4D would cause a distortion in the economic
arrangement among the Partners and it is not expected that the Partnership will have sufficient
other income to correct that distortion, the General Partners may request a waiver from the
Commissioner of the IRS of the application in whole or in part of Section 10.4C or Section 10.4D
in accordance with Treas. Reg. § 1.704-2(f)(4). Furthermore, if additional exceptions to the
minimum gain chargeback requirements of the Allocation Regulations have been provided through
revenue rulings or other IRS pronouncements, the General Partners (with the Consent of the
Investor Limited Partner) may cause the Partnership to take advantage of such exceptions if to do
so would be in the best interest of the Investor Limited Partner.
I. Any cancellation of debt income realized by the Partnership prior to the
withdrawal of the Managing General Partner shall be allocated eighty-one percent (81%) the
Managing General Partner and nine percent (9%) the Administrative General Partner, pro rata. If
there is only one General Partner at the time the Partnership realizes any cancellation of debt
income, such income shall be allocated 100% to said sole General Partner provided; however, if
the Administrative General Partner is the sole General Partner, then any cancellation of
indebtedness income will be allocated nine percent (9%) to the Administrative General Partner
and ninety-one percent (91%) to the Investor Limited Partner.
J. To the extent that interest on loans (or other advances which are deemed to
be loans) made by any Partner to the Partnership is determined to be deductible by the Partnership
in excess of the amount of interest actually paid by the Partnership, such additional interest
deduction(s) shall be allocated solely to such Partner.
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Section 10.5 Allocations for Income Tax Purposes
A. Except as otherwise specifically provided in this Agreement, all items of
the Partnership’s taxable income, gain, loss, deduction and other items not specifically provided
for shall be allocated to and among the Partners in a manner consistent with the allocations of the
corresponding items of income, gain, loss and expense for purposes of maintaining Capital
Accounts. Allocations pursuant to this Section 10.5A are solely for purposes of federal, state and
local taxes and shall not affect, or in any way be taken into account in computing, any Partner’s
Capital Account or share of Profits, Losses, Tax Credits or distributions pursuant to any other
provisions of this Agreement.
B. In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital
of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take
account of any variation between the adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value. In the event that the Gross Asset Value of
any Partnership Property is adjusted pursuant to the terms of this Agreement, subsequent
allocations of income, gain, loss, and deduction with respect to such asset shall take account of
any variation between the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Treasury Regulations
thereunder. Any elections or other decisions relating to such allocations shall be made by the
General Partners (with the Consent of the Investor Limited Partner) in any manner that reasonably
reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 10.5B
are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner’s Capital Account or share of Profits, Losses, other items,
or distributions pursuant to any provision of this Agreement.
C. Federal Low Income Tax Credits shall be allocated to and among the
Partners in accordance with their allocable shares of Losses described in Section 10.3A, it being
understood and agreed that each Partner’s allocable share of Losses reflects the same allocable
share of depreciation and cost recovery deductions attributable to the underlying Improvements
generating such Federal Low Income Tax Credits. Any other tax credits with respect to the
Partnership’s operations shall be allocated among the Partners as permitted by Treas. Reg. § 1.704-
1(b)(4)(ii).
D. Any recapture of any Tax Credit shall be allocated to and among the
Partners in the same manner in which such Tax Credit was allocated to the Partners.
E. For purposes of determining each Partner’s proportionate share of the
excess Nonrecourse Debt of the Partnership pursuant to Treas. Reg. § 1.752-3(a)(3), the Partners
shall be deemed to have an interest in Profits equal to the percentage interests set forth in Section
10.3A.
F. Any income earned by the Partnership prior to the Development Obligation
Date shall be specially allocated to the Managing General Partner.
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Section 10.6 General Rules
A. For purposes of determining the Profits, Losses, Tax Credits, or any other
items allocable to any period, Profits, Losses, Tax Credits, and any such other items shall be
determined on a closing of the books method, provided that the General Partners may (with the
Consent of the Investor Limited Partner) use daily, monthly, or other conventions or any other
permissible method under Code Section 706 and the Treasury Regulations thereunder.
B. Except as otherwise specifically provided in this Section 10.6, all Profits,
Losses and Tax Credits allocated to each class of Partners shall be shared by the respective Partners
in such class in the ratio which the paid-in Capital Contribution of each Partner in such class bears
to the aggregate paid-in Capital Contributions of all Partners in such class.
Section 10.7 Order of Application. The provisions of this Section 10 shall be applied in the
order required by the applicable provisions of the Allocation Regulations or if no such order is
specified, in the manner determined by the Accountants.
ARTICLE XI
MANAGEMENT AGENT
Section 11.1 Management Agent. The General Partners shall have responsibility for obtaining
a Management Agent acceptable to the Investor Limited Partner, and each Lender and
Governmental Agency to manage the Project in accordance with the requirements of each Lender
and Governmental Agency. The General Partners shall cause the Partnership to enter into the
Management Agreement with the Management Agent, which may be an Affiliate of a General
Partner. The initial Management Agent shall be Atlantic Pacific Community Management LLC.
No Management Agent may be removed or replaced without the prior written consent of the
Investor Limited Partner. Subject to the Regulations, the Management Agent shall be entitled to
receive a reasonable and competitive Management Fee (determined by reference to arm’s-length
property management arrangements for comparable properties in force in the general locality of
the Project) not to exceed the lesser of 6.00% of gross rental income or the maximum amount
permitted by any relevant Governmental Agency or Lender.
The Management Agent acknowledges that the Partnership is required under this
Agreement to use best efforts to lease 100% of the Low Income Units to tenants whose income
and rent levels qualify such apartments for inclusion in meeting the requirements for Tax Credits
and:
(i) The Management Agent shall require each prospective tenant to
certify, on the lease application or lease, the amount of such tenant’s annual family income,
family size, and any other information reasonably requested by the Partnership in
connection with the Tax Credits. The Management Agent shall require the tenants to certify
in writing as to such matters on an annual basis, prior to such time as the information is
required for reporting purposes.
(ii) Without the Partnership’s express prior written consent, the
Management Agent shall not enter into any lease on behalf of the Partnership at a rental
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amount exceeding the application maximum. The Partnership shall from time to time
furnish the Management Agent with a written schedule of maximum rents for the Units,
depending on family size.
(iii) The Management Agent shall maintain and preserve all written
records of the tenants’ family income and size, and any other information reasonably
requested by the Partnership in writing in connection with the Tax Credits, throughout the
term of the Management Agreement, and shall turn all such records over to the Partnership
upon the termination or expiration of the Management Agreement.
(iv) As requested in this Agreement, the Management Agent on behalf
of the Partnership shall prepare reports of low-income leasing and occupancy in form
suitable for submission in connection with the Tax Credits.
If at any time after the Completion Date:
(i) the Project shall be subject to any substantial building code violation
which shall not have been cured within ninety (90) days after notice from the applicable
Governmental Agency or department or unless such violation is being validly contested by
the General Partners by proceedings which operate to prevent any fines or criminal
penalties from being levied against the Partnership or unless, in the case of any such
violation not susceptible of cure within such ninety (90)-day period, the General Partners
are diligently making reasonable efforts to cure the same,
(ii) operating revenues of the Project in respect of any period of twelve
(12) consecutive calendar months after the Completion Date shall be insufficient to permit
the Partnership to pay when due on a current basis all Partnership obligations in respect of
such twelve (12) month period and the General Partners or Guarantors are not providing
funds to the deal in the form of Operating Expense Loans, Capital Contributions or
withdrawals from the Operating Reserves to fill the gap between revenue and obligations,
(iii) the Project ceases to qualify as a “qualified low-income housing
project” under Section 42(g) of the Code or any Low Income Unit in the Project ceases to
qualify as a “low income unit” under Section 42(i)(3) of the Code,
(iv) a Recapture Event shall have occurred and be continuing beyond
any applicable notice and cure period,
(v) the Management Agent or its agents or employees have
demonstrated continued incompetence or malfeasance in the management of the Project,
or
(vi) the Special Limited Partner has removed a General Partner that is an
Affiliate of the Management Agent pursuant to the provisions of Section 7.7,
then the General Partners shall forthwith give to the Special Limited Partner notice of such event
(a “Management Default Notice”), with a copy to be sent to the Administrative General Partner on
the condition that it is not the party that delivered the Management Default Notice to the Special
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Limited Partner, and thereafter the Partnership shall, subject to any Requisite Approvals, forthwith
terminate its management agreement with the Management Agent, unless the approval of the
Special Limited Partner is obtained to the retention of the Management Agent. Upon any
termination, the General Partners shall immediately proceed to select a qualified Person as the new
Management Agent (which, in the event the terminated Management Agent was an Affiliate of a
General Partner, shall be unaffiliated with such General Partner but may be an Affiliate of a
General Partner that was not affiliated with the terminated Management Agent) as the new
Management Agent for the Property, which selection shall be subject to the Consent of the Investor
Limited Partner and any Requisite Approvals; and, after such selection, no Management Fee shall
be payable to any Person which is an Affiliate of a General Partner unless the management contract
with any such Person shall provide for the right of the Partnership to terminate the same upon the
occurrence of any circumstance described in this Article XI. In the event that the Special Limited
Partner removes a General Partner that is an Affiliate of the Management Agent pursuant to the
provisions of Section 7.7, the Management Agreement shall automatically terminate upon the
expiration of any applicable cure period set forth in Section 7.7C. By its execution hereof, the
Management Agent agrees that the provisions of this Section which limit the amount of the
Management Fee and provide for the termination of the Management Agent under the
circumstances herein described are hereby incorporated into any present or future Management
Agreement (which shall be deemed amended hereby to the extent necessary to give effect to such
provisions).
Notwithstanding the foregoing, at any time that Atlantic Pacific Community Management, LLC is
an Affiliate of the Managing General Partner, the Management Agreement shall not be terminated
on account of a Management Default Notice pursuant to this Section 11.1 unless the Managing
General Partner has been removed pursuant to the provisions of Section 7.7 of this Agreement.
Without limiting the foregoing, upon the voluntary withdrawal of the Managing General Partner
in accordance with Section 7.1 of this Agreement, the Administrative General Partner shall
thereafter have the right to replace Atlantic Pacific Community Management LLC as the
Management Agent with HACMB or an Affiliate of HACMB, subject to the Consent of the Special
Limited Partner, which shall not be unreasonably withheld, conditioned or delayed. Managing
General Partner shall, with the assistance of the Administrative General Partner, seek, in good
faith, any requisite approval of each Lender, Government Agency, and the Investor Limited
Partner and Special Limited Partner for both the voluntary withdrawal of the Managing General
Partner pursuant to Section 7.1 of this Agreement and the replacement of Atlantic Pacific
Community Management LLC on or after the date of such voluntary withdrawal by HACMB or
an Affiliate of HACMB.
Section 11.2 Special Power of Attorney. If an event described in clauses (i) through (vi) of
Section 11.1 above occurs and the General Partners fail to send a Management Default Notice to
the Special Limited Partner within the ten (10) days of the date the General Partners became aware
of such event, the Special Limited Partner hereby is granted an irrevocable power of attorney,
coupled with an interest, to take such action, and to execute and deliver such documents on behalf
of the Partners and the Partnership, as shall be legally necessary and sufficient to effect the
provisions of this Article XI.
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ARTICLE XII
BOOKS AND REPORTING, ACCOUNTING, TAX ELECTION, ETC.
Section 12.1 Books, Records and Reporting
A. The Managing General Partner shall keep or cause to be kept a complete
and accurate set of books and supporting documentation with respect to the Partnership’s business
in accordance with this Article XII. The books of the Partnership shall be kept on the accrual basis.
The books and records of the Partnership (including all records required to be maintained under
the Uniform Act) shall at all times be maintained at the principal office of the Partnership. Each
Partner, its duly authorized representatives and any regulatory authority which regulates such
Partner shall have the right to examine the books of the Partnership and all other records and
information concerning the Partnership and the Project at reasonable times. The books and records
of the Partnership shall include, without limitation, copies of the following: (i) the Partnership’s
federal, state and local income tax or information returns and reports, if any, and all related back-
up documentation for ten (10) years from the date of production and (ii) financial statements of
the Partnership for ten (10) years from the date of production.
B. The Managing General Partner shall comply with all of the requirements set
forth in this Section 12.1 and Exhibit K and will deliver to the Special Limited Partner all of the
information requested in this Section 12.1 and on Exhibit K within the relevant time frames. If
the Managing General Partner shall fail to deliver (or cause to be delivered) the statements, reports,
filings, or other information required under this Section 12.1 or Exhibit K to the Special Limited
Partner by the due date, the Managing General Partner shall pay as damages the sum of $100 per
day (plus interest at the Designated Prime Rate plus 3% per annum) to the Special Limited Partner
until such information is received by the Special Limited Partner. Such damages shall be paid
forthwith by the General Partners. In addition, if the Managing General Partner fails to so pay, the
Investor Limited Partner may deduct any unpaid damages from any portion of its Capital
Contribution not yet paid, or if such Capital Contribution has been fully paid then the Managing
General Partner and its Affiliates shall forthwith cease to be entitled to any Cash Flow or to the
payment of any fees which are payable from Cash Flow as provided in Section 10.1A (“Cash Flow
Fees”). Such payments of Cash Flow and Cash Flow Fees shall only be restored upon the payment
of such damages in full and any amount of such damages not so paid shall be deducted against
payments of Cash Flow and Cash Flow Fees otherwise due to the Managing General Partner or its
Affiliates. Any failure to so pay the damages described herein or upon the third failure to deliver
the information required under this Section 12.1 in any one Fiscal Year shall constitute a Material
Default for purposes of Section 7.7.
C. The reports and tax returns described on Exhibit K shall be accompanied
by a certification from the Managing General Partner that states as follows: (i) all Capital Accounts
have been analyzed for minimum gain and, if applicable, how any potential reallocation of profits,
losses and Tax Credits will be addressed, (ii) to the best of the Managing General Partner’s
knowledge, no notices of any proceedings have been received by the Managing General Partner
from the IRS pertaining to the Partnership and, if such notices have been received, then a statement
as to the corrective action plan, and (iii) to the best of the Managing General Partner’s knowledge,
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no material litigation has been filed against the Partnership and, if such litigation has been filed, a
statement detailing the litigation and the potential outcome.
D. If the Managing General Partner fails to complete such tax returns and
submit such Schedules K-1 within the time frames set forth on Exhibit K, the Special Limited
Partner may select a firm of accountants who shall prepare such returns and Forms K-1. The
Managing General Partner shall immediately furnish all necessary documentation and other
information to prepare such tax returns and such Schedules K-1 to such accountants.
E. Every Limited Partner and the Administrative General Partner shall at all
times have access to the records of the Partnership and may inspect and copy any of them upon
reasonable advance notice and at reasonable times. 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.
F. The Managing General Partner shall furnish to the Special Limited Partner
a radon gas test measurement report and conclusion (a “Radon Report”) for each Building upon
completion of construction or rehabilitation thereof, unless the Project is located in a county in the
lowest risk EPA radon map Zone 3. The Radon Report must come from a radon service
professional who (i) meets state-specific requirements, if any, for providing such Radon Reports,
and (ii) has a proficiency listing, accreditation or certification in radon test measurement from
either (a) The National Environmental Health Association (“NEHA”) National Radon Proficiency
Program or (b) The National Radon Safety Board (“NRSB”). Alternatively, a Radon Report from
an environmental professional who lacks such a proficiency listing, accreditation or certification
from NEHA or NRSB may be acceptable if it follows state-specific requirements and EPA
recommendations and protocols set forth in the following EPA publications: Protocols for Radon
and Radon Decay Product Measurements in Homes (EPA 402-R-93-003, June, 1993) and the
Indoor Radon and Radon Decay Product Measurement Device Protocols (EPA 402-R-92-004,
July, 1992), which protocols are summarized at www.airchek.com. If the Radon Report
demonstrates that the radon gas level for a Building exceeds the EPA standard for radon action or
remediation then in effect, the Managing General Partner shall install a radon mitigation system
or take other recommended mitigation measures and shall provide a follow-up Radon Report to
confirm effectiveness.
G. The Managing General Partner and/or its Affiliates shall (i) report any
“reportable transactions” to the Service as required under Section 6111 of the Code (“Reportable
Transactions”); (ii) disclose any Reportable Transactions as required by Treasury Regulations
1.6011-4; (iii) promptly report to the Partners any Reportable Transactions in which the
Partnership engages; and (iv) maintain any list of investors in accordance with Section 6112 of the
Code to the extent they are required to maintain such lists. The Managing General Partner shall be
responsible for any expenses or penalties, including penalties for understatement of income, solely
attributable to the failure of the Managing General Partner or its Affiliates to satisfy the Reportable
Transactions requirements imposed on them.
H. In addition to the foregoing, the Managing General Partner and the
Administrative General Partner shall prepare a quarterly report describing each of the following:
(i) any new agreement, contract or arrangement between the Partnership and a General Partner or
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an Affiliate of a General Partner, (ii) the amount of all fees and other compensation and
distributions and reimbursed expenses paid by the Partnership for the quarter to any General
Partner or Affiliate of a General Partner, (iii) the amount of all distributions of Cash Flow and
Capital Proceeds made to Partners during such fiscal quarter (if any); and (iv) a report of the
significant activities of the Partnership during the fiscal quarter including, without limitation, any
material notice received by the Partnership or the Managing General Partner or the Administrative
General Partner of any IRS proceeding involving the Partnership, any lapse, cancellation, or non-
renewal of any insurance policy that insures the Partnership or its property, and any other material
notice (the “Quarterly Status Reports”). Each Quarterly Status Report shall also contain a
certification by the General Partners that neither the Partnership nor any General Partner has
received any notice or has been cited by or otherwise warned in writing of any Violation (as
hereinafter defined) by any Governmental Agency, which Violation could have a materially
adverse impact on any of them. For purposes of this certification, a “Violation” shall mean any act
or omission complained of which, if uncured, would be in violation of (a) any applicable statute,
code, ordinance, rule or regulation, (b) any agreement or instrument to which the Governmental
Agency and the Partnership or a General Partner is a party or to which the Project is subject, (c)
any license or permit, or (d) any judgment, decree or order of a court. Any exceptions to the
foregoing shall be described in such certification. In addition, if requested by the Investor Limited
Partner in writing, within a reasonable time after receipt of such a request, each General Partner
shall send to the Investor Limited Partner such recent financial statements (including a balance
sheet and statement of income) as shall have been so requested.
Section 12.2 Bank Accounts. Subject to any Requisite Approvals, the bank accounts of the
Partnership shall be maintained at Bank of America, N.A., as its principal bank, for deposits and
the maintenance of business, cash management, operating and administrative deposit accounts.
Specifically, the Managing General Partner will establish and maintain a separate operating
account for the Partnership (the “Operating Account”). All Cash Receipts from the Project will be
deposited into the Operating Account and all Operating Expenses will be paid out of the Operating
Account. Withdrawals shall be made only in the regular course of Partnership business on the
signature of the Managing General Partner. All deposits and other funds not needed in the
operation of the business or distributed to the Partners pursuant to Article X shall be deposited, to
the extent permitted by the Lender and the Governmental Agency, in interest-bearing accounts or
invested in short-term United States Government obligations maturing within one (1) year.
Promptly upon the request of the Investor Limited Partner, the Managing General Partner will
obtain and deliver to the Investor Limited Partner full, complete and accurate statements of the
amounts and status of all Partnership bank accounts and all withdrawals therefrom and deposits
thereto.
Section 12.3 Elections.
A. The Managing General Partner shall cause the Partnership to make an election to
be treated as an “electing real property trade or business” under Section 163(j)(7)(B) of the Code
only at the direction of, or with the Consent of, the Investor Limited Partner. The Managing
General Partner shall seek the direction and/or Consent of the Investor Limited Partner prior to
filing of the Partnership’s first year tax returns or such earlier time as such election is to be made.
Once made, the election will be irrevocable.
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B. Unless the Investor Limited Partner shall specify a different permissible treatment
in writing, and except to the extent otherwise required by Section 168(g)(1)(B) of the Code, the
Partnership shall depreciate its residential rental property, site improvements and personal property
costs, respectively, over thirty (30) years, ninety- one percent (91%) over fifteen (15) years and
nine percent (9%) over twenty (20 years, and ninety-one percent (91%) over five (5) years and
nine percent (9%) over nine (9) years, for federal income tax purposes and over forty (40) years,
twenty (20) years and ten (10) years for financial accounting purposes. Subject to the provisions
of Section 12.4, all other elections required or permitted to be made by the Partnership under the
Code shall be made by the Managing General Partners with the Consent of the Investor Limited
Partner.
Section 12.4 Special Adjustments. Upon request of the Investor Limited Partner, the Managing
General Partner will immediately file an election under Section 754 of the Code and the
corresponding Treasury Regulations on behalf of the Partnership to adjust the basis of the
Partnership’s assets under Section 734(b) or 743(b) and a corresponding election under the
applicable sections of state and local law. In the event of a Transfer of all or any part of any Interest
of a Partner, the Partnership shall elect, if requested by the transferee, to adjust the basis of
Partnership assets pursuant to Section 754 of the Code (or corresponding provisions of succeeding
law). Notwithstanding anything to the contrary contained in Article X, any such adjustment shall
affect only the successor in interest to the transferring Partner. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.
Section 12.5 Fiscal Year. The Fiscal Year of the Partnership shall be the calendar year unless a
different year is required by the Code.
Section 12.6 Inspections, Cooperation. The Partnership and the Managing General Partner will
permit representatives of the Limited Partners and the Construction Inspector to enter upon the
Land at reasonable times, upon reasonable notice, to inspect the Improvements and any and all
materials to be used in connection with the construction of the Improvements, to examine all
detailed plans and shop drawings and similar materials as well as all records and books of account
maintained by or on behalf of the Partnership and the Managing General Partner relating thereto
and to discuss the affairs, finances and accounts pertaining to Limited Partners’ investment in the
Partnership, the Mortgage Loans, and the Improvements with representatives of the Partnership
and the Managing General Partner. The Managing General Partner will at all times cooperate and
take all reasonable steps to cause the Builder and each and every one of its subcontractors and
material suppliers to cooperate with the representatives of Limited Partners and the Construction
Inspector in connection with Limited Partners’ rights under this Agreement. Except in the event
of an emergency, the Limited Partners will give the Managing General Partner at least seventy-
two hours’ notice by telephone (confirmed by email) in each instance before entering upon the
Land and/or exercising any other rights granted in this Section 12.6, provided that if any Person
with whom the Limited Partner desires to communicate is an Affiliate of the Limited Partner, such
notice to the Managing General Partner will not be required.
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ARTICLE XIII
GENERAL PROVISIONS
Section 13.1 Notices. Except as otherwise specifically provided herein, all notices, demands or
other communications hereunder shall be in writing and deemed to have been given when the same
are (i) deposited in the United States mail and sent by certified or registered mail, postage prepaid,
(ii) deposited with Federal Express or similar overnight delivery service, (iii) transmitted by
telecopier or other facsimile transmission, answerback requested, or (iv) delivered personally, in
each case to the parties at the addresses set forth below or at such other addresses as such parties
may designate by notice to the Partnership:
If to the Partnership, at the principal office of the Partnership set forth in Section 2.2, and
if to a Partner, at its address set forth in the Schedule, with copies to with copies to Holland &
Knight LLP, 10 St. James Avenue, Boston, MA 02116, Attention: Sara C. Heskett, Esq. and
Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., 150 West Flagler Street, Suite 2200,
Miami, FL 33130, Attention: Brian McDonough, Esq., Klein Hornig LLP, 1325 G Street NW,
Suite 770, Washington, DC, 20005 Attention: Chris Hornig, Esq., and Fox Rothschild LLP, BNY
Mellon Center, 500 Grant Street, Suite 2500, Pittsburgh, PA 15219, Attn: Michael H. Syme, Esq.
Following the withdrawal of the Managing General Partner pursuant to Section 7.1 of this
Agreement, notice to Stearns Weaver and Klein Hornig shall no longer be required.
Section 13.2 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 the
masculine gender shall include the feminine and neuter, and vice versa, unless the context
otherwise requires. Any references to “Sections” or “Articles” are to Sections or Articles of this
Agreement, unless reference is expressly made to a different document.
Section 13.3 Binding Provisions. The covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, the heirs, legal representatives, successors and assignees
of the respective parties hereto, except in each case as expressly provided to the contrary in this
Agreement. Subject to the preceding sentence, none of the provisions of this Agreement shall be
for the benefit of any lender or any other Person who is not a Partner.
Section 13.4 Applicable Law. This Agreement shall be construed and enforced in accordance
with the internal laws of the State. Venue shall be in the state courts located in Miami-Dade County
or the Federal courts of the Southern District of Florida.
Section 13.5 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.
Section 13.6 Paragraph Titles. Paragraph titles and any table of contents herein are for
descriptive purposes only, and shall not affect the meaning of this Agreement as set forth in the
text.
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Section 13.7 Separability of Provisions; Rights and Remedies
A. Each provision of this Agreement shall be considered separable and (i) if
for any reason any provisions herein are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or affect those portions of this
Agreement which are valid, or (ii) if for any reason any provisions herein would cause the Limited
Partners to be bound by the obligations of the Partnership under the laws of the State as the same
may now or hereafter exist, such provisions shall be deemed void and of no effect.
B. Each of the parties hereto irrevocably waives during the term of the
Partnership (including any periods during which the business of the Partnership is required to be
continued under Article VII) any right (i) that such party may have to maintain any action for
partition with respect to the property of the Partnership, and (ii) to commence an action seeking
dissolution of the Partnership (unless the Consent of the Investor Limited Partner has been
obtained).
C. The rights and remedies of any of the parties hereunder shall not be mutually
exclusive, and the exercise of one or more of the provisions hereof shall not preclude the exercise
of any other provisions hereof. Each of the parties confirms that damages at law may be an
inadequate remedy for breach or threat of breach of any provisions hereof. The respective rights
and obligations hereunder shall be enforceable by specific performance, injunction, or other
equitable remedy, but nothing herein contained is intended to limit or affect any rights at law or
by statute or otherwise of any party aggrieved as against the other parties for a breach or threat of
breach of any provision hereof, it being the intention that the respective rights and obligations of
the Partners shall be enforceable in equity as well as at law or otherwise.
D. Each Partner and each Guarantor irrevocably:
(i) agrees that any suit, action or other legal proceeding arising out of
this Agreement, any of the Related Agreements or any of the transactions contemplated
hereby or thereby shall be brought in the courts of record of Miami-Dade County of the
State of Florida or the courts of the United States located in Miami-Dade County, Florida;
(ii) consents to the jurisdiction of each such court in any such suit, action
or proceeding;
(iii) waives any objection which he may have to the laying of venue of
any such suit, action or proceeding in any of such courts; and
(iv) waives its right to a jury trial with respect to any suit, action or other
legal proceeding arising out of this Agreement, any of the Related Agreements or any of
the transactions contemplated hereby or thereby.
Section 13.8 Effective Date of Admission. Any Partner admitted to the Partnership during any
calendar month shall be deemed to have been admitted as of the first day of such calendar month
for all purposes of this Agreement including the allocation of profits, losses and credits under
Article X; provided, however, that if regulations are issued by the Service or an amendment to the
Code is adopted which would require, in the opinion of the Accountants, that a Partner be deemed
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admitted on a date other than as of the first day of such month, then the General Partners shall
select a permitted admission date which is most favorable to the Partner.
Section 13.9 Delivery of Certificate. Promptly upon the filing of the Certificate and each
amendment thereto in the appropriate filing office, the Managing General Partner shall deliver or
mail a copy thereof to each Partner.
Section 13.10 Additional Information. At the request of the Investor Limited Partner or the
Administrative General Partner, the Managing General Partner shall furnish to the Investor
Limited Partner or the Administrative General Partner, as the case may be: (i) Plans and
Specifications for the Project; (ii) manuals, booklets and other documents describing the location
and operation of all systems within the Project, including without limitation heating, air
conditioning, elevator, electrical and plumbing systems; (iii) a list and copies of all agreements
concerning the maintenance, operation and management of the Project; and (iv) such other
information regarding the Partnership, the Project or the Related Agreements as the Investor
Limited Partner or the Administrative General Partner, respectively, may reasonably request.
Section 13.11 Further Documents and Actions. The Partners agree that they shall, from time to
time, execute and deliver such further documents and do such further actions and things as may be
reasonably requested by any other such party in order to effect fully the purposes of this Agreement
and each other agreement or instrument identified on the Document Schedule.
Section 13.12 Brokers or Finders. The parties hereto agree that no broker or finder has any claim
for commissions or fees in connection with the transaction embodied herein. The General Partners
shall jointly and severally indemnify the Limited Partners against any brokers’ or finders’ fees or
commissions claimed through the General Partners or their Affiliates in connection with the
transactions contemplated hereby, including without limitation fees or commissions claimed by
any syndicator or consultant engaged by the General Partners or any of their Affiliates. Fees
payable to Bank of America, N.A. are not covered hereby.
Section 13.13 Amendment. This Agreement may only be amended in writing signed by the
General Partners, the Investor Limited Partner and the Special Limited Partner. All parties agree
that no oral agreements or course of conduct of the parties shall be deemed to be an amendment to
this Agreement unless in writing signed as described above.
Section 13.14 Publicity Rights. At the Investor Limited Partner’s request, but at the expense of
the Partnership, the Managing General Partner will place a sign at a location on the Property
satisfactory to the Investor Limited Partner, which sign will recite, among other things, that Bank
of America, N.A. is the investor limited partner in the Partnership. The Managing General Partner
expressly authorizes the Investor Limited Partner to prepare and to furnish to the news media for
publication from time to time news releases with respect to the Property, specifically to include
releases detailing Bank of America, N.A.’s involvement with the Property. Bank of America, N.A.
may feature the Project in a series of marketing materials that may be distributed both inside and
outside of Bank of America, N.A. These materials may include the names of the General Partners,
the Developer, the Guarantor, or the Project sponsor, a description of the Property type, its features,
and its impact on the community, the size of the Project, in terms of both the units produced and
the development costs, the Bank of America, N.A. products/services utilized in undertaking the
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Project (including amounts), and pictures and renderings of the Project. The Managing General
Partner and its Affiliates irrevocably grant to the Investor Limited Partner and its Affiliates the
right to use, publish, produce, copyright, and to distribute to the public from time to time, in various
forms of promotional materials, any information obtained by the Investor Limited Partner
concerning the Managing General Partner (excluding, however, financial information regarding
the Managing General Partner, the Guarantor, and Project sponsor, or other information of a
sensitive nature that reasonable parties would agree is not suitable for public distribution), its
name, projects financed in whole or in part by Bank of America, N.A., and any financial
relationships or transactions entered into between the Managing General Partner and Bank of
America, N.A. or its Affiliates, specifically including photographs or images of the Project,
whether or not such information, photographs or images are provided by or on behalf of the
Managing General Partner. The Managing General Partner hereby releases any and all interest it
may now or hereafter have in such promotional materials and any information, photographs or
images used in connection therewith.
ARTICLE XIV
ANTI-BRIBERY/ANTI-CORRUPTION
Section 14.1 Anti-Bribery/Anti-Corruption Representations and Warranties.
A. The General Partners are aware of the U.S. Foreign Corrupt Practices Act
of 1977, as amended (“FCPA”), and any other relevant regulations, and understands its relevance
in the transaction to Bank of America, N.A. Bank of America, N.A. is committed to strict
compliance to all requirements both in the letter and spirit of all relevant laws. General Partners
therefore make the following representations and warranties in connection with the transaction or
activity:
B. Familiarity and compliance with Bribery & Corruption prohibitions. The
General Partners represent and warrant that they are familiar with the FCPA and/or other relevant
bribery and/or corruption laws or regulations and its purposes, including its prohibition against
taking corrupt or improper actions in furtherance of an offer, payment, promise to pay or
authorization of the payment of anything of value, including but not limited to cash, checks, wire
transfers, tangible and intangible gifts, favors, services, and those entertainment, travel expenses
or any other financial advantage that goes beyond what is legal, reasonable and customary and of
modest value, to:
(i) an executive, official, employee or agent of a governmental
department, agency or instrumentality;
(ii) a director, officer, employee or agent of a wholly or partially
government-owned or government-controlled entity;
(iii) a political party or official thereof, or candidate for political office;
(iv) an executive, official, employee or agent of a public international
organization (e.g., the International Monetary Fund or the World Bank); or
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(v) any other person, entity or party, while knowing or having a
reasonable belief that all or some portion of the financial or other advantage will be used
for the purpose of:
(a) influencing any act, decision or failure to act by a person in
his or her private or official capacity;
(b) inducing a person to use his or her influence or
instrumentality to affect any act or decision; or
(c) offering, requesting or securing an improper or illegal
advantage; in order to obtain, retain, direct business or any other advantage.
C. Subsequently identified bribery and corruption laws or regulatory concerns.
The parties will meet promptly, as appropriate, in light of a potential bribery or corruption concern
being identified, discovered, or disclosed as the result of an ongoing or pending investigation
conducted by federal, state or municipal authorities. If, after consultation by all parties to the
transaction, any such bribery or corruption concern cannot be resolved in the good faith and
reasonable judgment of Bank of America, N.A., then Bank of America, N.A., on written notice to
General Partners, may withdraw from or terminate this agreement without penalty.
D. Non Government Employees. The Managing General Partner represents
that none of its officers, directors, senior managers, partners, owners, or principals are Government
Employees.
Under Bank of America, N.A. policy, a Government Employee includes:
• Any officers and employees, regardless of rank, of a branch of government, whether
national, state, provincial or local/municipal;
• Governmental departments, ministries and agencies;
• Judiciary;
• Public Hospitals;
• Central Bank officials and employees;
• Pension funds or systems;
• Sovereign Wealth Funds and employees;
• Customs Officials;
• Officers and employees of a wholly or partially Government-owned or
Government–controlled entity;
• Officers and employees of a public international organization;
• Officers and employees of Self-Regulatory Organizations (SROs);
• Political parties and their officers or employees;
• Individuals acting in an official capacity or on behalf of any government or public
international organization (e.g., an official advisor to the government);
• Candidates for political office and the official campaign staff of such candidates;
• Members of a ruling monarchical or royal family;
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• Close family members or close associates (e.g. key advisors) of Government
Employees as defined above.
The Managing General Partner agrees that if any of its officers, directors, senior managers,
partners, owners, or principals becomes a Government Employee (prior to the completion of this
transaction or during the relationship), then the Managing General Partner will promptly notify
Bank of America, N.A. in writing. On receipt of a written notice, the Parties will consult together
to address possible issues of compliance with the FCPA and or other relevant bribery and
corruption laws and regulations and determine whether those issues can be satisfactorily resolved.
If, after consultation, any such issues cannot be resolved in the good faith and reasonable judgment
of Bank of America, N.A., then Bank of America, N.A., on written notice to all General Partners,
may withdraw from or terminate this agreement without penalty.
E. Previous or pending violations. The General Partners warrant that they have
not breached any local bribery and corruption requirements, unless these have been fully disclosed
to the Bank, and that it has no reason to suspect any investigation is (or is about) to take place by
any regulator or law enforcement authority in relation to its (or its officers, agents or otherwise)
activities in any jurisdiction in relation to bribery and or corruption violations unless these have
been fully disclosed to the Bank.
F. Role of Government Employee. The General Partners represent and warrant
that no Government Employee who is an officer, director, senior manager, partner, owner,
principal or investor of the General Partners have been involved on behalf of a Government in
decisions as to whether the General Partners or Bank of America, N.A. would be awarded business
or that otherwise could benefit the General Partners or Bank of America, N.A., or in the
appointment, promotion, or compensation of persons who will make such decisions. The General
Partners further represent and warrant that no such Government Employee will use their
Government positions to influence acts or decisions of a Government for the benefit of the General
Partners or Bank of America, N.A. or any other linked person(s). The General Partners further
represent and warrant that such Government Employees will not meet or communicate with
Government Employees on behalf of the General Partners or Bank of America, N.A. without
advising the General Partners in writing in advance of such meeting or communication, and the
General Partners will promptly provide such writing to Bank of America, N.A.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exh. A - 1
#231323409_v6
Exhibit A
VISTA BREEZE, LTD.
SCHEDULE OF PARTNERS
As of December 15, 2023
Name and Business Address Capital
Contributions
Percentage of Partnership
Interests for Class
GENERAL PARTNERS:
APC Vista Breeze, LLC
161 NW 6th Street
Suite 1020
Miami, FL 33136
$100 0.0049%
HACMB – Vista Breeze, LLC
200 Alton Road
Miami Beach, FL 33139
Attention: Miguell Del Campillo
(305) 532-6401 x 3020
(Telephone No.)
(305) 674-8001 (Fax No.)
$100 0.0051%
INVESTOR LIMITED PARTNER:
Bank of America, N.A.
100 Federal Street
Boston, MA 02110
MA5-100-04-11
Attention: Asset Manager for Vista
Breeze Apartments
(617) 346-1426 (Telephone No.)
Email: lihtcreporting@bofa.com
$26,413,828* 100%
SPECIAL LIMITED PARTNER:
Banc of America CDC Special
Holding Company, Inc.
100 Federal Street
Boston, MA 02110
MA5-100-04-11
Attention: Asset Manager for Vista
Breeze Apartments
(617) 346-1426(Telephone No.)
Email: lihtcreporting@bofa.com
$0 100%
*Payable in accordance with Article V. Represents sum of Net Capital Contribution plus the
Expense Reimbursement Contribution.
Exh. B - 1
#231323409_v6
Exhibit B
1. Development Agreement
2. Guaranty Agreement
3. Closing Certificate
4. Supervisory Management Agreement
5. Partnership Management Agreement
6. Purchase Option Agreement
7. Right of First Refusal Agreement
8. Opinion of Local Counsel dated as of Investment Closing
9. Title Policy with Special Endorsements
10. Credit Approval
11. Insurance Certificates (satisfying the requirements of Exhibit C of the Partnership
Agreement)
12. Ground Lease
Exh. C - 1
#231323409_v6
Exhibit C
INSURANCE REQUIREMENTS
Summary of Requirements
Hazard insurance certificates and policy confirmations meeting Bank of America, N.A.’s
requirements should be obtained in favor of the Partnership and listing “Bank of America, N.A., a
national banking association, as Investor Limited Partner, Banc of America CDC Special Holding
Company, Inc., a North Carolina corporation, as Special Limited Partner, and each of their
successors and assigns, as their interests may appear” as additional insureds, with respect to the
following items:
(i) Builder’s Risk coverage in an amount at least equal to the amount of the hard cost
construction contract (i.e., the Insurable Value);
(ii) Fire and extended coverage insurance that are ordinarily insured against by similar
businesses, including but not limited to lightning, flood, windstorm, sinkhole, hail,
explosion, riot, civil commotion, damage from aircraft, smoke, vandalism, malicious
mischief and acts of terrorism in an amount equal to at least the full replacement cost
of the Project, or if under construction, to replace work completed to date;
(iii) Single limit comprehensive general liability insurance on an “occurrence basis” against
claims for personal injury in an amount described below for any single occurrence and
in aggregate coverage for any single year;
(iv) Loss of rental value insurance or business interruption insurance in an amount
acceptable to Investor, for a minimum 12 month period, or until the units have been
brought back to their original state plus an extended period of indemnity for at least
three (3) additional months to re-lease the repaired units;
(v) If at any time any portion of any structure on the Property is insurable against casualty
by flood and is located in a Special Flood Hazard Area under the Flood Disaster
Protection Act of 1973, as amended, a flood insurance policy in form and amount
acceptable to Investor Member.
If Bank of America N.A. as lender requires higher coverage or otherwise more stringent
requirements than those detailed herein, then lender requirements shall take precedence.
All Asset Management and Insurance Notifications and Certificates should be identified and sent
to:
Asset Manager: Asset Manager for Vista Breeze Apartments
Address/Mailcode: 100 Federal Street/MA5-100-04-11
City, State, Zip: Boston, MA 02110
Telephone: (617) 346-1426
Fax: (617) 346-2724
Email: lihtcreporting@bofa.com
Exh. C - 2
#231323409_v6
Insurance Format
All carriers must be admitted to do business in the state where the property is located, and must
be rated by A.M. Best and carry a minimum rating of A-IX or better.
THIS EXHIBIT OUTLINES GENERAL EQUITY INSURANCE REQUIREMENTS. A
FORMAL REQUIREMENTS LETTER FROM BANK OF AMERICA’s SPECIALTY
INSURANCE GROUP WHICH MAY HAVE DIFFERENCES SPECIFIC TO THE
PROPERTY.
Property Insurance Requirement
Evidence of Property Insurance ACORD 27, ACORD 28 or equivalent which conveys to the
investor all the rights and privileges afforded under the policy in a manner acceptable to Bank of
America, N.A. A Lender’s Loss Payable endorsement is required in addition to acceptable
evidence. This endorsement shall name Bank of America, N.A. as mortgagee and loss payee and
must contain provisions acceptable to Bank of America, N.A.
Note: ACORD 25 is acceptable for Liability and Worker’s Compensation insurance only. In lieu
of the ACORD certificate, the bank will also accept a copy of the insurance declarations page(s)
or Policy.
Evidence of Property Insurance must indicate all of the following coverage:
• Include a description of the property insured in addition to the property address.
• Bank of America, N.A., a national banking association, as Investor Limited Partner, Banc of
America CDC Special Holding Company, Inc., a North Carolina corporation, as Special
Limited Partner, and each of their successors and assigns, as their interests may appear, must
be listed as Named Insured.
• The policy limit for Hard Costs must be sufficient to cover the full cost to rebuild the building(s)
and Business Assets.
• Deductible of 1% of the amount of coverage or $25,000, whichever is greater.
• The insurance policy form must be Builders Risk.
• The policy must be written on Special Form (also known as All Risk).
• If the property involves rehabilitations, renovations or tenant improvements, the Policy must
include wording such as: “building(s) with renovations in progress” and vacancy clause must
be deleted.
• Builders Risk shall not include an occupancy clause. If the policy includes an occupancy clause,
it must be delted by endorsement.
• Acts of Terrorism – the insurance policy must not contain an exclusion for acts of terrorism.
The evidence of insurance must include the following: Acts of Terrorism are not specifically
excluded.
Exh. C - 3
#231323409_v6
• Windstorm Coverage- coverage for the peril of windstorm and hail must be provided or it must
not be excluded.
• Earthquake coverage – required for improved property with a Probable Maximum Loss (PML)
>20% when located in:
1. Insurance Industry Zone 1 or 2 and the improvement are any of the following:
a. wood frame over 3 stories;
b. wood frame with more than one wall faced with brick;
c. concrete, brick, adobe, or masonry block structure and there is no seismic
reinforcement; or
d. proposed construction with concrete tile-ups
2. California Special Studies seismic zone; or
3. Outside of California, within 1,000 feet of a know seismic fault.
• Sinkhole Coverage - coverage for the peril of sinkhole must be provided or it must not be
excluded.
• Completed Value form is required. Reporting Form is not acceptable.
• Vandalism and Malicious Mischief (V&MM) and Theft on construction materials on site prior
to installation must be included.
• The Builders Risk policy must include coverage for Soft Costs including construction period
loan interest payments and other expenses that could be incurred again during the reconstruction
period after a loss.
• 30 day cancellation clause, with 10 day for non payment of premium.
• Bank of America, N.A. must be named as an additional insured.
• A certified copy of the insurance policy will be required prior to investment and loan closing.
If this is a new insurance policy, a certified copy will be required within 90 days from the
effective date.
Exh. C - 1
#231323409_v6
Partnership’s Liability Insurance Requirements
Primary liability insurance and excess liability insurance limits are acceptable to comply with the
per occurrence policy limit requirement.
• The Partnership must be a Named Insured.
• Bank of America, N.A., a national banking association, as Investor Limited Partner, Banc of
America CDC Special Holding Company, Inc., a North Carolina corporation, as Special
Limited Partner, and each of their successors and assigns, as their interests may appear must
be named as additional insured.
• Commercial General Liability insurance policy must be on Occurrence Form. Claims Made
form is not acceptable. The policy limit must be $1,000,000.00 per occurrence and at least
$5,000,000 in the aggregate, and include the following coverage:
o Products/Completed Operations coverage.
o Protective Liability (a.k.a. Owners and Contractors Protective liability) covering
borrower for liability claims stemming from the general contractor’s actions.
• 30 day cancellation clause, with 10 day for non-payment of premium.
• Bank of America N.A. must be a certificate holder.
Builder’s Insurance Requirements
If a general contractor is hired to do the construction work, insurance from the contractor is
required as follows:
• The certificate of insurance must include a description of the property insured and the property
address.
• Commercial General Liability insurance policy must be on Occurrence Form. Claims Made
form is not acceptable. The policy limit must be $5,000,000.00 per occurrence.
The Policy must include the following coverage:
o Products/Completed Operations coverage must be included.
o Protective Liability (a.k.a. Independent Contractors Protective liability) covering
all subcontractors.
• Bank of America, N.A., a national banking association, as Investor Limited Partner, Banc of
America CDC Special Holding Company, Inc., a North Carolina corporation, as Special
Limited Partner, and each of their successors and assigns, as their interests may appear must
be named as additional insured.
• An additional insured endorsement naming the Partnership as an additional insured.
• 30 day cancellation clause, with 10 day for non-payment of premium.
• Bank of America, N.A. must be the certificate holder.
Exh. C - 2
#231323409_v6
Workers Compensation Insurance Requirements
This section applies to the general contractor (legal entity name on all contracts with the
subcontractors).
• Statutory Workers’ Compensation insurance.
• Employers’ Liability coverage ($1,000,000 minimum).
• Bank of America, N.A. must be the certificate holder.
Property Manager’s Insurance Requirements
If a management agent is hired to perform property management services, insurance from the
management agent is required as follows:
• The certificate of insurance must include a description of the property insured and the property
address.
• Commercial General Liability insurance policy must be on Occurrence Form. Claims Made
form is not acceptable. The policy limit must be $1,000,000.00 per occurrence and $5,000,000
in the aggregate and must include the following coverage.
• Fidelity/dishonesty bond in an amount not less than six (6) months of Property gross rental
receipts.
• A comprehensive automobile liability insurance in an amount of not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate covering liability arising out of any owned, non-
owned or hired vehicles (if any) utilized by the property manager in conjunction with the
property and shall comply with any compulsory coverage mandated by the jurisdiction where
such vehicles are registered.
• An additional insured endorsement naming the Partnership as an additional insured.
• 30 day cancellation clause, with 10 day for non-payment of premium.
• Statutory Workers’ Compensation insurance providing statutory benefits for all employees of
the Management Agent.
• Employers’ Liability coverage ($1,000,000.00 minimum).
• Bank of America, N.A. must be the certificate holder.
All of the conditions listed above are requirements of Bank of America, N.A., and must be
indicated on the Proof of Insurance. The insurance requirements listed above do not modify any
provisions of the loan or equity documents regarding insurance. They represent the minimum
requirements of Bank of America, N.A. and should not be accepted as advice of counsel
concerning an adequate property and casualty insurance program to meet your personal needs. We
urge you to seek advice from your insurance adviser in this regard.
Exh. D - 1
#231323409_v6
Exhibit D
FORM OF GUARANTY AGREEMENT OF HACMB
[attached behind]
FINAL FORM
#231735515_v3
GUARANTY AGREEMENT
(Vista Breeze)
This GUARANTY AGREEMENT (this “Guaranty”) is dated as of [____________] but
effective as of [_____________]. Reference is hereby made to the Amended and Restated
Agreement of Limited Partnership, dated as of December 15, 2023 (the “Partnership
Agreement”) of VISTA BREEZE, LTD., a Florida limited partnership (the “Partnership”).
Reference is hereby made to the Guaranty Agreement dated as of December 15, 2023 made by
Howard D. Cohen Revocable Trust U/A/D 4/6/1993 and Howard D. Cohen, an individual in favor
of Bank of America, N.A., a national banking association (the “Investor Limited Partner”) (the
“Existing Guaranty”).
Capitalized terms used herein and not otherwise defined shall have the meanings set forth
in the Partnership Agreement.
The Investor Limited Partner and BANC OF AMERICA CDC SPECIAL HOLDING
COMPANY, INC., a North Carolina corporation (the “Special Limited Partner” and, together
with the Investor Limited Partner, the “Limited Partners”), previously acquired limited
partnership interests in the Partnership (the “Interests”) pursuant to the Partnership Agreement.
As a result of the admission of the Limited Partners to the Partnership and the Investor Limited
Partner’s contribution of capital to the Partnership in accordance with the terms of the Partnership
Agreement, the undersigned expects to continue to receive substantial benefits, including, without
limitation, certain fees relating to the construction and development of the Project.
To induce the Investor Limited Partner to consent to the withdrawal of APC Vista Breeze,
LLC as the Managing General Partner and to recognize Vista Breeze HACMB, Inc. as the new
managing general partner of the Partnership, all pursuant to Section 7.1 of the Partnership
Agreement, HOUSING AUTHORITY OF THE CITY OF MIAMI BEACH, a public body
corporate and politic (the “Guarantors”, which term, if there is only one Guarantor, shall refer to
such sole Guarantor alone) hereby unconditionally and irrevocably, jointly and severally,
guarantees to the Investor Limited Partner, commencing on the date of withdrawal of APC Vista
Breeze, LLC from the Partnership, the due and punctual performance by the General Partner of
the following obligations under the Partnership Agreement (collectively referred to herein as the
“Obligations”):
(1) the obligations of the Developer under the Development Agreement;
(2) the obligation of the Managing General Partner to make a Capital
Contribution required under Section 4.1C of the Partnership Agreement;
(3) the obligations of the Managing General Partner to make all payments
required under Section 5.2 of the Partnership Agreement;
(4) the obligations of the Managing General Partner to purchase the Interest of
the Investor Limited Partner and to make all payments required under and
pursuant to Section 5.3 of the Partnership Agreement;
#231735515_v3 - 2 -
(5) the indemnification and other obligations of the General Partners under
Sections 6.6C, 6.6D and 6.6E of the Partnership Agreement;
(6) the obligations of the Managing General Partner to make all payments
required under Section 6.7 of the Partnership Agreement;
(7) the obligations of the Managing General Partner to make all payments
required under Section 6.8 of the Partnership Agreement; and
(8) the obligations of the Managing General Partner to make a Special Capital
Contribution required under Section 6.11A and 6.11B of the Partnership
Agreement.
Notwithstanding the foregoing but subject to the next sentence in this paragraph, to the
extent that any Obligations (or any portion of an Obligation) are attributable to the events or
circumstances occurring prior to the effective date of the withdrawal of APC Vista Breeze, LLC
as the managing general partner or class b limited partner, the Guarantor shall not be responsible
for such Obligations (or any portion of an Obligation) under this Guaranty. Notwithstanding the
foregoing, the Guarantor shall be responsible for any obligation, liability and/or claim under the
Existing Guaranty occurring prior to, or based on circumstances existing as of, the effective date
of the withdrawal of APC Vista Breeze, LLC as the managing general partner or Class B limited
partner in the Partnership, as applicable (the “Existing Guaranty Obligations”), provided that if
any such Existing Guaranty Obligations are not discovered within three (3) years following the
date of the withdrawal of APC Vista Breeze, LLC as the managing general partner or Class B
limited partner in the Partnership, as applicable, as a result of APC Vista Breeze, LLC’s gross
negligence or willful misconduct, then the Guarantor shall not be responsible for such Existing
Guaranty Obligations and the Limited Partners shall rely on the Existing Guaranty for such
Existing Guaranty Obligations.
The Guarantor hereby covenants and agrees to maintain, for so long as the Obligations and
the Existing Guaranty Obligations shall remain in effect, a cash liquidity of no less than one million
dollars ($1,000,000) in cash. The Guarantor shall furnish the Investor Limited Partner a current
and accurate financial statement (which may or may not be audited, depending upon the time of
year in which the Investor Limited Partner’s request is made) demonstrating compliance with the
foregoing covenants within thirty (30) days after annual audited financial statements of the
Guarantor have been submitted to and approved by the U.S. Department of Housing and Urban
Development and at such other times (and together with such other financial information) as the
Investor Limited Partner may reasonably request from time to time (but in any event no more than
twice annually for such additional financial information provided that no Event of Default has
occurred and is continuing beyond any applicable notice and cure period).
The Guarantor hereby agrees that its obligations hereunder shall be unconditional (and
shall not be subject to any advance, set-off, counterclaim or recoupment whatsoever), irrespective
of the regularity or enforcement of any Project Document, the Partnership Agreement or this
Guaranty or any other circumstances which might otherwise constitute a legal or equitable
discharge of a surety or guarantor or any other circumstances which might otherwise limit the
recourse of the Investor Limited Partner against the undersigned. The undersigned hereby waive
#231735515_v3 - 3 -
diligence, presentment and demand for payment, protest, any notice of any assignment hereunder
in whole or in part or of any default hereunder or under any Project Document or the Partnership
Agreement, and all notices with respect to this Guaranty, the Partnership Agreement or the Project
Documents. No waiver by the Investor Limited Partner of any of its rights under the Project
Documents, the Partnership Agreement or this Guaranty and no action by the Investor Limited
Partner to enforce any of its rights under this Guaranty or failure to take, or delay in taking, any
such action shall effect the Guarantors’ obligations hereunder.
The obligations of the Guarantor hereunder shall remain in full force and effect without
regard to, and shall not be affected or impaired by, (i) any amendment or modification of or
addition or supplement to the Partnership Agreement or the Project Documents, except as insofar
as such amendment, modification, addition or supplement shall directly affect any obligation
hereunder (and the Investor Limited Partner shall have affirmatively consented thereto), (ii) any
extension, indulgence or other action or inaction in respect of the Partnership Agreement or the
Project Documents, or any exercise or nonexercise of any right, remedy, power or privilege in
respect of such documents or this Guaranty, (iii) any default by the Guarantors under, or any
illegality or unenforceability of, or any irregularity or defect in, the Partnership Agreement, the
Project Documents or any provision of this Guaranty, (iv) any event of bankruptcy, insolvency,
reorganization or similar proceeding involving or affecting the Partnership or any of the
Guarantors, or (v) any other circumstances, whether or not the undersigned or the Investor Limited
Partner shall have actual or constructive notice or knowledge thereof. The undersigned hereby
waives to the fullest extent permitted by law, any and all notices and defenses to which they may
be entitled by law to their obligations hereunder, including, without limitation, notice of
acceptance of this Guaranty, and any requirement of diligence on the part of the Investor Limited
Partner or any other parties to the Partnership Agreement, Development Agreement or Project
Documents.
All notices, demands or other communications hereunder shall be in writing and shall be
deemed to have been given (a) three (3) days after being deposited in the United States mail and
sent by certified or registered mail, postage pre-paid, (b) one day after being delivered to a
nationally recognized overnight courier service, service prepaid, which requires written
acknowledgement of receipt or (c) when delivered personally, in each case, to the parties at the
addresses set forth below at such other addresses as such parties may designate by notice to other
parties:
(i) if to the Guarantor, 200 Alton Road, Miami Beach, FL 33139, Attention:
Miguell Del Campillo, Executive Director, and a copy to Fox Rothschild LLP, 500 Grant
Street, Suite 2500, Pittsburgh, PA 15219, Attention: Michael H. Syme, Esq.
(ii) if to the Limited Partners, c/o Bank of America, N.A., 100 Federal Street,
Boston, MA 02110, MA5-100-04-11, Attention: Asset Manager for Vista Breeze, with a
copy to Holland & Knight LLP, 10 St. James Avenue, Boston, MA 02116, Attention: Sara
C. Heskett, Esq.
This Guaranty (i) shall be governed by and construed in accordance with the internal law
of the State, (ii) shall be binding upon and inure to the benefit of the respective heirs, executors,
administrators, personal representatives, successors and assigns of the parties, and (iii) may not be
#231735515_v3 - 4 -
modified, amended or terminated except by a written agreement by and between the Investor
Limited Partner and the undersigned Guarantors. Venue shall be in the state courts located in
Miami-Dade County, or the Federal courts of the Southern District of Florida.
The obligations of the undersigned Guarantors hereunder are imposed solely and
exclusively for the benefit of the Investor Limited Partner and no other person shall have any
standing to enforce such obligations or shall be deemed to be beneficiaries of such obligations.
Notwithstanding anything in this Guaranty to the contrary, the parties to and beneficiaries
of this Guaranty acknowledge and agree that any obligation of Guarantor to hold harmless, defend,
indemnify or guarantee hereunder shall be payable by Guarantor only out of Non-Federal Funds.
For purposes of this Agreement, the term "Non-Federal Funds" means assets and funds that are
not restricted by law or contract for use in government-sponsored programs (including without
limitation any funds received or held by Guarantor with respect to Guarantor's public housing
portfolio). Without limiting the foregoing, there shall be no recourse against (i) any public housing
project of Guarantor; (ii) any operating receipts of Guarantor (as the terms "public housing project"
and "operating receipts" are defined in the Annual Contributions Contract between Guarantor and
the U.S. Department of Housing and Urban Development, as amended (the "ACC"), or in any
amendments thereto); or (iii) any public housing operating reserves of Guarantor reflected in
Guarantor’s annual operating budget required under the ACC. Guarantor’s obligations hereunder
are limited to eligible non-public housing assets (e.g., Section 8 administrative fee reserves or other
assets not subject to any Declaration of Trust and not acquired or merged with assets acquired with
public housing funds under the United States Housing Act of 1937, as amended.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Guaranty Agreement/HACMB Guarantor
Vista Breeze
Signature Page 1 of 1
IN WITNESS WHEREOF, the undersigned has caused this Guaranty Agreement to be
duly executed as of the date and year first written above.
HOUSING AUTHORITY OF THE CITY OF
MIAMI BEACH, a public body corporate and
politic
By: _______________________________
Name: _______________________________
Its: _______________________________
Exh. E - 1
#231323409_v6
Exhibit E
VISTA BREEZE, LTD.
SECOND INSTALLMENT PAYMENT CERTIFICATE
The undersigned, constituting the managing general partner (the “Managing General
Partner”) of Vista Breeze, Ltd., a Florida limited partnership (the “Partnership”), does hereby
certify to Bank of America, N.A., a national banking association, and its successors and assigns
(the “Investor Limited Partner”), pursuant to Section 5.1C(i) of the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of December 15, 2023 (the
“Partnership Agreement”), that:
1. All preconditions, representations, warranties and agreements set forth in the
Partnership Agreement and applicable to the Second Installment have been satisfied.
2. As set forth in Section 5.1A of the Partnership Agreement, the amount of the
Second Installment is $_________, there being no reduction in the amount thereof pursuant to
Section 5.2 of the Partnership Agreement. [Modify as appropriate if any adjustment shall have
occurred and attach supporting calculations and documentation.]
3. The Completion Date occurred on ____________.
4. Attached hereto is an opinion rendered by Partnership Counsel regarding the
Project’s qualification for the Property Tax Exemption.
5. Attached hereto is a copy of the completed certification provided by the
Construction Inspector or Architect, which has been reviewed and approved by the Special Limited
Partner, in the form attached as Attachment A.
6. Evidence of insurance for the Management Agent in accordance with the
requirements of Exhibit C.
7. Attached hereto is (a) a true copy of all temporary or final certificates or permits of
occupancy for the Project, and (b) a current title search report demonstrating that the Project is free
and clear of any mechanics’ or other liens.
8. Each of the representations and warranties set forth in Section 6.5 of the Partnership
Agreement is true and correct in all material respects.
9. No event has occurred which would permit the Investor Limited Partner to give an
Election Notice under Section 5.3 of the Partnership Agreement.
10. No Event of Bankruptcy as to any General Partner, Developer or Guarantor shall
have occurred unless such Event of Bankruptcy shall have been cured in a manner approved in
writing by the Investor Limited Partner.
Exh. E - 2
#231323409_v6
11. No event has occurred which suspends or terminates the obligations of the Investor
Limited Partner to pay Installments under the Partnership Agreement which has not been cured as
therein provided.
12. Attached hereto is a true copy of an updated title report evidencing the accuracy of
the representations contained in Section 6.5A(viii) of the Partnership Agreement.
13. The Investor Limited Partner has received copies of such other documents relating
to the Project as it may reasonably request.
Capitalized terms not defined herein shall have the meanings given to them in the
Partnership Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of
___________, 20__.
MANAGING GENERAL PARTNER: APC VISTA BREEZE, LLC, a Florida limited
liability company
By:
Kenneth Naylor, Vice President
Exh. E - 3
#231323409_v6
Attachment A
[Construction Inspector/Architect Letterhead]
100% Completion Certificate - Consultant
Form of Construction Consultant’s/Architect’s Certificate of Percentage Completion
The undersigned, ___________________, is the construction consultant engaged by Bank
of America, N.A. pursuant to that certain [Agreement] dated as of December 15, 2023, in
connection with the construction of a project known as Vista Breeze, in Miami Beach, Florida, as
a 119 unit multifamily mixed income project (the “Project”) owned by Vista Breeze, Ltd., a Florida
limited partnership (the “Partnership”). The undersigned hereby certifies to Bank of America,
N.A., its successors or assigns (the “Bank”) with respect to the Bank’s payment to the Partnership
of the amount due and owing as of the Second Installment as set forth in the Amended and Restated
Agreement of Limited Partnership of the Partnership dated as of December 15, 2023 (the
“Partnership Agreement”), executed by the Bank in connection with the Bank’s acquisition of its
Interest (as that and all other capitalized terms used herein are defined in the Partnership
Agreement), as follows:
The work to be performed by the Builder under the Construction Contract is substantially
complete, subject only to punch list items not in excess of $100,000 in the aggregate, and to the
best of my ability, such work has been performed in a good and workmanlike manner in
accordance with applicable requirements of all Governmental Agencies and substantially in
accordance with the Plans and Specifications.
Dated: as of ________________________, 20__.
[_______________________________]
By: _________________________________
Name: _______________________________
Title:________________________________
Exh. F - 1
#231323409_v6
Exhibit F
VISTA BREEZE, LTD.
THIRD INSTALLMENT PAYMENT CERTIFICATE
The undersigned, constituting the managing general partner (the “Managing General
Partner”) of Vista Breeze, Ltd., a Florida limited partnership (the “Partnership”), does hereby
certify to Bank of America, N.A., a national banking association, and its successors and assigns
(the “Investor Limited Partner”), pursuant to Section 5.1C(i) of the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of December 15, 2023 (the
“Partnership Agreement”), that:
1. All preconditions, representations, warranties and agreements set forth in the
Partnership Agreement and applicable to the Third Installment have been satisfied.
2. As set forth in Section 5.1A of the Partnership Agreement, the amount of the Third
Installment is $_________, there being no reduction in the amount thereof pursuant to Section 5.2
of the Partnership Agreement. [Modify as appropriate if any adjustment shall have occurred and
attach supporting calculations and documentation.]
3. The Partnership achieved an average Debt Service Coverage Ratio of not less than
115% over a period of three (3) consecutive calendar months on ___________ (which includes the
calendar month immediately preceding the date of this Certificate), as evidenced by the
determination letter attached hereto as Attachment A.
4. At least 90% of the Units are physically occupied.
5. The Initial Occupancy Date occurred on ____________, and copies of a current
rent roll and the Tenant Income Certifications for each of the Qualified Tenants in the Project have
been delivered to the Special Limited Partner.
6. Final Closing has occurred or will occur simultaneously with the payment of the
Third Installment. Attached hereto is a copy of the draft audit of the Partnership’s construction
costs as part of Cost Certification and a copy of the draft Mortgage Loan Documents evidencing
and securing the permanent Mortgage Loans to the extent not previously delivered to the Investor
Limited Partner for its review and approval prior to execution and delivery thereof.
7. Attached hereto are copies of the final (non-temporary) certificates of occupancy
permitting occupancy of 100% of the units in the Project.
8. Attached hereto is a copy of Exhibit H, evidencing the Partnership’s achievement
of the Development Obligation Date. Also attached is evidence of the implementation of radon
mitigation measures, if any, if required pursuant to the provisions of Section 12.1F of this
Agreement.
9. Attached hereto is a LOMA-R for each Building in the Project, indicating that each
Building is located in a zone that does not require the mandatory purchase of flood insurance.
Exh. F - 2
#231323409_v6
10. Each of the representations and warranties set forth in Section 6.5 of the Partnership
Agreement is true and correct in all material respects.
11. No event has occurred which would permit the Investor Limited Partner to give an
Election Notice under Section 5.3 of the Partnership Agreement.
12. No Event of Bankruptcy as to any General Partner, Developer or Guarantor shall
have occurred unless such Event of Bankruptcy shall have been cured in a manner approved in
writing by the Investor Limited Partner.
13. No event has occurred which suspends or terminates the obligations of the Investor
Limited Partner to pay Installments under the Partnership Agreement which has not been cured as
therein provided.
14. Attached hereto is a true copy of an ALTA as-built survey for the Project and an
updated title report, evidencing the accuracy of the representations contained in Section 6.5A(viii)
of the Partnership Agreement.
15. The Investor Limited Partner has received copies of such other documents relating
to the Project as it may reasonably request.
Capitalized terms not defined herein shall have the meanings given to them in the
Partnership Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of
___________, 20__.
MANAGING GENERAL PARTNER: APC VISTA BREEZE, LLC, a Florida limited
liability company
By:
Kenneth Naylor, Vice President
Exh. F - 3
#231323409_v6
Attachment A
[Letterhead of Partnership Accountants]
DETERMINATION OF DEBT SERVICE COVERAGE RATIO
___________, 20__
Bank of America, N.A.
100 Federal Street
Boston, MA 02110
MA5-100-04-11
Banc of America CDC Special Holding Company, Inc.
100 Federal Street
Boston, MA 02110
MA5-100-04-11
Re: Vista Breeze, Ltd. (the “Partnership”)
Ladies and Gentlemen:
We have reviewed the pertinent portions of the Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of December 15, 2023 (the “Partnership
Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings set
forth in the Partnership Agreement.
Using information provided to us by the Partnership concerning Vista Breeze, a 119-unit
apartment complex located in Miami Beach, Florida (referred to herein as the “Project”), we have
performed the following procedures:
We have compiled a statement of income and expenses for the three (3) month period
ending ____________, 20__.
We have obtained an annual budget prepared by the Project’s management agent for the
year ended December 31, 20__.
We have adjusted the statement to annualize all expenditures, including those of a seasonal
or irregular nature which might reasonably be expected to be incurred on an unequal basis during
a full annual period of operations. (Examples of such expenditures include debt service, reserve
funding, maintenance, utilities, snow removal and real estate taxes.)
We have compared the budget for such period to the statement of actual results, and have
made all inquiries we considered necessary with respect to any material variances.
We have performed such other procedures as we considered necessary to evaluate both the
assumptions used and the information provided to us by the Partnership and the management agent.
Exh. F - 4
#231323409_v6
We have determined that the Partnership, for a period of three (3) consecutive calendar
months (and during each individual month) beginning on ___________, 20__ (which date is
subsequent to Final Closing) has achieved an average Debt Service Coverage Ratio of at least
115%. Furthermore, nothing has come to our attention to suggest that the data or assumptions on
which the above determination is based are incorrect or inappropriate.
Copies of the calculations and adjustments we have made in reaching the determination
above and of financial statements and budgets upon which such calculations are based are attached
hereto.
[ACCOUNTANTS]
By:
Name: _______________________________
Its: _______________________________
Exh. G - 1
#231323409_v6
Exhibit G
VISTA BREEZE, LTD.
FOURTH INSTALLMENT PAYMENT CERTIFICATE
The undersigned, constituting the managing general partner (the “Managing General
Partner”) of Vista Breeze, Ltd., a Florida limited partnership (the “Partnership”), does hereby
certify to Bank of America, N.A. and its successors and assigns (the “Investor Limited Partner”),
pursuant to Section 5.1C(i) of the Amended and Restated Agreement of Limited Partnership of the
Partnership, dated as of December 15, 2023 (the “Partnership Agreement”), that:
1. All preconditions, representations, warranties and agreements set forth in the
Partnership Agreement and applicable to the Fourth Installment have been satisfied.
2. As set forth in Section 5.1A of the Partnership Agreement, the amount of the Fourth
Installment is $_________, there being no reduction in the amount thereof pursuant to Section 5.2
of the Partnership Agreement. [Modify as appropriate if any adjustment shall have occurred and
attach supporting calculations and documentation.]
3. Attached hereto are copies of the Forms 8609 from the Credit Agency with respect
to the Building comprising the Project. Part I of each Form 8609 has been completed, signed and
dated by the Credit Agency. Additionally, Part II of each Form 8609 has been completed, signed
and dated by the Managing General Partner.
4. Attached hereto is a copy of the recorded Extended Use Agreement.
5. Attached hereto is a copy of the final, certified Cost Certification prepared by the
Accountants. The amount of the Tax Credits for purposes of Cost Certification have been
determined, as evidenced by the determination letter attached hereto as Attachment A, and the
Managing General Partner and the Investor Limited Partner agree with the adjustments calculated
in accordance with Section 5.2 of the Partnership Agreement.
6. A qualified third-party firm approved by the Investor Limited Partner has
performed a tax credit compliance audit report of the tenant files at the Project, copies of which
are attached.
7. Each of the representations and warranties set forth in Section 6.5 of the Partnership
Agreement is true and correct in all material respects.
8. No event has occurred which would permit the Investor Limited Partner to give an
Election Notice under Section 5.3 of the Partnership Agreement.
9. No Event of Bankruptcy as to any General Partner, Developer or Guarantor shall
have occurred unless such Event of Bankruptcy shall have been cured in a manner approved in
writing by the Investor Limited Partner.
Exh. G - 2
#231323409_v6
10. No event has occurred which suspends or terminates the obligations of the Investor
Limited Partner to pay Installments under the Partnership Agreement which has not been cured as
therein provided.
11. Attached hereto is a true copy of an updated title report evidencing the accuracy of
the representation contained in Section 6.5A(viii) of the Partnership Agreement.
12. The Investor Limited Partner has received copies of such other documents relating
to the Project as it may reasonably request.
Capitalized terms not defined herein shall have the meanings given to them in the
Partnership Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of
___________, 20__.
MANAGING GENERAL PARTNER: APC VISTA BREEZE, LLC, a Florida limited
liability company
By:
Kenneth Naylor, Vice President
Exh. G - 3
#231323409_v6
Attachment A
[Letterhead of Partnership Accountants]
DETERMINATION OF TAX CREDIT
___________, 20__
Bank of America, N.A.
100 Federal Street
Boston, MA 02110
MA5-100-04-11
Banc of America CDC Special Holding Company, Inc.
100 Federal Street
Boston, MA 02110
MA5-100-04-11
Re: Vista Breeze, Ltd. (the “Partnership”)
Ladies and Gentlemen:
We have reviewed the pertinent portions of the Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of December 15, 2023 (the “Partnership
Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings set
forth in the Partnership Agreement.
Based upon information provided to us by the Partnership concerning Vista Breeze, a 119-
unit apartment complex located in Miami Beach, Florida (referred to herein as the “Project”), we
have performed the following procedures.
We have compiled a statement of the development costs through _________, 20__ and the
expected classification of each cost for tax purposes.
We have obtained a budget for the development costs from the Partnership.
We have compared the budget for such costs to the actual results, and have made all
inquiries we considered necessary with respect to any material variances.
We have performed such other procedures as we considered necessary to evaluate both the
assumptions used and the information provided to us by the Partnership.
We have determined that the Adjusted Aggregate Federal Low Income Tax Credit Amount
properly allocable to the Investor Limited Partner will be $_________.
Furthermore, nothing has come to our attention to suggest that the data or assumptions on
which the above determinations are based are incorrect or inappropriate.
Exh. G - 4
#231323409_v6
In making these determinations, we have assumed that 100% of the Units in the Project
will be “low-income units” as such term is defined in Section 42(i)(3) of the Internal Revenue
Code of 1986, as amended, and have no reason to believe that such assumption is unwarranted.
Copies of the calculations we have made in reaching the determinations above and of the
financial statements and budgets upon which such calculations are based are attached hereto.
[ACCOUNTANTS]
By:
Name: ________________________________
Its: ________________________________
Exh. H - 1
#231323409_v6
Exhibit H
VISTA BREEZE, LTD.
CERTIFICATE OF ACHIEVEMENT OF DEVELOPMENT OBLIGATION DATE
The undersigned, constituting the managing general partner (the “Managing General
Partner”) of Vista Breeze, Ltd., a Florida limited partnership (the “Partnership”), does hereby
certify to Bank of America, N.A. and its successors and assigns (the “Investor Limited Partner”),
pursuant to the Amended and Restated Agreement of Limited Partnership of the Partnership, dated
as of December 15, 2023 (the “Partnership Agreement”), that:
1. The Project has achieved three (3) consecutive calendar months of not less than
90% occupancy of the Units.
2. The Initial Occupancy Date occurred on ___________.
3. The Completion Date occurred on _____________.
4. Final Closing occurred on ______________.
5. The Development Obligation Date occurred on ____________.
Capitalized terms not defined herein shall have the meanings given to them in the
Partnership Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of
___________, 20__.
MANAGING GENERAL PARTNER: APC VISTA BREEZE, LLC, a Florida limited
liability company
By:
Kenneth Naylor, Vice President
Exh. J - 1
#231323409_v6
Exhibit I
VISTA BREEZE, LTD.
ENVIRONMENTAL REPORTS
1. Phase I Environmental Site Assessment (280-300 South Shore Drive) prepared by
Hydrologic Associates U.S.A., Inc. dated December 6, 2021
2. Phase I Environmental Site Assessment (165-185 South Shore Drive) prepared by
Hydrologic Associates U.S.A., Inc. dated December 6, 2021
3. Phase I Environmental Site Assessment (165-185 South Shore Drive) prepared by
Hydrologic Associates U.S.A., Inc. dated October 6, 2023
4. Phase I Environmental Site Assessment (280-300 South Shore Drive) prepared by
Hydrologic Associates U.S.A., Inc. dated October 6, 2023
5. Report of Subsurface Exploration & Geotechnical Engineering Study prepared by NV5,
Inc. dated September 28, 2022
Exh. J - 1
#231323409_v6
Exhibit J
INITIAL ECONOMIC PROJECTIONS
[attached behind]
RENTAL INCOME AND EXPENSESUSE THIS LINK TO ENTER ADDRESS AND VERIFY COUNTY AND CENSUS TRACThttps://factfinder.census.gov/faces/nav/jsf/pages/searchresults.xhtml?ref=geo&refresh=t#noneMSAUSE THIS LINK TO GET AMI and TAX CREDIT MAX RENTS FROM NOVOGRADAC WEBSITEhttp://www.novoco.com/products/rentincome.phpHUD YR2023AMI - 4 Person HouseholdUSE THIS LINK TO GET MSA AREA IF YOU HAVE AN ADDRESShttps://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspxSection 42 Max LIHTC RentsTotal Rental Assisted Units 119 # People 50% AMI100% AMI Unit Mix (BRs)22% 30% 50% 60% 70% 80% Total Restricted, Non-RA Units - 1 36,150 1,808 Studio397 542 903 1,084 1,265 1,446 Total Market Rate Units - 2 41,300 1,936 1425 580 968 1,161 1,355 1,549 Total Manager Units - 3 46,450 2,323 2510 696 1,161 1,393 1,625 1,858 Total Units 119 4 51,600 2,684 3590 805 1,341 1,610 1,878 2,147 5 55,750 2,995 4658 898 1,497 1,797 2,096 2,396 BR # of Units AMI% # of Units AMI%6 59,900 3,304 5726 991 1,651 1,982 2,312 2,643 Studio 119 22% 5 22%7 64,000 1 0 30% 20 30%8 68,150 ACC Units Total Unit SF 48,535 2 0 50% 0 50%RAD Units Average SF 408 3 0 60% 64 60%Supportive housing units4 0 70% 0 70%RA Contract Term Remaining5 0 80% 30 80%Total 119 Total 119 TotalMARKET RENTS COMPS DISCOUNTLIHTC If RA, Max Allow. Max Allow. Underwritten UW Restricted Over/(Under) Underwritten Open Market Percentage Section 8Unit? UnitEnter NETRestricted Utility Net Restr. Net Restricted Net Rent Max Allow. Market Rent Rent Comp Discount DiscountDescription # BRs # Baths (Y/ N) Classification AMI % No. Units Sq Ft of UA Gross Rent Allowance Rent Rent PSF Net Rent Per Unit Per Unit From Market to MarketStudio NHTF Unit 22% AMStudio Y HAP 22% 5 405 1,718 397 133 264 264 0.65 - 1,700 84% -1%Studio 30% AMI Studio Y HAP 30% 20 405 1,718 542 133 409 409 1.01 - 1,700 76% -1%Studio 60% AMI Studio Y HAP 60% 59 405 1,718 1,084 133 951 951 2.35 - 1,700 44% -1%Studio 60% AMI Studio Y HAP 60% 5 473 1,718 1,084 133 951 951 2.01 - 1,700 44% -1%Studio 80% AMI Studio Y HAP 80% 30 405 1,718 1,446 133 1,313 1,313 3.24 - 1,700 23% -1%- - - 0% 0%- - - 0% 0%45.75%Commercial IncomeOther IncomeTenant SF Rent/Month Rent PSF Comps Discount Description Annual Inc0.00 0.00% Application Fees0.00 0.00% Vending Fees0.00 0.00% Cable Fees0.00 0.00% Laundry0.00 0.00% Other 30,524 Total - - - - 0.00% Total 30,524 Miami-Miami Beach-Kendall, FL HUD Metro FMR AreaUNIT DESCRIPTIONRESTRICTED UNIT MONTHLY RENTS002074,70012/14/2023 1:03 PMPage 1
OPERATING INCOMEAnnual Per Unit PSFLow Income (Restricted) Rental Revenue 1,317,048 11,068 27.14Rental Assistance (e.g. HAP) - Incremental Amount 1,136,256 9,548 23.41Market Rate Rental Revenue- - 0.00Other Income30,524 257 0.63Commercial Rental Income- Potential Gross Income2,483,828 20,873 51.18Vacancy - Low Income 5.0% (65,852) (553) (1.36)Vacancy - Rental Assistance 5.0% (56,813) (477) (1.17)Vacancy - Market Rate- - 0.00Vacancy - Other Income- - 0.00Vacancy - Commercial- Total Vacancy(122,665) Effective Gross Income2,361,163 19,842 48.65OPERATING EXPENSESManagement Fees 6.00% 141,670 1,191 2.92Insurance178,500 1,500 3.68Real Estate Taxes- - 0.00Administration60,631 510 1.25Payroll and Benefits193,453 1,626 3.99Utilities114,000 958 2.35Marketing- 0.00Repairs and Maintenance101,150 850 2.08Security44,863 377 0.92Other 81,250 - 0.00Social Services- 0.00Total Operating Expenses834,267 7,011 17.19Replacement Reserves35,700 300 0.74Total Operating Expenses & Replacement Res. 869,967 7,311 17.92Net Operating Income1,491,196 12,531 30.72Citibank TEL Must PayIncludes Loan fee of37,757.50$ 848,796 7,133 Loan 2 Must Pay -$ - - Loan 3 Must Pay -$ - - FHFC Viability Loan -$ - - FHFC SAIL -$ - - FHFC Supplemental ELI -$ - - FHFC NHTF -$ - - Miami-Dade SURTAX -$ - - HOME Loan -$ - - Cash Flow Before Taxes642,400 5,398 13.24DSCR or Inc/Exp Ratio1.76DSCR or Inc/Exp Ratio Must Pay1.76w/o HAP: 0.49Max Debt at DSC of 1.20 18,194,725 92%V alue at Cap of 7.5% 19,882,614 12/14/2023 1:03 PMPage 2
Cret CreditAdjustment- Equity AmountNet Income (Loss)Tax Benefit / (Expense) Federal LIHTCFederal Historic Tax CreditGross State Tax Credit Cash Value of State Tax Credit Cash Flow Annual BenefitCumulative BenefitCumulative Net BenefitCapital Account2023 5,365,086 - - - - - - - - (5,365,086) 5,365,086 2024 - - - - - - - - - (5,365,086) 5,365,086 2025 10,524,371 (3,088,644) 741,275 1,669,475 - - - 2,410,750 2,410,750 (13,478,707) 12,800,813 2026 10,524,371 (2,521,341) 605,122 2,671,160 - - - 3,276,282 5,687,032 (20,726,796) 20,803,843 2027 - (2,240,370) 537,689 2,671,160 - - - 3,208,849 8,895,881 (17,517,947) 18,563,473 2028 (2,150,397) 516,095 2,671,160 - - - 3,187,256 12,083,136 (14,330,692) 16,413,076 2029 (2,157,770) 517,865 2,671,160 - - - 3,189,025 15,272,161 (11,141,667) 14,255,305 2030 (2,128,760) 510,903 2,671,160 - - - 3,182,063 18,454,224 (7,959,604) 12,126,545 2031 (2,039,802) 489,552 2,671,160 - - - 3,160,713 21,614,936 (4,798,892) 10,086,743 2032 (2,019,160) 484,598 2,671,160 - - - 3,155,758 24,770,695 (1,643,133) 8,067,583 2033 (2,004,650) 481,116 2,671,160 - - - 3,152,276 27,922,971 1,509,143 6,062,934 2034 (2,018,279) 484,387 2,671,160 - - - 3,155,547 31,078,518 4,664,690 4,044,655 2035 (2,014,744) 483,538 1,001,685 - - - 1,485,224 32,563,742 6,149,914 2,029,911 2036 (1,973,606) 473,666 - - - - 473,666 33,037,407 6,623,579 56,305 2037 (1,940,878) 465,811 - - - - 465,811 33,503,218 7,089,390 (1,884,574) 2038 (1,920,682) 460,964 - - - - 460,964 33,964,182 7,550,354 (3,805,255) 2039 (1,888,950) 453,348 - - - - 453,348 34,417,530 8,003,702 (5,694,205) 2040 (1,751,425) 420,342 - - - - 420,342 34,837,872 8,424,044 (7,445,631) 2041 - - - - - - - - - - 2042 - - - - - - - - - - - - - - - - - - - 26,413,828 (33,859,459) 8,126,270 26,711,602 - - - - 34,837,872 (7,445,631) At Sale2040 7,445,631 (1,786,951) (1,786,951) 34,837,872 6,637,092 - - - - - - - - - Total26,413,828 (26,413,828) 6,339,319 26,711,602 - - - - 33,050,920 PROJECTED VALUE OF TAX CREDITS, TAX LOSSES, AND CASH FLOW AMOUNTS TO INVESTOR
PROJECTION OF MINIMUM GAINGP PartnerRecourseLast Credit YrCALCULATION OF GAIN (LOSS)NR Debt Debt 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040Citibank TEL No No - - - 11,812,446 11,739,989 11,662,856 11,580,745 11,493,336 11,400,285 11,301,230 11,195,782 11,083,529 10,964,033 10,836,824 10,701,407 10,557,250 10,403,791 10,240,428 Loan 1 ReFi No No - - - - - - - - - - - - - - - - - - Loan 2 No No - - - - - - - - - - - - - - - - - - Loan 4 & 5 Refi No No - - - - - - - - - - - - - - - - - - Loan 3 No No - - - - - - - - - - - - - - - - - - FHFC Viability Loan No No - - - 4,339,417 4,382,811 4,426,639 4,470,905 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 4,300,000 FHFC SAIL No No - - - 3,027,500 3,057,775 3,088,353 3,119,236 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 FHFC Supplemental ELI No No - - - 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 FHFC NHTF No No - - - 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 1,301,500 Miami-Dade SURTAXNo No - - - 5,973,944 6,000,169 6,026,510 6,052,967 6,044,145 5,950,000 5,950,000 5,950,000 5,950,000 5,950,000 5,950,000 5,950,000 5,950,000 5,950,000 5,950,000 HOME Loan No No - - - 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 1,003,969 Ground Lease Balance(incl interest)No No 8,800,000 9,416,780 10,067,730 9,954,742 10,635,495 11,353,961 12,112,230 12,912,508 13,310,006 13,621,865 13,928,208 14,228,497 14,522,165 14,808,618 15,087,229 15,357,338 15,618,253 15,869,245 Recourse Debt Adjustment - - - - - - - - - - - - - - - - - - Total Non-Recourse Debt 8,800,000 9,416,780 10,067,730 38,013,518 38,721,708 39,463,788 40,241,553 40,655,458 40,865,761 41,078,564 41,279,459 41,467,495 41,641,667 41,800,912 41,944,105 42,070,057 42,177,513 42,265,142 Land - - 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 9,579,517 Off site Improvements - - - - - - - - - - - - - - - - - - Included Debt Service Reserve - - - - - - - - - - - - - - - - - - Included Operating Reserve - - 463,580 468,216 472,898 477,627 482,403 487,227 492,100 497,021 501,991 507,011 512,081 517,202 522,374 527,597 532,873 538,202 Included Transition Reserve - - - - - - - - - - - - - - - - - - Included Supportive Services Reserve - - - - - - - - - - - - - - - - - - Included Operating Deficit / Leaseup Reserve - - 19,782 198 200 202 204 206 208 210 212 214 216 219 221 223 225 227 Replacement Reserve - - 9,014 45,161 81,670 118,544 - 36,057 72,475 109,256 146,406 - 36,057 72,475 109,256 146,406 183,927 221,823 Capitalized Replacement Res. - - - - - - 154,244 154,244 154,244 154,244 154,244 336,350 336,350 336,350 336,350 336,350 336,350 336,350 Gross Book Value 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 52,195,703 Accum Depreciation - - (1,551,917) (3,606,672) (5,542,138) (7,402,720) (9,285,050) (11,128,988) (12,900,655) (14,660,475) (16,420,414) (18,207,771) (20,008,215) (21,785,231) (23,548,380) (25,311,411) (27,064,070) (28,771,254) Book Value of Property 52,195,703 52,195,703 60,715,679 58,682,123 56,787,850 54,968,873 53,127,021 51,323,966 49,593,591 47,875,475 46,157,658 44,411,023 42,651,709 40,916,233 39,195,040 37,474,385 35,764,525 34,100,568 Minimum Gain (Loss) - - - - - - - - - - - - - 884,678 2,749,064 4,595,672 6,412,987 8,164,574 CHANGE IN MINIMUM GAIN - - - - - - - - - - - - - 884,678 1,864,386 1,846,608 1,817,315 1,751,587 Partner Non Recourse Debt- - - - - - - - - - - - - - - - - - Minimum Gain From Partner Non-Recourse Debt *- - - - - - - - - - - Loss Reallocation to GP For Min Gain From Partner NR Debt- - - - - - - - - - - - - - - - - - Minimum Gain From Partnership Non-Recourse Debt- - - - - - - - - - - - - 884,678 2,749,064 4,595,672 6,412,987 8,164,574 Capital Account - LP After Partner NR Debt Reallocation5,365,086 5,365,086 12,800,813 20,803,843 18,563,473 16,413,076 14,255,305 12,126,545 10,041,539 7,966,291 5,903,249 3,824,249 1,746,434 (292,619) (2,301,341) (4,292,286) (6,253,942) (8,080,538) Allocated Minimum Gain to LP 99.99%- - - - - - - - - - - - - 884,590 2,748,789 4,595,212 6,412,346 8,163,758 (If Losses are reduced from 99.99% Post Credits:)2036 99.99%Expected basis for future losses (Capital Plus Min Gain)5,365,086 5,365,086 12,800,813 20,803,843 18,563,473 16,413,076 14,255,305 12,126,545 10,041,539 7,966,291 5,903,249 3,824,249 1,746,434 591,971 447,449 302,926 158,404 83,220 Loss Reallocation to GP (No Capital and No Min Gain) - - - - - - - - - - - - - - - - - - Total Reallocation of Losses to GP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - * Assumes that Partner Non Recourse Debt is Last in order of priority.Note: LP Capital Account assumes no reduction from cash flow, as the Benefit Schedule does not include it as a benefit.
Exh. K - 1
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Exhibit K
TAX CREDIT MANAGEMENT REQUIREMENTS
Financial, Tax and other Information
Annual Reporting and Quarterly Reporting will be coordinated through Integratec or any
other Third Party Vendor as designated by the Limited Partner
Annual Reporting: An annual report shall be provided to the Investor Limited Partner within 120
days of calendar year-end. This report must include all of the information detailed below:
• Any information required by the Investor Limited Partner to complete its annual Tax
Return, including, but not limited to Form 1065, Schedule K-1 (or its successor form)
prepared on a tax basis and an Apportionment Schedule (if applicable) for the Partnership
within 120 days of calendar year-end.
• Copy of Tax Extension (if applicable).
• General Partner will submit Draft Tax Returns to Investor Limited Partner for its approval
prior to filing within 120 days of calendar year-end.
• Audited financial statements for the Partnership within 120 days of calendar year-end. Such
audited report should include an audited balance sheet, an audited statement of income and
expenses, an opinion by the Partnership’s regular auditors as to the financial condition of
the Partnership, auditors report on internal control, an auditors report on compliance with
specific requirements of applicable programs, the results of operations, a statement of the
Partners’ equity, and changes in financial condition and cash flow from the preceding year.
All such reports shall be prepared in accordance with GAAP by the Partnership’s regular
certified public accountants. The books of account of the Partnership shall be kept on the
accrual basis of accounting.
• During Construction and Lease-Up, a Balance Sheet for the Partnership within 120 days of
calendar year-end.
• General Partner will submit the General Partners’ and Guarantors’ annual audited financial
statements, including balance sheets and income statements, and federal income tax returns
(including all Schedule K-1s and information returns) within 30 days after the filing of
such Person’s federal income tax or information return. All such financial statements must
be in form and detail acceptable to the Investor Limited Partner and must be certified as to
accuracy by each Person with respect to itself. The financial statements must be prepared
by a Certified Public Accountant acceptable to the Investor Limited Partner. All financial
statements for individuals must be on the Investor Limited Partner’s then-current personal
financial statement form or such other form satisfactory to the Special Limited Partner.
• An annual proforma operating budget for the succeeding calendar year shall be prepared
by the General Partner and furnished to the Investor Limited Partner before December 1st
of each year. In addition, the General Partner shall prepare and furnish to the Investor
Limited Partner an estimate of the profits and losses of the Partnership for federal income
tax purposes for the current Fiscal Year not later than September 30 of each year. If the
General Partner determines that the actual operating results shown on any annual budget
will vary from such budget by more than 10%, the General Partner will immediately give
the Investor Limited Partner written notice of such variance together with a written
explanation.
Exh. K - 2
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• A copy of each low-income housing tax credit compliance report delivered to or prepared
by the applicable tax credit monitoring agency with respect to the Project.
• A schedule setting forth the adjustments necessary, if any, to state the income of the
Partnership using the longer depreciable lives available under GAAP (rather than the
depreciable lives used for federal income tax purposes).
• Copies of any filings made by the Partnership with respect to the Project’s compliance with
rent and income restrictions set forth in any Regulatory Agreement or required by any
Lender or Governmental Agency with respect to the Project.
• Delivery of the attached certification from the General Partner (Attachment A).
• Certification that Real Estate Taxes are current and have been paid in full.
• Such other information as the Investor Limited Partner may specifically request from time
to time with regard to the business operations of the Partnership.
Quarterly Reporting: The Managing General Partner shall prepare a report within 60 days of the
end of the first, second, and third calendar quarters to the Investor Limited Partner. These reports
should provide sufficient financial and property information for the Investor Limited Partner to
monitor its investment and should include:
• Status of project under construction, including projected and actual start date, percentage
complete, and projected and actual end date, and any material budget issues or cost
overruns (including fourth quarter).
• Status of projects in lease-up, including projected and actual start date, percentage leased,
and projected and actual lease-up end date, (including fourth quarter).
• During lease-up, a Rent Roll should be submitted monthly. When lease-up is complete, a
Rent Roll should be submitted quarterly.
• Unaudited financial statements and footnotes to the financial statements, including a
balance sheet, income statement, statement of cash flows, reserve deposits and balances
for such quarter, and as a note to the financial statements, a schedule of all loans or
advances made to the Partnership by the General Partner pursuant to the Partnership
Agreement. For the avoidance of doubt, during construction of the Project and continuing
after Permanent Mortgage Commencement, an unaudited balance sheet of the Company
will need to be delivered to the Investor Limited Partner on a quarterly basis.
• A report detailing any material notice (of which the General Partner is aware) received by
the General Partner of (i) an Internal Revenue Service proceeding involving the
Partnership, (ii) any lapse, cancellation, or non-renewal of an insurance policy that insures
the Partnership or its Property, and (iii) any other material notice (including fourth quarter).
• Notification of any new or revised submission of Previous Participation Certificate (form
HUD-2530) including all applicable physical inspection dates and corresponding
rating/score (including fourth quarter).
• During construction, a copy of each draw request for construction or development costs as
such requests are made to the Lender.
• Notification of any changes to the list of income designations for each Unit in the Project
(required because the Minimum Set-Aside is met via Income Averaging Election).
Ongoing Information
• Ongoing notification all insurance requirements are being met
Exh. K - 3
#231323409_v6
• Prompt notification of any casualty or other significant adverse event relating to the
Partnership including, without limitation, notification of any issues surrounding insurance
claims which impact the delivery of credits.
Miscellaneous Information
• During construction and lease-up, anticipated tax credit adjuster amounts for properties
experiencing significant construction and/or lease-up delays (including fourth quarter).
• Upon occupancy of 100% of the Low Income Units in the Project by Qualified Tenants,
such achievement shall be confirmed by the Management Agent and certified by the
Managing General Partner, with a copy of such confirmation and certification, together
with a copy of the rent roll emailed to the Investor Limited Partner.
• In connection with delivery of the Fourth Installment, delivery via email of a report of
initial tenant files conducted by a qualified third-party firm reasonably approved by the
Investor Limited Partner. For the avoidance of doubt, only the report of the initial tenant
files should be emailed to the Investor Limited Partner, not the initial tenant files
themselves.
• After Conversion, estimated timing for receipt of 8609s.
Exh. K - 4
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Attachment A
Certification Regarding
Vista Breeze
CERTIFICATION dated ___________ __, 20[___] is delivered by APC VISTA BREEZE,
LLC, a Florida limited liability company (the “Managing General Partner”) to BANK OF
AMERICA, N.A., a national banking association (“BANA”) and BANC OF AMERICA CDC
SPECIAL HOLDING COMPANY, INC., a North Carolina corporation (“BANA CDC”),
regarding the current conditions of the property owned by VISTA BREEZE, LTD., a Florida
limited partnership (the “Partnership”). The limited partner of the Partnership is BANK OF
AMERICA, N.A., a national banking association, (the “Investor Limited Partner”). The
Partnership is currently governed by and operating according to that certain Amended and Restated
Agreement of Limited Partnership (the “Partnership Agreement”)] dated as of December 15,
2023 (the “Closing Date”).
The undersigned certifies to BANA and BANA CDC with regard to Vista Breeze (the
“Project”) as follows:
1. No litigation or proceeding against the Partnership, any General Partner, or
Guarantor nor any other litigation or proceeding directly affecting the Project, is pending before
any court, administrative agency or other Governmental Agency which would, if adversely
determined, have a material adverse effect on the Partnership, any General Partner or Guarantor,
or their respective businesses or operations, except for such matters as to which the likelihood of
such a determination adverse to the Partnership is, in the opinion of counsel to the Partnership,
remote. If such litigation has been filed, a statement detailing the litigation and the potential (or
actual) outcome should be added at the end of this certificate.
2. No default by any General Partner, any affiliate thereof having any relationship
with the Project, or the Partnership, in any material respect has occurred or is continuing (nor has
there occurred any continuing event which, with the giving of notice or the passage of time or
both, would constitute such a default in any material respect) under any document related to the
Project.
3. No General Partner has received any notices of any proceedings from the Internal
Revenue Service pertaining to the Partnership and, if such notices have been received, then the
Managing General Partner will supply a statement at the end of this certificate detailing what
corrective actions have been or will be taken.
4. Since the Closing Date, no General Partner has stored (except in compliance with
applicable hazardous waste laws) or disposed of any hazardous material at the Project; (ii) there
has been no direct or indirect transportation or arrangement for the transportation of any hazardous
material to, at or from the Project (except in compliance with applicable hazardous waste laws);
(iii) no potential or known release, or threat of release, of any hazardous material at or from the
Project has occurred; and (iv) no events have occurred at the property with regard to its
environmental condition which would require a General Partner to provide notice to the Investor
Limited Partner, BANA or BANA CDC under the terms of the Partnership Agreement.
Exh. K - 5
#231323409_v6
5. [The Accountants have analyzed all Capital Accounts for minimum gain and such
analysis does not indicate a reallocation of losses from depreciation and low-income housing tax
credits away from the Investor Limited Partner and to a General Partner at any time during the
Compliance Period.] [The Accountants have analyzed all Capital Accounts for minimum gain and
such analysis does not indicate a reallocation of losses from depreciation and low-income housing
tax credits away from the Investor Limited Partner and to a General Partner in an earlier year than
was projected in the initial economic projections provided to BANA on the Closing Date.] [The
Accountants have analyzed all Capital Accounts for minimum gain and such analysis does indicate
a reallocation of losses from depreciation and low-income housing tax credits away from the
Investor Limited Partner and to a General Partner in year __ of the Compliance Period. If this
option is selected, please set forth how any potential reallocations will be addressed.]
6. The Managing General Partner certifies that Real Estate Taxes are current and have
been paid in full.
The undersigned acknowledges that BANA and BANA CDC will rely upon the foregoing
certifications for purposes of its review of the annual reports and tax returns provided to it by the
Partnership and hereby consents to such reliance.
Explanation of any Issues or Qualifications of the Prior Representations: [If none, simply
indicate N/A below.]
1.
2.
3.
4.
5.
Exh. K - 6
#231323409_v6
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be duly executed
as of the date and year first above written.
MANAGING GENERAL PARTNER: APC VISTA BREEZE, LLC, a Florida limited
liability company
By:
Kenneth Naylor, Vice President
Exh. L - 1
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Exhibit L
Initial Unit Designations
Exh. N - 1
#231323409_v6
Exhibit N
SUMMARY OF PARTNERSHIP ELECTIONS AND SPECIAL ALLOCATIONS
1. Partnership Elections
a. Election to be treated as an “electing real property trade or business” under Section
163(j)(7)(B) of the Code only at the direction of, or with the Consent of, the Investor
Limited Partner [see Section 12.3A]
b. Residential rental property, site improvements and personal property costs,
respectively, over thirty (30) years, ninety-one percent (91%) over fifteen (15) years
and nine percent (9%) over twenty (20 years, and ninety-one percent (91%) over
five (5) years and nine percent (9%) over nine (9) years, for federal income tax
purposes and over forty (40) years, twenty (20) years and ten (10) years for financial
accounting purposes [see Section 12.3B]
c. Election under Section 168(k)(7) of the Code to elect out of “bonus depreciation”
which is available for any personal property and site work costs for the year in
which they are placed in service [see Sections 6.4R]
2. Special Allocations
a. Any income earned by the Partnership prior to the Development Obligation Date
shall be specially allocated to the Managing General Partner [Section 10.5F]
Exh. O - 1
#231323409_v6
KH 1103816
EXHIBIT B-3 TO CERTIFICATE
Certificate of Status of the Partnership
State of Florida
Department of State
I certify from the records of this office that VISTA BREEZE,LTD.is a limited
partnership organized under the laws of the State of Florida,filed on October 20,
2020.
The document number of this limited partnership is A20000000470.
I further certify that said limited partnership has paid all fees due this office
through December 31,2023 and that its status is active.
I further certify that said limited partnership has not filed a Certificate of
Withdrawal.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee,the Capital,this
the Twenty-eighth day of
November,2023
Tracking Number:1830807203CU
To authenticate this certificate,visit the following site,enter this number,and then
follow the instructions displayed.
https://services.sunbiz.org/Filings/CertificateOfStatus/CertificateAuthentication
KH 1103816
EXHIBIT C-1 TO CERTIFICATE
Articles of Organization of the General Partner
850-617-6381 10/7/2020 9:45:12 AM PAGE 2/002 Fax Server
October 7, 2020
APC VISTA BREEZE, LLC
161 NW 6TH ST STE 1020
MIAMI, FL 33136US
FLORIDA DEPARTMENT OF STATE
Division of Corporations
The Articles of Organization for APC VISTA BREEZE, LLC were filed on
October 6, 2020, and assigned document number L20000304327. Please refer
to this number whenever corresponding with this office.
T he certification you requested is enclosed. To be official, the
certification for a certified copy must be attached to the original
document number that was electronically submitted and filed under FAX
audit number H20000348016.
To maintain "active" status with the Division of Corporations, an annual
report must be filed yearly between January 1st and May 1st beginning in
the year following the file date or effective date indicated above. If
the annual report is not filed by May 1st, a $400 late fee will be added.
It is your responsibility to remember to file your annual report in a
timely manner.
A Federal Employer Identification Number (FEI/EIN) will be required when
this report is filed. Apply today with the IRS online at:
https://sa.www4.irs.gov/modiein/individual/index.jsp.
Please be aware if the limited liability company address changes, it is
the responsibility of the limited liability to notify this office.
Should you have any questions regarding this matter, please contact this
office at the address given below.
Carlos E Rico
Regulatory Specialist III
New Filing Section
D ivision of Corporations Letter Number: 520A00019507
P.O BOX 6327 — Tallahassee, Florida 32314
850-617-6381 10/7/2020 9:45:12 AM PAGE 1/002 Fax Server
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I certify the attached is a true and correct copy of the Articles of
Organization of APC VISTA BREEZE, LLC, a limited liability company
organized under the laws of the state of Florida, filed on
October 6, 2020, as shown by the records of this office.
I further certify the document was electronically received under FAX audit
number H20000348016. This certificate is issued in accordance with
section 15.16, Florida Statutes, and authenticated by the code noted below
The document number of this limited liability company is L20000304327.
gsw546 Authentication Code: 520A00019507-100720-L20000304327-1/1
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Seventh day of October, 2020
Secretary of of State
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ARTICLES OF ORGANIZATION OF
APC VISTA BREEZE, LLC
The undersigned, for the purpose of forming a limited liability company under the Florida
Revised Limited Liability Company Act, Florida Statutes Chapter 605, as amended, hereby makes,
acknowledges and files the following Articles of Organization.
ARTICLE I - NAME
The name of the limited liability company is APC Vista Breeze, LLC (the "Company").
ARTICLE II - ADDRESS
The mailing address and street address of the principal office of the Company is 161 NW 6th
Street, Suite 1020, Miami, Florida 33136.
ARTICLE III - DURATION
The period of duration for the Company shall be perpetual.
ARTICLE IV - REGISTERED OFFICE AND AGENT AND ADDRESS
The name and street address of the registered agent of the Company in the State of Florida
are:
Name Address
Brian J. McDonough 150 West Flagler St.
Museum Tower, Suite 2200
Miami, Florida 33130
ARTICLE V — MANAGEMENT
The Company shall be manager-managed. The name and address of the initial manager of
the Company is:
APCHD MM II Inc.
161 NW 6TH St., Suite 1020
Miami, FL 33136
IN WITNESS WHEREOF, the undersigned has made and subscribed these Articles of
Organization on the day of October 2020.
cDonough,
ed Representative
REGISTERED AGENT'S ACCEPTANCE
Having been named as registered agent and to accept service of process for APC Vista
Breeze, LLC at the place designated in this certificate, the undersigned hereby accepts the
appointment as registered agent and agrees to act in this capacity. The undersigned further agrees to
comply with the provisions of all statutes relating to the proper and complete performance of his
duties, and is familiar with and accepts the obligations of his position as registered agent as provided
for in Chapter 605, Florida Statutes.
Dated: October (e , 2020
Brian
Regis
#8881324 vl
KH 1103816
EXHIBIT C-2 TO CERTIFICATE
Operating Agreement of the General Partner
OPERATING AGREEMENT
OF
APC VISTA BREEZE, LLC
THIS OPERATING AGREEMENT (the “Operating Agreement”) is entered into by the
undersigned (each, a “Member” and, collectively, the “Members”) effective as of the ___ day of
August, 2022.
RECITAL
The Members formed APC VISTA BREEZE, LLC, a limited liability company (the
“Company”), under the Florida Revised Limited Liability Company Act for the purposes set forth
herein, and desire to enter into this Operating Agreement in order to set forth the terms and
conditions of the business and affairs of the Company and to determine the rights and obligations of
the Members.
NOW, THEREFORE, the Members, intending to be legally bound by this Operating
Agreement, hereby agree that the limited liability company operating agreement of the Company
shall be as follows:
ARTICLE I
DEFINITIONS
When used in this Operating Agreement, the following terms shall have the meanings set
forth below.
1.1 “Act” means the Florida Revised Limited Liability Company Act, as amended from
time to time, Chapter 605, Florida Statutes (or the corresponding provision(s) of any succeeding
law).
1.2 “Capital Contribution(s)” means the amount of cash and the agreed value of property,
services rendered, or a promissory note or other obligation to contribute cash or property or to
perform services contributed by the Members for such Members’ Interest in the Company, equal to
the sum of the Members’ initial Capital Contributions plus the Members’ additional Capital
Contributions, if any, made pursuant to Sections 4.1 and 4.2, respectively.
1.3 “Code” means the Internal Revenue Code of 1986 and the regulations promulgated
thereunder, as amended from time to time (or any corresponding provision or provisions of
succeeding law).
1.4 “Interest” means the entire ownership interest of a Member in the Company at any
particular time expressed as a percentage of all Interests in the Company (viz. 100%). The initial
Interest of each Member shall be set forth in Schedule A attached hereto.
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
2
1.5 “Manager” means APCHD MM II Inc., the manager of this limited liability company.
1.6 “Member(s)” means the undersigned or the permitted assignee or transferee of the
Member pursuant to this Operating Agreement.
1.7 “Owner Entity” means VISTA BREEZE, Ltd., a Florida limited partnership.
1.8 “Person” means any individual, partnership, firm, corporation, limited liability
company, joint-stock company, trust, or other entity.
1.9 “Project” means the acquisition, ownership, leasing, development, rehabilitation,
management, and operation of the Property by the Owner Entity.
1.10 “Property” means a multi-family development located in unincorporated Miami-Dade
County, Florida.
ARTICLE II
FORMATION
2.1 Organization. Pursuant to the filing of the Articles of Organization of the Company
with the Florida Department of State on October 6, 2020, the Members organized the Company as a
Florida limited liability company pursuant to the provisions of the Act.
2.2 Operating Agreement. The Members, by executing this Operating Agreement, hereby
agree to the terms and conditions of this Operating Agreement, as they may from time to time be
amended. To the extent any provision of this Operating Agreement is prohibited or ineffective under
the Act, this Operating Agreement shall be deemed to be amended to the least extent necessary in
order to make this Operating Agreement effective under the Act. In the event the Act is subsequently
amended or interpreted in such a way to validate any provision of this Operating Agreement that was
formerly invalid, such provision shall be considered to be valid from the effective date of such
amendment or interpretation.
ARTICLE III
PURPOSE; NATURE OF BUSINESS
3.1 Purpose; Nature of Business. The purpose of the Company shall be to engage in any
and all lawful business that may be engaged in by a limited liability company organized under the
Act, as such business activities may be determined by the Manager from time to time.
3.2 Powers. The Company shall have all powers of a limited liability company under the
Act and the authority to do all things necessary or convenient to accomplish its purpose and operate
its business as described in Section 3.1.
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
3
ARTICLE IV
MEMBERS AND CAPITAL
4.1 Members and Initial Capital Contribution. The ownership interest of a Member in the
Company at any particular time (the “Interest”) shall be expressed as a percentage of all Interests in
the Company (viz. 100%) and shall include, without limitation, the right of such Member to any and
all benefits, allocations and distributions to which a Member may be entitled as provided in this
Agreement and in the Act, together with the obligations of such Member to comply with all of the
terms and provisions of this Agreement and of the Act. The name, address, value of the initial
capital contribution and Interests of the Members shall be set forth on Schedule A attached hereto.
4.2 Additional Capital Contributions; Loans. The Members shall have no obligation to
make any additional capital contributions to the Company. The Members may make additional
contributions of capital to the Company at such times and in such amounts as the Manager
determines are necessary, appropriate, or desirable. With the approval of Manager, any Member
shall be permitted to make a loan or loans to the Company upon such terms as the Manager shall
approve. For purposes of this provision, any advances by Manager or any affiliate of Manager
pursuant to (or in lieu of) any guaranty of obligations of the Company or otherwise with respect to
the Project shall be deemed to be loans to the Company. Any such loans shall be repaid in full prior
to any distributions of cash or other assets to the Members.
4.3 No Benefit Conferred Upon Creditors. The provisions of this Agreement, including,
without limitation, this Article IV, are intended to benefit the Members and, to the fullest extent
permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the
Company (and no such creditor of the Company shall be a third-party beneficiary of this Agreement),
and no Member shall have any duty or obligation to any creditor of the Company to make any
additional capital contributions to the Company.
ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS
5.1 Distributions. All distributions of cash or other assets of the Company shall be made
and paid to the Members in accordance with their Interests, and in any event only after the Manager
determines that there is sufficient cash available for distributions following repayment of any
obligations of the Company and establishment of reserves as determined in Manager’s sole
discretion. Any and all such distributions will be payable to the Members pro rata in accordance
with their Interests.
5.2 Allocations. All items of income, gain, loss, deduction, and credit shall be allocated to
the Members pro rata in accordance with their Interests.
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
4
ARTICLE VI
TAXATION
6.1 Income Tax Reporting. The Members are aware of the income tax consequences of
the allocations made by Article V and hereby agree to be bound by the provisions of Article V in
reporting the Members’ share of Company income and loss for federal and state income tax
purposes.
ARTICLE VII
RIGHTS, POWER, AND AUTHORITY
OF THE MANAGER AND THE MEMBERS
7.1 Management by the Manager. APCHD MM II Inc. is hereby appointed as the
Manager of the Company. The Manager shall have the full and exclusive (subject to Section 7.3
hereinbelow) right, power, and authority to manage the affairs of the Company and to bind the
Company, to make all decisions with respect thereto and to do or cause to be done any and all acts or
things deemed to be necessary, appropriate, or desirable to carry out or further the business of the
Company. The Manager shall perform its duties in good faith, in a manner it reasonably believes to
be in the best interests of the Company and with such care as an ordinarily prudent person in a like
position would use under similar circumstances. In performing its duties, the Manager shall be
entitled to rely on information, opinions, reports or statements, including financial statements and
other financial data, in each case, prepared and presented by one or more agents or employees of the
Company whom the Manager reasonably believes to be reliable and competent in the matters
presented or counsel, public accountants or other persons as to matters which the Manager
reasonably believes to be within such person=s professional or expert competence. No Manager
shall be liable for actions taken as a Manager of the Company, or for failure to take actions, if such
Manager performed its duties in compliance with this Section 7.1.
7.2 Action by the Members. Except as otherwise set forth in this Operating Agreement,
the Members shall have no right, power, or authority to manage the affairs of the Company or to bind
the Company or to make any decisions with respect thereto.
7.3 Delegation of Authority to Officers. The Manager hereby delegates general authority
to the officers of the Company listed in Section 8.1 below to act on behalf of the Company in the
same manner as the Manager, and hereby ratifies all actions previously taken by such officers on
behalf of the Company.
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
5
ARTICLE VIII
OFFICERS
8.1 Officers. The Company may have a President, a Secretary, a Treasurer and one or
more Vice-Presidents and such other officers and assistant officers and agents of the Company as
may be deemed desirable by the Manager. The same person may hold any two or more offices,
except that the same person may not simultaneously hold the office of President and Vice-President.
All officers shall serve until their respective successors are appointed by the Manager and qualified.
The following persons shall serve as the initial officers of the Company for a term of one (1) year
and until their successors are duly appointed by the Manager and qualified:
Chief Executive Officer: Howard D. Cohen
President: Randy Weisburd
Vice-President: Kenneth Cohen
Vice-President: Stanley Cohen
Secretary and Vice-President: Kenneth Naylor
8.2 Removal. Any officer of the Company may be removed, with or without cause, by the
Manager.
8.3 Resignation. Any officer of the Company may resign upon written notice being made
to the Manager. The resignation is effective upon receipt thereof by the Manager.
8.4 Vacancies. Any vacancy occurring among the officers of the Company may be filled
by the Manager. A person elected to fill a vacancy shall hold office only until the next appointment
of officers by the Manager and until his successor shall have been duly appointed and qualified.
ARTICLE IX
DISSOLUTION AND WINDING UP
9.1 Events of Dissolution. The Company shall be dissolved upon the first to occur of (a)
the written consent of the Manager or (b) the entry of a decree of judicial dissolution under the Act.
9.2 Winding Up. In the event of the dissolution of the Company for any reason, the
Manager shall commence to wind up the affairs of the Company and to liquidate its investments.
Any proceeds from liquidation, together with any assets which the Manager determines to distribute
in kind, shall be applied in the following order:
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
6
(a) First, the expenses of liquidation and the debts of the Company, including any
debts and expenses of the Company to any Member as permitted by this Operating
Agreement. Any reserves shall be established or continued which the Manager deems
reasonably necessary for any contingent or unforeseen liabilities or obligations of the
Company arising out of or in connection with the Company or its liquidation. Such reserves
shall be held by the Company for the purpose of disbursement in payment of any of the
aforementioned contingencies; and
(b) Second, at the expiration of such period as the Manager deems advisable, the
Company shall distribute the balance thereafter remaining in accordance with Section 5.1.
9.3 Termination and Cancellation. Upon the completion of the liquidation of the Company
and the distribution of all Company funds, the Company shall terminate, and the Manager shall have
the authority to execute and deliver Articles of Dissolution of the Company as well as any and all
other documents required to effectuate the dissolution and termination of the Company.
ARTICLE X
ADMINISTRATION
10.1 Books and Records. The Manager shall keep, or cause to be kept, at the principal
place of business of the Company true and correct books of account, in which shall be entered fully
and accurately each and every transaction of the Company. The Company’s taxable and fiscal years
shall be the same as the taxable and fiscal years of the Members.
10.2 Accounting Decisions; Tax Elections. All decisions as to accounting matters and tax
elections, except as specifically provided to the contrary in this Operating Agreement, shall be made
by the Manager. The Manager may rely upon the advice of the Company’s accountants and
professional advisors in making such decisions.
ARTICLE XI
LIMITATION OF LIABILITY; INDEMNIFICATION
11.1 Limited Liability. Except as otherwise provided by the Act, the debts, obligations, and
liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations, and liabilities of the Company. Neither the Manager nor the Members shall be obligated
personally for any such debt, obligation, or liability of the Company solely by reason of being a
manager or member. The failure of the Company to observe any formalities or requirements relating
to the exercise of its powers or the management of its business or affairs under this Operating
Agreement or the Act shall not be grounds for imposing personal liability on the Manager or the
Members for any debts, liabilities, or obligations of the Company. Except as otherwise expressly
required by the Act or other applicable law, the Members, in such Members’ capacity as such, shall
have no liability in excess of (a) the amount of such Members’ net Capital Contributions, (b) such
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
7
Members’ share of any assets and undistributed profits of the Company, and (c) the amount of any
distributions required to be returned pursuant to Section 605.0406 of the Act.
11.2 Indemnification. The Company (including any receiver or trustee of the Company)
shall, to the fullest extent provided or allowed by law, indemnify, save harmless and pay all
judgments and claims against the Manager, the officers of the Company, the Members and each of
the Members’ agents, affiliates, heirs, legal representatives, successors and assigns (each, an
“Indemnified Party”) from, against and in respect of any and all liability, loss, damage and expense
incurred or sustained by the Indemnified Party in connection with the business of the Company or by
reason of any act performed or omitted to be performed in connection with the activities of the
Company or in dealing with third parties on behalf of the Company, including costs and attorneys’
fees before and at trial and at all appellate levels, whether or not suit is instituted (which attorneys’
fees may be paid as incurred), and any amounts expended in the settlement of any claims of liability,
loss or damage, provided that the act or omission of the Indemnified Party does not constitute fraud
or willful misconduct by such Indemnified Party. The Company shall not pay for any insurance
covering liability of the Manager, the officers of the Company, the Members or the Members’ agents,
affiliates, heirs, legal representatives, successors and assigns for actions or omissions for which
indemnification is not permitted hereunder; provided, however, that nothing contained herein shall
preclude the Company from purchasing and paying for such types of insurance, including extended
coverage liability and casualty and worker’s compensation, as would be customary for any Person
owning, managing and/or operating comparable property and engaged in a similar business or from
naming the Manager, the officers of the Company, the Members and any of the Members’ agents,
affiliates, heirs, legal representatives, successors or assigns or any Indemnified Party as additional
insured parties thereunder.
11.3 Non-Exclusive Right. The provisions of this Article XI shall be in addition to and not
in limitation of any other rights of indemnification and reimbursement or limitations of liability to
which an Indemnified Party may be entitled under the Act, common law, or otherwise.
Notwithstanding any repeal of this Article XI or other amendment hereof, its provisions shall be
binding upon the Company (subject only to the exceptions above set forth) as to any claim, loss,
expense, liability, action, or damage due to or arising out of matters which occur during or relate to
the period prior to any such repeal or amendment of this Article XI.
ARTICLE XII
AMENDMENT
12.1 Amendment. Except as other provided herein, this Operating Agreement may not be
altered or modified except by the unanimous prior written consent of all of the Members.
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
8
ARTICLE XIII
MISCELLANEOUS
13.1 Integration. This Operating Agreement constitutes the Members’ entire agreement
with respect to the subject matter hereof and supersedes any and all prior oral or written
understandings with respect to the subject matter hereof.
13.2 Binding Effect. This Operating Agreement shall be binding upon and inure to the
benefit of the undersigned, their legal representatives, heirs, successors, and assigns.
13.3 Applicable Laws. This Operating Agreement and the rights and duties of the
Members hereunder shall be governed by, and interpreted and construed in accordance with, the laws
of the State of Florida.
13.4 Headings. The article and section headings in this Operating Agreement are inserted
as a matter of convenience and are for reference only and shall not be construed to define, limit,
extend or describe the scope of this Operating Agreement or the intent of any provision.
13.5 Number and Gender. Whenever required by the context hereof, the singular shall
include the plural, and vice versa and the masculine gender shall include the feminine and neuter
genders, and vice versa.
13.6 Counterparts. This Operating Agreement may be executed in several counterparts, and
all so executed shall constitute one Operating Agreement binding on all of the Members hereto,
notwithstanding that all of the parties are not signatory to the original or the same counterpart.
IN WITNESS WHEREOF, this Operating Agreement has been made and executed by all of
the Members effective as of the date first written above.
MEMBERS:
APCHD MM II INC.,
a Delaware corporation
By: ________________________________
Name: Howard D. Cohen
Title: Chief Executive Officer
HOWARD D. COHEN REVOCABLE
TRUST U/A/D 4/6/1993
By: _______________________________
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
Howard D. Cohen, Sole Trustee
9
SCHEDULE A
NAME, ADDRESS, INITIAL
CAPITAL CONTRIBUTIONS AND INTERESTS OF THE MEMBERS
Name of Member Address of Member
Value of Initial
Capital
Contribution of
Member
Interest
Howard D. Cohen
Revocable Trust
1025 Kane Concourse
Suite 215
Bay Harbor Islands,
FL 33154
$99.00 99%
APCHD MM II Inc. 1025 Kane Concourse
Suite 215
Bay Harbor Islands,
FL 33154
$1.00 1%
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
KH 1103816
EXHIBIT C-3 TO CERTIFICATE
Certificate of Status for the General Partner
State of Florida
Department of State
I certify from the records of this office that APC VISTA BREEZE,LLC is a
limited liability company organized under the laws of the State of Florida,filed
on October 6,2020.
The document number of this limited liability company is L20000304327.
I further certify that said limited liability company has paid all fees due this
office through December 31,2023,that its most recent annual report was filed
on March 23,2023,and that its status is active.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee,the Capital,this
the Twenty-eighth day of
November,2023
Tracking Number:2914847173CU
To authenticate this certificate,visit the following site,enter this number,and then
follow the instructions displayed.
https://services.sunbiz.org/Filings/CertificateOfStatus/CertificateAuthentication
KH 1103816
EXHIBIT D-1 TO CERTIFICATE
Articles of Incorporation of the Manager
Delaware
The First State
Page 1
6175597 8100H Authentication: 203886090
SR# 20212937684 Date: 08-10-21
You may verify this certificate online at corp.delaware.gov/authver.shtml
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT
COPIES OF ALL DOCUMENTS ON FILE OF “APCHD MM II INC.” AS
RECEIVED AND FILED IN THIS OFFICE.
THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:
CERTIFICATE OF INCORPORATION, FILED THE SEVENTH DAY OF
OCTOBER, A.D. 2016, AT 4:16 O`CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID
CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE
AFORESAID CORPORATION, “APCHD MM II INC.”.
State of Delaware
Secretary of State
Division of Corporations
Delivered 04:16 PM 10/07/2016
FILED 04:16 PM 10/07/2016
SR 20166121586 - FileNumber 6175597
CERTIFICATE OF INCORPORATION
FOR
APCHD MM II INC.
ARTICLE I
The name of the corporation is APCHD MM II INC. (the “Corporation”).
ARTICLE II
The address of its registered office in the State of Delaware is 2711 Centerville Road,
Suite 400, City of Wilmington, and County of New Castle, Delaware 19808. The name of its
registered agent at such address is Corporation Sendee Company.
ARTICLE HI
The Corporation may engage in any activity or business permitted under the laws of
the United States and the General Corporation Law of Delaware.
ARTICLE IV
The total number of shares of stock in which the Corporation shall have authority to
issue is One Thousand (1,000) shares of Common Stock with a par value of $ 1.00 per share.
ARTICLE V
The name of the Incorporator is Danita Swider and the address of the Incorporator is
c/o Greenberg Traurig, LLP, 77 W. Wacker Drive, Suite 3100, Chicago, IL 6060L
ARTICLE VI
The Board of Directors of the Corporation shall consist of at least one (1) director,
with the exact number to be fixed from time to time in the manner provided in the
Corporation ’s Bylaws, who will serve as the Corporation ’s director until successors are duly
elected and qualified.
ARTICLE VII
No director of the Corporation shall be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director ’s duty of loyalty to the Corporation or its stockholders; (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing violation of
law; (iii) under §174 of the Delaware General Corporation Law; or (iv) for any transaction
from which the director derived an improper personal benefit. It is the intent that this
CHI 67482095v1
provision be interpreted to provide the maximum protection against liability afforded to
directors under the Delaware General Corporation Law in existence either now or hereafter.
ARTICLE VIII
This Corporation shall indemnify and shall advance expenses to, and may purchase
and maintain insurance on behalf of, its officers and directors to the fullest extent permitted
by law as now or hereafter in effect. Without limiting the generality of the foregoing, the
bylaws of the Corporation may provide for indemnification and advancement of expenses to
officers, directors, employees and agents on such terms and conditions as the Board of
Directors may from time to time deem appropriate or advisable.
ARTICLE IX
Unless otherwise provided by law, the bylaws of the Corporation may be altered,
amended or repealed, in whole or in part, or new bylaws may be adopted by the affirmative
vote of a majority of the directors in office or the affirmative vote of holders of a majority of
the shares entitled to vote on the matter.
ARTICLE X
The Corporation is to have perpetual existence.
IN WITNESS WHEREOF, the undersigned, being the Incorporator named above,
for the purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, does hereby make, file and record this Certificate, and does certify that the
fact herein stated are true and has accordingly hereunto set her hand this 7th day of October,
2016.
/s/ Danita L. Swider
Danita L. Swider
Incorporator
CHI 67482095v1
KH 1103816
EXHIBIT D-2 TO CERTIFICATE
Application by Foreign Corporation for Authorization to Transact Business in Florida of Manager
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Die Die88D2C3§C88j!iI certify the attached is a true and correct copy of the Application by Foreign
Corporation for Authorization to Transact Business in Florida for APCFID MM II
INC., a Delaware corporation authorized to transact business in the State of
Florida, qualified on April 18, 2018, as shown by the records of this office.
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Twentieth day of September, 2021
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212limSecretary of Statei iIi2
C'f&EOZZ (01-11)
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APPLICATION BY FOREIGN CORPORATION FOR AUTHORIZATION TO TRANSACT
BUSINESS IN FLORIDA
/:V CObtPLLAXCE WITH SECTfOiV607. ISOS, FLORIDA STA TOTES. THE FOLLOW MG IS SUBMITTED TO
REGISTER A FOREIGN CORPORATION TO TRANSACT BUSINESS IN THE STATE OF FLORIDA.
afchd mm ir Inc .
].
(Enter name of corporation; must include “INCORPORATED,” “COMPANY/1 "CORPORATION,"
"Inc.," 'Co.." "Corp,” Tnc/' "Co,” or "Corp.")
(If name unavailable in Florida, enter alternate corporate name adopted for the purpose of transacting business in Florida)
Delaware 81-4108409
3.2
(FEI number, iffipplicable)
(State or country under the law of which it is incorporated)
10/07/2036 ^ Perpetual
4.
(Date of incorporation)
Date of Filing Application with FC Department of State
0._________________________________________
(Date of duration, if other than perpetual)
(Date first transacted business in Florida, if prior to registration)
(SEE SECTIONS 607.1S01 * 607.1502, F.S., to determine penalty liability)
2950 $W '27th Avenue, Suite 200, Miami, PL 33133
7.(Principal office'•v.'drMs)
rsS
r(Current mailing address, if different)r*.c=»m-O
rrj
8. Name nnd street address of Florida registered agent: (P.O.Box NOT acceptable)
Brian I- McDonough, Esq.
r~>co mr".
Name:>o150 West Flagler St„ Suite 2200 O
Office Address:
Miami 33130 O
, Florida UJ‘iu
(Cits')(Zip code)
9. Registered agent’s acceptance:
Having teen named as registered agent and to accept service of process for the above stated corporation at the place
designated in this application, I hereby accept the appointment as registered agent and agree to act in this capacity. I
further agree to comply with the provisions of all statutes relative to the proper and complete performance of my
duties, and I am familiar with and accept the obligations of my position as registered agent.
f y w {(Rsa^ered .‘.geA? aVipiatuii)
10. Attached is a certificate of existence duly authenticated, not more than 90 days prior to delivery of this application to
the Department of State, by the Secretary of State or other official raving custody of corporate records in the jurisdiction
under the law of which it is incorporated.
11. Names and business addresses of officers and/or directors;
A. DIRECTORS
Howard D. Cohen
✓ Chairman;
1025 Kane Concourse, Suite 215
Adorew:
Bay Harbor Islands. FL 33 IM
Vice Chairman:
Address:« j*. . •
v
Director;4v
Address:
Director:
Address;
«£S
T|
B. OFFICERS
-x>
T:t
Randy Wsisburd
•J President:CO
1025 Kane Concourse, Suite 215, Bay Hatbot bloods, FL 33154 m
Address:O
/Kenneth Cohen, Vice President, 1025 Kwe Concourse, Suite 215, Bay Harbor Islands. FL 33154 q
Vice Prceidem:
/Swuley Cohen, Vice Presidsm, 1025 Kane Concourse, Suite 215, Bay.Harbor Islands, FL .13 i 54
. £ %
Kenneth Naylor, Vice President, 2950 SW 27th Ave„ Suit,-.290, Widih^FL 33133Address:
Secretary: _?:
Address:
J Kenneth Cohen, Treasuixr
'fwosurer:
1025 Kane Concourse, Suite 215, Buy Harbor Islands, FL 33154
Address:
NOTE; IfnecMtita ■tmach au addendum to the application lijHng additioaai officers and/or directors.
r
12.A4-
y \ \ j / Signahtre of Director or Officer
The office/ ortlirecior sijptinjg document (a»vd who is listed in number 11 above) affirms drat the facts stated herein
are true and that he or she is aware that fnlse uifonuotion submitted in a document to the Department of State constitutes
a third degree felony as provided for in S.817J55, F.S.
KeUiOfcTVi titwioft. V|Cg.fgfc6tt.e»ir
13.
(Typed or printed name and capacity of person signing application)
Delaware Page i
The First State
I, JEFFREY tf. BULLOCK, SECRETARY OF STATS Off THE STATE Off
DELAHARE, DO HEREBY CERTIFY "APCKD «H II INC. * IS DULY IHCORPOiiATED
»;
UNDER the LAWS OF THE STATE OF DELAWARE AHD IS IN GOOD STANDING AND
HAS A LEGAL CORPORATE EXISTENCE SO FAR AS THE RECORDS OF THIS
OFFICE SBOR, AS OF THE EIGHTEENTH DAY OF APRIL, A.D. 2014.
AND X DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE
BEEN FILED TO DATE.
AND I DO HEREBY FURTHER CERTIFY THAT TUB SAID "APCHD MM II
, A.D. 201S.
" WAS INCORPORATED ON THE SEVENTH PAX OF OCTOBER
Ci. *C t’INC.
AND I DO HEREBY FURTHER CERTIFY TH*? THE FRANCHISE TAXES HAVE
a
been paid to date.no
r*car n26:o
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CO m:
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o
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6175597 8300 Authentication: 202535257
Date: 04-18-18
SR* 20182803900
You may verify thi* certificate onSne at corp.delaware.EOv/authver.sTnnil
KH 1103816
EXHIBIT D-3 TO CERTIFICATE
Bylaws of the Manager
CHI 67512504v2
BYLAWS
OF
APCHD MM II INC.
ARTICLE I
Meetings of Stockholders
Section 1.1 Annual Meetings. If required by applicable law, an annual meeting of
stockholders shall be held for the election of directors at such date, time and place, if any, ei ther
within or without the State of Delaware, as may be designated by resolution of the Board of
Directors from time to time. Any other proper business may be transacted at the annual meeting.
Section 1.2 Special Meetings. Special meetings of stockholders for any purpose or
purposes may be called at any time by the Board of Directors, but such special meetings may not
be called by any other person or pers ons. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 1.3 Notice of Meetings. Whenever stockholders are required or permitted to
take any action at a meeting, a written notice of the meeting shall be given that shall state the
place, if any, date and hour of the meeting, the record date for determining stockholders entitled
to vote at the meeting, if such date is different from the record date for determining stockholders
entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes
for which the meeting is called. Unless otherwise provided by law, the certificate of
incorporation or these bylaws, the notice of any meeting shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at
such meeting, as of the record date for determining the stockholders entitled to notice of the
meeting. If mailed, such notice shall be deemed to be given when deposited in the United States
mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on
the records of the corporation.
Section 1.4 Adjournments. Any meeting of stockholders, annual or special, may
adjourn from time to time to reconvene at the same or some other place, and notice need not be
given of any such adjourned meeting if the time and place thereof are announced at the meeting
at which the adjournment is taken. At the adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting. If after the adjournment a new record date f or
stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a
new record date for notice of such adjourned meeting in accordance with Section 1.8 of these
bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to
vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
CHI 67512504v2 2
Section 1.5 Quorum. Except as otherwise provided by law, the certificate of
incorporation or these bylaws, at each meeting of stockholders the presence in person or by
proxy of the holders of a majority in voting power of the outstanding shares of stock entitled to
vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a
quorum, the stockholders so present may, by a majority in voting power thereof, adjourn the
meeting from time to time in the manner provided in Section 1.4 of these bylaws until a quorum
shall attend. Shares of its own stock belonging to the corporation or to another corporation, if a
majority of the shares entitled to vote in the election of directors of such other corporation is
held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for
quorum purposes; provided, however, that the foregoing shall not limit the right of the
corporation or any subsidiary of the corporation to vote stock, including but not limited to its
own stock, held by it in a fiduciary capacity.
Section 1.6 Organization. Meetings of stockholders shall be presided over by the
Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board,
if any, or in his or her absence by the President, or in his or her absence by a Vice President, if
any, or in the absence of the foregoing persons by a chairperson designated by the Boar d of
Directors, or in the absence of such designation by a chairperson chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the
meeting may appoint any person to act as secretary of the meeting.
Section 1.7 Voting; Proxies. Except as otherwise provided by or pursuant to the
provisions of the certificate of incorporation, each stockholder entitled to vote at any meeting of
stockholders shall be entitled to one vote for each share of stock held by such stockholder which
has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of
stockholders or to express consent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by proxy, but no such proxy shall
be voted or acted upon after three years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in person or by
delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. Voting
at meetings of stockholders need not be by written ballot. At all meetings of stockholders for the
election of directors at which a quorum is present a plurality of the votes cast shall be sufficient
to elect. All other elections and questions presented to the stockholders at a meeting at which a
quorum is present shall, unless otherwise provided by the certificate of incor poration, these
bylaws, the rules or regulations of any stock exchange applicable to the corporation, or
applicable law or pursuant to any regulation applicable to the corporation or its securities, be
decided by the affirmative vote of the holders of a majority in voting power of the shares of stock
of the corporation which are present in person or by proxy and entitled to vote thereon.
Section 1.8 Fixing Date for Determination of Stockholders of Record. In order that the
corporation may determine the stockholders entitled to notice of any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing without a me eting,
or entitled to receive payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange of stock or for
the purpose of any other lawful action, the Board of Directors may fix a record date, which
CHI 67512504v2 3
record date shall not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and which record date: (1) in the case of determination of
stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, shall,
unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before
the date of such meeting and, unless the Board of Directors determines, at the time it fixes such
record date, that a later date on or before the date of the meeting shall be the date for determining
the stockholders entitled to vote at such meeting, the record date for determining the
stockholders entitled to notice of such meeting shall also be the record date for determining the
stockholders entitled to vote at such meeting; (2) in the case of determination of stockholders
entitled to express consent to corporate action in writing without a meeting, shall not be more
than ten (10) days from the date upon which the resolution fixing the record date is adopted by
the Board of Directors; and (3) in the case of any other action, shall not be more than sixty (60)
days prior to such other action. If no record date is fixed: (1) the record date for det ermining
stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is held; (2) the
record date for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is required by law,
shall be the first date on which a signed written consent setting forth the action taken or proposed
to be taken is delivered to the corporation in accordance with applicable law, or, if prior action
by the Board of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and (3) the record
date for determining stockholders for any other purpose shall be at the close of business on the
day on which the Board of Directors adopts the res olution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors may fix a new
record date for the determination of stockholders entitled to vote at the adjourned meeting, and in
such case shall also fix as the record date for the stockholders entitled to notice of such
adjourned meeting the same or an earlier date as that fixed for the determination of stockholders
entitled to vote in accordance with the foregoing provisions of this Section 1.8 at the adjourned
meeting.
Section 1.9 List of Stockholders Entitled to Vote. The officer who has charge of the
stock ledger shall prepare and make, at least ten (10) days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at the meeting; provided, however, if the
record date for determining the stockholders entitled to vote is less than ten (10) days before the
meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the
meeting date, arranged in alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting for a period of at least
ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that
the information required to gain access to such list is provided with the notice of meeting or (ii)
during ordinary business hours at the principal place of business of the corporation. The list of
stockholders must also be open to examination at the meeting as required by applicable law.
Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the list of stockholders required by this Section 1.9 or to
vote in person or by proxy at any meeting of stockholders.
CHI 67512504v2 4
Section 1.10 Action By Written Consent of Stockholders. Unless otherwise restricted
by the certificate of incorporation, any action required or permitted to be taken at any annual or
special meeting of the stockholders may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which all shares entitled
to vote thereon were present and voted and shall be delivered to the corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or an officer or agent of
the corporation having custody of the book in which minutes of proceedings of stockholders are
recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or
registered mail, return receipt requested. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall, to the extent required by law, be
given to those stockholders who have not consented in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the record d ate for notice
of such meeting had been the date that written consents signed by a sufficient number of holders
to take the action were delivered to the corporation.
Section 1.11 Inspectors of Election. The corporation may, and shall if required by law,
in advance of any meeting of stockholders, appoint one or more inspectors of election, who may
be employees of the corporation, to act at the meeting or any adjournment thereof and to make a
written report thereof. The corporation may designate one or more persons as alternate inspectors
to replace any inspector who fails to act. In the event that no inspector so appointed or designated
is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one
or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of
his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with
strict impartiality and according to the best of his or her ability. The inspector or inspectors so
appointed or designated shall (i) ascertain the number of shares of capital stock of the
corporation outstanding and the voting power of each such share, (ii) determine the shares of
capital stock of the corporation represented at the meeting and the validity of proxies and ballots,
(iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and (v) certify their
determination of the number of shares of capital stock of the corporation represented at the
meeting and such inspectors’ count of all votes and ballots. Such certifica tion and report shall
specify such other information as may be required by applicable law. In determining the validity
and counting of proxies and ballots cast at any meeting of stockholders of the corporation, the
inspectors may consider such information as is permitted by applicable law. No person who is a
candidate for an office at an election may serve as an inspector at such election.
Section 1.12 Conduct of Meetings. The date and time of the opening and the closing of
the polls for each matter upon which the stockholders will vote at a meeting shall be announced
at the meeting by the person presiding over the meeting. The Board of Directors may adop t by
resolution such rules and regulations for the conduct of the meeting of stockholders as it shall
deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by
the Board of Directors, the person presiding over any meeting of stockholders shall have the
right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations
and procedures and to do all such acts as, in the judgment of such presiding person, are
appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether
CHI 67512504v2 5
adopted by the Board of Directors or prescribed by the presiding person at the meeting, may
include, without limitation, the following: (i) the establishment of an agenda or order of business
for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of
those present; (iii) limitations on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and cons tituted proxies or such other persons as
the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after
the time fixed for the commencement thereof; and (v) limitations on the time allotted to
questions or comments by participants. The presiding person at any meeting of stockholders, in
addition to making any other determinations that may be appropriate to the conduct of the
meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or busi ness
was not properly brought before the meeting and, if such presiding person should so determine,
such presiding person shall so declare to the meeting, and any such matter or business not
properly brought before the meeting shall not be transacted or considered. Unless and to the
extent determined by the Board of Directors or the person presiding over the meeting, meetings
of stockholders shall not be required to be held in accordance with the rules of parliamentary
procedure.
ARTICLE II
Board of Directors
Section 2.1 Number; Qualifications. The Board of Directors shall consist of one or
more members, the number thereof to be determined from time to time by resolution of the
Board of Directors. Directors need not be stockholders.
Section 2.2 Election; Resignation; Vacancies. The Board of Directors shall initially
consist of one director, and each director so elected shall hold office un til the first annual
meeting of stockholders and until his or her successor is duly elected and qualified. At the first
annual meeting of stockholders and at each annual meeting thereafter, the stockholders shall
elect directors each of whom shall hold office for a term of one year or until his or her successor
is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification
or removal. Any director may resign at any time upon notice to the corporation. Unless otherwise
provided by law or the certificate of incorporation, any newly created directorship or any
vacancy occurring in the Board of Directors for any cause may be filled by a majority of the
remaining members of the Board of Directors, although such majority is less than a quorum, or
by a plurality of the votes cast at a meeting of stockholders, and each director so elected shall
hold office until the expiration of the term of office of the director whom he or she has replaced
and until his or her successor is elected and qualified.
Section 2.3 Regular Meetings. Regular meetings of the Board of Directors may be
held at such places within or without the State of Delaware and at such times as the Board of
Directors may from time to time determine.
Section 2.4 Special Meetings. Special meetings of the Board of Directors may be held
at any time or place within or without the State of Delaware whenever called by the President,
any Vice President, the Secretary, or by any member of the Board of Directors. Notice of a
CHI 67512504v2 6
special meeting of the Board of Directors shall be given by the person or persons calling the
meeting at least twenty-four hours before the special meeting.
Section 2.5 Telephonic Meetings Permitted. Members of the Board of Directors, or
any committee designated by the Board of Directors, may participate in a meeting thereof by
means of conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a meeting pursuant
to this by-law shall constitute presence in person at such meeting.
Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board of
Directors the directors entitled to cast a majority of the votes of the whole Board of Directors
shall constitute a quorum for the transaction of business. Except in cases in which the certificate
of incorporation, these bylaws or applicable law otherwise provides, a majority of the votes
entitled to be cast by the directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.
Section 2.7 Organization. Meetings of the Board of Directors shall be presided over by
the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the
Board, if any, or in his or her absence by the President, or in their absence by a chairperson
chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her
absence the chairperson of the meeting may appoint any person to act as secretar y of the
meeting.
Section 2.8 Action by Unanimous Consent of Directors. Unless otherwise restricted by
the certificate of incorporation or these bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors, or of any committee thereof, may be taken without a
meeting if all members of the Board of Directors or such committee, as the case may be, consent
thereto in writing or by electronic transmission and the writing or writings or electronic
transmissions are filed with the minutes of proceedings of the board or committee in accordance
with applicable law.
ARTICLE III
Committees
Section 3.1 Committees. The Board of Directors may designate one or more
committees, each committee to consist of one or more of the directors of the corporation. The
Board of Directors may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of a member of the committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she or they constitute
a quorum, may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee, to the extent
permitted by law and to the extent provided in the resolution of the Board of Directors or these
bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it.
CHI 67512504v2 7
Section 3.2 Committee Rules. Unless the Board of Directors otherwise provides, each
committee designated by the Board of Directors ma y make, alter and repeal rules for the conduct
of its business. In the absence of such rules each committee shall conduct its business in the same
manner as the Board of Directors conducts its business pursuant to Article II of these bylaws.
ARTICLE IV
Officers
Section 4.1 Executive Officers; Election; Qualifications; Term of Office, Resignation;
Removal; Vacancies. The Board of Directors shall elect a President and Secretary, and it may, if
it so determines, choose a Chairperson of the Boar d and a Vice Chairperson of the Board from
among its members. The Board of Directors may also choose one or more Vice Presidents, one
or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other
officers as it shall from time to time deem necessary or desirable. Each such officer shall hold
office until the first meeting of the Board of Directors after the annual meeting of stockholders
next succeeding his or her election, and until his or her successor is elected and quali fied or until
his or her earlier death, resignation or removal. Any officer may resign at any time upon written
notice to the corporation. The Board of Directors may remove any officer with or without cause
at any time, but such removal shall be without pr ejudice to the contractual rights of such officer,
if any, with the corporation. Any number of offices may be held by the same person. Any
vacancy occurring in any office of the corporation by death, resignation, removal or otherwise
may be filled for the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 4.2 Powers and Duties of Executive Officers . The officers of the corporation
shall have such powers and duties in the management of the corporation as may be prescribed in
a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to
their respective offices, subject to the control of the Board of Directors. The Board of Directors
may require any officer, agent or employee to give security for the faithful performance of his or
her duties.
Section 4.3 Appointing Attorneys and Agents; Voting Securities of Other Entities .
Unless otherwise provided by resolution adopted by the Board of Directors, the Chairperson of
the Board, the President or any Vice President may from time to time appoint an attorney or
attorneys or agent or agents of the corporation, for, in the name and on behalf of the corporation,
to cast the votes which the corporation may be entitled to cast as the holder of stock or other
securities in any other corp oration or other entity, any of whose stock or other securities may be
held by the corporation, at meetings of the holders of the stock or other securities of such other
corporation or other entity, or to consent in writing, in the name of the corporation as such
holder, to any action by such other corporation or other entity, and may instruct the person or
persons so appointed as to the manner of casting such votes or giving such consents, and may
execute or cause to be executed for, in the name and on behalf of the corporation and under its
corporate seal or otherwise, all such written proxies or other instruments as he or she may deem
necessary or proper. Any of the rights set forth in this Section 4.3 which may be delegated to an
attorney or agent may also be exercised directly by the Chairperson of the Board, the President
or any Vice President.
CHI 67512504v2 8
ARTICLE V
Stock
Section 5.1 Certificates. Every holder of stock represented by certificates shall be
entitled to have a certificate signed by or in the name of the corporation by the Chairperson or
Vice Chairperson of the Board of Directors, certifying the number of shares owned by such
holder in the corporation. Any of or all the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before
such certificate is issued, it may be issued by the corporation with the same effect as if such
person were such officer, transfer agent, or registrar at the date of issue. The corporation shall
not have the power to issue a certificate in bearer form.
Section 5.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates .
The corporation may issue a new certificate of stock in the place of any certificate theretofore
issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the
owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the issuance of such
new certificate.
ARTICLE VI
Indemnification
Section 6.1 Right to Indemnification. The corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter
be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a
party or is otherwise involved in any action, suit or proceeding, whether civil, cr iminal,
administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person
for whom he or she is the legal representative, is or was a director or officer of the corporation
or, while a director or officer of the corporation, is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees)
reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as
otherwise provided in Section 6.3, the corporation shall be required to indemnify a Covered
Person in connection with a proceeding (or part thereof) commenced by such Covered Person
only if the commencement of such proceeding (or part thereof) by the Covered Person was
authorized in the specific case by the Board of Directors.
Section 6.2 Prepayment of Expenses. The corporation shall to the fullest extent not
prohibited by applicable law as it presently exists or may hereafter be amended , pay the expenses
(including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance
of its final disposition, provided, however, that, to the extent required by law, such payment of
expenses in advance of the final disposition of the proceeding shall be made only upon receipt of
CHI 67512504v2 9
an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately
determined that the Covered Person is not entitled to be indemnified under this Article VI or
otherwise.
Section 6.3 Claims. If a claim for indemnification (following the final disposition of
such action, suit or proceeding) or advancement of expenses under t his Article VI is not paid in
full within thirty (30) days after a written claim therefor by the Covered Person has been
received by the corporation, the Covered Person may file suit to recover the unpaid amount of
such claim and, if successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the corporation shall have the burden of proving that
the Covered Person is not entitled to the requested indemnification or advancement of expenses
under applicable law.
Section 6.4 Nonexclusivity of Rights. The rights conferred on any Covered Person by
this Article VI shall not be exclusive of any other righ ts which such Covered Person may have or
hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 6.5 Other Sources. The corporation’s obligation, if any, to indemnify or to
advance expenses to any Covered Person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or
nonprofit entity shall be reduced by any amount such Covered Person may collect as
indemnification or advancement of expenses from such other corporation, partnership, joint
venture, trust, enterprise or non-profit enterprise.
Section 6.6 Amendment or Repeal. Any repeal or modification of the foregoing
provisions of this Articl e VI shall not adversely affect any right or protection hereunder of any
Covered Person in respect of any act or omission occurring prior to the time of such repeal or
modification.
Section 6.7 Other Indemnification and Prepayment of Expenses. This Article VI shall
not limit the right of the corporation, to the extent and in the manner permitted by law, to
indemnify and to advance expenses to persons other than Covered Persons when and as
authorized by appropriate corporate action.
ARTICLE VII
Miscellaneous
Section 7.1 Fiscal Year. The fiscal year of the corporation shall be determined by
resolution of the Board of Directors.
Section 7.2 Seal. The corporate seal shall have the name of the corporation inscribed
thereon and shall be in such form as may be approved from time to time by the Board of
Directors.
Section 7.3 Manner of Notice. Except as otherwise provided herein or permitted by
applicable law, notices to directors and stockholders shall be in writing and delivered personally
CHI 67512504v2 10
or mailed to the directors or stockholders at their addresses appearing on the books of the
corporation. Notice to directors may be given by telecopier, telephone or other means of
electronic transmission.
Section 7.4 Waiver of Notice of Meetings of Stockholders, Directors and Committees .
Any waiver of notice, given by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to be transacted at
nor the purpose of any regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in a waiver of notice.
Section 7.5 Form of Records. Any records maintained by the corporation in the
regular course of its business, including its stock ledger, books of account, and minute books,
may be kept on, or by means of, or be in the form of, any information storage device or method,
provided that the records so kept can be converted into clearly legible pap er form within a
reasonable time.
Section 7.6 Amendment of Bylaws. These bylaws may be altered, amended or
repealed, and new bylaws made, by the Board of Directors, but the stockholders may make
additional bylaws and may alter and repeal any bylaws whether adopted by them or otherwise.
KH 1103816
EXHIBIT D-4 TO CERTIFICATE
Certificate of Good Standing for the Manager (DE)
Delaware
The First State
Page 1
6175597 8300 Authentication: 204672132
SR# 20234068654 Date: 11-28-23
You may verify this certificate online at corp.delaware.gov/authver.shtml
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY "APCHD MM II INC." IS DULY INCORPORATED
UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD STANDING AND
HAS A LEGAL CORPORATE EXISTENCE SO FAR AS THE RECORDS OF THIS
OFFICE SHOW, AS OF THE TWENTY-EIGHTH DAY OF NOVEMBER, A.D. 2023.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE
BEEN FILED TO DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE SAID "APCHD MM II
INC." WAS INCORPORATED ON THE SEVENTH DAY OF OCTOBER, A.D. 2016.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE
BEEN PAID TO DATE.
KH 1103816
EXHIBIT D-5 TO CERTIFICATE
Certificate of Status of the Manager (FL)
State of Florida
Department of State
I certify from the records of this office that APCHD MM II INC.is a Delaware
corporation authorized to transact business in the State of Florida,qualified on
April 18,2018.
The document number of this corporation is F18000001824.
I further certify that said corporation has paid all fees due this office through
December 31,2023,that its most recent annual report/uniform business report
was filed on October 3,2023,and that its status is active.
I further certify that said corporation has not filed a Certificate of Withdrawal.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee,the Capital,this
the Twenty-eighth day of
November,2023
Tracking Number:6688792852CU
To authenticate this certificate,visit the following site,enter this number,and then
follow the instructions displayed.
https://services.sunbiz.org/Filings/CertificateOfStatus/CertificateAuthentication
KH 1103816
EXHIBIT E-1 TO CERTIFICATE
Articles of Organization of Developer
850-617-6381 10/7/2020 9:51:16 AM PAGE 2/002 Fax Server
October 7, 2020 FLORIDA DEPARTMENT OF STA1E
Division of Corporations
APC VISTA BREEZE DEVELOPMENT, LLC
161 NW 6TH ST STE 1020
MIAMI, FL 33136US
The Articles of Organization for APC VISTA BREEZE DEVELOPMENT, LLC were
filed on October 6, 2020, and assigned document number L20000304293.
Please refer to this number whenever corresponding with this office.
The certification you requested is enclosed. To be official, the
certification for a certified copy must be attached to the original
document number that was electronically submitted and filed under FAX
audit number H20000348033.
To maintain "active" status with the Division of Corporations, an annual
report must be filed yearly between January 1st and May 1st beginning in
the year following the file date or effective date indicated above. If
the annual report is not filed by May 1st, a $400 late fee will be added.
It is your responsibility to remember to file your annual report in a
timely manner.
A Federal Employer Identification Number (FEI/EIN) will be required when
this report is filed. Apply today with the IRS online at:
https://sa.www4.irs.gov/modiein/individual/index.jsp.
Please be aware if the limited liability company address changes, it is
the responsibility of the limited liability to notify this office.
Should you have any questions regarding this matter, please contact this
office at the address given below.
Carlos E Rico
Regulatory Specialist III
New Filing Section
Division of Corporations Letter Number: 620A00019503
P.O BOX 6327 — Tallahassee, Flonda 32314
850-617-6381 10/7/2020 9:51:16 AM PAGE 1/002 Fax Server
EacrtaCDACENRCIM
wommoixam
J.
J.
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to °f floriba
Ihinnlment of 'tau.
I certify the attached is a true
Organization of APC VISTA BREEZE
company organized under the laws
October 6, 2020, as shown by the 3'‘,)
o riC
I further certify the document was electronically received under FAX audit :1r
a nd correct copy of the Articles of
DEVELOPMENT, LLC, a limited liability
of the state of Florida, filed on
records of this office.
number H20000348033. This certificate is issued in accordance with C
section 15.16, Florida Statutes, and authenticated by the code noted below7"/
The document number of this limited liability company is L20000304293. ilo
C,
Authentication Code: 620A00019503-100720-L20000304293-1/1
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Seventh day of October, 2020
Secretary of of State
gammxpammetmommen
ARTICLES OF ORGANIZATION OF
APC VISTA BREEZE DEVELOPMENT, LLC
The undersigned, for the purpose of forming a limited liability company under the Florida
Revised Limited Liability Company Act, Florida Statutes Chapter 605, as amended, hereby makes,
acknowledges and files the following Articles of Organization.
ARTICLE I - NAME
The name of the limited liability company is APC Vista Breeze Development, LLC (the
"Company").
ARTICLE II - ADDRESS
The mailing address and street address of the principal office of the Company is 161 NW 6th
Street, Suite 1020, Miami, Florida 33136.
are:
ARTICLE III - DURATION
The period of duration for the Company shall be perpetual.
ARTICLE IV - REGISTERED OFFICE AND AGENT AND ADDRESS
The name and street address of the registered agent of the Company in the State of Florida
Name Address
Brian J. McDonough 150 West Flagler St.
Museum Tower, Suite 2200
Miami, Florida 33130
ARTICLE V — MANAGEMENT
The Company shall be manager-managed. The name and address of the initial manager of
the Company is:
Howard D. Cohen
1025 Kane Concourse, Suite 215
Bay Harbor Islands, FL 33154
IN WITNESS WHEREOF, the undersigned has made and subscribed these Articles of
Organization on the October 2020.
Brian c I onoug ,
Auth d Representati
REGISTERED AGENT'S ACCEPTANCE
Having been named as registered agent and to accept service of process for APC Vista Breeze
Development, LLC at the place designated in this certificate, the undersigned hereby accepts the
appointment as registered agent and agrees to act in this capacity. The undersigned further agrees to
comply with the provisions of all statutes relating to the proper and complete performance of his
duties, and is familiar with and accepts the obligations of his position as registered agent as provided
for in Chapter 605, Florida Statutes.
Dated: October ,' , 2020
Bria cDonou
Regi ed Agent
#8881314 vl
KH 1103816
EXHIBIT E-2 TO CERTIFICATE
Operating Agreement of the Developer
OPERATING AGREEMENT OF
APC VISTA BREEZE DEVELOPMENT, LLC
(a Florida limited liability company)
THIS OPERATING AGREEMENT (the “Agreement”) is entered into by Atlantic Pacific
Communities, LLC, a Delaware limited liability company (the “Member”), effective as of the
______ day of August, 2022.
RECITAL
The Member has formed APC VISTA BREEZE DEVELOPMENT, LLC, a limited
liability company (the “Company”), under the Florida Revised Limited Liability Company Act
(the “Act”) for the purposes set forth herein, and, accordingly, desires to enter into this
Agreement in order to set forth the terms and conditions of the business and affairs of the
Company and to determine the rights and obligations of its Member.
NOW, THEREFORE, the Member, intending to be legally bound by this Agreement,
hereby agrees as follows:
1. Organization. The Member hereby organizes the Company as a Florida limited
liability company pursuant to the provisions of the Act.
2. Purpose; Powers. The purpose of the Company shall be to engage in any lawful
business that may be engaged in by a limited liability company organized under the Act, as such
business activities may be determined by the Member from time to time. The Company shall
have all powers of a limited liability company under the Act and the power and authority to do all
things necessary or convenient to accomplish its purpose and operate its business as described in
this Section 2.
3. Capital. The name, address and value of the initial Capital Contribution of the
Member shall be set forth on Schedule A attached hereto. The Member shall have no obligation
to make any additional capital contributions to the Company. The Member may make additional
contributions of capital to the Company as the Member determines are necessary, appropriate, or
desirable.
4. Management by the Manager.
(a) Howard D. Cohen is hereby appointed as the manager (the “Manager”) of the
Company. The Manager shall have the full and exclusive right, power, and authority to manage
the affairs of the Company and to bind the Company, to make all decisions with respect thereto
and to do or cause to be done any and all acts or things deemed to be necessary, appropriate, or
desirable to carry out or further the business of the Company. The Manager shall perform his
duties in good faith, in a manner he reasonably believes to be in the best interests of the
Company and with such care as an ordinarily prudent person in a like position would use under
similar circumstances. In performing his duties, the Manager shall be entitled to rely on
information, opinions, reports or statements, including financial statements and other financial
data, in each case, prepared and presented by one or more agents or employees of the Company
whom the Manager reasonably believes to be reliable and competent in the matters presented or
counsel, public accountants or other persons as to matters which the Manager reasonably believes
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
2
to be within such person’s professional or expert competence. The Manager is not liable for
actions taken as a manager of the Company, or for failure to take actions, if the Manager
performed his duties in compliance with this Section 4(a).
(b) Execution of Documents. Notwithstanding anything to the contrary contained
in this Agreement, all contracts, agreements, documents, or instruments purporting to bind the
Company or to convey or encumber assets of the Company shall be signed by the Manager or an
officer after obtaining the approval required by this Agreement, if any.
(c) Officers. The Manager may elect a President, a Secretary, a Treasurer and one
or more Vice-Presidents and such other officers and assistant officers and agents of the Company
as may be deemed desirable by the Manager. The same person may hold any two or more offices.
All officers shall serve until their respective successors are elected and qualified.
The following persons shall serve as the initial officers of the Company for a term
of one (1) year and until their successors are duly appointed by the Manager and qualified:
Chief Executive Officer: Howard D. Cohen
President: Randy Weisburd
Vice-President: Kenneth Cohen
Vice-President: Stanley Cohen
Secretary and Vice-President: Kenneth Naylor
(d) Delegation of Authority to Officers. The Manager hereby delegates general
authority to the officers of the Company listed in Section 4(c) above to act on behalf of the
Company in the same manner as the Manager, and hereby ratifies all actions previously taken by
such officers on behalf of the Company.
(e) Liability of the Member. Except as otherwise provided by the Act, the debts,
obligations, and liabilities of the Company, whether arising in contract, tort or otherwise, shall be
solely the debts, obligations and liabilities of the Company, and the Member shall not be
obligated personally for any such debt, obligation or liability of the Company solely by reason of
being a member.
5. Indemnification. The Company shall indemnify the Member, the Manager, and
any of the Member’s or Manager’s agents, affiliates, successors or assigns (individually, an
“Indemnified Party”) against any and all judgments, costs, losses, liabilities and damages
(including attorneys’ fees and expenses) paid or incurred by the Indemnified Party in connection
with the activities of the Company or in dealing with third parties on behalf of the Company, to
the fullest extent provided or allowed by law.
6. Dissolution and Winding-up of the Company. The Company shall be dissolved
upon the first to occur of the following: (a) the written consent of the Member or (b) the entry of
a decree of judicial dissolution under the Act. In the event there are no Members of the Company
at any time, the Company shall not be dissolved in the event that within a period of ninety (90)
days following the death, retirement, resignation, expulsion, bankruptcy or dissolution of the last
remaining Member, the personal or other legal representative of the last remaining Member
agrees in writing to continue the Company and agrees to the admission of the personal
representative of such Member or its nominee or designee to the Company as a Member,
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
3
effective as of the occurrence of the event that terminated the continued membership of the last
remaining Member.
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
4
7. Liability of Member and Representatives. The Member shall not be liable for the
debts, liabilities, contracts, or other obligations of the Company. Except as otherwise provided by
applicable state law, the Member shall be liable only to make such Member’s capital contribution
and shall not be required to lend any funds to the Company or to make any additional capital
contributions to the Company.
8. Amendment. This Agreement may be amended from time to time only with the
prior written consent of the Member.
9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida.
10. Severability. If any term or provision of this Agreement is held to be void or
unenforceable, that term or provision will be severed from this Agreement, the balance of the
Agreement will survive, and the balance of this Agreement will be reasonably construed to carry
out the intent of the parties as evidenced by the terms of this Agreement.
11. Captions. The captions used in this Agreement are for the convenience of the
parties only and will not be interpreted to enlarge, contract, or alter the terms and provisions of
this Agreement.
IN WITNESS WHEREOF, this Operating Agreement has been made and executed by the
Member effective as of the date first written above.
MEMBER:
ATLANTIC PACIFIC COMMUNITIES, LLC,
a Delaware limited liability company
By: ______________________________
Howard D. Cohen
Chief Executive Officer
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
5
SCHEDULE A
NAME, ADDRESS AND INITIAL
CAPITAL CONTRIBUTION OF THE MEMBER
Name of Member
Address of Member
Value of
Initial Capital
Contribution
of Member
Atlantic Pacific
Communities, LLC
161 NW 6th Street
Suite 1020
Miami, FL 33136
$100
DocuSign Envelope ID: A4EC9233-FCAF-4AA0-924E-FF2B3C2362FA
KH 1103816
EXHIBIT E-3 TO CERTIFICATE
Certificate of Status of the Developer
State of Florida
Department of State
I certify from the records of this office that APC VISTA BREEZE
DEVELOPMENT,LLC is a limited liability company organized under the laws
of the State of Florida,filed on October 6,2020.
The document number of this limited liability company is L20000304293.
I further certify that said limited liability company has paid all fees due this
office through December 31,2023,that its most recent annual report was filed
on March 23,2023,and that its status is active.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee,the Capital,this
the Twenty-eighth day of
November,2023
Tracking Number:0568258365CU
To authenticate this certificate,visit the following site,enter this number,and then
follow the instructions displayed.
https://services.sunbiz.org/Filings/CertificateOfStatus/CertificateAuthentication
KH 1103816
EXHIBIT F-1
Certificate of Formation and Certificate of Amendment of APC
Delaware
The First State
Page 1
5375007 8100H Authentication: 202046593
SR# 20161891528 Date: 03-25-16
You may verify this certificate online at corp.delaware.gov/authver.shtml
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT
COPIES OF ALL DOCUMENTS ON FILE OF “ATLANTIC PACIFIC
COMMUNITIES, LLC” AS RECEIVED AND FILED IN THIS OFFICE.
THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:
CERTIFICATE OF FORMATION, FILED THE TWENTY-NINTH DAY OF
JULY, A.D. 2013, AT 5:25 O`CLOCK P.M.
CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM "ATLANTIC
PACIFIC COMMUNITY HOUSING DEVELOPMENT, LLC" TO "ATLANTIC PACIFIC
COMMUNITIES, LLC", FILED THE TWELFTH DAY OF SEPTEMBER, A.D.
2013, AT 4:54 O`CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID
CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE
AFORESAID LIMITED LIABILITY COMPANY, “ATLANTIC PACIFIC
COMMUNITIES, LLC”.
KH 1103816
EXHIBIT F-2
Application by Foreign Limited Liability Company for Authorization to Transact Business in Florida of APC
9
(Requestor's Name)
(Address)
100251437351
(Address)
(City/State/Zip/Phone #)
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fT1(Business Entity Name)co 'U
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•T
“ rT-.O
00 3KIT1(Document Number)
H “<X-Tr Om
c5
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Certificates of StatusCertified Copies —<
m
Special Instructions to Filing Officer:
ca5:
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Office Use Only
K.SALY
examiner
SEP 1 9 20'3
CSC 1
CORPORATION SERVICE COMPANY*
ACCOUNT NO.120000000195
REFERENCE 811397 5174517
?AUTHORIZATION
•
$ 125.00COST LIMIT
ORDER DATE : September 17, 2013
ORDER TIME :5:27 PM
ORDER NO.811397-010
CUSTOMER NO:5174517
FOREIGN FILINGS
NAME:ATLANTIC PACIFIC COMMUNITIES,
LLC
XXXX QUALIFICATION (TYPE: LL)
PLEASE RETURN THE FOLLOWING AS PROOF OF FILING:
CERTIFIED COPY
PLAIN STAMPED COPY
CERTIFICATE OF GOOD STANDING
XX
CONTACT PERSON: Susie Knight -- EXT# 52956
EXAMINER:
CK2I-027 (9/10)
COVER LETTER
TO:Registration Section
Division of Corporations
Atlantic Pacific Communities, LLC
SUBJECT:
Name of Limited Liability Company
The enclosed "Application by Foreign Limited Liability Company for Authorization to Transact Business in Florida," Ceriilicate of
Existence, and check are submitted to register the above referenced foreign limited liability company to transact business in Florida..
Please return all correspondence concerning this matter to the following:
Danita Swider
Name of Person
Greenberg Traurig, LLP
Finn/Company
77 W. Wacker Drive, Suite 3100
Address
Chicago, Illinois 60601
Cily/State and Zip Code
swiderd@gtlaw.com
E-mail address: (to be used for future annual report notification)
For further information concerning this matter, please call:
Danita Swider 364-1622312
_____at (_
Area Code & Daytime Telephone NumberName of Person
MAILING ADDRESS:STREET ADDRESS:
Division of Corporations
Registration Section
Clifton Building
266 1 Executive Center Circle
Tallahassee, FL 3230 1
Division of Corporations
Registration Section
P.O. Box 6327
Tallahassee, FL 32314
Enclosed is a check for the following amount:
D $)25.00 Filing Fee □ SI30.00 Filing Fee & □ $155.00 Filing Fee & □ $160.00 Filing Fee, Certificate
Certificate of Status Certified Copy of Status & Certified Copy
APPLICATION BY FOREIGN LIMITED LIABILITY COMPANY FOR AUTHORIZATION TO
TRANSACT BUSINESS IN FLORIDA
IN COMPIJANCE WITH SECTION 608.503, FLORIDA STATUTES, WE FOLLOWING IS SUBMITTED TO REGISTER A FOREIGN
UMTTED LIABILITYCOMPANY TO TRANSACT BUSINESS INWE STATEOF FLORIDA:
Atlantic Pacific Communities, LLC1.
(Name ofForeign Limited Liability Company; must include “Limited Liability Company,” ”L.L.C.,” or “LLC.”)
(If name unavailable, enter alternate name adopted for the purpose of transacting business in Florida and attach a copy of the written
consent of the managers or managing members adopting the alternate name. The alternate name must include “Limited Liability
Company,” “L.L.C,” “LLC.”)
Delaware H(J>-2.3.
(Jurisdiction under the law of which foreign limited liability
company is organized)
4 July 29, 2013
(FE1 number, if applicable)
^ perpetual
(Date of Organization)(Duration; Year limited liability company will cease to
exist or “perpetual")
6.
(Date first transacted business in Florida, if prior to registration.)
(See sections 608.501 & 608.502 F.S. to determine penalty liability)
1025 Kane Concourse, Suite 215, Bay Harbor Islands, Florida 33154
i/-
r" Vj7.r<\Lo <\TC r'
03 \m\(Street Address of Principal Office)c/> --r'TZ. O■$-
8. If limited liability company is a manager-managed company, check here |H]&W‘r:te -UP
9. The name and usual business addresses of the managing members or managers are as follows:
Appreciation Holdings-Manager, LLC
T'
1025 Kane Concourse, Suite 215
Bay Harbor Islands, Florida 33154
10. Attached is an original certificate of existence, no mote than 90 days old, duly authenticated by llie official liaving custody of tecoids in
the jurisdiction under the law of which it is organized (A j)hotocopy is not acceptable. If the certificate is in a foreign language, a
tianslation of the certificate under oath oftiie translator must be submitted.)
11. Nature of business or purposes to be conducted or promoted in Florida:_______________________
Any lawful business or activity for whjeh a Florida limited liability company may be organized.
Signature of a menfoer or an authorized representative of a member.
(in accordance with section 608.408(3), F.S.. ihc execution of this cioeumenl constitutes an affinnaiion under the
penalties of perjury that the lads stated herein are true. I am aware that any false information submitted in a
document to the Department of State constitutes a third degree felony as provided for in s.81 7.! 55, F.S.)
^ ca //\cX q V\J t K 3 bo r d\4Typed or printed name of signee
\ *
CERTIFICATE OF DESIGNATION OF
REGISTERED AGENT/REGISTERED OFFICE
PURSUANT TO THE PROVISIONS OF SECTION 608.415 or 608.507, FLORIDA STATUTES,
THE UNDERSIGNED LIMITED LIABILITY COMPANY SUBMITS THE FOLLOWING
STATEMENT TO DESIGNATE A REGISTERED OFFICE AND REGISTERED AGENT IN THE
STATE OF FLORIDA.
1. The name of the Limited Liability Company is:
Atlantic Pacific Communities, LLC
If unavailable, the alternate to be used in the state of Florida is:
2. The name and the Florida street address of the registered agent and office are:
Corporation Service Company
(Name)
1201 Hays Street
Florida Street Address (P.O. Box NOT ACCtiPTABLli)
32301TallahasseeFL
City/State/Zip
Having bean named as registered agent and to accept service ofprocess for the above stated limited
liability company at the place designated in this certificate, 1 hereby accept the appointment as
registered agent and agree to act in this capacity. I further agree to comply M’ith the provisions of all
statutes relating to the proper and complete performance of my duties, and I am familiar with and
accept the obligations of my position as registered agent as provided for in Chapter 608, Florida
Statutes.
Sue G. Knight
Assistant Vice President
Corporation^service^ompai
(SignWc)
$ ] 00.00 Filing Fee for Application
$ 25.00 Designation of Registered Agent
S 30.00 Certified Copy (optional)
S 5.00 Certificate of Status (optional)
(Dataware PAGE 1
‘Tfe first State
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY nATLANTIC PACIFIC COMMUNITIES, LLC"
IS DULY FORMED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN
GOOD STANDING AND HAS A LEGAL EXISTENCE SO FAR AS THE RECORDS OF
THIS OFFICE SHOW, AS OF THE SEVENTEENTH DAY OF SEPTEMBER, A.D.
2013.
AND I DO HEREBY FURTHER CERTIFY THAT THE SAID "ATLANTIC
PACIFIC COMMUNITIES, LLC" WAS FORMED ON THE TWENTY-NINTH DAY OF
JULY, A.D. 2013.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL TAXES HAVE
NOT BEEN ASSESSED TO DATE.
Gfosr****-rwitfo* >rg
•w
*9
Jeffrey W Bullock. Secretary of State
5375007 8300 TION: 0743298AUTHEN'.8
iSxwig DATE: 09-17-13131098799
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KH 1103816
EXHIBIT F-3
Operating Agreement of APC
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OPERATING AGREEMENT
OF
ATLANTIC PACIFIC COMMUNITY HOUSING DEVELOPMENT, LLC
Effective as of September 11, 2013
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TABLE OF CONTENTS
Page
ARTICLE I INCORPORATION; DEFINITIONS ......................................................................... 1
1.01 Incorporation ........................................................................................................... 1
1.02 Definitions............................................................................................................... 1
ARTICLE II FORMATION, NAME, BUSINESS, TERM ........................................................... 9
2.01 Formation ................................................................................................................ 9
2.02 Name ..................................................................................................................... 10
2.03 Principal Place of Business, Recordkeeping Office, Registered Agent ................ 10
2.04 Purposes of the Company ..................................................................................... 10
2.05 Scope and Jurisdiction .......................................................................................... 10
2.06 Term ...................................................................................................................... 10
2.07 Title ....................................................................................................................... 10
2.08 Interested Transactions with the Company ........................................................... 11
2.09 Outside Activities .................................................................................................. 11
2.10 Affiliate Fees ......................................................................................................... 11
ARTICLE III CAPITAL CONTRIBUTIONS; LOANS .............................................................. 11
3.01 Initial Capital Contributions ................................................................................. 11
3.02 Additional Capital Contributions .......................................................................... 11
3.03 Loans ..................................................................................................................... 13
3.04 Indemnification and Contribution Obligations ..................................................... 13
3.05 Other Matters Relating to Capital and Loans ....................................................... 13
ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS ........................................................... 14
4.01 Distribution of Available Cash and Net Proceeds of an Interim Capital
Transactions .............................................................................................................................. 14
4.02 Distribution of Net Proceeds of a Terminating Capital Transaction .................... 14
4.03 Form of Distributions ............................................................................................ 14
4.04 Allocations of Profits and Losses ......................................................................... 14
4.05 Special Allocations ............................................................................................... 15
4.06 Curative Allocations ............................................................................................. 16
4.07 Tax Allocations ..................................................................................................... 16
4.08 Other Allocation Rules ......................................................................................... 17
4.09 Allocations to Transferred Interest ....................................................................... 17
4.10 No Restoration of Negative Capital Account. ...................................................... 17
ARTICLE V MANAGEMENT OF THE COMPANY ................................................................ 18
5.01 Company Management ......................................................................................... 18
5.02 Limitations on Authority....................................................................................... 22
5.03 Liability and Indemnification of the Manager and Officers. ................................ 22
5.04 Subsidiary Management........................................................................................ 23
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5.05 Certain Waivers .................................................................................................... 23
ARTICLE VI MATTERS REGARDING MEMBERS ................................................................ 23
6.01 Liability and Indemnification of Members ........................................................... 23
6.02 Management .......................................................................................................... 24
6.03 Limitation of Certain Rights ................................................................................. 24
6.04 Voting ................................................................................................................... 24
6.05 Meetings of the Members ..................................................................................... 24
6.06 Withdrawal of Members ....................................................................................... 25
6.07 Nature of Members’ Interest ................................................................................. 25
6.08 Prohibition on Liens .............................................................................................. 25
6.09 No Appraisal Rights .............................................................................................. 25
ARTICLE VII ISSUANCE AND TRANSFERS OF MEMBER INTERESTS ........................... 25
7.01 Prohibition............................................................................................................. 25
7.02 Rights of Assignee ................................................................................................ 26
7.03 Issuance of Additional Member Interests ............................................................. 26
7.04 Admission of Members ......................................................................................... 26
7.05 Permitted Transfer ................................................................................................ 27
7.06 Right of First Refusal ............................................................................................ 27
7.07 Mandatory Sale ..................................................................................................... 28
7.08 Rights of a Member’s Representative ................................................................... 31
7.09 Repayment of Outstanding Loans to Members .................................................... 32
7.10 Transfer Restrictions Reasonable ......................................................................... 32
ARTICLE VIII FISCAL MATTERS ........................................................................................... 32
8.01 Books and Records ............................................................................................... 32
8.02 Reports and Statements ......................................................................................... 32
8.03 Appointment of Tax Matters Partner .................................................................... 32
8.04 Tax Status.............................................................................................................. 33
8.05 Bank Accounts ...................................................................................................... 33
ARTICLE IX DISSOLUTION ..................................................................................................... 33
9.01 Dissolution ............................................................................................................ 33
9.02 Wind Up of Affairs ............................................................................................... 33
9.03 Termination ........................................................................................................... 35
ARTICLE X REPRESENTATIONS OF THE MEMBERS ........................................................ 35
ARTICLE XI MISCELLANEOUS .............................................................................................. 36
11.01 Amendments ......................................................................................................... 36
11.02 Notices .................................................................................................................. 36
11.03 Agency .................................................................................................................. 37
11.04 Further Assurances................................................................................................ 37
11.05 Headings ............................................................................................................... 37
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11.06 Binding Effect, Successors and Assigns ............................................................... 37
11.07 Applicable Law, Venue, Jurisdiction .................................................................... 37
11.08 Entire Agreement .................................................................................................. 37
11.09 Counterparts .......................................................................................................... 37
11.10 Gender ................................................................................................................... 37
11.11 Remedies, Specific Performance .......................................................................... 38
11.12 Attorney Fees ........................................................................................................ 38
11.13 No Third Party Beneficiary ................................................................................... 38
11.14 No Waiver ............................................................................................................. 38
11.15 No Recordation ..................................................................................................... 38
11.16 Provisions Severable ............................................................................................. 38
11.17 No Foreign Person Withholding. .......................................................................... 38
11.18 Legal Representation ............................................................................................ 38
11.19 Conflict Waiver ..................................................................................................... 39
11.20 No Broker.............................................................................................................. 39
11.21 Survival of Terms ................................................................................................. 39
11.22 Construction .......................................................................................................... 39
11.23 Schedules and Exhibits ......................................................................................... 39
11.24 Confidentiality ...................................................................................................... 39
SCHEDULES AND EXHIBITS
Schedule A Members
Schedule B Initial Officers
Exhibit 2.04(a) Pre-authorized Agreements
Exhibit 5.03(b) Indemnitees
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OPERATING AGREEMENT
OF
ATLANTIC PACIFIC COMMUNITY HOUSING DEVELOPMENT, LLC
THIS OPERATING AGREEMENT (“Agreement”) of ATLANTIC PACIFIC
COMMUNITY HOUSING DEVELOPMENT, LLC, a Delaware limited liability company (the
“Company”), is made and entered into as of September 11, 2013 (the “Effective Date”), by and among the
following:
(i) the Company;
(ii) the parties identified on Schedule A (each of the parties listed on Schedule A and their
permitted successors and assigns are sometimes hereinafter each referred to as a “Member”, and
collectively as the “Members”);
(iii) Appreciation Holdings-Manager, LLC, a Delaware limited liability company, as the
“Manager.”
W I T N E S S E T H:
WHEREAS, Articles of Organization (the “Articles”) legally creating the Company were filed
with the Department of State of the State of Delaware on July 29, 2013, and the Articles are approved and
the filing thereof ratified;
WHEREAS, the parties desire to participate together as a manager-managed limited liability
company formed under the Delaware Limited Liability Company Act (the “Act”), as from time to time
amended, to engage in the business described in Section 2.04 hereof;
WHEREAS, the parties desire to express in writing their mutual understandings and agreements
with respect to the formation and operation of the Company; and
WHEREAS, the parties believe that the best means to accomplish the foregoing is to supersede
any prior agreements or understandings among them by setting forth in this Agreement all the terms,
provisions, conditions and covenants by which the Company will be governed.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions
contained herein, and other good and valuable consideration, the parties hereto, each intending legally to
be bound, hereby agree as follows:
ARTICLE I
INCORPORATION; DEFINITIONS
1.01 Incorporation. The foregoing recitals are true and correct and, together with any
Schedules and Exhibits attached hereto, are hereby incorporated herein and made a part hereof.
1.02 Definitions. Capitalized terms used, but not otherwise defined, herein shall have the
meanings hereafter set forth.
Additional Capital Contributions. This shall have the meaning set forth in
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Section 3.02 hereof.
Adjusted Capital Account Deficit. With respect to any Member, the deficit balance,
if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to
the following adjustments:
(i) The deficit shall be decreased by any amounts which such Member is
obligated to restore or is deemed to be obligated to restore pursuant to the penultimate sentences
of Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) (i.e., the Member’s share of Minimum
Gain and Member Minimum Gain); and
(ii) The deficit shall be increased by the items described in Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
Affiliate. When used with reference to a specified Person, (i) any Person who,
directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common
control with the specified Person, (ii) any Person who is an officer, director, member or manager of,
partner in or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the
specified Person is an officer, director, manager, member, partner or trustee, or with respect to which the
specified Person serves in a similar capacity, (iii) any Person who, directly or indirectly, is the legal or
beneficial owner of more than ten percent (10%) of the beneficial interests in, the specified Person or of
which the specified Person is directly or indirectly the legal or beneficial owner of more than ten percent
(10%) of the beneficial interests, (iv) any Person which owns more than ten percent (10%) of the voting
interests of the specified Person, or in which the specified Person owns more than ten percent (10%) of
the voting interests, or (v) any Person who is the parent, sibling, married spouse, child, or lineal
descendants of a specified Person.
Agreement. This Agreement or any restatements hereof, as originally executed or as
may be amended from time to time.
Assignee. Any Person who acquires (by purchase, gift, inheritance, judgment,
Transfer or otherwise), or has an ownership or security interest (including any charging lien) in or against
the Company or any Member Interest, but who has not been admitted as a Member of the Company in
accordance with this Agreement.
Available Cash or Available Cash Flow. The cash funds, including tax exempt
income, generated by Company operations during a Fiscal Year (or other specified period), without
deduction for non-cash expenses, but excluding cash funds from a Capital Transaction and after deduction
of cash funds used to pay all other expenses and obligations of the Company whether or not deductible for
tax purposes, including, without limitation, the Expenses, principal and interest payments on Company
indebtedness (including the current portion payable under the Loans and any loans made by a Member or
its Affiliates, including Priority Loans and Default Loans and indemnity obligations of the Company to a
Member or its Affiliates), fees pursuant to Section 2.11 hereof, capital expenditures, operating
expenditures, prepayments of indebtedness, any fees or costs payable to the Manager, and any reasonable
amounts set aside for Reserves by the Company in the reasonable discretion of the Manager, whether for
current operations or future investment. Available Cash shall not include or reflect Capital Contributions
or any proceeds received or expenses incurred in connection with a Capital Transaction.
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Bankruptcy. As used in this Agreement, the term “Bankruptcy,” with respect to a
Person, shall refer to: (i) the appointment of a receiver, conservator, rehabilitator or similar officer for
such Person, unless the appointment of such officer shall be challenged in an application filed within
thirty (30) days after the appointment and the appointment is vacated and such officer discharged within
one hundred twenty (120) days of the appointment; (ii) the taking of possession of, or the assumption of
control over, all or any substantial part of the property of such Person by any receiver, conservator,
rehabilitator or similar officer or by the United States government or any agency thereof, unless such
possession or control is challenged in an application filed within thirty (30) days after such possession or
control is taken and property is relinquished within one hundred twenty (120) days of the taking; (iii) the
filing of a petition in bankruptcy or the commencement of any proceeding under any present or future
federal or state law relating to bankruptcy, insolvency, debt relief or reorganization of debtors by or
against such Person, provided, if filed against (and not by) such Person, such petition or proceeding is not
challenged within thirty (30) days after it is filed and if so challenged is not dismissed within one hundred
twenty (120) days of the filing of the petition or the commencement of the proceeding; or (iv) the making
of an assignment for the benefit of creditors or a private composition, arrangement or adjustment with the
creditors of such Person.
Business Day. This shall mean any weekday on which banks and all federal, state
and local government offices are open for business in Miami-Dade County, Florida.
Capital Account. An account that, throughout the full term of the Company, shall be
established, determined and maintained separately for each Member in accordance with the following
provisions:
(i) To each Member’s Capital Account there shall be credited such
Member’s Capital Contributions, such Member’s distributive share of Profits and any items in the
nature of income or gain which are specially allocated pursuant to Sections 4.05, 4.06 or 4.07
hereof, and the amount of any Company liabilities assumed by such Member or which are
secured by any Company property distributed to such Member.
(ii) To each Member’s Capital Account there shall be debited the amount of
cash and the Gross Asset Value of any Company property distributed to such Member pursuant to
any provision of this Agreement (excluding amounts distributed in payment of fees pursuant to
Section 2.10 and amounts distributed in repayment of principal and interest on loans made by a
Member to the Company), such Member’s distributive share of Losses and any items in the
nature of expenses or losses which are specially allocated pursuant to Sections 4.05, 4.06 or 4.07
hereof, and the amount of any liabilities of such Member assumed by the Company or which are
secured by any property contributed by such Member to the Company.
(iii) In the event all or a portion of an interest in the Company is transferred
in accordance with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred interest.
(iv) In determining the amount of any liability for purposes of (i) and (ii) of
this definition, there shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance
of Capital Accounts are intended to comply with Regulation Section 1.704-1(b) and shall be interpreted
and applied in a manner consistent with such Regulation. In the event the Manager shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including,
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without limitation, debits or credits relating to liabilities that are secured by contributed or distributed
property or that are assumed by the Company or any Member), are computed in order to comply with
such Regulations, the Manager may make such modification, provided that it is not likely to have a
material effect on the amounts distributable to any Member pursuant to Section 9.02 hereof upon the
dissolution of the Company. The Members shall (1) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Members and the amount of
Company capital reflected on the Company’s balance sheet, as computed for book purposes, in
accordance with Regulation Section 1.704-1(b)(2)(iv)(g), and (2) make any appropriate modifications in
the event unanticipated events might otherwise cause this Agreement not to comply with Regulation
Section 1.704-1(b).
Capital Call Notice. This shall have the meaning set forth in Section 3.02(a) hereof.
Capital Contribution. The amount of cash or the agreed fair market value of property
contributed by each Member to the capital of the Company, as reflected in the books of the Company.
Capital Transaction. A Capital Transaction refers to an “Interim Capital Transaction”
or a “Terminating Capital Transaction.” An Interim Capital Transaction shall mean a transaction pursuant
to which the Company borrows funds (including a refinancing), a sale, condemnation, exchange,
abandonment, or other disposition of a portion (which is less than substantially all) of the assets of the
Company, or an insurance recovery or any other transaction which, in accordance with generally accepted
accounting principles, is considered capital in nature, other than a Terminating Capital Transaction. A
Terminating Capital Transaction shall mean a sale, condemnation, exchange, or other disposition, whether
by foreclosure, abandonment, deed in lieu of foreclosure or otherwise, of all or substantially all of the
then remaining assets of the Company or a transaction that will result in a dissolution of the Company.
Change in Control. Change in Control shall mean any Transfers of any direct or
indirect interest in a Member that results in such entity not being a Controlled Affiliate.
Code. The Internal Revenue Code of 1986, as amended from time to time, or any
corresponding provision or provisions of any federal internal revenue law enacted in substitution of the
Internal Revenue Code of 1986.
Company. Atlantic Pacific Community Housing Development, LLC, a Delaware
limited liability company, and any successor limited liability company.
Company Accountants. Such independent accountants as may be selected, from time
to time, by the Manager.
Company Assets. The assets of the Company,
Company’s Business. This shall have the meaning set forth in Section 2.04 hereof.
Company Minimum Gain. This shall have the meaning set forth in Regulation
Sections 1.704-2(b) and (d) for “partnership minimum gain.”
Controlled Affiliate. Controlled Affiliate shall mean any Person directly or indirectly
controlled (ownership and voting) by any Member or a Permitted Transferee.
Default Loan. Default Loan shall have the meaning set forth in Section 3.02 hereof.
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Default Loan Payment. Default Loan Payment shall have the meaning set forth in
Section 7.07(b) hereof.
Depreciation. This shall mean, for each Fiscal Year, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such
Fiscal Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the depreciation, amortization or other cost
recovery deduction for income tax purposes for such Fiscal Year bears to such beginning adjusted tax
basis; provided, however, that if the adjusted basis for income tax purposes of an asset at the beginning of
such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Manager.
Distributions. Any cash or the fair market value of property distributed to the
Members in their capacities as Members, whether from Available Cash, Net Proceeds of a Capital
Transaction, or distributions following dissolution of the Company.
Effective Date. The effective date of this Agreement, as set forth in the opening
paragraph hereof.
Event of Dissolution. Any of the events that result in a dissolution of the Company
as set forth in Section 9.01 hereof.
Expenses. Expenses shall mean all costs and expenses which are incurred by the
Members and/or their related parties in connection with the creation of the Company and conducting the
Company Business, including, without limitation, travel expenses, attorneys’ fees and similar expenses
and costs incurred in performing services on behalf of the Company and/or its Subsidiaries.
Fiscal Year. The annual accounting period of the Company which, unless hereafter
changed by the Manager.
Gross Asset Value. With respect to any asset, the asset’s adjusted basis for federal
income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by a Member to
the Company shall be the gross fair market value of such asset, as determined by the contributing
Member and all other non-contributing Members.
(ii) The Gross Asset Values of all Company Assets shall be adjusted to
equal their respective gross fair market values, as determined by the Manager as of the
following times: (1) the acquisition of an additional interest in the Company by any new
or existing Member in exchange for more than a de minimis Capital Contribution; (2) the
distribution by the Company to a Member of more than a de minimis amount of property
as consideration for an interest in the Company; (3) the liquidation of the Company within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) and (4) the grant of an interest in the
Company (other than a de minimis interest) as consideration for the provision of services to or for
the benefit of the Company by an existing Member acting in a Member capacity or in anticipation
of being a Member; provided, however, that adjustments pursuant to clauses (1) and (2) shall be
made only if the Manager reasonably determine that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Members in the Company;
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(iii) The Gross Asset Value of any Company Asset distributed to any
Member shall be adjusted to equal the gross fair market value of such asset on the date of
distribution as determined by the distributee and the Manager; and
(iv) The Gross Asset Values of Company Assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account
in determining Capital Accounts pursuant to Regulation Section 1.704-1(b)(2)(iv)(m) and Section
4.05(i) hereof; provided, however, that Gross Asset Values shall not be adjusted to the extent the
Members determine that an adjustment pursuant to subparagraph (ii) of this definition is
necessary or appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph.
If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs
(i), (ii) or (iii) of this definition, such Gross Asset Value shall thereafter be adjusted by the Depreciation
taken into account with respect to such asset for purposes of computing Profits and Losses.
Guarantors. Guarantors shall mean Persons who execute and deliver any guaranties
in respect of a Loan.
Howard Cohen Family. Howard Cohen Family shall mean Howard Cohen and his
lineal descendants and their Affiliates.
Interim Capital Transaction. This shall have the meaning ascribed to such term in the
definition of Capital Transaction.
IRS. The Internal Revenue Service of the Department of Treasury of the United
States of America, or if the Internal Revenue Service ceases to exist, such other, subsequent or successor
governmental agency that is charged with the task of, or otherwise responsible for, collecting taxes and
administering the Code.
Law. Law shall mean the Delaware Limited Liability Company Act, as from time to
time amended.
Loan. Loans shall mean the loans obtained by or assumed by the Company.
Loan Documents. Shall mean the notes, loan agreements, mortgages and all other
documents contemplated thereby and/or delivered in connection with the Loans.
Manager. Appreciation Holdings-Manager, LLC and/or any other Person (whether
or not a Member) who may be appointed as Manager after the date hereof in accordance with
ARTICLE V of this Agreement.
Member. A Person who, as of the Effective Date, is a Member identified on
Schedule A hereto, and such other Persons to whom a Member Interest is issued or Transferred, after the
Effective Date, if such Persons are admitted as Members pursuant to ARTICLE VII hereof.
Member Interest or Membership Interest. The entire ownership interest of a Member
in the Company at any particular time, including such Member’s rights to any and all Distributions,
allocations and other incidents of participation in the Company to which such Member may be entitled as
provided in this Agreement and under applicable law, together with the obligations of such Member to
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comply with all of the terms and provisions of this Agreement and the Law, and further including its
Capital Account hereunder. The Membership Interest of the Members shall be in the percentage
indicating ownership and rights to Distributions in the percentage set forth on Schedule A as amended
pursuant to this Agreement.
Member Minimum Gain. An amount, with respect to each Member Nonrecourse
Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were
treated as a Nonrecourse Liability, determined in the same manner as “partner minimum gain” pursuant to
Regulation Section 1.704-2(i).
Member Nonrecourse Debt. Any nonrecourse debt (for the purposes of Regulation
Section 1.1001-2) of the Company for which any Member bears the “economic risk of loss” within the
meaning of Regulation Section 1.752-2.
Member Nonrecourse Deductions. These shall have the meaning set forth in
Regulation Section 1.704-2(i) for “partner nonrecourse deductions.” The amount of Member Nonrecourse
Deductions with respect to Member Nonrecourse Debt for any Fiscal Year equals the excess, if any, of (i)
the net increase, if any, in the amount of Member Minimum Gain attributable to such Member
Nonrecourse Debt during such Fiscal Year, over (ii) the aggregate amount of any distributions during that
Fiscal Year to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the
extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an
increase in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Regulation Section 1.704-2(i).
Member Percentages or Membership Percentages. The respective percentage interest
of each Member in the Company as set forth on Schedule A hereto as same may be amended from time to
time.
Net Proceeds of an Interim Capital Transaction or Net Proceeds of a Terminating
Capital Transaction or Net Proceeds of a Capital Transaction. The proceeds received by the Company in
connection with an Interim Capital Transaction or Terminating Capital Transaction, as applicable, after (i)
payment of all costs and expenses incurred by the Company in connection with such Capital Transaction,
including, without limitation, brokers’ commissions, loan fees, loan payments, and other closing costs, (ii)
payment of any Company indebtedness intended or required to be repaid if the Capital Transaction is a
financing or refinancing including the Loans, Priority Loans, Default Loans or any other loans payable to
a Member or their Affiliates, (iii) any Reserves reasonably deemed necessary or appropriate by the
Manager, and (iv) any amounts reinvested or held for reinvestment by the Manager.
Nonrecourse Deductions. Deductions of the Company described in Regulation
Section 1.704-2(b)(1).
Nonrecourse Liability. A liability of the Company described in Regulation Sections
1.704-2(b)(3) and 1.752-1(a)(2).
Obligations. The indebtedness, liabilities and obligations of the Company.
Officer. The Persons, if any, appointed by the Manager to perform specified
executive functions for the Company, as set forth on Schedule B attached hereto and specified further in
ARTICLE V hereof.
Pari Passu. Pro rata based on the then outstanding principal balances and accrued
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interest owed.
Permitted Transferee. A transfer of a Membership Interest or interest in the Member
to the member of the Howard Cohen Family, any other Member or an Affiliate of any of the foregoing.
Person. Any individual, partnership, corporation, limited liability company, trust,
estate, unincorporated or incorporated association, or other entity.
Priority Loan. Shall have the meaning in Section 3.02.
Profits and Losses. Profits and Losses means, for each Fiscal Year, an amount equal
to the Company’s taxable income or loss for such Fiscal Year, including gain or loss from Capital
Transactions, determined in accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss), with the following adjustments:
(i) Any income of the Company that is exempt from federal income tax and
not otherwise taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses” shall be added to such taxable income or loss;
(ii) Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulation Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant
to this definition of “Profits” and “Losses” shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Company Asset is adjusted
pursuant to subparagraphs (ii) or (iii) of the definition of “Gross Asset Value,” the amount of
such adjustment shall be taken into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of property with respect to
which gain or loss is recognized for federal income tax purposes shall be computed by reference
to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there shall be taken into
account Depreciation for such Fiscal Year, computed in accordance with the definition of
“Depreciation”;
(vi) To the extent an adjustment to the adjusted tax basis of any Company
Asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulation
Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a
result of a distribution other than in complete liquidation of a Member’s Member Interest, the
amount of such adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition
of the asset and shall be taken into account for purposes of computing Profits or Losses; and
(vii) Notwithstanding any other provision of this definition, any items which
are specially allocated pursuant to Section 4.05 or 4.06 shall not be taken into account in
computing Profits or Losses.
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The amounts of the items of Company income, gain, loss or deduction available to be specially allocated
pursuant to Section 4.05 and 4.06 shall be determined by applying rules analogous to those set forth in
subparagraphs (i) through (vi) above.
Regulation. Regulation shall mean a regulation interpreting the Code, including any
temporary regulations, from time to time promulgated under the Code.
Required Vote. The affirmative written approval of 50.1% of the Member
Percentages of the Members. Unless otherwise specifically provided in this Agreement, each Member
shall be entitled to vote on every matter as to which the Members are to vote, regardless of whether a
Member or its Affiliate has a personal interest or other conflict of interest with respect to the outcome of
such vote. All consents, approvals, ratifications, appointments, votes and other acts referenced herein to
be taken by the Members shall mean by Required Vote, without further reference thereto, unless the
context clearly requires otherwise.
Reserves. Reserves shall mean, with respect to any fiscal period, funds set aside
during such period which shall be maintained in amounts deemed sufficient by the Manager for working
capital, to pay taxes, insurance, debt service, replacements, capital improvements or repairs, contingent
liabilities, or other costs and expenses, incident to the ownership or operation of the Company’s assets.
Securities Laws. The Securities Act of 1933, as amended, and any other applicable
securities laws of any other jurisdiction, including, in each case, the rules and regulations promulgated
thereunder.
Stipulated Rate. With respect to any Default Loan or Priority Loan, the rate of
interest equal to 9% per annum simple interest.
Subsidiary. This shall mean a subsidiary of the Company that may be created, and
“Subsidiaries” refers to every Subsidiary which may be established from time to time.
Term. This shall have the meaning set forth in Section 2.06 hereof.
Terminating Capital Transaction. This shall have the meaning ascribed to such term
in the definition of Capital Transaction.
Transfer. The sale, transfer, conveyance, gift, assignment, syndication, pledge,
hypothecation, encumbrance or other disposition of all or any part of a Member Interest, either
voluntarily, involuntarily, by operation of law or otherwise. If a Member Interest is held by a Person other
than a natural person, a Change in Control shall be deemed a Transfer. Transfer of a Membership Interest
or transfer of interests in the Member to any Permitted Transferee shall be permitted (“Permitted
Transfers”) without the consent of the Manager.
ARTICLE II
FORMATION, NAME, BUSINESS, TERM
2.01 Formation. The Company has been formed for the purposes set forth herein. The
Members shall execute any and all certificates or other documents, and take whatever action is required,
in order to authorize the Company to conduct business as a limited liability company under the Law and
the laws of other jurisdictions applicable to the business of the Company. The rights and liabilities of the
Members shall be as provided in the Articles and the Law, except as otherwise provided herein.
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2.02 Name. The business of the Company shall be conducted under the name of the
Company and under any other name which the Manager selects. If the Company does business under a
name other than the name of the Company as set forth in its Articles, the Company shall file a fictitious
name registration as required by applicable law.
2.03 Principal Place of Business, Recordkeeping Office, Registered Agent. The principal
place of business of the Company shall be in Miami-Dade County, Florida, as determined by the
Manager. The Company shall maintain a registered agent and registered office for the service of process
in the State of Delaware and such other jurisdictions as the Manager shall determine. In the event a
registered agent ceases to act as such for any reason, or the registered office changes for any reason, the
Manager shall have the power and authority to designate a replacement registered agent and cause such
documents to be filed with any appropriate governmental agencies to reflect any such changes.
2.04 Purposes of the Company.
(a) The Company may engage in the business set forth below and in any other lawful
business approved by the Required Vote. The principal purpose for which the Company is organized is
(through itself or directly or indirectly through one or more Subsidiaries) property development, asset
management and other property related services on behalf of itself or other parties in respect of public
housing developments located throughout the United States owned by Affiliates of the Company, the
funding for which will be obtained from Capital Contributions of the Members, and Loans, and then
directly or indirectly, through itself or any Subsidiary of the Company, to conduct such business as set
forth above, and to engage in such other lawful activities as are reasonably necessary, convenient, or
incidental to the Company’s purpose (all the foregoing, collectively, the “Company’s Business”). In
regard to many of the above activities, the Members hereby specifically approve the documents
necessary, as determined by the Manager, to implement the agreements referred to on Exhibit 2.04(a)
attached hereto.
(b) In furtherance of the Company’s Business, but in no way limiting the generality
of the foregoing, the Company may (through itself or directly or indirectly through one or more
Subsidiaries): (i) enter into, perform and carry out contracts and agreements as may be necessary,
appropriate or incidental to the accomplishment of the purposes of the Company; (ii) sell, exchange,
lease, mortgage or otherwise dispose of all or any part of the properties and assets of the Company for
cash, stock, other securities or other property or any combination thereof; (iii) borrow money and
evidence the same by notes or other evidences of indebtedness and secure the same with liens on all or
any portion of the assets of the Company in furtherance of any of or all of the purposes of the Company;
(iv) authorize any Subsidiary to take any of the foregoing action with respect to the properties and assets
of such Subsidiary; and (v) do all other acts and things which may be necessary, appropriate or incidental
to the carrying out of the business and purposes of the Company and its Subsidiaries.
2.05 Scope and Jurisdiction. The Company is authorized to engage in all business
permitted by the Law. If the Company qualifies to do business in a foreign jurisdiction, then it may
transact all business permitted in that jurisdiction. There is no jurisdictional restriction upon the Company
Assets or activity of the Company. The Company may do business in foreign jurisdictions.
2.06 Term. The term of the Company as a limited liability company commenced with the
filing of the Articles, and shall continue in full force and effect until terminated in accordance with
ARTICLE IX of this Agreement or as otherwise provided by the Law.
2.07 Title. Legal title to Company property, whether real, personal or mixed, shall be held
in the name of the Company or any Subsidiary, as determined by the Manager.
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2.08 Interested Transactions with the Company. The fact that any Manager, Officer,
Member or Affiliate of any such Person is directly or indirectly interested in or connected with any
Person employed by the Company to render or perform services, or from, or to which the Company may
buy or sell merchandise, services, material or other property shall not prohibit the Company from
employing such Person or from otherwise dealing with them; provided that, in each case, the terms of
such employment, retention, purchase or sale are disclosed to the Members in advance and approved by
Required Vote or if they are on market terms, whereupon the Manager is authorized to enter into such
transaction.
2.09 Outside Activities. Unless otherwise provided in this Agreement, or agreed in a
separate agreement, document or other instrument with the Company, neither the Manager, Officers,
Members, nor any of their Affiliates are required to devote their full time or efforts to the business of the
Company. Unless otherwise stated in this Agreement, an employment agreement, non-compete
agreement, or other agreement with the Company, the Manager, Officers, Members and their respective
Affiliates are each permitted to conduct any other business or activity whatsoever, independent of the
Company and the other Members, and shall not be accountable to the Company or to any other Member
with respect to that business or activity even if the business or activity competes with the Company’s
Business. Neither the Company nor the other Members shall have any interest or rights with respect to
any such business interest, and the Manager, Officers, Members and their Affiliates shall not be deemed
to have breached their duty of care, duty of loyalty, or duty of good faith and fair dealing under the Law
by participating in such activities or by failing to present any such opportunity to the Company.
2.10 Affiliate Fees.
(a) Expenses. Notwithstanding anything to the contrary set forth in this Agreement
or elsewhere, and without limiting any other provision of this Agreement, the Members each expressly
acknowledge, approve, and agree that the Manager shall have authority, on behalf of the Company, to
reimburse the Expenses to the Manager and/or Members and their Affiliates.
(b) Permitted Affiliate Fee. Fees may be paid to Manager or its Affiliates if
approved by the Required Vote of the Members.
ARTICLE III
CAPITAL CONTRIBUTIONS; LOANS
3.01 Initial Capital Contributions. In exchange for their Member Interests and the
Member Percentages reflected beside each Member’s respective name on Schedule A hereto, each
Member has made or shall make an initial Capital Contribution in cash to the Company in the amount set
forth in the Company books in accordance with its respective Member Percentage, and each Member’s
Capital Account shall be credited in such respective amount.
3.02 Additional Capital Contributions.
(a) If the Manager at any time or from time to time determines that the Company
requires money for Company Business in addition to the Members’ initial Capital Contributions (in each
case, an “Additional Capital Contributions”), then Manager may give notice (“Capital Call Notice”) to
each Member of (i) the total amount of Additional Capital Contribution required, (ii) the reason the
Additional Capital Contribution is required, (iii) each Member’s proportionate share of the total
Additional Capital Contribution (determined in accordance with this Section), and (iv) the date each
Member’s Additional Capital Contribution is due and payable to the Company, which date shall not be
less than ten (10) Business Days after the Capital Call Notice has been given. A Member’s share of the
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total Additional Capital Contribution shall be equal to the product obtained by multiplying the Member’s
Member Percentage at the time of the Capital Call Notice by the total Additional Capital Contribution
required in such Capital Call Notice.
(b) Each Member acknowledges and agrees that all payments to be made by it
pursuant to this Section 3.02 will be made in wire transfer, cash or by company or certified bank check to
the Company without set-off, deduction, withholding or counterclaim and in lawful money of the United
States of America, directly to the Manager for deposit into the Company’s account, and shall be
accompanied by a written notice from such Member stating that such payment is made by such Member
pursuant to the Capital Call Notice.
(c) In the event that a Capital Call Notice is issued for an Additional Capital
Contribution pursuant to this Section (hereinafter referred to as the “Required Additional Capital
Contribution”) and any Member fails to make its Required Additional Capital Contribution by the date it
is required to be made (“Defaulting Member”), then the Members which advanced the Additional Capital
may elect (at its exclusive option) to convert such capital to a loan to the Company at the Stipulated Rate
(“Priority Loan”), and such Defaulting Member shall be in “Default” of this Agreement. In the event of
such Default, the other Members may elect, but shall not have the obligation, to advance as a loan to the
Company an amount equal to the additional contribution that the Defaulting Member failed to make
(“Default Loan”). The Members electing to make a Default Loan hereunder are hereinafter referred to as
“Lending Members”. The Lending Members shall determine amongst themselves the proportions in
which a Default Loan shall be made, or if they fail to agree, then pro rata based upon their relative
Membership Interests. In the event the Lending Members have advanced such monies as a Default Loan
to the Company, then and in such event the following shall be repaid to the extent of available funds prior
to any further Distribution to the Members, and (ii) all monies paid as repayment of such Default Loan
shall first be applied to the costs and expenses of the Lending Members, including attorneys’ fees and
costs with respect to such Default Loan, secondly towards accrued and unpaid interest, and finally
towards the outstanding principal balance.
(d) In the event the Lending Members shall make the Default Loan and in the further
event that the Defaulting Member shall have failed to fully cure the Default hereunder by paying the
Default Loan, together with interest thereon at the Stipulated Rate from the date such Default Loan was
due until the date of the election by the Lending Members to take advantage of the provisions of this
subsection, the Lending Members shall have the right (which shall only be elected in writing) to convert
all or any portion of the Default Loan (including interest which has accrued thereon) to the capital of the
Company, whereupon the Membership Interest of the Lending Members electing to convert its Default
Loan to capital shall be proportionately and permanently increased and the Membership Interest of the
Defaulting Member shall be proportionately and permanently reduced in the manner set forth in
subsection 3.02(e) below. Notwithstanding anything to the contrary contained herein, the Lending
Members shall give the Defaulting Member fifteen (15) days written notice of their intentions to invoke
the provisions of subsection 3.02(e) below, during which time the Defaulting Members shall have the
right to satisfy in full the then outstanding principal balance, together with any accrued but unpaid
interest, of the Default Loan owing to the Lending Members.
(e) In the event that any Lending Member shall determine to convert all or any
portion of the Default Loan to the capital of the Company pursuant to subsection 3.02(d) above, the
Membership Interests of the Members shall be permanently redetermined pursuant hereto so that each
Member’s redetermined Membership Interest percentage shall be equal to a fraction, the numerator of
which shall be equal to any Capital Contributions of such Member, plus, as to each applicable Member,
100% of any Priority Loans and Default Loans theretofore made by such Member (together with all
accrued but unpaid interest of any Priority Loan and Default Loans), and the denominator of which is
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equal to the sum of capital contributions of all Members, plus 100% of any Priority Loans and Default
Loans made by all Members (together with all accrued but unpaid interest of any Priority Loans and
Default Loans).
(f) The remedies heretofore expressly set forth are in addition to and not in lieu of
any and all other legal and equitable remedies that may be available to the Company and/or the Lending
Members in the event of a Default by the Defaulting Members. With respect to the foregoing remedies,
the Lending Members and the Company shall have the right to pursue same on a cumulative basis, no
action seeking any single remedy constituting an election or in any other way precluding the Lending
Members or the Company from simultaneously or thereafter pursuing the other remedies.
(g) The Priority Loans and Default Loans shall be paid Pari Passu based on the
outstanding principal balance of each and all payments of such Priority Loans and Default Loans shall
first be applied to costs of collection, then to accrued and unpaid interest and finally to principal.
(h) In the event the Lending Members shall make a Default Loan, the Defaulting
Member shall have the right to fully cure the default hereunder by paying to the Lending Member as
reimbursement of such Default Loan (x) all costs and expenses of the Lending Member (including
attorneys’ fees and costs with respect to such Default Loan), (y) interest on the entire Default Loan at the
Stipulated Rate from the date such Default Loan was made, plus (z) the outstanding principal amount of
such Default Loan, whereupon the Default Loan shall be paid in full.
3.03 Loans. Subject to ARTICLE V hereof, in the event that at any time or from time to
time additional funds in excess of the Capital Contributions of the Members are required by the Company
for or in respect of its business or any of its obligations, the Manager may, but shall not be obligated to,
apply on behalf of the Company to borrow such required additional funds, with interest payable at the
then prevailing rates, from one or more Persons not Affiliated with a Member, including without
limitation commercial banks, savings and loan associations or other lending institutions. Any Member or
their Affiliate may, but is not required to, provide security or personal guarantees for such loans, in
exchange for which such Member or their Affiliate may be compensated in such amount as shall be
agreed to by the Manager and such Member or their Affiliate.
3.04 Indemnification and Contribution Obligations . The Company and any Persons
which are parties described on Exhibit 5.03(b) shall be indemnified by the Company as provided in
Section 5.03.
3.05 Other Matters Relating to Capital and Loans.
(a) Interest earned on Company funds shall inure solely to the benefit of the
Company, and, except as specifically provided herein, no interest shall be paid upon any contributions or
advances to the capital of the Company or upon any undistributed or reinvested income or profits of the
Company.
(b) The Capital Contributions of the Members shall be utilized for carrying out the
purposes of the Company as set forth in this Agreement and for payment of any expenses incurred in
connection therewith, including payment or reimbursement of expenses paid or incurred on behalf of the
Company, whether prior or subsequent to the execution of this Agreement.
(c) Except as set forth in this Section 3.05, loans by a Member to the Company
(including those arising by virtue of payment under a guaranty or indemnity of the Company’s
obligations) shall not be considered Capital Contributions and shall not increase the Capital Account of
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the lending Member. Subject to the limitations contained in Section 4.07, the Company’s deduction for
interest paid in respect to any loan from any Member shall be allocated to that Member.
(d) Except as may be specifically provided herein, no Member shall be entitled to
withdraw its Capital Contribution, or to a return of any part of its Capital Contribution or to receive
property or assets other than cash in return thereof without the consent of the Manager, and the Manager
shall not be liable for the return of all or any portion of the Members’ Capital Contributions.
(e) No Member shall be entitled to priority over any other Member, either with
respect to a return of his Capital Contribution or to allocations of taxable income, gains, losses or credits,
or to distributions, except as may be provided in this Agreement.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
4.01 Distribution of Available Cash and Net Proceeds of an Interim Capital Transactions.
The Available Cash, if any, and the Net Proceeds of an Interim Capital Transaction, if any, of the
Company shall be distributed to the Members from time to time in proportion to their respective
Membership Percentages existing from time to time.
4.02 Distribution of Net Proceeds of a Terminating Capital Transaction. The Distribution
of Net Proceeds of a Capital Transaction of a Terminating Capital Transaction shall be made in
proportion to their respective Membership Percentages existing from time to time.
4.03 Form of Distributions. No Member shall have the right to demand or receive
property from the Company for any reason whatsoever and no Member shall have the right to sue for
partition of the Company or of the Company’s assets. The Company may make Distributions in cash,
notes, property, or other form of distribution, or any combination thereof, at the sole discretion of the
Manager. Distributions of property, other than cash, may be made to a liquidating trust for the benefit of
the Members, in accordance with their respective interests in such Distributions, and the Manager or
designees of the Manager shall serve as the liquidating trustee.
4.04 Allocations of Profits and Losses. All items of Company income, gain, loss and
deduction as determined for book purposes shall be allocated among the Members and credited or debited
to their respective Capital Accounts in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv),
so as to ensure to the maximum extent possible (i) that such allocations satisfy the economic effect
equivalence test of Treasury Regulations Section 1.704-1(b)(2)(ii)(i) (as provided hereinafter) and (ii) that
all allocations of items that cannot have economic effect (including credits and nonrecourse deductions)
are allocated to the Members in accordance with the Members’ interests in the Company, which, unless
otherwise required by Code Section 704(b) and the Treasury Regulations promulgated thereunder, shall
be in proportion to their Membership Percentages. To the extent possible, items that can have economic
effect shall be allocated in such a manner that the balance of each Member’s Capital Account at the end
of any taxable year (increased by the sum of (a) such Member’s “share of partnership minimum gain” as
defined in Treasury Regulations Section 1.704-2(g)(1) and (b) such Member’s share of “partner
nonrecourse debt minimum gain” as defined in Treasury Regulations Section 1.704-2(i)(5)) would be
positive to the extent of the amount of cash that such Member would receive if the Company sold all of its
property for an amount of cash equal to the book value (as determined pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)) of such property paid all Company liabilities (limited with respect to each
nonrecourse liability to the Gross Asset Value of the assets securing such liability) and all remaining cash
were distributed in liquidation immediately following the end of such taxable year in accordance with
Section 4.02.
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4.05 Special Allocations. The following special allocations shall be made in the following
order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Regulation Section
1.704-2(f), and notwithstanding any other provision of this ARTICLE IV, if there is a net decrease in
Company Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of
Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount
equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance
with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items
to be so allocated shall be determined in accordance with Regulation Sections 1.704-2(f)(6) and
1.704-2(j)(2). This Section is intended to comply with the minimum gain chargeback requirement in
Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Member Minimum Gain Chargeback. Except as otherwise provided in
Regulation Section 1.704-2(i)(4) and notwithstanding any other provision of this ARTICLE IV, if there is
a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal
Year, each Member who has a share of the Member Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulation Section 1.704-2(i)(5), shall be specially
allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Member’s share of the net decrease in Member Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with Regulation Section
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section is
intended to comply with the minimum gain chargeback requirement in Regulation Section 1.704-2(i)(4)
and shall be interpreted consistently therewith.
(c) Qualified Income Offset; Loss Limitation.
(i) If any Member unexpectedly receives any adjustment, allocation, or
distribution described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or
increases an Adjusted Capital Account Deficit, items of Company income and gain shall be
allocated to such Member in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, the Adjusted Capital Account Deficit of such Member, provided that such
allocations shall be made only if and to the extent that such Member would have an Adjusted
Capital Account Deficit after all other allocations provided for in this ARTICLE IV have been
tentatively made as if this Section 4.05(c)(i) were not in the Agreement. This provision is
intended to be a “qualified income offset,” as defined in Regulation Section 1.704-1(b)(2)(ii)(d),
such Regulations being specifically incorporated herein by reference.
(ii) The Losses allocated pursuant to Section 4.04 hereof shall not exceed the
maximum amount of Losses that can be so allocated without causing any Member to have an
Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of
the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of
Losses pursuant to Section 4.04 hereof, the limitation set forth in this Section 4.05(c)(ii) shall be
applied on a Member by Member basis so as to allocate the maximum permissible Losses to each
Member under Section 1.704-1(b)(2)(ii)(d) of the Regulations.
(d) Gross Income Allocation. In the event any Member has a deficit in its Capital
Account at the end of any Fiscal Year which is in excess of the sum of (i) the amount such Member is
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obligated to restore pursuant to any provision of this Agreement, and (ii) the amount such Member is
deemed to be obligated to restore pursuant to the penultimate sentences of Regulation Sections
1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income
and gain in the amount of such excess, provided that an allocation pursuant to this Section shall be made
only if and to the extent that such Member would have a deficit in its Capital Account in excess of such
sum after all other allocations provided for in this ARTICLE IV have been made as if Section 4.05(c)(i)
hereof and this Section 4.05(d) were not in this Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be
specially allocated to each Member based upon their respective Member Percentages.
(f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for
any Fiscal Year shall be specially allocated to the Member who bears the economic risk of loss with
respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable
in accordance with Regulation Section 1.704-2(i)(1).
(g) Excess Nonrecourse Liabilities. Solely for purposes of determining a Member’s
proportionate share of the “excess nonrecourse liabilities” of the Company within the meaning of
Regulation Section 1.752-3(a)(3), the Members’ interests in Company profits are based upon their
respective Member Percentages.
(h) Distributions with Respect to Nonrecourse Liabilities. To the extent permitted by
Regulation Section 1.704-2(h)(3), the Manager shall endeavor to treat distributions of Available Cash as
having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to
the extent that such distributions would not cause or increase an Adjusted Capital Account Deficit for any
Member.
(i) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Company Asset pursuant to Code Section 734(b) or Code Section 743(b) is required,
pursuant to Regulation Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as the result of a Distribution to a Member in complete
liquidation of its Member Interest, the amount of such adjustment to Capital Accounts shall be treated as
an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such
basis) and such gain or loss shall be specially allocated to the Members in accordance with their Member
Percentages in the event that Regulation Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to
whom such distribution was made in the event that Regulation Section 1.704-1(b)(2)(iv)(m)(4) applies.
4.06 Curative Allocations. The allocations set forth in Section 4.05 (the “Regulatory
Allocations”) are intended to comply with certain requirements of the Regulations. It is the intent of the
Members that, to the extent possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Company income, gain, loss or
deduction pursuant to this Section. Therefore, notwithstanding any other provision of this ARTICLE IV
(other than the Regulatory Allocations), the Manager shall make such offsetting special allocations of
Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal
to the Capital Account balance such Member would have had if the Regulatory Allocations were not part
of the Agreement and all Company items were allocated pursuant to Section 4.04.
4.07 Tax Allocations. Code Section 704(c).
(a) In accordance with Code Section 704(c) and the Regulations thereunder, income,
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gain, loss, and deduction with respect to any property contributed to the capital of the Company shall,
solely for tax purposes, be allocated among the Members so as to take account of any variation between
the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross
Asset Value (computed in accordance with subparagraph (i) of the definition of “Gross Asset Value”).
(b) In the event the Gross Asset Value of any Company Asset is adjusted pursuant to
subparagraph (ii) of the definition of “Gross Asset Value,” subsequent allocations of income, gain, loss,
and deduction with respect to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Regulations thereunder.
(c) Any elections or other decisions relating to such allocations shall be made by the
Manager in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations
pursuant to this Section are solely for purposes of federal, state, and local taxes and shall not affect, or in
any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses,
other items, or distributions pursuant to any provision of this Agreement.
(d) Except as otherwise provided in this Agreement, all items of Company income,
gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the
Members in the same proportions as they share Profits or Losses, as the case may be, for the Fiscal Year.
4.08 Other Allocation Rules.
(a) Profits, Losses and any other items of income, gain, loss or deduction shall be
allocated to the Members pursuant to this ARTICLE IV as of the last day of each Fiscal Year; provided
that Profits, Losses and such other items shall also be allocated at such times as the Gross Asset Values of
Company property are adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value.
(b) For purposes of determining the Profits, Losses, or any other items allocable to
any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other
basis, as determined by the Manager using any permissible method under Code Section 706 and the
Regulations thereunder.
(c) All allocations to the Members pursuant to this ARTICLE IV shall, except as
otherwise provided, be divided among them in proportion to the Member Percentages held by each.
(d) The Members are aware of the income tax consequences of the allocations made
by this ARTICLE IV and hereby agree to be bound by the provisions of this ARTICLE IV in reporting
their shares of Company income and loss for income tax purposes, except to the extent otherwise required
by law.
4.09 Allocations to Transferred Interest. Company Profits and Losses which are allocable
to a Member Interest that was Transferred or assigned during a Fiscal Year pursuant to this Agreement
shall be further allocated between or among the transferor and transferee Members in proportion to the
number of days during the Fiscal Year that each such transferee/transferor/Assignee/assignor owned said
Member Interest or in any other proportion authorized by the Code and selected by the Manager, without
regard to the actual Company Profits or Losses as of the date of such Transfer or assignment and without
regard to any Distributions made with respect to such Member Interest.
4.10 No Restoration of Negative Capital Account.. No Member shall be required to
restore a negative Capital Account.
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ARTICLE V
MANAGEMENT OF THE COMPANY
5.01 Company Management.
(a) Manager.
(i) Rights, Powers and Duties; Initial Manager. Subject to the provisions of
Sections 2.10, 5.02 or as otherwise provided in this Agreement requiring the Required Vote, the
overall management and control of all aspects of the business and operations of the Company
shall be vested in the Manager, and all actions referenced herein to be taken by the Company
(including decisions on behalf of the Company with respect to its interests to the Subsidiaries and
with respect to the Company Assets) shall mean by the Manager pursuant to and as stated in this
Agreement. The Manager shall have all the rights and powers provided in this Agreement, the
Law and the Articles, and any action rightfully taken by the Manager shall, except as expressly
otherwise provided in Sections 2.10, 5.02 or elsewhere in this Agreement, the Articles or the
Law, constitute the act of and serve to bind the Company. With respect to all of its obligations,
powers and responsibilities and the limitations thereon as provided in this Agreement, the
Manager is authorized to execute and deliver, for and on behalf of the Company, such agreements
or instruments as the Manager may deem necessary or desirable, all on such terms and conditions
as each may deem necessary or desirable, and the execution of such agreements, instruments or
other documents by the Manager shall be sufficient (subject to the terms of this Agreement) to
bind the Company. Furthermore, the Manager shall promptly notify all Members upon receiving
notice or becoming aware of any dispute raised against the Company, any Subsidiary, or other
assets of the Company that would have a potential negative financial impact on the Company in
excess of One Hundred Thousand Dollars ($100,000). Without limiting the generality of the
foregoing, but subject to Section 5.02 hereof, the Manager shall have the right, power and
authority, on behalf of the Company, to:
(A) Execute, on behalf of the Company, any and all agreements,
contracts, documents, certificates and other instruments which may be necessary or in the
opinion of the Manager necessary or desirable to carry out the intent and purpose of this
Agreement and/or which are in connection with the Company’s Business, not requiring
Member approval, including, but not limited to any documents whose operation and
effect may extend beyond the Term of the Company;
(B) Employ such agents, employees, Officers (pursuant to Section
5.01(b) hereof), managers, accountants, attorneys, consultants and other professionals for
the conduct of the Company’s Business and pay from Company Assets such fees,
expenses, salaries, wages and other compensation to such parties (whether Members,
Affiliates of Members or non-Members) as are appropriate;
(C) Hire, retain or employ, fire and coordinate the services of all
employees, supervisors, property managers, project managers, construction managers,
leasing agents, architects, engineers, attorneys, accountants, consultants, independent
contractors and other Persons necessary or appropriate to carry out the business of the
Company (whether they be Members, Affiliates of Members or non-Members),
recognizing all Members have approved the services and fees as provided in Section
2.10;
(D) Acquire the Company Assets and own and hold such Company
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Assets itself or through its Subsidiaries;
(E) Exercise all equity and voting rights and control of any
Subsidiary;
(F) Obtain all permits, licenses and other authorizations and
permissions to develop and operate the Company Assets in furtherance of the Company
Business;
(G) Construct, operate, maintain, and improve, or lease any real
estate in furtherance of the Company Business;
(H) Negotiate all terms of, and approve on behalf of the Company,
the sales or rental contracts for entire buildings or individual units with respect to the
Company Assets in connection with the Company Business, and enter, or authorize other
Persons to enter, on behalf of the Company or its Subsidiaries, into such contracts with
any such purchasers or lessees, or to enter into and/or authorize the sale of the entire
Company Business; in any event;
(I) Make any purchases for, on behalf of, or in the name of, the
Company, in the ordinary course of the Company’s Business;
(J) Obtain debt financing through loans, mortgage loans or
construction financing loans, in connection with the Company Business, and/or any
refinancings thereof;
(K) Sell, dispose, trade, lease, or exchange Company Assets in the
ordinary course of the Company’s Business, or as part of a sale-leaseback transaction;
(L) Pay from Company Assets, extend, renew, modify, adjust,
submit to arbitration, prosecute, defend or compromise upon such terms as it may
determine, and upon such evidence as it may deem sufficient, any obligation, suit,
liability, cause of action or claim, including taxes, either in favor of or against the
Company;
(M) Pay from Company Assets any and all expenditures that are
necessary for the conduct of the Company’s Business and the carrying out of its
obligations and responsibilities under this Agreement to the extent permissible under any
other agreements (including mortgages) to which the Company or any of its Subsidiaries
are a party;
(N) Purchase at the expense of the Company such market research
reports, economic and statistical data, evaluations, analyses, opinions and
recommendations as are reasonable or necessary;
(O) Purchase, at the expense of the Company, liability and other
insurance to protect the Members, Manager, the Officers, the Company, the Company’s
Business, its employees, properties and other assets;
(P) Invest the Company’s assets in bank and savings and loan
association savings accounts, whose accounts are insured by the FDIC (recognizing that
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based on the monies in the accounts, the total amount may not be insured), commercial
paper, government securities, certificates of deposit, bankers’ acceptances, other short
term interest bearing obligations and any other investments;
(Q) Make Distributions of capital or income, in cash or property, to
Members, in accordance with ARTICLE IV hereof;
(R) Arbitrate or consent to arbitrate any dispute or controversy
affecting the Company’s Business;
(S) Execute and deliver releases and discharges on behalf of the
Company;
(T) Maintain, at the expense of the Company, adequate records and
accounts of all operations and expenditures and furnish the Members with annual and
quarterly statements of accounts as of the end of each Company Fiscal Year, together
with tax reporting information;
(U) Issue Capital Call Notices, and accept Additional Capital
Contributions from Members, all pursuant to Section 3.02 hereof;
(V) Amend the Member Percentages of the Members, as set forth on
Schedule A attached hereto, to give effect to Additional Capital Contributions,
conversion of Default Loans or the issuance of new Member Interests in accordance with
ARTICLE VII hereof or as otherwise provided for in this Agreement;
(W) Repurchase all or a portion of the Member Interest of a Member,
with such Member’s consent which will be offered pro rata (based on their respective
Member Percentage) to all other Members (other than such selling Member or as
otherwise provided for in this Agreement);
(X) Consent on behalf of the Company to assignments and Transfers
of Member Interests pursuant to ARTICLE VII hereof;
(Y) Make, refrain from making, or revoke such elections under the
tax laws of the United States, the several States and other relevant jurisdictions as to the
treatment of items of Company income, gain, loss, deduction, and credit and as to all
other relevant matters (including, without limitation, elections under Section 754 of the
Code), as Manager has been advised is necessary or desirable by the Company
Accountants, and as authorized by the Required Vote;
(Z) Establish and maintain Reserves, in such amount as the Manager
determine to be appropriate, in their reasonable discretion under the then existing
circumstances; and
(AA) Take any and all other actions permitted under the Law and that
is reasonably related to Company Business.
(ii) Compensation. Except as provided elsewhere in this Agreement or as
otherwise agreed to in writing by the Required Vote, the Manager shall serve as Manager without
compensation, additional Distributions or allocations from the Company. The Manager may
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retain itself and/or its Affiliates to perform services on behalf of the Company and/or its
Subsidiaries without a Required Vote if the fees for such services do not exceed commercially
market terms.
(iii) Contractual Provisions. The Manager shall have the right and authority
to require a provision in all Company contracts that the Manager shall not be personally liable
thereon and that the Person contracting with the Company is to look solely to the Company and
its assets for satisfaction.
(iv) Delegation of Duties. The Manager shall have the right and authority to
delegate, at the Company’s expense and subject to the terms of this Agreement, to one or more
Persons (including, but not limited to, delegation among the Officers) the Manager’ right and
powers to manage and control the businesses, investments and affairs of the Company, including
to delegate to agents, employees and Affiliates of the Manager or the Company.
(v) Decisions. Unless otherwise provided in this Agreement to the contrary,
all approvals, decisions or similar actions of the Manager shall be in its sole determination and
discretion.
(b) Officers.
(i) Appointment of Officers. The Company is not required to appoint
Officers. If appointed, the Officers of the Company may consist of a Chairman and Chief
Executive Officer, President, a Chief Operating Officer, one or more Vice Presidents, a Treasurer,
a Secretary, and one or more Assistant Treasurers or Assistant Secretaries, all as determined by
the Manager. The Company’s initial Officers, if any, shall be as listed on Schedule B attached
hereto. The scope of authority of each Officer shall be as established by the Manager and shall at
all times be subject to the control and supervision of the Manager. Officers need not be a
Member, but must be natural persons, as is otherwise required in a corporation governed by the
General Corporation Law of the State of Delaware (“Delaware’s Corporate Laws”). The Officers
of the Company, if any, shall be appointed, replaced and/or removed by the Manager and shall
hold office until the Officer’s death, resignation, replacement or removal in accordance with this
Agreement. A Person may hold more than one office at the same time, except that the offices of
President and Vice President may not be held by the same Person. Appointment of an Officer or
agent shall not of itself create contract rights between the Company and that Officer or agent. A
vacancy in any office may be filled by the Manager.
(ii) Authority of Officers. Subject to limitations or other variances that may
be imposed from time to time by the Manager or by this Agreement, the Officers of the Company
shall have the authority to control and manage the day-to-day operations of the Company, and to
act for and bind the Company without the authorization of the Manager or the Members, as the
officers of the same or similar titles in a corporation governed by Delaware’s Corporate Laws
have to control and manage the day-to-day operations and to bind and act for the corporation
without the approval of the corporation’s board of directors.
(iii) No Compensation of Officers. Unless otherwise determined by the
Required Vote, the Officers shall receive no compensation for consideration of their duties as
Officers of the Company.
(iv) Removal and Resignation of Officers.
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(A) The Manager may at any time, and from time to time, with or
without cause remove an Officer as an officer of the Company, but the removal shall be
without prejudice to the contract rights, if any, of the Officer so removed.
(B) Unless stated otherwise herein or in any written agreement
between the Company and an Officer, an Officer may resign as an Officer of the
Company at any time upon written notice to the Manager.
(C) Upon removal or resignation, a removed/resigned Officer shall
immediately cease to have authority to act as an Officer of the Company. Any Company
funds or other property in the possession or under the control of such removed/resigned
Officer shall immediately be released and transferred to the Company. A
removed/resigned Officer shall cooperate in the orderly transition of affairs to its
successor.
(D) The removal or resignation of an Officer who is also a Member
or Affiliate of a Member shall not affect the Officer’s rights as a Member, and shall not
constitute a withdrawal of the Member or redemption of the Member’s Member Interest,
unless provided otherwise in this Agreement.
5.02 Limitations on Authority. Notwithstanding anything to the contrary contained
herein, without the Required Vote, no Manager nor any Officer shall have authority to:
(a) Obtain or modify any loan secured by a mortgage or lien on all or any portion of
the Company Assets, or refinance any such Loan;
(b) Sell, exchange, lease for a term in excess of ten (10) years, other than in the
ordinary course of business, the Company Assets;
(c) Dissolve or terminate the Company, and wind-up its affairs, or merge or convert
the Company with or into any other business entity;
(d) Change in any material respect of the Company Business other than with respect
to the sale of portions of the Company Assets; and
(e) Any other act for which this Agreement requires the Required Vote.
5.03 Liability and Indemnification of the Manager and Officers.
(a) Neither the Manager, the Officers, Guarantors nor any of their Affiliates,
designees, successors or assigns (the “Indemnified Principals”) shall be liable to the Company or the
Members for any loss or damage incurred by reason of any act performed or omitted in connection with
the activities of the Company or in dealing with third parties on behalf of the Company, unless such act or
omission was taken or omitted by the Indemnified Principal constitutes fraud, gross negligence or willful
breach of this Agreement, in violation of the limits on the authority of the Indemnified Principals set forth
in this Agreement. The Indemnified Principals do not, in any way, guarantee the return of the Members
capital or a profit from the operations of the Company or its Subsidiaries. The Indemnified Principals
shall not be responsible to any Member because of a loss of that Member’s investment or a loss in
operations, unless it has been occasioned by fraud, gross negligence or a willful breach of this Agreement
by such Indemnified Principals.
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(b) The Company, its receiver or its trustee, shall indemnify, defend and save
harmless the Indemnified Principals from any claim, liability, loss, judgment or damage incurred by them
by reason of any act performed or omitted to be performed in connection with the activities of the
Company or in dealing with third parties on behalf of the Company, including costs and attorneys’ and
paralegals’ fees (which costs and fees may be paid by the Company as incurred) and any amounts
expended in the settlement of any claims of liability, loss or damage, provided that the act or omission of
the Indemnified Principal is not found, by a final, non-appealable ruling of a court of competent
jurisdiction to have resulted from an act or omission of the Indemnified Principal, or that constitutes
fraud, gross negligence or willful breach of this Agreement, by the Indemnified Principal in violation of
the limits on the authority of the Indemnified Principal set forth in this Agreement. The Company shall
advance all sums required to indemnify, defend and hold the Indemnified Principals harmless as provided
herein from the initiation of any claim against such Indemnified Principals, subject to acknowledgment in
writing by such Indemnified Principals of the obligation to reimburse the Company in the event that,
following the entry of a final, non-appealable judgment, it is determined that the Company was not
obligated or permitted to indemnify such Indemnified Principal pursuant to this Agreement. All
judgments against the Company and any one or more Indemnified Principals, wherein an Indemnified
Principal is entitled to indemnification, must first be satisfied from Company Assets before the
Indemnified Principal shall be responsible for such obligations. The Company shall not pay for any
insurance covering liability of the Indemnified Principals for actions or omissions for which
indemnification is not permitted hereunder; provided, that nothing contained herein shall preclude the
Company from purchasing and paying for such types of insurance, including extended coverage liability
and casualty and worker’s compensation, as would be customary for any person owning comparable
property and engaged in a similar business or from naming any one or more of the Indemnified Principals
as additional insured parties thereunder. The provisions of this Section shall survive the expiration or
termination of this Agreement and the Term of the Company. For the purposes of this paragraph, the
Indemnified Principals shall include the Indemnitees listed in Exhibit 5.03(b).
5.04 Subsidiary Management. The parties hereto acknowledge that the Company may
own Company Assets through one or more Subsidiaries and the Manager may act on behalf of the
Company with respect to such Subsidiaries.
5.05 Certain Waivers. To the extent that a Member or Manager has duties and liabilities
relating to the Company or to another Member pursuant to this Agreement, the Member or Manager
acting under this Agreement shall not be liable to the Company or to any other Member for its good faith
reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent they restrict
or reduce the duties and liabilities of a Member otherwise existing at law or in equity shall replace the
other duties and liabilities of such Member.
ARTICLE VI
MATTERS REGARDING MEMBERS
6.01 Liability and Indemnification of Members.
(a) Except as may be otherwise provided in this Agreement or agreed to by a
Member, the Members shall not be bound by, or personally liable for, obligations or liabilities of the
Company beyond the amount of their initial Capital Contributions and any Additional Capital
Contributions to the Company; provided, however, the Members are obligated to return a Distribution
from the Company to the extent required by Law.
(b) Subject to the provisions of the Loan Documents, as and when applicable, the
Company will indemnify, to the extent of Company Assets, each Member against any claim of liability
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asserted by a Person other than the Company or another Member against a Member solely because the
Member is a Member of the Company, except for claims for fraud, gross negligence or an intentional or
willful breach of this Agreement. The Company shall advance all sums required to indemnify, defend and
hold the Members harmless as provided herein from the initiation of any claim against such Member,
subject to acknowledgment in writing by such Member of the obligation to reimburse the Company in the
event that, following the entry of a final, non-appealable judgment, it is determined that the Company was
not obligated to indemnify such Member pursuant to this Agreement.
6.02 Management. No Member is an agent of the Company solely by virtue of being a
Member. Except as provided in other provisions of this Agreement to permit such management actions,
no Member has the right, power or authority to sign for, act for or bind the Company solely by virtue of
being a Member. Except for their right to consent to certain actions as provided herein, and in particular
Section 5.02 hereof, the Members in their capacities as Members shall not participate in the operation or
management of the business of the Company, or transact any business for or in the name of the Company.
Any Member who signs for, takes any action for, or binds the Company in violation of this Section 6.02
shall be solely responsible for any loss and expense incurred as a result of the unauthorized action and
shall indemnify and hold the Company harmless with respect to the loss or expense. However, in the sole
discretion of the Manager, the Company is entitled to keep any benefit to the Company (including but not
limited to any revenue, income or profit) resulting from any action taken by a Member in violation of this
Section 6.02.
6.03 Limitation of Certain Rights. The Members shall not have the right or power to: (i)
withdraw or reduce their Capital Contributions to the Company except as a result of the dissolution of the
Company or as otherwise provided in this Agreement or required by the Law; (ii) bring an action for
partition against the Company or with respect to any of its property; or (iii) cause, or request any court or
other governmental agency or body to cause, the termination or dissolution of the Company by court
decree or as may otherwise be permitted by the Law, such rights being specifically waived by the
Members.
6.04 Voting. Whenever the Members are entitled by this Agreement to vote on any
particular matter, each Member shall be entitled to vote in proportion to the then-existing Member
Percentage of such Member as set forth on Schedule A, as amended. A Member may vote all of its
Member Percentage in favor of or against any matter to be voted on by such Member, or a Member may
choose to split its vote, in which case it may vote a portion of its Member Percentage for such matter and
a portion of its Member Percentage against such matter. The Manager shall be entitled to rely on the
representations of a Member and/or its Affiliates in determining whether such Member’s vote may be
split as to any particular matter to be voted upon by the Members. Except as specifically provided to the
contrary herein, all actions of the Members shall be authorized by Required Vote, either (a) at a duly
convened meeting in person, pursuant to Section 6.05 hereof, or (b) by written consent executed by
Members constituting a Required Vote. If action is taken by the Members by written consent in lieu of a
meeting, notice of such action shall be given to the Members that did not execute such written consent
within ten (10) days after such action is effective; provided that failure to give such notice shall not affect
the validity and binding effect of any such action by written consent.
6.05 Meetings of the Members.
(a) Meetings of the Members for any purpose may be called by the Manager, and
shall be called by the Manager upon receipt of a request in writing signed by any Member or group of
Members owning at least a ten percent (10%) Member Percentage. Such request shall state the purpose or
purposes of the proposed meeting and the business to be transacted. Such meetings shall be held at a
location specified by the Manager, which shall be in Miami-Dade County, Florida. Any one or more
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Members may participate in a meeting of the Members by means of conference telephone or similar
communications equipment allowing all persons participating in the meeting to hear each other at the
same time. Participation by such means or by proxy shall constitute presence in person at such meeting.
Notice of any such meeting shall be delivered to all Members entitled to vote at such meeting in the
manner prescribed in Section 11.02 of this Agreement within ten (10) days after receipt of such request
and no fewer than fifteen (15) days or more than ninety (90) days before the date of such meeting. The
notice shall state the place, date, hour and purpose of the meeting. Notwithstanding the foregoing
provisions, each Member who is entitled to notice waives objections to the place, date, hour and purpose
of the meeting if before or after the meeting the Member signs a waiver of the notice which is filed with
the records of Members’ meetings, or participates in the meeting in person or by proxy other than for the
sole purpose of objecting to the notice. At each meeting the Members present or represented by proxy
shall adopt such rules for the conduct of such meeting as they shall deem appropriate. A list of the names
and addresses of all Members shall be maintained as part of the books and records of the Company. Each
Manager shall be entitled to have the other Manager provide it with reasonable information within such
other Manager’ possession.
(b) The presence in person or by proxy of the Required Vote shall constitute a
quorum at all meetings; provided, however, that if there be no such quorum, Members (or their proxies)
owning more than fifty percent (50%) of the Member Percentages of the Members present at such
meeting may adjourn the meeting from time to time without further notice, until a quorum shall be
obtained.
(c) Each Member may authorize any Person to act for it by proxy in all matters in
which a Member is entitled to participate. Every proxy must be signed by the Member or its
attorney-in-fact (other than the Manager). Unless a proxy is expressly stated to be irrevocable, is coupled
with an interest and is approved, in writing, by the Manager, every proxy shall be deemed to be revocable
and shall no longer be valid after the expiration of six (6) months from the date thereof. Every revocable
proxy shall be recoverable and rescindable (if rescinded prior to any vote) by the Member executing it.
6.06 Withdrawal of Members. No Member may voluntarily withdraw or resign as a
Member of the Company prior to the dissolution and winding up of the Company without the prior
Required Vote of the remaining Members.
6.07 Nature of Members’ Interest. Member Interests in the Company shall be personal
property for all purposes. No Member, or its successor, representative or assign, shall have any right, title
or interest in specific Company property.
6.08 Prohibition on Liens. No Member shall cause or permit to be created a lien or
security interest in its Member Interest, except with the prior written consent of the Manager, which
consent may be withheld for any reason or no reason whatsoever.
6.09 No Appraisal Rights. The Members each hereby agree that no Member shall be
entitled to any appraisal rights otherwise provided in the Law. To the extent not eliminated, each Member
hereby waives all right such Member may have had to any appraisal rights.
ARTICLE VII
ISSUANCE AND TRANSFERS OF MEMBER INTERESTS
7.01 Prohibition. Except as provided in this ARTICLE VII and pledges permitted by
Section 6.08, no Member may Transfer all or any portion of its Member Interest.
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7.02 Rights of Assignee. An Assignee shall be entitled to share in such Profits and
Losses, to receive such Distributions, and to receive such allocation of income, gain, loss, deduction, or
credit or similar item to which the assignor was entitled, to the extent assigned. Any interest in the
Company or any Member Interest acquired by an Assignee is subject to the terms and conditions of this
Agreement and the Articles. An Assignee shall not be admitted as a Member of the Company unless (a)
the Manager approve such Assignee becoming a Member, and (b) the other conditions specified in
Section 7.04 hereof are satisfied. An Assignee has no rights or entitlements in respect to the Company or
any Member Interest except as specifically granted to the Assignee in this Agreement or the Articles. By
way of illustration and not limitation, an Assignee shall have no (i) voting or consent rights of any nature
or kind, or (ii) rights to require any information or accounting of the Company’s transactions or finances
or to inspect Company books unless an Assignee is admitted to the Company as a Member pursuant to
this Section and Section 7.04, in which case such admission shall vest in such Assignee all rights, powers,
authorities, obligations and responsibilities inuring to and imposed upon Members hereunder.
7.03 Issuance of Additional Member Interests. No additional Members shall be admitted
into the Company by creation of additional Member Interests without the prior approval of the Manager,
provided Potential New Members that are Affiliates of Manager shall not be admitted if same shall not
dilute the Members’ pro rata, without the Required Vote of the Members. The Manager will determine
when it is in the best interest of the Company to issue additional Member Interests to any Person
(“Potential New Member”), the Capital Contribution to be required, the Member Percentage to be given,
and the other terms and conditions of any issuance of additional Member Interests; and the Member
Percentages of all Members existing prior to such issuance shall, unless otherwise agreed by any
adversely affected Member, be diluted proportionately as required to issue the new Member Interests.
Any additional Member admitted into the Company shall comply with such additional requirements of
admission as determined by the Members, provided such requirements are not inconsistent with the
provisions of this Agreement.
7.04 Admission of Members. An Assignee or Potential New Member will be admitted to
the Company as a successor or additional Member only if all of the following conditions are met:
(a) The Member has complied with all applicable requirements of this ARTICLE
VII;
(b) The Manager consents in writing, in accordance with Section 7.02 hereof as to
Assignees, and Section 7.03 hereof as to Potential New Member, to the admission of the Assignee or
Potential New Member as a Member;
(c) The Assignee or Potential New Member agrees in writing to be bound by the
provisions of this Agreement, including all Exhibits hereto (e.g. indemnification/contribution);
(d) The Assignee or Potential New Member executes any and all documents,
including an amendment to this Agreement, required to effectuate or evidence its admission to the
Company as a Member, and delivers to the Company its (A) taxpayer identification number, and (B)
initial tax basis in the Transferred Interest;
(e) The Assignee or Potential New Member reimburses the Company for all
reasonable costs and expenses (including reasonable attorney’s fees) incurred in connection with the
Transfer and admission, if applicable;
(f) The Assignee or Potential New Member is not a minor (unless held by a Person
under the gift to minors or similar representative capacity where the trustee, custodian or similar person
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holding the interest for such minor is not a minor) or legally incompetent;
(g) The Transfer of the existing Member Interest or issuance of additional Member
Interest does not constitute a default under any agreement to which the Company, assignor, Assignee or
Potential New Member is bound;
(h) The principal of such Assignee or Potential New Member complies with Section
3.04 of this Agreement; and
(i) If deemed necessary by the Members, an opinion of counsel is delivered to the
Members in form, substance and from counsel satisfactory to the Members to the effect that the proposed
Transfer or issuance of additional Member Interest: (A) does not require registration under the Securities
Laws; (B) will not result in the Company being subject to the Investment Company Act of 1940, as
amended; and (C) will not cause the Company’s election for pass through tax treatment to be terminated
for federal income tax purposes pursuant to Code Section 708.
7.05 Permitted Transfer. Except as set forth in this Section, the prohibitions and
restrictions on Transfers of Member Interests set forth in this ARTICLE VII shall not apply to a Transfer
of all or a portion of a Member Interest (but the provisions of Section 3.04 shall apply) to any Permitted
Transferees. Any Transfer to a Permitted Transferee shall still be subject to compliance with the
provisions of Section 7.04(c) through 7.04(h) hereof; provided, however, that if the Transfer is to another
Member, the requirements of Sections 7.04(c) and 7.04(d) shall be deemed satisfied. If there is a Transfer
of a Membership Interest which is not permitted by this Agreement, such Membership Interest shall not
have voting rights as a Member until such Transfer is permitted under this Agreement.
7.06 Right of First Refusal.
(a) In the event that prior to the provisions of Section 7.07 or 7.08 being effectuated,
a Member desires to sell all, but such Members may not sell less than all of its Member Interest (“Offered
Interest”) directly, or indirectly through a Transfer of the equity or voting rights of a Member, to any
Person other than the Company or a Permitted Transferee to the extent set forth in Section 7.05
(“Proposed Transferee”), such Member (“Offeror Member”) shall give written notice (“Notice of Offer”)
of the proposed sale to the Company and to all the other Members. The Notice of Offer shall include: (i) a
true copy of a bona fide, signed, written offer by the Proposed Transferee to purchase the Offered Interest,
the price (“Purchase Price”) and the terms and conditions (“Purchase Terms”) upon which such offer is
made, including any deposit paid or required, and the name and the residence address of the ultimate
Proposed Transferee; and (ii) an offer (“Purchase Offer”) to sell all the Offered Interest at the Purchase
Price and on the Purchase Terms to the Company and, secondarily, in the event the Company is unable or
does not desire to purchase the Offered Interest, to all the other Members (hereinafter referred to
individually as “Offeree Member” and collectively as “Offeree Members”). The Purchase Offer shall be
and remain irrevocable until 11:59 PM (local time of the Company’s principal office) on the twentieth
(20th) day after the date on which the Company is deemed to have received the Notice of Offer (the
“Acceptance Period”).
(b) The Company and each Offeree Member shall give the Offeror Member written
notice of its or his acceptance of the Purchase Offer on or before the expiration of the Acceptance Period.
(c) If the Company gives the Offeror Member written notice of its acceptance of the
Purchase Offer within the Acceptance Period, the Company shall purchase all the Offered Interest at the
Purchase Price and on the Purchase Terms. If the Company does not give the Offeror Member written
notice of its acceptance of the Purchase Offer within the Acceptance Period, any Offeree Members who
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have given the Offeror Member written notice of their acceptance of the Purchase Offer (hereinafter
referred to individually as “Purchasing Member” and collectively as “Purchasing Members”) shall
purchase all the Offered Interest at the Purchase Price and on the Purchase Terms in such individual
proportions as they shall mutually agree or, in the absence of such agreement, in such individual
proportions as the amount of each Purchasing Member’s Member Interest bears to the aggregate amount
of all the Member Interests owned by the Purchasing Members. The foregoing shall not prohibit the
Company and the Offeree Members from collectively purchasing all the Offered Interest in such
individual proportions as they shall mutually agree.
(d) In the event that neither the Company nor any of the Offeree Members give the
Offeror Member written notice of their acceptance of the Purchase Offer in the manner described above
within the Acceptance Period, the Offeror Member may sell all the Offered Interest to the Proposed
Transferee for the Purchase Price and subject to the Purchase Terms; provided, however, that the sale to
the Proposed Transferee must be unconditionally concluded within sixty (60) days after the expiration of
the Acceptance Period or the Offeror Member must again offer the Offered Interest to the Company and
the Offeree Members in accordance with the provisions of this Section prior to consummating the sale
with the Proposed Transferee. Upon consummation of the sale to a Proposed Transferee, such Proposed
Transferee shall have the status of an Assignee hereunder, unless and until such Assignee is admitted as a
Member in accordance with Section 7.04 hereof.
(e) The closing (“Closing”) of the purchase of the Offered Interest by the Company
and/or the Purchasing Members pursuant to this Section 7.06 shall be held on the date set forth for
Closing in the Purchase Terms if such date is not earlier than the thirtieth (30th) day, nor later than the
sixtieth (60th) day, following the date on which the Notice of Offer was given. Otherwise, the Closing
date shall be the forty-fifth (45th) day after the date on which the Notice of Offer was given (or, if not a
Business Day, the next Business Day thereafter). At Closing, the Offeror Member shall: (i) represent and
warrant that the Offeror Member is the sole owner of the Member Interest being sold, that such Member
Interest is held free and clear of any and all pledges, claims, liens, encumbrances and rights of others
(other than as set forth in this Agreement) and that the Offeror Member has the full power, right and
authority to consummate the transaction; (ii) resign and cause the Offeror Member’s appointees to resign
from all offices and managerial positions held with the Company; and (iii) deliver to the Company and/or
the Purchasing Members all other documents necessary to transfer such Member Interest.
7.07 Mandatory Sale.
(a) Mandatory Sale Initiation and Exercise. In the event that there is an event which
requires the approval of a Required Vote and there is not an approval by the Required Vote to such action
(“Deadlock”), then any Members which voted one way in such action in which there was a Deadlock
(hereinafter referred to as “Initiating Member”) shall have the right to initiate a “Mandatory Sale” by
giving written notice thereof (“Mandatory Sale Notice”) to each of the other Members who voted the
other way in the action which caused the Deadlock (hereinafter referred to as “Electing Members”). The
Mandatory Sale Notice shall contain: (i) a dollar amount value of the Company’s gross assets (“Estimated
Value”) as determined by such Initiating Member in its sole discretion; (ii) an offer to buy (“Offer to
Buy”) all, but not less than all, of each Electing Member’s Member Interest for the “Mandatory Sale
Price” (hereafter defined) applicable to the Electing Member; and (iii) an offer to sell (“Offer to Sell”) all,
but not less than all, the Initiating Member’s Member Interest to the Electing Members for the Mandatory
Sale Price. For purposes of this Section 7.07, the Mandatory Sale Price with respect to a Member shall be
equal to the amount of money such Member would be entitled to receive in respect of its Member Interest
if the Company’s assets were sold for the Estimated Value, all debts of the Company (including the Loans
and loans to and from the Members, including Default Loans and Priority Loans) were paid in full, (if the
Seller is a Defaulting Member then the Mandatory Sale Price shall be reduced by such outstanding
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principal and interest of the Default Loan of such Seller) and the net proceeds of such sale were
distributed among the Members in accordance with Section 9.02 hereof, without any reserves. The
Members acknowledge that the Mandatory Sale Price may not be equal for all of the Members. The
Mandatory Sale Notice shall not be effective unless the Initiating Member has delivered to the trust
account of “Company’s Counsel” (as hereinafter defined) (upon such terms as the counsel may require) a
nonrefundable cash deposit equal to five percent (5%) of the expected Mandatory Sale Price and Default
Loan Payment (as hereinafter defined) that each Electing Member would be reasonably expected to
receive if each Electing Member accepted the Initiating Member’s Offer to Buy (“Initiating Member’s
Deposit”).
(i) Within thirty (30) days after the date on which the Mandatory Sale
Notice is given, the Electing Members shall elect either to accept the Offer to Buy or to accept the
Offer to Sell by giving written notice of such election to the Initiating Member (“Mandatory Sale
Election Notice”) or consent to the action causing the Deadlock
(ii) In the event Electing Members elect to accept the Offer to Sell, each
Electing Member shall (in the absence of an agreement to the contrary by such Electing
Members) purchase a portion of the Initiating Member’s Membership Interest equal to a fraction,
the numerator of which is the Member Percentage of such Electing Member and the denominator
of which is the aggregate Member Percentages of both Electing Members.
(iii) In the event one Electing Member (the “Selling Electing Member”)
elects to accept the Offer to Buy (or is deemed to have elected the Offer to Buy) and one Electing
Member (the “Purchasing Electing Member”) elects to accept the Offer to Sell, the Purchasing
Electing Member shall purchase the Member Interests of both the Selling Electing Member and
the Initiating Member.
(iv) A Mandatory Sale Election Notice electing to accept the Offer to Sell
shall not be effective unless the Electing Member has delivered to the trust account of the
Company’s Counsel (upon such terms as the counsel may require) a nonrefundable cash deposit
equal to five percent (5%) of the reasonably expected Mandatory Sale Price and Default Loan
Payment that the Initiating Member and the Selling Electing Member (if any) would be entitled to
receive as a result of such Offer to Sell (“Electing Member’s Deposit”); provided, however, the
Deposit attributable to the Selling Electing Member shall not be required to be funded until 15
days following the date that the Selling Electing Member elects to accept the Offer to Buy (or is
deemed to have elected the Offer to Buy). The failure of the Electing Member to give the
Mandatory Sale Election Notice or to provide the Electing Member’s Deposit, if required, in
accordance with the foregoing shall be deemed an affirmative election by the Electing Member to
accept the Offer to Buy, and a Mandatory Sale Election Notice to that effect shall be deemed
given as of date the period expires. Upon the Electing Member’s acceptance of the Offer to Sell
in accordance with the foregoing, the Initiating Member’s Deposit shall be refunded to the
Initiating Member. The Member or Members who are obligated to purchase Member Interests
pursuant to these provisions is hereinafter referred to as the “Purchaser,” the deposit such
Member has provided is referred to as the “Deposit,” the Member Interests the Purchaser is
obligated to purchase is hereinafter referred to as the “Mandatory Sale Member Interest,” and the
Member or Members who are obligated to sell Member Interests pursuant to these provisions are
hereinafter referred to as the “Seller.”
(b) Mandatory Sale Closing. The closing (“Mandatory Sale Closing”) under this
Section shall be held on the one hundred twentieth (120th) day following the date on which the
Mandatory Sale Election Notice is given or deemed given, or if such day is not a Business Day then on
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the subsequent Business Day. At the Mandatory Sale Closing, each Seller shall: (i) represent and warrant
in writing to each Purchaser that it is the sole owner of the Mandatory Sale Member Interest, that such
Mandatory Sale Member Interest is held free and clear of any and all pledges, claims, liens and rights of
others (other than the effect of this Agreement) and that it has the full power, right and authority to
consummate the sale of the Mandatory Sale Member Interest; (ii) resign (and cause its designees to
resign) from all managerial positions which it or its designees hold with the Company; and (iii) deliver to
each Purchaser against payment in full therefor an assignment of the Mandatory Sale Member Interest,
together with all other documents necessary to transfer the Mandatory Sale Member Interest. At the
Mandatory Sale Closing, the Purchaser shall deliver the Mandatory Sale Price applicable to each Seller in
cash, by cashier’s check or wire transfer of available funds to an account designated by the Seller. To the
extent the Seller is a Lending Member, the Purchaser shall also be obligated, effective as of the
Mandatory Sale Closing, to pay the portion of the indebtedness the Seller would have received in
repayment of the Default Loans and Priority Loans owed to such Lending Member under Section 9.02 if
the assets were sold for the Estimated Value (“Default Loan Payment”), and cause the Company to pay in
full all other indebtedness of the Company owed to the Seller regardless of the stated due dates thereof.
It shall be a condition precedent to the Purchaser’s right to purchase the Mandatory Sale Member
Interest to comply with the requirements of the Loan Documents and that each Seller and its principals
and Affiliates be released, effective as of the Mandatory Sale Closing, from any and all (A) personal
liability for, and guaranties of, Company indebtedness and obligations and (B) any obligations of such
parties under any indemnification and contribution agreements (other than obligations attributable to
actions of such parties occurring prior to the Mandatory Sale Closing).
In the event that the Purchaser or Seller (“Defaulting Party”), through no fault of the other of the
two (“Non-Defaulting Party”), breaches its obligations to consummate the Mandatory Sale in accordance
with this Section 7.07 (“Mandatory Sale Default”), then the Non-Defaulting Party may:
1) Deliver to Company’s Counsel a certificate signed by the Non-
Defaulting Party certifying that a Mandatory Sale Default has occurred, in which
event the Company’s Counsel shall send written notice to the Defaulting Party of
its receipt of such certificate, together with a copy of the certificate, and, unless
the Defaulting Party shall, within five (5) days after the date such notice is given,
deliver to such counsel a certificate signed by the Defaulting Party and notarized
certifying under oath that a Mandatory Sale Default has not occurred, the
Company’s Counsel shall promptly disburse the Deposit to the Non-Defaulting
Party, as liquidated damages for the Mandatory Sale Default and not as a penalty,
and the Non-Defaulting Party shall have no further obligation to consummate the
Mandatory Sale with respect to which the Mandatory Sale Default occurred. In
the event the Defaulting Party does deliver a written objection to such
disbursement of the Deposit within the time period set forth above, Company’s
Counsel shall either hold the Deposit until a court of competent jurisdiction
determines the appropriate disposition thereof, or place the Deposit with any such
court to be held by the court pending such determination; or
2) Obtain specific performance of the Defaulting Party’s obligation
to consummate the Mandatory Sale as provided herein.
In the event that the Purchaser is the Defaulting Party, then in addition to being entitled to the
Deposit resulting from such default, the Seller shall have the right to purchase the Member Interest of the
Purchaser, whereby the Purchaser shall be deemed to have made an Offer to Sell which may be accepted
by the Seller within fifteen (15) days after such default by the Purchaser, whereupon if Seller shall
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purchase the Membership Interest of the Purchaser for the Mandatory Sale Price of the Purchaser in
accordance with the provisions of this Agreement, Seller shall make the Electing Member Deposit as
provided in this Agreement and the closing shall be sixty (60) days after Seller’s election to purchase the
Purchaser’s interest as provided in this subsection.
Although the remedies in this Section 7.07(c) are intended to be alternative, the fact that any one
remedy shall have been commenced or denied shall not preclude the Non-Defaulting Party from seeking
and obtaining the other remedy.
(c) Notwithstanding anything contained herein to the contrary, in the event that any
Member initiates the mandatory sales provision of this Agreement by delivering a Mandatory Sale Notice,
the other Members shall have the right to cause such Mandatory Sale Notice to be withdrawn, whereby
the provisions of this Section 7.07 would not be applicable in the event that an Electing Member changes
its (or its affiliates) vote within thirty (30) days after the date on which a Mandatory Sale Notice is given
so that the Required Vote is adopted in accordance with the vote previously made by the Initiating
Member (or its affiliate) in connection with such Deadlock.
7.08 Rights of a Member’s Representative. Upon the death, incompetence or Bankruptcy
of an individual who is a Member, his personal representative, guardian, trustee or Person serving in a
similar capacity, as the case may be, shall have all of the rights of a Member for the purpose of settling or
managing his estate, and such power as the decedent, incompetent, or bankrupt possessed to constitute a
successor, other than a Permitted Transferee, as an Assignee and to join with such Assignee in making
application under this ARTICLE VII to substitute such Assignee as a Member. Upon the adjudication of
Bankruptcy, dissolution or other cessation of existence as a legal entity of a Member which is not an
individual, the authorized representative of such entity shall have all of the rights of a Member for the
purpose of effecting the orderly winding-up and disposition of the business of such entity and such power
as such entity possessed to constitute a successor, other than a Permitted Transferee, as an Assignee and
to join with such Assignee in making application to substitute such Assignee as a Member. However,
such representative or trustee shall not, by virtue of that capacity alone, have the right to become a
substituted Member in the place of his predecessor in interest unless the conditions of Section 7.04 are
satisfied, or if such Person is a Permitted Transferee, the applicable conditions of Section 7.05 are
satisfied.
Should any Member die (other than if such Membership Interest on death would be
transferred to a Permitted Transferee) or be adjudged bankrupt by any court of competent jurisdiction (in
either event a “Specified Member”), the Company shall have an option to purchase the Membership
Interest of that Member by paying to the person legally entitled thereto, the “Price” equal to the amount
such Specified Member would receive with respect to its Membership Interest if the Company Assets
were sold for 95% of their fair market value, all debts of the Company (including the Loans and loans to
and from Members, including Priority Loans and Default Loans) were paid in full without any reserve
(and if the Specified Member is a Default Member, then the Price shall be reduced by such Default Loan).
The fair market value for computing shall be the Price based upon an appraisal prepared by an MAI
appraiser obtained by the Company. In the event the Specified Member (or its estate, as applicable)
disputes the Company’s appraisal within fifteen (15) days of receipt of such appraisal, the determination
of fair market value shall be determined by arbitration in accordance with the rules of the American
Arbitration Association in which an MAI appraiser shall hear the cause in Miami-Dade County, Florida
and the determination in such arbitration shall be binding as to the fair market value. The costs of the
arbitrator shall be split between the Company and the Specified Member (or its estate, as applicable). The
procedures for such sale shall be as set forth in Section 7.07(c), except references to Mandatory Sale Price
shall be the Price, the Closing shall be one hundred twenty (120) days after the determination of the Price
and reference to Mandatory Sale Member Interest shall be the Specified Member’s Membership Interest,
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the Seller shall be the Specified Member and the Purchaser shall be the Company.
7.09 Repayment of Outstanding Loans to Members. Notwithstanding any other provision
of this Agreement to the contrary, no Member may Transfer all or any portion of its Member Interest to
any other Person, and no Member (or their Affiliate) may purchase all or any portion of the Member
Interest of another Member, unless such transferring or purchasing Member agrees to pay, in cash at the
time of closing of such transaction, any and all outstanding loans, debts, and obligations owed by the
transferring Member to the Company as of the closing date of such transaction, whether or not such loan
or other obligation is then due and payable.
7.10 Transfer Restrictions Reasonable. The parties agree that the identity of the Members
and the individual owners of entity Members, as applicable, was material to the Members’ decision to
participate in the Company. Therefore, the parties have agreed that the prohibitions and requirements set
forth in this ARTICLE VII are fair and reasonable.
ARTICLE VIII
FISCAL MATTERS
8.01 Books and Records. The Manager shall keep, or cause to be kept, full and accurate
books and records of all transactions of the Company using such method of accounting as determined by
the Manager in consultation with the Company Accountants. All organizational records of the Company
and other records required to be kept by the Company under the Law shall, at all times, be maintained at
the Company’s record keeping office, and shall be open during ordinary business hours for inspection and
copying upon the reasonable request and at the expense of the Member so requesting and its/their
authorized representatives.
8.02 Reports and Statements.
(a) Within ninety (90) days after the end of each Fiscal Year and thirty (30) days
after the end of each quarter, the Company shall, at its expense, cause to be delivered to any Person upon
request who was a Member at any time during the preceding Fiscal Year the following unaudited
financial statements, which obligation may be satisfied by delivery to such Persons of a copy of the
Company’s federal tax return:
(i) A profit and loss statement for such period; and
(ii) A balance sheet of the Company as of the end of such period.
(b) The Manager shall, at the expense of the Company, prepare, or cause to be
prepared, for delivery to the Members prior to the due date thereof (as same may be extended from time
to time), all federal and any required state and local income tax returns for the Company for each Fiscal
Year of the Company.
8.03 Appointment of Tax Matters Partner. Kenneth Cohen is hereby designated pursuant
to Code Section 6231(a)(7) as the Company’s “Tax Matters Partner,” and is responsible for acting as the
liaison between the Company and the IRS and will provide each Member with any written notices
received by the Tax Matters Partner from the Internal Revenue Service. The Tax Matters Partner shall
have the duties of a tax matters partner as provided in the Code, in addition to such other duties as are
provided under this Agreement. The Tax Matters Partner shall be indemnified and reimbursed by the
Company for all out-of-pocket expenses, costs and liabilities expended or incurred by the Tax Matters
Partner in acting as the Company’s Tax Matters Partner. Each Member shall be responsible for any costs
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incurred by such Member with respect to any tax audit or tax-related administrative or judicial proceeding
against any Member, even though it relates to the Company.
8.04 Tax Status. Any provision hereof to the contrary notwithstanding, solely for United
States federal income tax purposes, each of the Members hereby recognizes that the Company will be
subject to all provisions of Subchapter K of Chapter 1 of Subtitle A of the Code. The Members intend that
the Company be taxed as a partnership for United States income tax purposes. The Members intend that
all special allocations be considered to have economic effect under the “qualified income offset”
provisions described in Regulation Section 1.704-1(b)(2)(ii)(d). All questions of construction and
interpretation shall be resolved consistently with that intent.
8.05 Bank Accounts. All funds of the Company shall be deposited in one or more bank
accounts opened in the Company’s name. Subject to terms and conditions of the Loans and/or any other
loans the Company and/or the Subsidiary may enter into, the Manager shall determine the institutions at
which the accounts will be opened and maintained, the types of accounts, and the Persons who will have
authority with respect to the accounts and the funds therein.
ARTICLE IX
DISSOLUTION
9.01 Dissolution. The Company shall be dissolved only upon the occurrence of any of the
following:
(a) The sale of all or substantially all of the assets of the Company;
(b) The Required Vote of the Membership Interest, that the Company should be
dissolved;
(c) The Manager have all resigned, withdrawn or have been removed, and the
Required Vote of Members do not elect a successor Manager pursuant to and within ninety (90) days
thereof;
(d) The date on which the Company has no Members; or
(e) The Company is required to be dissolved under the Law.
Unless expressly stated otherwise in this Agreement, the Members agree that the Company shall not be
dissolved upon any of the following events, without the need for any consent of the Members at or after
the time of any such event: (i) the death, withdrawal, retirement, resignation, expulsion, Bankruptcy,
dissolution or Permanent Disability of a Member, or (ii) the repurchase or other Transfer of a Member’s
entire Member Interest.
9.02 Wind Up of Affairs.
(a) Upon dissolution of the Company, the Person designated to act as Liquidator
pursuant to Section 9.02(b) shall proceed with dispatch and without any unnecessary delay to sell or
otherwise liquidate the Company’s assets. The Capital Account of each Member shall be determined.
Profits or Losses to the date of termination, including realized profits or losses arising from a sale of all of
the assets of the Company (whether or not recognized for federal income tax purposes), and unrealized
profits and losses on any assets to be distributed in kind (determined as if such assets had been sold by the
Company for prices equal to their respective fair market value) shall be allocated as set forth in ARTICLE
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IV and credited or charged to the Capital Accounts of the Members. The Liquidator shall distribute the
net proceeds and any other liquid assets of the Company in the manner hereinafter set forth:
(i) First, to the expenses of any such sale or disposition;
(ii) Next, to the payment of just debts and liabilities of the Company
(including, but not limited to, the Loans, fees pursuant to Section 2.10 and other liabilities to the
Members and their Affiliates, including, but not limited to, Default Loans and Priority Loans);
(iii) Next, to the establishment of any reserves that the Liquidator may deem
reasonably necessary for any contingent or unforeseen liabilities and other obligations of the
Company or of the Members arising out of or in conjunction with the Company’s affairs;
(iv) Finally, to the Members, in accordance with the order of priority
specified in Section 4.02.
(b) The wind-up of the affairs of the Company shall be conducted exclusively by the
Liquidator, which is hereby authorized to do any and all acts and things authorized by law for such
purposes. Promptly following an Event of Dissolution, the Manager as “Liquidator” shall wind-up the
affairs of the Company. If the Event of Dissolution is that pursuant to Section 9.01(c) hereof, the
Members shall by Required Vote select the Liquidator (whether or not a Manager or a Member) to wind-
up the affairs of the Company, or if the Members cannot so select a Person within ten (10) Business Days
following the effective date of the event causing the dissolution, then any Member may petition a court of
competent jurisdiction to appoint a receiver to wind-up the affairs of the Company as Liquidator
hereunder. The Liquidator shall receive no separate compensation for conducting the wind-up of the
affairs of the Company, unless a court appoints a Liquidator and orders that such Liquidator be paid
certain compensation. In liquidating the assets of the Company, all tangible assets of a saleable value shall
be sold at such price and terms as the Liquidator in good faith determines to be fair and equitable. Any
Person in which all or any of the Manager and/or Members are in any way interested or Affiliated may
purchase such assets at such sale. It shall not be necessary to sell any intangible assets of the Company. A
reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the
discharge of liabilities to creditors so as to enable the Company to minimize the losses normally occurring
upon liquidation.
(c) If any assets of the Company are to be distributed in kind, such assets shall be
distributed on the basis of the then fair market value thereof (after adjusting the Capital Accounts of all
Members for any unrealized gain or loss inherent in such property, as set forth above). The fair market
value shall be determined by the Liquidator, or, if requested by the Required Vote, by an independent
appraiser who shall be selected by the Required Vote. In the discretion of the Liquidator, all or any
portion of the Distributions that would otherwise be made to the Members pursuant to this ARTICLE IX
may be:
(i) Distributed to a trust established for the benefit of the Members solely
for the purposes of liquidating Company property, collecting amounts owed to the Company, and
paying any contingent or unforeseen liabilities or obligations of the Company or of the Members
arising out of or in connection with the Company. The assets of any such trust shall be distributed
to the Members from time to time, in the reasonable discretion of the Liquidator in the same
proportions as the amount distributed to such trust by the Company would otherwise have been
distributed to the Members pursuant to this ARTICLE IX; or
(ii) Withheld to provide a reasonable reserve for Company liabilities
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(contingent or otherwise) and to allow for the collection of the unrealized portion of any
installment obligations owed to the Company, provided that such withheld amounts shall be
distributed to the Members as soon as practicable.
The portion of the Distributions that would otherwise have been made to each of the Members
that is instead distributed to a trust or withheld to provide a reserve pursuant hereto shall be determined in
the same manner as the expense or deduction would have been allocated if the Company had realized an
expense equal to such amounts immediately prior to Distributions being made pursuant to this
ARTICLE IX.
9.03 Termination. The Company shall terminate when all Company Assets shall have
been disposed of.
ARTICLE X
REPRESENTATIONS OF THE MEMBERS
By their execution below, each Member represents and warrants to the Manager and the
Company as follows:
(a) If the Member is a Person other than a natural person, the Member is duly
organized, validly existing, and in good standing under the laws of its state of organization and that it has
the full organizational power and authority to execute and agree to this Agreement and to perform its
obligations hereunder. If the Member is a natural person, he or she is of legal and mental capacity to
acquire the Member Interest and enter into this Agreement.
(b) The Member is knowledgeable and experienced in financial and business
matters, especially in investments which involve real property and are otherwise similar to the Company’s
Business, and which have risks similar to those which may be encountered by the Company. The Member
is capable of evaluating the merits and risks of an investment in the Company.
(c) The Member has been furnished or otherwise obtained all information necessary
to enable him to evaluate the merits and risks of his prospective investment in the Company. The Member
recognizes that the Company has no prior operating history, may be highly leveraged and involves
substantial risks. An investment in the Company is highly speculative and the Member may suffer a
complete loss of his investment.
(d) The Member has been furnished or has had access to any and all material
documents and information regarding the Company, the Manager and the equitable owners of the
Manager if the Manager is not a natural person. The Member has had an opportunity to question the
Manager and its officers, directors, partners, trustees, or other Persons who control or manage the
Manager if the Manager is not a natural person, and receive adequate answers to such questions. The
Member hereby acknowledges that the Company has made available to the Member prior to any
investment in the Company all information requested by the Member and reasonably necessary to enable
the Member to evaluate the risks and merits of an investment in the Company. The Member, after a
review of this information and other information he has obtained, is aware of the speculative nature of any
investment in the Company.
(e) The Member is aware that the Member will have to make the Capital
Contributions required hereunder. The Member can bear the economic risk of the investment in the
Company (including the possible loss of its entire cash payment) without impairing the Member’s ability
to provide for itself and/or its family in the same manner that the Member would have been able to
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provide prior to making an investment in the Company. The Member understands that he must continue
to bear the economic risk of the investment in the Company for an indefinite period of time.
(f) The Member understands that the Member Interests have not been registered
under the Securities Laws, inasmuch as the offering of Member Interests is being made to a limited group
of potential investors or are not deemed to be securities under applicable Securities Laws. The Member
understands that it has no rights whatsoever to request, and that the Company is under no obligation
whatsoever to furnish, a registration of the Member Interests under the Securities Laws.
(g) The Member Interest that the Member is acquiring are being acquired solely for
its account and are not being purchased with a view to, or for resale in connection with, any distribution
within the meaning of the Securities Laws. The Member will not resell or offer to resell any Member
Interests except in accordance with the terms of this Agreement and in compliance with all applicable
Securities Laws.
(h) The Member acknowledges that there is no current market for the Member
Interests and none is anticipated to develop. Moreover, there are substantial restrictions on the Transfer of
the Member Interests. Therefore, the Member has considered its prospective investment in the Company
to be a long-term illiquid investment acceptable because the Member is willing and can afford to accept
and bear the substantial risks of the investment for an indefinite period of time.
(i) The Member is aware that there is no assurance, representation or warranty, by
any Person, that the Company Business and the other assets anticipated to be acquired by the Company
will operate at a profit, will generate sufficient cash flow for distribution to the Members, or will
appreciate in value or be sold at a profit. The Manager is authorized to incur indebtedness on behalf of the
Company, to pay costs incurred in conducting and completing the Company’s Business, to establish and
maintain reserves for working capital, taxes, insurance and other costs and expenses, to raise substantial
debt financings, and to use Company revenues to pay the organization costs and debt costs of the
Company to the extent authorized by this Agreement. The use of Company revenues for such purposes
will delay the Member’s receipt of Available Cash Distributions from the Company, and may require the
Member to report and pay tax on Company income without having received contemporaneous cash
Distributions, even if the Company is profitable.
(j) The Member understands that the federal income tax treatment of the Company
and the ownership of interests therein, whether direct or indirect, are complex and, in many cases,
uncertain. Statutory provisions and administrative regulations have been interpreted inconsistently by the
courts. Additionally, some statutory provisions remain to be interpreted by administrative regulations. It
is possible that the IRS may successfully challenge the tax treatment accorded certain items by the
Company.
ARTICLE XI
MISCELLANEOUS
11.01 Amendments. This Agreement may only be amended if in writing and only upon the
express written consent of 60% of the Membership Percentages of the Members.
11.02 Notices. Any notice, demand, consent, election, offer, approval, request, or other
communication (each, a “Notice”) required or permitted to be delivered to any party hereto under the
provisions of this Agreement shall be in writing and shall be deemed to have been duly given (a) upon
hand delivery thereof, (b) on the first (1st) Business Day after being sent by any nationally recognized
overnight delivery company (e.g. Federal Express), (c) on the third (3rd) Business Day after mailing
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United States registered or certified mail, return receipt requested, postage prepaid, or (d) upon actual
receipt if sent by electronic mail. All Notices shall be addressed to such party at the party’s last known
address on the records of the Company, initially as set forth on Schedule A hereto, or, if to the Company,
at the Company’s registered office. Any party may designate, by notice to all of the others, substitute
addresses or addressees for Notices; and, thereafter, Notices are to be directed to those substitute
addresses or addressees.
11.03 Agency. Except as provided herein, nothing herein contained shall be construed to
constitute any Member hereof the agent of any other Member hereof or to limit in any manner the
Members in the carrying on of their own respective businesses or activities. Any Member may engage in
and/or possess any interest in other business ventures of every nature and description, independently or
with others, whether existing as of the date hereof or hereafter coming into existence; and neither the
Company nor any Member hereof shall have any rights in or to any such independent ventures or the
income or profits derived therefrom.
11.04 Further Assurances. The Members will execute and deliver such further instruments
and do such further acts and things as may be required to carry out the intent and purposes of this
Agreement.
11.05 Headings. The headings of the various sections of this Agreement are intended
solely for convenience of reference, and shall not be deemed or construed to explain, define, limit, modify
or place any construction upon the provisions hereof.
11.06 Binding Effect, Successors and Assigns. This Agreement and any amendments
hereto are binding upon and, to the extent expressly permitted by the provisions hereof, inure to the
benefit of the parties hereto and their respective heirs, executors, administrators, personal and legal
representatives, successors and permitted assigns.
11.07 Applicable Law, Venue, Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof. Agreed upon venue, to the extent permitted by law, shall be Miami-Dade County,
Florida. By execution hereof, each party hereby consents to the jurisdiction of the federal courts of the
United States located in the Southern District of the State of Florida and the state courts of the State of
Florida located in Miami-Dade County, Florida.
11.08 Entire Agreement. This Agreement, including any Schedules and Exhibits attached
hereto, sets forth all (and is intended by all parties hereto to be an integration of all) of the promises,
agreements, conditions, understandings, warranties and representations among the parties hereto as to the
subject matter hereof, and supersedes all prior negotiations, representations or agreements, either written
or oral.
11.09 Counterparts. This Agreement and any amendments hereto may be executed in one
or more original or .pdf counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same instrument. The signature of any party to any counterpart
shall be deemed a signature to, and may be appended to, any other counterpart.
11.10 Gender. Wherever the context requires, any noun or pronoun used herein may be
deemed to mean the corresponding masculine, feminine or neuter in form thereof and the singular form of
any nouns and pronouns herein may be deemed to mean the corresponding plural and vice versa as the
case may require.
CHI 63965637v1
11.11 Remedies, Specific Performance. Each of the Members acknowledges and agrees
that in the event that a Member shall violate any of the restrictions or fails to perform any of the
obligations hereunder (other than a failure to contribute capital in which the remedy shall be as provided
in ARTICLE III), the Company and/or the other Members will be without adequate remedy at law and
will therefore be entitled to enforce such restrictions or obligations by temporary or permanent injunctive
or mandatory relief obtained in an action or proceeding instituted in any court of competent jurisdiction
without the necessity of proving damages and without prejudice to any other remedies it may have at law
or in equity.
11.12 Attorney Fees. If the Company or any party hereto is required to engage in litigation
or other legal proceeding against any other party hereto, either as plaintiff or as defendant, in order to
enforce or defend any rights under this Agreement, and such proceeding results in a final judgment or
ruling in favor of such party (“Prevailing Party”), then the party or parties against whom said final
judgment or ruling is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental
expenses incurred, including, but not limited to, all attorneys’ fees (including paralegal fees), court costs,
and other expenses incurred throughout all negotiations, proceedings, trials or appeals undertaken in order
to enforce the Prevailing Party’s rights hereunder.
11.13 No Third Party Beneficiary. This Agreement is made solely and specifically among
and for the benefit of the parties hereto, and their respective successors and assigns subject to the express
provisions hereof relating to successors and assigns, and no other Person shall have any rights, interest or
claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party
beneficiary or otherwise.
11.14 No Waiver. No waiver of any provision of this Agreement shall be effective unless it
is in writing and signed by the party against whom it is asserted, and any such written waiver shall only
be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or
future waiver.
11.15 No Recordation. Neither this Agreement nor any memorandum thereof shall be
recorded amongst the public records of any governmental authority without the prior written consent of
the Manager.
11.16 Provisions Severable. This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations of the
jurisdictions in which the parties do business. If any provision of this Agreement, or the application
thereof to any Person or circumstance shall, for any reason or to any extent, be invalid or unenforceable,
the remainder of this Agreement and the application of such provision to other Persons or circumstances
shall not be affected thereby, but rather shall remain in full force and effect, and be construed and
enforced to the greatest extent permitted by law as if such invalid or unenforceable provisions were
omitted.
11.17 No Foreign Person Withholding. Each of the Members hereby represents and
warrants that it is not a “foreign person” within the meaning of Code Section 1445.
11.18 Legal Representation. The Company may retain one or more legal counsel (“Law
Firm”), from time to time, to represent the Company on specified matters and the Members hereby
recognize and acknowledge that representation of the Company shall not establish any attorney-client
relationship between the Members and the Law Firm. It is further expressly acknowledged and agreed by
the Members, that any Law Firm representing the Company may also represent any Member, the
Manager or any Affiliates of any Member or the Manager.
CHI 63965637v1
11.19 Conflict Waiver. The Members hereby acknowledge and agree that: (a) Greenberg
Traurig, LLP (the “Company’s Counsel”) has represented the Company in the preparation of this
Agreement and may hereafter represent the Company in other matters provided when representing the
Company the Company’s Counsel shall act in good faith without bias to any Member to represent the
interest of the Company; (b) the Company’s Counsel have also represented one or more Members and/or
their Affiliates in the past in other, unrelated matters, and may continue to do so in the future; (c) the
Manager and each Member has waived, on behalf of itself and its Affiliates, any actual or potential
conflict of interest that exists as a result of such representations; and (d) the Manager and each Member
have been advised to consult with independent legal counsel (other than the Company’s Counsel) before
entering into this Agreement, and has sought such counsel as it deemed appropriate, if any. The
Company’s Counsel shall not represent any Member in any litigation against another Member in
connection with this transaction..
11.20 No Broker. The Members have not entered into any agreement, arrangement or
understanding with any Person which will result in the obligation to pay any finder’s fee, brokerage
commission or similar payment in connection with the transactions contemplated hereby.
11.21 Survival of Terms. The expiration or termination of this Agreement for any reason
shall not release any party from any liabilities or obligations set forth in this Agreement which (a) the
parties have expressly agreed shall survive any such expiration or termination, (b) remain to be
performed, or (c) by their nature would be intended to be applicable following any such expiration or
termination. The expiration or termination of this Agreement shall not affect or limit any of the parties’
indemnification obligations or any other matters set forth in this Agreement that should survive in order
to carry out their intended purpose.
11.22 Construction. It is acknowledged that each party to this Agreement had the
opportunity to be represented by legal counsel (other than the Firm) in the preparation of this Agreement
and, accordingly, the rule that a contract shall be interpreted strictly against the party preparing same shall
not apply herein due to the joint contributions of the parties hereto.
11.23 Schedules and Exhibits. Each Schedule and Exhibit referred to in this Agreement
forms an essential part of this Agreement, and if not physically attached hereto, should nonetheless be
treated as part of this Agreement, and are hereby incorporated herein by reference.
11.24 Confidentiality. The parties shall maintain confidential the names of the principals of
the various Members, except (a) as required by law, (b) as may be required in connection with the
financings obtained by the Company which have been approved pursuant to this Agreement, (c) to the
other Members (and their principals) of the Company, and (d) to attorneys, accountants and other
professionals providing services to the Company who shall be required to keep such information
confidential, subject to the provisions set forth above.
[THIS SPACE INTENTIONALLY LEFT BLANK]
CHI 63965637v1
SCHEDULE A
MEMBERS
Name & Address
Member
Percentage
Members
The Howard D. Cohen Revocable Trust
U/A/D 4/6/1993
1025 Kane Concourse, Suite 215
Bay Harbor Islands, FL 33154
Email: HCohen@apmanagement.net
44.50%
Kenneth Cohen
1025 Kane Concourse, Suite 215
Bay Harbor Islands, FL 33154
Email: KCohen@apmanagement.net
18.50%
Stanley Cohen
1025 Kane Concourse, Suite 215
Bay Harbor Islands, FL 33154
Email: SCohen@apmanagement.net
18.50%
Randy K. Weisburd
733 Lakeview Drive
Miami Beach, FL 33140
Email: rweisburd@apmanagement.net
18.50%
TOTAL
100.00%
For purposes of delivering Notices pursuant to Section 11.02 of this Agreement, (i) copies of all
Notices required or permitted to be delivered to Members and/or the Manager shall be delivered to:
Greenberg Traurig, LLP, 77 West Wacker Drive, Suite 3100, Chicago, IL 60601, Attn: Michael T.
Fishman, Esq., email: FishmanM@gtlaw.com or such other address as the Manager may designate in
writing.
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SCHEDULE B
INITIAL OFFICERS
Howard D. Cohen - Chairperson and Chief Executive Officer
Randy K. Weisburd President
Stanley Cohen - Vice President
Kenneth Cohen Vice President / Treasurer / Secretary
CHI 63965637v1
EXHIBIT 2.04(a)
PRE-AUTHORIZED AGREEMENTS
Those certain notes, instruments and agreements evidencing or securing a $10,000,000 line of credit
from Wells Fargo Advisors, LLC obtained on or about September, 2013.
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EXHIBIT 5.03(b)
INDEMNITEES
Manager
Officers
Members
Guarantors
KH 1103816
EXHIBIT F-4
Certificate of Good Standing of APC (DE)
Delaware
The First State
Page 1
5375007 8300 Authentication: 204672107
SR# 20234068602 Date: 11-28-23
You may verify this certificate online at corp.delaware.gov/authver.shtml
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY "ATLANTIC PACIFIC COMMUNITIES, LLC" IS
DULY FORMED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD
STANDING AND HAS A LEGAL EXISTENCE SO FAR AS THE RECORDS OF THIS
OFFICE SHOW, AS OF THE TWENTY-EIGHTH DAY OF NOVEMBER, A.D. 2023.
AND I DO HEREBY FURTHER CERTIFY THAT THE SAID "ATLANTIC PACIFIC
COMMUNITIES, LLC" WAS FORMED ON THE TWENTY-NINTH DAY OF JULY, A.D.
2013.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL TAXES HAVE BEEN
PAID TO DATE.
KH 1103816
EXHIBIT F-5
Certificate of Status of APC (FL)
State of Florida
Department of State
I certify from the records of this office that ATLANTIC PACIFIC
COMMUNITIES,LLC is a Delaware limited liability company authorized to
transact business in the State of Florida,qualified on September 18,2013.
The document number of this limited liability company is M13000005906.
I further certify that said limited liability company has paid all fees due this
office through December 31,2023,that its most recent annual report was filed
on February 20,2023,and that its status is active.
I further certify that said limited liability company has not filed a Certificate of
Withdrawal.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee,the Capital,this
the Twenty-eighth day of
November,2023
Tracking Number:4108866352CU
To authenticate this certificate,visit the following site,enter this number,and then
follow the instructions displayed.
https://services.sunbiz.org/Filings/CertificateOfStatus/CertificateAuthentication