VININGS COMMUNITIES, L.P.
LIMITED PARTNERSHIP AGREEMENT
This Agreement is made as of August 12, 1997 by and among Vinings
Investment Properties Trust, a Massachusetts business trust, as general partner
(the "General Partner") and Vinings Investment Properties, L.P., a Delaware
limited partnership, as limited partner (the "Limited Partner"). The General
Partner and the Limited Partner are hereinafter sometimes referred to
individually as a "Partner" and collectively as the "Partners."
WITNESSETH THAT:
WHEREAS, the Partners desire to form a partnership to conduct certain
business activities;
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the parties hereto agree and declare as
follows:
ARTICLE 1.
FORMATION OF PARTNERSHIP; GENERAL INFORMATION
---------------------------------------------
1.01. There is hereby created a limited partnership pursuant to the Revised
Uniform Limited Partnership Act of Delaware, as amended from time to time (the
"Partnership Act").
1.02. The partnership shall be conducted under the name of Vinings
Communities, L.P. (the "Partnership").
1.03. The purposes of the Partnership shall be (i) to hold interests in
real property and to engage in all activities reasonably related thereto; (ii)
to conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Delaware Revised Uniform Limited Partnership Act (the
"Act"); and (iii) in connection with or incidental to the accomplishment of said
purposes, to enter into, perform and carry out contracts and activities of every
nature and description.
1.04. The term of the Partnership shall commence on the date of this
Agreement, and the Partnership shall continue until terminated as hereinafter
provided.
1.05. The fiscal year of the Partnership shall be the calendar year, or
such other year as is required by the Internal Revenue Code of 1986, as amended
(the "Code"), and the Treasury Regulations promulgated thereunder.
ARTICLE 2.
PARTNERSHIP CAPITAL
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2.01. Each Partner shall be required to make an initial capital
contribution to the Partnership upon its formation in the following amount,
which amount shall constitute the initial capital account of such Partner:
(a) The General Partner shall contribute $1 in cash.
(b) The Limited Partner shall contribute $99 in cash.
2.02. A separate capital account shall be maintained for each Partner in
accordance with the requirements of Treasury Regulations section
1.704-1(b)(2)(iv).
ARTICLE 3.
ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION AND CREDIT;
NONLIQUIDATING DISTRIBUTIONS
----------------------------
3.01. For federal income tax purposes, all items of income, gain, loss,
deduction and credit of the Partnership shall be allocated in accordance with
the requirements of Code section 704(b) and the Treasury Regulations promulgated
thereunder. Except as otherwise required thereby, all items of income, gain,
loss, deduction and credit shall be allocated as follows: 1% to the General
Partner and 99% to the Limited Partner. Appropriate adjustments shall be made to
each Partner's capital account with respect to such items.
3.02. All nonliquidating distributions shall be made in accordance with the
following percentages: 1% to the General Partner and 99% to the Limited Partner.
ARTICLE 4.
RIGHTS AND POWERS OF GENERAL PARTNER
------------------------------------
4.01. The management and operation of the Partnership and its business and
affairs shall be, and hereby is, vested solely in the General Partner. Except as
otherwise expressly provided herein, the General Partner shall have the power
and authority, in the name and on behalf of the Partnership, to do all things
which, in its sole discretion, it deems necessary, advisable, or appropriate to
carry out and implement all the purposes and powers of the Partnership.
4.02. Notwithstanding any other provision of this Agreement, any contract,
instrument, or act of the General Partner on behalf of the Partnership shall be
conclusive evidence in favor of any third party dealing with the Partnership
that the General Partner has the authority, power and right to execute and
deliver such contract or instrument and to take such act on behalf of the
Partnership. This Section 4.02 shall not be deemed to limit the liabilities and
obligations of the General Partner as set forth in this Agreement.
4.03. Any Partner may engage in or possess any interest in other business
ventures of any kind, nature or description, independently or with others,
whether or not such ventures are competitive with the Partnership. Neither the
Partnership nor any Partners shall have any rights or obligations by virtue of
this Agreement or the partnership relationship created hereby in or to such
independent ventures or the income or profits or losses derived therefrom, and
the pursuit of such ventures, even if competitive with the business of the
Partnership, shall not be deemed wrongful or improper. None of the Partners or
their affiliates shall be obligated to present any particular investment
opportunity to the Partnership even if such opportunity is of a character which,
if presented to the Partnership, could be taken by the Partnership.
ARTICLE 5.
POWERS, DUTIES AND
LIABILITIES OF THE LIMITED PARTNER
----------------------------------
5.01. The Limited Partner shall not have any right to participate in the
management of the business or affairs of the Partnership nor shall the Limited
Partner have any power or authority to act for or bind the Partnership.
5.02. Notwithstanding anything to the contrary contained in this Agreement,
the liability of the Limited Partner for the losses, obligations or debts of the
Partnership shall in no event exceed the amount of its contribution to the
capital of the Partnership.
ARTICLE 6.
TRANSFER OF LIMITED PARTNERSHIP INTEREST;
ADMISSION OF SUBSTITUTED LIMITED PARTNERS
-----------------------------------------
6.01. Subject to the written consent of each of the Partners to the
assignment of the whole or any portion of the Limited Partner's interest in the
Partnership, the granting or denial of which consent shall be within the sole
and absolute discretion of each Partner, an assignee of such interest shall be
entitled to receive distributions of cash or other property from the Partnership
applicable to the interest acquired by reason of such assignment; provided,
however, that a duly executed and acknowledged written instrument of assignment
in a form satisfactory to the General Partner, the terms of which are not in
contravention of any of the provisions of this Agreement, is filed with the
Partnership.
6.02. No assignee of the whole or any portion of a Limited Partner's
interest in the Partnership shall have the right to become a substituted Limited
Partner in place of its assignor unless all of the following conditions are
satisfied:
(a) The duly executed and acknowledged written instrument of
assignment which has been filed with the Partnership sets forth the intention of
the assignor that the assignee become a substituted Limited Partner with respect
to the assigned interest;
(b) The assignor and assignee execute and acknowledge such other
instruments as the General Partner may deem necessary or desirable to effect
such admission, including the written acceptance and adoption by the assignee of
the provisions of this Agreement; and
(c) The written consent of each Partner to such substitution shall
be obtained, the granting or denial of which shall be within the sole and
absolute discretion of each Partner.
6.03. Nothing herein shall preclude the General Partner or the Limited
Partner from acquiring the interest of a transferring Limited Partner pursuant
to the provisions of Sections 6.01 and 6.02 hereof and, as to the acquired
interest, becoming a substituted Limited Partner.
ARTICLE 7.
TRANSFER OF GENERAL PARTNER INTEREST;
ADMISSION OF SUCCESSOR GENERAL PARTNER
--------------------------------------
7.01. The General Partner may not transfer any of its General
Partner's interest in the Partnership, unless (i) each Partner consents to such
transfer in writing, the granting or denial of which consent shall be within the
sole and absolute discretion of each Partner, or (ii) such transfer is to an
entity which is directly or indirectly controlled by the General Partner or any
of its subsidiaries. An assignee of the whole or any portion of the General
Partner's interest in the Partnership shall be entitled to receive distributions
of cash or other property from the Partnership applicable to the interest
acquired by reason of such assignment; provided, however, that a duly executed
and acknowledged written instrument of assignment, the terms of which are not in
contravention of any of the provisions of this Agreement, is filed with the
Partnership.
7.02. A successor to all of the General Partner's interest in the
Partnership pursuant to Section 7.01 hereof who is proposed to be admitted as a
successor General Partner shall be admitted to the Partnership as the General
Partner, effective upon such transfer. Any such transferee shall carry on the
business of the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required to effect
the admission.
ARTICLE 8.
ADMISSION OF ADDITIONAL LIMITED PARTNERS
----------------------------------------
Except as otherwise provided in Articles 6 and 7, additional Limited
Partners shall be admitted to the Partnership only with the consent of the
General Partner. Any such new Partners shall fulfill the conditions of Section
6.02(b) hereof and shall receive a capital account and a percentage of
partnership interest as shall be provided in an amendment to this Agreement.
ARTICLE 9.
WITHDRAWALS BY PARTNERS
-----------------------
9.01. No Partner shall have the right to withdraw assets from the
Partnership.
9.02. No Partner shall have the right to demand or receive property other
than cash in connection with a discretionary distribution or the dissolution of
the Partnership, and no Partner shall have priority over any other Partner,
except as its interest may appear in the capital accounts of the Partnership or
in the percentages of partnership interest.
ARTICLE 10.
TERMINATION AND DISSOLUTION
---------------------------
10.01. The Partnership shall terminate and dissolve upon the earlier of (i)
thirty (30) days after the written determination of the General Partner, or (ii)
thirty (30) days after the resignation and/or bankruptcy of the General Partner,
unless in either case within such 30 day period all Limited Partners shall have
agreed to the continuation of the Partnership and shall have appointed a new
General Partner. Notwithstanding anything to the contrary in this agreement, in
no event shall the Partnership be dissolved as long as the Partnership is
subject to a regulatory agreement with HUD relating to any project which the
Partnership may own. The General Partner shall cease to be a General Partner if
it shall be adjudicated as bankrupt. If the General Partner ceases to be a
General Partner for any reason, it shall thereafter be a Limited Partner of the
Partnership.
10.02. Upon the termination and dissolution of the Partnership, its assets
shall be liquidated over such reasonable period as shall be consistent with the
realization of the fair market value of the Partnership's assets and the
proceeds applied in the following order of priority:
(a) to the payment in full of all creditors of the Partnership in
the order of priority by law (exclusive of creditors who are also Partners) and
to the expense of dissolution and liquidation;
(b) to the funding of any reserves which the General Partner deems
necessary for any contingent liabilities of the Partnership;
(c) to the payment in full with interest of all debts owed to
any of the Partners; and
(d) 1% to the General Partner and 99% to the Limited Partner.
10.03. The liquidation and dissolution of the Partnership shall be
conducted by the General Partner, or if there be no General Partner, by such
person as shall be designated by those Limited Partners having a majority in
interest of the partnership interests of all Limited Partners.
10.04. If, at the termination and dissolution of the Partnership,
either the Limited Partner or the General Partner has a deficit in their
respective capital accounts, then such Partner shall be required to restore such
deficit to zero.
ARTICLE 11.
AMENDMENTS
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The terms and provisions of this Agreement may be modified or amended
at any time and from time to time by the General Partner, or if there be no
General Partner, by those Limited Partners having a majority in interest of the
partnership interests of all Limited Partners.
ARTICLE 12.
BOOKS AND RECORDS; INSPECTION; REPORTING
----------------------------------------
12.01. At all times during the existence of the Partnership the General
Partner shall keep or cause to be kept by an agent full and true books of
account, in which shall be entered fully and accurately each transaction of the
Partnership. Such books of account, together with a certified copy of the
Certificate of Limited Partnership and any amendments thereto, shall at all
times be maintained at the principal office of the Partnership and shall be open
to the reasonable inspection and examination of the Partners or their duly
authorized representatives. Any Partner shall have the right to inspect and copy
said books and records provided that it owns an interest in the Partnership at
the time of inspection.
12.02. The accountant selected by the General Partner shall make an
annual computation of the taxable income or loss of the Partnership for federal
and state income tax purposes and shall within sixty (60) days after the end of
each taxable year prepare and mail to each Partner a report setting forth in
sufficient detail the distributive share and other pertinent information with
respect to the business of the Partnership during such taxable year as shall
enable such Partner to prepare its federal and state income tax returns in
accordance with all applicable rules and regulations. The accountant shall also
furnish balance sheets, income statements and the capital account of each
Partner at such time.
ARTICLE 13.
MISCELLANEOUS
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13.01. This Agreement (a) shall be binding on the executors,
administrators, estates, heirs or legal successors of the Partners and (b) shall
be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to the conflicts of laws provisions thereof.
13.02. Any notices required to be given hereunder shall be effective if
mailed, postage prepaid, to the Partners at their last known address appearing
on the records of the Partnership.
13.03. With respect to the terms of this Agreement, the existence and
terms of any amendments hereto, and the identity, decisions and actions of the
Partners, all persons may rely conclusively on the facts stated in a certificate
signed by the General Partner.
13.04. The General Partner shall serve as the initial "Tax Matters
Partner" of the Partnership and shall perform such duties required by the Code
and Treasury Regulations.
13.05. Section headings in this Agreement are for the convenience of
the reader only and shall not be deemed to affect, in any manner, the
construction of the Agreement or to limit, alter or amend the terms or
provisions hereof.
ARTICLE 14.
HUD REQUIREMENTS
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14.01. So long as the Secretary (the "Secretary") of the Department of
Housing and Urban Development ("HUD") or the Secretary's successors or assigns
is the insurer or holder of any note made by the Partnership or secured by any
project owned by the Partnership, no amendment to this Agreement that results in
any of the following will have any force or effect without the prior written
consent of the Secretary:
(a) Any amendment that modifies the term of the Partnership;
(b) Any amendment that activates the requirement that a
HUD previous participation certification be obtained;
(c) Any amendment that in any way affects any note insured or held
by HUD, security deed or security agreement on any project, or any regulatory
agreement between HUD and the Partnership;
(d) Any amendment that would authorize any partner other that the
General Partner or successor General Partner to bind the Partnership for all
matters concerning any project which require HUD's consent or approval;
(e) A change in the General Partner or preapproved successor
General Partner;
(f) Any change in a guarantor of any obligation to the Secretary.
14.02. The Partnership is authorized to execute any notes, security
deeds, security agreements in order to secure loans insured by the Secretary,
regulatory agreements, documents for the assumption of any existing notes,
security agreements or regulatory agreements and any other documents required by
the Secretary in connection with any HUD-insured loan (collectively, "HUD Loan
Documents").
14.03. Any successor General Partner must, as a condition to being
admitted to the Partnership, agree to be bound by any HUD Loan Documents to the
extent and on the same terms as the previous General Partner.
14.04. Any successor Partner must, as a condition to being admitted to
the Partnership, agree to be bound by paragraph 20 of the regulatory agreement
to the extent and on the same terms as the previous Partner.
14.05. Notwithstanding any other provisions of this Agreement, upon any
dissolution, no title or right of possession and control of any project and no
right to collect any rents from any project securing any HUD-insured loan, shall
pass to any person who is not bound by the regulatory agreement in a manner
satisfactory to the Secretary.
14.06. Notwithstanding any other provisions of this Agreement, in the
event that any provision of this Agreement conflicts with any HUD Loan
Documents, the provision of the HUD Loan Documents shall control.
14.07. So long as the Secretary or the Secretary's successors or
assigns is the insurer or holder of any note on any project owned by the
Partnership, the Partnership may not voluntarily be dissolved without the prior
written approval of the Secretary.
14.08. Any Partner, and any assignee of any Partner, agree to be liable
in their individual capacities to HUD with respect to the following matters:
(a) For funds or property of any project securing a HUD-insured
loan coming into their hands, which by the provisions of the regulatory
agreement, they are not entitled to retain; and
(b) For their own acts and deeds, or acts and deeds of others
which they have authorized, in violation of the provisions of any regulatory
agreement.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals
as of the date first set forth above.
GENERAL PARTNER:
VININGS INVESTMENT PROPERTIES TRUST
By: /s/ Xxxxxxxxx X. Xxxx
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Vice President
LIMITED PARTNER:
VININGS INVESTMENT PROPERTIES, L.P.
By: Vinings Investment Properties Trust
General Partner
By: /s/ Xxxxxxxxx X. Xxxx
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Vice President
