AMENDED AND RESTATED
AGREEMENT AND CERTIFICATE OF
LIMITED PARTNERSHIP
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
EXHIBIT A
FORM OF AMENDED AND RESTATED AGREEMENT
AND CERTIFICATE OF LIMITED PARTNERSHIP
AMENDED AND RESTATED
AGREEMENT AND CERTIFICATE OF
LIMITED PARTNERSHIP
OF
CNL INCOME FUND, LTD.
THIS AMENDED AND RESTATED AGREEMENT AND CERTIFICATE OF LIMITED
PARTNERSHIP is made and entered into effective this ______ day of _______, 1986,
by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and Centennial Realty
Corporation, as General Partners, ▇▇▇▇▇▇ ▇. Wall, as the Initial Limited
Partner, and those persons and entities whose names and addresses appear on
Schedule A hereto (as may be amended from time to time) as the Limited Partners.
WHEREAS, on November 26, 1985, a Certificate of Limited Partnership
(the "Original Agreement") was filed with the Secretary of State of the State of
Florida, whereby ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and Centennial Realty
Corporation, as General Partners, and ▇▇▇▇▇▇ ▇. Wall, as the Initial Limited
Partner, formed the Partnership under the Florida Uniform Limited Partnership
Act;
WHEREAS, on March 17, 1986, a First Amendment to the Certificate of
Limited Partnership (the "First Amendment") was filed with the Secretary of
State of the State of Florida, whereby the name of the Partnership was changed
from "Centennial Realty Income Fund, Ltd." to 'CNL Income Fund, Ltd."; and
WHEREAS, the parties hereto desire to amend, restate and supersede in
its entirety the Original Agreement and the First Amendment and to enter into
this Agreement for the purposes of admitting the Limited Partners into the
Partnership, and permitting the withdrawal of the Initial Limited Partner;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein- contained, and intending to be legally bound hereby, the
parties hereto agree to continue the Partnership as follows.
ARTICLE ONE
CERTAIN DEFINITIONS
When used in this Agreement, the following terms (used in plural where
the context indicates) shall have the meanings designated below.
1.1 "10% Preferred Return" as of any date means (i) in the case of
distributions of Net Cash Flow, an amount equal to a 10% noncumulative,
noncompounded annual return on a Limited Partner's Adjusted Capital
Contribution, and (ii) in all other cases, an amount equal to a 10% cumulative,
noncompounded annual return on a Limited Partner's Adjusted Capital
Contribution, reduced by all prior distributions of Net Cash Flow and Net Sales
Proceeds from a Nonliquidating Sale, other than those prior cash distributions
applied in payment of such Limited Partner's Adjusted Capital Contribution
pursuant to Article 9.2(b)(ii).
1.2 "Act" means the Uniform Limited Partnership Act of the State of
Florida, as amended. 1.3 "Acquisition Expenses" mean any and all
expenses incurred by the Partnership, any General Partner
or any Affiliate of any General Partner in connection with the selection or
acquisition of any Property, whether or not such Property is acquired,
including, without limitation, legal fees and expenses, travel and communication
expenses, costs of appraisals, nonrefundable option payments on property not
acquired, accounting fees and expenses, and title insurance.
1.4 "Acquisition Fees" mean any and all fees and commissions, exclusive
of Acquisition Expenses, paid by any person or entity to any other person or
entity, including any fees or commissions paid by or to any General Partner or
any Affiliate of any General Partner, in connection with the selection or
acquisition of any Property, whether or not such Property is acquired,
including, without limitation, real estate commissions, acquisition fees,
finder's fees, selection fees, development fees, nonrecurring management fees,
consulting fees or any other fees of a similar nature, however designated and
however treated for tax or accounting purposes.
1.5 "Additional Closing Date" means any date, other than the Initial
Closing Date, on which subscribers for Units are admitted to the Partnership as
Limited Partners.
A-1
1.6 "Adjusted Capital Contribution" as of any date means the Capital
Contribution of a Limited Partner reduced by all prior cash distributions to
such Limited Partner of Net Sales Proceeds from a Nonliquidating Sale, other
than those prior cash distributions applied in payment of such Limited Partner's
10% Preferred Return pursuant to Article 9.2(b)(i). Adjusted Capital
Contributions may differ from Capital Accounts, but may not be less than zero.
1.7 "Affiliate" means any person or entity directly or indirectly
through one or more intermediaries controlling, controlled by or under common
control with another person or entity. For the purposes of this definition, the
following shall be presumed to be Affiliates: (i) any person or entity owning or
controlling ten percent (10%) or more of the outstanding voting securities of
another person or entity; (ii) any officer, director, partner or trustee of such
person or entity; and (iii) if such other person or entity is an officer,
director, partner or trustee of a person or entity, the person or entity for
which such person or entity acts in any such capacity.
1.8 "Agreement" means this Amended and Restated Agreement and
Certificate of Limited Partnership, as amended from time to time, including all
exhibits thereto.
1.9 "Capital Account" means the book account, established and
maintained for each Partner in a manner which complies with Treasury Regulation
ss. 704-1(b)(2)(iv), as may be amended from time to time. Each Capital Account
shall reflect, among other items, (i) all cash and the fair market value of
property (net of liabilities securing such property that the Partnership is
considered to assume or take subject to under Code section 752) contributed by
the Partner to the Partnership, (ii) all allocations to the Partner of
Partnership Net Income, Net Loss, Gain and Loss, and (iii) all cash and the fair
market value of property (net of liabilities securing such property that the
Partner is considered to assume or take subject to under Code section 752)
distributed to the Partner by the Partnership. Any and all amounts distributed
to a Partner as a fee and/or as compensation or reimbursement for services shall
not reduce such Partner's Capital Account.
1.10 "Capital Contribution" means the amount actually paid or the
adjusted basis of property actually contributed to the Partnership by a Partner.
The Capital Contribution of a Substituted Limited Partner shall be that
attributable to the interest in the Partnership assigned to him.
1.11 "Code" means the Internal Revenue Code of 1954, as amended from
time to time. 1.12 "Competitive Real Estate Commission" means a real
estate or brokerage commission for the purchase
or sale of property which is reasonable, customary and competitive in light of
the size, type and location of the property.
1.13 "Effective Date" means the first date following the Initial
Closing Date upon which this Agreement is accepted for filing by the Secretary
of State of the State of Florida.
1.14 "Final Closing Date" means the last date on which subscribers for
Units are admitted to the Partnership as Limited Partners.
1.15 "Front-End Fees"means fees and expenses paid by any person or
entity to any person or entity for any services rendered in connection with the
organization of the Partnership and the acquisition of Properties, including
Selling Commissions, Organizational and Offering Expenses, Acquisition Expenses,
Acquisition Fees, and any other similar fees, however designated.
1.16 "Gain" means the income or gain of the Partnership for federal
income tax purposes arising from any Sale, and includes the Partnership's
distributive share for federal income tax purposes of the income or gain arising
from the sale or other disposition of all or a substantial portion of the assets
of any joint venture or partnership in which the Partnership is a co-venturer or
partner.
1.17 "General Partners" mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
and Centennial Realty Corporation, or any other person or entity which is
substituted for or succeeds to the interest of all or any of such persons as a
general partner pursuant to this Agreement.
1.18 "General Partners' Capital Contribution" means the total cash and
adjusted basis of property (including contract rights) contributed to the
Partnership by the General Partners.
1.19 "Initial Closing Date" means the first date on which subscribers
for Units are admitted to the Partnership as Limited Partners.
1.20 "Initial Limited Partner" means ▇▇▇▇▇▇ ▇. Wall, who will withdraw
from the Partnership on or immediately prior to the Effective Date.
A-2
1.21 "Investment in Properties" means the amount of the Limited
Partners' Capital actually paid or allocated by the Partnership, either directly
or through joint venture arrangements or other partnerships, to the purchase,
development, construction or improvement (including working capital reserves of
up to five percent of the Limited Partners' Capital) of Properties, and other
cash payments such as interest and taxes, but excluding Front-End Fees.
1.22 "Limited Partner" means any person or entity admitted to the
Partnership as a limited partner, including any person or entity admitted to the
Partnership as a Substituted Limited Partner in accordance herewith.
1.23 "Limited Partners' Capital" as of any date means the aggregate
Capital Contributions made by all of the Limited Partners.
1.24 "Liquidating Sale" means any Sale resulting in a dissolution of
the Partnership under Article 17.1, including any Sale which is part of a series
of Sales pursuant to a plan to sell or otherwise dispose of all or substantially
all of the assets of the Partnership. For purposes of this Agreement, a Sale or
other transfer of substantially all of the Partnership assets shall be deemed to
have occurred if 66-2/3% or more in value of the Partnership's assets are sold
or otherwise transferred.
1.25 "Loss" means the loss of the Partnership for federal income tax
purposes arising from any Sale, and includes the Partnership's distributive
share for federal income tax purposes of the loss arising from the sale or other
disposition of all or a substantial portion of the assets of any joint venture
or partnership in which the Partnership is a coventurer or partner.
1.26 "Net Cash Flow" means the Net Income or Net Loss of the
Partnership for each fiscal year, with the following adjustments: (i) there
shall be added to such Net Income or Net Loss the amount charged for any
deduction not involving a cash expenditure (such as depreciation and
amortization), and any cash receipts (excluding Net Sales Proceeds) which the
General Partners, in their sole discretion, deem to be available for
distribution; and (ii) there shall be subtracted from such Net Income or Net
Loss the amount of any nondeductible reserves established or maintained by the
General Partners and any other nondeductible cash items, including principal
payments on indebtedness and distributions made to the Partners prior to the end
of such fiscal year and the amount of any and all income not attributable to
cash receipts of the Partnership (such as accrued accounts receivable).
1.27 "Net Income" means the taxable income of the Partnership for
federal income tax purposes for each taxable year, determined using the accrual
method of accounting and calculated without regard to Gain or Loss.
1.28 "Net Loss" means the taxable loss of the Partnership for federal
income tax purposes for each taxable year, determined using the accrual method
of accounting and calculated without regard to Gain or Loss.
1.29 "Net Sales Proceeds" mean in the case of a Sale described in
Article 1.41(i), the proceeds of any such Sale less all costs and expenses
associated with such Sale and the amount of all Real Estate Commissions paid by
the Partnership. In the case of a Sale described in Article 1.41(ii), Net Sales
Proceeds mean the proceeds of any such Sale less the amount of any and all costs
and expenses, including legal and other selling expenses, incurred in connection
with such Sale. In the case of a Sale described in Article 1.41(iii), Net Sales
Proceeds mean the proceeds of any such Sale actually distributed to the
Partnership from the joint venture or partnership.
1.30 "Nonliquidating Sale" means any Sale other than a Liquidating
Sale.
1.31 "Operating Expenses" mean any and all costs and expenses incurred
by the Partnership, any General Partner or any Affiliate of any General Partner
which are in any way related to the operation of the Partnership or to
Partnership business, including but not limited to the costs and expenses listed
in Article 8.1, but excluding Selling Commissions, Organizational and Offering
Expenses, Acquisition Expenses, Acquisition Fees, Property Management Fees and
Real Estate Commissions.
1.32 "Organizational and 0ffering Expenses" mean any and all costs and
expenses, exclusive of Selling Commissions, incurred by the Partnership, any
General Partner or any Affiliate of any General Partner in connection with the
formation, qualification, organization, and registration of the Partnership and
in the marketing and distribution of Units, including, without limitation, the
following: legal, accounting and escrow fees; printing, amending, supplementing,
mailing, and distributing costs; filing, registration and qualification fees and
taxes; telegraph and telephone costs; and all advertising and marketing
expenses, including the costs related to investor and broker-dealer sales
meetings.
A-3
1.33 "Partner" means a General Partner or a Limited Partner, and
"Partners" means all Partners, both General and Limited.
1.34 "Partnership" means CNL Income Fund, Ltd., the Florida limited
partnership reorganized pursuant to this Agreement.
1.35 "Partnership Capital" means the total Capital Contributions made
by all Partners of the Partnership, both General and Limited.
1.36 "Partnership Interest(s)" mean the ownership interest of a Partner
in the Partnership's profits and losses, other items of income, gain, losses,
deductions, expenses and credits and distributions of net cash receipts at any
particular time, including the right of such Partner to any and all benefits to
which a Partner may be entitled as provided in this Agreement and under the Act,
together with the obligations of such Partner to comply with all the terms and
provisions of this Agreement and the Act. The Partnership Interest of a Limited
Partner shall be equal to that percentage expressed by a fraction, with the
numerator consisting of the number of Units purchased by such Limited Partner,
and the denominator consisting of the total number of Units held by all of the
Limited Partners. The term "Partnership Interests" shall refer to the entire
ownership interest of all Partners in the Partnership.
1.37 "Properties" mean the real properties, including the buildings
located thereon, which are acquired by the Partnership or by any joint venture
or partnership in which the Partnership is a co-venturer or partner, and
including any equipment located therein or thereon to the extent such equipment
is owned by the Partnership or by any such joint venture or partnership.
1.38 "Property Management Fee" means the fee paid for day-to-day
professional property management services in connection with Properties owned by
the Partnership.
1.39 "Prospectus" means the final prospectus included in the
Partnership's Registration Statement filed with the Securities and Exchange
Commission, pursuant to which the Partnership will offer Units to the public, as
the same may be amended or supplemented from time to time after the effective
date of such Registration Statement.
1.40 "Real Estate Commissions" means any and all real estate
commissions and other similar fees, costs or expenses, including a subordinated
real estate disposition fee payable to Centennial Investment Company pursuant to
Article 8.3, incurred in connection with the Sale of Properties owned by the
Partnership.
1.41 "Sale" means any transaction or series of transactions whereby-
(i) the Partnership sells, grants, transfers, conveys or relinquishes its
ownership of any Property or portion thereof, including any event with respect
to any such Property which gives rise to insurance claims or condemnation
awards; (ii) the Partnership sells, grants, transfers, conveys or relinquishes
its ownership of all or substantially all of the interest of the Partnership in
any joint venture or partnership in which it is a co-venturer or partner; or
(iii) any joint venture or partnership in which the Partnership is a co-venturer
or partner sells, grants, transfers, conveys or relinquishes its ownership of
any Property or portion thereof, including any event with respect to any such
Property which gives rise to insurance claims or condemnation awards.
1.42 "Selling Commissions" mean any and all commissions payable to
underwriters, managing dealers or other broker-dealers in connection with the
sale of Units as described in the Prospectus, including, without limitation,
commissions payable to Centennial Investment Company.
1.43 "Substituted Limited Partner" means a person or entity who is
admitted to the Partnership pursuant to the provisions of Article 14.3 hereof
and in accordance with the provisions of the Act.
1.44 "Termination Date" means December 31, 2025, or such earlier date
as the Partnership may be terminated pursuant to any provision of this
Agreement.
1.45 "Unit" means the Partnership Interest represented by a Capital
Contribution of $500.
ARTICLE TWO
ORGANIZATION
2.1 Formation. The parties hereby acknowledge that the term of the
Partnership commenced on November 26, 1985, and agree to continue the
Partnership as a limited partnership pursuant and subject to the Act.
A-4
2.2 Filings. The General Partner shall file, record and publish such
certificates and other documents as may be necessary and appropriate to comply
with the requirements for the organization and operation of a limited
partnership under the Act.
2.3 Foreign Qualification. In the event that the business of the
Partnership may be carried on or conducted in other states in addition to the
State of Florida, then the parties agree that this Partnership shall exist or
shall be qualified under the laws of each such additional state in which
business is actually conducted by the Partnership, and they severally agree to
execute and authorize the General Partners to execute on their behalf or on
behalf of the Partnership such other and further documents as may be necessary
or appropriate to permit the General Partners to qualify this Partnership, or
otherwise comply with requirements for the formation and organization of a
limited partnership in all such states.
ARTICLE THREE
NAME AND PRINCIPAL OFFICE
3.1 Name and Office. The name of the Partnership is "CNL Income Fund,
Ltd." Its principal office and its registered office in the State of Florida
shall be located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at such other address as the General Partners notify each Limited Partner in
writing in accordance herewith. The General Partners shall also have the right,
without notice to the Limited Partners, to establish a registered office or
offices in such other states as the General Parnters deem necessary in order to
qualify the Partnership under the laws of any additional state in which the
Partnership actually conducts business.
3.2 Assumed Names. The business of the Partnership shall be conducted
under the name listed above or under such variations of this name as the General
Partners deem appropriate to comply with the laws of any state in which the
Partnership does business. The General Partners shall execute and file in the
proper offices such certificates as may be required by the Assumed Name Act or
similar law in effect in the counties and other governmental jurisdictions in
which the partnership may elect to conduct business.
ARTICLE FOUR
PURPOSES AND POWERS OF THE PARTNERSHIP
The purpose of the Partnership shall be to acquire and lease commercial
properties on which fast-food restaurants which are part of regional or national
restaurant chains are or will be located, as more fully described in the
Prospectus. Subject to the limiations set forth elsewhere in this Agreement, the
Partnership shall be empowered to do or cause to be done, or not to do, any and
all acts deemed by the General Partners to be necessary or appropriate or in
furtherance of the purpose of the Partnership, including, without limitation,
the power and authority.
(a) to acquire, own, lease, manage and/or operate any
Properties;
(b) to enter into joint venture arrangements or general
partnerships with any person or entity wihch is not an Affliate of any of the
General Partners for the acquisitions, ownership, leasing, management and/or
operation of any Properties, provided that the Partnership has the ability to
control the management decisions of any such joint venture or general
partnership and there are no duplicate fees;
(c) to acquire any personal property necessary or appropriate,
in the opinion of the General Partners, for the business of the Partnership;
(d) to make such elections under the Code as to the treatment
of items of Partnership income, Gain, Loss, deductions and credit, and as to all
relevant matters as the General Partners believe necessary, desirable or
beneficial to the Limited Partners;
A-5
(e) to purchase or to elect not to purchase from others, at
the expense of the Partnership, contracts of liability, casualty and other
insurance which the General Partners deem advisable, appropriate or convenient
for the protection of the assets or affairs of the Partnership or for any
purpose convenient or beneficial to the Partnership;
(f) subject to the limitations contained in Article 10.6 and
elsewhere in this Agreement, to employ persons, including Affiliates, for the
operation and management of the Partnership and/or the Properties, on such terms
and for such compensation as the General Partners deem, in their absolute
discretion, to be in the best interest of the Partnership;
(g) to designate the depository or depositories in which all
bank accounts of the Partnership shall be kept and the person or persons upon
whose signature withdrawals therefrom shall be made;
(h) to prosecute, defend, settle, compromise or submit to
arbitration, at the Partnership's expense, any suits, actions or claims at law
or in equity to which the Partnership is a party or by which it is affected, as
may be necessary, proper or convenient, and to satisfy out of Partnership funds
any judgment, decree or decision of any court, board, agency or authority having
jurisdiction, or any settlement of any suit, action or claim prior to judgment
or final decision thereon;
(i) to incur, at the expense of the Partnership, bank charges
with respect to bank accounts maintained, and expenses relating to the purchase
of supplies, materials, equipment or similar items used in connection with the
operation of the Partnership, and to incur escrow fees, recording fees,
insurance premiums and similar expenses in connection with the Properties;
(j) to employ persons, at the expense of the Partnership, to
perform administrative, legal and independent auditing services in connection
with the operation and management of the Partnership's business, and to provide
services in connection with the preparation and filing of any tax return
required of the Partnership;
(k) to distribute among the Partners, to the extent deemed
prudent, cash generated from the operations of the Partnership;
(1) subject to the limitations contained elsewhere in this
Agreement, to transfer, sell or convey Properties, including its interest in any
joint ventures or partnerships, if such transactions are deemed by the General
Partners to be in the best interest of the Partnership;
(m) subject to the limitations set forth elsewhere in this
Agreement, to finance all or any of its activities authorized under the
provisions of this Agreement by secured or unsecured indebtedness and, in
connection therewith, to issue evidences of indebtedness and to execute and
deliver security instruments of every nature and kind as security therefor,
except that the Partnership shall. not encumber any of its Properties;
(n) to invest such funds as are temporarily not required for
Partnership purposes in short-term, highly liquid investments where there is
appropriate safety of principal, including, without limitation, United States
Treasury bills or bonds;
(o) to engage in such other businesses, activities and
transactions similar in nature and scope to those described in this Article Four
as the General Partners from time to time may determine to be necessary or
appropriate in furtherance of the purpose of the Partnership;
(p) to enter into such agreements, contracts, documents,
leases and instruments and to give such receipts, releases, and discharges with
respect to all of the foregoing and any matters incident thereto, as the General
Partners may deem advisable, appropriate or convenient; and
(q) subject to the limitations contained in Article 10.6 and
elsewhere in this Agreement, to execute, deliver, perform and carry out all
contracts, agreements and undertakings of every kind and engage in all
activities and transactions as may in the opinion of the General Partners be
necessary, incidental or advisable to the accomplishment of the Partnership's
purposes or in connection with any of the foregoing.
ARTICLE FIVE
TERM OF PARTNERSHIP
The Partnership commenced on November 26, 1985, and shall continue in existence
until the Termination Date.
A-6
ARTICLE SIX
CAPITALIZATION
6.1 Limited Partners' Capital Contributions. No Limited Partner shall
be admitted to the Partnership unless such Limited Partner shall make a Capital
Contribution of $2,500 or more; provided, however, that the required minimum
Capital Contribution for Individual Retirement Accounts and ▇▇▇▇▇ and pension
plans shall be $1,000 where permitted by applicable state law. Except where
prohibited by applicable state law or the Prospectus, Individual Retirement
Accounts and ▇▇▇▇▇ and pension plans making the required minimum investment in
the Partnership shall be entitled to make additional purchases in increments of
one-half Units. Limited Partners shall be admitted to the Partnership solely by
subscription, upon approval by the General Partners. No Limited Partner shall
borrow funds from the General Partners or their Affiliates in order to make
contributions to the Partnership Capital, and the Partnership shall not acquire
Properties in exchange for Units.
6.2 General Partners' Capital Contribution. The General Partners shall,
on or before the Effective Date, contribute to the Partnership the aggregate sum
of $1,000 as their General Partners' Capital Contribution. The General Partners
may also acquire Units as Limited Partners pursuant to the same terms and
conditions as other Limited Partners.
6.3 Minimum Capital Contributions. The aggregate Capital Contributions
by the Limited Partners may range from a minimum of $1,300,000 (2,600 Units) to
a maximum of $15,000,000 (30,000 Units), depending upon the number of such Units
offered and sold in connection with the Partnership's public offering of the
Units. Capital Contributions shall be due and payable in cash upon subscription.
6.4 Escrow. Prior to the General Partners' acceptance or rejection of
any subscription, funds received from such subscription shall be held in escrow.
6.5 Admission of Limited Partners. The General Partners may in their
sole and absolute discretion reject any subscription for any reason.
Subscriptions for Units shall be accepted or rejected by the General Partners
within thirty (30) days after receipt thereof by the General Partners.
Subscribers whose subscriptions are accepted by the General Partners subsequent
to the Initial Closing Date shall be admitted as Limited Partners not later than
the last day of the calendar month following the date such subscriptions are
accepted. Funds received from subscriptions rejected by the General Partners
shall be promptly returned to subscribers with interest and without deduction.
No sale of Units shall be made pursuant to the Prospectus after one year
following the initial effective date of the Prospectus.
6.6 Liability of Limited Partners. Except as otherwise provided in
Article 12. 1, a Limited Partner shall not be liable to the Partnership beyond
the amount of his Capital Contribution, nor shall he be personally liable for
any liabilities, contracts or obligations of the Partnership. However, it is the
intent of the Partners that no distribution (or any part of a distribution) made
to any Limited Partner pursuant to Article Nine of this Agreement shall be
deemed a return or withdrawal of capital, even if such distribution represents
(in full or in part) a distribution of depreciation or any other non-cash item
accounted for as a Loss or deduction from or offset to the Partnership's income,
and that no Limited Partner shall be obligated to pay any such amount to or for
the account of the Partnership or any creditor of the Partnership.
6.7 Interest. Except as provided in Article 7.2, interest earned on
Partnership funds shall inure to the benefit of the Partnership, and the
Partners shall not receive interest on their Capital Contributions.
6.8 Additional Capital Contributions. No Partner shall be required to
make any additional Capital Contributions beyond the amount of his initial
Capital Contribution, nor shall any Partner be required to lend any funds to the
Partnership.
A-7
6.9 Repayment of Capital Contributions of Limited Partners. Except as
expressly provided in this Agreement, no specific time has been agreed upon for
the repayment of the Capital Contributions of the Limited Partners. The Limited
Partners understand that the General Partners and their Affiliates make no
warranty, guarantee or representation that the Partnership will have sufficient
funds to repay the Capital Contribution or Capital Account of any Limited
Partner. The General Partners shall have no personal liability for the repayment
of the Capital Contribution or Capital Account of any Limited Partner. No
Limited Partner or any successor in interest shall have a right to withdraw or
reduce any capital contributed to the Partnership.
6.10 No Priorities Among Limited Partners. Except as expressly provided
in this Agreement, no Limited Partner shall have the right to demand or receive
property other than cash in return for his Capital Contribution, nor shall any
Limited Partner have priority over any other Limited Partner as to Capital
Contributions or as to compensation by way of income.
ARTICLE SEVEN
APPLICATION OF PARTNERSHIP CAPITAL
7.1 General. Partnership Capital shall be applied as set forth in this
Article Seven.
7.2 Return of Earned Interest. The Partnership shall within thirty days
after the Initial Closing Date return to each subscriber for Units from whom the
Partnership received funds prior to the Initial Closing Date an amount equal to
the interest earned on such subscriber's funds during the period in which such
subscriber's funds were held in escrow, with such interest to be calculated by
the General Partners based on such subscriber's pro rata share of all interest
on subscribers' funds during such period of time; provided, however, that a
subscriber for Units who subscribes for Units after the Initial Closing Date
shall receive interest on his subscription funds only if his subscription is
accepted and his funds were held in escrow for more than 20 days.
7.3 Selling Commissions. The Partnership shall pay any and all Selling
Commissions, in the amount of Forty-Two Dollars and Fifty Cents ($42.50) per
Unit sold, on the Initial Closing Date and on each Additional Closing Date in
accordance with the Underwriting Agreement with Centennial Investment Company.
7.4 Organizational and Offering Expenses. The Partnership shall, as
soon as practicable after the Initial Closing Date (and thereafter as soon as
practicable after such expenses are incurred), reimburse the General Partners
and their Affiliates for all Organizational and Offering Expenses incurred by
the General Partners and their Affiliates, and the Partnership shall pay all
other Organizational and Operating Expenses. Notwithstanding anything to the
contrary in the preceding sentence, the General Partners or their Affiliates
shall pay all Organizational and Offering Expenses which exceed the greater of
$65,000 or three percent (3%) of Limited Partners' Capital.
7.5 Acquisition Expenses and Fees. The Partnership shall, as soon as
practicable after such fees and expenses are incurred, reimburse Centennial
Investment Company for any and all Acquisition Expenses and Acquisition Fees
incurred by Centennial Investment Company, and shall, in connection with
services to be provided by Centennial Investment Company related to the
acquisition of properties, pay to Centennial Investment Company an Acquisition
Fee in an amount equal to 5% of Limited Partners' Capital; provided, however,
that the Acquisition Fee paid to Centennial Investment Company shall be reduced
or paid back to the Partnership if and to the extent (i) necessary for the
Partnership to make the required Investment in Properties as set forth in
Article 7.7, or (ii) the total of all Acquisition Fees paid by all persons in
connection with the purchase of all of the Properties exceeds the lesser of 18%
of Limited Partners' Capital or compensation customarily charged in arms' length
transactions by others rendering similar services as an ongoing public activity
in the same geographic locations and for comparable properties. The Partnership
shall pay all other Acquisition Expenses and Acquisition Fees.
7.6 Reserves. The Partnership shall maintain reserves in such amounts
as the General Partners in their sole and absolute discretion determine to be
adequate to meet the Partnership's working capital needs.
A-8
7.7 Investment in Properties. The Partnership shall, when and to the
extent desirable investment opportunities are available as determined by the
General Partners in their sole and absolute discretion, acquire, either directly
or through joint venture arrangements or other partnerships, such Properties as
the General Partners in their sole and absolute discretion determine to be in
the best interests of the Partnership. The Partnership shall commit at least 80%
of the Limited Partners' Capital to Investment in Properties within two years
following the initial effective date of the Prospectus; provided, however, that
any amount returned to the Limited Partners pursuant to Article 7.8 shall not be
considered in determining the percentage committed to Investment in Properties
as of such date. If any Acquisition Fees are paid by the seller of any Property
or Properties, such fees shall not be included in the purchase price of such
Property or Properties for purposes of determining whether the required minimum
Investment in Properties set forth herein has been satisfied.
7.8 Return of Uninvested Partnership Capital. If any portion of Limited
Partners' Capital is not committed to the investment in or actually invested in
Properties within two years after the initial effective date of the Prospectus
and has not been expended and is not reserved as working capital, then the
Partnership shall distribute such portion of the Limited Partners' Capital not
so used or invested to the Limited Partners pro rata as a return of capital. For
purposes of this Agreement, the Limited Partners' Capital will be deemed to have
been committed to investment (and therefore will not be returned to the Limited
Partners) to the extent written agreements in principle or letters of
understanding are executed at any time, which agreements in principle or letters
of understanding have not been rescinded, regardless of whether any such
investment may or may not be consummated, and also to the extent any funds have
been reserved to make contingent payments in connection with any Property,
regardless of whether any such payments are made.
7.9 Restrictions on Investments.
(a) The Partnership shall not acquire or invest in any of the
following: (i) limited partnership interests of another real estate program;
(ii) unimproved or nonincome-producing property, except in amounts not exceeding
10% of Limited Partners' Capital available for investment in Properties and only
upon terms which can be financed by Partnership Capital or from Net Cash Flow;
(iii) the securities of other issuers (nor shall the Partnership underwrite any
such securities), except that the Partnership may invest in short-term, highly
liquid investments where there is appropriate safety of principal; (iv) real
estate mortgages, junior trust deeds or other similar obligations, except in
connection with the disposition of one or more of the Properties; and (v) any
Properties which the Partnership is prohibited from acquiring pursuant to
Article 10.2 or any other provision of this Agreement.
(b) The Partnership shall not reinvest Net Cash Flow. Net Sales
Proceeds shall not be reinvested by the Partnership unless sufficient cash will
be distributed to pay any state (at a rate reasonably assumed by the General
Partners) and federal (assuming the Limited Partners are taxable at the maximum
applicable federal income tax bracket) income taxes created by the Sale.
(c) Neither the Partnership nor any joint venture or general
partnership in which the Partnership invests or participates will finance the
acquisition of any Properties by secured or unsecured indebtedness or encumber
any of the Properties with a lien.
(d) All investments in Properties shall be supported by an appraisal
prepared by a competent, independent appraiser, and the purchase price of any
Prolperty, plus all Acquisition Fees paid by the Partnership in connection with
the acquisition of such Property, shall not exceed, but may be less than, the
appraised value of such Property. Each such appraisal shall be maintained in the
Partnership's records for five years and shall be available for inspection and
copying by the Limited Partners during normal business hours.
A-9
ARTICLE EIGHT
OPERATING EXPENSES; OTHER FEES AND EXPENSES
8.1 Operating Expenses. Subject to the restrictions on reimbursement of
the General Partners and their Affiliates set forth in Article 10.1, the
Partnership shall, as soon as practicable after such expenses are incurred,
reimburse Centennial Investment Company and Affiliates for any and all Operating
Expenses incurred by Centennial Investment Company and Affiliates. All other
Operating Expenses shall be billed directly to and paid by the Partnership.
Operating Expenses shall include, but shall not be limited to, the following
(excluding, however, any costs or expenses listed below which constitute Selling
Commissions, Organizational and Offering Expenses, Acquisition Expenses,
Acquisition Fees, Property Management Fees or Real Estate Commissions):
(a) all costs of personnel employed or otherwise engaged by the
Partnership and directly involved on the operation of the Partnership or the
Properties; all amounts owed to lenders for borrowings to finance Partnership
operations; expenses of insurance required in connection with the operation of
the Partnership or the Properties; taxes and assessments on Properties and other
taxes allocable to the Partnership as an entity; travel expenses related to
Partnership business; fees and expenses paid to consultants, bankers,
independent contractors, insurance and other brokers and agents, and expenses in
connection with the replacement, alteration, repair, leasing, maintenance and
operation of Properties and any other Partnership properties or assets;
(b) all accounting, legal, audit and other professional and reporting
fees and expenses, which may include, but are not limited to, preparation and
documentation of Partnership bookkeeping, accounting and audits; preparation and
documentation of budgets, economic surveys, cash flow projections and working
capital requirements; preparation and documentation of Partnership state and
federal tax returns; printing and other expenses and taxes incurred in
connection witl the issuance, distribution, transfer and recordation of
documents in connection with the business of the Partnership;
(c) expenses in connection with distributions made by the Partnership
to, and communications, bookkeeping and clerical work necessary in maintaining
relations with, the Partners, including expenses in connection with preparing
and mailing reports required to be furnished to the Limited Partners pursuant to
Article 16.3;
(d) expenses of revising, amending, modifying or terminating this
Agreement, and of dissolving, terminating, reforming, liquidating, or winding up
the Partnership;
(e) costs incurred in connection with any litigation in which the
Partnership is involved as well as any examination, investigation or other
proceeding conducted by any governmental agency of the Partnership, including
legal and accounting fees incurred in connection therewith; and
(f) costs of any computer equipment or services used for or by the
Partnership, costs of any accounting, statistical or bookkeeping equipment
necessary for the maintenance of the books and records of the Partnership, the
costs of preparation and dissemination of informational material and
documentation relating to the potential sale or other disposition of Partnership
property, and the costs of supervision and the expenses of professionals
employed by the Partnership in connection with any of the foregoing, including
attorneys, accountants and appraisers.
(g) subject to the restrictions contained in Article Four, the
Partnership's share of all fees, commissions, costs and expenses incurred by any
joint venture or partnership of which the Partnership is a co-venturer or
partner.
8.2 Property Management Fee. In each fiscal year in which the Limited
Partners have received or will receive an amount equal to their aggregate,
noncumulative 10% Preferred Returns, the Partnership shall pay to Centennial
Investment Company, within sixty (60) days following the close of each such
fiscal year, an annual Property Management Fee of 1/2 of 1% of the Partnership
assets under management, valued at cost; provided, however, that such fee,
together with any bookkeeping services and fees paid to unaffiliated persons or
entities for property management services, shall not exceed an amount equal to
the lesser of (i) fees which are competitive for similar services in the same
geographic area, or (ii) 1% of the gross revenues derived from Properties owned
by the Partnership.
A-10
8.3 Real Estate Commissions. The Partnership shall pay any and all Real
Estate Commissions. In addition, upon any Sale of one or more of the
Partnership's Properties, the Partnership shall pay to Centennial Investment
Company, as a subordinated real estate disposition fee, an amount equal to the
lesser of (i) one-half of a Competitive Real Estate Commission, or (ii) 3% of
the gross sales price of the Property or Properties. The real estate disposition
fee payable to Centennial Investment Company shall be paid (i) only if
Centennial Investment Company provides a substantial amount of services in
connection with the Sale of the Property or Properties, (ii) in the case of a
Nonliquidating Sale, only after all distributions of Net Sales Proceeds pursuant
to Articles 9.2(b)(i), 9.2(b)(ii) and 9.2(b)(iii) have been made, and (iii) in
the case of a Liquidating Sale, only after all distributions of Net Sales
Proceeds pursuant to Articles 18.2(a) and 18.2(b), plus an additional amount
equal to the sum, as of such date, of the Limited Partners' aggregate 10%
Preferred Returns and their aggregate Adjusted Capital Contributions have been
distributed to the Limited Partners. The total compensation paid by the
Partnership to all persons and entities in connection with any Sale of
Partnership Properties shall not exceed the lesser of (i) a Competitive Real
Estate Commission, or (ii) 6% of the gross sales price of the Property or
Properties.
ARTICLE NINE
ALLOCATIONS AND DISTRIBUTIONS
9.1 Allocations. Net Income, Net Loss, Gain, and Loss for any taxable
year shall be allocated in the following manner. For purposes of this Article
9.1, Capital Accounts shall be determined as if the Partnership's taxable year
had ended immediately prior to any Sale.
(a) Net Income and Net Loss (and each Par-tner's allocable share of any
Partnership item of income, gain, loss, deduction, credit or allowance for any
Partnership tax year or other period taken into account in determining Net
Income and Net Loss) shall be allocated 99% to the Limited Partners and 1% to
the General Partners.
(b) Gain shall be allocated as follows:
(i) first, to the Partners having negative balances in their
Capital Accounts, in the proportion that the negative balance of each
such Partner's Capital Account bears to the aggregate negative balances
in the Capital Accounts of all such Partners, until the balances in
their Capital Accounts equal zero;
(ii) second, 100% to the Limited Partners until the aggregate
positive balances in the Limited Partners' Capital Accounts equal the
sum of their aggregate 10% Preferred Returns and their aggregate
Adjusted Capital Contributions;
(iii) third, 100% to the General Partners until the aggregate
positive balances in their Capital Accounts equal the sum of (1)
$1,000, plus (2) an amount equal to 1% of all prior distributions of
Net Cash Flow, reduced by (3) any amounts previously distributed to the
General Partners from Net Cash Flow and from Net Sales Proceeds
pursuant to subparagraphs (iii) and (iv) of Article 9.2(b); and
(iv) thereafter, 95% to the Limited Partners and 5% to the
General Partners. (c) Any Loss shall be allocated as follows:
(i) first, to the Partners with positive balances in their
Capital Accounts in the proportion that the positive balance in each
such Partner's Capital Account bears to the aggregate positive balances
in the Capital Accounts of all such Partners, until the balances in
their Capital Accounts equal zero; and
(ii) thereafter, 95% to the Limited Partners and 5% to the
General Partners. 9.2 Distributions. Partnership distributions shall be
made in the following manner. (a) The General Partners shall within 30
days following the close of each fiscal quarter or as soon
thereafter as practicable, distribute Net Cash Flow which the General Partners
in their sole and absolute discretion determine is available for distribution,
99% to the Limited Partners and 1% to the General Partners; provided, however,
that the 1% of Net Cash Flow to be distributed to the General Partners shall be
subordinated to receipt by the Limited Partners of their aggregate,
noncumulative 10% Preferred Returns for such fiscal quarter.
A-11
(b) Net Sales Proceeds from a Nonliquidating Sale shall be
distributed in the following order of priority: (i) first,
100% to the Limited Partners until the Limited Partners have
received an amount equal
to their aggregate 10% Preferred Returns;
(ii) second, 100% to the Limited Partners until the Limited
Partners have received an amount equal to their aggregate Adjusted
Capital Contributions;
(iii) third, 100% to the General Partners until the General
Partners have received the sum of (1) $1,000, plus (2) an amount equal
to 1% of all prior and current distributions of Net Cash Flow, reduced
by (3) any amounts previously distributed to the General Partners from
Net Cash Flow and from Net Sales Proceeds pursuant to subparagraphs
(iii) and (iv) of this Article 9.2(b);
(iv) thereafter, 95% to the Limited Partners and 5% to the
General Partners.
9.3 Determination of Allocations and Distributions among the Limited
Partners. For purposes of making
allocations and distributions among the Limited Partners pursuant to Articles
9.1 and 9.2 (or as required elsewhere in this Agreement), if the operative
provision refers to positive or negative balances of Capital Accounts, aggregate
10% Preferred Returns or Adjusted Capital Contributions, then the allocation or
distribution shall be made in accordance with the respective sizes of such items
for each Limited Partner; if, however, no specific item is refeffed to, then the
allocation or distribution shall be made in accordance with the Limited
Partners' respective Partnership Interests.
9.4 Determination of Allocations and Distributions among the General
Partners. The allocations and distributions pursuant to Articles 9.1 and 9.2 (or
as required elsewhere in this Agreement) shall be made among the General
Partners in such amounts as the General Partners may agree among themselves.
9.5 Admission of Limited Partners. In connection with the admission of
any Limited Partner to the Partnership, Net Income or Net Loss for the fiscal
year of such admission (or any item of income, gain, loss, deduction, credit or
allowance for such fiscal year taken into account in determining Net Income and
Net Loss) shall be allocated among all persons or entities who were Limited
Partners during such fiscal year in proportion to the number of days during the
fiscal year for which each was recognized as a Limited Partner.
9.6 Transfer of Units. Net Income or Net Loss for a fiscal year
allocable to any Units which may have been transferred during such year shall be
allocated between the transferor and the transferee based upon the number of
days that each was recognized as the holder of the Units for purposes of this
Article Nine. Gain and Loss for a fiscal year allocable to any Units which may
have been transferred during such year shall be allocated to the Limited Partner
who owned such Units on the date such Gain or Loss was realized for federal
income tax purposes.
9.7 Interest of the General Partners. Notwithstanding anything
contained in this Agreement to the contrary, the interest of the General
Partners in each material item of Partnership income, gain, loss, deduction and
credit will be equal to at least 1% of each such item at all times during the
existence of the Partnership.
9.8 Allocation of Recapture Itemsfor Tax Purposes. Notwithstanding the
allocation of Gain described above in Article 9.1(b), any income recognized
pursuant to the recapture provisions of sections 1245 or 1250 of the Code, or
pursuant to Code section 751 with respect to such recapture provisions, shall be
allocated among the Partners in the proportions in which the original
depreciation deductions being recaptured were allocated to them or to their
predecessors in interest.
9.9 Qualified Income Offset. Notwithstanding the allocation of Net
Income and Gain provided in Article 9.1, any Limited Partner who receives an
allocation or distribution described in Treasury Regulation ss. 1.704-
1(b)(2)(ii)(d)(5) or (6), as may be amended from time to time, respectively,
which causes or increases a deficit balance in such Limited Partner's Capital
Account, will first be allocated items of income or gain in an amount and manner
sufficient to eliminate such deficit balance as quickly as possible. In the
event there is more than one such Limited Partner, items of income or gain shall
be allocated among such Limited Partners in proportion to the respective sizes
of their deficit balances attributable to the allocations or distributions
described in Treasury Regulation ss. 1.704l(b)(2)(ii)(d)(5) or (6) (as may be
amended from time to time).
A-12
9.10 Allocation with Respect to Reserved Liquidation Proceeds. Any
deduction allowed to the Partnership by reason of the payment of any liability
from liquidation proceeds reserved pursuant to Article 18.2(b) shall be
allocated among the Partners in the same proportions that the amount paid on
such liability would otherwise have been distributed pursuant to Article 18.2.
9.11 Limitation on Distributions. Notwithstanding the foregoing, no
distribution shall be made unless, after such distribution, the Partnership's
assets are in excess of all liabilities of the Partnership except liabilities to
Limited Partners on account of their Capital Contributions and liabilities to
the General Partners.
ARTICLE TEN
TRANSACTIONS WITH GENERAL PARTNERS AND AFFILIATES
10.1 Services and Goods.
(a) The following conditions shall apply to all transactions between
the Partnership and the General Partners or their Affiliates in which the
General Partners or their Affiliates render services or sell or lease goods to
the Partnership and for which the General Partners or their Affiliates are
compensated by the Partnership: (i) the services or goods for which the General
Partners or their Affiliates are to receive compensation shall be embodied in a
written contract which details the services to be rendered and all compensation
to be paid; (ii) such contract may only to modified by a vote of a majority in
interest of Limited Partners' Capital; (iii) such contract shall contain a
clause allowing termination without penalty on sixty (60) days notice to the
General Partners; (iv) the terms of such contract and the compensation paid
shall be comparable to and competitive with the terms and compensation which
would demanded by unaffiliated persons or entities for comparable services or
for the sale or lease of comparable goods; and (v) the General Partners or their
Affiliates must previously have engaged in the business of rendering such
services or selling or leasing such goods, independent of the Partnership as an
ordinary and ongoing business.
(b) Reimbursement of the General Partners and their Affiliates for
Operating Expenses incurred by the General Partners or their Affiliates shall be
limited to: (i) the actual cost to the General Partners and their Affiliates of
all goods, materials and services used for or by the Partnership, which, in the
opinion of the General Partners, are reasonably necessary to the prudent
operation of the Partnership and are obtained from entities unaffiliated with
the General Partners or their Affiliates; and (ii) administrative services
performed by the General Partners or their Affiliates which, in the opinion of
the General Partners, are reasonably necessary to the prudent operation of the
Partnership. Reimbursement of the General Partners and their Affiliates for
administrative services shall be at the lower of the General Partners' or
Affiliates' actual cost or 90% of the amount the Partnership would be required
to pay to independent parties for comparable services in the same geographic
area. Such reimbursement shall not include (i) rent or depreciation, utilities,
capital equipment, and other overhead items, or (ii) salaries, fringe benefits,
travel expenses, and other overhead items incurred or allocated to any
controlling persons of the General Partners or their Affiliates. For purposes of
this Article 10.1(b) only, controlling persons shall mean any person who: (a)
holds a 5% or more equity interest in a General Partner or Affiliate or has the
power to direct or cause the directionof a General Partner or Affiliate whether
through the ownership of voting securities or otherwise; or (b) performs
functions for the General Partners similar to those of (i) the chairman or
member of the board of directors, (ii) executive management, such as the
president, vice-president, corporate secretary or treasurer, or (iii) senior
management, such as the vice-president of an operating division who reports
directly to executive management. No reimbursement shall be permitted for
services for which the General Partners are entitled to compensation by way of a
separate fee as provided for elsewhere in this Agreement. None of the
restrictions on reimbursement of General Partners and Affiliates et forth in
this Artcile 10.1(b) shall apply to any fees or other compensation to which the
General Parnters or their Affiliates are entitled in accordance with any other
provision of this Agreement.
A-13
(c) No rebates or give-ups may be received by the General Partners or
their Affiliates in connection with any services or goods provided to the
Partnership by unaffiliated persons or entities, nor may the General Partners or
their Affiliates participate in any reciprocal business arrangement which would
circumvent any restriction contained in this Agreement with respect to
transactios between the Partnership and the General Partners or their
Affiliates.
(d) Independent certified public accounts shall verify the allocation
of all Operating Expenses for which the General Partners or their Affiliates are
reimbursed. Such verification shall at a minimum include the following: (i) a
review of the time records of individual employees, the costs of whose services
were reimbursed; and (ii) a review of the specific nature of the work performed
by each such employee. The methods of verification shall be in accordance with
generally accepted auditing standards. The cost of such verification shall be
itemized by such accountants, which costs may be reimbursed to the General
Partners or their Affiliates only tot he extent that such reimbursement, when
added to the cost to the Partnership of the administrative services rendered by
the General Partners or their Affiliates, does not exceed the amount the
Partnership would be required to pay to independent parties in the same
geographic area for administrative services comparable to those rendered by the
General Partners or their Affiliates.
10.2 Sales and Leases.
(a) The Partnership shall not purchase or lease Properties in which the
General Partners or their Affiliates have an interest, nor shall the Partnership
acquire any Properties from any partnership or other organization in which the
General Partners or their Affiliates have an interest; provided, however, that
the General Partners or their Affiliates may purchase Properties in the name of
any one or more of them and temporarily hold title thereto for the purpsoe of
facilitating the acquisition of such properties, or the completion of
constrution of the Properties, or any other purpsoe related to the business of
the Partnership, if such Properties are purchased by the Partnership for a price
no greater than the cost of such Properties to the General Partners or their
Affiliates (including the cost of carrying such Properties during such interim
period, but excluding any and all fees and other compensation payable under this
Agreement) and there is no other benefit arising out of such trnasaction to the
General Partners or their Affiliates apart from any and all fees and other
compensation otherwise permitted under this Agreement.
(b) The Partnership shall not sell or lease Properties to the General
Parnters or their Affiliates. 10.3 Loans. (a) The Partnership shall not
make any loans to the General Partners or their Affiliates. (b) Neither
the General Partners nor their Affiliates shall provide financing, as
defined in the following
sentence, for the Partnership. For purposes of this paragrab (b), the term
"financing" shall mean loans to the Partnership encumbering any Properties, the
principal amount of which is scheduled to be paid over a period of 48 months or
more, and with 50 percent or more of the principal amount thereof scheduled to
be paid during the first 24 months of the loan; provided, however, that nothing
in this definition shall be construed as prohibiting a bona fide prepayment
provision in the financing agreement.
(c) Except as limited by paragrpah (b) of this Artcile 10.3, the
General Partners and their Affiliates may, but shall not be required to, lend
funds to the Partnership. The General Partners and their Affiliates shall not
receive interest or similar charges or fees with respect to any such loan in
excess of the amount charged to the General Partners or their Affiliates for
such loan by an unaffiliated lending institution.
10.4 No Exclusive Right to Sell. The Partnership shall not give the
General Partners or their Affiliates an exclusive right to sell or exclusive
employment to sell Properties for the Partnership.
10.5 Construction and Development of Properties. The General Partners
and their Affiliates shall notconstruct or develop any Properties or render any
services for which they will receive compensation from the Partnership in
connection with their construction or development of Properties.
10.6 No Other Compensation. Except as provided in this Agreement, the
Partnership shall not pay any commissions, fees or compensation to the General
Partners or their Affiliates.
A-14
ARTICLE ELEVEN
MANAGEMENT BY GENERAL PARTNERS
11.1 Duties of the General Partners. The General Partners shall manage
and control the Partnership and its business and affairs, and each of the
General Partners shall participate in all decisions made by the General Partners
hereunder, and the vote of a majority of the General Partners shall control. The
General Partners' obligations shall include the following:
(a) management of the Partnership affairs;
(b) fiduciary responsibility (i) for the safekeeping and use of all
funds of the Partnership, whether or not in their immediate possession or
control, and (ii) for ensuring that Partnership funds and assets are employed
for the exclusive benefit of the Partnership;
(c) furnishing Limited Partners with reports and information as
specified in Article Sixteen hereof, (d) maintenance of records of
Partnership assets, including information and reports of architects,
appraisers, engineers, attorneys, accountants, or other professionals;
(e) maintenance of books of account regarding Partnership operations
and business affairs; (f) keeping all records of the Partnership
available for inspection and audit by any Limited Partner or his
representative, during normal business hours at the principal place of business
of the Partnership and at the expense of the Limited Partner, following
reasonable notice to the Partnership; and
(g) submitting to officials or agencies administering applicable state
securities laws information required to be filed with such officials or
agencies, including reports and statements required to be distributed to Limited
Partners.
11.2 Rights and Powers. The General Partners shall have all the rights
and powers which may be possessed by a general partner under the Act and such
rights and powers as are otherwise confeffed by law or are necessary, advisable
or convenient to the discharge of their duties under this Agreement and to the
management of the business and affairs of the Partnership. Without limiting the
generality of the foregoing powers of the General Partners, it is agreed that
the General Partners shall have the following rights and powers, which they may
exercise on behalf of the Partnership at the cost, expense and risk of the
Partnership, on terms and conditions deemed necessary or appropriate in their
discretion:
(a) to carry out and implement any and all of the purposes of the
Partnership set forth in Article Four hereof;
(b) to employ the funds of the Partnership in the exercise of any
rights or powers possessed by the General Partners hereunder;
(c) subject to the restrictions contained elsewhere in this Agreement,
to borrow money on behalf of the Partnership for Partnership purposes and to use
as security therefor any Properties of the Partnership;
(d) to pay all fees and expenses incurred in the organization of the
Partnership and in the offer and sale of the Units;
(e) to invest such funds as are temporarily not required for
Partnership purposes in any short-term, highly liquid investments where there is
appropriate safety of principal;
(f) to obtain and maintain, at the expense of the Partnership, or in
their sole discretion to elect not to obtain, insurance policies covering the
property and operations of the Partnership;
(g) subject to the limitations contained elsewhere in this Agreement,
to sell, lease, exchange or otherwise dispose of all or any portion of the
Properties of the Partnership;
(h) to hire, train, transfer, supervise and discharge employees of the
Partnership and establish the compensation and benefits thereof;
(i) subject to the limitations contained elsewhere in this Agreement,
to delegate, by vote of a majority of the General Partners, any or all of their
duties hereunder, and to appoint, employ or contract with any person, which
person shall be under the ultimate supervision of the General Partners;
A-15
(j) to hold Properties in the Partnership name or the name of any of
them or in the name of any designee;
(k) to establish any reserves deemed necessary or advisable by
the Partnership;
(l) to make ministerial amendments to the Agreement and to make any
amendments to this Agreement which are approved or authorized in accordance with
Article 13.3; and
(m) to enter into such agreements, contracts, documents and instruments
and perform such acts with respect to all of the foregoing and any matter
incident thereto.
11.3 Limitations on General Partners' Authority. The General Partners
shall not:
(a) do any act in contravention of this Agreement;
(b) do any act which would make it impossible to carry on the
ordinary business of the Partnership; (c) possess Properties, or assign the
Partnership's rights in any Properties, for other than a Partnership purpose;
(d) confess a judgment against the Partnership;
(e) sell or transfer all or substantially all of the Partnership assets
without the prior consent of amajority in interest of Limited Partners' Capital;
(f) admit a person as a General Partner except as provided in this
Agreement; (g) admit a person as a Limited Partner except as provided
in this Agreement; or (h) contract away the fiduciary duty owed to the
Limited Partners under the common law of any applicable
jurisdiction.
11.4 Nonexclusive Duties. The General Partners shall devote such time,
effort and skill as they in their discretion determine may be reasonably
required for the conduct of the Partnership's business and affairs, which may be
less than full time. The Limited Partners recognize and agree that the General
Partners' involvement with the Partnership is not exclusive and that they or the
Affiliates of any one of them may perform similar duties for other entities in
another business, including the real estate business, some or all of which may
compete with the Partnership. The General Partner and the Affiliates of any of
them shall be entitled to engage in any other transactions and possess interests
in any other business ventures of any nature or description, independently or
with others, whether existing as of the date hereof or hereafter coming into
existence, and neither the Partnership nor the Limited Partners shall have any
rights in or to any such independent ventures or the income or profits derived
therefrom. The Limited Partners recognize and agree that such other business
ventures may be in or related to the real estate business and/or the restaurant
business and from time to time may compete with the Partnership. However, in the
event that the Partnership and a partnership with which the General Partners or
their Affiliates are affiliated have the same investment objectives, and an
investment opportunity becomes available which is suitable for both entities and
for which both entities have sufficient uninvested funds, then the entity which
has had uninvested funds for the longest period of time will make such
investment.
11.5 Limitation on Liability. No General Partner or Affiliate, as the
term Affiliate is defined in Article 19.1, shall be liable to the Partnership or
to any Limited Partner for any loss incurred by the Partnership which arises out
of any action or inaction of a General Partner or Affiliate, if the General
Partner or Affiliate, in good faith, determined that such course of conduct was
in the best interests of the Partnership, and such course of conduct did not
constitute negligence, misconduct, or breach of fiduciary duty to the Limited
Partners.
ARTICLE TWELVE
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Limited Partners shall have the following rights and obligations.
12.1 Liabilities. Except as otherwise provided in this Article 12.1 or
under applicable law, no Limited Partner shall be personally liable for any of
the debts of the Partnership or any of the losses thereof beyond the amount of
his Capital Contribution and the share of undistributed profits of the
Partnership attributable to such Limited Partner. In the event that the
Partnership is involuntarily liquidated because of insolvency, the Limited
Partners may be additionally liable to:
A-16
(a) return any cash distributed which represents a return of a Capital
Contribution, together with interest thereon; and
(b) repay any cash distributions wrongfully made to them, together with
interest, pro rata in accordance with their Partnership Interests, as is
required to discharge liabilities of the Partnership to creditors who extended
credit or whose claims arose during the period the returned Capital Contribution
was held by the Partnership.
Limited Partners may also be liable for the general obligations of the
Partnership if they are found, under applicable law, to have participated in the
management and control of the Partnership.
12.2 Management. No Limited Partner, as such, shall take part in the
management of the business or transact any business for the Partnership. All
management responsibility is vested in the General Partners.
12.3 Authority. No Limited Partner, as such, shall have the power to
sign for or to bind the Partnership. All authority to act on behalf of the
Partnership is vested in the General Partners.
12.4 Rights. A Limited Partner shall have the right to:
(a) have the Partnership books and records and this Agreement kept at
the principal office of the Partnership or at an office designated by the
General Partners through written notice to the Limited Partners and at all times
during regular business hours to inspect and copy any of them;
(b) have on demand, at their own expense, true and full information of
all things affecting the Partnership, and a formal accounting of Partnership
affairs whenever circumstances render it just and reasonable;
(c) have on demand, at their own expense, by mail for a proper purpose
a copy of the names, addresses and Capital Contributions of all Limited
Partners;
(d) approve or disapprove a Liquidating Sale by a vote of a majority in
interest of Limited Partners' Capital;
(e) propose and vote on certain amendments to this Agreement, as
provided in Article Thirteen; (f) remove any one or more of the General
Partners and elect one or more substitute General Partner, as
provided in Article Fifteen;
(g) have dissolution and winding up by decree of court as provided in
Articles Seventeen and Eighteen; (h) upon sixty (60) days notice to the
General Partners, terminate by vote of a majority in interest of the
Limited Partners' Capital any contract between the Partnership and the General
Partners or their Affiliates pursuant to which the General Partners or their
Affiliates are to receive compensation from the Partnership for services
rendered or goods sold or leased to the Partnership; and
(i) with the consent of the General Partners, modify by vote of a
majority in interest of Limited Partners' Capital any contract between the
Partnership or their Affiliates pursuant to which the General Partners or their
Affiliates are to receive compensation from the Partnership for services
rendered or goods sold or leased to the Partnership.
ARTICLE THIRTEEN
VOTING RIGHTS AND MEETINGS OF THE PARTNERSHIP
13.1 Voting Rights. Except as otherwise expressly provided in this
Agreement, a Limited Partner shall have no right to vote upon any matter
affecting the Partnership. Votes may be cast on any matter submitted for
consideration at a duly called meeting of the Partnership, or without a meeting
upon call of the General Partners or written request (stating the purpose of
such vote) of the Limited Partners holding ten percent (10%) or more of the
Limited Partners'Capital. Within twenty (20) days after receipt of such a
request, the General Partners (i) shall provide all Limited Partners with
appropriate ballots, which ballots shall include a verbatim statement of the
wording of any resolution proposed for adoption by any Limited Partner
requesting a vote on such resolution, and (ii) shall specify a time not less
than fifteen (15) nor more than sixty (60) days after receipt of such request by
which such ballots shall be returned.
A-17
13.2 Meetings of the Partnership. Meetings of the Partnership may be
called by the General Partners, or by written request (stating the purpose of
such meeting) of Limited Partners holding ten percent (10%) or more of the
Limited Partners' Capital. Within ten (10) days after receipt of such request,
the General Partners shall provide all Limited Partners with written notice of a
meeting to be held not less than fifteen ( 15) nor more than sixty (60) days
after receipt of such written request, which notice (i) shall specify the time
and place of such meeting, (ii) shall contain a detailed statement of each
matter to be acted on at such meeting, (iii) shall include a verbatim statement
of the wording of any resolution proposed for adoption by any Limited Partner
calling such meeting, and (iv) shall include proxies or written consents which
specify a choice between approval or disapproval of each matter to be acted upon
at such meeting. Meetings of the Partnership shall be held at such location as
shall be specified by the General Partners. A majority of the Limited Partners'
Capital entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of the Partnership.
13.3 Amendment of Agreement.
(a) Amendments to this Agreement may be proposed by the General
Partners or by Limited Partners owning not less than 10% in interest of the
Limited Partners' Capital. Proposed amendments, subject to the conditions set
forth in this Article Thirteen, may concern any Article in this Agreement,
including, but not limited to (i) removal of any one or more of the General
Partners and election of one or more substitute General Partners; and (ii)
termination of the Partnership.
(b) Following any proposal of an amendment, the General Partners shall,
within fifteen (15) days after receipt, submit to all Limited Partners a
verbatim statement of the proposed amendment. The General Partners shall include
in such submission an opinion of counsel to the General Partners concerning
whether the proposed amendment would result in changing the Partnership to a
general partnership, changing the liability of the General Partners or the
Limited Partners, or allowing the Limited Partners to take part in the control
or management of the Partnership. The General Partners may also include in said
submission their recommendation as to the proposed amendment. In the case of any
proposed amendment which would affect the allocations or distributions provided
for in Articles Nine or Eighteen hereof or would amend Article 7.9(c) hereof,
the General Partners shall include in said submission the written advice of
counsel experienced in federal income tax matters as to the effect which such
amendment would have, if any, on such allocations and distributions and on the
bases of the Limited Partners' Partnership Interests. Any Limited Partner may,
at his sole expense, include an opinion of counsel experienced in matters under
the Act concerning the effect of the proposed amendment. Except as otherwise
provided in Articles 11.2(l) or 13.3(d) hereof, all proposed amendments, whether
proposed by the General Partners or by Limited Partners, shall be submitted to
Limited Partners for a vote, and the affirmative vote of holders of a majority
in interest of the Limited Partners' Capital (or such greater majority as may be
required by law) shall be required to approve any such amendment. The General
Partners may seek the written vote of the Limited Partners or may call a
meeting.
(c) Notwithstanding the provisions of Article 13.3(a), no such
amendment shall alter the allocations specified in Articles Nine and Eighteen
hereof, alter the Capital Contributions of the Partners, or otherwise materially
adversely affect the interests of the Limited Partners without the specific
written consent of each Limited Partner adversely affected thereby; provided,
however, that Article 13.3(d) shall control in all events.
A-18
(d) Notwithstanding any provision of Article 13.3(c) or any other
provision of this Agreement to the contrary, the General Partners are authorized
and directed to allocate Net Income, Net Loss, Gain, and Loss arising in any
year differently than otherwise provided for in this Agreement to the extent
that the General Partners determine that allocating income, gain, loss,
deduction or credit (or item thereof) in the manner provided for in this
Agreement would not be permitted under section 704(b) of the Code and Treasury
regulations promulgated thereunder. Any such allocation (hereinafter referred to
as the "New Allocation") shall be deemed to be a complete substitute for any
allocation otherwise provided for in this Agreement, and no amendment of this
Agreement or approval of any Limited Partner shall be required. In making a New
Allocation, the General Partners are authorized to act only after having been
advised by the Partnership's counsel that the existing allocations are not or
may not be permissible under section 704(b) of the Code and Treasury regulations
promulgated thereunder. The General Partners shall use their best efforts to
cause the New Allocations to resemble in all material ways and to the maximum
extent possible the allocations contained in this Agreement as originally
adopted; the General Partners, however, make absolutely no warranties in this
regard. No New Allocation, and no choice by the General Partners among possible
alternative New Allocations, shall give rise to any claim or cause of action by
any Limited Partner against any party, including. but not limited to, the
General Partners, the Partnership's counsel, or any individual related thereto.
(e) This Article 13.3 may not be amended without the unanimous written
consent of all Partners, and no provision of this Agreement requiring the
consent of greater than a majority in interest of the Limited Partners'Capital
may be amended without the same consent of the Limited Partners' Capital as is
required in the provision to be amended.
ARTICLE FOURTEEN
RESTRICTIONS ON TRANSFER OF INTEREST IN PARTNERSHIP
14.1 Representations of Limited Partners. Each Limited Partner
acknowledges that he is fully aware that the Partnership is selling the Units in
reliance upon the truth and accuracy of the representations of each Limited
Partner contained in this Agreement and in such Limited Partner's Subscription
Agreement.
14.2 Transfer of Limited Partners'Partnership Interests. Subject to
compliance with applicable state and federal securities laws and the conditions
on transfer set forth in this Article Fourteen, a Limited Partner shall have the
right to sell, assign, transfer, encumber, pledge, convey, hypothecate, or
otherwise transfer or dispose (which actions are collectively referred to in
this Article Fourteen as a "transfer") of all or any part of his Partnership
Interest. Transfers may be made only with the consent of the General Partners,
which consent may be granted or withheld at the sole discretion of the General
Partners. Any such transfer shall also comply with the following conditions:
(a) No assignments or transfers will be permitted if such assignments
or transfers would, in the opinion of counsel for the Partnership or the General
Partners, result in the Partnership being considered to have terminated within
the meaning of Section 708 of the Code.
(b) In no event shall Units be assigned or transferred to a minor or an
incompetent except by will or intestate succession.
(c) No sale, assignment or transfer after which the transferor or the
transferee will hold an interest representing a Capital Contribution of less
than $2,500 ($1,000, or such greater amounts as may be required by applicable
state law, in the case of transfers by an Individual Retirement Account, ▇▇▇▇▇
or pension plan), will be recognized for any purpose.
14.3 Effect of Transfer.
(a) No transfer will be binding upon the Partnership or the Partners
until (i) the provisions of Article 14.2 have been met; and (ii) there shall
have been filed with the Partnership a duly executed and acknowledged
counterpart of the instrument making such transfer, signed by both the
transferor and the transferee, with such instrument evidencing the written
acceptance by the transferee of all of the terms and provisions of this
Agreement and containing a representation by the transferor that such transfer
was made in accordance with all applicable laws and regulations.
A-19
(b) All transfers of a Limited Partner's Partnership Interest shall
entitle the transferee only to receive the economic interest to, which the
transferring Limited Partner would otherwise be entitled. Such transferee shall
become a Substituted Limited Partner only with the written consent of the
General Partners following compliance with the conditions set forth in this
Article 14.3 and in Article 14.2 hereof. The Substituted Limited Partner shall
also be required to (i) execute and acknowledge such instruments as the General
Partners deem necessary or advisable to effect the admission of such person as a
Substituted Limited Partner, and (ii) pay all reasonable expenses incurred by
the Partnership in connection with such person's admission as a Substituted
Limited Partner (not to exceed $100).
(c) All such transfers shall be effective as of the close of business
on the last day of the calendar month in which the assignment, transfer or
conveyance occurs, or, at the General Partners' election, at 7:00 o'clock a.m.,
Orlando, Florida time, on the following day. Each Partner agrees to execute such
certificates and other documents and perform such acts as may be requested by
the General Partners in connection with such transfer. The General Partners
shall be required to amend this Agreement at least once each calendar quarter to
reflect the substitution of Limited Partners. Until this Agreement is so
amended, an assignee shall not become a Substituted Limited Partner. Any
Substituted Limited Partner so admitted to the Partnership will succeed to all
the rights and be subject to all the obligations of the transferring Limited
Partner with respect to the Partnership Interest as to which such Limited
Partner was substituted. The Limited Partners hereby consent to the substitution
as a Limited Partner of any individual or entity approved by the General
Partners.
14.4 Liability of Transferring Limited Partner. Any Limited Partner who
shall transfer all of his Partnership Interest shall cease to be a Limited
Partner of the Partnership, except that unless and until a Substituted Limited
Partner is admitted in his stead, such transferring Limited Partner shall retain
the statutory rights of an assignor of a limited partnership interest under the
Act. No substitution of an assignee as a Limited Partner shall operate to
relieve the assignor of the liabilities imposed under the Act or of his duties
and obligations hereunder, unless the General Partners agree in writing to
release such Limited Partner.
14.5 Record Owner of Partnership Interest. Notwithstanding anything
contained in this Agreement to the contrary, both the Partnership and the
General Partners shall be entitled to treat the transferor of any Partnership
Interest as the absolute owner thereof in all respects, and shall incur no
liability for distributions of cash or other property made in good faith to such
transferor in reliance on the Partnership records as they exist until such time
as the above-referenced written instrument of transfer has been received by,
approved and recorded on the books of, the Partnership.
14.6 Admission of Additional Limited Partners. The General Partners are
authorized, in their sole discretion and without the approval of any of the
Limited Partners, to admit from time to time as additional Limited Partners such
persons or entities who subscribe for Units during the period in which Units are
offered for sale to the public as described in the Prospectus. Each such person
or entity may apply for admission by completing, executing and delivering to the
General Partners (i) a form of subscription agreement required by the General
Partners which shall include, and constitute, an agreement by him to be bound by
this Agreement and to become a Limited Partner, (ii) his Capital Contribution,
and (iii) such other documents as may be required by the General Partners.
Admission of an additional Limited Partner will become effective upon the
recordation of an amendment to this Agreement reflecting such admission.
14.7 Death, Incompetency or Dissolution of a Limited Partner. The
death, legal incompetency, bankruptcy or dissolution of a Limited Partner shall
not dissolve the Partnership. The rights and obligations of such Limited Partner
to share in the Net Income, Net Loss, Net Cash Flow, Gain and Loss of the
Partnership, to receive distributions of Partnership funds and to transfer his
Partnership Interest pursuant to. this Article Fourteen shall, upon the
happening of such an event, devolve upon such Limited Partner's legal
representative or successor in interest, as the case may be, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership. Upon the death of a Limited Partner, his legal
representative shall have all the other rights of a Limited Partner solely for
the purpose of settling his estate. In no event, however, may such estate, legal
representative or other successor in interest become a Substituted Limited
Partner except in accordance with Article 14.4 hereof. Each Limited Partner's
estate or other successor in interest shall be liable for all the obligations
and liabilities of such Limited Partner.
A-20
ARTICLE FIFTEEN
ADDITION, REMOVAL, OR WITHDRAWAL OF A GENERAL PARTNER
15.1 Additional General Partners. The General Partners may at any time
designate one or more additional general partners whose Partnership Interests
shall be such as shall be agreed upon by the General Partners and such
additional general partners, provided that the Partnership Interests of the
Limited Partners shall not be affected thereby.
15.2 Removal and Election of General Partners.
(a) Notwithstanding anything else herein contained, any General Partner
may be removed and a new General Partner may be elected as a substitute General
Partner in the place of such removed General Partner by the vote of a majority
in interest of the Limited Partners' Capital.
(b) Written notice of the removal of a General Partner shall be served
upon such General Partner, either by certified or registered mail, return
receipt requested, or by personal service. Such notice shall set forth the
reasons for the removal and the date upon which the removal is to become
effective. Notwithstanding the foregoing sentence, any removal of the last
remaining General Partner shall be effective only at the earlier of (i) such
date as a successor General Partner shall have been admitted to the Partnership
pursuant to Section 15.4 hereof, or (ii) a date ninety (90) days after the date
on which the required majority in interest of the Limited Partners' Capital
shall have voted for such removal of the General Partner. Upon the effective
date of the removal of a General Partner, he or it shall cease to be a General
Partner, and any loans made by such General Partner or his or its Affiliates to
the Partnership shall be repaid as expeditiously as possible.
(c) In the event a General Partner is removed and the remaining General
Partner or General Partners elect to continue the business of the Partnership
pursuant to Article 17.2, or if the business of the Partnership is continued
pursuant to Article 17.2 in the event of the removal of the last remaining
General Partner, then (i) the Partnership shall purchase the General Partner's
Partnership Interest at a price determined in accordance with Article 15.5
hereof, and (ii) if no substitute General Partner is elected in the place of any
removed General Partner, those persons or entities who are General Partners
following such removal shall use their best efforts to release such removed
General Partner (and his or its Affiliates, if applicable) from personal
liability on any existing or future Partnership borrowings.
15.3 Death, Incompetency, Bankruptcy, Dissolution or Withdrawal of a
General Partner.
(a) Subject to the provisions of Articles 17.1(e) and 17.2 hereof, the
death, incompetency, bankruptcy or dissolution of a General Partner shall
dissolve the Partnership. In the event
that, following the death, incompetency, bankruptcy or dissolution of a General
Partner, the remaining General Partner or General Partners (if any) elect to
continue the business of the Partnership pursuant to Article 17.2, or if the
business of the Partnership is otherwise continued pursuant to Article 17.2, the
Partnership shall have the obligation, in accordance with Article 17.2, to
purchase the Partnership Interest of such General Partner at a purchase price
determined in accordance with Article 15.5 hereof.
A-21
(b) A General Partner may withdraw, whether through resignation or
otherwise, or transfer all of his General Partner's Partnership Interest at any
time provided that he shall give at least sixty (60) days prior written notice
to the Limited Partners of such resignation, and such withdrawal shall become
effective at the expiration of such sixty-day period. The last remaining General
Partner may withdraw or transfer all of his General Partner's Partnership
Interest only if (i) he shall give the notice specified in the foregoing
sentence, (ii) in such notice, he shall nominate as a substituted General
Partner a willing person or entity that, in such General Partner's reasonable
discretion, meets the requirements for qualification of the Partnership as a
partnership for federal income tax purposes, and (iii) a majority in interest of
Limited Partners' Capital shall consent in writing to such withdrawal,
resignation, or transfer. Such General Partner shall, concurrently with the
request for such consent, identify to the Limited Partners the interest to be
transferred, the date of the transfer, the proposed transferee and the proposed
substituted General Partner, if any, who shall in such General Partner's
reasonable discretion meet the requirements for qualification of the Partnership
as a partnership for federal income tax purposes. If the Limited Partners
consent to a transfer of such General Partner's Partnership Interest by the
requisite majority, the nominated substituted General Partner shall seek
admission to the Partnership in accordance with the provisions of Article 15.4
hereof prior to the withdrawal of such General Partner, and the withdrawal,
resignation or transfer of such General Partner shall become effective only upon
the admission of a substituted General Partner or the expiration of ninety (90)
days following such withdrawal, resignation or transfer. The substituted General
Partner shall purchase such withdrawing, transferring or resigning General
Partner's Partnership Interest at such price as the substituted General Partner
and such withdrawing, transferring or resigning General Partner shall agree upon
or, if they cannot so agree, at a price determined in accordance with Article
15.5 hereof. Notwithstanding anything else herein contained, no person or entity
shall be admitted as a substituted General Partner until the full purchase price
for the Partnership Interest of such withdrawing, transferring or resigning
General Partner has been paid in full or arrangements satisfactory to such
withdrawing, transferring or resigning General Partner for full payment have
been made. Upon the effective date of the withdrawal or resignation of any
General Partner, or the transfer of his Partnership Interest, he shall cease to
be a General Partner of the Partnership, and all loans made by him or it or by
such General Partner's Affiliates to the Partnership shall be repaid as
expeditiously as possible, and before any distributions to the Limited Partners.
15.4 Admission of Substituted General Partner. No person or entity
shall be admitted as a substituted General Partner unless all of the following
conditions are met or, by unanimous agreement of the Limited Partners, waived:
(a) such person or entity agrees in writing to accept the
responsibilities of the removed General Partner and makes arrangements
reasonably satisfactory to such General Partner (i) to release such General
Partner (and his Affiliates, if applicable) from personal liability on any
existing or future Partnership borrowings and to indemnify such General Partner
and his or its Affiliates against all other liabilities of the Partnership,
fixed, contingent or otherwise, except liabilities for which the General
Partners may not be indemnified by the Partnership under Article Nineteen or
(ii) to indemnify such General Partner and his or its Affiliates against all
liabilities of the Partnership, fixed, contingent or otherwise (including any
existing or future Partnership borrowings), except such liabilities for which
the General Partners may not be indemnified by the Partnership under Article
Nineteen;
(b) such person or entity agrees in writing to become a substituted
General Partner;
(c) counsel for the Partnership renders an opinion
that such admission is in conformity with the Act and
will not cause a termination or dissolution of the Partnership or cause it to be
classified other than as a partnership
for federal income tax purposes;
(d) a majority in interest of the Limited Partners' Capital consent to
the admission of such person as a substituted General Partner; and
(e) such person or entity executes and acknowledges such instruments as
may be necessary or advisable to effect the admission of such person or entity
as a substituted General Partner, including, without limitation, the written
acceptance and adoption by such person of the provisions of this Agreement and
the filing of an amendment to this Agreement evidencing such admission.
A-22
Upon satisfaction or waiver of the foregoing conditions, this Agreement shall be
amended in accordance with the Act, and all other steps shall be taken as are
reasonably necessary to effect the admission of the substituted General Partner.
15.5 Purchase Price of a General Partner's Interest.
(a) In the event that a General Partner's Partnership Interest is
purchased pursuant to Articles 15.2(c) or 15.3(a), or pursuant to 15.3(b) if a
purchase price cannot be agreed upon, the purchase price shall be based upon an
appraisal performed as set forth in this Article 15.5 and shall be equal to the
fair market value of the distribution of Partnership funds to which such General
Partner would have been entitled if the Partnership were dissolved and wound up
pursuant to Article Eighteen hereof on the effective date of the dissolution and
its assets sold on such date without compulsion of the Partnership to do so.
(b) The Partnership and the General Partner whose Partnership Interest
is being purchased shall select an appraiser which is not an Affiliate of the
Partnership or such General Partner to perform the appraisal. If such General
Partner and the Partnership cannot agree upon such an appraiser, then each shall
appoint one appraiser. If the two appraisers so appointed cannot agree on a
purchase price, the two appraisers shall select a third appraiser, or if the
first two appraisers are unable to agree upon a third appraiser, such third
appraiser shall be selected by the American Arbitration Association. The third
appraiser shall submit a written report on the value of such General Partner's
Partnership Interest. If the value arrived at by the third appraiser is between
the values arrived at by the first two appraisers, the report of the third
appraiser shall govern. If the value arrived at by the third appraiser is higher
than the value arrived at by the first two appraisers, the report of the higher
of the first two appraisers shall govern. If the value arrived at by the third
appraiser is lower than the value arrived at by the first two appraisers, the
report of the lower of the first two appraisers shall govern. The costs of the
appraisals shall be bome equally by such General Partner (or such General
Partner's legal representative) and the Partnership.
(c) The purchase price of such General Partner's Partnership Interest
shall be paid by the Partnership giving such General Partner (or such General
Partner's legal representative) a non-interestbearing unsecured promissory note
evidencing such purchase price payable only from Net Cash Flow otherwise payable
to the General Partners pursuant to Article Nine hereof or, as the case may be,
from assets available for payment of Partnership liabilities upon dissolution
and liquidation pursuant to Articles Seventeen and Eighteen hereof.
ARTICLE SIXTEEN
REPORTS, ACCOUNTING AND TAX MATTERS
16.1 Fiscal Year. The fiscal year of the Partnership shall be the
calendar year. 16.2 Books of Account and Accounting. The General
Partners shall maintain or cause to be maintained, full, complete,
accurate and proper books of account and records of the Partnership's
operations.
16.3 Reports to the Limited Partners.
(a) An annual report, examined and reported on by independent
certified public accountants, will be furnished to Limited Partners within 120
days following the close of each fiscal
year. The annual report will contain an audited balance sheet, statement of
operations, statement of Partners' equity, statement of changes in financial
position, an unaudited cash flow statement, and a report of the activities of
the Partnership during the relevant period. The annual report will also contain
a complete statement of distributions to Partners, of any transactions with the
General Partners or their Affiliates and a summary of compensation and fees paid
or payable to the General Partners and their Affiliates (including reimbursable
expenses).
(b) Within 60 days after the end of each fiscal quarter in which the
General Partners or their Affiliates received fees or other compensation from
the Partnership, Limited Partners will be furnished with a detailed statement
setting forth the services rendered or to be rendered by the General Partners or
their Affiliates for the Partnership and the fees or compensation received
therefore.
(c) Information necessary for the preparation of federal income tax
returns will be furnished to Limited Partners within 75 days following the close
of each fiscal year.
A-23
(d) Within 75 days following the close of each fiscal year, each
Limited Partner will be furnished with an annual statement of Unit valuation to
enable Limited Partners subject to annual reporting requirements under ERISA to
file such annual reports as they relate to their Partnership investment. The
statement will report an estimated value of each Unit based on the amount
Limited Partners would receive if the Properties were sold at their appraised
values as of the close of the fiscal year, and if such proceeds and any other
funds of the Partnership were distributed in a liquidation of the Partnership as
described in the Prospectus. For Properties acquired during the fiscal year, an
appraisal will not be obtained as of the end of such fiscal year if the
Partnership obtained an appraisal within a nine-month period prior to the close
of such fiscal year. Limited Partners will not receive copies of appraisals. For
the first three annual valuation reports to Limited Partners after the
termination of the offering, the General Partners will value all Properties at
cost and report the net asset value per each Unit at $500. In providing such
reports to the Limited Partners, the Partnership and the General Partners and
their Affiliates do not thereby make any warranty, guarantee or representation
that (i) the Limited Partners or the Partnership, upon liquidation, will
actually realize the estimated value per Unit, or (ii) the Limited Partners will
realize the estimated net asset value if they attempt to sell their Units.
(e) If the Partnership is required by the Securities Exchange Act of
1934, as amended, to file quarterly reports with the Securities and Exchange
Commission, Limited Partners will, within 60 days after the end of each fiscal
quarter, be furnished with a copy of each such report, containing a balance
sheet, a quarterly statment of income and cash flow, and all pertinent
information regarding the Partnership and its activities during the quarter, as
required by Form 10-Q under the Securities Exchange Act of 1934, as amended. If
the Partnership is not subject to this filing requirement, Limited Partners will
be furnished with a semi-annual report within 60 days after the end of each
six-month period containing the information described in the preceding sentence,
but applicable to such six-month period.
(f) Until such time as all of the Limited Partners' Capital remaining
after payment of the amounts specified in Articles 7.2, 7.3, 7.4 and 7.5 and
creation of reserves as provided in Article 7.6 is used to acquire Properties as
provided in Article 7.7 or is returned to investors as provided in Article 7.8,
special reports will be furnished to the Limited Partners on a quarterly basis,
which shall contain the following information: (i) the location and a
description of the general character of all Properties which the Partnership
acquired during such quarter or which the Partnership intends to acquire during
the following quarter; (ii) the present or proposed use of such Properties,
their suitability and adequacy for such uses, (iii) the material terms of any
leases affecting such Properties, (iv) the method of financing such Properties,
and (v) a statement that title insurance has been or will be obtained on all
Properties acquired or to be acquired. The Partnership may incorporate the
information contained in such reports into any of the reports furnished to the
Limited Partners pursuant to this Article 16.3.
(g) Within 60 days after the end of each fiscal quarter in which
Limited Partners have received distributions from the Partnership, each Limited
Partner who is at that time a resident of the State of New York will be
furnished with the information required by New York Form SD-1 or any sucessor
form.
(h) Financial information contained in all reports to Limited Partners
will be prepared on the accrual basis of accounting in accordance with generally
accepted accounting principles. If such information differs from the information
furnished to Limited Partners for tax purposes, the two sets of information will
be reconciled.
16.4 Tax Returns. The General Partners shall use their best efforts to
cause the Partnership to file on a timely basis all federal, state and local tax
and information returns required of the Partnership and shall, on behalf of the
Limited Partners, make such elections and determinations as are provided for
herein or as they otherwise in their sole discretion deem appropriate. Such
returns shall be prepared on the accrual basis of accounting.
16.5 Tax Matters. Upon the transfer of a Partnership Interest, the
Partnership will consider, upon any Partner's request, an election to cause the
basis of the Partnership property to be adjusted for federal income tax
purposes, as provided in Section 754 of the Code. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or his
successor, is hereby designated as the "Tax Matters Partner" in accordance with
Section 6231(a)(7) of the Code and, in connection therewith and in addition to
all other powers given thereunto, shall have all other powers necessary or
appropriate to fully perform such role, including without limitation the power
to retain all attorneys and accountants of his choice and the right to settle
any audits without the consent of the Limited Partners. This designation is
hereby expressly consented to by each Limited Partner as an express condition to
becoming a Limited Partner.
A-24
ARTICLE SEVENTEEN
DISSOLUTION OF THE PARTNERSHIP
17.1 Events of Dissolution. The Partnership shall dissolve upon the
first to occur of: (a) the expiration of the term of the Partnership;
(b) a vote of a majority in interest of the Limited Partners' Capital
that the Partnership shall dissolve; (c) the cash sale or other
disposition of all or substantially all Partnership assets (as defined
in Article
1.24), other than a transfer thereof as security for indebtedness of the
Partnership, or the receipt by the Partnership of the final payment in the case
of an installment sale of all or substantially all of such assets;
(d) the removal of any General Partner pursuant to Article 15.2 hereof
or the withdrawal or resignation of any General Partner pursuant to Article
15.3, subject in each case to the provisions of Article 17.2 hereof;
(e) the bankruptcy, death, dissolution or adjudication of incompetency
of any General Partner, in each case subject to the provisions of Article 17.2,
and further provided that for purposes of this Article 17. 1 (e), the term
"dissolution" shall not include the merger, consolidation or recapitalization of
any corporate General Partner; or
(f) any other event causing the dissolution of the Partnership under
the Act.
17.2 Reformation. Notwithstanding Article 17.1, in the event of a
dissolution pursuant to Article 17.1(d) or 17. 1(e) above, the Partnership shall
not be dissolved if either of the following conditions is met: (i) the remaining
General Partners elect to continue the business of the Partnership, or (ii) in
the event there are no General Partners remaining at such time, then if all of
the Limited Partners agree to continue the business of the Partnership on the
same terms and conditions as are contained herein and elect by vote of a
majority in interest of Limited Partners' Capital a substituted General Partner
admitted pursuant to Article 15.4 hereof within ninety (90) days following the
occurrence of one of the events specified in Article 17.1(d) or 17.1(e). If
either of the foregoing conditions are met, then the provisions of Article
Eighteen hereof shall not apply, the Partnership shall continue its business
without dissolving, and the interest in the Partnership of the General Partner
to whom one of the events specified in Article 17.1(d) or 17.1(e) applies shall
be purchased by the Partnership. In the event of such reformation, all of the
assets and liabilities of the Partnership shall be contributed to the new
partnership which shall be formed and all parties to this Agreement shall become
partners in such new partnership and, unless otherwise agreed to by unanimous
vote of the Limited Partners, this Agreement, as it may from time to time be
amended, shall continue as the Limited Partnership Agreement of such new
partnership.
ARTICLE EIGHTEEN
WINDING UP OF PARTNERSHIP
18.1 Liquidation of Assets. The Partnership shall not terminate upon a
dissolution, but shall cease to engage in further business except to the extent
necessary to wind up its affairs, perform existing contracts and preserve the
value of its assets. The General Partners or a liquidation trustee appointed by
the General Partners or, if there is no General Partner, a liquidation trustee
selected by a majority in interest of Limited Partners' Capital (the
"Liquidation Trustee") shall take full account of the Partnership's assets and
liabilities, file all certificates and notices of dissolution as are required by
law, wind up its affairs, and liquidate the Partnership's assets as promptly as
is consistent with obtaining the fair value thereof. The General Partners or the
Liquidation Trustee, as the case may be, shall have full power and authority to:
(a) sell or otherwise dispose of, at such prices and upon such terms as
they or it in their or its sole discretion may deem appropriate, all of the
Partnership's assets; and
(b) as promptly as possible after such liquidation, effect a
distribution of the assets of the Partnership in cash as set forth in Article
18.2.
A-25
During the course of winding up, the Partners shall continue to share in Net
Income, Net Loss, Net Cash Flow, Gain and Loss as provided in this Agreement,
and all of the provisions of this Agreement shall continue to bind the parties
and apply to the activities of the Partnership except as specifically provided
to the contrary, but there shall be no distributions to the Partners except
pursuant to this Article Eighteen.
18.2 Distributions. Distribution of the proceeds of liquidation
pursuant to Article 18.1 hereof, any Net Sales Proceeds from a Liquidating Sale,
and the cash assets of the Partnership following a dissolution shall, subject to
Article 8.3, be made in the following order of priority:
(a) first, to the payment and discharge of all of the Partnership's
debts and liabilities to creditors other than Partners;
(b) second, to the establishment of any reserves which the General
Partners or the Liquidation Trustee, as the case may be, may deem necessary for
any anticipated, contingent or unforeseen liabilities or obligations of the
Partnership arising out of the conduct of its business, which reserves will be
held in escrow until the expiration of such period of time as the General
Partners or the Liquidation Trustee, as the case may be, shall deem advisable,
at which time any balance of any such reserves not required to discharge such
liabilities or obligations shall be distributed as provided in subsections (c)
and (d) below;
(c) third, to the payment and discharge of all of the Partnership's
debts and liabilities, if any, to the Partners (other than in respect of their
Partnership Interests);
(d) fourth, after allocations of (i) Net Income or Net Loss, if any,
have been made pursuant to Article 9.1(a) hereof and (ii) Gain or Loss have been
made pursuant to Articles 9.1(b) or 9.1(c) hereof, to the Partners with positive
Capital Account balances, in proportion to such balances, up to amounts
sufficient to reduce such positive balances to zero; and
(e) thereafter, any funds then remaining shall be distributed 95% to
the Limited Partners and 5% to the General Partners.
18.3 Distribution in Kind. The Partnership shall not make any
distribution in kind of tangible or intangible assets.
18.4 Time for Orderly Liquidation. A reasonable amount of time shall be
allowed for the orderly liquidation of the assets of the Partnership and the
discharge of liabilities to creditors so as to enable the General Partners or
the Liquidation Trustee, as the case may be, to minimize the normal losses
attendant upon such liquidation.
18.5 Indebtedness of Partners. Notwithstanding the foregoing, if any
Partner shall be indebted to the Partnership, then until payment of such amount
by him, the General Partners or the Liquidation Trustee, as the case may be,
shall retain such Partner's distributive share of the assets and apply such
assets or the income therefrom to the liquidation of such indebtedness and the
cost of holding such assets during the period of such liquidation. If such
amount has not been paid or otherwise liquidated at the expiration of six months
after the statement required by the first sentence of Article 18.7 hereof has
been given to such Patner, the General Partners or the Liquidation Trustee, as
the case may be, may sell the interest of such Partner at public or private sale
of the best price immediately obtainable which shall be determined in the sole
judgment of the General Partners or the Liquidation Trustee, as the case may be.
Proceeds of such sale shall be applied to the liquidation of the amount then due
under this Article Eighteen, and the balance of such proceeds, if any, shall be
delivered to such Partner.
18.6 Deficit Restoration. Notwithstanding any other provision of this
Agreement to the contrary, if, upon the liquidation of a General Partner's
partnership Interest (whether or not in connection with the liquidation of the
Partnership), such General Parnter has a negative balance in his Capital Account
(as detemined after taking into account Capital Account adjustments for the
Partnership taxable year during which such lliquidation occurs, other than those
made pursuant to this Article 18.6), then such General Parnter shall be required
to pay to the Partnership, by the end of such taxable year (or, if later, within
90 days after the date of such liquidation), an amount in cash equal to the
differnece btween such Partner's negative Capital Account and zero. The
aggregate of such payments by all General Partners having negative Capital
Accounts shall, upon liquidation of the Partnership, be distributed to the
Partnership's then-creditors, if any, and any excess among the Partners having
positive Capital Account balances.
A-26
18.7 Final Accounting. Upon the dissolution of the Partnership pursuant
to Article Seventeen, the accountants for the Partnership shall promptly
prepare, and the General Partners or the Liquidation Trustee, as the case may
be, shall furnish to each Partner, a statement setting forth the assets and
liabilities of the Partnership upon its dissolution. Promptly following the
complete liquidation and distribution of Partnership property and assets, the
Partnership accountants shall furnish to all Partners, a statement showing the
manner in which the Partnership assets were liquidated and distributed.
18.8 Compliance with Law. The General Partners and each Liquidation
Trustee shall comply with any requirements of the Act or other applicable law
pertaining to the winding up of a limited partnership, upon the completion of
which the Partnership shall be deemed terminated. Upon the complete liquidation
and distribution of the Partnership's assets, the Partners shall cease to be
Partners of the Patnership and the General Partners or the Liquidation Trustee,
as the case may be, shall execute, acknowledge, and cause to be filed all
certificates and notices required by law to terminate the Partnership.
ARTICLE NINETEEN
INDEMNIFICATION
19.1 General. If any threatened, pending or completed action, suite or
proceeding to which a General Partner or an Affiliate, as defined below, was or
is a party or is threatened to be made a party by reason of the fact that such
General Partner or Affiliate (i) is or was a General Partner, or (ii) is an
Affiliate or a General Partner, the Partnership shall hold harmless and
indemnify such General Partner or Affiliate against any and all losses, harm,
liabilities, damages, costs and expenses (including, but not limited to
attorneys' fees, judgments and amounts paid in settlement) incurred by such
General Partner or Affiliate in connection with such action, suit or proceeding
if such General Partner or Affiliate acted in good faith, within the scope of
the General Partners' authority, and in a manner reasonably believed to be in
the best interests of the Partnership, and provided that such General Partner's
or Affiliate's conduct does not constitute negligence, misconduct, or breach of
fiduciary duty to the Limited Partners. Notwithstanding anything to the contrary
in this Agreement, for purposes of this Article 19.1 only, the term "Affiliate"
shall mean any person performing services on behalf of the Partnership who (a)
directly or indirectly controls, is controlled by, or is under common control
with a General Partner; or (b) owns or controls 10% or more of the outstanding
voting securities of a General Partner; or (c) is an officer, director, partner
or trustee of a General Partner; or (d) if a General Partner is an officer,
director, partner or trustee, is any company for which a General Partner acts in
any such capacity.
19.2 Securities Laws Violations. Notwithstanding anything to the
contrary in Article 19.1, the Partnership shall not indemnify a General Partner
or Affiliate, as the term Affiliate is defined in Article 19.1, for any
liability imposed by judgment, and costs associated therewith, including
attorneys fees, arising from or out of a violation of state or federal
securities laws associated with the offer and sale of Units; provided, however,
that indemnification will be allowed for any and all settlements and related
expenses of lawsuits alleging securities laws violations and for any and all
expenses incurred in successfully defending such lawsuits, if a court either (i)
approves the settlement and finds that indemnification of the settlement and
related costs should be made, or (ii) approves indemnification of litigation
costs if a successful defense is made. The General Partner or Affiliate agrees
to apprise the court from which approval of indemnification pursuant to this
Article 19.2 is sought, prior to seeking such approval, of the positions of the
Securities and Exchange Commission and all state securities agencies with which
the Partnership has registered Units for sale to the public with respect to
indemnification for securities laws violations.
19.3 Liability Insurance. The Partnership shall not incur the cost of
that portion of any liability insurance which insures a General Partner or
Affiliate, as the term Affiliate is defined in Article 19.1, against liabilities
as to which such General Partner or Affiliate may not be indemnified under this
Article Nineteen.
A-27
ARTICLE TWENTY
POWER OF ATTORNEY
20.1 General Partners as Attorney-in-Fact. In order to induce the
General Partners to accept each Limited Partner as a Limited Partner of the
Partnership, and in consideration of the General Partners' agreement to serve as
General Partners of the Partnership, each Limited Partner, by the execution of
this Agreement (either individually or through his agent and attorney), does
irrevocably constitute and appoint the General Partners, and each of them, with
full power of substitution and ratification, his true and lawful attorney, in
his name, place and ▇▇▇▇▇, to execute, acknowledge, swear to, file and record in
the appropriate public offices all documents, instruments and certificates of
whatsoever nature which the General Partners determine are necessary or
advisable to execute or conduct the business of the Partnership, including,
without limitation:
(a) those (including counterparts of this Agreement) which the General
Partners deem appropriate to qualify or continue the Partnership as a limited
partnership (or a partnership in commendam) in any jurisdiction in which the
Partnership may conduct business;
(b) those which the General Partners deem appropriate to reflect a
change or modification of the Partnership or this Agreement made in accordance
with the terms of this Agreement;
(c) those which the General Partners deem appropriate to reflect the
admission of additional Limited Partners or General Partners or Substituted
Limited Partners admitted to the Partnership in accordance with the terms of
this Agreement; and
(d) all conveyances and other documents, instruments and certificates
which the General Partners deem necessary, appropriate or convenient to sell,
assign, convey or transfer Partnership property in accordance with the terms of
this Agreement or to effect the dissolution, termination and liquidation of the
Partnership.
20.2 Special and Durable Power. The foregoing grant of authority is
hereby declared to be irrevocable, and a special power coupled with an interest
which shall survive the death, disability, dissolution, bankruptcy, incapacity
or insolvency of the Limited Partners. In the event of any conflict between the
provisions of this Agreement and any document executed or filed by any of the
General Partners pursuant to the Power of Attorney granted in this Article
Twenty, this Agreement shall govern. Each Limited Partner authorizes the General
Partners, and each of them, to take any further action which such General
Partner(s) shall consider necessary or advisable in connection with any of the
foregoing, hereby giving the General Partners full power and authority to do and
perform each and every act or thing whatsoever requisite or advisable to be done
relating to the foregoing as fully as such Limited Partner might or could do if
personally present, and hereby ratifying and confirming all that the General
Partners shall lawfully do or cause to be done by virtue hereof. This Power of
Attorney may be exercised by the General Partners by listing all of the Limited
Partners executing any agreement, certificate, instrument or document with the
single signature of the General Partners, or any of them, in their, his or its
capacity as attomey-in-fact for any and all of them; and shall survive the
delivery of a transfer by a Limited Partner of his Partnership Interest, except
that where the purchaser, transferee or assignee of the whole of such
Partnership Interest with the consent of the General Partner is admitted as a
Substituted Limited Partner, the Power of Attorney shall survive the delivery of
such transfer for the sole purpose of enabling such General Partner to sign,
execute, certify, acknowledge, swear to, file and record any such agreement,
certificate, instrument or document necessary to effect such substitution. The
power hereby conferred to make agreements, certificates, instruments, and
documents shall be deemed to include the power to sign, execute, acknowledge,
swear to, verify, deliver, file, record, and publish the same.
ARTICLE TWENTY-ONE
MISCELLANEOUS
2.11 Reliance upon General Partners. No person or entity dealing with
any General Partner shall be required to determine such General Partner's
authority to make any commitment or undertaking on behalf of the Partnership,
nor to determine any fact or circumstance bearing upon the existence of his or
its authority.
A-28
21.2 Banking. All funds of the Partnership shall be deposited in such
bank account or accounts as shall be determined by the General Partners. Such
bank accounts shall be maintained separately from other bank accounts of any of
the General Partners. All withdrawals therefrom shall be made upon checks signed
by one of the General Partners or by a person authorized to do so by the General
Partners. The funds of the Partnership shall not be commingled with those of any
other person or entity.
21.3 Investment Company Act. The Partnership shall not operate in such
a manner as to be classified as an "investment company" for purposes of the
Investment Company Act of 1940.
21.4 Notices. Any notice or other communication required or permitted
to be given by any provision of this Agreement shall be in writing and shall be
deemed to have been delivered and given for all purposes (i) if delivered
personally to the party to whom the same is directed, or (ii) whether or not the
same is actually received, if sent by registered or certified mail, return
receipt requested, postage and charges prepaid, addressed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Centennial Investment Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, if to the Partnership or any General Partner, or to such other
address as any of the General Partners may from time to time specify by written
notice to the Limited Partners; and if to a Limited Partner, at such Limited
Partner's address as set forth on Schedule A hereto, or to such other address as
such Limited Partner may from time to time specify by written notice to the
Partnership in accordance herewith.
21.5 No Inducement to Advise. Neither the General Partners nor their
Affiliates shall directly or indirectly pay or award any commission or other
compensation to any person engaged by a potential investor for investment advice
as an inducement to such advisor to advise the purchase of Units; provided,
however, that this provision shall not prohibit the Selling Commissions
authorized in the Prospectus and this Agreement which are payable to a
registered broker-dealer or other properly licensed person or entity for selling
Units.
21.6 Nonrecourse Loans. No creditor who makes a nonrecourse loan to the
Partnership shall have, or acquire at any time as a result of making such loan,
any direct interest in the profits, capital or other property of the
Partnership, other than as a secured creditor.
21.7 Issuance of Senior Securities. The Partnership shall not issue
senior securities, except notes to banks and others.
21.8 Section Headings. All headings contained in this Agreement are for
convenience of reference only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provisions
hereof.
21.9 Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the remainder of this Agreement or any
valid clause of any invalid portion. Any such invalid or unenforceable provision
shall be replaced with a valid and enforceable provision which comes closest to
the intent of the parties with respect to such invalid or unenforceable
provision.
21.10 Governing Law. Florida law shall govern the validity of this
Agreement, the construction of its terms and the interpretation of the rights
and duties of the parties.
21.11 Counterpart Execution. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one Agreement.
21.12 Parties in Interest. Each and every covenant, term, provision and
agreement herein contained shall be binding upon, and inure to the benefit of,
the heirs, successors, assigns and legal representatives of the respective
parties hereto.
21.13 Gender and Number. As the context requires, all words used herein
in the singular number shall extend to and include the plural; all words used in
the plural number shall extend to and include the singular; and all words used
in any gender shall extend to and include all genders or be neutral.
21.14 Partition. Each of the parties hereof irrevocably waives during
the term of the Partnership any right, if any, to maintain an action for
partition with respect to Partnership property.
21.15 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof, and no
amendment, modification, or alteration of the terms shall be binding unless the
same be in writing, dated subsequent to the date hereof, and duly executed as
required by law.
A-29
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written by the General Partners, the Initial Limited Partner and the
Limited Partners.
GENERAL PARTNERS:
Sworn to this 31st day of December 1986:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------- ------------------------------
Notary Public in and for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Orange County, Florida
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------- ------------------------------
Notary Public in and for ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Orange County, Florida
CENTENNIAL REALTY CORPORATION
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------------- Title: General Partner
Notary Public in and for
Orange County, Florida
ALL THE LIMITED PARTNERS LISTED ON
THE ATTACHED SCHEDULE A
Sworn to this 31st day of December, 1986.
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as
Attomey-in-Fact for the
Limited Partners set
forth on Schedule A
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------- --------------------------------
Notary Public in and for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Orange County, Florida
INITIAL LIMITED PARTNER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. Wall
---------------------------------------- --------------------------------
Notary Public in and for ▇▇▇▇▇▇ ▇. Wall
Orange County, Florida
A-30
