Exhibit 3.6
6/18/02
ASTOR PLACE LIMITED
PARTNERSHIP AGREEMENT
This Agreement of Limited
Partnership (the “Agreement”) made and entered into by
and between Kimball Hill, Inc., an Illinois corporation (sometimes
referred to as the “General Partner”) and Kimball Hill
Development Company, an Illinois corporation (the “Limited
Partner”) dated effective as of June 20, 2002. The General
Partner and the Limited Partner are collectively sometimes
hereinafter referred to as the “Partners”.
ARTICLE I
FORMATION OF LIMITED
PARTNERSHIP
The parties hereby enter into a
limited partnership (the “Partnership”) under the
provisions of the Limited Partnership Act of the State of Illinois,
and the rights and liabilities of the Partners shall be provided in
that Act except as herein otherwise expressly provided.
ARTICLE II
NAME
The business of the Partnership
shall be conducted under the name of Astor Place Limited
Partnership or such other similar name as the General Partner shall
designate.
ARTICLE III
PROPERTY AND
PURPOSES
The business of the Partnership is
to invest in, purchase, acquire, hold, maintain, operate, improve,
develop, sell, exchange, lease and otherwise use real property
(“Property”) located in the Village of Wheeling, County
of Cook, Illinois. The Property consists of lots for townhome and
condominium residences with associated roads and other common
areas. The General Partner intends to market the Property under the
name “Astor Place”. The legal description of the
Property is attached to and made a part of this Agreement as
Exhibit A. The General Partner previously acquired the Property
from LaSalle Bank National Association, as successor trustee to
American National Bank and Trust Company of Chicago as Trustee
under land trust No. 23622 dated June 27, 1966, Fifth Third Bank
(Chicago) as successor trustee to Grand Premier Trust and
Investment, Inc., N.A., as Trustee under Trust No. 3003851 dated
September 18, 1998, Michael Srulovitz and Alfred D. Stavros, as
Sellers. Sellers are not owned,
controlled or affiliated with the General
Partner. The General Partner shall, subsequent to the execution of
this Agreement and prior to the delivery of the first home to be
built on the Property, transfer title to the Property to the
Partnership.
ARTICLE IV
TERM
The term of the Partnership shall
commence on the date of filing by the General Partner of the
Certificate of Limited Partnership with the Secretary of State of
Illinois, which date shall be subsequent to the date of this
Agreement, and shall terminate 20 years thereafter, provided,
however, that the Partnership shall be dissolved prior to such date
upon the earlier of (a) the disposition by the Partnership of its
entire interest in all of the Property, or (b) dissolution,
insolvency or bankruptcy of the General Partner as provided herein,
(c) as elsewhere expressly provided in this Agreement, or (d) as
required under the Illinois Limited Partnership Act notwithstanding
the other provisions of this Agreement.
ARTICLE V
OFFICES
Section 5.1
Principal Place of
Business
(a)
The principal place of the business
shall be as follows:
c/o Kimball Hill, Inc.
5999 New Wilke Road, Suite 504
Rolling Meadows, IL 60008
(b)
The General Partner may from
time-to-time change the principal place of business, and in such
event, the General Partner shall notify the Limited Partner in
writing within 20 days of the effective date of such
change.
Section 5.2
Registered Agent and
Office
(a)
The registered agent of the
Partnership is CT Corporation System and the registered office of
the Partnership is as follows:
208 South LaSalle Street, Suite
814
Chicago, IL 60604
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(b)
The General Partner may from
time-to-time change the registered agent and the registered office
of the Partnership, and in such event the General Partner shall
notify the Limited Partner in writing 20 days prior to the
effective date of such change and shall file with the Secretary of
State of Illinois an amendment to the certificate of limited
partnership of the Partnership reflecting any such
changes.
ARTICLE VI
CAPITAL CONTRIBUTIONS AND SALE
TO PARTNERSHIP
Section 6.1
Capital Contribution of
General Partner and Sale of Property to
Partnership
(a)
The General Partner shall contribute
$50,000.00 to the Partnership upon execution of this
Agreement.
(b)
The General Partner hereby assigns
to the Partnership, as an additional capital contribution, all of
its existing title, rights to and obligations of the Property. The
Partnership accepts such assignment and agrees to reimburse the
General Partner for all expenses in connection with or incidental
to the purchase, development and sale of the Property and the other
Partnership purposes as set forth in Article III of this Agreement,
whether said expenses are incurred or paid before or after the date
of this Agreement, provided, however, that all such expense must be
incurred by the General Partner directly and solely for such
Partnership purposes. Accordingly, the general office and executive
salaries and similar expenses of the General Partner shall not be
paid or reimbursed by the Partnership.
Section 6.2
Capital Contribution of
Limited Partner
(a)
Upon execution of this Agreement,
the Limited Partner shall contribute equity of $10.00 to the
Partnership as its initial capital contribution to the
Partnership.
(b)
On July 15, 2002, or at such
subsequent time as agreed upon by the General Partner, and the
Limited Partner, the Limited Partner shall contribute an additional
$
representing total capital contributions by the Limited Partner to
the Partnership in the amount of
$ .
(c)
No further capital contributions
shall be required of the Limited Partner, and the Limited Partner
shall not be required to make any loans to the
Partnership.
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(d)
The Limited Partner understands that
time is of the essence with respect to such capital contribution.
In addition to any other appropriate remedies available to the
General Partner, the Limited Partner shall not at any time be
entitled to any distributions from the Partnership if it fails to
make any capital contributions to the Partnership when same are due
under the terms of this Agreement.
Section 6.3
Capital
Accounts
A capital account shall be
established for each Partner and shall be maintained in accordance
with the capital accounting rules set forth in Treasury
Regulations, Section 1.704-1(b)(2)(iv), as such rules may be
amended. In general, a Partner’s capital account shall be
credited with the cash and the fair market value of property
contributed by such Partner to the Partnership net of liabilities
secured by such contributed property that the Partnership is
considered to assume or take subject to under Section 752 of the
Internal Revenue Code of 1986, as amended (the “Code”),
and such Partner’s distributive share of net income
(including for this purpose income exempt from tax) and gain from
capital transactions, and shall be debited with the cash and the
fair market value of property distributed to such Partner (net of
liabilities secured by such distributed property and that such
Partner is considered to assume or take subject to under Code
Section 752), such Partner’s distributive share of net loss
and losses from capital transactions, and such Partner’s
distributive share of expenditures of the Partnership described in
Code Section 705(a)(2)(B). No interest shall be paid or accrued at
any time on a Partner’s capital account or on any capital
contribution. Each Partner shall have a single capital account
regardless of the time or times and the manner in which such
interest was acquired.
ARTICLE VII
ADDITIONAL
PARTNERS
Additional Partners, either General
or Limited, may be admitted to the Partnership only upon prior
written approval and consent of both the General Partner and the
Limited Partner.
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ARTICLE VIII
MANAGEMENT POWERS, DUTIES AND
RESTRICTIONS
Section 8.1
Authority of General
Partner
The General Partner shall have
exclusive authority to manage the operations and affairs of the
Partnership and to make all decisions regarding the business of the
Partnership and shall devote such time to the Partnership as shall
be reasonably required for its welfare and success. The General
Partner, without limitation on any power that may be conferred upon
it by law, and except as may be provided to the contrary elsewhere
in this Agreement, shall have full power, right and
authority:
(a)
to deal with, purchase, sell,
mortgage, transfer, assign or otherwise dispose of any and all of
the assets of the Partnership; to borrow money on behalf of the
Partnership. The Limited Partner specifically approves and consents
to the execution and delivery by the General Partner of (i) a
Construction Loan Agreement with Harris Trust and Savings Bank of
Chicago, Illinois providing for a $20,738,000 loan and (ii) the
mortgage and other collateral security documents that will encumber
the Partnership’s assets under such Construction Loan
Agreement;
(b)
to borrow money on behalf of the
Partnership;
(c)
to repay in whole or in part,
refinance, recast, increase, modify or extend any loan which may
affect any of the Property owned by the Partnership;
(d)
to execute or cause to be executed
for and on behalf of the Partnership any mortgage, note, assignment
of rents, assignment of beneficial interest for collateral
purposes, and other documents, and any renewals, extensions or
modifications thereof; provided that none of the Partners except
the General Partner shall have any personal liability
thereon;
(e)
to make expenditures and incur
obligations in the ordinary course of business;
(f)
to acquire and enter into any
contract of insurance which it deems necessary and proper for the
protection of the Partnership, for conservation of its assets, or
for any purpose convenient or beneficial to the
Partnership;
(g)
to employ, retain or contract, from
time-to-time, with persons, firms or corporations, which may be or
include the General Partner, for the right to acquire and for the
improvement of the Property and for the operation and management of
the Partnership business and to carry out all of its purposes,
including but not limited to supervisory and managing agents,
building management agents, contractors and subcontractors,
insurance brokers, real estate brokers, loan brokers, consultants
in
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management and finance, attorneys and
accountants, on such terms and for such compensation as the General
Partner shall determine;
(h)
to obtain such zoning, planned unit
development and/or other approvals as are necessary and desirable
to allow the Partnership to develop on the Property the residential
dwelling units as generally described in Article III of this
Agreement.
(i)
to compromise, arbitrate or
otherwise adjust claims in favor of or against the Partnership and
to commence or defend litigation with respect to the Partnership or
any assets of the Partnership as the General Partner may deem
advisable, all or any of the above matters being at the expense of
the Partnership;
(j)
to hold title for the Partnership to
the Property;
(k)
to perform and carry out all other
powers, rights and authority authorized under the Limited
Partnership Act of the State of Illinois; and
(l)
to execute, acknowledge and deliver
any and all instruments to effectuate any of the foregoing
management responsibilities.
Section 8.2
General Partner Home Builder
Expense Reimbursement
In addition to any other provision
in this Agreement with respect to sharing of profits and
reimbursement and payment of expenses, the General Partner shall
receive a general contractor and nonsite-specific cost
reimbursement fee (“General Partner Home Builder Expense
Reimbursement”) from the Partnership payable at the closing
of the sale of each dwelling unit on the Property in the amount of
five percent (5%) of the total, gross sales price for such unit.
This and any other reference in this Agreement to the total, gross
sales price for each unit shall in all cases mean the amount
actually paid by the purchaser of such unit and does not include
any upgrades or other similar items which are supplied to such
purchaser at no additional cost to be paid by such purchaser. The
General Partner Home Builder Reimbursement shall constitute a
Partnership expense for all purposes and not a profit or tier
distribution to the General Partner. The General Partner Home
Builder Expense Reimbursement may commence at any time during the
term of the Partnership. If and while payments of First Tier
Distributions or Second Tier Distributions as defined and provided
for in Section 15.2 below are not current, then payments of the
General Partner Home Builder Expense Reimbursement shall be
deferred until such First and Second Tier Distributions are
current. Under all circumstances and for all purposes, the General
Partner Home Builder Expense Reimbursement shall be subordinate to
the First and Second Tier Distributions.
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Section 8.3
Limited Partner’s
Liability
The Limited Partner shall not take
part in the management of the business or transact any business for
the Partnership or have the power to sign for or to bind the
Partnership to any agreement or document. Except as and to the
extent expressly set forth in this Agreement, the Limited Partner
shall not be subject to assessment nor shall the Limited Partner be
personally liable as a Limited Partner for any of the debts of the
Partnership or for any of the losses thereof beyond the amount
contributed by it as capital to the Partnership and its share of
the undistributed profits of the Partnership, provided, however,
that the Limited Partner shall be personally liable to the General
Partner with respect to the capital contributions required of the
Limited Partner pursuant to the terms of this Agreement.
Section 8.4
Requests for Information and
Meetings
(a)
Any Partner shall be entitled upon
request, provided such request is made in good faith and for proper
purpose, to (i) review and copy the books and records of the
Partnership at reasonable times and at the location where the
records are kept, (ii) obtain the list of the names and addresses
of all of the Partners, and (iii) have an accounting of all
Partnership affairs and finances.
(b)
The General Partner shall have a
designated employee available to meet monthly with a designated
employee of the Limited Partner to discuss Partnership matters and
to provide to the Limited Partner monthly financial statements and
sales and construction status reports.
Section 8.5
No Guaranty of
Investment
The Limited Partner acknowledges
that its capital contributions are being made without any guaranty
or representation by the General Partner of any particular return
on investment or of a return of its capital contribution and that
such investment involves a high degree of risk which the Limited
Partner is willing to assume. All financial projections, proformas,
profits summary results calculations and the like delivered by the
General Partner to the Limited Partner are strictly for projection
purposes and are not guarantees of results.
ARTICLE IX
BANKING
All funds of the Partnership are to
be deposited in such bank and/or savings and loan association
account or accounts as shall be designated by the
General
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Partner. Withdrawal from any such bank account
or accounts may be made by the General Partner. All such accounts
shall be held in the name of the Partnership and shall be
segregated from all other accounts of the General Partner and any
other partnership or entity.
ARTICLE X
BOOKS OF ACCOUNT, RECORDS AND
REPORTS
Section 10.1
Keeping of
Books
Proper and complete records and
books of account shall be kept by the General Partner in which
shall be entered fully and accurately all transactions and other
matters relative to the Partnership’s business as are usually
entered into records and books of account maintained by persons
engaged in business of like nature. The Partnership books and
records shall be prepared on an accrual basis in accordance with
generally accepted accounting principles, consistently applied. The
books and records shall at all times be maintained at the principal
office of the Partnership.
Section 10.2
Audited Statements and
Ac
