Basil Rallis Tax Credit Property Disposition: A New Generation of Rights, Obligations and Opportunities Through Year 15 and Beyond October 11 & 12, 2007 General Partner Transfers: The Buyers View Markets for General Partner Transfers During Compliance Period

L.P. Initiated --LP has removed original GP and is selling the GP rights Positives – – Single point of negotiation – – Same goal of moving towards a closing – – Rarely involved personnel issues

L.P. Initiated Continued Negatives – –Often challenged properties are paired with performing…the Good, the Bad and the Ugly…dealing with negative capital accounts, and foreclosure risk. – – Non-affiliated, or Non-profit partners that need to consent, may feel cut out of the transaction.

L.P. Initiated Continued Mechanics – –Fairly straight forward accounting issues, without many surprises. – –LP understands the tax and accounting issues.

G.P. Initiated -- Successful GP is looking to sell their various economic interests Positives – Its a deal! That is Always A Plus… – –Usually represented by professional who can manage the process and expectations…It is not closing in 30 days! – –Some opportunities to add talented staff to your organization

G.P. Initiated Continued Negatives – The Consent Process… – – The LP approval – The need to improve upon their current position, and settle up with the departing GP. – – Does The LP Approval change the economics for the buyer, or seller? How to adjust and not renegotiate. – – Pushing on a string – No control on timing; motivating the required consenting parties.

G.P. Initiated Continued Mechanics – Not So Straight Forward… – –Price allocations – Hot Assets (deferred developer fee) GP Interests, receivables. – –Reinterpreting the Partnership Agreement; Are the receivables, really capital? – –Cleansing the Balance Sheet – Proration of expenses, capex requirements – whose dime? – –Controlling slippage – Declining operations associated with protracted closings

Basil Rallis Director Cascade Affordable Housing Tax Credit Property Disposition: A New Generation of Rights, Obligations and Opportunities Through Year 15 and Beyond October 11 & 12, 2007 General Partner Transfers: The Buyers View Markets for General Partner Transfers During Compliance Period