DALLAS/XXXX HILLS, L.P.
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS
ARTICLE II GENERAL
2.1 Continuation of the Partnership
2.2 Principal Office
2.3 Principal Place of Business; Resident Agent
2.4 Term
2.5 Purpose
ARTICLE III CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions; General Partner
3.2 Withdrawal of Withdrawing Limited Partners; Admission of
Limited Partners
3.3 Special Limited Partner
3.4 Investor Limited Partner
3.5 [Reserved]
3.6 Treatment of Other Advances
3.7 Capital Accounts; No Interest; Withdrawal
3.8 Liability of Limited Partners
3.9 Provision of Other Amounts
3.10 Outside Activities of Limited Partners
ARTICLE IV COMPLIANCE WITH AUTHORITY REQUIREMENTS; PARTNERSHIP
BORROWINGS
4.1 Authority Requirements
4.2 Authorization to the General Partner
4.3 Right to Mortgage
4.4 Loans
ARTICLE V RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNER AND
LIMITATIONS THEREON; PARTNERS' ACTIVITIES
5.1 Exercise of Management
5.2 Duties and Authority of General Partner
5.3 Delegation of General Partner Authority; Tax Matters
Partner
5.4 Lease, Conveyance or Refinancing of Assets of the
Partnership
5.5 Restrictions on Authority
5.6 Activities of Partners
5.7 Dealing with Affiliates
5.8 Indemnification and Liability of the General Partners
5.9 Representations and Warranties
5.10 Additional Covenants of General Partner
5.11 Obligation to Repair and Rebuild Apartment Complex
ARTICLE VI CERTAIN PAYMENTS
6.1 Development Fee
6.2 Consulting Monitoring Fee
6.3 Annual Local Administrative Fee
6.4 Supervisory Management Fee
6.5 Asset Management Fee
6.6 Amounts Earned on $1,500,000 Escrow
6.7 Contractor Fee
ARTICLE VII ACCOUNTING, REPORTS, BOOKS, BANK ACCOUNTS AND FISCAL YEAR
7.1 Bank Accounts
7.2 Books of Account; Fiscal Year
7.3 Reports
7.4 Other Reports
7.5 Tax Returns and Tax Treatment
ARTICLE VIII MANAGEMENT AGENT
8.1 Management Agent and Management Fee
ARTICLE IX PROFITS AND LOSSES; DISTRIBUTIONS
9.1 Allocations of Profits and Losses
9.2 Distribution and Application of Cash Flow and Proceeds
From Sale or Refinancing Transactions
9.3 Overriding Allocations of Profits and Losses
ARTICLE X TRANSFER OF LIMITED PARTNER INTERESTS; SUBSTITUTED
PARTNERS; ASSIGNEES
10.1 Assignment of Limited Partner Interests
10.2 Substituted Partners; Admission
10.3 Assignees
ARTICLE XI WITHDRAWAL OF A GENERAL PARTNER; NEW GENERAL PARTNERS
11.1 Withdrawal
11.2 Effect of Withdrawal; Election to Continue Business
11.3 Formation of New Partnership
11.4 Special Removal Rights
11.5 Additional General Partners
11.6 Amendment of Schedule and Agreement
11.7 Survival of Liabilities
ARTICLE XII DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
12.1 Events Which Cause a Dissolution
12.2 Actions of Liquidating Agent Upon Dissolution
12.3 Statements on Termination
12.4 Priority on Liquidation; Distribution of Non-Liquid Assets
12.5 Orderly Liquidation
12.6 No Goodwill Value
ARTICLE XIII FOREIGN PARTNERS
13.1 Certification of Non-Foreign Status
13.2 Withholding of Certain Amounts Attributable to Interests
of Foreign Partners
ARTICLE XIV MISCELLANEOUS
14.1 Law Governing
14.2 Power of Attorney
14.3 Counterparts
14.4 Partners Independently Bound
14.5 Separability of Provisions
14.6 Address and Notice
14.7 Computation of Time
14.8 Titles and Captions
14.9 Entire Agreement
14.10 Agreement Binding
14.11 Parties in Interest
14.12 Amendments; Other Actions
14.13 Survival of Representations, Warranties and Agreements
14.14 Further Assurances
14.15 Remedies Cumulative
14.16 Meetings
14.17 Class Z General Partner
DALLAS/XXXX HILLS, L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement"),
dated as of the ____ day of March, 1997, by and among XXXX HILLS HOMES FOR
AMERICA, INC. as General Partner ("HOMES" or the "General Partner") XXXXX
X. XXXX ("Xxxx" or the "Class Z General Partner"), RELATED CORPORATE SLP
L.P., a Delaware limited partnership (the "Special Limited Partner"), and
RELATED CORPORATE PARTNERS V, L.P., a Delaware limited partnership (the
"Investor Limited Partner" and, together with the Special Limited Partner,
the "Limited Partners"), and XXX-XXX XX - Xxxx Hills, LTD., a Texas limited
partnership, JOCK P.R. LIVING TRUST 3/28/89, 0000 XXXXXX XXXX, INC., a
Texas corporation and XXXXXXX X. XXXXXX, as Withdrawing Limited Partners.
W I T N E S S E T H :
WHEREAS, the Partnership was formed as a limited partnership under the laws
of the State pursuant to the certificate of limited partnership ("Original
Certificate") by and among Xxxx, as general partner, and Xxx-Xxx XX-Xxxx
Hills, Ltd., a Texas limited Partnership, Jock P.R. Living Trust 3/28/89,
0000 Xxxxxx Xxxx, Inc., a Texas corporation, and Xxxxxxx X. Xxxxxx, as
original limited partners. The Original Certificate was filed with the
Filing Office on October 18, 1995 and was amended on April 17, 1996;
WHEREAS, the Investor Limited Partner was admitted to the Partnership as a
limited partner as of the Admission Date (as hereinafter defined);
WHEREAS, the parties hereto desire to enter into this Agreement to provide
for, among other things, (i) the continuation of the Partnership, (ii) the
withdrawal of the Withdrawing Limited Partners from the Partnership, (iii)
the admission of the Limited Partners and HOMES into the Partnership, (iv)
the payment of Capital Contributions by the Investor Limited Partner to the
Partnership, (v) the reallocation of Profits, Losses, Credits and
distributions of Cash Flow and other proceeds of the Partnership among the
Partners, (vi) the respective rights, obligations and interests of the
parties hereto to each other and to the Partnership and (vii) certain other
matters;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree that the Initial Agreement
is hereby amended and restated in its entirety to read as follows:
ARTICLE I
DEFINED TERMS
Capitalized terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified in this Article I. Certain
additional defined terms are set forth elsewhere in this Agreement and,
where referenced, in the Contribution Agreement and in the Exhibits
thereto.
"Accountants" means such firm or firms of independent
certified public accountants as may be engaged by the General
Partners with the Consent of the Special Limited Partner from
time to time, and shall initially be Xxxxxx X. Xxxxxxx & Company,
P.C., having an address at 000 Xxxx Xxx Xxxxxxx Xxxx., Xxxxx
0000, Xxxxxx, Xxxxx 00000.
"Adjusted Capital Account Deficit" means, with respect to
any Partner, the deficit balance, if any, in such Partner's
Capital Account as of the end of any fiscal year of the
Partnership, after giving effect to the following adjustments:
credit to such Capital Account any amounts which such Partner is obligated
to restore thereto pursuant to any provision of this Agreement or is deemed
to be obligated to restore thereto pursuant to the penultimate sentences of
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
debit to such Capital Account the items described in Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d)
of the Regulations and shall be interpreted consistently therewith.
"Admission Date" means the day on which the Investor Limited Partner
acquires its Interest pursuant to the terms of the Contribution
Agreement.
"Affiliate" means, when used with reference to a specified Person, any
(i) Person that directly or indirectly controls or is controlled by or
is under common control with the specified Person, (ii) 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 and (iii)
Person that, directly or indirectly, is the beneficial owner of 10% or
more of any class of equity securities of 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. "Affiliate" of the
Partnership or a General Partner does not include a Person who is a
partner in one or more partnerships or joint ventures with the
Partnership or any other Affiliate of the Partnership if such a Person
is not otherwise an Affiliate of the Partnership or such General
Partner.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended from time to time.
"Apartment Complex" means the real property owned by the Partnership
located in Dallas, Texas as more fully described in the Title Policy
(the "Land"), together with (i) 41 buildings containing 386 apartments
and ancillary and appurtenant facilities (including those intended for
commercial use, if any) being constructed thereon and (ii) all
furnishings, equipment and personal property used in connection with
the operation thereof ((i) and (ii), collectively, the
"Improvements").
"Assignment" (including the verb form "Assign" and the adjectival form
"Assigned") means a valid sale, exchange, transfer or syndication or
other disposition of all or any portion of an Interest. "Assignor"
means a Partner who makes an Assignment and "Assignee" means a Person
who receives an Assignment.
"Authority" means any Government Agency, together with any applicable
housing finance authority, which is a public body corporate and
politic created by the State, or other agency authorized to issue
bonds or other evidence of indebtedness to finance residential housing
development. To the extent applicable, Authority shall also mean any
government mortgage insurance or co-insurance agency, or any other
governmental body or agency having jurisdiction over the operations of
the Apartment Complex or that provides assistance to the Partnership,
the Apartment Complex and/or its tenants and imposes requirements in
connection with such assistance.
"Bankruptcy" or "Bankrupt" means, with respect to any Partner, such
Partner making an assignment for the benefit of creditors, becoming a
party to any liquidation or dissolution action or proceeding with
respect to such Partner or any bankruptcy, reorganization, insolvency
or other proceeding for the relief of financially distressed debtors
with respect to such Partner, or a receiver, liquidator, custodian or
trustee being appointed for such Partner or a substantial part of such
Partner's assets and, if any of the same occur involuntarily, the same
not being dismissed, stayed or discharged within ninety (90) days; or
the entry of an order for relief against such Partner under Title 11
of the United States Code. A Partner shall be deemed Bankrupt if the
Bankruptcy of such Partner shall have occurred and be continuing.
"Capital Account" means, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following
provisions:
to each Partner's Capital Account there shall be credited such
Partner's Capital Contributions, such Partner's distributive share of
Profits, and any items in the nature of income or gain which are
specially allocated pursuant to Article IX hereof, and the amount of
any Partnership liabilities assumed by such Partner or which are
secured by any property distributed to such Partner;
to each Partner's Capital Account there shall be debited the amount of
cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Losses, and any items in the nature of expenses
or losses which are specially allocated pursuant to Article IX hereof,
and the amount of any liabilities of such Partner assumed by the
Partnership or which are secured by any property contributed by such
Partner to the Partnership;
in the event any Interest is Assigned in accordance with the terms of
this Agreement, the Assignee shall succeed to the Capital Account of
the Assignor to the extent it relates to the Assigned Interest; and
in determining the amount of any liability for purposes of clauses (i)
and (ii) above, there shall be taken into account Section 752(c) of
the Code and any other applicable provisions of the Code and the
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 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
which are secured by contributed or distributed property or which
are assumed by the Partnership or the Partners), are computed in
order to comply with such Regulations, the General Partners may
make such modification with the Consent of the Special Limited
Partner, provided that it is not likely to have a material effect
on the amounts distributable to any Partner pursuant to Section
12.4 hereof upon the dissolution of the Partnership. The General
Partners, with the Consent of the Special Limited Partner, also
shall (a) make any adjustments that are necessary or appropriate
to maintain equality between the aggregate Capital Accounts of
the Partners and the aggregate amount of Partnership capital
reflected on the Partnership's balance sheet, as computed for
book purposes in accordance with Section 1.704-1(b)(2)(iv)(q) of
the Regulations, (b) make any appropriate modifications in the
event unanticipated events might otherwise cause this Agreement
not to comply with Section 1.704-1(b) of the Regulations, and (c)
make any appropriate modifications to the Capital Accounts of the
Partners to reflect revaluations of the Apartment Complex
pursuant to Section 1.704-1(b)(2)(iv)(f) of the Regulations.
"Capital Contributions" means, with respect to any Partner,
the amount of money (other than any amounts contributed pursuant
to a Partner's obligations under the Development Deficit Guaranty
Agreement) and the initial Gross Asset Value of any property
(other than money) contributed to the Partnership with respect to
the Interest held by such Partner pursuant to the terms of this
Agreement in accordance with Schedule A attached hereto. Any
reference in this Agreement to the Capital Contribution of a then
Partner shall include the contributions to the capital of the
Partnership made by any predecessor in interest of such Partner
in respect of such Interest of such Partner.
"Capital Note" means the promissory note issued by the Investor Limited Partner
to the Partnership in the form annexed hereto as Exhibit B pursuant to Section
3.4 hereof.
"Cash Expenditures" means all disbursements of cash during the year (excluding
distributions to Partners), including, without limitation, payment of operating
expenses, payment of principal and interest on the Partnership's indebtedness
(excluding payments of principal and interest on Voluntary Loans and Operating
Loans), cost of repair and restoration of the Apartment Complex, amounts
allocated to reserves (including any amounts required to be funded as operating
reserves or replacement reserves) by the General Partner and the payment of the
fees set forth in Article VI hereof. In addition, the net increase during the
year in any escrow account or reserve maintained by or for the Partnership shall
be considered a cash expenditure during the year. Cash Expenditures payable to
Partners or Affiliates of Partners shall be paid after Cash Expenditures payable
to third parties.
"Cash Flow" means the excess of Cash Receipts over Cash Expenditures. Cash Flow
shall be determined separately for each fiscal year or portion thereof.
"Cash Receipts" means all cash receipts of the Partnership from whatever source
derived other than from a Sale or Refinancing Transaction, including, without
limitation, cash from operations, any amounts attributable to construction or
development savings, and Capital Contributions. In addition, the net reduction
in any year in the amount of any escrow account or reserve maintained by or for
the Partnership shall be considered a cash receipt of the Partnership for such
year. Notwithstanding the foregoing, at the election of the General Partners,
Cash Receipts received near the end of a fiscal year and intended for use in
meeting the Partnership's obligations (including the cost of acquiring assets or
paying debts or expenses) in the subsequent fiscal year shall not be deemed
received until such following year.
"Certificate" means the Original Certificate as amended by any amendments
thereto filed in the Filing Office in accordance with the Uniform Act.
"Class" means a specific class or grouping of Partners (i.e., the General
Partners or the Investor Limited Partner and the Special Limited Partner).
"Class Z General Partner" means Xxxx.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute.
"Compliance Period" shall have the meaning provided in Section 42(i)(1) of the
Code.
"Consent of the Special Limited Partner" means the prior written consent or
approval of the Special Limited Partner, which may be granted or withheld in its
sole discretion.
"Contractor" means KRR Construction, and its successors and assigns.
"Contribution Agreement" means the Contribution Agreement dated as of the date
hereof among the General Partner, the Partnership (as constituted immediately
prior to the execution of this Agreement) and the Investor Limited Partner.
"CPI" means the National Consumer Price Index for Urban Wage Earners and
Clerical Workers (1982 - 1984 = 100) published by the United States Department
of Labor, Bureau of Labor Statistics. If the described index shall no longer be
published, another generally recognized as authoritative shall be substituted
with the Consent of the Special Limited Partner.
"Credit" or "Credits" means the low income housing tax credit allowable under
Section 42 of the Code.
"Credit Agency" shall mean Texas Department of Housing and Community Affairs.
"Credit Amount" means $350,260 of Credits per annum.
"Credit Conditions" means, for the duration of the Compliance Period, any and
all restrictions including, but not limited to, applicable federal, state and
local laws, rules and regulations, which must be complied with in order to
qualify for the Credits or to avoid an event of recapture in respect of the
Credits.
"Credit Period" shall have the meaning specified in Section 42 of the Code.
"Credit Reduction Payments" shall mean an amount equal to the present value cost
to the Investor Limited Partner (assuming a 15% discount rate) of a difference
(a "Credit Reduction") between the amount of Credits received by the Partnership
and allocated to the Limited Partners and 99.99% of the amounts of Credits set
forth in Exhibit A to the Recapture Guaranty Agreement, as such amounts are
adjusted pursuant to Section 3.4.B(ii) hereof, which arises as a result of a
Credit Reduction other than in connection with a Tax Credit Recapture Event (as
such term is defined in the Recapture Guaranty Agreement), which occurs after
the last Note Payment Date (as such term is defined in the Contribution
Agreement). Credit Reduction Payments shall not be required to the extent
amounts equal to such payments have been paid previously to the Limited Partners
pursuant to the Recapture Guaranty Agreement or pursuant to Section 9.2.D
hereof. "Depreciation" means, for each fiscal year of the Partnership or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such fiscal 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 fiscal
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 fiscal year or other
period bears to such beginning adjusted tax basis; provided, however, that if
the Federal income tax depreciation, amortization, or other cost recovery
deduction for such fiscal year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the General Partners.
"Developer" means Xxxx.
"Development Deficit" shall have the meaning provided in the Development Deficit
Guaranty Agreement.
"Development Deficit Guaranty Agreement" means the agreement of the Guarantor to
fund "Development Deficits", which shall be substantially in the form of Exhibit
E annexed to the Contribution Agreement.
"Entity" means any general partnership, limited partnership, corporation, joint
venture, trust, business trust, cooperative or association.
"Filing Office" means the Office of the Secretary of State of the State.
"Foreign Partner" means a Partner who at the time of acquisition of such
Partner's interest is a United States citizen or a resident alien of the United
States and whose status subsequently changes to that of a non-resident alien of
the United States.
"Foreign Person" means a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate, within the
meaning of Sections 897, 1445 and 1446 of the Code.
"General Partner" or "General Partners" means any or all Persons
designated as General Partners in Schedule A, including, without
limitation, the Managing General Partner, and any Person or Persons
who, at the time of reference thereto, have been admitted as
additional or successor General Partners, in each such Person's
capacity as a general partner of the Partnership. If there is only one
General Partner of the Partnership, the term "General Partners" shall
be deemed to refer to such General Partner. Notwithstanding anything
to the contrary herein, the term General Partner or General Partners
shall not include the Class Z General Partner.
"Government Agency" shall have the meaning set forth in the
Contribution Agreement.
"Governmental Agreements" shall have the meaning set forth in the
Contribution Agreement.
"Governmental Permits" shall have the meaning set forth in the
Contribution Agreement.
"Gross Asset Value" means, with respect to any asset owned by the
Partnership, the asset's adjusted basis for Federal income tax
purposes, except as follows:
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, as
determined by the contributing Partner and the General Partners with
the Consent of the Special Limited Partner;
the Gross Asset Value of each asset shall be adjusted to equal its
gross fair market value, as determined by the General Partners with
the Consent of the Special Limited Partner, as of the following times:
(a) the acquisition of an additional Interest by any new or existing
Partner in exchange for more than a de minimis Capital Contribution;
(b) the distribution by the Partnership to a Partner of more than a de
minimis amount of property in respect of its Interest; and (c) the
liquidation of the Partnership within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Regulations; provided, however, that
adjustments pursuant to clauses (a) and (b) above shall be made only
if the General Partners with the Consent of the Special Limited
Partner reasonably determine that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners
in the Partnership;
the Gross Asset Value of any asset distributed to any Partner shall be
the gross fair market value of such asset on the date of distribution;
and
the Gross Asset Value of each asset shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such asset
pursuant to Section 734(b) or Section 743(b) of the Code, but only to
the extent that such adjustment is taken into account in determining
Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the
Regulations and Article IX hereof; provided, however, that Gross Asset
Values shall not be adjusted pursuant to this clause (iv) to the
extent the General Partners determine that an adjustment pursuant to
clause (ii) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to
this clause (iv).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to clause (i), (ii) or (iv) above, 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.
"Guarantor" means, collectively, the General Partner and Homes For
America Holdings, Inc., a Texas corporation.
"Guaranty Period" means the period during which Guarantor is obligated
to fund any Operating Deficit pursuant to the Operating Deficit
Guaranty Agreement.
"Housing Agency" means the Credit Agency.
"HUD" means the United States Department of Housing and Urban
Development, or any successor Federal agency.
"Improvements" has the meaning specified in the definition of
Apartment Complex.
"Initial Agreement" means the Agreement of Limited Partnership dated
February 9, 1996 among Xxxx as general partner and the Withdrawing
Limited Partner, as limited partner.
"Interest" means the entire ownership interest of a Partner in the
Partnership at any particular time, including the right of such
Partner to any and all benefits to which a Partner may be entitled as
provided in this Agreement, together with the obligations of such
Partner to comply with all terms and provisions of this Agreement.
"Investor Contributions" means $2,787,337 plus the amount of any
Capital Contributions made by or on behalf of the Investor Limited
Partner in addition to those provided for in Section 3.4.A hereof,
less the amount by which the Capital Contribution is reduced pursuant
to Section 3.4.B hereof.
"Investor Limited Partner" means Related Corporate Partners V, L.P., a
Delaware limited partnership, and any person who becomes a Substituted
Limited Partner in respect of any portion of the Interests of the
Investor Limited Partner as provided in Article X hereof. The term
"Investor Limited Partner" does not include the Special Limited
Partner.
"Involuntary Withdrawal" means any Withdrawal caused by the death,
adjudication of insanity or incompetence, or Bankruptcy of a General
Partner, or the removal of such General Partner pursuant to Section
11.4.C hereof.
"Land" has the meaning specified in the definition of Apartment
Complex.
"Lender" means any lender under any mortgage constituting the
Mortgage.
"Limited Partners" means the Investor Limited Partner and the Special
Limited Partner and any Substituted Limited Partner.
"Liquidating Agent" shall have the meaning provided in Section 12.2
hereof.
"Management Agent" means Autumn Gate Properties, Inc. or its
successors or any other person approved by each Authority the approval
of which is required and selected to provide management services to
the Apartment Complex from time to time in accordance with Article
VIII hereof.
"Management Agreement" means the agreement between the Partnership and
the Management Agent for the management of the Apartment Complex
entered into pursuant to the authority granted by Article VIII hereof.
"Managing General Partner" means the General Partner, initially, and
its successors and assigns, as Managing General Partner pursuant to
the provisions of Section 5.3 hereof; provided, however, if there is
only one General Partner, such person shall be the Managing General
Partner.
"Mortgage" means any mortgage or deed of trust securing an
indebtedness of the Partnership and encumbering the Apartment Complex,
as such indebtedness may be increased, decreased or refinanced in
accordance with this Agreement and the Project Documents. Where the
context admits, the term "Mortgage" shall include any mortgage, deed,
deed of trust, note, regulatory agreement, security agreement,
assumption agreement or other instrument executed in connection with a
Mortgage Note which is binding on the Partnership; and in case any
Mortgage is replaced or supplemented by any subsequent mortgage or
mortgages, the term "Mortgage" shall refer to any such subsequent
mortgage or mortgages.
"Mortgage Note" means any promissory note held by a Lender evidencing
the indebtedness secured by the Mortgage. "Nonrecourse Deductions" has
the meaning set forth in Section 1.704-2(b)(1) of the Regulations.
"Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"Operating Deficit" shall have the meaning provided in the Operating
Deficit Guaranty Agreement.
"Operating Deficit Guaranty Agreement" means the agreement of the
Guarantor to fund Operating Deficits, which shall be substantially in
the form of Exhibit F annexed to the Contribution Agreement.
"Operating Loans" means loans made by the Guarantor to the Partnership
pursuant to the Operating Deficit Guaranty Agreement to fund Operating
Deficits occurring during the Guaranty Period, which loans do not bear
interest and are repayable only as provided in Article IX hereof.
"Other Guarantees" or "Guarantees" shall mean any guarantees made by
the Guarantor pursuant to the Contribution Agreement.
"Partner" or "Partners" means any or all of the General Partners and
the Limited Partners.
"Partner Nonrecourse Debt" has the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Section 1.704-2(i)(2) of the Regulations.
"Partner Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(i)(1) of the Regulations.
"Partnership" means the limited partnership governed by this
Agreement, as such limited partnership may from time to time be
amended or reconstituted.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"Permanent Lender" shall have the meaning set forth in the
Contribution Agreement.
"Permanent Loan" shall have the meaning set forth in the Contribution
Agreement.
"Person" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such
Person as the context may require.
"Prime Rate" means the rate of interest publicly announced from time
to time by Chemical Bank, New York, New York, as its prime rate.
"Profits" and "Losses" means, for each fiscal year of the Partnership
or other period, an amount equal to the Partnership's taxable income
or loss for such year or period, determined in accordance with Section
703(a) of the Code (for this purpose, all items of income, gain, loss,
or deduction required to be stated separately pursuant to Section
703(a)(1) of the Code shall be included in taxable income or loss),
with the following adjustments: any income of the Partnership that is
exempt from Federal income tax and not otherwise taken into account in
computing Profits or Losses shall be added to such taxable income or
loss;
any expenditures of the Partnership described in Section 705(a)(2)(B)
of the Code or treated as Section 705(a)(2)(B) expenditures pursuant
to Section 1.704-1(b)(2)(iv)(i) of the Regulations and not otherwise
taken into account in computing Profits or Losses, shall be subtracted
from such taxable income or loss;
in the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (ii) or (iii) of the definition thereof,
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;
gain or loss resulting from any disposition of Partnership 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;
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 or other period; and
notwithstanding any other provisions hereof, any items which are
specially allocated pursuant to Article IX hereof shall not be taken
into account in computing Profits or Losses.
"Project Documents" means the Contribution Agreement, the Construction
Contract, the Governmental Agreements, the Title Policy, the
Management Agreement, the Loan Documents (as such term is defined in
the Contribution Agreement), and any other document related to the
financing, development, construction, use or operation of the
Apartment Complex, as any such documents may be amended from time to
time.
"Regulations" means the Income Tax Regulations promulgated under the
Code.
"Regulatory Agreement" means that certain Declaration of Land Use
Restrictive Covenants For Low-Income Housing Credits entered into on
October 1, 1996 by and between the Credit Agency and the Partnership.
"Required Reserve Amount" means (i) $285 per unit per annum for years
one through three of the Compliance Period and (ii) $200 per unit per
annum for years four through fifteen of the Compliance Period.
"Return Amount" shall have the meaning ascribed to such term in
Section 9.2.D.
"Sale or Refinancing Transaction" means any of the following items or
transactions not in the ordinary course of business: a sale, transfer,
exchange or other disposition of all or substantially all of the
assets of the Partnership, a condemnation of, or a casualty at, the
Apartment Complex or any part thereof, a claim against a title
insurance company, the refinancing of any Mortgage Note or other
indebtedness of the Partnership and any similar item or transaction;
provided, however, that neither distributions which are deemed returns
of capital for Federal income tax purposes nor the payment of Capital
Contributions by the Partners shall be included within the meaning of
the term "Sale or Refinancing Transaction."
"Sale or Refinancing Transaction Proceeds" means all cash receipts of
the Partnership arising from a Sale or Refinancing Transaction
(including principal and interest received on a debt obligation
received as consideration, in whole or in part, on a Sale or
Refinancing Transaction) less any deductibles or expenses incurred in
connection therewith.
"Special Limited Partner" means Related Corporate SLP L.P., and its
successors and assigns.
"State" means the State of Texas.
"Substituted Partner" means any transferee of the Interest of a
Partner who is admitted to the Partnership as a successor partner in
respect of the Interest of such Partner in accordance with Article X.
"Tax Matters Partner" means the Partner designated from time to time
as the Tax Matters Partner of the Partnership pursuant to Section
5.3.D hereof.
"Title Policy" means the Policy of Title Insurance to be issued
pursuant to Title Commitment No. TC96-83715 of Security Union Title
Insurance Company and all the documents relating thereto.
"Total Credit Amount" means $3,473,412 of Credits.
"Unavoidable Events" means strikes, acts of God, governmental
restrictions (other than those contained in the Governmental
Agreements), severe and unusual shortages of labor or materials, enemy
action, riot, civil commotion, fire, unavoidable casualty or other
causes beyond the reasonable control of a party. Lack of funds shall
not be deemed a cause beyond the control of a party.
"Uniform Act" means the Uniform Limited Partnership Act, or its
equivalent, as it may be adopted or amended from time to time by the
State, or any successor statute governing the operation of limited
partnerships.
"United States Real Property Interest" means any direct or indirect
interest in United States real property as defined in Section 897(c)
of the Code and the Regulations promulgated thereunder.
"Voluntary Loan" means a voluntary, unsecured interest-bearing loan of
any Partner to the Partnership as described in Section 4.4 hereof.
"Withdrawing" or "Withdrawal" (including the verb form "Withdraw" and
the adjectival forms "Withdrawing" and "Withdrawn") means, as to a
General Partner, the occurrence of the death, adjudication of insanity
or incompetence, Bankruptcy, dissolution or liquidation of such
Partner, or the withdrawal, removal or retirement from the Partnership
of such Partner for any reason, including any Assignment of its
Interest and those situations when a General Partner may no longer
continue as a General Partner by reason of any law or pursuant to any
terms of this Agreement.
"Withdrawing Limited Partners" means Xxx-Xxx XX-Xxxx Hills Apartments,
Ltd., a Texas limited partnership, Jock P.R. Living Trust 3/28/89 0000
Xxxxxx Xxxx, Inc., a Texas corporation and Xxxxxxx X. Xxxxxx.
* * * Each definition or pronoun herein shall be deemed to refer to
the singular, plural, masculine, feminine or neuter as the context
requires. Words such as "herein," "hereinafter," "hereof," "hereto"
and "hereunder," when used with reference to this Agreement, refer to
this Agreement as a whole, unless the context otherwise requires.
ARTICLE II
GENERAL
2.1 Continuation of the Partnership.
The Partnership shall be continued as a limited partnership pursuant
to this Agreement. The name of the Partnership shall continue to be
Dallas/Xxxx Hills, L.P. or such other name selected by the General
Partner with the Consent of the Special Limited Partner as may be
acceptable to the appropriate recording officials of the State.
As soon after the execution of this Agreement as is practicable, the
General Partner shall (if required by the Uniform Act) file this
Agreement in accordance with the Uniform Act and/or amend and file the
Certificate to reflect the matters set forth herein. The General
Partner shall from time to time take all such other actions as may be
deemed by them to be necessary or appropriate to (i) effectuate and
permit the continuation of the Partnership as a limited partnership
under the laws of the State, (ii) enable the Partnership to do
business in the state where the Apartment Complex is located and (iii)
protect the limited liability of the Limited Partners under the laws
of the State and of the state where the Apartment Complex is located,
including the preparation and filing of such amendments to this
Agreement and any other certificate, document or instrument as may be
required under the laws of the State and of the state where the
Apartment Complex is located. The Partners shall execute such
certificates, documents and instruments and take such other action as
may be necessary to enable the General Partner to fulfill its
responsibilities under this Section 2.1.B. The power of attorney
granted in Section 14.2 hereof may be exercised by the General Partner
to effect the provisions of this Section 2.1.B.
2.2 Principal Office. The principal office of the Partnership shall be
located at c/o Homes for America Holdings, Inc., 000-0 Xxxx 000xx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000. The General Partner may maintain
such other offices on behalf of the Partnership in the State as they
may from time to time deem advisable. The Partnership's books and
records will be made available to the Investor Limited Partner or its
representatives at its principal office at all times and for any
purpose. The principal office of the Partnership may be changed by the
General Partner, in which event written notice thereof shall be given
by the General Partner to all the other Partners.
2.3 Principal Place of Business; Resident Agent. The principal place
of business of the Partnership shall be c/o Homes for America
Holdings, Inc., 000-0 Xxxx 000xx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
Xxx X. Xxxxxxxxx has been appointed the Partnership's resident agent
for the service of process in the State.
2.4 Term. The Partnership shall continue in full force and effect
until the dissolution and termination of the Partnership pursuant to
Article XII hereof.
2.5 Purpose. The specific business and purpose of the Partnership is
the application for and maintenance of the Credits, investment in real
property and the provision of low income housing through the
renovation, rehabilitation, operation (including conversion to
cooperative or condominium form of ownership and the sale of apartment
units, if such action would not cause the Credit to be reduced for any
year during the Credit Period or Compliance Period) and leasing of the
Apartment Complex and any commercial space located therein, and in
connection therewith, subject to and in accordance with the terms
hereof, the permission of each applicable Authority and all
Governmental Agreements, to make and perform contracts and other
undertakings and to engage in any and all activities and transactions
as may be necessary or advisable in connection therewith, including,
but not limited to, the purchase, transfer, mortgage, pledge and
exercise of all other rights, powers, privileges and other incidences
of ownership with respect to the Apartment Complex and to borrow or
raise money without limitation as to amount or manner and to carry on
any and all activities related to any of the foregoing, subject always
to the terms and conditions of this Agreement. The business of the
Partnership shall be limited to the rehabilitation, ownership,
financing, operation and disposition of the Apartment Complex.
In order to carry out its business and purpose under Section 2.5.A
hereof, subject to the terms and conditions hereof, the Partnership is
hereby authorized to:
acquire, own and lease real property, and to hold such property for
investment purposes;
renovate, rehabilitate, own, maintain and operate the Apartment
Complex;
mortgage, lease, transfer and exchange or otherwise convey and
encumber such property and the improvements thereon (including
conversion to cooperative or condominium form of ownership and the
sale of apartment units) in furtherance of any and all of the objects
of its business in connection with the Apartment Complex;
enter into, perform and carry out contracts of any kind necessary to,
or in connection with or incidental to, the construction, renovation,
rehabilitation, ownership, financing, maintenance and operation of the
Apartment Complex, including, but not by way of limitation, any
contracts with any Authority which may be desirable or necessary to
comply with the requirements of such Authority, including any
agreements relating to regulations or restrictions contained in any
mortgages as to rents, sales, charges, capital structure, rate of
return and methods of operation;
rent dwelling units and commercial space, if any, in the Apartment
Complex from time to time in accordance with applicable Federal, state
and local regulations, in such a manner so as to qualify for the
Credit, collect the rents therefrom, pay the expenses incurred in
connection therewith, and distribute the net proceeds to the Partners,
subject to any requirements which may be imposed by any Authority; and
purchase, transfer, mortgage, pledge and exercise all other rights,
powers, privileges and other incidences of ownership with respect to
the Apartment Complex and borrow or raise money without limitation as
to amount or manner and carry on any and all activities incidental and
appropriate to effectuate the purposes of the Partnership.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions; General Partner. The Capital
Contribution of the Partners as of the Admission Date are set forth in
Schedule A, and as follows:
Partner Capital Contribution
General Partner $1.00
Special Limited Partner $1.00
Investor Limited Partner $2,211,910
Class Z General Partner $1,500,000
The General Partner shall not be required to make any capital
contributions to the Partnership, except (i) to the extent provided in
Section 3.7.B and (ii) insofar as the same may be required pursuant to
the Development Deficit Guaranty Agreement in connection with the
completion of construction of the Apartment Complex (it being
understood that such contributions will be deemed to have been already
reflected in the Capital Account of the General Partner and will not
further increase the General Partner's Capital Account).
3.2 Withdrawal of Withdrawing Limited Partners; Admission of Limited
Partners. The Withdrawing Limited Partners hereby withdraw as Partners
of the Partnership. The Investor Limited Partner and the Special
Limited Partner are hereby admitted to the Partnership as the Limited
Partners. The Withdrawing Limited Partners acknowledge that they (i)
have no further interest as Partners in the Partnership as of the
Admission Date, (ii) have released all claims, if any, against the
Partnership arising out of their participation as Partners and (iii)
shall be deemed to have withdrawn as limited partners of the
Partnership as of such date.
3.3 Special Limited Partner. The Special Limited Partner shall be in a
different class from the Investor Limited Partner and, except as
otherwise expressly stated in this Agreement, shall not participate in
any rights allocable to or exercisable by the Investor Limited Partner
under this Agreement.
3.4 Investor Limited Partner.
Subject to compliance with the terms and conditions hereinafter set
forth, the Investor Limited Partner shall make Capital Contributions
to the Partnership in the amounts and as and when required pursuant to
the terms of the Contribution Agreement.
The amount of the Investor Limited Partner's Capital Contributions was
determined in part upon the amount of Credits that are expected to be
available to the Partnership, and was based upon the assumption that
the Partnership would be eligible to recognize Credits of no less than
the Total Credit Amount. The amount of the qualified basis of the
Apartment Complex and the annual rate of the Credits which the
Partnership will be able to claim with respect thereto will not be
known until the end of the first year of the Credit Period for the
Apartment Complex. Therefore, if the total amount of Credits which the
Partnership will be entitled to recognize and allocate to the Limited
Partners, as certified to the Investor Limited Partner by the
Accountants upon Completion, is (x) less than 99.99% of the Total
Credit Amount, then the amount of the Capital Contributions described
in Section 3.4.A hereof shall be reduced by $0.6830 for each $1.00 by
which 99.99% of the Total Credit Amount exceeds the total Credits
which the Accountants certify as aforesaid that the Partnership will
be entitled to claim and allocate to the Limited Partners or (y) more
than 99.99% of the Total Credit Amount, then the amount of the Capital
Note shall be increased (subject to the availability of funds) by
$0.6830 for each $1.00 by which 99.99% of the Total Credit Amount is
less than the total Credits which the Accountants certify as aforesaid
that the Partnership will be entitled to claim and allocate to the
Limited Partners.
The amounts set forth on Exhibit A to the Recapture Guaranty Agreement
shall be revised to reflect the total amount of Credits which the
Accountants certify pursuant to Section 3.4.B(i) hereof.
Notwithstanding the foregoing provisions of Section 3.4.B(i) hereof,
in the event that any installment of the Limited Partner's Capital
Contribution has not been paid to the Partnership at the time that the
Partnership files a Federal income tax return in which it claims
Credits with respect to the Apartment Complex, the calculation
required by Section 3.4.B(i) hereof (and the adjustment required by
Section 3.4.B(ii) hereof) shall be made by subtracting from the annual
amount of Credits certified by the Accountants to the Limited Partner
upon the Admission Date the portion of such annual Credits which
represents any apartment unit in the Apartment Complex with respect to
which Credits were not claimed on such Federal income tax return. For
these purposes, any Credits which the Partnership will be entitled to
claim in later taxable years as a result of Section 42(f)(3) of the
Code shall be ignored.
The Limited Partners' Capital Contributions shall first be applied to
the payment of the fee specified in Section 6.2.
The Investor Limited Partner's obligation to pay the Capital Note is
non-recourse to the Investor Limited Partner except to the extent of
the Investor Limited Partner's Interest, which shall be pledged as
security for such obligation pursuant to a Pledge Agreement in
substantially the form of Exhibit A attached hereto, and is subject to
satisfaction of the Note Payment Conditions (as such term is defined
in the Contribution Agreement).
3.5 [Reserved]
3.6 Treatment of Other Advances. If any Partner shall advance funds to
the Partnership other than the amount of its Capital Contribution, the
amount of such advance shall not be considered a contribution to the
capital of the Partnership, but shall be deemed either an Operating
Loan or a Voluntary Loan and shall be subject to the provisions of
Section 4.4 hereof.
3.7 Capital Accounts; No Interest; Withdrawal.
Capital Account balances shall be deemed to have already reflected any
contributions by the General Partner, the Class Z General Partner and
their Affiliates that are necessary to fund the completion of
rehabilitation of the Apartment Complex pursuant to the Development
Deficit Guaranty Agreement (i.e., such contributions will not increase
the Capital Account balance of the General Partner.)
No Partner shall have the right to demand a return of his Capital
Contribution, except as otherwise provided in this Agreement. No
Partner shall have priority over any other Partner, either as to
return of its Capital Contribution or as to profits, losses or
distributions, except as otherwise specifically provided herein.
Moreover, the General Partner shall not be personally liable for the
return of the Capital Contribution of any Limited Partner, or any
portion thereof, it being expressly understood that any such return
shall be made solely from assets of the Partnership, nor shall the
General Partner be required to pay the Partnership or any Partner any
deficit in its or any other Partner's Capital Account upon dissolution
or otherwise, it being understood and agreed that any deficit in any
Capital Account shall not be treated as asset of the Partnership;
provided, however, that if on final liquidation, the Capital Account
of the General Partner is negative, the General Partner shall make a
contribution to the capital of the Partnership in an amount equal to
the lesser of (A) the deficit balance in its Capital Account or (B) an
amount equal to the excess of (i) 1.01% of the Capital Contributions
of the Limited Partners over (ii) the Capital Contribution of the
General Partner. Upon dissolution of the Partnership, the Special
Limited Partner shall contribute to the Partnership an amount equal to
the lesser of (A) the deficit balance in the Special Limited Partner's
Capital Account and (B) the cumulative depreciation deductions
allocated to the Special Limited Partner by the Partnership. The
Investor Limited Partner shall not be required to pay to the
Partnership any deficit in its Capital Account upon dissolution or
otherwise, except as provided by law, with respect to third-party
creditors of the Partnership. No interest shall be paid on any Capital
Account or Capital Contribution. No Partner shall have the right to
demand or receive property other than cash for its Interest. Each of
the Partners does hereby agree to, and does hereby, waive any right
such Partner may otherwise have to cause any asset of the Partnership
to be partitioned or to file a complaint or institute any proceeding
at law or in equity seeking to have any such asset partitioned.
Subject to any adjustment in the amount of the Investor's Capital
Contribution pursuant to Section 3.4.B(i), immediately following the
date of this Agreement, the Capital Account of the General Partner
shall be $1.00, of the Investor Limited Partner shall be $2,211,910
(including the Consulting Monitoring Fee), of the Class Z General
Partner shall be $1,500,000 and of the Special Limited Partner shall
be $1.00. The Partnership assets shall be revalued for Capital Account
purposes to reflect such amounts.
3.8 Liability of Limited Partners. Neither the Special Limited Partner
nor the Investor Limited Partner shall be liable for any debts,
liabilities, contracts or obligations of the Partnership, except as
provided by law. Subject to Section 3.7, the Investor Limited Partner
and the Special Limited Partner shall be liable only to make payments
of their Capital Contributions as and when due under this Agreement.
3.9 Provision of Other Amounts. The Partners acknowledge that,
pursuant to the Contribution Agreement, the General Partner is
obligated to indemnify the Partnership against any and all liability
in respect of any and all transfer, gains, income, sales or other
taxes and transfer fees of any kind imposed or asserted with respect
to the acquisition by the Limited Partners of their Interest. No such
amounts shall be treated as loans or contributions to the Partnership,
and the provision of such amounts shall not affect the allocations and
distributions provided for in Article IX in any way whatsoever.
3.10 Outside Activities of Limited Partners. The Limited Partners may
engage or possess interests in other business ventures of every kind
and description for their own account, including, without limitation,
the ownership or management of other real estate projects,
developments or undertakings. Neither the Partnership nor any of the
other Partners shall have any rights by virtue of this Agreement in
such independent business ventures or to income or profits derived
therefrom.
ARTICLE IV
COMPLIANCE WITH AUTHORITY REQUIREMENTS;
PARTNERSHIP BORROWINGS
4.1 Authority Requirements.
During the Compliance Period, the following provisions shall apply:
(i) each of the provisions of this Agreement shall be subject to, and
the General Partner covenants to act in accordance with, the Credit
Conditions and all applicable federal, state and local laws and
regulations; (ii) the Credit Conditions and all such laws and
regulations, as amended or supplemented, shall govern the rights and
obligations of the Partners, their heirs, executors, administrators,
successors and assigns, and they shall control as to any terms in this
Agreement which are inconsistent therewith, and any such inconsistent
terms in this Agreement shall be unenforceable by or against any of
the Partners; (iii) upon any dissolution of the Partnership or any
transfer of the Apartment Complex, no title or right to the possession
and control of the Apartment Complex and no right to collect rent
therefrom shall pass to any person who is not, or does not become,
bound by the Credit Conditions in a manner that, in the opinion of
counsel to the Partnership, would not adversely affect the ability of
the owner(s) of the Apartment Complex to utilize the Credits or avoid
a recapture thereof; and (iv) any conveyance or transfer of title to
all or any portion of the Apartment Complex required or permitted
under this Agreement shall in all respects be subject to the Credit
Conditions and all conditions, approvals or other requirements of the
rules and regulations of any Authority applicable thereto.
4.2 Authorization to the General Partner.
Without in any way limiting the right or authority of the General
Partner under this Article IV or Article V hereof, the General Partner
is specifically authorized to execute all documents required by any
Authority or any Lender in connection with the acquisition,
construction or financing of the Apartment Complex; provided that the
terms and conditions of the related Governmental Agreement and/or
Mortgage and Mortgage Note were accurately and completely disclosed to
the Investor Limited Partner pursuant to the Contribution Agreement or
such requirement arises out of an amendment to such Governmental
Agreement, Mortgage or Mortgage Note made with the Consent of the
Special Limited Partner. Notwithstanding any other provision in this
Agreement, the General Partner is hereby authorized to amend this
Agreement without the consent of the Investor Limited Partner or the
Special Limited Partner to effectuate any amendments required by any
Authority or any Lender pursuant to applicable law and/or the terms
and conditions of a Governmental Agreement or Mortgage and Mortgage
Note, the terms and conditions whereof were accurately and completely
disclosed to the Investor Limited Partner pursuant to the Contribution
Agreement or such requirement arises out of an amendment to such
Governmental Agreement, Mortgage or Mortgage Note made with the
Consent of the Special Limited Partner. The General Partner may
exercise the power of attorney granted in Section 14.2 hereof to
effect the provisions of this Section 4.2.A.
The General Partner shall, at no time, do or cause to be done any act
directly or indirectly affecting the Apartment Complex except pursuant
to the requirements of each applicable Authority and Lender and (if
such approval is required) with the prior approval thereof.
4.3 Right to Mortgage.
The Partnership has obtained financing for the Apartment Complex from
the Lender and has secured the same by the Mortgage. Each and every
Mortgage provides and shall continue to provide that, except prior to
Completion, no Person, including, but not limited to, the Partnership,
any party holding a partnership interest in the Partnership, or any of
their Affiliates, shall have any personal liability for the payment of
all or any part of such Mortgage.
The execution by the General Partner or the Class Z General Partner on
behalf of the Partnership of the Project Documents is hereby ratified
provided that the terms and conditions thereof were accurately and
completely disclosed to the Investor Limited Partner pursuant to the
Contribution Agreement.
The Partners contemplate refinancing the Permanent Loan and the
General Partner will use its best efforts, at the General Partner's
expense, to refinance the Permanent Loan by February 28, 1999 (or, if
unsuccessful, by August 31, 1999) for purposes of making certain
distributions to Xxxx (the "Xxxx Refinancing"). If for any reason the
Xxxx Refinancing does not occur by August 31, 1999, the General
Partner will have a continuing obligation to use its best efforts to
refinance the Permanent Loan.
The General Partner may modify, refinance or repay the Mortgage with
the approval of each Lender and each Authority, if required, including
any required transfer or conveyance of Partnership assets for security
or mortgage purposes; provided, however, that the terms of any such
modification, refinancing or repayment must receive the Consent of the
Special Limited Partner before such transaction shall be binding on
the Partnership; it being agreed and understood that the consent of
the Special Limited Partner shall not be unreasonably withheld with
respect to the terms and conditions of the Xxxx Refinancing.
4.4 Loans. All borrowings by the Partnership shall be subject to the
terms of this Agreement, the Project Documents and applicable rules,
regulations and directives of any Authority. To the extent borrowings
are permitted, they may be made from any source, including any Partner
or an Affiliate thereof; provided, however, that any borrowings from
the General Partner or its Affiliates shall require the Consent of the
Special Limited Partner. Except as may be otherwise specifically set
forth in this Agreement, if any Partner or Affiliate thereof shall
lend any monies to the Partnership, such loan shall be unsecured and
the amount of any such loan shall not be an increase of such Partner's
Capital Contribution nor affect in any way such Partner's share of the
profits and losses or distributions of the Partnership. Any loan by a
Partner or its Affiliate, other than an Operating Loan, shall be a
Voluntary Loan, shall bear interest per annum at a rate equal to two
percent in excess of the Prime Rate (but not in excess of the lawful
maximum rate) and shall be repayable as set forth in Article IX hereof
(to the extent permitted by each Authority); provided, however, that
any Voluntary Loan shall be made solely for the benefit of the
Partnership. No Voluntary Loans by the General Partner or its
Affiliates may be made to the Partnership during the time that the
Guarantor is obligated to make Operating Loans to the Partnership.
ARTICLE V
RIGHTS, POWERS AND OBLIGATIONS OF THE
GENERAL PARTNER AND LIMITATIONS THEREON; PARTNERS' ACTIVITIES
5.1 Exercise of Management.
The overall management and control of the business, assets and affairs
of the Partnership shall be vested in the General Partner and, subject
to the specific limitations and restrictions set forth in this Article
V and in Article IV hereof, the General Partner, in extension of and
not in limitation of the powers given it by law, shall have full,
exclusive and complete charge of the management of the business of the
Partnership in accordance with its purpose stated in Section 2.5
hereof; provided, however, the General Partner shall not cause the
Partnership to enter into any contracts for services having a term in
excess of one year without the consent of the Special Limited Partner,
which consent shall not be unreasonably withheld. Neither the Special
Limited Partner nor any other Limited Partner shall take part in the
management or control of the business of the Partnership or have
authority to bind the Partnership. Notwithstanding the foregoing, the
provisions of this Section 5.1.A shall not limit the exercise by the
Special Limited Partner of any and all of the rights granted to it
under this Agreement.
The Managing General Partner (if at the time more than one Person
constitutes the Managing General Partner) shall act by vote of a
majority in interest of the Persons constituting the Managing General
Partner, except where otherwise specified herein. If at any time there
is no Managing General Partner, the General Partners shall act by vote
of a majority in interest of the General Partners, except where
otherwise specified herein.
Any General Partner, to the extent of its authorization, may from time
to time, by an instrument in writing delegate all or any of its powers
or duties hereunder to another General Partner. Such writing shall
fully authorize such other General Partner to act alone without
requirement of any other act or signature of the delegating General
Partner, to take any action of any type and to do anything and
everything which the delegating General Partner may be authorized to
take or do hereunder except insofar as said delegation may be limited
to certain acts or activities; provided, however, that any such
delegation shall not relieve the delegating General Partner of its
obligations or liabilities under its Agreement.
Each obligation of the General Partners under this Agreement shall be
the joint and several obligation of each General Partner and each such
obligation shall survive any withdrawal of a General Partner pursuant
to Article XI hereof.
5.2 Duties and Authority of General Partner.
The General Partner shall devote to the Partnership such time as may
be necessary for the proper performance of the duties of the General
Partner. The General Partner shall at all times exercise its
responsibilities as General Partner in a fiduciary manner. The
signature of a General Partner shall be required on any instrument,
document or agreement to bind the Partnership, and third parties may
rely fully on any such instrument, document or agreement signed by the
General Partner. Subject to the terms and conditions hereof, the
General Partner shall be obligated, and is hereby authorized and
directed, to:
Take all action that may be necessary or appropriate to carry out the
purposes of the Partnership as described in this Agreement;
Make inspections of the Apartment Complex and assure that the
Apartment Complex is being properly maintained in accordance therewith
and necessary repairs are being made;
Prepare or cause to be prepared in conformity with good business
practice all reports that are to be furnished to the Partners or that
are required by taxing bodies, any Authority or other governmental
agencies, including operations reports of the Apartment Complex or by
or on behalf of the General Partner, and the financial statements and
reports referred to in Section 7.3 hereof;
Cause the property of the Partnership at all times to be insured in a
manner similar to other property of like kind in the same locality and
in such amounts and on such terms as will fully and adequately protect
the Partnership (provided that such insurance shall be in an amount at
least sufficient to satisfy the provisions of Section 5.11 hereof);
Obtain and maintain in force or cause to be obtained and maintained in
force Worker's Compensation Insurance and such other insurance as may
be required by applicable law or governmental regulation;
Obtain and maintain in force or cause to be obtained and maintained in
force adequate public liability insurance;
Comply with any rehabilitation budget delivered pursuant to the
Contribution Agreement;
Enforce compliance with any construction agreements;
Provide an O&M Plan for the Apartment Complex acceptable to the
Special Limited Partner within fifteen (15) days of the date hereof.
Comply with all Governmental Agreements;
Promptly report to the Limited Partners any (I) material variance from
the qualification standards for Credits or (II) failure to comply with
the Governmental Agreements which would give rise to the Special
Removal Right under Section 11.4.A(ii); and
Do all other things (subject to the restrictions contained herein)
that may be necessary or desirable in order properly and efficiently
to administer and carry on the affairs, assets and business of the
Partnership.
The General Partner shall operate the Apartment Complex and shall
cause the Management Agent to manage the Apartment Complex in such a
manner that the Apartment Complex will be eligible to receive Credits
with respect to 100% of the apartment units in the Apartment Complex.
To that end, the General Partner agrees, without limitation, to make
all elections requested by the Special Limited Partner under Section
42 of the Code to allow the Partnership or its Partners to claim the
Credit; to file Form 8609 with respect to the Apartment Complex as
required; for at least the duration of the Compliance Period, to
operate the Apartment Complex and cause the Management Agent to manage
the Apartment Complex so as to comply with the requirements of
Sections 42(g) and (i)(3) of the Code; and to make all certifications
required by Section 42(1) of the Code.
The General Partner agrees that it shall prepare or cause to be
prepared an annual budget in connection with the operations of the
Apartment Complex for each succeeding fiscal year of the Partnership
and shall deliver the same to the Special Limited Partner not later
than November 1 of the fiscal year preceding the fiscal year to which
such budget relates. Each such budget shall contain an amount to be
added to separate reserves for payment of real estate taxes, insurance
and replacements in an amount with respect to each such reserve equal
to the greater of the amount required to be added to such reserve
during such year by any Lender or the amount that is reasonable in the
circumstances, which, in the case of the reserve for replacements,
shall be not less than an amount equal to the Required Reserve Amount.
Such budget shall not be adopted without the Consent of the Special
Limited Partner. The Partnership shall not make any expenditure of
funds, or commit to make any such expenditure, other than in response
to an Unavoidable Event, except as provided for in an annual budget so
approved by the Special Limited Partner.
If the General Partner and the Special Limited Partner agree that the
annual amount to be placed into a reserve for replacement and repairs,
as reflected in Section 5.2.C hereof (as such amount may be adjusted
from time to time by the General Partner with the Consent of the
Special Limited Partner), exceeds the amount which the Partnership is
required to place into such an account to be maintained by or under
the direction of the Lender or the Authority, the General Partner
shall each month cause the Partnership to pay one-twelfth (1/12th) of
such excess into an escrow account pursuant to the terms of the
Replacement Reserve Guaranty Agreement annexed to the Contribution
Agreement as Exhibit J.
5.3 Delegation of General Partner Authority; Tax Matters Partner.
The General Partners hereby delegate all their powers and duties
hereunder to the Managing General Partner. For all purposes of this
Agreement, including, without limitation, the delivery of certificates
and the granting of withholding of all consents and approvals, the
Managing General Partner shall have the sole right to act in the name
of and on behalf of the General Partners. On and subject to the terms
and conditions of this Agreement, the Managing General Partner is
hereby fully authorized, without the requirement of any act or
signature of the other General Partners, to take any action of any
type and to do anything and everything which a general partner of a
limited partnership organized under the Uniform Act may be authorized
to take or do thereunder, and specifically, without limitation of such
authority, to execute, sign, seal and deliver in the name and on
behalf of the Partnership:
any note, mortgage or other instrument or document in connection with
the Mortgage, the Mortgage Note or any Governmental Agreement, and all
other agreements, contracts, certificates, instruments or documents
required by any Authority and/or any Lender in connection therewith or
with the acquisition, development, construction, improvement,
operation or leasing of the Apartment Complex or otherwise required by
any Authority and/or any Lender under the Project Documents in
connection with the Apartment Complex;
any deed, lease, mortgage, mortgage note, xxxx of sale, contract or
any other instrument purporting to convey or encumber the real or
personal property of the Partnership; any rent supplement or leasing
or other contract or agreement providing for public or non-public
financial assistance, directly or indirectly, to tenants of the
Apartment Complex;
any and all agreements, contracts, documents, certificates and
instruments whatsoever involving the acquisition, development,
construction, improvement, management, maintenance, leasing and
operation of the Apartment Complex, including the employment of such
Persons as may be necessary therefor; and
any and all instruments, agreements, contracts, certificates or
documents requisite to carrying out the intention and purpose of this
Agreement, including, without limitation, the filing of all business
certificates, this Agreement and all amendments thereto, and documents
required pursuant to the Project Documents or by any Authority and/or
any Lender or deemed advisable by the Managing General Partners in
connection with any financing.
Every contract, agreement, certificate, document or other instrument
executed by the Managing General Partner shall be conclusive evidence
in favor of every person relying thereon or claiming thereunder that,
at the time of the delivery thereof, (i) the Partnership was in
existence, (ii) this Agreement had not been terminated or cancelled or
amended in any manner so as to restrict such authority (except as
shown in any instrument duly filed in the Filing Office) and (iii) the
execution and delivery thereof was duly authorized by the General
Partners. Any Person dealing with the Partnership or the Managing
General Partner may, absent actual knowledge to the contrary, rely on
a certificate signed by the Managing General Partner hereunder:
as to who are the Partners hereunder;
as to the existence or nonexistence of any fact or facts which
constitute conditions precedent to acts by any General Partner or are
in any other manner germane to the affairs of the Partnership;
as to who is authorized to execute and deliver any instrument,
contract, agreement, certificate or document for the Partnership;
as to the authenticity of any copy of this Agreement and amendments
thereto; or
as to any act or failure to act by the Partnership or as to any other
matter whatsoever involving the Partnership or the Apartment Complex.
The Partners hereby consent to the exercise by the Managing General
Partner of the powers conferred on it by this Agreement.
All of the Partners hereby agree that the Managing General Partner
shall be the "Tax Matters Partner" pursuant to the Code and in
connection with any audit of the Federal income tax returns of the
Partnership. In discharging its duties and responsibilities, the Tax
Matters Partner shall act as a fiduciary (i) to the Limited Partners
(to the exclusion of the other Partners) insofar as tax matters
related to Credits are concerned, and (ii) to the Partners in other
respects. In acting as tax matters partner, the Tax Matters Partner
shall consult with the Special Limited Partner.
5.4 Lease, Conveyance or Refinancing of Assets of the Partnership.
Except as may be otherwise expressly provided in Sections 4.1 and 4.3
hereof and elsewhere in this Agreement, the General Partner, with the
approval of each Authority (if required), is hereby authorized to
sell, lease, exchange, refinance or otherwise transfer, convey or
encumber all or substantially all of the assets of the Partnership;
provided, however, that the terms of any such sale, exchange,
refinancing or other transfer, conveyance or encumbrance must receive
the Consent of the Special Limited Partner before such transaction
shall be binding on the Partnership. Notwithstanding the foregoing, no
such consent shall be required for the leasing of apartments to
tenants in the normal course of operations, or leases or concessions
of facilities related to the operation of the Apartment Complex.
Notwithstanding any provision of this Agreement to the contrary, the
Special Limited Partner shall have the right at any time after the
fourteenth year of the Compliance Period (A) to require, by written
notice to the General Partner, that the General Partner promptly
submit a written request to the Credit Agency pursuant to Code Section
42(h)(6)(I) that the Credit Agency endeavor to locate within one year
from the date of such written request a buyer who will continue to
operate the Property as a qualified low-income building at a purchase
price that is not less than the debt encumbering the Property plus the
Partnership's equity in the Property (adjusted for cost-of-living
increases as permitted by Code Section 42(h)(6)(G)), and (B) in the
event the Credit Agency locates such a buyer, to compel the General
Partner to accept such buyer's offer to purchase the Property.
Subject to Section 5.4(B)(i) hereof and notwithstanding any other
provision of this Agreement to the contrary, the Special Limited
Partner shall have the right at any time after the end of the
Compliance Period to require, by written notice to the General Partner
(the "Required Sale Notice"), that the General Partner promptly use
its best efforts to obtain a buyer for the Apartment Complex on the
most favorable terms then obtainable. The General Partner shall submit
the terms of any proposed sale to the Special Limited Partner for its
approval as provided in Section 5.4.A hereof. If the General Partner
shall fail to so obtain a buyer for the Apartment Complex within six
months of the Required Sale Notice or if the Special Limited Partner
in its sole discretion shall withhold its consent to any proposed sale
to such buyer, then the Special Limited Partner shall have the right
at any time thereafter to obtain a buyer for the Apartment Complex on
terms acceptable to the Special Limited Partner (but not less
favorable to the Partnership than any proposed sale previously
rejected by the Special Limited Partner). In the event that the
Special Limited Partner so obtains a buyer, it shall notify the
General Partner in writing with respect to the terms and conditions of
the proposed sale and the General Partner shall cause the Partnership
promptly to sell the Apartment Complex to such buyer.
A sale of the Apartment Complex prior to the end of the Compliance
Period may only take place if the conditions of Section 42(j)(6) of
the Code will be satisfied upon such sale either (a) by having the
purchaser of the Apartment Complex post the required bond on behalf of
the Partnership or (b) with the Consent of the Special Limited
Partner, having the Partnership post such bond.
5.5 Restrictions on Authority. Notwithstanding any other provisions of
this Agreement:
No General Partner shall have authority to perform any act in
violation of any applicable laws or regulations, the Project Documents
or any agreement between the Partnership and any Authority or any
Lender, or to take any action which under the Uniform Act or this
Agreement requires the approval, ratification or consent of some or
all of the Partners without first obtaining such approval,
ratification or consent, as the case may be.
The General Partner shall not have authority to do any of the
following acts, except with the Consent of the Special Limited Partner
and the approval, to the extent required, of any Authority and any
Lender:
acquire any real or personal property (tangible or intangible) in
addition to the Apartment Complex, the aggregate value of which shall
exceed $10,000 (other than easements or similar rights necessary or
appropriate for the operation of the Apartment Complex);
become personally liable on or in respect of, or guarantee, a Mortgage
Note or a Mortgage or any other indebtedness of the Partnership;
pay any salary, fees or other compensation to a General Partner or any
Affiliate thereof, except as authorized by Section 5.7 or Articles VI,
VIII or IX hereof or specifically provided for in this Agreement;
sell all or any portion of the Apartment Complex or modify or
refinance the Mortgage or incur any indebtedness for borrowed money
except as specifically provided in this Agreement and subject to the
provisions contained in Section 5.4 hereof;
terminate the services of the Accountants, the Contractor or the
Management Agent, or terminate, amend or modify any Project Document
or grant any material waiver or consent thereunder;
engage a substitute Management Agent or approve the delegation by the
Management Agent of all or a substantial portion of its duties to a
third party;
amend or terminate the Operating Deficit Guaranty Agreement or any of
the Other Guarantees, or grant any waiver or consent thereunder;
cause the Partnership to redeem or repurchase all or any portion of
the Interest of a Partner;
accept additional Capital Contributions other than those expressly
provided for in this Agreement;
approve the Withdrawal of a General Partner or the admission of a
successor or additional General Partners or Limited Partners to the
Partnership except in accordance with the express terms hereof;
cause the Partnership to convert the Apartment Complex to cooperative
or condominium ownership;
cause or permit the Partnership to be merged with any other entity;
cause or permit the Partnership to make loans to the General Partner
or any of its Affiliates; grant any waivers or consents under any
Project Documents; or
cause or permit the Partnership to take or omit or suffer any action
that would result in a recapture of Credits previously recognized by
the Partnership or a reduction or disallowance of any Credits
anticipated to be recognized by the Partnership as contemplated by
Section 3.4.B hereof, other than an Unavoidable Event.
The enumeration of the foregoing rights shall not diminish or affect
the existence or exercise of other rights expressly granted to the
Special Limited Partner elsewhere herein.
5.6 Activities of Partners. It is understood that the General Partner
is and will be engaged in other activities and occupations unrelated
to the Partnership, and the General Partner shall be required to
devote only so much of its time as it in its sole discretion may deem
necessary to the affairs of the Partnership. Any Partner may engage in
and have an interest in other business ventures of every nature and
description, independently or with others, including, but not limited
to, the ownership, financing, leasing, operating, construction,
rehabilitation, renovation, improvement, management and development of
real property whether or not such real property is directly or
indirectly in competition with the Apartment Complex; provided,
however, that nothing herein shall be construed to relieve the General
Partner of any of its fiduciary obligations with respect to the
management, financing and disposition of the Apartment Complex.
Neither the Partnership nor any other Partner shall have any rights by
virtue of this Agreement in and to such independent ventures or the
income or profits derived therefrom, regardless of the location of
such real property and whether or not such venture was presented to
such Partner as a direct or indirect result of his connection with the
Partnership or the Apartment Complex.
5.7 Dealing with Affiliates. Subject to the restrictions contained in
this Agreement, the General Partner may, for, in the name and on
behalf of, the Partnership, enter into agreements or contracts for
performance of services for the Partnership as an independent
contractor with the General Partner or an Affiliate thereof and the
General Partner may obligate the Partnership to pay compensation for
and on account of any such services; provided, however, that unless
the terms of such compensation and/or services are specified in this
Agreement, (x) such compensation and services shall be on terms not
less favorable to the Partnership than if such compensation and
services were paid to and/or performed by a person who was not the
General Partner or an Affiliate thereof, and (y) after full and
accurate disclosure to the Special Limited Partner of the interest of
the General Partner, the Consent of the Special Limited Partner to the
provision of such services by such Affiliate shall have been obtained.
5.8 Indemnification and Liability of the General Partners.
To the maximum extent permitted by law and this Section 5.8, the
Partnership, its receiver or its trustee, shall indemnify and hold
harmless the General Partner and its Affiliates from and against any
liability, loss or damage incurred by them by reason of any act
performed or omitted to be performed by them pursuant to the authority
granted to them by this Agreement, including costs and reasonable
attorneys' fees and any amount expended in the settlement of any claim
of liability, loss or damage; provided, however, that (i) if such
liability, loss or damage arises out of any action or inaction of any
Affiliate, such action or inaction must have occurred while such party
was engaged in activities which could have been engaged in by a
General Partner in its capacity as such; (ii) if such liability, loss
or damage arises out of any action or inaction of the General Partner
or its Affiliates, (a) the General Partner or its Affiliates must have
determined, in good faith, that such course of conduct was in the best
interests of the Partnership and (b) such course of conduct did not
constitute fraud, negligence or misconduct by the General Partner or
its Affiliates; and (iii) any such indemnification shall be
recoverable only from the assets of the Partnership and not from the
assets of any Partner. All judgments against the Partnership and the
General Partner or its Affiliates, wherein the General Partner or its
Affiliates are entitled to indemnification, must first be satisfied
from Partnership assets before such General Partner or its Affiliates
are responsible for these obligations. The Partnership shall not pay
for any insurance covering liability of the General Partner or its
Affiliates for actions or omissions for which indemnification is not
permitted hereunder; provided, however, that nothing contained herein
shall preclude the Partnership from purchasing and paying for such
types of insurance, including extended coverage liability and casualty
and workers' compensation, as would be customary for any person owning
comparable assets and engaged in a similar business, or from naming
the General Partner or its Affiliates as additional insured parties
thereunder, if such addition does not add to the premiums payable by
the Partnership. Nothing contained herein shall constitute a waiver by
any Investor Limited Partner of any right which it may have against
any party under Federal or state securities laws nor shall an Investor
Limited Partner be permitted to contract away the fiduciary duty owed
to it by the General Partner or its Affiliates under common law. The
provision of advances from the Partnership to the General Partner or
its Affiliates for legal expenses and other costs incurred as a result
of a legal action is permissible if the following three conditions are
satisfied: (I) the legal action relates to the performance of duties
or services by General Partner or its Affiliates on behalf of the
Partnership; (II) the legal action is initiated by a third party who
is not an Investor Limited Partner of the Partnership or a beneficial
owner thereof; and (III) the General Partner or its Affiliates
undertake to repay to the Partnership the funds so advanced in cases
in which they would not be entitled to indemnification hereunder.
Notwithstanding anything to the contrary contained herein, in no event
shall any indemnity under this Section 5.8.A be applicable to any
expenditures or obligations of the General Partner or Affiliate
thereof which are the subject of a separate obligation or guaranty to
the Partnership or the Limited Partners by such General Partner or an
Affiliate thereof.
Notwithstanding the provisions of Section 5.8.A hereof, the General
Partner and its Affiliates shall not be indemnified or held harmless
pursuant to Section 5.8.A hereof from any liability, loss or damage
incurred by them in connection with, and shall indemnify and hold
harmless the Partnership and the other Partners from and against any
liability, loss or damage incurred by them by reason of, (i) any
liability imposed by law, including for fraud, negligence or
misconduct; or (ii) any claim or settlement involving allegations that
Federal or state securities laws associated with the offer and sale of
an Interest were violated by the General Partner or its Affiliates
unless: (a) the indemnitee is successful in defending such action on
the merits of each count involving securities laws violations and such
indemnification is specifically approved by a court of competent
jurisdiction; (b) such claims have been dismissed with prejudice on
the merits by a court of competent jurisdiction and the court
specifically approves such indemnification; or (c) a court of
competent jurisdiction approves a settlement of the claims against the
entity seeking indemnification involving securities law violations and
finds that indemnification of the settlement and related costs should
be made. Any person seeking indemnification shall apprise the court of
the current position of the Securities and Exchange Commission, the
California Commissioner of Corporations, the Massachusetts Securities
Division and other applicable state securities administrators
regarding indemnification for violations of securities laws.
5.9 Representations and Warranties. The General Partner hereby
represents and warrants to each of the other Partners that the
following are true and accurate as of the date hereof and on the
Admission Date as if made on and as of such date and will be true and
accurate on the due date of any payment of Capital Contributions to
the Partnership:
The execution and delivery of all instruments and the performance of
all acts heretofore or hereafter made or taken pertaining to the
Partnership or the Apartment Complex by the General Partner which is a
corporation or a partnership or by each Affiliate of General Partner
which is a corporation or a partnership have been or will be duly
authorized by all necessary corporate or partnership actions, as the
case may be, or other action and the consummation of any such
transactions with or on behalf of the Partnership will not constitute
a breach or violation of, or a default under, the charter or by-laws,
or partnership agreement, of such General Partner or such Affiliate or
any agreement by which such General Partner or such Affiliate or any
of its properties is bound, nor constitute a violation of any law,
administrative regulation or court decree.
No Bankruptcy has occurred with respect to the General Partner or any
Affiliates thereof.
As of the Admission Date all accounts of the Partnership required to
be maintained under the terms of the Project Documents, including,
without limitation, any account for replacement reserves, are
currently funded to required levels, including levels required by any
Authority.
The General Partner has not lent or otherwise advanced any funds to
the Partnership other than its Capital Contribution and the
Partnership has no unsatisfied obligation to make any payments of any
kind to the General Partner or any Affiliate thereof outstanding as of
the Admission Date.
No event has occurred which with the giving of notice, the passage of
time, or both, would constitute a material default under any of the
Project Documents.
Each of the representations and warranties contained in the
Contribution Agreement is true and correct on the date hereof as if
made on and as of such date.
The Partnership is acquiring the Capital Note without a view to the
sale or distribution thereof and without any present intention of
distributing or selling the same. The Partnership agrees that it (and
any holder of any interest in the Capital Note) will not sell, assign
or otherwise transfer its interest in the Capital Note (or any
fraction thereof) without the Consent of the Special Limited Partner
and unless such transfer shall be in full compliance with all
applicable securities laws and regulations.
5.10 Additional Covenants of General Partner. The General Partner
shall permit, and shall cause the Management Agent to permit, the
Special Limited Partner and its representatives to have access to the
Apartment Complex and personnel employed by the Partnership and by the
Management Agent who are concerned with management of the Apartment
Complex at all reasonable times during normal business hours and to
examine all agreements and plans and specifications and shall deliver
to the Special Limited Partner such copies of such documents and such
reports as may reasonably be required by the Special Limited Partner.
The General Partner shall promptly upon transmission or receipt
provide the Special Limited Partner with copies of all correspondence,
notices and reports sent pursuant to and received under the Project
Documents or any Authority with respect to the Apartment Complex,
together with copies of all other correspondence relating to or
affecting the Credits or that a prudent investor in the position of
the Limited Partners might reasonably be expected to wish to examine
in connection with the transaction.
5.11 Obligation to Repair and Rebuild Apartment Complex. With the
approval of any Lender and any Authority, if such approval is
required, any insurance proceeds received by the Partnership due to
fire or other casualty affecting the Apartment Complex occurring
during the Compliance Period will be utilized to repair and rebuild
the Apartment Complex in satisfaction of the conditions contained in
Section 42(j)(4) of the Code and to the extent required by any Lender
and any Authority. Any such proceeds received in respect of such an
event occurring after the Compliance Period shall be so utilized or,
if permitted by the Project Documents and with the Consent of the
Special Limited Partner, treated as Sale or Refinancing Proceeds.
ARTICLE VI
CERTAIN PAYMENTS
6.1 Development Fee. As consideration for development and contracting
services provided to the Partnership, the Partnership shall pay the
Developer on the date hereof (i) a development fee of $507,623
("Development Fee") and (ii) a contractor fee of $96,500 ("Contractor
Fee"). The Development Fee and the Contractor Fee shall be taken into
income for Federal income tax purposes by the Developer in 1997. Upon
request, the Developer will submit to the Special Limited Partner such
evidence as may be required for the Special Limited Partner to confirm
that, for Federal income tax purposes, the Development Fee and the
Contractor Fee were taken into income as aforesaid. The Developer, by
his signature below, hereby acknowledges and agrees that the
Development Fee and the Contractor Fee have been paid in full and that
no further development or contractor fees are owing to him from the
Partnership.
6.2 Consulting Monitoring Fee. The Partnership shall pay to RCC Asset
Managers V L.L.C. a consulting monitoring fee in the amount of
$110,756 for its services in assisting the Partnership in acquiring
the Apartment Complex and in supervising the construction of the
Apartment Complex. This fee shall be payable on the Closing Date
pursuant to the Consultant Fee Agreement which agreement is annexed to
the Contribution Agreement as Exhibit R.
6.3 Annual Local Administrative Fee. For its services in monitoring
the operations of the Partnership, the Partnership shall pay to the
Special Limited Partner an Annual Local Administrative Fee in the
amount of $5000 per annum beginning on the Admission Date (and
increased each year thereafter (to a maximum of $12,000 per annum) by
the greater of (A) 5% or (B) the percentage increase in CPI) if there
is sufficient cash available to pay same provided that, if in any year
there are not sufficient funds to pay such fee after payment of all
operating expenses of the Project, then, in such event such fee shall
accrue and be payable out of available Cash Flow in subsequent years
or if there is no available Cash Flow, out of Sale or Refinancing
Transaction Proceeds but shall be a legal obligation only if paid to
the extent Cash Flow or Sale or Refinancing Transaction Proceeds are
available. Notwithstanding anything to the contrary contained herein,
proceeds of Operating Loans shall not be used to pay the Annual Local
Administrative Fee.
6.4 Supervisory Management Fee. For its services in supervising the
Management Agent, the Partnership shall pay the General Partner a
non-cumulative supervisory management fee (the "Supervisory Management
Fee") in an amount equal to 40% of available Cash Flow as set forth in
Section 9.2.A.
6.5 Asset Management Fee. For its services in monitoring the
operations of the Apartment Complex, the Partnership shall pay the
General Partner a non-cumulative asset management fee ("Asset
Management Fee") in an amount equal to the lesser of (A) available
Cash Flow as set forth in Section 9.2.A and (B) one (1%) percent of
net rental income for the Apartment Complex.
6.6 Amounts Earned on $1,500,000 Escrow. Any and all amounts earned
and paid to the Partnership on that certain escrow account held by
Xxxxx Fargo Bank pursuant to that certain Escrow Agreement dated as of
December 29, 1996 and executed by Xxxxx Fargo Bank (Texas), N.A., the
Credit Agency and the Partnership shall be paid to Xxxx within a
reasonable period after the Partnership's receipt thereof but in no
event later than sixty (60) days from such receipt. Any amounts
received by Xxxx pursuant to this Section 6.6 shall reduce any
payments of earnings required to be made to Xxxx pursuant to Sections
9.2.A and 9.2.B hereof.
6.7 Contractor Fee. As consideration for supervision and contracting
services provided to the Partnership, the Partnership shall pay the
General Partner a contractor fee in an amount equal to the lesser of
(A) $30,000 or (B) eight (8%) percent of the cost of the additional
construction work required to be performed with respect to the
Apartment Complex ("Contractor Fee"), which shall be paid by the
Partnership pursuant to a note ("Contractor Note") in substantially
the form annexed to the Contribution Agreement as Exhibit T to be
executed on the date hereof. If any or all of the Contractor Note
remains unpaid at the end of the Compliance Period, the General
Partner shall be obligated to contribute such unpaid amount to the
Partnership for payment thereof. If, in any fiscal year of the
Partnership, the Partnership's payments ("Contractor Note Payments")
in reduction of the Contractor Note (including principal and unpaid
interest thereon) are less than the depreciable portion of such fee
for such year then the full amount of such depreciable portion shall
be taken into income for Federal income tax purposes by the General
Partner in such year; in all other cases the actual amount of the
Contractor Note Payments made during such year shall be taken into
income for Federal income tax purposes by the General Partner upon
receipt thereof. Upon request, the General Partner will submit to the
Special Limited Partner such evidence as may be required for the
Special Limited Partner to confirm that, for Federal income tax
purposes, the Contractor Fee was taken into income as aforesaid.
ARTICLE VII
ACCOUNTING, REPORTS, BOOKS,
BANK ACCOUNTS AND FISCAL YEAR
7.1 Bank Accounts. The bank accounts of the Partnership shall be
maintained in such banking institutions authorized to do business in
the State or such other states as permitted by each Authority and as
the General Partners shall determine with the Consent of the Special
Limited Partner, and withdrawals shall be made on such signature or
signatures as the General Partners shall determine. The Partnership's
funds shall not be commingled with the funds of any other Person and
shall not be used except for the business of the Partnership. All
deposits (including security deposits and other funds required to be
placed in escrow by any Authority or any Lender and other funds not
needed in the operation of the Partnership's business) shall be
deposited, to the extent permitted by each Authority, in
interest-bearing accounts or invested in obligations of or guaranteed
by the United States, any state thereof, or any agency, municipality
or other political subdivision of any of the foregoing, commercial
paper (investment grade), certificates of deposit and time deposits in
commercial banks with capital in excess of $50,000,000 and in mutual
(money market) funds investing in any or all of the foregoing;
provided, however, that any funds required to be placed in escrow by
any Authority shall be controlled by such Authority, and the General
Partners shall not be permitted to make any withdrawal from such funds
without the express written consent of such Authority to the extent
required.
7.2 Books of Account; Fiscal Year. Complete and accurate books of
account, in which shall be entered, fully and accurately, each and
every transaction of the Partnership, shall be kept or caused to be
kept by the General Partner. The books shall be kept on an accrual
basis of accounting, and the fiscal year of the Partnership shall be
the calendar year. All of the Partnership's books of account, together
with an executed copy of this Agreement and all Project Documents and
copies of such other instruments as the General Partner may execute
hereunder, including amendments thereto, shall at all times be kept at
the principal office of the Partnership and shall be available during
normal business hours for inspection by any Partner or his duly
authorized representative or, at the expense of any Partner, for audit
by him or his duly authorized representative.
7.3 Reports.
Within 45 days after the end of each of the first three quarters of
each fiscal year, the General Partner shall have prepared and shall
deliver to the Limited Partners, commencing with the first quarterly
period ending after the Admission Date, (i) a balance sheet and
statements of income (or loss) and changes in financial position and
Cash Flow for, or as of the end of, such quarter in customary form and
substance (or in such form and substance as the Special Limited
Partner shall reasonably request so as to facilitate the Investor
Limited Partner's filings with the Securities and Exchange Commission
and any other filings required by law), none of which need be audited
unless required by law, together with a report of other pertinent
information regarding the Partnership and its activities during such
quarter, including, but not limited to, a statement of the amount of
all fees and other compensation paid by the Partnership during such
quarter to the General Partner or any of its Affiliates, and (ii) a
certificate of the General Partners that each of the apartment units
in the Apartment Complex which is then occupied qualifies as a "low
income unit" under Section 42 of the Code.
The General Partner shall send to each Investor Limited Partner such
tax information as shall be necessary for inclusion by each Investor
Limited Partner in its Federal income tax returns and required state
income tax and other tax returns. The General Partner shall send this
information within 45 days after the end of each fiscal year.
Within 60 days after the end of each fiscal year of the Partnership,
the General Partner shall send to the Limited Partners (i) the balance
sheet of the Partnership as of the end of such fiscal year and
statements of income (loss), Partners' equity and cash flows for such
fiscal year, all of which shall be prepared in accordance with
generally accepted accounting principles consistently applied and
shall be accompanied by a report of the audit of the Accountants for
the Partnership reflecting no limitations as to the scope of the
Accountant's audit of such statements, and (ii) a statement of Cash
Flow for such fiscal year (which need not be audited), showing
distributions in respect of such fiscal year, which statement shall
identify distributions from (a) Cash Flow generated during the fiscal
year, (b) Cash Flow generated during prior fiscal years, (c) proceeds
from the disposition of property and investments and (d) reserves and
other sources.
If the General Partner shall fail, for any reason, to deliver to the
Limited Partners when due any of the information or statements
required by this Section 7.3, the Partnership shall pay the Limited
Partners, as liquidated damages for such failure, an amount equal to
$300 for each day that elapses after the respective due date until
such information or statements have been delivered to the Limited
Partners. The General Partner hereby guarantees the payment of any
amount due to the Limited Partners by the Partnership under this
Section 7.3.D; provided, however, that such payments shall not be
deemed to be either a capital contribution or a loan from the General
Partner and that neither the Partnership nor any Investor Limited
Partner shall be under any obligation to repay any such amount paid by
the General Partner.
7.4 Other Reports. The General Partner shall from time to time submit
to the Partners such other written reports and information regarding
the operations of the Partnership as may be required by the Investor
Limited Partner to satisfy its reporting requirements to its partners
or governmental authorities. The General Partner shall provide to the
Partners by November 30 of each fiscal year an estimate of each
Partner's share of profits and losses for Federal and state income tax
purposes for such fiscal year.
7.5 Tax Returns and Tax Treatment. The General Partner shall, for each
fiscal year, file on behalf of the Partnership a United States
Partnership Return of Income within the time prescribed by law for
such filing. The General Partner shall also file on behalf of the
Partnership such other tax returns and other documents from time to
time as may be required by the Federal government or by any state or
any subdivision thereof. All tax returns shall be prepared by the
Accountants. The General Partner shall send a copy of Schedule K-1 or
any successor or replacement form thereof, and, upon request, such tax
return, to each Partner within 45 days after the expiration of each
fiscal year.
ARTICLE VIII
MANAGEMENT AGENT
8.1 Management Agent and Management Fee.
The General Partner shall have the responsibility for managing the
Apartment Complex and obtaining a management agent (the "Management
Agent"), the choice of which with respect to any successor to the
Management Agent at the Admission Date shall be made with the Consent
of the Special Limited Partner after accurate and complete disclosure
to the Special Limited Partner of any affiliation between the General
Partner and such successor. The Management Agent at the Admission Date
is Autumn Gate Properties, Inc., and is not an Affiliate of the
General Partners.
The Management Agent shall receive a management fee payable by the
Partnership on an annual basis in an amount not to exceed four (4%)
percent of the net rental income from the Apartment Complex for
management services in accordance with the Management Agreement as
approved by each Authority (if such approval is necessary) which is
intended to be executed by the Partnership. The term of any Management
Agreement shall not exceed one year without the Consent of the Special
Limited Partner, and no payment or penalty shall be payable by the
Partnership for failure to renew any such agreement. In the event that
the Management Agent is an Affiliate of the General Partner, the
Management Agreement will be amended to provide that forty (40%)
percent of such management fee with respect to any fiscal year of the
Partnership shall not become due and payable unless the Partnership
has positive Cash Flow with respect to that fiscal year, and any
unpaid portion of such management fee may be payable from positive
Cash Flow of the Partnership in future fiscal years of the Partnership
or from Sale or Refinancing Transaction Proceeds, as provided in
Sections 9.2.A and 9.2.B.
The General Partner will have the duty to manage the Apartment Complex
during any period when there is no Management Agent and the
Partnership will pay the General Partner for such services an annual
management fee equal to such amount as each Authority shall approve
(but not in excess of the fee set forth in Section 8.1.B hereof) from
time to time or, if no approval is required, a fee equal to the
amounts set forth in Section 8.1.B hereof. If at any time the present
Management Agent shall cease to act as the Management Agent, the
General Partner shall be authorized, subject to the Consent of the
Special Limited Partner and the approval of each Authority and Lender
(if required) to retain and to enter into a Management Agreement with
a different Management Agent on terms at least as favorable to the
Partnership as the terms and conditions of the Management Agreement
with the present Management Agent.
Subject to the approval of each Authority, if required, the Special
Limited Partner shall have the right, in the event the General Partner
is removed as General Partner pursuant to Section 11.4 hereof, to
terminate the Management Agreement and every other contract between
the Partnership and Affiliates of the General Partner so removed, upon
not less than 30 days' written notice to the party contracting with
the Partnership. All existing contracts between the Partnership and
Affiliates of the General Partner have been amended to contain this
right and the General Partner covenants not to enter any future
contract with any of their Affiliates which does not contain such
right.
ARTICLE IX
PROFITS AND LOSSES; DISTRIBUTIONS
9.1 Allocations of Profits and Losses.
For tax and accounting purposes, Profits and Losses of the Partnership
for each fiscal year shall be allocated to the respective classes of
Partners as follows:
Subject to Section 9.3 hereof, Profits other than those arising from a
Sale or Refinancing Transaction shall be allocated (i) first to the
extent of prior allocations of Losses (other than Nonrecourse
Deductions), in proportion to the amount of prior Losses allocated to
each Partner, then (ii) to each Partner until the Profits allocated to
such Partner equals the cash distributions made to such Partner
pursuant to Section 9.2.A (xi) hereof, and then (iii) to each Partner
in an amount equal to the cash distributions that would be made to
each Partner pursuant to Section 9.2.A (xi) if the Partnership had
cash available in an amount equal to such remaining Profits. Subject
to Section 9.3 hereof, Profits arising from a Sale or Refinancing
Transaction shall be allocated as follows:
First, to the Partners until each Partner has been allocated an amount
or Profits equal to the aggregate Losses previously allocated to such
Partner pursuant to Section 9.1.C hereof, to the extent such aggregate
Losses are more than the aggregate Profits allocated to such Partner
pursuant to Section 9.1.A(i) hereof and this Section 9.1.B(i);
Next, 99.98% to the Investor Limited Partner, .01% to the Special
Limited Partner and .01% to the General Partner until the Capital
Account of the Investor Limited Partner is equal to its Investor
Contributions;
Next, to the Special Limited Partner until the Capital Account of the
Special Limited Partner is equal to the amount distributable to it
pursuant to Section 9.2.B(x) and then to the General Partner until the
Capital Account of the General Partner is equal to the amount
distributable to it pursuant to Section 9.2.B(xi); and
Thereafter, 49.89% to the Investor Limited Partner, .01% to the
Special Limited Partner and 50.1% to the General Partner.
Subject to Section 9.3 hereof, Losses shall be allocated .01% to the
General Partner, 99.98% to the Investor Limited Partner and .01% to
the Special Limited Partner.
The Losses allocated pursuant to this Section 9.1.C shall not exceed
the maximum amount of Losses that can be so allocated without causing
any Investor Limited Partner to have an Adjusted Capital Account
Deficit at the end of any fiscal year of the Partnership. All Losses
in excess of the limitations set forth in this Section 9.1.C(ii) shall
be allocated to the General Partner.
Nonrecourse Liabilities of the Partnership shall be allocated among
the Partners in the same manner as Losses are allocated pursuant to
Section 9.1.C(i) hereof.
Nonrecourse Deductions for any fiscal year of the Partnership or other
period shall be specially allocated 99.98% to the Investor Limited
Partner, .01% to the Special Limited Partner and .01% to the General
Partner.
Any Partner Nonrecourse Deductions for any fiscal year of the
Partnership or other period shall be specially allocated to the
Partner who bears the risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable.
All Credits shall be allocated 99.98% to the Investor Limited Partner,
.01% to the Special Limited Partner and .01% to the General Partner.
Where a distribution of an asset is made in the manner described in
Section 734 of the Code, or where a transfer of an Interest permitted
by this Agreement is made in the manner described in Section 743 of
the Code, the Partnership shall file, upon the request of the Special
Limited Partner, an election under Section 754 of the Code, in
accordance with the procedures set forth in the applicable
Regulations. Subject to Section 5.2 hereof, all other elections
required or permitted to be made by the Partnership under the Code
shall be made in such manner as, in the opinion of the Special Limited
Partner with the advice of the Accountants and legal counsel for the
Partnership, will be most advantageous to the Investor Limited
Partner.
Except as otherwise provided herein, each Partner shall be allocated
Profits and Losses in accordance with this Section 9.1 from the date
on which it is admitted to the Partnership. 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 General
Partners using any permissible method under Section 706 of the Code
and the Regulations promulgated thereunder.
Notwithstanding the other provisions of this Section 9.1, if any of
the allocations provided in this Section 9.1 would not result in an
aggregate allocation of Profits, Losses and credits to the General
Partner in an amount equal to at least .01% of the Profits, Losses and
credits allocable to all Partners in any fiscal year, then the amounts
otherwise allocable to the Limited Partner and the Special Limited
Partner shall be reduced in order to assure that the General Partner
receives an aggregate allocation of at least .01% of all Profits,
Losses and credits allocable to all Partners in any fiscal year.
If any fee or other compensation payable from the Partnership to a
Partner or an Affiliate of a Partner is treated as a distribution for
income tax purposes, there shall be allocated to the recipient Partner
or Affiliate of a Partner an amount of income equal to the amount of
such payment in the year in which such payment is made or in the first
succeeding year in which the Partnership realizes income.
9.2 Distribution and Application of Cash Flow and Proceeds From Sale
or Refinancing Transactions. Except as otherwise provided by this
Agreement or required by law (including all applicable rules,
directives and regulations of each Authority), cash distributions
shall be made to the Partners on the following bases within 60 days
after the end of each calendar quarter:
Cash Flow shall be applied in the following order of priority:
To repay any loan payable to any Partner other than the General
Partner;
To the Limited Partners, an amount or amounts equal to the unpaid
balance of any Voluntary Loan made by them and to the General Partner,
to pay the difference, if positive, between an amount or amounts equal
to the unpaid balance of any Voluntary Loan made by it and an amount
equal to any accrued and unpaid Credit Reduction Payments;
In the event the Partnership is unsuccessful in refinancing the
Permanent Loan on February 28, 1999, Cash Flow will be paid to Xxxx as
follows:
(a) If the Permanent Lender agrees to reduce the principal of the
Permanent Loan to reflect the payment of $1,500,000 and to reamortize
the Permanent Loan with such new principal balance, until Xxxx has
received an amount equal to $1,500,000 plus a non-compounded return on
the unreturned portion of such amount equal to (i) 9% beginning on
February 28, 1999 until August 31, 1999 and (ii) 11% per annum after
August 31, 1999 until Xxxx has been repaid the $1,500,000, all Cash
Flow up to an amount equal to the difference between (1) the monthly
payment of principal and interest under the Permanent Loan prior to
the reduction of the principal amount and the reamortization and (2)
the monthly payment of principal and interest under the Permanent Loan
after the reduction of the principal and the reamortization will be
paid to Xxxx, or
(b) If the Permanent Lender does not agree to reduce the principal of
the Permanent Loan to reflect the payment of the $1,500,000 and to
reamortize the Permanent Loan with such new principal balance, until
Xxxx has received an amount equal to $1,500,000 plus a non-compounded
return on the unreturned portion of such amount equal to (i) 9% per
annum beginning on February 28, 1999, until August 31, 1999 and (ii)
11% per annum after August 31, 1999 until Xxxx has been repaid the
$1,500,000, all Cash Flow will be paid to Xxxx.
To pay the difference, if positive, between any accrued but unpaid
Management Fees (described in Section 8.1.B) and an amount equal to
any accrued and unpaid Credit Reduction Payments;
To the Special Limited Partner, an amount equal to any accrued Annual
Local Administrative Fees pursuant to the terms of Section 6.3 hereof;
To the General Partner to pay any principal and interest due and
payable under the Contractor Note (reduced by an amount equal to any
accrued and unpaid Credit Reduction Payments);
To the extent of 50% of the remaining Cash Flow, to the Guarantor, to
pay the difference, if positive, between an amount or amounts equal to
the unpaid balance of any Operating Loan made by it and an amount
equal to any accrued and unpaid Credit Reduction Payments;
To the General Partner to pay the difference if positive, between (A)
a non-cumulative, non-interest bearing priority return in the amount
of $50,000 and (B) an amount equal to any accrued and unpaid Credit
Reduction Payments;
To the General Partner, to pay the difference, if positive, between
the Asset Management Fee described in Section 6.5 and an amount equal
to any accrued and unpaid Credit Reduction Payments;
To the extent of 40% of the remaining Cash Flow, to the General
Partner, to pay the difference, if positive, between the Supervisory
Management Fee and an amount equal to any accrued and unpaid Credit
Reduction Payments; and
Of the remainder, 49.89% to the Investor Limited Partner, 50.1% to the
General Partner (reduced by an amount equal to any accrued and unpaid
Credit Reduction Payments, which amount shall be distributed 99% to
the Investor Limited Partner and 1% to the Special Limited Partner)
and .01% to the Special Limited Partner.
Subject to the provisions of Sections 9.2.D and 12.4 hereof, Sale or
Refinancing Transaction Proceeds shall be applied in the following
order of priority:
To the payment of all of the expenses of such Sale or Refinancing
Transaction, and, with regard to damage recoveries or insurance or
condemnation proceeds (other than for temporary loss of use), to the
payment of all repairs, replacements or renewals resulting from damage
to or partial condemnation of the affected property;
To Xxxx, in an amount equal to the excess of (I)(A) Xxxx'x $1,500,000
Capital Account, plus (B) a return on Xxxx'x Capital Account
calculated in the same manner as interest at a rate of 9% per annum,
beginning on February 28, 1999 until August 31, 1999 on which date
such 9% rate shall increase to 11% until paid over (II) amounts
previously distributed to Xxxx pursuant to this Section 9.2.B(ii) and
9.2.A(iii);
To establish such reserves as the General Partner in its sole
discretion determines to be reasonably necessary for any contingent or
foreseeable liability or obligation of the Partnership; provided,
however, that the balance of any such reserve remaining at such time
as the General Partner shall reasonably determine that such reserve is
no longer necessary shall be distributed in accordance with
subparagraphs (iv) through (xii) of this Section 9.2.B;
To repay any loan payable to any Partner other than the General
Partner;
To the Limited Partners, an amount or amounts equal to the unpaid
balance of any Voluntary Loan made by them and to the General Partner,
to pay the difference, if positive, between an amount or amounts equal
to the unpaid balance of any Voluntary Loan made by it and an amount
equal to any accrued and unpaid Credit Reduction Payments;
To the General Partner, to pay the difference, if positive, between
(A) a one-time disposition fee in an amount equal to the difference
between (x) six (6%) percent of the gross sales price of the Apartment
Complex and (y) all expenses (including all third-party commissions)
incurred with respect to such sale and (B) an amount equal to any
accrued and unpaid Credit Reduction Payments.
To the Special Limited Partner, an amount equal to any accrued Annual
Local Administrative Fees pursuant to the terms of Section 6.3 hereof;
To the Guarantor, to pay the difference, if any, between an amount or
amounts equal to the unpaid balance of any Operating Loan made by it
and an amount equal to any accrued and unpaid Credit Reduction
Payments;
To the Investor Limited Partner until the Investor Limited Partner has
received an amount equal to the aggregate of the Investor
Contributions, reduced by the amount of all prior distributions under
this Section 9.2.B(ix);
To the Special Limited Partner, an amount equal to its Capital
Contributions, reduced by the amount of all prior distributions under
this Section 9.2.B(x);
To the General Partner, an amount equal to the difference, if
positive, between (A) an amount equal to any distributions paid to the
Investor Limited Partner under Section 9.2.(B)(ix) and (B) an amount
equal to all accrued and unpaid Credit Reduction Payments; and
The balance, if any, 49.89% to the Investor Limited Partner, .01% to
the Special Limited Partner and 50.1% to the General Partner (reduced
by an amount equal to any accrued and unpaid Credit Reduction
Payments, which amount shall be distributed 99% to the Investor
Limited Partner and 1% to the Special Limited Partner.
Except as otherwise provided in this Section 9.2, each Partner shall
share in distributions in accordance with this Section 9.2 from the
date on which such Partner is admitted to the Partnership.
In the event that the amount of the Credits finally allowed to the
Partnership and allocated to the Limited Partners during any calendar
year during the Credit Period with respect thereto is less than 99.99%
of the amount specified on Exhibit A to the Recapture Guaranty
Agreement for such year for any reason other than a change in law,
including, without limitation, the failure of the Partnership to
operate the Apartment Complex so as to have 100% of the Apartment
Units therein eligible for Credits for any such year, the "Return
Amount" shall be calculated. The "Return Amount" shall be an amount
equal to the excess of (a)(I) the amount, if any, by which 99.99% of
the Credit Amount exceeds the amount of Credits finally allowed to the
Partnership and allocated to the Limited Partners with respect to any
such calendar year plus (II) 15% per annum thereon calculated from the
end of the calendar year in question until the Return Amount is paid
as provided herein, over (b)(I) the amount, if any, by which the
Credits finally allowed to the Partnership and allocated to the
Limited Partners with respect to any other calendar year during the
Credit Period exceeds 99.99% of the Credit Amount plus (II) 15% per
annum thereon calculated from the end of the calendar year in question
until the Return Amount is paid as provided herein. If the Partnership
claims Credits for less than 12 calendar months with respect to any
taxable year, then the calculation of the Return Amount with respect
to such taxable year shall be made by proportionally pro rating the
Credit Amount. At the time of distribution of any Sale or Refinancing
Transaction Proceeds pursuant to Section 9.2.B hereof, there shall be
distributed to the Investor Limited Partner, out of any Sale or
Refinancing Transaction Proceeds that would otherwise have been
distributed to the General Partner under such section, an amount equal
to the Return Amount, before the General Partner and the Guarantor
shall be distributed any such proceeds pursuant to such section, and
an appropriate adjustment to the allocation of Profits and Losses
shall be made. A distribution pursuant to the preceding sentence shall
not be required to the extent that it would duplicate an amount
previously paid to the Investor Limited Partner pursuant to the
Recapture Guaranty Agreement or as a Credit Reduction Payment
hereunder. For purposes of this Section 9.2.D, a Credit with respect
to a taxable year shall be deemed finally allowed upon the latest to
occur of the following: (I) the period for assessment of a deficiency
for such taxable year shall have expired without a deficiency being
assessed by the Internal Revenue Service against any Partner with
respect to the Credit claimed by the Partnership for such taxable
year; or (II) if such deficiency is so assessed, the determination by
the Internal Revenue Service as to the amount of the Credit for such
taxable year is no longer subject to petition to the United States Tax
Court; or (III) if a petition with respect to such determination is
filed with such court, a decision by such court as to the amount of
the Credit for such taxable year becomes final and not subject to
appeal; or (IV) if an appeal from such decision is filed, a decision
of a court upon such appeal becomes final and not subject to further
appeal. Any Credits which are recaptured pursuant to Section 42 of the
Code, other than due to an Assignment of an Interest or a disposition
of the Apartment Complex that occurs with the Consent of the Special
Limited Partner, shall be deemed not to have been finally allowed for
purposes of this Section 9.2.D.
9.3 Overriding Allocations of Profits and Losses.
Notwithstanding anything contained in Section 9.1 hereof or this
Section 9.3 to the contrary, if there is a net decrease in Partnership
Minimum Gain during any taxable year of the Partnership, except as
otherwise permitted by Sections 1.704-2(f)(2), (3), (4) and (5) of the
Regulations, items of Partnership income and gain for such taxable
year (and subsequent years, if necessary) in the order provided in
Section 1.704-2(j)(2)(i) of the Regulations shall be allocated among
all Partners whose shares of Partnership Minimum Gain decreased during
that year in proportion to and to the extent of such Partner's share
of the net decrease in Partnership Minimum Gain during such year. The
allocation contained in this Section 9.3.A(i) is intended to be a
minimum gain chargeback within the meaning of Section 1.704-2 of the
Regulations, and shall be interpreted consistently therewith.
Notwithstanding anything contained in Section 9.1 hereof or this
Section 9.3 to the contrary, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain, except as provided in Section
1.704-2(i) of the Regulations, items of Partnership income and gain
for such taxable year (and subsequent years, if necessary) in the
order provided in Section 1.704-2(j)(2)(ii) of the Regulations shall
be allocated among all Partners whose share of Partner Nonrecourse
Debt Minimum Gain decreased during that year in proportion to and to
the extent of such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain during such year. This Section 9.3.A(ii)
is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2 of the Regulations and shall be interpreted
consistently therewith.
Notwithstanding any provisions of Section 9.1 hereof or this Section
9.3 to the contrary, in the event any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations, items of
Partnership income and gain (including gross income) shall be
specially allocated to each such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations,
the Adjusted Capital Account Deficit of such Partner as quickly as
possible, provided that an allocation pursuant to this Section 9.3.B
shall be made only if and to the extent that such Partner would have
an Adjusted Capital Account Deficit. In the event that any such
adjustments, allocations or distributions create an Adjusted Capital
Account Deficit for more than one Partner in any taxable year of the
Partnership, all such items of income and gain of the Partnership for
such taxable year and all subsequent taxable years shall be allocated
among all such Partners in proportion to their respective Adjusted
Capital Account Deficits in such amount and manner sufficient to
eliminate such Adjusted Capital Account Deficits as quickly as
possible. The allocation contained in this Section 9.3.B is intended
to be a "qualified income offset" within the meaning of Section
1.704-1(b)(2)(ii)(d) of the Regulations, and shall be subject thereto.
Sections 9.3.A and 9.3.B hereof shall be applied in the order provided
in Section 1.704-2 of the Regulations.
Notwithstanding any provisions of Section 9.1 hereof or this Section
9.3 to the contrary, but subject to the provisions of Sections 9.3.A,
9.3.B and 9.3.C hereof:
(a) in accordance with Section 704(c) of the Code and the Regulations
promulgated 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 as provided
in Section 704(c) of the Code 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; (b) in
the event the Gross Asset Value of any Partnership asset is adjusted
as provided herein, 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
Section 704(c) of the Code and the Regulations promulgated thereunder;
and (c) any elections or other decisions relating to the allocations
provided in this Section 9.3.D(i) shall be made by the General Partner
with the Consent of the Special Limited Partner as provided in Section
704(c) of the Code in any manner that reasonably reflects the purpose
and intention of this Agreement; allocations pursuant to this Section
9.3.D(i) 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;
the General Partner shall be allocated an amount of deductions equal
to any interest expense allowed to the Partnership in connection with
any Operating Loans;
in the event that the General Partner is allocated more than .01% of
the Losses pursuant to Section 9.1.C(ii) hereof, the General Partner
shall thereafter be allocated all Profits to the extent that the
aggregate Losses theretofore allocated to the General Partner pursuant
to Section 9.1.C(ii) hereof shall have exceeded the Losses that would
have otherwise theretofore been allocated to the General Partner had
the provisions of Section 9.1.C(ii) hereof not been given effect;
in the event any Partner has a deficit Capital Account at the end of
any fiscal year of the Partnership that is in excess of the sum of (a)
the amount such Partner is obligated to restore to its Capital Account
(pursuant to the terms of such Partner's promissory note or otherwise)
and (b) the amount such Partner is deemed to be obligated to restore
to its Capital Account pursuant to the penultimate sentences of
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such
Partner shall be specially allocated items of Partnership income and
gain in the amount of such excess as quickly as possible, provided
that an allocation pursuant to this Section 9.3.D(iv) shall be made if
and only to the extent that such Partner would have a deficit Capital
Account in excess of such sum after all other allocations provided for
in this Article IX have been tentatively made as if Section 9.3.B
hereof and this Section 9.3.D(iv) were not in this Agreement;
to the extent the Partnership has taxable interest income with respect
to any promissory note issued by a Partner pursuant to Section 483,
Sections 1271 through 1288 or Section 7872 of the Code:
(a) such interest income shall be specially allocated to the Partner
to whom such promissory note relates; and
(b) the amount of such interest income shall be excluded from the
Capital Contributions credited to such Partner's Capital Account in
connection with payments of principal with respect to such promissory
note; and
The Limited Partner shall be allocated an amount of Profits resulting
from a Sale or Refinancing Transaction equal to the Return Amount.
Xxxx shall be specially allocated an amount of gross income equal to
the amount distributed to Xxxx pursuant to Section 9.2.B(ii)(I)(B) and
any distributions pursuant to 9.2.A(iii) that represent the return on
the $1,500,000 payable to Xxxx and any payments to Xxxx made pursuant
to Section 6.6 hereof. The General Partner shall be specially
allocated an amount of gross income equal to the amount distributed to
the General Partner pursuant to Section 9.2.A (viii).
ARTICLE X
TRANSFER OF LIMITED PARTNER INTERESTS; SUBSTITUTED PARTNERS; ASSIGNEES
10.1 Assignment of Limited Partner Interests. The Investor Limited
Partner and the Special Limited Partner shall have the right at any
time to make an Assignment of their Interests without the consent or
approval of the General Partner or any other Partner. The General
Partner shall cooperate with the Investor Limited Partner and the
Special Limited Partner in facilitating such Assignment by promptly
furnishing complete and accurate financial and other relevant data
regarding the Partnership, the Apartment Complex, the General Partners
and the Affiliates of the General Partner and any other matters
reasonably necessary in the judgment of the Special Limited Partner to
facilitate and effect such Assignment. Each Assignee of an Interest
transferred in accordance with this Section 10.1 shall be
automatically admitted to the Partnership as a Substituted Partner
without necessity of General Partners approval; provided, however,
that each Substituted Limited Partner shall execute such instrument or
instruments as shall be required by the General Partners to signify
its agreement to be bound by all the provisions of this Agreement, the
Project Documents, if required, and shall pay reasonable legal fees
and filing costs in connection with its substitution as a limited
partner hereunder. The Investor Limited Partner and the Special
Limited Partner shall notify the General Partner as to any proposed
Assignment of their Interests.
10.2 Substituted Partners; Admission.
The General Partner may not admit any additional partners to the
Partnership without the Consent of the Special Limited Partner.
Any Assignee shall not be admitted as a Substituted Partner unless (i)
the Assignee expressly agrees to be bound, to the same extent as the
Assignor, by the provisions of this Agreement, the Project Documents
and any other documents required in connection therewith and to assume
the obligations of the Assignor hereunder and (ii) the Assignee shall
have agreed to pay all reasonable expenses and legal fees relating to
the Assignment and its admission as a Substituted Partner.
Upon the admission of a Substituted Partner, Schedule A shall be
amended to reflect the name and address of such Substituted Partner
and to eliminate the name and address of the Assignor, and an
amendment to this Agreement reflecting such admission shall be filed
in accordance with the Uniform Act. No consent or approval of the
Investor Limited Partner or Special Limited Partner (other than the
Assignor and the Assignee) shall be required and the General Partner
may exercise the power of attorney granted in Section 14.2 hereof to
effect the provisions of this Article X.
10.3 Assignees.
Any Person who acquires in any manner whatsoever any Interest,
irrespective of whether such Person has accepted and adopted in
writing the terms and provisions of this Agreement, shall be deemed by
the acceptance of the benefit of the acquisition thereof to have
agreed to be subject to and bound by all the obligations of this
Agreement that any predecessor in interest of such Person was subject
to or bound by. A Person acquiring an Interest, including the personal
representatives and heirs of a deceased Partner, shall have only such
rights, and shall be subject to all the obligations, as are set forth
in this Agreement; and, without limiting the generality of the
foregoing, such Person shall not have any right to have the value of
his Interest ascertained or receive the value of such Interest or, in
lieu thereof, profits attributable to any right in the Partnership,
except as herein set forth.
Any Assignee of an Interest pursuant to an Assignment satisfying the
conditions of this Article X who does not become a Substituted Partner
in accordance with this Article X shall have the right to receive the
same share of the Profits and Losses and distributions of the
Partnership to which his Assignor would have been entitled. If such
Assignee desires to make an Assignment of his Interest, he shall be
subject to all the provisions of this Article X to the same extent and
in the same manner as any Partner desiring to make an Assignment.
Any Partner who shall Assign all of his Interest shall cease to be a
Partner and shall no longer have any rights or privileges of a Partner
except that, unless and until his Assignee is admitted to the
Partnership as a Substituted Partner in accordance with this Article
X, such Assignor shall retain all rights and be subject to all
obligations under the Uniform Act.
In the event of an Assignment, the obligation of the Assignor to make
Capital Contributions hereunder shall be extinguished only by and to
the extent of Capital Contributions made by him or his Assignee.
In the event that an Assignment shall be made, there shall be filed
with the Partnership a duly executed and acknowledged counterpart of
the instrument making such Assignment. Such instrument must evidence
the written acceptance of the Assignee to all the terms and provisions
of this Agreement. If such an instrument is not so filed, the
Partnership need not recognize any such purported Assignment for any
purpose.
ARTICLE XI
WITHDRAWAL OF A GENERAL PARTNER; NEW GENERAL PARTNERS
11.1 Withdrawal.
A General Partner may not Withdraw (other than an
Involuntary Withdrawal) from the Partnership or Assign,
pledge or encumber all or any part of its General Partner
Interest (except for that certain pledge of Cash Flow by
HOMES to Xxxx to the extent the Special Limited Partner has
reviewed and approved same) without the Consent of the
Special Limited Partner, and, to the extent required, of
each Authority and each Lender. The consent of the Investor
Limited Partner shall not be required. For purposes of this
Agreement, the sale, transfer, or other conveyance, or the
pledge or encumbering, of any share of capital stock of a
General Partner shall be deemed an Assignment by that
General Partner of its General Partner Interest. Each
General Partner shall indemnify and hold harmless the
Partnership and all Partners from any Withdrawal or
Assignment in violation of Section 11.1.A hereof or in
violation of any of the Project Documents. In the event of a
Withdrawal of a General Partner (other than an Involuntary
Withdrawal) or the Assignment, pledge or encumbrance of any
part of its General Partner Interest in violation of Section
11.1.A hereof, the Interest of the General Partner who so
Withdrew, Assigned, pledged or encumbered any part of its
Interest shall immediately and automatically terminate on
the effective date of such Withdrawal (or the effective date
of such Assignment, pledge or encumbrance) and such General
Partner shall have no further right to participate in the
management or operation of the Partnership or to receive any
future allocations of Profits and Losses, any distributions
from the Partnership or any other funds or assets of the
Partnership, nor shall it be entitled to receive or to be
paid by the Partnership any further payments of fees
(including fees which have been earned but are unpaid) or to
be repaid any outstanding advances or loans made by it to
the Partnership. From and after the effective date of such
Withdrawal, Assignment, pledge or encumbrance, the rights of
the Withdrawing General Partner to receive or to be paid
such allocations, distributions, funds, assets, fees or
repayments shall be reallocated to the other General Partner
or General Partners, or if the Special Limited Partner
becomes a general partner of the Partnership at that time,
to the Special Limited Partner. Notwithstanding such
Withdrawal, Assignment, pledge or encumbrance, and loss of
any right to receive such allocations, distributions, funds,
assets, fees and repayments, the Withdrawing General Partner
shall remain liable to the Partnership and the other
Partners for only those obligations incurred by it while it
was General Partner under this Agreement. Notwithstanding
anything herein to the contrary, any remaining Partner shall
have all other rights and remedies against the Withdrawing
General Partner as provided by law.
Upon the Involuntary Withdrawal of the General Partner, the
General Partner's Interest shall automatically become an
Interest of a Class B Limited Partner. Until the purchase of
such Class B Limited Partner Interest shall occur pursuant
to the provisions of Section 11.3.B hereof, the Class B
Limited Partner shall be entitled to receive the fees
payable to the Withdrawing General Partner set forth in
Article VI hereof accrued to the date of such Withdrawal, to
be repaid any outstanding advances or loans made by the
Withdrawing General Partner to the Partnership and to share
in the Profits and Losses and distributions at the same
times and in the same manner as the Withdrawing General
Partner would have otherwise received as a General Partner,
but shall not be entitled to participate in the management
of the Partnership's business or to participate in any
allocation of profits and losses and distributions payable
to the Investor Limited Partner or the Special Limited
Partner.
11.2 Effect of Withdrawal; Election to Continue Business.
Upon the occurrence of an event giving rise to a Withdrawal
of a General Partner, (A) any remaining General Partner, if
any, or, if there be no remaining General Partner, the
Withdrawing General Partner or its legal representative
shall promptly notify the Limited Partners of such
Withdrawal (the "Withdrawal Notice"), (B) the Special
Limited Partner shall have the right to become an additional
General Partner (and to become the Managing General Partner
if the Withdrawing General Partner was previously the
Managing General Partner) and (C) the Partnership shall
continue; provided, however, the Partnership shall be
dissolved and terminated if there is no General Partner (and
the Special Limited Partner does not exercise its right to
become an additional General Partner). The Withdrawal of a
General Partner shall not be deemed to be effective until
the expiration of 90 days from the day on which the
Withdrawal Notice has been mailed to the Limited Partners. A
Withdrawn General Partner shall remain liable for
obligations incurred by it under this Agreement through the
effective date of its Withdrawal, whether or not such
Withdrawal shall be an Involuntary Withdrawal and in
compliance with or in violation of this Agreement.
11.3 Formation of New Partnership.
Subject to the provisions of Section 11.1.A hereof, upon the
occurrence of an event giving rise to the Withdrawal of a
General Partner, if there is then no other General Partner
(and the Special Limited Partner does not elect to become a
General Partner), the Limited Partners may unanimously elect
within 120 days thereafter to form a new partnership on
substantially identical terms to those of this Agreement to
carry on the business of the Partnership. In so doing, the
Limited Partners shall designate a successor general partner
to serve in place of the Withdrawing General Partner with
the approval of each Authority and each Lender, if such
approval is required; provided, however, that no Person
shall be designated or admitted as a successor general
partner if he is below the age of majority in the State or
has theretofore been adjudged insane or incompetent, and
unless, in the opinion of the Partnership's counsel, such
Person has a financial net worth to assure that he shall
satisfy the financial net worth requirements of the Internal
Revenue Service for the Partnership to continue to be
treated as a partnership for Federal income tax purposes.
If the Limited Partners shall designate a successor general
partner and obtain all necessary approvals therefor, the
Class B Limited Partner Interest of the Withdrawing General
Partner where the Withdrawal was Involuntary shall be
transferred to the successor general partner upon its
written assumption of the obligations of the Withdrawing
General Partner under this Agreement (except for any
obligations of the Withdrawing General Partner under this
Agreement specifically excepted by the Special Limited
Partner). In such event, the successor general partner shall
pay to the Withdrawing General Partner or its legal
representative as the purchase price for its Class B Limited
Partner Interest an amount to be agreed upon between them.
If no agreement can be reached as to the amount of the
purchase price for the Class B Limited Partner Interest of
the Withdrawing General Partner under Section 11.3(B)(i)
hereof and if the successor general partner does not own a
.01% interest in all material items of profits and losses
and distributions of the Partnership, each limited partner
of the Partnership (including the Person succeeding to the
Interest of the Withdrawing General Partner as a Class B
Limited Partner and any other Class B Limited Partner) shall
transfer a pro rata portion of his Interest to the successor
general partner in an amount sufficient to give the
successor general partner such .01% interest and the
successor general partner shall pay to each limited partner
of the Partnership (including the Person succeeding to the
Interest of the Withdrawing General Partner as a Class B
Limited Partner and any other Class B Limited Partner) as
the purchase price for his Interest, an amount determined by
the Special Limited Partner.
In exercising the election permitted under Section 11.3.A
hereof, the successor general partner and all the limited
partners of the Partnership agree to be bound by the
provisions of this Agreement; provided, however, that if
this Agreement is amended by them, no amendment shall be
made without the Consent of the Special Limited Partner and
unless counsel to the Partnership shall issue an opinion
that the Partnership shall continue to be treated as a
partnership for Federal income tax purposes; provided,
further, however, that the amended agreement shall be as
similar in form and substance to this Agreement as
practicable and the successor partnership shall engage in
the same business as the Partnership employing the assets
and name of the Partnership to the extent possible.
Any new limited partnership formed pursuant to this Section
11.3 shall succeed to all rights and assets of the
Partnership subject to all liabilities of the Partnership.
Each limited partner of the Partnership shall be a limited
partner of any limited partnership formed pursuant to this
Section 11.3 and agrees to execute all documents and take
such further action as may be necessary in connection
therewith. Until such time as the new limited partnership
agreement is executed by all of the Partners, this Agreement
shall continue to be binding on all of the partners of the
Partnership. Upon execution of a declaration to be bound by
the terms of this Agreement and delivery of such declaration
to any Partner of the Partnership, the general partner of
such new limited partnership shall succeed to all the rights
and liabilities of the then general partners of the
Partnership under this Agreement.
11.4 Special Removal Rights.
Notwithstanding any other provision of this Agreement to the
contrary, in the event that
the General Partner or Guarantor shall:
(a) materially violate its fiduciary responsibilities as a
General Partner or as a Guarantor of the Partnership;
(b) be in material breach of this Agreement or the
Contribution Agreement or any of the Other Guaranties for
ten days after notice thereof has been given by the Special
Limited Partner; provided, however, that if such breach is
of the type that cannot reasonably be cured within ten days,
the Special Limited Partner shall not have the right to
remove a General Partner under this Section 11.4.A(i)(b)
with respect to such breach for a 60-day period after such
notice is given so long as the General Partners are
diligently pursuing a cure of such breach at all times
during such 60-day period;
(c) willfully violate any law, regulation or order
applicable to the Partnership which has a material adverse
financial impact on the Partnership or the Apartment
Complex; or
(d) become Bankrupt;
the Partnership shall:
(a) be in material breach of or have suffered a material
event of default to occur under any Project Document (other
than the Contribution Agreement) or any other material
agreement or document affecting the Partnership or the
Limited Partners to which it is a party; or
(b) (I) at any time (v) prior to the commencement of the
Guaranty Period, if the Guarantor is at such time in default
of its obligations under the Development Deficit Guaranty
Agreement, or (w) during the Guaranty Period if the
Guarantor is at such time in default of its obligations
under the Operating Deficit Guaranty Agreement, or (x) after
termination of the Guaranty, have realized a deficit in Cash
Flow in each calendar month for a period of six consecutive
months (provided that (y) unless such deficit has been
funded by Voluntary Loans by the General Partners, the
number "six" in this clause (I) shall be replaced by "one",
and (z) if such deficit in any calendar month shall exceed
$10,000 (unless such deficit has been funded with Voluntary
Loans), such month shall be deemed to be the last month in a
period of six consecutive months in which the Partnership
shall have realized a deficit in Cash Flow, (II) have had
less than 100% of the apartment units in the Apartment
Complex eligible to receive the Credit in any month, (III)
have had the qualified basis (as defined in Section 42 of
the Code) of the Apartment Complex at the end of any taxable
year prior to the taxable year starting January 1, 2012 be
less than the amount of such basis at the close of the
preceding tax year, or (IV) otherwise be in any situation,
except where such situation is due to a change in law, where
the amount of the Credits which the Partnership is entitled
to claim under Section 42 of the Code be less than the
Credit Amount (as provided in Exhibit A to the Recapture
Guaranty Agreement and as such number is adjusted pursuant
to Section 3.4.B(ii) hereof) in any year during the Credit
Period of the Partnership (other than any year therein in
which Credits may not be claimed for 12 months because the
first day of the Compliance Period was other than the first
day of a calendar year); or
(a) an uncured default exists under any agreement or
commitment entered into by the Partnership or binding
thereon, or any such agreement or commitment shall have
expired or shall have been terminated by any of the parties
thereto and shall not have been extended, or (b) any Lender
shall have commenced foreclosure proceedings against the
Apartment Complex and such proceedings shall not have been
stayed or dismissed within 30 days unless the Interest of
the Investor Limited Partner is purchased by the General
Partners under the Development Deficit Guaranty Agreement;
then, in any such event (a "Major Default") the Special
Limited Partner shall have the right, but not the
obligation, in its sole discretion, (y) in the case of the
occurrence of an event specified in clause (i) of this
Section 11.4.A, to remove such General Partner and all of
such General Partner's Affiliates as General Partner of the
Partnership and to appoint itself or any of its Affiliates
to succeed such General Partner as a General Partner of the
Partnership in accordance with the provisions of Section
11.2 hereof, and (z) upon fifteen (15) days' prior written
notice to the General Partner, in the case of the occurrence
of an event specified in clauses (ii) or (iii) of this
Section 11.4.A, to remove the General Partner as General
Partner of the Partnership and to appoint itself or any of
its Affiliates to succeed such General Partner as a General
Partner of the Partnership in accordance with the provisions
of Section 11.2 hereof. Each Partner hereby irrevocably
constitutes and appoints the Special Limited Partner as its
true and lawful attorney-in-fact and agent with full power
and authority to act in its name, place and stead to
execute, acknowledge, swear to, deliver, file, record and
publish any documents which the Special Limited Partner
reasonably deems necessary or appropriate to confirm and/or
effect (x) the removal of the General Partner as General
Partner of the Partnership and (y) the appointment of the
Special Limited Partner or its designee as a General Partner
of the Partnership including, without limitation, to:
(i) To qualify or continue the Partnership as a limited
partnership;
(ii) To reflect a modification of the Partnership or an
amendment of this Agreement or the Certificate of Limited
Partnership of the Partnership in accordance with the terms
hereof; and
(iii) To effect transfers, admissions, withdrawals and
substitutions of Partners as provided under the terms of
this Agreement.
The General Partner and the Guarantor agree to indemnify and
hold the Limited Partners harmless from and against all
losses, costs and expenses incurred in connection with a
Major Default (other than pursuant to Section 11.4.A(ii)(b)
hereof) and the exercise of any of the remedies provided
above, including, without limitation, all legal fees and
other expenses of the Limited Partners in connection with
the transaction.
The removal of the General Partner pursuant to Section
11.4.A hereof (other than Section 11.4.A(i)(d) hereof) shall
be treated for purposes of this Agreement as a voluntary
Withdrawal of such General Partner from the Partnership. The
removal of the General Partner pursuant to Section
11.4.A(i)(d) shall be treated for purposes of this Agreement
as an Involuntary Withdrawal of such General Partners from
the Partnership.
11.5 Additional General Partners. At any time, the General
Partner, with the Consent of the Special Limited Partner and
subject to any applicable approvals of each Authority and
each Lender, may admit an additional general partner to the
Partnership with such share of the aggregate General
Partner's Interest as shall be agreed upon between the
General Partners and the additional general partner. Any
additional general partner, as a condition of receiving any
Interest, shall agree to be bound by the Project Documents
and any other document required in connection therewith and
by the provisions of this Agreement to the same extent and
on the same terms as the General Partner.
11.6 Amendment of Schedule and Agreement. Upon the admission
of a successor or additional general partner or the
Withdrawal of a General Partner in accordance with the terms
and conditions hereof, Schedule A attached hereto shall be
amended to reflect such admission or Withdrawal and such
amendment shall be filed as required by the Uniform Act. The
General Partner may exercise the power of attorney granted
in Section 14.2 hereof and the Special Limited Partner may
exercise the power of attorney granted in Section 11.4
hereof to effect the provisions of this Section 11.6.
11.7 Survival of Liabilities. It is expressly understood
that no Withdrawal, Assignment, pledge or encumbrance of a
General Partners's Interest, even if it results in the
substitution of the Assignee as a Partner, shall release the
Withdrawing General Partners from any liability to the
Partnership which shall survive such Withdrawal, Assignment,
pledge or encumbrance, including those set forth in the
Uniform Act.
ARTICLE XII
DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
12.1 Events Which Cause a Dissolution. The Partnership shall
continue in full force and effect until December 31, 2037,
except that the Partnership shall be dissolved prior thereto
upon the happening of any of the following events:
An election to dissolve the Partnership made in writing by
the General Partner, with the Consent of the Special Limited
Partner;
The Withdrawal of the General Partner if the Partnership is
not continued in accordance with Section 11.2 hereof;
Any event which shall make it unlawful for the existence of
the Partnership to be continued; or
The sale or other disposition of all or substantially all of
the assets of the Partnership.
12.2 Actions of Liquidating Agent Upon Dissolution. Upon the
dissolution of the Partnership, the Partnership shall be
liquidated in accordance with this Article XII and the
Uniform Act. The liquidation shall be conducted and
supervised by the General Partner or, if there is no
remaining general partner, by a person who shall be
designated for such purpose by the Special Limited Partner
(the General Partner, or such person so designated, being
hereinafter referred to as the "Liquidating Agent"). The
Liquidating Agent shall have all of the rights in connection
with the liquidation and termination of the Partnership that
a general partner would have with respect to the assets and
liabilities of the Partnership during the term of the
Partnership, and the Liquidating Agent is hereby expressly
authorized and empowered to effectuate the liquidation and
termination of the Partnership and the transfer of any
assets and liabilities of the Partnership. The Liquidating
Agent shall have the right from time to time, by revocable
powers of attorney, to delegate to one or more persons any
or all of such rights and powers and the authority and power
to execute documents in connection therewith, and to fix the
reasonable compensation of each such person, which
compensation shall be charged as an expense of liquidation.
The Liquidating Agent is also expressly authorized to
distribute the Partnership's property to the Partners
subject to liens.
12.3 Statements on Termination. Each Partner shall be
furnished with a statement prepared by the Liquidating Agent
which shall set forth the assets and liabilities of the
Partnership as at the date of complete liquidation, and each
Partner's share thereof. Upon compliance with the
distribution plan set forth in Section 12.4 hereof, the
Investor Limited Partner and the Special Limited Partner
shall each cease to be a partner of the Partnership, and the
Liquidating Agent shall execute, acknowledge and cause to be
filed a certificate of termination of the Partnership.
12.4 Priority on Liquidation; Distribution of Non-Liquid
Assets.
The Liquidating Agent shall, to the extent feasible,
liquidate the assets of the Partnership as promptly as shall
be practicable. To the extent the proceeds are sufficient
therefor, as the Liquidating Agent shall deem appropriate,
the proceeds of such liquidation shall be applied in
accordance with the provisions of Section 9.2.B(i) through
(viii) hereof, and the balance of such proceeds shall be
distributed by the Liquidating Agent to the Partners pro
rata in accordance with their respective Capital Accounts,
as such accounts are determined after all adjustments are
made as required herein to such accounts for the taxable
year of the Partnership during which the liquidation occurs.
If the Liquidating Agent shall determine with the Consent of
the Special Limited Partner that it is not feasible to
liquidate all or part of the assets of the Partnership or
that an immediate sale of all or part of such assets would
cause an undue loss to the Partners, the Liquidating Agent
shall cause the fair market value of the assets not so
liquidated to be determined by independent appraisal. Such
assets, as so appraised, shall be retained or distributed by
the Liquidating Agent as follows (it being understood that
the allocation of specific assets pursuant to this Section
12.4 shall require the Consent of the Special Limited
Partner):
The Liquidating Agent shall retain assets having a value
(which value shall be equal to the fair market value of such
assets less the amount of any liability related thereto)
equal to the amount by which the net proceeds of the
liquidated assets are insufficient to satisfy the
requirements of subparagraphs (i) through (viii) of Section
9.2.B hereof; and
Thereafter to the Partners pro rata in accordance with their
respective Capital Accounts, as such accounts are determined
after all adjustments are made as required herein to such
accounts for the taxable year of the Partnership during
which the liquidation occurs.
Any distribution of assets in kind shall be distributed on
the basis of the fair market value thereof and any Partner
entitled to any interest in such assets shall receive such
interest therein as a tenant-in-common with all other
Partners so entitled. If the Liquidating Agent, with the
Consent of the Special Limited Partner, deems it not
feasible to distribute to each Partner an aliquot share of
each asset, the Liquidating Agent may allocate and
distribute specific assets to one or more Partners as
tenants-in-common as the Liquidating Agent shall determine
with the Consent of the Special Limited Partner, taking into
consideration, inter alia, the basis for tax purposes of
each asset distributed and the effect of crediting or
charging the Capital Accounts for any unrealized
appreciation or unrealized depreciation.
Notwithstanding any other provision of this Article XII, in
the event the Partnership is liquidated within the meaning
of Section 1.704-1(b)(2)(ii)(g) of the Regulations but no
Event specified in Section 12.1 hereof has occurred, the
property of the Partnership shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged,
and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be deemed to have distributed
its property in kind to the Partners, who shall be deemed to
have assumed and taken subject to all Partnership
liabilities, all in accordance with their respective Capital
Accounts. Immediately thereafter, the Partners shall be
deemed to have recontributed such property in kind to the
Partnership, which shall be deemed to have assumed and taken
subject to all such liabilities.
12.5 Orderly Liquidation. A reasonable time shall be allowed
for the orderly liquidation of the assets of the Partnership
and the discharge of liabilities so as to minimize the
losses normally attendant upon a liquidation.
12.6 No Goodwill Value. At no time during continuation of
the Partnership shall any value ever be placed on the
Partnership name, or the right to its use, or to the
goodwill appertaining to the Partnership or its business,
either as among the Partners or for the purpose of
determining the value of any Interest, nor shall the legal
representatives of any Partner have any right to claim any
such value. In the event of a termination and dissolution of
the Partnership as provided in this Agreement, neither the
Partnership name, nor the right to its use, nor the same
goodwill, if any, shall be considered as an asset of the
Partnership, and no valuation shall be put thereon for the
purpose of liquidation or distribution, or for any other
purpose whatsoever; nor shall any value ever be placed
thereon as between the remaining or surviving Partners and
the legal representatives of the estate of any deceased,
insane, incompetent, dissolved, liquidated or Bankrupt
Partner.
ARTICLE XIII
FOREIGN PARTNERS
13.1 Certification of Non-Foreign Status.
Each Partner shall upon acquiring a Partnership Interest
certify that he is not a Foreign Person on forms to be
provided by the General Partners at the time of
subscription. At any time that an Interest is transferred or
assigned, the transferee shall certify to non-foreign status
prior to the transfer or assignment of such Interest. Such
certifications shall be made on a form to be provided by the
General Partners.
Each Partner shall notify the General Partners if he becomes
a Foreign Person within 30 days of such change.
Prior to a disposition of a United States Real Property
Interest, a distribution attributable to a disposition of a
United States Real Property Interest or any other
distribution by the Partnership, each Partner may be
required to certify to non-foreign status.
13.2 Withholding of Certain Amounts Attributable to
Interests of Foreign Partners.
In the event that either (y) the Partnership's actual or
deemed amount realized upon disposition of any United States
Real Property Interest is attributed to a Foreign Partner or
(z) the Partnership has effectively connected taxable income
for any taxable year:
any tax required to be withheld under Sections 1445 or 1446
of the Code shall be charged to that Foreign Partner's
Capital Account as if the amount of such tax had been
distributed to such Partner;
the General Partner shall have the right to make a loan to
the Partnership in an amount equal to the amount of tax
required to be withheld pursuant to Sections 1445 or 1446 of
the Code to the extent that cash is needed to make the
Sections 1445 or 1446 withholding payment attributable to
that Foreign Partner; and
the General Partner may retain appropriate portions of a
Foreign Partner's distributions until any withholding
obligations relating to that Foreign Partner are satisfied
and may apply such distributions to repay any loan made
pursuant to Section 13.2.A(ii) hereof.
For purposes of this Section 13.2, any person who fails to
provide a certification of a non-foreign status when
requested to do so by the General Partners shall be treated
as a Foreign Person.
ARTICLE XIV
MISCELLANEOUS
14.1 Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State
applicable to contracts made and to be performed entirely
therein.
14.2 Power of Attorney. Each Partner hereby irrevocably
constitutes and appoints each General Partner who is an
individual, each general partner of any General Partner
which is a partnership and each of the President, each Vice
President and the Secretary of any corporate General
Partners, his true and lawful attorney-in-fact and agent
with full power and authority to act in his name, place and
stead to execute, acknowledge, swear to, deliver, file,
record and publish any documents which such persons
reasonably deem necessary or appropriate:
To qualify or continue the Partnership as a limited
partnership;
To reflect a modification of the Partnership or an amendment
of this Agreement in accordance with the terms hereof;
To reflect the dissolution and termination of the
Partnership in accordance with the terms hereof; or
To effect transfers, admissions, withdrawals and
substitutions of Partners as specifically provided under the
terms of this Agreement.
No person shall take any action as an attorney-in-fact of
the Investor Limited Partner or any Special Limited Partner
which is not authorized by the terms of this Agreement or
would in any way increase the liability of such Partner
beyond the liability expressly set forth in this Agreement.
This power of attorney may be revoked by any Partner by
written notice of revocation (the "Notice of Revocation") to
the General Partners. Upon receipt by the General Partners
of a Notice of Revocation, the General Partners shall file
with the appropriate office or agency an amendment to this
Agreement reflecting any such revocation, provided, however,
that until such amendment is filed, any party may rely upon
this power of attorney as being valid.
14.3 Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original
for all purposes, but all of which taken together shall
constitute only one agreement. The production of any
executed counterpart of this Agreement shall be sufficient
for all purposes without producing or accounting for any
other counterpart thereof.
14.4 Partners Independently Bound. The General Partner, the
Special Limited Partner and the Investor Limited Partner
shall become bound by this Agreement upon execution thereof
by all Partners.
14.5 Separability of Provisions. Each provision of this
Agreement shall be considered separable and if for any
reason any provision or provisions herein (A) are determined
to be invalid or 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 (B)
would cause any of the Limited Partners to be bound by the
obligations of the Partnership (other than under the rules,
directives and regulations of any Authority) under the laws
of the State as the same may now or hereafter exist, such
provision or provisions shall be deemed void and of no
effect.
14.6 Address and Notice. All notices, demands, solicitations
of consent or approval, and other communications hereunder
required or permitted shall be in writing and shall be
deemed to have been given when personally delivered or five
days after the date when deposited in the United States mail
and sent postage prepaid by registered or certified mail,
return receipt requested, addressed as follows: if intended
for (A) the Partnership, to its principal place of business
or (B) the Partners, to their respective addresses set forth
on Schedule A, or to such other address which any Partner
shall have given to the Partnership for such purpose by
notice hereunder; provided, however, that copies of all such
items (which shall not constitute notice hereunder) shall
also be sent to Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; Attention: Xxxx X. Xxxxxx, Esq.
14.7 Computation of Time. In computing any period of time
pursuant to this Agreement, the day of the act, event or
default from which the designated period of time begins to
run shall not be included.
14.8 Titles and Captions. All article and section titles or
captions contained in this Agreement are for convenience
only and shall not be deemed part of the text of this
Agreement.
14.9 Entire Agreement. This Agreement and all agreements
referenced herein and entered into by and among the parties
hereto constitute the entire understanding between and among
the parties and supersedes any prior understandings and
agreements between and among them respecting the subject
matter of this Agreement. It is expressly agreed that,
unless expressly approved by the Special Limited Partner in
writing, any and all agreements previously entered into
among Xxxx, the Partnership, the General Partner or any of
their Affiliates with respect to the subject matter of this
Agreement or the Apartment Complex are deemed null and void
except for the following: (i) Agreement of Purchase and Sale
of Partnership Interests in Dallas/Xxxx Hills, L.P., dated
as of September 16, 1996, as amended, together with all
contracts, agreements and documents signed or executed in
connection therewith (to the extent same have been approved
in writing by the Special Limited Partner); (ii) Promissory
Note in the amount of $400,000 issued to Xxxx by the General
Partner and guaranteed by the Guarantor; (iii) Collateral
Assignment of Rights in Partnership Interests entered into
by and between the General Partner and Xxxx; and (iv) that
certain Indemnity Agreement entered into by and between
Homes For America Holdings, Inc. and Xxxx. Notwithstanding
anything to the contrary in this Section 14.9, to the extent
that any of the provisions of the agreements listed as items
(i) through (iv) in the preceding sentence are inconsistent
with the provisions of this Agreement, the provisions of
this Agreement shall control.
14.10 Agreement Binding. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors,
administrators, legal representatives and permitted
successors and assigns of the parties hereto.
14.11 Parties in Interest. Nothing herein shall be construed
to be to the benefit of or enforceable by any third party
including, but not limited to, any creditor of the
Partnership.
14.12 Amendments; Other Actions.
This Agreement may not be amended or modified except by the
General Partner with the Consent of the Special Limited
Partner and the approval, if required, of each Authority;
provided, however, that the prior written consent of all
Partners is required to any amendment which would (i) extend
the term of the Partnership as set forth in Section 12.1
hereof, (ii) amend this Section 14.12, (iii) increase or
extend the liability or obligation of the Investor Limited
Partner or any limited partner, (iv) increase the amount of
Capital Contributions payable by the Investor Limited
Partner or any limited partner, (v) accelerate the date of
payment of any installment or (vi) alter the distribution or
allocation to the Partners of any profits and losses and
distributions of the Partnership; provided, further,
however, that the Limited Partners may, without the consent
of the General Partners, amend or modify this Agreement in
any manner which does not modify in any manner or to any
extent the rights, privileges or liabilities of the General
Partners hereunder or items (i) through (vi) in the first
proviso to this Section 14.12.A.
Notwithstanding any other provision of this Agreement, no
action may be taken under this Agreement unless such action
is taken in compliance with the provisions of the Uniform
Act.
C. The General Partners acknowledge and agree that upon
receipt of written notice from the Investor Limited Partner
that it desires to exercise the right(s) of the Special
Limited Partner (a) to consent to the actions specified in
Sections 5.5B(iv), (x), (xi) and (xii) hereof, (b) to
receive information and/or reports with regard to the
physical and financial condition of the Apartment Complex
and/or (c) under Section 11.4 hereof (including the right to
appoint a successor General Partner upon the removal of a
General Partner), such rights shall be exercisable
exclusively by the Investor Limited Partner and this
Agreement shall be deemed to have been so amended to reflect
that such rights are to be exercised exclusively by the
Investor Limited Partner.
14.13 Survival of Representations, Warranties and
Agreements. All representations, warranties and agreements
shall survive until the dissolution and termination of the
Partnership, except to the extent that a representation,
warranty or agreement expressly provides otherwise.
14.14 Further Assurances. The Partners 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.
14.15 Remedies Cumulative. No remedy conferred upon or
reserved to the Partnership or any Partner by this Agreement
is intended to be exclusive of any other remedy. Each and
every such remedy shall be cumulative and shall be in
addition to any other remedy given to the Partnership or any
Partner hereunder or now or hereafter existing at law or in
equity or by statute.
14.16 Meetings. Meetings of the Partnership may be called by
the General Partner or by the Special Limited Partner for
any matters for which the Partners may vote as set forth in
this Agreement or to obtain information concerning the
Partnership. A list of names and addresses of all Partners
shall be maintained as part of the books and records of the
Partnership and shall be made available upon request to any
Partner or its representative at cost. Upon receipt of a
request either in person or by registered mail stating the
purposes of the meeting, the General Partner shall provide
the Partners, within ten days after receipt of such request,
written notice of a meeting and the purpose of such meeting
to be held on a date not less than 15 nor more than 30 days
after receipt of such request, at a time and place within or
without the State convenient to the Partners.
14.17 Class Z General Partner. The parties hereto
acknowledge and agree that upon the Partnership's receipt of
a form 8609 for each building in the Apartment Complex,
Xxxx'x interest as a Class Z General Partner shall be
automatically converted to an interest as a Class Z Limited
Partner; all other provisions relating to Xxxx shall remain
unchanged.
IN WITNESS WHEREOF, this Agreement has been duly executed on
the day and year first above written.
GENERAL PARTNER
XXXX HILLS HOMES FOR AMERICA, INC.
By: /s/ Xxxxxx X. XxxXxxxxxx
----------------------------
Name: Xxxxxx X. XxxXxxxxxx
----------------------------
Title: President/Director
----------------------------
CLASS Z GENERAL PARTNER
-------------------------------
XXXXX X. XXXX
SPECIAL LIMITED PARTNER
RELATED CORPORATE SLP L.P.
By: RCC Asset ManAgers, L.P.,
General Partner
By: RCC General Corporation,
General Partner
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President
LIMITED PARTER
RELATED CORPORATE PARTNERS V, L.P.
By: RCC Asset Managers V. L.L.C.,
Its General Partner
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxxx
Member
WITHDRAWING LIMITED PARTERS
XXX-XXX XX-XXXX HILLS, LTD.,
A Texas limited partnership
By: /s/ Xxxxx Xxxx
----------------------------
Xxxxx Xxxx
JOCK X.X. XXXXXXXX LIVING
TRUST 3/28/89
By: /s/ Xxxxx Xxxx (for Jock X.X. Xxxxxxx Living Trust 3/28/89)
----------------------------------------------------------------
Name:
0000 XXXXXX XXXX, INC.,
a Texas Corporation
By: /s/ Xxxxx Xxxx
-------------------------------------
Name:
/s/ Xxxxx Xxxx (for Xxxxxxx X. Xxxxxx)
--------------------------------------
XXXXXXX X. XXXXXX
SCHEDULE A TO
THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
DALLAS/XXXX HILLS, L.P.
dated as of ----------------, 1997
General Partner Capital Contribution
Xxxx Hills Homes For America, Inc. $1.00
0000 XxXxxxx Xxxxxx, XX
Xxxxx 000 Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx Xxxx
Special Limited Partner
Related Corporate SLP L.P. $1.00
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investor Limited Partner
Related Corporate Partners V, L.P. $2,211,910
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Class Z General Partner
Xxxxx X. Xxxx $1,500,000
0000 Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
