EXHIBIT 10.1
2008 AMENDMENT TO THE LIMITED PARTNERSHIP AGREEMENT
THIS
2008 AMENDMENT TO THE LIMITED PARTNERSHIP AGREEMENT
("Amendment"),
dated as of December 1, 2008 (the "Effective Date"), is made by
JUSTICE
INVESTORS, a California partnership (the "Partnership"), PORTSMOUTH
SQUARE,
INC., a California corporation ("Portsmouth" or "Managing General
Partner"),
EVEN CORPORATION, formerly known as "Evon Garage Corporation", a
California
corporation ("Evon" or "Co-General Partner") (Portsmouth and Evon,
each a
"General Partner" and collectively, the "General Partners"), and
the parties
listed on the signature pages of this Amendment (each a "Limited
Partner" and
collectively, the "Limited Partners") (the General Partners and the
Limited
Partners, each a "Partner" and collectively, the "Partners") (the
Partnership
and the Partners, each a "Party" and collectively, the
"Parties").
RECITALS
A.
On July 10, 1967,
certain Partners formed the Partnership by filing a
Certificate of Limited Partnership with the Office of the Recorder
of the City
and County of San Francisco on July 10, 1967. The Partners are subject to
that
certain Limited Partnership Agreement dated July 10, 1967, as
amended by that
certain Amended Limited Partnership Agreement dated March 20, 1968,
as amended
by that certain Amended Limited Partnership Agreement dated January
1, 1979
("1979 Restated Agreement"), as amended by that certain Amendment
of
Partnership Agreement dated as of June 27, 2005 ("2005 Amendment").
The
Partners agree that the 1979 Restated Agreement, as amended by the
2005
Amendment (collectively, the "Partnership Agreement") is the
operative document
of the Partnership.
B.
In or around 1983,
Justice Enterprises, Inc., which was one of the two
original general partners, withdrew as a general partner and Evon
was made a
general partner with Portsmouth. Evon has been acting as the
Managing General
Partner of the Partnership, and Portsmouth has been acting as the
other General
Partner.
C.
The Partnership is the
owner of that certain real property located at
750 Kearny Street, San Francisco, California (the "Property"), on
which a hotel
(the "Hotel") and a garage (the "Garage") are located. The Hotel is currently
managed by Prism Hospitality, L.P., a Texas limited partnership
("Prism")
pursuant to that certain Management Agreement dated as of February
2, 2007, by
and between the Partnership and Prism (the "Hotel Management
Agreement"). The
persons operating the Hotel are employees of a subsidiary of the
Partnership.
The Garage is currently managed by Ace Parking Management, Inc.
("Ace")
pursuant to that certain Parking Facility Management Agreement
dated as of
September, 1, 2005, by and between Evon and Ace, which was assigned
to the
Partnership as of July 1, 2008 (the "Garage Management Agreement").
The
Partnership also leases portions of the Property to various
tenants. These
tenants include the Chinese Cultural Center, a spa and various
antennae on the
roof of the Hotel.
D.
The General Partners
have determined that it will be beneficial to the
Partnership to modify the powers and duties of the General Partners
so that
Portsmouth takes on Evon's former role as Managing General Partner
and
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Evon takes on Portsmouth's former role as the other General
Partner. The
General Partners have therefore recommended to the Limited Partners
that the
Partnership Agreement be amended to modify the management roles
and
compensation of the General Partners.
E.
The Partners desire to
amend the Partnership Agreement pursuant to the
terms and conditions of this Amendment.
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and the mutual
provisions
contained in this Amendment, the Parties agree as follows:
AGREEMENT
1.
Managing General
Partner; Co-General Partner. The Partnership has two
General Partners.
Notwithstanding any contrary language in any prior
Partnership agreements, as of the Effective Date, the Managing
General Partner
is Portsmouth (the "Managing General Partner") and the other
General Partner is
Evon (the "Co-General Partner").
2.
Partnership Office.
Each General Partner
shall have access to the
office of the Partnership located at 750 Kearny Street, Room 502,
San
Francisco, California 94108 ("Partnership Office") and the
Property. The
furniture, fixtures, and equipment currently located at the
Partnership Office
shall remain the property of the Partnership. At the sole cost of the
Partnership, each General Partner shall be provided with a computer
terminal,
desk, file space, access to all Partnership office equipment, and
incidental
assistance from the Partnership clerical staff as may be necessary
to assist
such General Partner in the performance of such General Partner's
duties.
3.
Removal of a General
Partner. A General
Partner may be removed only
upon the consent of at least seventy-five percent (75%) of the
interests of the
Limited Partners.
4.
Amendment of
Partnership Agreement.
Amendments to the Partnership
Agreement may be made only upon the consent of the General Partners
and at
least seventy five percent (75%) of the interests of the Limited
Partners.
5.
Purpose of
Partnership. Paragraph
4 of the Partnership Agreement is
hereby repealed and replaced with the following Paragraph 4:
4. Business of the
Partnership. The
business of the Partnership is
limited to the acquisition, development, management, operation,
leasing and sale of the real property commonly known as the
Hilton
San Francisco Financial District in the City and County of San
Francisco, California.
A description of said property is attached
hereto, marked Exhibit "A", and made a part hereof. The Partnership
shall not engage in any other business or activity which is not
directly or indirectly related to such primary purpose.
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6.
Powers and Duties of
the Partners.
Paragraph 9 of the Partnership
Agreement is hereby repealed and replaced with the following
Paragraph 9:
9. Powers and Duties
of the Partners.
9.1 Powers and Duties
of the Managing General Partner. The
Managing General Partner shall devote such time to the
Partnership
as shall be necessary to conduct the Partnership business.
Subject
to the remaining provisions of this Agreement, the Managing
General
Partner shall be responsible for the management of the
Partnership
business and shall have all rights, powers and duties generally
conferred by law or necessary, advisable or consistent in
connection
therewith, or in connection with the business of the Partnership.
Without limiting the foregoing, and subject to any restrictions
set
forth in this Agreement (including, without limitation, any
consulting and participation rights of Evon as set forth in
subparagraph 9.3, the approval rights of Evon as set forth in
subparagraph 9.4, and the requirements of subparagraph 9.5 as to
the
asset manager, the Managing General Partner shall have the
following
rights and obligations:
9.1.1 Expenditures.
To expend the capital
and revenues of the
Partnership in furtherance of the Partnership business, in
accordance with the budget approved by both General Partners.
9.1.2 Agreements and
Other Documents. To
enter into and carry out
agreements of any kind and to do any and all other acts and
things
necessary, proper or convenient to carry out the Partnership
purpose; and to prepare, execute, acknowledge, record, file
and/or
deliver any and all reports, instruments or documents and to
take
all actions, required
or deemed necessary, reasonable or desirable
by the Managing General Partner to effectuate any of the
foregoing,
to comply with requirements of applicable law or to comply with
the
provisions of this Agreement.
9.1.3 Insurance.
To acquire and enter
into any contract of
insurance of any type which the Managing General Partner deems
necessary or desirable for the protection of the Partnership,
for
the conversion of its assets, for compliance with loan
covenants
made by the Partnership, or for any purpose convenient or
beneficial
to the Partnership.
9.1.4 Employment of
Personnel. To employ
or engage persons in the
operation and management of the Partnership business or assets,
including but not limited to supervisory managing agents,
building
contractors, engineers, appraisers, insurance brokers, real
estate
brokers and loan brokers, on such terms and for such compensation
as
the Managing General Partner shall determine.
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9.1.5 Investments.
To invest Partnership
cash or, pending other
investment in furtherance of the Partnership's purpose, the
proceeds
derived from the sale of Partnership interests, in United
States
Treasury obligations, prime quality commercial paper,
certificates
of deposit, deposit or other obligations of insured commercial
banks, savings banks or savings and loan associations, or in
any
other similar interim investments; provided that such
investments
are generally considered to be safe, cash-equivalent liquid
investments.
Partnership funds shall not be used to make any
speculative investments or purchase any equity interests.
9.1.7 Partnership
Expenses. To pay
Partnership expenses (including
expenses in connection with an audit or review of Partnership
tax
returns or a Partnership matter in a Partner's tax return) and
to
make all decisions relative to Partnership accounting,
including
without limitation, determining the source of Partnership
Disbursements, and whether disbursements are to be made from
Partnership operating income or from some other source such as
Partnership reserves, proceeds from the sale of Partnership
interests, or proceeds from the sale or refinancing of
Partnership
property.
9.1.8 Reimbursable
Expenses. To be
reimbursed by, or to charge,
the Partnership for reasonable expenses incurred by the
Managing
General Partner on behalf of the Partnership, provided such
expenses
were
included in the approved budget or are otherwise approved by
the Co-General Partner. The Managing General Partner will
endeavor
to have such Partnership expenses billed directly to the
Partnership
whenever feasible. The
foregoing notwithstanding, the Managing
General Partner shall not charge to the Partnership, and shall
reimburse the Partnership for, any legal, accounting or other
costs
incurred by the Managing General Partner or the Partnership due
to
requirements of the Managing General Partner (including but not
limited to costs related to the public reporting and/or
Sarbanes-
Oxley requirements applicable to the Managing General Partner),
but
only to the extent those costs exceed the costs that would be
incurred by the Partnership if the Managing General Partner had
no
such requirements.
9.2 Duty to Cooperate
with Co-General Partner. In addition to its
other obligations, the Managing General Partner shall inform
and
coordinate with the Co-General Partner as follows:
9.2.1 Information.
The Managing General
Partner has the obligation
to inform Co-General Partner of all significant operational
matters
concerning the Partnership and the Property with enough time
and
sufficient detail to permit Co-General Partner to carry out and
perform Co-General Partner's fiduciary duties as a General Partner.
Specifically, and not by way of limitation, the Managing
General
Partner, directly or by direction to the Asset Manager (a) will
prepare and deliver to Co-General Partner notices of any of the
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matters set forth in subparagraph 9.4 (Decisions of Both
General
Partners) or joint decisions identified in subparagraph 9.5
(Asset
Manager) within a reasonable time after learning of a matter
requiring a
joint decision; (b)
will provide Co-General Partner
with timely and thorough copies of any reports received by the
Managing General Partner about Hotel and Garage operations,
including, without limitation, the results of audits, auditor's
recommendation letters, financial projections, hotel management
reports, proposed budgets, significant proposals to change a
budget
that has been previously adopted, materials prepared for
meetings
with the Managing General Partner, notices by any governmental
entity, and any legal notices, which reports shall include the
same
level of detail as the reports that have been made available to
the
Managing General Partner; (c) will provide the Co-General
Partner
with complete copies of any written materials that Managing
General
Partner prepares concerning the Hotel and Garage operations,
including meeting agendas and materials; (d) upon request by Co-
General Partner, will prepare and deliver to Co-General Partner
reports concerning the Partnership, the Property and the
operations
of the Hotel and Garage within a reasonable time after such
request;
and (e) upon
request by the Co-General Partner, will facilitate Co-
General Partner's access to senior staff of the Hotel and
Garage
within a reasonable time after such request.
9.2.2 Meetings.
The Managing General
Partner shall meet with the
Co-General Partner on at least a quarterly basis. The Managing
General Partner and the Co-General Partner shall set a schedule
of
regular meeting to facilitate the Co-General Partner's
participation
in
management decisions which shall include, without limitation,
decisions concerning budgets (including forecasts and other
budget
updates) and capital improvements. The Managing G
