Common use of Conflicts Arising From The General Partners Clause in Contracts

Conflicts Arising From The General Partners. Allocation Of Time Between The Partnership And Other Activities. As a result of their possible future interests in other partnerships and the fact that they have also engaged and will continue to engage in other business activities, the General Partners and their Affiliates will have conflicts of interests in allocating their time between the Partnership and other activities in which they are involved. However, the General Partners believe that they, and their Affiliates, have sufficient personnel to discharge fully their responsibilities to other affiliated partnerships and ventures in which they are involved. Redwood Mortgage also provides loan brokerage services to other investors beside the Partnership. As a result, there will then exist conflicts of interest on the part of the General Partners between the Partnership and the other partnerships or investors with which they are affiliated at such time. The General Partners will decide which Mortgage Investments are appropriate for funding by the Partnership or by such other partnerships and investors after consideration of all relevant factors, including the size of the loan, portfolio diversification, and amount of uninvested funds and the length of time that excess funds have remained uninvested. To date, the General Partners have each allocated approximately 12-17 hours per week, exclusively on Partnership activities and estimate that they will continue to allocate approximately the same amount of time in the future. This amount may be higher during the initial offering and marketing stages and may be lower after several years of operations. The General Partners believe that they will have sufficient time, based upon the organization and personnel that they have built and retained over the last eighteen (18) years, to discharge fully their obligations to the Partnership. In the event that a conflict were to arise, however, the General Partners will take the following action: (i) they will seek the advice of counsel with respect to the conflict; (ii) in the event of a short fall of resources, they would seek to allot their financial and legal resources on a pro rata basis among the partnerships; (iii) in the event a pro rata allotment would materially adversely effect the operations of any partnership, the General Partners will use their best efforts to apply resources to that partnership so as to attempt to prevent a material adverse effect, and the remainder of the resources, if any, would be applied on a pro rata basis.