THE LIMITED PARTNER INTERESTS EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS (a) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
OR (b) THE PARTNERSHIP HAS BEEN FURNISHED WITH AN OPINION
OF COUNSEL ACCEPTABLE TO THE PARTNERSHIP TO THE EFFECT THAT
NO REGISTRATION IS LEGALLY REQUIRED FOR SUCH TRANSFER
UCV, L.P.
a California limited partnership
(formerly UNIVERSITY CITY VILLAGE, a California joint
venture operating as a general partnership under the California
Uniform Partnership Act)
AGREEMENT
OF
LIMITED PARTNERSHIP
This Agreement of Limited Partnership (the "Partnership Agreement") is
executed to be effective as of the first day of JUNE 1, 1994 (the "Effective
Date") by and between:
(a) UCVGP, INC., a California corporation ("UCVGP"), as the initial
Managing General Partner;
(b) XXXXXX PROPERTIES, INC., a Missouri corporation ("BPI"), as a General
Partner;
(c) SPORTS ARENAS PROPERTIES, INC., a California corporation ("SAPI"), as
an original Limited Partner holding Units; and
(d) XXXXXXXX X. XXXXXXX, a married woman ("Xxxxxxx"), as an original
Limited Partner holding Units as her sole and separate property;
all of whom desire to form a limited partnership under the California Revised
Limited Partnership Act and the laws of the State of California on the following
terms and conditions.
RECITALS
A. UNIVERSITY CITY VILLAGE, a California joint venture ("UCV"), was formed
on or about March 1, 1968.
B. By this Agreement, the partners of UCV intend to admit UCVGP and BPI as
general partners and to convert UCV into a limited partnership to be governed
under the terms of the Revised Limited Partnership Act. The Partners also intend
to change the name of the Partnership from UNIVERSITY CITY VILLAGE to "UCV,
L.P., a California limited partnership."
1. Name and Place of Business
The name of the Partnership is UCV, L.P., a California limited
partnership, and its principal place of business is Sorrento Mesa Office Plaza,
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, or such other
place or places as the Managing General Partner may hereafter determine.
2. Definition and Glossary of Terms
Words and terms having their initial letter capitalized in this
Partnership Agreement shall (unless otherwise expressly provided herein or
unless the context otherwise requires) have the respective meanings set forth in
Exhibit A, attached hereto.
3. Business of the Partnership
The Partnership may engage in any business activity permitted under the
California Revised Limited Partnership Act.
4. Term
The Partnership shall be converted from a joint venture operated as
general partnership to a limited partnership on the date the Certificate in the
name of UCV, L.P., is filed in the Office of the Secretary of State of the State
of California, and shall continue until December 31, 2052, unless earlier
terminated in accordance with the provisions of this Partnership Agreement.
5. General Partners' Interests
5.01 Admission. Immediately prior to the conversion of UCV from a general
partnership into a limited partnership, UCVGP and BPI shall each be admitted as
general partners of UCV entitled to a one percent (1%) interest in the capital,
profits and losses of UCV and contribute capital equal to 1/98th of the then Net
Fair Market Value of UCV's assets (other than the Koplar Note). The admissions
of UCVGP and BPI as general partners of UCV shall not dissolve UCV. As part of
the conversion of UCV into the Partnership: (a) UCVGP's and BPI's respective
general partner interests in UCV shall be converted into a Partnership Interest
in this Partnership; (b) UCVGP shall become the initial Managing General Partner
of this Partnership; (c) BPI shall become a General Partner of the Partnership:
and (d) UCVGP and BPI shall each retain a one percent (1%) interest in
Partnership Allocations and Distributions.
5.02 Additional Capital Contributions. If after the conversion of UCV into
this Partnership the Partnership receives additional capital contributions from
Limited Partners, each General Partner shall make an additional contribution to
the Partnership's capital equal to the Net Fair Market Value of any additional
capital contribution made by a Limited Partner multiplied by a number equal to
one (1) divided by the sum of 100 minus the number of percentage interests held
by all General Partners in their capacities as General Partners. For example, if
their are two General Partners, each of which own a one percent (1%) interest in
the Partnership, each General Partner will make an additional capital
contribution equal to the Net Fair Market Value of any additional capital
contribution made by a Limited Partner multiplied by 1/98. Such contribution
shall be made within 10 days after such additional contribution by the Limited
Partner. Notwithstanding the foregoing, this provision shall not apply to any
contributions made by a Limited Partner pursuant to a Limited Deficit Make-Up
Obligation.
5.03 Right to Make Contributions in Cash or by Promissory Note. The
General Partners shall make any contribution to the capital of the Partnership
required under this Agreement either in cash or by executing and delivering to
the Partnership a promissory note, which note shall be: (a) in the amount of the
required capital contribution; (b) payable to the Partnership or order; (c)
non-interest bearing; and (d) due and payable by the end of the taxable year in
which the General Partner's interest is liquidated or, if later, within 90 days
after the date of such Liquidation.
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6. Original and Additional Limited Partners
6.01 SAPI. As part of UCV's conversion into this Partnership, the
Partnership shall issue 49 Units to SAPI and admit SAPI as an original Limited
Partner. As of the date of conversion, SAPI's Capital Account Balance shall be
deemed to be its Capital Account Balance as shown on the Partnership's 0000
Xxxxxx Xxxxxx Income Tax Return, Form 1065, as adjusted through the date of
conversion.
6.02 Xxxxxxx. As part of UCV's conversion into this Partnership, the
Partnership shall issue 49 Units to Xxxxxxx and admit Xxxxxxx as an original
Limited Partner. As of the date of conversion, Xxxxxxx'x Capital Account Balance
shall be deemed to be its Capital Account Balance (including the Capital Account
Balance of M. Xxxxxx Xxxxxxx whose Partnership Interest was acquired by Xxxxxxx
in 1993) as shown on the Partnership's 0000 Xxxxxx Xxxxxx Income Tax Return,
Form 1065, as adjusted through the date of conversion.
6.03 Additional Limited Partners, Units & Capital Contributions. Except as
otherwise approved by each General Partner, the Partnership shall neither admit
additional Limited Partners, issue additional Units or interests in the
Partnership, accept any offer to contribute property or services in exchange for
additional Units or interests in the Partnership nor permit additional
contributions to the capital of the Partnership by any Limited Partner.
6.04 Additional Limited Partners. If all General Partners have approved
the admission of additional Limited Partners and the consideration to be
received in exchange for the Partnership's issuance of Units, the Partnership
may accept offers to acquire Units. Each person whose offer to acquire Units is
accepted by the Partnership shall become an additional Limited Partner as of the
date designated by the Managing General Partner in its sole and absolute
discretion providing such person has: (a) contributed to the capital of the
Partnership the amount required under this Agreement for each additional Unit
acquired; (b) executed and filed with the Partnership a written instrument which
sets forth an intention to become an additional Limited Partner holding Units
and requests admission to the Partnership in that capacity; (c) accepted in
writing the provisions of this Partnership Agreement; (d) executed, acknowledged
and delivered to the Managing General Partner a special power of attorney, the
form, style and content of which are more fully described in Paragraph 20 of
this Agreement; and (e) executed and delivered to the Managing General Partner
such other instruments as the Managing General Partner may deem necessary or
desirable to effect such admission.
6.05 Amendment of Agreement. The Managing General Partner shall amend this
Partnership Agreement to reflect the admission of additional Limited Partners
not later than 30 days after each Admission Date when additional Limited
Partners are admitted to the Partnership.
6.06 Amendment of Certificate. The General Partners shall amend the
Certificate and cause such amended Certificate to be filed with the California
Secretary of State within 30 days of the happening of an event resulting in a
change of the information contained in the then current Certificate.
7. Status of Limited Partners
7.01 Limitation on Liability. Except as otherwise set forth herein,
Limited Partners shall not be bound by, or be personally liable for, the
expenses, liabilities or obligations of the Partnership.
7.02 Adjusted Capital Account Balance and Limitations on Loss Allocations.
The Partners intend each Limited Partner shall bear the ultimate risk of
economic loss of the sum of: (a) its Capital Account Balance, plus (b) the
amount, if any, of the Limited Deficit Make-Up Obligation (in the form attached
hereto as Exhibit D) executed and delivered to the Partnership by such Limited
Partner.
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7.02.1 By executing a Limited Deficit Make-Up Obligation, each
Partner grants the Partnership the right to enforce payment of any deficit in
such Partner's Capital Account Balance which is created by virtue of the Limited
Deficit Make-Up Obligation. For example, if the Partnership has borrowed
$100,000 on a recourse basis and a Limited Partner has executed a Limited
Deficit Make-Up Obligation in the amount of $10,000, the Partnership may
allocate recourse deductions to such Limited Partner until such Limited
Partner's Capital Account Balance (plus such Partner's share of Minimum Gain)
equals a negative $10,000. Under the provisions of this Agreement, the Limited
Partner shall restore such deficit in such Partner's Capital Account Balance
pursuant to Paragraph 11.02. The deficit Capital Account Balance of any such
Partner represents a personal liability of such Partner, for which the Partner
waives any rights of contribution, indemnity or subrogation.
7.02.2 A Partner who executes a Limited Deficit Make-Up Obligation
intends its share of the liability be allocated to it under Internal Revenue
Code Section 752, and the Regulations thereunder, for purposes of determining
such Partner's basis in its Partnership Interest.
8. Status of Units
Except as otherwise provided in this Agreement, each Unit, when issued,
shall be fully paid and nonassessable.
9. Compensation to the General Partners and Affiliates
9.01 Compensation in General. In addition to compensation payable for
services under Paragraph 9 of this Agreement, the Managing General Partner may
cause the Partnership to purchase goods or services from any Partner or its
Affiliates, or from unaffiliated persons, and pay such consideration or
compensation therefor as the Managing General Partner shall determine in its
sole and absolute discretion, except that the amount of consideration or
compensation payable hereunder shall be reasonable and not exceed the
consideration or compensation which would otherwise be payable to unaffiliated
persons for similar goods or services in the same geographic locale.
9.02 Compensation to SAPI. The Partnership shall pay to SAPI (or any
Affiliate thereof as designated by SAPI) a Management Fee in accordance with the
terms of the written Management Agreement in existence as of the conversion of
UCV into a Limited Partnership. SAPI or such Affiliate shall have the authority
to assign such Management Agreement to SAPI or any of SAPI's Affiliates without
the consent of the Partnership.
10. Partnership Expenses
10.01 General Partners' Expenses. Each General Partner or any Affiliate
thereof at its own expense and at no expense to the Partnership shall pay all
overhead expenses of such General Partner or Affiliate not related to the
operation of the Partnership business.
10.02 Partnership Expenses. The Partnership shall pay or reimburse each
General Partner or its Affiliates for all expenses which are appropriate to the
formation, operation, dissolution or winding up of the Partnership. In addition,
the Partnership shall pay the costs and expenses of organizing and forming the
Partnership and issuing of Units.
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11. Partnership Allocations and Distributions
11.01 Distributions. Except as otherwise provided in this Paragraph 11,
the Managing General Partner shall cause the Partnership to make Distributions
of Cash Available for Distribution as follows: one percent (1%) to each General
Partner and the balance to the Holders of Units, as a group, to be further
distributed as more specifically described in Exhibit B, hereto. The Managing
General Partner shall cause the Partnership to make Distributions of such
amounts of Cash Available for Distribution as may be determined by the Managing
General Partner in its sole and absolute discretion.
11.02 Deficit Restoration. Notwithstanding any other provision of this
Agreement, if a General Partner or any Holder has a deficit balance in its
Capital Account upon Liquidation of its Partnership Interest (after taking into
account all Capital Account adjustments incidental to such Liquidation), such
Partner or Holder shall have an obligation to contribute to the Partnership by
the end of the taxable year or, if later, within 90 days after the date of such
Liquidation, cash in an amount equal to such Partner's or Holder's negative
Capital Account Balance determined as of the date of Liquidation.
11.03 Distributions on Liquidation. After taking into account any
restorations required under Paragraph 11.02, the Partnership shall make
Distributions to a Partner or Holder upon Liquidation of the Partnership or of a
Partner's or Holder's Partnership Interest: (a) in proportion to and in
accordance with the positive Capital Account Balances of the Partners and
Holders after taking into account any adjustments that would be made to the
Capital Account Balance on a deemed sale of all the Partnership assets
immediately prior to the Liquidation; and (b) by the end of the taxable year in
which the Liquidation occurred or, if later, within 90 days of such Liquidation.
Notwithstanding the foregoing, the Managing General Partner in its sole and
absolute discretion may cause the Partnership to retain (on a proportional
basis) from the liquidating Distributions owed to the Partners or Holders
reasonable amounts for reserves or for contingent liabilities, provided the
Partnership distributes such amounts immediately after final and full
satisfaction of all outstanding Partnership obligations.
11.04 Partnership Allocations. The timing and method of allocations of Net
Income, Net Loss and other Partnership Allocations, including Definitions
relating to such allocations, are set forth in Exhibit B, attached hereto, and
by this reference such exhibit is incorporated herein as if fully set forth at
this point.
12. Assignment of Limited Partnership Interests
12.01 Right of Assignment. Subject to the terms and conditions of this
Agreement, a Limited Partner (but not an Assignee or Assignee of Record) shall
have the right to assign its Partnership Interest by a written instrument of
assignment duly executed by the assignor, the terms of which are not in
contravention of any of the provisions of this Partnership Agreement. No
assignment shall be effective unless: (a) at least 10 days prior to the
effective date of the assignment, the Limited Partner proposing to assign its
Partnership Interest delivers to the Managing General Partner notice of such
Partner's intent to assign, a true copy of the proposed written instrument of
assignment and a non-refundable assignment fee determined in the and absolute
discretion of the Managing General Partner to reimburse the Partnership for
estimated administrative costs in evaluating the proposed assignment; and (b)
prior to the effective date of such assignment, either the proposed assignor or
Assignee reimburses the Partnership for all costs, including without limitation
attorneys and accounting fees, incurred in evaluating the proposed assignment
which exceeds the assignment fee.
12.01.1 The Partnership and each General Partner shall be entitled
to treat the assigning Limited Partner of any Partnership Interest as the
absolute owner thereof in all respects and shall incur no liability for
allocations affecting the Capital Account Balance attributable to such
Partnership Interest or for the transmittal of reports or accountings which are
made in good faith to such assignor until such time as the written instrument of
assignment has been received by the Partnership and recorded on its books and
the effective date of the assignment has passed.
12.01.2 The effective date of an assignment (on which date the
Assignee shall be deemed to be an Assignee of Record) shall be the first day of
the month following the date on which the Partnership receives actual notice of
the assignment of a Partnership Interest.
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12.02 Rights of Assignee of Record. An Assignee of Record shall be
entitled to receive Partnership reports and accountings and Partnership
Allocations and Distributions attributable to such person's assigned Partnership
Interest from and after the effective date of the assignment. Unless and until a
person is admitted to the Partnership as a substituted Limited Partner, an
Assignee or Assignee of Record shall have no right to: (a) inspect the
Partnership books or records; (b) vote on Partnership matters; (c) reassign the
Partnership Interest; or (c) exercise any other right or privilege as a Limited
Partner. A Limited Partner assigning his or her Partnership Interest shall not
agree as a condition of such assignment to act on behalf of or under the
direction of an Assignee or Assignee of Record with regard to the exercise of
any right or privilege which a Limited Partner would have with respect to such
Partnership Interest. Any attempt to act in such capacity shall be void and of
no effect and shall not be recognized by the Partnership.
12.03 General Partner Consent. Except as otherwise provided, no assignment
of a Partnership Interest shall be permitted without the prior consent of each
General Partner. Such consent may be unreasonably withheld if the proposed
Assignee is a person other than a Permitted Assignee. If the proposed Assignee
is a Permitted Assignee, a General Partner may neither unreasonably withhold nor
delay its consent. If a General Partner withholds its consent to a proposed
assignment of a Partnership Interest to a Permitted Assignee, such General
Partner shall notify the other General Partners and the proposed assignor of the
grounds upon which such General Partner based its withholding of consent. Among
other grounds, it shall be conclusively deemed reasonable for a General Partner
to withhold its consent to a proposed assignment to a Permitted Assignee if such
assignment would more likely than not cause (as substantiated by an opinion of
independent counsel): (a) a reassessment of the Partnership's Property for
California ad valorem or real property tax purposes; or (b) the deemed
termination of this Partnership under the Code.
12.04 Right of First Refusal Affecting Units. Limited Partners holding
Units may assign any number of whole Units if and only if such assignment
complies with all provisions of this Partnership Agreement governing the
assignment of Partnership Interests. In addition, if the proposed Assignee is
other than a Permitted Assignee, such assigning Limited Partner shall afford
each Optionee Class the option to purchase the Units as set forth in this
paragraph.
12.04.1 Any Limited Partner holding Units desiring to assign any of
such Units shall first give notice thereof to the Partnership, each General
Partner and each of the other Limited Partners. Such notice shall contain a true
copy of the offer to purchase from the proposed Assignee, if any, and a
statement of the number of the Units proposed to be assigned, the price per
Unit, payment terms offered by the proposed Assignee for such Units and the
identity of the proposed Assignee.
12.04.2 Each Optionee Class, in the order of priority set forth
below, shall have the option to purchase the Units proposed for assignment for
the same price per Unit specified in the notice of the proposed assignment: (a)
the General Partners; (b) the Partnership; and (c) the Limited Partners.
12.04.3 The option to purchase Units proposed for assignment shall:
(a) except as otherwise provided, be exercisable as to all or any lesser number
of Units or remaining Units proposed for assignment; (b) remain in effect during
the applicable Option Exercise Period; and (c) be exercised by notice from the
acquiring Optionee to the General Partner and the proposed assignor during the
applicable Option Exercise Period.
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12.04.4 The Option Exercise Period for each Optionee Class shall be
as follows:
OPTIONEE CLASS NUMBER OF DAYS FROM
NOTICE OF PROPOSED ASSIGNMENT
General Partners 0 to 7
The Partnership 8 to 14
Limited Partners 15 to 28
12.04.5 If Optionees in any Optionee Class as a group have exercised
options to purchase more Units than the total number of remaining Units proposed
for assignment, each such Optionee's option to purchase Units shall be reduced
to the number of Units that equals: (a) the ratio of the number of Units each
such Optionee has opted to purchase bears to the total number of Units that all
Optionees in the Optionee Class as a group have opted to purchase; multiplied by
(b) the total number of remaining Units proposed for assignment.
12.04.6 If the Optionees have exercised their options such that all
of the Units proposed for assignment will be purchased, such purchases shall be
consummated on or before the 60th day following the notice of proposed
assignment. Each such purchasing Optionee shall elect to pay the price per Unit
pursuant to the terms set forth in the notice of proposed assignment. If no
notice of proposed assignment has been given, such purchase price shall be
payable by an unsecured promissory note which shall:
(a) bear an adjustable interest rate equal to the lesser of the
prime interest rate published from time to time by the WALL STREET JOURNAL or
the maximum rate permitted to be charged by a person under law; or
(b) be payable in quarterly principal installments each of which
shall be equal to one-twentieth (1/20th) of the purchase price, plus accrued but
unpaid interest thereon.
12.04.7 If the Optionees fail to opt to purchase all of the Units
proposed for assignment, none of the options so exercised shall be effective.
Thereafter, the Holder proposing to assign Units: (a) shall not be obligated to
sell and the Optionees exercising options shall not be obligated to purchase the
Units proposed for assignment; and (b) may assign such Units at any time between
the 29th day and the 60th day after the notice of proposed assignment, but only
to the proposed Assignee and only for the price and terms stated in the notice
of proposed assignment.
12.04.8 For purposes of this paragraph, any of the following changes
in the beneficial ownership of a Limited Partner holding Units shall be deemed a
proposed assignment of such Limited Partner's Units:
(a) if the Limited Partner is a corporation, a transfer of 25
percent or more of the voting control of such corporation to any person other
than a Permitted Assignee; or
(b) if the Limited Partner is a partnership, a transfer of more than
a 25 percent interest in the net loss, net income or distributions from such
partnership to any person other than a Permitted Assignee, the dissolution of
the partnership or the transfer, death or voluntary or involuntary withdrawal of
any general partner of such partnership.
7
In the event of such a change in the beneficial ownership of a Limited
Partner holding Units, the Units deemed proposed for assignment shall be
considered to have been proposed for assignment at a price equal to the fair
market value of such Units, which value shall be determined by appraisal.
12.05 Appraisal Rights. If the fair market value of any Units is required
to be determined by Appraisal, each General Partner and the Holder of such Units
within 14 days after notice from the Managing General Partner shall commence
good faith negotiations to determine by agreement the value per Unit and the
allocation of such value as hereinafter required. If within 21 days after the
Managing General Partner's notice, the Holder and each General Partner agree on
a value per Unit and the allocation of such value, such determination shall be
final and binding.
12.05.1 If no agreement can be reached within 21 days after the
Managing General Partner's notice: (a) the Holder shall choose one Appraiser and
the Partnership shall choose one Appraiser and the two Appraisers so chosen
shall choose a third Appraiser; (b) if either the Holder or the Partnership
fails to choose an Appraiser within seven days, the Appraiser selected by the
other party shall serve as the sole Appraiser; (c) the decision of a majority of
the Appraisers (or the sole Appraiser) as to the fair market value of the
Holder's Units shall be final and binding and may be enforced by legal
proceedings; and (d) the Holder and the Partnership shall each compensate the
Appraiser appointed by it and the compensation of the third or sole Appraiser
shall be borne equally by the Partnership and the Holder.
12.05.2 The purchase price for the Units determined by agreement or
as established by Appraisers shall specify what portion of the value per Unit
(including the relief of liability accruing to the benefit of the Holder) is
allocable to the Holder's interest in the underlying assets of the Partnership.
The remaining portion of the value per Unit shall be treated as a guaranteed
payment.
12.07 Effect of Prohibited Assignment. Any assignment, sale, exchange or
other transfer in contravention of the provisions of this Agreement governing
such transfer shall be void and shall not bind or be recognized by the
Partnership.
13. Substituted Limited Partners
13.01 Conditions Precedent. No Assignee or Assignee of Record shall have
the right to become a substituted Limited Partner unless approved for admission
by each General Partner, which approval may be unreasonably withheld, and such
Assignee or Assignee of Record:
(a) has filed with the Partnership a duly executed and acknowledged
written instrument of assignment, which instrument shall specify the number of
Units being assigned and set forth the intention of the assignor that the
Assignee or Assignee of Record succeed the assignor's interest as a substituted
Limited Partner in the assignor's place;
(b) has executed and acknowledged such other instruments as the
Managing General Partner may deem necessary or desirable to effect such
substitution, including the written acceptance and adoption by such person of
the provisions of this Partnership Agreement and the Assignee's execution,
acknowledgment and delivery to the Managing General Partner of a special power
of attorney, the form and content of which are more fully described herein; and
(c) delivered to the Managing General Partner a non-refundable
substitution fee in an amount determined in the sole and absolute discretion of
the Managing General Partner to reimburse the Partnership or the Managing
General Partner for estimated or actual administrative costs in evaluating the
proposed substitution.
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13.02 No Consent of Other Limited Partners. By executing or adopting this
Partnership Agreement, each Limited Partner consents to the admission of any
such Assignee as an additional or substituted Limited Partner if approved by
each General Partner.
13.03 Amendment of Books and Records. The General Partner shall cause the
Partnership Agreement and the books and records of the Partnership to be amended
to reflect the substitution of Limited Partners not less frequently than once in
each calendar quarter in which any such substitution occurs.
14. Books, Records, Accountings and Reports
14.01 Maintenance & Inspection. The Partnership's books and records, the
Agreement and all amendments thereto, and any separate certificates of limited
partnership shall be maintained at the principal office of the Partnership or
such other place as the Managing General Partner may determine and, pursuant to
California Corporations Code ss.15634(b), shall be open to the inspection,
examination or copying by Limited Partners or their duly authorized
representatives within a reasonable time after written request therefor. Upon
written request, the Managing General Partner shall provide to any Limited
Partner or such Limited Partner's duly authorized representative copies of: (a)
the most recent listing of Partners' names, addresses, capital contributions and
share of profits and losses; (b) the Certificate; and (c) the Partnership
Agreement.
14.02 Annual Financial Statements. At least once each year, the Managing
General Partner shall cause the preparation of financial statements at
Partnership expense.
14.03 Tax Returns. The Managing General Partner shall cause income tax
returns for the Partnership to be prepared and timely filed with the appropriate
authorities at Partnership expense. Within 90 days after the end of each taxable
year, the General Partner shall furnish to the Limited Partners such information
as is necessary to complete federal or state income tax or information returns.
15. Rights, Authority, Powers, Responsibilities and Duties of a General Partner
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15.01 Managing General Partner. The Partnership shall have one Managing
General Partner. The initial Managing General Partner shall be UCVGP. A Managing
General Partner shall serve until the earlier to occur of the date: (a) such
Managing General Partner is no longer a Controlled Affiliate of Elkan or
Xxxxxxx; (b) of the election and installation of a replacement Managing General
Partner; or (c) such Managing General Partner suffer a Disqualification Event.
15.02 Replacement Managing General Partners. By a Majority Vote of the
Limited Partners holding Units, the Limited Partners at any time with or without
cause may elect an existing General Partner to replace a serving or disqualified
Managing General Partner. If the replaced Managing General Partner has not
suffered a Disqualification Event, it shall continue as a General Partner of the
Partnership.
15.03 Powers of a General Partner. Except as otherwise provided in this
Agreement, each General Partner shall have the broadest authorities, rights and
powers as are permitted by law, possessed by a partner in a partnership without
limited partners and required by or appropriate to the management of the
Partnership business, including without limitation the right to require in any
Partnership contract that the General Partners will not be personally liable
thereon and that the remedy for a breach of such contract shall be satisfied
solely from the assets of the Partnership. Each General Partner shall have a
fiduciary responsibility to the Partnership and the Partners and the duty and
responsibility for providing continuing administrative and executive support,
advice, consultation, analysis and supervision with respect to the Partnership
business and Property.
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15.04 Powers of a Managing General Partner. Notwithstanding the foregoing,
the Managing General Partner may unilaterally exercise the rights, authorities
and powers to the extent expressly authorized under this Agreement. Otherwise,
the General Partners shall govern, manage and control this Partnership and
exercise the rights, powers and authority of the General Partner under this
Agreement as shall be determined by a majority of such General Partners, subject
to the limitations on such rights, powers and authority of a General Partner
under this Agreement.
15.04.1 If the Partnership has an even number of General Partners
who are evenly divided and cannot agree as to the management of the
Partnership's business affairs so that the Partnership's business can no longer
be conducted to advantage or so that there is danger that the Partnership's
Property or business will be impaired or lost, the General Partners shall submit
the matters related thereto to arbitration.
15.04.2 If a matter is submitted to arbitration, each General
Partner shall: (a) choose one arbitrator by notice to the other General Partners
within 14 days after the matter is submitted and the arbitrators so chosen shall
choose another arbitrator; (b) if a General Partner fails to choose an
arbitrator within such period, the arbitrators selected by the other General
Partners shall serve as the sole arbitrator; (c) the decision of a majority of
the arbitrator (or the sole arbitrator) as to the matter shall be final and
binding and may be enforced by legal proceedings; and (d) the Partnership shall
compensate the arbitrators. Except as otherwise provided in this subsection, the
arbitration proceedings shall be conducted in accordance with and governed by
Title 9 of the California Code of Civil Procedure (Section 1280 et seq.). As
permitted by California Code of Civil Procedure section 1283.1, each party to
the arbitration proceedings may take depositions and obtain discovery to the
fullest extent permitted by California Code of Civil Procedure section 1283.05,
which section is hereby incorporated by reference.
15.05 Prohibited Acts. Neither any General Partner nor any of its
Affiliates shall have the authority to:
(a) continue the Partnership business or enter into contracts which
would bind the Partnership after a sole remaining General Partner suffers
a Disqualification Event, except as provided in California Corporations
Code ss.15685;
(b) knowingly use or permit any other person to use Partnership
funds or assets in any manner except for the exclusive benefit of the
Partnership;
(c) do any act in contravention of this Partnership Agreement or
which would make it impossible to carry on the ordinary business of the
Partnership;
(d) confess a judgment against the Partnership in connection with
any threatened or pending legal action;
(e) sell, assign, pledge or otherwise transfer its Partnership
Interest (or any interest therein); or
(f) do any act or fail to take any action for which a vote of the
Limited Partners is required under this Partnership Agreement.
15.06 Tax Matters Partner. The Managing General Partner shall act as the
"tax matters partner" as defined in Code Section 6231(a)(7).
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16. Rights, Powers and Voting Rights of the Limited Partners
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16.01 No Control. Neither any Limited Partner, Assignee or Assignee of
Record shall take part in or interfere in any manner with the control, conduct
or operation of the Partnership, nor shall any of them have any right or
authority to act for or bind the Partnership.
16.02 Voting Rights. In addition to matters requiring the approval of the
Limited Partners either set forth elsewhere in this Agreement or under
applicable law, all Limited Partners holding Units, but not the Assignees or
Assignees of Record of Limited Partners, shall have the right to vote only upon:
(a) the admission of a General Partner or an election to continue
the business of the Partnership after a General Partner ceases to be a General
Partner other than by removal where there is no remaining or surviving General
Partner; or
(b) the admission of a General Partner or an election to continue
the business of the Partnership after the removal of a General Partner when
there is no remaining or surviving General Partner.
16.03 Vote Required to Approve. Except as otherwise provided in this
Agreement, matters upon which the Limited Partners may vote shall require the
Majority Vote of the Limited Partners entitled to vote to pass and become
effective.
16.04 Meetings & Votes Without A Meeting. Meetings and votes of the
Partners shall be governed by the provisions of California Corporations
Codess.15637 as from time to time amended.
16.05 Voting. Except as otherwise provided in this Agreement, a Limited
Partner holding Units of any class shall be entitled to cast one vote for each
Unit owned. Neither Assignees nor Assignees of Record shall be entitled to vote
on Partnership matters.
16.06 Limited Partner Prohibited Acts. No Limited Partner or Holder shall
have the right or power to: (a) withdraw from the Partnership or reduce his or
her contribution to the capital of the Partnership except as a result of the
dissolution of the Partnership or as otherwise specified in this Agreement; (b)
bring an action for partition against the Partnership; (c) cause the dissolution
and winding up of the Partnership by court decree or otherwise, except as set
forth in this Partnership Agreement; or (d) demand or receive property other
than cash in return for such Partner's contribution to the capital of the
Partnership.
16.07 Court Directed Winding Up. Upon a petition executed by Limited
Partners holding five percent (5%) or more of the issued and outstanding Units,
a court of competent jurisdiction may enter a decree ordering the winding up of
the Partnership if: (a) it is not reasonably practicable to carry on the
business in conformity with the Agreement; (b) a General Partner has been guilty
or has knowingly countenanced persistent and pervasive fraud or abuse of
authority or persistent unfairness toward any Partner or the Partnership
Property is being misapplied or wasted by a General Partner; or (c) dissolution
is reasonably necessary for the protection of the rights or interests of any
Partners who petition under this paragraph. Any decree entered pursuant to this
paragraph shall designate the Partners who are to wind up the affairs of the
Partnership. Except as otherwise provided, Limited Partners designated to wind
up the affairs of the Partnership shall be entitled to reasonable compensation.
Notwithstanding the foregoing, no compensation or expenses shall be allowed to
the Limited Partners designated to wind up the affairs of the Partnership if the
petition is brought solely under subpart (c) of this paragraph.
16.08 Return of Capital Contributions. Except as provided in this
Partnership Agreement, no Limited Partner or Holder shall have priority over any
other Limited Partner or Holder either as to the return of contributions of
capital or as to Partnership Allocations. Other than upon the dissolution and
winding up of the Partnership as provided by this Partnership Agreement, there
11
has been no time agreed upon when the contribution of each Limited Partner or
Holder to the capital of the Partnership is to be returned. Notwithstanding any
provision of this Agreement to the contrary, a Limited Partner shall return any
Distribution made to such Limited Partner to the extent that immediately after
the Distribution: (a) all Partnership liabilities, other than liabilities to
Partners on account of their Partnership Interests and liabilities to which the
recourse of creditors is limited to specific items of Partnership Property;
exceed (b) the fair salable value of the Partnership Property, provided the fair
salable value of any Property which is subject to a liability as to which
recourse of creditors is so limited shall be included in the Partnership
Property only to the extent that the fair value of the Property exceeds such
liability.
17. Disqualification of a General Partner
17.01 Expulsion. If and to the extent a General Partner who has suffered a
Disqualification Event is not removed as a general partner by operation of law,
the Limited Partners by a Majority Vote may remove such General Partner.
17.02 Rights After Disqualification. Upon the sufferance of a
Disqualification Event by a General Partner, the disqualified General Partner
shall have the Partnership Interest, rights (including voting rights) and
liabilities set forth under subdivision (b) of California Corporations Code
ss.15662. Solely for purposes of voting, the disqualified General Partner shall
be deemed to hold one Unit as a Limited Partner.
17.03 Relinquishment of Rights. Upon sufferance of a Disqualification
Event by a General Partner, the disqualified General Partner, or any successor
in interest thereto, including but not limited to any trustee in bankruptcy or
debtor-in-possession, shall relinquish any and all rights it may have under
federal bankruptcy law or similar state insolvency laws to continue to act as a
General Partner of this Partnership.
17.04 Financial Statements After Removal. Within 90 days after the Limited
Partners have voted to remove a General Partner, the Managing General Partner
shall cause the preparation of financial statements at Partnership expense,
which shall be distributed to each Limited Partner and Assignee of Record as
soon as possible after receipt thereof.
18. Certain Transactions
Except as otherwise provided in this Agreement, a General Partner, any
Limited Partner, Holder, Assignee of Record or any Affiliates thereof, or any
shareholder, officer, director, employee or any person owning a legal or
beneficial interest therein, may engage in or possess an interest in any other
business or venture of every nature and description, independently or with
others, and no Partner, Holder or such other person shall have any interest
therein by reason of such person's interest in the Partnership.
19. Termination and Dissolution of the Partnership
19.01 Events Causing Dissolution. The Partnership shall be wound up and
dissolved, except as set forth below, upon the earlier to occur of: (a) the
sufferance of a Disqualification Event by a General Partner unless within 120
days thereafter either each remaining General Partner or a successor General
Partner, if any, elects to continue the business of the Partnership; (b) the
entry of a decree of judicial dissolution; (c) the expiration of the term of the
Partnership; (d) the written decision of all General Partners to wind up and
dissolve the Partnership; or (e) the approval of a motion by a Majority Vote of
the Limited Partners to wind up and dissolve.
12
19.02 Winding Up. Upon the dissolution and winding up of the Partnership
for any reason, the Managing General Partner shall take full account of the
Partnership assets and liabilities and liquidate the assets as promptly as is
consistent with obtaining the fair market value thereof. Thereafter the Managing
General Partner shall apply and distribute the proceeds from any liquidation to:
(a) first, 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 (b) second, the Partners and Assignees of Record
pursuant to the provisions of Paragraph 11 of this Partnership Agreement.
20. Special and Limited Power of Attorney
20.01 Appointment of Attorney-in-Fact. The Managing General Partner at all
times during the term of the Partnership shall have a special and limited power
of attorney as the attorney-in-fact for each Limited Partner, with power and
authority to act in the name and on the behalf of each such Limited Partner to
execute, acknowledge and swear to in the execution, acknowledgment and filing of
documents, which shall include but not be limited to: (a) this Agreement, any
separate certificates of limited partnership, as well as any amendments to the
foregoing which, under the laws of the State of California or the laws of any
other state, are required to be filed or which the General Partner shall deem it
advisable to file; (b) any other instrument or document which may be required to
be filed by the Partnership under the laws of any state or by any governmental
agency or which the Managing General Partner shall deem it advisable to file;
and (c) any instrument or document which may be required to effect the
continuation of the Partnership, the admission of additional or substituted
Limited Partners or the dissolution and winding up of the Partnership (provided
such continuation, admission or dissolution and winding up are in accordance
with the terms of this Partnership Agreement) or to reflect any reductions in
the amount of capital contributions made by the Partners.
20.02 Nature of Power. The special and limited power of attorney to the
Managing General Partner: (a) is a special power of attorney coupled with an
interest, is irrevocable, shall survive the death of the granting Limited
Partner and is limited to those matters herein set forth; (b) may be exercised
by the Managing General Partner for each of the Limited Partners by the
authorized signature of the Managing General Partner; (c) shall survive an
assignment by a Limited Partner of all or any portion of his or her Units; and
(d) shall be deemed revoked upon the Managing General Partner's sufferance of a
Disqualification Event.
21. Indemnification
The Partnership shall protect, defend, indemnify and hold harmless each
General Partner, its Affiliates, officers, directors, employees, agents and
assigns from any liability, loss or damage incurred partially or entirely,
directly or indirectly in connection with the business of the Partnership,
including but not limited to reasonable attorneys' fees and costs and any
amounts expended in the settlement of any claims for loss or damages. Any such
indemnification shall be recoverable only from the assets of the Partnership and
not from the assets of the Limited Partners. Notwithstanding the foregoing, the
Partnership shall have no obligation to indemnify and hold harmless if: (a) the
claim or liability resulting solely from any action or inaction of the General
Partner or any of its Affiliates; and (b) such action or inaction was undertaken
in bad faith, constituted gross negligence or intentional misconduct.
22. Miscellaneous
22.01 Counterparts. This Partnership Agreement may be executed in several
counterparts. All executed counterparts shall constitute one Partnership
Agreement.
22.02 Successors. The terms and provisions of this Partnership Agreement
shall be binding upon and shall inure to the benefit of the successors and
assigns of the respective Partners.
13
22.03 Severability. If any provision of this Partnership Agreement is
declared by a court of competent jurisdiction to be void, such provision shall
be deemed severed from the remainder of the Partnership Agreement and the
balance of the Partnership Agreement shall remain in full force and effect.
22.04 Notices. All notices, consents or other communications required or
permitted under this Partnership Agreement shall be in writing. Any such
communication may be served personally, transmitted by facsimile or nationally
recognized overnight delivery service (i.e., Federal Express) or sent by
prepaid, first class mail posted to the address maintained by the Partnership
for such person or at such other address as such person may specify in writing,
which communication shall be deemed effective upon personal delivery, confirmed
receipt of any communication transmitted by facsimile, two days after
transmission by nationally recognized overnight delivery service or three days
after mailing in accordance with this paragraph.
22.05 Governing Law & Trial by Reference. This Partnership Agreement shall
be governed by and construed in accordance with the laws of the State of
California. Any action brought to interpret or enforce this Agreement shall be
tried by the reference procedures set forth in California Code of Civil
Procedure Section 638 et seq. upon motion by a party to the Superior Court for
the County of San Diego, California. A single referee shall be appointed to try
the matter and such referee shall be a retired judge of the California Superior
Court, California Court of Appeals or California Supreme Court. Each party may
reject two judges appointed by the court and hereby waives the right to trial by
jury. The referee shall be compensated at the rate per hour charged by senior
attorneys in major San Diego County law firms. During the pendency of the
referenced proceeding, each party shall pay its proportionate share of the cost
thereof based upon such the parties relative interests in Partnership
Allocations. Upon the conclusion of the referenced proceeding, the losing party
or parties shall pay all of remaining unpaid costs of the referenced proceeding
and reimburse the prevailing party or parties for any such costs previously paid
by the prevailing parties. Such reimbursement shall be included in any judgment
or final order issued in the referenced proceeding. Except as otherwise required
by law, each party shall exercise its best efforts to keep the referenced
proceeding and the testimony and evidence presented therein confidential.
22.06 Titles & Captions. Paragraph titles or captions contained in this
Partnership Agreement are inserted only as a matter of convenience and for
reference. Such titles and captions in no way define, limit, extend or describe
the scope of this Partnership Agreement or the intent of any provision hereof.
22.07 Interpretation. Wherever the context of this Agreement requires, all
words used in the singular shall be construed to have been used in the plural,
and vice versa, and the use of any gender specific pronoun shall include any
other appropriate gender. The term "person" shall refer to any individual,
corporation or legal entity having standing to bring an action in its own name
under California law, whether or not such person has qualified to do business in
California or filed a fictitious business name statement. The conjunctive "or"
shall mean "and/or" unless otherwise required by the context in which the
conjunctive "or" is used.
22.08 Informed Written Consent to Attorney Representation. In negotiating
and preparing this Agreement, XXXXXXXXX & BASS, A Professional Corporation
("G&B") represented Xxxxxxx and BPI and OGGEL, XXXXXX, XXX, XXXXXXX & XXXXXX, A
Professional Corporation ("OCJP&B") represented UCVGP and SAPI. Currently and in
the past both OCJP&B and G&B have represented UCV, the Partners or their
Affiliates and may represent the Partnership, any of the Partners or any
Affiliate thereof in the future. Some or all of these clients have interests
which actually or potentially conflict with the interests of the others. By
executing and delivering this Agreement, each Partner: (a) acknowledges G&B and
OCJP&B have advised such Partner of the relevant circumstances and the
reasonably foreseeable adverse consequences of such current and prior multiple
client representation; and (b) grants such Partner's informed written consent
after disclosure to OCJP&B's and G&B's representation of their respective
Partner clients in connection with this Partnership and its business.
14
22.09 Integration. This Partnership Agreement constitutes the entire
understanding of the Partners with respect to any matter mentioned herein. No
prior agreement or understanding pertaining to any such matter shall be
effective. This Agreement may be modified or amended only in writing as provided
for herein.
22.10 General Partner's Address. The name and address of the General
Partners are:
Initial Managing
General Partner: UCVGP, INC.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
BPI: Xxxxxx Properties, Inc.
c/o Xxxxxxx X. Xxxxxxxx, Esq.
XXXXXXXXX & BASS
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxx Xxxxxx
University Club Tower
0000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
22.11 Limited Partner Addresses. The names and addresses as of the date of
the formation of the Partnership of the Limited Partners shall be set forth in
Exhibit C to this Partnership Agreement, which exhibit in the discretion of the
Managing General Partner may be separately maintained at the Partnership's
principal place of business.
22.12 Recitals and Exhibits. All recitals and exhibits referred to in this
Agreement are a part of this Agreement and hereby incorporated by reference.
22.13 Time. Time of the essence to the performance of each and every
obligation under this Agreement.
22.14 Reasonable Consent and Approval. Except as otherwise provided in
this Agreement, whenever a party is required or permitted to give its consent or
approval under this Agreement, such consent or approval shall not be
unreasonably withheld or delayed. If a party is required or permitted to give
its consent or approval in its sole and absolute discretion, such consent or
approval may be unreasonably withheld but shall not be unreasonably delayed.
22.15 Waivers. Any waiver by any party shall be in writing and shall not
be construed as a continuing waiver. No waiver will be implied from any delay or
failure to take action on account of any default by any party. Consent by any
party to any act or omission by another party shall not be construed to be a
consent to any other subsequent act or omission or to waive the requirement for
consent to be obtained in any future or other instance.
15
IN WITNESS WHEREOF, the undersigned have set their hands to this Agreement
of Limited Partnership on the date first set forth in the preamble hereof.
INITIAL MANAGING
GENERAL PARTNER: UCVGP, a California corporation
BY: /S/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx, President
GENERAL PARTNER: XXXXXX PROPERTIES, INC., a Nevada corporation
BY: /S/Xxxxxxxx Xxxxxxx
------------------------------------
Xxxxxxxx Xxxxxxx, President
LIMITED PARTNERS: /S/Xxxxxxxx Xxxxxxx
------------------------------------
XXXXXXXX XXXXXXX, a married woman
as her sole and separate property
SPORTS ARENAS PROPERTIES, INC., a California corporation
BY: /S/Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx, President
16
A-4
EXHIBIT A
DEFINITIONS
"Adjusted Capital Account Balance" shall mean the amount of the Capital
Account Balance of any Partner as of the close of a taxable year after adding to
the unadjusted Capital Account Balance of such Partner such Partner's share of
the Minimum Gain, plus the total amount of capital such Partner is obligated by
the terms of this Agreement or by a Limited Deficit Make-Up Obligation to
contribute to the Partnership and subtracting therefrom any capital
contributions actually made by such Partner.
"Affiliate" shall mean: (a) any person directly or indirectly controlling,
controlled by or under common control with another person; (b) a person owning
or controlling more than 50 percent of the outstanding voting securities of such
other person; (c) any officer, director or partner of such person; or (d) if
such other person is an officer, director, or partner, any company for which
such person acts in any capacity.
"Agreement", "Partnership Agreement" or "Limited Partnership Agreement"
shall mean this Agreement of Limited Partnership, together with all amendments,
attached exhibits or other documents which may be incorporated herein by
reference.
"Appraiser" shall mean a person having five or more years experience
appraising real estate businesses.
"Assignee" shall mean a person who has acquired a beneficial interest in a
Partnership Interest but who has not been admitted to the Partnership as a
Partner.
"Assignee of Record" shall mean an Assignee who has acquired a beneficial
interest in a Partnership Interest, as evidenced by a written instrument of
assignment the effective date of which has passed, and whose ownership of such
Partnership Interest has been recorded on the books of the Partnership but who
has not been admitted to the Partnership as a Partner.
"Capital Account" and "Capital Account Balance" shall mean an account, and
the balance of such account, maintained in accordance with Regulation Section
1.704-1(b)(2)(iv), except that the Partnership shall compute its Net Income and
Net Loss in accordance with the adjusted tax basis of Partnership Property. The
Partnership expects to comply with the economic equivalence test of Regulation
Section 1.704-1(b)(2)(ii)(i).
"Cash Available for Distribution" shall mean the sum of: (a) the gross
revenues generated by the Partnership less all cash funds used to pay
Partnership expenses, including without limitation cash withheld in operating or
capital reserves, debt payments and expenses of acquisition, improvement,
repair, maintenance, replacements, compensation payable pursuant to Paragraph 9
of this Agreement and all other expenses related to the Partnership Property;
plus (b) the net cash realized by the Partnership from the sale, refinancing or
other disposition of the Partnership Property after retirement of affected
mortgage debt and payment of all expenses related to the transaction; plus (c)
cash realized by the Partnership from any other source.
"Certificate" shall refer to the certificate of limited partnership for
the Partnership as shall be filed with the Secretary of State of the State of
California, and as such certificate may be amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent federal revenue laws.
"Controlled Affiliate" shall mean an Affiliate of Xxxxxxx or Xxxxx who is
controlled directly or indirectly by Xxxxxxx or Elkan. An Affiliate is
controlled directly or indirectly by Xxxxxxx or Xxxxx if: (a) either or both
Xxxxxxx or Elkan directly or indirectly control: (1) more than 50 percent of the
outstanding voting securities of such other person; or (2) the trusteeship of a
revocable living trust held for the benefit of such Affiliate; (b) Elkan is an
"executive officer" of such Affiliate (as "executive officer is defined under
Reg. ss.240.3b-7 of the Securities and Exchange Act of 1934 [17 CFR 240.3b-7]
except that the term "registrant" in such regulation shall instead refer to such
Affiliate); or (c) such Affiliate is approved in writing by both Xxxxxxx and
Xxxxx to be deemed a Controlled Affiliate.
17
"Disqualification Event" shall mean the removal of a General Partner as
provided in this Agreement or any event set forth in California Corporations
Code ss.15642 upon the happening of which a person ceases to be a general
partner of a limited partnership.
"Distributions" shall refer to any cash or other property distributed to
Partners or other Holders in connection with their Partnership Interests, but
shall not include any payments made under the provisions of Paragraphs 9 or 10
of this Partnership Agreement.
"Elkan" shall mean XXXXXX X. XXXXX, an unmarried man.
"General Partner" shall mean each person initially named as a General
Partner or Managing General Partner in this Agreement, or any person who
succeeds it in such capacity under this Agreement or any person who is admitted
as an additional General Partner under this Agreement.
"Holder" shall refer to an owner of a Partnership Interest who is either a
Partner, Assignee or Assignee of Record.
"Koplar Note" shall mean that certain promissory note dated November 1,
1987 issued by KOPLAR ENTERPRISES, INC., in the original face amount of
$1,007,839.90.
"Limited Partner" shall refer to any person who has been admitted to the
Partnership as an original, additional or substituted Limited Partner.
"Liquidation" shall mean a termination of a Partner's entire interest in
the Partnership by means of a Distribution, or a series of Distributions, to the
Partner by the Partnership, as set forth in Regulation sections 1.761-1(d) and
1.704-1(b)(2)(ii)(g).
"Majority Vote" shall mean the vote or written consent of the Limited
Partners holding more than 55 percent of the issued and outstanding Units
entitled to vote and which approves a proposal that is required or permitted to
be approved by such Limited Partners.
"Minimum Gain" shall have the meaning set forth in Regulation Section
1.704-2(d).
"Net Fair Market Value" shall mean the fair market value of property less
the amount of liabilities, if any, to which the property is subject or that are
assumed by the transferee in connection with a transfer of the property.
"Net Income" and "Net Loss" shall mean the net income, including tax
exempt income, or the net loss of the Partnership computed with reference to the
adjusted tax basis of items of the Partnership Property. Minimum Gain shall not
be taken into account in computing Net Income and Net Loss.
"Nonrecourse Deductions" shall have the meaning set forth in Regulation
Section 1.704-2(c).
"Nonrecourse Proceeds" shall mean the cash proceeds of a nonrecourse loan
secured by Partnership Property which results in an increase in the Minimum Gain
of the Partnership for such year or, in the case described in Regulation Section
1.704-2(h)(4), for the next taxable year. Whether proceeds of a nonrecourse loan
are properly allocable to a nonrecourse liability shall be determined by the
Managing General Partner using any reasonable method. Such adjustments as are
required by the Regulations shall be made if the Nonrecourse Proceeds are
derived in whole or in part from a Partner Nonrecourse Liability.
18
"Option Exercise Period" shall mean the period during which Optionees in a
specified Optionee Class have the right to exercise their options to purchase
Units proposed for assignment.
"Optionee" shall mean the Partnership or any Partner having the option to
purchase Units which have been proposed for assignment.
"Optionee Class" shall mean a class of Optionees having a right of equal
priority to exercise options to purchase Units proposed for assignment.
"Partner Nonrecourse Liability" shall be determined in accordance with
Regulation Section 1.704-2(i), which provides, in part, that a debt which would
otherwise be a nonrecourse debt under local law, but for which a partner bears
an economic risk of loss due to particular partnership relationships, shall be
treated as a partner nonrecourse debt to the extent any partner bears an
economic risk of loss with respect to such liability.
"Partners" shall refer collectively to the General Partners and to the
Limited Partners holding Units, and reference to a "Partner" shall be to any one
of the Partners unless the context shall otherwise require.
"Partnership" shall refer to the limited partnership created under this
Partnership Agreement.
"Partnership Allocations" shall mean allocations of Partnership Net
Income, Net Loss, Minimum Gain, items specially allocated pursuant to Paragraphs
B.02 and B.03 of Exhibit B, Nonrecourse Deductions and Distributions of cash
made to the Partners with respect to their Partnership Interests.
"Partnership Interest" shall refer to Units of any class and to the
interest of the General Partners or its Assignee or Assignee of Record in
Distributions.
"Permitted Assignee" shall mean any person who is either a Partner or a
child of a Partner or: (a) the estate of any such person; (b) a trust for the
benefit of any such person; or (c) a corporation or partnership in which any
such person holds at least a majority of the voting interests.
"Property" or "Partnership Property" shall mean all the real and personal
property owned or leased by the Partnership.
"Regulation" shall mean regulations issued by the Department of Treasury
pursuant to authority granted in the Code.
"Xxxxxxx" shall mean XXXXXXXX X. XXXXXXX, a married woman.
"Unit" shall represent an interest of a Limited Partner or its Assignee or
Assignee of Record in Distributions and Partnership Allocations subject to the
terms of this Partnership Agreement.
19
B-4
EXHIBIT B
PARTNERSHIP ALLOCATIONS
B.01 Definitions. Words and terms having their initial letters capitalized
in this Exhibit B shall have the respective meanings set forth in Exhibit A,
attached to the Partnership Agreement, unless otherwise expressly provided
herein or unless the context otherwise requires.
B.02 Priority Allocations. Notwithstanding any other provision of this
Partnership Agreement, the Partnership shall allocate the first items of income,
gain, loss and deduction of the Partnership and adjust the Capital Account
Balances of the Partners in the manner and order of priority set forth below.
B.02.1 First, if any portion of a Partnership liability is a Partner
Nonrecourse Liability, the Partnership shall allocate Nonrecourse Deductions and
Minimum Gain attributable to the Partner Nonrecourse Liability in accordance
with Regulation Section 1.704-2(i).
B.02.2 After the adjustments set forth in Paragraph B.02.1, above,
if there is a net decrease in the Partnership's Minimum Gain during a taxable
year, the Partnership shall allocate to each Partner the first items of income
or gain (or positive adjustments) of the Partnership in an amount equal to the
decrease in such Partner's share of Minimum Gain. As of the date of the
conversion of the Partnership to a limited partnership, SAPI and Xxxxxxx shall
each be deemed to have a share of the existing Minimum Gain equal to the
deficits in their respective Capital Account Balances as shown on the 1993 Form
1065 for the Partnership. Any Minimum Gain in excess of their combined deficits
will be deemed to be shared by them equally. Each Partner's share of the Minimum
Gain accruing after the conversion of the Partnership into a limited partnership
shall be computed in accordance with the provisions of Regulation Section
1.704-2(g). The allocation of Minimum Gain need not be made with respect to
Partners affected by transactions described in Regulation Sections
1.704-2(f)(2), (3) and (5). Any waiver described in Regulation Section
1.704-2(f)(4) may be made only by the Managing General Partner in its sole and
absolute discretion. This Paragraph B.02.2 is intended to qualify as a "minimum
gain chargeback" within the meaning of Regulation Section 1.704-2(f).
B.02.3 Nonrecourse Deductions shall be allocated one percent each to
the General Partners and the remainder to the Holders of Units, as a group.
B.02.4 If any Partner's Adjusted Capital Account Balance is
unexpectedly reduced below zero by virtue of an adjustment, allocation or
Distribution under Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then
the Partnership shall allocate the first items of income or gain (or positive
adjustments) of the Partnership so as to eliminate the deficit in each such
Partner's Adjusted Capital Account Balance as quickly as possible. An allocation
shall be made pursuant to this Paragraph B.02.4 only if a Partner's Adjusted
Capital Account Balance is less than zero as of the close of the taxable year
and after all other allocations under Paragraph 11 (including this Exhibit B)
have been tentatively made as if this Paragraph B.02.4 was not a part of this
Agreement. This Paragraph B.02.4 is intended to qualify as a "qualified income
offset" within the meaning of Regulation Section 1.704-1(b)(2)(ii)(d).
B.02.5 If any Partner's Adjusted Capital Account Balance is reduced
below zero as of the close of the taxable year by any Partnership Allocation or
Distribution other than an allocation of Nonrecourse Deductions or a
Distribution of Nonrecourse Proceeds, the Partnership shall allocate the first
items of income or gain (or positive adjustments) of the Partnership so as to
eliminate the deficit in each such Partner's Adjusted Capital Account Balance as
quickly as possible. An allocation shall be made pursuant to this Paragraph
B.02.5 only if a Partner's Adjusted Capital Account Balance is less than zero as
of the close of the taxable year and after all other allocations under Paragraph
11 (including this Exhibit B) have been tentatively made as if Paragraph B.02.4
and this Paragraph B.02.5 were not a part of this Agreement.
20
B.02.6 Any special allocations made pursuant to Paragraphs B.02.1
through B.02.5, inclusive, shall be taken into account in computing subsequent
allocations under this Exhibit B, so that the net amount of Partnership
Allocations shall be equal, to the extent possible, to the net amount that would
have been allocated to such Partner or Partners pursuant to this Exhibit B if
allocations pursuant to Paragraphs B.02.1 through B.02.5 had not been made.
B.03 Special Allocations. After taking into account the allocations under
Paragraph B.02 and prior to making allocations under Paragraph B.04, Partnership
gain and loss shall be specially allocated among the Partners as follows:
B.03.1 If interest income is imputed with respect to an obligation
owed by a Partner to the Partnership, the Partnership shall allocate such income
to the obligor Partner.
B.03.2 To the extent compensation paid a General Partner under
Paragraph 9 is not a guaranteed payment under Section 707(c) of the Code and is
not paid to the General Partner other than in its capacity as a Partner within
the meaning of Section 707(a) of the Code, the Partnership shall allocate to the
General Partner to the extent permitted by the Code such items of income or gain
of the Partnership at a time and in an amount equal to the amount of such
compensation.
B.03.3 Subject to Paragraph B.03.4, the Partnership shall allocate
items of gain, loss, income, depreciation or deduction attributable to
contributed property among all the Partners in accordance with Code Section
704(c). To the extent the adjusted tax basis of Partnership Property varies from
the Net Fair Market Value of Partnership Property at the time new Partners are
admitted to the Partnership or a Partner's interest in the Partnership is
liquidated, the Partnership shall specially allocate Net Income or Net Loss
attributable to the sale of any assets in accordance with the principles of Code
Section 704(c).
B.03.4 Notwithstanding any other provision of this Agreement, on the
sale of substantially all the property of the Partnership, the Minimum Gain
shall be allocated in accordance with Paragraph B.02.2. Thereafter, Net Income
equal to the amount of gain that would have been allocated to the Units issued
to Xxxxxxx and SAPI under the principals of Code Section 704(c) if the
Partnership assets had been revalued to their Net Fair Market Value on the
conversion of the Partnership into a limited partnership, less the share of SAPI
and Xxxxxxx in the Minimum Gain existing on the date of conversion, shall be
allocated to the Holders of Units until, first, all negative Adjusted Capital
Account Balances are reduced to zero; and, thereafter, to the Holders of Units,
as a group. Any Net Income in excess of the foregoing amount shall be allocated
to the Holders and General Partners until each General Partner's Capital Account
Balance equals one percent of the sum of the Capital Account Balances of the
General Partners, plus the Adjusted Capital Account Balances of all Holders, and
each Holder's Adjusted Capital Account Balance bears the same ratio to the
Adjusted Capital Account Balances of all Holders as the number of Units held by
such Holder bears to the total number of issued and outstanding Units. Any
remaining Net Income shall be allocated in accordance with the provisions of
subpart (b) of Paragraph B.04.1.
B.03.5 Notwithstanding any other provision of this Agreement, all
gain, loss, deduction or income arising from or associated with the Koplar Note
shall be allocated to Xxxxxxx. The Xxxxxx Note shall be distributed to Xxxxxxx
on a Liquidation of Xxxxxxx'x Partnership Interest up to the extent of Xxxxxxx'x
positive Capital Account Balance. If Xxxxxxx and the Partnership agree, the
Partnership may distribute the Koplar Note to Xxxxxxx prior to the Liquidation
of Xxxxxxx'x Partnership Interest.
B.04 Allocation of Net Income and Net Loss. The Partnership shall allocate
Net Income and Net Loss among the Partners and Holders, and adjust their
respective Capital Account Balances, as provided in this paragraph.
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B.04.1 Except as otherwise provided in this Exhibit B, the
Partnership shall allocate the Net Income of the Partnership to the Partners as
follows:
(a) first, in the same manner, to the same extent and in reverse
chronological order of the aggregate Net Loss previously allocated to the
Holders until the aggregate Net Income allocated pursuant to this subpart for
this fiscal year and for all previous fiscal years equals the aggregate Net Loss
allocated during all previous years; and
(b) thereafter, one percent (1%) to each General Partner and the
balance to the Holders of Units, as a group.
B.04.2 The Partnership shall allocate the Net Loss of the
Partnership to the Partners as follows:
(a) first, one percent (1%) to each General Partner and the balance
to the Holders of Units, as a group, until the aggregate Net Loss allocated
pursuant to this subpart for this fiscal year and for all previous fiscal years
equals the aggregate Net Income allocated during all previous years pursuant to
subpart (b) of Paragraph B.04.1;
(b) second, one percent (1%) to each General Partner and the balance
to the Holders of Units, to be reallocated among the Holders in proportion to
and in accordance with their positive Capital Account Balances, until the
Capital Account Balances of all Holders are reduced to zero;
(c) third, one percent (1%) to each General Partner and the balance
to the Holders of Units, to be reallocated among the Holders in proportion to
and in accordance with their positive Adjusted Capital Account Balances, until
the Adjusted Capital Account Balances of all Holders are reduced to zero; and
(d) thereafter, any additional Net Loss shall be allocated pro rata
among the General Partners.
B.04.3 Notwithstanding any other provision of this Agreement, no
losses arising from any tort liability of the Partnership shall be allocated to
any Limited Partner if such allocation would create a deficit in such Limited
Partner's Capital Account Balance, even if such allocation would not create a
deficit in the Limited Partner's Adjusted Capital Account Balance.
B.05 Special Adjustments and the Maintenance of Capital Accounts. The
provisions of this Partnership Agreement regarding the maintenance of Capital
Account Balances are intended to comply with Regulation Section
1.704-1(b)(2)(ii)(i) and shall be interpreted and applied in a manner consistent
with such Regulations. If the Managing General Partner determines it is prudent
to modify the manner in which the Capital Account Balances of the Partners are
computed in order to comply with such Regulations, the Managing General Partner
may amend this Agreement to make any such modification if it is unlikely to have
a material effect on the amounts distributable to any Partner upon the
Liquidation of the Partnership. The Managing General Partner shall also make any
appropriate modifications for unanticipated events (such as the acquisition of
oil and gas properties) in order to comply with such Regulations.
B.06 Allocations Among Partners. The Partnership shall apportion
Partnership Allocations among the Partners in accordance with the provisions of
this Paragraph B.06.
B.06.1 Except as otherwise provided in this Agreement, all divisions
among and allocations of items affecting Capital Account Balances to the Holders
of Units of the same class shall be in the ratio which the number of Units of
such class which are held by each such Holder on the date of such allocation
(which allocation date shall be selected by the Managing General Partner in its
sole discretion), bears to the total number of Units of such class which are
issued and outstanding as of such date, without regard to the number of days on
which each recipient was a Holder of Units.
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B.06.2 If a Partnership Interest is assigned prior to an allocation
date, the Partnership shall apportion the items affecting Capital Account
Balances of the Partners during the period commencing with the last allocation
date before the assignment and ending on the first allocation date after the
assignment between the Partner and such Partner's Assignee based upon the number
of days of their respective ownership during such period before and after the
date that such Assignee became an Assignee of Record, without regard to the
results of the Partnership's operations during the period before or after such
assignment. The assigning Partner's Capital Account shall become the Capital
Account of the Assignee as of the date the Assignee becomes an Assignee of
Record.
B.06.3 The Partners are aware of the income tax consequences of the
allocations made by this Exhibit B and hereby agree to be bound by the
provisions of this Exhibit B in reporting their shares of Partnership
Allocations for income tax purposes.
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C-1
EXHIBIT C
NAMES AND ADDRESSES OF THE PARTNERS
UCVGP, INC.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
SPORTS ARENAS PROPERTIES, INC.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
XXXXXXXX X. XXXXXXX
BPI
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D-2
EXHIBIT D
LIMITED DEFICIT MAKE-UP OBLIGATION
Not to Exceed: [$Amount] [Date]
-------
1. Promise To Make Capital Contribution
FOR VALUE RECEIVED, the undersigned partner ("Payor") in UCV, L.P., a
California limited partnership, promises to pay to UCV, L.P., a California
limited partnership ("Payee") at such address as the holder of this promissory
note may from time to time designate, the lesser of: (a) the principal sum of
[__________ THOUSAND DOLLARS ($______)]; or (b) the deficit balance of Payee's
Capital Account Balance (within the meaning of Payee's Partnership Agreement) in
Payee. The principal balance hereunder shall not bear interest and is all due
and payable by the end of the taxable year in which Payor's interest is Payee is
Liquidated (within the meaning of Payee's Partnership Agreement) or, if later,
within 90 days of the date of Liquidation.
2. Payments
2.01 Payments. All payments hereunder shall be in cash or other good
funds.
2.02 Waivers. Payor waives: (a) the applicable statute of limitations for
enforcement of this obligation; and (b) presentment, demand, dishonor and
protest and notice of any of the foregoing.
3. Miscellaneous
3.01 Default. If Payor fails to make the principal payment when due or
breaches any other obligation under this obligation, Payor shall be in default
of this obligation. Such a default will occur without notice or opportunity to
cure.
3.02 No Waiver. No delay or omission on the part of Payee hereof in
exercising any right or remedy shall operate as a waiver of such right or remedy
or of any other right or remedy. The waiver by Payee of any breach of or default
hereunder shall not be deemed to be a waiver of any subsequent breach of or
default.
3.03 Miscellaneous. If any party employs counsel to enforce this
obligation, including without limitation the commencement of any legal
proceeding whatsoever, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and court costs. Except as provided to the contrary
in this obligation, this obligation shall be binding on and inure solely to the
benefit of the parties and their successors and assigns. Payor shall not assign
its obligations under this obligation without Payee's prior written consent.
This obligation shall be construed and interpreted in accordance with the laws
of the State of California. The unenforceability, invalidity, or illegality of
any provision of this obligation shall not render the other provisions
unenforceable, invalid, or illegal.
IN WITNESS WHEREOF, Payor has executed this Limited Deficit Make-Up
Obligation to be effective as of as of the date set forth above.
PAYOR: __________________________________
[Limited Partner]
25
