SUPERIOR AND SEDGWICK
ASSOCIATES
an ILLINOIS LIMITED
PARTNERSHIP
This is an Agreement of Limited
Partnership (the “Agreement”) made effective as of the
1st day of November, 1984, by and among: Robert J. Washlow and
Sheldon Chertow, as General Partners: and Lawson Products, Inc., a
Delaware Corporation, as a Limited Partner.
AGREEMENT
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1.
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Formation, Name, and
Office
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A.
Formation . The signatories to this Agreement, hereby
organize a Limited Partnership (the “Partnership”)
under the Uniform Limited Partnership Act of the State of Illinois
(the “Act”). The rights and obligations of the General
Partners and the Limited Partner shall be determined by the Act,
except as otherwise provided in this Agreement.
B.
Name . The name of the Partnership is “Superior and
Sedgwick Associates; an Illinois Limited Partnership.” The
General Partners may, from time to time, in the General
Partners’ discretion, change the name of the Partnership by
giving notice of the change to all the Partners.
C.
Office . The office of the Partnership initially shall be
located at 30 North LaSalle Street, Suite 3630, Chicago, Illinois
60602. The General Partners may, from time to time, in the General
Partners’ discretion, change the location of the office of
the Partnership at any time by giving notice of the change to all
Partners.
2.
Principal Business . The principal business of the
Partnership shall be to acquire, rehabilitate, lease and operate
the property commonly known as 366 West Superior and 400-432 West
Superior, Chicago, Illinois, legally described on Exhibit
“A” hereto, and to acquire all leases to which such
property is subject, including but not limited to the Lease, and
perform all obligations thereunder, for the purpose of investment.
The Partnership shall have all powers necessary or incidental to
conduct such business, including the right to sell, lease, manage,
operate, rehabilitate, remodel, repair and improve the Partnership
Property, to enter into agreements with others to perform such
functions, to borrow money and to do such other things as the
General Partners deem necessary or advisable to carry out the
purposes of the Partnership.
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3.
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Evidencing of Partnership
Interest .
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The Partnership Interest of each
Partner is set forth on Exhibit “B”, which is made a
part hereof, as it may be adjusted from time to time pursuant to
this Agreement.
4.
Pertinent Definitions . For purposes of this Agreement, the
following definitions will be applicable:
A.
Affiliate means (i) every entity in which any Partner
directly or indirectly has a controlling financial interests (ii) a
partner’s spouse, child, grandchild, parent, brother
or
sister, and (iii) every entity in
which a person described in clause (ii) directly or indirectly has
a controlling financial interest.
B.
Auditors shall mean the certified public accountants, from
time to time employed by the Partnership as selected by the General
Partners.
C.
Cash Flow means for each Fiscal Year the Net Income or Net
Loss for such year plus the following amounts received,
charged, or deducted during such Fiscal Year:
(1) Capital
Contributions in cash made by the Partners and the proceeds of all
loans to the Partnership (including the proceeds of loans made by
the Partners), but not including Proceeds of
Refinancing;
(2) All
other cash receipts of the Partnership from any source not included
in determining Net Income or Net Loss except Proceeds of
Refinancing and Proceeds of Sale;
(3) Depreciation
of building, furniture, fixtures and equipment, amortization, and
other non-cash charges deducted in determining Net Income or Net
Loss; and
(4) The
amount of withdrawals of excess funds from reserves deducted for
the prior Fiscal Year pursuant to (6) and (9) of this Section
4C;
Minus the following items for such Fiscal
Year:
(5) Principal
payments on all mortgages, security agreements and loans of the
Partnership, except loans made by the Partners and loans, the
repayment of which have been taken into account in computing
Proceeds of Refinancing:
(6) All
deposits to property replacement reserves and capital expenditures
to the extent made other than from such reserves;
(7) Prepaid
expenses, except those paid from reserves previously
accumulated;
(8) All
accrued but uncollected income included in determining Net Income
or Net Loss;
(9) Such
amounts as the General Partners may reasonably deem necessary to
maintain reserves for working capital, real estate taxes,
insurance, replacement contingency and other anticipated
expenditures for anticipated Operating Deficits of the
Partnership;
(10) Security
deposits, if any, received from tenants of the Property;
and
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(11) Any
and all other cash expenditures of the Partnership to the extent
not deducted in determining Net Income or Net Loss (except refunds
of security deposits).
D.
Closing and Escrow Disbursement means the Closing of the
acquisition of the Property and Escrow Disbursement pursuant to the
Contract and this Agreement.
E.
Contract means the Contract for Sale of Beneficial Interest
and Lessor’s Interest in Lease, Reimbursement of
Rehabilitation Costs and Completion of Construction, attached
hereto as Exhibit “C”.
F.
Complete Sale means the sale, condemnation, foreclosure,
destruction or other disposition of the Property or any substantial
portion thereof.
G.
Fiscal Year means the fiscal year of the Partnership which
shall be the calendar year.
H.
General Partners means Robert J. Washlow and Sheldon Chertow
and any person or entity who becomes an additional or successor
General Partner in accordance with this Agreement.
I.
Income means all gross revenues received from the operation
of the Property, including rental receipts from tenants, receipts
from parking lots, and interest income, but excluding security
deposits, if any.
J.
Lending Institution means Cardinal Federal Savings Bank or
other entity providing funds of not less than Thirteen Million One
Hundred Fifty Thousand ($13,150,000) Dollars (less loan fees and
expenses) to finance the acquisition of the Property, and other
cash requirements of the Partnership.
K.
Limited Partner shall mean Lawson Products, Inc., a Delaware
Corporation, and any other person or entity who becomes an
additional or substituted Limited Partner in accordance with this
Agreement.
L.
Lease means that certain Office Building Lease dated March
19, 1984, between the American Trust, as Landlord, and Schering
Corporation, a New Jersey Corporation, as Tenant, (the
“Tenant”), guaranteed by Schering-Plough Corporation, a
Delaware Corporation (the “Guarantor”) a copy of which
Lease is attached hereto as Exhibit “D”.
M.
Loan means the loan to be obtained by the Partnership and
approved by the General Partners from the Lending Institution in
accordance with the terms of the Loan Documents for the purpose of
acquiring the Property, and conducting the business of the
Partnership.
N.
Loan Documents shall mean all documents, reports,
agreements, notes, mortgages, assignments, loan agreements, letters
of credit, and all other papers or instruments required by the
Lending Institution to evidence, document, or secure the Loan. The
Lending Institution’s Commitment to make the Loan is attached
hereto as Exhibit “E”.
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O.
Net Income or Net Loss means the Net Income or Net Loss of
the Partnership as determined (or as redetermined, whether by
amended return filed by the Partnership, by court order, or
otherwise) for Federal income tax purposes by the Auditors, but
excluding all Gain or Loss on Complete Sale and determined without
regard to any adjustment to basis pursuant to Sections 734 and 743
of the Internal Revenue Code; provided, however, that any portion
of any redetermined amount affecting the Net Income or Net Loss of
the Partnership of another Fiscal Year shall be allocated to the
same class of Partners to whom originally allocated.
P.
Operating Deficit shall mean the amount, for any period, by
which the Income, Loan proceeds, and Capital Contributions, if any,
is less than the Operating Expenses.
Q.
Operating Expenses shall mean, for any Fiscal Year, any and
all expenses and costs paid or incurred in connection with the
purchase and rehabilitation of the Property, the operation of the
Property, and the management of Partnership affairs, including but
not limited to payments of principal and interest on the Loan and
loans to the Partnership made by Partners; amounts set aside for
reserves for the foregoing purposes whether required under the
terms of the Loan or by the General Partners; cash expenditures
otherwise capitalized; and expenses of prosecuting, defending,
settling, or disposing of litigation with partners or other
parties.
R.
Partners shall mean all of the General Partners, and the
Limited Partner from time to time.
S.
Partnership Class shall mean the group of Partners of the
same type to which each of the General Partners or the Limited
Partner respectively belong.
T.
Partnership Interest shall mean for each Partner at any
time, the share of the Net Income or Net Loss, Gain or Loss on
Sale, Cash Flow, Proceeds of Refinancing, Proceeds of Sale and
Capital Accounts allocated to such Partner (or Partners) at such
time under this Agreement. As of the execution of this Agreement,
Lawson Products, Inc., is the sole Limited Partner. If at any time
there are more than one Limited Partner, then the Partnership
Interest of each of the Limited Partners within the Partnership
Class of the Limited Partners to be set forth on a revised Exhibit
“B” hereto and shall be determined by taking the ratio
that the Capital Contribution Points allocable to a Limited Partner
bears to the total Capital Contribution Points of all of the
Limited Partners. The Partnership Interest of a Limited Partner
within the Partnership Class of the Limited Partners shall be
adjusted from time to time as provided by this
Agreement.
U.
Proceeds of Refinancing shall mean cash proceeds received by
the Partnership from the refinancing of the Loan or any other
indebtedness representing a replacement, modification or extension
thereof, after deducting the portion of the Loan or other
indebtedness paid by such refinancing.
V.
Proceeds of Sale shall mean the cash proceeds resulting from
a Complete Sale, after deducting all of the expenses and costs
incurred in connection with such sale.
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W.
Terminated Partner shall mean a General Partner who has been
removed or who has withdrawn or resigned from the
Partnership.
5.
Representations and Warranties of Limited Partners. The
Limited Partner represents, warrants and covenants to both the
Partnership and the General Partners that:
A. Except
as otherwise provided for in this Agreement, the Limited Partner
will not assign, sell, mortgage, pledge, or otherwise transfer or
encumber any of its rights under this Agreement;
B. The
Limited Partner was granted full and unrestricted access to the
Partnership’s business premises, offices, and properties and
its business, partnership, and financial books and records as it
requested, and was permitted to examine the foregoing, to question
the General Partners, and to make all other investigations that it
considered appropriate to determine or verify the business or
condition (financial or otherwise) of the Partnership and to
consummate the transaction contemplated by this
Agreement;
C. The
Partnership furnished the Limited Partner all additional
information concerning the Partnership’s business and affairs
that it requested;
D. The
Limited Partner understands the Partnership and its property,
management, and financial condition; it understands that an
investment in the Partnership is highly speculative;
E. The
Limited Partner is able to evaluate the merits, risks, and other
factors bearing on the suitability of the Partnership as an
investment;
F. The
Limited Partner is acquiring its Partnership Interest solely for
its own account, as a principal, for investment purposes and not
with a view to, or for resale in connection with, any distribution
or underwriting of its Partnership Interest;
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G.
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The Limited Partner understands
that:
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(1) the
Partnership Interest that it will purchase has not been and will
not be registered under the Securities Act of 1933, the Illinois
Uniform Securities Act or any other state securities
law;
(2) the
Limited Partner must hold the Partnership Interest indefinitely
unless the Partnership Interest is subsequently registered under
those laws or transferred in reliance on an opinion of counsel
satisfactory to the Partnership and its counsel that registration
under those laws is not required and will not cause a termination
of the Partnership under Section 708 of the Internal Revenue Code,
and
(3) stop-transfer
instructions will be noted in the appropriate records of the
Partnership;
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H. The
Limited Partner will not sell, transfer, pledge, or otherwise
dispose of its Partnership Interest, unless the Partnership
Interest is registered under the Securities Act of 1933 and under
Illinois and any other applicable state securities law, or unless
it furnishes the Partnership an opinion of counsel satisfactory to
it and its counsel that registration under those laws is not
required and that the disposition will not terminate the
Partnership under Sec. 708 of the Internal Revenue Code.
I. The
Limited Partner understands that the Partnership will not file
periodic reports with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
6.
Term . The Partnership shall exist from the date the
Certificate of Limited Partnership is recorded pursuant to the Act,
to and including December 31, 2025; provided, however, that the
Partnership may be dissolved and terminated prior to such date
under the circumstances described in Section 27 below.
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7.
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Capital Contributions
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A.
General Partners . The General Partners shall each
contribute One Hundred ($100) Dollars and their interest under the
Contract to the capital of the Partnership. No additional capital
contributions shall be required of the General Partners and they
shall not be obligated to make loans to the Partnership. If,
however, the General Partners advance additional funds to the
Partnership such amounts shall be deemed to be loans made by the
General Partners to the Partnership, and shall bear interest at the
prime rate plus one percentage point as announced from time to time
by the Exchange National Bank of Chicago.
B.
Contributions of Limited Partners . The Limited Partner
shall contribute to the Partnership Capital the aggregate amount of
Four Million ($4,000,000) Dollars, as follows:
(1) As
of the execution of this Agreement, the amount of Fifty Thousand
($50,000) Dollars.
(2) At
the time of signing of the Contract, an additional amount of One
Million Five Hundred Thousand ($1,500,000) Dollars, in the form of
a receipt for the Treasury Bill which is to serve as Earnest Money
and partial downpayment on the Contract Price pursuant to Section
2.2A of the Contract. Subject to the terms of the Contract,
interest on the Treasury Bill shall be paid to the Limited Partner,
and the Limited Partner shall substitute cash for such Treasury
Bill, at the time of “Escrow Disbursement”, as defined
in the Contract, or the Treasury Bill shall be sold.
(3) At
the time of “Closing”, as defined in the Contract, an
additional amount of Contract, an additional amount of Five Hundred
Thousand ($500,000) Dollars, which together with the Treasury Bill
referred to in Section 7B(2), shall serve as a downpayment on the
Contract Price pursuant to Section 2.2B of the Contract.
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(4) At
Escrow Disbursement, an additional amount of Two Million
($2,000,000) Dollars.
C. The
Loan requires the Limited Partner to guaranty unpaid accrued
interest thereunder up to a maximum aggregate amount of One Million
($1,000,000) Dollars. The Limited Partner shall execute such Loan
Documents that are required to evidence its guaranty of accrued
unpaid interest. If the Limited Partner is required to make payment
on its guaranty of accrued interest, then the amounts so paid shall
be deemed to be Additional Capital contributed by the Limited
Partner, and the Capital Contribution Points and Partnership
Interest of the Limited Partner shall be adjusted pursuant to
Sections 8F and G by awarding the Limited Partner one (1) Capital
Contribution Point for each One Thousand ($1,000) Dollars paid in
satisfaction of the guaranty of accrued interest.
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8.
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Capital Requirements in Excess of
$4,000,000 .
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A. If
the General Partners reasonably determine that the Capital
Contributions to be made by the Limited Partner pursuant to
Sections 7B(l), (2), (3), and (4) are at any time insufficient to
finance the business of the Partnership or fund the Operating
Deficit, they may from time to time arrange for the Limited Partner
(or Limited Partners if there are more than one) to contribute
Additional Capital to the Partnership (“Additional
Capital”), as provided herein, causing the Partnership to
raise funds from such Additional Capital, and in connection
therewith, reallocating the then Partnership Interests of any
Partner unwilling to contribute Additional Capital (“Failing
Partner”) to other Partners or persons willing to become
Partners, who are then willing to contribute such Additional
Capital (“Contributing Partners”).
B. The
General Partners shall give a written notice (an “Additional
Capital Contributions Notice”) stating: (1) their intention
to require Additional Capital Contributions; (2) the amount
thereof; (3) the amount of Additional Capital to be contributed by
the Limited Partner; and (4) the number of Capital Contribution
Points (the “Dilution Factor”) by which a Failing
Partner’s aggregate Capital Contribution Points shall be
reduced for each One Thousand ($1,000) Dollars of Additional
Capital not contributed by a Failing Partner. The Dilution Factor
shall be determined by the General Partners in their reasonable
discretion at the time of giving of the Additional Capital
Contribution Notice, but in no event shall the Dilution Factor be
greater than three (3) Capital Contribution Points for each One
Thousand ($1,000) Dollars of Additional Capital not contributed. If
there is more than one Limited Partner, then the Additional Capital
Contribution Notice shall also state the aggregate amount of the
Additional Capital Contributions by the Limited Partner as a class,
and the resulting amount of the Additional Capital to be
contributed by each Partner.
C. None
of the General Partners shall be required to contribute Additional
Capital.
D. If
there is more than one Limited Partner at any time, then the amount
of Additional Capital to be contributed by each Limited Partner
shall be in the same proportion that the number of Capital
Contribution Points of each Limited Partner, as may set forth on
Exhibit “C” and as may be adjusted from time to time as
provided herein, bears to the total number of
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Capital Contribution Points for all
of the Limited Partners, at the time of the notice to contribute
Additional Capital.
E. Without
personal liability to do so, each Limited Partner shall contribute
his share of the Additional Capital as set forth in the notice of
the General Partners on the date specified in the notice, which
shall be at least thirty (30) days after the date of the notice to
contribute Additional Capital is received by the Limited Partners.
The General Partners shall inform the other Partners of the failure
to contribute of a Failing Partner and such Partners shall then
have an opportunity to contribute the balance of the unpaid
Additional Capital in the order or priority described herein. If
any Limited Partner has failed to contribute the Additional Capital
requested of him, the remaining Limited Partners, if any, shall
have the first opportunity to contribute such Additional Capital in
the proportions which their interests in the Partnership bear to
the interests in the Partnership of all of the Limited Partners
willing to contribute. If there are no other Limited Partners, or
if the Limited Partners who are willing to contribute fail to
contribute the entire remaining balance of a Failing Partner, then
the General Partners shall have the opportunity without any
obligation to contribute such Additional Capital in the proportions
in which their interests in the Partnership bear to the interests
in the Partnership of all the General Partners willing to
contribute. If the General Partners fail to contribute the entire
remaining balance of the Failing Partner’s share of
Additional Capital, then the General Partners, without being
obligated to do so, may seek such Additional Capital from persons
who are not Partners and to admit as new Limited Partners to the
Partnership those persons selected by the General Partners who are
willing to contribute such Additional Capital. If the General
Partners do not choose to admit new Limited Partners to the
Partnership, then the General Partners shall return the Additional
Capital already contributed to the contributing Partners, and shall
have no further obligation to obtain Additional Capital for
Partnership purposes.
F. The
Capital Contribution Points of each Contributing Partner shall be
increased by one additional Capital Contribution Point for each One
Thousand ($1,000) Dollars of Additional Capital required of and
contributed by him and by the Dilution factor plus one in number of
Contribution Points for each One Thousand ($1,000) Dollars of
Additional Capital contributed as a result of the failure of a
Failing Partner to contribute the Additional Capital requested of
him. Each Failing Partner’s Capital Contribution Points shall
be reduced (but not below zero) by the Dilution Factor in number of
Capital Contribution Points for each One Thousand ($1,000) Dollars
of Additional Capital contributed by another person as a result of
the Failing Partner’s failure to contribute the Additional
Capital required of him. If a General Partner, or non-Partner
contributes Additional Capital requested of a Failing Partner, then
the contributor, for purposes of the allocations set forth in
Sections 11 to 13, inclusive, and otherwise shall be deemed to have
been admitted to the Partnership as a Limited Partner to the extent
of the Additional Capital Contribution Points awarded to the
contributor as a result of the default of the Failing
Partner.
G. The
interest of each Limited Partner in the Net Income, Net Loss, Gain
or Loss on a Complete Sale, Cash Distributions and Capital Accounts
of the Partnership, as set forth in Sections 11, 12 and 13, are
based on the initial Capital Contribution Points of the Partners
set forth on Exhibit “C”. If additional Capital
Contribution Points are allocated to any person under any provision
of this Agreement, or if the Capital Contribution Points of a
Partner are to be reduced under any provision of this Agreement,
then the allocation of Net Profits, Net
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Loss, Gain or Loss on a Complete
Sale, Cash Distributions and Capital Accounts shall be adjusted in
like proportion. The Partnership Interests of each of the Limited
Partners shall be adjusted (effective as of the first day of the
next quarter following the date on which such adjustment can be
calculated) so that the Partnership Interests are allocated in the
same proportion that the Capital Contribution Points of each of the
Limited Partners, as adjusted in accordance with this Section,
bears to the total of the Capital Contribution Points, as so
adjusted, for all of the Limited Partners.
9.
Partnership Borrowings . Except for the Limited
Partner’s guaranty of accrued interest to a maximum of One
Million ($1,000,000) Dollars referred to in Section 7C hereof, the
Loan and other Partnership loans in excess of Fifty Thousand
($50,000) Dollars as obtained by the Partnership shall be
non-recourse without personal liability or guaranty of any Partner.
The General Partners may from time to time at their election borrow
from any of the General Partners or the Limited Partner. All loans
made to the Partnership by the General Partners and loans made to
the Partnership by any Limited Partner shall bear interest at the
prime rate plus one percentage point as announced from time to time
by the Exchange National Bank of Chicago.
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10.
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Deposit and Use of Contributions
and Other Partnership Funds .
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A. All
Partnership funds (to the extent not needed for current working
capital), required in the conduct of the Partnership’s
business shall, as determined by the General Partners, be either
(1) deposited in one or more interest-bearing accounts of the
Partnership, in a bank or banks selected by the General Partners,
or (2) invested in short-term United States governmental
securities, certificates of deposit, or commercial paper as the
General Partners deem advisable.
B. The
Partners’ Capital Contributions and any other Partnership
funds (including any interest or other income generated by
Partnership deposits or investments) shall be used exclusively for
Partnership purposes authorized by this Agreement and shall not be
used for the benefit of or commingled with the funds of the General
Partners or any other person.
11.
Capital Accounts . The Partnership shall establish capital
accounts for each of the Partners to which it shall credit the
amount of their respective Capital Contributions, and Net Income,
and debit the respective Net Loss and Cash Distributions. No
Partner shall be entitled to:
A. withdraw
any part of his Capital Contribution, except as provided in this
Agreement;
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B.
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receive distributions from the
Partnership other than cash; or
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C.
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be paid interest on his Capital
Contributions.
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12.
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Net Income and Net
Loss .
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A. The
Partnership Net Income or Net Loss, other than Gain or Loss on a
Complete Sale, as herein defined, shall be determined as of the end
of each Fiscal Year.
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B. The
Partnership Net Income or Net Loss, other than Gain or Loss on a
Complete Sale, shall be allocated ninety-seven percent (97%) to the
Limited Partner (if there is more than one Limited Partner, then
pro rata in accordance with their Capital Contribution Points as
adjusted pursuant to Sections 8F and 8G), and one and one-half
percent (1.5%) to each of the General Partners.
C. If
there is more than one Limited Partner, the Net Income and Net Loss
allocable to the Limited Partners shall be allocated to each
Limited Partner in accordance with his respective Partnership
Interests as initially set forth on Exhibit “C”, and as
may be adjusted from time to time in accordance with Sections 8F
and 8G of this Agreement.
13.
Gain or Loss on Complete Sale . Gain or Loss on a Complete
Sale shall be allocated among the Partners as follows:
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A.
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Loss on a Complete Sale shall be
allocated as follows:
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(1) Loss
on a Complete Sale shall first be allocated to those Partners with
positive capital accounts, pro rata, in accordance with such
positive capital accounts, until such accounts are brought to
zero.
(2) Any
Loss on a Complete Sale not allocated pursuant to Section 13A(l)
shall be allocated ninety-seven percent (97%) to the Limited
Partner, and one and one-half percent (1.5%) to each of the General
Partners.
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B.
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Gain on a Complete Sale shall be
allocated as follows:
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(1) Gain
on a Complete Sale shall first be allocated to those Partners with
negative capital accounts, pro rata, in accordance with such
negative capital accounts until such accounts are brought to
zero;
(2) Gain
on a Complete Sale not allocated pursuant to Section 13B(1) shall
next be allocated to the Limited Partner, in a manner which results
in the Partner having a capital account equal to an amount
calculated to be equal to the product of the Partner’s number
of Capital Contribution Points, as adjusted pursuant to Sections 8F
and 8G multiplied by One Thousand ($1,000) Dollars minus all
previous distributions of cash to the Limited Partner (the
“Net Cash Investment”);
(3) Gain
on a Complete Sale not allocated pursuant to Sections 13B(l) and
(2) shall be allocated to the General Partners equally to a maximum
of Thirty-Five Thousand ($35,000) Dollars each (the “General
Partner’s Adjusted Gain”).
(4) Any
Gain on a Complete Sale not allocated pursuant to
Sections 13B(1), (2) and (3) shall be allocated ninety-seven
percent (97%) to the Limited Partner, and one and one-half percent
(1.5%) to each of the General Partners. Provided that if after the
allocation pursuant to Section 13B(2), any Limited Partner has a
capital account in excess of the Net Cash Investment, or any
General Partner has a capital account in excess of the General
Partner’s Adjusted
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Gain, then such excess amounts shall
be credited against the amounts of gain to be allocated among the
Partners pursuant to this Section 13B(4), so that if after the
allocation of gain pursuant to this Section 13B(4) the Net Cash
Investment were then hypothetically to be subtracted from the
capital account of the Limited Partner, and each General
Partner’s Adjusted Gain were then hypothetically to be
subtracted from his capital account, the resulting capital accounts
would be in the ratio of one and one- half percent (1.5%) for each
of the General Partners and ninety-seven percent (97%) for the
Limited Partner.
C. The
Gain or Loss on a Complete Sale allocable to the General Partners
shall be allocable among them equally, and if there is more than
one Limited Partner, that allocable to the Limited Partners, except
as otherwise provided in Section 13B(2), shall be allocable to the
Limited Partners, pro rata, in accordance with their Capital
Contribution Points as adjusted pursuant to Sections 8F and
8G.
D. The
foregoing allocations of gain or loss on a Complete Sale may in the
discretion of the General Partners, be amended to conform with
final regulations adopted under Section 704(b) of the Internal
Revenue Code, with the object of preserving to the greatest extent
permitted under such final regulations, the economic objectives of
the Partners as expressed herein.
A.
Distributions of Cash Flow . Subject to the requirements of
applicable law, any cash available to the Partnership shall first
be used to pay interest and principal on the Loan, when due, cash
costs and operating expenses and any loans made to the Partnership
by the Partners. Any remaining cash available to the Partnership
from time to time available shall, in the General Partners’
discretion, considering the reasonable business needs of the
Partnership, be used or distributed in the following order of
priority:
(1) as
a reserve to the extent necessary to satisfy all reasonable and
necessary obligations incurred or expected to be incurred by the
Partnership with respect to the Property and in determining Cash
Flow;
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(2)
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to the payment of the fees to be
paid pursuant to Section 15A;
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(3) to
the Limited Partner, (if there is more than one Limited Partner,
then pro rata, in accordance with their Capital Contribution
Points, as adjusted pursuant to Sections 8F and 8G), One Thousand
($1,000) Dollars for each Capital Contribution Point less all
distributions of cash to the Limited Partner prior to the date of
the distribution.
(4) Any
remaining cash that the General Partners determine is available for
distribution shall be distributed as follows: ninety-seven percent
(97%) to the Limited Partner (or if there is more than one Limited
Partner, then pro rata, in accordance with their Capital
Contribution Points, as adjusted in accordance with Sections 8F and
8G); and one and one-half percent (1.5%) to each of the General
Partners.
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(5) Cash
flow may be distributed with respect to any Fiscal Year at such
times as the General Partners may determine based upon their
reasonable discretion.
B.
Distribution of Proceeds of Refinancing . Proceeds of
Refinancing shall be applied and distri
