EXHIBIT 10.1
2008 AMENDMENT TO THE LIMITED PARTNERSHIP AGREEMENT
THIS 2008 AMENDMENT TO THE LIMITED PARTNERSHIP AGREEMENT ("Amendment"),
dated as of December 1, 2008 (the "Effective Date"), is made by JUSTICE
INVESTORS, a California partnership (the "Partnership"), PORTSMOUTH SQUARE,
INC., a California corporation ("Portsmouth" or "Managing General Partner"),
EVEN CORPORATION, formerly known as "▇▇▇▇ Garage Corporation", a California
corporation ("▇▇▇▇" or "Co-General Partner") (Portsmouth and ▇▇▇▇, each a
"General Partner" and collectively, the "General Partners"), and the parties
listed on the signature pages of this Amendment (each a "Limited Partner" and
collectively, the "Limited Partners") (the General Partners and the Limited
Partners, each a "Partner" and collectively, the "Partners") (the Partnership
and the Partners, each a "Party" and collectively, the "Parties").
RECITALS
A. On July 10, 1967, certain Partners formed the Partnership by filing a
Certificate of Limited Partnership with the Office of the Recorder of the City
and County of San Francisco on July 10, 1967. The Partners are subject to that
certain Limited Partnership Agreement dated July 10, 1967, as amended by that
certain Amended Limited Partnership Agreement dated March 20, 1968, as amended
by that certain Amended Limited Partnership Agreement dated January 1, 1979
("1979 Restated Agreement"), as amended by that certain Amendment of
Partnership Agreement dated as of June 27, 2005 ("2005 Amendment"). The
Partners agree that the 1979 Restated Agreement, as amended by the 2005
Amendment (collectively, the "Partnership Agreement") is the operative document
of the Partnership.
B. In or around 1983, Justice Enterprises, Inc., which was one of the two
original general partners, withdrew as a general partner and ▇▇▇▇ was made a
general partner with Portsmouth. ▇▇▇▇ has been acting as the Managing General
Partner of the Partnership, and Portsmouth has been acting as the other General
Partner.
C. The Partnership is the owner of that certain real property located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Property"), on which a hotel
(the "Hotel") and a garage (the "Garage") are located. The Hotel is currently
managed by Prism Hospitality, L.P., a Texas limited partnership ("Prism")
pursuant to that certain Management Agreement dated as of February 2, 2007, by
and between the Partnership and Prism (the "Hotel Management Agreement"). The
persons operating the Hotel are employees of a subsidiary of the Partnership.
The Garage is currently managed by Ace Parking Management, Inc. ("Ace")
pursuant to that certain Parking Facility Management Agreement dated as of
September, 1, 2005, by and between ▇▇▇▇ and Ace, which was assigned to the
Partnership as of July 1, 2008 (the "Garage Management Agreement"). The
Partnership also leases portions of the Property to various tenants. These
tenants include the Chinese Cultural Center, a spa and various antennae on the
roof of the Hotel.
D. The General Partners have determined that it will be beneficial to the
Partnership to modify the powers and duties of the General Partners so that
Portsmouth takes on ▇▇▇▇'▇ former role as Managing General Partner and
▇▇▇▇ takes on Portsmouth's former role as the other General Partner. The
General Partners have therefore recommended to the Limited Partners that the
Partnership Agreement be amended to modify the management roles and
compensation of the General Partners.
E. The Partners desire to amend the Partnership Agreement pursuant to the
terms and conditions of this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and the mutual provisions
contained in this Amendment, the Parties agree as follows:
AGREEMENT
1. Managing General Partner; Co-General Partner. The Partnership has two
General Partners. Notwithstanding any contrary language in any prior
Partnership agreements, as of the Effective Date, the Managing General Partner
is Portsmouth (the "Managing General Partner") and the other General Partner is
▇▇▇▇ (the "Co-General Partner").
2. Partnership Office. Each General Partner shall have access to the
office of the Partnership located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Partnership Office") and the Property. The
furniture, fixtures, and equipment currently located at the Partnership Office
shall remain the property of the Partnership. At the sole cost of the
Partnership, each General Partner shall be provided with a computer terminal,
desk, file space, access to all Partnership office equipment, and incidental
assistance from the Partnership clerical staff as may be necessary to assist
such General Partner in the performance of such General Partner's duties.
3. Removal of a General Partner. A General Partner may be removed only
upon the consent of at least seventy-five percent (75%) of the interests of the
Limited Partners.
4. Amendment of Partnership Agreement. Amendments to the Partnership
Agreement may be made only upon the consent of the General Partners and at
least seventy five percent (75%) of the interests of the Limited Partners.
5. Purpose of Partnership. Paragraph 4 of the Partnership Agreement is
hereby repealed and replaced with the following Paragraph 4:
4. Business of the Partnership. The business of the Partnership is
limited to the acquisition, development, management, operation,
leasing and sale of the real property commonly known as the Hilton
San Francisco Financial District in the City and County of San
Francisco, California. A description of said property is attached
hereto, marked Exhibit "A", and made a part hereof. The Partnership
shall not engage in any other business or activity which is not
directly or indirectly related to such primary purpose.
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6. Powers and Duties of the Partners. Paragraph 9 of the Partnership
Agreement is hereby repealed and replaced with the following Paragraph 9:
9. Powers and Duties of the Partners.
9.1 Powers and Duties of the Managing General Partner. The
Managing General Partner shall devote such time to the Partnership
as shall be necessary to conduct the Partnership business. Subject
to the remaining provisions of this Agreement, the Managing General
Partner shall be responsible for the management of the Partnership
business and shall have all rights, powers and duties generally
conferred by law or necessary, advisable or consistent in connection
therewith, or in connection with the business of the Partnership.
Without limiting the foregoing, and subject to any restrictions set
forth in this Agreement (including, without limitation, any
consulting and participation rights of ▇▇▇▇ as set forth in
subparagraph 9.3, the approval rights of ▇▇▇▇ as set forth in
subparagraph 9.4, and the requirements of subparagraph 9.5 as to the
asset manager, the Managing General Partner shall have the following
rights and obligations:
9.1.1 Expenditures. To expend the capital and revenues of the
Partnership in furtherance of the Partnership business, in
accordance with the budget approved by both General Partners.
9.1.2 Agreements and Other Documents. To enter into and carry out
agreements of any kind and to do any and all other acts and things
necessary, proper or convenient to carry out the Partnership
purpose; and to prepare, execute, acknowledge, record, file and/or
deliver any and all reports, instruments or documents and to take
all actions, required or deemed necessary, reasonable or desirable
by the Managing General Partner to effectuate any of the foregoing,
to comply with requirements of applicable law or to comply with the
provisions of this Agreement.
9.1.3 Insurance. To acquire and enter into any contract of
insurance of any type which the Managing General Partner deems
necessary or desirable for the protection of the Partnership, for
the conversion of its assets, for compliance with loan covenants
made by the Partnership, or for any purpose convenient or beneficial
to the Partnership.
9.1.4 Employment of Personnel. To employ or engage persons in the
operation and management of the Partnership business or assets,
including but not limited to supervisory managing agents, building
contractors, engineers, appraisers, insurance brokers, real estate
brokers and loan brokers, on such terms and for such compensation as
the Managing General Partner shall determine.
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9.1.5 Investments. To invest Partnership cash or, pending other
investment in furtherance of the Partnership's purpose, the proceeds
derived from the sale of Partnership interests, in United States
Treasury obligations, prime quality commercial paper, certificates
of deposit, deposit or other obligations of insured commercial
banks, savings banks or savings and loan associations, or in any
other similar interim investments; provided that such investments
are generally considered to be safe, cash-equivalent liquid
investments. Partnership funds shall not be used to make any
speculative investments or purchase any equity interests.
9.1.7 Partnership Expenses. To pay Partnership expenses (including
expenses in connection with an audit or review of Partnership tax
returns or a Partnership matter in a Partner's tax return) and to
make all decisions relative to Partnership accounting, including
without limitation, determining the source of Partnership
Disbursements, and whether disbursements are to be made from
Partnership operating income or from some other source such as
Partnership reserves, proceeds from the sale of Partnership
interests, or proceeds from the sale or refinancing of Partnership
property.
9.1.8 Reimbursable Expenses. To be reimbursed by, or to charge,
the Partnership for reasonable expenses incurred by the Managing
General Partner on behalf of the Partnership, provided such expenses
were included in the approved budget or are otherwise approved by
the Co-General Partner. The Managing General Partner will endeavor
to have such Partnership expenses billed directly to the Partnership
whenever feasible. The foregoing notwithstanding, the Managing
General Partner shall not charge to the Partnership, and shall
reimburse the Partnership for, any legal, accounting or other costs
incurred by the Managing General Partner or the Partnership due to
requirements of the Managing General Partner (including but not
limited to costs related to the public reporting and/or ▇▇▇▇▇▇▇▇-
▇▇▇▇▇ requirements applicable to the Managing General Partner), but
only to the extent those costs exceed the costs that would be
incurred by the Partnership if the Managing General Partner had no
such requirements.
9.2 Duty to Cooperate with Co-General Partner. In addition to its
other obligations, the Managing General Partner shall inform and
coordinate with the Co-General Partner as follows:
9.2.1 Information. The Managing General Partner has the obligation
to inform Co-General Partner of all significant operational matters
concerning the Partnership and the Property with enough time and
sufficient detail to permit Co-General Partner to carry out and
perform Co-General Partner's fiduciary duties as a General Partner.
Specifically, and not by way of limitation, the Managing General
Partner, directly or by direction to the Asset Manager (a) will
prepare and deliver to Co-General Partner notices of any of the
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matters set forth in subparagraph 9.4 (Decisions of Both General
Partners) or joint decisions identified in subparagraph 9.5 (Asset
Manager) within a reasonable time after learning of a matter
requiring a joint decision; (b) will provide Co-General Partner
with timely and thorough copies of any reports received by the
Managing General Partner about Hotel and Garage operations,
including, without limitation, the results of audits, auditor's
recommendation letters, financial projections, hotel management
reports, proposed budgets, significant proposals to change a budget
that has been previously adopted, materials prepared for meetings
with the Managing General Partner, notices by any governmental
entity, and any legal notices, which reports shall include the same
level of detail as the reports that have been made available to the
Managing General Partner; (c) will provide the Co-General Partner
with complete copies of any written materials that Managing General
Partner prepares concerning the Hotel and Garage operations,
including meeting agendas and materials; (d) upon request by Co-
General Partner, will prepare and deliver to Co-General Partner
reports concerning the Partnership, the Property and the operations
of the Hotel and Garage within a reasonable time after such request;
and (e) upon request by the Co-General Partner, will facilitate Co-
General Partner's access to senior staff of the Hotel and Garage
within a reasonable time after such request.
9.2.2 Meetings. The Managing General Partner shall meet with the
Co-General Partner on at least a quarterly basis. The Managing
General Partner and the Co-General Partner shall set a schedule of
regular meeting to facilitate the Co-General Partner's participation
in management decisions which shall include, without limitation,
decisions concerning budgets (including forecasts and other budget
updates) and capital improvements. The Managing General Partner
will provide the Co-General Partner with reasonable advance notice
of any meeting with the Asset Manager or the managers or operators
of the Hotel and Garage, to the extent that those meetings relate to
a change in senior staff of the Hotel or Garage or a material change
(a) in Hotel or Garage operations or (b) in the use or management of
the Property.
9.3 Powers and Duties of the Co-General Partner. The Co-General
Partner shall devote such time to the Partnership as shall be
necessary to conduct the Partnership business. The Co-General
Partner shall consult with the Managing General Partner and
participate in decisions that require the consent of both General
Partners, which are listed below in subparagraphs 9.4 and, as
applicable, 9.5. Without limiting the foregoing, and subject to the
Managing General Partner's primary responsibility for the management
of the Partnership's business, the Co-General Partner has the
following obligations and express rights, as applicable, to
participate in the following activities of the Partnership:
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9.3.1. Documents. When required by the Partnership Agreement or
applicable law, the Co-General Partner shall execute and deliver
partnership documents on behalf of the Partnership in a timely
fashion.
9.3.2 Service Providers. The Co-General Partner has the right to
participate (through oversight and consultation) in supervising and
evaluating the work of all persons necessary to provide services for
the management and operation of the Hotel and Garage and, as set
forth in subparagraphs 9.4.1 below, to participate in making
decisions concerning the employment of senior Hotel and Garage
staff.
9.3.3 Reports. The Co-General Partner shall have the right to
participate (through oversight and consultation) in preparing or
causing to be prepared all reports to be provided to the Partners or
lenders on a monthly, quarterly, or annual basis consistent with the
requirements of this Agreement.
9.3.4 Coordination. The Co-General Partner shall have the right to
participate (through oversight and consultation) in coordinating all
present and future development, construction, or rehabilitation of
the Property.
9.3.5 Compliance. The Co-General Partner shall have the right to
assist the Managing General Partner in monitoring compliance with
all government regulations and files and to assist in supervising
the filing of all required documents with government agencies in a
timely fashion.
9.3.6 Communications with Managers. Except as prohibited or
otherwise restricted by the Hotel Management Agreement, the Garage
Management Agreement, other written agreements between the
Partnership and a manager or lessee of a portion of the Property or
of the business of the Partnership and any and all successor
agreements, the Co-General Partner shall have the right to
communicate directly with senior staff of the Hotel and Garage and
to request and to receive the same information from such persons as
is provided by them to the Managing General Partner.
9.3.7 Reimbursable Expenses. To be reimbursed by, or to charge,
the Partnership for reasonable expenses incurred by the Co-General
Partner on behalf of the Partnership, provided such expenses were
included in the approved budget or are otherwise approved by the
Managing General Partner. The Co-General Partner will endeavor to
have such Partnership expenses billed directly to the Partnership
whenever feasible. The foregoing notwithstanding, the Co-General
Partner shall not charge to the Partnership, and shall reimburse the
Partnership for, any legal, accounting or other costs incurred by
the Co-General Partner or the Partnership due to requirements of the
Co-General Partner, but only to the extent those costs exceed the
costs that would be incurred by the Partnership if the Co-General
Partner had no such requirements.
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9.4 Decisions of Both General Partners. Notwithstanding any other
provision of this Agreement to the contrary, the following matters,
as well as any joint decisions related to the Asset Manager
identified in subparagraph 9.5, require the approval of both the
Managing General Partner and the Co-General Partner in a timely
fashion:
9.4.1 Senior Hotel and Garage Managers. To determine the duties
of, to engage, to retain, and/or to terminate the employment of the
Hotel's General Manager and the Garage's senior manager;
9.4.2 Hotel and Garage Agreements. To enter into, amend or
terminate the Hotel Management Agreement or Garage Management
Agreement and any subsequent management agreements relating to the
Hotel and Garage;
9.4.3 Leasing Decisions. To enter into, amend or terminate any
lease of any portion of the Property;
9.4.4 Legal Matters. To initiate or undertake any legal action, to
confess any judgment against the Partnership or to settle any legal
matter for an amount in excess of ten thousand dollars ($10,000.00);
9.4.5 New Partners. To admit any person as a General Partner or a
Limited Partner, except as permitted by Paragraph 17 of this
Agreement;
9.4.6 Bankruptcy, Etc. To file a bankruptcy case, to execute or
deliver any assignment for the benefit of the creditors of the
Partnership, or otherwise take any act or action to seek protection
from the Partnership's creditors;
9.4.7 Transfer of General Partner Interest. To transfer a General
Partner's interest as the General Partner in the Partnership, except
as permitted in this Agreement;
9.4.8 Borrowing. To borrow money from any lender, including any
Partner; to mortgage or subject to any other security device any
portion of the Property or any other property of the Partnership; to
obtain replacements of any mortgage or other security device; and to
prepay in whole or in part, refinance, increase, modify, consolidate
or extend any mortgage or other security device, all of the
foregoing on such terms, in such amounts and by such means
identified in such security devices or modifications thereto;
9.4.9 Appraisals. To approve the draft of any appraisal of the
Partnership or the Property;
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9.4.10 Budgets. To approve the annual budgets for the Hotel, the
Garage and the Partnership, including, without limitation, capital
improvements, reserves and partnership distributions, insurance
coverage, material contracts and expenditures, and engagement of
consultants, and any revisions or reforecasts thereto;
9.4.11 Reserves and Distributions. To establish cash reserves for
contingencies and to make distributions of Partnership income in
accordance with Paragraph 13 of the Partnership Agreement, provided,
however, that the General Partners may jointly elect not to make a
distribution in any calendar quarter if they reasonably determine
that by doing so the Partnership would not be able to maintain
adequate reserves;
9.4.12 Development, Construction or Rehabilitation. To approve
major decisions concerning the present or future development,
construction or rehabilitation of the Property;
9.4.13 Non-Recurring Expenditures. To approve any non-recurring
expenditure or contract in excess of twenty thousand dollars
($20,000);
9.4.14 Modifications. To approve any modification of a non-
recurring expenditure or contract in excess of ten thousand dollars
($10,000); and
9.4.15 Tax Elections. To make elections (or revocations thereof)
under federal or state tax law.
9.5 Asset Manager. The Partners agree as follows with respect to
the asset manager engaged by the Partnership to oversee the Property
and the day-to-day operations of the Partnership (including any
service providers engaged in the future to perform any of the
functions currently being performed by the Asset Manager) (the
"Asset Manager"):
9.5.1 Partnership Employee. The Asset Manager will be employed by
the Partnership, rather than by either of the General Partners, and
may not be an employee or director of either of the General Partners
unless the other General Partner gives its consent.
9.5.2 Employment of Asset Manager. The Managing General Partner
will be responsible for interviewing candidates, negotiating and
recommending compensation agreements and employment terms
commensurate with the Asset Manager's job description and with
industry standards, and for making recommendations as to hiring and
compensation decisions. Decisions to determine or change the duties
or compensation of, to engage, to retain, and/or to terminate the
employment of the Asset Manager will be made by mutual consent of
both General Partners. The General Partners have agreed to hire
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as the initial Asset Manager on such terms and
for such compensation as the General Partners shall jointly
determine.
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9.5.3 Supervision and Evaluation. The Managing General Partner
shall have the obligation to supervise and evaluate the work of the
Partnership's Asset Manager, and the Co-General Partner shall have
the right to assist the Managing General Partner in such supervision
and evaluation.
9.5.4 Communication with Co-General Partner. The Co-General
Partner shall have the right to communicate directly with the Asset
Manager and to receive the same information from the Asset Manager
as is provided by the Asset Manager to the Managing General Partner.
9.6 Management Decisions. With respect to the management, conduct
and operation of the Partnership business, and subject to the
exceptions set forth in subparagraph 9.4 (Decisions of Both General
Partners) and, as applicable, subparagraph 9.5 (Asset Manager), the
decisions of the Managing General Partner shall prevail.
7. General Partner Compensation. Paragraph 10 of the 1979 Restated
Agreement is hereby repealed and replaced with the following Paragraph 10:
10.The General Partners shall be entitled to receive reasonable
compensation for services rendered to the Partnership consistent
with past practices. The General Partners are hereby authorized to
enter into a Compensation Agreement for the purpose of setting the
compensation that the General Partners shall be entitled to receive.
The Compensation Agreement may be amended, modified and restated by
agreement of the General Partners. In the event that there is only
one (1) General Partner, the Compensation Agreement may be amended
only with approval of at least seventy-five percent (75.0 %) of the
interests of the Limited Partners.
8. Resolution of Disputes. Paragraph 11 of the Partnership Agreement is
hereby repealed and replaced with the following Paragraph 11:
11. Resolution of Disputes.
11.1 Mediation. If a dispute, controversy or claim: (i) occurs,
in law or in equity; (ii) involves any of the Parties; and (iii)
arises under, out of, in connection with, or in relation to the
Partnership, the Property, this Agreement, any amendments to this
Agreement or a breach of this Agreement, the disputing Parties agree
first to try in good faith to settle the dispute by mediation under
the mediation rules of JAMS or its successor organization before
resorting to arbitration. The disputing Parties agree that
mediation shall be completed within thirty (30) days of a
notification of a dispute, unless otherwise agreed by such Parties
in writing.
11.2 Arbitration of Disputes. If the mediation provided by
subparagraph 11.1 (Mediation) under the time period provided under
subparagraph 11.1 (Mediation) does not resolve the dispute, the
disputing Parties agree that neutral binding arbitration shall
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decide and settle such dispute. The disputing Parties agree to hold
the arbitration in San Francisco, California, and to follow the
rules then applicable of JAMS or its successor organization. The
disputing Parties agree that the arbitration shall be completed
within one hundred twenty (120) days of the completion of the
mediation under subparagraph 11.1 (Mediation).
11.2.1 Selection of Arbitrators. The disputing Parties shall
select one (1) neutral arbitrator in accordance with the rules of
JAMS. The arbitrator shall have significant experience in
commercial real estate and management matters.
11.2.2 Decision of Arbitrator. The disputing Parties shall have a
mandatory pre-hearing document exchange. The arbitrator shall issue
a written decision which does not need to be a reasoned award. The
decision in writing of the arbitrator shall be final and binding on
each and all of the Parties. Judgment may be entered on such award
in any court having jurisdiction thereof.
11.3 Injunctive Relief and Remedies to Enforce Arbitration and
Mediation. The Parties recognize that each Party will have no
adequate remedy at law for breach by any of the other Party of any
of the agreements contained in this Agreement and, in the event of
any such breach, the Parties agree and consent that any of the other
Parties shall be entitled to a judicial decree of specific
performance, mandamus or other appropriate remedy to enforce this
Agreement. The filing of a judicial action to enable the recording
of a notice of pending action, order of attachment, receivership,
injunction or other provisional remedy, shall not constitute a
waiver of the right to mediate or arbitrate under this Agreement.
In no event shall a Party have the right to demand mediation or
arbitration after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. This
agreement to mediate or arbitrate shall be specifically enforceable
under the prevailing mediation and arbitration laws.
11.4 Legal Fees and Costs. Notwithstanding any contrary language
in any prior documents relating to the management and operations of
the Partnership or the compensation of the Partnership's General
Partners, any legal fees and costs arising out of any dispute,
controversy or claim of the type described in subparagraph 11.1
above shall be borne by the party that incurred such fees and costs.
9. Limited Partnership Interest Transfers. Paragraph 17 of the
Partnership Agreement is hereby repealed and replaced with the following
Paragraph 17:
17. Limited Partnership Interest Transfers. The interest of a
Limited Partner is transferable (including transfers to a Permitted
Transferee) only with the consent of both General Partners, which
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consent shall not be unreasonably withheld. For purposes of this
Paragraph 17, a "Permitted Transferee" is: (i) the spouse or member
of the family of the Limited Partner; (ii) a custodian, trustee
(including a trustee of a voting trust), executor, or other
fiduciary for the account of the Limited Partner, the spouse of the
Limited Partner or members of the family of the Limited Partner; or
(iii) a trust for the benefit of the Limited Partner.
17.1 Representations by Portsmouth and Proposed Transferee. When
any transfer of a Limited Partner interest is proposed (other than a
transfer to a Permitted Transferee), Portsmouth and the Proposed
Transferee each shall separately provide the Partnership and ▇▇▇▇
with affirmative written representations (a) that to the knowledge
of the party making the representation, the proposed transferee is
not an Affiliate of Portsmouth (b) that the party making the
representation has not entered into and it does not presently intend
to enter into any agreement by which such interest will be
transferred to Portsmouth, or an Affiliate of Portsmouth, and (c)
that the party making the representation is not aware of any other
reason that the proposed transfer reasonably could result in a
Material Reassessment of the Property. For purposes of this
Paragraph 17, an "Affiliate" of Portsmouth is any party that is 50%
or more owned by Portsmouth or any Affiliate of Portsmouth.
17.2 Withholding Consent. Within ten business (10) days after
Portsmouth and the Proposed Transferee have delivered the written
representation described in Paragraph 17.1, either General Partner
may withhold consent to a proposed transfer of a Limited Partner
interest. The non-consenting General Partner shall provide, at the
time such consent is withheld, a written explanation to the other
General Partner specifying in reasonable detail (including specific
citations to applicable legal authority and factual evidence) the
reasons why consent was withheld. The written explanation will also
include any specific information that the non-consenting General
Partner reasonably needs in order to provide its approval. The
withholding of consent is not unreasonable if the objecting General
Partner reasonably believes that the proposed transfer would
materially harm the Partnership or the Property or if the proposed
transfer reasonably could result in a Material Reassessment of the
Property. "Material Reassessment of the Property" shall mean that as
a result of the proposed transfer, the Property is subject to
reassessment and that such reassessment would result in a material
increase in property taxes assessed against the Property that are
payable by the Partnership in any year or years.
17.3 Material Reassessment Risk. If a General Partner withholds
consent to a proposed transfer on grounds that a Material
Reassessment of the Property reasonably could result, the refusal of
such General Partner to consent to the proposed transfer shall be
reasonable unless the proposed transferee or the other General
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Partner has provided to the objecting General Partner written
materials (including specific citations to applicable legal authority
and factual evidence) reasonably satisfactory to the objecting
General Partner demonstrating that the proposed transfer will not
result in a Material Reassessment of the Property. In the event that
such written materials are delivered to the objecting General
Partner, the consent of the objecting General Partner shall be
presumed to have been given unless, within ten business (10) days
after receipt of such written materials, the objecting General
Partner notifies the other General Partner of its continuing
objection. In such event, either General Partner may pursue dispute
resolution as provided in Paragraph 11 of the Partnership Agreement.
17.4 New Partners to Be Bound by Partnership Agreement.
Notwithstanding any other provision in the Partnership Agreement, a
transferee shall be admitted as a Limited Partner only upon the
transferee's agreement to being bound by the terms of this
Partnership Agreement.
17.5 Assignment of Distribution Rights. Notwithstanding any other
provision in the Partnership Agreement, each Limited Partner shall
have the right to assign his, her or its right to distributions from
the partnership.
17.6 Examination Rights. Each Partner shall have the right to
examine the books and records of the Partnership upon reasonable
notice to the General Partners.
10. Partnership Interests. Updated schedules of the percentage ownership
interests of all Partners are attached hereto as Exhibit B, replacing Exhibit B
to the 1979 Restated Agreement and Exhibits A, B and C to the 2005 Amendment.
11. Conflict Between Documents. In the event of a conflict between the
Partnership Agreement and this Amendment, the Partners agree that this
Amendment shall control.
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12. Partnership Documents. Except as expressly set forth herein, all
provisions of the Partnership Agreement remain in full force and effect. The
General Partners Compensation Agreement dated as of February 23, 2006, has been
replaced as of the Effective Date by the General Partners Compensation
Agreement of even date herewith.
IN WITNESS WHEREOF, the Partners have caused this Amendment to be executed
as of the Effective Date.
"MANAGING GENERAL PARTNER" "CO-GENERAL PARTNER"
PORTSMOUTH SQUARE, INC. ▇▇▇▇ CORPORATION
a California corporation a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Vice President Chairman of the Board
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇,
Secretary
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[Exhibits and limited partner signature pages omitted]
