CORPORATE REALTY INCOME FUND I, L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT ("Partnership Agreement")
entered into as of November 25, 1985, and amended as of February
12, 1986, March 19, 1986, March 26, 1986, March 31, 1986, June 2,
1986, July 3, 1986, August 5, 1986, September 3, 1986, September
15, 1986, October 3, 1986, October 17, 1986, November 14, 1986,
December 15, 1986, January 15, 1987, January 16, 1987, February 13,
1987, March 13, 1987, April 15, 1987, May 15, 1987, June 15, 1987,
July 15, 1987, August 14, 1987, September 15, 1987, October 2,
1987, March 1, 1995, and July 24, 1995 among 1345 Realty
Corporation, a Delaware corporation, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
each as a General Partner, and SB Depositary Corp., a Delaware
corporation, as the Assignor Limited Partner, all of whom form a
limited partnership pursuant to the Delaware Revised Uniform
Limited Partnership Act, upon the following terms and conditions:
1. NAME AND PLACE OF BUSINESS
The name of the Partnership is Corporate Realty Income Fund I,
L.P., its registered office in Delaware is Corporation Trust
Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its
registered agent for service of process at that address is The
Corporation Trust Company. The Partnership's principal place of
business is ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or
such other place or places as the General Partners may hereafter
determine.
2. DEFINITIONS AND GLOSSARY OF TERMS
The following terms used in this Agreement shall (unless
otherwise expressly provided herein or unless the context otherwise
requires) have the following respective meanings:
"Acquisition Expenses" shall mean expenses including but not
limited to legal fees and expenses, travel and communications
expenses, costs of appraisals, non-refundable option payments on
property not acquired, accounting fees and expenses, title
insurance, costs of surveys, transfer taxes, mortgage taxes,
recording fees, engineers reports and miscellaneous expenses
related to selection and acquisition of properties, whether or not
acquired.
"Acquisition Fees" shall mean the total of all fees and
commissions paid by any person to any person, including any
Sponsor, in connection with the purchase or development of any
Property by the Partnership, whether designated as real estate
commission, selection fee, non-recurring management fee, non-recurring
start-up fee, development fee (which is defined as a fee
for the packaging of a Partnership Property, including negotiating
and approving plans and undertaking to assist in obtaining zoning
and necessary variances and necessary financing for the specific
Property, either initially or at a later date), or any fee of a
similar nature, however designated, but not any loan fee
("points"). Acquisition Fees shall not include Acquisition
Expenses.
"ACRS" shall mean the Accelerated Cost Recovery System
provided for in the Code which permits depreciation of real and
personal property over predetermined "recovery periods."
"Adjusted Cash From Operations" shall mean with respect to any
period, Cash Flow less any amount set aside for the restoration or
creation of reserves.
"Adjusted Invested Capital" shall mean the Original Invested
Capital paid for or attributable to the original purchaser of a
Unit reduced by the total of cash distributed with respect to such
Unit from Cash From Sales or Refinancings and from reserves
released pursuant to Paragraph 3.2 (to the extent such reserves
come from Net Proceeds).
"Affiliate" shall mean: (i) any officer, director, or general
partner of a General Partner; (ii) any person, corporation,
partnership, trust or other entity controlling, controlled by or
under common control with a General Partner or any person described
in (i) above; and (iii) any officer, director, or general partner
of any person described in (ii) above. For purposes of this
definition, the term "control" shall also mean the control or
ownership of 10% or more of the outstanding voting securities of
the entity referred to.
"Assignor Limited Partner" shall mean SB Depositary Corp., an
affiliate of the Corporate General Partner and the Selling Agent,
or its successor, which will acquire and hold up to 3,200,000
Limited Partnership Interests on behalf of those persons who
purchase Units, on the basis of one Limited Partnership Interest
for each Unit, and will assign to those persons its rights and
interest in and under such Limited Partnership Interests.
"Asset Management Fee" shall mean the fee payable to the
General Partners in accordance with Paragraph 9.4.
"Book Amortization" shall mean, as provided in Paragraph
11.2(c), the amount of amortization as computed for book purposes
with respect to a Property which may be greater or less than
amortization as computed for tax purposes.
"Book Depreciation" shall mean, as provided in Paragraph
11.2(c), the amount of depreciation as computed for book purposes
with respect to a Property which may be greater or less than
depreciation as computed for tax purposes.
"Book Disparity" shall mean, as provided in Paragraph 11.2(c),
the disparity which may exist when Property is reflected in the
capital accounts of the Partners and Unitholders at a fair market
value that differs from the adjusted basis of such property.
"Book Gain" and "Book Loss" shall mean, as provided in
Paragraph 11.2(c), the gain or loss computed for book purposes with
respect to a Property which may be greater or less than gain or
loss as computed for tax purposes.
"Capital Account Deficiency" shall mean the amount by which
Negative Balances exceed minimum gain and capital accounts, if any,
defined in Paragraph 11.1.3.
"Cash From Initial Financing" shall mean the net cash realized
by the Partnership during that portion of the term of the
Partnership ending two years after the Final Closing Date from (i)
the initial financing of any Partnership Property and (ii) the
replacement of initial financing with respect to any Partnership
Property with permanent financing.
"Cash Flow" means, with respect to any period, (a) all cash
receipts derived from the operation of the Partnership Properties
(exclusive of any Cash From Sales or Refinancings or Cash From
Initial Financing), plus (b) all cash receipts from Partnership
operations (including any interest from temporary investments of
the Partnership pursuant to Paragraph 15.2.17 and any cash reserves
deemed no longer necessary for Partnership operations by the
General Partners) without deduction or amortization, less (c) cash
receipts used to pay debt service payments and other operating
expenses (including the Asset Management Fee, Property Management
Fee and Partnership Management Fee).
"Cash From Sales or Refinancings" shall mean the net cash
received by the Partnership from the Sale or Disposition of any
Partnership Property after retirement of applicable mortgage debt
and all expenses related to the transaction payable to
non-Affiliates, together with the principal amount of, and interest
received on, any note taken back by the Partnership upon the sale
of a Property; however, Cash From Sales or Refinancings shall not
include Cash From Initial Financing or Cash Reserves released
pursuant to Paragraph 3.2.
"Cash Reserves" shall mean that portion of the Gross Proceeds
maintained according to the provisions of Paragraph 3.2.
"Certificate of Limited Partnership Interest" means a
Certificate signed on behalf of the Partnership by a General
Partner evidencing the interest of a Limited Partner, including the
Assignor Limited Partner on behalf of the Unitholders, in the
Partnership.
"Class A Units" shall mean those Units subscribed for,
purchased by and held on the Final Closing Date by taxable
investors.
"Class B/TE Units" shall mean those Units subscribed for,
purchased by and held on the Final Closing Date by tax-exempt
investors.
"Class A Depreciation" shall mean the depreciation,
approximately 19 ACRS straight line depreciation, allocated to
Class A Units.
"Class B/TE Depreciation" shall mean the depreciation,
approximately 40 ACRS straight line depreciation, allocated to
Class B/TE Units to the extent that there is a reduction in the
Partnership's depreciation deductions as a result of Class B/TE
Units being issued.
"Closing Date" shall mean each date designated by the General
Partners on which subscribers for Units are accepted as Unitholders
as a result of purchases occurring during the offering period.
"Initial Closing Date" shall mean the date on which the first
closing for Units sold pursuant to the Prospectus occurs. "Final
Closing Date" shall mean the date on which the last closing for
Units sold pursuant to the Prospectus occurs. "Additional Closing
Date" shall mean each date between the Initial Closing Date and the
Final Closing Date on which a closing for Units sold pursuant to
the Prospectus occurs.
"Code" shall mean the Internal Revenue Code of 1954, as
amended, or corresponding provisions of subsequent revenue laws.
"Controlling Person" shall mean any person, regardless of
title, who performs executive or senior management functions for
the General Partners or Affiliates similar to those of executive
management or senior management, and directors, or those holding 5%
or more equity interest in the General Partners or Affiliates, or
persons having the power to direct or cause the direction of the
General Partners or Affiliates through ownership of voting
securities, by contract or otherwise. It is not intended that every
person who carries a title such as vice president, senior vice
president, secretary or treasurer of a General Partner or an
Affiliate thereof be considered a Controlling Person.
"Corporate General Partner" shall mean 1345 Realty
Corporation, a Delaware corporation and an affiliate of the Selling
Agent and the Assignor Limited Partner, or any other person,
corporation or other entity which succeeds it in such capacity.
"Depositary Receipt" shall mean the certificate delivered by
the Assignor Limited Partner, registered in the name of a
Unitholder or its nominee, evidencing the Unitholder's ownership of
Units.
"Depreciation" means cost recovery deductions and depreciation
deductions pursuant to Section 168 or 167 of the Code.
"Distributable Cash From Operations" shall mean Adjusted Cash
From Operations.
"Distributions" shall mean any cash or other property
distributed to Partners arising from their interests in the
Partnership, but shall not include any payment to the General
Partners under the provisions of Articles 9 or 10.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated
thereunder.
"Expense Allowance" shall mean the accountable expense
allowance payable by the Partnership to the Selling Agent pursuant
to Paragraph 9.2.
"Front-End Fees" shall mean fees and expenses paid by any
person for any services rendered in connection with and during the
Partnership's organization and acquisition stages including
Organization and Offering Expenses, Acquisition Fees and
Acquisition Expenses, and any other similar fees or expenses.
"General Partners" shall mean 1345 Realty Corporation and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and any other person, corporation or other
entity which succeeds any of such persons in their respective
capacities.
"Gross Proceeds" shall mean the total proceeds from the sale
of Units before deductions for Organization and Offering Expenses.
"Gross Revenues" shall mean all rent and other revenues from
the operation of real property owned by the Partnership other than
from security deposits paid by lessees thereof, together with any
interest earned on funds held by the Partnership. The term "Gross
Revenues" shall not include revenues from Sales or Dispositions of
Partnership Properties.
"Individual General Partner" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇., a New York resident, or any other person who succeeds him in
such capacity.
"Investment in Properties" shall mean the amount of Gross
Proceeds actually paid or allocated to the purchase, development,
construction or improvement of Properties acquired by the
Partnership (including working capital reserves allocable thereto
in an amount of up to three percent of the Gross Proceeds, and
other cash payments such as interest and taxes, but excluding
"Front-End Fees").
"Limited Partners" shall mean the original Limited Partner,
the Assignor Limited Partner on behalf of Unitholders, and any
other person who is admitted to the Partnership as an additional or
substituted Limited Partner. Reference to a "Limited Partner"
shall refer to any one of them.
"Limited Partnership Interest" shall mean the entire ownership
interest of the Limited Partners, including the Assignor Limited
Partner on behalf of the Unitholders, in the Partnership as
evidenced by Certificates of Limited Partnership Interest. Each
Limited Partnership Interest represents $25 of Original Invested
Capital.
"Majority Vote" shall mean the affirmative vote of the holders
of more than 50% of the total outstanding Limited Partnership
Interests.
"Minimum Gain" means the amount determined by computing with
respect to each nonrecourse liability of the Partnership, the
amount of gain (of whatever character), if any, that would be
realized by the Partnership if it disposed (in a taxable
transaction) of the Partnership Property subject to such liability
in full satisfaction thereof, and by then aggregating the amounts
so computed.
"Negative Balance" shall mean the negative capital account
balance of a Partner or Unitholder having a negative capital
account balance (whether caused by Distributions or by allocations
of depreciation, Net Loss, Book Loss, Book Depreciation or items
thereof).
"Negative Balance Ratio" shall mean the proportion which a
Partner's or Unitholder's Negative Balance bears to the aggregate
Negative Balance of all Partners and Unitholders.
"Net Income" or "Net Loss" shall mean the taxable income or
taxable loss of the Partnership as determined for federal income
tax purposes; provided, however, that Depreciation shall not be
included in the foregoing.
"Net Proceeds" shall mean total Gross Proceeds less
Organization and Offering Expenses paid by the Partnership.
"Non-Terminating Sale or Refinancing" shall mean a Sale or
Disposition of any Partnership Property other than of the last
three Properties owned by the Partnership.
"Organization and Offering Expenses" shall mean those expenses
incurred in connection with the formation, qualification and
registration of the Partnership and in marketing, distributing and
processing Units, including any selling commissions and discounts
under applicable federal and state law, and any other expense
actually incurred and directly related to the offering and sale of
Units, including such expenses as: (a) fees and expenses paid to
attorneys in connection with the offering, (b) registration fees,
filing fees and taxes, (c) the costs of qualifying, printing,
amending, supplementing, mailing and distributing the Partnership's
registration statement and Prospectus, including telephone and
telegraphic costs, (d) the costs of qualifying, printing, amending,
supplementing, mailing and distributing sales materials used in
connection with the issuance of Units, including telephone and
telegraphic costs, (e) accounting and legal fees and expenses
incurred in connection therewith by the General Partners or their
Affiliates and (f) the Expense Allowance.
"Original Invested Capital" shall mean $25 per Unit or Limited
Partnership Interest, which amount shall be attributed to such Unit
or Limited Partnership Interest in the hands of a subsequent
holder.
"Partners" shall mean collectively to the General Partners and
the Limited Partners including the Assignor Limited Partner, and
reference to a "Partner" shall be to any one of the Partners.
"Partnership" shall mean the limited partnership created under
this Agreement.
"Partnership Act" shall mean the Delaware Revised Uniform
Limited Partnership Act as in effect on the date hereof and as
amended from time to time.
"Partnership Management Fee" shall mean the annual fee equal
to a percentage of Adjusted Cash From Operations payable in
accordance with Paragraph 9.6.
"Partnership Nonrecourse Debt" shall mean those liabilities of
the Partnership with respect to which none of the Partners has any
personal liability.
"Partnership Properties" or "Properties" shall mean all
properties or any interest therein acquired directly or indirectly
by the Partnership, and reference to "Partnership Property" or
"Property" shall be to any one of them.
"Priority Return" shall mean the Distributions to Limited
Partners pursuant to Paragraph 11.4.1.
"Property Management Fee" shall mean the fee for property
management services, payable in accordance with Paragraph 9.5.
"Prospectus" shall mean the final prospectus relating to the
registration of Units as filed with the Securities and Exchange
Commission pursuant to Section 424(b) of the Securities Act of
1933, as such prospectus may subsequently be supplemented or
amended.
"Qualified Plans" shall mean qualified pension, profit-sharing
and other employee retirement benefit plans and trusts, H.R.10
("▇▇▇▇▇") plans, bank commingled trust funds for such plans and
trusts, and individual retirement accounts ("IRAs").
"Sale or Disposition" shall mean any Partnership transaction
(other than the receipt of subscriptions for Units) not in the
ordinary course of its business, including, without limitation,
sales (including foreclosure sales), refinancings, exchanges or
other dispositions of real or personal property, condemnations,
recoveries of damage awards and insurance proceeds (other than
business or rental interruption insurance proceeds). The
disposition of a Partnership Property by transfer back to the
seller or an affiliate thereof, whether in the form of a
rescission, exchange or resale or pursuant to an option or other
similar arrangement entered into at or prior to the time of taking
title to the Property shall not, if the proceeds from such transfer
back are reinvested in other Property, constitute a Sale or
Disposition and shall not result in Cash From Sales or
Refinancings.
"Sponsor" shall mean any person directly or indirectly
instrumental in organizing, wholly or in part, the Partnership or
who will manage or participate in the management of the Partnership
and any Affiliate of such person, but does not include (i) any
person whose only relationship with the Partnership or the General
Partners is that of an independent property manager whose only
compensation from the Partnership is as such, and (ii) wholly
independent third parties such as attorneys, accountants, and
underwriters whose only compensation from the Partnership is for
professional services rendered in connection with the offering of
Units or the operations of the Partnership.
"Subordinated Property Disposition Fee" shall mean the real
estate commission payable to the General Partners or their
Affiliates under the provisions of Paragraph 9.7.
"Substantially All of the Assets" shall mean, unless the
context otherwise dictates, Properties, the original purchase price
of which represents 75% of the original purchase price of all
Partnership Properties which are owned as of the end of the most
recently completed fiscal quarter.
"Selling Agent" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
Incorporated, an affiliate (at the time of the public offering of
Units) of the Corporate General Partner and of the Assignor Limited
Partner, the selling agent for the public offering of Units.
"Terminating Sale" shall be as defined in Paragraph
11.10.4(f).
"Unit" shall mean the beneficial ownership interest of a
Unitholder in a Limited Partnership Interest of the Partnership.
Each Unit represents the assignment by the Assignor Limited Partner
of all of the economic and virtually all of the ownership rights
for one Limited Partnership Interest and will be evidenced by a
Depositary Receipt.
"Unitholder" shall mean any person who holds Units evidenced
by Depositary Receipts and who is recorded as such by the transfer
agent in respect of the Units.
3. BUSINESS AND PURPOSE
3.1 Purpose. The nature of the business to be conducted or
promoted by the Partnership is to invest in, hold and manage
existing income-producing real estate, primarily commercial and
industrial properties which are or will be net-leased to others.
3.2 Reserves. The Partnership shall initially endeavor to
maintain Cash Reserves for major repairs, replacements, capital
improvements, contingencies, capital improvements, the funding of
escrows, costs and expenses of Partnership Properties, and accruals
required by mortgagees, for insurance, real estate taxes and
related items in an amount equal to at least three percent in the
aggregate of the Gross Proceeds applicable to the acquisition of
such Properties. Any Cash Reserves used as aforesaid need not be
restored, but if restored, shall be restored from cash generated
from Partnership Properties. Upon the Sale or Disposition of each
Partnership Property, any Cash Reserves for that Property need not
be maintained thereafter, but may be applied as Cash Reserves for
other Properties.
4. TERM
The Partnership commenced on November 25, 1985, and shall
continue until December 31, 2010, unless previously terminated in
accordance with the provisions of this Agreement.
5. GENERAL PARTNERS
5.1 Capital Contributions of General Partners. The Corporate
General Partner has contributed $800 and the Individual General
Partner has contributed $200 in cash to the Partnership. At all
times during the existence of the Partnership, each General Partner
shall have a present and continuing interest in Net Income, Net
Loss, Depreciation and Distributions according to the provisions of
Article 11.
5.2 Capital Accounts. A separate capital account shall be
maintained for each General Partner pursuant to Paragraph 11.11
hereof.
5.3 Deficiencies. In the event that, immediately prior to the
dissolution of the Partnership referred to in Paragraph 19.1, the
General Partners shall have a deficiency in their capital accounts
as determined in accordance with tax accounting principles, then
the General Partners shall contribute in cash to the capital of the
Partnership an amount equal to the lesser of (a) the deficiency in
the General Partners' capital accounts or (b) the excess of 1.01%
of the total Original Contributions over the total capital
contributions of the General Partners.
6. LIMITED PARTNERS
6.1 Original Limited Partner. The original Limited Partner
contributed the sum of $25.00 to the capital of the Partnership and
received one Limited Partnership Interest for such contribution.
The original Limited Partner withdrew as a Limited Partner on the
Initial Closing Date in return for payment of the sum of $25.00.
6.2 Authorization of Units. The Partnership is authorized to
issue and sell not more than 4,000,000 Units representing a
corresponding number of Limited Partnership Interests.
6.3 Capital Accounts. A separate capital account shall be
maintained for each Limited Partner and Unitholder, including the
Original Limited Partner, pursuant to Paragraph 11.11 hereof.
6.4 Escrow Account and Transfer of Subscription Funds to
Partnership. All subscription funds shall be received by the
Partnership in trust, and, commencing on the effective date of the
Prospectus and continuing until the minimum proceeds are received,
shall be deposited in an escrow account in any of the branches of
Chemical Bank, New York, New York or in any other financial
institution permitted under Rule 15c2-4 under the Securities
Exchange Act of 1934 and designated by the General Partners as
escrow holder for the subscription funds. Upon the sale of
$10,000,000 in Units to a minimum of 100 purchasers the escrow
agent shall release such funds to the Assignor Limited Partner
which shall immediately transmit such funds to the Partnership.
Investors shall be admitted to the Partnership as Unitholders
within 15 days after release of funds to the Partnership (as to the
first admission) and thereafter, on a monthly basis subject to the
acceptance by the General Partners of such persons as Unitholders
which may be conditioned upon, among other things, such acceptance
not resulting in a determination that the assets of the Partnership
would constitute "plan assets" for purposes of ERISA. Any interest
earned on subscription funds during the period they are held in
escrow prior to the Initial Closing Date shall be paid to the
subscribers and any interest earned on subscription funds during
any period after the Initial Closing Date shall be paid to the
Partnership. If the $10,000,000 minimum is not obtained on or
before six months from the date of the Prospectus, all monies held
in escrow shall be returned to subscribers with any interest
(subject to back-up withholding and the payment of escrow expenses)
earned thereon.
7. STATUS OF LIMITED PARTNERS AND UNITHOLDERS
7.1 General Limitation on Liability. Limited Partners and
Unitholders shall not be bound by, or be personally liable for, the
expenses, liabilities or obligations of the Partnership in excess
of their Original Invested Capital, and no Limited Partner or
Unitholder shall be required to lend funds to the Partnership, or
to make any further capital contribution after his Original
Invested Capital.
7.2 Certain Liabilities of Limited Partners and Unitholders.
Under state law, it is possible that a Limited Partner or
Unitholder may be liable to the Partnership to the extent of a
previous Distribution made to him if the Partnership does not have
sufficient assets to discharge its liabilities. Notwithstanding the
definition of Adjusted Invested Capital, it is the intent of the
General Partners that no Distribution to any Limited Partner or
Unitholder of Distributable Cash From Operations pursuant to
Paragraph 11.3 or Cash From Sales or Refinancings pursuant to
Paragraph 11.4 shall be deemed a return or withdrawal of capital,
even if such Distribution represents, for federal income tax
purposes, or otherwise (in full or in part) a distribution of
depreciation or any other noncash item accounted for as a loss or
deduction from or offset to the Partnership's income, and no
Limited Partner or Unitholder shall be obligated to pay any such
amount to or for the account of the Partnership or any creditor of
the Partnership; however, if any court of competent jurisdiction
holds that, notwithstanding the provisions of this Agreement, any
Limited Partner or Unitholder is obligated to make any such
payment, such obligation shall be the obligation of such Limited
Partner or Unitholder and not of the General Partners or the
Assignor Limited Partner.
8. STATUS OF UNITS AND LIMITED PARTNERSHIP INTERESTS
Each Unit and Limited Partnership Interest shall be fully paid
and nonassessable.
9. COMPENSATION TO GENERAL PARTNERS AND THEIR AFFILIATES
9.1 Limitations on Compensation.
9.1.1 Other than Distributions specified in Article 11 herein,
the General Partners and their Affiliates shall receive
compensation from the Partnership only as specified in Articles 9
and 10 of this Agreement.
9.1.2 No Acquisition Fee shall be paid by the Partnership to
any General Partner or any Affiliate thereof, nor shall any General
Partner or any Affiliate thereof receive a fee, commission, or
other benefit from any person, upon any reinvestment of Cash From
Sales or Refinancings of Partnership Properties.
9.1.3 Except as set forth in this Article 9, no other real
estate commission, property purchase fee, finder's fee or other
compensation shall be paid or payable by the Partnership to the
General Partners or to any other person in connection with the
acquisition of specific Properties.
9.2 Unit Distribution Compensation. The Selling Agent shall
be entitled to receive from the Partnership (acting as agent for
the Unitholders) (i) a selling commission of 6% (subject to volume
discounts, if any) of the product obtained by multiplying $25 by
the number of Units sold in the offering, of which up to the full
6% may be reavowed to registered broker-dealers who sell Units in
the offering, and (ii) an Expense Allowance in an amount which
shall not exceed 1/2% of the Gross Proceeds which is to be applied
toward due diligence expenses. If the General Partners or their
Affiliates effect the resale of any Limited Partnership Interest or
Unit on behalf of a Limited Partner or Unitholder, respectively,
they shall be entitled to receive reasonable resale commissions in
connection therewith.
9.3 Acquisition Fees. Subject to the limitations contained
in Paragraph 9.1, the General Partners or their Affiliates shall
receive an Acquisition Fee not greater than 2% of the cost of the
Property purchased through the services of the General Partners or
their Affiliates, which fee shall be paid by the sellers of the
Partnership Properties acquired. To the extent that all or a
portion of the services entitling a person to an Acquisition Fee
are rendered by persons other than the General Partners or their
Affiliates, with respect to the acquisition of any Partnership
Property, all or such portion of the Acquisition Fee with respect
to such Partnership Property shall be paid to such non-Affiliate.
Any earned Acquisition Fees shall be payable at the close of escrow
with respect to purchases of any Property, or, if there is no
escrow, at the time legal title to such Property is transferred to
the Partnership.
9.4 Asset Management Fee. The General Partners shall be
entitled to an Asset Management Fee payable quarterly which shall
be equal to 0.5% per annum of the amount of Net Proceeds (other
than any amount set aside as Cash Reserves pursuant to Paragraph
3.2) not invested in Properties, with such Asset Management Fee to
be earned commencing on the Initial Closing Date.
9.5 Property Management Fee. The General Partners or their
Affiliates shall be entitled to a Property Management Fee for
services in providing continuing professional property management
or supervision of professional property managers of the Partnership
Properties. Such fees shall be paid quarterly and shall be equal to
the following: (a) in the case of industrial and commercial
property which is leased on a long-term (ten or more years) net (or
similar) basis, 1% of annual Gross Revenues, or (b) in the case of
industrial and commercial property other than as provided in (a)
above, the maximum fee shall be 6% of annual Gross Revenues where
the General Partners or their Affiliates perform leasing,
re-leasing and related leasing services, or 3% of annual Gross
Revenues where the General Partners or their Affiliates do not
perform any such services; provided, however, that the fee payable
hereunder shall not exceed the competitive rate charged by others
rendering similar services in the same geographical area. If a
lease on a property described in (a) above is terminated for any
reason and the General Partners or their Affiliates perform
leasing, re-leasing or leasing related services, they shall be
entitled to a leasing fee of 3% of Gross Revenues on each
replacement lease during a period of five years from the
commencement date of the replacement lease. The Property Management
Fee shall be paid as compensation for the services of the General
Partners or their Affiliates in overall management of the
Partnership Properties, including, but not limited to: (i) review
of the maintenance, repair, remodeling and refurbishing of all
Partnership Properties; (ii) preparation and review of rental
schedules and recommendations with respect to changes thereto;
(iii) employment and supervision of on-site property managers
together with the establishment of procedures and preparation of
operational manuals regarding the management of Partnership
Properties; (iv) preparation and review of rental surveys; (v)
review of historical performance and variation analyses and
preparation and review of projected performance and variation
analyses; (vi) review of leases, management agreements and
maintenance agreements; (vii) review of replacement reserves and
working capital and recommendations with respect to changes
thereto; (viii) review of regional economic surveys; (ix)
preparation and review of budgets and cash flow projections for
each project and the Partnership as a whole over the term of the
Partnership; (x) periodic physical inspections and market surveys;
(xi) determination and implementation of capital improvements;
(xii) continuing review to determine when Properties should be sold
and acceptable terms of sale; (xiii) initiation of any necessary
litigation; and (xiv) maintenance of books and records of the
Partnership Properties. For purposes of calculating the maximum
Property Management Fee, fees paid to unaffiliated third parties
for property management services shall be included.
9.6 Partnership Management Fee. As compensation for services
rendered in managing the affairs of the Partnership, the General
Partners shall be entitled to receive a Partnership Management Fee,
payable quarterly, equal to 7% of Adjusted Cash From Operations.
9.7 Subordinated Property Disposition Fee. The Partnership
shall pay for property disposition services to all persons or
entities involved in the sale of Partnership Properties, property
disposition fees which are reasonable, customary and competitive,
taking into consideration the size, type and location of the
Property ("Competitive Fee"), which shall not in the aggregate
exceed 6% of the gross sales price of the Property; however, as to
the General Partners and their Affiliates such fees shall be paid
only if the General Partners or their Affiliates provide a
substantial amount of services in the sales effort, in which case
such fees shall not exceed the lesser of (i) a percentage of the
gross sales price of a Property equal to one-half of the
Competitive Fee, or (ii) up to 1% of the gross sales price of a
Property. Such real estate disposition fee shall be payable upon
the completion of the sale of each Property; provided, however, the
payment thereof to any Affiliate of the General Partners shall be
made (a) only after the Partnership has distributed to Limited
Partners and Unitholders the Priority Return and (b) before any
other Distribution is made of Cash From Sales or Refinancings.
Except as set forth in the first sentence of this Paragraph 9.7,
there is neither limitation nor subordination as to any property
disposition fee paid only to non-Affiliates of the General
Partners.
9.8 Payment Upon Removal. Should a General Partner be removed
as a General Partner of the Partnership according to the provisions
of Article 17, any portion of the Acquisition Fee, Asset Management
Fee, Property Management Fee, Partnership Management Fee and
Subordinated Property Disposition Fee or any other fee, commission
or interest which is then accrued and due, but not yet paid, or
which would have become due and payable subsequent to the date of
removal, shall be paid by the Partnership to such General Partner
or its Affiliate, as the case may be, at the same time and manner
as such fee, commission or interest would have been paid if such
General Partner had not been removed; provided, however that the
form of payment and the amount of any such fees, commissions,
interest and the General Partner's interest in Cash From Sales or
Refinancings shall be subject to the provisions set forth in
Paragraph 17.4.
10. PARTNERSHIP EXPENSES
10.1 Reimbursement of Expenses. The General Partners and their
Affiliates may be reimbursed by the Partnership for the following
Partnership expenses:
10.1.1 subject to the limitations thereon set forth in
Paragraph 10.2.3, Organization and Offering Expenses;
10.1.2 the actual cost of goods and materials used for or by
the Partnership and obtained from entities unaffiliated with the
Sponsor; and
10.1.3 administrative services necessary to the prudent
operation of the Partnership, provided that such reimbursement will
be at the lesser of (a) the actual cost to the General Partners or
their Affiliates, or (b) 90% of the competitive price which would
be charged by unaffiliated persons for comparable administrative
services in the same geographical location.
10.2 The General Partners and their Affiliates shall not be
reimbursed by the Partnership for the following expenses:
10.2.1 services for which the General Partner or Affiliates
are entitled to compensation in the form of a separate fee pursuant
to Article 9 hereof;
10.2.2 rent, depreciation, utilities or other administrative
items generally constituting a General Partner's overhead;
10.2.3 Organization and Offering Expenses (excluding selling
commissions) in excess of four percent of the Gross Proceeds,
payment of any such excess to be the obligation of the Corporate
General Partner, which hereby agrees to pay the same; or
10.2.4 salaries, fringe benefits, travel expenses or other
administrative items incurred by or allocated to any Controlling
Person of the General Partners or Affiliates; provided, however,
that the Partnership may reimburse the General Partners or their
Affiliates for the travel expenses of Controlling Persons if such
travel expenses are incurred during the property acquisition stage
of the Partnership by such Controlling Persons for the evaluation
of Properties being considered for acquisition or visits to
executives of potential tenants of properties being considered for
acquisition to discuss current financial results.
10.3 Partnership Obligations. Subject to Paragraphs 10.1 and
10.2, the Partnership shall pay all expenses (which expenses shall
be billed directly to the Partnership, to the extent deemed
advisable by the General Partners in the exercise of their
fiduciary duty to the Partnership) of the Partnership which may
include, but are not limited to:
10.3.1 all costs of personnel employed by the Partnership and
involved in the business of the Partnership, including persons who
may also be employees of the General Partners;
10.3.2 all costs of borrowed money, taxes and assessments on
Partnership Properties and other taxes applicable to the
Partnership;
10.3.3 legal, audit, accounting, brokerage and other fees;
lO.3.4 printing, engraving and other expenses and taxes
incurred in connection with the issuance, distribution, transfer,
registration and recording of documents evidencing ownership of an
interest in the Partnership or in connection with the business of
the Partnership;
10.3.5 fees and expenses paid to independent contractors,
appraisers, mortgage bankers, brokers and servicers, leasing
agents, consultants, on-site managers, real estate brokers,
insurance brokers and other agents;
10.3.6 expenses in connection with the acquisition,
disposition, replacement, alteration, repair, remodeling,
refurbishment, leasing, initial financing, refinancing and
operation of Partnership Properties (including the costs and
expenses of foreclosures, insurance premiums, real estate brokerage
and leasing commissions and of maintenance of such Property),
including Acquisition Expenses;
10.3.7 the cost of insurance as required in connection with
the business of the Partnership;
10.3.8 expenses of organizing, revising, amending, converting,
modifying or terminating the Partnership;
10.3.9 costs of preparation and dissemination of the sales
literature, informational material and documentation relating to
potential Sales or Dispositions of Partnership Property;
10.3.10 costs incurred in connection with any litigation in
which the Partnership is involved, as well as in the examination,
investigation or other proceedings conducted by any regulatory
agency of the Partnership, including legal and accounting fees
incurred in connection therewith;
10.3.11 costs of any computer equipment or services used for
or by the Partnership;
10.3.12 costs of any accounting, statistical or bookkeeping
equipment necessary for the maintenance of the books and records of
the Partnership; and
10.3.13 supervision and expenses of professionals retained by
the Partnership in connection with any of the foregoing, including,
without limitation, attorneys, accountants and appraisers.
11. ALLOCATION OF INCOME, LOSS AND DISTRIBUTIONS
11.1 Apportionment of Net Income, Net Loss and Distributions.
Except as otherwise provided in this Article 11, Net Income, Net
Loss, Depreciation and Distributions of the Partnership allocated
to Limited Partners, including the Assignor Limited Partner on
behalf of the Unitholders, shall be apportioned as follows:
11.1.1 except as provided in Paragraph 11.10.4(e), that
portion of Net Income, Net Loss, Depreciation and Distributions of
the Partnership allocated to one or more Limited Partners as a
group with respect to any month shall be apportioned among the
Limited Partner to whom such allocations are made in the ratio in
which the number of Limited Partnership Interests owned by each
Limited Partner on the first day of such month bears to the total
number of Limited Partnership Interests owned by all of such
Limited Partners as of that date, without regard to capital
accounts or the number of days during such month in which a person
was a Limited Partner. For purposes of determining the number of
days that each Limited Partnership Interest was owned during any
month during which any Closing Date occurs, investors who purchase
a Limited Partnership Interest from the Partnership on or prior to
the 15th day of such month will be treated as having owned the
Limited Partnership Interests underlying the Units from the
Partnership as of the first day of such month and investors who
purchase Limited Partnership Interests after the 15th day will be
treated for all purposes as having owned the Limited Partnership
Interests underlying the Units as of the first day of the
succeeding month. In the case of a proposed assignment of Limited
Partnership Interests, the assignment shall be effective from and
after the date provided in Paragraph 13.3;
11.1.2 except as provided in Paragraph 11.10.4(e), that
portion of Net Income, Net Loss, Distributions and Depreciation
which is apportioned to the account of the Assignor Limited Partner
for the benefit of Unitholders shall with respect to any month be
apportioned to each Unitholder in the ratio which the number of
Units owned by each Unitholder to whom such allocations are made on
the first day of the month bears to the total number of Units owned
by all such Unitholders on such date, without regard to capital
accounts or the number of days during such month in which a person
was a Unitholder. For purposes of determining the number of days
that each Unit was outstanding during any month during which any
Closing Date occurs, Unitholders who acquire Units from the
Partnership during the first 15 days of a month are treated as
having been accepted as Unitholders on the first day of a month and
Unitholders who acquire Units from the Partnership after the 15th
day will be treated as having been accepted as Unitholders on the
first day of the succeeding month. In the case of a proposed
assignment of Units, the assignment shall be effective from and
after the date provided in Paragraph 12.11; and
11.1.3 Allocations Causing Negative Capital Accounts.
Notwithstanding Paragraph 11.1.1, if any allocation of Net Loss or
Depreciation to a Unitholder or Limited Partner (i) would reduce
such Unitholder's or Limited Partner's capital account balance
below zero, (ii) would increase the negative balance in such
Unitholder's or Limited Partner's capital account at a time when
another Unitholder or Limited Partner has a positive capital
account balance, to the extent such allocation would cause the sum
of the negative capital account balances of such Partner or
Unitholder (determined after taking into account all prior
Distributions and all prior allocations of Net Income, Net Loss and
Depreciation), to exceed such Partner's or Unitholder's share of
the Partnership's Minimum Gain, as determined under Treas. Reg.
(Section) 1.704-1(b)(4)(iv)(f), at the close of the period in respect of
which the Net Loss or Depreciation, as the case may be, is to be
allocated, such excess shall instead be allocated, (a) first, in
the case of Net Loss, pro rata to Unitholders and Limited Partners
having positive capital account balances in proportion to their
respective positive capital account balances until such capital
account balances are reduced to zero and (b) second, in the case of
Depreciation (i) first, pro rata to Class A Unitholders and Limited
Partners holding Class A Units to the extent of and in proportion
to their respective positive capital account balances until such
capital account balances are reduced to zero, and (ii) thereafter,
pro rata to all Unitholders and Limited Partners having positive
capital account balances to the extent of and in proportion to
their respective capital account balances; provided, however, that
in no event shall there be a reallocation of any item of income,
gain, loss or deduction allocated among the Partners and
Unitholders pursuant to this Agreement for prior years.
In the event that the provisions of this Paragraph 11.1.3
prohibit the allocation of Net Loss and/or Depreciation to the
Limited Partners and Unitholders, such Net Loss and/or Depreciation
shall instead be allocated to the General Partners.
For purposes of determining a Limited Partner's or
Unitholder's capital account balance under this Paragraph 11.1.3,
Distributions made prior to or contemporaneous with any allocation
to a Limited Partner or Unitholder shall be reflected in such
Unitholder's or Partner's capital account prior to making such
allocation to such Unitholder or Partner.
For purposes of this Paragraph 11.1.3, a Partner's or
Unitholder's capital account shall be reduced for:
(x) allocations of Net Loss (or items thereof) or
Depreciation which, as of the end of each Partnership year, are
reasonably expected to be allocated to such Partner or Unitholder
pursuant to Code Section 704(e)(2), Code Section 706(d) and Treas.
Reg. (SECTION) 1.751-1(b)(2)(ii), and
(y) Distributions that, as of the end of such year,
reasonably are expected to be made to such Partner or Unitholder to
the extent they exceed offsetting increases to such Partner's or
Unitholder's capital account that reasonably are expected to occur
during (or prior to) the Partnership taxable years in which such
Distributions reasonably are expected to be made.
For purposes of determining the amount of expected
Distributions and expected capital account increases described in
(y) above: (A) the rule set forth in Treas. Reg. (Section)
1.704-1(b)(2)(iii)(c) concerning the presumed value of Partnership
Property shall apply, and (B) gross income or Net Income allocated
to a Partner or Unitholder pursuant to Paragraph 11.10.3 hereof
shall be taken into account. For purposes of this Paragraph 11.1.3
and Paragraph 11.10.3, a Partner's or Unitholder's capital account
shall be increased to the extent that such Partner or Unitholder is
obligated to fund deficits in such Partner's or Unitholder's
capital account upon liquidation of the Partnership (or is treated
as obligated to so restore such deficits pursuant to Treas. Reg.
(Section) 1.704-1(b)(2)(ii)(c)).
11.2 (a) Allocation of Net Income and Net Loss and Tax-Exempt
Items. Except as provided in Paragraph 11.1.3 and 11.10.3, Net
Income (other than Net Income arising from the occurrence of a Sale
or Disposition of a Partnership Property), and Net Loss and all
items of income exempt from federal income tax shall be allocated
99% to the Limited Partners, including the Assignor Limited Partner
on behalf of the Unitholders, and 1% to the General Partners. That
portion of Net Income and Net Loss, if any, prior to the Initial
Closing Date shall be allocated 1% to the General Partners and 99%
to the original Limited Partner. Any expenditures of the
Partnership which are neither deductible nor properly chargeable to
his capital account under Code Section 705(a)(2)(B), or which are
treated as such expenditures under Treas. Reg. (SECTION) 1.704-1(b)(2)(iv)(i),
shall be allocated as follows: (a) to the extent
such expenditures represent selling commissions which constitute
syndication expenditures under Code Section 709 and which are paid
by the Partnership, such expenditures shall be allocated to the
Units in respect of which such commissions were paid, and (b) the
balance of such expenditures shall be allocated among the Limited
Partners on a per Unit basis.
11.2 (b) Depreciation. The provisions of this Paragraph shall
apply only in the event that Class B/TE Units are acquired from the
Partnership by "tax-exempt entities," as defined under Section
168(j)(4) of the Code. Except as otherwise provided in Paragraph
11.1.3, with respect to any property subject to a reduction in
available depreciation as a result of the acquisition of Class B/TE
Units by tax-exempt entities, Depreciation calculated over 19 years
(or other recovery period otherwise available to taxable entities)
shall be allocated 99% to the Limited Partners and Unitholders
holding Class A Units (and apportioned thereunder in accordance
with their respective ownership of Units) and 1% to the General
Partners; and Depreciation calculated over 40 years (or other
recovery period otherwise available to tax-exempt entities) shall
be allocated 99% to the Limited Partners and Unitholders holding
Class B/TE Units (and apportioned thereunder in accordance with
their respective ownership of Units) and 1% to the General
Partners. With respect to any property not subject to a reduction
in available Depreciation as a result of the acquisition of Class
B/TE Units by tax-exempt entities, Depreciation shall be allocated
1% to the General Partners and 99% to the Unitholders and Limited
Partners.
11.2 (c) Allocation of Book Items. In cases where Partnership
Property is, under Treas. Reg. (Section) 1.704-1(b)(2)(iv), properly
reflected in the capital accounts of the Partners and Unitholders
at a fair market value that differs from the adjusted basis of such
property (such difference is hereinafter referred to as the "Book
Disparity"), then depreciation, amortization and gain or loss as
computed for book purposes with respect to such property ("Book
Depreciation," "Book Amortization," "Book Gain," and "Book Loss,"
respectively) will be greater or less than the depreciation,
amortization or gain or loss as computed for tax purposes. The
General Partners shall adopt, pursuant to Treas. Reg. (Section)
1.704-1(b)(2)(iv)(g), a reasonable method of computing Book Depreciation
and Book Amortization. Such Book Amortization and Book Depreciation
shall be allocated among the Partners and Unitholders and reflected
in Partners' and Unitholders' capital accounts under Paragraph
11.11(c) hereof, in a manner so as to eliminate to the extent
possible, the Book Disparity.
11.2 (d) Mandatory Allocations. Any allocation of Net Income,
Net Loss or Depreciation for tax purposes which is required to be
allocated among the Partners and Unitholders to take into account
the disparity between the fair market value of a Partnership asset
and its adjusted basis (e.g., allocations under Code Section 704(c)
for contributed property) shall be allocated among the Partners and
Unitholders in accordance with the requirements of the Code and the
regulations promulgated thereunder.
11.3 Distribution of Distributable Cash From Operations.
11.3.1 Distributable Cash From Operations, if any, shall be
distributed 99% to the Limited Partners and Unitholders and l% to
the General Partners. Such Distributions shall be distributed
quarterly within 45 days after the close of a quarter, commencing,
if available, following the close of the first fiscal quarter which
closing occurs more than 60 days after the Initial Closing Date.
If any discrepancies in capital account balances (determined on a
per Unit basis) arise during the offering period among the Limited
Partners (including the Assignor Limited Partner on behalf of the
Unitholders), then, during or as soon as is practicable after the
expiration of the offering period, Distributions of Distributable
Cash From Operations or allocations of Net Income (or items
thereof) or Depreciation (determined in the discretion of the
General Partners) shall first be made so as to equalize the capital
account as to each Unit, with any excess Distributable Cash From
Operations or Net Income or Net Loss distributed or allocated in
the manner otherwise described herein. Units shall not be listed
on any national securities exchange or included for quotation on
the National Association of Securities Dealers Automated Quotation
System until such equalization per Unit shall have occurred.
11.3.2 The General Partners, in their sole discretion, may for
any period elect to defer Distributions to them of all or any
portion of their respective shares of Distributable Cash From
Operations, and any amount so deferred shall be distributed to the
Limited Partners and Unitholders as Distributable Cash From
Operations. In the event the General Partners make an election
pursuant to this Paragraph 11.3.2, the General Partners thereafter
shall be entitled to receive, at their election, an amount (without
interest) equal to any deferred Distribution to them of
Distributable Cash From Operations or Cash From Sales or
Refinancings prior to any Distribution to the Limited Partners and
Unitholders.
11.4 Distributions of Cash From Sales or Refinancings. Cash
From Sales or Refinancings shall, except as provided in Paragraphs
9.7, 11.3.2 and 11.7 hereof, be distributed in the following order
of priority:
11.4.1 First, 99% to the Limited Partners and Unitholders and
1% to the General Partners until each Limited Partner and
Unitholder has received an amount which, when added to all prior
Distributions of Cash From Sales or Refinancings, shall equal his
Original Invested Capital;
11.4.2 Second, 99% to the Limited Partners and Unitholders and
1% to the General Partners until each Limited Partner and
Unitholder has received an amount which, when added to all prior
Distributions to such Limited Partner or Unitholder (other than
pursuant to Section 11.4.1), will equal 8% per annum cumulative
noncompounded on his Adjusted Invested Capital, commencing the
Final Closing Date of the Partnership through the date of payment;
and
11.4.3 Third, 75% to the Limited Partners and Unitholders
and 25% to the General Partners of the remaining Cash From Sales or
Refinancings.
11.5 Distributions on Terminating Sales. In connection with
a Terminating Sale (or a liquidation of the Partnership), Cash From
Sales or Refinancing (and in the case of a liquidation, any
remaining working capital reserves) shall be allocated among, and
distributed to, the Partners in proportion to, and to the extent
of, their positive capital account balances after the Net Income or
Net Loss from any Sale or Disposition of Partnership Property has
been allocated in accordance with Paragraph 11.10 hereof. For
purposes of this Paragraph 11.5, a Terminating Sale is a Sale
defined under subparagraph 11.10.4(f). To the extent, if any, that
a Partner is entitled to receive a Distribution based upon a
positive capital account balance, such Distribution shall be
credited against the amount of Distributions which he otherwise
would have been entitled to receive had Distributions been made
pursuant to the provisions of Paragraph 11.4 hereof (in the case of
nonterminating Sales or Dispositions) in the order of priority
described therein.
11.6 Restrictions. The Partnership may be restricted from
making Distributions under the terms of notes, mortgages or other
types of debt obligations which it may issue or assume in
conjunction with borrowed funds and Distributions may also be
restricted or suspended in circumstances if the General Partners
determine, in their absolute discretion, that such action is in the
best interests of the Partnership.
11.7 Unutilized Net Proceeds. In the event that any portion of
the Net Proceeds is not invested or committed for investment within
two years from the date of the original effective date of the
registration statement of which the Prospectus is part (except for
any amounts utilized to pay Partnership operating expenses,
including amounts set aside for reserves as set forth in Paragraph
3.2 of this Agreement), such portion of the Net Proceeds shall be
distributed to the Limited Partners and Unitholders by the
Partnership as a return of capital, except as otherwise provided by
law. For the purposes of this Paragraph 11.7, funds will be deemed
to have been committed to investment to the extent written
agreements in principle or letters of understanding were at any
time executed, regardless of whether any such investment is
consummated, and to the extent any funds have been reserved to make
contingent payments in connection with any Property, regardless of
whether any such payment is made. In addition, any Net Proceeds
distributed to Limited Partners and Unitholders pursuant to this
Paragraph 11.7 shall be subtracted from Gross Proceeds for purposes
of the provisions of Paragraph 15.10 of this Agreement.
11.8 General Partners' Interest. Notwithstanding any provision
to the contrary in this Agreement, in no event shall the General
Partners' interests in each material item of Partnership income,
gain, loss, deduction or credit be less than one percent of each
such item at all times during the existence of the Partnership.
11.9 Escheat. If, upon the termination and dissolution of the
Partnership, there remains outstanding on the books of the
Partnership a material amount of Distribution checks which have not
been negotiated for payment by Limited Partners and Unitholders,
then the General Partners may, if deemed to be in the best
interests of the Partnership and permitted by law, cause such
amounts to be redistributed pro rata to Limited Partners and
Unitholders in proportion to their percentage ownership interest in
the Partnership; provided, however, that the Partnership and not
the General Partners shall be liable for any subsequent claim for
payment of such redistributed Distributions. The General Partners
are not required to make such a redistribution in which case such
amounts may escheat to a state.
11.10 Allocation of Net Income From a Sale or Disposition.
Except as otherwise provided in Paragraphs 11.2(d), 11.8 and
11.10.3, Net Income arising from the occurrence of a Sale or
Disposition (other than in connection with a Terminating Sale as
described in Paragraph 11.10.4) shall be allocated as follows (such
Net Income shall be allocated, and capital account balances
determined, prior to making Distributions arising from such Sale or
Disposition):
11.10.1 first, such Net Income, up to an amount equal to the
Depreciation deductions previously allocated to Limited Partners,
Unitholders and the General Partners which deductions are
attributable to the Partnership Properties that are the subject of
the Sale or Disposition, shall be allocated to each such Limited
Partner, Unitholder and General Partner in the same ratio as the
amount of such depreciation previously allocated to such Limited
Partner, Unitholder and General Partner (less Net Income, if any,
in respect of such Sale or Disposition or gross income (other than
gross income which has previously been taken into account under
this Paragraph 11.10.1) allocated to each such Limited Partner,
Unitholder and General Partner pursuant to Paragraph 11.10.3) bears
to the aggregate of such Depreciation deductions so allocated to
all Limited Partners, Unitholders and General Partners (less Net
Income, if any, in respect of such Sale or Disposition or gross
income (other than gross income which has previously been taken
into account under this Paragraph 11.10.1) allocated to all such
Units pursuant to Paragraph 11.10.3).
11.10.2 second, the remainder of such Net Income, if any,
shall be allocated in the following order of priority:
(a) to the Partners and Unitholders to the extent of and in
proportion to the amount of Cash From Sales or Refinancings which
are to be distributed to each of them pursuant to Paragraph 11.4
(other than pursuant to Paragraph 11.4.1); and
(b) The remainder of such Net Income, if any, shall be
allocated to the Partners and Unitholders in proportion to the
amount of Cash From Sales or Refinancings which are to be
distributed to the Partners and Unitholders pursuant to Paragraph
11.4.1.
11.10.3 Capital Account Deficiency, Qualified Income Offset
and Minimum Gain Chargeback. This Paragraph 11.10.3 shall apply
only if at the close of any Partnership taxable year (a) the
negative capital account balance of any Partner or Unitholder
having a negative capital account balance (whether caused by
Distributions or by allocations of Depreciation, Net Loss, Book
Loss, Book Depreciation or items thereof) (a "Negative Balance")
exceeds (b) such Partner's or Unitholder's share of Minimum Gain
under Treas. Reg. (Section) 1.704-1(b)(4)(iv)(f), if any (the excess of
clause (a) over clause (b) hereinafter is referred to as a "Capital
Account Deficiency"). Notwithstanding the provisions of Paragraphs
11.10.1 and 11.10.2 hereof, an amount of Net Income arising from a
Sale or Disposition of Partnership Property equal to the Capital
Account Deficiency shall first be allocated to each Partner having
a Negative Balance in the proportion in which such Partner's
Negative Balance bears to the aggregate Negative Balance of all
Partners and Unitholders ("Negative Balance Ratio"). In the event
that the foregoing allocation would be insufficient to eliminate
the Capital Account Deficiency, an amount of gross income (as
defined in Code Section 61) of the Partnership necessary to
eliminate the Capital Account Deficiency shall be allocated to each
Partner and Unitholder with a Negative Balance Ratio. Any
allocation under this Paragraph 11.10.3 shall, to the extent
possible, be made at a time no later than the time at which the
Capital Account Deficiency arises; provided, however, that in no
event shall there be a reallocation of any item of income, gain,
loss, or deduction among the Partners and Unitholders for prior
years pursuant to this Agreement;
11.1O.4 Termination Rules. In connection with a Terminating
Sale (defined in subparagraph 11.10.4(f)), Net Income shall be
allocated as follows:
(a) First, Net Income arising from a Terminating Sale up to an
amount equal to the sum of the negative capital account balances of
Partners and Unitholders having negative capital account balances,
shall first be allocated to Partners and Unitholders having
negative capital account balances pro rata in proportion to such
respective negative balances;
(b) then, 1% to the General Partner and 99% to the Unitholders
and Limited Partners until the capital account balance of each
Unitholder and Limited Partner (determined after making the
allocation described in Paragraph 11.10.4(a) but before
distributing the proceeds from such sale) shall equal his Adjusted
Invested Capital. In the event the Net Income to be allocated to
Limited Partners pursuant to this Paragraph 11.10.4(b) shall be
insufficient to bring the capital account balance of each
Unitholder and Limited Partner to whom such allocation is required
to said balance, then such Net Income shall be allocated first to
Unitholders and Limited Partners having the smallest capital
accounts per Unit so as to equalize, to the extent possible, the
capital accounts per Unit of all Unitholders and Limited Partners;
(c) then, 1% to the General Partners and 99% to the Limited
Partners and Unitholders until the capital account balance of each
Limited Partner and Unitholder (determined after making the
allocations described in subparagraphs 11.10.4(a) and (b) but
before distributing the proceeds from such sale) shall equal the
amount which would have been distributed to such Limited Partner or
Unitholder in respect of such Terminating Sale had the proceeds
from such sale been distributed pursuant to the provisions of
Paragraph 11.4.1;
(d) then, to the Partners or Unitholders until the capital
account balance of each Partner or Unitholder (determined after
making the allocations described in subparagraphs 11.10.4(a), (b)
and (c) but before distributing the proceeds from such sale) shall
equal the amount which would have been distributed to such Partner
or Unitholder in respect of such Terminating Sale had the proceeds
from such Terminating Sale been distributed pursuant to the
provisions of Paragraphs 11.4.1 and 11.4.2; and
(e) the remainder of such Net Income, if any, shall be
allocated 25% to the General Partners and 75% to the Limited
Partners and Unitholders. The portion of the Net Income under this
Paragraph 11.10.4(e) which is allocated to the Limited Partners and
Unitholders as a group shall, to the extent of any unpaid
cumulative noncompounded return of the Limited Partners and
Unitholders under Paragraph 11.4.1, first be allocated among the
Limited Partners and Unitholders in proportion to such unpaid
return due to each Limited Partner and Unitholder.
(f) A "Terminating Sale" shall mean the earlier to occur of
(i) the Sale or Disposition of the Partnership's last three
Properties commencing with the first such sale or (ii) the Sale or
Disposition of Partnership Properties with an aggregate acquisition
cost in excess of 66 2/3% of the aggregate cost of all Partnership
Properties. The Sale or Disposition of a Partnership Property, the
proceeds of which are reinvested in Partnership Property pursuant
to Paragraph 15.4.19 hereof, shall not be considered a sale for
purposes of determining whether a Terminating Sale has occurred.
11.10.5 Income Characterization. Such portion of the Net
Income allocated pursuant to Paragraph 11.10 which is treated as
ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Unitholders
and Partners in the proportion which (i) the amount of depreciation
previously allocated to each Unitholder and Partner relating to the
Property which is the subject of the Sale or Disposition bears to
(ii) the total of such depreciation allocated to all Unitholders
and Partners. This Paragraph 11.10.5 shall not alter the amount of
allocations among the Unitholders and Partners pursuant to
Paragraph 11.10, but merely the character of gain so allocated. For
purposes of determining the amount of depreciation previously
allocated to a Unitholder and Limited Partner, the depreciation
previously allocated to any prior owner of such Unitholder's and
Limited Partner's Units shall be deemed to have been allocated to
such Unitholder and Limited Partner.
11.11 Capital Accounts. (a) A separate capital account shall
be maintained for each Partner and Unitholder. Each Partner's or
Unitholder's capital account shall be increased by (1) the amount
of money contributed by such Partner or Unitholder to the capital
of the Partnership; (2) such Partner's or Unitholder's share of
Partnership Net Income and any income or gain that is exempt from
federal income taxation; and (3) such Partner's or Unitholder's
share of the increase in the basis of the Partnership's property,
if any, arising out of the recapture of the investment tax credit.
Each Partner's or Unitholder's capital account shall be decreased
by (i) the amount of money distributed to such Partner by the
Partnership; (ii) such Partner's or Unitholder's share of Net Loss
or Depreciation for tax purposes; (iii) such Partner's or
Unitholder's share of the decrease in basis of the Partnership's
Property under Code Section 48(q) arising from the allowance of the
investment tax credit; and (iv) such Partner's or Unitholder's
share of expenditures of the Partnership which are neither
deductible nor proper chargeable to capital account under Code
Section 705(a)(2)(B) or are treated as such expenditures under
Treas. Reg. (SECTION) 1.704-1(b)(2)(iv)(i).
(b) A Partner or Unitholder who has more than one interest in
the Partnership shall have a single capital account that reflects
all such interests, regardless of the class of interests owned by
such partner (e.g., general or limited) and regardless of the time
or manner in which such interests were acquired.
(c) In the event that property (other than cash) is
contributed (or deemed contributed pursuant to the provisions of
Code Section 708) by a Partner or Unitholder to the Partnership,
the computation of capital accounts, as set forth in this Paragraph
11.11, shall be adjusted as follows:
(i) the contributing Partner's or Unitholder's capital account
shall be increased by the fair market value of the property
contributed to the Partnership by such Partner or Unitholder (net
of liabilities secured by such contributed property that the
Partnership is considered to assume or take subject to under Code
Section 752); and
(ii) as required by Treas. Reg. (Section) 1.704-1(b)(2)(iv)(g) and
1.704-1(b)(4)(i), if any Partner's or Unitholder's capital account
reflects a fair market value for property which differs from such
property's adjusted basis, each Partner's or Unitholder's capital
account shall be adjusted to take account of the amount of Book
Gain, Book Loss (other than Book Loss attributable to expenditures
of the Partnership described in Paragraph 11.11(a)(iv)) and Book
Depreciation allocated to such Partner or Unitholder pursuant to
Paragraph 11.2(c) hereof and shall not take into account the Net
Income, Net Loss and depreciation for tax purposes allocated to
such Partner or Unitholder pursuant to this Article 11.
(d) In the event that property is distributed (or deemed
distributed pursuant to the provisions of Code Section 708) by the
Partnership to a Partner or Unitholder the following special rules
shall apply:
(i) the capital accounts of the Partners and Unitholders shall
be adjusted (as provided in Treas. Reg. (Section) 1.704-1(b)(2)(iv)(e)) to
reflect the manner in which the unrealized income, gain, loss and
deduction inherent in such property (that has not already been
reflected in the Partners' and Unitholders' capital accounts) would
be allocated to the Partners and Unitholders if there were a
taxable disposition of such property for its fair market value on
the date of distribution; and
(ii) the capital account of the Partner or Unitholder who is
receiving the distribution of property from the Partnership shall
be charged with the fair market value of the property at the time
of distribution (net of liabilities secured by such property that
such Partner or Unitholder is considered to assume or take subject
to under Code Section 752).
(e) The foregoing provisions are intended to satisfy the
capital account maintenance requirements of Treas. Reg. (Section)
1.704-1(b)(2)(iv) and such provisions shall be modified to the extent
required by such Section or any successor provision thereto.
12. ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS TO UNITHOLDERS;
RIGHTS AND OBLIGATIONS
12.1 Issuance of Depositary Receipts. Simultaneously with
each Closing, the Assignor Limited Partner shall contribute to the
Partnership the proceeds of the sale of Units, on behalf of the
purchasers of Units, and shall receive from the General Partners a
Certificate of Limited Partnership Interest evidencing one Limited
Partnership Interest for each Unit sold. The Assignor Limited
Partner thereupon shall hold on deposit or arrange to have held on
deposit such Certificates of Limited Partnership Interest (together
with a list containing the name, address and number of Units
purchased by each Unitholder, which list shall be available for
inspection by any Unitholder on written request) and shall, at the
request of Unitholders, issue to the order of the respective
Unitholders Depositary Receipts registered in the name of such
Unitholder (or their nominees) in respect of the Certificates of
Limited Partnership Interest held on deposit. In connection with
such deposit, the Assignor Limited Partner shall execute an
assignment of the Limited Partnership Interests to the Unitholders
in proportion to the number of Units purchased by each Unitholder,
whereupon the Unitholders shall be recognized by the Partnership as
assignees of such Limited Partnership Interests. By tendering
payment for Units, and upon receipt and acceptance of a
confirmation, a Unitholder shall be deemed to have assented to all
the terms and conditions of this Partnership Agreement.
12.2 Assignment by Assignor Limited Partner. The Assignor
Limited Partner, by the execution of this Agreement, irrevocably
transfers and assigns to the Unitholders substantially all of the
Assignor Limited Partner's rights and interest in and to the
Limited Partnership Interests, said transfer and assignment to be
deemed to have occurred as of the time of release to the
Partnership of the payments for the Units related to such assigned
Limited Partnership Interests. The rights and interest so
transferred and assigned shall include, without limitation, the
following:
12.2.1 all rights to receive Distributions and allocations in
respect of Limited Partnership Interests;
12.2.2 all rights to receive any proceeds of liquidation of
the Partnership;
12.2.3 all rights to inspect books and records and to receive
reports;
12.2.4 the right to instruct the Assignor Limited Partner with
respect to the voting of the assigned Limited Partnership Interests
related to the Units (the Assignor Limited Partner having no right
to vote with respect to any Unit or assigned Limited Partnership
Interest without instructions from the record owners of the
applicable Units) and the right to call meetings; and
12.2.5 all rights attendant to the Limited Partnership
Interests, other than record ownership and the right to vote
directly upon matters submitted to Limited Partners for a vote,
which Limited Partners have to the extent they may be assigned
under this Partnership Agreement and under the Partnership Act.
12.3 Consent to Assignment. The General Partners, by the
execution of this Agreement, irrevocably consent to the foregoing
transfer and assignment by the Assignor Limited Partner to the
Unitholders of the Assignor Limited Partner's rights and interest
in the assigned Limited Partnership Interests as described above,
and acknowledge that (i) each such transfer and assignment is
effective and (ii) the Unitholders are intended to be and shall be
treated as third party beneficiaries of the assigned rights and
privileges of the Assignor Limited Partner in respect of the
assigned Limited Partnership Interests. The General Partners
covenant and agree that, in accordance with such transfer and
assignment, all the Assignor Limited Partner's rights and
privileges in respect of assigned Limited Partnership Interests may
be exercised by the Unitholders.
12.4 No Liability of Assignor Limited Partner. The Assignor
Limited Partner shall not be liable to any Unitholder for any
action taken or nonaction by it in good faith reliance upon advise,
written notice, request or direction from a Unitholder believed by
it to be genuine and to have been signed or presented by the proper
person(s).
12.5 Rights and Liabilities of Unitholders. In accordance with
the foregoing transfer and assignment described in Paragraph 12.2,
it is the intention of the parties hereto that Unitholders shall
have the same rights and obligations that Limited Partners have
under this Partnership Agreement and under the Partnership Act.
Without limiting the generality of the foregoing, Limited Partners
(other than the Assignor Limited Partner) and Unitholders shall
share pari passu on the basis of one Limited Partnership Interest
for one Unit, and shall be considered as a single class, with
respect to all rights to receive Distributions and allocations
pursuant to this Partnership Agreement.
12.6 Voting. As provided in Paragraph 16.4.2, Limited Partners
(other than the Assignor Limited Partner) and Unitholders shall
vote on all matters in respect of which they are entitled to vote
(either in person, by proxy, or by written consent), as a single
class, with each Limited Partnership Interest and each Unit
entitled to one vote; provided, however, that the Assignor Limited
Partner shall vote on behalf of and only as directed by the
Unitholders and that a General Partner shall not be entitled to
vote unless he or it owns Units or Limited Partnership Interests.
12.7 Canvassing Unitholders. The Assignor Limited Partner, in
compliance with the proxy rules of the Securities and Exchange
Commission set forth in Regulation 14A if and to the extent such
proxy rules are applicable, shall canvass the preferences of all
Unitholders on all matters to be voted on by the Limited Partners
(including the Assignor Limited Partner on behalf of the
Unitholders). Each General Partner shall have the right to assist
in the preparation of and/or review any documents to be utilized by
the Assignor Limited Partner in canvassing the Unitholders (or
their nominees).
12.8 Capital Accounts. The Assignor Limited Partner shall
direct the Partnership to maintain records showing capital accounts
on behalf of the Unitholders in respect of their Original Invested
Capital which shall reflect Net Income, Net Loss, Depreciation and
Distributions attributable to their assigned Limited Partnership
Interests.
12.9 Allocations. The portion of Net Income, Net Loss and
Distributions which shall be credited to the account of the
Assignor Limited Partner for the benefit of Unitholders shall be
allocated and apportioned among the Unitholders in the same manner
as Net Income, Net Loss and Distributions are allocated and
apportioned among the Limited Partners with respect to the assigned
Limited Partnership Interests in Article 11 of this Partnership
Agreement. The portion of Depreciation which shall be credited to
the account of the Assignor Limited Partner for the benefit of
Unitholders shall be allocated and apportioned among the
Unitholders as follows: (i) all of the 19-year Depreciation (or the
shortest period prescribed by law) of the Partnership shall be
allocated to the Unitholders holding Class A Units; and (ii) all of
the 40-year Depreciation (or the shortest period prescribed by law)
of the Partnership shall be allocated to the Unitholders holding
Class B/TE Units.
12.10 Conversion of Units into Limited Partnership Interests.
Any Unitholder who desires to convert all his Units into Limited
Partnership Interests may do so following the Final Closing Date by
(a) delivering to the Assignor Limited Partner endorsed Depositary
Receipts, executed subscription agreements and transfer
applications (which are available upon request from the General
Partners) for such number of Units as are actually owned by such
Unitholder, (b) fulfilling the requirements of Paragraph 13.4 for
the admission of substitute Limited Partners and (c) paying a fee
equal to the greater of (i) $150 ($30 for Individual Retirement
Accounts), or (ii) the actual cost to the Partnership to complete
such transfer, such costs to include, without limitation, legal and
administrative costs and recording fees. Unitholders surrendering
Depositary Receipts to become Limited Partners must surrender all
of their Units and will be admitted to the Partnership four times
a year, on or as promptly as possible after the commencement of the
next calendar quarter of the Partnership. Persons who effect such
conversion will receive one Limited Partnership Interest for each
Unit they convert and will not be able to re-exchange their Limited
Partnership Interests for Units. The capital account of the
Assignor Limited Partner shall be reduced by an amount equal to the
capital account of such former Unitholder's new capital account as
a substitute Limited Partner. Units which have been converted into
Limited Partnership Interests will be cancelled and will not be
reissued.
12.11 Transferability of Units. Units evidenced by Depositary
Receipts shall be issued in registered form and shall be freely
transferable 15 days after the Final Closing Date (unless the
General Partners permit earlier transfers) unless otherwise
restricted under applicable federal or state securities laws or
unless the General Partners impose transfer restrictions pursuant
to Paragraph 15.2.20; provided, however, that Class A Units may be
acquired by or transferred to taxable investors only, and Class
B/TE Units may be acquired by or transferred to tax-exempt
investors only. The transferee of a Unit shall not be recognized as
an assignee of Limited Partnership Interests until the first day of
the calendar month following such transfer; provided, however that
if either or both classes of Units are listed on an exchange or
quoted on NASDAQ, such Transfer will be effective on the day such
transfer is accepted and recorded by the transfer agent of the
Partnership in respect of the Units. Any attempted sale,
assignment, transfer or exchange in contravention of the provisions
of this Article 12 shall, unless otherwise determined by the
General Partners in their sole discretion, be void and deemed
ineffectual and shall not bind or be recognized by the Partnership.
13. TRANSFERABILITY OF LIMITED PARTNERSHIP INTERESTS
13.1 Restrictions on Transfers of Limited Partnership
Interests by Limited Partners Other Than the Assignor Limited
Partners. A Limited Partner (other than the Assignor Limited
Partner on behalf of the Unitholders) may only assign his Limited
Partnership Interests by a duly executed, written instrument of
assignment, the terms of which are not in contravention of any of
the provisions of this Agreement. Within 30 days after any proposed
assignment of Limited Partnership Interests which occurs without a
transfer of record ownership of such Limited Partnership Interests,
the assignor shall give notice of such proposed assignment to the
General Partners. Notwithstanding the foregoing, no Limited Partner
(other than the Assignor Limited Partner on behalf of the
Unitholders) may sell, assign, transfer or exchange any Limited
Partnership Interests:
13.1.1 if such sale, assignment, transfer or exchange may
result, when considered in the aggregate with all other sales,
assignments, transfers and exchanges of Limited Partnership
Interests which are effective within the previous 12 months, in the
Partnership being considered to have been terminated within the
meaning of Section 708 of the Code;
13.1.2 if such sale, assignment, transfer or exchange would be
in violation of any applicable federal or state securities law
(including any investor suitability standard); or
13.1.3 except for transfers by gift or inheritance,
intra-family transfers, transfers resulting from family
dissolutions, transfers to Affiliates or transfers of such
transferor's entire holdings of Limited Partnership Interests, if
the transferor or the transferee would hold Limited Partnership
Interests representing Original Invested Capital of less than
$10,000 ($2,000 for transfers by or to IRAs or ▇▇▇▇▇ Plans).
13.2 Void Transfers. Any attempted sale, assignment, transfer
or exchange in contravention of the provisions of this Article 13
shall, unless otherwise determined by the General Partners in their
sole discretion, be void and deemed ineffectual and shall not bind
or be recognized by the Partnership.
13.3 Effective Date. An assignment of Limited Partnership
Interests shall be effective, and an assignee of Limited
Partnership Interests shall be entitled to receive allocations of
Net Income, Net Loss and deductions, and Distributions in respect
of such allocations attributable to the Limited Partnership
Interests acquired by reason of such assignment, only from and
after the "effective date" of the assignment of such Limited
Partnership Interests to him; provided, however, anything herein to
the contrary notwithstanding, that the Partnership and the General
Partners shall be entitled to treat the assignor of such Limited
Partnership Interests as the absolute owner thereof in all
respects, and shall incur no liability for any allocation of Net
Income, Net Loss or deduction, Distribution, or transmittal of
reports or notice required to be given to Limited Partners
hereunder which is made in good faith to such assignor until such
time as the written instrument of assignment has been received by
the Partnership and recorded on its books and the "effective date"
of the assignment has passed. The "effective date" of any such
assignment of Limited Partnership Interests, for any and all
purposes, shall be the first day of the calendar month beginning
after the later to occur of (a) the date set forth on the written
instrument of assignment or (b) the date on which the Partnership
has received written notice of the assignment of the Limited
Partnership Interests.
13.4 Substitute Limited Partners. No person shall have the
right to become a substitute Limited Partner in place of his
assignor unless all of the following conditions are first
satisfied:
13.4.1 a duly executed and acknowledged written instrument of
assignment covering Limited Partnership Interests representing
Original Invested Capital of at least $10,000 ($2,000 in the case
of IRAs or ▇▇▇▇▇ Plans) shall have been filed with the Partnership
and recorded on its books, which instrument shall specify the
Limited Partnership Interests being assigned and set forth the
intention of the assignor that the assignee succeed to the
assignor's interest as a substitute Limited Partner in his place;
13.4.2 the Limited Partner and his assignee shall have
executed and acknowledged such other instruments as the General
Partners may deem necessary or desirable to effect such
substitution, including the written acceptance and adoption by the
assignee of the provisions of this Agreement, as the same may be
amended, and his execution, acknowledgement and delivery to the
General Partners of a special power of attorney, the form and
content of which are described herein; and
13.4.3 a transfer fee equal to the greater of (a) $150, or (b)
the actual cost to the Partnership to complete such transfer, to
cover all reasonable expenses connected with such substitution
shall have been paid to the Partnership.
13.5 Consent. By executing and/or adopting this Agreement,
each Limited Partner, including the Assignor Limited Partner on
behalf of the Unitholders, consents to the admission of substitute
Limited Partners by the General Partners in accordance with the
foregoing.
13.6 Records. The General Partners shall cause this Agreement
and, if required by the Partnership Act or any other applicable
law, any separate certificate of limited partnership to be amended
to reflect the admission and/or substitution of substitute Limited
Partners at least once in each calendar month, but not later than
30 days after the effective date of the substitution.
14. BOOKS, RECORDS, ACCOUNTING AND REPORTS
14.1 Location of Records; Copies. The Partnership's books and
records, this Partnership Agreement and any amendment hereto or
restatement hereof, any separate certificate of limited partnership
and any amendment thereto or restatement thereof, and copies of
each appraisal of Partnership Property shall be maintained at the
principal office of the Partnership or such other place as the
General Partners may determine and shall be open to inspection,
examination and copying by Limited Partners or their duly
authorized representatives at all reasonable times. A reasonable
charge for copy work may be charged by the Partnership. Other than
as included in the Prospectus, the Limited Partners shall not
receive copies of this Partnership Agreement and any amendment
hereto or restatement hereof, the certificate of limited
partnership and any amendment thereto or restatement thereof, or a
current list of all Partners and Unitholders in the Partnership
unless they request in writing a copy from the General Partners and
pay any necessary duplication fee. Each appraisal of Partnership
Property shall be maintained by the General Partners and available
for inspection and examination by any Limited Partner or his duly
authorized representative at all reasonable times for the term of
the Partnership following the date of acquisition of the Property
that is the subject of such appraisal (but for not less than five
years).
14.2 Annual Reports. The General Partners shall have prepared
at least annually (a) financial statements (balance sheet,
statement of income or loss, partners' equity and changes in
financial position) prepared in accordance with generally accepted
accounting principles and accompanied by a report thereon
containing an opinion of an independent certified public accounting
firm; (b) a statement of cash flow; (c) Partnership information
necessary in the preparation of the Limited Partners' and
Unitholders' federal income tax returns; (d) a report of the
business of the Partnership; (e) a statement as to the compensation
received by the General Partners and their Affiliates during the
year from the Partnership, which statement shall set forth the
services rendered or to be rendered by the General Partners and
their Affiliates and the amount of fees received, and a report
identifying Distributions from: (i) Adjusted Cash From Operations
of that year and/or prior years; (ii) Distributable Cash From
Operations; (iii) Cash From Sales or Refinancings and (iv) cash
from reserve accounts and other sources, together with a breakdown
of all costs reimbursed to the General Partners and Affiliates from
the Partnership. Within the scope of the annual audit, the
independent certified public accountants must verify the allocation
of such costs to the Partnership. The method of verification shall
be in accordance with generally accepted auditing standards and
shall include such tests of the accounting records and such other
auditing procedures which the independent certified public
accountants consider appropriate in the circumstances. Copies of
the annual report shall be distributed to each Limited Partner and
Unitholder within 120 days after the close of each taxable year of
the Partnership; provided, however, that all Partnership
information necessary in the preparation of the Limited Partners'
and Unitholders' federal income tax returns shall be distributed to
each Limited Partner and Unitholder not later than 75 days
subsequent to December 31 of each year.
14.3 Quarterly Report. The General Partners shall prepare,
commencing with the first fiscal quarter in which the effective
date of the registration statement of which the Prospectus is a
part occurs, quarterly reports covering each of the first three
quarterly fiscal year periods of Partnership operations in each
fiscal year, unaudited financial statements (balance sheet,
statement of income or loss for such quarterly period and statement
of Adjusted Cash From Operations and Distributable Cash From
Operations for such quarterly period), a statement as to the
compensation received by the General Partners and their Affiliates
during such quarter from the Partnership (which statement shall set
forth the services rendered or to be rendered by the General
Partners and their Affiliates and the amount of fees received) and
a statement of other pertinent information regarding the
Partnership and its activities during the quarterly period covered
by the report. At such time as the Partnership is required to file
Quarterly Reports on Form 10-Q with the Securities and Exchange
Commission, the Partnership may make the reports required by this
Section on such Forms 10-Q. Copies of such statements and other
pertinent information shall be distributed to each Limited Partner
and Unitholder within 60 days after the close of the quarterly
period covered by the report of the Partnership.
14.4 ERISA Report. The General Partners shall (to enable
Limited Partners and Unitholders subject to annual reporting
requirements under ERISA to file such annual reports as they relate
to an investment in the Partnership), within 120 days after the end
of each taxable year, furnish each Limited Partner and Unitholder
with an annual statement of value. Such annual statement shall,
during the period between the end of each taxable year and 120 days
thereafter, be available upon request of Limited Partners and
Unitholders. Such annual statement shall report the value of each
Unit (and the underlying Limited Partnership Interest) based upon
the General Partners' estimate of the amount a holder thereof would
receive if Partnership Properties were sold as of the close of the
Partnership's fiscal year and if the proceeds therefrom (without
reduction for selling expenses), together with any other funds of
the Partnership, were distributed in a liquidation of the
Partnership pursuant to this Agreement.
14.5 Acquisition Reports. The General Partners shall
distribute to each Limited Partner and Unitholder within 45 days
after the end of each fiscal quarter in which Partnership
Properties are acquired, a report which shall describe: (i) the
location and a description of the general character of all
materially important Properties acquired or presently intended to
be acquired by the Partnership during the quarter; (ii) the present
or proposed use of such Properties and their suitability and
adequacy for such use; (iii) the terms of any material lease
affecting the Property; (iv) the proposed method of financing,
including estimated down payment, leverage ratio, prepaid interest,
balloon payment(s), prepayment penalties, due-on-sale or
encumbrance clauses and possible adverse effects thereof and
similar details of the proposed financing plan; (v) a statement
that title insurance and any required permanent or other financing
have been or will be obtained on all Properties acquired; and (vi)
such other relevant information with respect to the acquisition of
such Properties as the General Partner deems appropriate (including
by way of illustration the date and appraised value of the real
property, and the amount of Net Proceeds remaining uncommitted, in
terms of dollars and percentage of Gross Proceeds).
14.6 Information Returns. The General Partners shall cause
information returns for the Partnership to be prepared and timely
filed with the appropriate authorities.
14.7 Miscellaneous Reports. The General Partners shall cause
to be prepared and timely filed, with appropriate federal and state
regulatory and administrative bodies, all reports required to be
filed with such entities under then current applicable laws, rules,
and regulations; provided, however, that the General Partners shall
only be required to use their best efforts to file reports with
local authorities on a timely basis. Such reports shall be prepared
on the accounting or reporting basis required by such regulatory
bodies. Any Limited Partner or Unitholder shall be provided with a
copy of any such report, upon request in writing, without expense
to him.
14.8 Suitability Records. The General Partners shall maintain
for a period of at least four years a record of the information
obtained to indicate that a Limited Partner or Unitholder meets the
suitability standards set forth in the Prospectus.
15. RIGHTS, AUTHORITY, POWERS, RESPONSIBILITIES AND DUTIES OF THE
GENERAL PARTNERS
15.1 Services of the General Partners. The General Partners
shall only be responsible for the following services to the
Partnership:
15.1.1 supervising the organization of the Partnership and the
offering and sale of Units;
15.1.2 arranging for (i) the identification of Properties
suitable for investment by the Partnership; (ii) a review of the
significant factors in deciding whether or not to invest in a
particular Property; and (iii) if a decision is made to make a
particular investment, the making of such investment;
15.1.3 supervising Partnership management, which includes (i)
establishing policies for the operation of the Partnership; (ii)
causing the Partnership's agents or employees to arrange for the
provision of services necessary to the operation of the Partnership
(including property management, investor, accounting and legal
services, and services relating to Distributions by the
Partnership); (iii) when necessary or appropriate, approving
actions to be taken by the Partnership; (iv) providing advice,
consultation, analysis and supervision with respect to the
functions of the Partnership as an owner of Partnership Properties
(including, without limitation, decisions regarding adjustments to
rental schedules, the Sale or Disposition of Partnership Properties
and compliance with federal, state and local regulatory
requirements and procedures); (v) executing documents on behalf of
the Partnership; (vi) having a fiduciary responsibility for the
safekeeping and use of all funds of the Partnership, whether or not
in the General Partners' immediate possession or control; and (vii)
making all decisions as to accounting matters; and
15.1.4 approval of the terms of the Sale or Disposition of
Partnership Properties, including establishing the terms for and
arranging any such transaction.
15.2 Powers of the General Partners. The conduct of the
Partnership's business shall be controlled by the General Partners.
The General Partners shall have all authority, rights and powers
conferred by law and those required or appropriate to the
management of the Partnership's business which, by way of
illustration but not by way of limitation, shall, subject only to
the provisions of Paragraph 15.4 following, include the right,
authority and power:
15.2.1 to acquire, improve, hold and dispose of real property,
interests therein or appurtenances thereto, as well as personal or
mixed property connected therewith, including the purchase, lease,
improvement, maintenance, exchange, trade or sale of such
properties and, subject to the provisions of Paragraph 15.4.33 of
this Agreement, to invest in any program, partnership or other
venture, at such price, rental or amount, for cash, securities (in
compliance with appropriate securities regulations) or other
property and upon terms, as the General Partners in their sole
discretion deem to be in the best interests of the Partnership;
15.2.2 to cause the Partnership to borrow money and, if
security is required therefor, to mortgage or subject any
Partnership investment to any other security device, 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 at such terms and in such amounts as the General
Partners, in their sole discretion, deem to be in the best
interests of the Partnership;
15.2.3 to place record title to or the right to use
Partnership assets in the name(s) of nominee(s) or trustee(s) for
any purpose convenient or beneficial to the Partnership;
15.2.4 to acquire and enter into any contract of insurance
which the General Partners deem necessary or appropriate for the
protection of the Partnership and the General Partners, for the
conservation of Partnership assets, or for any purpose convenient
or beneficial to the Partnership;
15.2.5 to employ persons in the operation and management of
the business of the Partnership including, but not limited to,
supervisory managing agents, building management agents, insurance
brokers, real estate brokers and loan brokers, on such terms and
for such compensation as the General Partners shall determine,
subject, however, to the limitations with respect thereto as set
forth in Article 9 and provided that agreements with the General
Partners or their Affiliates for the services set forth in Article
9 shall contain the terms and limitations as to fees and expenses
as set forth in Article 9 and provided further that any of such
agreements shall be terminated immediately upon dissolution of the
Partnership under Paragraph 19.1;
15.2.6 to prepare or cause to be prepared reports, statements
and other relevant information, including without limitation all
federal income tax reports, statements and information, for
distribution to Limited Partners and Unitholders, including annual
and quarterly reports;
15.2.7 to open accounts and deposit and maintain funds in the
name of the Partnership in banks or savings and loan associations;
15.2.8 to cause the Partnership to make or revoke any of the
elections permitted by the Code;
l5.2.9 to select as its accounting year for financial
reporting and tax purposes a fiscal year ending December 31 or any
other fiscal year approved by the Internal Revenue Service;
15.2.10 to determine the appropriate accounting method or
methods to be used by the Partnership in maintaining its books and
records, provided that for tax purposes, the Partnership shall use
initially the accrual method of accounting;
15.2.11 to offer and sell Units in the Partnership to the
public directly or through any registered member of the National
Association of Securities Dealers, Inc., whether an Affiliate or
non-Affiliate, and to employ personnel, agents and dealers for such
purpose;
15.2.12 to require in all Partnership obligations that the
General Partners shall not have any personal liability thereon but
that the person or entity contracting with the Partnership is to
look solely to the Partnership and its assets for satisfaction and
in the event that any such obligation has personal liability, the
General Partners may require its satisfaction prior to entering
into contracts without such personal liability; provided, however,
that the inclusion of the aforesaid provisions shall not materially
affect the cost of the service or material being supplied and all
Partnership obligations are satisfied in accordance with prudent
business practical as to time and manner of payment;
15.2.13 to reinvest all Cash From Initial Financing and all
Cash from Sales and Refinancings;
l5.2.14 to purchase Property in its own name or in the name of
a nominee, a trust or otherwise (and assume loans in connection
therewith) and temporarily hold title thereto for the purpose of
facilitating the acquisition of such Property or the borrowing of
money or obtaining of financing for the Partnership, or any other
purpose related to the business of the Partnership; provided that
such Property is purchased by the Partnership for a purchase price
no greater than the cost of such Property to the General Partners
or their Affiliates, except for compensation in accordance with
Article 9 of this Agreement; and further provided that there is no
difference in interest rates of the loans secured by the Property
at the time acquired by the nominee and the time acquired by the
Partnership, nor any other benefit arising out of such transaction
to the General Partners apart from the compensation otherwise
permitted by this Agreement;
15.2.15 to allow the Partnership to borrow money from
Affiliates of the General Partners on a short-term basis, at any
time and from time to time including, but not limited to, prior to
the Final Closing Date, and in connection therewith to pay interest
and other financing charges or fees which would be charged by a
third party financing institution on comparable loans for the same
purpose in the same geographic area; provided, however, that no
prepayment charge or penalty shall be required by the General
Partners or their Affiliates on any such loan to the Partnership
secured by either a first or a junior or all-inclusive trust deed,
mortgage or encumbrance on Property except to the extent that such
prepayment charge or penalty is attributable to the underlying
encumbrance;
15.2.16 to allow the Partnership to sell Properties to
Affiliates of the General Partners in order to provide sufficient
funds to the Partnership to repay loans, in the event that the
proceeds of the sale of Units are not sufficient to permit the
Partnership to repay any loans obtained in order to purchase
Properties. In such event, Properties will be sold in the reverse
order in which they were acquired by the Partnership with the most
recently acquired Property being sold first. The sales price will
be an amount equal to the Partnership's purchase price for the
Property plus the amount of all the carrying costs, including
principal and interest, incurred by the Partnership during the
period the Partnership owned such Property and the cost of all
capital improvements made to the Property at the expense of the
Partnership. All or a portion of the price will be paid by the
Affiliates of the General Partners taking title subject to any
existing mortgage loans on the Properties;
15.2.17 prior to the sale of the minimum number of Units as
set forth in the Prospectus, to deposit the Gross Proceeds into an
escrow account and to invest such funds temporarily in bank
accounts, short-term certificates of deposit issued by a bank or
short-term securities issued or guaranteed by the United States
Government and any other investment permitted under Rule 15c2-4 of
the Securities Exchange Act of 1934; and prior to investment in
Properties but after the sale of such minimum number of Units, to
invest the Gross Proceeds or Net Proceeds temporarily in United
States Government securities, certificates of deposit of United
States banks having assets in excess of $100,000,000, bank
repurchase agreements covering the securities of the United States
Government or governmental agencies, bankers' acceptances,
commercial paper rated A or better by ▇▇▇▇▇'▇ Investors Service,
Inc. and/or money market funds having assets in excess of
$100,000,000;
15.2.18 in their sole discretion, on behalf of the
Partnership, to list the Units on a securities exchange or the
National Association of Securities Dealers, Inc. Automated
Quotation System or otherwise facilitate the establishment of a
market for the trading of Units, and take such actions as they deem
appropriate therefor. In connection therewith, upon notice to but
without the consent of the Limited Partners and Unitholders, the
General Partners may amend this Agreement to give effect to any
action taken pursuant to the preceding sentence, including, without
limitation, to change from monthly to a shorter or longer period
the dates upon which transfers of Units will be recognized;
15.2.19 to assure any person dealing with the Partnership or
the General Partners that he may rely upon a certificate signed by
either or both General Partners as authority with respect to: (a)
the identity of any General Partner, Limited Partner or Unitholder
hereof; (b) the existence or nonexistence of any fact which
constitutes a condition precedent to acts by a General Partner or
which are in any other manner germane to the affairs of the
Partnership; (c) the persons who are authorized to execute and
deliver any instrument or document of the Partnership; or (d) any
act or failure to act by the Partnership or as to any other matter
whatsoever involving the Partnership, any Partner or Unitholder;
15.2.20 to take such steps, including making any amendment to
this Agreement, as the General Partners determine are advisable or
necessary in order to preserve the tax status of the Partnership as
a pass-through entity for federal income tax purposes, including,
without limitation, imposing restrictions on transfers of Limited
Partnership Interests or Units (provided such restrictions on
transfers do not cause the Partnership's assets to be deemed to be
"plan assets" with respect to investors which are Qualified Plans).
The General Partners shall take steps pursuant to this Paragraph
15.2.20 only if they determine, in good faith, that such steps are
in the best interests of the Limited Partners and Unitholders;
15.2.21 in addition to any amendment otherwise authorized
herein, to amend this Agreement from time to time,
(a) to add to the representations, duties or obligations of
the General Partners or their Affiliates or surrender any right or
power granted to the General Partners or their Affiliates herein,
for the benefit of the Limited Partners and Unitholders, except to
the extent required by law;
(b) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with law or with any
other provision herein, or to make any other provision with respect
to matters or questions arising under this Agreement which will not
be inconsistent with law or with any other provision herein;
(c) to delete from or add to any provision of this Agreement
required to be so deleted or added by the staff of the Securities
and Exchange Commission or by a State securities commissioner or
similar such official, which addition or deletion is deemed by such
Commission or official to be for the benefit or protection of the
Limited Partners and Unitholders;
(d) to change the name of the Partnership to any lawful name
which they may select;
(e) to reflect the addition or substitution of Limited
Partners or the reduction of capital accounts upon the return of
capital to Partners, including the Assignor Limited Partner on
behalf of the Unitholders;
(f) upon notice to all Limited Partners, (i) to amend the
provisions of Article 11: (A) so as to revise the date upon which
each Partner's distributive share of Net Income, Net Loss and
Distributions of Adjusted Cash from Operations is determined and
the period of time over which such distributive share relates,
provided that in the opinion of the accountants or counsel to the
Partnership, such amended provisions are permissible under
applicable Federal and/or state income tax legislation, rules or
regulations enacted or promulgated thereunder, or administrative
pronouncements or interpretations thereof; and (B) to the minimum
extent necessary to take account of any amendments to Section 704
of the Code or the regulations thereunder or any judicial or
administrative interpretations thereof; (ii) to take such steps as
the General Partners determine are advisable or necessary in order
to preserve the tax status of the Partnership as a pass-through
entity for federal income tax purposes, including, without
limitation, converting to a different form of pass-through entity;
and/or (iii) in the event that either (A) the assets of the
Partnership would constitute "plan assets" for purposes of ERISA or
(B) the transactions contemplated hereunder would constitute
"prohibited transactions" under ERISA or the Code and an exemption
for such transactions is not obtainable, or not sought by the
General Partners, from the United States Department of Labor, to
(I) restructure the Partnership's activities to the extent
necessary to comply with any exemption in any final plan asset
regulation adopted by the Department of Labor or to comply with any
requirement the Department of Labor might impose as a condition to
granting a prohibited transaction exemption, including, but not
limited to, discontinuing sales to tax-exempt investors after a
given date and/or restructuring the property management activities
of the Partnership, and/or (II) terminate the offering of Units or
to compel a dissolution and termination of the Partnership. The
General Partners are empowered to amend such provisions to the
minimum extent they believe necessary in accordance with the advice
of accountants and/or counsel to comply with any applicable federal
or state legislation, rules, regulations, administrative
pronouncements or interpretations and/or judicial interpretations
thereof after the date of this Partnership Agreement. Such
amendment(s) made by the General Partners in reliance upon the
advice of competent accountants or counsel described above shall be
deemed to be made pursuant to the fiduciary obligation of the
General Partners to the Partnership and Limited Partners or
Unitholders, and no such amendment shall give rise to any claim or
cause of action by any Limited Partner or Unitholder; and
15.2.22 to execute, acknowledge and deliver any and all
instruments to effectuate the foregoing, and to take all action in
connection therewith as the General Partners shall deem necessary
or appropriate.
15.3 Comparison With General Partnership. Except as otherwise
provided in this Partnership Agreement or in the Partnership Act,
the General Partners shall have all the rights and powers and shall
be subject to all the restrictions of a partner in a partnership
without limited partners.
15.4 Limitations. Neither the General Partners nor any
Affiliate shall have the authority to:
15.4.1 enter into contracts with the Partnership which would
bind the Partnership after the removal, adjudication of bankruptcy
or insolvency of the last remaining General Partner, or continue
the business with Partnership assets after the occurrence of such
event;
15.4.2 grant to them or any Affiliate an exclusive listing for
the sale of Partnership assets, including Partnership Properties;
15.4.3 without the consent of the Unitholders and Limited
Partners as provided in Paragraph 16.2.5, sell all or Substantially
All of the Assets of the Partnership in a single sale, or in
multiple sales in the same twelve-month period, except in the
orderly liquidation and winding up of the business of the
Partnership upon its termination and dissolution and except in the
ordinary course of the business of the Partnership;
15.4.4 without the consent of the Unitholders and Limited
Partners as provided in Paragraph 16.2.6, pledge or encumber all or
Substantially All of the Assets of the Partnership at one time,
other than in connection with the acquisition or improvement of
assets or the refinancing of previous obligations;
15.4.5 alter the nature of the business of the Partnership as
set forth in Article 3;
15.4.6 receive a rebate or give-up or participate in any
reciprocal business arrangement which would enable it or an
Affiliate to do so;
15.4.7 except as provided in this Agreement, sell or lease any
Property to any entity in which a General Partner or any Affiliate
has an interest;
15.4.8 except as provided in this Agreement, purchase or lease
Property from the Partnership or sell or lease Property to the
Partnership;
15.4.9 purchase Property for the Partnership without first
having obtained an appraisal with respect to the value thereof,
rendered by an independent appraiser who is a member of a
nationally recognized society of appraisers, which appraisal
provides that the purchase price of such Property plus any
Acquisition Fees paid with respect to such Property by any person
equals or is less than the appraised value;
15.4.10 cause the Partnership to exchange Units or Limited
Partnership Interests for real property;
15.4.11 make long-term secured or unsecured loans or other
permanent financing to the Partnership and on short-term unsecured
loans made to the Partnership, receive interest or other financing
charges or fees in excess of those amounts which would be charged
by unaffiliated third party financing institutions on comparable
loans for the same purpose in the same geographic area; as used
herein, "long term" or "permanent" financing shall mean financing
the principal amount of which is scheduled to be paid over a period
of not less than 48 months, and not more than 50% of the principal
amount of which is scheduled to be paid during the first 24 months;
15.4.12 cause the Partnership to finance the purchase of
Partnership Property by use of a wraparound note and mortgage
("all-inclusive" note and deed of trust) unless: (a) no General
Partner or any Affiliate thereof shall receive interest in excess
of that payable to the lender on such underlying encumbrances; (b)
all payments on the underlying obligation shall be made by the
Partnership or, in the alternative, payments by the Partnership on
the wraparound note are made to a third party collecting agent
which in turn disburses such payment, first to the holder of such
underlying obligation, and thereafter to the holder of the
wraparound note; and (c) the Partnership will receive credit on its
all-inclusive note for payments made directly on the underlying
obligations;
15.4.13 do any act in contravention of this Agreement or which
would make it impossible to carry on the ordinary business of the
Partnership;
15.4.14 confess a judgment against the Partnership in
connection with any threatened or pending legal action;
15.4.15 possess any Partnership Property or assign the rights
of the Partnership in specific Partnership Property for other than
a Partnership purpose;
15.4.16 admit a person as a General Partner except as provided
in this Agreement;
15.4.17 perform any act (other than an act required by this
Agreement or any act taken in good faith reliance upon counsel's
opinion) which would, at the time such act occurred, subject any
Limited Partner or Unitholder to liability as a general partner in
any jurisdiction;
15.4.18 reinvest in Property any Adjusted Cash From
Operations;
15.4.19 invest any of the Gross Proceeds in Properties which
are non-income producing except in amounts and upon terms which can
be financed by Gross Proceeds or Adjusted Cash From Operations, but
in no event shall such investment exceed 10% of the Gross Proceeds;
15.4.20 receive any insurance brokerage fee or write any
insurance policy covering any of the Partnership Properties;
15.4.21 employ, or permit to employ, the funds or assets of
the Partnership in any manner except for the exclusive benefit of
the Partnership;
15.4.22 incur any nonrecourse indebtedness wherein the lender
will have or acquire, at any time as a result of making the loan,
any direct or indirect interest in the profit, capital or property
of the Partnership other than as a secured creditor;
15.4.23 incur aggregate borrowings of the Partnership in
excess of the sum of (a) 60% of the aggregate purchase price as to
all Properties which have not been refinanced plus (b) 80% of the
aggregate value as determined by the lender as of the date of
refinancing as to all Properties which have been refinanced;
purchase price for purposes of this Paragraph shall mean the sum of
the cash down payment, any Net Proceeds allocated for capital
improvements, any mortgage indebtedness on a Property acquired by
the Partnership and any Acquisition Fee paid, but does not include
loan points, prepaid interest or other prepaid expenses;
15.4.24 commingle the Partnership funds with those of any
other person or entity except that the use of a zero balance or
clearing account shall not constitute a commingling of Partnership
funds and that funds of the Partnership and funds of other
partnerships sponsored by the General Partners or their Affiliates
may be held in an account or accounts established and maintained
for the purpose of making computerized disbursements and/or
short-term investments;
15.4.25 receive any commission or fee for the placement of
mortgage loans or trust deed loans on the Partnership Property or
otherwise act as a finance broker on behalf of the Partnership;
15.4.26 directly or indirectly pay or award any finder's fees,
commissions or other compensation to any person engaged by a
potential investor for investment advice as an inducement to such
advisor to advise the purchaser regarding the purchase of Units;
provided, however, that the General Partners shall not be
prohibited from paying the normal sales commissions payable to a
broker-dealer registered with the NASD;
15.4.27 operate the Partnership in such a manner as to have
the Partnership classified as an "investment company" for purposes
of the Investment Company Act of 1940;
15.4.28 invest any of the Gross Proceeds in mortgages, junior
trust deeds or other similar obligations;
15.4.29 use any of the Gross Proceeds to prepay interest on
Partnership mortgages, deeds of trust or other similar obligations;
however, the General Partners may cause the Partnership to pay
"points" to prospective lenders as a condition to obtaining
financing and may cause the Partnership to pay any prepayment
penalties incurred by the sellers of Properties acquired by the
Partnership;
15.4.30 cause the Partnership to enter into any agreements
with a General Partner or its Affiliates which shall not be subject
to termination without penalty by either party upon not more than
60 days' written notice;
15.4.31 cause the Partnership to lend money to the General
Partners or their Affiliates;
15.4.32 except as specifically provided in this Agreement,
cause the Partnership to invest in or underwrite the securities of
other issuers for any purposes;
15.4.33 (a) cause the Partnership to invest in any program,
partnership or other venture unless: (i) it is a general
partnership or a joint venture; (ii) such general partnership or
joint venture owns and operates a particular Property and the
Partnership acquires the controlling interest in such entity; (iii)
the Partnership, as a result of the form of such ownership of a
Property, is not charged directly or indirectly, more than once for
the same service; (iv) the agreement of partnership or joint
venture does not authorize the Partnership to do anything as a
partner or joint venturer with respect to the Property which the
Partnership or a General Partner could not do directly because of
the policies set forth in this Partnership Agreement; and (v) the
General Partners and the Affiliates of a General Partner are
prohibited from receiving any compensation, fees or expenses which
are not permitted to be paid under the terms of this Agreement; or
(b) Notwithstanding Paragraph 15.4.33(a), the Partnership
shall be permitted to invest in joint venture arrangements with
programs that are Affiliates of the Partnership if all of the
following conditions are met: (i) such affiliated program has
investment objectives and policies substantially identical to those
of the Partnership; (ii) there are no duplicative property
management or other fees; (iii) the compensation of the General
Partners and sponsor of such affiliated program is substantially
identical; (iv) the Partnership has a right of first refusal to buy
the affiliated program's interest in the joint venture if such
affiliated program wishes to sell property held in the joint
venture; and (v) the investment of the Partnership and the
affiliated program in the joint venture is on substantially the
same terms and conditions (although not necessarily the same
percentage).
15.5 No Personal Liability. The General Partners shall have no
personal liability for the repayment of the Original Invested
Capital of any Limited Partner or Unitholder or to repay the
Partnership any portion or all of any negative balance in their
capital accounts, except as otherwise provided in Paragraph 5.3.
15.6 Notice of Limitation of Liability. Each of the General
Partners shall at all times conduct its or his affairs and the
affairs of the Partnership and all of its Affiliates in such a
manner that neither the Partnership, any Partner, any Unitholder,
nor any Affiliate thereof will have any personal liability under
any mortgage on any of the Partnership Properties or make any
guaranty thereof, unless, in the opinion of the General Partners,
it would be in the best interest of the Limited Partners and
Unitholders for the General Partners to be personally liable on
recourse liabilities or to make such guaranties. The General
Partners shall use their best efforts, in the conduct of the
Partnership's business, to put all suppliers and other persons with
whom the Partnership does business on notice that the Limited
Partners and Unitholders are not liable for Partnership obligations
and all agreements to which the Partnership is a party shall
include a statement to the effect that the Partnership is a limited
partnership organized under the Partnership Act; however, the
General Partners shall not be liable to the Limited Partners and
Unitholders for any failure to give such notice to such suppliers
or other persons.
15.7 Notice of Withdrawal of General Partner. Following the
receipt by a General Partner of written notice of the proposed
retirement or withdrawal of any other General Partner, the
remaining General Partner(s) shall promptly send written notice of
such retirement or withdrawal to the Limited Partners and
Unitholders.
15.8 Accounting Matters. The General Partners shall make all
decisions as to accounting matters in connection with the
accounting methods adopted by the Partnership in accordance with
generally accepted accounting principles and procedures applied on
a consistent basis. The General Partners may rely on the
Partnership's independent certified public accountants to determine
whether such decisions are in accordance with generally accepted
accounting principles.
15.9 Tax Matters Partner. The Individual General Partner is
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 thereunder, shall have all other powers
needed to perform fully hereunder including, without limitation,
the power to retain all attorneys and accountants of its choice and
the right to manage administrative tax proceedings conducted at the
Partnership level by the Internal Revenue Service with respect to
Partnership matters. In the event the Individual General Partner
fails to make a required tax related filing and/or make a tax
related filing by the applicable due date then the Corporate
General Partner shall have the right, in its sole discretion, to
assume the responsibilities of the Tax Matters Partner and prepare
and file the necessary tax-related documents. Any Partner has the
right to participate in such administrative proceedings relating to
the determination of partnership items at the Partnership level.
15.10 Investment in Properties. In accordance with the
provisions of the Statement of Policy Regarding Real Estate
Programs adopted by North American Securities Administrators
Association, Inc. on October 2, 1985, effective January 1, 1986,
the General Partners shall commit to Investment in Properties a
percentage of Gross Proceeds at least equal to 85% of Gross
Proceeds.
15.11 Designated Organizer and Designated Person. The
Individual General Partner shall be the "designated organizer" of
the Partnership and the "designated person" for maintaining lists
of investors in the Partnership, and shall take such actions as
shall be required to register timely the Partnership and to
maintain lists of investors in the Partnership.
16. RIGHTS AND POWERS OF THE LIMITED PARTNERS AND UNITHOLDERS
16.1 Control. Limited Partners and Unitholders shall not take
part in or interfere in any manner with the control, conduct or
operation of the Partnership and shall have no right or authority
to act for or bind the Partnership.
16.2 Voting Rights. Limited Partners and Unitholders
considered together as a class shall have the right, by Majority
Vote, to vote only upon the following matters affecting the basic
structure of the Partnership:
16.2.1 removal of a General Partner;
16.2.2 the election of a successor General Partner and
continuation of the Partnership's business, as described in
Paragraph 19.1.1 of this Agreement;
16.2.3 termination and dissolution of the Partnership pursuant
to Article 19;
16.2.4 amendment of this Agreement, provided such amendment is
not for any of the purposes set forth in Paragraphs 15.2.20 or
15.2.21;
16.2.5 sale of all or Substantially All of the Assets of the
Partnership in a single sale, or in multiple sales in the same
twelve-month period, except in the liquidation and winding up of
the business of the Partnership upon its termination and
dissolution and except in the ordinary course of the business of
the Partnership;
16.2.6 pledge or encumbrance of all or Substantially All of
the Assets of the Partnership at one time, other than in connection
with the acquisition or improvement of assets, initial financing of
a Partnership Property, or the refinancing of previous obligations;
16.2.7 extension of the term of the Partnership;
16.2.8 assignment of a General Partner's interest in the
Partnership, subject to the provisions of Paragraph 17.6; and
16.2.9 material changes in the four primary investment
objectives and policies of the Partnership.
16.3 Meetings. The General Partners may at any time call a
meeting with the Limited Partners and Unitholders or for a vote,
without a meeting, of the Limited Partners and Unitholders on
matters on which they are entitled to vote, and shall call for such
meeting or vote following receipt of written request therefor of
Limited Partners and Unitholders considered together as a class
holding 10% or more of the outstanding Limited Partnership
Interests and Units taken as a whole held by all Limited Partners
and Unitholders as of the date of receipt of such written request
("notice date"). Within 10 days of such notice date, the General
Partners shall notify all Limited Partners and Unitholders of
record as of the notice date as to the time and place of the
Partnership meeting, if called, the general nature of the business
to be transacted thereat, or if no such meeting has been called, of
the matters to be voted upon and the date upon which the votes will
be counted, which date in either case shall not be less than 10 nor
more than 60 days after the notice date. All expenses of the voting
and such notification shall be borne by the Partnership. If a
meeting is adjourned to another place or time, and if an
announcement of the adjournment of time or place is made at the
meeting, it shall not be necessary to give any notice of the
adjourned meeting. The presence in person or by proxy of a majority
in interest of the Limited Partners and Unitholders considered
together as a class shall constitute a quorum at all meetings of
the Limited Partners and Unitholders, provided, however, that if
there be no such quorum, holders of a majority in interest of the
Limited Partners and Unitholders considered together as a class so
present or so represented may adjourn the meeting from time to time
without further notice, until a quorum shall have been obtained. No
notice of the time, place or purpose of any meeting of Limited
Partners and Unitholders need be given to any Limited Partner or
Unitholder who attends in person or is represented by proxy, except
for a Limited Partner or Unitholder attending a meeting for the
express purpose of objecting at the beginning of the meeting to the
transaction of any business on the ground that the meeting is not
lawfully called or convened, or to any Limited Partner or
Unitholder entitled to such notice who, in writing, executed and
filed with the records of the meeting, either before or after the
time thereof, waives such notice.
16.4 Voting Procedures.
16.4.1 A Limited Partner who is entitled to vote shall be
entitled to cast one vote for each Limited Partner Interest which
he owns, and a Unitholder who is entitled to vote shall be entitled
to cast one vote for each Unit which he owns in accordance with
Paragraph 16.4.2: (a) at a meeting, in person, by written proxy or
by a signed writing directing the manner in which he desires that
his vote be cast, which writing must be received by the General
Partners prior to such meeting, or (b) without a meeting, by a
signed writing directing the manner in which he desires that his
vote be cast, which writing must be received by the General
Partners prior to the date upon which the votes of Limited Partners
and Unitholders are to be counted. Only the votes of Limited
Partners and Unitholders of record on the notice date, whether at
a meeting or otherwise, shall be counted. No General Partner shall
be entitled to vote unless he or it owns Units or Limited
Partnership Interests and then only to the extent of the Units or
Limited Partnership Interests owned by such General Partners.
16.4.2 A Unitholder shall be entitled to cast one vote for
each Unit that he owns only by giving a proxy to the Assignor
Limited Partner to vote, and the Assignor Limited Partner shall
vote as proxy for such Unitholder, the number of Limited
Partnership Interests equal to the number of Units that such
Unitholder owns. The Assignor Limited Partner shall only vote the
Limited Partnership Interests held by it in accordance with, and to
the extent of, written instructions received from the Unitholders.
16.4.3 The laws of the State of Delaware pertaining to the
validity and use of corporate proxies shall govern the validity and
use of proxies given by Limited Partners and Unitholders. At each
meeting of Limited Partners and Unitholders, the General Partners
shall appoint such officers and adopt such rules for the conduct of
such meeting as the General Partners shall deem appropriate. In
connection with each meeting or vote without a meeting of the
Limited Partners and Unitholders, the Partnership shall provide for
proxies or written consents which specify a choice between approval
and disapproval of each matter to be acted upon at the meeting or
by vote without a meeting. For purposes of obtaining a written vote
under this Partnership Agreement, the General Partners may require
a written response within a specified time, but not less than 10
days nor more than 60 days.
16.5 Limitations. No Limited Partner, including the Assignor
Limited Partner on behalf of the Unitholders, shall have the right
or power to: (a) withdraw or reduce his contribution to the capital
of the Partnership except as a result of the dissolution of the
Partnership or as otherwise provided by law, (b) bring an action
for partition against the Partnership, (c) cause the termination
and dissolution of the Partnership by court decree or otherwise,
except as set forth in this Agreement or as provided by law, or (d)
demand or receive property other than cash in return for his
contribution. No Limited Partner, except the original Limited
Partner, shall have priority over any other Limited Partner either
as to the return of contributions of capital or as to Net Income,
Net Loss or Distributions. Other than upon the termination and
dissolution of the Partnership as provided by this Agreement, and
except as otherwise provided by this Agreement, there has been no
time agreed upon when the contribution of each Limited Partner may
be returned.
17. WITHDRAWAL, REMOVAL, BANKRUPTCY OR DISSOLUTION OF A GENERAL
PARTNER AND TRANSFER OF A GENERAL PARTNER'S INTEREST
17.1 Removal. A General Partner may be removed as a General
Partner of the Partnership upon a Majority Vote. Written notice of
the removal of a General Partner shall be served upon him either by
certified or registered mail, return receipt requested, or by
personal service. Such notice shall set forth the date upon which
the removal is to become effective.
17.2 Voluntary Withdrawal. Except as otherwise provided in
Paragraph 17.3, a General Partner may withdraw from the
Partnership, provided (a) there has been 60 days' prior written
notice to the Limited Partners of such withdrawal, (b) the
remaining General Partner(s), in its sole discretion, consents to
such withdrawal and (c) the Partnership receives an opinion of
counsel to the Partnership to the effect that upon such withdrawal
the Partnership will not be classified as an entity taxable as a
corporation for federal income tax purposes.
17.3 Involuntary Withdrawal. A General Partner shall be deemed
to have withdrawn (an "involuntary withdrawal") from the
Partnership upon the adjudication of bankruptcy of a General
Partner, dissolution or other cessation to exist of a corporate
General Partner or the insolvency or death of an individual General
Partner. Until the dissolution of the Partnership, no General
Partner shall take any voluntary steps to dissolve itself.
17.4 Purchase Price. Upon the removal or voluntary or
involuntary withdrawal of a General Partner (the "Terminated
Partner") pursuant to Paragraphs 17.1, 17.2 or 17.3, respectively,
the Partnership shall purchase its interest in the Partnership by
issuing to the Terminated Partner a noninterest bearing obligation
to pay the Terminated Partner's interest in the Net Income, Net
Loss and Distributions as set forth in this Agreement payable, if
at all, at such time as such Net Income, Net Loss or Distributions
would otherwise be allocated or paid to the Terminated Partner if
it had remained a General Partner; provided, however that if the
Terminated Partner is removed as a result of a breach of its
fiduciary duty to the Partnership, the Terminated Partner shall be
entitled to allocation and payment of only 50% of the foregoing
obligation. The Terminated Partner shall, upon giving five days
written notice to the non-terminated General Partner, have the
right at any time to sell its noninterest bearing obligation to a
third party.
17.5 Limitation on Merger or Reorganization of Corporate
General Partner; No Assignment. The Corporate General Partner shall
not enter into a merger, reorganization or consolidation into or
with any corporation or other entity, or the transfer of all the
capital stock of the Corporate General Partner and the assumption
of the rights and duties of the Corporate General Partner by, in
the case of a merger, reorganization or consolidation, the
surviving corporation or other entity without obtaining the written
consent of the Individual General Partner which consent shall not
be unreasonably withheld; provided, however that nothing in this
Agreement shall be deemed to prevent the parent of the Corporate
General Partner from merging, reorganizing, consolidating,
transferring its capital stock or otherwise causing a transfer or
change of control. Each General Partner's interest in the
Partnership as a General Partner shall not be assignable, except as
described in this Paragraph 17.5, without a Majority Vote. Any
entity to which the entire interest of each General Partner in the
Partnership is assigned in compliance with this Paragraph 17.5
shall be substituted by the General Partners by the filing of
appropriate amendments to this Agreement and any separate
certificate of limited partnership in its stead as a General
Partner of the Partnership. The foregoing notwithstanding, the
General Partners may at any time assign their respective right to
receive the Partnership Management Fee or Subordinated Incentive
Fee without the consent of any other Partner, although any such
assignment shall not relieve the General Partners of their
obligation to render services for which such fees are payable.
17.6 Additional General Partners. One or more additional
General Partners may be admitted to the Partnership by agreement of
both General Partners, from time to time, in the discretion of the
General Partners; however, successor General Partners may be
elected only pursuant to, and as described in, the provisions of
Paragraphs 16.2.2 and 19.1.1 of this Partnership Agreement. In such
event, the aggregate interest of the General Partners in
Partnership Net Income, Net Loss and Distributions shall be
apportioned among the General Partners in such manner as the
General Partners shall agree.
18. CERTAIN TRANSACTIONS
The General Partners, any Limited Partner or Unitholder, any
Affiliate, any shareholder, officer, director, partner or employee
thereof, or any person owning a legal or beneficial interest
therein, may engage in or possess an interest in any other business
or venture of every nature and description, independently or with
others including, but not limited to, the ownership, financing,
leasing, operation, management, brokerage and development of real
property. Except as described in the Prospectus, neither the
General Partners nor their Affiliates shall be obligated to present
to the Partnership any particular investment opportunity, even if
such opportunity is of such character that the Partnership could
take it if such opportunity were presented to the Partnership, and
each General Partner and Affiliate shall have the right to take for
its own account (individually or otherwise) or to recommend to
others any such investment opportunity.
19. TERMINATION AND DISSOLUTION OF THE PARTNERSHIP
19.1 Terminating Events. The Partnership shall be terminated
and dissolved upon the earliest to occur of the following:
19.1.1 the withdrawal, removal, adjudication of bankruptcy or
insolvency of a General Partner, dissolution or other cessation to
exist as a legal entity of a corporate General Partner, or the
death of an individual General Partner unless (i) the remaining
General Partner(s), within 90 days of the date of such event,
elects to continue the business of the Partnership, or (ii) if
there is no remaining General Partner, the Limited Partners and
Unitholders by Majority Vote, within 90 days of the date of such
event, elect to continue the business of the Partnership, in a
reconstituted form if necessary, and elect a successor General
Partner (expenses incurred in reformation, or attempted
reformation, of the Partnership shall be deemed expenses of the
Partnership);
19.1.2 a Majority Vote in favor of dissolution and termination
of the Partnership;
19.1.3 the expiration of the term of the Partnership;
19.1.4 the Sale or Disposition of all interests in Properties
and other assets of the Partnership and the receipt of the final
cash payment of the purchase price of all such Properties and
assets; or
19.1.5 the election by the General Partners to dissolve and
terminate the Partnership (after consulting with Partnership
counsel), without the consent of any Limited Partner or Unitholder,
in the event that either (i) the Partnership's assets constitute
"plan assets," as such term is defined for purposes of ERISA, or
(ii) any of the transactions contemplated under this Agreement
constitutes a "prohibited transaction" under ERISA and no exemption
for such transaction is obtainable from the United States
Department of Labor or the General Partners determine not to seek
such an exemption.
19.2 Liquidation and Distribution of Assets. Upon a
dissolution and termination of the Partnership for any reason, the
General Partners shall take full account of the Partnership's
assets and liabilities, shall liquidate the assets as promptly as
is consistent with obtaining the fair value thereof, and shall
apply and distribute the proceeds therefrom in the following order:
19.2.1 first, to the payment of third-party creditors of the
Partnership, but excluding secured creditors whose obligations will
be assumed or otherwise transferred on the liquidation of
Partnership assets;
19.2.2 second, to the repayment of any outstanding loan made
by the General Partners to the Partnership in accordance with
Article 15; and
19.2.3 third, to the General Partners and Limited Partners,
including the Assignor Limited Partner on behalf of the
Unitholders, pursuant to the provisions of Paragraph 11.5 of this
Partnership Agreement.
Notwithstanding anything to the contrary, the General Partners
have the right to defer liquidation if, in the opinion of the
General Partners, the sale of Partnership assets in liquidation
would result in a material under realization on the Partnership's
assets.
20. SPECIAL POWER OF ATTORNEY
20.1 Grant of Power of Attorney. By executing and/or adopting
this Partnership Agreement, each Limited Partner (including the
Assignor Limited Partner on behalf of the Unitholders who by
purchase of the Units and acceptance of the confirmation of such
purchase have authorized the Assignor Limited Partner to act on
their behalf) is hereby granting to each of the General Partners,
with full power of substitution, a special power of attorney
irrevocably making, constituting and appointing each General
Partner as the attorney-in-fact for such Limited Partner, with
power and authority to act in his name and on his behalf to
execute, acknowledge and swear to in the execution, acknowledgement
and filing of documents, which shall include, by way of
illustration but not of limitation, the following:
20.1.1 this Agreement, any separate certificate of limited
partnership, as well as any amendment to or restatement of the
foregoing which, under the laws of the State of Delaware or the
laws of any other state, are required to be filed or which the
General Partners deem to be advisable to file;
20.1.2 any other instrument or document which may be required
to be filed by the Partnership under the laws of any state or by
any governmental agency or which the General Partners deem
advisable to file; and
20.1.3 any instrument or document which may be required to
effect the continuation of the Partnership for a period not in
excess of the term set forth in Article 4, the admission of any
additional or substituted Limited Partner or the dissolution and
termination of the Partnership (provided such continuation,
admission or dissolution and termination are in accordance with the
terms of this Agreement), or to reflect any reduction in amount of
contributions of Partners.
20.2 Character of Power of Attorney. The special power of
attorney being hereby granted by each Limited Partner (including
the Assignor Limited Partner on behalf of the Unitholders who by
purchase of the Units have authorized the Assignor Limited Partner
to act on their behalf):
20.2.1 is a special power of attorney coupled with an
interest, is irrevocable, shall survive the death or legal
incapacity of the granting Limited Partner, and is limited to those
matters herein set forth;
20.2.2 may be exercised by either General Partner acting alone
for each Limited Partner by a facsimile signature of the General
Partner or by one of its officers, or by listing all of the Limited
Partners executing any instrument with a signature of the General
Partner or one of its officers acting as its attorney-in-fact; and
20.2.3 shall survive an assignment by a Limited Partner of all
or any portion of his Limited Partnership Interests (including the
assignment of Limited Partnership Interests by the Assignor Limited
Partner to the Unitholders) except that, where the assignee of the
Limited Partnership Interests owned by a Limited Partner has been
approved by either General Partner for admission to the Partnership
as a substituted Limited Partner, the special power of attorney
shall survive assignment for the sole purpose of enabling either
General Partner to execute, acknowledge and file any instrument or
document necessary to effect such substitution.
21. INDEMNIFICATION
21.1 Agreement to Indemnify. To the maximum extent permitted
by law, the Partnership, its receiver or its trustee, shall
indemnify, save harmless and pay all judgments and claims against
the Sponsor and the Assignor Limited Partner from any liability,
loss or damage incurred by them or by the Partnership by reason of
any act performed or omitted to be performed by them in connection
with the business of the Partnership, including costs and
attorneys' fees (which attorneys' fees may be paid as incurred) and
any amount expended in the settlement of any claim of liability,
loss or damage; provided that (i) if such liability, loss or claim
arises out of any action or inaction of the Assignor Limited
Partner, the Assignor Limited Partner was not guilty of fraud,
negligence or misconduct; (ii) if such liability, loss, or claim
arises out of any action or inaction of employees, subsidiaries or
affiliated assigns of the Sponsor or the Assignor Limited Partner,
such actions or inactions must have occurred while such parties
were engaged in activities which could have been engaged in by a
General Partner in its capacity as such; (iii) if such liability,
loss or damage arises out of any action or inaction of the General
Partners, it did not constitute negligence or misconduct by the
General Partners and all of the General Partners must have
determined, in good faith, that such course of conduct was in or
not opposed to the best interests of the Partnership; and (iv) any
such indemnification shall be recoverable only from the assets of
the Partnership and not from the assets of the Limited Partners or
Unitholders. All judgments against the Partnership and the Sponsor
or Assignor Limited Partner, wherein such person is entitled to
indemnification, must first be satisfied from Partnership assets
before such General Partner is responsible for these obligations.
Nothing contained herein shall constitute a waiver by any Limited
Partner or Unitholder of any right which he may have against any
party under federal or state securities laws.
21.2 Limitations. Notwithstanding Paragraph 21.1, neither the
Sponsor nor the Assignor Limited Partner shall be indemnified
pursuant to Paragraph 21.1 from any liability, loss or damage
incurred by them in connection with (i) any claim or settlement
involving allegations that the Securities Act of 1933 or state
securities laws were violated by the Sponsor or the Assignor
Limited Partner unless: (a) the Sponsor and/or the Assignor Limited
Partner seeking indemnification is successful in defending such
action; and (b) such indemnification is specifically approved by a
court of competent jurisdiction which shall have been advised as to
the current position of the Securities and Exchange Commission and,
if Units are offered and/or sold in California, the California
Commissioner of Corporations regarding indemnification for
violations of securities law, or (ii) any liability imposed by law,
including liability for negligence or misconduct.
22. MISCELLANEOUS
22.1 Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one Partnership
Agreement, binding on all of the parties hereto, notwithstanding
that all of the parties are not signatory to the original or the
same counterpart.
22.2 Binding Provisions. The terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of
the successors and assigns of the respective Partners and
Unitholders.
22.3 Severability. In the event any sentence or paragraph of
this Agreement is declared by a court of competent jurisdiction to
be void, such sentence or paragraph shall be deemed severed from
the remainder of this Agreement and the balance of this Agreement
shall remain in effect.
22.4 Notice. All notices under this Agreement shall be in
writing and shall be given to the person entitled thereto, by
personal service or by mail, posted to the address maintained by
the Partnership for such person or at such other address as he may
specify in writing.
22.5 Headings. Paragraph titles or captions contained in this
Agreement are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope
of this Agreement nor the intent of any provision hereof.
22.6 Meanings. Whenever required by the context hereof, the
singular shall include the plural, and vice-versa; the masculine
gender shall include the feminine and neuter genders, and
vice-versa; and the word "person" shall include a corporation,
partnership, firm or other form of association.
22.7 List of Partners. The names, business or residence
addresses and capital contributions of the Partners are set forth
on Exhibit I attached hereto, which exhibit shall be maintained at
the principal place of business of the Partnership.
22.8 Governing Law. Notwithstanding the place where this
Partnership Agreement may be executed by any of the parties hereto,
the parties expressly agree that all the terms and provisions
hereof shall be construed under the internal laws, and not the laws
pertaining to conflicts or choice of law, of the State of Delaware
and that the Partnership Act as now adopted and as hereafter
amended shall govern the partnership aspects of this Partnership
Agreement.
22.9 Other Jurisdiction. In the event the business of the
Partnership is carried on or conducted in states in addition to the
State of Delaware, then the parties agree that the Partnership
shall be qualified under the laws of each state in which business
is actually conducted by the Partnership, and they severally agree
to execute such other and further documents as may be required or
requested in order that the General Partners legally may qualify
the Partnership in such states. The power of attorney granted to
each General Partner by each Limited Partner (including the
Assignor Limited Partner on behalf of the Unitholders) in Article
20 shall constitute the authority of the General Partners to
perform the ministerial duty of qualifying the Partnership under
the laws of any state in which it is necessary to file documents or
instruments of qualification. A Partnership office or principal
place of business in any state may be designated from time to time
by the General Partners.
22.10 Power to Reconstitute. In the event that the State of
Delaware amends the Partnership Act in any manner which precludes
the Partnership, at any time, from obtaining an opinion of tax
counsel to the effect that the Partnership will be treated as a
partnership for federal income tax purposes and not as an
association taxable as a corporation, then the General Partners
may, in their sole discretion, reconstitute the Partnership under
the laws of another state.
[Remainder of Page Left Intentionally Blank]
GENERAL PARTNERS:
CORPORATE GENERAL PARTNER:
1345 REALTY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
President
INDIVIDUAL GENERAL PARTNER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
ASSIGNOR LIMITED PARTNER:
SB DEPOSITARY CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
President
EXHIBIT I
CORPORATE REALTY INCOME FUND I, L.P.
GENERAL PARTNERS
NAME AND ADDRESS CAPITAL CONTRIBUTION
1345 Realty Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . $800.00
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . $200.00
ASSIGNOR LIMITED PARTNER
SB Depositary Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . $80,000,000.00