Exhibit 10.2

 

 

SECOND AMENDMENT TO AMENDED AND RESTATED AGREEMENT AND CERTIFICATE
OF LIMITED PARTNERSHIP
OF
VILLAGE APARTMENT, LTD.

This Second Amendment to Amended and Restated Agreement and Certificate of
Limited Partnership (the "Amendment") of Village Apartment, Ltd., a Tennessee
limited partnership (the "Partnership"), is made as of May 18, 2011, by and R.L.
Ayers, an individual (the "Operating General Partner"); and Village Apartment
Limited, Inc., a Tennessee corporation (the "Corporation"); Real Estate
Associates Limited III, a California limited partnership (the "Withdrawing
Limited Partner"); and Helen Ayers, an individual (the "Incoming Limited
Partner" and together with the Operating General Partner, the Incoming Limited
Partner and the Corporation, each a "Party" and any two or more, as the context
requires, collectively, the "Parties"), with reference to the following:

A.                                Village Apartment, Ltd. (the "Partnership"),
was formed as a limited partnership under the laws of the State of Tennessee and
is being governed pursuant to a Amended and Restated Agreement and Certificate
of Limited Partnership, dated as of March 31, 1981, and a First Amendment to
Amended and Restated Agreement and Certificate of Limited Partnership, dated as
of November 13, 2008 (collectively, the "Amended Partnership Agreement").

B.                                    The Parties desire to enter into this
Amendment to provide for, among other things (i) the withdrawal of the
Withdrawing Limited Partner from the Partnership as the Limited Partner of the
Partnership, (ii) the assignment of the Withdrawing Limited Partner's interest
in the Partnership to the Incoming Limited Partner, and (iii) other amendments
to the Amended Partnership Agreement.

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set
forth, and for such other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Parties agree that the Amended
Partnership Agreement is amended as follows:

1.                  Capitalized terms not defined in this Amendment shall have
the meanings set forth in the Amended Partnership Agreement.

2.                  Effective on the Effective Date:

(a)               The Withdrawing Limited Partner withdraws from the Partnership
and acknowledge that it has no further interest therein;

(b)               The entire Interest of the Withdrawing Limited Partner,
including, but not limited to, its right to and/or interests in all Cash From
Operations, Net Refinancing Cash, Cash from Disposition and other Partnership
distributions, other Partnership funds and assets, and any reimbursements of
expenses, repayments of any loans made by the Withdrawing Limited Partner or any
Affiliate to the Partnership (the "Interest"), is transferred to the Incoming
Limited Partner;

(c)               The Incoming Limited Partner is admitted into the Partnership
as the Limited Partner and all of the components of the Interest of the Limited
Partner shall be allocated or distributed, as appropriate, to the Operating
General Partner, and the Operating General Partner assumes and agrees to perform
all of the obligations of the Limited Partner under the Amended Partnership
Agreement.

3.                                    Notwithstanding the withdrawal of the
Withdrawing Limited Partner, each of the other Partners elects to continue the
business of the Partnership.

4.                                    The defined term "Limited Partner" is
deleted in its entirety and replaced with the following:

"Limited Partner means Helen Ayers, an individual, or her successors and
assigns.

5.                                    The defined term "Partner" or "Partners"
is deleted in its entirety and replaced with the following:

"Partner" or "Partners" means any or all of the Operating General Partner and
the Limited Partner.

6.                                    The address of the Limited Partner is
deleted in its entirety and replaced with the following:

7.                                          Notwithstanding the withdrawal of
the Withdrawing Limited Partner, the Operating General Partner shall:

(a)              file on behalf of the Partnership for the current Fiscal Year a
United States Partnership Return of Income and such other tax returns and other
documents from time to time as may be required by the federal government or by
any state or any subdivision thereof within the time(s) prescribed by law for
such filings;

(b)              deliver to the Withdrawing Limited Partner within forty-five
(45) days after the end of the current Fiscal Year such tax information,
including, without limitation, a copy of Schedule K-1, as shall be reasonably
necessary for inclusion by the Withdrawing Limited Partner in its federal income
tax returns and required state income tax and other tax returns;

8.                                                As a material inducement to
the Withdrawing Limited Partner entering into this Amendment, the Operating
General Partner represents and warrants to the Withdrawing Limited Partner that
the following are true and correct:

(a)                  The Partnership at all times has been and continues to be a
limited partnership duly organized, validly existing and in good standing under
the laws governing limited partnerships, as adopted in the state of its
formation. The Partnership has taken all requisite action in order to conduct
lawfully its business in the state in which the Project is situated, and is not
qualified or licensed to do business and is not required to be so qualified or
licensed in any other jurisdiction. The Partnership has the full power and
authority to carry on its business, including without limitation, to own, lease
and operate the Project.

 

(b)              (i) The execution and delivery of this Amendment by the
Operating General Partner and the performance of the transactions contemplated
herein have been duly authorized by all requisite corporate and partnership
proceedings, and (ii) assuming the due and proper execution and delivery by the
Withdrawing Limited Partner, this Amendment is binding upon and enforceable
against the Operating General Partner in accordance with its terms.

(c)               The Partnership has obtained all necessary consents and
approvals for the transactions contemplated by this Agreement, including, but
not limited to, the consent of the holders of all Mortgages all Governmental
Agencies.

9.                                                As a material inducement to
the Withdrawing Limited Partner entering into this Amendment, the Incoming
Limited Partner hereby represents and warrants to the Withdrawing Limited
Partner that the following are true and correct :

(a)                               The execution and delivery of this Amendment
by the Incoming Limited Partner and the performance of the transactions
contemplated herein have been duly authorized by all requisite corporate and
partnership proceedings.

(b)                              Assuming the due and proper execution and
delivery by the Withdrawing Limited Partner, this Amendment is binding upon and
enforceable against the Incoming Limited Partner in accordance with its terms.

(c)                                The Incoming Limited Partner has obtained all
necessary third-party consents to the transactions contemplated by this
Amendment, including, but not limited to, any required consent of the holders of
all Mortgages and all Governmental Agencies.

(d)                              No proceeding before any federal, state,
municipal or other governmental department, commission, board or agency is
pending against the Incoming Limited Partner or, to the knowledge of the
Incoming Limited Partner, threatened against the Incoming Limited Partner
pursuant to which an unfavorable judgment would restrain, prohibit, invalidate,
set aside, rescind, prevent or make unlawful this Amendment or the transactions
contemplated hereunder, nor does the Incoming Limited Partner know of any reason
to believe any such proceeding will be instituted.

(e)                               The Incoming Limited Partner has incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Amendment.

(f)          The Incoming Limited Partner is aware of the restrictions on
transfer or encumbrance of the Interest under the Partnership Agreement, as well
as the transfer restrictions imposed by the Securities Act of 1933, as amended,
and applicable state securities laws (the "Securities Laws"). The Incoming
Limited Partner is able to bear the economic risk of its investment in the
Interest, is aware that it must hold the Interest for an indefinite period and
that the Interest has not been registered under the applicable Securities Laws
and may not be sold or otherwise transferred unless permitted by the terms of
the Partnership Agreement and the Interest is registered, or an exemption from
the registration requirements is available with respect thereto, under the
Securities Laws. The Incoming Limited Partner is acquiring the Interest for its
own account and not with a view to resell, transfer or otherwise dispose
thereof.

(g)               The Incoming Limited Partner is an Affiliate of the Operating
General Partner and, knows, therefore, at least as much about the Partnership as
the Withdrawing Limited Partner. The Incoming Limited Partner is experienced in
financial transactions such as ownership of the Interest and understands the
business and operations of the Partnership and its ownership and operation of
the Project. The Incoming Limited Partner has had an opportunity to ask
questions about and seek information about the Partnership and the Project, and
has not relied upon any express or implied representations or warranties from
the Withdrawing Limited Partner with regard to the Interest, the Partnership or
the Project, except as expressly provided herein.

10.                                           As a material inducement to the
Operating General Partner and the Incoming Limited Partner entering into this
Amendment, the Withdrawing Limited Partner represents and warrants that the
following are true and correct:

(a)                                    The Withdrawing Limited Partner has at
all times been and continues to be duly organized, validly existing and in good
standing under the laws governing limited partnerships, as adopted in the state
of its formation.

(b)                                   The Withdrawing Limited Partner is the
owner of the Interest and the Interest is not subject to any lien, pledge or
encumbrance of any nature whatsoever and the Operating General Partner shall
acquire the same free of any rights or claims thereto by any other party
claiming by, through or under the Withdrawing Limited Partner .

(c)                                     The execution and delivery of this
Amendment by the Withdrawing Limited Partner and the performance of the
transactions contemplated herein have been duly authorized by all requisite
corporate and partnership proceedings and, assuming the due and proper execution
and delivery by the Operating General and the Incoming Limited Partner, this
Amendment is binding upon and enforceable against the Withdrawing Limited
Partner in accordance with its terms.

(d)                                   To the Withdrawing Limited Partner's
knowledge, there is no litigation, action, proceeding, investigation or claim
pending or threatened against or involving the Interests, or which questions the
validity of this Amendment, and, to the Withdrawing Limited Partner's knowledge,
there is no fact or circumstance which could give rise to any such litigation,
action, proceeding, investigation or claim.

11.                                           Notwithstanding the withdrawal of
the Withdrawing Limited Partner, the Operating General Partner acknowledges that
from and after the Effective Date matters may arise that relate back to events
that occurred prior to the Effective Date (for purposes of illustration and not
limitation, audits by the IRS). The Operating General Partner agrees that as to
such matters (i) the Operating General Partner shall conduct itself in a manner
which is consistent with the obligations it had as the Operating General Partner
immediately prior to the Effective Date and, accordingly, recognize all of the
corresponding rights of the Withdrawing Limited Partner as if the Withdrawing
Limited Partner had not withdrawn from the Partnership as provided in this
Amendment and (ii) that nothing herein shall relieve the Operating General
Partner from such pre-existing obligations. Without limiting the generality of
the foregoing, the Operating General Partner shall:

(a)           file on behalf of the Partnership for the current Fiscal Year a
United States Partnership Return of Income and such other tax returns and other
documents from time to time as may be required by the federal government or by
any state or any subdivision thereof within the time(s) prescribed by law for
such filings;

 

(b)               deliver to the Withdrawing Limited Partner within ninety (90)
days after the end of the current Fiscal Year such tax information, including,
without limitation, a copy of Schedule K-1, as shall be reasonably necessary for
inclusion by the Withdrawing Limited Partner in its federal income tax returns
and required state income tax and other tax returns;

(c)               deliver to the Withdrawing Limited Partner the current Fiscal
Year audited financial statement of the Partnership as required pursuant to the
terms of Section 11.7 of the Amended Partnership Agreement.

If the Operating General Partner shall fail, for any reason, to prepare and/or
deliver to the Withdrawing Limited Partner any of the returns or other
information required by this paragraph 11, the Withdrawing Limited Partner shall
have the right to cause such returns and other information prepared at the sole
cost and expense of the Operating General Partner, plus an administrative fee
payable to the Withdrawing Limited Partner in an amount equal to fifteen percent
(15%) of the actual out-of-pocket costs incurred by the Withdrawing Limited
Partner to have such returns and information prepared. In furtherance of the
foregoing, the Withdrawing Limited Partner and its duly authorized
representatives shall have the right to inspect and copy such portions of the
Partnership's books of account which are necessary or appropriate for the
preparation of such returns and information; provided, however, it is expressly
understood and agreed by the Withdrawing Limited Partner that such access is
solely for the purpose of preparing such returns or other information that the
Operating General Partner failed to prepare and/or deliver as herein provided,
and shall not be deemed to grant the Withdrawing Limited Partner any other
rights with respect to the Partnership and/or the operation of its business.

12.                                                                                                         
Without limiting the generality of the provisions of paragraph 11,

(a)               Within five (5) calendar days after the sending or the receipt
of any correspondence or communication relating to the Partnership to or from
the IRS which could affect the Withdrawing Partners, or either of them, the
Operating General Partner, as the 'tax matters partner" (as that term is defined
in the Code) of the Partnership (the "Tax Matters Partner") shall promptly
forward to the Withdrawing Partners a photocopy of all such correspondence or
communication(s).

(b)               The Tax Matters Partner, shall not, with respect to any matter
which could affect the Withdrawing Limited Partner, take any of the following
actions without the prior written consent or approval of the Withdrawing Limited
Partner:

(i)                  Extend the statute of limitations for assessing or
computing any tax liability against the Partnership (or the amount or character
of any Partnership tax items);

(ii)                Settle any audit with the IRS concerning the adjustment or
readjustment of any partnership item(s) (within the meaning of Section
6231(a)(3) of the Code);

(iii)               File a request for an administrative adjustment with the IRS
at any time or file a petition for judicial review with respect to any such
request;

(iv)              Initiate or settle any judicial review or action concerning
the amount or character of any partnership tax item(s) (within the meaning of
Section 6231(a)(3) of the Code); or

 

(v)        Intervene in any action brought by any other Partner for judicial
review of a final adjustment.

13.                               In the event of any Partnership level
proceeding instituted by the IRS pursuant to Sections 6221 through 6233 of the
Code which could affect the Withdrawing Limited Partner, the Tax Matters Partner
shall consult with the Withdrawing Limited Partner regarding the nature and
content of all action and defense to be taken by the Partnership in response to
such proceeding. The Tax Matters Partner also shall consult with the Withdrawing
Limited Partner regarding the nature and content of any proceeding pursuant to
Sections 6221 through 6233 of the Code instituted by or on behalf of the
Partnership (including the decision to institute proceedings, whether
administrative or judicial, and whether in response to a previous IRS proceeding
against the Partnership or otherwise).

14.                               All of the provisions of this Amendment shall
survive the withdrawal of the Withdrawing Limited Partner from the Partnership.

15.                               Except as amended by this Amendment, the
Amended Partnership Agreement remains in full force and effect without change.

16.                               This Amendment may be executed in counterparts
and may be executed by facsimile, each of which shall be deemed to be effective
and all of which when taken together, shall constitute one instrument.

17.                               Each provision of this Amendment shall be
considered separate and if for any reason any provision or provisions herein are
determined to be invalid or contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of this
Amendment which are valid, such provision or provisions shall be deemed void and
of no effect.

18.                               The Parties shall execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Amendment.

[Signatures on following page(s)]

EXECUTED to be effective as of the Effective Date.

 

OPERATING GENERAL PARTNER                                           /s/R. L.
Ayers

                                                                                                               
R. L. AYERS

 

CORPORATION:                                                                             
VILLAGE APARTMENT LIMITED, INC.,

                                                                                                               
a Tennessee corporation

 

                                                                                                               
By  /s/ R. L. Ayers

                                                                                                                       
Name:  R. L. Ayers

                                                                                                                       
Title:  President

 

INCOMING LIMITED PARTNER:                                                  
/s/Helen Ayers

                                                                                                               
HELEN AYERS

 

WITHDRAWING LIMITED PARTNER:                                        REAL ESTATE
ASSOCIATES LIMITED III,

                                                                                                               
a California limited partnership

 

                                                                                                               
By  National Partnership Investments Corp.,

                                                                                                                       
a California corporation,

                                                                                                                       
General Partner

 

                                                                                                               
By  /s/Jesse Curll

                                                                                                                       
Name:  Jesse Curll

                                                                                                                       
Title:  Vice President