Exhibit 10.18
AMENDED AND
RESTATED
AGREEMENT OF LIMITED
PARTNERSHIP
OF
FAIRWAYS FRISCO,
L.P.
AMENDED AND
RESTATED
AGREEMENT OF LIMITED
PARTNERSHIP
OF
FAIRWAYS FRISCO,
L.P.
This Amended & Restated
Agreement of Limited Partnership (the “ Agreement
”) is entered into February 24, 2005, but effective for all
purposes as of December 30, 2004, by and among Fairways Equities,
LLC, a Texas limited liability company (“FE”), as the
general partner (the “ General Partner ”), and
the limited partners executing and delivering Subscription
Agreements (as hereinafter defined).
R
E C I
T A L S :
WHEREAS, the General Partner and
certain Limited Partners formed a limited partnership under the
laws of the State of Texas pursuant to that certain Agreement of
Limited Partnership Fairways Frisco, L.P. dated effective December
30, 2004 (the “ Original Agreement ”) for the
purpose of acquiring, owning and leasing improved real estate,
including the Property (hereinafter defined).
WHEREAS, the General Partner desires
to admit those persons executing and delivering to the General
Partner a Subscription Agreement, to be described in the Limited
Partners Partnership Interest Schedule as “ Limited
Partners ”, into the Partnership upon full and complete
execution by the Limited Partner and the General Partner of the
Limited Partner’s Subscription Agreements.
WHEREAS, in connection with the
formation and operation of such limited partnership, the General
Partner and the Limited Partners desire to amend and restate the
Original Agreement and wish to set forth their respective rights
and obligations as members thereof.
A
G R E
E M E N T :
NOW THEREFORE, in consideration of
the mutual covenants set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the General Partner and the Limited
Partners agree that the Original Agreement is hereby amended and
restated to provide as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Terms Defined
. When used in this Agreement, the following terms shall have
the meanings set forth below:
“ Act ” shall
mean the Texas Revised Limited Partnership Act as set forth in
Vernon’s Revised Civil Statutes Annotated Article 6132a-1, as
subsequently amended.
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“ Additional Capital
Contributions ” shall have the meaning set forth in
Section 3.2 hereof.
“ Affiliate ”
shall mean a Person, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control
with the Person in question. The term “control,” as
used in the immediately preceding sentence, means, with respect to
an entity that is a corporation, the right to exercise, directly or
indirectly, more than 50% of the voting rights attributable to the
shares of such corporation and, with respect to a Person that is
not a corporation, the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person.
“ Appraised Value
” shall have the meaning set forth in Section 7.8
hereof.
“ Capital Account
” shall have the meaning set forth in Section 3.3
hereof.
“ Capital Contribution
” shall mean the cash and the fair market value of property
other than cash (net of liabilities which the Partnership assumes
or takes the property subject to) contributed to the capital of the
Partnership by a Partner.
“ Cash Flow ”
shall mean, for the period in question, or in the case of a Major
Capital Event, the event in question, the amount by which the
aggregate cash receipts of the Partnership from any source
(including loans and Capital Contributions) exceed the sum of the
cash expenditures of the Partnership plus a cash reserve in the
amount determined by the General Partner to be sufficient to meet
the working capital requirements of the Partnership.
“ Certificate ”
shall mean the Certificate of Limited Partnership filed upon behalf
of the Partnership with the Secretary of State of Texas in
accordance with all applicable statutes.
“ Code ” shall
mean the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations thereunder.
“ Contracts ”
shall mean all agreements and related documents pertaining to the
acquisition of the Property by the Partnership or any
Subsidiary.
“ Cure Date ”
shall have the meaning set forth in Section 3.4
hereof.
“ Curing Partner
” shall have the meaning set forth in Section 3.4
hereof.
“ Curing Partner’s
Existing Equity ” shall have the meaning set forth in
Section 3.4(b)(i) hereof.
“ Curing Partner’s
New Equity ” shall have the meaning set forth in
Section 3.4(b)(iii) hereof.
“ Equity Adjustment
Formula ” shall have the meaning set forth in Section
3.4(b) hereof.
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“ Exhibit ” shall
mean an exhibit attached to this Agreement.
“ Failing Partner
” shall have the meaning set forth in Section 3.4
hereof.
“ Failing Partner’s
Existing Equity ” shall have the meaning set forth in
Section 3.4(b)(i) hereof.
“ Failing Partner’s
New Equity ” shall have the meaning set forth in
Section 3.4(b)(iii) hereof.
“ Failure Date ”
shall have the meaning set forth in Section 3.4
hereof.
“ Financing ”
shall mean all indebtedness incurred by the Partnership and/or a
Subsidiary to acquire, or operate the Subsidiaries or the
Subsidiary Interests and/or acquire or cause the Subsidiaries to
acquire the Property, and any modification or refinancing thereof,
to be secured by the Property.
“ General Partner
” shall mean FE, so long as such Person shall continue as a
general partner hereunder, and any other Person who has been
admitted as and continues to be, a general partner of the
Partnership.
“ Interest Rate ”
shall have the meaning set forth in Section 3.4(a)
hereof.
“ Latest Additional Capital
Contribution ” shall have the meaning set forth in
Section 3.4(b)(ii) hereof.
“ Limited Partners
” shall mean the Limited Partners, so long as each such
Person shall continue as a limited partner hereunder, and any other
Person who has been admitted as, and who continues to be, a limited
partner of the Partnership.
“ Limited Partners
Partnership Interest Schedule ” shall mean the schedule,
prepared from time to time, as appropriate, by the General Partner,
showing the respective Partnership Interests of the Limited
Partners, and attached hereto as Exhibit “B ,”
with such Exhibit “B ” being replaced with a
corrected schedule upon the admission of each new Limited
Partner.
“ Liquidating Event
” shall mean the sale, liquidation, condemnation or exchange
of all of the Property and the Subsidiaries, or other transaction
which, individually or together with any similar transaction or
transactions, results in the disposition of all of the Property and
the Subsidiary Interests and occurs in the course of liquidation of
the Partnership or upon and with respect to which event the
Partnership is dissolved and wound up and all payments, including
payments on any promissory notes, have been received.
“ Major Capital Event
” shall mean any event (excluding a Liquidating Event)
arising other than in the ordinary course of the
Partnership’s business, including, without limitation: (i)
the sale of less than all of the Property and the Subsidiary
Interests; (ii) a condemnation of less than substantially all of
the Property; (iii) the recovery of damage
AGREEMENT OF LIMITED PARTNERSHIP - Page
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awards or settlements or insurance
proceeds from the loss of or damage to the Property; (iv) a
borrowing or refinancing; and (v) a similar major capital event of
a Subsidiary. The General Partner’s designation of an event
as a Major Capital Event shall be binding upon the Partners and the
Partnership absent manifest error.
“ Major Decision
” shall have the meaning set forth in Section 4.3
hereof.
“ Majority in Interest
” shall mean Partners (or Partners of a designated class)
owning more than fifty percent (50%) of the Partnership Interests
(or Partnership Interests of the designated class).
“ Negative Cash Flow
” shall mean, for the period in question, the amount by which
the operating expenses, capital expenditures and debt service of
the Partnership and the capital contributions to be made by the
Partnership to the Subsidiaries due and payable within the period
in question exceed the cash amounts held by the Partnership or
which are expected to be received by the Partnership within the
period in question and which are or will be available for payment
of such expenses and debt service.
“ Operations ”
shall mean all activities arising in the ordinary course of the
Partnership’s business and the business of the Subsidiaries
not constituting a Major Capital Event or a Liquidating
Event.
“ Partners ”
shall mean the General Partner, the Limited Partners.
“Partner” shall mean any one of the
Partners.
“ Partnership ”
shall mean the limited partnership created and existing pursuant
hereto.
“ Partnership Interest
” shall mean a Partner’s interest, or a designated
class of Partners’ interest, expressed as a percentage in
Section 3.9 hereof, in the income, gains, losses,
deductions, tax credits, voting rights and distributions of the
Partnership as may be affected by the provisions of this Agreement
and as may thereafter be adjusted.
“ Partnership’s
Existing Net Worth ” shall have the meaning set forth in
Section 3.4(b)(i) hereof.
“ Partnership’s New
Net Worth ” shall have the meaning set forth in
Section 3.4(b)(ii) hereof.
“ Permitted Transferee
” shall have the meaning set forth in Section 8.3
hereof.
“ Person ” shall
mean an individual, partnership, joint venture, corporation,
limited liability company, trust, estate or other entity or
organization.
“ Proceeding ”
means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding,
and any inquiry or investigation that could lead to such an action,
suit or proceeding.
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“ Property ”
shall mean those certain tracts of improved and unimproved real
property described in Exhibit ”A ” attached
hereto, owned by a Subsidiary.
“ Put Election ”
shall have the meaning set forth in Section 8.7
hereof.
“ Put Interest ”
shall have the meaning set forth in Section 8.7
hereof.
“ Sales Price ”
shall have the meaning set forth in Section 8.7
hereof.
“ Section ” shall
mean any section or subsection in this Agreement.
“ Selling Partner
” shall have the meaning set forth in Section 8.7
hereof.
“ Service ” shall
mean the Internal Revenue Service.
“ Subscription
Agreement ” shall mean the subscription agreement in a
form determined by the General Partner, executed and delivered by
each Limited Partner and accepted by the General Partner, providing
for such Limited Partner’s subscription and agreement to be
bound by this Agreement as a Limited Partner of the respective
class indicated in such agreement.
“ Subsidiary ”
shall mean a limited partnership, trust, limited liability company,
corporation and any other person or form of organization which is
or may be formed to own the Property, or to own interests in
entities which own all or any portion of the Property, including
without limitation Fairways B1-6 F1-11, LLC, Fairways B1-7 F1-10,
LLC, Fairways FS Properties, LLC, Frisco Square B1-6 F1-11, Ltd.,
Frisco Square B1-7 F1-10, Ltd., Frisco Square Properties, Ltd., and
Frisco Square Ltd.
“ Subsidiary Interests
” shall mean any equity interest owned by the Partnership in
each Subsidiary.
“ Transfers ”
shall mean the sale, transfer, conveyance, assignment, pledge,
hypothecation, mortgage or other encumbrance or disposition of all
or any part of a Partnership Interest.
“ Undistributed Yield
” shall mean zero.
“ Unreturned Capital
Contributions ” shall mean, as to each Partner, the
aggregate Capital Contributions made to the Partnership by such
Partner reduced by the aggregate distributions to such Partner from
the Partnership pursuant to Sections 6.2(a) and (b)
hereof.
“ Valuation Period
” shall have the meaning set forth in Section 3.5
hereof.
“ Value Notice ”
shall have the meaning set forth in Section 7.8
hereof.
“ Yield ” shall
mean zero percent.
AGREEMENT OF LIMITED PARTNERSHIP - Page
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Section 1.2 Number and
Gender . Whenever the context requires, references in this
Agreement to the singular number shall include the plural, and the
plural number shall include the singular, and words denoting gender
shall include the masculine, feminine and neuter.
ARTICLE II
GENERAL
Section 2.1 Formation
. The Partners created and hereby continue the Partnership as a
limited partnership pursuant to the Act for the purposes
hereinafter described. The General Partner has executed and filed
on behalf of the Partners and the Partnership a Certificate in
accordance with applicable statutory requirements in such offices
and places as may be required by the laws of the State of
Texas.
Section 2.2 Name . The
business of the Partnership shall be conducted under the name
“Fairways Frisco, L.P.”
Section 2.3 Principal Place of
Business; Registered Office; Registered Agent . The
principal place of business and the principal office of the
Partnership shall be at 16250 N. Dallas Parkway, #101, Dallas,
Texas 75248. The registered agent of the Partnership shall be Cathy
R. Sweeney. The General Partner may change the principal place of
business of the Partnership to any other place within the State of
Texas upon ten (10) days written notice to the Limited
Partners.
Section 2.4 Purposes .
The purposes of the Partnership shall be:
(a) to acquire, invest in, own,
manage, sell or otherwise deal with the Subsidiary
Interests;
(b) to borrow or cause the
Subsidiaries to borrow money to finance the acquisition,
development, construction and operation of the Property, and to
modify and refinance such borrowings;
(c) to develop, construct
improvements upon, manage, maintain, lease, sell or otherwise deal,
or to cause such Subsidiaries to develop, construct improvements
upon, manage, maintain, lease, sell or otherwise deal, with the
Property as contemplated by the terms of this Agreement;
and
(d) to do any and all other acts and
things necessary, incidental or convenient to carry on the
Partnership business as contemplated under this
Agreement.
Section 2.5 Term . The
Partnership shall continue until terminated pursuant to Section
10.1 hereof.
AGREEMENT OF LIMITED PARTNERSHIP - Page
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ARTICLE III
CAPITAL CONTRIBUTIONS -
PARTNERSHIP INTERESTS
Section 3.1 Initial Capital
Contributions .
(a) General Partner . Upon
the execution of this Agreement, the General Partner shall be
obligated to make an initial Capital Contribution to the
Partnership of cash in an amount equal to $100.00.
(b) Limited Partners . Each
Limited Partner shall make Capital Contributions to the Partnership
of cash up to (but not more than) the amounts set forth in such
Limited Partner’s Subscription Agreement, seventy-five
percent (75%) of which Capital Contributions to be made upon
execution and delivery of the Subscription Agreement by such
Limited Partner and the balance generally will be based on the
dates and amounts required pursuant to Exhibit “C”
attached hereto. Each Limited Partner shall make such Capital
Contributions if, when and to the extent requested by the General
Partner, provided that the General Partner shall provide the
Limited Partners with at least five (5) days notice of such request
for Capital Contributions.
Section 3.2 Additional Capital
Contributions . After all Capital Contributions have been
made pursuant to Section 3.1(b), at any time thereafter if
requested by the General Partner, the Limited Partners may, but
shall not be obligated to, contribute cash to the Partnership
(“ Additional Capital Contributions ”) for the
purpose of satisfying the Partnership’s Negative Cash
Flow.
Section 3.3 Capital
Accounts . The Partnership shall establish and maintain a
capital account (“ Capital Account ”) for each
Partner in accordance with Section 704(b) of the Code and Treasury
Regulations Section 1.704-1(b)(2)(iv). Except as otherwise provided
in this Agreement, the Capital Account balance of each Partner
shall be credited (increased) by (i) the amount of cash contributed
by such Partner to the capital of the Partnership, (ii) the fair
market value of property contributed by such Partner to the capital
of the Partnership (net of liabilities secured by such property
that the Partnership assumes or takes subject to under Code Section
752), and (iii) such Partner’s allocable share of Partnership
income and gain (or items thereof) including income and gain exempt
from federal taxation and income and gain attributable to
adjustments to reflect book value pursuant to Regulations’
Section 1.704-1(b)(2)(iv)(g), but excluding income and gain
attributable to tax items which differ as a result of the
revaluation of Partnership property as described in
Regulations’ Section 1.704-1(b)(4), and the Capital Account
balance of each Partner shall be debited (decreased) by (i) the
amount of cash distributed to such Partner, (ii) the fair market
value of property distributed to such Partner (net of liabilities
secured by such property which the Partner assumes or takes subject
to under Code Section 752), (iii) such Partner’s allocable
share of expenditures of the Partnership described in Code Section
705(a)(2)(B), and (iv) such Partner’s allocable share of
Partnership losses, depreciation and other deductions (or items
thereof) including loss and deduction attributable to adjustments
to reflect book value pursuant to Regulations’ Section
1.704-1(b)(2)(iv)(g) but excluding expenditures described in (iii)
above and loss or deduction attributable to tax items which differ
as a result of the revaluation of
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Partnership property or excess percentage
depletion as described in Regulations’ Section
1.704-1(b)(4)(i) and (ii). Notwithstanding the foregoing, a
Partner’s Capital Account shall not be adjusted to reflect
gain or loss attributable to the disposition of property
contributed by such Partner to the extent such Partner’s
Capital Account reflected such inherent gain or loss in the
property on the date of its contribution to the
Partnership.
Section 3.4 Failure to Make
Additional Capital Contributions . If any Limited Partner
(a “ Failing Partner ”) shall fail or refuse to
make any Capital Contribution or Additional Capital Contribution
when required, and such failure or refusal shall have continued for
a period of five (5) days following written demand therefor by the
General Partner, then after the expiration of the five (5) day
grace period (the “ Failure Date ”) the other
Limited Partners, in proportion to the Limited Partnership
Interests of such Partners who exercise the following election
(collectively, the “ Curing Partner ”) may, at
their sole discretion do either of the following on or before
forty-five (45) days after the Failure Date (the “ Cure
Date ”), in addition to any other remedies available at
law:
(a) Make a nonrecourse loan to the
Failing Partner through an advance to the Partnership on behalf of
the Failing Partner in the amount of the Failing Partner’s
required Capital Contribution. If the Curing Partner makes such a
loan, the Failing Partner and its Partnership Interest shall be
credited with such Capital Contribution and said loan advance shall
be payable upon demand and shall bear interest at the rate of the
lesser of the base or prime interest rate of Bank of America plus
two percent (2%) per annum, or the highest rate permitted by law
(the “ Interest Rate ”). Thereafter, all
Partnership distributions or withdrawals attributable to the
Failing Partner’s Partnership Interest shall be paid directly
to the Curing Partner until such time as all such loan amounts so
advanced, together with accrued interest thereon, shall have been
fully repaid. Further, the Curing Partner shall have and is hereby
granted a security interest in and lien upon the Failing
Partner’s Partnership Interest to secure the repayment of
said loan advances and the accrued interest thereon and shall have
all rights to which a secured party is entitled under the Texas
Uniform Commercial Code, as amended including
foreclosure.
(b) Make the Failing Partner’s
required Capital Contribution, in which event the Failing
Partner’s Partnership Interest shall be reduced and the
Curing Partner’s Partnership Interest shall be
correspondingly increased to a percentage as determined by the
application of the formula (“ Equity Adjustment
Formula ”) as follows:
(i) The Failing Partner’s
existing equity (“ Failing Partner’s Existing
Equity ”) shall be determined by multiplying the Failing
Partner’s Partnership Interest immediately prior to the
Failure Date by the Partnership’s existing net worth (“
Partnership’s Existing Net Worth ”) (less any
Capital Contributions made by any Partner with respect to the
additional capital call from which the Failing Partner defaulted).
The Curing Partner’s existing equity (“ Curing
Partner’s Existing Equity ”) shall likewise be
determined by multiplying the Curing Partner’s Partnership
Interest immediately prior to the Failure Date by the
Partnership’s Existing Net Worth (less any aforesaid
contributions).
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(ii) The Partnership’s new net
worth (“ Partnership’s New Net Worth ”)
shall be determined by adding to the Partnership’s Existing
Net Worth the aggregate Capital Contributions made by all Partners
with respect to said call for Capital Contributions on or before
the Cure Date (the “ Latest Capital Contribution
”).
(iii) The Failing Partner’s
new equity (“ Failing Partner’s New Equity
”) shall be the same as the Failing Partner’s Existing
Equity, but the Curing Partner’s new equity (“
Curing Partner’s New Equity ”) shall be equal to
the sum of the Curing Partner’s Existing Equity plus the
Curing Partner’s portion of the Latest Capital Contribution
(including the portion made on behalf of the Failing
Partner).
(iv) The Failing Partner’s new
Partnership Interest shall be the quotient arrived at by dividing
the Failing Partner’s New Equity by the Partnership’s
New Net Worth and the Curing Partner’s new Partnership
Interest shall be the quotient arrived at by dividing the Curing
Partner’s New Equity by the Partnership’s New Net
Worth.
At any time there is a dilution of a
Failing Partner’s Partnership Interest pursuant to this
Section 3.4(b) , such Failing Partner shall have the option
of restoring his Partnership Interest by payment to the Curing
Partner of the Capital Contribution paid by such Curing Partner on
behalf of such Failing Partner plus an amount equal to the Interest
Rate on such amounts, provided such payment is made no later than
six (6) months following the subject dilution.
If there is more than one Curing
Partner, all decisions of the Curing Partner shall be made by a
Majority in Interest of the Curing Partners. All expenses of the
Curing Partners shall be shared pro rata based upon their
Partnership Interests.
If the Curing Partner elects to make
a loan to the Failing Partner pursuant to Section 3.4(a)
hereof, then at any time thereafter while all or a portion of such
loan remains unpaid, the Curing Partner may convert all, but not
less than all of the entire outstanding principal balance of such
loan into a Capital Contribution, provided that all accrued
interest is paid in full, and the Partnership Interests of the
Failing Partner and the Curing Partner shall be adjusted at the
time of conversion in accordance with Section 3.4(b)
hereof.
Section 3.5 Determination of
Existing Net Worth . The Partnership’s Existing Net
Worth shall be equal to the greater of (a) $100 or (b) the book
value of the Partnership’s assets net of liabilities,
determined based on the Partnership’s regular accounting
method.
Section 3.6 Partner Loans
. A Partner, or an Affiliate of a Partner, may, but is not
obligated to, loan or cause to be loaned to the Partnership such
additional sums as the General Partner deems appropriate or
necessary for the conduct of the Partnership’s business.
Loans made by a Partner, or an Affiliate of a Partner, shall be
upon such terms and for such maturities as the General Partner
deems reasonable in view of all the facts and circumstances and the
repayment of which may be designated in priority to distributions
of Cash Flow. In no event
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shall a Partner be permitted to make a loan to
the Partnership pursuant to this Section 3.6 , in lieu of
making an Additional Capital Contribution which it is obligated to
make pursuant to Section 3.2 hereof.
Section 3.7 Other Matters
Relating to Capital Contributions . Except as otherwise
expressly provided herein:
(a) Loans by any Partner to the
Partnership shall not be considered contributions to the capital of
the Partnership;
(b) No Partner shall be required to
make contributions to the capital of the Partnership except to the
extent expressly provided by this Article III ;
(c) No Partner shall be entitled to
withdraw, or to obtain a return of, any part of its contribution to
the capital of the Partnership, or to receive property or assets
other than cash in return thereof, and no Partner shall be liable
to any other Partner for a return of its contributions to the
capital of the Partnership, except as provided in this
Agreement;
(d) No Partner shall be entitled to
priority over any other Partner, either with respect to a return of
its contributions to the capital of the Partnership, or to
allocations of taxable income, gains, losses or credits, or to
distributions, except as provided in this Agreement; and
(e) No interest shall be paid on any
Partner’s Capital Contribution or Additional Capital
Contribution.
Section 3.8 Deficit Capital
Account Balances . Upon liquidation of the Partnership, no
Partner with a deficit balance in its Capital Account shall have
any obligation to restore such deficit balance, or to make any
contribution to the capital of the Partnership, except to the
extent such Partner is personally liable to make contributions to
the capital of the Partnership pursuant to Section 3.1 of
this Agreement.
Section 3.9 Partnership
Interests . Except as provided in Section 3.4 , the
Partnership Interest of the Partners shall be as
follows:
(a) The Partnership Interest of the
General Partner shall be one-tenth of one percent (0.1%) and the
Partnership Interest of the Limited Partners shall be ninety-nine
and nine-tenths percent (99.9%).
(b) As among the Limited Partners,
each such Partner’s Partnership Interest shall be equal to
the percentage determined by dividing the Capital Contributions
actually made by such Partner by the Capital Contributions actually
made by all Limited Partners as of the date of such determination.
The General Partner is hereby authorized and instructed to update
and correct the Limited Partners Partnership Interest Schedule from
time to time and at the time of each change (whether by admission
of a Limited Partner or otherwise) in the Limited Partners and to
substitute as Exhibit “B ” attached hereto such
revised Limited Partners Partnership Interest Schedule for the then
existing Limited
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Partners Partnership Interest
Schedule, which upon such substitution, such revised Limited
Partners Partnership Interest Schedule shall be deemed a part of
this Agreement and the old Limited Partners Partnership Interest
Schedule shall be deemed to be so amended and restated.
ARTICLE IV
RIGHTS AND POWERS OF THE
GENERAL PARTNER
Section 4.1 Duties of General
Partner . The General Partner shall be solely responsible
for the operation and management of the business of the
Partnership, and, except as otherwise expressly provided in this
Agreement, shall possess all rights and powers generally conferred
by applicable law or deemed by the General Partner as necessary,
advisable or consistent in connection therewith.
Section 4.2 Illustrative
Rights and Powers . In addition to any other rights and
powers which it may possess by law, the General Partner shall have
all the specific rights, powers and authorities required or
appropriate to the operation and management of the business of the
Partnership which, by way of illustration, but not by way of
limitation, shall include the right and power, directly or through
Subsidiaries:
(a) to perform any and all acts
necessary or appropriate in connection with the business of the
Partnership, including, without limitation, commencing, defending
and settling litigation;
(b) to take and hold all property
and assets (including, without limitation, the Subsidiary
Interests) of the Partnership, real, personal and mixed, in the
name of the Partnership;
(c) to negotiate, execute and
deliver or cause the Subsidiary to negotiate, execute and deliver
the Contracts, the Financing documents and any other contracts,
deeds, notes, leases, subleases, mortgages, bills of sale,
financing statements, security agreements and any and all other
instruments necessary or incidental to the conduct of the business
of the Partnership, and to amend or modify any such
instruments;
(d) to sell and assign the Contracts
to a Subsidiary or third parties;
(e) to coordinate all accounting and
clerical functions of the Partnership and to employ such
accountants, lawyers, managers, agents and other management or
service personnel as may from time to time be required to carry on
the business of the Partnership;
(f) to form Subsidiaries, to
contribute capital to Subsidiaries and to manage, vote, sell or
transfer the Subsidiary Interests;
(g) to admit a Partner to the
Partnership and to amend this Agreement to reflect such
admission;
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(h) to develop, improve, lease,
maintain, sell and otherwise deal with the Property; to enter into
agreements with others with respect to such development,
improvement or maintenance, which documents and agreements may
contain such terms, provisions and conditions as the General
Partner in its discretion shall reasonably approve; and
(i) to authorize, instruct or direct
the Subsidiaries to take any of the action contemplated in
Sections 4.2(c), (d) and (h) above for the
Partnership.
Section 4.3 Major
Decisions . All Major Decisions (hereinafter defined) with
respect to the Partnership’s business shall require the
approval of a Majority in Interest of the Limited Partners. The
matters set forth below shall constitute a “ Major
Decision .”
(a) the refinancing or modification
of the Financing by the Partnership or the Subsidiaries;
(b) the sale or other disposition of
any parcel of the Property by the Partnership or the
Subsidiaries;
(c) the sale or other disposition of
all or any portion of the Subsidiary Interests or the
Subsidiaries;
(d) the amount of any compensation
to be paid to any Partner or to any Affiliate of a Partner, unless
such amount is authorized pursuant to Section 4.9
;
(e) the merger or consolidation of
the Partnership with any other partnership, whether foreign or
domestic;
(f) the dissolution and termination
of the Partnership; and
(g) the admission of any additional
Limited Partner.
Section 4.4 Authority to
Acquire Property and Subsidiary Interests . Without the
necessity of any further consent or approval, the General Partner
is hereby authorized to take all actions, obtain all permits, and
execute the Contracts and all documents reasonably necessary to
close the acquisition and the Financing of the Property by the
Partnership, and the formation and capitalization of the
Subsidiaries, and the authorization and instruction to the
Subsidiaries to execute the Contracts and all documents reasonably
necessary for the consummation of the Financing of the Property by
the Subsidiaries, including the negotiation, execution and delivery
of agreements, deeds, promissory notes, security agreements and
assignments, and to improve and manage the Property.
Section 4.5 Management
. The General Partner shall operate and manage the affairs of
the Partnership on a day-to-day basis and shall perform for the
Partnership all such other management services with respect to the
Property and Subsidiaries and other business of the Partnership.
Notwithstanding the foregoing, the General Partner shall have the
right, in its sole discretion, to employ any competent management
company as it shall select to perform said management
services.
AGREEMENT OF LIMITED PARTNERSHIP - Page
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Section 4.6 Operating Reserve
Account . To the extent funds of the Partnership are
sufficient therefor, the General Partner shall maintain an adequate
reserve for operating expenses and capital expenditures, in such
amount as deemed necessary by the General Partner for the proper
conduct of the business of the Partnership and the operation of the
Property.
Section 4.7 Payment of Costs
and Expenses . The Partnership shall be responsible for
paying all costs and expenses of forming and continuing the
Partnership, owning, operating and holding the Property, and
conducting the business of the Partnership, including, without
limitation, costs of utilities, costs of furniture, fixtures,
equipment and supplies, insurance premiums, property taxes,
advertising expenses, accounting costs, legal expenses and office
supplies. If any such costs and expenses are or have been paid by
the General Partner, or any of its Affiliates, on behalf of the
Partnership, then such General Partner (or its Affiliates) shall be
entitled to be reimbursed for such payment so long as such cost or
expense was reasonably necessary and was reasonable in
amount.
Section 4.8 Exercise of Rights
and Powers . The General Partner shall endeavor to operate
and manage the business of the Partnership to the best of its
ability, in a careful and prudent manner and in accordance with
good industry practice. The authority of the General Partner to
take any action required or permitted under the provisions of this
Agreement shall in all respects be exercised in its sole and
absolute discretion, and the General Partner shall be required to
devote only such time to the performance of its duties and
obligations hereunder as it shall, in its sole and absolute
discretion, determine to be necessary or advisable. The General
Partner shall be entitled to deal with its Affiliates in the
performance of its duties and obligations under this Agreement, so
long as the material terms and conditions of such dealings are not
substantially different from the prevailing market terms,
conditions and prices available from non-Affiliated third
parties.
Section 4.9 Compensation
. The General Partner and its Affiliates shall be entitled to
receive compensation from the Partnership equal to $10,000 per
month for administrative and management services performed for the
Partnership and the Subsidiaries. In addition, the General Partner
and/or its Affiliates shall be entitled to receive an Asset
Management Fee equal to 0.25% of the Property owned by the
Subsidiaries, net of liabilities, such Asset Management Fee to be
paid annually on or about January 1 of each year, and such net
asset value to be determined annually based on a valuation of the
improved and unimproved Property owned by the Subsidiaries and
determined as follows:
The value of the Property for a year
shall be the value determined by the General Partner if a Majority
in Interest of the Limited Partners approve of such valuation. If a
Majority in Interest of the Limited Partners do not approve of such
valuation, then the General Partner, at its cost, and a Majority in
Interest of the Limited Partners, at the cost of all of the Limited
Partners, each shall select an appraiser and the two appraisers
shall jointly determine the valuation of the Property. If the two
appraisers cannot agree on a valuation for the Property, then they
shall select a third appraiser, the cost of whom shall be paid
equally by the General Partner and the Limited Partners, and each
of the three appraisers shall determine a
