Exhibit 3.116
THE GLEN TOWNHOMES LIMITED
PARTNERSHIP AGREEMENT
This Agreement of Limited
Partnership (the “Agreement”) made and entered into by
and between Kimball Hill, Inc., an Illinois corporation (the
“General Partner”) and Kimball Hill Development
Company, an Illinois corporation (the “Limited
Partner”) dated effective as of September 1, 2001. 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 Revised Uniform 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 The Glen Townhomes 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 Glenview
(“Village”), Cook County, Illinois. The Property
consists of real estate approved by the Village for a total of 154
townhome residential dwelling units. It is part of the real estate
to be known as The Glen, which is to be developed as a mixed-use
community on a portion of what was the Glenview Naval Air Station.
The Property is being acquired in at least two take-outs pursuant
to the terms of an Agreement for Purchase and Sale of Real Estate
dated March 16, 2001 and effective March 20, 2001 between the
Village as seller and OliverMcMillan, LLC as purchaser. All of the
rights and interests of OliverMcMillan to the residential parcels
under such Agreement for Purchase and Sale of Real Estate have been
transferred to the General Partner in its individual capacity and
not as General Partner of the
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Partnership pursuant to the terms of an
Assignment of Agreement dated and effective March 20, 2001 between
OliverMcMillan as assignor and the General Partner individually, as
assignee. Contemporaneously with the execution of this Agreement,
and also effective September 1, 2001, the General Partner in its
individual capacity assigned all of its right and interest in the
residential parcels constituting the Property pursuant to an
Assignment of Interest. A copy of the Agreement for Purchase and
Sale of Real Estate is attached to and made a part of this
Agreement as Exhibit A. A copy of the Assignment of Agreement is
attached to and made a part of this Agreement as Exhibit B. A copy
of the Assignment of Interest is attached to and made a part of
this Agreement as Exhibit C. The legal description of the Property
is contained on Exhibit D attached to and made a part of this
Agreement. The Property shall be developed, marketed, constructed
and sold as high-quality upscale townhomes in accordance with the
development plan obtained from and required by the
Village.
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 twenty (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 Revised Uniform
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, Illinois 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 twenty (20) days of the effective date of such
change.
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Section 5.2
Registered Agent and
Office
(a)
The registered agent of the
Partnership is Eileen Connelly, a resident of the State of
Illinois, and the registered office of the Partnership is as
follows:
5999 New Wilke Road, Suite 504
Rolling Meadows, IL 60008
(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
$250,000.00 to the Partnership upon execution of this
Agreement.
(b)
The General Partner hereby confirms
its Assignment of Interest to the Partnership, as an additional
capital contribution, of all of its rights to and obligations of
the Property and the attached Agreement for Purchase and Sale of
Real Estate and Assignment of Agreement. The Partnership hereby
confirms its consent to and acceptance of such Assignment of
Interest 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 $5,000,000.00 to the
Partnership as its total capital contribution to the
Partnership.
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(b)
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.
(c)
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, provided that the net proceeds
resulting from any new or refinanced loan, lien or encumbrance
shall be used in the operation, management or improvement of the
Property owned by the Partnership and in furtherance of the
Partnership’s interest, or shall be distributed to the
Partners in accordance with the distribution provisions hereinafter
set forth:
(b)
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) such
documents as are necessary to cause the Partnership to become a
borrower under a Revolving Construction Loan Agreement with Harris
Trust and Savings Bank of Chicago, Illinois as agent and any other
banks which are a party to such Revolving Construction Loan
Agreement providing for a $100,000,000.00 construction loan to the
Partnership and to other borrowers who are parties to such
Revolving Construction Loan Agreement and (ii) the mortgage and
other collateral security documents that will encumber the
Partnership’s assets for all borrowers’ obligations
under such Revolving Construction Loan Agreement. The Limited
Partner also expressly acknowledges that a default by any other
borrower, even if not the Partnership, under such Revolving
Construction Loan Agreement could jeopardize or cause the loss of
some or all assets of the Partnership, including without limitation
all of the Property, even though the Partnership was not itself
under default under any of the terms of the Revolving Construction
Loan Agreement and associated mortgage and other collateral
security documents;
(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 with respect to any financing
of any property the
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sole security for such financing shall be
Partnership property only and 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 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 Revised Uniform
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.
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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.
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.
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(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 Partner.
Withdrawal from any such bank account or accounts may be made by
the General Partner. All such a
