FIRST AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF
505 WEST MAIN LIMITED PARTNERSHIP
This First Amendment to the Amended and Restated Agreement of Limited
Partnership of 000 Xxxx Xxxx Limited Partnership, a South Dakota limited
partnership (the "First Amendment") is being entered into as of the date written
below by and between Crane & Xxxxxx Investments, L.L.C. and Sioux Falls
Environmental Access, Inc. as the general partners (collectively, the "General
Partner"), WNC Housing Tax Credit Fund VI, L.P. Series 9, a California limited
partnership as the limited partner (the "Limited Partner"), WNC Housing, L.P., a
California limited liability company as the special limited partner (the
"Special Limited Partner") and WNC Holding, LLC as the withdrawing limited
partner ("WNC Holding"). The General Partner, Limited Partner, Special Limited
Partner and WNC Holding may collectively be referred to as the Partners or may
individually be referred to as a Partner.
RECITALS
WHEREAS, 000 Xxxx Xxxx Limited Partnership, a South Dakota limited
partnership (the "Partnership") filed a certificate of limited partnership with
the South Dakota Secretary of State on August 31, 1998. A Limited Partnership
Agreement dated August 28, 1998 was entered into by and between Xxxxx X.
Xxxxxxxx and Xxxxxxxx Investments, Inc. as the general partners (the "Original
General Partners") and Xxxxxxx X. Xxxxx as the initial limited partner (the
"Initial Limited Partner") (the "Partnership Agreement").
WHEREAS, on March 1, 2001, an Amended and Restated Certificate of
Limited Partnership was filed with the Office of the Secretary of State of South
Dakota in which Sioux Falls Environmental Access, Inc. ("SFEA") was added as a
General Partner ("Amended and Restated Certificate")
WHEREAS, on May 23, 2001 the Amended and Restated Certificate was
amended and filed with the Office of the Secretary of State of South Dakota for
the withdrawal of the Original General Partners and to admit Crane & Xxxxxx
Investments, L.L.C. and Sioux Falls Environmental Access, Inc. as the Substitute
General Partners (the "Second Amended and Restated Certificate").
WHEREAS, on January 29, 2002, the Original Partnership Agreement was
amended and restated to provide, in part, for the withdrawal of the original
limited partners and for the admission of the WNC Holding as the limited partner
and the WNC Housing, L.P. as the special limited partner (the "Amended and
Restated Partnership Agreement"). The partners of the Amended and Restated
Partnership Agreement failed to acknowledge SFEA as a general partner and failed
to obtain SFEA's signature on the Amended and Restated Partnership Agreement.
Therefore, SFEA had not agreed to the terms of the Amended and Restated
Partnership Agreement at the time of the Amended and Restated Partnership
Agreement.
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WHEREAS, the Limited Partner agrees to be admitted into the
Partnership, to pay the Capital Contribution provided herein, and to be bound by
the terms and provisions of this First Amendment and the Amended and Restated
Partnership Agreement.
WHEREAS, WNC Holding hereby agrees to withdraw as a limited partner in
the Partnership and to have no further rights, title or interest in the
Partnership and the Partnership agrees to permit the withdrawal of WNC Holding.
Any capitalized terms not defined in this First Amendment shall have the meaning
ascribed in the Amended and Restated Partnership Agreement.
NOW THEREFORE, in consideration of the foregoing Recitals, which are a
part of this Amendment, and the mutual promises, covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners do hereby agree to
amend, in part, the Amended and Restated Partnership Agreement as follows:
Section 1.50 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 1.50 "Limited Partner" shall mean WNC Housing Tax Credit Fund
VI, L.P. Series 9, a California limited partnership, and such other Persons as
are admitted to the Partnership as additional or Substitute Limited Partners
pursuant to this Agreement.
Section 1.70 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 1.70 "Projected Annual Tax Credits" shall mean LIHTC in the
amount of $54,331 for 2002, $108,663 per year for each of the years 2003 through
2011 and $54,332 for 2012 which the General Partner has projected to be the
total amount of LIHTC which will be allocated to the Limited Partner by the
Partnership, constituting % of the aggregate amount of LIHTC of $1,086,850 to be
available to the Partnership.
Section 6.1 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 6.1 Capital Contribution of General Partner. The General
Partner shall make a Capital Contribution equal to $100.
Section 6.2 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 6.2 Construction and Renovation Obligations.
(a) Crane & Xxxxxx Investments, L.L.C. ("Guarantors") hereby guarantees
a lien free completion of construction and renovation of the Apartment Housing
on or before December 1, 2002("Completion Date") at a total development cost of
not more than $2,266,626("Development Budget"), which includes all hard and soft
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costs incident to the acquisition, development, renovation and construction of
the Apartment Housing in accordance with the Construction Budget, the
Construction Contract, and the Project Documents, except for additional
expenditures as approved by Limited Partner or Special Limited Partner. At any
time during construction and renovation, if the Special Limited Partner
ascertains that the Development Budget exceeds the sum of the Capital
Contributions and the Mortgage amount then the General Partner shall be
responsible for and shall be obligated to pay the difference thereof within
thirty days of receiving written notice from the Special Limited Partner except
as otherwise provided for in this Agreement. Any advances by the General Partner
pursuant to the previous sentence shall not be repayable, shall not change the
Interest of any Partner in the Partnership and shall be considered a guaranteed
payment to the Partnership for cost overruns. Upon such notice from the Special
Limited Partner, the General Partner shall advance the requested funds into the
Projects General Fund account.
(b) In addition, if (1) the Improvements are not completed on or before
the Completion Date (which date may be extended in the events of Force Majeure,
but in no event longer than three months from the Completion Date); (2) prior to
completing the Improvements, the Lender sends a notice of default under the
Loan; or (3) a foreclosure action is commenced against the Partnership, then at
the Special Limited Partner's election, either the General Partner will be
removed from the Partnership and the Special Limited Partner will be admitted as
successor General Partner, all in accordance with Article XIII hereof, or the
General Partner will repurchase the Interest of the Limited Partner and the
Special Limited Partner for an amount equal to the amounts theretofore paid by
the Limited Partner and the Special Limited Partner, and the Limited Partner and
the Special Limited Partner shall have no further Interest in the Partnership.
If the Special Limited Partner elects to have the General Partner repurchase
such Interests then the repurchase shall occur within 60 days after the General
Partner receives written demand from the Special Limited Partner. If the Special
Limited Partner elects to remove the General Partner then the provisions of
Article XIII apply.
Section 7.2 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 7.2 Capital Contribution of Limited Partner. The Limited
Partner shall make a Capital Contribution in the amount of $760,643, as may be
adjusted in accordance with Section 7.4 of this Agreement, in cash on the dates
and subject to the conditions hereinafter set forth.
(a) $684,579 shall be payable upon the Limited Partner's receipt and
approval of the following documents:
(1) Special Limited Partner's acquisition committee approval;
(2) a legal opinion in a form substantially similar to the
form of opinion attached hereto as Exhibit "B" and incorporated herein by this
reference;
(3) a fully executed Certification and Agreement in the form
attached hereto as Exhibit "C" and incorporated herein by this reference;
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(4) a copy of a title commitment, (in a form and substance
satisfactory to the Special Limited Partner) constituting an agreement by such
title company to issue the Title Policy within fifteen working days. The title
commitment will show the Apartment Housing to be free from liens except the
Construction Loan and free from other exceptions not previously approved by the
Special Limited Partner;
(5) Insurance required during construction and renovation; and
(6) a copy of the recorded grant deed (warranty deed).
(b) $76,064 shall be payable upon the Limited Partner's receipt and
approval of the following documents:
(1) Completion of Construction or Renovation;
(2) a certificate of occupancy (or equivalent evidence of
local occupancy approval if a permanent certificate is not available) on all the
apartment units in the Apartment Housing;
(3) a completion certification in a form substantially similar
to the form attached hereto as Exhibit "D" and incorporated herein by this
reference, indicating that the Improvements have been completed in accordance
with the Project Documents;
(4) a letter from the Contractor in a form substantially
similar to the form attached hereto as Exhibit "F" and incorporated herein by
this reference stating that all amounts payable to the Contractor have been paid
in full and that the Partnership is not in violation of the Construction
Contract;
(5) Insurance required during operations;
(6) Mortgage Loan documents signed and the Mortgage funded;
(7) endorsement to the Title Policy dated no more than ten
days prior to the scheduled Capital Contribution providing an as-built survey
and confirming that there are no liens, claims or rights to a lien or judgments
filed against the property or the Apartment Housing during the time period since
the issuance of the Title Policy referenced above in Section 7.2(a);
(8) the current rent roll evidencing a minimum 90% occupancy
by Qualified Tenants for 90 consecutive days immediately prior to funding;
(9) copies of all initial tenant files including completed
applications, completed questionnaires or checklist of income and assets,
documentation of third party verification of income and assets, and income
certification forms (LIHTC specific) collected by the Management Agent, or
General Partner, verifying each tenant's eligibility pursuant to the Minimum
Set-Aside Test;
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(10) copies of the executed lease agreement with the tenants;
(11) a copy of the declaration of restrictive
covenants/extended use agreement entered into between the Partnership and the
State Tax Credit Agency;
(12) an audited construction and renovation cost certification
(which includes an itemized cost breakdown);
(13) the Accountant's final Tax Credit certification in a form
substantially similar to the form attached hereto as Exhibit "E" and
incorporated herein by this reference;
(14) Debt Service Coverage of 1.15 for 90 consecutive days
immediately prior to funding;
(15) Internal Revenue Code Form 8609, or any successor form;
(16) the construction and renovation documents required
pursuant to Section 14.3(a) of this Agreement, if not previously provided to the
Limited Partner and a determination by the Special Limited Partner that
financing is In-Balance; and
(17) any documents previously not provided to the Limited
Partner but required pursuant to this Section 7.2 and Sections 14.3(a) and (b).
Section 7.4 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 7.4 Adjustment of Capital Contributions.
(a) The amounts of the Limited Partner's and the Special Limited
Partner's Capital Contributions were determined in part upon the amount of Tax
Credits that were expected to be available to the Partnership, and was based on
the assumption that the Partnership would be eligible to claim, in the
aggregate, the Projected Tax Credits. If the anticipated amount of Projected Tax
Credits to be allocated to the Limited Partner and Special Limited Partner as
evidenced by IRS Form 8609, Schedule A thereto, provided to the Limited Partner
and Special Limited Partner are less than $1,086,741 (the new Projected Tax
Credit amount, if applicable, shall be referred to as the "Revised Projected Tax
Credits") then the Limited Partner's and Special Limited Partner's Capital
Contribution provided for in Section 7.2 and Section 7.5 respectively shall be
adjusted by the amount which will make the total Capital Contribution to be paid
by the Limited Partner and Special Limited Partner to the Partnership equal to
70% of the Revised Projected Tax Credits so anticipated to be allocated to the
Limited Partner and Special Limited Partner. If any Capital Contribution
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adjustment referenced in this Section 7.4(a) is a reduction which is greater
than the remaining Capital Contribution to be paid by the Partner whose Capital
Contribution is being adjusted, then the General Partner shall have ninety days
from the date the General Partner receives notice from either the Limited
Partner or the Special Limited Partner to pay the shortfall to the Partner whose
Capital Contribution is being adjusted. If the Capital Contribution adjustment
referenced in this Section 7.4(a) is an increase then the Partner whose Capital
Contribution is being adjusted shall have thirty days from the date the Limited
Partner and Special Limited Partner have received notice from the General
Partner to pay the increase.
(b) The General Partner is required to use its best efforts to rent
100% of the Apartment Housing's apartment units to tenants who meet the Minimum
Set-Aside Test throughout the Compliance Period. If at the end of any calendar
year during the first five calendar years following the year in which the
Apartment Housing is placed in service, the Actual Tax Credit for any fiscal
year or portion thereof is or will be less than the Projected Annual Tax Credit,
or the Projected Annual Tax Credit as modified by Section 7.4(a) of this
Agreement if applicable (the "Annual Credit Shortfall"), then the next Capital
Contribution owed by the Limited Partner shall be reduced by the Annual Credit
Shortfall amount, and any portion of such Annual Credit Shortfall in excess of
such Capital Contribution shall be applied to reduce succeeding Capital
Contributions of the Limited Partner. If the Annual Credit Shortfall is greater
than the Limited Partner's remaining Capital Contributions then the General
Partner shall pay to the Limited Partner the excess of the Annual Credit
Shortfall over the remaining Capital Contributions. The General Partner shall
have sixty days to pay the Annual Credit Shortfall from the date the General
Partner receives notice from the Special Limited Partner. The provisions of this
Section 7.4(b) shall apply equally to the Special Limited Partner in proportion
to its Capital Contribution and anticipated annual Tax Credit.
(c) In the event that, for any reason, at any time after the first five
calendar years following the year in which the Apartment Housing is placed in
service, there is an Annual Credit Shortfall, then there shall be a reduction in
the General Partner's share of Net Operating Income in an amount equal to the
Annual Credit Shortfall and said amount shall be paid to the Limited Partner. In
the event there are not sufficient funds to pay the full Annual Credit Shortfall
to the Limited Partner at the time of the next Distribution of Net Operating
Income, then the unpaid Annual Credit Shortfall shall be repaid in the next year
in which sufficient monies are available from the General Partner's share of Net
Operating Income. In the event a Sale or Refinancing of the Apartment Housing
occurs prior to repayment in full of the Annual Credit Shortfall then the excess
will be paid in accordance with Section 11.2(b). The provisions of this Section
7.4(b) shall apply equally to the Special Limited Partner in proportion to its
Capital Contribution and anticipated annual Tax Credit.
(d) The General Partner has represented, in part, that the Limited
Partner will receive Projected Annual Tax Credits of $54,331 in 2002 and
$108,663 in 2003. In the event the 2002 or 2003 Actual Tax Credits are less than
projected then the Limited Partner's Capital Contribution shall be reduced by an
amount equal to 70% times the difference between the Projected Annual Tax
Credits for 2002 or 2003 and the Actual Tax Credits for 2002 or 2003. If the
2002 or 2003 Actual Tax Credits are less than projected then the Special Limited
Partner's Capital Contribution shall be reduced following the same equation
referenced in the preceding sentence. If, at the time of determination thereof,
the Capital Contribution adjustment referenced in this Section 7.4(d) is greater
than the balance of the Limited Partner's or Special Limited Partner's Capital
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Contribution payment which is then due, if any, then the excess amount shall be
paid by the General Partner to the Limited Partner and/or the Special Limited
Partner within sixty days of the General Partner receiving notice of the
reduction from the Limited Partner and/or the Special Limited Partner.
(e) The Partners recognize and acknowledge that the Limited Partner and
the Special Limited Partner are making their Capital Contribution, in part, on
the expectation that the Projected Tax Credits are allocated to the Partners
over the Tax Credit Period. If the Projected Tax Credits are not allocated to
the Partners during the Tax Credit Period then the Limited Partner's and Special
Limited Partner's Capital Contribution shall be reduced by an amount agreed upon
by the Partners, in good faith, to provide the Limited Partner and the Special
Limited Partner with their anticipated internal rate of return.
(f) In the event there is: (1) a filing of a tax return by the
Partnership evidencing a reduction in the qualified basis or eligible basis of
the Apartment Housing causing a recapture of Tax Credits previously allocated to
the Limited Partner; (2) a reduction in the qualified basis or eligible basis of
the Apartment Housing for income tax purposes following an audit by the Internal
Revenue Service (IRS) resulting in a recapture or reduction of Tax Credits
previously claimed; (3) a decision by the United States Tax Court upholding the
assessment of such deficiency against the Partnership with respect to any Tax
Credit previously claimed in connection with the Apartment Housing, unless the
Partnership shall timely appeal such decision and the collection of such
assessment shall be stayed pending the disposition of such appeal; or (4) a
decision of a court affirming such decision upon such appeal then, in addition
to any other payments to which the Limited Partner and/or the Special Limited
Partner are entitled under the terms of this Section 7.4, the General Partner
shall pay to the Limited Partner and the Special Limited Partner within sixty
days of receiving notice from the Limited Partner and/or the Special Limited
Partner the sum of (A) the amount of the Tax Credit recapture, (B) any interest
and penalties imposed on the Limited Partner or Special Limited Partner with
respect to such recapture, and (C) an amount sufficient to pay any tax liability
owed by the Limited Partner or Special Limited Partner resulting from the
receipt of the amounts specified in (A) and (B).
(g) The increase in the Capital Contribution of the Limited Partner and
the Special Limited Partner pursuant to Section 7.4(a) shall be subject to the
Limited Partner and Special Limited Partner having funds available to pay any
such increase at the time of its notification of such increase. For these
purposes, any funds theretofore previously earmarked by the Limited Partner or
Special Limited Partner to make other investments, or to be held as required
reserves, shall not be considered available for payment hereunder.
Section 17.3 of the Amended and Restated Partnership Agreement is
amended in its entirety to provide:
Section 17.3 Notices. Any notice given pursuant to this Agreement may be served
personally on the Partner to be notified, or may be sent by overnight courier,
or may be mailed, first class postage prepaid, to the following address, or to
such other address as a party may from time to time designate in writing:
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To the General Partner: Crane & Xxxxxx Investments, L.L.C.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Sioux Falls Environmental Access, Inc.
0000 Xxxx 00xx Xxxxxx, Xxx. 0000
X.X. Xxx 000
Xxxxx Xxxxx, XX 00000
To the Limited Partner: WNC Housing Tax Credit Fund VI, L.P. Series 9
c/o WNC & Associates, Inc.
0000 Xxxxxxx Xxx., Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
To the Special
Limited Partner: WNC Housing, L.P.
0000 Xxxxxxx Xxx., Xxxxx 000
Xxxxx Xxxx, XX 00000-0000
Sioux Falls Environmental Access, Inc. acknowledges receipt of all
documents and information that would be material to a prudent investor in making
an informed decision. By its signature below, SFEA agrees and consents to the
terms of the Amended and Restated Partnership Agreement and the First Amendment
and acknowledges that it was a partner of the Partnership during all times since
the filing of the Amended Certificate of Limited Partnership with the South
Dakota Secretary of State on March 1, 2001. Execution of this First Amendment by
SFEA has been duly and validly authorized by or on behalf of SFEA and, having
been executed and delivered constitutes the valid and binding agreement of SFEA.
The Partnership shall be continued pursuant to the Act and on the same
terms and conditions as set forth in the Amended and Restated Partnership
Agreement amended only as specifically set forth herein.
[signatures begin on following page]
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IN WITNESS WHEREOF, this First Amendment to the Amended and Restated
Agreement of Limited Partnership of 000 Xxxx Xxxx Limited Partnership, a South
Dakota limited partnership, is made and entered into as of July 31, 2002.
GENERAL PARTNER
Crane & Xxxxxx Investments, L.L.C.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx,
Member
Sioux Falls Environmental Access, Inc.
By: /s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx,
President
LIMITED PARTNER
WNC Housing Tax Credit Fund VI, L.P. Series 9
By: WNC & Associates, Inc.
General Partner
By: /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
Executive Vice President
WITHDRAWING LIMITED PARTNER
WNC Holding, LLC
By: WNC & Associates, Inc.,
Managing Member
By: /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx,
Executive Vice President
Signatures continue on next page...
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SPECIAL LIMITED PARTNER
WNC Housing, L.P.
By: WNC & Associates, Inc.,
General Partner
By: /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx,
Executive Vice President
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