FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-24843
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
(Exact name of registrant as specified in its
Agreement of Limited Partnership)
Delaware 47-0810385
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1004 Farnam Street, Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 444-1630
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Beneficial Unit Certificates representing assignments of limited
partnership interests in the America First Tax Exempt Investors, L.P.
(the "BUCs")
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by the Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405 of the chapter) is not contained herein,
and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the Partnership's BUC's on March 23, 1999,
based on the final sales price per BUC as reported in the Wall Street Journal
on March 24, 1999, was $61,122,159.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE> -i-
TABLE OF CONTENTS
Page
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . 3
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters. . . . . . . . . . . . . . . . . . . . 4
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . 4
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . 4
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . 4
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . 4
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . 4
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . 5
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 6
Item 12. Security Ownership of Certain Beneficial Owners and Management . . 6
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . 6
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . 7
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
<PAGE> -ii-
Item 1. Business. America First Tax Exempt Investors, L.P. (the Registrant
or the Partnership) was formed on April 2, 1998 under the Delaware Revised
Uniform Limited Partnership Act for the purpose of acquiring, holding,
operating, selling and otherwise dealing with a portfolio of federally
tax-exempt mortgage bonds which have been issued to provide construction
and/or permanent financing of multifamily residential apartments. The
Registrant's business objectives are to: (i) preserve and protect its capital;
(ii) provide regular cash distributions to investors; and, (iii) provide a
potential for an enhanced federally tax-exempt yield as a result of a
participation interest in the net cash flow and net capital appreciation of
the real estate financed by the tax-exempt bonds held by the Registrant.
As of December 31, 1998, the Partnership had not yet begun its business
operations. However, on February 1, 1999, the Partnership merged with America
First Tax Exempt Mortgage Fund Limited Partnership (the Prior Partnership).
Under the terms of the merger agreement, the Partnership was the surviving
partnership and effectively took over the operations of the Prior Partnership
as of that date. As of the date of the merger, the assets of the Prior
Partnership consisted primarily of seven of tax-exempt mortgage bonds with a
carrying value (at estimated fair value) equal to $71,720,000. These
tax-exempt mortgage bonds were issued by various state and local housing
authorities to provide for the construction and/or permanent financing of
seven multifamily housing properties located in five states. Under the terms
of the mortgage bonds, the principal amounts do not amortize over their
terms. However, the mortgage bonds provide for the payment of base interest
to the Partnership and for the payment of contingent interest based upon the
amount of net cash flow and net capital appreciation generated by the
underlying apartment properties. Therefore, the return to the Partnership
from the mortgage bonds depends upon the economic performance of the real
estate which collateralizes the mortgage bonds. For this reason, the
Partnership's investments are dependent on the economic performance of such
real estate and may be considered to be in competition with other
income-producing real estate of the same type in the same geographic areas.
A description of the seven tax-exempt mortgage bonds acquired by the
Registrant as a result of the merger with the Prior Partnership (and the
properties collateralizing such bonds) is set forth below:
<TABLE>
<CAPTION>
Base
Number Maturity Interest
Property Name Location of Units Date Rate
------------------------ ---------------- --------- --------- ---------
<S> <C> <C> <C> <C>
Arama Apartments Miami, FL 293 07/01/10 8.5% (1)
Shoals Crossing Atlanta, GA 176 12/01/09 8.5% (1)
Woodbridge Apts. of
Bloomington III (4) Bloomington, IN 280 12/01/27 7.5% (2)
Ashley Pointe at
Eagle Crest (4) Evansville, IN 150 12/01/27 7.0% (2)
Woodbridge Apts. of
Louisville II (4) Louisville, KY 190 12/01/27 7.5% (2)
Northwoods Lake
Apartments (4) Duluth, GA 492 09/01/25 7.5% (2)
Ashley Square Des Moines, IA 144 12/01/09 8.5% (1)
</TABLE>
(1) In addition to the base interest rates shown, the bonds bear additional
contingent interest as defined in each revenue note which, when combined with
the base interest, is limited to a cumulative, noncompounded amount not greater
than 16% per annum.
(2) In addition to the base interest rates shown, the bonds bear additional
contingent interest as defined in each revenue note of up to an additional
3.5% per annum that is payable out of 50% (100% in the case of Ashley Pointe
and Northwoods Lake Apartments) of the net cash flow generated by the
respective property.
<PAGE> -1-
The Partnership intends to pursue a business strategy of increasing the number
of tax-exempt multifamily mortgage bonds held by it in order to: (i) increase
the amount of tax-exempt interest available for distribution to its investors
and (ii) reduce risk through asset diversification and achieve economies of
scale. Unlike the Prior Partnership, the Registrant has the ability to
finance the acquisition of additional tax-exempt mortgage bonds through the
issuance of additional Beneficial Unit Certificates (BUCs) representing
assigned limited partnership interests and from the sale of senior debt
instruments created from its existing portfolio of tax-exempt mortgage bonds.
In general, tax-exempt mortgage bonds acquired by the Partnership will be
secured by a first mortgage or deed of trust on multifamily real estate.
Unlike the Prior Partnership, the Partnership also has the authority to
acquire tax-exempt bonds that represent less than 100% of the bonds secured by
a particular multifamily property provided that such bonds are rated in one of
the highest four rating categories by at least one nationally recognized
securities rating agency. Such bonds may not represent more than 25% of the
Partnership's assets at the time of acquisition. In addition, the Partnership
will be able to acquire bonds secured by multifamily real estate which
generate interest that is not exempt from federal income tax. However, such
bonds may only be acquired in conjunction with the acquisition of tax-exempt
mortgage bonds secured by the same property.
The amount of cash that the Partnership will receive from its mortgage bonds
will be a function of the net rental revenues generated by the financed
properties. Net rental revenues from a multifamily apartment complex depend
on the rental and occupancy rates of the property and on the level of
operating expenses. Occupancy rates and rents are directly affected by the
supply of, and demand for, apartments in the market areas in which a property
is located. This, in turn, is affected by several factors such as local or
national economic conditions, the amount of new apartment construction and
interest rates on single-family mortgage loans. In addition, factors such as
government regulation (such as zoning laws), inflation, real estate and other
taxes, labor problems and natural disasters can affect the economic operations
of a property.
In each city in which the properties financed by the Partnership are located,
such properties compete with a substantial number of other apartment
complexes. Apartment complexes also compete with single-family housing that
is either owned or leased by potential tenants. The principal method of
competition is to offer competitive rental rates. Such properties also
compete by emphasizing property location, condition and amenities.
The Partnership believes that each of the properties financed by the
Partnership is in compliance in all material respects with federal, state and
local regulations regarding hazardous waste and other environmental matters
and the Partnership is not aware of any environmental contamination at any of
such properties that would require any material capital expenditure by the
Registrant for the remediation thereof.
The Partnership is engaged solely in the business of providing financing for
the acquisition and improvement of multifamily real estate. Accordingly, the
presentation of information about industry segments is not applicable and
would not be material to an understanding of the Partnership's business taken
as a whole.
The Partnership has no employees. Certain services are provided to the
Partnership by employees of America First Companies L.L.C. which is the
general partner of the general partner of the Partnership. America First
Companies L.L.C. is reimbursed by the Partnership for such services at cost.
The Registrant is not charged, and does not reimburse, for the services
performed by managers and officers of America First Companies L.L.C.
Item 2. Properties. As a result of the merger described in Item 1, the
Partnership acquired seven tax-exempt mortgage bonds collateralized by first
mortgages on multifamily housing properties Properties collateralizing these
mortgage bonds are described in the following table:
<PAGE> -2-
<TABLE>
<CAPTION>
Average
Number Square Feet
Property Name Location of Units Per Unit
- ----------------------------------- ------------------- -------- -----------
<S> <C> <C> <C>
Woodbridge Apts. of Bloomington III Bloomington, IN 280 892
Ashley Pointe at Eagle Crest Evansville, IN 150 910
Woodbridge Apts. of Louisville II Louisville, KY 190 934
Northwoods Lake Apartments Duluth, GA 492 964
Ashley Square Des Moines, IA 144 963
Shoals Crossing Atlanta, GA 176 926
Arama Apartments Miami, FL 293 562
--------
1,725
========
</TABLE>
The average annual occupancy rate and average effective rental rate per unit
or per square foot for each of the properties for each of the last five years
are listed in the following table:
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
WOODBRIDGE APTS. OF BLOOMINGTON III
Average Occupancy Rate 95% 90% 95% 93% 96%
Average Effective Annual Rental Per Unit $7,018 $6,957 $7,251 $6,848 $6,701
ASHLEY POINTE AT EAGLE CREST
Average Occupancy Rate 99% 99% 96% 96% 93%
Average Effective Annual Rental Per Unit $6,711 $6,423 $6,163 $6,032 $5,686
WOODBRIDGE APTS. OF LOUISVILLE II
Average Occupancy Rate 93% 95% 95% 93% 96%
Average Effective Annual Rental Per Unit $7,291 $7,075 $6,880 $6,451 $6,504
NORTHWOODS LAKE APARTMENTS
Average Occupancy Rate 97% 94% 94% 97% 98%
Average Effective Annual Rental Per Unit $7,584 $7,263 $7,188 $7,101 $6,806
ASHLEY SQUARE
Average Occupancy Rate 97% 96% 97% 98% 97%
Average Effective Annual Rental Per Unit $6,565 $6,792 $6,728 $6,764 $6,574
SHOALS CROSSING
Average Occupancy Rate 90% 95% 93% 95% 96%
Average Effective Annual Rental Per Unit $4,581 $4,942 $4,712 $4,649 $4,458
ARAMA APARTMENTS
Average Occupancy Rate 98% 98% 99% 99% 99%
Average Effective Annual Rental Per Unit $7,649 $7,467 $7,517 $7,156 $7,355
</TABLE>
In the opinion of the Partnership's management, each of the properties is
adequately covered by insurance. A discussion of general competitive
conditions to which these properties are subject is included in Item 1 hereof.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
<PAGE> -3-
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
(a) Market Information. The BUCs trade on The NASDAQ Stock Market under
the trading symbol "ATAXZ." However, as of December 31, 1998, trading had not
yet commenced and therefore, no market information was available with respect
to the time period covered by this item. For market information relating to
the BUCs of the Prior Partnership, please refer to the Form 10-K filed by
America First Tax Exempt Mortgage Fund Limited Partnership for the year ended
December 31, 1998.
(b) BUC Holders. The approximate number of BUC holders on March 23,
1999 was 5,700.
(c) Distributions. As of December 31, 1998, the Partnership had not yet
commenced operations. As such, no distributions were paid through that date.
Upon commencement of operations, the Partnership plans to make monthly
distributions at the same rate as the Prior Partnership. For information on
distributions made by the Prior Partnership, please refer to the Form 10-K
filed by America First Tax Exempt Mortgage Fund Limited Partnership for the
year ended December 31, 1998.
Item 6. Selected Financial Data.
As of December 31, 1998, the Partnership had not yet been capitalized or
commenced operations. The Partnership merged with the Prior Partnership on
February 1, 1999, and effectively assumed the operations of the Prior
Partnership on that date. For selected financial data relating to the Prior
Partnership, for the five year period ended December 31, 1998, please refer to
the Form 10-K of America First Tax Exempt Mortgage Fund Limited Partnership
for the year ended December 31, 1998.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
As of December 31, 1998, the Partnership had not yet been capitalized or
commenced operations. The Partnership merged with the Prior Partnership on
February 1, 1999, and effectively assumed the operations of the Prior
Partnership on that date. For management's discussion and analysis of the
financial condition and results of operations of the Prior Partnership for its
two most recent fiscal years, please refer to the Form 10-K of America First
Tax Exempt Mortgage Fund Limited Partnership for the year ended December 31,
1998.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. As
of December 31, 1998, the Partnership had not yet been capitalized or
commenced operations. The Partnership merged with the Prior Partnership on
February 1, 1999, and effectively assumed the operations of the Prior
Partnership on that date. For quantitative and qualitative disclosure
regarding market risk of the assets acquired from the Prior Partnership as a
result of the merger, please refer to the Form 10-K of America First Tax
Exempt Mortgage Fund Limited Partnership for the year ended December 31,
1998.
Item 8. Financial Statements and Supplementary Data.
No financial statements for the Partnership have been included in this report
because the Partnership had not yet been capitalized or commenced operations
as of December 31, 1998. The Partnership merged with the Prior Partnership on
February 1, 1999, and effectively assumed the operations of the Prior
Partnership on that date. The financial statements and supplementary data of
the Prior Partnership are included in the Form 10-K of America First Tax
Exempt Mortgage Fund Limited Partnership for the year ended December 31, 1998.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None
<PAGE> -4-
PART III
Item 10. Directors and Executive Officers of the Registrant. The
Registrant has no directors or officers. Management of the Registrant
consists of the general partner of the Registrant, America First Capital
Associates Limited Partnership Two ("AFCA") and its general partner, America
First Companies L.L.C.. The following individuals are the managers and
officers of America First Companies L.L.C., and each serves for a term of one
year.
Name Position Held Position Held Since
Michael B. Yanney Chairman of the Board, 1985
President, Chief
Executive Officer and Manager
Michael Thesing Vice President, Secretary, 1985
Treasurer and Manager,
Chief Financial and
Accounting Officer
William S. Carter, M.D. Manager 1994
Martin A. Massengale Manager 1994
Alan Baer Manager 1994
Gail Walling Yanney Manager 1996
Mariann Byerwalter Manager 1997
Michael B. Yanney, 65, has served as the Chairman, President and Chief
Executive Officer of America First Companies L.L.C. and its predecessors since
1984. From 1977 until the organization of the first such fund in 1984, Mr.
Yanney was principally engaged in the ownership and management of commercial
banks. Mr. Yanney also has investments in private corporations engaged in a
variety of businesses. From 1961 to 1977, Mr. Yanney was employed by Omaha
National Bank and Omaha National Corporation (now part of U.S. Bank), where he
held various positions, including the position of Executive Vice President and
Treasurer of the holding company. Mr. Yanney also serves as a member of the
boards of directors of Burlington Northern Santa Fe Corporation, Forest Oil
Corporation, Level 3 Communications, Inc., Freedom Communications, Inc.,
Magnum Resources, RCN Corporation, Rio Grande Medical Technologies, Inc. and
PKS Information Services, Inc.
Michael Thesing, 44, has been Vice President and Chief Financial Officer
of affiliates of America First Companies L.L.C. since July 1984. He serves as
President of America First Investment Advisors, LLC and is a member of the
Board of the Board of Managers of America First Companies L.L.C. From January
1984 until July 1984 he was employed by various companies controlled by Mr.
Yanney. He was a certified public accountant with Coopers & Lybrand from 1977
through 1983.
William S. Carter, M.D., 72, is a retired physician. Dr. Carter
practiced medicine for 30 years in Omaha, Nebraska, specializing in
otolaryngology (disorders of the ears, nose and throat).
Martin A. Massengale, 65, is President Emeritus of the University of
Nebraska, Director of the Center for Grassland Studies and Foundation
Distinguished Professor. Prior to becoming President in 1991, he served as
Interim President from 1989, as Chancellor of the University of Nebraska
Lincoln from 1981 until 1990 and as Vice Chancellor for Agriculture and
Natural Resources from 1976 to 1981. Prior to that time, he was a professor
and associate dean of the College of Agriculture at the University of
Arizona. Dr. Massengale currently serves on the board of directors of Woodmen
Accident & Life Insurance Company and IBP, Inc. and is a member of the Board
of Trustees of the Great Plains Funds, Inc.
<PAGE> -5-
Alan Baer, 76, is presently Chairman of Alan Baer & Associates, Inc., a
management company located in Omaha, Nebraska. He is also Chairman of Lancer
Hockey, Inc., Baer Travel Services, Wessan Telemarketing, Total Security
Systems, Inc. and several other businesses. Mr. Baer is the former Chairman
and Chief Executive Officer of the Brandeis Department Store chain which,
before its acquisition, was one of the larger retailers in the Midwest. Mr.
Baer has also owned and served on the board of directors of several banks in
Nebraska and Illinois.
Gail Walling Yanney, 62, is a retired physician. Dr. Walling practiced
anesthesia and was most recently the Executive Director of the Clarkson
Foundation until October of 1995. In addition, she was a director of FirsTier
Bank, N.A., Omaha prior to its merger with First Bank, N.A.. Ms. Yanney is
the wife of Michael B. Yanney.
Mariann Byerwalter, 38, is Vice President of Business Affairs and Chief
Financial Officer of Stanford University. Ms. Byerwalter was Executive Vice
President of America First Eureka Holdings, Inc. ("AFEH") and EurekaBank from
1988 to January 1996. Ms. Byerwalter was Chief Financial Officer and Chief
Operating Officer of AFEH, and Chief Financial Officer of EurekaBank from 1993
to January 1996. She was an officer of BankAmerica Corporation and its
venture capital subsidiary from 1984 to 1987. She served as Vice President
and Executive Assistant to the President of Bank of America and was a Vice
President in the bank's Corporate Planning and Development Department. Ms.
Byerwalter currently serves on the board of directors of Redwood Trust, Inc.
Item 11. Executive Compensation. Neither the Registrant nor AFCA has
any managers or officers. Certain services are provided to the Registrant by
managers and officers of America First Companies, L.L.C. (America First) (the
general partner of AFCA). None of the managers or executive officers of
America First Companies L.L.C. receive compensation from the Registrant and
AFCA receives no reimbursement from the Registrant for any portion of their
salaries. No remuneration was paid by the Registrant to its general partner
pursuant to the terms of its limited partnership agreement during 1998.
However, during 1999 remuneration will be paid by the Registrant to its
general partner.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) No person is known by the Registrant to own beneficially more
than 5% of the Registrant's BUCs.
(b) No manager or officer of America First and no partner of AFCA
owns any BUCs.
(c) There are no arrangements known to the Registrant the operation
of which may, at any subsequent date, result in a change in control of the
Registrant. As described in Item 1, the Registrant merged with the Prior
Partnership on February 1, 1999. However, this merger did not result in a
change of control of the Registrant since AFCA was the sole general partner of
the Registrant before and after the merger. AFCA was also the general partner
of the Prior Partnership prior to the merger.
Item 13. Certain Relationships and Related Transactions. The general
partner of the Registrant is AFCA and the sole general partner of AFCA is
America First. During the period covered by this report, the Registrant did
not engage in any transaction with AFCA, America First or with any person who
is (i) a manager or executive officer of America First or any general partner
of AFCA; (ii) a nominee for election as manager of America First; (iii) an
owner of more that 5% of the BUCs or (iv) a member of the immediate family of
any of the foregoing persons. Upon completion of the merger with the Prior
Partnership, the Partnership will reimburse AFCA and/or America First for
certain expenses incurred by them on behalf of the Partnership. For
information relating to reimbursements paid by the Prior Partnership to AFCA
and America First, please see the Form 10-K filed by Amrica First Tax Exempt
Mortgage Fund Limited Partnership for the year ended December 31, 1998.
<PAGE> -6-
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
3. Exhibits. The following exhibits were filed as required
by Item 14(c) of this report. Exhibit numbers refer to the
paragraph numbers under Item 601 of Regulation S-K:
4(a) Form of Certificate of Beneficial Unit Certificate
incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-4 (No. 333-50513)
filed by the Registrant on April 17, 1998.
4(b) Agreement of Limited Partnership of the Registrant
4(c) Amended Agreement of Merger, dated June 12, 1998,
between the Registrant and America First Tax Exempt
Mortgage Fund Limited Partnership (incorporated by
reference to Exhibit 4.3 to Amendment No. 3 to
Registration Statement on Form S-4 (No. 333-50513)
filed by the Registrant on September 14, 1998.
24. Power of Attorney.
27. Financial Data Schedule.
(b) The Registrant did not file any reports on Form 8-K during
the last quarter of the period covered by this report.
<PAGE> -7-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERICA FIRST TAX EXEMPT
INVESTORS, L.P.
By America First Capital
Associates Limited
Partnership Two, General
Partner of the Registrant
By America First Companies L.L.C.,
General Partner of
America First Capital
Associates Limited
Partnership Two
By /s/ Michael Thesing
Michael Thesing, Vice
President and
Principal Financial Officer
Date: June 25, 1999
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: June 25, 1999 By /s/ Michael B. Yanney*
Michael B. Yanney,
Chairman of the Board,
President, Chief Executive Officer
and Manager
Date: June 25, 1999 By /s/ Michael Thesing
Michael Thesing,
Principal Financial Officer
and Manager
Date: June 25, 1999 By /s/ William S. Carter, M.D.*
William S. Carter, M.D.,
Manager
Date: June 25, 1999 By /s/ Martin A. Massengale*
Martin A. Massengale,
Manager
Date: June 25, 1999 By /s/ Alan Baer*
Alan Baer,
Manager
Date: June 25, 1999 By /s/ Gail Walling Yanney*
Gail Walling Yanney
Manager
Date: June 25, 1999 By /s/ Mariann Byerwalter*
Mariann Byerwalter
Manager
*By Michael Thesing,
Attorney-in-Fact
/s/ Michael Thesing
Michael Thesing
<PAGE> -8-
EXHIBIT 4(b)
AGREEMENT OF LIMITED PARTNERSHIP
<PAGE> -9-
AMERICA FIRST
TAX EXEMPT INVESTORS, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
ARTICLE I
DEFINED TERMS............................................................... 12
ARTICLE II
NAME, PLACE OF BUSINESS, PURPOSE AND TERM
Section 2.01. Name.......................................................... 16
Section 2.02. Principal Office and Name and Address of Resident Agent....... 16
Section 2.03. Purpose....................................................... 17
Section 2.04. Term.......................................................... 17
ARTICLE III
PARTNERS AND CAPITAL
Section 3.01. General Partner............................................... 17
Section 3.02. Limited Partner............................................... 17
Section 3.03. Partnership Capital........................................... 17
Section 3.04. Liability of Partners and BUC Holders......................... 18
ARTICLE IV
DISTRIBUTIONS OF CASH; ALLOCATIONS OF INCOME AND LOSS
Section 4.01. Distributions of Net Interest Income.......................... 18
Section 4.02. Distributions of Net Residual Proceeds and of Liquidation
Proceeds...................................................... 18
Section 4.03. Allocation of Income and Loss From Operations................. 19
Section 4.04. Allocation of Income and Loss Arising From a Repayment,
Sale or Liquidation........................................... 19
Section 4.05. Determination of Allocations and Distributions Among Limited
Partners and BUC Holders...................................... 19
Section 4.06. Capital Accounts.............................................. 20
Section 4.07. Rights to Distributions....................................... 20
ARTICLE V
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
Section 5.01. Management of the Partnership................................. 20
Section 5.02. Authority of the General Partner.............................. 21
Section 5.03. Authority of General Partner and Its Affiliates To Deal With
Partnership................................................... 22
Section 5.04. General Restrictions on Authority of the General Partner...... 23
Section 5.05. Compensation and Fees. 24
Section 5.06. Duties and Obligations of the General Partner................. 25
Section 5.07. Delegation of Authority....................................... 26
Section 5.08. Other Activities.............................................. 26
Section 5.09. Limitation on Liability of the General Partner and Initial
Limited Partner; Indemnification.............................. 26
Section 5.10. Special Amendments to the Agreement........................... 27
ARTICLE VI
CHANGES IN GENERAL PARTNERS
Section 6.01. Withdrawal of General Partner................................. 27
Section 6.02. Admission of a Successor or Additional General Partner........ 27
Section 6.03. Removal of a General Partner.................................. 28
Section 6.04. Effect of Incapacity of a General Partner..................... 28
ARTICLE VII
TRANSFERABILITY OF BUCS AND LIMITED PARTNERS' INTERESTS
Section 7.01. Free Transferability of BUCs.................................. 29
Section 7.02. Restrictions on Transfers of BUCs and of Interests of Limited
Partners Other Than the Initial Limited Partner............... 29
Section 7.03. Assignees of Limited Partners Other Than the Initial
Limited Partner............................................... 30
Section 7.04. Joint Ownership of Interests.................................. 30
ARTICLE VIII
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
Section 8.01. Events Causing Dissolution.................................... 31
Section 8.02. Liquidation................................................... 31
<PAGE> - 10 -
ARTICLE IX
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS
Section 9.01. Books and Records............................................. 32
Section 9.02. Accounting Basis and Fiscal Year.............................. 32
Section 9.03. Reports....................................................... 32
Section 9.04. Designation of Tax Matters Partner............................ 33
Section 9.05. Expenses of Tax Matters Partner............................... 33
ARTICLE X
MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS AND BUC HOLDERS
Section 10.01. Meetings..................................................... 34
Section 10.02. Voting Rights of Limited Partners and BUC Holders............ 35
Section 10.03. Opinion Regarding Effect of Action by Limited Partners
and BUC Holders.............................................. 35
Section 10.04. Other Activities............................................. 35
ARTICLE XI
ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS TO BUC HOLDERS AND RIGHTS OF
BUC HOLDERS
Section 11.01. Assignment of Limited Partnership Interests to BUC Holders... 36
Section 11.02. Rights of BUC Holders........................................ 36
Section 11.03. Voting by the Initial Limited Partner on Behalf of
BUC Holders.................................................. 37
Section 11.04. Preservation of Tax Status................................... 37
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Appointment of the General Partner as Attorney-in-Fact....... 38
Section 12.02. Signatures................................................... 38
Section 12.03. Amendments................................................... 39
Section 12.04. Binding Provisions........................................... 39
Section 12.05. Applicable Law............................................... 39
Section 12.06. Separability of Provisions................................... 39
Section 12.07. Captions..................................................... 39
Section 12.08. Entire Agreement............................................. 40
TESTIMONIUM................................................................. 40
SCHEDULE A.................................................................. 41
<PAGE> - 11 -
AMERICA FIRST TAX EXEMPT INVESTORS, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
This Agreement is made as of October 1, 1998 by and between America First
Capital Associates Limited Partnership Two (the "General Partner") and America
First Fiduciary Corporation Number Five (the "Initial Limited Partner"), who
by joining in this Agreement agree to become partners in a limited partnership
under the laws of the State of Delaware.
Article I
DEFINED TERMS
The defined terms used in this Agreement shall, unless the context otherwise
requires, have the meanings specified in this Article I. The singular shall
include the plural and the masculine genders shall include the feminine and
neuter gender, and vice versa, as the context requires.
"Accountants" means such nationally recognized firm of independent public
accountants as shall be engaged from time to time by the General Partner on
behalf of the Partnership.
"Act" means the Delaware Revised Uniform Limited Partnership Act, which
consists of Title 6, Chapter 17 of the Delaware Code Annotated, as it may be
amended or revised from time to time, or any other provision of Delaware law
which may, from time to time, supersede part or all of the Delaware Revised
Uniform Limited Partnership Act.
"Administrative Fee" means the fee payable to the General Partner that is
described in Section 5.05(a) hereof.
"AFCA" means America First Capital Associates Limited Partnership Two, a
Delaware limited partnership, the General Partner.
"Affiliate" means, when used with reference to a specified Person, (i) any
Person who directly or indirectly controls or is controlled by or is under
common control with the specified Person, (ii) any Person who is (or has the
power to designate) an officer of, general partner in or trustee of, or serves
(or has the power to designate a person to serve) in a similar capacity with
respect to, the specified Person, or of which the specified Person is an
officer, general partner or trustee, or with respect to which the specified
Person serves in a similar capacity, and (iii) any Person who, 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. An Affiliate of the Partnership or the General Partner does not
include any limited partner of the General Partner if such Person is not
otherwise an Affiliate of the Partnership or the General Partner.
"Agreement" means this Limited Partnership Agreement, as originally executed
and as amended from time to time.
"Bankruptcy" or "Bankrupt" as to any Person means the filing of a petition for
relief by such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or like provision of law or insolvency of such Person as finally determined by
a court proceeding.
"Bond" or "Bonds" means the tax-exempt housing bonds issued by various state
or local authorities in order to provide construction and permanent financing
for apartment complexes and which are held by the Partnership from time to
time.
"BUC" means a Limited Partnership Interest which is credited to the Initial
Limited Partner on the books and records of the Partnership and assigned by
the Initial Limited Partner to a BUC Holder.
"BUC Holder" means any Person who has been assigned one or more Limited
Partnership Interests by the Initial Limited Partner pursuant to Section
11.01. A BUC Holder is not a Limited Partner and will have no right to be
admitted as a Limited Partner.
"Business Day" means any day other than a Saturday, Sunday or a day on which
banking institutions in either New York, New York or Omaha, Nebraska are
obligated by law or executive order to be closed.
<PAGE> - 12 -
"Capital Account" means the capital account of a Partner or a BUC Holder as
described in Section 4.06 hereof.
"Capital Contribution" means the total amount contributed to the capital of
the Partnership by or on behalf of all Partners or any class of Partners or by
any one Partner, as the context may require (or by the predecessor holders of
the Partnership Interests of such Persons) and, with respect to a BUC Holder,
the Capital Contribution of the Initial Limited Partner made on behalf of such
BUC Holder.
"Cause" means conduct which constitutes fraud, bad faith, negligence,
misconduct or breach of a fiduciary duty.
"Certificate" means the certificate of limited partnership filed pursuant to
Section 17-201 of the Act.
"Code" means the Internal Revenue Code of 1986, as amended, or any
corresponding provision or provisions of succeeding law.
"Consent" means either the consent given by a vote at a meeting called and
held in accordance with the provisions of Section 10.01 hereof or the written
consent, as the case may be, of a Person to do the act or thing for which the
consent is solicited, or the act of granting such consent, as the context may
require. Consent given after the act or thing is done with respect to which
the Consent is solicited shall be deemed to relate back to the date such act
or thing was done.
"Contingent Interest" means (i) any Interest Income paid from the net cash
flow of a Project (or any Residual Proceeds paid from the proceeds of a Sale
or refinancing of the Project), the payment of either of which is not required
under the terms of the Mortgage Investment unless there is specified cash flow
from a Project or other specified contingencies are satisfied, and (ii) any
amounts received by the Partnership on the sale or other disposition of a
Mortgage Investment other than amounts representing repayment of principal and
amounts constituting Interest Income.
"Counsel" means the law firm representing the General Partner in connection
with the operation of the Partnership or the law firm, if any, selected by the
General Partner to represent the Partnership.
"Distribution Date" means a Business Day selected by the General Partner for
the distribution of Net Interest Income or Net Residual Proceeds with respect
to a Distribution Period, which Business Day shall be no later than 60 days
following the last day of the Distribution Period to which such Distribution
Date relates.
"Distribution Period" means the period of time selected by the General Partner
for which the distribution of Net Interest Income or Net Residual Proceeds is
made, which period may be no longer than six calendar months.
"General Partner" means AFCA or any Person or Persons who, at the time of
reference thereto, have been admitted as successors to the Partnership
Interest of AFCA or as additional General Partners, in each such Person's
capacity as a General Partner.
"Incapacity" or "Incapacitated" means, as to any Person, death, the
adjudication of incompetency or insanity, Bankruptcy, dissolution,
termination, withdrawal pursuant to Section 6.01 or removal pursuant to
Section 6.03, as the case may be, of such Person.
"Income" means the taxable income of the Partnership as determined in
accordance with the Partnership's method of accounting and computed under
Section 703 of the Code; any item of taxable income required to be separately
stated on the Partnership's federal income tax return pursuant to Section
703(a)(1) of the Code; and any income of the Partnership excluded from the
gross income of the Partnership for federal income tax purposes under Section
103 of the Code.
"Initial Limited Partner" means America First Fiduciary Corporation Number
Five, a Nebraska corporation, or any Person or Persons who, at the time of
reference thereto, have been admitted to the Partnership, with the consent of
the General Partner, as successors to the Limited Partnership Interest of
America First Fiduciary Corporation Number Five.
<PAGE> - 13 -
"Interest Income" means all cash receipts of the Partnership with respect to
any period except for (i) Capital Contributions, (ii) amounts received by the
Partnership upon a Repayment or upon the sale or other disposition of a
Mortgage Investment, Tax Exempt Investment or other Partnership asset which do
not represent accrued interest on the Mortgage Investment or Tax Exempt
Investment other than accrued interest which represents accrued Contingent
Interest, or (iii) the proceeds of any loan to the Partnership or the
refinancing of any loan, including proceeds received from the reissuance of
any Mortgage Investment or Tax Exempt Investment.
"Limited Partner" means any Person who is a Limited Partner, including the
Initial Limited Partner, at the time of reference thereto, in such Person's
capacity as a Limited Partner of the Partnership. A BUC Holder is not a
Limited Partner and has no right to be admitted as a Limited Partner.
"Limited Partnership Interest" means the Partnership Interest held by a
Limited Partner, including the Limited Partnership Interests assigned to BUC
Holders.
"Liquidation Proceeds" means all cash receipts of the Partnership (other than
Operating Income and Sale Proceeds) arising from the liquidation of the
Partnership's assets in the course of the dissolution of the Partnership.
"Loss" means taxable losses of the Partnership, as determined in accordance
with the Partnership's method of accounting and computed under Section 703 of
the Code; any item of loss or expense required to be separately stated on the
Partnership's federal income tax return pursuant to Section 703(a)(1) of the
Code; and any expenditures of the Partnership not deductible in computing its
taxable income and not properly treated as a capital expenditure.
"Merger Agreement" means the Amended Agreement of Merger, dated June 12, 1998,
by and between the Partnership and the Prior Partnership pursuant to which the
Partnership and the Prior Partnership will be merged in accordance with the
provisions of the Act with the Partnership being the surviving partnership.
"Merger Date" means the effective date of the merger of the Partnership and
the Prior Partnership specified in the Merger Agreement.
"Monthly Record Date" means the last day of a calendar month.
"Mortgage Investment" means a direct or indirect interest in a tax-exempt
mortgage revenue bond secured by a Property, including residual interests in
one or more trusts which hold tax-exempt mortgage revenue bonds, and any other
loan (whether or not the interest thereon is exempt from federal income
taxation) secured by a mortgage on a Property on which the Partnership also
directly or indirectly holds a tax-exempt mortgage revenue bond.
"Net Interest Income" means, with respect to any Distribution Period, all
Interest Income received by the Partnership during such Distribution Period,
plus any amounts previously set aside as Reserves from Interest Income which
the General Partner releases from Reserves as being no longer necessary to
hold as part of Reserves, less (i) expenses of the Partnership (including fees
and reimbursements paid to the General Partner but excluding any expenses of
the Partnership which are directly attributable to the sale of a Mortgage
Investment or Tax Exempt Investment) paid from Interest Income during the
Distribution Period (other than operating expenses paid from previously
established Reserves), (ii) all cash payments made from Interest Income during
such Distribution Period to discharge Partnership indebtedness, and (iii) all
amounts from Interest Income set aside as Reserves or used to acquire
additional Mortgage Investments or Tax Exempt Investments during such
Distribution Period. Net Interest Income will consist of Net Interest Income
(Tier 1), Net Interest Income (Tier 2) and Net Interest Income (Tier 3).
During each Distribution Period the additions and deductions from Interest
Income set forth above shall be first applied against Net Interest Income
(Tier 1).
"Net Interest Income (Tier 1)" means, with respect to any Distribution Period,
all Net Interest Income, other than Contingent Interest, received by the
Partnership during such Distribution Period.
<PAGE> - 14 -
"Net Interest Income (Tier 2)" means, with respect to any Distribution Period,
all Net Interest Income representing Contingent Interest received by the
Partnership during such Distribution Period up to an amount which, when
combined with all prior amounts of Contingent Interest distributed pursuant to
Sections 4.02(b) and 4.03(b), aggregates 0.9% per annum of the principal
amount of the Mortgage Investments during the period such Mortgage Investments
are held by the Partnership or the Predecessor Partnership.
"Net Interest Income (Tier 3)" means, with respect to any Distribution Period,
all Net Interest Income representing Contingent Interest received by the
Partnership during such Distribution Period in excess of any Contingent
Interest included in Net Interest Income (Tier 2).
"Net Residual Proceeds" means, with respect to any Distribution Period, all
Residual Proceeds received by the Partnership during such Distribution Period,
plus any amounts previously set aside as Reserves from Residual Proceeds which
the General Partner releases from Reserves as being no longer necessary to
hold as part of Reserves, less (i) all expenses of the Partnership which are
directly attributable to a Repayment or sale or other disposition of a
Mortgage Investment or Tax Exempt Investment, (ii) all cash payments made from
Residual Proceeds during such Distribution Period to discharge Partnership
indebtedness and (iii) all amounts from Residual Proceeds set aside as
Reserves or used to acquire additional Mortgage Investments or Tax Exempt
Investments during such Distribution Period or held by the Partnership to
acquire additional Mortgage Investments or Tax Exempt Investments in future
Distribution Periods. Net Residual Income will consist of Net Residual Income
(Tier 1), Net Interest Residual (Tier 2) and Net Residual Income (Tier 3).
During each Distribution Period the additions and deductions from Residual
Income set forth above shall be first applied against Net Residual Income
(Tier 1).
"Net Residual Proceeds (Tier 1)" means, with respect to any Distribution
Period, all Net Residual Proceeds received by the Partnership during such
Distribution Period representing the principal amount of a Mortgage Investment
or Tax Exempt Investment which is the subject of a Repayment, sale or other
disposition, plus any amounts previously set aside as Reserves from Residual
proceeds which the General Partner releases from Reserves for distribution.
"Net Residual Proceeds (Tier 2)" means, with respect to any Distribution
Period, all Net Residual Proceeds representing Contingent Interest received by
the Partnership during such Distribution Period up to an amount which, when
combined with all prior amounts of Contingent Interest distributed pursuant to
Sections 4.02(b) and 4.03(b) and the Contingent Interest to be distributed by
the Partnership pursuant to Section 4.02(b) for the current Distribution
Period, aggregates 0.9% per annum of the principal amount of the Mortgage
Investments during the period such Mortgage Investments are held by the
Partnership or the Predecessor Partnership.
"Net Residual Proceeds (Tier 3)" means, with respect to any Distribution
Period, all Net Residual Proceeds representing Contingent Interest received by
the Partnership during such Distribution Period in excess of any Contingent
Interest included in Net Residual Proceeds (Tier 2).
"Notice" means a writing, containing the information required by this
Agreement to be communicated to any Person, personally delivered to such
Person or sent by registered, certified or regular mail, postage prepaid, to
such Person at the last known address of such Person.
"Partner" means the General Partner or any Limited Partner.
"Partnership" means the limited partnership created by this Agreement and
known as the America First Tax Exempt Investors, L.P., as said limited
partnership may from time to time be constituted.
"Partnership 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 under this Agreement,
together with the obligations of such Partner to comply with all the terms and
provisions of this Agreement and the Act.
"Person" means any individual, partnership, corporation, trust, association or
other legal entity.
<PAGE> - 15 -
"Prior Partnership" means America First Tax Exempt Mortgage Fund Limited
Partnership, a Delaware limited partnership.
"Prior Partnership Agreement" means the Agreement of Limited Partnership,
dated November 11, 1985, of the Prior Partnership.
"Property" or "Properties" means the real property, including land and the
buildings thereon, which is secured by a mortgage or other similar encumbrance
backing a Mortgage Investment held by the Partnership.
"Regulations" means the United States Treasury Regulations promulgated or
proposed under the Code.
"Repayment" means the payment of the outstanding principal, and Contingent
Interest, is any, upon the maturity of a Mortgage Investment or Tax Exempt
Investment or at such earlier time as the Partnership may require the payment
of outstanding principal.
"Reserve" means such amount of funds as shall be withheld from Capital
Contributions, Interest Income or Residual Proceeds by the General Partner
from time to time in order to provide working capital for the Partnership and
which may be used for any purpose relating to the operation of the Partnership
and its Mortgage Investments and Tax Exempt Investments, including the
acquisition of additional Mortgage Investments and Tax Exempt Investments.
"Residual Proceeds" means all amounts received by the Partnership upon a
Repayment or upon the sale of or other disposition of a Mortgage Investment or
a Tax Exempt Investment or other Partnership asset except for amounts
representing accrued interest on a Mortgage Investment (other than accrued
Contingent Interest) or Tax Exempt Investment. Amounts representing accrued
interest (other than accrued Contingent Interest) received by the Partnership
upon a Repayment or upon the sale or other disposition of a Mortgage
Investment or Tax Exempt Investment shall be included in Interest Income.
Residual Proceeds will not include any amount received by the Partnership
representing proceeds from the securitization of a Mortgage Investment.
"Schedule A" means the schedule, as amended from time to time, of Partners'
names, addresses and Capital Contributions, which schedule, in its initial
form, is attached to and made a part of this Agreement.
"Tax Exempt Investments" means any securities, other than Mortgage
Investments, the interest on which is exempt from federal income taxation and
which are rated in one of the four highest rating categories by at least one
nationally recognized rating agency which are acquired by the Partnership and
not held in the Reserve.
"Tax Matters Partner" means the Partner designated as the Tax Matters Partner
of the Partnership by the General Partner pursuant to Section 9.04.
Article II
NAME, PLACE OF BUSINESS, PURPOSE
AND TERM
Section 2.01. Name. The Partners have caused the formation a limited
partnership pursuant to the Act under the name of "America First Tax Exempt
Investors, L.P." The Partners and BUC Holders have entered into this
Agreement in order to set forth their respective rights and liabilities as
such, subject to the provisions of the Act unless otherwise provided herein.
Section 2.02. Principal Office and Name and Address of Resident Agent. The
address of the principal office and place of business of the Partnership,
unless hereafter changed by the General Partner, shall be Suite 400, 1004
Farnam Street, Omaha, Nebraska 68102. Notification of any change in the
Partnership's principal office and place of business shall be promptly given
by the General Partner to the Limited Partners and BUC Holders. The name and
address of the initial resident agent of the Partnership in the State of
Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801. The resident agent may be changed by the General Partner.
<PAGE> - 16 -
Section 2.03. Purpose. The purpose of the Partnership is to acquire, hold,
sell and otherwise deal with tax-exempt mortgage bonds and other tax-exempt
instruments backed by multifamily residential properties. The Partnership
will pursue its purpose in order (i) to preserve and protect the Partnership's
capital, (ii) to provide regular cash distribution to the BUC Holders and
(iii) to provide a potential for an enhanced federally tax-exempt yield from
Contingent Interest payable from the net cash flow from the Properties and
from the net proceeds of a sale or refinancing of the Properties. The
Partnership is authorized to hold Mortgage Investments and Tax Exempt
Investments, to foreclose on Properties secured by Mortgage Investments, to
sell all or a portion of its interest in a Mortgage Investment and to reinvest
the proceeds therefrom in additional Mortgage Investments or Tax Exempt
Investments on such terms and conditions as the General Partner shall
determine in its sole discretion and to engage in any and all acts necessary,
appropriate, advisable or incidental to its purpose and to the conduct of its
business.
Section 2.04. Term. The Partnership began on the date of the filing of the
Certificate and shall continue in full force and effect until December 31,
2050 or until sooner dissolved pursuant to the provisions of this Agreement.
Article III
PARTNERS AND CAPITAL
Section 3.01. General Partner.
(a) The name, address and Capital Contribution of the General Partner (which
shall be measured by its capital account in the Prior Partnership on the
Merger Date) are set forth in Schedule A. The General Partner, as such, shall
not be required to make any additional Capital Contribution to the
Partnership, except as provided in paragraph (b) of this Section 3.01.
(b) Upon the dissolution and termination of the Partnership, the General
Partner will contribute to the Partnership an amount equal to the lesser of
(i) any deficit balance in its Capital Account or (ii) the excess of (A) 1.01%
of the Capital Contributions of the Limited Partners to the Partnership
(including the Capital Contribution of the Initial Limited Partner made on
behalf of the BUC Holders) over (B) the amount of previous Capital
Contributions made by the General Partner to the Partnership.
Section 3.02. Limited Partner. The name, address and Capital Contribution of
the Limited Partner (which initially shall be measured by its capital account
in the Prior Partnership on the Merger Date) are as set forth in Schedule A.
The Capital Contribution made by the Initial Limited Partner shall be deemed
to have been made on behalf of, and as trustee for, the BUC Holders. Neither
the Initial Limited Partner nor the BUC Holders shall be required to make any
additional Capital Contribution to the Partnership. Other than to serve as
Initial Limited Partner, the Initial Limited Partner shall have no other
business purpose and shall not engage in any other activity or incur any
debts. The Initial Limited Partner agrees not to amend its articles of
incorporation with respect to the incurrence of debt without the written
Consent of a majority in interest of the BUC Holders.
Section 3.03. Partnership Capital.
(a) No Partner or BUC Holder shall be paid interest on any Capital
Contribution.
(b) Except as specifically provided in Section 6.03, the Partnership shall not
be required to redeem or repurchase any Partnership Interest or BUC and no
Partner or BUC Holder shall have the right to withdraw, or receive any return
of, his Capital Contribution. Under circumstances requiring a return of any
Capital Contribution, no Limited Partner or BUC Holder will have the right to
receive property other than cash.
(c) No Limited Partner or BUC Holder shall have any priority over any other
Limited Partner or BUC Holder as to the return of his Capital Contribution or
as to distributions.
(d) The General Partner shall have no liability for the repayment of the
Capital Contributions.
<PAGE> - 17 -
Section 3.04. Liability of Partners and BUC Holders. No Limited Partner or
BUC Holder shall be required to lend any funds to the Partnership or, after
his Capital Contribution has been paid, to make any further Capital
Contribution to the Partnership. The liability of any Limited Partner or BUC
Holder for the losses, debts, liabilities and obligations of the Partnership
shall, so long as the Limited Partner or BUC Holder complies with Section
5.01(b), be limited to his Capital Contribution and his share of any
undistributed Income of the Partnership. Notwithstanding the foregoing, it is
possible that, under applicable law, a Limited Partner or BUC Holder may be
liable to the Partnership to the extent of previous distributions made to such
Limited Partner or BUC Holder if such distributions have caused the
liabilities of the Partnership to exceed the fair value of its assets. To the
extent that the Initial Limited Partner is required by law to return any
distributions or repay any amount, each BUC Holder who has received any
portion of such distributions agrees, by virtue of accepting such
distribution, to pay his proportionate share of such amount to the Initial
Limited Partner immediately upon Notice by the Initial Limited Partner to such
BUC Holder. In lieu of requiring return of such distributions from BUC
Holders, the General Partner may withhold future distributions of Net Interest
Income, Net Residual Proceeds or Liquidation Proceeds until the amount so
withheld equals the amount of the distributions the Initial Limited Partner is
required to repay or return regardless of whether the BUC Holders entitled to
receive such distribution were the same BUC Holders who actually received the
distribution required to be returned. In the event that the Initial Limited
Partner is determined to have unlimited liability for losses, debts,
liabilities and obligations of the Partnership, nothing set forth in this
Section shall be construed to require BUC Holders to assume any portion of
such liability.
Article IV
DISTRIBUTIONS OF CASH;
ALLOCATIONS OF INCOME AND LOSS
Section 4.01. Distributions of Net Interest Income.
(a) On each Distribution Date, all Net Interest Income (Tier 1 and Tier 3)
with respect to the related Distribution Period will be distributed 99% to the
Limited Partners and BUC Holders as a class and 1% to the General Partner.
(b) On each Distribution Date, all Net Interest Income (Tier 2) will be
allocated 75% to the Limited Partners and BUC Holders as a class and 25% to
the General Partner.
Section 4.02. Distributions of Net Residual Proceeds and of Liquidation
Proceeds.
(a) On each Distribution Date, all amounts representing Net Residual Proceeds
(Tier 1 and Tier 3) will be distributed 100% to the Limited Partners and BUC
Holders as a class.
(b) On each Distribution Date, all distributions of Net Residual Proceeds
(Tier 2) will be allocated 75% to the Limited Partners and BUC Holders as a
class and 25% to the General Partner.
(c) All Liquidation Proceeds shall be applied and distributed in the following
amounts and order of priority:
(i) to the payment of the amounts and the establishment of the reserves
provided for in Section 8.02(b);
(ii) to the Partners and BUC Holders in accordance with the positive balances
in their respective Capital Accounts until such accounts are reduced to zero;
and
(iii) then to the Partners and BUC Holders giving effect to the provisions of
Section 4.02(a) as if such Liquidation Proceeds constituted Net Residual
Proceeds for purposes of such Section.
<PAGE> - 18 -
Section 4.03. Allocation of Income and Loss From Operations.
(a) Income and Loss shall be determined in accordance with the accounting
methods followed by the Partnership for federal income tax purposes and
otherwise in accordance with generally accepted accounting principles. For
purposes of determining the Income, Loss, tax credits or any other items
allocable to any period, Income, Loss, tax credits and any such other items
shall be determined on a daily, monthly or other basis, as determined by the
General Partner using any permissible method under Section 706 of the Code and
the Regulations thereunder. An allocation to a Partner of a share of Income
or Loss under this Section 4.03 shall be treated as an allocation to such
Partner of the same share of each item of income, gain, loss, deduction and
credit that is taken into account in computing such Income and Loss.
(b) Subject to the provisions of Sections 4.03(c) and (d) and 5.04(m), Income
and Loss for each Distribution Period not arising from the sale or other
disposition of a Mortgage Investment or Tax Exempt Investment or the
liquidation of the Partnership shall be allocated 1% to the General Partner
and 99% to the Limited Partners and the BUC Holders as a class.
(c) Notwithstanding any provision hereof to the contrary, if a Partner has a
deficit Capital Account balance as of the last day of any fiscal year, then
all items of Income for such fiscal year shall be first allocated to such
Partner in the amount and in the manner necessary to eliminate such deficit
Capital Account balance.
(d) Notwithstanding any other provision of this Agreement, all allocations of
Income and Loss shall be subject to and interpreted in accordance with Section
704 of the Code to the extent applicable. The foregoing allocations are
intended to comply with Section 704 of the Code and the Regulations thereunder
and shall be interpreted consistently therewith.
Section 4.04. Allocation of Income and Loss Arising From a Repayment, Sale or
Liquidation.
(a) Subject to Section 4.03(c), Income arising from a Repayment or a sale or
other disposition of a Mortgage Investment or Tax Exempt Investment or from
the liquidation of the Partnership assets shall be allocated (i) first, to the
General Partner in an amount equal to the Net Residual Proceeds distributed to
the General Partner from the transaction pursuant to Section 4.02 and (ii)
second, the balance to the Limited Partners and the BUC Holders as a class.
(b) Loss arising from a Repayment or a sale or other disposition of a Mortgage
Investment or Tax Exempt Investment or from the liquidation of Partnership
assets shall be allocated among the Partners (including the Initial Limited
Partner on behalf of the BUC Holders) in the same manner as Net Residual
Proceeds or Liquidation Proceeds are allocated among the Partners pursuant to
Section 4.02.
Section 4.05. Determination of Allocations and Distributions Among Limited
Partners and BUC Holders.
(a) As of each Monthly Record Date during the term of the Partnership, a
determination shall be made of the amount of Income and Loss which, under the
Partnership's method of accounting, is properly attributable to the month to
which such Monthly Record Date relates and which was allocable to the Limited
Partners and BUC Holders as a class in accordance with Sections 4.04 and 4.05.
(b) As of the last day of each Distribution Period during the term of the
Partnership, a determination shall be made of the amount of Net Interest
Income and Net Residual Proceeds available to the Partnership during such
Distribution Period which was allocated for distribution to the Limited
Partners and BUC Holders in accordance with Sections 4.01 and 4.02; provided,
however, that the General Partner may elect to make the determination under
this Section 4.05(b) as of each Monthly Record Date.
(c) All allocations to the Limited Partners and the BUC Holders as a class
pursuant to Section 4.03 shall be made on a monthly basis among the Limited
Partners or BUC Holders who held of record a Limited Partnership Interest or
BUC as of the Monthly Record Date in the ratio that (i) the number of Limited
Partnership Interests or BUCs held of record by each such Limited Partner or
BUC Holder as of the Monthly Record Date bears to (ii) the aggregate number of
Limited Partnership Interests and BUCs outstanding on each such Monthly Record
Date.
<PAGE> - 19 -
(d) All allocations to the Limited Partners and the BUC Holders as a class
pursuant to Section 4.04 shall be made among the Limited Partners or BUC
Holders of record on the Monthly Record Date for the month during which the
Income or Expense arose from a Repayment, sale or other liquidation of a
Mortgage Investment or Tax Exempt Investment or liquidation of the
Partnership, in the ratio that (i) the number of Limited Partnership Interests
or BUCs held of record by each such Limited Partner or BUC Holder on such
Monthly Record Date bears to (ii) the number of Limited Partnership Interests
or BUCs outstanding on such Monthly Record Date.
(e) Net Interest Income and Net Residual Proceeds will be allocated to the
Limited Partners or BUC Holders of record on the last day of the Distribution
Period (or, if the General Partner so elects, on each Monthly Record Date
during such Distribution Period) in the ratio that (i) the number of Limited
Partnership Interests or BUCs owned of record by each such Limited Partner or
BUC Holder on each such date bears to (ii) the number of Limited Partnership
Interests or BUCs outstanding on such date.
Section 4.06. Capital Accounts. A separate Capital Account shall be
maintained and adjusted for each Partner in accordance with the Code and the
Regulations. There shall be credited to each Partner's Capital Account the
amount of such Partner's Capital Contribution (equal to the amount of its
capital account on the books and records of the Prior Partnership as of the
Merger Date) and such Partner's share of Income; and there shall be charged
against each Partner's Capital Account the amount of such Partner's share of
Loss and cash distributions. The Initial Limited Partner's Capital Account
shall be subdivided into separate Capital Accounts to reflect the interest of
each BUC Holder. Any items credited or charged to the BUC Holders shall be
reflected in the Capital Account of the Initial Limited Partner and in the
subaccounts reflecting the interest of each BUC Holder. Any person who
acquires a Limited Partnership Interest or a BUC from a Limited Partner or BUC
Holder shall have a Capital Account equal to the Capital Account of the
Limited Partner or BUC Holder from which such Limited Partnership Interest or
BUC was acquired.
Section 4.07. Rights to Distributions. Each holder of Partnership Interests
and BUCs shall look solely to the assets of the Partnership for all
distributions with respect to the Partnership, his Capital Contributions and
his share of Net Interest Income, Net Residual Proceeds and Liquidation
Proceeds and, except as provided in Section 3.01(b), shall have no recourse
therefor, upon dissolution or otherwise, against the General Partner or the
Initial Limited Partner. No Partner or BUC Holder shall have any right to
demand or receive property other than cash upon dissolution and termination of
the Partnership. All distributions pursuant to this Article IV are subject to
the provisions of Section 3.04.
Article V
RIGHTS, OBLIGATIONS AND POWERS
OF THE GENERAL PARTNER
Section 5.01. Management of the Partnership.
(a) The General Partner, within the authority granted to it under this
Agreement, shall have full, complete and exclusive discretion to manage and
control the business of the Partnership and to carry out the purposes of the
Partnership. In so doing, the General Partner shall use its best efforts to
take all actions necessary or appropriate to protect the interests of the
Limited Partners and the BUC Holders. All decisions made for and on behalf of
the Partnership by the General Partner shall be binding upon the Partnership.
Except as otherwise provided in this Agreement, the General Partner shall have
all the rights and powers and shall be subject to all the restrictions and
liabilities of a partner in a partnership without limited partners.
(b) No Limited Partner or BUC Holder shall take part in the management or
control of the business of the Partnership or transact any business in the
name of the Partnership. No Limited Partner or BUC Holder shall have the
power or authority to bind the Partnership or to sign any agreement or
document in the name of the Partnership. No Limited Partner or BUC Holder
shall have any power or authority with respect to the Partnership except
insofar as the vote or Consent of the Limited Partners or BUC Holders shall be
expressly required or permitted by this Agreement.
<PAGE> - 20 -
Section 5.02. Authority of the General Partner.
(a) Subject to Sections 5.03 and 5.04, but otherwise without in any way
limiting the power and authority conferred on the General Partner by Section
5.01(a), the General Partner, for and in the name and on behalf of the
Partnership, is hereby authorized, without limitation:
(i) to acquire, hold, refund, reissue, remarket, securitize, transfer,
foreclose upon, sell or otherwise deal with the Mortgage Investments and Tax
Exempt Investments (provided, that the acquisition by the Partnership of any
Tax Exempt Investment may not cause the aggregate book value of all Tax Exempt
Investments then held by the Partnership to exceed 25% of the total assets of
the Partnership) and to negotiate, enter into, and deliver any and all
agreements, documents and instruments of any nature whatsoever with respect
thereto on such terms, and subject to such conditions, as it determines in its
sole discretion;
(ii) to acquire by purchase, lease, exchange or otherwise any real or personal
property to be used in connection with the business of the Partnership;
provided, however, that no property may be acquired from the General Partner
or its Affiliates except for goods and services provided subject to the
restrictions of Section 5.03;
(iii) to issue additional BUCs and to borrow money and issue evidences of
indebtedness and to secure the same by a pledge, lien, mortgage or other
encumbrance on any assets of the Partnership and to apply to proceeds of such
transactions to the acquisition of Mortgage Investments and Tax Exempt
Investments or such other proper Partnership purpose as the General Partner
shall determine in its sole discretion;
(iv) to employ agents, accountants, attorneys, consultants and other Persons
that are necessary or appropriate to carry out the business and operations of
the Partnership and to pay fees, expenses and other compensation to such
Persons; provided, that if such Persons are Affiliates of the General Partner,
the terms of such employment shall be subject to the restrictions of Section
5.03;
(v) to pay, extend, renew, modify, adjust, submit to arbitration, prosecute,
defend or compromise, upon such terms as it may determine and upon such
evidence as it may deem sufficient, any obligation, suit, liability, cause of
action or claim, including taxes, either in favor of or against the
Partnership;
(vi) except as otherwise expressly provided herein, to determine the
appropriate accounting method or methods to be used by the Partnership;
(vii) except as prohibited by this Agreement, to cause the Partnership to make
or revoke any of the elections referred to in the Code or any similar
provisions enacted in lieu thereof, including, but not limited to, those
elections provided for in Code Sections 108, 709 and 1017;
(viii) to amend the Certificate or this Agreement to reflect the addition or
substitution of Partners and to amend this Agreement as provided in Section
12.03;
(ix) to deal with, or otherwise engage in business with, or provide services
to and receive compensation therefor from, any Person who has provided or may
in the future provide any services to, lend money to, sell property to or
purchase property from the General Partner or any of its Affiliates;
(x) to obtain loans from the General Partner or its Affiliates, provided that
the requirements of Section 5.03(d)(iii) are met;
(xi) to establish and maintain the Reserve in such amounts as it deems
appropriate from time to time and to increase, reduce or eliminate the Reserve
as it deems appropriate from time to time;
(xii) to invest all funds not immediately needed in the operation of the
business including, but not limited to, (A) Capital Contributions, (B) the
Reserves or (C) Net Interest Income and Net Residual Proceeds prior to their
distribution to the Partners and BUC Holders or their reinvestment in Mortgage
Investments and Tax Exempt Investments;
<PAGE> - 21 -
(xiii) to acquire BUCs for the account of the Partnership in the secondary
trading market, provided that the BUCs are listed on The Nasdaq Stock Market
or a national securities exchange and to cause such BUCs to be cancelled; and
(xiv) to engage in any kind of activity and to enter into, perform and carry
out contracts of any kind necessary or incidental to, or in connection with,
the accomplishment of the purposes of the Partnership.
(b) With respect to all of its obligations, powers and responsibilities under
this Agreement, the General Partner is authorized to execute and deliver, for
and on behalf of the Partnership, such notes and other evidences of
indebtedness, contracts, trust instruments, agreements, assignments, deeds,
loan agreements, mortgages, deeds of trust, leases and such other documents as
it deems proper, all on such terms and conditions as it deems proper.
(c) No Person dealing with the General Partner shall be required to determine
the General Partner's authority to enter into any contract, agreement or
undertaking on behalf of the Partnership or to determine any facts or
circumstances bearing upon the existence of such authority. Any Person
dealing with the Partnership or the General Partner may rely upon a
certificate signed by the General Partner as to:
(i) the identity of the General Partner or any BUC Holder or Limited Partner;
(ii) the existence or nonexistence of any fact or facts which constitute a
condition precedent to acts by the General Partner or are in any other manner
germane to the affairs of the Partnership;
(iii) the Persons who are authorized to execute and deliver any instrument or
document by or on behalf of the Partnership; or
(iv) any act or failure to act by the Partnership or as to any other matter
whatsoever involving the Partnership or any Partner.
Section 5.03. Authority of General Partner and Its Affiliates To Deal With
Partnership.
(a) The General Partner and its Affiliates may, and shall have the right to,
provide goods and services to the Partnership (including the right to act as
property manager of a Property or servicer of any Mortgage Investment),
subject to the conditions set forth in Section 5.03(b).
(b) The General Partner and its Affiliates shall not have the right to
contract or otherwise deal with the Partnership for the provision of goods and
services, except for those dealings, contracts or provisions of services
described in this Agreement. The provision of any goods and services by the
General Partner or its Affiliates shall be part of its or their ordinary and
ongoing business in which it or they have previously engaged, independent of
the activities of the Partnership and such goods and services being provided
shall be reasonable for and necessary to the Partnership, shall actually
furnished to the Partnership and (except as provided in Section 5.05(f)
hereof) shall be provided at the lower of the actual cost of such goods or
services or the competitive price charged for such goods or services by
independent parties for comparable goods and services in the same geographic
location and the provision of such goods and services in all other respects
meets the requirements of Section 5.03(c) and (d). The costs of verifying
that the amounts paid to the General Partner or its Affiliates for such goods
and services meet the foregoing standard may be reimbursed to the General
Partner or its Affiliates only to the extent that, when added to the costs of
such goods and services rendered, such sum does not exceed the competitive
rate for such goods and services.
<PAGE> - 22 -
(c) All goods and services provided by the General Partner or any Affiliates
pursuant to Section 5.03(b) shall be rendered pursuant to this Agreement or a
written contract, which contract precisely describes the services to be
rendered and all compensation to be paid and shall contain a clause allowing
termination without penalty on 60 days' Notice to the General Partner by the
vote of the majority in interest of the Limited Partners and the BUC Holders
(the Initial Limited Partner acting according to direction of the BUC
Holders). Any payment made to the General Partner or any Affiliate for such
goods and services shall be fully disclosed to all Limited Partners and BUC
Holders in the reports required under this Agreement. Neither the General
Partner nor any Affiliate shall, by the making of lump sum payments to any
other Person for disbursement by such other Person, circumvent the provisions
of Section 5.03(b), (c) or (d).
(d) The General Partner is prohibited from entering into any agreements,
contracts or arrangements on behalf of the Partnership with the General
Partner or any Affiliate of the General Partner under which:
(i) the General Partner or any Affiliate shall be given an exclusive right to
sell, or exclusive employment to sell, a Property;
(ii) the Partnership lends money to the General Partner or any Affiliate of
the General Partner; or
(iii) the General Partner or any Affiliate of the General Partner makes a loan
to the Partnership which provides for a prepayment penalty or provides for an
interest rate or other finance charges and fees which are in excess of the
lesser of (A) amounts charged by unrelated banks on comparable loans to the
Partnership or (B) the same rate as the General Partner or such Affiliate paid
to obtain the funds to make the loan to the Partnership.
(e) Notwithstanding any provisions of this Section 5.03, neither the General
Partner nor any of its Affiliates shall:
(i) receive any rebate or give-up, or participate in any reciprocal
arrangement, which would circumvent the provisions of this Section 5.03; or
(ii) receive any compensation for providing insurance brokerage services to
the Partnership; or
(iii) charge the Partnership for, or take from any other Person, any program
management, real estate brokerage or mortgage servicing fee with respect to
Partnership property or assets.
(f) Nothing in this Section 5.03 shall prevent an Affiliate of the General
Partner from acquiring and holding debt securities or other interests secured
by a Property, provided that the Mortgage Investment held by the Partnership
that is secured by the same Property may not be junior or subordinate to the
interest held by such Affiliate.
Section 5.04. General Restrictions on Authority of the General Partner. In
exercising management authority and control of the Partnership, the General
Partner, on behalf of the Partnership and in furtherance of the business of
the Partnership, shall have the authority to perform all acts which the
Partnership is authorized to perform. However, the General Partner shall not
have any authority to:
(a) perform any act in violation of this Agreement or any applicable law or
regulation thereunder;
(b) do any act required to be approved or ratified by the Limited Partners
under the Act without Consent of the Limited Partners or the BUC Holders,
unless the right to do so is expressly otherwise given in this Agreement;
(c) sell or otherwise dispose of all or substantially all of the assets of the
Partnership in a single transaction without the Consent of a majority in
interest of the Limited Partners (including the Initial Limited Partner acting
on behalf of the BUC Holders) as provided in Section 10.02(a)(ii); provided,
however, that this subsection (c) shall not apply to (i) the transfer of
Mortgage Investments to a trust in connection with the securitization thereof
or to the sale of any interest in such trust, or (ii) the sale of Partnership
assets in connection with the liquidation thereof after the dissolution of the
Partnership;
<PAGE> - 23 -
(d) borrow money from the Partnership;
(e) dissolve the Partnership without the Consent of a majority in interest of
the Limited Partners (including the Initial Limited Partner acting on behalf
of the BUC Holders) as provided in Section 10.02(a)(iii);
(f) possess Partnership property, or assign the Partnership's rights in
specific Partnership property, for other than a Partnership purpose;
(g) admit a Person as a General Partner, except as provided in this Agreement;
(h) admit a Person as a Limited Partner, except as provided in this Agreement;
(i) sell, lease or lend Partnership assets to the General Partner or any
Affiliate of the General Partner or purchase or lease property from the
General Partner or its Affiliates, except as permitted by Section 5.02(a)(i);
(j) underwrite the securities of other issuers;
(k) do any act which would make it impossible to carry on the ordinary
business of the Partnership;
(l) knowingly perform any act that would subject any Limited Partner or BUC
Holder to liability as a general partner in any jurisdiction;
(m) allocate any Income or Loss (or any item thereof) to any Partner or BUC
Holder if, and only to the extent that, such allocation will cause the
determinations and allocations of Income or Loss (or any item thereof)
provided for in Article IV hereof not to be permitted by Section 704(b) of the
Code and the Regulations promulgated thereunder;
(n) confess a judgment against the Partnership;
(o) issue equity securities with rights and privileges senior to those of the
BUCs;
(p) make loans to the Partnership or accept loans on behalf of the Partnership
from the General Partner or any Affiliates of the General Partner, except as
provided in Section 5.03(d)(iii);
(q) amend this Agreement, except to the extent the right to amend this
Agreement is expressly provided for in other provisions of this Agreement; or
(r) invest Partnership funds in (i) securities of other issuers, except for
Mortgage Investments, Tax Exempt Investments and temporary investments
pursuant to Section 5.02(a)(xii), (ii) land contracts, or (iii) unimproved
real estate not associated with a Property.
Section 5.05. Compensation and Fees.
(a) The Partnership will pay the General Partner an Administrative Fee equal
to 0.45% per annum of the outstanding principal balance of any Mortgage
Investment or Tax Exempt Investment for which an unaffiliated party is not
obligated to pay an "administrative fee" to the General Partner under the
terms of such Mortgage Investment of Tax Exempt Investment. The
Administrative Fee will be payable in equal monthly installments in arrears
based on the average outstanding principal balance of such Mortgage
Investments or Tax Exempt Investments held by the Partnership during the
previous month.
(b) Subject to Section 5.05(c), the Partnership will reimburse the General
Partner or its Affiliates on a monthly basis for the actual out-of-pocket
costs of direct telephone and travel expenses incurred by them on Partnership
business, direct out-of-pocket fees, expenses and charges paid by them to
third parties for rendering legal, auditing, accounting, bookkeeping,
computer, printing and public relations services, expenses of preparing and
distributing reports to Limited Partners and BUC Holders, an allocable portion
of the salaries and fringe benefits of employees of AFCA or its Affiliates,
insurance premiums (including premiums for liability insurance which will
cover the Partnership, the General Partner and its general partner), the cost
of compliance with all state and federal regulatory requirements and stock
exchange or NASDAQ listing fees and charges and other payments to third
parties for services rendered to the Partnership.
<PAGE> - 24 -
(c) The Partnership will not reimburse the General Partner or its Affiliates
for the travel expenses of the president of the general partner of the General
Partner or for any items of general overhead, including, but not limited to,
rent, utilities or the use of computers, office equipment or other capital
items owned by the General Partner or its Affiliates. The Partnership will
not reimburse the General Partner or its general partner for any salaries or
fringe benefits of any partner of the General Partner or of the officers or
board of managers of its general partner regardless of whether such persons
provide services to the Partnership.
(d) The Accountants will verify on the basis of generally accepted auditing
standards that any amounts reimbursed by the Partnership pursuant to Section
5.05(c) were incurred by the General Partner or its Affiliates in connection
with the conduct of the business and affairs of the Partnership or the
acquisition and management of its assets and were permissible reimbursements
pursuant to Section 5.05(c).
(e) In the event the Partnership becomes the equity owner of a Property, due
to the foreclosure of a Mortgage Investment or otherwise, the Partnership will
pay the General Partner an administrative fee of 0.45% of the principal amount
of the Mortgage Investment relating to such Property and may pay the General
Partner or an Affiliate a reasonable property management fee in the event the
General Partner deems it to be in the best interest of the Partnership that it
take over active management of the Property. Notwithstanding anything in
Section 5.03, the General Partner may charge a property management fee not to
exceed the lesser of (i) the competitive price charged for multifamily
property management services by independent parties in the same geographic
area as the managed Property or (ii) 5% of the gross revenues of the managed
Property, irrespective of the General Partner's or such Affiliates cost for
providing such services.
(f) Except as provided in this Agreement, the General Partner will receive no
compensation from the Partnership.
Section 5.06. Duties and Obligations of the General Partner.
(a) The General Partner shall devote to the affairs of the Partnership such
time as it deems necessary for the proper performance of its duties under this
Agreement, but neither the General Partner, its general partner nor any
officer or manager of its general partners shall be expected to devote full
time to the performance of such duties.
(b) The General Partner shall take such action as may be necessary or
appropriate for the classification of the Partnership as a partnership for
federal income tax purposes and for the continuation of the Partnership's
valid existence under the laws of the State of Delaware and in order to
qualify the Partnership under the laws of any jurisdiction in which the
Partnership is doing business or in which such qualification is necessary or
appropriate to protect the limited liability of the Limited Partners and BUC
Holders or in order to continue in effect such qualification. The General
Partner shall file or cause to be filed for recordation in the office of the
appropriate authorities of the State of Delaware, and in the proper office or
offices in each other jurisdiction in which the Partnership is qualified, such
certificates, including limited partnership and fictitious name certificates,
and other documents as are required by the applicable statutes, rules or
regulations of any such jurisdiction.
(c) The General Partner shall prepare or cause to be prepared and shall file
on or before the due date (or any extension thereof) any federal, state or
local tax returns required to be filed by the Partnership. The General
Partner shall cause the Partnership to pay any taxes payable by the
Partnership.
(d) The General Partner shall have fiduciary responsibility for the
safekeeping and use of all funds and assets of the Partnership, whether or not
in the General Partner's possession or control. The General Partner shall not
employ, or permit another to employ, such funds or assets in any manner except
for the exclusive benefit of the Partnership. The General Partner shall take
all steps necessary to insure that the funds of the Partnership are not
commingled with the funds of any other entity. The General Partner owes the
same fiduciary duty to the BUC Holders as the General Partner owes to the
Limited Partners.
<PAGE> - 25 -
Section 5.07. Delegation of Authority. Subject to the provisions of this
Article V, the General Partner may delegate all or any of its powers, rights
and obligations under this Agreement and may appoint, employ, contract or
otherwise deal with any Person for the transaction of the business of the
Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve. Notwithstanding any such delegation, the General Partner shall
remain liable for any acts or omissions by such Person under the standards of
responsibility for the General Partner set forth herein.
Section 5.08. Other Activities. The General Partner and its Affiliates may
engage in or possess interests in other business ventures of every kind and
description for their own accounts, including, without limitation, serving as
general partner of other partnerships which own, either directly or through
interests in other partnerships, investments similar in nature to the Mortgage
Investments and Tax Exempt Investments. Neither the Partnership nor the
Partners or BUC Holders shall have any rights by virtue of this Agreement in
or to such other business ventures or to the income or profits derived
therefrom, and the pursuit of such ventures, even if competitive with the
business of the Partnership, shall not be deemed wrongful, improper or a
breach of fiduciary duty.
Section 5.09. Limitation on Liability of the General Partner and Initial
Limited Partner; Indemnification.
(a) Neither the General Partner, the Initial Limited Partner nor their
Affiliates (including the officers, managers and members of the general
partner of AFCA) shall be liable, responsible or accountable in damages or
otherwise to the Partnership or to any of the Limited Partners or BUC Holders
for any act or omission performed or omitted by such General Partner or
Initial Limited Partner in good faith and in a manner reasonably believed by
it to be within the scope of the authority granted to it by this Agreement and
in the best interests of the Partnership, provided that such General Partner's
or Initial Limited Partner's conduct did not constitute Cause. The
Partnership shall indemnify and hold harmless the General Partner, the Initial
Limited Partner and their Affiliates (including the officers, managers and
members of the general partner of AFCA) against and for any loss, liability or
damage incurred by any of them or the Partnership by reason of any act
performed or omitted to be performed by them in connection with the business
of the Partnership, including all judgments, costs and attorneys' fees (which
attorneys' fees may be paid as incurred, except as provided in 5.09(b)) and
any amounts expended in settlement of any claims of liability, loss or damage,
provided that the indemnified Person's conduct did not constitute Cause. The
satisfaction of any indemnification obligation shall be from and limited to
Partnership assets, and no Limited Partner or BUC Holder shall have any
personal liability on account thereof. The termination of any action, suit or
proceeding, by judgment or settlement, shall not, of itself, create a
presumption that the indemnified Person did not act in good faith and in a
manner which is reasonably believed to be in or not opposed to the best
interest of the Partnership. Any indemnification under this subsection,
unless ordered by a court, shall be made by the Partnership only upon a
determination by independent legal counsel in a written opinion that
indemnification of the indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in this
Agreement. Notwithstanding any provision of this subsection to the contrary,
the General Partner shall be presumed to be personally liable to creditors for
the debts of the Partnership.
(b) Notwithstanding the provisions of Section 5.09(a), neither the General
Partner, the Initial Limited Partner nor any officer, director, manager,
partner, member, employee, agent, Affiliate, subsidiary or assign of the
General Partner, the Initial Limited Partner or the Partnership shall be
indemnified with regard to any liability, loss or damage incurred by them in
connection with any claim or settlement involving allegations that the
Securities Act of 1933, as amended, or any state securities laws were violated
by the General Partner or by any such other Person unless: (i)(A) the General
Partner or other Persons seeking indemnification are successful in defending
such action on the merits of each count involving such violation, (B) such
claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction or (C) a court of competent jurisdiction approves a
settlement of such claims; and (ii) such indemnification is specifically
approved by a court of law which shall have been advised as to the then
current position of the Securities and Exchange Commission regarding
indemnification for violations of securities laws.
<PAGE> - 26 -
Section 5.10. Special Amendments to the Agreement.
(a) Any provision to the contrary herein notwithstanding, the General Partner
may, without the Consent of the Limited Partners or BUC Holders, amend
Sections 4.03, 4.04 and 4.05 of this Agreement on the advice of Counsel or the
Accountants and upon Notice to the Limited Partners and BUC Holders mailed 10
days prior to the proposed effectiveness of such amendment (unless earlier
effectiveness is required by law) to the extent necessary to ensure compliance
with the Code and Regulations then in effect, provided that such amendments do
not materially adversely affect the interests of the Limited Partners and BUC
Holders in the sole determination of the General Partner.
(b) New allocations made by the General Partner in reliance upon the advice of
Counsel or the Accountants pursuant to Section 5.10(a) shall be deemed to be
made pursuant to the fiduciary obligation of the General Partner to the
Partnership, the Limited Partners and the BUC Holders, and no such new
allocation shall give rise to any claim or cause of action by any Limited
Partner or BUC Holder.
(c) The General Partner may take such action as it deems necessary or
appropriate, including action with respect to the manner in which BUCs are
being or may be transferred or traded, in order to preserve the status of the
Partnership as a partnership rather than an association taxable as a
corporation for federal income tax purposes or to insure that BUC Holders will
be treated as limited partners for federal income tax purposes.
Article VI
CHANGES IN GENERAL PARTNERS
Section 6.01. Withdrawal of General Partner. The General Partner shall not be
entitled to voluntarily withdraw from the Partnership or to sell, transfer or
assign all or a portion of its Partnership Interest as General Partner unless
a substitute General Partner has been admitted in accordance with the
conditions of Section 6.02.
Section 6.02. Admission of a Successor or Additional General Partner. The
General Partner may at any time designate additional Persons to be General
Partners, whose Partnership Interest in the Partnership shall be such as shall
be agreed upon by the General Partner and such additional General Partners,
provided that the Partnership Interests of the Limited Partners and the BUC
Holders shall not be reduced thereby. A Person shall be admitted as a General
Partner of the Partnership only if each of the following conditions is
satisfied:
(a) The admission of such Person shall have been Consented to by a majority in
interest of the Limited Partners (including the Initial Limited Partner voting
on behalf of the BUC Holders) as a class;
(b) such Person shall have accepted and agreed to be bound by the terms and
provisions of this Agreement by executing a counterpart hereof, and such
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner shall have been filed for
recording, and all other actions required by law in connection with such
admission shall have been performed;
(c) if such Person is a corporation, it shall have provided the Partnership
evidence satisfactory to Counsel of its authority to become a General Partner
and to be bound by the terms and provisions of this Agreement; and
(d) the Partnership shall have received an opinion of Counsel that the
admission of such Person is in conformity with the Act and that none of the
actions taken in connection with the admission of such Person is in violation
of the Act.
<PAGE> - 27 -
Section 6.03. Removal of a General Partner. Subject to Section 10.02, a
majority in interest of the Limited Partners (including the Initial Limited
Partner voting on behalf of the BUC Holders) acting together as a class,
without the Consent or other action by the General Partner to be removed, may
remove any General Partner and, subject to the provisions of Sections 6.02 and
8.01(a), may elect a replacement therefor. After the Limited Partners vote to
remove a General Partner pursuant to this Section 6.03, they shall provide the
removed General Partner with Notice thereof, which Notice shall set forth the
date upon which such removal is to become effective, which date shall be no
earlier than the date upon which the General Partner receives such Notice.
Section 6.04. Effect of Incapacity of a General Partner.
(a) Upon the Incapacity of a General Partner, such General Partner shall
immediately cease to be a General Partner. If the Incapacitated General
Partner is not the sole General Partner, the business of the Partnership shall
be continued by the remaining General Partner who shall immediately (i) give
Notice to the Limited Partners and BUC Holders of such Incapacity and (ii)
prepare such amendments to this Agreement and execute and file for recording
such amendments or documents or other instruments necessary to reflect the
assignment, transfer, termination or conversion (as the case may be) of the
Partnership Interest of the Incapacitated General Partner. If the
Incapacitated General Partner is the sole General Partner, the provisions of
Section 8.01(a)(i) shall be applicable.
(b) Nothing in this Section 6.04 shall affect any rights, including the rights
to the payment of any fees under this Agreement, of the Incapacitated General
Partner which matured or were earned prior to the Incapacity of such General
Partner. Such Incapacitated General Partner shall remain liable for all
obligations and liabilities incurred by it as General Partner before such
Incapacity shall have become effective, but shall be free from any obligations
or liability as General Partner incurred on account of the activities of the
Partnership from and after the time such Incapacity shall have become
effective.
(c) The Partnership Interest of an Incapacitated General Partner shall be
converted into that of a Limited Partner with the same rights under Article IV
as such Incapacitated General Partner has prior to its Incapacity to share in
Income, Loss, Net Interest Income, Net Residual Proceeds and Liquidation
Proceeds. However, any Incapacitated General Partner which becomes a Limited
Partner pursuant to this paragraph (c) shall not have the right to participate
in the management of the affairs of the Partnership or to vote on any matter
requiring the Consent of the Limited Partners and shall not be entitled to any
portion of the Income, Loss, Net Interest Income, Net Residual Proceeds or
Liquidation Proceeds payable to the class comprised of Limited Partners and
BUC Holders. Notwithstanding the conversion of a Incapacitated General
Partner's Partnership Interest, a successor or remaining General Partner shall
have the right, but not the obligation, to acquire the Partnership Interest of
the Incapacitated General Partner at the then fair market value of such
Partnership Interest The fair market value of the Incapacitated General
Partner's Partnership Interest shall be the sum of (i) the present value of
future administrative fees and Net Interest Income which would be paid to the
Incapacitated General Partner if the Incapacity had not occurred and (ii) the
amount the Incapacitated General Partner would receive upon dissolution and
termination of the Partnership, assuming that such dissolution or termination
occurred on the date of the event causing the Incapacity and the assets of the
Partnership were sold for their then fair market value without any compulsion
on the part of the Partnership to sell such assets. The fair market value of
such Partnership Interest shall be determined by agreement of the
Incapacitated General Partner and the successor or remaining General Partner
or, if they cannot agree, by arbitration in accordance with the then current
rules of the American Arbitration Association. The expense of arbitration
shall be borne equally by the Incapacitated General Partner and the successor
or remaining General Partner.
(d) All parties hereto hereby agree to take all actions and to execute all
documents necessary or appropriate to effect the foregoing provisions of this
Section 6.04.
<PAGE> - 28 -
Article VII
TRANSFERABILITY OF BUCS AND LIMITED PARTNERS' INTERESTS
Section 7.01. Free Transferability of BUCs.
(a) BUCs shall be issued in registered form only and shall be freely
transferable (subject to compliance with federal or state securities law and
Section 7.02 or 11.04 of this Agreement); provided, however, nothing in this
Agreement shall impose any obligation on the General Partner, the Partnership
or any transfer agent to restrict or place conditions on the transfer of BUCs.
(b) BUCs may be transferred only on the books and records of the Partnership.
(c) A Person shall be recognized as a BUC Holder for all purposes on the books
and records of the Partnership as of the day on which the General Partner (or
other transfer agent appointed by the General Partner) receives evidence of
the transfer of a BUC to such Person which is satisfactory to the General
Partner. All BUC Holder rights, including voting rights, rights to receive
distributions and rights to receive reports, and all allocations in respect of
BUC Holders, including allocations of Income and Loss, will vest in, and be
allocable to, each BUC Holder as of the close of business on such day.
(d) In order to record a transfer of a BUC on the Partnership's books and
records, the General Partner may require such evidence of transfer or
assignment and authority of the transferor or assignor, including signature
guarantees, and such additional documentation as the General Partner may
determine.
(e) The General Partner is hereby authorized to do all things necessary in
order to register the BUCs under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, pursuant to the rules and
regulations of the Securities and Exchange Commission, to qualify the BUCs
with state securities regulatory authorities or to perfect exemptions from
qualification, to cause the BUCs to be listed on The NASDAQ Stock Market or a
national stock exchange and to any other actions necessary to allow the resale
of BUCs by the BUC Holders.
Section 7.02. Restrictions on Transfers of BUCs and of Interests of Limited
Partners Other Than the Initial Limited Partner.
(a) If any sale, assignment, pledge or transfer of a Limited Partnership
Interest, other than by the Initial Limited Partner, or of a BUC, when
considered with all other sales, assignments, pledges or transfers of
Partnership Interests and BUCs within the previous 12-month period, may result
in the transfer (within the meaning of Section 708 of the Code and Regulations
promulgated thereunder) of more than 45% of the Partnership Interest and BUCs,
then the sale, assignment, pledge or transfer of a Limited Partnership
Interest or a BUC may be suspended or deferred by the General Partner;
provided, however, that the General Partner will have no obligation to suspend
or defer any such sale, assignment, pledge or transfer. The seller, assignor,
pledgor or transferor shall be notified of such deferral, and any transaction
deferred pursuant to this provision shall be effected (in chronological order
to the extent practicable) as of the first day of the next succeeding period
as of which such transaction can be effected without either termination of the
Partnership for tax purposes or any material adverse effects from such
termination. In the event transactions are suspended, the General Partner
shall give written Notice of such suspension to all Limited Partners and BUC
Holders as soon as practicable.
(b) A Limited Partner (other than the Initial Limited Partner) may assign his
Limited Partnership Interests only by a duly executed written instrument of
assignment, the terms of which are not in contravention of any of the
provisions of this Agreement. Within 30 days after an assignment of Limited
Partnership Interests (other than by the Initial Limited Partner) which occurs
without a transfer of record ownership of such Limited Partnership Interests,
the assignor shall give Notice of such assignment to the General Partner.
(c) The provisions of this Section 7.02 and of Section 7.03 shall not apply to
the transfer and assignment by the Initial Limited Partner of Limited
Partnership Interests to BUC Holders in accordance with Section 11.01(a).
<PAGE> - 29 -
Section 7.03. Assignees of Limited Partners Other Than the Initial Limited
Partner.
(a) If a Limited Partner other than the Initial Limited Partner dies, his
executor, administrator or trustee, or, if he is adjudicated incompetent, his
committee, guardian or conservator, or, if he becomes Bankrupt, the trustee or
receiver of his estate, shall have all the rights of a Limited Partner for the
purpose of settling or managing his estate and such power as the deceased or
incompetent Limited Partner possessed to assign all or any part of his Limited
Partnership Interests and to join with the assignee thereof in satisfying any
conditions precedent to such assignee becoming a Limited Partner. The
Incapacity of a Limited Partner shall not dissolve the Partnership.
(b) The Partnership need not recognize for any purpose any assignment of all
or any fraction of the Limited Partnership Interests of a Limited Partner
other than the Initial Limited Partner unless there shall have been filed with
the Partnership and recorded on the Partnership's books a duly executed and
acknowledged counterpart of the instrument effecting such assignment, and
unless such instrument evidences the written acceptance by the assignee of all
of the terms and provisions of this Agreement, contains a representation that
such assignment was made in accordance with all applicable laws and
regulations (including any investor suitability requirements) and in all other
respects is satisfactory in form and substance to the General Partner.
(c) Any Limited Partner other than the Initial Limited Partner who shall
assign all of his Limited Partnership Interests shall cease to be a Limited
Partner of the Partnership, except that unless and until a Limited Partner is
admitted in his place, such assigning Limited Partner shall retain the
statutory rights and liabilities of an assignor of a limited partnership
interest under the Act.
(d) An assignee of Limited Partnership Interests (other than a BUC Holder) may
become a Limited Partner only if each of the following conditions is satisfied:
(i) the instrument of assignment sets forth the intentions of the assignor
that the assignee succeed to the assignor's Limited Partnership Interest in
his place;
(ii) the assignee shall have fulfilled the requirements of Sections 7.03(b)
and 12.03(b);
(iii) the assignee shall have paid all reasonable legal fees and filing costs
incurred by the Partnership in connection with his substitution as a Limited
Partner; and
(iv) the assignee shall have received the Consent of the General Partner,
which Consent the General Partner may withhold in its sole discretion.
(e) This Agreement and the Certificate shall be amended as necessary to
recognize the admission of any Limited Partners and shall be submitted in a
timely manner for filing with the Delaware Secretary of State. Assignees of
Limited Partnership Interests (other than a BUC Holder) shall be recognized as
such, to the extent set forth in Section 7.03(b) or 7.03(d), as of the day on
which the Partnership has received the instrument of assignment and all of the
other conditions to the assignment are satisfied.
(f) An assignee of Limited Partnership Interests (other than a BUC Holder) who
does not become a Limited Partner and who desires to make a further assignment
of his Limited Partnership Interests shall be subject to all of the provisions
of this Article VII to the same extent and in the same manner as a Limited
Partner desiring to make an assignment of Limited Partnership Interests.
Section 7.04. Joint Ownership of Interests. Subject to the other provisions
of this Agreement, a Limited Partnership Interest or BUC may be acquired by
two or more Persons, who shall, at the time they acquire such Limited
Partnership Interest or BUC, indicate to the Partnership whether the Limited
Partnership Interest or BUC is being held by them as joint tenants with the
right of survivorship, as tenants-in-common or as community property. In the
absence of any such designation, joint owners shall be presumed to hold such
Limited Partnership Interest or BUC as tenants-in-common. The Consent of such
joint Limited Partners or BUC Holders shall not require the action or vote of
all owners of any such jointly held Limited Partnership Interest or BUC.
<PAGE> - 30 -
Article VIII
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
Section 8.01. Events Causing Dissolution.
(a) The Partnership shall dissolve upon the happening of any of the following
events:
(i) ninety days following the Incapacity of a General Partner who is at that
time the sole General Partner, unless all of the remaining Partners (it being
understood that, notwithstanding any other provision herein to the contrary,
for purposes of this provision the Initial Limited Partner shall act solely in
accordance with the direction of a majority in interest of the BUC Holders)
agree in writing to continue the business of the Partnership and a successor
General Partner satisfying the standards set forth in Section 6.02 is
designated within 90 days of the occurrence of such an Incapacity;
(ii) the passage of 180 days after the repayment, sale or other disposition of
all of the Mortgage Investments and Tax Exempt Investments and substantially
all other assets, if any, held by the Partnership;
(iii) the election by a majority in interest of the Limited Partners
(including the Initial Limited Partner voting on behalf of the BUC Holders)
pursuant to Section 10.02(a)(iii) or the election by the General Partner to
dissolve the Partnership pursuant to Section 5.04(e) with the Consent of a
majority in interest of the Limited Partners thereto;
(iv) the expiration of the term of the Partnership specified in Section 2.04;
or
(v) any other event causing the dissolution of the Partnership under the laws
of the State of Delaware.
(b) Dissolution of the Partnership shall be effective on the day on which the
event occurs giving rise to the dissolution, but the Partnership shall not
terminate until a certificate of cancellation is filed with the Delaware
Secretary of State and the assets of the Partnership are distributed as
provided in Section 8.02. Notwithstanding the dissolution of the Partnership,
prior to the termination of the Partnership, the business of the Partnership
and the affairs of the Partners shall continue to be governed by this
Agreement.
(c) The obligations imposed on the General Partner by Article IX of the
Agreement will cease upon the termination of the Partnership.
Section 8.02. Liquidation.
(a) Upon dissolution of the Partnership, unless all of the Partners elect to
reform the Partnership (it being understood that, notwithstanding any other
provision herein to the contrary, for purposes of this provision the Initial
Limited Partner shall act solely in accordance with the direction of a
majority in interest of the BUC Holders), the General Partner shall liquidate
the assets of the Partnership and shall apply and distribute the proceeds
thereof as contemplated by this Section 8.02 and Article IV and cause the
cancellation of the Certificate in accordance with the Act. If there is no
General Partner, a majority in interest of the Limited Partners (including the
Initial Limited Partner voting on behalf of the BUC Holders) may elect a
liquidator to liquidate the assets of the Partnership and perform the
functions of the General Partner set forth in this Section 8.02.
(b) After payment of the expenses of the liquidation and of liabilities owing
to creditors of the Partnership (including the repayment of any loans from the
General Partner or its Affiliates), the General Partner may set aside as a
reserve such amount as it deems reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Partnership which may be paid
over by the General Partner to a bank, to be held in escrow for the purpose of
paying any such contingent or unforeseen liabilities or obligations, and, at
the expiration of such period as the General Partner may deem advisable, the
amount in such reserve shall be distributed in the manner set forth in Section
4.02(b) among the Partners and BUC Holders who would have been entitled to
receive such amounts had such amounts not been placed in such reserves.
<PAGE> - 31 -
(c) Notwithstanding the foregoing, if the General Partner or liquidator shall
determine that an immediate sale of part or all of the Partnership's assets
would cause undue loss to the Partners or the BUC Holders, the General Partner
or liquidator may, after giving Notice to the Limited Partners and BUC
Holders, and to the extent not then prohibited by any applicable law of any
jurisdiction in which the Partnership is then formed or qualified, defer
liquidation and withhold from distribution for a reasonable time any assets of
the Partnership, except those assets necessary to satisfy the Partnership's
debts and obligations.
Article IX
BOOKS AND RECORDS, ACCOUNTING, REPORTS, TAX ELECTIONS
Section 9.01. Books and Records. The Partnership shall maintain its books and
records at its principal office. The Partnership's books and records shall be
available during ordinary business hours for examination and copying there at
the reasonable request, and at the expense, of any Partner or BUC Holder or
his duly authorized representative, or copies of such books and records may be
requested in writing by any Partner or BUC Holder or his duly authorized
representative, provided that the reasonable costs of fulfilling such request,
including copying expenses, shall be paid by the Partner or BUC Holder making
such request. The Partnership's books and records shall include the following:
(a) a current list of the full name, last known home or business address and
Partnership Interest of each Partner and BUC Holder set forth in alphabetical
order;
(b) a copy of this Agreement and the Certificate, together with executed
copies of any powers of attorney pursuant to which such Certificate, and any
amendments thereto, have been executed;
(c) copies of the Partnership's federal, state and local income tax returns
and reports, if any, for the three most recent years; and
(d) copies of all financial statements of the Partnership for the three most
recent years.
Section 9.02. Accounting Basis and Fiscal Year. The books and records of the
Partnership initially shall be kept on the accrual method. The Partnership
will use a fiscal year identical to its taxable year. Unless permission is
granted by the Internal Revenue Service to use a taxable year other than the
calendar year, the Partnership will use a calendar year taxable year.
Section 9.03. Reports.
(a) Within 60 days after the end of each of the first three quarters of each
fiscal year, the General Partner shall send to each Person who was a Limited
Partner or a BUC Holder during such quarter a balance sheet and statements of
income, changes in Partners' capital and cash flow of the Partnership (all
prepared in accordance with generally accepted accounting principles but none
of which need be audited) and a statement showing distributions of Net
Interest Income and Net Residual Proceeds during such quarter, which need not
be audited, together with a report of the activities of the Partnership during
such quarter.
(b) Within 75 days after the end of each fiscal year, the General Partner
shall send to each Person who was a Limited Partner or a BUC Holder at any
time during the year then ended such tax information relating to the
Partnership as shall be necessary for the preparation by such Limited Partner
or BUC Holder of his federal income tax return and required state income and
other tax returns.
<PAGE> - 32 -
(c) Within 120 days after the end of each fiscal year, the General Partner
shall send to each Person who was a Limited Partner or BUC Holder at any time
during the year then ended a report including (i) the balance sheet of the
Partnership as of the end of such year and statements of income, changes in
Partners' capital and cash flow of the Partnership for such year, all of which
shall be prepared in accordance with generally accepted accounting principles
and accompanied by a report of the Accountants containing an opinion of the
Accountants, (ii) a report of the activities of the Partnership during such
year and (iii) a statement (which need not be audited) showing cash
distributions per Limited Partnership Interest and per BUC during such year in
respect of such year, which statement shall identify distributions of (a) Net
Interest Income and Net Residual Proceeds received by the Partnership during
such year, (b) Net Interest Income and Net Residual Proceeds received during
prior years which had been held in the Reserve and (c) cash placed in Reserves
during such year. The Partnership's annual report will include a detailed
statement of (i) the amount of the fees, if any, paid to the General Partner
pursuant to Section 5.05(e) hereof and (ii) the amounts actually reimbursed to
the General Partner and its Affiliates pursuant to Section 5.05(b) hereof.
The Accountants will certify that the amounts actually reimbursed to the
General Partner pursuant to Section 5.05(b) were costs incurred by the General
Partner in connection with the conduct of the business and affairs of the
Partnership or the acquisition and management of its assets and were
permissible reimbursements under this Agreement. The methods of verification
used by the Accountants will be in accordance with generally accepted auditing
standards and include such tests of the accounting records and other auditing
procedures which the Accountants consider appropriate.
Section 9.04. Designation of Tax Matters Partner. The General Partner is
hereby authorized to designate itself or any other General Partner as Tax
Matters Partner of the Partnership, as provided in Section 6231 of the Code
and the Regulations promulgated thereunder. Each Partner, by execution of
this Agreement, and each BUC Holder, by acceptance of his BUCs, consents to
such designation of the General Partner as the Tax Matters Partner and agrees
to execute, certify, acknowledge, deliver, swear to, file and record at the
appropriate public offices such documents as may be necessary or appropriate
to evidence the appointment of the General Partner as such.
Section 9.05. Expenses of Tax Matters Partner. The Partnership shall
reimburse the Tax Matters Partner for all expenses, including legal and
accounting fees, and shall indemnify him for claims, liabilities, losses and
damages incurred in connection with any administrative or judicial proceeding
with respect to the tax liability of the Partners and BUC Holders. The
payment of all such expenses and indemnification shall be made before any
distributions are made from Net Interest Income, Net Residual Proceeds or
Liquidation Proceeds. Neither the General Partner, nor any Affiliate, nor any
other Person shall have any obligation to provide funds for such purpose. The
taking of any action and the incurring of any expense by the Tax Matters
Partner in connection with any such proceeding, except to the extent required
by law, is a matter in the sole discretion of the Tax Matters Partner, and the
provisions on limitations of liability of the General Partner and
indemnification set forth in Section 5.09 of this Agreement shall be fully
applicable to the Tax Matters Partner in its capacity as such.
<PAGE> - 33 -
Article X
MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS AND BUC HOLDERS
Section 10.01. Meetings.
(a) The General Partner may call a meeting of the Limited Partners and BUC
Holders for any purpose or call for a vote of the Limited Partners and BUC
Holders without a meeting or otherwise solicit the consent of the Limited
Partners and BUC Holders at any time and the General Partner shall call for
such a meeting or vote without a meeting or solicit the consents of the
Limited Partners and BUC Holders upon receipt of a written request for such a
meeting, vote or solicitation signed by 10% or more in interest of the Limited
Partners (it being understood that the Initial Limited Partner will act in
accordance with the directions of the BUC Holders). Any such meeting shall be
held not less than 15 days nor more than 60 days after the receipt of such
request. Any such request shall state the purpose of the proposed meeting and
the matters proposed to be acted upon at such meeting, and no matter may be
acted upon at the meeting other than as set forth in such request or as
otherwise permitted by the General Partner. Meetings shall be held at the
principal office of the Partnership or at such other place as may be
designated by the General Partner or, if the meeting is called upon the
request of the Limited Partners (including the Initial Limited Partner acting
on behalf of the BUC Holders), as designated by such Limited Partners
(including the Initial Limited Partner acting on behalf of the BUC Holders).
(b) Notice of any meeting to be held pursuant to Section 10.01(a) shall be
given (in person or by certified mail) within 10 days of the receipt by the
General Partner of the request for such meeting to each Limited Partner at his
record address, or at such other address which he may have furnished in
writing to the General Partner and to the BUC Holders at the address shown on
the Partnership's books and records kept in accordance with Section 9.01.
Such Notice shall state the place, date and hour of the meeting and shall
indicate that the Notice is being issued at the direction of, or by, the
Partner(s) calling the meeting. The Notice shall state the record date
established in Section 10.01(c) and state the purpose of the meeting. If a
meeting is adjourned to another time or place, and if an announcement of the
adjournment of time or place is made at the meeting, it shall not be necessary
to give Notice of the adjourned meeting. The presence in person or by proxy
of a majority in interest of the Limited Partners (including the Initial
Limited Partner acting for and at the direction of the BUC Holders) considered
as a class shall constitute a quorum at all meetings of the Partners and BUC
Holders; provided, however, that if no such quorum is present, holders of a
majority in interest of the Limited Partners considered as a class (it being
understood that the Initial Limited Partner shall be present at the direction
of the BUC Holders and only to the extent of such direction) so present or so
represented may adjourn the meeting from time to time without further Notice,
until a quorum shall have been obtained. No Notice of the time, place or
purpose of any meeting of Limited Partners and BUC Holders need be given (i)
to any Limited Partner or BUC Holder who attends in person or is represented
by proxy, except for a Partner attending a meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business
on the ground that the meeting is not lawfully called or convened, or (ii) to
any Limited Partner or BUC Holder entitled to such Notice who, in writing,
executed and filed with the records of the meeting, either before or after the
time thereof, waives such Notice.
(c) For the purpose of determining the Limited Partners entitled to vote at
any meeting of the Limited Partners and BUC Holders, and the BUC Holders
entitled to receive Notice of and direct the voting of the Initial Limited
Partner at any such meeting, or any adjournment thereof, or to act by written
Consent without a meeting, the General Partner or the Limited Partners or the
BUC Holders requesting such meeting or vote pursuant to Section 11.03(a) may
fix, in advance, a date as the record date of any such determination of
Limited Partners and BUC Holders. Such date shall not be more than 60 days
nor less than 15 days before any such meeting or not more than 60 days prior
to the initial solicitation of Consents from the Limited Partners and BUC
Holders.
(d) At each meeting of Limited Partners and BUC Holders, the Limited Partners
and BUC Holders present or represented by proxy shall elect such officers and
adopt such rules for the conduct of such meeting as they shall deem
appropriate.
<PAGE> - 34 -
Section 10.02. Voting Rights of Limited Partners and BUC Holders.
(a) Subject to Section 10.03, a majority in interest of the Limited Partners
(it being understood that the Initial Limited Partner shall act at the
direction of the BUC Holders), without the concurrence of the General Partner,
may: (i) amend this Agreement, provided that the concurrence of the General
Partner shall be required for any amendment to this Agreement which modifies
the compensation or distributions to which the General Partner is entitled or
which affects the duties of the General Partner; (ii) approve or disapprove
the sale or other disposition of all or substantially all of the Partnership's
assets in a single transaction in the circumstances provided by Section
5.04(c); (iii) dissolve the Partnership; and (iv) remove any General Partner
and elect a successor therefor, which successor shall become a General Partner
only in accordance with Section 6.02. Amendments to this Agreement may be
proposed at any time by a writing signed by 10% or more in interest of the
Limited Partners (it being understood that the Initial Limited Partner will
act in accordance with the direction of the BUC Holders).
(b) A Limited Partner shall be entitled to cast one vote for each Limited
Partnership Interest which he owns, and a BUC Holder shall be entitled to
direct the Initial Limited Partner to cast one vote for each BUC which he owns
(it being understood that the Initial Limited Partner will act at the
direction of the BUC Holders) at a meeting, in person, by written proxy or by
a signed writing directing the manner in which he desires that his vote be
cast, which writing must be received by the General Partner prior to the
adjournment sine die of such meeting. In the alternative, BUC Holders may
Consent to actions without a meeting, by a signed writing identifying the
action taken or proposed to be taken. Every proxy must be signed by the
Limited Partner or BUC Holder or his attorney-in-fact. No proxy shall be
valid after the expiration of 12 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Limited Partner or the BUC Holder executing it by Notice to the Person to whom
the proxy was given. Written Consents may be irrevocable if stated in a
writing delivered to BUC Holders at the time at which their Consent is
solicited. Only the votes or Consents of Limited Partners or BUC Holders of
record on the record date established pursuant to Section 10.01(c), whether at
a meeting or otherwise, shall be counted. The General Partner shall not be
entitled to vote in its capacity as General Partner. The laws of the State of
Delaware pertaining to the validity and use of corporate proxies shall govern
the validity and use of proxies given by the Limited Partners and BUC Holders,
except to the extent such laws are inconsistent with this Agreement. The BUC
Holders may give proxies only to the Initial Limited Partner. The Initial
Limited Partner will vote in accordance with the directions of the BUC Holders
so that each BUC will be voted separately.
(c) Reference in this Agreement to a specified percentage in interest of the
Limited Partners and BUC Holders means the Limited Partners and BUC Holders
whose combined Capital Contributions (it being understood that the BUC
Holders' Capital Contributions were made by the Initial Limited Partner)
represent the specified percentage of the Capital Contributions of all Limited
Partners and BUC Holders.
Section 10.03. Opinion Regarding Effect of Action by Limited Partners and BUC
Holders. Prior to any vote or Consent by Limited Partners or BUC Holders that
might (i) materially affect the tax status of the Partnership, (ii) impair the
limited liability of the Limited Partners or BUC Holders, or (iii) result in
the dissolution or termination of the Partnership, the Partnership will
provide Limited Partners and BUC Holders written advice from Counsel as to the
possible and most likely consequences of such vote or Consent with respect
thereto.
Section 10.04. Other Activities. The Limited Partners and BUC Holders may
engage in or possess interests in other business ventures of every kind and
description for their own accounts, including without limitation serving as
general or limited partners of other partnerships which own, either directly
or through interests in other partnerships, investments similar in nature to
the Mortgage Investments and the Tax Exempt Investments. Neither the
Partnership nor any of the Partners or BUC Holders shall have any rights by
virtue of this Agreement in or to such business ventures or to the income or
profits derived therefrom.
<PAGE> - 35 -
Article XI
ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS TO BUC HOLDERS AND RIGHTS OF
BUC HOLDERS
Section 11.01. Assignment of Limited Partnership Interests to BUC Holders.
(a) Except as otherwise provided herein, the Initial Limited Partner, by the
execution of this Agreement, irrevocably assigns to the Persons who are BUC
Holders of the Prior Partnership as of the Merger Date, all of the Initial
Limited Partner's rights and interest in its Partnership Interest. The rights
and interest so transferred and assigned shall include, without limitation,
the following:
(i) all rights to receive distributions of Net Interest Income pursuant to
Section 4.01;
(ii) all rights to receive Net Residual Proceeds and Liquidation Proceeds
pursuant to Section 4.02;
(iii) all rights in respect of allocations of Income and Loss pursuant to
Sections 4.03 and 4.04;
(iv) all rights in respect of determinations of allocations and distributions
pursuant to Section 4.05;
(v) all rights to inspect records and to receive reports pursuant to Article
IX;
(vi) all rights to vote on Partnership matters pursuant to Article X; and
(vii) all rights which Limited Partners have, or may have in the future, under
the Act, except as otherwise provided herein.
Notwithstanding the foregoing, the Partnership may issue additional BUCs from
time to time as determined by the General Partner, in which case the foregoing
assignment will be deemed to include an assignment to the holders of such
additional BUCs and such additional BUCs shall participate in the rights and
interest of the Initial Limited Partner to the same extent as the BUCs
existing on the Merger Date. All Persons becoming BUC Holders shall be bound
by the terms and conditions of, and shall be entitled to all rights of,
Limited Partners under this Agreement.
(b) The Initial Limited Partner shall remain as Initial Limited Partner on the
books and records of the Partnership notwithstanding the assignment of all of
its Limited Partnership Interest until such time as the Initial Limited
Partner transfers its position as Initial Limited Partner to another Person
with the Consent of the General Partner. Other than pursuant to Section
11.01(a), the Initial Limited Partner may not transfer or assign a Limited
Partnership Interest without the prior written Consent of the General Partner.
(c) The General Partner, by the execution of this Agreement, irrevocably
Consents to and acknowledges on behalf of itself and the Partnership that (i)
the foregoing assignment pursuant to Section 11.01(a) by the Initial Limited
Partner to the BUC Holders of the Initial Limited Partner's rights and
interest in the Limited Partnership Interests is valid and binding on the
Partnership and the General Partner, and (ii) the BUC Holders are intended to
be third-party beneficiaries of all rights and privileges of the Initial
Limited Partner in respect of the Limited Partnership Interests. The General
Partner covenants and agrees that, in accordance with the foregoing transfer
and assignment, all the Initial Limited Partner's rights and privileges in
respect of the Limited Partnership Interests assigned to the BUC Holders may
be exercised by the BUC Holders, including, without limitation, those listed
in Section 11.01(a).
Section 11.02. Rights of BUC Holders.
(a) Limited Partners (including the Initial Limited Partner but only with
respect to its own Limited Partnership Interests) and BUC Holders shall share
pari passu on the basis of one Limited Partnership Interest for one BUC, and
shall be considered as a single class with respect to all rights to receive
distributions of Net Interest Income, Net Residual Proceeds and Liquidation
Proceeds, allocations of Income and Loss, and other determinations of
allocations and distributions pursuant to this Agreement.
<PAGE> - 36 -
(b) Limited Partners (including the Initial Limited Partner voting on behalf
of the BUC Holders) shall vote on all matters in respect of which they are
entitled to vote (either in person, by proxy or by written Consent), as a
single class with each entitled to one vote.
(c) A BUC Holder is entitled to the same duty (including any fiduciary duty
created by law) from the General Partner as the General Partner owes to a
Limited Partner and may sue the General Partner to enforce the same. A BUC
Holder may bring a derivative action against any Person (including the General
Partner) to enforce any right of the Partnership to recover a judgment to the
same extent as a Limited Partner has such a right under the Act.
(d) A BUC Holder is not a Limited Partner and has no right to be admitted to
the Partnership as such.
Section 11.03. Voting by the Initial Limited Partner on Behalf of BUC Holders.
(a) Subject to Section 8.01(a)(i), the Initial Limited Partner hereby agrees
that, with respect to any matter on which a vote of the Limited Partners is
taken, the Consent of the Limited Partners is required or any other action of
the Limited Partners is required or permitted, it will not vote its Limited
Partnership Interest or grant such Consent or take such action (other than
solely administrative actions as to which the Initial Limited Partner has no
discretion) except for the sole benefit of, and in accordance with the written
instructions of, the BUC Holders with respect to their BUCs. The Initial
Limited Partner (or the Partnership on behalf of the Initial Limited Partner)
will provide Notice to the BUC Holders containing information regarding any
matters to be voted upon or as to which any Consent or other action is
requested or proposed. The Partnership and the General Partner hereby agree
to permit BUC Holders to attend any meetings of Partners and the Initial
Limited Partner shall, upon the written request of BUC Holders owning BUCs
which represent in the aggregate 10% or more of all of the outstanding BUCs,
request the General Partner to call a meeting of Partners pursuant to Section
10.01 or to submit a matter to the Initial Limited Partner without a meeting
pursuant to this Agreement. The General Partner shall give the BUC Holders
Notice of any meeting to be held pursuant to Section 10.01(a) at the same time
and manner as such Notice is required to be given to the Initial Limited
Partner pursuant to Section 10.01(b).
(b) The Initial Limited Partner will exercise its right to vote or Consent to
any action under this Agreement in accordance with the written instructions of
holders of BUCs outstanding as of the relevant record date. In addition,
holders of a majority of the BUCs outstanding may instruct the Initial Limited
Partner to take, and upon receipt of such instruction, the Initial Limited
Partner shall take, the actions permitted by Section 10.02.
(c) The Initial Limited Partner will mail to any BUC Holder (at the address
shown on the Partnership's records kept in accordance with Section 9.01(a))
any report, financial statement or other communication received from the
Partnership or the General Partner with respect to the Limited Partnership
Interests held by the Initial Limited Partner (including, without limitation,
any financial statement or report or tax information provided pursuant to
Section 9.03). In lieu of mailing of any such document by the Initial Limited
Partner, the Initial Limited Partner may, at its option, request the General
Partner to mail any such communications directly to the BUC Holders, and the
Initial Limited Partner shall be deemed to have satisfied its obligations
under this Section 11.03(b) upon its receipt of written notification from the
General Partner that any such communication has been mailed, postage prepaid,
to all of the BUC Holders at the addresses shown on the Partnership's records.
Section 11.04. Preservation of Tax Status. With the Consent of each BUC
Holder so affected, the General Partner may at any time cause such BUC Holder
to become a Limited Partner and may take such other action with respect to the
manner in which BUCs are being or may be transferred or traded as it may deem
necessary or appropriate, in order to preserve the status of the Partnership
as a partnership rather than an association taxable as a corporation for
federal income tax purposes or to insure that BUC Holders will be treated as
limited partners for federal income tax purposes.
<PAGE> - 37 -
Article XII
MISCELLANEOUS PROVISIONS
Section 12.01. Appointment of the General Partner as Attorney-in-Fact.
(a) Each Limited Partner by the execution of this Agreement irrevocably
constitutes and appoints, with full power of substitution, the General Partner
as his true and lawful attorney-in-fact with full power and authority in his
name, place and stead to execute, certify, acknowledge, deliver, swear to,
file and record at the appropriate public offices such documents as may be
necessary or appropriate to carry out the provisions of this Agreement,
including, but not limited to:
(i) the Certificate and amendments thereto, and all certificates and other
instruments (including counterparts of this Agreement), and any amendments
thereof, which any such Person deems appropriate to form, qualify or continue
the Partnership as a limited partnership (or a partnership in which the
Limited Partners will have limited liability comparable to that provided by
the Act on the date thereof) in a jurisdiction in which the Partnership may
conduct business or in which such formation, qualification or continuation is,
in the opinion of any such Person, necessary to protect the limited liability
of the Limited Partners and BUC Holders;
(ii) any other instrument or document which may be required to be filed by the
Partnership under federal law or under the laws of any state in which any such
Person deems it advisable to file;
(iii) all amendments to this Agreement adopted in accordance with the terms
hereof and all instruments which any such Person deems appropriate to reflect
a change or modification of the Partnership in accordance with the terms of
this Agreement; and
(iv) any instrument or document, including amendments to this Agreement, which
may be required to effect the continuation of the Partnership, the admission
of a Limited Partner or an additional or successor General Partner or the
dissolution and termination of the Partnership (provided such continuation,
admission or dissolution and termination are in accordance with the terms of
this Agreement) or to reflect any reductions in amount of Capital Accounts.
(b) The appointment by each Limited Partner of each of such Persons as his
attorney-in-fact is irrevocable and shall be deemed to be a power coupled with
an interest, in recognition of the fact that each of the Partners under this
Agreement will be relying upon the power of such Persons to act as
contemplated by this Agreement in any filing and other action by them on
behalf of the Partnership, and such power shall survive the Incapacity of any
Person hereby giving such power and the transfer or assignment of all or any
part of the Limited Partnership Interests of such Person; provided, however,
that in the event of a transfer by a Limited Partner of all or any part of his
Limited Partnership Interests, the foregoing power of attorney shall survive
such transfer only until such time as the transferee is admitted to the
Partnership as a Limited Partner and all required documents and instruments
are duly executed, filed and recorded to effect such substitution.
Section 12.02. Signatures. Each Limited Partner and any additional or
successor General Partner shall become a signatory hereto by signing such
number of counterpart signature pages to this Agreement and such other
instrument or instruments in such manner and at such time as the General
Partner shall determine. By so signing, each Limited Partner, successor
General Partner or additional General Partner, as the case may be, shall be
deemed to have adopted, and to have agreed to be bound by, all the provisions
of this Agreement, as amended from time to time; provided, however, that no
such counterpart shall be binding unless and until it has been accepted by the
General Partner.
<PAGE> - 38 -
Section 12.03. Amendments.
(a) In addition to any amendments otherwise authorized herein, amendments may
be made to this Agreement or the Certificate from time to time by the General
Partner, without the Consent of the Limited Partners or the BUC Holders, (i)
to add to the representations, duties or obligations of the General Partner or
surrender any right or power granted to the General Partner in this Agreement;
(ii) to cure any ambiguity or correct or supplement any provision in this
Agreement which may be inconsistent with the manifest intent of this
Agreement, if such amendment is not materially adverse to the interests of
Limited Partners and BUC Holders in the sole judgment of the General Partner;
(iii) to delete or add to any provision of this Agreement required to be
deleted or added to based upon comments by the staff of the Securities and
Exchange Commission or other federal agency or by a state securities
commissioner; (iv) to delete, add or revise any provision of this Agreement
that may be necessary or appropriate, in the General Partner's judgment, to
insure that the Partnership will be treated as a partnership, and that each
BUC Holder and each Limited Partner will be treated as a limited partner, for
federal income tax purposes; (v) to reflect the withdrawal, removal or
admission of Partners; and (vi) to reflect a change in the name or address of
the Partnership's registered agent in the State of Delaware; provided,
however, that no amendment shall be adopted pursuant to this Section 12.03(a)
unless the adoption thereof (A) is consistent with Section 5.01 and is not
prohibited by Section 5.04; (B) does not affect the distribution of Net
Interest Income, Net Residual Proceeds or Liquidation Proceeds or the
allocation of Income or Loss (except as provided in Section 5.10); (C) does
not, in the sole judgment of the General Partner after consultation with
Counsel, affect the limited liability of the Limited Partners or the BUC
Holders or cause the Partnership not to be treated as a partnership for
federal income tax purposes; and (D) does not amend this Section 12.03(a).
(b) If this Agreement shall be amended as a result of substituting a Limited
Partner, the amendment to this Agreement shall be signed by the General
Partner, the Person to be substituted and the assigning Limited Partner. If
this Agreement shall be amended to reflect the designation of an additional
General Partner, such amendment shall be signed by the other General Partners
and by such additional General Partner. If this Agreement shall be amended to
reflect the withdrawal of a General Partner when the business of the
Partnership is being continued, such amendment shall be signed by the
withdrawing General Partner and by the remaining or successor General
Partner. In the event the withdrawing General Partner or the assigning
Limited Partner does not sign such an amendment within 30 days following its
withdrawal or substitution, the remaining or successor General Partners are
hereby appointed by the withdrawing General Partner or the assigning Limited
Partner as its attorney-in-fact for purposes of signing such amendment.
(c) In making any amendments, there shall be prepared and filed by the General
Partner for recording such documents and certificates as shall be required to
be prepared and filed under the Act and in any other jurisdictions under the
laws of which the Partnership is then qualified.
Section 12.04. Binding Provisions. The covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the heirs,
executors, administrators, personal representatives, successors and assigns of
the respective parties hereto.
Section 12.05. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware.
Section 12.06. Separability of Provisions. Each provision of this Agreement
shall be considered separable and if for any reason any provision or
provisions hereof are determined to be invalid and contrary to any law, such
invalidity shall not impair the operation of or affect those portions of this
Agreement which are valid.
Section 12.07. Captions. Article and Section titles are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.
<PAGE> - 39 -
Section 12.08. Entire Agreement. This Agreement, together with Schedule A
hereto, sets forth all, and is intended by all parties to be an integration of
all, of the promises, agreements and understandings among the parties hereto
with respect to the Partnership, the Partnership business and the property of
the Partnership, and there are no promises, agreements, or understandings,
oral or written, express or implied, among them other than as set forth,
incorporated or contemplated in this Agreement.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the 1st day
of October, 1998.
GENERAL PARTNER:
AMERICA FIRST CAPITAL ASSOCIATES
LIMITED PARTNERSHIP TWO
By America First Companies L.L.C.,
General Partner
By /s/ Michael B. Yanney
Michael B. Yanney, President
INITIAL LIMITED PARTNER:
AMERICA FIRST FIDUCIARY
CORPORATION NUMBER FIVE
By /s/ Michael B. Yanney
Michael B. Yanney, President
<PAGE> - 40 -
SCHEDULE A
GENERAL PARTNER:
America First Capital $4,996
Associates Limited
Partnership Two
Suite 400
1004 Farnam Street
Omaha, NE 68102
INITIAL LIMITED PARTNER:
America First Fiduciary $72,644,126
Corporation Number Five
Suite 400
1004 Farnam Street
Omaha, NE 68102
<PAGE> - 41 -
EXHIBIT 24
POWER OF ATTORNEY
<PAGE> -42-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1998, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Tax Exempt Mortgage Fund Limited Partnership
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 1st day of February, 1999.
/s/ Michael B. Yanney
Michael B. Yanney
<PAGE> -43-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1998 and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Tax Exempt Mortgage Fund Limited Partnership
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 1st day of February, 1999.
/s/ William S. Carter, M.D.
William S. Carter, M.D.
<PAGE> -44-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1998, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Tax Exempt Mortgage Fund Limited Partnership
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 1st day of February, 1999.
/s/ Martin A. Massengale
Martin A. Massengale
<PAGE> -45-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1998, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Tax Exempt Mortgage Fund Limited Partnership
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 1st day of February, 1999.
/s/ Alan Baer
Alan Baer
<PAGE> -46-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1998 and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Tax Exempt Mortgage Fund Limited Partnership
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 1st day of February, 1999.
/s/ Gail Walling Yanney
Gail Walling Yanney
<PAGE> -47-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1998 and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Tax Exempt Mortgage Fund Limited Partnership
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 1st day of February, 1999.
/s/ Mariann Byerwalter
Mariann Byerwalter
<PAGE> -48-
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<PERIOD-END> DEC-31-1998
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