Common use of The General Partners Clause in Contracts

The General Partners. 9.1 The General Partners shall have complete discretion in the management and control of the business of the Partnership for the purposes herein stated, shall make all decisions affecting the business of the Partnership and shall manage and control the affairs of the Partnership to the best of their abilities and use their best efforts to carry out the purposes of the Partnership. The powers of the General Partners include, but are not limited to, the powers: (a) to expend the capital and profits of the Partnership in furtherance of the Partnership's business; (b) to acquire, hold (in the Partnership's name or, in the best interest of the Partnership, under any other title arrangement selected by the General Partners), lease, sell, mortgage, convey, or refinance any real or personal property, including Projects and Project Interests, at such price and upon such terms, as they deem to be in the best interests of the Partnership, including the power to vote to amend a local limited partnership agreement in such a manner as to reduce the limited partnership interest of the Partnership in the local limited partnership, to vote to reduce the Partnership's interests in the profits, losses, and special allocations of the local limited partnerships and assign a part of the limited partnership interest in such partnership, provided that such action is necessary to preserve the economic value of the -------- Partnership's Project Interest; (c) to monitor the construction and operations of any of the Projects, Project Interests, or other Partnership property and to make recommendations with respect thereto; (d) to retain independent consultants to evaluate the Projects, Project Interests, and other Partnership property; (e) to borrow money and execute promissory notes and to secure the same by mortgage upon the Partnership's property; (f) to invest in short-term debt obligations (including obligations of federal and state governments and their agencies, bank repurchase obligations, commercial paper, and certificates of deposit of commercial banks, savings banks, or savings and loan associations) such funds as are temporarily not required for investment in Projects, Project Interests, or other Partnership property; (g) to lend money or provide advances in furtherance of the Partnership's purposes; and (h) to enter into and carry out agreements of any kind, provided that all contracts with the General Partners or their affiliates must provide for termination by the Partnership on 60 days written notice, without penalty, and to do any and all other acts and things necessary, proper, convenient, or advisable to effectuate and carry out the purposes of the Partnership. 9.2 The General Partners shall (a) diligently and faithfully devote such of their time to the business of the Partnership as they deem necessary to conduct it for the greatest advantage of the Partnership; (b) file and publish all certificates, notices, statements, or other instruments required by law for formation and operation of the Partnership in all appropriate jurisdictions; (c) cause the Partnership to carry adequate public liability, property damage, and other insurance, any or all of which may name the General Partners as the sole insured; (d) indemnify and hold the Partnership harmless from any loss, damage or liability due to, or arising out of, any General Partner's breach of fiduciary duty; and (e) maintain capital accounts on the books and records of the Partnership in respect of each interest in the Partnership. The General Partners may become Limited Partners and thereby become entitled to all of the rights of Limited Partners to the extent of the Limited Partnership Interests so acquired, provided that such acquisition of Limited Partnership Interests shall not reduce any liability of the General Partners under this Agreement. Notwithstanding the foregoing, 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 and they shall not employ, or permit another to employ, such funds, or assets in any manner except for the exclusive benefit of the Partnership. 9.3 Notwithstanding any provision in this Agreement to the contrary, it is understood and agreed that (i) in conducting, carrying on, and managing the business of the Partnership, the General Partners shall be bound by the following investment policies, which may not be changed, altered, or amended except as provided in Section 14 hereof and (ii) the General Partners shall endeavor to conduct the Partnership's business in accordance with the policies set forth in the Prospectus: (a) except for interim commitments in short-term government obligations, commercial paper (investment grade), certificates of deposit, bank repurchase obligations, and tax-exempt notes and bonds or registered investment companies holding such securities, investments will be initially limited to Project Interests, provided that (i) not less than 75% of the amount of -------- public offering proceeds available for investment will be invested in Project Interests in partnerships or joint ventures which will own or lease federal, state, or local government-assisted housing projects and (ii) the Partnership may subsequently refinance or convert such Project Interests to other uses with a view to realizing higher revenue or capital gains, although reinvestment of cash flow (excluding proceeds resulting from a disposition or refinancing of property) shall not be allowed. (b) Projects or Project Interests will be acquired with a view toward maximizing tax deductions, with cash income and long-term appreciation as additional considerations, and not with a view to early resale; (c) the Partnership will seek to avoid depreciation recapture and defer taxes by not selling any Projects or Project Interests within ten years, except (i) to qualified tenant cooperatives as defined in the Internal Revenue Code, and (ii) under circumstances described in the Prospectus; (d) upon any sale or refinancing, the Partnership shall not reinvest any proceeds thereof; (e) the Partnership may (a) borrow money only against individual Projects or Project Interests to acquire Projects or interests therein, to defray expenses or preserve its interest in each individual Project or interest therein, but may not pledge or encumber other Projects or Project Interests for this purpose, and (ii) borrow only such amount for which the Partnership can reasonably expect to meet debt service requirements from anticipated Net Cash Flow. The Partnership may make or cause its affiliates to make loans or advances for the acquisition of Projects or Project Interests, but such affiliates may not receive interest or other financing charges or fees in excess of the amounts which would be charged by unrelated banks for comparable loans for the same purpose in the locality of the Project or in amounts which otherwise are unreasonable or require any prepayment charge or penalty, provided that in connection with any of the foregoing transactions, (A) the -------- Partnership shall not enter into transactions involving the use of "all-inclusive" or "wrap-around" notes except as permitted by the Rules of the Department of Corporations of the State of California, and (B) the Partnership shall not incur any indebtedness whereby the lender will have or acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor; (f) the Partnership shall not (i) issue senior securities, except as set forth in the preceding paragraph and even then only at par or at a premium, (ii) invest in other issuers for the purpose of exercising control (other than local limited partnerships owning or leasing projects), (iii) underwrite the securities of other issuers, or (iv) offer Units or Limited Partnership Interests in exchange for property; (g) except in a case in which a single Project investment exceeds this limitation, the Partnership shall not sell and reinvest more than 25% of its portfolio of Projects or Project Interests within any single year, unless by exempted sales to qualified tenant cooperatives; (h) the Partnership shall not make loans to the General Partners or their affiliates and will not make loans to others except (i) to developers in connection with the acquisition of Projects or Project Interests (and then only if such loans do not exceed, in the aggregate, 5% of the difference between the aggregate amount of contributions made pursuant to Section 5 hereof less expenses of the Partnership determined in accordance with Section 6 hereof), (ii) to local limited partnerships in which the Partnership has an equity interest, and (iii) as permitted by Sections 5.4 or 9.3(a) hereof; (i) commitments of Partnership funds will be contingent upon receipt of satisfactory appraisals as to non-governmental-assisted Projects and Project Interests or FHA feasibility or equivalent letters as to government-assisted projects and no significant contributions to government-assisted projects will be made prior to Initial Endorsement by FHA/HUD or its equivalent for non-FHA/HUD Projects; (j) the Partnership will not purchase or lease a Project or Project Interest, if the General Partners or their affiliates have (or if any limited partnership in which the General Partners or their affiliates have an interest in has) any equity interest in such Project or have made loans with respect thereto (except where their interest is minimal and held primarily for the benefit of the Partnership), or have any interest of a type other than equity or debt which has not been disclosed to the Limited Partners; (k) the Partnership will not sell or lease any Project or Project Interest to the General Partners or their affiliates; (l) the Partnership will not purchase Projects or Project Interests in exchange for Units or Limited Partnership Interests; (m) the Partnership shall not give the General Partners or their affiliates the exclusive right or employment to sell Projects or Project Interests; (n) the Partnership may not pay the General Partners or their affiliates any commission in connection with the reinvestment of the proceeds of any resale, exchange, or refinancing of any Project Interest; (o) the General Partners, their affiliates, and any salesman or dealer offering Units or Additional Limited Partnership Interests shall not take any action in violation of Section 260.140.114.6 of Title 10 of the California Administrative Code; (p) the Partnership's funds may not be commingled with the funds of others; (q) all expenses of the Partnership shall be billed directly to it, except organizational expenses and offering expenses (including, subject to the limitation set forth in Section 9.6.1, expenses associated with the selection and acquisition of Projects or Project Interests) paid by the General Partners or their affiliates, which expenses may be reimbursed; (r) the Partnership will not enter into any transaction or agreement with any Limited Partner or any affiliate of a Limited Partner, if the Partnership would be prohibited pursuant to this Section 9.3 from entering into a similar agreement or transaction with the General Partners or their affiliates, provided that nothing herein set forth shall prohibit a "sponsor" (i.e., a general partner, developer, contractor, or affiliate thereof) of any local limited partnership from acquiring or holding Units or Limited Partnership Interests in the Partnership or being admitted as a Limited Partner; (s) the Partnership will not acquire an interest in a partnership, local limited partnership, or joint venture which does not constitute at least a 50% interest of all limited partnership or similar interests; and (t) the Partnership shall not sell all or substantially all of the Partnership's assets in a single transaction or a series of related transactions without obtaining the consent of Limited Partners owning a majority of the outstanding Limited Partnership Interests; provided, however, that the foregoing will not apply to a sale of a single Project (or a sale of Project Interests related to a single Project) that is not part of a series of related transactions involving the sale of multiple Projects (or Project Interests related to multiple Projects) that constitute all or substantially all of the Projects. 9.4 The General Partners may delegate all or any of their powers, rights, and obligations hereunder, and in furtherance of any such delegation may appoint, employ, or contract with any person for the account of the Partnership for the transaction of the business of the Partnership, which persons may, under the supervision of the General Partners, perform any acts or services for the Partnership as the General Partners may approve. 9.5 As compensation for services to the Partnership by the General Partners pursuant to this Agreement, the General Partners shall be entitled to receive an Annual Management Fee, the amount of which shall be equal to 4% of the Partnership's "Invested Assets." "Invested Assets" is defined as the cost of acquiring Project Interests or projects, including the proportionate amount of the mortgage loans on and other debts related to the Projects equivalent to the Partnership's interest in the capital accounts of the respective partnerships, Projects or joint ventures, but excluding depreciation, amortization, and capitalized expenditures (such as the Acquisition and Selection Fees [defined in Section 9.6.1 hereof] due the General Partners, organizational expenditures, and acquisition closing costs). The Annual Management Fee shall be due and payable in monthly installments in every year; the other fees due the General Partners shall be deferred until Annual Management Fees due are paid, and Annual Management Fees may, to serve the best interests of the Partnership, be paid out of any Partnership funds. The amount, if any, of the Annual Management Fee earned, but unpaid in any year, shall accrue for payment in later years.

The General Partners. 9.1 The General Partners shall have complete discretion in the management and control of the business of the Partnership for the purposes herein stated, shall make all decisions affecting the business of the Partnership and shall manage and control the affairs of the Partnership to the best of their abilities and use their best efforts to carry out the purposes of the Partnership. The powers of the General Partners include, but are not limited to, the powers: (a) to expend the capital and profits of the Partnership in furtherance of the Partnership's business; (b) to acquire, hold (in the Partnership's name or, in the best interest of the Partnership, under any other title arrangement selected by the General Partners), lease, sell, mortgage, convey, or refinance any real or personal property, including Projects and Project Interests, at such price and upon such terms, as they deem to be in the best interests of the Partnership, including the power to vote to amend a local limited partnership agreement or joint venture agreement in such a manner as to reduce the limited partnership interest or joint venture interest of the Partnership in the local limited partnershippartnership or joint venture, to vote to reduce the Partnership's interests in the profits, losses, and special allocations of the local limited partnerships partnership or joint ventures and assign a part of the limited partnership interest or joint venture interest in such partnership, provided that such action is necessary to preserve the economic value of the -------- Partnership's Project Interest; (c) to monitor the construction and operations of any of the Projects, Project Interests, or other Partnership property and to make recommendations with respect thereto; (d) to retain independent consultants to evaluate the Projects, Project Interests, and other Partnership property; (e) to borrow money and execute promissory notes and to secure the same by mortgage upon the Partnership's property; (f) to invest in short-term debt obligations (including obligations of federal and state governments and their agencies, bank repurchase obligations, commercial paper, and certificates of deposit of commercial banks, savings banks, or savings and loan associations) such funds as are temporarily not required for investment in Projects, Project Interests, or other Partnership property; (g) to lend money or provide advances in furtherance of the Partnership's purposes; and (h) to enter into and carry out agreements of any kind, provided that all contracts with the General Partners or their affiliates must provide for termination by the Partnership on 60 days written notice, without penalty, and to do any and all other acts and things necessary, proper, convenient, or advisable to effectuate and carry out the purposes of the Partnership. The limitation contained in the proviso in the preceding sentence shall not apply to any agreement entered into in connection with the proposed Sale. 9.2 The General Partners shall (a) diligently and faithfully devote such of their time to the business of the Partnership as they deem necessary to conduct it for the greatest advantage of the Partnership; (b) file and publish all certificates, notices, statements, or other instruments required by law for formation and operation of the Partnership in all appropriate jurisdictions; (c) cause the Partnership to carry adequate public liability, property damage, and other insurance, any or all of which may name the General Partners as the sole insured; (d) indemnify and hold the Partnership harmless from any loss, damage or liability due to, or arising out of, any General Partner's breach of fiduciary duty; and (e) maintain capital accounts on the books and records of the Partnership in respect of each interest in the Partnership. The General Partners may become Limited Partners and thereby become entitled to all of the rights of Limited Partners to the extent of the Limited Partnership Interests so acquired, provided that such acquisition of Limited Partnership Interests shall not reduce any liability of the General Partners under this Agreement. Notwithstanding the foregoing, 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 and they shall not employ, or permit another to employ, such funds, or assets in any manner except for the exclusive benefit of the Partnership. 9.3 Notwithstanding any provision in this Agreement to the contrary, it is understood and agreed that (i) in conducting, carrying on, and managing the business of the Partnership, the General Partners shall be bound by the following investment policies, which may not be changed, altered, or amended except as provided in Section 14 hereof and (ii) the General Partners shall endeavor to conduct the Partnership's business in accordance with the policies set forth in the Prospectus: (a) except for interim commitments in short-term government obligations, commercial paper (investment grade), certificates of deposit, bank repurchase obligations, and tax-exempt notes and bonds or registered investment companies holding such securities, investments will be initially limited to Project Interests, provided that (i) not less than 75% of the amount of -------- public offering proceeds available for investment will be invested in Project Interests in partnerships or joint ventures which will own or lease federal, state, or local government-assisted housing projects including existing government-assisted housing (the Partnership will have the right to invest up to 25% of the aggregate amount available in housing projects which are not government-assisted or in local limited partnerships or joint ventures which will own or lease housing projects which are not government-assisted) and (ii) the Partnership may subsequently refinance or convert such Project Interests to other uses (consistent with partnership objectives) with a view to realizing higher revenue or capital gains, although reinvestment of cash flow (excluding proceeds resulting from a disposition or refinancing of property) shall not be allowed. (b) Projects or Project Interests will be acquired with a view toward maximizing tax deductions, with cash income and long-term appreciation as additional considerations, and not with a view to early resale; (c) the Partnership will seek to avoid depreciation recapture and defer taxes by not selling any Projects or Project Interests within ten years, except (i) to qualified tenant cooperatives as defined in the Internal Revenue Code, and (ii) under circumstances described in the Prospectus; (d) upon any sale or refinancing, refinancing the Partnership shall not reinvest any proceeds thereof; (e) the Partnership may (ai) borrow money only against individual Projects or Project Interests to acquire Projects or interests therein, to defray expenses or preserve its interest in each individual Project or interest therein, but may not pledge or encumber other Projects or Project Interests for this purpose, and (ii) borrow only such amount for which the Partnership can reasonably expect to meet debt service requirements from anticipated Net Cash Flow. The Partnership may make or cause its affiliates to make loans or advances for the acquisition of Projects or Project Interests, but such affiliates may not receive interest or other financing charges or fees in excess of the amounts which would be charged by unrelated banks for comparable loans for the same purpose in the locality of the Project or in amounts which otherwise are unreasonable or require any prepayment charge or penalty, provided that in connection with any of the foregoing transactions, (A) the -------- Partnership shall not enter into transactions involving the use of "all-inclusive" or "wrap-around" notes except as permitted by the Rules of the Department of Corporations of the State of California, and (B) the Partnership shall not incur any indebtedness whereby the lender will have or acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor; (f) the Partnership shall not (i) issue senior securities, except as set forth in the preceding paragraph and even then only at par or at a premium, (ii) invest in other issuers for the purpose of exercising control (other than local limited partnerships owning or leasing projects), (iii) underwrite the securities of other issuers, or (iv) offer Units or Limited Partnership Interests in exchange for property; (g) except in a the case in which a single Project investment exceeds this limitation, the Partnership shall not sell and reinvest more than 25% of its portfolio of Projects or Project Interests within any single year, unless by exempted sales to qualified tenant cooperatives; (h) the Partnership shall not make loans to the General Partners or their affiliates and will not make loans to others except (i) to developers in connection with the acquisition of Projects or Project Interests (and then only if such loans do not exceed, in the aggregate, 5% of the difference between the aggregate amount of contributions made pursuant to Section 5 hereof less expenses of the Partnership determined in accordance with Section 6 hereof), (ii) to local limited partnerships in which the Partnership has an equity interest, and (iii) as permitted by Sections 5.4 or 9.3(a) hereof; (i) commitments of Partnership funds will be contingent upon receipt of satisfactory appraisals as to non-governmentalgovernment-assisted Projects and Project Interests and existing government-assisted Projects and Project Interests or FHA feasibility or equivalent letters as to newly constructed government-assisted projects and no significant contributions to government-assisted projects will be made prior to HUD approval of the transfer, if required, Initial Endorsement by FHA/HUD or its equivalent for non-FHA/HUD Projects; (j) the Partnership will not purchase or lease a Project or Project Interest, if the General Partners or their affiliates have (or if any limited partnership in which the General Partners or their affiliates have an interest in has) any equity interest in such Project or have made loans with respect thereto (except where their interest is minimal and held primarily for the benefit of the Partnership), or have any interest of a type other than equity or debt which has not been disclosed to the Limited Partners; (k) the Partnership will not sell or lease any Project or Project Interest to the General Partners or their affiliates;; provided that the foregoing shall not apply to any sale of Project Interests made in connection with the proposed Sale described in the Definitive Consent Solicitation Statement of the Partnership dated August 6, 1998. (l) the Partnership will not purchase Projects or Project Interests in exchange for Units or Limited Partnership Interests; (m) the Partnership shall not give the General Partners or their affiliates the exclusive right or employment to sell Projects or Project Interests; (n) the Partnership may not pay the General Partners or their affiliates any commission in connection with the reinvestment of the proceeds of any resale, exchange, or refinancing of any Project Interest; (o) the General Partners, their affiliates, and any salesman or dealer offering Units or Additional Limited Partnership Interests shall not take any action in violation of Section 260.140.114.6 of Title 10 of the California Administrative Code; ; (p) the Partnership's funds may not be commingled with the funds of others; (q) all expenses of the Partnership shall be billed directly to it, except organizational expenses and offering expenses (including, subject to the limitation set forth in Section 9.6.1, expenses associated with the selection and acquisition of Projects or Project Interests) paid by the General Partners or their affiliates, which expenses may be reimbursed; (r) the Partnership will not enter into any transaction or agreement with any Limited Partner or any affiliate of a Limited Partner, if the Partnership would be prohibited pursuant to this Section 9.3 from entering into a similar agreement or transaction with the General Partners or their affiliates, provided that nothing herein set forth shall prohibit a "sponsor" (i.e., a general partner, developer, contractor, or affiliate thereof) of any local limited partnership from acquiring or holding Units or Limited Partnership Interests in the Partnership or being admitted as a Limited Partner; (s) the Partnership will not acquire an interest in a partnership, local limited partnership, or joint venture which does not constitute at least a 50% interest of all limited partnership or similar interests; and (t) the Partnership shall not sell all or substantially all of the Partnership's assets in a single transaction or a series of related transactions without obtaining the consent of Limited Partners owning a majority of the outstanding Limited Partnership Interestsinterests; provided, however, that the foregoing will not apply to a sale of a single Project (or a sale of Project Interests related to a single Project) that is not part of a series of related transactions involving the sale of multiple Projects (or Project Interests related to multiple Projects) that constitute all or substantially all of the ProjectsInterest. 9.4 The General Partners may delegate all or any of their powers, rights, and obligations hereunder, and in furtherance of any such delegation may appoint, employ, or contract with any person for the account of the Partnership for the transaction of the business of the Partnership, which persons may, under the supervision of the General Partners, perform any acts or services for the Partnership as the General Partners may approve. 9.5 As compensation for services to the Partnership by the General Partners pursuant to this Agreement, the General Partners shall be entitled to receive receive, with respect to the Partnership's investments in local limited partnerships owning government-assisted housing projects, an Annual Management Fee, the amount of which shall be equal to 4.5% of the Partnership's "Invested Assets." "Invested Assets" is defined as the cost of acquiring Project Interests or projectsProjects, including capital contributions and other equity payments to be made and the proportionate amount of the mortgage loans on and other debts related to the Projects or Project Interests equivalent to the Partnership's interest in the capital accounts of the respective partnerships, Projects or joint ventures, but excluding depreciation, amortization, and capitalized expenditures (such as the Acquisition and Selection Fees [defined in Section 9.6.1 9.6,1 hereof] due the General Partners, organizational expenditures, and acquisition closing costs). The Annual Management Fee shall be due and payable in monthly installments in every year; the other fees due the General Partners shall be deferred until Annual Management Fees due are paid, and Annual Management Fees may, to serve the best interests of the Partnership, be paid out of any Partnership funds. The amount, if any, of the Annual Management Fee earned, but unpaid in any year, shall accrue for payment in later years.

The General Partners. 9.1 The General Partners shall have complete discretion in the management and control of the business of the Partnership for the purposes herein stated, shall make all decisions affecting the business of the Partnership and shall manage and control the affairs of the Partnership to the best of their abilities and use their best efforts to carry out the purposes of the Partnership. The powers of the General Partners include, but are not limited to, the powers: (a) to expend the capital and profits of the Partnership in furtherance of the Partnership's business; (b) to acquire, hold (in the Partnership's name or, in the best interest of the Partnership, under any other title arrangement selected by the General Partners), lease, sell, mortgage, convey, or refinance any real or personal property, including Projects and Project Interests, at such price and upon such terms, as they deem to be in the best interests of the Partnership, including the power to vote to amend a local limited partnership agreement in such a manner as to reduce the limited partnership interest of the Partnership in the local limited partnership, to vote to reduce the Partnership's interests in the profits, losses, and special allocations of the local limited partnerships partnership and assign a part of the limited partnership interest in such partnership, provided that such action is necessary to preserve the economic value of the -------- Partnership's Project Interest; (c) to monitor the construction and operations of any of the Projects, Project Interests, or other Partnership property and to make recommendations with respect thereto; (d) to retain independent consultants to evaluate the Projects, Project Interests, and other Partnership property; (e) to borrow money and execute promissory notes and to secure the same by mortgage upon the Partnership's property; (f) to invest in short-term debt obligations (including obligations of federal and state governments and their agencies, bank repurchase obligations, commercial paper, and certificates of deposit of commercial banks, savings banks, or savings and loan associations) such funds as are temporarily not required for investment in Projects, Project Interests, or other Partnership property; (g) to lend money or provide advances in furtherance of the Partnership's purposes; and (h) to enter into and carry out agreements of any kind, provided that all contracts with the General Partners or their affiliates must provide for termination by the Partnership on 60 days written notice, without penalty, and to do any and all other acts and things necessary, proper, convenient, or advisable to effectuate and carry out the purposes of the Partnership. 9.2 The General Partners shall (a) diligently and faithfully devote such of their time to the business of the Partnership as they deem necessary to conduct it for the greatest advantage of the Partnership; (b) file and publish all certificates, notices, statements, or other instruments required by law for formation and operation of the Partnership in all appropriate jurisdictions; (c) cause the Partnership to carry adequate public liability, property damage, and other insurance, any or all of which may name the General Partners as the sole insured; (d) indemnify and hold the Partnership harmless from any loss, damage or liability due to, or arising out of, any General Partner's breach of fiduciary duty; and (e) maintain capital accounts on the books and records of the Partnership in respect of each interest in the Partnership. The General Partners may become Limited Partners and thereby become entitled to all of the rights of Limited Partners to the extent of the Limited Partnership Interests so acquired, provided that such acquisition of Limited Partnership Interests shall not reduce any liability of the General Partners under this Agreement. Notwithstanding the foregoing, 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 and they shall not employ, or permit another to employ, such funds, or assets in any manner except for the exclusive benefit of the Partnership. 9.3 Notwithstanding any provision in this Agreement to the contrary, it is understood and agreed that (i) in conducting, carrying on, and managing the business of the Partnership, the General Partners shall be bound by the following investment policies, which may not be changed, altered, or amended except as provided in Section 14 hereof and (ii) the General Partners shall endeavor to conduct the Partnership's business in accordance with the policies set forth in the Prospectus: (a) except for interim commitments in short-term government obligations, commercial paper (investment grade), certificates of deposit, bank repurchase obligations, deposit and tax-exempt notes and bonds or registered investment companies holding such securities, investments will be initially limited to Project Interests, provided that (i) not less than 7590% of the amount of -------- public offering proceeds available for investment will be invested in Project Interests in partnerships or joint ventures which will own or lease federal, state, or local government-assisted housing projects and (ii) the Partnership may subsequently refinance or convert such Project Interests to other uses with a view to realizing higher revenue or capital gains, although reinvestment of cash flow (excluding proceeds resulting from a disposition or refinancing of property) shall not be allowed. (b) Projects or Project Interests will be acquired with a view toward maximizing tax deductions, with cash income and long-term appreciation as additional considerations, and not with a view to early resale; (c) the Partnership will seek to avoid depreciation recapture and defer taxes by not selling any Projects or Project Interests within ten years, except (i) to qualified tenant cooperatives as defined in the Internal Revenue Code, and (ii) under circumstances described in the Prospectus; (d) upon any sale or refinancing, the Partnership shall not reinvest any proceeds thereof; (e) the Partnership may (ai) borrow money only against individual Projects or Project Interests to acquire Projects or interests therein, to defray expenses or preserve its interest in each individual Project or interest therein, but may not pledge or encumber other Projects or Project Interests for this purpose, and (ii) borrow only such amount for which the Partnership can reasonably expect to meet debt service requirements from anticipated Net Cash Flow. The Partnership may make or cause its affiliates to make loans or advances for the acquisition of Projects or Project Interests, but such affiliates may not receive interest or other financing charges or fees in excess of the amounts which would be charged by unrelated banks for comparable loans for the same purpose in the locality of the Project or in amounts which otherwise are unreasonable or require any prepayment charge or penalty, provided that in connection with any of the foregoing transactions, (A) the -------- Partnership shall not enter into transactions involving the use of "all-all- inclusive" or "wrap-around" notes except as permitted by the Rules of the Department of Corporations of the State of California, and (B) the Partnership shall not incur any indebtedness whereby the lender will have or acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor; (f) the Partnership shall not (i) issue senior securities, except as set forth in the preceding paragraph and even then only at par or at a premium, (ii) invest in other issuers for the purpose of exercising control (other than local limited partnerships owning or leasing projects), (iii) underwrite the securities of other issuers, or (iv) offer Units or Limited Partnership Interests in exchange for property; (g) except in a case in which a single Project investment Investment exceeds this limitation, the Partnership shall not sell and reinvest more than 25% of its portfolio of Projects or Project Interests within any single year, unless by exempted sales to qualified tenant cooperatives; (h) the Partnership shall not make loans to the General Partners or their affiliates and will not make loans to others except (i) to developers in connection with the acquisition of Projects or Project Interests (and then only if such loans do not exceed, in the aggregate, aggregate 5% of the difference between the aggregate amount of contributions made pursuant to Section 5 hereof less expenses of the Partnership determined in accordance with Section 6 hereof), (ii) to local limited partnerships in which the Partnership has an equity interest, and (iii) as permitted by Sections 5.4 or 9.3(a9.3 (a) hereof; (i) commitments of Partnership funds will be contingent upon receipt of satisfactory appraisals as to non-governmentalgovernment-assisted Projects and Project Interests or FHA feasibility or equivalent letters as to government-assisted projects and no significant contributions to government-assisted projects will be made prior to Initial Endorsement by FHA/HUD or its equivalent for non-FHA/HUD Projects; (j) the Partnership will not purchase or lease a Project or Project Interest, if the General Partners or their affiliates have (or if any limited partnership in which the General Partners or their affiliates have an interest in has) any equity interest in such Project or have made loans with respect thereto (except where their interest is minimal and held primarily for the benefit of the Partnership), or have any interest of a type other than equity or debt which has not been disclosed to the Limited Partners; (k) the Partnership will not sell or lease any Project or Project Interest to the General Partners or their affiliates; (l) the Partnership will not purchase Projects or Project Interests in exchange for Units or Limited Partnership Interests; (m) the Partnership shall not give the General Partners or their affiliates the exclusive right or employment to sell Projects or Project Interestsinterests; (n) the Partnership may not pay the General Partners or their affiliates any commission in connection with the reinvestment of the proceeds of any resale, exchange, or refinancing of any Project Interest; (o) the General Partners, their affiliates, and any salesman or dealer offering Units or Additional Limited Partnership Interests shall not take any action in violation of Section 260.140.114.6 of Title 10 of the California Administrative Code; (p) the Partnership's funds may not be commingled with the funds of others; (q) all expenses of the Partnership shall be billed directly to it, except organizational expenses and offering expenses expense (including, subject to the limitation set forth in Section 9.6.1, expenses associated with the selection and acquisition of Projects or Project Interests) paid by the General Partners or their affiliates, which expenses may be reimbursed; (r) the Partnership will not enter into any transaction or agreement with any Limited Partner or any affiliate of a Limited Partner, if the Partnership would be prohibited pursuant to this Section 9.3 from entering into a similar agreement or transaction with the General Partners or their affiliates, provided that nothing herein set forth shall prohibit a "sponsor" (i.e., a general partner, developer, contractor, or affiliate thereof) of any local limited partnership from acquiring or holding Units or Limited Partnership Interests in the Partnership or being admitted as a Limited Partner; (s) the Partnership will not acquire an interest in a partnership, local limited partnership, or joint venture which does not constitute at least a 50% interest of all limited partnership or similar interests; and (t) the Partnership shall not sell all or substantially all of the Partnership's assets in a single transaction or a series of related transactions without obtaining the consent of Limited Partners owning a majority of the outstanding Limited Partnership Interests; provided, however, that the foregoing will not apply to a sale of a single Project (or a sale of Project Interests related to a single Project) that is not part of a series of related transactions involving the sale of multiple Projects (or Project Interests related to multiple Projects) that constitute all or substantially all of the Projects. 9.4 The General Partners may delegate all or any of their powers, rights, and obligations hereunder, and in furtherance of any such delegation may appoint, employ, or contract with any person for the account of the Partnership for the transaction of the business of the Partnership, which persons may, under the supervision of the General Partners, perform any acts or services for the Partnership as the General Partners may approve. 9.5 As compensation for services to the Partnership by the General Partners pursuant to this Agreement, the General Partners shall be entitled to receive an Annual Management Fee, the amount of which shall be equal to 4.4% of the Partnership's "Invested Assets." "Invested Assets" is defined as the cost of acquiring Project Interests or projectsinterests, including the proportionate amount of the mortgage loans on and other debts related to the Projects equivalent to the Partnership's interest in the capital accounts of the respective partnerships, Projects or partnerships and joint ventures, but excluding depreciation, amortization, and capitalized expenditures (such as the Acquisition and Selection Fees [defined in Section 9.6.1 hereof] due the General Partners, organizational expenditures, and acquisition closing costs). The Annual Management Fee shall be due and payable in monthly installments in every year; the other fees due the General Partners shall be deferred until Annual Management Fees due are paid, and Annual Management Fees may, to serve the best interests of the Partnership, be paid out of any Partnership funds. The amount, if any, of the Annual Management Fee earned, but unpaid in any year, shall accrue for payment in later years.

The General Partners. 9.1 The General Partners shall have complete discretion in the management and control of the business of the Partnership for the purposes herein stated, shall make all decisions affecting the business of the Partnership and shall manage and control the affairs of the Partnership to the best of their abilities and use their best efforts to carry out the purposes of the Partnership. The powers of the General Partners include, but are not limited to, the powers: (a) to expend the capital and profits of the Partnership in furtherance of the Partnership's business; (b) to acquire, hold (in the Partnership's name or, in the best interest of the Partnership, under any other title arrangement selected by the General Partners), lease, sell, mortgage, convey, or refinance any real or personal property, including Projects and Project Interests, at such price and upon such terms, as they deem to be in the best interests of the Partnership, including the power to vote to amend a local limited partnership agreement in such a manner as to reduce the limited partnership interest of the Partnership in the local limited partnership, to vote to reduce the Partnership's interests in the profits, losses, and special allocations of the local limited partnerships partnership and assign a part of the limited partnership interest in such partnership, provided that such action is necessary to preserve the economic value of the -------- Partnership's Project Interest; (c) to monitor the construction and operations of any of the Projects, Project Interests, or other Partnership property and to make recommendations with respect thereto; (d) to retain independent consultants to evaluate the Projects, Project Interests, and other Partnership property; (e) to borrow money and execute promissory notes and to secure the same by mortgage upon the Partnership's property; (f) to invest in short-term debt obligations (including obligations of federal and state governments and their agencies, bank repurchase obligations, commercial paper, and certificates of deposit of commercial banks, savings banks, or savings and loan associations) such funds as are temporarily not required for investment in Projects, Project Interests, or other Partnership property; (g) to lend money or provide advances in furtherance of the Partnership's purposes; and (h) to enter into and carry out agreements of any kind, provided that all contracts with the General Partners or their affiliates must provide for termination by the Partnership on 60 days written notice, without penalty, and to do any and all other acts and things necessary, proper, convenient, or advisable to effectuate and carry out the purposes of the Partnership. 9.2 The General Partners shall (a) diligently and faithfully devote such of their time to the business of the Partnership as they deem necessary to conduct it for the greatest advantage of the Partnership; (b) file and publish all certificates, notices, statements, or other instruments required by law for formation and operation of the Partnership in all appropriate jurisdictions; (c) cause the Partnership to carry adequate public liability, property damage, and other insurance, any or all of which may name the General Partners as the sole insured; (d) indemnify and hold the Partnership harmless from any loss, damage or liability due to, or arising out of, any General Partner's breach of fiduciary duty; and (e) maintain capital accounts on the books and records of the Partnership in respect of each interest Interest in the Partnership. The General Partners may become Limited Partners and thereby become entitled to all of the rights of Limited Partners to the extent of the Limited Partnership Interests Units so acquired, provided that such acquisition of Limited Partnership Interests Units shall not reduce any liability of the General Partners Partner under this Agreement. Notwithstanding the foregoing, 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 and they shall not employ, or permit another to employ, such funds, or assets in any manner except for the exclusive benefit of the Partnership. 9.3 Notwithstanding any provision in this Agreement to the contrary, it is understood and agreed that (i) in conducting, carrying on, and managing the business of the Partnership, the General Partners shall be bound by the following investment policies, which may not be changed, altered, or amended except as provided in Section 14 hereof and (ii) the General Partners shall endeavor to conduct the Partnership's business in accordance with the policies set forth in the Prospectus: (a) except for interim commitments in U.S. Treasury Bills and Bonds, bank certificates of deposit, other short-term government obligations, commercial paper (investment grade), certificates of deposit, bank repurchase obligations, and tax-exempt notes and bonds bonds, or registered investment companies holding such securities, investments will be initially limited to Project Interests, provided that (i) not less than 7590% of the amount of -------- public offering proceeds available for investment will be invested in Project Interests in local limited partnerships or joint ventures which will own or lease federal, state, or local government-assisted housing projects and (ii) the Partnership may subsequently refinance or convert such Project Interests to other uses with a view to realizing higher revenue or capital gains, although reinvestment of cash flow (excluding proceeds resulting from a disposition or refinancing of or property) shall not be allowed. (b) Projects or Project Interests will be acquired with a view toward maximizing tax deductions, with cash income and long-term appreciation as additional considerations, and not with a view to early resale; (c) the Partnership will seek to avoid depreciation recapture and defer taxes by not selling any Projects or Project Interests within ten years, except (i) to qualified tenant cooperatives as defined in the Internal Revenue Code, and (ii) under circumstances described in the Prospectus; (d) upon any sale or refinancing, refinancing the Partnership shall not reinvest any proceeds thereofthereof prior to distributing to the Partners from the proceeds sufficient cash to pay the state and federal tax at the then maximum rates, and may distribute to the Partners the balance of the Proceeds; (e) the Partnership may (ai) borrow money only against individual Individual Projects or Project Interests Interest to acquire such Projects or interests Interests therein, to defray expenses or preserve its interest in each individual Individual Project or interest therein, therein but may not pledge or encumber other Projects or Project Interests for this purpose, and (ii) borrow only such amount for which the Partnership can reasonably expect to meet debt service requirements from anticipated Net Cash Flow. The Partnership may , and (iii) make or cause its affiliates to make loans or advances for the acquisition of Projects or Project Interests, but such affiliates may not receive interest Interest or other financing charges or fees in excess of the amounts which would be charged by unrelated banks for comparable loans for the same purpose in the locality of the Project or in amounts which otherwise are unreasonable or require any prepayment charge or penalty, provided that in connection with any of the foregoing transactions, (A) the -------- Partnership shall not enter into transactions involving the use of "all-inclusive" or "wrap-around" notes except as permitted by the Rules of the Department of Corporations of the State of California, and (B) the Partnership shall not incur any indebtedness whereby the lender will have or acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor; (f) the Partnership shall not (i) issue senior securities, except as set forth in the preceding paragraph and even then only at par or at a premium, (ii) invest in other issuers for the purpose of exercising control (other than local limited partnerships owning or leasing projects), (iii) underwrite the securities of other issuers, or (iv) offer Units or Limited Partnership Interests in exchange for property; (g) except in a case in which a single Project investment exceeds this limitation, the Partnership shall not sell and reinvest more than 25% of its portfolio of Projects or Project Interests within any single year, unless by exempted sales to qualified tenant cooperatives; (h) the Partnership shall not make loans to the General Partners or their affiliates and will not make loans to others except (i) to developers in connection with the acquisition of Projects or Project Interests (and then only if such loans do not exceed, in the aggregate, 5% of the difference between the aggregate amount of contributions made pursuant to Section 5 hereof less expenses of the Partnership determined in accordance with Section 6 hereof), (ii) to local limited partnerships in which the Partnership has an equity interest, and (iii) as permitted by Sections 5.4 or 9.3(a) hereof;: (i) commitments of Partnership funds will be contingent upon receipt of satisfactory appraisals as to non-governmentalgovernment-assisted Projects and Project Projects Interests or FHA feasibility or equivalent letters as to government-assisted projects and no significant contributions contribution to government-assisted projects will be made prior to Initial initial Endorsement by FHA/HUD or its equivalent for non-FHA/HUD Projects; (j) the Partnership will not purchase or lease a Project or Project Interest, if the General Partners or their affiliates have (or if any limited partnership in which the General Partners or their affiliates have an interest in has) any equity interest in such Project or have made loans with respect thereto (except where their interest is minimal and held primarily for the benefit of the Partnership)thereto, or have any interest of a type other than equity or debt debt, which has equity interests, loans, or other type of interest have not been disclosed to the Limited Partners; (k) the Partnership will not sell or lease any Project or Project Interest to the General Partners or their affiliates; (l) the Partnership will not purchase Projects or Project Interests in exchange for Units or Limited Partnership InterestsUnits; (m) the Partnership shall not give the General Partners or their affiliates the exclusive right or of employment to sell Projects or Project Interests; (n) the Partnership may not pay the General Partners or their affiliates any commission in connection with the reinvestment of the proceeds of any resale, exchange, or refinancing of any Project Interest; (o) the General Partners, their affiliates, and any salesman or dealer offering Units or Additional Limited Partnership Interests shall not take any action in violation of Section 260.140.114.6 of Title 10 of the California Administrative Code; (p) the Partnership's funds may not be commingled with the funds of others; (q) all expenses of the Partnership shall be billed directly to it, except organizational expenses and offering expenses expense (including, subject to the limitation set forth in Section 9.6.19.61, expenses associated with the selection and acquisition of Projects or Project Interests) paid by the General Partners or their affiliates, which expenses may be reimbursed; (r) the Partnership will not enter into any transaction or agreement with any Limited Partner or any affiliate of a Limited Partner, if the Partnership would be prohibited pursuant to this Section 9.3 from entering into a similar agreement or transaction with the General Partners or their affiliates, provided that nothing herein set forth shall prohibit a "sponsor" (i.e., a general partner, developer, contractor, or affiliate affiliates thereof) of any local limited partnership from acquiring or holding Units or Limited Partnership Interests in the Partnership or being admitted as a Limited Partner; (s) the Partnership will not acquire an interest in a partnership, local limited partnership, partnership or joint venture which does not constitute at least a 50% interest of all limited partnership or similar interests; and (t) the Partnership shall not sell all or substantially all of the Partnership's assets in a single transaction or a series of related transactions without obtaining the consent of Limited Partners owning a majority of the outstanding Limited Partnership InterestsUnits; provided, however, that the foregoing will not apply to a sale of a single Project (or a sale of Project Interests related to a single Project) that is not part of a series of related transactions involving the sale of multiple Projects (or Project Interests related Interest; (u) the General Partners and their affiliates (except other local limited partnerships) will not acquire properties adjacent to multiple Projectsproperties in which the Partnership has an interest. (v) that constitute all or substantially all of the ProjectsGeneral Partners and their affiliates will not purchase a property for their own account if the Partnership is in a position to purchase such property. 9.4 The General Partners may delegate all or any of their powers, rights, and obligations hereunder, and in furtherance of any such delegation may appoint, employ, or contract with any person for the account of the Partnership for the transaction of the business of the Partnership, which persons may, under the supervision of the General Partners, perform any acts or services for the Partnership as the General Partners may approve. 9.5 As compensation for services to the Partnership by the General Partners pursuant to this Agreement, the General Partners shall be entitled to receive an Annual Management Fee, the amount of which shall be equal to 4one-half of 1% of the Partnership's "Invested Assets." "Invested Assets" is defined as the cost of acquiring Project Interests or projectsInterests, including the proportionate amount of the mortgage loans on and other debts related to the Projects equivalent to the Partnership's interest Interest in the capital accounts of the respective partnerships, Projects or partnerships and joint ventures, but excluding depreciation, amortization, and capitalized expenditures (such as the Acquisition and Selection Fees [defined in Section 9.6.1 hereof] due the General Partners, organizational expenditures, and acquisition closing costs). The Annual Management Fee shall be due and payable in monthly installments in every yearyear (except that in 1978 such fee shall be due monthly but payable only beginning with the month of the Partnership's initial investment); the other fees due the General Partners shall be deferred until Annual Management Fees due are paid, and Annual Management Fees may, to serve the best interests interest of the Partnership, be paid out of any Partnership funds. The amount, if any, of the Annual Management Fee earned, but unpaid in any year, shall accrue for payment in later years.

The General Partners. 9.1 The General Partners shall have complete discretion in the management and control of the business of the Partnership for the purposes herein stated, shall make all decisions affecting the business of the Partnership and shall manage and control the affairs of the Partnership to the best of their abilities and use their best efforts to carry out the purposes of the Partnership. The powers of the General Partners include, but are not limited to, the powers: (a) to expend the capital and profits of the Partnership in furtherance of the Partnership's business; (b) to acquire, hold (in the Partnership's name or, in the best interest of the Partnership, under any other title arrangement selected by the General Partners), lease, sell, mortgage, convey, or refinance any real or personal property, including Projects and Project Interests, at such price and upon such terms, as they deem to be in the best interests of the Partnership, including the power to vote to amend a local limited partnership agreement in such a manner as to reduce the limited partnership interest of the Partnership in the local limited partnership, to vote to reduce the Partnership's interests in the profits, losses, and special allocations of the local limited partnerships and assign a part of the limited partnership interest in such partnership, provided that such action is necessary to preserve the economic value of the -------- Partnership's Project Interest; (c) to monitor the construction and operations of any of the Projects, Project Interests, or other Partnership property and to make recommendations with respect thereto; (d) to retain independent consultants to evaluate the Projects, Project Interests, and other Partnership property; (e) to borrow money and execute promissory notes and to secure the same by mortgage upon the Partnership's property; (f) to invest in short-term debt obligations (including obligations of federal and state governments and their agencies, bank repurchase obligations, commercial paper, and certificates of deposit of commercial banks, savings banks, or savings and loan associations) such funds as are temporarily not required for investment in Projects, Project Interests, or other Partnership property; (g) to lend money or provide advances in furtherance of the Partnership's purposes; and (h) to enter into and carry out agreements of any kind, provided that all contracts with the General Partners or their affiliates must provide for termination by the Partnership on 60 days written notice, without penalty, and to do any and all other acts and things necessary, proper, convenient, or advisable to effectuate and carry out the purposes of the Partnership. 9.2 The General Partners shall (a) diligently and faithfully devote such of their time to the business of the Partnership as they deem necessary to conduct it for the greatest advantage of the Partnership; (b) file and publish all certificates, notices, statements, or other instruments required by law for formation and operation of the Partnership in all appropriate jurisdictions; (c) cause the Partnership to carry adequate public liability, property damage, and other insurance, any or all of which may name the General Partners as the sole insured; (d) indemnify and hold the Partnership harmless from any loss, damage or liability due to, or arising out of, any General Partner's breach of fiduciary duty; and (e) maintain capital accounts on the books and records of the Partnership in respect of each interest in the Partnership. The General Partners may become Limited Partners and thereby become entitled to all of the rights of Limited Partners to the extent of the Limited Partnership Interests so acquired, provided that such acquisition of Limited Partnership Interests shall not reduce any liability of the General Partners under this Agreement. Notwithstanding the foregoing, 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 and they shall not employ, or permit another to employ, such funds, or assets in any manner except for the exclusive benefit of the Partnership. 9.3 Notwithstanding any provision in this Agreement to the contrary, it is understood and agreed that (i) in conducting, carrying on, and managing the business of the Partnership, the General Partners shall be bound by the following investment policies, which may not be changed, altered, or amended except as provided in Section 14 hereof and (ii) the General Partners shall endeavor to conduct the Partnership's business in accordance with the policies set forth in the Prospectus: (a) except for interim commitments in short-term government obligations, commercial paper (investment grade), certificates of deposit, bank repurchase obligations, and tax-exempt notes and bonds or registered investment companies holding such securities, investments will be initially limited to Project Interests, provided that (i) not less than 75% of the amount of -------- public offering proceeds available for investment will be invested in Project Interests in partnerships or joint ventures which will own or lease federal, state, or local government-assisted housing projects and (ii) the Partnership may subsequently refinance or convert such Project Interests to other uses with a view to realizing higher revenue or capital gains, although reinvestment of cash flow (excluding proceeds resulting from a disposition or refinancing of property) shall not be allowed. (b) Projects or Project Interests will be acquired with a view toward maximizing tax deductions, with cash income and long-term appreciation as additional considerations, and not with a view to early resale; (c) the Partnership will seek to avoid depreciation recapture and defer taxes by not selling any Projects or Project Interests within ten years, except (i) to qualified tenant cooperatives as defined in the Internal Revenue Code, and (ii) under circumstances described in the Prospectus; (d) upon any sale or refinancing, the Partnership shall not reinvest any proceeds thereof; (e) the Partnership may (ai) borrow money only against individual Projects or Project Interests to acquire Projects or interests therein, to defray expenses or preserve its interest in each individual Project or interest therein, but may not pledge or encumber other Projects or Project Interests for this purpose, and (ii) borrow only such amount for which the Partnership can reasonably expect to meet debt service requirements from anticipated Net Cash Flow. The Partnership may make or cause its affiliates to make loans or advances for the acquisition of Projects or Project Interests, but such affiliates may not receive interest or other financing charges or fees in excess of the amounts which would be charged by unrelated banks for comparable loans for the same purpose in the locality of the Project or in amounts which otherwise are unreasonable or require any prepayment charge or penalty, provided that in connection with any of the foregoing transactions, (A) the -------- Partnership shall not enter into transactions involving the use of "all-inclusive" or "wrap-around" notes except as permitted by the Rules of the Department of Corporations of the State of California, and (B) the Partnership shall not incur any indebtedness whereby the lender will have or acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor; (f) the Partnership shall not (i) issue senior securities, except as set forth in the preceding paragraph and even then only at par or at a premium, (ii) invest in other issuers for the purpose of exercising control (other than local limited partnerships owning or leasing projects), (iii) underwrite the securities of other issuers, or (iv) offer Units or Limited Partnership Interests in exchange for property; (g) except in a case in which a single Project investment exceeds this limitation, the Partnership shall not sell and reinvest more than 25% of its portfolio of Projects or Project Interests within any single year, unless by exempted sales to qualified tenant cooperatives; (h) the Partnership shall not make loans to the General Partners or their affiliates and will not make loans to others except (i) to developers in connection with the acquisition of Projects or Project Interests (and then only if such loans do not exceed, in the aggregate, 5% of the difference between the aggregate amount of contributions made pursuant to Section 5 hereof less expenses of the Partnership determined in accordance with Section 6 hereof), (ii) to local limited partnerships in which the Partnership has an equity interest, and (iii) as permitted by Sections 5.4 or 9.3(a) hereof; (i) commitments of Partnership funds will be contingent upon receipt of satisfactory appraisals as to non-governmental-assisted Projects and Project Interests or FHA feasibility or equivalent letters as to government-assisted projects and no significant contributions to government-assisted projects will be made prior to Initial Endorsement by FHA/HUD or its equivalent for non-FHA/HUD Projects; (j) the Partnership will not purchase or lease a Project or Project Interest, if the General Partners or their affiliates have (or if any limited partnership in which the General Partners or their affiliates have an interest in has) any equity interest in such Project or have made loans with wish respect thereto (except where their interest is minimal and held primarily for the benefit of the Partnership), or have any interest of a type other than equity or debt which has not been disclosed to the Limited Partners; (k) the Partnership will not sell or lease any Project or Project Interest to the General Partners or their affiliates; (l) the Partnership will not purchase Projects or Project Interests in exchange for Units or Limited Partnership Interests; (m) the Partnership shall not give the General Partners or their affiliates the exclusive right or employment to sell Projects or Project Interests; (n) the Partnership may not pay the General Partners or their affiliates any commission in connection with the reinvestment of the proceeds of any resale, exchange, or refinancing of any Project Interest; (o) the General Partners, their affiliates, and any salesman or dealer offering Units or Additional Limited Partnership Interests shall not take any action in violation of Section 260.140.114.6 of Title 10 of the California Administrative Code; (p) the Partnership's funds may not be commingled with the funds of others; (q) all expenses of the Partnership shall be billed directly to it, except organizational expenses and offering expenses (including, subject to the limitation set forth in Section 9.6.1, expenses associated with the selection and acquisition of Projects or Project Interests) paid by the General Partners or their affiliates, which expenses may be reimbursed; (r) the Partnership will not enter into any transaction or agreement with any Limited Partner or any affiliate of a Limited Partner, if the Partnership would be prohibited pursuant to this Section 9.3 from entering into a similar agreement or transaction with the General Partners or their affiliates, provided that nothing herein set forth shall prohibit a "sponsor" (i.e., a general partner, developer, contractor, or affiliate thereof) of any local limited partnership from acquiring or holding Units or Limited Partnership Interests in the Partnership or being admitted as a Limited Partner; (s) the Partnership will not acquire an interest in a partnership, local limited partnership, or joint venture which does not constitute at least a 50% interest of all limited partnership or similar interests; and (t) the Partnership shall not sell all or substantially all of the Partnership's assets in a single transaction or a series of related transactions without obtaining the consent of Limited Partners owning a majority of the outstanding Limited Partnership Interests; provided, however, that the foregoing will not apply to a sale of a single Project (or a sale of Project Interests related to a single Project) that is not part of a series of related transactions involving the sale of multiple Projects (or Project Interests related to multiple Projects) that constitute all or substantially all of the Projects. 9.4 The General Partners may delegate all or any of their powers, rights, and obligations hereunder, and in furtherance of any such delegation may appoint, employ, or contract with any person for the account of the Partnership for the transaction of the business of the Partnership, which persons may, under the supervision of the General Partners, perform any acts or services for the Partnership as the General Partners may approve. 9.5 As compensation for services to the Partnership by the General Partners pursuant to this Agreement, the General Partners shall be entitled to receive receive, with respect to the Partnership's investments in local limited partnerships owning government-assisted housing projects, an Annual Management Fee, the amount of which shall be equal to 4.5% of the Partnership's "Invested Assets." "Invested Assets" is defined as the cost of acquiring Project Interests or projectsProjects, including capital contributions and other equity payments to be made and the proportionate amount of the mortgage loans on and other debts related to the Projects or Project Interests equivalent to the Partnership's interest in the capital accounts of the respective partnerships, Projects or joint ventures, but excluding depreciation, amortization, and capitalized expenditures (such as the Acquisition and Selection Fees [defined in Section 9.6.1 hereof] due the General Partners, organizational expenditures, and acquisition closing costs). The Annual Management Fee shall be due and payable in monthly installments in every year; the other fees due the General Partners shall be deferred until Annual Management Fees due are paid, and Annual Management Fees may, to serve the best interests of the Partnership, be paid out of any Partnership funds. The amount, if any, of the Annual Management Fee earned, but unpaid in any year, shall accrue for payment in later years.

The General Partners. 9.1 The General Partners shall have complete discretion in the management and control of the business of the Partnership for the purposes herein stated, shall make all decisions affecting the business of the Partnership and shall manage and control the affairs of the Partnership to the best of their abilities and use their best efforts to carry out the purposes of the Partnership. The powers of the General Partners include, but are not limited to, the powers: (a) to expend the capital and profits of the Partnership in furtherance of the Partnership's business; (b) to acquire, hold (in the Partnership's name or, in the best interest of the Partnership, under any other title arrangement selected by the General Partners), lease, sell, mortgage, convey, or refinance any real or personal property, including Projects and Project Interests, Interests at such price and upon such terms, as they deem to be in the best interests of the Partnership, including the power to vote to amend a local limited partnership agreement in such a manner as to reduce the limited partnership interest of the Partnership in the local limited partnership, to vote to reduce the Partnership's interests in the profits, losses, and special allocations of the local limited partnerships and assign a part of the limited partnership interest in such partnership, provided that such action is necessary to preserve the economic value of the -------- Partnership's Project Interest; (c) to monitor the construction and operations of any of the Projects, Project Interests, or other Partnership property and to make recommendations with respect thereto; (d) to retain independent consultants to evaluate the Projects, Project Interests, and other Partnership property; (e) to borrow money and execute promissory notes and to secure the same by mortgage upon the Partnership's property; (f) to invest in short-term debt obligations (including obligations of federal and state governments and their agencies, agencies bank repurchase obligations, commercial paper, and certificates of deposit of commercial banks, savings banks, or savings and loan associations) such funds as are temporarily not required for investment in Projects, Project Interests, or other Partnership property; (g) to lend money or provide advances in furtherance of the Partnership's purposes; and (h) to enter into and carry out agreements of any kind, provided that all contracts with the General Partners or their affiliates must provide for termination by the Partnership on 60 days written notice, without penalty, and to do any and all other acts and things necessary, proper, convenient, or advisable to effectuate and carry out the purposes of the Partnership. 9.2 The General Partners shall (a) diligently and faithfully devote such of their time to the business of the Partnership as they deem necessary to conduct it for the greatest advantage of the Partnership; (b) file and publish all certificates, notices, statements, or other instruments required by law for formation and operation of the Partnership in all appropriate jurisdictions; (c) cause the Partnership to carry adequate public liability, property damage, and other insurance, any or all of which may name the General Partners as the sole insured; (d) indemnify and hold the Partnership harmless from any loss, damage or liability due to, or arising out of, any General Partner's breach of fiduciary duty; and (e) maintain capital accounts on the books and records of the Partnership in respect of each interest in the Partnership. The General Partners may become Limited Partners and thereby become entitled to all of the rights of Limited Partners to the extent of the Limited Partnership Interests so acquired, provided that such acquisition of Limited Partnership Interests shall not reduce any liability of the General Partners under this Agreement. Notwithstanding the foregoing, 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 and they shall not employ, or permit another to employ, such funds, or assets in any manner except for the exclusive benefit of the Partnership. 9.3 Notwithstanding any provision in this Agreement to the contrary, it is understood and agreed that (i) in conducting, carrying on, and managing the business of the Partnership, the General Partners shall be bound by the following investment policies, which may not be changed, altered, or amended except as provided in Section 14 hereof and (ii) the General Partners shall endeavor to conduct the Partnership's business in accordance with the policies set forth in the Prospectus: (a) except for interim commitments in short-term government obligations, commercial paper (investment grade), certificates of deposit, bank repurchase obligations, and tax-exempt notes and bonds or registered investment companies holding such securities, investments will be initially limited to Project Interests, provided that (i) not less than 7585% of the amount of -------- public offering proceeds available for investment will be invested in Project Interests in partnerships or joint ventures which will own or lease tease federal, state, or local government-assisted housing projects and (ii) the Partnership may subsequently refinance or convert such Project Interests to other uses with a view to realizing higher revenue or capital gains, although reinvestment of cash flow (excluding proceeds resulting from a disposition or refinancing of property) shall not be allowed. (b) Projects or Project Interests will be acquired with a view toward maximizing tax deductions, with cash income and long-term appreciation as additional considerations, and not with a view to early resale; (c) the Partnership will seek to avoid depreciation recapture and defer taxes by not selling any Projects or Project Interests within ten years, except (i) to qualified tenant cooperatives as defined in the Internal Revenue Code, and (ii) under circumstances described in the Prospectus; (d) upon any sale or refinancing, the Partnership shall not reinvest any proceeds thereof; (e) the Partnership may (ai) borrow money only against individual Projects or Project Interests to acquire Projects or interests therein, to defray expenses or preserve its interest in each individual Project or interest therein, but may not pledge or encumber other Projects or Project Interests for this purpose, and (ii) borrow only such amount for which the Partnership can reasonably expect to meet debt service requirements from anticipated Net Cash Flow. The Partnership may make or cause its affiliates to make loans or advances for the acquisition of Projects or Project Interests, but such affiliates may not receive interest or other financing charges or fees in excess of the amounts which would be charged by unrelated banks for comparable loans for the same purpose in the locality of the Project or in amounts which otherwise are unreasonable or require any prepayment charge or penalty, provided that in connection with any of the foregoing transactions, (A) the -------- Partnership shall not enter into transactions involving the use of "all-inclusive" or "wrap-around" notes except as permitted by the Rules of the Department of Corporations of the State of California, and (B) the Partnership shall not incur any indebtedness whereby the lender will have or acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor; (f) the Partnership shall not (i) issue senior securities, except as set forth in the preceding paragraph and even then only at par or at a premium, (ii) invest in other issuers for the purpose of exercising control (other than local limited partnerships owning or leasing projects), (iii) underwrite the securities of other issuers, or (iv) offer Units or Limited Partnership Interests in exchange for property; (g) except in a case in which a single Project investment exceeds this limitation, the Partnership shall not sell and reinvest more than 25% of its portfolio of Projects or Project Interests within any single year, unless by exempted sales to qualified tenant cooperatives; (h) the Partnership shall not make loans to the General Partners or their affiliates and will not make loans to others except (i) to developers in connection with the acquisition of Projects or Project Interests (and then only if such loans do not exceed, in the aggregate, 5% of the difference between the aggregate amount of contributions made pursuant to Section 5 hereof less expenses of the Partnership determined in accordance with Section 6 hereof), (ii) to local limited partnerships in which the Partnership has an equity interest, and (iii) as permitted by Sections 5.4 or 9.3(a) hereof; (i) commitments of Partnership funds will be contingent upon receipt of satisfactory appraisals as to non-governmental-assisted Projects and Project Interests or FHA feasibility or equivalent letters as to government-assisted projects and no significant contributions to government-assisted projects will be made prior to Initial Endorsement by FHA/HUD or its equivalent for non-FHA/HUD Projects; (j) the Partnership will not purchase or lease a Project or Project Interest, if the General Partners or their affiliates have (or if any limited partnership in which the General Partners or their affiliates have an interest in has) any equity interest in such Project or have made loans with respect thereto (except where their interest is minimal and held primarily for the benefit of the Partnership), or have any interest of a type other than equity or debt which has not been disclosed to the Limited Partners; (k) the Partnership will not sell or lease any Project or Project Interest to the General Partners or their affiliates; (l) the Partnership will not purchase Projects or Project Interests in exchange for Units or Limited Partnership Interests; (m) the Partnership shall not give the General Partners or their affiliates the exclusive right or employment to sell Projects or Project Interests; (n) the Partnership may not pay the General Partners or their affiliates any commission in connection with the reinvestment of the proceeds of any resale, exchange, or refinancing of any Project Interest; (o) the General Partners, their affiliates, and any salesman or dealer offering Units or Additional Limited Partnership Interests shall not take any action in violation of Section 260.140.114.6 of Title 10 of the California Administrative Code; (p) the Partnership's funds may not be commingled with the funds of others; (q) all expenses of the Partnership shall be billed directly to it, except organizational expenses and offering expenses expense (including, subject to the limitation set forth in Section 9.6.1, expenses associated with the selection and acquisition of Projects or Project Interests) paid by the General Partners or their affiliates, which expenses may be reimbursed; (r) the Partnership will not enter into any transaction or agreement with any Limited Partner or any affiliate of a Limited Partner, if the Partnership would be prohibited pursuant to this Section 9.3 from entering into a similar agreement or transaction with the General Partners or their affiliates, provided that nothing herein set forth shall prohibit a "sponsor" (i.e., a general partner, developer, contractor, or affiliate thereof) of any local limited partnership from acquiring or holding Units or Limited Partnership Interests in the Partnership or being admitted as a Limited Partner; (s) the Partnership will not acquire an interest in a partnership, local limited partnership, or joint venture which does not constitute at least a 50% interest of all limited partnership or similar interests; and (t) the Partnership shall not sell all or substantially all of the Partnership's assets in a single transaction or a series of related transactions without obtaining the consent of Limited Partners owning a majority of the outstanding Limited Partnership Interests; provided, however, that the foregoing will not apply to a sale of a single Project (or a sale of Project Interests related to a single Project) that is not part of a series of related transactions involving the sale of multiple Projects (or Project Interests related to multiple Projects) that constitute all or substantially all of the Projects. 9.4 The General Partners may delegate all or any of their powers, rights, and obligations hereunder, and in furtherance of any such delegation may appoint, employ, or contract with any person for the account of the Partnership for the transaction of the business of the Partnership, which persons may, under the supervision of the General Partners, perform any acts or services for the Partnership as the General Partners may approve. 9.5 As compensation for services to the Partnership by the General Partners pursuant to this Agreement, the General Partners shall be entitled to receive an Annual Management Fee, the amount of which shall be equal to 4.4% of the Partnership's "Invested Assets." "Invested Assets" is defined as the cost of acquiring Project Interests or projectsInterests, including the proportionate amount of the mortgage loans on and other debts related to the Projects equivalent to the Partnership's interest in the capital accounts of the respective partnerships, Projects or partnerships and joint ventures, but excluding depreciation, amortization, and capitalized expenditures (such as the Acquisition and Selection Fees [defined in Section 9.6.1 hereof] due the General Partners, organizational expenditures, and acquisition closing costs). The Annual Management Fee shall be due and payable in monthly installments in every year; the other fees due the General Partners shall be deferred until Annual Management Fees due are paid, and Annual Management Fees may, to serve the best interests of the Partnership, be paid out of any Partnership funds. The amount, if any, of the Annual Management Fee earned, but unpaid in any year, shall accrue for payment in later years.