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EXHIBIT 3(e)
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
SECOND AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP
Agreement dated as of the 7th day of February, 1997, by and among
Uniprop Manufactured Housing Communities Income Fund, a Michigan limited
partnership (the "Partnership"), P.I. Associates, the General Partner of the
Partnership (the "General Partner"), and those persons identified on Schedule 1
attached hereto as Limited Partners.
WHEREAS, the General Partner formed the Partnership by filing a
Certificate of Limited Partnership with the Secretary of State of Michigan on
May 16, 1985 and by entering into an Agreement of Limited Partnership dated as
of May 16, 1985, as amended by the First Amendment to the Uniprop Manufactured
Housing Communities Income Fund Agreement of Limited Partnership dated May 16,
1985, executed as of March 4, 1986 (the "Agreement"), and wishes to
continue the Partnership under this Second Amendment to Agreement of Limited
Partnership and the provisions of the Michigan Revised Uniform Limited
Partnership Act;
WHEREAS, the General Partner wishes to amend the Agreement in
anticipation of causing the Partnership to enter into a Financing;
WHEREAS, the General Partner wishes to amend the Agreement to permit
the Partnership to undertake the Financing notwithstanding that it may reduce
the Net Cash from Operations distributed to the Limited Partners in the year in
which the Financing occurs below $3,000,000;
WHEREAS, the General Partner wishes to amend the Agreement to authorize
the Partnership to pay to the General Partner, on an ongoing basis, a
Partnership management distribution;
WHEREAS, the General Partner wishes to amend the Agreement to authorize
the Partnership to pay a fee out of the net proceeds to the Financing to an
affiliate of the General Partner for its services in arranging the Financing;
and
WHEREAS, the General Partner may, pursuant to Section 17.b of the
Agreement, amend the Agreement with the consent of Limited Partners holding
more than 50% of the then-outstanding Units;
NOW THEREFORE, the parties hereto agree as follows:
1. The definition of the term "Gain From Sale" in Section 1 of the
Agreement is hereby amended and restated as follows:
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"Gain From Sale" means any net income or gain of the
Partnership for Federal income tax purposes resulting from a
Capital Transaction, determined without regard to allocations
required by Section 10.a.(v) or 10.a.(vii).
2. The definition of the term "Loss From Sale" in Section 1 of the
Agreement is hereby amended and restated as follows:
"Loss From Sale" means any net loss of the Partnership for
Federal income tax purposes resulting from a Capital
Transaction, determined without regard to allocations required
by Section 10.a.(v) or 10.a.(vii).
3. The definition of the terms "Net Income" and "Net Loss"
in Section 1 of the Agreement is hereby amended and restated as
follows:
"Net Income" or "Net Loss" means the net income or net loss,
determined without regard to depreciation (including cost
recovery allowances), allocations required by Section 10.a.(v)
or 10.a.(vii), Gain From Sale or Loss From Sale, for each
taxable year as determined for Federal income tax purposes.
4. The definition of the term "Partnership Management
Distribution" is hereby added to Section 1 of the Agreement to
read as follows:
"Partnership Management Distribution" means the distribution
described in Section 12.f.(vii).
5. The definition of the term "Regulations" is hereby added to
Section 1 of the Agreement to read as follows:
"Regulations" means the income tax regulations promulgated under
the Code and any successor provisions.
6. Section 10.a.(v) of the Agreement is hereby amended and
restated as follows:
(v) Notwithstanding anything to the contrary in this Section
10, other than Section 10.a.(vii), any income from
depreciation recapture under Section 1245 or 1250 of the
Code attributable to depreciation (including cost recovery
allowances) as of the date of this Amendment shall be
allocated to the Class A Limited Partners and General
Partner in proportion to and in the amount of any deductions
giving rise to such recapture, provided, however, that to
the extent a Partner has received a distribution from the
proceeds of a nonrecourse liability under Section 10.b.(iv)
hereof that would otherwise be charged back under Section
10.a.(vii)(d), such recapture income shall be treated as if
it were also a minimum gain chargeback allocation under
Section 10.a.(vii)(d) hereof.
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7. Section 10.a.(vii) is hereby amended and restated to read as
follows:
(vii) Notwithstanding anything to the contrary in the
Agreement:
(a) The Partnership shall not allocate
Net Loss to the Partners to the extent such
allocation would violate the alternate test for
economic effect under Section 1.704-1(b)(2)(ii)(d)
of the Regulations;
(b) The Partnership shall make all qualified income
offset allocations required by Section
1.704-1(b)(2)(ii)(d) of the Regulations;
(c) The Partnership shall make all nonrecourse
deduction allocations (as defined in Regulations
Section 1.704-2(c)),20% to the General Partner and
80% to the Limited Partners in proportion to the
Units held by each Limited Partner;
(d) The Partnership shall make the minimum gain
chargeback allocations required by Regulations
Section 1.704-2(f)(1); provided, however, that to
the extent such allocation is caused by a repayment
of all or a portion of a nonrecourse financing of
the Partnership and would reduce the negative
Capital Account of a Partner below the negative
Capital Account of the Partner as of the end of the
Partnership taxable year in which the distribution
of such nonrecourse financing occurs, such
allocation shall be treated as if it were also
recapture income allocated under Section 10.a.(v)
hereof;
(e) The Partnership shall take the allocations
required by this Section 10.a.(vii) (other than
Section 10.a.(vii)(g)) into account when making
future allocations so that the net amount of such
allocations to a Partner shall be equal to the net
amount that would have been allocated to such
Partner if the allocations pursuant to this Section
10.a.(vii) (other than Section 10.a.(vii)(g))
had not occurred; and
(f) The Partnership shall otherwise comply with
Regulations Section 1.704-1(b) and -2.
(g) Notwithstanding anything to the contrary in this
Agreement, any payment of the Partnership
Management Distribution shall be treated as an
additional distribution to the General Partner in
excess of the aggregate distributions to which the
General Partner would otherwise have been entitled
under Section 10.b. hereof if the Partnership
Management Distribution were not made to it, and,
after giving effect to all of the special
allocations under this Section 10.a.(vii) (except
Section 10.a.(vii)(e) and this Section
10.a.(vii)(g)), income shall first be allocated to
the General Partner and then gain shall be
specially
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allocated to the General Partner until the cumulative
income and gain allocated to the General Partner
pursuant to this Section 10.a.(vii)(g) for the current
and all prior fiscal years of the Partnership equals the
cumulative Partnership Management Distribution paid to
the General Partner for the current and all prior fiscal
years of the Partnership. In the event that such
Partnership Management Distribution or Incentive
Management Interest or any other distribution is
recharacterized as a payment under Code Section 707(a)
or a guaranteed payment under Code Section 707(c), any
income, gain, loss or deduction realized as a direct or
indirect result of the recharacterization of the
distribution as such a payment or guaranteed payment for
tax purposes shall be allocated among the Partners so
that (after effecting appropriate adjustments to the
Capital Accounts of the Partners to reflect the tax
treatment of the recharacterization) the aggregate
amount (including any distributions recharacterized
as payments for tax purposes and any amounts received
upon liquidation of the Partnership) that each Partner
is entitled to receive from the Partnership over the
life thereof (and each accounting period thereof) is
equal to the aggregate amount that each such Partner
would have been entitled to receive had the
recharacterization not occurred. In addition to the
extent possible without contravening the previous
sentence, such income, gain, loss or deduction shall be
allocated in a manner that puts each Partner, as soon as
possible, in the same after-tax position as they would
have been in had the recharacterization not occurred.
8. Section 10.a.(viii) is hereby added to the Agreement to read as
follows:
(viii) Solely for purposes of determining a Partner's
proportionate share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), the Partners'
interests in Partnership profits are as follows: 20% to
the General Partner and 80% to the Limited Partners in
proportion to the number of Units held by each Limited
Partner.
9. Section 10.b.(iv) is hereby added to the Agreement to read as
follows:
(iv) To the extent permitted by Regulations Section
1.704-2(h)(3), the General Partner shall endeavor to
treat distributions of the Sale or Financing Proceeds
attributable to any financing or indebtedness of the
Partnership as having been made from the proceeds of a
nonrecourse liability (as such term is defined in
Regulations Section 1.704-2(b)(3)) only to the extent
that such distributions would cause or increase a
deficit in the Capital Account of any Partner that
exceeds the amount such Partner is otherwise obligated
to restore (within the meaning of Regulations Section
1.704-1(b)(2)(ii)(c)) as of the end of the Partnership
taxable year in which the distribution occurs.
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10. Section 12.d (xvii) of the Agreement is hereby removed.
11. Section 12.f (vii) and (viii) are hereby added to the Agreement
to read as follows:
(vii) Agree to pay to the General Partner a quarterly
Partnership Management Distribution equal to one-fourth
of 1% of the most recent appraised value of the
properties held by the Partnership, payable in arrears 45
days after the end of each fiscal quarter. The
Partnership Management Distribution shall commence on the
date of the closing of a Financing which results in a
complete return to the Limited Partners of their Adjusted
Capital Contributions (a "Major Financing") and shall be
pro rated for the balance of the quarter in which such a
Major Financing occurs. In the event of termination of
the Partnership other than at the end of a quarter, the
Partnership Management Distribution shall be pro rated
for the partial quarter and paid on the date of
termination.
The General Partner will calculate Net Cash From
Operations with respect to each fiscal quarter by
applying the definition of Net Cash From Operations in
Section 1 as if "taxable quarter" were substituted for
"taxable year." The Partnership Management Distribution
will be payable only if and to the extent that there is
sufficient Net Cash From Operations in the quarter with
respect to which the Partnership Management Distribution
is proposed to be paid and only if and to the extent that
the Partnership has sufficient cash to pay the
Partnership Management Distribution at the time it is
due and any portion of the Partnership Management
Distribution that cannot be paid as a result of the
limitations in this sentence will not be payable at any
future time.
(viii) Agree to pay to an Affiliate of the General Partner a
finance fee equal to 1% of the amount of any Major
Financing. The finance fee shall be payable in full at
the closing of such a Major Financing.
12. Except as otherwise provided herein, the parties hereto
confirm the Agreement in its entirety.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Second Amendment to Agreement of Limited Partnership as of the date first
specified above.
GENERAL PARTNER
P.I. ASSOCIATES LIMITED PARTNERSHIP
By: /s/ Xxxx X. Xxxxxxx,
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Xxxx X. Xxxxxxx, General Partner
LIMITED PARTNERS
Each of the Limited Partners named in Schedule 1 hereto,
By: P.I. ASSOCIATES LIMITED PARTNERSHIP, their attorney-in-fact
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, General Partner
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