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EXHIBIT 2.01
LIMITED PARTNERSHIP AGREEMENT
OF
ST. XXX/ARVIDA COMPANY, L.P.
AMONG
ST. XXX/ARVIDA COMPANY, INC.
(THE "MANAGING PARTNER")
AND
JMB SOUTHEAST DEVELOPMENT, L.L.C.
(THE "NON-MANAGING PARTNER")
AND
ST. XXX DEVELOPMENT, INC.
AND
JMB SOUTHEAST DEVELOPMENT, L.P.
Dated as of November 12, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS
ARTICLE II - FORMATION
2.1 Formation ............................................................ 8
2.2 Name ................................................................. 8
2.3 Term ................................................................. 9
2.4 Office and Agent ..................................................... 9
2.5 Purposes of the Partnership .......................................... 9
ARTICLE III - PURCHASE OF UNITS;CAPITAL CONTRIBUTIONS AND LOANS
3.1 Purchase of Units .................................................... 10
3.2 Initial Capital Contribution ......................................... 10
3.3 Capital Calls; Defaults; Dilution; Partner Loans ..................... 10
3.4 Capital Accounts ..................................................... 12
3.5 No Interest .......................................................... 12
ARTICLE IV - PARTNERS
4.1 Limited Liability of Partners for Partnership Debts .................. 13
4.2 Withdrawal of Partners ............................................... 13
4.3 Transactions With The Partnership; Competing Activities .............. 13
4.4 Remuneration To Partners ............................................. 14
4.5 Non-Managing Partner and Limited Partner Are Not Agents .............. 14
4.6 Meetings of General Partners ......................................... 14
ARTICLE V - MANAGEMENT AND CONTROL OF THE PARTNERSHIP
5.1 Exclusive Management of the Partnership by the Managing Partner ...... 15
5.2 Determination of Partner to Act as Managing Partner .................. 16
5.3 Powers of Managing Partner ........................................... 17
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5.4 Non-Managing Partner Has No Managerial Authority Except With
Respect to Major Decisions ...................................... 18
5.5 Performance of Duties; Liability of Managing Partner and
Non-Managing Partner............................................. 20
5.6 Devotion of Time ..................................................... 21
5.7 Transactions between the Partnership and the Managing Partner ........ 21
5.8 Liability of Partners to Partnership or Each Other Limited to Assets . 21
5.9 Limited Partners Have No Managerial Authority ........................ 22
5.10 Officers ............................................................. 22
5.11 Managing Partner and Its Successors To Be Single Purpose Entity ...... 22
5.12 New Development or Management Opportunities .......................... 22
5.13 Certain Employment Matters ........................................... 27
5.14 Business Plan ........................................................ 28
ARTICLE VI - ALLOCATIONS OF PROFITS AND LOSSES AND DISTRIBUTIONS
6.1 Sharing of Income, Gain, Loss, Deduction and Credit .................. 29
6.2 Allocations and Distributions Attributable to Transferred Interest ... 30
6.3 Distributions ........................................................ 30
6.4 Tax Status and Reports ............................................... 30
6.5 Capital Accounts of the Partners ..................................... 30
6.6 Minimum Gain Chargeback; Qualified Income Offset ..................... 31
ARTICLE VII - TRANSFER AND ASSIGNMENT OF ECONOMIC INTERESTS
7.1 Transfer and Assignment of Interest .................................. 31
7.2 Substitution of Partners ............................................. 32
7.3 Effective Date of Transfers and Admission to Partnership ............. 32
7.4 Rights of Legal Representatives ...................................... 33
7.5 No Effect to Transfers in Violation of Agreement ..................... 33
7.6 Right of Partnership and Remaining Partners to Purchase Partnership
Interest Prior to Transfer ...................................... 33
7.7 Piggy-Back Right ..................................................... 34
7.8 Right of Managing Partner to Call Partnership Interest of
Non-Managing Partner and JMB LP ................................. 34
7.9 Restrictions on Transfer ............................................. 35
7.10 Indemnity ............................................................ 35
7.11 Arbitration of Call Price ............................................ 36
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ARTICLE VIII - ACCOUNTING, RECORDS, REPORTING BY MANAGING PARTNER
8.1 Books and Records .................................................. 37
8.2 Delivery to Partners and Inspection ................................ 38
8.3 Financial Statements and Reports ................................... 38
8.4 Filings ............................................................ 39
8.5 Bank Accounts ...................................................... 39
8.6 Accounting Decisions and Reliance on Others ........................ 39
8.7 Tax Matters for the Partnership Handled by Managing Partner and
Tax Matters Partner............................................. 39
8.8 Section 754 Election ............................................... 40
ARTICLE IX - DISSOLUTION AND WINDING UP
9.1 Dissolution ........................................................ 40
9.2 Winding Up ......................................................... 40
9.3 Distributions in Kind .............................................. 40
9.4 Liquidation Distributions .......................................... 41
9.5 No Deficit Restoration Requirements ................................ 41
9.6 Limitations on Payments Made in Dissolution ........................ 41
9.7 Certificate of Cancellation ........................................ 41
9.8 No Action for Dissolution .......................................... 41
ARTICLE X - INDEMNIFICATION
ARTICLE XI - ARBITRATION
11.1 Arbitration of Claims .............................................. 42
11.2 Selection of Arbitrators ........................................... 42
11.3 Arbitration Fees and Expenses ...................................... 43
ARTICLE XII - MISCELLANEOUS
12.1 Complete Agreement ................................................. 43
12.2 Binding Effect ..................................................... 44
12.3 Parties in Interest ................................................ 44
12.4 Pronouns; Statutory References ..................................... 44
12.5 Headings ........................................................... 44
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12.6 Interpretation ...................................................... 44
12.7 References to this Agreement ........................................ 44
12.8 Exhibits and Schedules .............................................. 44
12.9 Severability ........................................................ 44
12.10 Additional Documents and Acts ....................................... 44
12.11 Notices ............................................................. 45
12.12 Amendments .......................................................... 46
12.13 Reliance on Authority of Person Signing Agreement ................... 46
12.14 No Interest in Partnership Property, Waiver of Action for Partition . 46
12.15 Multiple Counterparts ............................................... 47
12.16 Time is of the Essence .............................................. 47
12.17 Remedies Cumulative ................................................. 47
Exhibit A Initial Capital Contributions of the Partners
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LIMITED PARTNERSHIP AGREEMENT
OF
ST. XXX/ARVIDA COMPANY, L.P.
This Limited Partnership Agreement (this "Agreement"), is made as of
the ____ day of November, 1997, by and among ST. XXX/ARVIDA COMPANY, INC., a
Florida corporation, Suite 400, DuPont Center, 0000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000 (the "Managing Partner"), JMB SOUTHEAST DEVELOPMENT,
LLC, a Delaware limited liability company, Suite 1900, 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Non-Managing Partner") as General
Partners, and ST. XXX DEVELOPMENT, INC., a Florida corporation, Suite 400,
DuPont Center, 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 ("St. Xxx
Development"), and JMB SOUTHEAST DEVELOPMENT, L.P., a Delaware limited
partnership, Suite 1900, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
("JMB LP"), as Limited Partners.
W I T N E S S E T H
WHEREAS, pursuant to the filing of a Certificate of Limited Partnership
of St. Xxx/Arvida Company, L.P. (the "Partnership") with the Secretary of State
of Delaware on November 6, 1997, the Partnership was formed in accordance with
the Delaware Revised Uniform Limited Partnership Act (the "Act"); and
WHEREAS, the Managing Partner desires to purchase 1 Unit in the
Partnership from the Non-Managing Partner and St. Xxx Development desires to
purchase 73 Units in the Partnership from JMB LP; and
WHEREAS, the Non-Managing Partner and the JMB LP now desire to admit
the Managing Partner as a new General Partner of the Partnership and to enter
into this Agreement, with respect to the conduct of the affairs of the
Partnership and the Partners' rights and obligations with regard to their
Interests in the Partnership; and
WHEREAS, the parties hereto therefore desire to adopt and approve their
agreement for the Partnership.
NOW, THEREFORE, the parties hereto by this Agreement set forth the
Limited Partnership Agreement of the Partnership under the laws of the State of
Delaware, upon the terms and subject to the conditions of this Agreement.
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ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings set forth below (all capitalized terms used in this Agreement that are
not defined in this Article I shall have the meanings set forth elsewhere in
this Agreement):
"Act" shall mean the Delaware Revised Uniform Limited Partnership Act
(6 Del. C. Section 17-101, et. seq.), as the same may be amended from time to
time.
"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. Adding to such Capital Account the following items:
(i) the amount, if any, that such Partner is
obligated to contribute to the Company upon
liquidation of such partner's Partnership Interest;
and (ii) the amount that such Partner is obligated to
restore or is deemed to be obligated to restore
pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)
or the penultimate sentence of each of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
B. Subtracting from such Capital Account such Partner's
share of the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Affiliate" shall mean with respect to any Partner, any Person directly
or indirectly, through one or more intermediaries, controlling, controlled by,
or under common control with such Partner. The term "control", as used in the
immediately preceding sentence, means, with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the controlled entity. With respect
to the Managing Partner, solely for the purposes of Section 5.12, "Affiliate"
shall additionally mean any Person controlled by St. Xxx that has the ability,
as a member, general partner, shareholder, agent, contractor, or otherwise, to
exercise significant control or influence over the purchase, development,
management, ownership, sale or financing of a Future Development.
"Agreement" shall mean this Limited Partnership Agreement, as
originally executed and as amended from time to time.
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"Arbitration Notice of Call Price" shall have the meaning ascribed
thereto in Section 7.11A.
"Arvida Company" shall mean Arvida Company, an Illinois corporation.
"Arvida I" shall mean Arvida/JMB Partners, L.P., a Delaware limited
partnership.
"Arvida-named project" shall have the meaning ascribed to it in Section
5.12A.
"Asset Contribution Agreement" shall mean that certain Asset
Contribution Agreement of even date herewith by and among the Partnership, JMB
LP and the Non-Managing Partner.
"Assumed Obligations" shall have the meaning attributed thereto in the
Asset Contribution Agreement.
"Bankrupt Partner" shall mean a Partner who:
(i) Has become the subject of an order for relief under the United
States Bankruptcy Code; or,
(ii) Has initiated, either in an original proceeding or by way of
answer in any state insolvency or receivership proceeding, an action for
liquidation, arrangement, composition, readjustment, dissolution or similar
relief.
"Business Day" shall mean any day that national banks doing business in
the City of Jacksonville, Florida, are generally open for business in
Jacksonville, Florida.
"Business Plan" shall have the meaning ascribed to it in Section 5.14.
"Call Assessment Period" shall have the meaning ascribed to in Section
7.8.
"Call Counteroffer" shall have the meaning ascribed to in Section 7.8.
"Call Negotiation Period" shall have the meaning ascribed to in Section
7.8.
"Call Notice" shall have the meaning ascribed to it in Section 7.8.
"Call Offer" shall have the meaning ascribed to in Section 7.8.
"Call Price" shall have the meaning ascribed to it in Section 7.8.
"Call Response" shall have the meaning ascribed to in Section 7.8.
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"Call Transfer Date" shall have the meaning ascribed to in Section 7.8.
"Called Interest" shall have the meaning ascribed to it in Section 7.8.
"Capital Account" shall mean with respect to any Partner the capital
account that the Partnership establishes and maintains for such Partner pursuant
to Section 3.4.
"Capital Call" shall have the meaning ascribed in Section 3.3.A.
"Capital Contributions" shall mean the cash and property (including
promissory notes or other obligations) contributed to the Partnership by
Partners. The Capital Contributions of a Partner shall be valued at the amount
of cash and the Fair Market Value (as of the date of contribution) of property
other than cash constituting such Capital Contributions. Such Fair Market Value
shall be determined by the Partnership and such Partner prior to the acceptance
of such Capital Contribution by the Partnership.
"Cause" shall mean any of the following with respect to a Partnership
Officer:
(i) the Partnership Officer's gross negligence or
fraudulent, dishonest or willful misconduct relative
to the Partnership Officer's employment with the
Partnership;
(ii) the Partnership Officer's failure to perform his or
her duties in all material respects, including any
set forth in any employment contract with the
Partnership (including any assumed by the Partnership
pursuant to the Asset Contribution Agreement); or
(iii) the Partnership Officer's conviction following final
disposition of any available appeal of a felony, or
pleading guilty or no contest to a felony.
"Certificate" means the Certificate of Limited Partnership of the
Partnership, filed with the Delaware Secretary of State on November 6, 1997, as
amended from time to time.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, the provisions of succeeding law, and to the extent applicable,
the Regulations.
"Contributed Assets" shall have the meaning attributed thereto in the
Asset Contribution Agreement.
"Defaulting Partner" shall have the meaning ascribed to it in Section
3.3.B.
"Development Costs" shall have the meaning ascribed to it in Section
5.12.C.
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"Development Notice" shall have the meaning ascribed to it in Section
5.12A.4.
"Development Notice Period" shall have the meaning ascribed to it in
Section 5.12A.4.
"Development Participation Notice" shall have the meaning ascribed to
it in Section 5.12A.4.
"Dissolution Event" shall have the meaning ascribed to it in Section
9.1.
"Distributable Cash" shall mean the amount of cash which the Managing
Partner deems available for distribution to the Partners, after taking into
account all debts, liabilities, and obligations of the Partnership then due
(including indebtedness of the Partnership owed to any Partner) and amounts
which the Managing Partner deems necessary to place into reserves for customary
and usual, or actual claims with respect to the Partnership's business.
"Education Partners" shall mean Education Partners, L.P., a Delaware
limited partnership.
"Fair Market Value" with respect to a parcel of real property or other
specific asset (and the improvements thereon) shall mean the price at which such
real property or asset would be sold for cash by a willing seller to a willing
unaffiliated buyer, subject to such financing and liens which then encumber such
real property or asset, in its then-current condition or state of development,
assuming a purchase and sale agreement with customary terms and provisions.
"Fair Market Value" with respect to the Partnership, shall mean the price at
which the Partnership, taken as a whole, would be sold for cash by a willing
seller to a willing unaffiliated buyer, assuming a purchase and sale agreement
with customary terms and provisions.
"Fiscal Year" shall mean the Partnership's fiscal year that shall be
the calendar year or any other fiscal year as determined by the Managing
Partner.
"Future Development" shall have the meaning ascribed to it in Section
5.12.
"Future Development Entity" shall have the meaning ascribed to it in
Section 5.12A.4.
"Future Management Contracts" shall have the meaning ascribed to it in
Section 2.5.
"GAAP" means those generally accepted accounting principles and
practices in the United States which are recognized as such by the Financial
Accounting Standards Board (or any generally recognized successor).
"General Partners" shall mean the Managing Partner and the Non-Managing
Partner, and their respective permitted successors appointed as set forth
herein.
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"Inventory Items" shall have the meaning ascribed to in Section 751(d)
of the Code.
"JMB LP" shall have the meaning attributed thereto in the preamble to
this Agreement.
"JMB Partner" shall have the meaning ascribed to it in Section 5.12A.
"Limited Partners" shall mean St. Xxx Development and JMB LP, and their
permitted successors appointed as set forth herein.
"Liquidators" shall have the meaning ascribed to it in Section 9.2.
"Major Decisions" shall mean those decisions that require the consent
of the Non-Managing Partner as set forth in Section 5.4.
"Managing Partner" shall mean St. Xxx/Arvida Company, Inc., a Florida
corporation, and its permitted successors appointed as set forth herein.
"Non-Defaulting Partners" shall have the meaning ascribed to it in
Section 3.3.B.
"Non-Managing Partner" shall mean JMB Southeast Development, LLC, a
Delaware limited liability company, and its permitted successors appointed as
set forth herein.
"Non-Transferring Partners" shall have the meaning ascribed to it in
Section 7.1.
"Old Arvida Bonus Plans" shall have the meaning ascribed to it in
Section 5.13.
"Partner" shall mean each Person who (a) is an initial signatory to
this Agreement as either a General Partner or a Limited Partner, has been
admitted to the Partnership as a Partner in accordance with this Agreement or is
an assignee who has become a Partner in accordance with Article VII and (b) has
not ceased to be a Partner pursuant to the terms of this Agreement.
"Partnership" shall mean St. Xxx/Arvida Company, L.P., a Delaware
limited partnership.
"Partnership Accountants" means, as of any specified time, the firm of
certified public accountants then engaged as the Partnership's outside
accountants. The initial Partnership Accountants shall be KPMG Peat Marwick,
LLP, certified public accountants, but the Partnership Accountants may be
changed at any time and from time to time by the Managing Partner with the
consent of the Non-Managing Partner, provided that such consent shall not be
required if the newly-selected Partnership Accountants are a nationally
recognized accounting firm.
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"Partnership Interest" shall mean a Partner's entire interest in the
Partnership including, without limitation, the Partner's share of the
Partnership's Profits, Losses, and distributions of the Partnership's assets
pursuant to this Agreement and the Act, the right to vote on or participate in
the management, and the right to receive information concerning the business and
affairs, of the Partnership.
"Paying Agreement" shall have the meaning ascribed to it in Section
5.13.
"Percentage Interest" shall mean for any Partner the percentage
obtained by dividing the number of Units held by such Partner by the total
number of Units of the Partnership then issued and outstanding, subject to
adjustment pursuant to Section 3.3.
"Person" shall mean an individual, general partnership, limited
partnership, limited liability company, corporation, trust, estate, real estate
investment trust, association or any other entity (except that with respect to
St. Xxx, "Person" shall not include the Xxxxxx X. xxXxxx Testamentary Trust).
"Profits" and "Losses" shall mean the income, gain, loss, deductions,
and credits of the Partnership in the aggregate or separately stated, as
appropriate, under the method of accounting at the close of each Fiscal Year on
the Partnership's information tax return filed for federal income tax purposes.
"Regulations" shall, unless the context clearly indicates otherwise,
mean the regulations currently in force as final or temporary that have been
issued by the U.S. Department of Treasury pursuant to its authority under the
Code.
"St. Xxx" shall mean St. Xxx Corporation, a Florida corporation.
"St. Xxx Advances" shall have the meaning ascribed to it in Section
5.12C.
"St. Xxx Partner" shall have the meaning ascribed to it in Section
5.12A.
"Subsidiary" shall have the meaning ascribed to it in Section 2.5.
"Tax Matters Partner" shall be the Managing Partner, or its successor
as designated pursuant to Section 8.7.
"Term" shall have the meaning ascribed to it in Section 2.3.
"Transfer" shall have the meaning ascribed to it in Section 7.1.
"Transfer Notice" shall have the meaning ascribed to it in Section 7.6.
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"Transfer Acceptance Notice" shall have the meaning ascribed to it in
Section 7.6.
"Transfer Notice Period" shall have the meaning ascribed to it in
Section 7.6.
"Transferred Employees" shall have the meaning ascribed to it in
Section 5.13.
"Transferee" shall have the meaning ascribed to it in Section 7.1.
"Transferor" shall have the meaning ascribed to it in Section 7.1.
"Units" shall mean partnership interests in the Partnership evidencing
the ownership interests of the Partners in the Partnership. Partners may own
fractional Units, and such Units may be held as general partnership interests or
limited partnership interests; provided, however, that at no time shall less
than 1% of the Units be held, in the aggregate, by the General Partners as
general partnership interests.
"Unrealized Receivables" shall have the meaning ascribed to in Section
751(c) of the Code.
"Value Negotiation Date" shall have the meaning ascribed to it in
Section 5.12A.5.
ARTICLE II
FORMATION
2.1 Formation. Pursuant to the Act, the Non-Managing Partner and JMB LP
have formed a limited partnership under the laws of the State of Delaware by
filing the Certificate with the Delaware Secretary of State and otherwise
complying with the requirements of the Act for the formation of limited
partnerships. The rights and liabilities of the Partners shall be determined
pursuant to the Act and this Agreement. To the extent that the rights or
obligations of any Partner are different by reason of any provision of this
Agreement than they would be in the absence of such provision, this Agreement
shall, to the extent not prohibited by the Act, control.
2.2 Name. The name of the Partnership shall be St. Xxx/Arvida Company,
L.P. The business of the Partnership may be conducted under that name or any
other name that the Managing Partner deems appropriate or advisable. The
Managing Partner shall file any fictitious name certificates and similar filings
that the Managing Partner considers appropriate or necessary.
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2.3 Term. The term of the Partnership and this Agreement (the "Term")
shall be from the date of filing of the Certificate with the Delaware Secretary
of State as aforesaid until December 31, 2047, unless sooner terminated as
hereinafter provided.
2.4 Office and Agent. The Partnership shall continuously maintain a
registered office and registered agent in the State of Delaware as required by
the Act. The registered office of the Partnership in Delaware is 0000 Xxxxxx
Xxxxxx in the City of Wilmington, County of New Castle. The name of the
Partnership's registered agent is The Corporation Trust Company and its address
is the same as that of the registered office of the Partnership as set forth
above. In addition, the Partnership shall maintain its principal business office
at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx, or at such other
place as the Managing Partner may determine. The Partnership also may have such
other offices anywhere in the United States as the Managing Partner from time to
time may determine. The registered office and registered agent of the
Partnership may be changed at any time and from time to time by the Managing
Partner in accordance with the Act.
2.5 Purposes of the Partnership. The purposes of the Partnership are
(i) either directly or through one or more wholly-owned (directly and/or through
intermediaries) subsidiary entities (each a "Subsidiary") to provide services
relative to the acquisition, predevelopment, development, construction,
management, supervision, marketing and sale of Future Developments, (ii) to act,
either directly or through one or more Subsidiaries, as the exclusive agent and
with respect to Future Developments, to enter into exclusive pre-development,
development, management, residential property brokerage, advisory, construction,
project consulting and/or project supervisory agreements (the "Future Management
Contracts"), and to engage in such activities in a manner that will capitalize
on the value and goodwill associated with the "Arvida" name, (iii) to continue
existing license agreements and enter into new license agreements for, and
otherwise utilize and engage in business under, the name "Arvida" and its
derivatives, (iv) to continue existing educational consulting contracts of JMB
LP or its Affiliates and to enter into new educational consulting contracts; (v)
if otherwise permitted by this Agreement, to own interests, directly or
indirectly in Future Developments; (vi) to employ certain persons formerly
employed by Arvida Company and its Affiliates, (vii) to enter into and perform
certain sub-management agreements pursuant to the Asset Contribution Agreement,
and (viii) to engage in any and all activities related or incidental thereto. In
addition, the Partnership may, pursuant to the Asset Contribution Agreement,
acquire certain rights and obligations with respect to certain management
agreements and certain partnerships, limited liability companies and
corporations engaged in the business of development and management of
residential real properties consistent with the purposes of the Partnership. The
Partnership may engage in any other lawful activity for which a limited
partnership may be organized under the Act, only if the same is approved by all
of the Partners in writing, and is otherwise conducted in accordance with the
terms of this Agreement.
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ARTICLE III
PURCHASE OF UNITS; CAPITAL CONTRIBUTIONS AND LOANS
3.1 Purchase of Units. As of the date hereof and immediately after the
contribution of the Contributed Assets to the Partnership, the Managing Partner
hereby purchases 1 Unit from the Non-Managing Partner and St. Xxx Development
hereby purchases 73 Units from JMB LP for the aggregate cash purchase price
of .
3.2 Initial Capital Contribution. The capitalization of the Partnership
is comprised of 100 Units in the aggregate with the amount of each Partner's
initial Capital Contribution (after taking into account the purchase of Units
set forth in Section 3.1) set forth opposite its name in Exhibit "A" hereto.
3.3 Capital Calls; Defaults; Dilution; Partner Loans.
A. Capital Calls. The Partners (including any Transferor
admitted pursuant to Section 7.1 hereof) shall be obligated to make
additional Capital Contributions to the Partnership for expenses
incurred or to be incurred in the ordinary course of the Partnership's
business at such times and in such amounts as the Managing Partner and
the Non-Managing Partner shall determine upon not less than 10 Business
Days prior written notice (which shall be sent by telecopy or by
overnight courier service). Pursuant to a call (a "Capital Call") from
the Managing Partner for an additional Capital Contribution, each
Partner will be obligated to contribute to the Partnership an amount
equal to the product of such Partner's then Percentage Interest
multiplied by the total additional Capital Contribution to be made by
all Partners pursuant to the Capital Call.
B. Defaults. In the event that any Partner (a "Defaulting
Partner") shall fail to contribute all or any portion of its additional
Capital Contribution within 5 Business Days of the due date specified
in the notice for the Capital Call (or such later date as the Managing
Partner, in its sole discretion, may determine), the Managing Partner
may (but will not be required to) permit the Partners (including the
Managing Partner) who contributed their respective additional Capital
Contribution pursuant to a Capital Call (the "Non-Defaulting Partners")
to contribute all or any portion of the additional Capital Contribution
that such Defaulting Partner failed to contribute. In such event the
Managing Partner shall request that each Non-Defaulting Partner
contribute a pro rata share of the Defaulting Partner's additional
Capital Contribution based upon the ratio that such Non-Defaulting
Partner's Percentage Interest immediately prior to such Capital Call
bears to the aggregate Percentage Interests of all Non-Defaulting
Partners immediately prior to such Capital Call. If any Non-Defaulting
Partner shall, within the time period designated by the Managing
Partner, in its sole discretion, decline or fail to contribute its
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entire pro rata share of the Defaulting Partner's additional Capital
Contribution, the Managing Partner may (but will not be required to)
permit such share, or any portion thereof, to be contributed in such
amounts and/or such proportions as the Managing Partner, in its sole
discretion, may determine by any Non-Defaulting Partner or Partners who
contribute its or their entire pro rata share or shares of the
Defaulting Partner's additional Capital Contribution.
C. Dilution. In the event of a default described in this
Section 3.3, the Percentage Interests of the Partners shall be adjusted
in accordance with the following from and after the effective date of
such adjustment as determined by the Managing Partner, in its sole
discretion: (i) the Percentage Interest of a Defaulting Partner shall
be determined as the ratio, expressed as a percentage, that the total
Capital Contribution then made to date by the Defaulting Partner bears
to the total Capital Contributions then made to date by all Partners
plus 100% of the amount of the Defaulting Partner's additional Capital
Contribution that has been contributed by a Non-Defaulting Partner or
Partners; and (ii) the Percentage Interest of a Non-Defaulting Partner
shall be determined as the ratio, expressed as a percentage, that the
total Capital Contribution then made to date by such Non-Defaulting
Partner (including any amount of a Defaulting Partner's additional
Capital Contribution contributed by such Non-Defaulting Partner),
increased by 100% of the amount (if any) of a Defaulting Partner's
additional Capital Contribution that such Non-Defaulting Partner has
contributed, bears to the total Capital Contributions then made to date
by all Partners plus 100% of the amount of the Defaulting Partner's
additional Capital Contribution that has been contributed by a
Non-Defaulting Partner or Partners. A Non-Defaulting Partner shall be
deemed to have acquired that portion of the Defaulting Partner's
Percentage Interest that corresponds to such adjustment in the
Non-Defaulting Partner's Percentage Interest attributable to the
default and to that extent the Non-Defaulting Partner, from and after
the effective date of such adjustment, shall be entitled to the
allocations of Profits, Losses and distributions of Distributable Cash
and other rights and obligations (including the obligation to make any
future additional Capital Contribution pursuant to a Capital Call) with
respect to the portion of the Defaulting Partner's Percentage Interest
so acquired; provided, however, that (x) a Non-Defaulting Partner shall
not acquire any interest in the Capital Account of a Defaulting Partner
as a result of such adjustments, and there shall be no adjustment to
the Capital Accounts of the Partners as a result of such adjustments to
the Percentage Interests of the Partners (other than adjustments caused
by future allocations of Profits and Losses and distributions of
Distributable Cash or other assets), and (y) in no event shall any
Limited Partner acquire any management rights, management obligations
or general liability as a general partner as a result of any adjustment
in the Percentage Interest of a General Partner. Each of the Partners
authorizes the Managing Partner to amend this Agreement (including
Exhibit A hereto) and the Partnership's Certificate of Limited
Partnership to reflect any adjustment provided in this Section 3.3,
including without limitation any adjustment in the allocations of
Profits and Losses and distributions. Notwithstanding anything herein
to the contrary, the Managing Partner, in its sole discretion and
without
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the consent of any other Partner, may at any time (notwithstanding that
a Capital Call for an additional Capital Contribution has been made and
is outstanding or any Partner is in default with respect thereto)
cancel (in whole or in part) any Capital Call for an additional Capital
Contribution and/or may seek a loan or loans from the Partners in lieu
of all or any portion of an additional Capital Contribution as provided
in Section 3.3D hereof.
D. Partner Loans. No loan to the Partnership shall be made
without the prior consent of the Managing Partner. Subject to the other
terms of this Agreement, the Managing Partner may obtain on behalf of
the Partnership a loan or loans from all of the Partners (other than
any Defaulting Partner or Partners with respect to an outstanding
Capital Call) in lieu of all or any portion of an additional Capital
Contribution (whether or not a Capital Call for an additional Capital
Contribution has been made and is outstanding and any Partner is in
default with respect thereto or the maximum amount of additional
Capital Contributions has been made pursuant to Section 3.3A hereof).
In such event the Managing Partner shall request that each
Non-Defaulting Partner lend a pro rata share of any such loan based
upon the ratio that a Non-Defaulting Partner's then Percentage Interest
bears to the then Percentage Interest of all Non-Defaulting Partners.
If any Non-Defaulting Partner shall, within the time period designated
by the Managing Partner, in its sole discretion, decline or fail to
lend his entire pro rata share of such loan, the Managing Partner may
(but will not be required to) permit such share, or any portion
thereof, to be lent, in such amounts and/or such proportions as the
Managing Partner in its sole discretion shall determine, by any other
Non-Defaulting Partner or Partners. Any such loan(s) shall bear
interest at two percent (2%) plus the prime rate as announced from time
to time by First Union National Bank of Florida, and the same, together
with interest as aforesaid shall be repaid before any distribution
shall be made under Section 6.3 or Section 9.4 hereof; provided that
any loan made as a result of a Defaulting Partner's failure to
contribute its share of an additional Capital Contribution pursuant to
a Capital Call shall bear interest at fifteen percent (15%) per annum
and not at two percent (2%) plus prime. Unless otherwise agreed in
writing by all the Partners, any such loan shall be without recourse to
each of the Partners and their respective personal assets, and the
amount of such loan, together with interest thereon, shall be repaid
before any distribution shall be made to the Partners.
3.4 Capital Accounts. The Partnership shall establish an individual
capital account for each Partner. The Partnership shall determine and maintain
each capital account in accordance with Section 6.5 hereof.
3.5 No Interest. No Partner shall be entitled to receive any interest
from the Partnership on such Partner's Capital Contributions or Units.
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ARTICLE IV
PARTNERS
4.1 Limited Liability of Partners for Partnership Debts. Except as
required under the Act or as expressly set forth in this Agreement or as
expressly agreed by such Partner, under no circumstances will any Partner, or
any director, officer, shareholder, member, manager, partner, employee, agent or
Affiliate of any Partner, have any personal responsibility for any debt,
liability or obligation of the Partnership (whether on a theory of alter ego,
piercing the corporate veil, or otherwise), whether that liability or obligation
arises in contract, tort, or otherwise, beyond its Capital Contribution actually
made, and no third party shall have any right to enforce or rely upon any
obligation of such Partner (or any other Person) hereunder or otherwise.
4.2 Withdrawal of Partners. Except as specifically set forth in this
Agreement, no Partner may resign, retire or otherwise withdraw from the
Partnership.
4.3 Transactions With The Partnership; Competing Activities. Subject to
any limitations set forth in this Agreement, including, without limitation,
Sections 5.4, 5.7 and 5.12, and with the prior approval of the Managing Partner,
a Partner may enter into any agreement and transact any business with the
Partnership, and such Partner shall have the same rights and obligations with
respect thereto as it would have had if it were not a Partner. Any such
agreement or business conducted after the date hereof shall be entered into and
conducted on market terms. Except as set forth in this Agreement, and in
particular Section 5.12 hereof, the Partners, and their respective officers,
directors, shareholders, partners, members, managers, agents, employees and
Affiliates may engage or invest in, independently or with others, any business
activity of any type or description, including without limitation those that
might be the same as or similar to the Partnership's business and that might be
in direct or indirect competition with the Partnership. Neither the Partnership
nor any Partner shall have any right in or to such other ventures or activities
or to the income or proceeds derived therefrom. Except as set forth in this
Agreement, and in particular Section 5.12, no Partner shall be obligated to
present any investment opportunity or prospective economic advantage to the
Partnership, even if the opportunity or advantage is of the character that, if
presented to the Partnership, could be taken by the Partnership. Except as set
forth in this Agreement, and in particular Section 5.12, the Partners shall have
the right to hold any investment opportunity or prospective economic advantage
for their own account or to recommend such opportunity or advantage to Persons
other than the Partnership. Except as set forth in this Agreement, and in
particular Section 5.12, each Partner acknowledges that the other Partners and
their respective Affiliates own and/or manage other businesses, including
businesses that may compete with the Partnership and for the Partners' time.
Each Partner hereby waives any and all rights and claims which it may otherwise
have against each other Partner and such other Partner's officers, directors,
shareholders, partners, members, managers, agents, employees, and Affiliates as
a result of any of such
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activities; including specifically, but without limitation, any claim that a
General Partner has breached its fiduciary duty to the Partnership as a result
of such activities.
4.4 Remuneration To Partners. Subject to the entitlement of Partners
winding up the affairs of the Partnership to reasonable compensation as
Liquidators pursuant to Section 9.2, no Partner nor any Affiliate of any Partner
shall be entitled to remuneration for services rendered or goods provided to the
Partnership in such Person's capacity as a Partner; provided, however, that
nothing herein shall prevent the Partnership from employing any Partner to
provide goods or services on behalf of the Partnership in furtherance of the
Partnership's business and to be compensated therefor, subject to any other
provision of this Agreement governing same. The Partnership shall also pay or
reimburse the Partners or their Affiliates for organizational expenses
(including, without limitation, reasonable legal and accounting fees and costs)
incurred to form the Partnership and prepare the Certificate of Formation and
this Agreement.
4.5 Non-Managing Partner and Limited Partner Are Not Agents. Pursuant
to Section 5.1 and the Certificate (and subject to Sections 5.4 and 5.13), the
management of the Partnership is vested in the Managing Partner. Neither the
Non-Managing Partner nor the Limited Partners, acting solely in their respective
capacities as such, shall act as an agent of the Partnership nor shall either
the Non-Managing Partner or the Limited Partners, in any such capacity, bind or
execute any instrument on behalf of the Partnership, except to the extent
otherwise expressly provided herein.
4.6 Meetings of General Partners.
A. Date, Time and Place of Meetings of General Partners.
Meetings of General Partners shall be held at least semi-annually, upon
such date and at such time and place within or without the State of
Illinois or the State of Florida as determined by the Managing Partner.
No other annual or regular meetings of Partners are required.
B. Power to Call Meetings. Meetings of the General Partners
may be called at any time and at any place, but no less often than
semi-annually, by the Managing Partner, for the purpose of discussing
the business and prospects of the Partnership generally and addressing
any matters on which the General Partners may vote or on which the
Partnership must obtain the consent of the Non-Managing Partner.
C. Notice of Meeting. Written notice of a meeting of General
Partners shall be sent or otherwise given to each General Partner not
less than seven (7) or more than sixty (60) days before the date of the
meeting. The notice shall specify the place, date and hour of the
meeting and the general nature of the business to be transacted. If the
subject matter of such a meeting is to include items that also require
the consent of the Limited Partners, or any of them, the Managing
Partner shall also send such notice to the Limited Partners and afford
them the opportunity to attend such meeting. Such meetings may be
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held at any time and place without notice, by unanimous written consent
of the Partners, or by the presence (whether in person or by telephone)
of all Partners at such meeting.
D. Action by Written Consent without a Meeting. Any action
that may be taken at a meeting of General Partners may be taken without
a meeting, if a consent in writing setting forth the action so taken,
is signed and delivered to the Partnership by all of the Partners
having a right to consent thereto. All such consents shall be filed
with the Managing Partner and shall be maintained in the Partnership
records. Any Partner giving a written consent, or the Partner's proxy
holders, may revoke the consent by a writing received by the Managing
Partner or secretary, if any, of the Partnership before written
consents of all Partners required to authorize the proposed action have
been filed.
E. Telephonic Participation by Partner at Meetings. Partners
may participate in any General Partners' meeting through the use of any
means of conference telephones or similar communications equipment as
long as all Partners participating can hear and communicate with one
another. A Partner so participating is deemed to be present in person
at the meeting.
F. Proxies. Every Partner entitled to vote shall have the
right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the Managing
Partner or secretary, if any, of the Partnership. A proxy shall be
deemed signed if the Partner's name is placed on the proxy (whether by
manual signature, typewriting, telegraphic transmission, electronic
transmission or otherwise) by the Partner or the Partner's
attorney-in-fact. A proxy may be transmitted by a telephonic
transmission if it is submitted with information from which it may be
determined that the proxy was authorized by the Partner or the
Partner's attorney-in-fact. A validly executed proxy which does not
state that it is irrevocable shall continue in full force and effect
unless (i) revoked by the person executing it, before the vote pursuant
to that proxy, by a writing delivered to the Partnership stating that
the proxy is revoked, or by a subsequent proxy executed by, or
attendance at the meeting and voting in person by, the Partner
executing the proxy; or (ii) written notice of the dissolution, death
or incapacity of the Partner executing the proxy is received by the
Partnership before the vote pursuant to that proxy is counted;
provided, however, that no proxy shall be valid after the expiration of
eleven (11) months from the date of the proxy, unless otherwise
provided in the proxy.
ARTICLE V
MANAGEMENT AND CONTROL OF THE PARTNERSHIP
5.1 Exclusive Management of the Partnership by the Managing Partner.
Except to the extent otherwise expressly set forth in this Agreement, including,
without limitation Sections 5.4 and 5.13, the business, property and affairs of
the Partnership shall be managed exclusively by
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the Managing Partner. Except for situations in which the approval of the
Non-Managing Partner and/or the Limited Partners are expressly required by this
Agreement or pursuant to provisions of the Act, the Managing Partner shall have
full, complete and exclusive authority, power, and discretion to manage and
control the business, property and affairs of the Partnership, to make all
decisions regarding those matters and to perform any and all other acts or
activities customary or incident to the management of the Partnership's
business, property and affairs. Without limitation on the foregoing, the
Managing Partner shall designate either as authorized signatories or as officers
of the Partnership, from time to time the Persons having authority to sign and
endorse checks, execute contracts and otherwise bind the Partnership, and no
Person not so designated shall have any such authority. Any third party shall be
entitled to conclusively rely on any contract or instrument (including, but not
limited to, any guaranty) signed by the Managing Partner on behalf of the
Partnership, as the act and deed of the Partnership.
5.2 Determination of Partner to Act as Managing Partner.
A. Number and Tenure. The Partnership shall at all times have
one Managing Partner. Subject to the terms of this Agreement, the
Partnership may have no more than one Non-Managing Partner and any
number of Limited Partners. The initial Managing Partner and
Non-Managing Partner are the Partners identified as such in the
preamble to this Agreement.
B. Vacancies. The Managing Partner and the Non-Managing
Partner shall each serve in such capacity until the earlier of (with
respect to such Partner only) (i) except relative to an event described
in Section 7.4, the sale, transfer or other disposition (whether
voluntarily or by operation of law, including, without limitation, by
merger, consolidation or liquidation) of such Partner's Partnership
Interest in the Partnership in accordance with this Agreement, (ii)
such Partner becoming a Bankrupt Partner, (iii) the determination by a
court of competent jurisdiction that such Partner has committed fraud,
gross negligence, a material breach of its fiduciary duties hereunder,
or willfully or intentionally breached this Agreement in any material
respect, (iv) the occurrence of an event described in Section 7.4 and
(v) the agreement of the Managing Partner and the Non-Managing Partner
that the Managing Partner shall become the Non-Managing Partner and
vice-versa. The Managing Partner shall have no right to resign, nor may
the Non-Managing Partner act to remove the Managing Partner, absent any
of the events set forth in the first sentence of this Section 5.2B;
provided, that the Non-Managing Partner may seek the determination of a
court of competent jurisdiction that any such events have in fact
occurred. The Non-Managing Partner shall have no right to resign as
such, nor may the Managing Partner act to remove the Non-Managing
Partner as such absent any of the events set forth in the first
sentence of this Section 5.2B; provided, that the Managing Partner may
seek a determination of a court of competent jurisdiction that any such
events have in fact occurred. In the event of the sale, transfer or
other disposition of the Partnership Interest of the Managing Partner
or the Non-Managing Partner as described in clause (i) of the first
sentence of this Section 5.2B, the successor to such Partner's
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Partnership Interest shall thereupon automatically succeed to the
rights of such Partner as Managing Partner or Non-Managing Partner, as
applicable. Upon the occurrence of any of the events set forth in
clauses (ii), (iii) or (iv) of the first sentence of this Section 5.2B
with respect to the Managing Partner only, the Non-Managing Partner
shall automatically become the Managing Partner, and the Managing
Partner shall become a Limited Partner. In the event of a change in the
identity of the Managing Partner hereunder, the departing Managing
Partner shall cooperate fully with the new Managing Partner to effect a
smooth transition of the duties and responsibilities assigned to the
Managing Partner hereunder, as well as the delivery of any and all
relevant books and records, files and other information which the
departing Managing Partner has in its possession or control relative to
such duties and obligations and the business and affairs of the
Partnership.
5.3 Powers of Managing Partner. Without limiting the generality of
Section 5.1, but subject to the express limitations set forth elsewhere in this
Agreement, including, without limitation, Sections 5.4 and 5.13, the Managing
Partner shall have all necessary powers to manage and carry out the purposes,
business, property, and affairs of the Partnership, including, without
limitation, the power to do any or all of the following on behalf and in the
name of the Partnership:
A. The licensing of the name "Arvida" or any of its
derivatives, provided that, such licensing shall not have a material
adverse effect on the business or any of the properties owned (directly
or through joint ventures or partnerships) or managed by Arvida/JMB
Partners, L.P. as of the date hereof and set forth on Schedule 5.3A.
B. Acquire, purchase, and own any personal property that the
Managing Partner determines is necessary or appropriate or in the
interest of the business of the Partnership;
C. Sell, exchange, lease, or otherwise dispose of the property
and assets owned by the Partnership, or any part thereof, or any
interest therein;
D. Borrow money on behalf of the Partnership from any party
including the Partners and their respective Affiliates, issue evidences
of indebtedness in connection therewith, and secure such indebtedness
by mortgage, deed of trust, pledge, security interest, or other lien on
Partnership assets, in each case where the amount of any such
indebtedness does not exceed $1,000,000.00 in the aggregate; provided,
however, that the Managing Partner shall have the power and authority,
subject to the terms of this Agreement, to borrow money on behalf of
any Future Development Entities (or other entities controlled by them)
in such amounts as it deems necessary or appropriate, so long as such
indebtedness is non-recourse to the Partnership and the Partners
(except for customary recourse "carve-outs" for which recourse is
limited to the interests of the Partnership and/or the Partners in the
applicable Future Development Entity but not to any Partner's
Partnership Interest);
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E. Subject to Sections 5.3D and 5.4B incur debts and
liabilities in the normal course of the business of the Partnership.
F. Undertake all actions that the Managing Partner determines
are necessary or appropriate or in the interest of the business of the
Partnership in furtherance of the purposes of the Partnership set forth
in Section 2.5; obtain such licenses and permits on behalf of the
Partnership and its Subsidiaries as are necessary or appropriate to
conduct their respective businesses; employ persons to manage and
perform the business of the Partnership and to provide compensation and
other financial and employment benefits thereto as the Managing
Partners may determine;
G. Xxx on, defend, or compromise any and all claims or
liabilities in favor of or against the Partnership; submit any or all
such claims or liabilities to arbitration; and confess a judgment
against the Partnership in connection with any litigation in which the
Partnership is involved;
H. Retain legal counsel, auditors, and other professionals in
connection with the Partnership business and to pay therefor such
remuneration as the Managing Partner may determine;
I. Purchase liability and other insurance to protect the
Partnership's property and business; and
J. Invest any Partnership funds in time deposits, short-term
governmental obligations, commercial paper or other money market
investments as the Managing Partner may determine.
5.4 Non-Managing Partner Has No Managerial Authority Except With
Respect to Major Decisions. The Non-Managing Partner shall have no power to
participate in the management of the Partnership except as expressly authorized
by this Agreement (including, without limitation, this Section 5.4) and except
as expressly required by the Act. Unless expressly and duly authorized in
writing to do so by the Managing Partner or as otherwise provided herein, the
Non-Managing Partner shall not have any power or authority to bind or act on
behalf of the Partnership in any way, to pledge its credit, or to render it
liable for any purpose. If the Partnership establishes a Subsidiary in
accordance with Section 2.5, the Non-Managing Partner shall have the same
approval rights for actions proposed to be taken by any such Subsidiary as are
specified in this Section 5.4 with respect to actions proposed to be taken by
the Partnership. The following matters in this Section 5.4 ("Major Decisions")
shall require the prior written approval of both the Managing Partner and the
Non-Managing Partner, such consent to be given or withheld at their sole and
absolute discretion, before action binding on the Partnership may be taken by
the Managing Partner with respect to such matter:
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A. Any sale, transfer or disposition by the Partnership,
directly or indirectly, of all or substantially all of the
Contributed Assets, and the terms of and parties to the
documentation relating to the same.
B. Except as permitted by Section 5.3D, any financing,
refinancing or indebtedness, or any material modification of
the terms of any financing, refinancing or indebtedness,
obtained by the Partnership in its own name or in the name of
any of its Subsidiaries (or for which any of them are liable,
directly or indirectly, by guaranty or otherwise), and the
terms of and parties to the documentation relating to the
same.
C. Except as expressly permitted by Section 5.12, the
acquisition of one or more additional real property assets, or
any direct or indirect interest therein, by the Partnership,
costing in the aggregate, more than $1,000,000.
D. Except for the provisions of Section 3.3C, any transaction
which would otherwise be permitted under Section 5.7, such
consent by the Non-Managing Partner not to be unreasonably
withheld unless it falls within another category requiring the
consent of the Non-Managing Partner under this Section 5.4 or
elsewhere in this Agreement.
E. Any sale of the Partnership or any of its Subsidiaries, or
merger or consolidation thereof with another entity.
F. Any voluntary action of the Partnership to (a) make an
assignment for the benefit of creditors, (b) obligate any
Partner as a surety, guarantor or accommodation party to any
obligation, or (c) file a petition, or consent to the
appointment of a trustee or receiver or any judgment or order,
under the federal bankruptcy laws on behalf of the Partnership
or any of its Subsidiaries.
G. Except with respect to any action permitted by the
provisions of Section 3.3, any action that may, either
immediately or upon the exercise of future rights or options,
cause the dilution of the Non-Managing Partner's or any
Limited Partner's Percentage Interest in the Partnership.
H. The amendment, waiver or repeal of any of the provisions of
this Agreement.
I. The conversion of the form of the Partnership from a
limited partnership to any other type of entity.
J. Prior to the earlier of (i) the liquidation and termination
of Arvida/JMB Partners, LP or (ii) December 31, 2002, the
termination, replacement or
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reassignment of the Chief Executive Officer of the
Partnership, or any material reduction in such person's duties
or in his or her total compensation or benefits (as the duties
and compensation exist effective as of January 1, 1998).
K. The preparation and filing of the Partnership's federal
income tax return and the making (or revocation) of all tax
elections for federal income tax purposes for the fiscal year
ended December 31, 1997. The Managing Partner shall use its
best efforts to provide a copy of the Partnerships proposed
federal income tax return for the fiscal year ended December
31, 1997, to the Non-Managing Partner for its review no later
than February 28, 1998.
L. The terms of any employment contract (or any modification
or amendment thereof) which purports to give a Partnership
employee any rights thereunder relative to the Old Arvida
Bonus Plans or any other benefits to be provided by the
Non-Managing Partner or its Affiliates (other than the
Partnership).
M. The termination by the Partnership of any license agreement
described on Schedule 5.4M, with respect to uses permitted as
of the date hereof; provided that in the event the Managing
Partner determines in the future that any other uses are in
violation of the quality standards set forth under any such
license agreements it shall provide the Non-Managing Partner
written notice of such violation and the licensee (or its
affiliate as the case may be) shall have forty-five (45) days
to cure such violation. If such violation is not cured within
such forty-five (45) day period, then the Managing Partner
shall have the right without the consent of the Non-Managing
Partner to terminate the license agreement.
N. The dissemination and the contents of any public notice,
release or announcement, or public distribution of any
document, relative to (a) transactions set forth in the Asset
Contribution Agreement, (b) the terms and provisions of this
Agreement, or (c) the private or public sale of debt or equity
securities of the Partnership or any Subsidiary (if such
notice, release, announcement or document refers to any other
Partner's investment in the Partnership or such Subsidiary),
except as such notice, release or announcement, or
distribution of such document, may be required by law or the
rules or regulations of any securities exchange, in which case
the Partner required to give such notice, issue such release,
make such announcement or distribute such document, or the
Partnership, as applicable, shall allow the other General
Partner a reasonable opportunity to comment upon the contents
of such notice, release, announcement or document in advance
of the public dissemination of same.
Any change in any tax accounting practice or methods of the Partnership
shall be subject to the consent of the Non-Managing Partner, which consent may
not be unreasonably withheld.
5.5 Performance of Duties; Liability of Managing Partner and
Non-Managing Partner. Neither the Managing Partner nor the Non-Managing Partner
shall be liable to the Partnership or to any Partner for any loss or damage
sustained by the Partnership or any Partner, unless the loss
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or damage shall have been the result of fraud, the material breach of fiduciary
duty hereunder, gross negligence or willful or intentional misconduct by the
Managing Partner or the Non-Managing Partner. In performing their duties, the
Managing Partner and the Non-Managing Partner shall be fully protected in
relying in good faith on the records of the Partnership and on information,
opinions, reports, or statements, including financial statements and other
financial data presented to the Partnership by:
(i) any of the other Partners, officers, employees or committees
of the Partnership or its Subsidiaries; or
(ii) any attorney, independent accountant, or other person as to
matters which the Managing Partner or the Non-Managing Partner reasonably
believes to be within such person's professional or expert competence and who
has been selected with reasonable care by or on behalf of the Partnership.
5.6 Devotion of Time. The Managing Partner and the Non-Managing Partner
are not obligated to devote all of their time or business efforts to the affairs
of the Partnership. The Managing Partner and the Non-Managing Partner shall
devote whatever time, effort, and skill as they reasonably deem appropriate for
the operation of the Partnership.
5.7 Transactions between the Partnership and the Managing Partner.
Notwithstanding that it may constitute a conflict of interest, the Managing
Partner may, and may cause its Affiliates to, engage in any transaction
(including, without limitation, the purchase, sale, lease, or exchange of any
property or the rendering of any service, or the establishment of any salary,
other compensation, or other terms of employment) with the Partnership so long
as such transaction is not expressly prohibited by this Agreement and so long as
the terms and conditions of such transaction, on an overall basis, are fair and
reasonable to the Partnership and are at least as favorable to the Partnership
as those that are generally available from Persons capable of similarly
performing them and in similar transactions between parties operating at arm's
length.
5.8 Liability of Partners to Partnership or Each Other Limited to
Assets. Unless otherwise specifically agreed in writing by the Person
undertaking such liability, under no circumstances will any director, officer,
shareholder, member, manager, partner, employee, agent or Affiliate of any
Partner, have any personal responsibility, directly or indirectly, for any
liability or obligation of the Partner (whether on a theory of alter ego,
piercing the corporate veil, or otherwise), whether that liability or obligation
arises in contract, tort, or otherwise, and any recourse permitted under this
Agreement or otherwise of the Partners, any former Partner or the Partnership
against a Partner will be limited to the assets of the Partner (exclusive of any
rights by or on behalf of such Partner against any of its directors, officers,
shareholders, members, managers, partners, employees, agents or Affiliates) as
they may exist from time to time; provided, however, that nothing herein shall
protect any such Person from liability arising from the fraud, gross negligence
or willful or intentional misconduct by such Person, or the activities of such
Person taken outside the scope of such Person's duties and authority as a
director, officer,
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shareholder, member, manager, partner, employee or agent of the Partnership or
its Subsidiaries, as applicable.
5.9 Limited Partners Have No Managerial Authority. No Limited Partner
shall have any power to participate in the management of the Partnership except
as expressly authorized by this Agreement, and except as expressly required by
the Act. Unless expressly and duly authorized in writing to do so by the
Managing Partner or as otherwise provided herein, no Limited Partner shall have
any power or authority to bind or act on behalf of the Partnership in any way,
to pledge its credit, or to render it liable for any purpose.
5.10 Officers. The Managing Partner (subject to the rights of the
Non-Managing Partner under Sections 5.4 and 5.13) may elect officers at any time
and shall maintain the names and offices held of such officers in the records of
the Partnership. The initial officers of the Partnership are set forth in
Schedule 5.13 attached hereto. The officers of the Partnership may have such
titles as are determined by the Managing Partner. The officers shall serve at
the pleasure of the Managing Partner, subject to Sections 5.4, 5.13, and this
Section 5.10, and all rights, if any, of an officer under any contract of
employment that is or becomes an obligation of the Partnership. Any individual
may hold any number of offices. No officer need be a resident of any State or
citizen of the United States. If the Managing Partner is not an individual,
subject to Section 5.13, such Managing Partner's officers may serve as officers
of the Partnership if elected by the Managing Partner. The officers shall
exercise such powers and perform such duties as shall be determined from time to
time by the Managing Partner.
5.11 Managing Partner and Its Successors To Be Single Purpose Entity.
The Managing Partner hereby covenants and agrees that its sole purpose while it
has any obligations under this Agreement, shall be to hold its Partnership
Interest in the Partnership and exercise its rights, duties and obligations in
connection herewith. Each successor in interest to the Managing Partner shall
also be a single-purpose entity in accordance with the foregoing. St. Xxx also
joins in this Agreement for the purpose of acknowledging the foregoing and
covenanting that it will cause any of its Affiliates that is (or becomes) the
Managing Partner to comply with this Section 5.11 and that it will take no
action inconsistent therewith.
5.12 New Development or Management Opportunities. The Partnership and
the Managing Partner each hereby covenant and agree that all opportunities for
the project supervision and management, predevelopment, development, purchase,
ownership, construction, marketing or sale of any Future Development (as defined
below) shall be governed by this Section 5.12. St. Xxx shall join in this
Agreement for the purpose of, among other things, acknowledging and becoming
bound by the provisions of Section 5.12 hereof.
A. Right of Non-Managing Partner and JMB LP to Participate as
Owner in Future Developments. For the purposes of this Agreement,
"Future Development" means: (i) future Arvida-named projects; and (ii)
other residential projects or mixed use projects that are primarily
residential, but may include other land uses, whether or not such
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projects include the name "Arvida". This term includes all land,
infrastructure, improvements (whether residential improvements or
non-residential improvements which support any such property
development), rights, fixtures, easements and other real and personal
property relative thereto. Future Developments, at St. Joe's sole
discretion, may, in addition, include stand alone hotel and/or resort
properties, but shall not include stand-alone golf courses; provided
that, Future Developments in all cases shall include any Arvida-named
projects regardless of any designations to the contrary by St. Xxx. The
Managing Partner and St. Xxx Development, on behalf of themselves and
their Affiliates (herein collectively referred to as the "St. Xxx
Partner"), hereby grant to the Non-Managing Partner and its Affiliates
(and to JMB LP to the extent set forth herein), and their respective
Affiliates (collectively referred to as the "JMB Partner") the right to
participate in any Future Development on the same economic basis as the
Managing Partner and its Affiliates, for up to 26% (such percentage to
be determined by the JMB Partner) of the Future Development. The right
of participation granted to the JMB Partner pursuant to this Section
5.12A shall cover all acquisitions of economic interests of the St. Xxx
Partner, including all interests in the Future Developments obtained
through purchase, option, the acquisition of development rights, loans,
contribution or other transfers of assets, securities or rights. The
decision as to whether a particular stand-alone hotel and/or resort
project is a Future Development in which a JMB Partner shall have a
right to participate in shall be the sole decision of the St. Xxx
Partner; provided that, Future Developments in all cases include any
Arvida-named projects regardless of any designations to the contrary by
St. Xxx. An "Arvida-named project" means any project that includes
"Arvida" in its name, whether or not with any other name, designation
or reference.
1. Currently Owned Properties. Except for the
projects and properties listed on Schedule 5.12A(1), in the
event that the St. Xxx Partner determines to develop a Future
Development on land that is owned by the St. Xxx Partner as of
the date hereof, the St. Xxx Partner shall afford the JMB
Partner the right to purchase up to 26% (such percentage to be
determined by the JMB Partner) of such Future Development for
a purchase price based upon the Fair Market Value thereof, as
determined under subsection 5 below.
2. Not Currently Owned Properties. Except for the
projects and properties listed on Schedule 5.12A(1), in the
event that the St. Xxx Partner determines to develop a Future
Development on land that is not owned by the St. Xxx Partner
as of the date hereof, the St. Xxx Partner shall afford the
JMB Partner the right to participate for up to 26% (such
percentage to be determined by the JMB Partner) of the St. Xxx
Partner's economic interest therein for a cost equal to the
cost to the St. Xxx Partner (prorated on the basis of their
relative percentage interests) of acquiring such interest.
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3. Character of JMB Partner's Interest. The JMB
Partner's interest in any Future Development Entity shall be
as a limited partner, non-managing member of a limited
liability company or other similar interest in which the JMB
Partner has no liability beyond its interest therein, unless
the JMB Partner requests in writing that it be a non-managing
general partner. Any participation of the JMB Partner in any
such Future Development shall be upon market terms and the
provisions and any documentation regarding such Future
Development Entity shall be on market terms, but shall in any
event permit the JMB Partner to freely transfer any such
interest to an Affiliate. In addition to the foregoing, to the
extent that the terms of the relevant organizational documents
(e.g. partnership agreement, limited liability company
agreement, etc.) or transactional documents relative to the
investment of the Future Development Entity in such Future
Development entitles the St. Xxx Partner to receive
promotional or incentive fees based upon the returns achieved
by the Future Development Entity in such Future Development,
such promotional and incentive fees shall not be taxed against
the interest of the JMB Partner in such Future Development
Entity (other than those given to a third party unaffiliated
with the St. Xxx Partner which shall be taxed proportionally
against the St. Xxx Partner and the JMB Partner).
4. Notice of Opportunity and Election to Participate.
If the St. Xxx Partner desires to undertake or participate in
the development of a Future Development, the St. Xxx Partner
shall first deliver a notice (the "Development Notice") to the
Non-Managing Partner notifying it thereof and identifying all
of the material terms of and facts relating to the investment
theretofore made, or to be made, by the St. Xxx Partner in
such Future Development, including, without limitation, the
identity and extent of participation of any third parties
therein. For a period of thirty (30) days after receipt of
such Development Notice (the "Development Notice Period") the
Non-Managing Partner (on behalf of itself and any other JMB
Partner) shall have the right to invest in such development,
upon the same terms and conditions as set forth in the
Development Notice, which shall otherwise be consistent with
this Section 5.12. Such Development Notice shall also include
the St. Xxx Partner's good faith estimate of the Fair Market
Value of any property currently owned by the St. Xxx Partner
which shall be a part of such Future Development, which Fair
Market Value shall be finally determined in accordance with
subsection 5 below. The JMB Partner may exercise its right to
invest hereunder by delivering a written notice (the
"Development Participation Notice") to the St. Xxx Partner
prior to the end of the Development Notice Period, which
Development Participation Notice shall specify the percentage
participation (relative to the entire collective participation
of the St. Xxx Partner and the JMB Partner, but not any
unaffiliated third parties), not greater than 26%, that the
JMB Partner desires in such Future Development. If the JMB
Partner delivers a timely Development Participation Notice
exercising its right to invest in the development of such
Future Development, the St. Xxx Partner and the JMB Partner
shall (i)
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promptly initiate the appraisal process set forth in
subsection 5 below, if applicable, (ii) form and agree upon
the terms and provisions of the operating agreements for an
entity through which the ownership of the interests in such
Future Development shall be held (a "Future Development
Entity"); provided, however, that in the event that the JMB
Partner elects to invest for its entire 26% entitlement and
there are no third-party investors in such Future Development,
such ownership may, at the election of the Managing Partner,
be held directly by the Partnership, which shall then be
deemed to be the Future Development Entity for the purposes of
such Future Development, (iii) effect the transfer of any
currently owned property to such Future Development Entity,
and (iv) enter into development and management agreements with
the Partnership which comply with the terms of this Agreement.
The Partners hereby agree that, to the extent that the
Non-Managing Partner and JMB LP elect to invest for their
entire 26% entitlement and the Partnership is to be the Future
Development Entity, each of the Partners shall invest therein
for such portion in accordance with their respective
Percentage Interests. If the JMB Partner does not exercise the
right granted hereunder with respect to a particular Future
Development the St. Xxx Partner will have the right to
undertake and participate in such Future Development. If the
St. Xxx Partner ultimately determines to undertake or
participate in such Future Development and there is a material
change in the terms and conditions from those contained in the
original Development Notice (which would be beneficial to the
JMB Partner economically) or the development costs incurred
with respect to such Future Development during the one year
period after the date of the expiration of the original
Development Notice Period are less than $250,000, then the
right of the Managing Partner and its Affiliates to develop
such Future Development shall again become subject to this
Section 5.12, and a new Development Notice containing such
revised terms and conditions must be delivered.
5. Agreement Upon Fair Market Value; Appraisal
Process. In the event that the St. Xxx Partner and the JMB
Partner are unable to agree on the Fair Market Value of any
interest in property to be purchased by such JMB Partner from
such St. Xxx Partner under this Section 5.12, within thirty
(30) days after the delivery of the Development Participation
Notice (the "Value Negotiation Date"), the Fair Market Value
of such property shall be determined by an appraisal made by a
single appraiser or by a board of three appraisers, each of
whom must (i) be a member of the American Institute of Real
Estate Appraisers or a successor body hereinafter constituted
exercising a similar function, (ii) have at least five (5)
years experience in appraising large tracts of undeveloped
land, and (iii) have no direct or indirect financial or other
business interests in or with either the JMB Partner or the
St. Xxx Partner. During the fifteen (15) days immediately
following the Value Negotiation Date, the St. Xxx Partner and
the JMB Partner will endeavor to jointly select and appoint an
appraiser; however, if they fail to do so, each of
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them shall within thirty (30) days after the Value Negotiation
Date select and appoint an appraiser, and the two appraisers
so selected shall select and appoint a third appraiser. If the
appraisers selected by the St. Xxx Partner and the JMB Partner
are unable to agree upon a third appraiser within forty-five
(45) days after the Value Negotiation Date, such third
appraiser shall be appointed pursuant to the rules of the
American Arbitration Association. If either the St. Xxx
Partner or the JMB Partner fails to select and appoint an
appraiser within thirty (30) days after the Value Negotiation
Date (and they have not otherwise agreed on a single
appraiser) the appraiser selected and appointed by the party
that appointed an appraiser within such period shall be the
sole appraiser to determine the Fair Market Value hereunder.
The costs and expenses of each of the first two appraisers
shall be paid by the party appointing such appraiser, and the
costs and expenses of the third appraiser (or the single
appraiser, if applicable) shall be shared 50% by the St. Xxx
Partner and 50% by the JMB Partner. Each appraiser appointed
shall proceed to appraise the Fair Market Value of the
property and notify the parties of same by written notice
(which shall include a copy of such appraiser's appraisal
report) not later than thirty (30) days after such
appointment. If there is a single appraiser, such appraiser's
determination shall constitute the Fair Market Value of such
property. If there are three appraisers, the middle appraisal
in terms of value shall constitute the Fair Market Value of
such property. Such determination of Fair Market Value shall
be binding and conclusive on the St. Xxx Partner and the JMB
Partner.
B. Right of Partnership to Enter Into Future Management
Contracts. Unless otherwise agreed in writing by the Partners, the
Managing Partner and its Affiliates shall enter into Future Management
Contracts solely with the Partnership (or its wholly-owned
Subsidiaries) for all Future Developments, and shall refer all
opportunities for Future Management Contracts with unaffiliated third
parties for Future Developments to the Partnership, which shall include
all property purchase, pre-development, development, management,
residential property brokerage, advisory, construction, project
consulting and/or project supervisory services to be provided relative
to such Future Developments. The Managing Partner and its Affiliates
may not perform any of such services themselves, but shall act solely
through the Partnership and its Subsidiaries. The terms and provisions
of each such Future Management Contract respecting any Future
Development shall be market terms for such contracts available at the
time with unaffiliated third parties, provided, however, that the
Partnership shall, in addition to any other compensation to be received
pursuant to any such Future Management Contract, receive reimbursement
of or value for all out-of-pocket costs incurred by the Partnership and
its Affiliates (or their officers, directors, managers, members,
shareholders, partners, employees, contractors or agents) in connection
with the provision of services pursuant to any such Future Management
Contract.
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C. Advancement of Development Costs. The St. Xxx Partner
covenants and agrees that it will advance 75% of the costs and expenses
(the "Development Costs") associated with the evaluation of potential
Future Developments (the "St. Xxx Advances"). The St. Xxx Advances
shall be made to a Subsidiary of St. Xxx. The Partnership shall be
responsible for funding the remaining 25% of the Development Costs to
be borne by the Partners in their respective Percentage Interests at
the time of funding (i.e. 74% to be charged to the Capital Accounts of
the Managing Partner and St. Xxx Development (or 18.5% of the total
Development Costs) and 26% to be charged to the Capital Accounts of the
Non-Managing Partner and JMB LP (or 6.5% of the total Development
Costs), subject to adjustment as provided in Section 3.3). The St. Xxx
Advances shall bear interest at the rate of 2% plus the prime rate
announced from time to time by First Union National Bank of Florida and
shall accrue interest from the date the first advance is made. In the
event that either the St. Xxx Partner or the JMB Partner ultimately
decide to invest in a particular Future Development then the
Development Costs shall be repaid by the Future Development Entity
including repayment of any St. Xxx Advances together with accrued
interest. In the event that neither the St. Xxx Partner or the JMB
Partner invests in a particular Future Development, then only 25% of
the Development Costs shall be charged against the Capital Accounts of
each Partner pursuant to their respective Percentage Interests.
5.13 Certain Employment Matters. Pursuant to the Asset Contribution
Agreement, the Assumed Obligations include, among other things, employment
agreements with certain executives of Arvida Company. As of January 1, 1998, the
Partnership will become the employer of all the officers listed on Schedule 5.13
(the "Partnership Officers"). The Managing Partner agrees that it will give the
Non-Managing Partner 45 days prior written notice of termination of any
Partnership Officer; provided, however, that the Managing Partner shall not be
required to provide any prior notice of termination to the Non-Managing Partner
for the termination of any Partnership Officer if such termination is for Cause.
Notwithstanding the foregoing, if the Partnership Officer that the Managing
Partner intends to terminate is the Chief Executive Officer (the "CEO") of the
Partnership (who initially shall be Xxxxx X. Xxxxx), then the Managing Partner
shall provide the Non-Managing Partner 60 days prior written notice. In
addition, the decisions to terminate and replace the CEO of the Partnership
shall be made jointly by the Managing Partner and the Non-Managing Partner. The
rights of the Non-Managing Partner to prior notices regarding Partnership
Officers and decisions regarding the CEO shall terminate upon the earlier of (i)
the liquidation and termination of Arvida/JMB Partners, L.P. or (ii) December
31, 2002. The Managing Partner hereby acknowledges and agrees that there are
currently in effect for the benefit of certain employees of Arvida I and Arvida
Company: (i) the Long Term Income Award Program, and (ii) the Bonus Program
(collectively, the "Old Arvida Bonus Plans"). Arvida Company also has adopted
and maintains the Amended and Restated 1997 Supplemental Bonus Plan (the
"Supplemental Plan"). The Partnership has entered into that certain Paying
Agreement (the "Paying Agreement") with Arvida Company, dated as of the date
hereof, whereby the Partnership will act as the paying agent of Arvida Company,
which will otherwise continue to administer the Supplemental Plan. Subject to
the provisions of this
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Section 5.13, the Partnership will administer the Old Arvida Bonus Plans from
and after January 1, 1998. The Non-Managing Partner represents that any amounts
awarded and unpaid under the Old Arvida Bonus Plans on the date hereof are
subject to reimbursement by Arvida I. With respect to any amounts to be awarded
under the Old Arvida Bonus Plans from and after January 1, 1998 (or any other
plans adopted from and after such date) for which reimbursement will be sought
from Arvida I ("Arvida I Reimbursable Bonus Costs"), all actions of the
Partnership and decisions with respect thereto shall be determined by the
Non-Managing Partner, in its sole and absolute discretion. In addition, the
Partners acknowledge and agree that the Partnership will obtain the consent of
Arvida I prior to the determination of any Arvida I Reimbursable Bonus Costs.
The rights of the Non-Managing Partner hereunder shall (subject to the
Non-Managing Partner obtaining the approval of Arvida I and solely with respect
to Arvida I Reimbursable Bonus Costs) include, without limitation: (i) the
determination of the size of any bonus pools funded by Arvida I, (ii) the
formulae and parameters for determining whether bonuses will be awarded, (iii)
the range of bonus eligibility for each employee; (iv) the exercise of any
discretion with respect to the determination of the bonus payable to any
employee; (v) the timing of payment, (vi) the rules for participation, vesting
and forfeiture of employees; and, (vii) the modification or termination of the
Old Arvida Bonus Plans. The Managing Partner shall have no responsibility or
liability with respect to duties and obligations of the Non-Managing Partner
relative to the Arvida I Reimbursable Bonus Costs. The Managing Partner will
have the right to make decisions and take action with respect to any bonus
program of the Partnership that is in effect from or after January 1, 1998, to
the extent it is a Partnership obligation and not an Arvida I Reimbursable Bonus
Cost.
5.14 Business Plan. Prior to thirty (30) days before the beginning of
each calendar year the Managing Partner shall prepare (or cause the Partnership
to prepare) and submit to the Non-Managing Partner a business plan (the
"Business Plan") for such calendar year with respect to the operations of the
Partnership. Notwithstanding the foregoing, the Partners agree that the 1998
Business Plan shall not be submitted to the Non-Managing Partner until ninety
(90) days after the date of this Agreement. The Business Plan shall be presented
in sufficient detail that the recipient thereof shall have a comprehensive
report on the projected cash expenditures, capital expenditures, cash receipts,
reserves, material business developments and other significant matters expected
to be pursued or encountered by the Partnership during the calendar year in
question with respect to the portion of the operations of the Partnership
covered by such Business Plan. The Managing Partner and the Non-Managing
Partner, shall meet within fifteen (15) days following the submission of any
Business Plan in order that they may each discuss and provide comments thereon,
however, the Managing Partner shall have the sole and absolute authority to
adopt such Business Plan and cause the Partnership to implement same; provided
that the foregoing shall not modify any rights or obligations under a management
agreement or sub-management agreement by which the Partnership is bound. The
Business Plan may be amended at any time by the Managing Partner provided that
reasonable advance notice be given to the Non-Managing Partner, and a reasonable
opportunity for additional discussion and commentary has been provided. The
Managing Partner shall cause the Partnership to prepare and deliver a report to
the Partners within sixty (60) days after the end of each calendar quarter which
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compares the actual results of the Partnership both for the quarter, and on a
year to date basis, along with comparable historical information, if available
from the previous Fiscal Year, with the projected results set forth in the
Business Plan. Such report shall also contain an update of the development and
management activities of the Partnership at each of the communities where it is
performing services or conducting its activities. The Managing Partner will
respond to reasonable questions presented by any Partner respecting the Business
Plan, such reports and the operating results of the Partnership.
ARTICLE VI
ALLOCATIONS OF PROFITS AND LOSSES AND DISTRIBUTIONS
6.1 Sharing of Income, Gain, Loss, Deduction and Credit.
A. Profits and Losses. Except as otherwise expressly provided
in this Agreement, all Profits and Losses (including, without
limitation, all items of income, gain, loss, deduction and credit) and
all cash flow, proceeds and other cash available for distribution, and
any other economic item or attribute of the Partnership shall be shared
by the Partners in accordance with this Article VI.
B. Allocation. Subject to Sections 6.1C and D and Sections 6.5
and 6.6 for each Partnership taxable year (or portion thereof), all
Profits and Losses (including, without limitation, all items of income,
gain, loss, deduction and credit) shall be allocated among the Partners
in proportion to their respective Percentage Interests; provided,
however, that Losses shall not be allocated to a Partner to the extent
that they would create or increase an Adjusted Capital Account Deficit
for such Partner, and any such Losses that would, absent the
application of the preceding sentence, otherwise be allocated to such
Partner, shall be allocated to the other Partners; and provided
further, that any such reallocation shall be subject to the application
of this Section 6.1B to the other Partners.
C. Allocations in Accordance with Section 704(c) of Code. The
parties hereto intend that the allocations of Profits and Losses set
forth in this Section 6.1 be in compliance with Section 704(c) of the
Code, to the extent that such Section applies to Partnership property.
Accordingly, allocations shall be made so as to take account of the
variation between the respective basis of the Partnership properties
and their fair market values at the time of contribution, as determined
pursuant to Section 5.12, if applicable, and otherwise as determined by
all of the Partners. Subject to Section 5.4, the "traditional method"
under Regulation Section 1.704-3(b) shall be used.
D. Unrealized Receivables and Inventory Items. For purposes of
determining the character of any gain or profit (arising from the sale
or other disposition of property by the Partnership or a partnership or
limited liability company in which the Partnership is a partner, member
or economic interest owner) allocated to any Partner under this Section
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6.1, the portion of such gain or profit allocated under this Section
6.1 that represents ordinary income attributable to depreciation
recapture, to other Unrealized Receivables or to Inventory Items, shall
be allocated to the Partners who were allocated the depreciation
deductions or other tax benefits giving rise to or attributable to such
depreciation recapture, other Unrealized Receivables or Inventory
Items, but only to the extent of such gain or profit already allocated
to such Partners under this Section 6.1.
6.2 Allocations and Distributions Attributable to Transferred Interest.
Except with respect to the transfer described in Section 3.1 hereof, with
respect to any Transfer of an interest in the Partnership in accordance with
this Agreement during any period for which an allocation or distribution is
made, Profits, Losses and cash distributions resulting from the operations of
the Partnership, or a partnership or limited liability company in which the
Partnership is a partner or owns an economic interest, shall be allocated or
distributed based upon the number of days in such period which occurred before
and after such Transfer regardless of the time at which any item was actually
received, paid or incurred, and Profits, Losses and cash distributions resulting
from sales of properties outside the ordinary course of business by the
Partnership, or a partnership or limited liability company in which the
Partnership is a partner or owns an economic interest, shall be allocated or
distributed, as the case may be, to the Partners of the Partnership as of the
day on which such allocations or distributions were based even if they have
ceased to be Partners on any date on which such allocations or distributions are
made. The determination of allocations of Profits and Losses and distributions
with respect to the transfer of Units described in Section 3.1 hereof as between
the transferor and the transferee of such Units shall be based upon the closing
of the books of the Partnership, on an accrual basis, as of the date of
transfer.
6.3 Distributions. Subject to Section 6.2, each distribution to the
Partners of cash or other assets of the Partnership made prior to the
dissolution of the Partnership, including, but not limited to, each distribution
of Distributable Cash from the operations of the Partnership shall be made to
the Partners in accordance with their respective Percentage Interests, as of the
date of such distribution. Subject to Section 6.2, each distribution of cash or
other assets of the Partnership made after dissolution of the Partnership shall
be made in accordance with Article IX hereof. Distributions to the Partners will
be made in such amounts and at such times as shall be determined by the Managing
Partner, or in the event of the dissolution and liquidation of the Partnership,
by the Liquidators. Distributions of Distributable Cash shall be made no less
frequently than annually.
6.4 Tax Status and Reports. Any provisions hereof to the contrary
notwithstanding, solely for Federal income tax purposes, each of the Partners
hereby recognizes that the Partnership will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, that the
filing of partnership returns of income for such tax purposes shall not be
construed to extend the purposes of the Partnership.
6.5 Capital Accounts of the Partners.
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A. General. The Managing Partner shall establish and maintain
for each Partner a separate Capital Account in accordance with Section
704(b) of the Code and Regulation Section 1.704-1(b)(2)(iv). Unless
otherwise required by the immediately preceding sentence, such Capital
Account shall be increased by (a) the amount of all Capital
Contributions made by such Partner to the Partnership pursuant to this
Agreement and (b) all Profits or items of Partnership income and gain
(including income and gain exempt from tax) computed in accordance with
Section 6.5B. hereof and allocated to such Partner pursuant to Section
6.1 hereof, and decreased by (i) all distributions of cash or property
(determined based on the Fair Market Value thereof) made to such
Partner pursuant to this Agreement, (ii) all Losses or items of
Partnership loss or deduction computed in accordance with Section 6.5B.
hereof and allocated to such Partner pursuant to Section 6.1, and (iii)
any expenditures of the Partnership described, or treated under Section
704(b) of the Code as described in Section 705(a)(2)(B) of the Code.
The initial Capital Account balance of each Partner on the date hereof
is as set forth in Exhibit B.
B. Income, Gains, Deductions and Losses. For purposes of
computing the amount of any item of income, gain, loss or deduction to
be reflected in the Partners' Capital Accounts, unless otherwise
specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for Federal income tax purposes
determined in accordance with Section 703(a) of the Code (for this
purpose all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a)(1) of the Code shall be
separately included in taxable income or loss).
C. Distributions and Partnership Interest Transfers. The
Managing Partner shall make the adjustments to the Capital Accounts of
the Partners to the extent permitted by Regulation Section
1.704-1(b)(2)(iv)(f) & (g).
6.6 Minimum Gain Chargeback; Qualified Income Offset. Notwithstanding
anything to the contrary in this Agreement, Profits and Losses shall be
allocated as though this Agreement contained (and there is hereby incorporated
by reference) a minimum gain chargeback provision which complies with the
requirements of Section 1.704-2 of the Treasury Regulations and qualified income
offset provision which complies with the regulations of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
ARTICLE VII
TRANSFER AND ASSIGNMENT OF ECONOMIC INTERESTS
7.1 Transfer and Assignment of Interest. Any Partner (a "Transferor")
may transfer, assign, convey, sell, pledge, encumber, gift, bequeath (subject to
Section 7.4 hereof) or otherwise
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alienate (any such event being hereinafter referred to as a "Transfer") such
Partner's Partnership Interest hereunder only if such Transfer otherwise
complies with the provisions of this Agreement (including, without limitation,
Sections 7.2, 7.6 and 12.10 hereof). Subject to such requirements, such
Partnership Interest may be transferred in whole, but not in part, and any
attempt of a Partner to transfer only a portion of such Partner's Partnership
Interest shall be void, and without any force or effect; provided, however, that
a Partner may transfer a portion of such Partner's Partnership Interest to any
other Partner or to an Affiliate of the Transferor. In further limitation of the
foregoing, a Partner may not make any Transfer to a non-Affiliate, unless all
Affiliates of such Partner who also hold Partnership Interests, transfer such
Partnership Interests to such non-Affiliate (or an Affiliate thereof) on the
same terms and conditions as, and in conjunction with, such Transfer. In the
event of any Transfer to a Person who is not an Affiliate of such Partner, the
Partnership and the other Partners who are not Affiliates of the Transferor (the
"Non-Transferring Partners") shall have certain rights to purchase such
Partnership Interest or to sell such other Non-Transferring Partners'
Partnership Interests pursuant to Sections 7.6 and 7.7. Subject to Section 7.4,
in the event of a Transfer of an Partnership Interest hereunder which complies
with the provisions of this Agreement, the transferee of such Partnership
Interest (the "Transferee") shall be admitted as a substitute Partner of the
same category as the Transferor, entitled to all of the benefits, and
responsible for all of the obligations, in the Partnership represented by such
category of interest from and after the date of such admission as established in
Section 7.3. In addition to the other provisions in this Section 7.1, a Partner
may not Transfer or otherwise dispose of the economic interest represented by
its Partnership Interest, separately from such Partnership Interest, except as
expressly provided in this Article 7. In addition to the other restrictions
noted in this Agreement, each Partner agrees that it will not, directly or
indirectly, Transfer any interest, economic or otherwise, represented by its
Units except as permitted under the Securities Act of 1933 and other applicable
securities laws. A transfer or other disposition of all or a controlling
interest in the stock, partnership interests, membership interests or other
equity interests in a Partner, directly or indirectly, shall be deemed a
Transfer of such Partner's Partnership Interest for the purposes of this Article
VII.
7.2 Substitution of Partners. A Transfer shall not be effective, and
Transferee shall not become a substitute Partner, unless the Transferee executes
an instrument satisfactory to the Non-Transferring Partners (other than the
Limited Partners) accepting and adopting the terms and provisions of this
Agreement, and the Transferee pays any reasonable expenses in connection with
such Transferee's admission as a new Partner. The admission of a substitute
Partner shall not result in the release of the Transferor from any liability
that the Transferor may have to the Partnership or any other Partner as of the
date of the Transfer. A Transferor who is a Partner shall cease to be a Partner
upon the effective date of Transfer under Section 7.3.
7.3 Effective Date of Transfers and Admission to Partnership. Unless
otherwise agreed by the Partners in writing, any Transfer of a Partnership
Interest shall be effective as of the date following the later of (i) the date
upon which the Transferor provides the Non-Transferring Partners with written
notice of such Transfer (or, if the Transfer is proposed to be made to a Person
other than an Affiliate of such Transferor, the date of expiration of the
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Transfer Notice Period under Section 7.6), (ii) the date as of which such
Transfer and any other Transfers required under Section 7.7 are consummated
between the Transferor and those Partners exercising their piggy-back rights
under Section 7.7 and the Transferee, and (iii) the date upon which the
Transferee executes an instrument satisfactory to the Non-Transferring Partners
(other than the Limited Partners and those other Partners exercising their
piggy-back rights under Section 7.7) accepting and adopting the terms and
provisions of this Agreement. Any Transferee of a Partnership Interest shall
take subject to the restrictions on Transfer imposed by this Agreement.
7.4 Rights of Legal Representatives. Subject to Section 5.2, if a
Partner who is an individual dies or is adjudged by a court of competent
jurisdiction to be incompetent to manage the Partner's person or property, the
Partner's executor, administrator, guardian, conservator, or other legal
representative may exercise all of the Partner's rights for the purpose of
settling the Partner's estate or administering the Partner's property. Subject
to Section 5.2, if a Partner that is a corporation, trust or other entity is
dissolved or terminated, the Partner's rights may be exercised by such Partner's
legal representative or successor.
7.5 No Effect to Transfers in Violation of Agreement. No transfer of a
Partnership Interest not permitted under or made in compliance with this
Agreement shall be valid or effective for any purpose.
7.6 Right of Partnership and Remaining Partners to Purchase Partnership
Interest Prior to Transfer. If a Partner desires to make a Transfer pursuant to
Section 7.1, other than to an Affiliate of such Partner, the Partner shall first
deliver a notice (the "Transfer Notice") to the Partnership and the
Non-Transferring Partners notifying them thereof and all of the material terms
of such Transfer, including, without limitation, the identity of the proposed
Transferee (and any reasonable information with respect thereto requested by the
Non-Transferring Partner), the consideration for such Transfer and material
terms to be set forth in any agreement of transfer intended to be entered into
with respect to such Transfer. For a period of sixty (60) days after receipt of
such Transfer Notice (the "Transfer Notice Period") the Non-Transferring
Partners shall have a right of first refusal to purchase (or cause a designee
who is an Affiliate to purchase) the Partnership Interest which is the subject
of such proposed Transfer, upon the same terms and conditions as set forth in
the Transfer Notice. The Non-Transferring Partners may exercise their purchase
right hereunder by delivering a notice (the "Transfer Acceptance Notice") to the
Transferor prior to the end of the Transfer Notice Period. If any
Non-Transferring Partner delivers a timely Transfer Acceptance Notice exercising
its right to purchase the Transferor's Partnership Interest, the Transferor
shall transfer such Partnership Interest to the Non-Transferring Partner (or its
designee who is an Affiliate) on a date selected by the Non-Transferring Partner
on or before thirty (30) days after the end of the Transfer Notice Period. If
more than one Non-Transferring Partner exercises such rights, each such
Non-Transferring Partner shall purchase its pro rata share of such Partnership
Interest, based upon the relative Percentage Interests of such Non-Transferring
Partners. If the Non-Transferring Partners do not exercise either the right
granted hereunder, or the right granted under Section 7.7,
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the Transferor must consummate such proposed Transfer, on the terms set forth in
the Transfer Notice (including, without limitation, consummating such Transfer
to the Transferee proposed in the Transfer Notice, or an Affiliate thereof),
within sixty (60) days after the expiration of the Transfer Notice Period, or
the Transferor's right to Transfer shall again become subject to this Section
7.6 and Section 7.7 hereof, and a new Transfer Notice must be delivered. Any
such Transfer shall also be subject to all other provisions of this Agreement
respecting Transfers.
7.7 Piggy-Back Right. In the event that a Partner delivers a Transfer
Notice as described in Section 7.6, the Non-Transferring Partners and each other
Partner shall also have the right to elect, such right also to be exercised in
the Transfer Acceptance Notice described in Section 7.6, to sell its Partnership
Interest to the Transferee specified in the Transfer Notice, on the same terms
and conditions (adjusted on a pro-rata basis to take into account the relative
Percentage Interests of the Partners) as specified in the Transfer Notice. If
the Non-Transferring Partner or any such other Partner delivers a timely
Transfer Acceptance Notice exercising its right to sell its Partnership
Interest, the Transferor shall cause the Transfer of the Partnership Interests
of both the Transferor and Partners so electing, to the proposed Transferee, on
or before thirty (30) days after the end of the Transfer Notice Period. The
Transferor shall in such event have no right to modify any of the terms of the
proposed Transfer without the prior written consent of each of the
Non-Transferring Partners, which consent may be withheld or delayed in the sole
discretion of the Non-Transferring Partners. In the event such Transfers are not
consummated on or before the end of such thirty (30) day period, the
Transferor's right to Transfer shall again become subject to Section 7.6 and
this Section 7.7 hereof, and a new Transfer Notice must be delivered.
7.8 Right of Managing Partner to Call Partnership Interest of
Non-Managing Partner and JMB LP. The Managing Partner shall have the right,
which may be exercised at any time after the tenth anniversary of the date
hereof, upon one hundred twenty (120) days prior written notice (the "Call
Notice"), to purchase the entire aggregate Partnership Interests of the
Non-Managing Partner and JMB LP, and their respective successors and assigns, in
the Partnership (collectively, the "Called Interest"), upon the terms set forth
in this Section 7.8. The price to be paid by the Managing Partner (or an
Affiliate designated by the Managing Partner) for the Called Interest (the "Call
Price") shall be the amount obtained by multiplying the Fair Market Value of the
Partnership, determined on the date of delivery of the Call Notice, by the
aggregate Percentage Interests represented by the Called Interest. The Call
Notice shall include the Managing Partner's proposal for the Call Price (the
"Call Offer"), together with supporting information in sufficient detail so that
the Non-Managing Partner may assess the basis for and adequacy of the Call Price
so proposed, as well as the date for closing the purchase (the "Call Transfer
Date"), which shall be not more than one hundred fifty (150) days from the date
of the Call Notice. After receiving the Call Offer, the Non-Managing Partner
shall have ninety (90) days (the "Call Assessment Period") to perform such due
diligence on the Partnership, at the Non-Managing Partner's sole cost and
expense, as the Non-Managing Partner may reasonably deem necessary in order to
assess the appropriate Call Price, and the Managing Partner shall fully
cooperate with the Non-Managing Partner in facilitating such due diligence
review. Prior to the
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end of the Call Assessment Period, the Non-Managing Partner shall deliver a
notice to the Managing Partner (the "Call Response") which shall include the
Non-Managing Partner's proposal for the Call Price (the "Call Counteroffer"),
together with supporting information in sufficient detail so that the Managing
Partner may assess the basis for and adequacy of the Call Price so proposed. The
Call Response and Call Counteroffer shall be binding upon all Limited Partners.
For a period of thirty (30) days after the delivery of the Call Response (the
"Call Negotiation Period"), the Managing Partner and the Non-Managing Partner
shall negotiate in good faith to arrive at the Call Price to be paid hereunder.
In the event that the Managing Partner and the Non-Managing Partner are unable
to agree on the Call Price prior to the end of such thirty-day period, either
the Managing Partner or the Non-Managing Partner may request arbitration with
respect thereto by written notice to the other party. In such event, such
arbitration shall be conducted in accordance with Section 7.11. Once the
Arbitrators with respect to such arbitration determine the Call Price, the
Managing Partner shall promptly pay the Call Price to the Non-Managing Partner
and JMB LP, or their respective successors or assigns, (prorated based on their
respective Percentage Interests), together with interest thereon from the Call
Transfer Date to the date of such payment at the Applicable Rate, such payment
to be made in cash. The Partnership Interests of the Non-Managing Partner and
JMB LP, and their respective successors or assigns, shall be deemed transferred
hereunder as of the Call Transfer Date and the Non-Managing Partner and JMB LP
agree to deliver appropriate assignment documentation as determined by the
Managing Partner.
7.9 Restrictions on Transfer. Anything contained in the provisions of
this Article VII to the contrary notwithstanding, no Transfer of Partnership
Interests (or any interests therein) shall be effective if the Non-Transferring
Partners determine, based on the advice of counsel from a nationally-recognized
law firm, that such Transfer (i) would result in the Partnership being
classified as an association taxable as a corporation for Federal and/or state
income tax purposes (and any such Transfer shall be effected in such manner as
may be necessary to maintain the classification of the Partnership as a
partnership for Federal and/or state income tax purposes), (ii) would result in
a termination of the Partnership under Section 708(b)(1)(B) of the Code, unless
the Non-Transferring Partners approve such a Transfer, (iii) would create a
material risk of adverse tax consequences to any Partner (other than the
transferor and transferee), including without limitation any material risk that
the Partnership will be treated as a "publicly traded partnership" under Section
7704 of the Code, or (iv) would create a material risk that the Partnership will
fail to qualify for at least one available safe harbor under Section 7704 of the
Code and the Treasury Regulations, unless the Non-Transferring Partners approve
such Transfer.
7.10 Indemnity. To the fullest extent permitted under applicable law,
each Partner shall indemnify and hold harmless the Partnership and all other
Partners who were or are parties, or are threatened to be made parties, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of or arising from any
actual or alleged misrepresentation, misstatement of facts or omission to state
facts made (or omitted to be made), noncompliance with any agreement or failure
to perform any covenant by such Partner in connection with any Transfer of all
or any portion of its Units (or any economic
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interest therein), against losses, damages or expenses (including attorneys'
fees, judgments, fines and amounts paid in settlement) actually and reasonably
incurred by it or them in connection with such action, suit or proceeding and
for which it or they have not otherwise been reimbursed.
7.11 ARBITRATION OF CALL PRICE. IN THE EVENT THAT THE MANAGING PARTNER
AND THE NON-MANAGING PARTNER ARE UNABLE TO AGREE UPON THE CALL PRICE FOR THE
CALLED INTEREST AS PROVIDED UNDER SECTION 7.8, SUCH DISPUTE SHALL BE SETTLED BY
ARBITRATION IN WASHINGTON, D.C. IN ACCORDANCE WITH THE FOLLOWING.
A. AT ANY TIME AFTER THE CALL NEGOTIATION DATE, EITHER THE
MANAGING PARTNER OR THE NON-MANAGING PARTNER, MAY REQUEST ARBITRATION
BY WRITTEN NOTICE TO THE OTHER (THE "ARBITRATION NOTICE OF CALL
PRICE"), WHICH NOTICE SHALL ALSO DESIGNATE AN ARBITRATOR. THE OTHER
PARTY SHALL THEN, BY WRITTEN NOTICE TO THE FIRST PARTY, DESIGNATE A
SECOND ARBITRATOR WITHIN FIFTEEN DAYS AFTER RECEIPT OF THE ARBITRATION
NOTICE OF CALL PRICE, THE TWO ARBITRATORS SO SELECTED SHALL, WITHIN
THIRTY (30) DAYS AFTER THE DELIVERY OF THE ARBITRATION NOTICE, SELECT A
THIRD ARBITRATOR AND ALL THREE SHALL CONDUCT THE ARBITRATION. THE
ARBITRATORS SHALL BE PERSONS WITH EXPERIENCE IN MANAGING, DEVELOPING
AND MARKETING RESIDENTIAL REAL ESTATE PROJECTS OF THE KIND AND NATURE
THAT THE PARTNERSHIP AND ITS PARTNERS HAVE BEEN ASSOCIATED WITH.
B. EACH OF THE MANAGING PARTNER AND THE NON-MANAGING PARTNER
SHALL WITHIN TEN (10) DAYS AFTER THE DETERMINATION OF THE IDENTITY OF
THE THIRD ARBITRATOR, DELIVER THE CALL OFFER AND THE CALL COUNTEROFFER
TO EACH ARBITRATOR.
C. THE ARBITRATORS SHALL CONDUCT THE ARBITRATION IN ACCORDANCE
WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, WITH SUCH
MODIFICATIONS THEREOF AS THE ARBITRATORS MAY DEEM APPROPRIATE, AND THE
PARTIES SHALL DILIGENTLY ENDEAVOR TO CONCLUDE THEIR PRESENTATIONS FOR
SUCH ARBITRATION WITHIN SIXTY (60) DAYS WITH A DECISION NO LATER THAN
THIRTY (30) DAYS THEREAFTER.
D. THE ARBITRATORS MAY RETAIN COUNSEL (UNRELATED TO EITHER
PARTNER OR ITS RESPECTIVE AFFILIATES) TO ADVISE ALL OF THEM ON MATTERS
OF LEGAL INTERPRETATION, THE COST OF WHICH SHALL BE A COST OF THE
ARBITRATION. THE ARBITRATORS SHALL BE ENTITLED TO REASONABLE
COMPENSATION AND REIMBURSEMENT OF
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EXPENSES AS MUTUALLY AGREED BY THE PARTNERS, OR IF THEY ARE UNABLE TO
AGREE, THEN AS REASONABLY DETERMINED BY THE ARBITRATORS. SUCH
COMPENSATION AND OTHER EXPENSES SHALL BE BORNE SOLELY BY THE PARTY
WHOSE OFFER OR COUNTEROFFER IS NOT SELECTED BY THE ARBITRATORS.
E. THE ONLY ISSUE TO BE DETERMINED BY THE ARBITRATORS PURSUANT
TO THIS SECTION 7.11 SHALL BE WHETHER, BASED ON THE RELATIVE MERITS AND
THE EXPRESS PROVISIONS OF THIS AGREEMENT, THE OFFER OF THE MANAGING
PARTNER OR THE OFFER OF THE NON-MANAGING PARTNER SO SUBMITTED FOR
ARBITRATION IS TO BE SELECTED, AND THE ARBITRATORS SHALL CHOOSE BETWEEN
THE TWO OFFERS WITHOUT ALTERATION OR COMPROMISE OF THE CHOSEN OFFER.
THE AWARD AND ALL OTHER DECISIONS OF A MAJORITY OF THE ARBITRATORS
SHALL BE FINAL AND BINDING UPON THE PARTNERS, AND A JUDGMENT THEREON
MAY BE RENDERED IN ANY COURT OF RECORD, EXCEPT THAT THE ENTITY
RESPONSIBLE FOR THE PAYMENT OF THE COMPENSATION OF THE ARBITRATORS AND
THE EXPENSES OF ARBITRATION MAY CONTEST AND OBTAIN JUDICIAL REVIEW OF
THE REASONABLENESS OF THE DETERMINATION OF COMPENSATION UNDER
SUBSECTION D. ABOVE.
ARTICLE VIII
ACCOUNTING, RECORDS, REPORTING BY MANAGING PARTNER
8.1 Books and Records. The books and records of the Partnership shall
be kept, and the financial position and the results of its operations recorded,
in accordance with the accounting methods followed for federal income tax
purposes, or otherwise as determined by the Partnership Accountants in
accordance with generally accepted accounting practices. The books and records
of the Partnership shall reflect all the Partnership transactions and shall be
appropriate and adequate for the Partnership's business. The Partnership shall
maintain at its principal office, or at such other locations as determined by
the Managing Partner, all of the following:
A. A current list of the full name and last known business or
residence address of each Partner, together with the Capital
Contributions, Capital Account, Units and Percentage Interest of each
Partner;
B. A copy of the Certificate and any and all amendments
thereto together with executed copies of any powers of attorney
pursuant to which the Certificate or any amendments thereto have been
executed;
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C. A copy of this Agreement and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to
which this Agreement or any amendments thereto have been executed;
D. The Partnership's books and records of account as they
relate to the internal affairs of the Partnership for at least the
current and past five Fiscal Years.
8.2 Delivery to Partners and Inspection.
A. Upon the request of any Partner, the Managing Partner shall
promptly deliver to the requesting Partner, at the expense of the
Partnership, a copy of the information required to be maintained by
Section 8.1.
B. Each Partner has the right, upon reasonable request, to:
1. inspect during normal business hours any of the Partnership
records described in Section 8.1 and make copies or memoranda; and
2. obtain from the Managing Partner, promptly after their
becoming available, a copy of the Partnership's federal, state, and
local income tax or information returns for each Fiscal Year; and
3. visit and inspect the properties which are subject to a
management agreement or submanagement agreement with the Partnership or
Future Management Contracts, or are owned by the Partnership.
8.3 Financial Statements and Reports.
A. In addition to the Business Plan to be prepared and adopted
pursuant to Section 5.14, the Managing Partner shall provide to the
Partners monthly operating reports, quarterly and annual financial
statements, all prepared in accordance with GAAP. Annual financial
statements shall be audited by the Partnership Accountants and be
prepared and delivered to the Partners not later than sixty (60) days
after the close of each Fiscal Year. The Managing Partner shall also
cause an unaudited quarterly report to be prepared and delivered to the
Partners not later than twenty-five (25) days after the close of each
calendar quarter. Each such annual or quarterly report shall contain a
balance sheet as of the end of the Fiscal Year (or calendar quarter for
quarterly reports), an income statement for the Fiscal Year (or
calendar quarter for quarterly reports), and a statement of changes in
cash flow for the Fiscal Year (or calendar quarter for quarterly
reports). Each such report shall also contain comparable projected
information from the Business Plan for the comparable period, and, if
available, comparable historical information from the comparable
periods of the previous Fiscal Year. Copies of such reports shall be
available to any Partner upon written request. The unaudited accounting
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statements of the Partnership with respect to each month, which
accounting statements shall be prepared and presented in the manner
customary for purposes of dissemination for management of the
Partnership, shall be delivered to the Partners by the Partnership
within twenty (20) days following the end of the month. The unaudited
reports shall contain the certificate of the Managing Partner that the
financial statements were prepared without audit from the books and
records of the Partnership and that, to the best knowledge of the
Managing Partner, such statements fairly present the financial position
of the Partnership.
B. The Managing Partner shall cause to be prepared at least
annually, at Partnership expense, information necessary for the
preparation of the Partners' federal and state income tax returns. The
Managing Partner shall send or cause to be sent to each Partner within
seventy-five (75) days after the end of each taxable year such
information as is necessary for such Partner to complete federal and
state income tax or information returns respecting its investment in
the Partnership.
8.4 Filings. Subject to Section 5.4 the Managing Partner, at
Partnership expense, shall cause the income tax returns for the Partnership to
be prepared and timely filed with the appropriate authorities. The Managing
Partner, at Partnership expense, shall also cause to be prepared and timely
filed, with appropriate federal and state regulatory and administrative bodies,
amendments to, or restatements of, the Certificate and all reports required to
be filed by the Partnership with those entities under the Act or other then
current applicable laws, rules, and regulations.
8.5 Bank Accounts. The Managing Partner shall maintain the funds of the
Partnership in one or more separate bank accounts in the name of the
Partnership. The Managing Partner and the appropriate officers of the
Partnership shall have signing authority on such accounts as reasonably
necessary for them to perform their duties and obligations hereunder.
8.6 Accounting Decisions and Reliance on Others. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall be
made by the Managing Partner. The Managing Partner may rely upon the advice of
the Partnership Accountants and/or the Partnership's legal counsel as to whether
such decisions are in accordance with accounting methods followed for GAAP or
federal income tax purposes.
8.7 Tax Matters for the Partnership Handled by Managing Partner and Tax
Matters Partner. Subject to Section 5.4, the Tax Matters Partner (who shall have
the same duties and authority as a "Tax Matters Partner", as defined in Code
Section 6231, and the other duties and authority specified in this Agreement),
shall represent the Partnership (at the Partnership's expense) in connection
with all examinations of the Partnership's affairs by tax authorities, including
resulting judicial and administrative proceedings, and shall expend the
Partnership funds for professional services and costs associated therewith, and
the Tax Matters Partner shall oversee the Partnership's tax affairs in the
overall best interests of the Partnership.
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8.8 Section 754 Election. In connection with any transfer of or
distribution with respect to a Partnership Interest, the Managing Partner shall,
upon written request by any Partner, cause the Partnership to make an election
pursuant to Code Section 754 and Regulation Section 1.754-1(b) to adjust the
basis of Partnership property in the manner provided in Code Sections 734(b) and
743(b). Such Partner shall pay all costs incurred by the Partnership in
connection with such election.
ARTICLE IX
DISSOLUTION AND WINDING UP
9.1 Dissolution. The Partnership shall not be dissolved except as
provided in this Section 9.1. The Partnership shall be dissolved on the first to
occur of the following (each, a "Dissolution Event"):
A. The vote to dissolve by the Managing Partner and the
Non-Managing Partner; or,
B. The expiration of the Term.
9.2 Winding Up. Upon the occurrence of any event specified in Section
9.1, the Partnership shall continue solely for the purpose of winding up its
affairs in an orderly manner, liquidating its assets, and satisfying the claims
of its creditors. The Managing Partner shall be responsible for overseeing the
winding up and liquidation of Partnership, shall take full account of the
liabilities and assets of Partnership, shall either cause its assets to be sold
or distributed, and if sold as promptly as is consistent with obtaining the Fair
Market Value thereof, shall cause the proceeds therefrom, to the extent
sufficient therefor, to be applied and distributed as provided in Section 9.4.
The Persons winding up the affairs of the Partnership (herein called
"Liquidators") shall take such actions as may be required by law for the
liquidation and winding up of the affairs of the Partnership and otherwise
conduct such liquidation and winding up in the best interests of the
Partnership. The Liquidators shall be entitled to reasonable compensation for
such services.
9.3 Distributions in Kind. Any non-cash asset distributed to one or
more Partners shall first be valued at its Fair Market Value to determine the
Profit or Loss that would have resulted for federal income tax purposes if such
asset were sold for such value, such Profit or Loss shall then be allocated
pursuant to Article VI, and the Partners' Capital Accounts shall be adjusted to
reflect such allocations. The amount distributed and charged to the Capital
Account of each Partner receiving an interest in such distributed asset shall be
the Fair Market Value of such interest (net of any liability secured by such
asset that such Partner assumes or takes subject to). The Fair Market Value of
such asset shall be determined by the Liquidators or if any Partner
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objects, by an independent appraiser (any such appraiser must be recognized as
an expert in valuing the type of asset involved) selected by the Liquidators and
approved by all the Partners.
9.4 Liquidation Distributions. Upon liquidation of the Partnership,
distributions shall be made pursuant to Regulation Section
1.704-1(b)(2)(ii)(b)(2). Unless otherwise required by the immediately preceding
sentence, after determining that all the known debts and liabilities of the
Partnership, including, without limitation, debts and liabilities to Partners
who are creditors of the Partnership, have been paid or adequately provided for,
the remaining assets shall be distributed to the Partners in accordance with
Section 6.3.
9.5 No Deficit Restoration Requirements. If, upon liquidation, any
Partner has a deficit balance in its Capital Account, after taking into account
all permitted Capital Account adjustments for the Partnership's taxable year
during which liquidation occurs, such Partner shall have no obligation to
contribute capital to the Partnership on account thereof and such deficit
balance shall not be considered a debt owed by such Partner to the Partnership
or to any other Person for any purpose whatsoever.
9.6 Limitations on Payments Made in Dissolution. Except as otherwise
specifically provided in this Agreement, each Partner shall look solely to the
assets of the Partnership for any payment with respect to its Partnership
Interest and shall have no recourse for its Capital Contribution and/or share of
distributions against the other Partners.
9.7 Certificate of Cancellation. The Liquidators shall cause to be
filed in the office of, and on a form prescribed by, the Delaware Secretary of
State, a certificate of cancellation of the Partnership (or its equivalent) upon
the completion of the winding up of the affairs of the Partnership.
9.8 No Action for Dissolution. The Partners acknowledge that
irreparable damage would be done to the goodwill and reputation of the
Partnership if any Partner should bring an action in court to dissolve the
Partnership under circumstances where dissolution is not required by Section
9.1. This Agreement has been drawn carefully to provide fair treatment of all
parties and equitable payment in liquidation of the Partnership Interests.
Accordingly, except where the Managing Partner has failed to liquidate the
Partnership as required by this Article IX, each Partner hereby waives and
renounces his or her right to initiate legal action to seek the appointment of a
receiver or trustee to liquidate the Partnership or to seek a decree of judicial
dissolution of the Partnership on any ground including, but not limited to, that
(a) it is not reasonably practicable to carry on the business of the Partnership
in conformity with this Agreement, or (b) dissolution is reasonably necessary
for the protection of the rights or interests of the complaining Partner.
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ARTICLE X
INDEMNIFICATION
Indemnification of Agents. The Partnership shall and does hereby
indemnify any Person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he or she is or was a Partner, officer, employee or other agent of
the Partnership or that, being or having been such a Partner, officer, employee
or agent, he or she is or was serving at the request of the Partnership as a
manager, director, officer, employee or other agent of another limited liability
company, corporation, partnership, joint venture, trust or other enterprise (all
such persons being referred to hereinafter as an "agent"), to the fullest extent
permitted by applicable law in effect on the date hereof and to such greater
extent as applicable law may hereafter from time to time permit; provided,
however, that nothing herein shall protect any such Person from liability
arising from the fraud, gross negligence or willful or intentional misconduct by
such Person, or the activities of such Person taken outside the scope of such
Person's duties and authority as a director, officer, shareholder, member,
manager, partner, employee or agent of the Partnership or its Subsidiaries, as
applicable. The Managing Partner shall be authorized, on behalf of the
Partnership, to enter into indemnity agreements from time to time with any
Person entitled to be indemnified by the Partnership hereunder, upon such terms
and conditions as the Managing Partner deems appropriate in its business
judgment.
ARTICLE XI
ARBITRATION
11.1 Arbitration of Claims. Except for the matters included in Sections
5.12A.5, 7.8 and 7.11, any other controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules and judgment on the award rendered by a majority of
the arbitrators appointed pursuant to Section 11.2 of this Agreement may be
entered in any court having jurisdiction thereof. Any such arbitration
proceeding shall be held in Washington, D.C. Any arbitrator selected pursuant to
this Article 11 shall have experience in managing, developing and marketing
residential real estate projects of the kind and nature that the Partnership and
its Partners have been associated with.
11.2 Selection of Arbitrators. Either General Partner may demand
arbitration in writing within ten (10) days after a controversy arises, which
demand shall include the name of the arbitrator appointed by the party demanding
arbitration, together with a statement of the matter in controversy. Within ten
(10) days after such demand, the other General Partner shall name its
arbitrator, or in default of such naming, such second arbitrator shall be named
by the Arbitration Committee of the American Arbitration Association, and the
two arbitrators so selected shall name a third arbitrator within five (5) days
after the selection of the second arbitrator and the three arbitrators shall
conduct the arbitration, with the award being determined
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by the decision of a majority of the arbitrators. The General Partners agree to
diligently endeavor to bring such arbitration to conclusion within sixty (60)
days with the award of the arbitrators to be made no later than thirty (30) days
after the conclusion of presentations by the parties.
11.3 Arbitration Fees and Expenses. All fees and expenses of the
arbitration shall be borne by the parties equally. However, each party shall
bear the expense of its own counsel, experts, witnesses, and preparation and
presentation of proofs.
NOTICE: BY INITIALING THE SPACE BELOW, EACH OF THE MANAGING PARTNER, THE
NON-MANAGING PARTNER AND THE LIMITED PARTNERS ARE AGREEING TO THE MATTERS
INCLUDED IN THIS ARTICLE XI AND IN SECTIONS 5.12A.5, 7.8 AND 7.11, ARE GIVING
UP ANY RIGHTS IT MAY POSSESS TO HAVE THE DISPUTES DESCRIBED HEREIN LITIGATED IN
A COURT, WITH OR WITHOUT A JURY TRIAL, AND ARE GIVING UP ANY RIGHTS TO DISCOVERY
AND APPEAL. EACH OF THE MANAGING PARTNER, THE NON-MANAGING PARTNER AND THE
LIMITED PARTNERS HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT ALL
DISPUTES TO ARBITRATION AS PROVIDED HEREIN.
/s/ /s/
--------------------------- --------------------------------
MANAGING PARTNER SENIOR V.P. NON-MANAGING PARTNER V.P.
/s/ /s/
--------------------------- --------------------------------
ST. XXX DEVELOPMENT JMB LP
SENIOR V.P.
ARTICLE XII
MISCELLANEOUS
12.1 Complete Agreement. This Agreement and the Certificate constitute
the complete and exclusive statement of agreement among the Partners with
respect to the subject matter herein and therein and replace and supersede all
prior written and oral agreements or statements by and among the Partners or any
of them. No representation, statement, condition or warranty not contained in
this Agreement or the Certificate will be binding on the Partners or have any
force or effect whatsoever. Notwithstanding the foregoing, the Partners
acknowledge the existence of the Asset Contribution Agreement and the various
documents and instruments executed and delivered in connection therewith, and
they hereby agree that nothing in this Agreement shall render void or
ineffective any provision of same; provided, however, that to the extent any of
the express provisions of this Agreement shall be in conflict with any of the
express provisions of the Asset Contribution Agreement, or any such other
document and instrument unless expressly agreed to by the parties thereto, the
provisions of this Agreement shall be controlling.
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12.2 Binding Effect. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and inure to
the benefit of the Partners and their respective successors and assigns.
12.3 Parties in Interest. Except as expressly provided in this
Agreement, nothing in this Agreement shall confer any rights or remedies under
or by reason of this Agreement on any Persons other than the Partners and their
respective permitted successors and assigns, nor shall anything in this
Agreement relieve or discharge the obligation or liability of any third person
to any party to this Agreement, nor shall any provision give any third person
any right of subrogation or action over or against any party to this Agreement.
12.4 Pronouns; Statutory References. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the context in which they are used may require. Any reference to
the Code, the Regulations, the Act, or other statutes or laws will include all
amendments, modifications, or replacements of the specific sections and
provisions concerned.
12.5 Headings. All headings herein are inserted only for convenience
and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
12.6 Interpretation. This Agreement is the result of negotiations among
the parties. Therefore, in the event any claim is made by any Partner relating
to any conflict, omission or ambiguity in this Agreement, no rule of
construction, presumption or burden of proof or persuasion shall be implied by
virtue of the fact that this Agreement or any provision hereof was prepared by
or at the request of a particular Partner or its counsel.
12.7 References to this Agreement. Numbered or lettered articles,
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.
12.8 Exhibits and Schedules. All Exhibits and Schedules attached to
this Agreement, if any, are incorporated and shall be treated as if set forth
herein.
12.9 Severability. If any provision of this Agreement or the
application of such provision to any Person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision to
Persons or circumstances other than those to which it is held invalid shall not
be affected thereby.
12.10 Additional Documents and Acts. Each Partner agrees to execute and
deliver such additional documents and instruments and to perform such additional
acts as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions, and conditions of this Agreement and the transactions
contemplated hereby.
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50
12.11 Notices. Any notice or other communication required or permitted
to be made or given under this Agreement shall be in writing and shall be deemed
to have been received by the party to whom it is addressed: (i) on the date
indicated on the United States certified or registered mail return receipt; (ii)
on the date actually received if hand delivered or if transmitted by facsimile
(receipt of which is confirmed to sender); or (iii) on the Business Day after
such notice was delivered to an overnight delivery service, addressed, delivered
or transmitted in each case as follows:
To the Partnership:
St. Xxx/Arvida Company, L.P.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
JMB Southeast Development, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
JMB Southeast Development, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Managing Partner and St. Xxx Development:
c/o St. Xxx/Arvida Company, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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51
With a copy to:
St. Xxx Corporation
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Non-Managing Partner and JMB LP:
c/o JMB Southeast Development, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
JMB Southeast Development, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any Partner may, at any time by giving five (5) days' prior written notice to
the other Partner, designate any other address in substitution of the foregoing
address to which such notice will be given.
12.12 Amendments. This Agreement may not be amended in any way, except
by the unanimous vote or written consent of the Partners of the Partnership.
12.13 Reliance on Authority of Person Signing Agreement. If a Partner
is not a natural person, neither the Partnership, any Partner nor any third
party will (a) be required to determine the authority of the individual signing
this Agreement to make any commitment or undertaking on behalf of such entity or
to determine any fact or circumstance bearing upon the existence of the
authority of such individual or (b) be responsible for the application or
distribution of proceeds paid or credited to individuals signing this Agreement
on behalf of such entity.
12.14 No Interest in Partnership Property, Waiver of Action for
Partition. No Partner has any interest in specific property of the Partnership.
Without limiting the foregoing, each Partner irrevocably waives during the term
of the Partnership any right that it may have to maintain any action for
partition with respect to the property of the Partnership.
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52
12.15 Multiple Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
12.16 Time is of the Essence. All dates and times in this Agreement are
of the essence.
12.17 Remedies Cumulative. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any Person may be
lawfully entitled.
IN WITNESS WHEREOF, the Partners of St. Xxx/Arvida Company, L.P., a
Delaware limited partnership, have executed this Agreement, effective as of the
date written above.
MANAGING PARTNER:
ST. XXX/ARVIDA COMPANY, INC.,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Its: Senior Vice President
------------------------------------
NON-MANAGING PARTNER:
JMB SOUTHEAST DEVELOPMENT, LLC,
a Delaware limited liability company
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Its: XXXXXXX X. XXXXXXXXX
------------------------------------
Vice President
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LIMITED PARTNERS:
JMB SOUTHEAST DEVELOPMENT, L.P.,
a Delaware limited partnership
By: EDUCATION PARTNERS, L.P.,
a Delaware limited partnership,
General Partner
By: A/J ACQUISITIONS COMPANY,
a Delaware corporation,
General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Its: Vice President
-----------------------------
ST. XXX DEVELOPMENT, INC., a Florida
corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Its: Senior Vice President
-------------------------------------
Joinder for the purposes set forth in this Agreement:
ST. XXX CORPORATION,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Its: Senior Vice President
-------------------------------------
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EXHIBIT A
Initial Capital Contributions of the Partners
AGREED FAIR MARKET
CASH VALUE OF PROPERTY
------------- ------------------
St. Xxx/Arvida Company, Inc.
St. Xxx Development, Inc.
JMB Southeast Development, L.L.C.
JMB Southeast Development, L.P.
55
LIMITED PARTNERSHIP AGREEMENT
SCHEDULE 5.3A
ARVIDA ENTITIES
NAME STATE OF ORG. TYPE OF ENTITY
---- ------------- --------------
Arvida-BR Investors Illinois General Partnership
Arvida-BR Managers, Inc. Delaware Corporation (for profit)
Arvida-Bridle Ridge Managers, L.P. Delaware Limited Partnership
Arvida-Bridle Ridge Partners, L.P. Delaware Limited Partnership
Arvida-CCG, L.L.C. Delaware Limited Liability Company
Arvida-Hickory Springs Manager, Inc. Delaware Corporation (for profit)
Arvida-Hickory Springs Partners Limited Partnership Delaware Limited Partnership
Arvida-Hickory Springs Managers, Limited Partnership Delaware Limited Partnership
Arvida-Sawmill Lakes Managers, Limited Partnership Delaware Limited Partnership
Arvida-Sawmill Lakes Partners, Limited Partnership Delaware Limited Partnership
Arvida-TC Investors Illinois General Partnership
Arvida-TC Managers, L.P. Delaware Limited Partnership
Arvida-TC Sales, L.L.C. Texas Limited Liability Company
Arvida-Twin Creeks Partners L.P. Delaware Limited Partnership
Arvida Builders, Inc. Florida Corporation (for profit)
Arvida Commercial Realty, Inc. Florida Corporation (for profit)
Arvida Company Illinois Corporation (for profit)
Arvida Contractors-II, Inc. Delaware Corporation (for profit)
Arvida Contractors-II, L.P. Delaware Limited Partnership
Arvida Contractors Limited Partnership Delaware Limited Partnership
Arvida Contractors, Inc. Florida Corporation (for profit)
Arvida Corporate Park Associates Florida General Partnership
Arvida Grand Bay Limited Partnership-I Delaware Limited Partnership
Arvida Grand Bay Limited Partnership-II Delaware Limited Partnership
Arvida Grand Bay Limited Partnership-III Delaware Limited Partnership
Arvida Grand Bay Limited Partnership-IV Delaware Limited Partnership
Arvida Grand Bay Limited Partnership-V Delaware Limited Partnership
Arvida Grand Bay Limited Partnership-VI Delaware Limited Partnership
Arvida Grand Bay Managers, Inc. Delaware Corporate (for profit)
Arvida Grand Bay Properties, Inc. Delaware Corporate (for profit)
Arvida Home Builders, Inc. Delaware Corporate (for profit)
Arvida Management Co. of Georgia, Inc. Delaware Corporate (for profit)
Arvida Management Limited Partnership Delaware Limited Partnership
Arvida Managers, Inc. Florida Corporation (for profit)
Xxxxxx Xxxx XX, Ltd. Florida Limited Partnership
Arvida Pompano Associates Joint Venture Florida General Partnership
Arvida Realty Company Delaware Corporation (for profit)
Arvida Realty Contracting, L.L.C. Delaware Limited Liability Company
Arvida Realty Limited Partnership Delaware Limited Partnership
56
Residential - Continued
-----------------------
NAME STATE OF ORG. TYPE OF ENTITY
---- ------------- --------------
Arvida Realty At Boca West, Inc. Florida Corporation (for profit)
Arvida Realty Sales Limited Partnership Delaware Limited Partnership
Arvida Realty Sales of Georgia, Inc. Georgia Corporation (for profit)
Arvida Realty Sales, Inc. Florida Corporation (for profit)
Arvida/Heathrow Cable, Inc. Delaware Corporation (for profit)
Arvida/Heathrow Club, Inc. Delaware Corporation (for profit)
Arvida/Heathrow Developers Limited Partnership Delaware Limited Partnership
Arvida/Heathrow Realty Sales, Inc. Delaware Corporation (for profit)
Arvida/Jacksonville Contractors, Inc. Delaware Corporation (for profit)
Arvida/Jacksonville Contractors, L.P. Delaware Limited Partnership
Arvida/JMB Associates Illinois General Partnership
Arvida/JMB Associates Limited Partnership-II Illinois Limited Partnership
Arvida/JMB Limited Partnership Illinois Limited Partnership
Arvida/JMB Managers-II, Inc. Delaware Corporation (for profit)
Arvida/JMB Managers, Inc. Delaware Corporation (for profit)
Arvida/JMB Partners Florida General Partnership
Arvida/JMB Partners, L.P. Delaware Limited Partnership
Arvida/JMB Partners, L.P.-II Delaware Limited Partnership
Arvida/Lakes Managers, Inc. Delaware Corporation (for profit)
Arvida/Lakes Plaza, L.P. Delaware Limited Partnership
Arvida/River Hills Contractors, Inc. Delaware Corporation (for profit)
Arvida/River Hills Contractors, L.P. Delaware Limited Partnership
Arvida/Weston Contractors-III, L.P. Delaware Limited Partnership
Arvida/Weston Contractors-II, L.P. Delaware Limited Partnership
Arvida/Weston Contractors-I, L.P. Delaware Limited Partnership
Arvida/Weston Contractors, Inc. Delaware Corporation (for profit)
Arvida/Weston Realty Sales Limited Partnership Delaware Limited Partnership
Education Partners, L.P. d/b/a Arvida/JMB Delaware Limited Partnership
Acquisitions, Ltd.
Arvida Company of Illinois (d/b/a on file in Arizona)
PROPERTIES
Residential
Palm Beach County, Florida Jacksonville, Florida
Broken Sound Sawgrass Country Club
The Players Club
Weston, Florida Jacksonville Golf & Country Club
Weston Sawmill Lakes
2
57
Residential - Continued
Sarasota/Tampa, Florida Xxxx County, Georgia
River Hills Country Club Hickory Springs
Grand Bay
Gwinnett County, Georgia
Seminole County, Florida Country Club of Gwinnett
Heathrow
Xxxxxxxx County, Georgia
Cherokee County, Georgia Bridle Bridge
Eagle Watch
Dekalb County, Georgia
Water's Edge
North Carolina Dockside
Cullasaja
Commercial and Industrial
Arvida Parkway Center, Boca Raton
Arvida Executive Center, Boca Raton
Arvida Park Center, Sarasota
Arvida Pompano Park, Pompano Beach
Arvida Corporate Park, Tampa
Arvida Lakes Plaza, Weston
Metrodrama Joint Venture Property, Palm Beach County
HAE Joint Venture Property, Palm Beach County
3
58
LIMITED PARTNERSHIP AGREEMENT
SCHEDULE 5.4M
LICENSE AGREEMENTS
1. License Agreement by and between Arvida/JMB Partners, L.P., a Delaware
limited partnership ("Arvida-I") and Arvida Company, an Illinois
corporation ("Arvida"), set forth as Exhibit A to that certain
Management, Advisory and Supervisory Agreement, dated as of September
10, 1987, by and between Arvida-I and Arvida.
2. License Agreement by and between Arvida/JMB Partners, L.P.-II, a
Delaware limited partnership ("Arvida-II"), and Arvida, set forth as
Exhibit A to that certain Management Agreement, dated as of October 16,
1989, by and between Arvida-II and Arvida.
3. License Agreement by and between Arvida-Bridle Ridge Partners, L.P., a
Delaware limited partnership ("Arvida-Bridle"), and Arvida, set forth
as Exhibit A to that certain Management Agreement, dated as of June 1,
1994, by and among Arvida-Bridle, Arvida-Bridle Ridge Managers, L.P., a
Delaware limited partnership, and Arvida.
4. License Agreement by and between Arvida-Hickory Springs Partners
Limited Partnership, a Delaware limited partnership ("Arvida-Hickory"),
and Arvida, set forth as Exhibit A to that certain Management
Agreement, dated as of December 9, 1996, by and among Arvida-Hickory,
Arvida-Hickory Springs Managers, Limited Partnership, a Delaware
limited partnership, and Arvida.
5. License Agreement by and between Arvida-Sawmill Lakes Partners Limited
Partnership, a Delaware limited partnership ("Arvida-Sawmill"), and
Arvida, set forth as Exhibit A to that certain Management Agreement,
dated as of July 1, 1996, by and among Arvida-Sawmill, Arvida-Sawmill
Lakes Managers, Limited Partnership, a Delaware limited partnership,
and Arvida.
6. License Agreement by and between Heathrow Land Company Limited
Partnership, a Florida limited partnership ("Heathrow"), and Arvida,
set forth as Exhibit A to that certain Development Management
Agreement, dated as of June 14, 1996, by and between Heathrow and
Arvida.
7. License Agreement, dated as of December 30, 1996, by and between
Country Club of Gwinnett, L.L.C. and Arvida.
8. License Agreement, dated as of October 17, 1997, by and between
Stanford Lake Hotel, Inc. and Arvida.
9. License Agreement dated November 12, 1997, by and between the
Partnership and Arvida.
59
LIMITED PARTNERSHIP AGREEMENT
SCHEDULE 5.12A(1)
EXCLUDED PROJECTS
1. Arcadia Land Company projects
2. Seaside (500 Acres in Florida panhandle)
3. Boulevard Company (Infill residential properties)
60
LIMITED PARTNERSHIP AGREEMENT
SCHEDULE 5.13
PARTNERSHIP OFFICERS
NAME TITLE
---- -----
XXXXXX, XXXX VP & PROJECT MANAGER
XXXXX, XXXXXX PROJECT MANAGER
XXXXX, XXXX VP & GENERAL COUNSEL
GRAB, XXXX VP & PROJECT GENERAL MANAGER
HILL, MILES E. VP & PROJECT MANAGER
XXXXXXXX, XXXXXXXX PROJECT MANAGER
XXXXX, XXXXXX DIRECTOR, IS
XXXXXX, XXXXXXX VP SALES & MARKETING
XXXXXXX, XXXX VP & CORPORATE CONTROLLER
XXXXX, XXXXXX VP, DEVELOPMENT
XXXXX, XXXXX PRESIDENT & CEO
XXXXXX, XXX VP & PROJECT GENERAL MANAGER
XXXXXX, XXXXXX VP
