Exhibit 10
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BT ORLANDO LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
("Agreement") is made and entered into at Orlando, Florida, as of the 1st day of
August, 2001, among BEF, INC., a Tennessee corporation ("BEFI"), and
XXXXXXXX-XXXXX INDUSTRIES, INC., a Delaware corporation ("XXXXXXXX")
(individually, a "General Partner" and collectively, the "General Partners") and
BT PARTNERSHIP, a Tennessee general partnership ("BT") and EST ORLANDO, LTD., a
Florida limited partnership ("EST") ("Limited Partners") (the General Partners
and the Limited Partners are sometimes hereinafter collectively referred to as
the "Partners").
WHEREAS, the Partners (as of May 20, 1996) entered into that certain
Agreement of Limited Agreement of BT Orlando Limited Partnership (the "Original
Partnership Agreement");
WHEREAS, the Original Partnership Agreement has been subject to five
formal amendments (dated July ___, 1996, May 20, 1998, December 31, 1998, June
30, 1999 and August 11, 1999) and one letter agreement amendment (dated March
27, 2000) (collectively, the "Amendments");
WHEREAS, BT Orlando Limited Partnership (the "Partnership") closed on
construction financing for a portion of the Project (as defined below) on
September 3, 1999 (the "Initial Financing") and on or about the date of
execution of this Agreement will close on financing (the "2001 Financing") which
is intended, together with additional funds provided by the Partners as provided
herein, to provide funds necessary for completion of the Project;
WHEREAS, certain of the Partners have (since the date of the Original
Partnership Agreement) provided additional funds to the Partnership and
additional guarantees and collateral in connection with the Initial Financing
and the 2001 Financing;
WHEREAS, the Partners desire to further amend certain provisions of the
partnership agreement in connection with the provision of additional collateral,
guaranties and funds to the Partnership, in order to consolidate the provisions
of the Amendments into one document, and to eliminate certain provisions of the
Original Partnership Agreement and the Amendments which are no longer
applicable;
NOW, THEREFORE, for and in consideration of the mutual covenants and
understandings between the parties, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound hereby, the parties hereto hereby agree to amend and restate the
Original Partnership Agreement and the Amendments into one document, hereinafter
referred to as the Amended and Restated Agreement of Limited Partnership of BT
Orlando Limited Partnership (the "Agreement"), upon the following terms and
conditions:
ARTICLE I
ORGANIZATION
Section 1.1 Formation and Name. The Partners have formed a Limited
Partnership under the Revised Uniform Limited Partnership Act as adopted in the
State of Florida, Florida Statutes ss.620.101 (the "Act") under the name and
style of BT ORLANDO LIMITED PARTNERSHIP (hereinafter referred to as the
"Partnership").
Section 1.2 Certificate of Limited Partnership. (a) The Administrative
General Partner has caused a Certificate of Limited Partnership as described in
ss.620.108 of the Act (the "Certificate") to be filed in the Office of the
Secretary of State of Florida in accordance with the Act on June 18, 1996. The
Administrative General Partner has caused a certified copy of the Certificate to
be recorded with the Secretary of State in Tallahassee.
(a) Upon dissolution of the Partnership, the General Partners shall
promptly execute and cause to be filed a Certificate of Cancellation in
accordance with the Act.
ARTICLE II
CHARACTER, PLACE OF BUSINESS, REGISTERED AGENT AND OFFICE
TERM OF PARTNERSHIP AND PARTNER
Section 2.1 Partnership Business. The business of the Partnership is
to:
(a) Acquire approximately 140 commercially zoned acres in Orlando,
Florida (as described by metes and bounds in Exhibit A hereto) and develop,
construct, operate and lease thereon a retail/entertainment/ shopping center
complex consisting of at least 900,000 square feet (the "Project").
(b) Engage in such other activities as are related or incidental to the
foregoing purposes.
Any and all of the property as may from time to time be owned by the Partnership
shall hereinafter be referred to as the "Property."
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Section 2.2 Place of Business. The principal office of the Partnership
shall be located at 000 Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxx 00000, or
at such other substituted or additional places of business in the State of
Tennessee or elsewhere as may be designated by the General Partners.
Section 2.3 Registered Agent and Office for Service of Process. The
registered agent and office for the Partnership for service of process and
maintenance of records required to be maintained under ss.620.106 of the Act
shall be Corporation Company of Miami, 000 Xxxxx Xxxxxxxx Xxxxxxxxx, 0000 Xxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000.
Section 2.4 Term. The Partnership shall continue for a term ending
December 31, 2055, unless earlier dissolved and terminated pursuant to the Act
or pursuant to any other provisions of this Agreement.
Section 2.5 Name and Address of General Partners. The General Partners
of the Partnership and its address and the number of Units owned by it are as
follows:
Units
-----
BEF, Inc. 1
000 Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000
Xxxxxxxx-Xxxxx Industries, Inc. 35
c/o Thackeray Corporation
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Section 2.6 Name and Address of Limited Partners. The Limited Partners
and their addresses and the number of Units owned by them are as follows:
Units
-----
BT Partnership 41.28
000 Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000
EST Orlando, Ltd. 22.72
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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ARTICLE III
DEFINITIONS
Section 3.1 "Adjusted Capital Account Deficit" means, with respect to
any Partner, the deficit balance, if any, in such Partner's Capital Account as
of the end of the relevant fiscal year, after giving effect to the following
adjustments:
(a) Credit to such Capital Account any amount which such Partner is
obligated to restore pursuant to any provision of this Agreement or is deemed to
be obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(i) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
Section 3.2 "Preferred Partnership Capital" means, as of any day, a
Partner's Capital Contributions adjusted as follows:
(a) Increased by the amount of any Partnership liabilities which, in
connection with distributions pursuant to Section 6.1 hereof, are assumed by
such Partner or are secured by any Partnership property distributed to such
Partner, and
(b) Reduced by the amount of cash and fair market value of any
Partnership property distributed to such Partner pursuant to (i) Section
6.2(a)(iv) distributions resulting from Section 5.4(b) allocations or (ii)
Section 6.2(a)(v) and 6.2(b)(v) distributions and the amount of liabilities of
such Partner assumed by the Partnership or which are secured by any property
contributed by such Partner to the Partnership.
In no event shall distributions of Net Cash Flow From
Operations reduce the amount of Preferred Partnership Capital or otherwise be
construed as a return of or payment in reduction of a Partner's Preferred
Partnership Capital, nor shall any revaluation of the Property (for federal
income tax purposes or otherwise) reduce or in any way affect the amount,
balance or computation of "Preferred Partnership Capital." A change in the
"Gross Asset Value" of any Partnership property will not, in any event, decrease
Preferred Partnership Capital.
In the event any Partner transfers all or any portion of its
Units in accordance with the terms of this Agreement, its transferee shall
succeed to such portion of the Preferred Partnership Capital of the transferor
as is agreed in writing between the transferor and the transferee.
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Section 3.3 "Additional Preferred Capital" means, with respect to any
Partner, Capital Contributions made by such Partner after the date hereof in
accordance with the provisions of Article IV in excess of those Capital
Contributions contemplated to be made by the Partners consistent with total
development cost reflected in the agreed Budget as set forth on Exhibit "B"
(funds necessary to cover increases in total development cost or operating
losses), reduced by the amount of cash and fair market value of any Partnership
property distributed to such Partner pursuant to 6.2(a)(i) and 6.2(b)(i) (from
Net Cash From Sales or Refinancing attributable to sale or refinancing of the
Property). The Partners acknowledge that, since the date of the Original
Partnership Agreement, the Partners have contributed substantial additional
funds to the Partnership and, except as otherwise provided herein (i.e., to the
extent additional Partner Capital Contributions are necessary in order to cover
increases in total development costs over those reflected in the agreed Budget
as set forth on Exhibit "B" or to cover operating losses), all such funds
constitute Preferred Partnership Capital hereunder and do not constitute
"Additional Preferred Capital".
Section 3.4 "Additional Preferred Capital Preferred Return" means for
each fiscal year of the Partnership commencing with the date hereof, an amount
equal to 9% per annum of the Additional Preferred Capital, determined on the
basis of a year of 365 or 366 days, as the case may be, for the actual number of
days in the period for which the Additional Preferred Capital Preferred Return
is being computed, cumulative but not compounded.
Section 3.5 "Additional Preferred Capital Preferred Return Arrearage"
means, for a fiscal period of the Partnership, an amount equal to the excess, if
any, of the aggregate of the Additional Preferred Capital Preferred Return for
all prior fiscal periods of the Partnership, over the Additional Preferred
Capital Preferred Return actually distributed to the Partners for such prior
fiscal periods.
Section 3.6 "Affiliate" means with respect to any individual,
partnership, corporation, trust or other entity (collectively, "Person"), (i)
any Person directly or indirectly controlling, controlled by, or under common
control with such Person, (ii) any Person owning or controlling ten percent
(10%) or more of the outstanding voting interest of such Person, (iii) any
officer, director or general partner of such Person, (iv) any Person who is an
officer, director, general partner, trustee, or holder of ten percent (10 %) or
more of the voting interest of any Person described in clauses (i) through (iii)
of this sentence, or (v) any Person who is a member of such Person's family. For
purposes of the preceding sentence, "family" shall include a Person's spouse,
lineal ascendants, descendants, siblings, and lineal ascendants and descendants
of such siblings or spouse. For purposes of this definition, the term
"controls," "is controlled by" or "is under common control with" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person or entity, whether through the ownership
of voting securities, by contract or otherwise. For purposes of this definition,
the term "control" shall also mean the control of beneficial ownership of ten
percent (10%) or more of the outstanding voting securities or control of the
entity referred to. With respect to BEFI and BT, "Affiliate" shall be defined to
include any Person which is an Affiliate of Xxxx X. Xxxx or Xxxxxx Xxxxxx.
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Section 3.7 "Capital Account" means, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with the following
provisions:
(a) To each Partner's Capital Account there shall be credited such
Partner's Capital Contributions, such Partner's distributive share of profits
and any items in the nature of income or gain which are specially allocated
pursuant to Section 5.3 hereof, and the amount of any Partnership liabilities
assumed by such Partner or which are secured by any property distributed to such
Partner.
(b) To each Partner's Capital Account there shall be debited the amount
of cash and the Gross Asset Value of any Property distributed to such Partner
pursuant to any provision of this Agreement, such Partner's distributive share
of losses and any items in the nature of expenses or losses which are specially
allocated pursuant to Section 5.3 hereof, and the amount of any liabilities of
such Partner assumed by the Partnership or which are secured by any property
contributed by such Partner to the Partnership.
(c) In the event all or a portion of an interest in the Partnership is
transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the
transferred interest.
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the General Partners shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Partnership, the General Partners, or Limited Partners), are
computed in order to comply with such Regulations, the General Partners may make
such modification, provided that it is not likely to have a material effect on
the amounts distributed to any Partner pursuant to the terms hereof upon the
dissolution of the Partnership or otherwise.
Section 3.8 "Capital Contributions" means, with respect to any Partner,
the amount of money and the initial Gross Asset Value of any property (other
than money) contributed to the Partnership with respect to the interest in the
Partnership held by such Partner. Any contributions during a calendar month
shall not be deemed made until the last day of the month. As of the date hereof,
the Capital Contributions of the Partners are as set forth on Exhibit "A"
attached hereto. Xxxxxxxx has caused Thackeray Corporation ("Thackeray"), in
connection with closing of the Initial Financing and again pursuant to the 2001
Financing, to mortgage the approximately 78 acres of land adjacent to the
Project (the "Phase II Land") in favor of the lenders under such financings.
Such mortgage does not constitute a Capital Contribution by either Xxxxxxxx or
Xxxxxxxxx for purposes of this Agreement.
Section 3.9 "Code" means the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of succeeding law).
Section 3.10 "Cumulative Preferred Return" means, for each of the
Partners, the amount specified on Exhibit "A" attached hereto. The amounts
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reflected on Exhibit "A" adjust and recalculate the amounts of Cumulative
Preferred Return accruing to the Partners under the Original Partnership
Agreement and the Amendments. No additional Cumulative Preferred Return will
accrue on the Partnership's Preferred Partnership Capital. A Partner's
Cumulative Preferred Return shall be reduced by the amount of cash and fair
market value of any Partnership property distributed to such Partner pursuant to
Section 6.1 or 6.2 in repayment of such Partner's Cumulative Preferred Return.
Section 3.11 "Depreciation" means, for each fiscal year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
other period, Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis; provided, however, that if the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partners.
Section 3.12 "Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for .federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Partner
to the Partnership shall be the gross fair market value of such asset, as
determined by the contributing Partner and the General Partners; provided that,
if the contributing Partner is a General Partner, the determination of the gross
fair market value of a contributed asset shall require the consent of the other
General Partner and Limited Partners holding a majority of the Limited
Partnership Units;
(b) The Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross fair market values, as determined by the General
Partners, as of the following times: (x) the acquisition of an additional
interest in the Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (y) the distribution by the Partnership
to a Partner of more than a de minimis amount of Property as consideration for
an interest in the Partnership; and (z) the liquidation of the Partnership
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided,
however, that adjustments pursuant to clauses (x) and (y) above shall be made
only if the General Partners reasonably determine that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Partner in the Partnership;
(c) The Gross Asset Value of any Partnership asset distributed to any
Partner shall be the gross fair market value of such asset on the date of
distribution; provided that, if the distributee is a General Partner, the
determination of the fair market value of the distributed asset shall require
the consent of the other General Partner and Limited Partners holding a majority
of the Units; and
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(d) The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
Section 3.12(a), Section 3.12(b) or Section 3.12(d) hereof, such Gross Asset
Value shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing profits and losses. In no event
shall any adjustment to the Gross Asset Value of any Partnership asset decrease
the amount of any Partner's Preferred Partnership Capital.
Section 3.13 "Net Cash Flow From Operations" for any fiscal period
shall mean the gross cash receipts from Partnership operations (excluding
receipts from loans, Capital Contributions or Net Cash From Sales or
Refinancing) less the portion thereof used to pay, or establish reserves for,
all Partnership expenses, debt service payments, capital improvements,
replacements and contingencies, all as determined by the General Partners. Net
Cash Flow From Operations shall not be reduced by depreciation, amortization,
cost recovery deductions or similar allowances, but shall be increased by any
reductions of reserves previously established pursuant to the first sentence of
this Section 3.13.
Section 3.14 "Net Cash From Sales or Refinancing" shall mean the net
cash receipts from all sales and other dispositions and all financing or
refinancing of Property, or any part thereof. All Net Cash From Sales or
Refinancings shall be distributed to the Partners as set forth in Section 6.2,
unless the General Partners agree to establish or increase reserves for
contingent liabilities. Net Cash From Sales or Refinancings shall be increased
by any reduction of reserves previously established pursuant to the preceding
sentence. Net Cash From Sales or Refinancing shall include all principal and
interest payments with respect to any note or other obligation received by the
Partnership in connection with a sale or other disposition of Property.
Section 3.15 "Net Profits and Net Losses" shall mean the net income or
net loss, respectively, of the Partnership for federal income tax purposes,
including, without limitation, allocations to the Partnership of net income and
net loss, as determined by the Partnership's accountants, and as agreed by the
General Partners as set forth in Section 5.8.
Section 3.16 "Regulations" means regulations promulgated by the United
States Department of the Treasury under authority of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND LOANS
Section 4.1 Capitalization. The capital of the Partnership shall
consist of (a) the Preferred Partnership Capital, (b) the Additional Preferred
Capital, and (c) One Hundred (100) Partnership Units consisting of thirty-six
(36) General Partnership Units ("General Partnership Units") and sixty-four (64)
Limited Partnership Units ("Limited Partnership Units"), all of which are
hereinafter
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collectively referred to as "Units" and sometimes, where the context so allows,
individually, as a "Unit."
Section 4.2 Payment for the Units. The Partners have contributed as
their Capital Contributions to the Partnership all of their right, title and
interest in and to the property or cash described in Exhibit A attached hereto
and made a part hereof by this reference. The Partners agree that the land
described in Exhibit A has (for purposes of this Agreement) the Gross Asset
Value listed opposite such property and that each Partner's Capital Account has
been credited with Capital Contributions listed opposite its name in Exhibit A.
Title to the land was contributed by Xxxxxxxx to the Partnership simultaneously
with the closing of the Initial Financing loan.
Section 4.3 Additional Capital Contributions.
(a) Additional Contributions. Except as provided herein, no Partner
shall be required to contribute additional capital to the Partnership. BEFI, BT
and EST have contributed the cost of Partnership preconstruction/preclosing
expenses associated with the development of the Project, including but not
limited to, planning, engineering, environmental testing, insurance, legal,
permitting, appraisal, construction loan application, financing and mortgage
brokerage fees, marketing and management costs. Xxxxxxxx has contributed the
real estate taxes on the Property incurred by Xxxxxxxx from the date of the
Original Partnership Agreement until the Property was transferred to the
Partnership, and has contributed certain pre-construction/pre-closing expenses
associated with the development of the Project, pertaining to the waiver of the
"Development of Regional Impact" process. Since the inception of the
Partnership, Brennand, BEFI, BT and EST have contributed additional funds to the
Partnership (although not required to do so) in connection with the development
of the Project. The Partners agree that all of the foregoing amounts funded
pursuant to this first paragraph of Section 4.3(a) shall constitute Capital
Contributions and Preferred Partnership Capital for all purposes under this
Agreement, and such amounts are included in the amounts reflected on Exhibit "A"
hereto. Construction financing is to be obtained to finance both the hard and
soft construction costs of the Project. BEFI shall use its best efforts to
secure construction financing for the Project, subject to the approval of
Xxxxxxxx.
Additional Capital Contributions may only be called for and required by
agreement of both of the General Partners by written demand upon the Partners
from time to time to fund net operating losses of the Partnership or for any
other purpose deemed appropriate by the General Partners in their reasonable
discretion. Such Additional Capital Contributions shall be payable in proportion
to the number of Units owned by each Partner.
Due to restrictions imposed by the 2001 Financing, and restrictions
expected to be imposed in connection with any further financing or refinancing
of the Project, the Partners agree that any additional funds provided by any
Partner to the Partnership shall constitute Capital Contributions and not loans
or indebtedness. The Partners agree that no additional funds will be contributed
by any Partner to the Partnership without the consent of both General Partners,
which consent shall not be unreasonably withheld. Any such permitted additional
Capital Contributions in excess of that amount of Capital Contributions
contemplated by the revised development budget set forth in Exhibit "B" (funds
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necessary to cover increases in total development cost or operating losses) are
defined herein as "Additional Preferred Capital". To clarify, Capital
Contributions required of all the Partners may only be made with the consent of
both General Partners (such consent to be granted or withheld in their
reasonable discretion); however, additional funds may be contributed by any
Partner (without contribution by other Partners) with the consent of both
General Partners, which consent shall not be unreasonably withheld by either
General Partner.
(b) Indemnification/Contribution. In the event that any lender with
respect to the Project requires the guarantee of any Partner for any debt of the
Partnership, all Partners shall guarantee such debt. To the extent any Partner
is ultimately responsible for payment of any portion of any Partnership debt in
excess of his proportionate share thereof determined by reference to the number
of Units owned by such Partner ("Excess Share"), such Partner shall be entitled
to rights of indemnity and contribution from the other Partners to the extent of
such Excess Share, so that each Partner ultimately bears responsibility for such
debt in proportion to the number of Units owned by such Partner. Similar
provisions shall apply in the event that any Affiliate of a Partner is
ultimately responsible for payment of any portion of any Partnership debt in
excess of the proportionate share of each Partner to which such Person is an
Affiliate.
In the event payments are made by or on behalf of any Partner
in order to satisfy the outstanding principal indebtedness of (or any portion or
portions thereof) the 2001 Financing upon maturity, payments of such amounts
shall be governed by Section 4.3(b) of the Agreement, as though such payments
were made pursuant to guaranties of such indebtedness. For purposes of the
foregoing, in the event all or any portion of the Phase II Land is taken by the
lenders in full or partial satisfaction of the 2001 Financing (either by
foreclosure, deed in lieu of foreclosure or otherwise), such event shall
constitute a payment made by or on behalf of Xxxxxxxx in the amount of the fair
market value of the Phase II Land so taken. In such event, the fair market value
of such 78 acres (or portions thereof) shall be determined in the same manner as
set forth below in this Section 4.3(b) pertaining to the determination of fair
market value (that is, as agreed between BEFI and Xxxxxxxx, or if they do not
agree, by real estate appraisers as set forth below).
The Partners acknowledge that BT Partnership or its Affiliate
will deposit a $2,500,000 letter of credit with Bank of America as part of the
collateral for the 2001 Financing, and that BT Partnership or its Affiliate will
guarantee $ (to be determined) of indebtedness owed by RJSS Orlando, LLC ("Xxx
Xxx") in connection with Xxx Jon's construction of its commercial space
comprising a portion of the Project. In the event that the aforementioned letter
of credit is drawn upon by the lenders or BT Partnership or its Affiliate are
required to pay any amounts in connection with the guaranty of the Xxx Xxx
indebtedness, any such payments shall be covered by the
indemnification/contribution provisions of this Section 4.3(b).
In the event Section 4.3(b) becomes operative due to payments
being made attributable to guaranties of Partnership Indebtedness, the
indemnification/contribution obligations set forth herein shall not become
operative if each Partner pay its pro rata share of the amounts referenced
therein.
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In the event the indemnification/contribution obligation set
forth herein become operative, then with respect to the "Excess Share" of any
Partner, such Excess Share shall be treated (for purposes of computing the
amount repayable hereunder) as a loan by such Partner to the other Partners,
bearing interest (cumulative but not compounded) at the rate of 9% per annum.
Any indemnification/contribution obligation of any Partner hereunder shall
(except as otherwise set forth herein) be payable sixty (60) days after payment
by a Partner to a third party giving rise to such indemnification/contribution
obligation. Such indemnification/contribution obligation shall be paid (to the
extent of available funds) from the other Partners' share of Net Cash Flow From
Operations and/or Net Cash From Sales or Refinancing otherwise distributable to
the Partner(s) liable for such indemnification/contribution obligation;
provided, however, if no such distributions are available, such payment
obligation shall be payable within the aforementioned sixty (60) day period.
The parties agree that the obligation of Xxxxxxxx and
Thackeray (Thackeray's obligation as set forth in that certain agreement dated
as of even date hereof by and between Xxxx Investco L.P., Union Realty Company,
Ltd. and Thackeray) to pay cash under Section 4.3(b) is limited to an amount
which, after such payment, leaves Thackeray with $1,500,000 of cash (the "$1.5
million Limit"). In the event Xxxxxxxx and Xxxxxxxxx do not fully satisfy their
indemnification/contribution obligation under Section 4.3(b) with a cash payment
due to the foregoing $1.5 million Limit, then the parties agree as follows:
(i) The parties shall have the right, on mutually agreeable
terms, for a period of one year commencing with payment giving rise to the
indemnification/contribution obligation of Xxxxxxxx and Thackeray, to attempt to
sell the Property. In the event of such sale, the first proceeds therefrom shall
be distributed to the Partners in such manner so as to satisfy the
indemnification/contribution obligations of the Partners under Section 4.3(b).
Thereafter, any remaining proceeds from such sale shall be distributed as set
forth in this Agreement.
(ii) If, after the expiration of the one year period
referenced above, the parties cannot agree on mutually agreeable terms on which
to sell the Property, BEFI shall have the right, for a period of one year
commencing after expiration of the one year period referenced in (i) above, to
attempt to sell the Property for an amount not less than ninety percent (90%) of
the Property's fair market value.
The term "fair market value" shall mean the highest and
best use of the Property, as improved to the date of the determination of such
value, with neither buyer or seller being under any compulsion to either
purchase or sell the Property, with such value determined as though the Property
was clear of all liens and encumbrances.
The fair market value of the Property shall be
determined as follows. First, BEFI and Xxxxxxxx may agree as to the fair market
value of the Property. If BEFI and Xxxxxxxx do not so agree, then each shall
engage the services of a certified real property appraiser familiar with the
Orlando, Florida real estate market ("Appraiser") to determine the fair market
value of the Property. If the appraised fair market value as determined by the
two Appraisers are within ten percent (10%), then the average of such two values
shall be the fair market value of the Property. If the appraised fair market
values of the two Appraisers are not within ten percent (10%) of each other,
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then the two Appraisers shall engage the services of a third Appraiser to
determine the fair market value of the Property. If the value of the Property as
determined by the third Appraiser is between the determinations of value as set
forth by the first Appraisers, then the determination of value by the third
Appraiser shall be conclusive; if the determination of value by the third
Appraiser is not between the values as determined by the first two Appraisers,
then the average of the values as determined by the three Appraisers shall
conclusively be the fair market value of the Property.
(iii) If, after the expiration of the one-year periods
referenced above in (i) and (ii), the parties are unable to sell the Property
comprised of the Project and any unimproved real estate owned by the
Partnership, the parties shall then (and only then) be entitled to fully enforce
their indemnity rights under Section 4.3(b) of the Agreement. In such instance,
the $1.5 million Limit shall not be applicable. In enforcing such rights, the
parties agree that the restrictions imposed by the Agreement applicable to sales
or other transfers of interests in the Partnership shall not operate so as to
restrict the rights of enforcement hereunder. To the extent legally permissible,
the parties agree that enforcement of indemnity or contribution rights hereunder
shall include the right to proceed directly against interests in the Partnership
held by the parties, and to the maximum extent permissible under applicable law,
include the right to foreclose upon and acquire the interest of a party in the
Partnership.
(iv) If, at the end of either of the one-year periods
referenced above, a binding contract (subject to normal closing conditions and
providing for closing within a reasonable period of time) to sell the Property
referenced above is in place, then the one-year period referenced in (i) or (ii)
above shall be extended until the date of closing under such binding contract.
Xxxxxxxx agrees, that until such time as it fully satisfies its
indemnification/contribution obligation referenced herein (to the extent such
obligation is outstanding), that neither Xxxxxxxx nor Xxxxxxxxx shall permit the
sale or encumbrance of any portion of the 78 acres comprising the Phase II Land,
unless as part of such transaction the indemnification/contribution obligation
of Xxxxxxxx hereunder (to the extent outstanding) is fully satisfied.
Upon maturity of the 2001 Financing (as such financing may be extended
with the consent of the lenders), if the Partnership has not secured replacement
financing for such financing, Xxxxxxxx may (in its sole discretion) require the
following to occur:
(i) If the loan documents evidencing the 2001 Refinancing
provide for a release mechanism and price pursuant to which a payment of less
than the full outstanding balance thereof is required in order to release the
Phase II Land from the mortgages securing the repayment of the 2001 Financing,
then upon Xxxxxxxx'x request, each of the parties shall cause to be paid to the
lender its proportionate share of such release price, determined by reference to
the number of Units owned by each party in the Partnership. In such instance,
the $1.5 million Limit should not be applicable.
(ii) The parties acknowledge and agree that no Partner shall
unilaterally repay or satisfy the outstanding balance of the 2001 Financing (or
any replacement financing thereof) prior to its maturity without first affording
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Xxxxxxxx the reasonable opportunity to exercise its rights under (i) above.
(b) Failure to Contribute. In the event additional capital is required
pursuant to a capital call made by both General Partners upon all the Partners
pursuant to Section 4.3(a) hereof and a Partner (the "Non-Contributing Partner")
fails to contribute its entire proportionate share within thirty (30) days of
notice that such is due, then the other contributing Partners ("Contributing
Partners") and the Partnership shall have the following remedies in addition to
an action against the Non-Contributing Partner for the amount due:
(i) The Contributing Partners may loan to the Non-Contributing
Partner (for re-contribution to the Partnership) the amount which the
Non-Contributing Partner has failed to contribute, which loan shall be repaid
with interest at a variable rate equal to the base rate as set from time to time
by Citibank, N.A., or its successor in interest, plus four percent (4%), or, if
lower, the highest rate permitted by applicable law, from the sums which would
otherwise be distributed to the Non-Contributing Partner pursuant to Article VI
prior to any distribution to the Non-Contributing Partner; provided, however,
that at any time such loan has been outstanding for six months, any Partner who
loaned funds may notify the Non-Contributing Partner that it is converting such
loan, in the amount of the unpaid principal and interest at that time
outstanding on the loan, to Capital Contributions to the Partnership. If the
Non-Contributing Partner does not contribute to the Partnership the amount
necessary to repay the outstanding loan balance to the Contributing Partner
within fifteen (15) days of receipt of the notice specified above, the loan
shall be converted to Capital Contributions to the Partnership if the
Contributing Partner so elects, and the Partnership interests will be
redetermined by issuing additional Units in the Partnership (which Units shall
be General Partnership Units or Limited Partnership Units, according to whether
the Contributing Partner is a General or a Limited Partner) or cancel Units in
such amounts so that each Partner's interest in the Partnership shall be in
proportion to each Partner's total Capital Contributions; provided, for these
calculations, Preferred Partnership Capital and Additional Preferred Capital
shall not be deemed to be Capital Contributions.
(ii) The Contributing Partners may arrange for a third-party
loan to the Partnership upon such commercially reasonable terms as may be
negotiated between the lender and the Contributing Partners, which loan shall be
repaid in the manner described in subparagraph (i) immediately above.
Section 4.4 Third Party Creditors. The foregoing provisions of this
Article IV pertaining to the obligation of the Partners to contribute additional
funds to the Partnership are solely and exclusively for the benefit of the
parties to this Agreement, and are not intended for the benefit of (and shall
not be enforceable by) any third party creditor of the Partnership. In
particular, in the event (pursuant to the terms of the 2001 Financing or
otherwise) that the interests in the Partnership of the General Partner (or the
stock in such General Partners) are pledged as collateral, and as a result of
foreclosure or realization upon such collateral BEFI and Xxxxxxxx are no longer
the General Partners in the Partnership (or, alternatively, the shareholders of
BEFI and Xxxxxxxx as of the date of this Agreement are replaced by the lenders
or their representatives or Affiliates), then in any of such events the
provisions of this Article IV pertaining to the ability of the General Partners
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to call for and require additional Capital Contributions of the Partners shall
null and void and of no further force or effect.
ARTICLE V
PROFIT AND LOSS
Section 5.1 Allocation of Net Profit. After giving effect to the special
allocations set forth in Section 5.3 hereof, the Partnership's net profits for
any fiscal year shall be allocated in the following order and priority:
(a) First, prorata to the Partners (in proportion to the respective
amount of losses being offset) in an amount equal to the excess, if any, of (i)
the cumulative Losses allocated pursuant to Section 5.2(b) for all prior fiscal
years over (ii) the cumulative profits allocated pursuant to this Section 5.1
(a) for all prior periods.
(b) The balance, to the Partners proportionate to their ownership of
Units.
Section 5.2 Allocation of Net Losses. After giving effect to the
special allocations set forth in Section 5.3 hereof, the Partnership's net
losses for any fiscal year shall be allocated in the following order and
priority:
(a) First, to the extent profits have been allocated pursuant to
Section 5.1 (b) hereof for any prior year, losses shall be allocated to offset
any profits allocated pursuant to Section 5.1(b) hereof (pro rata among the
Partners in proportion to their shares of the profits being offset). To the
extent any allocations of profits are offset pursuant to this Section 5.2(a),
such allocations shall be disregarded for purposes of computing subsequent
allocations pursuant to this Section 5.
(b) The balance, to the Partners proportionate to their ownership of
Units.
(c) The losses allocated pursuant to Section 5.2(a) and (b) hereof
shall not exceed the maximum amount of losses that can be so allocated without
causing any Partner to have an Adjusted Capital Account Deficit at the end of
any fiscal year. In the event some but not all of the Partners will have
Adjusted Capital Account Deficits as a consequence of an allocation of losses
pursuant to Section 5.2(a) or (b) hereof, the limitations set forth in this
Section 5.2(c) shall be applied on a Partner by Partner basis so as to allocate
the maximum permissible losses to each Partner under Section
1.704-1(b)(2)(ii)(d) of the Regulations. All losses in excess of the limitations
set forth in this Section 5.2(c) shall be allocated to the General Partners
proportionate to the number of Units owned by each General Partner.
Section 5.3 Special Allocations. The following special allocations
shall be made in the following order of priority:
(a) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations, or distributions described in Section
1.704-1(b)(2)(ii)(d)(5) or (6) of the Regulations, items of Partnership income
and gain shall be specially allocated to each such Partner in an amount and
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manner sufficient to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Partner as quickly as possible,
provided that an allocation pursuant to this Section 5.3(a) shall be made only
if and to the extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article V have been
tentatively made and as if this Section 5.3(a) were not in the Agreement.
(b) Special Allocations. In the event the Partnership incurs
"non-recourse debt" or "partner non-recourse debt" and allocates "non-recourse
deductions" or "partner no recourse deductions," then items of income and gain
shall be specially allocated pursuant to this Section 5.3(b) as is necessary to
keep the Partnership in compliance with Section 1.704-2(f) of the Regulations or
its successor. This Section 5.3(b) is intended to keep the Partnership in
compliance with the minimum gain chargeback requirements of Section 1.704-2(f)
and shall be interpreted consistently therewith.
(c) Priority Return Allocations. All or a portion of Partnership net
profits, income or gain, if any, shall be specially allocated to the Partners in
proportion to and to the extent of the excess, if any, of (i) the Cumulative
Preferred Return and Additional Preferred Capital Preferred Return distributions
each Partner has received pursuant to Sections 6.1 and 6.2 hereof from the
commencement of the Partnership, over (ii) the cumulative amount of Partnership
net profits, income or gain allocated to such Partners pursuant to this Section
5.3(c) for all prior fiscal periods.
Section 5.4 Other Allocation Rules.
(a) In the event of a transfer of any interest in the Partnership,
and/or in the event of any increase or decrease in the interest of any Partner
in the Partnership, whether arising out of or in connection with the entry of a
new partner, the liquidation, partial or whole, of any Partner's interest or
otherwise, after the admission of any Partner, the share of the profits, losses
and gains or losses from the disposition of Property, and each item of income
and expenses pertaining thereto, of the respective Partners shall be fixed and
determined by reference to the income and expenses reflected on the books and
records of the Partnership according to the following convention: a Partner
admitted on or before the 15th day of the month shall be deemed admitted as of
the first day of the month and a Partner admitted after the 15th day of the
month shall be deemed admitted as of the last day of the month; provided,
however, that if this convention is not permitted under applicable Regulations,
a convention permitted under such Regulations approximating the foregoing as
closely as possible will be used.
(b) In accordance with Code Section 704(c) and the Regulations
thereunder, items of income, gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its agreed value (which shall be the fair market value
of a Partner's non-cash Capital Contribution as of the date of the
contribution). In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to the terms of this Agreement, subsequent allocations of
income, gain, loss and any deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for federal
15
income tax purposes and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Regulations thereunder. Any elections or other decisions
relating to such allocations shall be made by the General Partners in any manner
that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 5.4(b) are solely for purposes of federal,
state and local taxes and shall not affect or in any way be taken into account
in computing any Partner's Capital Account or share of profits, losses, other
items or distributions pursuant to any provision of this Agreement.
Section 5.5 Transfer of an Interest. Upon the transfer by any Partner
of all or any part of its Units, the proportionate amount of the Capital Account
of the transferor shall be transferred to the transferee. Any such transferee
shall have no right to partition the Partnership's assets or to have the value
of its interest ascertained or to receive the value of such interest or, in lieu
thereof, the profits attributable to any right in the Partnership, except as
expressly provided in this Agreement.
Section 5.6 Interest: Withdrawal of Capital Account. Except as
expressly provided in this Agreement, no interest shall be paid on any Capital
Contribution of any Partner, no Partner shall have any priority over any other
Partner with respect to the return of its Capital Contribution, and no Partner
shall be entitled to withdraw any part of its Capital Contributions to the
Partnership or to receive any distribution from the Partnership. No Partner
shall be entitled to demand or receive any property from the Partnership other
than cash. Each Partner expressly waives the rights it might otherwise have for
a partition of the Partnership's assets.
Section 5.7 Compliance. The foregoing provisions and the other
provisions of this Partnership Agreement relating to the maintenance of Capital
Accounts are intended to comply with Section 1.704-1(b) of the Regulations, and
shall be interpreted and applied in a manner consistent with such Treasury
Regulations.
Section 5.8 Accounting. The Partnership books shall be kept in
accordance with United States federal income tax accrual basis of accounting
standards, except that for purposes of determining book net profits and losses
the calculation of depreciation and amortization shall be based upon the fair
market value at the time of contribution of all contributed property. The fiscal
year of the Partnership is the calendar year. All Partnership income tax returns
must be approved by both General Partners prior to the filing thereof with the
Internal Revenue Service and the State of Florida. The General Partners shall
cause the Partnership to have prepared and to distribute to all Partners the
following reports:
(a) Within ninety (90) days after the end of the Partnership's fiscal
year, all information reasonably necessary for the preparation of the Partner's
federal income tax returns.
(b) Within one hundred twenty (120) days after the end of the
Partnership's fiscal year, an annual report containing (i) a statement of
financial condition as of the year then ended, (ii) an operating statement for
the year then ended, and (iii) such other information as reasonably requested by
the Limited Partners (or any of them). Items (i) and (ii) shall be audited by an
16
accounting firm selected by both General Partners. The General Partners agree
that Xxxxxx Xxxxxxxx is currently acceptable.
Section 5.9 Optional Adjustments to Basis. Where a distribution of a
property is made in the manner provided in Section 734 of the Code, or where a
transfer of a Partnership interest permitted by this Partnership Agreement is
made in the manner provided in Section 743 of the Code, the General Partners may
in their discretion file on behalf of the Partnership, an election under Section
754 of the Code in accordance with the procedures set forth in the Treasury
Regulations. If any Partner transfers all or part of its Units, any basis
adjustment allocable to said transfer, whether made under Section 754 of the
Code, or otherwise, shall be allocated solely to the transferee.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions of Net Cash From Operations. Net Cash From
Operations of the Partnership shall be distributed by the General Partners at
such times as they reasonably deem it available. Net Cash From Operations shall
be distributed (i) first to the Partners, proportionate to their respective
amounts of their Additional Preferred Capital Preferred Return and Additional
Preferred Capital Preferred Return Arrearage; (ii) second to the Partners,
proportionate to their respective amounts of their Cumulative Preferred Return;
and (iii) then, to the Partners, in the proportion that the number of Units
owned by each Partner bears to the total number of all Partnership Units then
outstanding. For purposes of this Section 6.1, Additional Preferred Capital
Preferred Return and Additional Preferred Capital Preferred Return Arrearage
shall be computed as of the end of the month immediately preceding the
distribution.
Section 6.2 Distributions of Net Cash From Sales or Refinancing. Net
Cash From Sales or Refinancing shall be distributed as set forth herein.
(a) To the extent attributable to sale of all or part of the Property,
such proceeds shall be distributed (i) first, to the Partners, proportionate to
their respective amounts of Additional Preferred Capital; (ii) second, to the
Partners proportionate to their respective amounts of Additional Preferred
Capital Preferred Return and Additional Preferred Capital Preferred Return
Arrearage, (iii) third, to the Partners, proportionate to their respective
amounts of their Cumulative Preferred Return; (iv) fourth, in the event of a
sale of a part of the Property, to the Partners proportionate to their
respective estimated amounts of federal income tax liabilities which they may be
required to pay on their allocable shares of net profits reported by the
Partnership for such fiscal year (determined as provided below), but only to the
extent such estimated tax liability is greater than the aggregate amount
otherwise distributable to such Partner under this Section 6.2 without reference
to this clause (iv); (v) to the Partners proportionate to their respective
amounts of Preferred Partnership Capital until paid in full; and (vi) the
balance to the Partners in the proportion that the number of Units owned by each
Partner bears to the total number of all Partnership Units then outstanding. The
Partnership's Accountant shall estimate the required amount of the distribution
set forth in clause (iv) above, based upon the maximum individual United States
Federal income tax rate then in effect and assuming each Partner is taxable as
17
an individual. The distributions to be made pursuant to clause (iv) shall be
irrespective of the actual amount of federal income tax which each Partner (or
the Partners of such Partner, in the event of a "pass through" entity) may be
required to pay with respect to the Partnership's income. For purposes of this
Section 6.2, Additional Preferred Capital Preferred Return and Additional
Preferred Capital Preferred Return Arrearage shall be computed as of the end of
the month immediately preceding the distribution.
(b) Net Cash From Sales or Refinancing attributable to refinancing of
the Property shall be distributed (i) first, to the Partner proportionate to
their respective amounts of Additional Preferred Capital; (ii) second, to the
Partners proportionate to their respective amounts of their Additional Preferred
Capital Preferred Return and Additional Preferred Capital Preferred Return
Arrearage; (iii) third, unless the 78 acres of Phase II Land is released from
mortgage as part of such refinancing, to Xxxxxxxx in an amount (combined with
the amounts received by Xxxxxxxx in (i) and (ii) above) equal to the aggregate
amount received by BEFI, BT and EST in (i) and (ii) (such payment to Xxxxxxxx
shall constitute an offset against the amounts otherwise distributable to
Xxxxxxxx under (iv) and (v) below); (iv) fourth, to the Partners, proportionate
to the respective amounts of their Cumulative Preferred Return; (v) fifth, to
the Partners proportionate to their respective amounts of Preferred Partnership
Capital until paid in full; and (vi) the balance to the Partners in the
proportionate to the number of Units owned by each Partner bears to the total
number of all Partnership Units then outstanding.
Section 6.3 Distributions upon Termination.
(a) Upon dissolution and termination of the Partnership, assets shall
be distributed (i) first, to the payment of creditors (including loans or
advances made to the Partnership by the Partners) and to the setting up of
reserves which the General Partners or liquidating trustee deems necessary for
any contingent obligations of the Partnership; (ii) thereafter, as provided in
Section 6.2 as pertains to the sale of the Property.
(b) If any assets of the Partnership are to be distributed in kind,
such assets shall be distributed on the basis of the fair market value thereof
and any Partner entitled to an interest therein shall receive such interest as a
tenant-in-common with the other Partners entitled thereto, or at the reasonable
discretion of the General Partners, said assets may be distributed to one or
more Partners, with assets of equal fair market value distributed to the
remaining Partners. Before any distribution in kind is made, the Capital Account
of each Partner shall be credited or charged in accordance with Section 5.1 for
the amount of net gain or loss on disposition that would have been credited or
charged if such assets had been sold at their fair market value, and the Capital
Account of each Partner shall be charged to reflect the distribution of such
assets as though the adjusted basis of such assets to the Partnership was equal
to their fair market value.
Section 6.4 Distributions in Kind. In addition to distributions in kind
upon termination of the Partnership, distributions in kind may also be made in
accordance with subsection (b) of Section 6.3 without the dissolution and
termination of the Partnership being required.
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ARTICLE VII
POWERS, DUTIES, AND
COMPENSATION OF GENERAL PARTNERS
Section 7.1 Powers and Duties of General Partners. The General Partners
shall be responsible for the management of the Partnership business with all
rights and powers generally conferred by law or necessary, advisable or
consistent in connection therewith. Each General Partner shall have one vote in
all matters pertaining to General Partner action or approval or the converse
thereof.
Section 7.2 Administrative General Partner. The Partners hereby appoint
BEF, Inc. to act as the Administrative General Partner. The Administrative
General Partner shall generally use its best efforts to take such reasonable
actions as it deems necessary to develop the Property into the Project, subject
to the provisions hereof as to the requirements for approval by both General
Partners. The Administrative General Partner shall have the duty and authority
to the extent funds are available therefor, to:
(a) Generally maintain the Property;
(b) Employ, retain, terminate and coordinate the services of all
employees, contractors, and suppliers of products and services necessary in the
conduct of the Partnership's business;
(c) Collect all income of the Partnership, and to the extent funds of
the Partnership are available therefor, pay all debts and other obligations of
the Partnership including amounts due under loans to the Partnership and the
cost of operation and maintenance of the Property;
(d) Consistent with the Budgets, make all such repairs, improvements
and development to the Property, in such manner and upon such terms as the
Administrative General Partner may deem proper, and execute all contracts and
agreements therefor, and pay for the same out of funds of the Partnership;
(e) Maintain broad form fire and extended coverage on any improvements
constructed on the Property in an insured sum not less than its replacement
cost, and maintain liability insurance in the name of the Partnership and the
Partners in an insured sum of not less than One Million Dollars ($1,000,000.00)
per accident, and such other insurance as the Administrative General Partner may
deem proper and appropriate, all with insurance companies licensed to do
business in the State of Florida;
(f) Keep accurate and adequate records and accounts of the financial
and business affairs of the Partnership and provide the Partners with all
financial reports required herein;
(g) Prepare, or cause to be prepared, all reports, tax returns and
documents of a similar nature required by the Partnership by the terms of this
Agreement subject to the approval of the General Partners;
19
(h) Pay all taxes, assessments, rents and other impositions applicable
to the Property and the Partnership, and other assets owned by the Partnership;
(i) Make such distributions to the Partners as set forth in Sections
6.1 and 6.2 as are required by this Agreement, or authorized hereunder;
(j) Generally perform all normal day-to-day business functions and
otherwise operate and manage the business and affairs of the Partnership in
accordance with this Agreement, and all applicable laws; and
(k) Negotiate and execute tenant leases, in accordance with the leasing
parameters agreed upon by the General Partners;
(l) Coordinate and supervise consultants and contractors;
(m) Provide marketing coordination and supervision to the Partnership;
(n) Use its best efforts to negotiate and arrange for construction
financing of the Project, subject to approval of the General Partners;
(o) Consistent with the Budgets, take all such action and make all such
decisions as it may deem proper and advisable on behalf of the Partnership in
accomplishing the purposes of the Partnership and not otherwise limited or
prohibited by this Agreement; and
(p) Operate the property in compliance with the provisions of the 2001
Financing (and any replacement financing therefor).
Xxxxxxxx shall have the right (upon provision of notice to BEFI) to
consult with, the Administrative General Partner with respect to all actions
authorized pursuant to this Section 7.2.
The Administrative General Partner will not commingle the Partnership
funds with its own, its Affiliates' or third party funds. All checks to
Affiliates, and all checks that vary from the approved Budget more than 10% for
any individual line item (after allocation of available contingency funds) and 5
% for all items in the aggregate (excluding taxes, insurance, management fees
and utilities) shall require the prior approval of Xxxxxxxx, which approval
shall not be unreasonably withheld or delayed and which may be by fax
transmission. The lack of response for a period of 72 hours shall constitute
approval.
The powers of BEFI hereunder are limited to actions within the scope of
the Budgets, provided (x) there may be deviations therefrom reasonably deemed
not to be material; and (y) notwithstanding anything to the contrary contained
herein, the Administrative General Partner may, without obtaining the prior
consent of the other General Partner, make any decision or take any action which
otherwise requires the prior consent of the other General Partner pursuant to
the terms hereof if, in the reasonable judgment of the Administrative General
Partner, such decision or action is necessary for the protection of life of
health or for the preservation of the Property or to avoid the suspension of any
service to or of the Property and there is insufficient time to notify the other
20
General Partner; provided, however, that the Administrative General Partner
shall use its reasonable efforts to notify the other General Partner and request
its consent prior to making any such decision or taking any such action.
Section 7.3 Compensation of Administrative General Partner.
(a) The Administrative General Partner (or its Affiliate designee)
shall receive a management fee of three percent (3 %) of the gross rentals
collected by the Partnership each month. Neither the Administrative General
Partner (nor any Affiliate thereof) shall be entitled to receive any leasing fee
or leasing renewal fee for any leases executed on behalf of the Partnership. The
Management and Leasing Agreement executed in connection with the Original
Partnership Agreement shall be amended to conform with the provisions of this
Section 7.3(a). The Administrative General Partner shall be entitled to pay
market rate leasing fees to unaffiliated third party brokers, and shall be
entitled to reimbursement for any out-of-pocket expenses advanced in connection
with leasing of the Property (including salary payments to Xxxxxx Xxxxxx; and
commission payments to Xxx Xxxxxxx when paid on a commission only basis). The
aggregate leasing fee (to unaffiliated third party brokers and to "in-house"
persons such as Xxxxxx Xxxxxx and Xxxx Xxxxxxx) shall not exceed three (3%)
percent. Each General Partner shall be entitled to reimbursement by the
Partnership for its reasonable out-of-pocket expenses paid to unaffiliated third
parties incurred on behalf of the Partnership, after approval (not to be
unreasonably withheld from the other General Partner.
(b) The Administrative General Partner shall not be liable to the
Partnership or to the Partners for damages or otherwise for any acts performed
by it within the scope of authority conferred upon it by this Agreement, except
for gross negligence, malfeasance or acts in contravention of this Agreement.
(c) The Administrative General Partner shall devote substantially all
of its time to the handling of the affairs of the Partnership, and shall provide
staffing and personnel necessary and as needed (without expense to the
Partnership except for reimbursement of $1,000 per month for internal accounting
overhead) to achieve completion of the Project in accordance with the revised
development budget attached as Exhibit "B". The officers and directors of the
Administrative General Partner shall devote such time as is reasonably necessary
to the handling of the affairs of the Partnership as may be required.
Section 7.4 Plans, Budgets and Schedules. All activities and
expenditures pertaining to the business of the Partnership shall be carried out
only in accordance with and as limited by development and marketing plans,
construction budgets and schedules, and operating budgets approved by the
General Partners in writing. The Administrative General Partner shall prepare
and submit to the General Partners a development and marketing plan, a
construction budget and schedule, and annual operating budgets containing
proposed development, marketing and operating activities and revenues and
expenditures for a specified succeeding period (collectively, the "Budgets").
Until otherwise agreed to by each General Partner, within ten (10) business days
following the delivery of each such plan, budget and schedule, the General
Partners shall confer (by telephone or by meeting) to review and consider (i)
the specific plans, budget and schedules, (ii) overall development plans,
budgets and schedules, (iii) Partnership expenditures and activities from prior
21
periods, and (iv) other Partnership business. Unless the Administrative General
Partner shall receive notice from the other General Partner within fifteen (15)
business days following submission of a Budget that the Budget is unacceptable,
the Administrative General Partner shall be entitled to rely on such Budget and
such Budget shall be deemed approved by the Partnership for the next succeeding
period (not to exceed twelve (12) months). In the event the other General
Partner shall not agree with, or raise any objections to, the proposed annual
operating budget, and the General Partners are unable to resolve the disputed or
objectionable matters submitted by the Administrative General Partner prior to
the commencement of the applicable calendar year, the aggregate amount of the
annual operating budget for the preceding calendar year, adjusted upward by the
percentage of increase in the Consumer Price Index during such preceding year,
shall be deemed to be the annual operating budget in effect until such time as a
new annual operating budget has been approved.
Section 7.5 Major Decisions. No act shall be taken or sum expended or
obligation incurred by the Partnership or the Administrative General Partner
with respect to matters within the scope of the major decisions ("Major
Decisions") affecting the Partnership, as defined below, unless the same shall
have been approved in writing by all General Partners in their respective sole
discretions, and the General Partners shall have full and absolute authority to
authorize and accomplish the Major Decisions on behalf of the Partnership. The
Major Decisions shall be the following:
(a) Sale of the Property or any material part thereof;
(b) Transfer or assignment of the Property or any part thereof;
granting a mortgage, encumbrance or security interest in the Property or any
part thereof;
(c) Acquisition of any additional land by the Partnership;
(d) Approval of the master development plan and material changes
thereto;
(e) Approval of the Budgets and material changes thereto;
(f) All financing, refinancing and prepayments of existing mortgage
financing.
(g) Transactions with Affiliates;
(h) Transfers of Partnership interests or admissions of new Partners;
(i) Approval of annual proforma leasing plans;
(j) Any final agreements or permits with governmental agencies;
(k) Selection of Architect, General Contractor and major
subcontractors, consultants and professionals (including attorneys and
accountants) for the development of the Project;
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(l) Revision of any material contract or plan which required approval
of both General Partners.
Section 7.6 Admission of Limited Partners. The General Partners have
the right to admit Limited Partners in substitution of Limited Partners
disposing of their interests in the Partnership in accordance with the terms
hereof. The General Partners also have the right to admit any lenders of funds
for the acquisition, development or refinancing of the Partnership Property or
other parties (including an increase in the contributions and interests or Units
of existing Partners) where additional capital contributions are required, as
additional Limited Partners, upon such terms as they shall deem advisable,
provided (x) the interests, of the General Partners and the Limited Partners are
reduced prorata, and (y) the right to supply such financing or refinancing shall
first be offered to the Partners.
Section 7.7 Certain Limitations. Notwithstanding the authority granted
the General Partners under Sections 7.1 and 7.2 hereinabove, without obtaining
the consent of (x) both General Partners and (y) General and Limited Partners
holding in the aggregate not less than a majority of units in the Partnership,
such consent not to be unreasonably withheld, the General Partners will not:
(a) Act in contravention of this Agreement;
(b) Confess a judgment against the Partnership;
(c) Admit a person as a General Partner or as a Limited Partner except
as otherwise herein provided.
Section 7.8 Reliance. Notwithstanding the prior provisions of this
Article VII, all vendors, service suppliers and proposed tenants may rely upon
execution of contracts, leases and related items by the Administrative General
Partner only. Further, all checks except as provided below may be signed by the
Administrative General Partner only. All checks representing distributions to
Partners shall be signed by both General Partners.
ARTICLE VIII
RIGHTS AND PROHIBITIONS OF LIMITED PARTNER
Section 8.1 Rights of Limited Partner.
(a) The Limited Partners and their respective officers, shareholders,
directors, partners, and Affiliates (collectively, "Associates"), shall not in
any way be prohibited from or restricted in engaging or owning an interest in
any other business venture of any nature, including any venture which might be
competitive with the business of the Partnership, and the Partnership may engage
the Limited Partners and their Associates for specific purposes and may
otherwise deal with the Limited Partners and their Associates on terms and for
compensation to be agreed upon by such Limited Partners or Associates, as
applicable, and the Partnership; provided, however, that Limited Partners shall
not be entitled to participate in the management or control of the business of
the Partnership.
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(b) Subject to such reasonable standards as the General Partners may
establish, the Limited Partners shall be entitled to obtain from the General
Partners, from time to time, upon reasonable demand for any purpose reasonably
related to the respective Limited Partner's interest as a Limited Partner:
(i) In addition to the information and documentation required
under Section 5.8 hereinabove, true and full information regarding the status of
the business and financial condition of the Partnership;
(ii) Promptly after becoming available, a copy of the
Partnership's federal, state and local income tax returns for each year;
(iii) A current list of the name and last known business,
residence or mailing address of each Partner;
(iv) A copy of the Partnership Agreement and Certificate of
Limited Partnership and all amendments thereto.
(v) True and full information regarding the amount of cash and
a description and statement of the agreed value of any other property or
services contributed by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner; and
(vi) Such information regarding the affairs of the Partnership
as is reasonably requested.
(c) Each Limited Partner shall be entitled to cast one vote for each
Partnership Unit held by it on all matters with respect to which such Partner is
given the right to vote pursuant to this Agreement. Fractional units shall be
entitled to a fractional vote equal to said fraction.
Section 8.2 Prohibitions with Respect to Limited Partners. The Limited
Partners shall have no right:
(a) To take part in the management or control of the Partnership
business or to sign for or to bind the Partnership in any manner whatsoever.
(b) To have their Capital Contributions repaid except to the extent
provided in this Agreement or to demand property other than cash in payment of
their Partnership Capital Accounts.
(c) To require partition of Partnership property or to compel any sale
or inventory or appraisement of the Partnership assets or sale of a deceased
24
Partner's interests therein, notwithstanding any provisions of law to the
contrary, the right thereto being hereby waived and relinquished.
(d) To sell, assign, mortgage, pledge or transfer their respective
interests in the Partnership as a substituted Limited Partner, except as
provided in Article X hereof.
(e) To withdraw from the Partnership prior to its dissolution and
winding up in accordance with the provisions of Article XI.
ARTICLE IX
DISSOLUTION, WITHDRAWAL, ETC. OF A GENERAL PARTNER
Section 9.1 Termination and Replacement of a General Partner.
(a) In the event of the death, dissolution, act of insolvency,
adjudication of insanity or incompetency, inability to serve, or other
termination, of a General Partner, its General Partner Units shall be converted
to Limited Partner Units, and the Partnership shall be continued with the
remaining General Partner serving alone. In the event of the death, dissolution,
act of insolvency, adjudication of insanity or incompetency, inability to serve,
or other termination of both General Partners, their interests as General
Partners shall be terminated and the Partnership shall be dissolved, provided
the remaining Partners may, within ninety (90) days after notice of any such
event, by affirmative vote of 100% of the Limited Partners (a) elect to continue
the Partnership, and (b) elect a new General Partner or General Partners, who or
which shall consent to and accept such election. In the event the Limited
Partners do not elect to continue the Partnership as above provided, the Limited
Partners shall by majority vote designate a liquidating Partner to wind up and
liquidate the Partnership as provided in Article XI hereof. As used in this
Agreement, an "act of insolvency" shall occur in the event a General Partner:
(i) shall file a voluntary petition in bankruptcy or is
adjudicated a bankrupt or insolvent and such adjudication (if involuntary) is
not cured or otherwise set aside within sixty (60) days after the occurrence
thereof; or
(ii) has a receiver appointed for all or substantially all of
his or its business or assets on the grounds of insolvency and such appointment
(if involuntary) is not cured or otherwise set aside within ninety (90) days
after the occurrence thereof; or
(iii) has a trustee appointed for him or it after a petition
has been filed for reorganization or arrangement under the Bankruptcy Act of the
United States, or any law of the United States now in existence or hereafter
enacted having the same general purpose and such act or event (if involuntary)
is not cured or otherwise set aside within ninety (90) days from the occurrence
thereof; or
(iv) makes a general assignment for the benefit of his or its
creditors.
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(b) If BEFI, Inc., ceases to be a General Partner, Xxxxxxxx shall
become the Administrative General Partner, the Management and Leasing Agreement
referred to in Section 7.3 shall terminate and Xxxxxxxx may designate a new
management and leasing agent.
(c) In the event foreclosure proceedings are commenced against the
Partnership and such proceedings are not terminated or withdrawn within thirty
(30) days after commencement thereof, then BEFI shall cease to be a General
Partner, and Xxxxxxxx shall become the Administrative General Partner, the
Management and Leasing Agreement referred to in Section 7.3 shall terminate and
Xxxxxxxx may designate a new management and leasing agent.
Section 9.2 Admission of General Partners. Additional or replacement
General Partners may be admitted by the affirmative vote of all remaining
General Partner(s) and 100% of the Limited Partners (excluding in said vote any
General Partner (or related Limited Partner) being replaced ).
Section 9.3 Partnership Interest of Terminated General Partner. In the
event of the termination of a General Partner for any of the reasons as provided
in Section 9.1, the General Partnership Unit(s) of such terminated or
withdrawing General Partner shall become Limited Partnership Unit(s) and such
terminated or withdrawing General Partner shall become an assignee as set forth
in Section 10.2(b) with the same interest in the Partnership capital, profits
and losses as the former General Partner had, but with no voting or consent
rights. Such assignee may become a substituted Limited Partner upon satisfaction
of the conditions set forth in Section 10.3.
ARTICLE X
TRANSFER OF INTERESTS
Section 10.1 General Partners.
(a) The General Partnership Units shall not be sold, assigned,
hypothecated or otherwise transferred, except as Limited Partnership Units
subject to the provision Section 10.2; notwithstanding said limitation, however,
commencing one year after the Project is completed as set forth in Section 16.1
(a), Xxxxxxxx may transfer its General Partnership Units as such, or its parent
may transfer all or a part of its own stock or its stock in Xxxxxxxx, to another
party ("Third Party"), other than to parties defined in Section 10.2 (a) (iv) or
(v), without requiring the consent of the remaining General Partner or the
Limited Partner; provided, if not a tax free transaction, the proposed third
party shall, in the reasonable determination of the remaining General Partner,
be (i) of financial strength commensurate with its obligations as General
Partner, (ii) of good reputation for honesty, integrity and ability in the
business community of which it is a part and (iii) experienced in shopping
center ownership; otherwise the transfer shall be void. Xxxxxxxx shall give the
other General Partner not less than thirty (30) days notice of such proposed
transaction, including with such notice, details of the proposed transfer and
detailed information as to the third party in order that the other General
Partner may make a determination as to the qualifications under (i), (ii) and
(iii) above. Failure of the other General Partner to notify Xxxxxxxx of its
determination
26
within fifteen (15) days of receipt of such notice shall be deemed acceptance of
the third party. If the proposed transfer is not a tax free transaction, the
other General Partner also shall have the right of first refusal as set forth in
Section 10.1 (b) or 10.2(a)(vi) or (vii); if a tax-free transaction, the
foregoing rights of first refusal shall not apply.. Further, Xxxxxxxx or its
parent, as applicable, shall give the remaining Partners not less than thirty
(30) days notice of such proposed transaction and allow the remaining Partners
to participate in such transaction, at their election, on the same terms as
Xxxxxxxx'x or its parent's participation.
(b) If 25 % or more of the equity ownership interests in a General
Partner are sold other than to parties described in Sections 10.1 (a) or 10.2(a)
(iv) or (v), said General Partner shall cease to be a General or Limited
Partner, but rather shall be entitled only to the rights of an assignee under
Section 10.2(b) hereinbelow. If 50% or more of the equity ownership interests in
a General Partner are sold or proposed to be sold other than to parties
described in Sections 10.1(a) or 10.2(a) (iv) or (v), said General Partner shall
be required to offer its total Partnership Units (as Limited Partnership Units)
to the remaining Partners pursuant to Section 10.2(a) (vii), the purchase price
for the Limited Partnership Units so offered to be determined by referring to
the price offered for the equity ownership interests in the General Partner,
adjusted to eliminate all assets and liabilities of such General Partner other
than its interest in the Partnership.
Section 10.2 Limited Partners.
(a) Except as specifically provided in this Section 10.2(a), no Limited
Partner (including for this purpose General Partnership Units converted to
Limited Partnership Units pursuant to Sections 9.3 and 10.1) shall have the
right to sell, assign, hypothecate or otherwise transfer its Units in the
Partnership. All Partners agree to maintain their Partnership Units lien-free,
any attempted hypothecation thereof being null and void.
(i) No Limited Partner shall have the right to sell, assign,
hypothecate, or transfer its Units as a Limited Partner in the Partnership to a
minor or to any person who for any reason lacks the capacity to contract for
himself under applicable laws. However, such limitation shall not restrict the
right of a Limited Partner to sell, assign, hypothecate or transfer to a
custodian or trustee for such a person.
(ii) Upon the death, bankruptcy, insolvency or legal
incompetency of an individual Limited Partner, such individual shall no longer
be a Limited Partner. The legally authorized personal representative of such
individual shall become a Limited Partner in his place and stead, with all of
the rights of a Limited Partner solely for the purpose of settling or managing
the estate of such individual, and such representative shall have the power as
such individual possessed to make an assignment or transfer of his Partnership
interest in accordance with the terms of subsections (iv), (v) or (vi) hereof
and to join with such transferee in making application to substitute such
transferee as a substituted Limited Partner subject to the provisions of Section
10.3.
(iii) Upon the bankruptcy, insolvency, dissolution or other
cessation to exist as a legal entity of any Limited Partner which is not an
individual, such entity shall no longer be a Limited Partner. The authorized
27
representative of such entity shall become a Limited Partner in its place and
stead, with all of the rights of a Limited Partner solely for the purpose of
effecting the orderly winding-up and disposition of the business of such entity,
and such representative shall have the power as such entity possessed to make an
assignment or transfer of its Partnership interest in accordance with the terms
of subsections (iv), (v) or (vi) hereof and to join with such transferee in
making application to substitute such transferee as a substituted Limited
Partner, subject to the provisions of Section 10.3.
(iv) The Limited Partnership Units may be transferred (by
either inter vivos, testate or intestate disposition) to the spouse, to the
descendants and their spouses of a Limited Partner (including in said definition
of a Limited Partner the owners of a corporation, partnership or trust
comprising such Limited Partner), to a corporation, partnership, trust or other
entity which is majority owned and controlled by any one or more of said
persons, or to an estate or a trust for the benefit of any such persons, or to
Affiliates of a Limited Partner, subject to the provisions of Section 10.3.
(v) Limited Partnership Units resulting from the conversion of
the Xxxxxxxx General Partner Units, in whole or in part, may be transferred to
the equity owners or Affiliates of Xxxxxxxx.
(vi) If 25 % or more of the equity ownership interests in a
Limited Partner are sold other than to parties described in subsection (iv) or
(v) hereinabove, said Partner shall cease to be a Limited Partner, but rather
shall be entitled only to the rights of an assignee under Section 10.2(b)
hereinbelow. If 50% or more of the equity ownership interests in a Limited
Partner are sold or proposed to be sold other than to parties described in
subsection (iv) or (v) hereinabove, said Partner shall be required to offer its
total Limited Partnership Units to the remaining Partners pursuant to subsection
(vii) hereinbelow, the purchase price for the Limited
Partnership Units so offered to be determined by referring to the price offered
for the equity ownership interests in the Limited Partner, adjusted to eliminate
all assets and liabilities of such Limited Partner other than its interest in
the Partnership. (vii) (x) Except as otherwise provided in subsections (iv) and
(v), if either Xxxxxxxx as to its 35 Units or BEFI, BT and EST acting as a
single unit/entity holding in the aggregate 65 Units wishes to sell all of its
Units (no sale of a portion thereof being permitted) in the Partnership, it
shall first deliver to the other Partner a written notice of the proposed sale
setting forth the name and address of the proposed purchaser, the purchase price
(which must be an amount specified in dollars, but which may be paid either in a
lump sum or in installments over an extended period of time) and the provisions
of the proposed sale. A photostatic copy of the third party offer shall be
included with said notice. The other Partner shall have the option, which shall
be exercised by delivery to such Partner of a written notice of exercise at any
time within sixty (60) days after the delivery of the notice of proposed sale,
to purchase such Units at the purchase price and pursuant to the provisions set
forth in accordance with the terms of the notice of proposed sale, and within
thirty (30) days after delivery of the notice of exercise, the other Partner
will purchase such Units in accordance with the division thereof agreed upon by
the group constituting the other Partner; provided the purchasing Partner shall
have the right at its respective option and in lieu of the terms offered by the
third party offeror, to pay for the Units by means of a cash payment of 20 % of
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the purchase price and with the balance payable in equal monthly installments of
principal over a twelve (12) month period plus interest at an interest rate
equal to the prime commercial rate of interest of Citibank, N.A., or its
successor in interest, plus 2% per annum, adjusted daily, but never to exceed
the maximum lawful contract rate. If said bank is not then in existence or not
setting a prime rate, that New York City bank (with its principal place of
business being there) with the largest net worth and so setting a prime rate
shall be used.
(y) Payment of the 80% deferred purchase price shall
be evidenced by a negotiable promissory note and secured by a
pledge of the purchased Units pursuant to security agreement
and UCC-1 Financing Statements perfecting said security
interest in form as reasonably required by the selling
Partner. At the selling Partner's election and as a condition
to the deferral, it may require the guaranty of 30 % of the
purchase price by a guarantor with a net worth not less than
three times the amount of the guaranty, the guaranty to burn
off on pay down of the deferred purchase price dollar for
dollar. Prepayments may be made at any time without penalty.
The entire deferred balance shall be due and payable on sale
or other disposition of the Project. The net proceeds from a
refinancing shall be applied as a prepayment against the
deferred balance, any such prepayments to be applied against
the last due payments without reduction in the regular monthly
installments. All distribution under Section 6.1 shall be
applied first to the remaining Partners' federal income tax
liabilities attributable to their ownership interest in the
Partnership, based upon the maximum individual United States
income tax rate then in effect and assuming each Partner is
taxable as an individual, with the entire balance to be
applied against the current interest due and the principal
installments next due and payable until such entire balance is
exhausted.
(z) If the other Partner fails to exercise the
aforesaid option, such Partner shall have the right to sell
its Units as a Limited Partner in the Partnership so offered
to the person named in the notice of proposed sale at the
price and pursuant to the provisions set forth therein.
However, if such Partner fails to complete such sale within
ninety (90) days after the lapse of the other Partner's right
to purchase such Units or after the other Partner's rejection
of such offer of sale, such right shall terminate, and such
Partner shall not thereafter sell to any person such Units
without again complying with the foregoing procedure.
(viii) If Xxxxxxxx converts its General Partnership Units to
Limited Partnership Units, the provisions of Section 10.1(a) apply equally to
such Limited Partnership Units.
(b) Subject to compliance with and satisfaction of the provisions of
subsections (a) and (c) of this Section 10.2, the Units of a Limited Partner
shall be assignable, but the assignee shall not become a substituted Limited
Partner, except pursuant to the provisions of Section10.3. An assignee who does
29
not become a substituted Limited Partner has no right to receive any information
or account of Partnership transactions, to inspect the Partnership's books, to
vote on Partnership matters, to request a meeting of the Partnership or to
exercise any of the other rights of a Limited Partner other than to receive
distributions of Cash Flow or other property and the allocation of Partnership
profits, losses and credits (including all items thereof) to which his or her
assignor would otherwise be entitled as to the Partnership Units.
(c) No Assignment pursuant to Section 10.2 shall be effective as to the
General Partners or the Partnership unless and until a copy of an instrument of
assignment and assumption executed by the assignor and the assignee, in form and
substance reasonably satisfactory to the Partnership and with both assignor and
assignee indemnifying the General Partners and the Partnership against loss or
liability arising out of such assignment, shall have been received by the
General Partners. An assignee of a Limited Partner shall be entitled to receive
distributions of Net Cash Flow From Operations and of Net Cash From Sales or
Refinancing or other property and the allocation of Partnership profits, losses
and credits (including all items thereof) attributable to the Units acquired by
reason of such assignment which are distributed or allocated, as the case may
be, from and after the effective date of the assignment of such Units to it.
(d) A Limited Partner that has assigned all of its Units in the
Partnership, whether or not the assignee has become a substituted Limited
Partner, shall not thereafter be entitled to any rights of a Limited Partner nor
shall it have any obligations as Limited Partner except as otherwise provided by
the Act.
Section 10.3 Substitution of a Limited Partner. The assignee of the
Units of a Limited Partner that has complied with the provisions of Section 10.2
hereof may become a substituted Limited Partner only when the General Partners
shall have consented thereto (which shall be in their sole discretion), the
assignee shall have become a party to this Agreement, such certificates or
instruments as are required by law shall have been executed and filed and the
assignor or the assignee shall have paid or obligated itself to pay all
reasonable expenses (as the General Partners may reasonably determine) connected
with such admission or substitution which shall include, without necessarily
being limited to, a minimum fee of Five Hundred Dollars ($500.00) (which the
General Partners shall have the right to waive in their sole discretion).
Section 10.4 Limitation on Assignment or Transfer. Notwithstanding the
above provisions, no transfer or assignment of any Partnership Units may be made
if (a) such transfer or assignment, together with all other transfers and
assignments of Partnership Units within the preceding twelve months would, in
the opinion of counsel for the Partnership, result in a termination of the
Partnership for purposes of Code ss.708, or any comparable provision then in
effect; (b) in the opinion of counsel for the Partnership, such transfer or
assignment would violate the Securities Act of 1933, as amended, or applicable
state securities or Blue Sky laws or any other applicable provision of law in
any respect; (c) in the opinion of such counsel, such transfer and assignment
would cause the Partnership to be treated as an association taxable as a
corporation rather than as a partnership subject to the provisions of Subchapter
K of the Code, or any comparable provisions then in effect; or (d) such
assignment would cause a breach or default under any contract or loan to which
the Partnership is a party. Nothing contained in this Section 10.4 shall be
30
deemed to require the General Partners to obtain an opinion of counsel
concerning the matters covered hereby if, in the good faith judgment of the
General Partners, such an opinion is not necessary. Notwithstanding the
provisions of subsection (a) above, any transfer or assignment permitted under
Section 10.1(a) or 10.2(a)(viii) during the period commencing after the Project
is completed as set forth in Section 16.1(a) and ending five (5) years
thereafter shall be permitted.
ARTICLE XI
TERMINATION OF THE PARTNERSHIP
Section 11.1 Termination. The Partnership shall be dissolved upon the
earliest to occur of the following:
(a) As provided in Section 9.1 (subject to continuance as therein
provided).
(b) Upon the expiration of the term specified in this Agreement.
(c) Upon the determination of the General Partners.
(d) Upon the sale of substantially all the assets of the
Partnership.
Upon dissolution of the Partnership, the liquidating Partner
as provided in Section 9.1 shall wind up and liquidate the Partnership by
selling the Partnership's assets and distributing the net proceeds therefrom, or
distributing the assets or portions thereof in kind, as hereinabove set forth in
Section 6.3. Upon completion of the liquidation, the Partnership shall be deemed
completely dissolved and terminated.
Section 11.2 Final Accounting Each of the Partners shall be furnished
with a statement by the Partnership's accountants, which shall set forth the
assets and liabilities of the Partnership immediately prior to the date of the
complete liquidation. Upon compliance by the liquidating Partner with the
foregoing distribution plan, the Limited Partnership shall cease to be such, and
the liquidating Partner, as the sole remaining partner of the Partnership, shall
execute and cause to be filed a Certificate of Cancellation of the Partnership
and any and all other documents necessary with respect to termination and
cancellation.
ARTICLE XII
AMENDMENTS
Section 12.1 Authority to Amend.
(a) This Partnership Agreement may be amended by the General Partners
without the approval of the Limited Partners if such amendment is solely for the
purpose of clarification or does not change the substance hereof and the
Partnership has obtained the opinion of its counsel to that effect.
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(b) This Partnership Agreement may further be amended by the General
Partners without the approval of the Limited Partners if such amendment is for
the purpose of substituting or adding Limited Partners in accordance with the
provisions hereof.
(c) This Partnership Agreement may further be amended by the General
Partners without the approval of the Limited Partners if such amendment is, in
the opinion of counsel for the Partnership, necessary or appropriate to satisfy
requirements of the Internal Revenue Code with respect to partnerships or of any
federal or state securities law or regulations. .Any amendment made pursuant to
this paragraph may be made effective as of the date of this Partnership
Agreement.
(d) Except as otherwise specifically provided in this Partnership
Agreement, amendments to this Partnership Agreement shall require the approval
of (x) (the General Partners and of (y) the Partners (including the General
Partners) owning not less than a majority of the Partnership Units.
(e) Notwithstanding Sections 12.1(a), 12.1(b), 12.1(c) and 12.1(d), any
amendment to this Partnership Agreement which would (i) adversely affect the
personal liabilities of the Limited Partners, (ii) change the method of
allocation of profit and loss or distributions, or (iii) except as permitted
under Section 7.6, dilute the ownership percentages shall require the approval
of the holders of one hundred percent (100%) of the Limited Partnership Units so
affected.
(f) A copy of any amendment to be approved by the Limited Partners
pursuant to Sections 12.1(d) or 12.1(e) shall be mailed to the Limited Partners
not less than ten (10) days in advance of any meeting called for the purpose of
voting on such amendment. The Limited Partners shall be notified as to the
substance of any amendment adopted pursuant to Section 12.1 and upon request
shall be furnished a copy thereof.
ARTICLE XIII
POWER OF ATTORNEY
Section 13.1 Power. The Limited Partners, including any future
substituted Limited Partners, irrevocably constitute and appoint the General
Partners as their true and lawful attorneys in their name, place and xxxxx to
make, execute, swear to, acknowledge, deliver and file:
(a) Any certificates or other instruments which may be required to be
filed by the Partnership under the laws of the State of Florida, or of any other
state or jurisdiction in which the Partnership shall transact business or in
which the General Partners shall deem it advisable to file.
(b) Any documents, certificates or other instruments, including,
without limitation to the generality of the foregoing, any and all amendments
and modifications of this Partnership Agreement pursuant to Section 12.1 or of
the instruments described in Section 13.1(a), which may be required or deemed
32
desirable by the General Partners to effectuate the provisions of any part of
this Partnership Agreement, and, by way of extension and not in limitation, to
do all such other things as shall be necessary to continue and to carry on the
business of the Partnership.
(c) All documents, certificates or other instruments which may be
required to effectuate the dissolution and termination of the Partnership.
The power of attorney granted hereby shall not constitute a waiver of,
or be used to avoid, the rights of the Limited Partners to approve certain
amendments to this Agreement and other Partnership matters pursuant to Section
12.1 or be used in any other manner inconsistent with the status of the
Partnership as a Limited Partnership.
Section 13.2 Survival of Power. It is expressly intended by the Limited
Partners that the foregoing power of attorney is coupled with an interest, is
irrevocable and shall survive the deaths, dissolution, incompetence and
adjudication of insanity of a Limited Partner. The foregoing power of attorney
shall survive the delivery of an assignment by a Limited Partner of its entire
interest in the Partnership, except that where an assignee of such entire
interest has become a substituted Limited Partner, then the foregoing power of
attorney of the assignor Limited Partner shall survive the delivery of such
assignment for the sole purpose of enabling the General Partners to execute,
acknowledge and file any and all instruments necessary to effectuate such
substitution.
ARTICLE XIV
LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS
Section 14.1 Liability of the General Partners. So long as the General
Partners shall act in good faith with respect to the conduct of the business and
affairs of the Partnership, they shall not be liable or accountable to the
Partnership or to any of the Partners, in damages or otherwise, for any error of
judgment, for any mistake of fact or of law, or for any other act or thing which
it may do or refrain from doing in connection with the business and affairs of
the Partnership except for willful misconduct, gross negligence, breach of
fiduciary duty or malfeasance. The respective General Partners do hereby
indemnify the Partnership and the remaining Partners for any loss, expense or
damage which they might suffer as a result of the said General Partner's willful
misconduct, gross negligence, breach of fiduciary duty or malfeasance.
Section 14.2 Indemnity. The Partnership (but not the Limited Partners)
does hereby indemnify and agree to hold the General Partners wholly harmless
from and against any loss, expense, or damage suffered by it by reason of
anything it may do or refrain from doing hereafter for and on behalf of the
Partnership and in furtherance of its interests, including the payment by the
General Partners of any debts of the Partnership; provided, however, that the
Partnership shall not be required to indemnify or hold harmless any General
Partner for any loss, expense, or damage which it might suffer as a result of
its willful misconduct, gross negligence, breach of fiduciary duty or
malfeasance.
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ARTICLE XV
MISCELLANEOUS
Section 15.1 Governing Laws. The Partnership and this Partnership
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida.
Section 15.2 Entire Agreement. This Partnership Agreement contains the
entire understanding among the Partners and supersedes any prior understanding
and agreements between them respecting the within subject matter (including but
not limited to the Original Partnership Agreement and the Amendments). There are
no representations, agreements, arrangements or understandings, oral or written,
between or among the Partners hereto relating to the subject matter of this
Partnership Agreement which are not fully expressed herein.
Section 15.3 Severability. This Partnership Agreement is intended to be
performed in accordance with, and only to the extent permitted by the applicable
laws, ordinances, rules and regulations of the jurisdiction in which the
Partnership does business. If any provision of this Partnership Agreement, or
the application thereof to any person or circumstance shall, for any reason and
to any extent, be invalid or unenforceable, the remainder of this Partnership
Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby, but rather shall be enforced to the
greatest extent permitted by law.
Section 15.4 Notices. Notices to Partners or to the Partnership shall
be deemed to have been given when personally delivered to the recipient, when
mailed, by prepaid registered or certified mail, return receipt requested, or
when sent by nationally recognized overnight courier service, addressed in
either instance as set forth in this Partnership Agreement, or as set forth in
any notice of change of address previously given in writing by the addressee to
the addressor. Any notice to Xxxxxxxx shall be addressed to it, c/o Thackeray
Corporation, at the address shown on page 3, Attn: Xxxxx Xxxx, with a copy to
Xxxxxx X. Xxxxxxxxxx, c/o Taconic Investment Partners, 0000 Xxxxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000.
Section 15.5 Counterparts. This Partnership Agreement may be executed
in several counterparts, and all so executed shall constitute one agreement,
binding on all parties hereto, notwithstanding that all the parties are not
signatories to the original or the same counterpart. This Agreement may be
executed by facsimile signature, provided that an executed original counterpart
shall be provided to all other parties as soon as reasonably possible after
delivery of such facsimile execution.
Section 15.6 Construction. The headings of the articles and sections
contained herein are for convenience only and do not define, limit or construe
the contents of such articles and sections. Words of any gender, masculine,
feminine or neuter, shall be construed to include any other gender; words in the
singular number shall be construed to include the plural, and words in the
plural number shall be construed to include the singular, when the context or
sense of this Partnership Agreement allows.
34
Section 15.7 Tax Partner. The Administrative General Partner is
designated as Tax Matters Partner for the Partnership; provided, however, no
definitive action may be taken without consent of both General Partners.
Section 15.8 Representations. The undersigned Partners hereby represent
and warrant that (a) their respective entities are each duly organized and
validly existing under the laws of their respective states of organization; (b)
each is in full compliance with all legal requirements to do business as an
entity in their respective states of organization as well as the state of
Florida; (c) the undersigned persons are duly authorized to execute and deliver
this Limited Partnership Agreement on behalf of their respective entities; (d)
there are no actions, suits or proceedings pending or threatened against the
respective Partners, which, if adversely determined, could affect their ability
to perform their obligations under this Limited Partnership Agreement, or which
challenges the validity of or enforceability of, or the ability of the Partners
to fulfill each of their respective obligations hereunder; and (e) entering into
this Limited Partnership Agreement does not violate any other agreements to
which said Partners may be bound.
Section 15.9 Meetings. The General Partners shall hold regular
quarterly meetings on dates and at locations to be agreed upon by said Partners.
Section
15.10 Single Purpose Entity Provisions. For so long as the loan from
Canpartners Realty Holding Company IV, LLC to the Partnership in the principal
amount of $10,000,000 (the "Mezzanine Loan"), as provided for in the Commitment
Letter from Canyon Capital Realty Advisors LLC dated March 21, 2001 (the
"Mezzanine Loan Commitment") and the Definitive Loan Documents (as defined in
the Mezzanine Loan Commitment) executed in connection therewith, remains unpaid,
or any other Obligation (as defined in the Mezzanine Loan Commitment) remains
unpaid or unperformed, or any portion of the Mezzanine Loan remains outstanding,
the Partnership:
(a) Shall establish and maintain an office through which the
Partnership's business shall be conducted separate and apart from that of any of
the Partners or Affiliates (as defined, for purposes of this Section 15.10 only,
in the Definitive Loan Documents) or, if the Partnership shares office space
with the Partnership's parent or any Affiliate, any overhead for shared office
space shall be fairly and reasonably allocated;
(b) Shall maintain Partnership records and books of account separate
from those of any Affiliate;
(c) Shall observe all corporate and Partnership formalities;
(d) Shall not commingle Partnership assets with those of any Affiliate;
(e) Shall conduct the Partnership's own business and the Partnership's
own name;
(f) Shall maintain financial statements separate from any Affiliate;
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(g) Shall pay any liabilities out of Partnership funds, including
salaries of any employees, and such liability shall not be paid out of the funds
of any Affiliate;
(h) Shall maintain an arm's length relationship with any Affiliate;
(i) Shall not guaranty or become obligated for the debts of any other
entity, including any Affiliate, or hold out the Partnership's credit as being
available to satisfy the obligations of others;
(j) Shall use stationery, invoices and checks separate from any
Affiliate;
(k) Shall not pledge Partnership's assets for the benefit of any other
entity, including any Affiliate; and
(l) Shall hold the Partnership out as an entity separate from any
Affiliate.
Section 15.11 Pledge of Interests as Security for Canpartners Loan.
Notwithstanding any provision to the contrary set forth in this Agreement, a
Partner (either general or limited) may pledge or hypothecate its Partnership
Units and its interests in the Partnership (collectively, "Interests") in
connection with and as security for that certain loan in the original principal
amount of $10,000,000 to be made by Canpartners Realty Holding Company IV, LLC
("Canpartners") to the Partnership (the "Canpartners Loan"). None of the
restrictions on transfer, requirements for notice or consent, or other
prerequisites relating to the transfer of Interests as set forth in this
Agreement shall apply to a pledge of Interests in connection with the
Canpartners Loan. Such pledge shall be valid and enforceable in accordance with
the terms of any pledge agreement entered into by the pledging Partner in favor
of Canpartners (the "Pledge Agreement") without regard to any provision of this
Agreement. Furthermore, in the event that such a pledge is effectuated and
Canpartners forecloses on or otherwise takes ownership of the pledged Interests,
Canpartners shall, at its election and subject only to the terms of the Pledge
Agreement, assume the position of the pledging Partner in the Partnership
without any Partner consent and without regard to the requirements of the
Partnership Agreement relating to the transfer of Interests or the admission of
a new Partner or a new Administrative General Partner or General Partner. Upon
Canpartners' assumption of ownership of the pledged Interests, Canpartners may
act and operate as an original Partner of the Partnership and shall have all
rights, benefits, powers, and obligations of that Partner under the Partnership
Agreement.
Notwithstanding the foregoing provisions of this Section 15.10, and as
further provided in Section 4.4, Canpartners shall not be entitled (pursuant to
the provisions of Article IV or otherwise) to require that Capital Contributions
be made by any Partner to the Partnership.
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ARTICLE XVI
BUY-SELL PROVISIONS
Section 16.1
(a) At any time from and after one (1) year from the date of completion
of the Project (deemed to be the date upon which certificates of completion in
accordance with the construction plans from the architect, engineer and general
contractor with two sets of as-builts, final affidavits of the foregoing
certifying payment of all amounts owed, a title endorsement without lien
exceptions, and evidence of compliance with all governmental requirements
including a certificate of occupancy are received) in the event the General
Partners cannot agree upon the terms of a sale of the Property, or in the event
of an unresolvable dispute as to a material matter, and a period of sixty (60)
days has elapsed during which the General Partners have attempted to agree upon
a price or settle their dispute, either Xxxxxxxx (as to its entire Partnership
interest) or BT, BEFI and EST (as to their aggregate Partnership interests) (the
"Electing Partner") may offer by written notice (the "Original Notice") to the
other Partner (the "Determining Partner") to either buy from or sell to the
Determining Partner all, but not less than all, of its (their) interest in the
Partnership. The Original Notice shall state the Electing Partner's desire to
effect the sale of its (their) entire interest in the Partnership or the
purchase of the Determining Partner's entire interest in the Partnership for an
amount equal to the Purchase Price (as hereinafter defined). The Original Notice
shall clearly reflect the computation of Purchase Price resulting from the
deemed distribution of sales proceeds under Section 6.3, including the fair
market value of the Property. The "Purchase Price" shall be an amount equal to
the amount which would be received by the Partner required to sell (the "Selling
Partner") if all of the Partnership assets had been sold for an amount equal to
their fair market value as determined by the Electing Partner and the proceeds
thereof had been applied and distributed in accordance with Section 6.3.
Notwithstanding the preceding, in no event shall the Purchase Price to the
Selling Partner be an amount less than the sum of (a) the Preferred Partnership
Capital, (b) the Additional Preferred Capital, (c) the Additional Preferred
Capital Preferred Return and Additional Preferred Capital Preferred Return
Arrearage, and (d) the Cumulative Preferred Return of the Selling Partner.
(b) Within sixty (60) days after the receipt of the Original Notice,
the Determining Partner shall give a notice ("Notice of Election") to the
Electing Partner of its decision (i) to sell its Units or (ii) to purchase the
Units of the Electing Partner for the Purchase Price. If the Determining Partner
shall not deliver a Notice of Election within such sixty (60) day period, then
the Determining Partner shall be deemed to have elected and agreed to sell its
Units for the Purchase Price and the Electing Partner shall be obligated to
purchase the Units as set forth below. In addition to its elections under (i)
and (ii) hereinabove, the Determining Partner may also elect to place the
Project for sale on the open market at a price set by the Determining Partner
but not less than that price which would return to the Electing Partner its
requested price for its Partnership Interest. If the Project is so marketed, it
shall be held for sale for at least six (6) months from the date listed until
the date a bona fide third party purchase contract is executed. If no such bona
fide purchase offer is received at the listed price, the Determining Partner
must elect either to
37
sell or buy the Electing Partner's Partnership Interest on the terms set forth
above as contained in the Original Notice.
(c) Upon the giving of the Notice of Election, the Determining Partner
shall be obligated to purchase from the Electing Partner the Partnership
Interest of the Electing Partner or to sell its Partnership Interest to the
Electing Partner, as the case may be, and the Electing Partner shall be
obligated to sell its Partnership Interest to the Determining Partner or to
purchase from the Determining Partner the Partnership Interest of the
Determining Partners as the case may be, for the Purchase Price on the closing
date. The Partner thus purchasing another Partner's Partnership Interest shall
hereinafter be referred to as the "Purchasing Partner".
(d) The date and place of such sale and purchase shall be designated in
the Notice of Election or, if no Notice of Election shall have been timely
given, in a writing given by the Electing Partner; provided, however, that the
closing date shall not be more than sixty (60) days after the Notice of Election
or such writing by the Electing Partner, as the case may be, shall have been
given. On such designated date of acquisition, the Purchasing Partner shall
acquire the Selling Partner's Partnership Interest by payment of the Purchase
Price for the Partnership Interest, either in cash or at the election of the
Purchasing Partner upon payment of 20% of the Purchase Price in cash, with the
balance due and payable for a period of five (5) years in annual amortized
installments, due one, two, three, four and five years after the closing,
including interest at nine percent (9%) per annum. The provisions of Section
10.2(a)(vii)(y) shall apply to the deferred purchase price.
(e) If either Partner defaults in its obligation to purchase for the
Purchase Price and otherwise upon the terms and conditions set forth
hereinabove, the nondefaulting Partner shall have the right to (i) purchase the
Partnership Interest of the defaulting Partner for a Purchase Price equal to
eighty percent (80 %) of the purchase price which would be applicable had the
non-defaulting Partner elected to purchase the Partnership Interest of the
defaulting Partner and (ii) exercise any and all rights and remedies available
at law or in equity including without limitation, the right to xxx and obtain a
personal judgment against the defaulting Partner.
(f) The General Partner within the Purchasing Partner will become
responsible for all of the debts of the Partnership incurred before or after
such purchase and will indemnify and hold harmless the Selling Partner with
respect to such debts and all claims, causes of action and damages arising with
respect thereto.
(g) Notwithstanding anything to the contrary contained in this Section
16, the provisions of such Section may not be triggered or otherwise utilized by
BT, BEFI or EST until such time as the 78 acres of Phase II Land are released
from all mortgages and no longer constitute collateral for any financing of the
Project.
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IN WITNESS WHEREOF, the parties hereto have executed this Partnership
Agreement as of the day and year first above written.
GENERAL PARTNERS: LIMITED PARTNERS:
BEF, INC. a Tennessee corporation BT PARTNERSHIP, a Tennessee general
partnership
By: BE, INC., Managing Partner
By: _______________________________
By: ________________________
XXXXXXXX-XXXXX INDUSTRIES, INC., a EST ORLANDO, LTD., a Florida limited
Delaware corporation partnership
By: _______________________________ By: _________________________________
Page _____ of Amended and Restated Agreement of Limited Partnership of BT
Orlando Limited Partnership dated as of the____ day of August, 2001.
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EXHIBIT A
Preferred Partnership Capital
-----------------------------
BEF, Inc. $224,241 Cash
Xxxxxxxx-Xxxxx Industries, Inc. $2,424,300 Cash
$15,246,000 Property (described on Exhibit A-1)
contributed to capital under Section 4.2)
BT Partnership $9,256,691 Cash
EST Orlando, Ltd. $5,094,768 Cash
Cumulative Preferred Return (as of July 31, 2001)
-------------------------------------------------
BEF, Inc. $23,492 (NOTE: 9% on capital from inception to closing of Initial
Financing; Bank of America prime on capital from Initial Financing to
date of this Agreement)
Xxxxxxxx-Xxxxx Industries, Inc. $1,425,412 (NOTE: 50% of 9% preferred return on Land; full 9% on
cash)
BT Partnership $969,761(NOTE: 9% on capital from inception to closing of Initial
Financing; Bank of America prime on capital from Initial Financing to
date of this Agreement)
EST Orlando, Ltd. $533,744 (NOTE: 9% on capital from inception to closing of Initial
Financing; Bank of America prime on capital from Initial Financing to
date of this Agreement)
40
