1. (a) To the extent the law of the state of organization is not inconsistent, the limited partnership agreement must provide that holders of a majority of the then outstanding units may, without the necessity for concurrence by the general partner, vote to (1) amend the limited partnership agreement or charter document, (2) dissolve the program, (3) remove the general partner and elect a new general partner, (4) approve or disapprove the sale of all or substantially all of the assets of the program, and (5) cancel any contract for services with the sponsor or any affiliate without penalty upon thirty days notice. The agreement should provide a detailed provision for the substitution of a new general partner and a provision for the purchase of the removed general partner's interest, excluding any interest he may have as an investor, including the following:

   1. 1. A method of valuation of the removed general partner's interest which is fair. Normally, valuation at the time of such removal by means of an appraisal, arbitration or agreement will be deemed fair.
   2. 2. A method of payment for such interest which is fair and which protects the solvency and liquidity of the partnership. If immediate payment would impose a hardship upon the partnership, the provision should call for payment plus reasonable interest to be postponed to the time payment of his subordinated interest would have been made.

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporation Code.

History

1. Editorial correction adding Note filed 11-8-82 (Register 82, No. 46).