EXHIBIT 10.7
AGREEMENT OF LIMITED PARTNERSHIP
OF
BEHRINGER HARVARD NORTHPOINT I LP
This Agreement of Limited Partnership ("Agreement") is effective as of
______________, 2004 by and between Behringer Harvard Northpoint I GP, LLC, a
Texas limited liability company as the general partner (the "General Partner"),
and Behringer Harvard Mid-TermValue Enhancement Fund I LP, a Texas limited
partnership, as the limited partner (the "Limited Partner"), for the purpose of
forming a limited partnership (the "Partnership") in accordance with the
provisions of the Texas Revised Limited Partnership Act (the "Act").
1. FORMATION AND FILINGS
1.1 CERTIFICATE OF FORMATION. The parties hereto form a limited
partnership pursuant to the Act. The General Partner shall complete, execute and
file a Certificate of Formation pursuant to the Act.
1.2 OTHER FILINGS. The General Partner shall prepare, execute,
acknowledge, verify, file, record and publish all certificates, statements and
documents (and amendments thereto) required by applicable law or necessary to
protect the Partnership or to preserve the limited liability of the Limited
Partner.
2. NAME, OFFICE, AGENT FOR SERVICE OF PROCESS AND PURPOSE.
2.1 NAME OF THE PARTNERSHIP. The name of the Partnership shall be
"Behringer Harvard Northpoint I LP."
2.2 PRINCIPAL EXECUTIVE OFFICE. The street address of the
Partnership's principal executive office where the books and records are kept is
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2.3 AGENT FOR SERVICE OF PROCESS. The name and address for agent for
service of process on the Partnership is as set forth in the Certificate of
Formation.
2.4 PURPOSE. The purpose of the Partnership is to acquire, own and
hold that certain real property located in Dallas, Texas commonly known as the
Northpoint I Office Building (the "Project") and lease, operate, manage,
maintain, develop and improve the Project.
2.5 TERM. The Partnership shall commence on the effective date of
this Agreement and shall continue until December 31, 2090, unless earlier
terminated pursuant to the terms of this Agreement.
3. CAPITAL CONTRIBUTIONS AND FINANCING.
3.1 CONTRIBUTION BY THE GENERAL PARTNER. The General Partner shall
contribute to the capital of the Partnership cash in the amount of 0.1% of the
net purchase price (after closing
prorations and adjustments) plus closing and other costs associated with the
purchase of the Project by the Partnership.
3.2 CONTRIBUTION BY THE LIMITED PARTNER. The Limited Partner shall
contribute to the capital of the Partnership cash in the amount of 99.9% of the
net purchase price (after closing prorations and adjustments) plus closing and
other costs associated with the purchase of the Project by the Partnership.
3.3 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNER. The Partners
shall make additional contributions to the capital of the Partnership at such
times and in such amounts as agreed to by the Partners. Except as expressly set
forth herein, the Partners shall not be required to make any additional capital
contributions and no capital contribution of any Partner shall bear interest or
otherwise entitle the contributing Partner to a preferred return or compensation
for the use of the contributed capital.
4. MANAGEMENT.
4.1 AUTHORITY OF GENERAL PARTNER. The General Partner shall be the
manager of the activities of the Partnership and shall have all power and
authority as a general partner is able to have under the Act.
4.2 NO MANAGEMENT BY LIMITED PARTNER. The Limited Partner shall not
participate in the management or operations of, or have any control over, the
Partnership's business, nor shall the Limited Partner have the power to
represent, act for, sign for or bind the General Partner or the Partnership.
4.3 REIMBURSEMENT. The General Partner shall receive no compensation
for its service hereunder, but shall be reimbursed for any costs, expenses, fees
or other disbursements paid or incurred by it for or on behalf of the
Partnership.
5. DISTRIBUTIONS AND TAX ALLOCATIONS.
5.1 DISTRIBUTIONS. After all creditors have been paid in full, any
cash available for distribution to the Partners shall be distributed to the
Partners as follows:
5.1.1 Distributions of cash derived from the Partnership shall
be distributed ninety-nine and nine tenths percent (99.9%) to the Limited
Partner and one tenth of one percent (0.1%) to the General Partner.
5.2 TAX ALLOCATIONS. For each taxable year of the Partnership (and
for each portion of each taxable year treated separately under Internal Revenue
Code ss. 706):
5.2.1 Taxable income of and taxable loss of the Partnership
shall be allocated ninety-nine and nine tenths percent (99.9%) to the Limited
Partner and one tenth of one percent (0.1%) to the General Partner.
5.2.2 Before any allocation under Section 5.2.1 (i) items of
Partnership income and gain (including gross income), deduction, and loss shall
be allocated in compliance with the
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"minimum gain chargeback" and then the "qualified income offset" provisions of
the regulations under Internal Revenue Code 704(b), and (ii) subject to the
prior application of clause (i) for any taxable year or period, then to offset
as quickly as possible any allocation pursuant to clause (i).
5.2.3 "Taxable income" and "taxable loss" shall mean the
taxable income or taxable loss of the Partnership as determined for federal
income tax purposes under Internal Revenue Code ss. 702(a)(8), modified by (i)
including in the calculation thereof all items required to be separately stated
under Internal Revenue Code ss. 702(a)(1)-(7) or otherwise required to be
separately stated (including without limitation income exempt from tax and items
treated as nondeductible expenditures not properly chargeable to capital
account), and (ii) excluding, notwithstanding clause i) of this sentence, any
item of income, gain, deduction, loss or credit specially allocated under this
Agreement other than as part of a special allocation of taxable-income or
taxable loss generally. In the event that property of the Partnership properly
is reflected on its books in accordance with Treasury Regulations Section
1.704-1(b) at a value other than adjusted tax basis of such property for federal
income tax purposes, then (i) "book" income, gain, deduction and loss with
respect to such property, as determined in accordance with such Regulations,
shall be allocated in the manner taxable income and taxable loss are allocated
under this Agreement, and (ii) taxable income and taxable loss shall be
allocated in the manner required by Section 704(c) of the Internal Revenue Code
or the principles thereof as set forth in applicable Treasury Regulations.
6. STATUS OF LIMITED PARTNER.
6.1 NO PERSONAL LIABILITY. The Limited Partner shall not have any
personal liability whatever, whether to the Partnership, to any of the Partners
or to the creditors of the Partnership, for the debts of the Partnership or any
of its losses beyond the amount agreed to be contributed by it to the capital of
the Partnership as set forth in Section 3.2 except to the extent required by the
Act. The Limited Partner shall not be obligate to restore any deficit in its
capital account upon the liquidation of the Partnership or its Partnership
Interest.
6.2 BANKRUPTCY OR DEATH OF LIMITED PARTNER. The dissolution,
bankruptcy, mental incompetency or legal disability of the Limited Partner shall
not cause a dissolution of the Partnership, but the rights of the Limited
Partnership to share in the profits and losses of the Partnership, and to
receive distributions of Partnership funds shall, on the happening of such an
event, devolve upon the Limited Partner's legal representatives or successors in
interest, as the case may be, subject to the terms and conditions of this
Agreement and the Partnership shall continue as a limited partnership. The
Limited Partner's estate or other successor in interest shall be liable for all
the obligations of the Limited Partner.
7. INDEMNIFICATION. To the fullest extent permitted by law, the General
Partner, its Affiliates, their respective officers, managers, directors,
partners, employees, members and agents or any person performing a similar
function (individually, an "Indemnitee") shall be indemnified and held harmless
by the Partnership from and against any and all losses, claims, damages,
judgments, liabilities, obligations, penalties, settlements and reasonable
expenses (including legal fees) arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved, as a
party or otherwise, but reason of its status as (i) the General
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Partner or an Affiliate therefore, or (ii) an officer, manager, director,
employee, member or agent of the General Partner or an Affiliate thereof,
regardless of whether the Indemnitee continues to be the General Partner or an
Affiliate or an officer, manager, director, employee, member or agent of the
General Partner or an Affiliate thereof at the time any such liability or
expense is paid or incurred, unless the act or failure to act giving rise to
indemnity hereunder constituted fraud or willful misconduct.
8. BOOKS. RECORDS AND REPORTS.
8.1 IN GENERAL. The General Partner shall be responsible for
maintaining or causing to be maintained the books and records of the Partnership
and making reports to partners in accordance with generally accepted accounting
principles, prudent business practice and the Act.
8.2 TAX ACCOUNTING. Capital accounts shall be maintained for each
Partner in accordance with regulations under Section 704(b) of the Internal
Revenue Code, and taxable income and taxable loss shall be determined in
accordance with such regulations.
9. OUTSIDE INTERESTS. Any Partner, and any affiliate thereof, may engage or
possess an interest in any other business venture of any nature and description,
whether such ventures are competitive with the partnership or otherwise,
independently or with others, including, but not limited to, the acquisition,
ownership, syndication, financing, leasing, management, brokerage, operation,
maintenance, construction and development of properties similar to the Property
or Project, which may be located in the same market area or vicinity of the
Property or Project. No Partner shall have any interest in any other such
business by reason of an interest of the Partnership.
10. TRANSFER OF PARTNER'S INTEREST.
10.1 GENERAL PARTNER. The General Partner may not sell, exchange,
assign, convey, pledge, encumber, hypothecate or otherwise transfer all or any
portion of its interest in the Partnership without the consent of the Limited
Partner.
10.2 LIMITED PARTNER. The Limited Partner may not sell, exchange,
assign, convey, pledge, encumber, hypothecate or otherwise transfer all or any
portion of its interest in the Partnership except with the approval of the
General Partner and in accordance with any deed of trust encumbering the
Project.
10.3 WITHDRAWAL. Except as otherwise provided in this Agreement or as
agreed to by the General Partner, neither the General Partner nor the Limited
Partner may withdraw from the Partnership.
11. DISSOLUTION.
11.1 TERMINATION. The Partnership will dissolve upon the earliest to
occur of the following:
11.1.1 The expiration of the Partnership's term, unless the
Partners agree to extend the term of the Partnership past the date set forth in
Section 25;
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11.1.2 The sale of all of the Partnership's assets
11.1.3 The written consent of all of the Partners;
11.1.4 Subject to Section 11.2, the death, incompetency,
bankruptcy, insolvency, withdrawal or removal from the Partnership of the
General Partner; or
11.1.5 Entry of a decree of judicial dissolution.
11.2 CONTINUATION OF PARTNERSHIP. Upon the occurrence of any event
set forth in Section 11.1.4 with respect to the General Partner, the business of
the Partnership shall be continued pursuant to the provisions of this Agreement
if, within a period of ninety (90) days from the date of such occurrence, the
Limited Partner shall elect in writing that it be so continued and shall
designate one or more parties to be admitted to the Partnership as a General
Partner. Any such party shall, upon admission to the Partnership, succeed to all
of the rights and powers of a General Partner hereunder, provided, that the last
remaining General Partner shall retain and be entitled to its share of profits,
losses, distributions, and capital associated with the General Partner's
Partnership interest.
11.3 LIQUIDATION OF ASSETS. Upon a dissolution of the Partnership for
any reason and, if required and within the period prescribed after any
"liquidation" of the Partnership under regulations pursuant to Section 704(b) of
the Internal Revenue Code, the General Partner shall take full account of the
Partnership assets and liabilities, shall liquidate the assets as promptly as is
consistent with obtaining the fair market value thereof, and shall apply and
distribute the proceeds therefrom in the following order:
11.3.1 To the payment of creditors of the Partnership,
including Partners who are creditors to the extent permitted by law, but
excluding secured creditors whose obligations will be assumed or otherwise
transferred on the liquidation of Partnership assets; and
11.3.2 To the Partners in accordance with the positive balances
in their capital accounts, as determined after taking into account all
adjustments for the Partnership taxable year during which such liquidation
occurs.
11.4 LIQUIDATION. Notwithstanding the foregoing, in the case of a
"liquidation" of the Partnership arising solely by reason of the application of
Section 708(b)(1)(B) of the Internal Revenue Code upon the sale or exchange of
an interest in Partnership capital or profits, no actual distribution of
Property shall be required. However, capital accounts of the Partners shall be
adjusted and the provisions of this Agreement applied as though the Property of
the Partnership had been distributed in liquidation in accordance with this
Agreement and recontributed by the Partners; and the Partnership shall continue
thereafter for the remaining balance of the original term of the Partnership in
accordance with the provisions of this Agreement.
11.5 TERMINATION. Upon completion of the liquidation of the
Partnership and the distribution of all Partnership funds, the Partnership shall
terminate and the General Partner shall (and is hereby given the power and
authority to) execute, acknowledge, swear to and record all documents required
to effectuate the dissolution and termination of the Partnership.
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11.6 DEFICIT CAPITAL ACCOUNTS. No Partner shall be required to
restore any deficit in its Capital Account.
12. MISCELLANEOUS.
12.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and, to the extent provided in this Agreement, shall be for the benefit of the
successors and assigns of the respective Partners.
12.2 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the Partners with respect to the transactions contemplated herein and
supersedes all prior or contemporaneous written or oral agreements to the
contrary.
12.3 SEVERABILITY. In the event any provision of this Agreement is
declared by a court of competent jurisdiction to be void, voidable or
unenforceable, such provision shall be deemed severed from the remainder of this
Agreement and the balance of this Agreement shall remain in full force and
effect.
12.4 NOTICES. All notices under this Agreement shall be in writing
and shall be given to the Partner entitled thereto, by personal delivery or by
United States mail, posted to the address for such person specified in this
Agreement or at such other address as such person may specify by notice given in
accordance with this provision. Notice shall be effective upon receipt in the
case of personal delivery or upon deposit in any official United States mail
depository in the case of notice by mail properly given in accordance with this
provision.
12.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the local laws of the State of Texas.
12.6 CAPTIONS. Paragraph titles or captions contained in this
Agreement in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provisions hereof.
12.7 GENDER, NUMBER AND PERSON. Whenever required by the context
hereof, each gender and number shall include each other gender and number; and
the word "person" shall include an individual, trust, estate, corporation,
partnership, joint venture, firm or other form of entity, organization or
association.
12.8 CONSENTS AND WAIVERS. No consent or waiver, express or implied,
by any Partner required or permitted by this Agreement, or to or of any breach
or default by another Partner in the performance by such other Partner of its
obligations hereunder, shall be deemed or construed to be valid unless in
writing, or to be a consent or waiver to or of any other breach or default in
the performance of such other party of the same or any other obligations of such
Partner hereunder. Failure on the part of any Partner to complain of any act of
any of the other Partners or to declare any of the other Partners in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such Partner of its rights hereunder.
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12.9 ATTORNEYS' FEES. In the event of any litigation, arbitration, or
other action to enforce or interpret this Agreement, the prevailing party (as
determined by the tribunal) shall be entitled to recovery such party's
reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, the undersigned have executed this Agreement of
Limited Partnership effective as of the date first above written.
GENERAL PARTNER:
Behringer Harvard Northpoint I GP, LLC, a Texas
limited liability company
By: ____________________________________
Name:
Title:
Address of the General Partner:
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LIMITED PARTNER:
Behringer Harvard Mid-Term Value Enhancement
Fund I LP, a Texas limited partnership
By: ____________________________________
Name:
Title:
Address of Limited Partner:
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