Amendment to Amended and Restated Agreement of Limited Partnership
of Middlebury Elkhart, L.P. dated December 15, 2000.
GUARANTEED PAYMENT-OVERSIGHT FEE
This Amended Agreement is made as of December 15, 2000, by and between
Middlebury Elkhart, L.P., an Indiana limited partnership (the "Partnership"),
and Prairie Village - Homes for America, Inc., an Indiana Corporation (the
"Oversight Agent"). This Agreement is made with reference to the following
facts:
A. The Partnership, pursuant to its Amended and Restated Agreement of Limited
Partnership of even date herewith (the "Agreement"), is engaged in the
construction/rehabilitation ownership and operation of an apartment complex
known as Prairie Village and located in Elkhart, Indiana (the "Apartment
Complex"). (Capitalized terms used and not otherwise herein shall have the
respective meanings set forth in the Agreement.)
B. The Oversight Agent is being retained to perform certain additional
acquisition and placement services, and the partnership has agreed to pay
the Oversight Agent a certain fee, all as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Services and Duties of Oversight Agent.
I. The Oversight Agent shall provide services to the Partnership and The
Apartment Complex. Such services are intended to enable the Partnership to
be better able acquire, gain and sell with all Code requirements for the
Housing Tax Credits (the "Credits"), to establish eligibility for such
Credits with respect to the entire Apartment Complex and avoid recapture
thereof during the compliance period established under the Code and to
ensure that the Partnership shall comply with all local city, county and
state laws applicable to the business of the Partnership.
II. The Oversight Agent shall assist the Partnership in planning, supervising
and developing for the Apartment Complex, including, without limitation,
the following:
(A) Assisting (x) the supervision of such professional copywriters, companies,
artists and agencies as may be required to develop programs, brochures,
grand opening campaigns or daily newspaper advertisements, and (y) the
selection and supervision of such services as may be required to close,
furnish model apartment units, furnish recreation areas or develop rental
displays;
(B) Furnishing such assistance as may be required to develop a market analysis
through field inspections of competitive projects or surveys of property
managers and owners, and assisting in developing a rental schedule;
(C) Assisting the Partnership in placing the credits and developing close
systems for processing applications, credit checks, occupancy schedules and
such other procedures as may be required to assure an orderly occupancy of
the Apartment Complex;
D. Assisting the Partnership and the Management Agent in coordinating Efforts
to achieve a desirable tenant selection through recruitment and screening
of tenants before and during occupancy and assisting in helping tenants
organize themselves for social programs;
Exhibit 10.7.3 - Page 1
E. Developing and maintaining favorable community relations between the
Partnership and various social and community organizations; and
F. Maintaining effective communications with all governmental bodies having
jurisdiction over the Apartment Complex.
III. The Oversight Agent will provide asset management services for the
Partnership. This asset management shall include:
A. Responsibility for overall strategic management of the Apartment Complex,
including establishing rent levels and concessions thereto, marketing
strategies for the Apartment Complex, and sales strategies for the
Apartment Complex;
B. Performance of accounting services for the Apartment Complex, including
providing reports showing income and expenses, on a monthly and annual
basis. These services will not include tax return preparation for the
Partnership or auditing services to be performed by independent accountants
on behalf of the Partnership; and
C. Preparation of periodic communications to the Partnership, with such
frequency as Acquisition & Tax Credit Placement Fee Agent in its sole
discretion may deem appropriate.
IV. The Oversight Agent is authorized to approach and negotiate with new or
existing lenders with respect to the Apartment Complex from time to time on
behalf of the Partnership and to negotiate for additional funds, better
interest rates and/or extended repayment terms as and when The Oversight
Agent determines that such negotiations may result in beneficial loan
modifications and/or refinancing and shall present such recommended
financing to the Partnership for consideration. The Oversight Agent shall
also provide consulting services to the Partnership in connection with
selling the Apartment Complex. The listing price and minimum sales price
for the Apartment Complex shall be as recommended by the The Oversight
Agent.
2. Compensation.
Commencing October 1, 1999, the Partnership shall pay The Oversight Agent a fee
for each year equal to the following amounts; provided, that the amounts payable
with respect to any year shall be owed and payable only to the extent of Cash
Flow available for payment of the incentive management fee for such year
pursuant to Section 9.2A of the Agreement ("Net Cash Flow"):
80.0% of Net Cash Flow, provided that the incentive management fee for any year
shall not exceed that amount which equals 12.0% of gross rental income received
by the Partnership for such year.
(I) The Partnership shall reimburse the Acquisition & Tax Credit Placement Fee
3. Default of The Oversight Agent.
Notwithstanding anything contained in this Agreement to the contrary, in the
event that (a) the Acquisition & Tax Credit Placement Fee Agent shall default in
any material respect in any of its obligations hereunder or (b) the General
Partners default in any of their obligations under the Agreement and such
default shall continue beyond any applicable notice or cure period, then the
Partnership shall have the right to withhold all compensation otherwise payable
to the Acquisition & Tax Credit Placement Fee Agent hereunder until such default
is fully cured, and to set off against such compensation any obligations of the
Acquisition & Tax Credit Placement Fee Agent hereunder or of the General
Partners under the Agreement. In addition, this Agreement shall automatically
terminate upon the withdrawal of a General Partner as a general partner of the
Partnership for whatever reason. 4. Term of Agreement. Subject to Section 3
above, the term of this Agreement shall commence on and as of the date hereof
and shall continue in full force and effect until termination of the
Partnership.
Exhibit 10.7.3 - Page 2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
THE OVERSIGHT AGENT
Prairie Village - Homes For America, Inc., an
Indiana corporation
By:----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
PARTNERSHIP:
Middlebury Elkhart, L.P., an Indiana limited
Partnership
By: Prairie Village - Homes for America, Inc.
Its general partner
By: ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
Exhibit 10.7.3 - Page 3