Exhibit 10.11
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALLERY-JUDGE GROVE,
A NEW YORK LIMITED PARTNERSHIP
dated as of
February 9, 2005
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALLERY-JUDGE GROVE,
A NEW YORK LIMITED PARTNERSHIP
This SECOND
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated
as
of February 9, 2005 is
entered into by and among CJG Management, Ltd., a
Florida
limited partnership ("CJG
Management"), as the general partner and those persons
and entities whose names and
addresses appear on the books and records of the
Partnership as
partners.
WITNESSETH:
WHEREAS, a
limited partnership having the name "Callery-Judge Grove"
was
previously formed under the
Laws of the State of New York (the "Partnership");
and
WHEREAS, CJG
Management is the sole general partner of the Partnership;
and
WHEREAS, the
parties to this Second Amended and Restated Agreement of
Limited Partnership currently
constitute all of the partners in the Partnership;
and
WHEREAS, the
parties to this Second Amended and Restated Agreement of
Limited Partnership intend to
amend and restate the Agreement of Limited
Partnership governing the
Partnership upon the terms and conditions hereinafter
set forth;
NOW, THEREFORE,
for valuable consideration, the parties do hereby agree
that the Partnership shall
continue under, and the actions of each of the
parties to this Second
Amended and Restated Agreement of Limited Partnership
with respect to the
Partnership shall, to the extent not inconsistent with
the
laws of the State of New
York, be governed by, the terms and conditions of this
Agreement set forth
below.
ARTICLE I
Certain Definitions; General Provisions
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Section 1.01
Continuation. The parties hereto hereby continue the
Partnership under the name
Callery-Judge Grove, L.P., in accordance with, and
subject to the terms and
conditions set forth in, this Agreement.
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Section 1.02
Certain Definitions. As used herein:
"Adjusted Capital Account" shall mean, with respect to
any
Partner, the balance in the Partner's Capital Account
(whether
positive or negative) as of the end of the Fiscal Year, (i)
increased
by the sum of (A) any amount which such Partner is obligated
to
contribute to the Partnership, (B) such Partner's share of
minimum
gain attributable to partnership nonrecourse liabilities (within
the
meaning of Treasury Regulations Section 1.704-2) as of the end of
the
Fiscal Year, (C) such Partner's share of minimum gain attributable
to
partner nonrecourse liabilities (within the meaning of
Treasury
Regulations 1.704-2) as of the end of the Fiscal Year, and (D)
any
amount for which such Partner is personally liable with respect
to
liabilities of the
Partnership (except to the extent that such amount
would duplicate the amount of any items under clauses (A), (B)
or
(C)), and (ii) decreased by such Partner's share of the
reasonably
expected net adjustments, allocations and distributions described
in
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and
(6).
"Affiliate" means, with respect to a Partner, any Person
(i)
which directly or indirectly owns 50% or more of, or (ii) 50% or
more
of which is directly or indirectly owned by, or (iii) 50% or more
of
which directly or indirectly is owned by one or more other
Persons
directly or indirectly owning 50% or more of, such Partner.
For
purposes of the preceding sentence, a Person shall be deemed to
own
that portion of another Person equal to (x) if such other Person is
a
partnership, trust or any other unincorporated association or
entity,
the percentage interest in income or capital of such
partnership,
trust or unincorporated association or entity, or (y) if such
other
Person is a corporation, the percentage of total shares or
voting
shares of such corporation, whichever is greater, owned by such
first
Person.
"Capital Account" means the amount or value of the
Capital
Contributions made by a Partner and the allocations to such Partner
of
Partnership items of income, gains, losses and deductions (pursuant
to
Section 2.03(b) and predecessor provisions of prior
limited
partnership agreements of the Partnership) and distributions
(pursuant
to Section 5.01 and Section 7.03 and predecessor provisions of
prior
limited partnership agreements of the Partnership), as adjusted by
any
and all adjustments required to be made in order to maintain
Capital
Account balances in compliance with Treasury Regulations
Section
1.704-l(b).
The Capital Account for each Partner shall be adjusted at
the
time of, and to reflect, an adjustment of the Gross Asset Value of
all
Partnership assets pursuant to subparagraph (ii) of the definition
of
Gross Asset
Value in this Section 1.02 in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv), including Treasury
Regulations
Section 1.704-1(b)(2)(iv)(f).
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"Capital Contribution" means the cash or fair market value
of
other property previously contributed by a Partner (or its
predecessor
in interest and properly allocable to such Partner) to
the
Partnership, or that may in the future be contributed by a
Partner
pursuant to this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from
time to time. A reference to a section of the Code shall be deemed
to
include any amendatory or successor provision thereto.
"Distributable Funds" means the amount of cash (including
cash
held in Partnership reserves and net refinancing proceeds) that
the
Managing Partner anticipates will be available to the
Partnership
during such period of time as the Managing Partner deems relevant
to
such determination, reduced by the sum of (i) the amount of cash
that
the Managing Partner, in its sole discretion, anticipates will
be
required
to meet all of the obligations of the Partnership
(including,
but not limited to, capital expenditures and payments of principal
and
interest on any debts and other obligations of the Partnership)
during
such period, and (ii) the amount of cash that the Managing Partner,
in
its sole discretion, believes necessary or appropriate for
the
Partnership to retain.
"ERISA" means the Employee Retirement Income Security Act
of
1974, as amended from time to time. A reference to a Section of
ERISA
shall be deemed to include a reference to any amendatory or
successor
provision thereto.
"GAAP" means generally accepted accounting principles
and
practices in effect in the United States from time to
time.
"GAAP Profits" means the profits of the Partnership for a
fiscal
year calculated using GAAP.
"General Partner" means CJG Management, in its capacity as
a
general partner in the Partnership, and any other Person which
both
(a) acquires, pursuant to this Agreement, an Interest as a
general
partner in the Partnership and (b) is admitted to the Partnership
as a
general partner pursuant to this Agreement.
"Gross Asset Value" means, with respect to any asset, the
asset's
adjusted basis for federal income tax purposes, except as
follows:
(i) The initial Gross Asset Value of any asset contributed by
a
Partner to the Partnership shall be the gross fair market value
of
such asset, as determined by the contributing Partner and the
General
Partner, provided that, if the contributing Partner is the
General
Partner, the determination of the fair market value of the
contributed
asset shall require the consent of a majority of the Limited
Partners;
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(ii) The Gross Asset Values of all Partnership assets shall
be
adjusted to equal their respective gross fair market
values,
determined in accordance with Treasury Regulations
Section
1.704-1(b)(2)(iv)(h), as of the date of the following: (A)
the
acquisition of an additional interest in the Partnership by any new
or
existing Partner in exchange for more than a de minimis
capital
contribution; (B) the distribution by the Partnership to a Partner
of
more than a de minimis amount of Partnership property as
consideration
for an interest in the Partnership; and (C) the liquidation of
the
Partnership within the meaning of Treasury Regulations
Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant
to
clauses (A) and (B) above shall be made only if the General
Partner
reasonably determines that such adjustments are necessary
or
appropriate to reflect the relative economic interests of
the
Partners;
(iii) The Gross Asset Value of any Partnership asset
distributed
to any Partner shall be adjusted to equal the gross fair market
value
of such asset on the date of distribution as determined by
the
distributee and the
General Partner, provided that, if the distributee
is the General Partner, the determination of the fair market value
of
the distributed asset shall require the consent of a majority of
the
Limited Partners; and
(iv) The Gross Asset Values of Partnership assets shall
be
increased (or decreased) to reflect any adjustments to the
adjusted
basis of such assets pursuant to Code Section 734(b) or
Section
743(b), but only to the extent that such adjustments are taken
into
account in determining capital accounts pursuant to
Treasury
Regulations Section 1.704-1(b)(2)(iv)(m) and the
following:
(A) To the extent an adjustment to the adjusted tax basis
of
any Partnership asset pursuant to Code Section 734(b) or
Section
743(b) is required pursuant to Treasury Regulations
Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining
capital accounts as a result of a distribution other than in
complete
liquidation of a Partner's interest, the amount of such
adjustment
shall be treated as an item of gain (if the adjustment increases
the
basis of the asset) or loss (if the adjustment decreases the basis
of
the asset) from the disposition of the asset and shall be taken
into
account for purposes of computing Net Profits or Net
Losses;
(B) To the extent an adjustment to the adjusted tax basis
of
any Partnership asset pursuant to Code Section 734(b) or
Section
743(b) is required pursuant to Treasury Regulations
Section
1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4) to be
taken
into account in
determining capital accounts as the result of a
distribution to a Partner in complete liquidation of the
Partner's
interest in the Partnership, the amount of such adjustment to
the
capital accounts shall be treated as an item of gain (if
the
adjustment increases the basis of the asset) or loss (if
the
adjustment decreases such basis) and such gain or loss
shall
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be specially allocated to the Partners in accordance with
their
interests in the Partnership in the event Treasury Regulations
Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom
such
distribution was made in the event Treasury Regulations
Section
1.704-1(b)(2)(iv)(m)(4) applies; provided, however, that Gross
Asset
Values shall not be adjusted pursuant to this subparagraph (iv) to
the
extent the General Partner determines that an adjustment pursuant
to
subparagraph (ii) is necessary or appropriate in connection with
a
transaction that would otherwise result in an adjustment pursuant
to
this subparagraph (iv).
If the Gross Asset Value of an asset has been determined
or
adjusted pursuant to subparagraphs (i), (ii), or (iv), such
Gross
Asset Value shall thereafter be adjusted by the depreciation
taken
into account with respect to such asset for purposes of computing
Net
Profits and Net Losses. For purposes of this definition of Gross
Asset
Value, a capital contribution or distribution shall be considered
de
minimis if its value is less than $1,000.
"Incentive Bonus" means an amount equal to five percent of
the
GAAP Profits of the Partnership for a Fiscal Year in excess
of
$500,000.
"Incentive Compensation Plan" means a deferred compensation
plan
pursuant to which appropriate financial incentives are provided
to
employees and consultants of the Partnership as determined by
the
Managing Partner.
"Interest" has the meaning specified in Section 2.03(a).
"IRS" means the United States Internal Revenue Service.
"Limited Partner" means each of the Persons the names of
which
appear on the books and records of the Partnership as partners in
its
capacity as a limited partner in the Partnership, and any other
Person
which both
(a) acquires, pursuant to this Agreement, an Interest as
a
limited partner in the Partnership and (b) is admitted to
the
Partnership as a limited partner.
"Major Decision" has the meaning specified in Section
3.02.
"Majority-In-Interest" means one or more Partners which, in
the
aggregate, hold greater than 50% of the Percentage Interests held
by
all Partners.
"Managing Partner" means CJG Management for so long as it is
a
General Partner and has not been removed (pursuant to
Section
3.02(a)(v)), dissolved or otherwise ceases to be the managing
partner
of the Partnership, and any other General Partner selected to be
the
managing partner
of the Partnership pursuant to Section 3.02(a)(ii).
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"Net Losses" means, for each Fiscal Year or other period,
an
amount equal to the Partnership's loss, if any, for such Fiscal
Year
or period, as the case may be, determined in accordance with
Section
703(a) of the Code (with all items of income, gain, loss and
deduction
required to be stated separately pursuant to Section 703(a)(1) of
the
Code to be included in computing such loss); provided, however,
such
loss shall be adjusted by any and all adjustments required to be
made
in order to determine Capital Account balances in compliance
with
Treasury Regulations Section 1.704-l(b).
"Net Profits" means, for each Fiscal Year or other period,
an
amount equal to the Partnership's taxable income, if any, for
such
Fiscal Year or period, as the case may be, determined in
accordance
with Section 703(a) of the Code (with all items of income, gain,
loss
and deduction required to be stated separately pursuant to
Section
703(a)(1) of the Code to be included in computing such
profit);
provided, however, such income shall be adjusted by any and
all
adjustments required to be made in order to determine Capital
Account
balances in compliance with Treasury Regulations Section
1.704-l(b).
"Notices" has the meaning specified in Section 10.01(a).
"Partners" means, collectively, the General Partners
(including
the Managing Partner), and the Limited Partners, and any
Person(s)
admitted to the Partnership as General Partner(s) or
Limited
Partner(s) pursuant to this Agreement.
"Percentage Interest" means, for each Partner, its interest
in
the distributions by, and income, gains, losses, deductions
and
credits of, the Partnership, as set forth, as at the date hereof
in
the books and records of the Partnership and as changed, from time
to
time, pursuant to the terms of this Agreement.
"Person" means an individual, corporation, association,
limited
liability company, partnership, trust, unincorporated organization
or
a government or any agency or political subdivision
thereof.
"Property" means the parcel or parcels of real property in
Palm
Beach County, Florida owned by the Partnership, together with
all
improvements thereon, the citrus and other trees planted and to
be
planted thereon, the easements, rights and privileges
appurtenant
thereto, and such other real property or interests therein, whether
or
not contiguous with the real property described above, that may
be
purchased or otherwise acquired by the Partnership from time to
time.
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"Recognition and Retention Plan" means a deferred
compensation
plan pursuant to which the Managing Partner can provide
appropriate
financial incentives to employees, former employees and former
general
partners of the Partnership.
"State" means the State of New York.
"Transfer" means any sale, assignment, gift,
hypothecation,
pledge or other disposition, whether voluntary or by operation of
law,
of an Interest or any portion thereof, or any such sale or
other
disposition of an ownership or voting interest, directly
or
indirectly, in a Partner, other than to the Partnership.
"Withdrawing Partner" has the meaning specified in
Section
7.01(d).
Section 1.03
Name. The name of the Partnership shall be
"Callery-Judge
Grove L.P."
Section 1.04
Principal Place of Business. The Partnership's principal
place
of business shall continue to
be in Palm Beach County, Florida, or at such other
place as the Managing Partner
may designate from time to time.
Section 1.05
Purposes; Powers. The purposes of the Partnership shall
continue to be to own the
Property and all of the machinery, equipment,
inventory and other property,
real or personal, tangible or intangible, owned or
acquired by the Partnership
(or in which the Partnership owns or acquires any
interest) from time to time
used in those businesses in which it may engage
pursuant to this Agreement;
to engage in the business of citrus production and
other businesses related to
citrus production, processing and sales; and to
engage in the business of
holding real estate for investment and for
development. The Partnership
shall have the power to do any and all acts and
things necessary,
appropriate, proper, advisable, incidental to or
convenient
for the furtherance and
accomplishment of such purposes.
Section 1.06
Duration. The Partnership shall continue until dissolved
pursuant to Section
7.01.
Section 1.07
General Partner. CJG Management is the sole General Partner
of
the Partnership on the date
hereof. The management of the business and affairs
of the Partnership shall be
conducted as provided in ARTICLE III.
Section 1.08
Limited Partners. The persons and entities whose names
appear
as such on the books and
records of the Partnership are the Limited Partners of
the Partnership on the date
hereof. The Limited Partners shall not participate
in making the decisions of
the Partnership, and in no event shall the Limited
Partners have the power to
manage or transact any Partnership business or act
for or in the name of, or
otherwise bind, the Partnership or take part in the
control of the business of
the Partnership, except that the Limited Partners
shall have such rights and
powers as are expressly granted to them in this
Agreement. No Limited Partner
shall take any action which would, if taken, cause
(i) a partition of the
Property, or any other asset of
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the Partnership, or (ii) a
dissolution of the Partnership. No Limited Partner in
its capacity as such shall
ever be personally liable for any part of debts or
other obligations of the
Partnership, or obligated to make further Capital
Contributions to the
Partnership.
Section 1.09
Statutory Compliance. The Partnership shall exist under,
be
governed by, and this
Agreement shall be construed in accordance with, the New
York Revised Uniform Limited
Partnership Act. All real and personal property
owned by the Partnership
(including, if and to the extent owned by the
Partnership, the Property) is
and shall continue to be owned by the Partnership
as an entity and held in its
name, and no Partner has or shall have any
ownership interest in any
such property in its individual name. The Managing
Partner shall cause to be
executed and filed on behalf and at the expense of the
Partnership (i) all
certificates and other documents required by law to be
filed
in connection with the
continuation of the Partnership and this amendment and
restatement of the agreement
of limited partnership of the Partnership, and (ii)
such other documents,
instruments and certificates as it may deem necessary,
appropriate, helpful or
convenient with respect to the continuation of, and the
conduct of business by, the
Partnership.
ARTICLE II
Capital Contributions, Other Financing;
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Interests in the Partnership
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Section 2.01
Capital Contributions.
(a) Each of the
Partners (other those Limited Partners who formerly held
Interests as General Partners
or Special Limited Partners) or each Partner's
predecessor-in-interest has
made a Capital Contribution to the Partnership prior
to the date hereof in the
amount set forth in the books and records of the
Partnership.
(b) The Managing
Partner may, from time to time, make, and may cause the
Partnership to accept from
Persons (including Partners) offering to make, loans
and additional Capital
Contributions to the Partnership, on such terms as it
may
deem necessary, appropriate,
helpful or convenient subject to the terms of this
Agreement.
Section 2.02
Financing of the Partnership. The money required to
finance
the business of the
Partnership shall be derived from the revenues of the
Partnership and from loans
and Capital Contributions to the Partnership.
Section 2.03
Interests in the Partnership; Allocation of Profits,
Gains,
Losses and
Deductions.
(a) Each Partner
has an ownership interest in the Partnership (an
"Interest") measured by its
respective Percentage Interest. Each Partner's
Percentage Interest, as of
the date hereof, is set forth in the books and
records of the
Partnership.
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(b) The income,
gains, losses and deductions of the Partnership shall be
determined for each Fiscal
Year in accordance with the accounting methods
followed by the Partnership
for federal income tax purposes, and shall be
allocated as
follows:
(i) Subject to subsections (iii) and (iv) of this Section 2.03(b),
the
Net Losses of
the Partnership shall be allocated to the Partners in
the
following order
of priority:
(I) First, to the Partners in accordance with their
Percentage
Interests, to the extent that the amount of Net Profits
previously
allocated to the Partners under Section 2.03(b)(ii)(IV) exceed the
sum
of (i)
distributions previously made to the Partners under
Section
5.02(a) plus (ii) the Net Losses theretofore allocated to the
Partners
under this Section 2.03(b)(i)(I);
(II) Second, to each Partner in proportion to the amount
the
positive balance in its Adjusted Capital Account bears to
the
aggregate of positive balances in all Adjusted Capital Accounts,
until
the Adjusted Capital Accounts of the Partners are reduced to zero;
and
(III) Third, to the General Partner.
(ii) Subject to subsections (iii) and (iv) of this Section
2.03(b),
the Net Profits
of the Partnership shall be allocated in the following
order of
priority:
(I) First, to the General Partner ratably (as described
in
Section 2.03(b)(i)(III)) until the General Partner has been
allocated
Net Profits equal to the amount of Net Losses previously allocated
to
it under Section 2.03(b)(i)(III);
(II) Second, to each Partner in proportion to the amount of
Net
Losses previously allocated to each Partner under Section
2.03(b)
(i)(II) bears to the aggregate of all Net Losses so allocated to
all
Partners, until the Partners have been allocated Net Profits equal
to
the amount of Net Losses previously so allocated;
(III) Third, to each Partner in proportion to the amount of
Net
Losses previously allocated to each Partner under
Section
2.03(b)(i)(I) bears to the aggregate of all Net Losses so allocated
to
all Partners until the Partners have been allocated Net Profits
equal
to the amount of Net Losses previously so allocated; and
(IV) Fourth, to the Partners in accordance with their
Percentage
Interests.
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(iii) Notwithstanding paragraphs (i) and (ii) of this Section
2.03(b):
(I) Minimum Gain Chargeback. Notwithstanding any other
provision
of this Agreement, if there is a net decrease in Partnership
minimum
gain (as defined in Treasury Regulations Section 1.704-2(g)(2)),
items
of income and gain shall be allocated to all Partners in
accordance
with Treasury Regulations Section 1.704-2(f), and such allocations
are
intended to comply with the minimum gain chargeback requirements
of
Treasury Regulations Section 1.704-2 and shall be
interpreted
consistently
therewith.
(II) Section 704(c) Allocation. (1) Solely for federal, state
and
local income tax purposes and not for book or Capital
Account
purposes, depreciation, amortization, gain or loss with respect to
the
property that is properly reflected on the Partnership's books at
a
value (computed in accordance with subparagraph (i) of the
definition
of "Gross Asset Value" in Section 1.02) that differs from its
adjusted
basis for federal income tax purposes shall be allocated in
accordance
with the principles and requirements of Code Section 704(c) and
the
Treasury Regulations promulgated thereunder, and in accordance
with
the requirements of the relevant provisions of the
Treasury
Regulations issued under Code Section 704(b). For Capital
Account
purposes, depreciation, amortization, gain or loss with respect
to
property that is properly reflected on the Partnership's books at
a
value that differs from its adjusted basis for tax purposes shall
be
determined in accordance with the rules of Treasury
Regulations
Section 1.704-1(b)(2)(iv)(g).
(2) In the event the Gross Asset Value of any
Partnership
asset is adjusted pursuant to subparagraph (ii) of the definition
of
"Gross Asset Value" in Section 1.02, subsequent allocations of
income,
gain, loss, and deduction with respect to such asset shall
take
account of any variation between the adjusted basis of such asset
for
federal income tax purposes and its Gross Asset Value in the
same
manner as under Code Section 704(c) and the Treasury
Regulations
promulgated thereunder.
(3) In accordance with Treasury Regulations Sections
1.704-1(b)(2)(iv)(f)(2), unrealized income, gain, loss or deduction
in
Partnership assets as of the time of the adjustment of the
capital
accounts
pursuant to the definition of "Capital Account" in
Section
1.02 (that had not been reflected in the Capital Accounts
previously)
shall be allocated among the Partners on a taxable disposition of
any
Partnership asset, the Gross Asset Value of which has been
adjusted
pursuant to subparagraph (ii) of the definition of "Gross Asset
Value"
in Section 1.02, as if there were a taxable disposition of
such
Partnership assets at the time of the adjustment of the
capital
accounts.
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(4) In accordance with Treasury Regulations Sections
1.704-1(b)(2)(iv)(f)(3) and 1.704-1(b)(2)(iv)(g), capital
accounts
shall be adjusted for
allocations to them of depreciation, depletion,
amortization, and gain or loss, as computed for book purposes,
with
respect to any Partnership asset, the Gross Asset Value of which
has
been adjusted pursuant to subparagraph (ii) of the definition
of
"Gross Asset Value" in Section 1.02.
(5) In accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(f)(4), Partners' distributive shares
of
depreciation, depletion, amortization, and gain or loss, as
computed
for tax purposes, with respect to any Partnership asset, the
Gross
Asset Value of which has been adjusted pursuant to subparagraph
(ii)
of the definition of "Gross Asset Value" in Section 1.02, shall
be
determined so as to take account of the variation between the
adjusted
tax basis and the Gross Asset Value of such Partnership assets in
the
same manner as under Code Section 704(c).
(6) Any elections or other decisions relating to such
allocations shall be made by the General Partner in any manner
that
reasonably reflects the purpose and intention of this
Agreement,
provided that the Partnership shall elect to apply the
allocation
method permitted by the Treasury Regulations under Code
Section
704(c). Allocations pursuant to this Section 2.03 are solely
for
purposes of federal, state, and local taxes and shall not affect,
or
in any way be taken into account in computing, any Partner's
Capital
Account or share of Net Profits, Net Losses, other items,
or
distributions pursuant to any provisions of this
Agreement.
(III) Risk of Loss Allocation. Any item of Partner
Nonrecourse
Deduction (as hereinafter defined) with respect to a
Partner
Nonrecourse Debt (as hereinafter defined) shall be allocated to
the
Partner or Partners who bear the economic risk of loss for
such
Partner Nonrecourse Debt in accordance with Treasury
Regulations
Section 1.704-2(i). The term "Partner Nonrecourse Deduction" means
any
item of loss that is attributable to a Partner Nonrecourse
Debt
pursuant to Treasury Regulations Section 1.704-2(i)(1) and (2).
The
term "Partner Nonrecourse Debt" means any nonrecourse debt of
the
Partnership (within the meaning of Treasury Regulations
Section
1.704-2(b)(4)) for which any Partner bears the economic risk of
loss
(within the meaning of Treasury Regulations Section
1.704-2(b)(4)).
Subject to subparagraph (I) hereof, but notwithstanding any
other
provision of this Agreement, in the event that there is a net
decrease
in minimum gain attributable to a Partner Nonrecourse Debt
(such
minimum gain being hereinafter referred to as "Partner
Nonrecourse
Minimum Gain") for a taxable year of the Partnership, then,
after
taking into account allocations pursuant to subparagraph (a)
hereof,
but before any other allocations are made for such taxable year,
each
Partner with a share of Partner Nonrecourse Gain attributable to
such
Partner Nonrecourse Debt at the beginning of such year shall
be
allocated items of income and gain for such year (and if
necessary,
for
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subsequent years) equal to such Partner's share of the net decrease
in
Partner Nonrecourse Minimum Gain as determined under
Treasury
Regulations Section 1.704-2(i)(4).
(IV) Allocation of Excess Nonrecourse Liabilities. For
the
purpose of determining each Partner's share of Partnership
nonrecourse
liabilities pursuant to Treasury Regulations Section 1.752-3(a),
and
solely for such purpose, each Partner's interest in
Partnership
profits is hereby specified to be such Partner's Percentage
Interests.
(V) Other Allocation Rules.
(1) Net Profits, Net Losses, and any other items of
income,
gain, loss, or deduction shall be allocated to the Partners
pursuant
to this Section 2.03 as of the last day of each Fiscal Year,
provided
that Net Profits, Net Losses, and such other items shall also
be
allocated at such times as the Gross Asset Values of
Partnership
Property are adjusted pursuant to subparagraph (ii) of the
definition
of Gross Asset Value in Section 1.02.
(2) For purposes of determining the Net Profits, Net
Losses,
or any other items allocable to any period, Net Profits, Net
Losses,
and any such other items shall be determined on a daily, monthly,
or
other basis, as determined by the General Partner using
any
permissible method under Code Section 706 and the Treasury
Regulations
promulgated thereunder.
(3) All
allocations to the Partners pursuant to this Section
2.03 shall, except as otherwise provided, be divided among them
in
proportion to the Interests held by each.
(VI) Unexpected Allocations and Distributions. No allocation
may
be made to a Limited Partner to the extent such allocation causes
or
increases a deficit balance in such Limited Partner's Capital
Account
in excess of any amount that such Limited Partner is obligated
to
restore (taking into account Treasury Regulations
Sections
1.704-1(b)(2)(ii)(d), 1.704-2(i)(5) and 1.704-2(g)(1)(ii)) as of
the
end of the taxable year to which such allocation
relates.
Notwithstanding any other provision of this Agreement
except
subparagraphs (I) and (III) hereof, in the event that a
Limited
Partner unexpectedly receives an adjustment, allocation
or
distribution described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) which - results in such
Limited
Partner having a negative Capital Account balance (as
determined
above), then such Limited Partner shall be allocated items of
income
and gain (including items of gross income) in an amount and
manner
sufficient to eliminate, to the extent required by the
Treasury
Regulations, such negative balance in such Limited Partner's
Capital
Account as quickly as possible.
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(VII) The Partners are aware of the income tax consequences
of
the allocations made by this Section 2.03 and agree to be bound by
the
provisions of this Section 2.03 in reporting their shares
of
Partnership income and loss for income tax purposes, except to
the
extent otherwise required by law.
(iv) Adjustment of Capital Accounts. After all allocations for
a
taxable year are
made, Capital Accounts shall be adjusted by the
Partnership to
the extent necessary to comply with all applicable laws,
regulations and
administrative pronouncements. Notwithstanding anything
contained in
this Agreement to the contrary, any and all distributions
to
the Partners to
be made under Section 7.02 shall be made in the order of
priority set
forth in Section 5.02. The tax allocation provisions of
this
Agreement are
intended to produce final Capital Account balances that
are
at levels
("Target Final Balances") which permit liquidating
distributions
that are made in
accordance with such final Capital Accounts balances to
be
equal to the
distributions that would occur under Section 5.02(a) if
such
liquidating
proceeds were distributed pursuant to Section 5.02(a). To
the
extent that the
tax allocation provisions of this Agreement would not
produce the
Target Final Balances, the Partners agree to take such
actions
as are necessary
to amend such tax allocation provisions to produce such
Target Final
Balances. Notwithstanding the other provisions of this
Agreement,
allocations of income, gain, loss and deduction (including
items
of gross income,
gain, loss and deduction) for the year in which
distributions to
the Partners are made under Section 7.02 shall be made
as
necessary to
produce such Target Final Balances (and, to the extent
such
allocations
would not effect such result, at the discretion of the
Managing
Partner, the
prior tax returns of the Partnership shall be amended to
reallocate items
of gross income, gain, loss and deduction to produce
such
Target Final
Balances).
Section 2.04
Withdrawal of Capital; Limitation on Distributions. No
Partner
shall be entitled to withdraw
any part of its Capital Account in, or to receive
any distributions from, the
Partnership, except as provided in Section 5.01 and
Section 7.02. No Partner
shall be entitled to demand or receive interest on its
Capital Account or any
property other than cash from the Partnership.
ARTICLE III
Management
----------
Section 3.01 In
General.
(a) The Managing
Partner shall be responsible for the management of the
business, activities and
affairs of the Partnership. The Managing Partner shall
have all the rights and
powers which may by law be possessed by it and such
rights and powers as are
necessary, advisable or convenie
