Exhibit 10.9
AGREEMENT OF LIMITED PARTNERSHIP
OF
114 STARWOOD DEVELOPMENT, LTD.
THIS AGREEMENT OF LIMITED PARTNERSHIP (the "AGREEMENT") is made and entered
into as of January 5, 2004, by and among NEHC Properties, Inc., a Texas
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corporation whose address is 000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx #000 Xxxxxxx,
Xxxxx 00000 as general partner ("GENERAL PARTNER"), and each of the entities
whose names are set forth as limited partners on Exhibit "A" attached hereto
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("LIMITED PARTNERS"). The General Partner and Limited Partners each has executed
multiple originals of this Agreement.
ARTICLE I
ORGANIZATION OF THE PARTNERSHIP
1.1 FORMATION OF LIMITED PARTNERSHIP. The parties hereby form, pursuant to
the Texas Revised Limited Partnership Act, Article 6132a-l of the Revised Civil
Statutes of the State of Texas, (the "Act"), a Limited Partnership (the
"PARTNERSHIP"). The rights and liabilities of the Partners shall be as provided
for in this Agreement and in the Act.
1.2 CERTIFICATE OF LIMITED PARTNERSHIP. The parties shall execute and file
a Certificate of Limited Partnership (the "CERTIFICATE"), and other relevant
documents ancillary to the Certificate, with the office of the Secretary of
State of the State of Texas as required by the Act, and take all other
appropriate action to comply with all legal requirements for the formation and
operation of a limited partnership under the Act.
1.3 PARTNERSHIP NAME. The name of the Partnership shall be 114 Starwood
Development, Ltd. If considered necessary in the opinion of counsel to the
Partnership to preserve the limited liability of the Limited Partners, the
business conducted by the Partnership shall be conducted under that name or
under such other name or names as the General Partner may select and might be
necessary to preserve such limited liability.
1.4 LOCATION OF OFFICE. The principal business office of the Partnership
shall be at 000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx #000 Xxxxxxx, Xxxxx 00000.
1.5 PURPOSE OF PARTNERSHIP. The purpose of the Partnership shall be as
follows: to buy, develop, manage and sell, as appropriate, the Property
(hereinafter defined) acquired by the Partnership, including improvements and
personal property located thereon.
1.6 EXCLUSIVE SUPPLIER. Each of the Partners hereby acknowledges and agrees
that American Homestar Corporation and its affiliates shall be the exclusive
suppliers of manufactured homes to the Partnership, its Partners and the
affiliates thereof with respect to any and all manufactured and/or modular homes
leased, purchased or otherwise acquired for use or placement on the Property.
Neither the Partnership nor the
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Partners or any of their affiliates may lease, purchase or otherwise acquire any
interest in any manufactured home for use or placement on the property that is
not produced and/or supplied by American Homestar Corporation, without its
written consent.
1.7 PROJECT OPERATION AND COMPLETION. The General Partner will use all
reasonable efforts and will act in good faith and with reasonable dispatch to
buy, develop, manage, operate and sell, as appropriate, the Property in
accordance with the terms of this Partnership Agreement. Presently existing on
the Property are manufactured home rental units. The General Partner will
utilize the rental income derived from the rental units to pay the recurring
interest payments on the acquisition loan between the closing of the acquisition
loan and the closing of a future development loan.
1.8 TERM OF PARTNERSHIP. The Partnership shall become effective on the date
that the Certificate of Limited Partnership of this Partnership is duly Filed in
the office of the Secretary of State of the State of Texas, and shall remain
effective until December 31, 2070, or until such earlier date as the Partnership
is dissolved pursuant to the Act or the provisions of this Partnership
Agreement.
ARTICLE II
DEFINITIONS
The following terms used in this Agreement shall, unless otherwise
expressly provided in this Agreement or unless the context otherwise requires,
have the following respective meanings:
2.1 "ADDITIONAL CAPITAL CONTRIBUTION" shall have the meaning set forth in
Section 3.5 of this Agreement.
2.2 "AGREEMENT" shall mean this Agreement of Limited Partnership.
2.3 "AVAILABLE CASH" shall mean cash that is available in the accounts of
the Partnership, less such amounts as the General Partner reasonably determines
to be necessary to meet current or reasonably foreseeable Partnership
obligations or expenditures (including the repayment of loans made to the
Partnership by third parties or Partners).
2.4 "CURATIVE CONTRIBUTION" shall have the meaning set forth in Section
3.3(b) of this Agreement.
2.5 "EFFECTIVE DATE" shall mean the date the Certificate is filed with the
Secretary of State of Texas.
2.6 "FINANCING PARTNERS" shall have the meaning set forth in Section 3.3(a)
of this Agreement.
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2.7 "GENERAL PARTNER" shall mean NEHC Properties, Inc., or such substitute
or different General Partner as may be subsequently named pursuant to the terms
of this Agreement.
2.8 "INITIAL CAPITAL CONTRIBUTIONS" shall mean the amount contributed to
the Partnership by any Partner as determined in accordance with Section 3.1
hereof.
2.9 "LENDER" shall have the meaning set forth in Section 3.3(d) of this
Agreement.
2.10 "LIMITED PARTNERS" shall mean those persons who execute this Agreement
or any counterpart of this Agreement as Limited Partners and whose names and
residence addresses appear on Exhibit "A", which is attached to this Agreement
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and made a part of this Agreement for all purposes.
2.11 "LOAN DOCUMENTS" shall have the meaning set forth in Section 3.3(a) of
this Agreement.
2.12 "MAJORITY IN INTEREST OF LIMITED PARTNERS" shall mean those Limited
Partners who at the time of any determination of a majority have more than fifty
percent (50%) of the Partnership Interest of the Limited Partners.
2.13 "NOTE" shall have the meaning set forth in Section 3.3(d) of this
Agreement.
2.14 "PARTNER" shall mean the reference to the General Partner or any one
of the Limited Partners.
2.15 "PARTNERS" shall mean the collective reference to the General Partner
and the Limited Partners.
2.16 "PARTNERSHIP INTEREST" shall mean the percentage set opposite the name
of each Partner on Exhibit "A" attached to this Agreement and made a part of
this Agreement for all other purposes.
2.17 "PERSON" shall mean any individual, corporation, partnership, trust,
or other entity.
2.18 "PREFERRED RETURN" shall mean with respect to American Homestar
Corporation and any other Partner that makes an Additional Capital Contribution
pursuant to Sections 3.2 or 3.4, respectively, the aggregate amount of cash
distributions sufficient to yield such Partner a return equal to the amount of
simple non-compounding interest at a rate of 8% per annum on such Partners' then
unreturned Additional Capital Contributions from the respective dates that each
such Additional Capital Contribution was made. The Preferred Return shall be
distributed first to American Homestar Corporation in satisfaction of its
Additional Capital Contribution described in Section
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3.2, then to all Partners that make Additional Capital Contributions pursuant to
Section 3,5 in the order in which such contributions were made.
2.19 "PREFERRED RETURN PAYOUT EVENT" shall mean the time at which the
aggregate amount of cash distributions received by American Homestar Corporation
and any other Partners who may have made Additional Capital Contributions equals
the Preferred Return.
2.20 "PROPERTY" shall mean Xxxxx 0, Xxxxx 0, and Tract 3 described in that
certain survey prepared by Xxxxxx Land Surveying, Inc., dated December 31, 2003,
and attached hereto as Exhibit "C".
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2.21 "WINDING UP" shall mean the period following the dissolution of the
Partnership after which its business is not continued as set forth in Article
XII.
ARTICLE III
CAPITAL CONTRIBUTIONS AND
PARTNERSHIP INTERESTS
3.1 INITIAL CAPITAL CONTRIBUTIONS. The capital to be contributed initially
to the Partnership by the General Partner and each of the Limited Partners shall
be the sum set opposite its name in the attached Exhibit "A". Each Partner shall
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be liable to the Partnership for the full amount of its Initial Capital
Contribution in the amounts set forth on Exhibit A.
3.2 ADDITIONAL CAPITAL CONTRIBUTION OF AMERICAN HOMESTAR CORPORATION AND
OTHER PARTNERS. In addition to the contributions required by other provisions of
this Agreement, American Homestar Corporation, a limited partner of this
Partnership shall have the capital contribution obligations required by this
Section 3.2. American Homestar Corporation shall provide for the timely payment
as obligations accrue of all funds necessary for (1) the xxxxxxx money and
extension fees to acquire the property, (2) economic, market, environmental and
other feasibility type studies, (3) reimbursement of costs of organization,
accounting, survey, preliminary engineering and other reasonable and necessary
start up costs and expenses of the types that are often and/or normally incurred
for the development of property prior to closing of a development loan (4) other
cash amounts required for capital equity interest by the financial institution
making the acquisition and/or development loans relating to the Property, and
(5) all closing costs for the acquisition and development loans. The foregoing
costs shall be reflected on the books of the Partnership as Partner's capital
equity. The total obligation of American Homestar Corporation pursuant to this
Section 3.2 shall not exceed $500,000.00. Such capital account amount shall be
entitled to a Preferred Return of 8% per annum to accrue from the date of each
such contribution. The Preferred Return and the balance in the capital account
that is created under this Section 3.2 shall be paid to American Homestar
Corporation out of Available Cash. To the extent that the aforementioned costs
are
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reimbursed at the closing of the acquisition and/or development loan, American
Homestar Corporation will be paid promptly out of such reimbursement funds.
3.3 THIRD-PARTY FINANCING.
(a) It is agreed that the General Partner and Modern Modular Home
Rental Corp. (hereinafter sometimes collectively called the "FINANCING
PARTNERS") are responsible for arranging any and all third-party loans that
may be necessary or required, from time to time, to finance the operations
of the Partnership. In this regard, the Financing Partners covenant and
agree to provide all personal guaranties and other types of credit
enhancement of any nature that may be required by any such third-party
lender in connection with any loan to the Partnership. All notes, deeds of
trust, security agreements, guaranties and other documents, instruments and
agreements executed by the Partnership in connection with any third-party
loan(s), together with any and all renewals, extensions, increases or
rearrangements of any such indebtedness, are hereinafter collectively
called the "LOAN DOCUMENTS."
(b) Notwithstanding anything to the contrary contained in the
Partnership Agreement, if the Partnership is in default at any time under
the Loan Documents executed in connection with any such third-party
loan(s), the Financing Partners will be obligated, jointly and severally,
to take such action and to contribute such additional capital to the
Partnership as may be necessary or required to enable the Partnership to
cure such default (any such additional capital contribution being
hereinafter called a "CURATIVE CONTRIBUTION").
(c) All Curative Contributions made by the Financing Partners will be
deemed to be additional contributions for purposes of Section 3.2 of this
Partnership Agreement. American Homestar Corporation is not and will never
be obligated under any circumstances to make a Curative Contribution to the
Partnership.
(d) The provisions of this Section 3.3 are applicable (but not
limited) to that certain loan in the principal amount of $2,250,000.00, to
be made to the Partnership by First National Bank (the "LENDER") and to be
evidenced by a promissory note in such amount (the "NOTE"), which note will
be secured by a Deed of Trust and Security Agreement covering the Property
owned by the Partnership. The Note shall be guaranteed by Xxx Xxxxxxx and
Xxxxx Xxxxxxx, individually, pursuant to Guaranty Agreements.
(e) The General Partner undertakes and agrees to give American
Homestar Corporation immediate written notice of any default under any
third-party loan to the Partnership or any event or condition which, with
notice or lapse of time (or both) may constitute a default under any such
third-party loan. In addition, the General Partner will furnish American
Homestar Corporation
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immediate written evidence of all Curative Contributions made by the
Financing Partners to the Partnership.
3.4 FAILURE TO MAKE CURATIVE CONTRIBUTIONS.
(a) If, at any time, the Financing Partners fail to take such action
and/or to make Curative Contributions to the Partnership in amounts
sufficient to cure any outstanding default by the Partnership under Loan
Documents in effect from time to time, then pursuant to the terms and
provisions of the Option Agreement attached hereto as Exhibit "B", American
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Homestar Corporation will have the right and option (i) to cure any
defaults by the Partnership under the Loan Documents, and (ii) to purchase
the Note and all liens securing same from the Lender if any default under
the Loan Documents is not cured, and thereupon each such defaulting
Financing Partner will be obligated to repay such sum immediately to
American Homestar Corporation. All sums advanced by American Homestar
Corporation to the Partnership on behalf of the defaulting Financing
Partners will be deemed to be loans by American Homestar Corporation to the
defaulting Financing Partners and will bear interest at the maximum
non-usurious rate of interest permitted under applicable Texas law from the
date of said advance until paid.
(b) As security for the repayment of such indebtedness, American
Homestar Corporation (sometimes referred to in this Paragraph as "Secured
Party") will have and is hereby granted a lien and security interest upon
the entire interest of the Financing Partners (sometimes referred to in
this Paragraph as "Debtor") in the Partnership. Such lien and security
interest may be foreclosed at any time after the passage of the thirty (30)
days following the advance of the defaulted sum and prior to the repayment
of such sum with interest, as hereinabove provided. In addition to any
other remedies granted in this instrument or under applicable law, the
Secured Party may proceed under the applicable provisions of the Texas
Uniform Commercial Code as to the Debtor's interest in the Partnership and
may exercise all rights, remedies and powers of a secured party under the
Texas Uniform Commercial Code, including, without limitation, the right and
power to sell, at public or private sale or sales, or otherwise dispose of
such interest in any manner authorized or permitted under the Texas Uniform
Commercial Code after default by a debtor, and to apply the proceeds
thereof toward payment of any and all costs, expenses (including attorneys
fees and court costs) thereby incurred by Secured Party, and toward payment
of the Debtor's obligation in such order or manner as Secured Party may
elect.
(c) To the extent permitted by law, Debtor expressly waives any notice
of sale or other disposition of its interests in the Partnership and any
other rights or remedies of a debtor or formalities prescribed by law
relative to sale or disposition of such interest or exercise of any other
right or remedy of a secured party existing after default; and to the
extent any such notice is required and
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cannot be waived, Debtor agrees that if such notice is mailed, postage
prepaid, to the Debtor at least ten (10) days before the date of the sale
or such disposition, such notice will be deemed reasonable and will fully
satisfy any requirements for the giving of said notice.
3.5 ADDITIONAL CAPITAL CONTRIBUTIONS. Except as provided in Sections 3.1
through 3.4, the Partners shall not be obligated to make any additional
contributions to the capital of the Partnership. If additional capital is needed
for the purposes of the Partnership as reasonably determined by the General
Partner, then the General Partner may request, but not require, additional
capital from the Limited Partners ("ADDITIONAL CAPITAL CONTRIBUTIONS") in the
same proportion of Initial Capital Contributions set forth in Column I of
Exhibit "A" hereto, or borrow such additional capital on behalf of the
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Partnership. Any such loans shall be on commercially reasonably terms and shall
be from any third party or from any one or more of the Partners. With respect to
such loans from third party lenders, the Financing Partners agree to provide all
personal guaranties and other types of credit enhancement of any nature that may
be required by any such third party lender in connection with any loan to the
Partnership. In the event that any Partner shall make an Additional Capital
Contribution pursuant to this Section 3.5, such Partner shall be entitled to
receive a Preferred Return on such additional amount after any Preferred Return
owing to American Homestar Corporation pursuant to Section 3.2 has been
distributed.
ARTICLE IV
PROFITS AND LOSSES
4.1 ALLOCATIONS. Allocations of income, gains, deductions, losses and
credits among the Limited and General Partner shall be determined by the
Partnership Interest percentage set opposite its name on Exhibit "A".
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4.2 TRANSFER - TRANSFEREE ALLOCATIONS. If a Partnership Interest is
transferred in accordance with Article 10 during any year, the income, gains,
losses, and deductions allocable in respect to that Partnership Interest shall
be prorated between the transferor and the transferee on the basis of the number
of days in the year that each was the holder of that Interest, without regard to
the results of the Partnership operations during the period before and after the
transfer, unless the transferor and transferee otherwise agree to an allocation
based on the result as of the record date of transfer and agree to reimburse the
Partnership for the cost of making and reporting their agreed allocation.
4.3 RECAPTURE. In the event that the Partnership recognizes income, gain,
or addition to tax by virtue of the recapture of any previously deducted or
credited item, such recaptured income or gain or addition to tax shall be
allocated to the Partners in the same percentage as allocated at the time of its
deduction.
ARTICLE V
CASH DISTRIBUTIONS
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5.1 CASH DISTRIBUTIONS. After the payment and satisfaction of all trade
debts and any loans made to the Partnership by the Partners and any and all
third parties for acquisition and/or development of the Property, then Available
Cash shall be paid as follows:
(a) first, all accrued and unpaid Preferred Return shall be paid to
American Homestar Corporation as set forth in Section 3.2;
(b) second, all accrued and unpaid Preferred Return shall be paid to
eligible Partners as set forth in Section 3.5;
(c) third, the Additional Capital Contribution of American Homestar
Corporation shall be repaid to such Partner;
(d) fourth, the Additional Capital Contributions, if any, of the
Partners shall be repaid pro rata in accordance with their respective
Partnership Interests;
(e) fifth, the Initial Capital Contributions of the Partners shall be
repaid pro rata in accordance with their respective Partnership Interests;
and
(f) thereafter, to the Partners in the same ratio as profits and
losses are allocated pursuant to Section 4.1.
No Partner shall have the right to require the return of any part of the
Capital Contributions made by such Partner unless there is sufficient Available
Cash and distributions are made in accordance with this Section 5.1. No interest
shall be payable to any Partner on any of the Capital Contributions made by or
on behalf of any Partner to the Partnership.
5.2 NO COMPENSATION OF GENERAL PARTNER. The General Partner shall not be
entitled to any compensation for its time, effort and services to the
Partnership, except for distributions received by the General Partner pursuant
to Section 5.1. However, the Partnership shall be obligated to reimburse the
General Partner all reasonable costs and expenses incurred by the General
Partner as they may mutually agree on behalf of the Partnership, including those
relating to the formation and organization of the Partnership.
ARTICLE VI
OWNERSHIP OF PARTNERSHIP PROPERTY
6.1 All real property, including all improvements placed or located
thereon, and all personal property acquired by the Partnership shall be owned by
the Partnership, such ownership being subject to the other terms and provisions
of this Agreement. Each Partner hereby expressly waives the right to require
partition of any Partnership property or any part thereof.
ARTICLE VII
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BOOKS AND RECORDS
7.1 ELECTIONS. The Partnership shall elect as a fiscal year the calendar
year. The Partnership shall elect to be taxed on such method of accounting as
the General Partner shall determine. The Partnership shall not elect to be taxed
other than as a partnership.
7.2 CAPITAL ACCOUNTS OF PARTNERS. The Partnership shall maintain a capital
account for each Partner, the initial balance of each of which shall be zero.
Each Partner's capital account shall be increased (1) by any income and gains
allocated to that Partner for federal income tax purposes pursuant to Article 4
of this Agreement, and (2) by the amount of cash contributed to the Partnership
by that Partner. The Partner's capital account shall be decreased (1) by any
deductions and losses allocated to that Partner for federal income tax purposes
pursuant to Article 4 of this Agreement, and (2) by the amount of cash
distributed by the Partnership to that Partner.
7.3 FINANCIAL STATEMENTS. Annually, the General Partner shall cause to be
prepared statements showing the financial condition of the Partnership, copies
of which shall be delivered to each Partner.
7.4 TAX RETURNS. The General Partner shall use its best efforts to cause
the Partnership to file all tax and information returns required of the
Partnership and to furnish to the Limited Partners the tax information required
by them for federal, state and local tax purposes in a timely fashion.
7.5 MAINTENANCE AND INSPECTION OF BOOKS. The Partnership shall maintain a
complete and accurate set of books, records, and supporting documents. The books
of account and all other financial records of the Partnership shall be kept at
the Partnership's principal place of business, and may be inspected at any
reasonable time by the Limited Partners or their representatives.
7.6 BANK ACCOUNTS, FUNDS AND ASSETS. The funds of the Partnership shall be
deposited in such bank or banks as the General Partner shall deem appropriate.
Subject to the provisions of this Agreement, the funds may be withdrawn only by
the General Partner or its duly authorized agents. All bank accounts shall
require the signatures of the General Partner on all checks. The General Partner
shall have a fiduciary responsibility for the safekeeping and use of all funds
of the Partnership, whether or not in their immediate possession or control, and
they shall not employ, or permit another to employ, the funds or assets in any
manner, except for the exclusive benefit of the Partnership. The General Partner
shall not commingle or permit the commingling of the funds of the Partnership
with the funds of any other person.
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
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8.1 ADMISSION OF LIMITED PARTNERS. No additional Limited Partners shall be
admitted to the Partnership except upon amendment of this Agreement, although
substituted Limited Partners may be admitted pursuant to Article X below.
8.2 PARTICIPATION IN MANAGEMENT. No Limited Partner shall have the right,
power, or authority to take any part in the control or management of, or to
transact any business for, the Partnership, or to sign for or bind the
Partnership in any manner.
8.3 LIMITED LIABILITY. No Limited Partner shall be liable for losses,
debts, or obligations of the Partnership in excess of its Initial Capital
Contribution, plus its undistributed share of the Partnership profits.
8.4 PARTICIPATION IN OTHER ACTIVITIES. No Limited Partner, or any officer,
director, shareholder, or other person holding a legal or beneficial interest in
any Limited Partner, shall, by virtue of the interest in the Partnership, be in
any way prohibited or restricted from engaging in, investing in, or possessing
an interest in any business activity of any nature or description, including
those which may be equivalent to or in competition with the Partnership. Neither
the Partnership nor any Partner shall have any right by virtue of this Agreement
or any relationship created by this Agreement in or to such other ventures or
activities or to the income or proceeds derived from them.
8.5 GENERAL RIGHTS AND LIMITATIONS OF THE LIMITED PARTNERS. Except as
otherwise set forth in this Agreement, a Limited Partner who is not also a
General Partner shall not be:
(a) Personally liable because of its Partnership Interest in the
Partnership for any losses of any other Limited Partner;
(b) Entitled to be paid any salary or to have a Partnership drawing
account;
(c) Entitled to receive any interest on its Initial Capital
Contributions or balance in its capital account; or
(d) Entitled to priority over any other Limited Partners.
8.6 VOTING. Each Limited Partner shall be entitled to a vote in all matters
for which this Agreement gives Limited Partners the right to vote, consent, or
agree. Each Limited Partner's vote shall be equal in percentage to the ratio
that its Partnership Interest bears to one hundred percent (100%).
8.7 LIMITATIONS ON TRANSFERABILITY. The ownership interest in the
Partnership owned by a Limited Partner shall not be transferable except under
the conditions set forth in Article 10 of this Agreement.
ARTICLE IX
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THE GENERAL PARTNER
9.1 DUTIES. Subject to any specific limitation contained in this Agreement
or provided by applicable law, the General Partner shall have exclusive
responsibility and authority to take all action necessary or desirable to
accomplish the purposes of the Partnership, and shall have exclusive control
over the management and affairs of the Partnership. The General Partner agrees
to manage and control the affairs of the Partnership to the best of its ability
and to conduct the operations contemplated under this Agreement in a careful and
prudent manner and in accordance with good industry practice. The General
Partner may subcontract to others all or a portion of its duties.
9.2 SPECIFIC LIMITATIONS. The General Partner agrees that it shall not:
(a) Commingle the Partnership's funds or assets with those of any
other person, or employ or permit any person to employ such funds or assets
in any manner that is not for the exclusive benefit of the Partnership;
(b) Bind or obligate the Partnership with regard to any matter outside
the scope of the Partnership business; and
(c) Use the Partnership name, credit, or property for other than
Partnership purposes.
9.3 SPECIFIC POWERS. The General Partner or its agents or assigns shall
without limitation have the authority to:
(a) Acquire or dispose of the personal property (but not any interest
in real property except by a vote of a Majority in Interest of Limited
Partners) for cash, securities, other property, or any combination of them,
on such terms and conditions as the General Partner may, from time to time,
determine (including, in instances where the personal property is
encumbered, on either an assumption or a "subject to" basis);
(b) Finance the Partnership's activities either with the seller of the
Property or by borrowing money from third parties, all on such terms and
conditions as the General Partner deems appropriate. In instances where
money is borrowed for Partnership purposes, the General Partner shall be,
and hereby is, authorized to pledge, mortgage, encumber, and grant security
interest in Partnership personal properties (but not in real property
except by a vote of a Majority in Interest of Limited Partners) for the
repayment of such loans.
(c) Acquire, own, hold, improve, manage, and lease personal property
(but not in real property except by a vote of a Majority in Interest of
Limited Partners), either alone or in conjunction with others through
partnerships, limited partnerships, joint ventures, or other business
associations or entities;
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(d) Employ, retain, or otherwise secure or enter into other contracts
with personnel or firms to assist in the acquisition, development,
improvement, management, and general operation of the Partnership
properties, including, but not limited to, real estate brokers or agents,
supervisory, development and/or building management agents, attorneys,
accountants, and engineers, all on such terms and for such consideration as
the General Partner deems advisable; and
(e) Take any and all other action which is permitted under the Act and
which is customary or reasonably related to the development, improvement,
management, and leasing of real, personal, or mixed property.
9.4 RELIANCE. Persons dealing with the Partnership shall be entitled to
rely conclusively on the authority and power of any of the then acting General
Partner as set forth in this Agreement.
9.5 INQUIRIES. In no event shall any person dealing with the General
Partner or any of its representatives with respect to any business or property
of the Partnership be obligated to ascertain that the provisions of this
Agreement have been complied with or be obligated to inquire into the necessity
or expedience of any act or action of such persons. Every contract, agreement,
security agreement, promissory note, or other instrument or document executed by
either a General Partner or its representatives with respect to any business or
property of the Partnership shall be conclusive evidence in favor of any and
every person relying on or claiming thereunder that (1) at the time of the
execution and/or delivery of the instrument or document this Agreement was in
full force and effect; (2) the instrument or document was duly executed in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership and all of the Partners, and (3) the General Partner or its
representatives were duly authorized and empowered to execute and deliver any
such instrument or document for and on behalf of the Partnership.
9.6 TAX MATTERS PARTNER. The General Partner, is hereby designated as a Tax
Matters Partner as defined in Section 6231 of the Internal Revenue Code as
amended for so long as it shall remain a General Partner. If the General Partner
is removed or resigns, then the substituted General Partner shall be designated
the Tax Matters Partner.
In the event that an audit of the Partnership occurs, and the Tax Matters
Partner does not reach a settlement agreement with the Internal Revenue Service,
the Tax Matters Partner shall in his sole discretion choose whether to file a
petition for readjustment of the Partnership items with either the Tax Court,
the District Court of the United States for the district for which the
Partnership's place of business is located, or the Court of Claims.
9.7 OBLIGATIONS NOT EXCLUSIVE. The General Partner shall be required to
devote only such time as is reasonably necessary to manage the Partnership's
business, it being understood that the General Partner has other business
activities and therefore shall not devote its time exclusively to the
Partnership. No General Partner, or any officer,
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director, shareholder, or other person holding a legal or beneficial interest in
any General Partner, shall, by virtue of the interest in the Partnership, be in
any way prohibited or restricted from engaging in, investing in, or possessing
an interest in any business activity of any nature or description, including
those which may be equivalent to or in competition with the Partnership. Neither
the Partnership nor any Partner shall have a right by virtue of this Agreement
or any relationship created by this Agreement in or to such other ventures or
activities or to the income or proceeds derived from them.
9.8 LIABILITY OF GENERAL PARTNER TO LIMITED PARTNERS. The General Partner,
its representatives, employees, and agents shall not be liable to the
Partnership or to the Limited Partners for losses sustained or liabilities
incurred as a result of any error of judgment or mistake of law or fact,
including simple negligence, or for any act done or omitted to be done in good
faith in conducting the Partnership business, unless the error, mistake, act, or
omission was performed or omitted fraudulently or constituted gross negligence
or willful misconduct.
9.9 INDEMNIFICATION OF GENERAL PARTNER. The General Partner and each
representative, assignee, or agent of the General Partner shall be protected,
defended, indemnified, and held harmless by the Partnership from and against any
loss, expense, damage, or injury suffered or sustained by them by reason of any
acts, omissions, or alleged acts or omissions, even if such acts or omissions
constitute simple negligence, arising out of the activities of the General
Partner on behalf of the Partnership or in furtherance of the interests of the
Partnership, including, but not limited to, any judgment, accord, settlement,
reasonable attorney's fees, and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding, or claim:
provided, however, that the General Partner shall not be entitled to
indemnification under this paragraph if the acts, omissions or alleged acts or
omission on which any actual or threatened action, proceeding, or claim is based
were: (1) performed or omitted fraudulently: (2) resulted from the gross
negligence by or willful misconduct of the General Partner or (3) resulted from
a breach by the General Partner of a material provision of this Agreement.
ARTICLE X
TRANSFERS OF PARTNERSHIP INTEREST
10.1 TRANSFER OF GENERAL PARTNER INTEREST. The General Partner may, without
the consent of any of the other Partners, transfer its Partnership Interest or
any part thereof to a third party so long as the original General Partner,
individually, maintains the ownership of a majority of its Partnership Interest.
10.2 WITHDRAWAL OR REMOVAL OF GENERAL PARTNER.
(a) The General Partner may:
(1) resign or withdraw from the Partnership as General Partner
without the consent of the Limited Partners;
13
(2) be removed at any time, for cause, by the affirmative vote
of 49.5% in interest of Limited Partners. As used in this
paragraph "Cause" shall mean (i) a material violation by a
General Partner of its fiduciary duties, (ii) willful
misconduct, (iii) gross negligence, or (iv) a material
violation of this Agreement by the General Partner or as a
Financing Partner.
(b) Immediately on withdrawal or removal of the General Partner, a
successor General Partner shall be selected by Limited Partner, American
Homestar.
(c) A General Partner departing for whatever reason shall relinquish
its Partnership interest and the right to any distributions and such
successor General Partner shall accede to such interest and right in the
Partnership.
10.3 SUBSTITUTED LIMITED PARTNER. Each Limited Partner hereby consents to
the admission as a substituted Limited Partner of any person complying with
Section 10.7. When compliance with this Agreement has been shown, the General
Partner shall cause the necessary amendments to be filed as required by law.
10.4 TRANSFER ON DEATH OF A LIMITED PARTNER. On the death of a Limited
Partner, its successor in interest shall succeed to the decedent's Partnership
Interest, and shall be liable for the obligations of the decedent, but shall not
become a substituted limited partner until compliance with Section 10.6 and
10.7.
10.5 WITHHOLDING OF DISTRIBUTIONS. From the date of the receipt of any
instrument relating to the transfer of a Partnership Interest, or at any time
the General Partner is in doubt as to the person entitled to receive
distributions in respect of any such Partnership Interest, the General Partner
may withhold any such distributions until the transfer is completed or abandoned
or any dispute is resolved.
10.6 FAMILY TRANSFERS BY LIMITED PARTNERS. Subject to Section 10.7 below, a
Limited Partner may sell or otherwise transfer all or any portion of a
Partnership Interest to the spouse or any direct ascendants or descendants of
the Limited Partner or to a trust, corporation, partnership, or other entity in
which all of the beneficial interest is held by or for the Limited Partner,
spouse, ascendants, or descendants, provided the transfer would not result in a
termination of the Partnership.
10.7 CONDITIONS OF EFFECTIVE TRANSFER. A purported transfer of a
Partnership Interest by a Limited Partner shall be valid as to the Partnership
and the General Partner on the first day of the month following the month in
which (1) the General Partner and a Majority In Interest of Limited Partners
have consented in writing to the transfer; and (2)
14
the General Partner is satisfied that the following conditions, any of which may
be waived by the General Partner, have been met:
(a) The transferor and transferee have agreed to provide the
Partnership with the information in their possession required to permit the
Partnership to make any basis adjustments required by the Internal Revenue
Tax Code;
(b) The transferee has delivered an instrument satisfactory to the
General Partner by which the transferee accepts and adopts the terms and
provisions of this Agreement, including the assumption of any obligations
of the transferor to the Partnership;
(c) The transferor has agreed to pay a reasonable fee to reimburse the
Partnership for the costs incurred in connection with the admission of the
transferee as a substitute limited partner, including any costs incurred or
to be incurred by the Partnership in connection with the basis adjustments
and additional accounting operations required;
(d) The transferor has delivered to the General Partner an opinion of
counsel in form and substance satisfactory to the General Partner to the
effect that neither the transfer nor any offering in connection with the
transfer violates any provision of any federal or state securities or
comparable law;
(e) The General Partner has determined that the transfer would not
cause a termination of the Partnership, within the provisions of the
Internal Revenue Code;
(f) The transfer is evidenced by an instrument in writing signed by
the transferor and transferee stating, among other things, that the
transferor has the right to transfer, and the transferee has the right to
acquire, the transferor's Partnership Interest, and acknowledging that the
transferee is bound by the terms of this Agreement; and
(g) The transferee has delivered a statement in form and substance
reasonably satisfactory to the General Partner making appropriate
representation and warranties with respect to the satisfaction of
applicable federal and state securities laws.
10.8 ASSIGNMENTS BY OPERATION OF LAW. If any Limited Partner shall die,
with or without leaving a will, become non compos mentis, or become bankrupt or
insolvent, or if a corporate or partnership Limited Partner dissolves during the
Partnership term, the legal representatives, heirs, and legatees, and the
spouse, if the Partnership Interest of the Limited Partner have been community
property of the Partner and the Partner's spouse, bankruptcy assignees, or
corporate or partnership distributees shall not become substitute Limited
Partners but shall have, subject to the other terms and
15
provisions thereof, such rights as are provided with respect to such persons
under the Act; provided, however, such legal representatives, heirs and
legatees, bankruptcy assignees and corporate or partnership distributees may
become substitute Limited Partners with the consent of the General Partner.
10.9 RIGHT OF FIRST REFUSAL. In addition to the other limitations and
restrictions set forth in this Section 10, except as permitted by Section 10.6
hereof, no Limited Partner shall transfer all or any portion of his Partnership
Interest (the "OFFERED INTERESTS") unless such Limited Partner (the "Seller")
first offers to sell the Offered Interest pursuant to the terms of this Section
10.
(a) LIMITATION ON TRANSFERS. No transfer may be made under this
Section 10.9 unless the Seller has received a bona fide offer (the
"PURCHASE OFFER") from a third party (the "PURCHASER") to purchase the
Offered Interest for a purchase price (the "OFFER PRICE") denominated and
payable in United States dollars at closing or according to specified
terms, with or without interest, which offer shall be in writing signed by
the Purchaser and shall be irrevocable for a period ending no sooner than
the day following the end of the Offer Period, as hereinafter defined.
(b) OFFER NOTICE. Prior to making any transfer that is subject to the
terms of this Section 10.9, the Seller shall give to the Partnership and
each Limited Partner written notice (the "OFFER NOTICE") which shall
include a copy of the Purchase Offer and an offer (the "FIRM OFFER") to
sell the Offered Interests to the Limited Partners and the General Partner
(the "OFFEREES") for the Offer Price, payable according to the same terms
as those contained in the Purchase Offer.
(c) OFFER PERIOD. The Firm Offer shall be irrevocable for a period
(the "OFFER PERIOD") ending at 11:59 PM., local time at the Partnership's
principal place of business, on the thirtieth (30th) day following the day
of the Offer Notice.
(d) ACCEPTANCE OF FIRM OFFER. At any time during the thirty (30) days
of the Offer Period, any Offeree may accept the Firm Offer as to all or any
portion of the Offered Interest, by giving written notice of such
acceptance to the Seller and the General Partner which notice shall
indicate the maximum Interests that such Offeree is willing to purchase. In
the event that within the first thirty (30) days of the Offer Period,
Offerees ("ACCEPTING OFFEREES"), in the aggregate, accept the Firm Offer
with respect to all of the Offered Interests, the Firm Offer shall be
deemed to be accepted and each such Accepting Offeree shall be deemed to
have accepted that portion of the Offered Interests that corresponds to the
ratio of the Interests that such Accepting Offerees indicated a willingness
to purchase. In the event that Offerees including the General Partner
("ACCEPTING OFFEREES"), in the aggregate, accept the Firm Offer with
respect to all of the Offered Interest, the Firm Offer shall be deemed
accepted. If Offerees do not accept the Firm Offer
16
as to all the Offered Interest during the Offer Period, the Firm Offer
shall be deemed to be rejected in its entirety.
(e) CLOSING OF PURCHASE PURSUANT TO FIRM OFFER. In the event that the
Firm Offer is accepted, the closing of the sale of the Offered Interest
shall take place within thirty (30) days after the Firm Offer is accepted
or, if later, the date of closing set forth in the Purchase Offer. The
Seller and all Accepting Offerees shall execute such documents and
instruments as may be necessary or appropriate of effect the sale of the
Offered Interest pursuant to the terms of the Firm Offer and this Section
10.
(f) SALE PURSUANT TO PURCHASE OFFER IF FIRM OFFER REJECTED. If the
Xxxx Offer is not accepted in the manner herein above provided, the Seller
may sell the Offered Interest to the Purchaser at any time within thirty
(30) days after the last day of the Offer Period, provided that such sale
shall be made on terms no more favorable to the Purchaser than the terms
contained in the Purchase Offer and provided further that such sale
complies with other terms, conditions, and restrictions of this Agreement
that are applicable to sales of a Partnership Interest and are not
expressly made inapplicable to sales occurring under this Section 10.9. In
the event that the Offered Interest is not sold in accordance with the
terms of the preceding sentence, the Offered Interest shall again become
subject to all of the conditions and restrictions of this Section 10.9.
10.10 EXPENSES OF TRANSFER. The person acquiring a Partnership Interest
pursuant to any of the provisions of this Article X shall bear all costs and
expenses necessary to effect a transfer of that Partnership Interest including,
without limitation, reasonable attorney's fees incurred in preparing amendments
to this Agreement of Limited Partnership to reflect the transfer or acquisition
and the cost of filing the amendments with the appropriate governmental
officials.
10.11 AMENDMENT OF CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP. For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate to prepare and record an amendment of the
Certificate of Limited Partnership, prepare and execute an amendment of this
Agreement. For this purpose, they may exercise the powers of attorney granted
pursuant to Section 13.5. An amendment of this Agreement required to add new
Limited or General Partner need only be filed at the end of the month in which
each new Limited or General Partner is to be added.
10.12 SURVIVAL OF LIABILITIES. No sale or assignment of a Partnership
Interest, even if it results in substitution of the assignee or vendee as a
Limited Partner, shall release the assignor or vendor from those liabilities to
the Partnership that survive the assignment or sale as a matter of law.
ARTICLE XI
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AMENDMENTS
11.1 PROPOSAL OF AMENDMENTS GENERALLY. Any amendments to this Agreement may
be proposed:
(a) By the General Partner, which shall give notice to the Limited
Partners of (1) the text of such amendment, (2) a statement of the purpose
such amendment, (3) an opinion of counsel obtained by such General Partner
to the effect that such amendment is permitted by the Act and this
Agreement, will not impair the limited liability of the Limited Partners
and will not adversely affect the classification of the Partnership as a
partnership for federal income tax purposes; or
(b) By any Limited Partner, who shall submit to the General Partner
the text of such proposed amendment, together with a statement of the
purpose of such amendment and an opinion of counsel obtained by them, which
counsel shall not have been disapproved of by the General Partner, to the
effect that such amendment is permitted by the Act and this Agreement, will
not impair the limited liability of the Limited Partners and will not
adversely affect the classification of the Partnership as a partnership for
federal income tax purposes.
The General Partner shall, within twenty (20) days after receipt of any
proposal under subsection) above, give written notice to all Partners of such
proposed amendment, such statement of purpose and such opinion of counsel,
together with the views, if any, of the General Partner with respect to such
proposed amendment (including with respect to whether such proposed amendment is
permitted by the Act and this Agreement, will not impair the limited liability
of the Limited Partners or will adversely affect the classification of the
Partnership as a partnership for federal income tax purposes).
11.2. ADOPTION OF AMENDMENTS. Amendments to this Agreement shall be adopted
only upon the affirmative vote of a Majority in Interest of Limited Partners.
Upon such vote, the General Partner shall within a reasonable time after the
adoption of any amendment to this Agreement make any official filings or
publications required or desirable to reflect such amendment, including any
required filing for recordation of any certificate.
11.3 LIMITATIONS ON AMENDMENTS. No amendment to this Agreement may:
(a) Add to, detract from or otherwise modify the purposes of the
Partnership without the affirmative vote of all the Partners;
(b) Enlarge the obligations of any Partner under this Agreement or
convert the Partnership Interest of any Limited Partner into the
Partnership Interest of a General Partner or modify the limited liability
of any Limited Partner
18
without the consent of such Partner and the consent of a Majority in
Interest of Limited Partners;
(c) Modify the order provided in Article IV for allocations of profits
and losses, the order provided in Article V for cash distributions, or the
order provided in Section 12.3 for distribution of cash proceeds upon
dissolution without the written consent of each Partner adversely affected
by such modification and the written consent of a Majority in Interest of
Limited Partners;
(d) Amend this Article XI or Article X, or Sections 3.5 and 5.2 of
this Agreement without the written consent of all Partners;
(e) Adopt any amendment to this Agreement that increases the liability
of any Partner, or changes the contributions required by any Partner or the
rights of any Partner in interest in the profits, losses, deductions,
credits, revenues, or distributions of the Partnership, rights upon
dissolution, or any voting rights specifically set forth in this Agreement,
without the written consent of that Partner.
ARTICLE XII
DISSOLUTION AND TERMINATION
12.1 DISSOLUTION AND TERMINATION OF THE PARTNERSHIP. The Partnership shall
be dissolved upon the occurrence of any of the following:
(a) The bankruptcy or insolvency of the General Partner or the
occurrence of any other event that would permit a trustee or receiver to
acquire control of the affairs of the General Partner;
(b) The withdrawal from the Partnership, death, or insanity of the
General Partner;
(c) Agreement of the General Partner and a Majority In Interest of
Limited Partners to dissolve;
(d) Any disposition of all of the property of the Partnership;
(e) The termination of the Partnership pursuant to Section 1.8; or
(f) The occurrence of any other circumstances that by law would
require the Partnership to be dissolved. The dissolution shall be effective
on the day on which the event causing dissolution occurs, but the
Partnership shall not terminate until its assets have been distributed in
accordance with the provisions of this Agreement.
12.2 CONTINUATION OF BUSINESS ENTERPRISE.
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(a) On dissolution of the Partnership pursuant to Section 12.1(a) or
(b), the Partners may elect to continue the Partnership by the vote of a
Majority In Interest of Limited Partners taken within 90 days of any event
of dissolution, with any election to continue being binding on all the
Partners. If they elect to continue the Partnership, the Partners shall
also by a vote of a Majority In Interest of Limited Partners elect a new
General Partner.
(b) On dissolution of the Partnership after which the business
enterprise of the Partnership is not continued, the liquidating trustee,
which shall be a General Partner if the dissolution is one described in
Section 12.1(c), (d) or (e) and otherwise shall be a person selected by a
Majority In Interest of Limited Partners or by a court having jurisdiction
over the affairs of the Partnership, shall proceed diligently to wind up
the affairs of the Partnership and distribute its assets. The liquidating
trustee shall use its best efforts to sell the equipment and otherwise
convert Partnership assets into cash as promptly as possible but in an
orderly and businesslike manner so as not to involve undue sacrifice. No
Partner shall have any right to demand or receive property other than cash
during Winding Up.
12.3 WINDING UP. The cash proceeds of the Partnership shall be applied or
distributed on the winding up of the Partnership in the following order of
priority:
(a) In payment of all liabilities of the Partnership to creditors
other than Partners. If any liability is contingent or uncertain in amount,
a reserve equal to the maximum amount for which the Partnership could be
reasonably held liable shall be established. On the satisfaction or other
discharge of that contingency, the amount of the reserve remaining, if any,
will be treated as income to the extent previously treated as a deduction.
(b) Pursuant to Section 5.1 (a) - (f).
ARTICLE XIII
MISCELLANEOUS
13.1 MEETINGS OF PARTNERS. Meetings of the Partners may be called by the
General Partner or any Limited Partner for any matters for which the Partners
may vote as set forth in this Agreement, or for a report from the General
Partner on matters pertaining to the Partnership business and activities. A list
of the names and addresses and percentage interest of all Limited Partners shall
be furnished each Limited Partner and shall be maintained as a part of the books
and records of the Partnership. Within seven (7) days after receipt of a written
request in compliance with the above terms, either in person or by registered or
certified mail, stating the purpose of the meeting, the General Partner shall
mail to all Partners written notice of the place and purpose of such meeting to
be held on a date not less than seven (7) nor more than twenty-eight (28) days
20
after receipt of the request. When a vote of the Limited Partners is called, the
Limited Partners may vote at the meeting in person or by proxy.
13.2 ACTION WITHOUT MEETING. Any matter as to which the Limited Partners
are authorized to take action under this Agreement or by law may be taken by the
Limited Partners without a meeting and shall be as valid and effective as action
taken by the Limited Partners at a meeting assembled, if written consents to the
action by all of the Limited Partners (1) approve the action and (2) are
delivered to the General Partner.
13.3 TAX RETURNS. Each Partner hereby agrees to execute promptly, together
with acknowledgment or affidavit, if requested by a General Partner, all such
agreements, certificates, tax statements, tax returns, and other documents as
may be required of the Partnership or its Partners by the laws of the United
States of America, the State of Texas, or any other state in which the
Partnership conducts or plans to conduct business, or any political subdivision
or agency thereof.
13.4 NOTICES. All notices, offers, or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and either
delivered or deposited in the United States Mail, postage prepaid, addressed to
the respective Partners at the addresses appearing in the records of the General
Partner. Any Limited Partner may change its address for notice by giving notice
in writing to the General Partner stating the new address. The General Partner
may change its addresses for notice by giving written notice of the change to
the Limited Partners.
13.5 POWER OF ATTORNEY. By the execution of this Agreement, each Limited
Partner and any assignee or transferee of a Limited Partner's Partnership
Interest irrevocably constitutes and appoints each General Partner its true and
lawful attorney-in-fact and agent to execute, acknowledge, verify, swear to,
deliver, record, and file in that Partner's or assignee's name, place and stead,
all documents which may from time to time be required by any federal or state
law, including the execution, verification, acknowledgment, delivery, filing and
recording of this Agreement, as well as all authorized amendments to any such
document, all assumed name certificates, documents, bills of sale, assignments,
and other instruments or conveyances, leases, contracts, loan documents and/or
counterparts of any such document, and all other documents that may be required
to effect a continuation of the Partnership and that the General Partner deem
necessary or reasonably appropriate. The power of attorney granted in this
paragraph shall be deemed to be coupled with an interest, shall be irrevocable
and survive the death, bankruptcy, incompetency or legal disability of a Limited
Partner, and shall extend to that Limited Partner's heirs successors and
assigns. Each Limited Partner agrees to be bound by any representations made by
the General Partner acting in good faith pursuant to the Power of Attorney, and
each Limited Partner waives any and all defenses that may be available to
contest, negate, or disaffirm any action of the General Partner taken in good
faith under this Power of Attorney.
13.6 EFFECTIVE LAW. This Agreement and the rights of the Partners shall be
governed by and interpreted in accordance with the laws of the State of Texas.
21
13.7 ASSIGNS. This Agreement shall be binding on and shall inure to the
benefit of the Partners and their spouses as well as their respective legal
representatives, heirs, successors and assigns.
13.8 COUNTERPART EXECUTION. This Agreement may be executed in multiple
counterparts, each of which shall be considered an original, but all of which
shall constitute one instrument.
13.9 GENDER AND NUMBER. Whenever the context requires, the singular shall
include the plural and the masculine shall include the feminine and neuter, as
the identification of the person, corporation, or other entity may require.
13.10 SEVERABILITY. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations of the State of Texas. If any provision of
this Agreement or its application to any person or circumstances shall, for any
reason and to any extent, be held invalid or unenforceable, the remainder of
this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby, but rather shall be effective and
in force to the greatest extent permitted by law.
13.11 OPTION TO PURCHASE. Limited Partner, Modern Modular Home Rental
Corporation ("Modem Modular"), is hereby granted an option to purchase Tract 3
from the Partnership upon the terms and conditions set forth in the Xxxxxxx
Money Contract-Commercial Improved Property (the "Xxxxxxx Money Contract")
attached hereto and marked Exhibit "D". The option granted herein may be
exercised by Modern Modular at any time prior to August 6, 2004, by Modern
Modular providing written notice thereof to all the Partners, and if not
exercised by the preceding date such option shall automatically expire. Within
seven days thereafter the parties shall execute the Xxxxxxx Money Contract and
the General Partner shall deliver a signed copy to the applicable title company.
13.12 OPERATING AGREEMENT. Subsequent to the execution of this Agreement,
the General Partner and the Limited Partners will prepare and execute an
operating agreement that will more specifically define the General Partner's
duties, responsibilities and obligations with respect to the day to day
operations of the Partnership and development of the Property. Once prepared and
signed, the Operating Agreement will be subject to the terms and conditions of
this Agreement and will be attached hereto as Exhibit "E"
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date and year first above written.
GENERAL PARTNER:
---------------
NEHC Properties, Inc.
By: /s/ Xxx Xxxxxxx
-------------------------
Xxx Xxxxxxx, President
Address for notice:
000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx #000
Xxxxxxx, Xxxxx 00000
LIMITED PARTNERS:
----------------
MODERN MODULAR HOME RENTAL CORP., a Texas Corporation
By: /s/ Xxx Xxxxxxx
--------------------------
Xxx Xxxxxxx, President
Address for notice:
000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx #000
Xxxxxxx, Xxxxx 00000
AMERICAN HOMESTAR CORPORATION, A Texas corporation
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxxxx, Exec. Vice-President
Address for notice:
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxx 00000
23
EXHIBIT "A"
TO
114 STARWOOD DEVELOPMENT, LTD.
PARTNERSHIP AGREEMENT
GENERAL PARTNER:
---------------
NAME AND ADDRESS COLUMN I COLUMN II
---------
Initial Capital Partnership
Contribution Interest
NEHC Properties, Inc.
000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx #000 $ 1.00 1.00%
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
Facsimile: 281-260-9798
Tax Payer Identification Number: 00-0000000
LIMITED PARTNERS:
----------------
American Homestar Corporation $ 49.50 49.50%
0000 Xxxxx Xxxxx Xxxx. Xxxxx 000
Xxxxxx Xxxx, Xxxxx 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
Taxpayer Identification Number: 00-0000000
Modern Modular Home Rental Corp. $ 49.50 49.50%
000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx #000
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
Facsimile: 281-260-9798
Taxpayer Identification Number: 00-0000000
A-1
AGREEMENT
This Agreement (this "Agreement") is made as of the 1st day of July, 2004,
---------
by and among American Homestar Corporation, a Texas Corporation ("American
--------
Homestar"), NEHC Properties, Inc., a Texas corporation ("NEHC"), and Modern
-------- ----
Modular Home Rental Corp., a Texas corporation ("Modern Modular"). American
--------------
Homestar, NEHC, and Modern Modular are sometimes referred to herein,
individually or collectively, as the case may be, as a "Party" or the "Parties."
----- -------
RECITALS
WHEREAS, American Homestar, NEHC, and Modern Modular, and are parties to
that certain Agreement of Limited Partnership of 114 Starwood Development Ltd.,
a Texas limited partnership (the "Partnership") dated as of January 5, 2004 (the
---------------
"Partnership Agreement), which Partnership Agreement provides for, among other
things, the governance of the Partnership and the rights, ownership, and
privileges of the partners of the Partnership;
WHEREAS, during discussions and negotiations relating to the terms and
provisions of the Partnership Agreement, the Parties orally agreed that each of
the partners would be responsible for their respective proportionate share of
the net cash losses, if any, of the Partnership at the time the Partnership
winds up its affairs;
WHEREAS, the partners made additional oral agreements to the effect that
such net cash losses, if any, will include American Homestar's additional
capital contributions and earned but unpaid preferred return on the additional
capital contributions, as more fully described in the Partnership Agreement; and
WHEREAS, the Partnership Agreement does not explicitly set forth these
agreements between the partners, and the Parties wish to clarify and confirm
that such agreements were made between the Parties and was the intention and
understanding of the Parties at the time they formed the Partnership that such
net cash losses, if any, will be appropriated to the partners as set forth
above.
NOW, THEREFORE, for and in consideration of the recitals above and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Parties do covenant and agree as follows:
1. Net Cash Losses. The Parties acknowledge and agree and desire to clarify
---------------
their understanding and intention that each of the partners has been responsible
since the formation of the Partnership and shall continue to be responsible for
each of their respective proportionate shares of the net cash losses, if any, of
the Partnership at the time that the Partnership winds up its affairs. This
Agreement is intended to clarify the agreements made by the Parties hereto and
shall not amend or modify the Partnership Agreement, which Partnership Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned on
the date set forth in the first paragraph hereof.
AMERICAN HOMESTAR CORRATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx, Executive Vice
President and Chief Executive Officer
NEHC PROPERTIES, INC.
By: /s/ Xxx Xxxxxxx
------------------------------
Xxx Xxxxxxx, President
MODERN MODULAR HOME RENTAL CORP.
By: /s/ Xxx Xxxxxxx
------------------------------
Xxx Xxxxxxx, President
