EXHIBIT 10.2
AMENDED CONTRACT BETWEEN
THE GENERAL PARTNER AND THE PARTNERSHIP
AMENDED PARTNERSHIP MANAGEMENT AGREEMENT
THIS AMENDED PARTNERSHIP MANAGEMENT AGREEMENT (the "Agreement") dated
November 17, 1997, is entered into by and between XXXXXXX XXXXXX & COMPANY
LEASING, INC., an Iowa corporation ("Leasing") and TELECOMMUNICATIONS INCOME
FUND XI, L.P. and Iowa limited partnership ("TIF XI").
WHEREAS, Leasing is the general partner of TIF XI, and as such, pursuant to
the Agreement of Limited Partnership of TIF XI (the "Partnership Agreement") has
full, complete and exclusive discretion and authority to manage and control the
business of the TIF XI, subject to the limitations contained in the Partnership
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and subject to the terms and conditions set
forth herein, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Partnership Agreement.
2. SERVICES. TIF XI hereby retains the services of Leasing, and Leasing
hereby accepts and undertakes to provide to TIF XI such services as TIF XI shall
require pertaining to the management of TIF XI, including but not limited to,
such services as are set forth in the Partnership Agreement, and on behalf of
TIF XI, such services as TIF XI shall require pertaining to the management of
TIF XI, including but not limited to, such services as are set forth in the
Partnership Agreement.
3. STAFF. During the term of this Agreement, Leasing shall maintain in
its employ, or have otherwise available to it, personnel sufficient in number
and adequate in ability to perform all services that it may be called upon to
perform under this Agreement.
4. FEES AND REIMBURSEMENTS TO LEASING. In consideration of the services
and activities to be performed by Leasing pursuant to this Agreement, during the
term of this Agreement, TIF XI shall pay Leasing fees, and reimburse Leasing
expenses, in amounts and for the purposes as set forth in the Partnership
Agreement, particularly Articles IX and X (and, with respect to distributions
and allocations, Articles XI and XII), including the following:
(a) The General Partner has committed a percentage of Capital
Contributions to Investment in Program Assets which is equal to the greater of
(a) 80.0% of the Capital Contributions reduced by .0625% for each 1.0% of
indebtedness encumbering Program Assets; or (b) 75.0% of Capital Contributions.
The percent of indebtedness encumbering Program Assets is calculated by dividing
the amount of indebtedness by the Purchase Price of Equipment, excluding the
Front End Fees. The resulting quotient is then multiplied by .0625% to
determine the percentage to be deducted from 80.0%. The General Partner shall
bear all Front End Fees which in the aggregate are in excess of that percentage
of Gross Proceeds determined by subtracting from 100% the percentage amount
determined by application of the foregoing formula.
(b) The Managing Sales Agent shall be Xxxxxxx Xxxxxx & Company Financial
Services, Inc., an affiliate of Leasing. TIF XI will pay a Managing Sales Agent
Fee to the Managing Sales Agent equal to 9.0% of the Gross Proceeds.
-1-
(c) TIF XI will pay a maximum of three and one-half percent (3.5%) of
Gross Proceeds of the offering for actual expenses incurred by Leasing in
connection with the formation of TIF XI, and in qualifying Units under
applicable federal and state law and any other expenses actually incurred and
directly related to the qualification, registration, advertising, offering and
sale of Units. Such expenses include (i) fees and expenses paid by TIF XI to
any counsel or accountants, (ii) registration fees, filing fees and taxes,
(iii) the costs of printing, amending, supplementing and distributing the
Prospectus and Registration Statement, (iv) the costs of producing, qualifying,
printing and distributing advertising and sales materials used in connection
with the issuance of Units, (v) the costs of "due diligence" activities
(including meetings and seminars), and (vi) accounting and legal fees incurred
in connection with any of the foregoing, but does not include Acquisition Fees.
The total of Organization and Offering Expenses plus the nine percent (9.0%)
Selling Commission will not exceed twelve and one-half percent (12.5%) of the
Gross Proceeds. The twelve and one-half percent (12.5%) limitation is without
recourse to, or reimbursement by, TIF XI.
(d) Leasing will receive an Acquisition Fee for rendering its services in
connection with the research, evaluation and negotiation of available
acquisition and financing opportunities. The Acquisition Fee shall be in an
amount equal to five percent (5%) of the cost of Equipment purchased by TIF XI,
all or a portion of which will be payable when the Equipment is purchased by TIF
XI (or Leasing as nominee) and five percent (5%) of the amount of financings
placed by TIF XI, payable upon the closing of a financing transaction. The
total Acquisition Fee including all fees and commissions paid by all parties to
all parties in connection with the initial acquisition or manufacturer of
Equipment will not exceed the lesser of five percent (5%) of the cost of
Equipment purchased by TIF XI and financings placed by the TIF XI, or an amount
which is competitive with that charged for Affiliates of Leasing. Included in
the Acquisition Fee will be any leasing commission, selection fee, construction
supervision fee, financing fee, remarketing fee, nonrecurring management fee, or
any fee of a similar nature, however designated. Leasing shall pay Acquisition
Expenses out of its Acquisition Fee. The Partnership shall not reimburse
Leasing for Acquisition Expenses. The Acquisition Fee shall be paid for
acquisition services during the Acquisition Phase and during the Operating Phase
and Liquidating Phase.
(e) During the Operating Phase and Liquidating Phase of TIF XI, Leasing is
entitled to receive, to the extent available, (i) the General Partner's Expense
Allowance, (ii) the Management Fee, (iii) twenty percent (20%) of certain
Liquidating Distributions, as provided in Articles XI and XII of the Partnership
Agreement, (iv) its distributions as owner of the General Partner interest
(equivalent to 10 Units), and (v) the Re-Leasing fee described in Section 9.3.2
of the Partnership Agreement.
(f) As compensation for providing re-leasing services to TIF XI, Leasing
will receive a fee equal to the lesser of the competitive rate for comparable
services for similar equipment or 2.0% of the gross rental payments derived from
the re-lease of such equipment after the time that the re-lease has been
consummated as a result of the efforts of Leasing. Leasing will not be paid for
re-leasing services where Equipment is re-leased to a previous lessee of such
Equipment or to an affiliate of such previous lessee. Payment for re-leasing
services shall be paid as each rental payment is made over the term of the
re-lease. This fee will not be paid on a current basis if TIF XI has not paid
the Limited Partners Operating Distributions equal to 9.6% of Adjusted Capital
Contributions for the year. In such case, the fee will be accrued as a debt TIF
XI payable out of future revenues.
(g) TIF XI will reimburse Leasing or its Affiliates for (i) Organization
and Offering Expenses reimbursed pursuant to Section 9.2.3 of the Partnership
Agreement; (ii) loans made pursuant to Section 9.4 of the Partnership Agreement;
(iii) the actual cost to Leasing or its Affiliates of goods and materials used
for or by TIF XI and obtained from persons who are not Affiliates of Leasing;
(iv) expenses incurred by TIF XI or its Affiliates related to the purchase,
operations, financing and acquisition of Equipment incurred prior to the time
that TIF XI has funds available to pay such expenses directly; and (v)
administrative
-2-
services provided by Leasing or any of its Affiliates, such as legal,
accounting, computer, transfer agent, mailings to Limited Partners and other
similar services. However, reimbursement for administrative expenses will be at
the lesser of cost or the competitive rate that is charged by persons who are
not Affiliates of Leasing for comparable administrative services in the same
geographic area.
The reimbursement for administrative expenses will be for administrative
expenses that are necessary for the prudent operation of TIF XI, and will not be
for time expended by Controlling Persons of Leasing or its Affiliates, or for
salaries, fringe benefits, travel expenses, and other administrative items
incurred or allocated to any Controlling Person of a Sponsor. No general or
administrative overhead incurred by Leasing in connection with the
administration of TIF XI will be charged to TIF XI. Such general or
administrative overhead includes, but is not limited to, salaries, rent, travel
expenses, utilities, capital expenditures and other items generally falling
under the category of overhead. No payment will be made for services to which
Leasing or its Affiliates are entitled by way of a separate fee.
Any expenses referred to in this section 4(g) that may be reimbursed
pursuant to this section 4(g) but that are properly categorized as Acquisition
Expenses shall not be included in the reimbursement described in this section
4(g).
(h) Subject to Section 10.1 of the Partnership Agreement, TIF XI shall pay
all expenses of TIF XI, which expenses shall be billed directly to TIF XI from
unrelated third parties and not from Leasing and may include, but are not
limited to: (i) all costs (excluding rent, depreciation, utilities, capital
equipment and other overhead items) of personnel employed full or part-time by
TIF XI and involved in the business of TIF XI, and such personnel may include
employees of Leasing or its Affiliates (other than Controlling Persons); (ii)
all costs of borrowed money, taxes and assessments on Equipment and other taxes
applicable to TIF XI; (iii) legal, audit, accounting, data processing,
programming, brokerage and other fees; (iv) printing, engraving and other
expenses and taxes incurred in connection with the issuance, distribution,
transfer, registration and recording of documents evidencing ownership of an
interest in TIF XI or in connection with the business of TIF XI; (v) fees and
expenses paid to independent contractors, bankers, brokers and servicers,
consultants and other Equipment management personnel, insurance brokers and
other agents; (vi) expenses in connection with the disposition, replacement,
alteration, repair, refurbishment, leasing, re-leasing, financing, refinancing
and operation of Equipment (including the costs and expenses of insurance
premiums and of maintenance of such Equipment); (vii) expenses of organizing,
revising, amending, converting, modifying or terminating TIF XI; (viii) expenses
in connection with distributions made by TIF XI to, and communications,
bookkeeping and clerical work necessary in maintaining relations with its
Limited Partners, including the costs of printing and mailing to such persons
any evidence of ownership of Units and reports of meetings of the Limited
Partners, and of preparation of proxy statements and solicitations of proxies in
connection therewith; (ix) expenses in connection with preparing and mailing
reports required to be furnished to Limited Partners for investor, tax reporting
or other purposes, and reports which Leasing deems to be in the best interests
of TIF XI to furnish to the Limited Partners; (x) any accounting, computer
(including, but not limited to, terminals, controllers, leased lines, and CPUs),
statistical, data processing, programming or bookkeeping costs necessary for the
maintenance of the books and records of TIF XI (including an allocable portion
of Leasing's costs of acquiring and owning computer equipment primarily used in
connection with the operations and reporting activities of TIF XI and any other
investment entities sponsored or administered by Leasing or any of its
Affiliates), and (xi) the cost of preparation and dissemination of the
informational material and documentation relating to the potential lease,
re-lease, sale, financing or other disposition of Equipment.
5. SERVICES OF LEASING NOT EXCLUSIVE. The services of Leasing to TIF XI
hereunder are not to be deemed exclusive and Leasing shall be free to render
similar services to others and to conduct its own business.
-3-
6. TERMINATION. Subject to the terms and provisions of this Agreement,
upon the earliest to occur of any of the following events, this Agreement shall
be terminated:
(a) by either party without penalty, upon not less than 60 days prior
written notice of its intention to so terminate;
(b) upon the withdrawal or removal of Leasing as general partner of TIF
XI; or
(c) upon the liquidation of TIF XI and the cancellation of its Certificate
of Limited Partnership.
7. INDEMNIFICATION OF LEASING BY TIF XI. To the extent that Leasing were
to seek any indemnification from TIF XI, it would be subject to the limitations
on indemnification contained in Article XXIII of the Partnership Agreement.
8. AMENDMENTS. This Agreement may not be amended or modified except by
an instrument in writing executed by all of the parties hereto, and upon the
vote of a majority of the then outstanding Units.
9. ASSIGNABILITY. This Agreement may not be assigned to any party hereto
without the express written consent of the other parties.
10. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the matters to which it pertains and
supersedes all prior oral and written agreements and understandings between the
parties with respect thereto.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa without giving effect to any
conflicts of law or choice of law provisions.
13. NOTICES. All notices and other communications required or permitted
hereunder shall be delivered, telefaxed, cabled or mailed (by registered or
certified mail, postage prepaid, or by Federal Express or similar express mail
service) to the parties hereto at their respective addresses set forth below:
(a) If to Leasing: XXXXXXX XXXXXX & COMPANY LEASING, INC.
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
(b) If to TIF XI: TELECOMMUNICATIONS INCOME FUND XI, L.P.
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
Any party may, by notice given as aforesaid, change its address for notices
hereunder.
IN WITNESS WHEREOF, Leasing and TIF XI have caused this Agreement to be
duly executed as of the date first above written by their respective officers
and representatives.
XXXXXXX XXXXXX & COMPANY LEASING, INC. TELECOMMUNICATIONS INCOME FUND XI, L.P.
By: XXXXXXX XXXXXX & COMPANY LEASING,
-4-
By INC., its General Partner
---------------------------------
---------------------------------
By
---------------------------------
---------------------------------
-5-
