Exhibit 10(vv)
CRIIMI MAE HOLDINGS II, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP, made and entered into as of the
4th day of June 1998, between CRIIMI MAE Inc., a Maryland corporation as the
General Partner (the "General Partner") and CRIIMI MAE Services Limited
Partnership, a Maryland limited partnership as a Limited Partner (the "Limited
Partner").
W I T N E S S E T H:
WHEREAS, the Partnership is being formed pursuant to a certificate of
limited partnership for the purpose of acquiring, owning, operating, managing,
holding, selling, assigning, transferring, pledging, financing, refinancing and
otherwise dealing with certain mortgage-backed certificates further described on
Schedule B attached hereto (the "Assets"), and with any property that the
Partnership may acquire or have a right to acquire as a result of its ownership
of the Assets; and
WHEREAS, the parties hereto desire to enter into this agreement of
limited partnership to reflect the agreement among them;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein set forth, the parties hereby agree t the formation of the
Partnership as a limited partnership pursuant to the Delaware Revised Uniform
Limited Partnership Act upon the following terms and conditions:
ARTICLE I
NAME AND BUSINESS
1.1 NAME. The name of the Partnership is CRIIMI MAE Holdings II, L.P.
1.2 PLACE OF BUSINESS; REGISTERED AGENT. The principal place of
business of the Partnership is at c/o CRIIMI MAE Inc., 00000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000 or at such other place as the General Partner may
hereafter designate upon notice to the Limited Partners. The address of the
registered office in the State of Delaware shall be CT Corp., Corporation Trust
Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 and the registered agent
for service of process on the Partnership in the State of Delaware at such
registered office shall be CT Corp., or such other registered office or
registered agent as the General Partner may hereafter designate upon notice to
the Limited Partner.
1.3 ADDRESSES OF GENERAL PARTNER AND LIMITED PARTNER.
(a) The name and principal place of business of the General
Partner is CRIIMI MAE Inc., 00000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000.
(b) The name and principal place of business of the Limited Partner is
CRIIMI MAE Services Limited Partnership, 00000 Xxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx 00000.
1.4 PURPOSE.
(a) The nature of the business or purposes to be conducted or
promoted by the Partnership is limited to the following activities and none
other:
(i) To acquire, own, hold, transfer, assign,
pledge and otherwise deal with the trust certificates, participation
certificates, pass-through certificates, bonds or other securities with respect
to or secured by Mortgage Loans (collectively, "Private MBS") and securities
representing interests in or secured by Private MBS (collectively, the
"Mortgage Assets"):
(ii) To do all such things as are reasonable or
necessary to enable the Partnership to carry out any of the above, including,
without limitation, entering into repurchase agreements and bond purchase
agreements.
(b) The Partnership shall have the authority to engage in any
other acts or activities and to exercise any power permitted to corporations
under the Delaware Revised Uniform Limited Partnership Act so long as the same
are incidental to, or connected with, the foregoing or are necessary, suitable
or convenient to accomplish the foregoing. In connection with the foregoing, the
Partners hereby ratify the entering into by the Partnership of the [Master
Repurchase Agreement] including any attachments thereto, dated as of June 4,
1998 (the "Repurchase Agreement"), between Citicorp Securities, Inc. as
purchaser and the Partnership as seller.
1.5 TERM. The term of the Partnership shall commence on the filing of
the Certificate and shall continue until December 31, 2050, unless the
Partnership is earlier dissolved and terminated in accordance with the
provisions of this Agreement.
1.6 CERTIFICATE. The General Partner shall file the Certificate in
accordance with applicable law.
ARTICLE II
DEFINITIONS
Unless the context clearly indicates otherwise, the following terms
shall have the following meanings for purposes of this Agreement:
2.1 AFFILIATE shall mean any Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Person specified. The term "control" (including the
terms "controlling," "controlled by" and "under common control with") means the
possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of at least 10% of the voting securities, by
contract, or otherwise.
2.2 Agreement shall mean this agreement of limited partnership, as
it may be amended from time to time.
2.3 ASSETS shall mean the CRIIMI MAE CMBS Corp. Commercial
Mortgage Loan Trust Certificates, Series 1998-1, described on Schedule B
attached hereto.
2.4 CAPITAL CONTRIBUTION shall mean the amount of money or other
assets contributed to the Partnership by each Partner.
2.5 CERTIFICATE shall mean the certificate of limited partnership
of the Partnership as filed with the Secretary of State of the State of
Delaware, as it may be amended from time to time.
2.6 DISTRIBUTIONS shall mean nay money or other property distributed to
the Partners with respect to their interests in the Partnership, but shall not
include any payments to the General Partner permitted by Section 5.8.
2.7 EVENT OF DISSOLUTION shall mean the withdrawal,
resignation, dissolution, adjudication of bankruptcy or insolvency of the
General Partner or an attempted transfer or withdrawal in contravention of
Section 8.1.
2.8 FISCAL YEAR shall mean the calendar year.
2.9 GENERAL PARTNER shall mean CRIIMI MAE Inc., a Maryland
corporation, and any successors in that capacity.
2.10 LIMITED PARTNER shall mean CRIIMI MAE Services Limited
Partnership, a Maryland limited partnership, and any successors in that
capacity.
2.11 NET CASH FLOW shall mean with respect to any fiscal period of
the Partnership, all revenues of the Partnership, including revenues from the
Assets and net cash proceeds from disposition of the Assets during that
period decreased by (a) cash expenditures for operating expenses (but not
including expense items which do not require a current cash outlay), (b)
capital expenditures to the extent not made from reserves, (c) reserves for
contingencies and working capital, established in such amounts as the General
Partner may determine, (d) repayments of principal on any financing of the
Assets and (e) taxes.
2.12 PARTNERS shall mean the General Partner and the Limited Partner.
2.13 PARTNERSHIP shall mean the limited partnership governed under
this Agreement.
2.14 PERSON shall mean and include an individual, proprietorship,
trust, estate partnership, joint venture, association, company, corporation,
limited liability company or other entity.
2.15 SECTION shall mean any section of this Agreement.
2.16 SUBSTITUTE LIMITED PARTNER shall mean a person admitted to the
Partnership as a limited partner pursuant to Section 7.3.
2.17 TAX TERMS:
(a) ADJUSTED CAPITAL ACCOUNT DEFICIT shall mean, with respect
to any Partner, the deficit balance, if any, in such Partner's Capital Account
as of the end of the relevant Fiscal Year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account the minimum
gain chargeback that such Partner is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items
described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account deficit is intended to
comply with the provisions of Section 1.704(b)(2)(ii)(d) of the Regulations and
shall be interpreted consistently therewith.
(b) NONRECOURSE DEDUCTIONS has the meaning set forth in
Section 1.704-2(b)(1) of the Regulations.
(c) NONRECOURSE LIABILITY has the meaning set forth in
Section 1.704-2(b)(3) of the Regulations.
(d) PARTNER NONRECOURSE DEBT has the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.
(e) PARTNER NONRECOURSE DEBT MINIMUM GAIN means an
amount, with respect to each Partner Nonrecourse Debt, equal to the
Partnership Minimum Gain that would result if such Partner Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance
with Section 1.704-2(i)(3) of the Regulations.
(f) PARTNER NONRECOURSE DEDUCTIONS has the meaning set forth
in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.
(g) PARTNERSHIP MINIMUM GAIN has the meaning set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.
(h) PROFITS AND LOSSES shall mean, for each Fiscal Year, an
amount equal to the Partnership's taxable income or loss for such Fiscal Year,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in computing Profits or
Losses pursuant to this paragraph 2.24(h) shall be added to such taxable income
or loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Profits or Losses pursuant to this paragraph
2.24(h), shall be subtracted from such taxable income or loss;
(iii) Notwithstanding any other provisions of
this definition, any items which are specially allocated pursuant to Section
4.3 and Section 4.4 hereof shall not be taken into account in computing
Profits or Losses.
The amounts of the items of Partnership income, gain, loss, or
deduction available to be specially allocated pursuant to Sections 4.3 and 4.4
shall be determined by applying rules analogous to those set forth in clauses
(i) through (iii) above.
(i) CODE shall mean the Internal Revenue Code of 1986, as now
or hereafter amended.
(ii) REGULATIONS shall mean the federal income tax regulations
promulgated by the United States Treasury Department under the Code as such
Regulations may be amended from time to time. All references herein to a
specific section of the Regulations shall be deemed also to refer to any
corresponding provision of succeeding Regulations.
ARTICLE III
CAPITAL
3.1 CAPITAL CONTRIBUTION OF THE GENERAL PARTNER. The General Partner
shall make a Capital Contribution consisting of the Assets, which shall be due
and payable upon the execution of this Agreement.
3.2 CAPITAL CONTRIBUTION OF THE LIMITED PARTNER. The Limited Partner
shall make a Capital Contribution of $10, which shall be due and payable upon
the execution of this Agreement.
3.3 CAPITAL ACCOUNT. A capital account shall be maintained for each
Partner throughout the term of the Partnership in accordance with the rules of
Regulation ss.1.704-1(b)(2)(iv) as in effect from time to time, and, to the
extent not inconsistent therewith, to which the following provisions apply:
(a) to each Partner's Capital Account there shall be credited
(i) the amount of money contributed by such Partner to the Partnership
(including liabilities of the Partnership assumed by such Partner as provided in
Regulation ss.1.704-1(b)(2)(iv)(c)); (ii) the fair market value of any property
contributed to the Partnership by such Partner (net of liabilities secured by
such contributed property that the Partnership is considered to assume or take
subject to under Code ss.752); and (iii) such Partner's share of the
Partnership's Profits and items of income and gain that are specially allocated.
(b) To each Partner's Capital Account there shall be debited
(i) the amount of money distributed to such Partner by the Partnership
(including liabilities of such Partner assumed by the Partnership as provided in
Regulation ss.1.704-1(b)(2)(iv)(c)) other than amounts which are in repayment of
debt obligations of the Partnership to such Partner; (ii) the fair market value
of property distributed to such Partner (net of liabilities secured by such
distributed property that such Partner is considered to assume or take subject
to); and (iii) such Partner's share of the Partnership's Losses or items of loss
or deduction that are specifically allocated.
(c) The Capital Account of a transferee Partner shall include
the appropriate portion of the Capital Account of the partner from whom the
transferee Partner's interest was obtained.
(d) In determining the amount of any liability there shall be
taken into account Code Section 752(c) and any other applicable provisions of
the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Partnership or any Partner), are computed in order to comply
with such Regulations, the General Partner may make such modification, provided
that it is not likely to have a material effect on the amounts distributable to
any Partner pursuant to Article XII hereof upon the dissolution of the
Partnership. The General Partner also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g) and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
3.4 INTEREST. No Partner shall be entitled to interest on his or her
Capital Contribution or on any Profits retained by the Partnership.
3.5 NO PERSONAL LIABILITY. The General Partner shall have no
personal liability for the repayment of any Capital Contributions of the
Limited Partner.
ARTICLE IV
ALLOCATION OF PROFIT AND LOSS; DISTRIBUTIONS
4.1 PROFITS. After giving effect to the special allocations set
forth in Sections 4.3 and 4.4, Profits for any Fiscal Year shall be
allocated in the following order and priority:
(a) First, to the General Partner to the extent of the excess,
if any, of (i) the cumulative Losses allocated to the General Partner pursuant
to the last sentence of Section 4.2(b) for all prior Fiscal Years, over (ii) the
cumulative Profits allocated to the General Partner pursuant to this Section
4.1(a) for all prior Fiscal Years;
(b) Second, to the Partners, in proportion to and to the
extent of the excess, if any of (i) the cumulative Losses allocated to each
Partner pursuant to Section 4.2(b) for all prior Fiscal Years (after reduction
of such Losses in the case of the general Partner by the cumulative Profits
allocated to the General Partner pursuant to Section 4.1(a) for the current and
all prior Fiscal Years), over (ii) the cumulative Profits allocated to each
Partner pursuant to this Section 4.1(b) for all prior Fiscal Years;
(c) Third, to the Partners, in proportion to and to the extent
of the excess, if any, of (i) the cumulative Losses allocated to each Partner
pursuant to Section 4.2(a)(ii) for all prior Fiscal Years over (ii) the
cumulative Profits allocated to such Partner pursuant to this Section 4.1(c) for
all prior Fiscal Years;
(d) The balance, if any, among the Partners in proportion to
their respective Capital Contributions.
4.2 LOSSES. After giving effect to the special allocations set
forth in Sections 4.3 and 4.4, Losses for any Fiscal Year shall be allocated
as set forth in Section 4.2(a), subject to the limitation in Section 4.2(b).
(a) Losses for any Fiscal Year shall be allocated in the
following order and priority:
(i) First, to the Partners, in proportion to and
to the extent of the excess, if any, of (1) the cumulative Profits allocated to
each such Partner pursuant to Section 4.1(d) for all prior Fiscal Years, over
(2) the cumulative Losses allocated to such Partner pursuant to this Section
4.2(a)(i) for all prior Fiscal Years;
(ii) The balance, if any, among the Partners in
proportion to their respective Capital Contributions.
(b) The Losses allocated pursuant to Section 4.2(a) shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Partner to have an Adjusted Capital Account Deficit at the end of any Fiscal
Year. In the event some but not all of the Partners would have Adjusted Capital
Account Deficits as a consequence of an allocation of Losses pursuant to Section
4.2(a), the limitation set forth in this Section 4.2(b) shall be applied on a
Partner by Partner basis so as to allocate the maximum permissible Losses to the
Limited Partner under Section 1.704-1(b)(2)(ii)(d) of the Regulations. All
Losses in excess of the limitations set forth in the foregoing sentences of this
Section 4.2(b) shall be allocated to the General Partner.
4.3 SPECIAL ALLOCATIONS. The following special allocations shall be
made in the following order:
(a) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
this Article IV, if there is a net decrease in Partnership Minimum Gain during
any Fiscal Year, each Partner shall be specially allocated items of Partnership
income and gain for such Fiscal Year (an, if necessary, subsequent Fiscal Years)
in an amount equal to such Partner's share of the net decrease in Partnership
Minimum Gain, determined in accordance with Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Sections
1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 4.3(a) is
intended to comply with the minimum gain chargeback requirement in Section
1.704-2(f) of the Regulations and shall be interpreted consistently therewith.
(b) PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other
provision of this Article IV, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal
Year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Partnership income and gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Section
1.704-2(i)(4) and 1704-2(j)(2) of the Regulations. This Section 4.3(b) is
intended to comply with the minimum gain chargeback requirement in Section
1.704-2(i)(4) of the Regulations and shall be interpreted consistently
therewith.
(c) QUALIFIED INCOME OFFSET. In the event the Limited Partner
unexpectedly receives any adjustments, allocations, or distributions described
in Section 1704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(D)(5), or Section
1.704-1(b)(2)(ii)(D)(6) of the Regulations, items of Partnership income and gain
shall be specially allocated to the Limited Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of the Limited Partner as quickly as possible, provided
that an allocation pursuant to this Section 4.3(c) shall be made only if and to
the extent that the Limited Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article IV have been
tentatively made as if this Section 4.3(c) were not in the Agreement.
(d) GROSS INCOME ALLOCATION. In the event any Partner has a
deficit Capital Account at the end of any Fiscal Year which is in excess of the
sum of the amount such Partner is deemed to be obligated to restore pursuant to
the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
Regulations, each such Partner shall be specially allocated items of Partnership
income and gain in the amount of such excess as quickly as possible, provided
that an allocation pursuant to this Section 4.3(d) shall be made only if and to
the extent that such Partner would have a deficit Capital Account in excess of
such sum after all other allocations provided for in this Article IV have been
made as if Section 4.3(c) and this Section 4.3(d) were not in the Agreement.
(e) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
Fiscal Year shall be specially allocated among the Partners in proportion to
their Capital Contributions.
(f) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the Partner who
bears the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(l).
(g) ALLOCATIONS WITH REPSECT TO CONTRIBUTED PROPERTY. If any
property contributed to the Partnership by any Partner has, at the time of such
contribution, a fair market value that differs from the contribution Partner's
adjusted tax basis for such property, income, gain, loss, and deductions with
respect to such property shall be allocated so as to take into account such
difference. This provision is intended to comply with Code Section 704(c) and
Regulations Section 1.704-3, and shall be interpreted and applied in a manner
consistent with such Regulations, using the "traditional method" described in
Regulations Section 1.704-3(b), provided, however, that any other method
allowable under applicable Regulations may be used for any contribution or
property as to which there is agreement between the contributing Partner and the
General Partner or, if the contributing Partner and the General Partner are the
same, as to which there is agreement between the General Partner and a majority
of the other Partners.
4.4 CURATIVE ALLOCATIONS. the allocations set forth in Sections
4.2(b)., 4.3(a), 4.3(b), 4.3(c), 4.3(d), 4.3(e), 4.3(f) and 4.3(g) (the
"Regulatory Allocations") are intended to comply with certain requirements of
the Regulations. It is the intent of the Partners that, to the extent
possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of
Partnership income, gain, loss, or deduction pursuant to this Section 4.4.
Therefore, notwithstanding any other provision of this Article IV (other
than the Regulatory Allocations), the General Partner shall make such
offsetting special allocations of Partnership income, gain, loss, or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner's Capital Account balance is,
to the extent possible, equal to the Capital Account balance such Partner
would have had if the Regulatory Allocations were not part of the Agreement
and all Partnership items were allocated pursuant to Sections 4.1 and 4.2(a).
In exercising its discretion under this Section 4.4, the General Partner
shall take into account future Regulatory Allocations under Section 4.3(a)
and 4.3(b) that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Sections 4.3(e) and 4.3(f).
4.5 OTHER ALLOCATION RULES.
(a) Notwithstanding any other provision of this Article IV
other than Section 4.2(b) and Section 4.3, a minimum of one percent (1%) of
Profits and one percent (1%) of Losses for each Fiscal Year shall be allocated
to the General Partner.
(b) For purposes of determining the Profits, Losses, or any
other items allocable to any period, Profits, Losses, and any such other items
shall be determined on a daily, monthly, or other basis, as determined by the
General Partner using any permissible method under Code Section 706 and the
Regulations thereunder.
(c) The Partners are aware of the income tax consequences of
the allocations made by this Article IV and hereby agree to be bound by the
provisions of this Article IV in reporting their shares of Partnership Profits
and Losses for income tax purposes.
(d) Solely for purposes of determining a Partner's
proportionate share of the "excess nonrecourse liabilities" of the Partnership
within the meaning of Section 1.752-3(a)(3) of the Regulations, the Partners'
interests in Partnership profits are in proportion to their Capital
Contributions.
(e) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the General Partner shall endeavor to treat distributions of Net
Cash Flow as having been made from the proceeds of a Nonrecourse Liability or a
Partner Nonrecourse Debt only to the extent that such distributions would cause
or increase an Adjusted Capital Account Deficit for the Limited Partner.
4.6 DISTRIBUTION OF NET CASH FLOW. New Cash Flow shall be
distributed to the Partners in the same manner as Profits are allocated under
this Article IV. Such
distributions, which shall be made at the sole discretion of the General
Partner, shall be made within 90 days of the end of each of the Partnership's
fiscal years to those persons recognized on the books of the Partnership as
Partners or as assignees of their interest in the Partnership on the last day of
the fiscal year just ended.
ARTICLE V
RIGHTS, POWERS AND DUTIES OF GENERAL PARTNER
5.1 MANAGEMENT. The General Partner shall be responsible for the
management of, and for making all decisions regarding, the Partnership business.
5.2 POWERS. Subject to Sections 1.4 and 5.3, the General Partner shall
have all authority, rights and powers generally conferred by law, including the
authority, rights and powers of a general partner in a partnership without
limited partners, and shall have all the authority, rights and powers which it
deems necessary or appropriate to effect the purposes of the Partnership.
5.3 RESTRICTIONS OF THE GENERAL PARTNER AND COVENANTS OF THE GENERAL
PARTNER.
(a) The General Partner shall be subject to all the restrictions and
limitations of a partner in a partnership without limited partners, and in
addition, each of the General Partner on behalf of the Partnership and the
Partnership shall not:
(i) do any act in contravention of the Agreement;
(ii) do any act which would make it impossible to carry on the
ordinary business of the Partnership;
(iii) possess Partnership property, or assign its rights in
specific Partnership property, for other than a Partnership purpose;
(iv) admit a Person as a general partner;
(v) merge or consolidate, the Partnership with or into
any Person; or
(vi) The Partnership shall not incur any financial obligations
or indebtedness, other than the Repurchase Agreement until after the termination
of the Repurchase Agreement
(b) The General Partner shall be subject to all the restrictions and
limitations of a partner in a partnership without limited partners, and in
addition, without the prior consent of the Limited Partner, the General Partner
shall not:
(i) file on behalf of the Partnership, for voluntary
bankruptcy, insolvency or consent to the institution of a bankruptcy or
insolvency proceedings, seek or consent to the appointment of a receiver,
liquidator, trustee, custodian or similar official for the corporation or its
properties, or make an assignment for the benefit of the Partnership's
creditors.
(c) The General Partner covenants that:
(i) it shall not cause the Partnership to dissolve,
liquidate or sell all or substantially all of its assets;
(ii) it shall not cause the Partnership to commingle
its assets with those of any Partner or any other affiliate of the
Partnership;
(ii) it shall cause the Partnership to maintain
separate partnership records and books of account from those of any partner
or any other affiliate of the Partnership and any resolutions,
agreements and other instruments will be continuously maintained as
official records by the Partnership;
(iii) it shall ensure that the Partnership's
capitalization is adequate in light of its business and purposes and the
Partnership will pay from its own funds and assets all obligations and
indebtedness incurred by it;
(iv) it will not cause the Partnership to hold itself
out as being liable for the liabilities of another party or engage in any
other actions that bear on the separateness of the Partnership;
(v) the Partnership's accounting records will
disclose the effect of the transactions in accordance with statutory
accounting practices and relevant pronouncements and the Partnership shall
maintain separate financial statements;
(vi) it shall cause the Partnership to conduct its own
business in its own name and shall hold itself out as a separate entity;
(vii) it shall cause the Partnership to pay the
salaries of its own employees and maintain a sufficient number of employees
in light of its contemplated business operations;
(viii) it shall conduct all transactions with Affiliates
on commercially reasonable terms; and
(ix) it shall cause the Partnership to correct any
known misunderstanding regarding its separate identity.
5.4 OTHER ACTIVITIES. The General Partner shall not be required to
devote its full time to the management of the Partnership business, but only so
much of its time as
the General Partner deems necessary or appropriate for the proper management of
such business. The General Partner, and any of its Affiliates, may engage or
possess an interest, independently or with others, in other businesses or
ventures of every nature and description.
5.5 DISTRIBUTIONS. Each Partner shall look solely to the assets of the
Partnership for all Distributions and share of Profits or Losses, and shall have
no recourse therefor (upon dissolution or otherwise) against the General Partner
or the Limited Partner. No Partner shall have any rights to demand or receive
property other than money upon dissolution and termination of the Partnership.
5.6 EXPENSES. The Partnership shall pay directly or reimburse the
General Partner for certain expenses of the Partnership incurred by the General
Partner in the management of the Partnership's business. Such expenses may
include but are not limited to: (a) costs of borrowed money and taxes applicable
to the Partnership; (b) fees and expenses paid to suppliers, tradespeople,
brokers, consultants and other agents; (c) costs of insurance as required in
connection with the conduct of the business of the Partnership; and (d) expenses
incurred by the Partnership for tax return preparation.
5.7 LIMITATION ON LIABILITY; INDEMNIFICATION. None of the General
Partner, its Affiliates, designees or nominees, or any employee, officer or
director of the General Partner (collectively, "Indemnified Parties") shall be
liable, responsible or accountable in damages or otherwise to the Partnership or
to the Limited Partner for any loss in connection with the Partnership business
if such Indemnified Party acts in good faith and is not guilty of fraud or gross
negligence. The Partnership shall indemnify and save harmless each Indemnified
Party against any loss, damage or expense (including attorneys' fees) incurred
by it as a result of any act performed or omitted on behalf of the Partnership
or in furtherance of the Partnership's interests without, however, relieving
such Indemnified Party of liability for bad faith, fraud or gross negligence.
The satisfaction of any indemnification and any saving harmless shall be from
and limited to Partnership assets and the Limited Partner shall not have any
personal liability on account thereof.
ARTICLE VI
RIGHTS AND LIMITATIONS OF LIMITED PARTNERS
6.1 NO ASSESSMENT. The Limited Partner shall not be subject to
assessment or be personally liable for, or bound by, any expenses, liabilities
or obligations of the Partnership beyond such Partner's Capital Contribution and
such Partner's share of undistributed profits of the Partnership.
6.2 NO RIGHT TO MANAGE. The Limited Partner shall not take part in, or
interfere in any manner with, the management, control, conduct or operation of
the Partnership, or have any rights, power or authority to act for or bind the
Partnership. The
Limited Partner shall not have the right to bring an action for partition
against the Partnership.
6.3 SUBSTITUTION OF LIMITED PARTNER. The Partnership shall not
be dissolved by the admission of a Substitute Limited Partner pursuant to
Section 7.3.
6.4 REMOVAL OF GENERAL PARTNER. Except as permitted by applicable
law, the Limited Partner shall have no right to remove the General Partner.
6.5 DEATH, DISSOLUTION OR DISABILITY OF LIMITED PARTNER. The
Partnership shall not be dissolved by the death, insanity, adjudication of
incompetency, bankruptcy, insolvency, dissolution or withdrawal of any Limited
Partner; by the assignment by any Limited Partner of his or her interest i the
Partnership; or by the admission of a Substitute Limited Partner.
ARTICLE VII
TRANSFER BY LIMITED PARTNER
7.1 COMPLIANCE WITH SECURITIES LAWS. No Partnership interest has been
registered under the Securities Act of 1933, as amended, or under any applicable
state securities laws. The Limited Partner may not transfer (a transfer, for
purposes of this Agreement, shall be deemed to include, but not be limited to,
any sale, transfer, assignment, pledge, creation of a security interest or other
disposition) all or any part of such Partner's interest, except upon compliance
with the applicable federal and state securities laws. The General Partner shall
have no obligation to register the Limited Partner's interest under the
Securities Act of 1933, as amended, or under any applicable state securities
laws, or to make any exemption therefrom available to the Limited Partner.
7.2 TRANSFER. Except for the right to receive allocations of Profits
and Losses and to receive Distributions, the Partnership interest of the Limited
Partner may not be transferred in whole or in part.
7.3 ADMISSION OF SUBSTITUTE LIMITED PARTNER. Except as otherwise
provided by Section 7.5, a transferor of a Partnership interest may give his or
her transferee the right to become a Limited Partner only after the following
terms and conditions have been satisfied:
(a) The General Partner shall have consented in writing
to the substitution, which consent may be arbitrarily withheld;
(b) The transferor and the transferee shall have complied with
such other requirements as the General Partner may reasonably impose, including
the conditions that the transferee:
(i) adopt and approve in writing all the terms
and provisions of the Agreement then in effect;
(ii) execute, acknowledge and deliver to the General
Partner a power of attorney, the form and content of which are substantially as
described herein; and
(iii) pay such fees as may be reasonable to pay the
costs of the Partnership in effecting such substitution; and
7.4 STATUS OF TRANSFEREE. A transferee of a Partnership interest of the
Limited Partner shall only be entitled to receive that share of Profits, Losses
and Distributions, and the return of Capital Contribution, to which the
transferor would otherwise be entitled with respect to the interest transferred,
and shall have no right to obtain any information on account of the
Partnership's transactions, to inspect the Partnership's books or to vote with
the Limited Partner on any matter. The Partnership shall, however, if a
transferee and transferor jointly advise the General Partner in writing of a
transfer of the Partnership interest, furnish the transferee with pertinent tax
information at the end of each fiscal year of the Partnership.
7.5 ELECTION TO TREAT TRANSFEREE AS A PARTNER. The General Partner may
elect to treat a transferee of a Partnership interest who has not become a
Substitute Limited Partner as a Substitute Limited Partner in the place of the
transferor should the General Partner deem, in its absolute discretion, that
such treatment is in the best interest of the Partnership for any of its
purposes or for any of the purposes of this Agreement.
7.6 DEATH, DISSOLUTION, BANKRUPTCY OR INCOMPETENCY OF A PARTNER. Upon
the death, dissolution, adjudication of bankruptcy, insanity or adjudication of
incompetency of the Limited Partner, such Partner's successors, executors,
administrators or legal representatives shall have all the rights of a Limited
Partner for the purpose of settling or managing such Partner's estate, including
such power as such Partner possessed to substitute a successor as a transferee
of such Partner's interest in the Partnership and to join with such transferee
in making the application to substitute such transferee as a Partner. However,
such successors, executors, administrators or legal representatives will not
have the right to become Substitute Limited Partner in the place of their
predecessor in interest unless the General Partner shall so consent as provided
in Section 7.3(a).
ARTICLE VIII
DISPOSITION OF A GENERAL PARTNER'S INTEREST
8.1 TRANSFER AND WITHDRAWAL. The General Partner may not withdraw,
retire or transfer all or any part of its interest in the Partnership without
the consent of the Limited Partner.
ARTICLE IX
ACCOUNTING
9.1 BOOKS AND RECORDS. The Partnership's books and records, this
Agreement and all amendments thereto, and all certificates shall be maintained
at the principal office of the Partnership or such other place as the General
Partner may determine and shall be open to inspection and examination by the
Limited Partner or its duly authorized representatives at all reasonable times.
9.2 BOOKS OF ACCOUNT. The General Partner shall, for income tax
purposes, keep and maintain, or cause to be kept and maintained, adequate books
of account of the Partnership. Such books of account shall initially be kept on
the cash method of accounting, but the General Partner shall have the right, but
not the obligation, to adopt the accrual method of accounting.
9.3 FISCAL YEAR. The fiscal year of the Partnership shall be the
calendar year.
9.4 TAX RETURNS. The General Partner, at Partnership expense, shall
prepare or cause income tax returns for the Partnership to be prepared and filed
timely with such authorities as the General Partner shall determine are entitled
thereto.
9.5 REPORTS. The General Partner shall cause to be prepared and
delivered to each Partner, within ninety (90) days after the expiration of each
fiscal year of the Partnership, and at Partnership expense, Partnership
information necessary for the preparation of the Limited Partner's federal
income tax returns.
ARTICLE X
TAX MATTERS PARTNER
10.1 TAX MATTERS PARTNER. The General Partner shall be the tax matters
partner of the Partnership for all federal income tax purposes set forth in the
Code.
10.2 AUTHORITY TO EXTEND PERIOD FOR ASSESSING TAX. The tax matters
partner shall have the authority to extend the period for assessing any tax
imposed on any Partner under the Code by any agreement as provided for under
Section 6226(b)(1)(b) of the Code if the tax matters partner shall determine in
its discretion to do so.
10.3 CHOICE OF FORUM FOR FILING PETITION FOR READJUSTMENT. Any petition
for readjustment may, but is not required to, be filed by the tax matters
partner in accordance with Section 6226(a) of the Code.
10.4 AUTHORITY TO BIND PARTNERS BY SETTLEMENT AGREEMENT. The tax
matters partner may, but shall not be required to, enter into a settlement
agreement in accordance with Section 6224(c)(3) of the Code.
10.5 NOTICES SENT TO THE INTERNAL REVENUE SERVICE. The tax matters
partner will use its best efforts to furnish to the Internal Revenue Service the
name, address, profits interest and taxpayer identification number of all of the
Partners as set forth on Schedule A hereto. The tax matters partner will use its
best efforts to furnish to the Internal Revenue Service any additional
information it receives from any Partner regarding any change in that Partner's
name, address, profits interest and taxpayer identification number. In no event
will the tax matters partner be liable, responsible or accountable in damages or
otherwise to any Partner for any loss in connection with furnishing the Internal
Revenue Service such name, address, profits interest and taxpayer identification
number if the tax matters partner acts in good faith and is not guilty of fraud
or gross negligence.
10.6 INDEMNIFICATION OF TAX MATTERS PARTNER. The Partnership shall
indemnify and save harmless the tax matters partner against any loss, damage,
cost or expense (including attorneys' fees) incurred by it as a result of any
act performed or omitted on behalf of the Partnership or either Partner or in
furtherance of the Partnership's interests or the interests of either Partner,
in its capacity as tax matters partner, without, however, relieving the tax
matters partner of liability for bad faith, fraud or gross negligence.
10.7 APPROVAL OF TAX MATTERS PARTNER'S DECISIONS. The tax
matters partner may call a meeting of the Partners in accordance with
Section 13.2 at any time in order to discuss any decisions the tax matters
partner may propose to make, notice of which shall be included in the notice
of such meeting. The tax matters partner may require that it will make no
decision and take no action with respect to the determination, assessment
or collection of any tax imposed by the Code on any of the Partners unless
and until such decision has been approved by the Limited Partner.
10.8 PARTICIPATION BY PARTNERS IN INTERNAL REVENUE
SERVICE ADMINISTRATIVE PROCEEDINGS. Nothing contained in this Article X
shall be construed to take away from any Partner any right granted to such
person by the Code to participate in any manner in administrative
proceedings of the Internal Revenue Service.
10.9 WITHHOLDING. The General Partner shall withhold federal income tax
with respect to all partnership income allocable to the Limited Partner, as
required under Section 1446 of the code, and to charge the Limited Partner's
capital account with the amount of all such withholdings.
ARTICLE XI
POWER OF ATTORNEY
11.1 POWER OF ATTORNEY. The Limited Partner hereby irrevocably
constitutes and appoints the General Partner, with full power of substitution,
such Partner's true and lawful attorney-in-fact, in such Partner's name, place
and stead, with full power to act jointly and severally, to make, execute, sign,
acknowledge, swear to, verify, deliver, file, record and publish the following
documents:
(a) The Certificate;
(b) Any other certificate, instrument or document which the
General Partner may believe is necessary or appropriate to be filed by the
Partnership under the laws of the any state, or by any governmental agency; and
(c) Any certificate, instrument or document which may be
required to effect the continuation of the Partnership, the admission of a
limited partner, or the dissolution and termination of the Partnership, provided
such continuation, admission, dissolution and termination is in accordance with
the terms of this agreement.
11.2 DURATION OF POWER OF ATTORNEY. It is expressly intended by the
Limited Partner that the Power of Attorney granted under Section 11.1 is coupled
with an interest, and it is agreed that such Power of Attorney shall survive (a)
the dissolution, death or incompetency of the Limited Partner and (b) the
assignment by the Limited Partner of the whole or any portion of such Partner's
Partnership interest, except that, where the transferee of the interest of the
Limited Partner has been approved by the General Partner for admission to the
Partnership as a Substitute Limited Partner, the power of attorney shall survive
such transfer for the sole purpose of enabling the General Partner to execute,
acknowledge and file any instrument or document necessary to effect such
substitution.
ARTICLE XII
TERMINATION AND DISSOLUTION
12.1 DISSOLUTION. Subject to Section 5.3, the Partnership
shall be dissolved upon the earliest to occur of the following:
(a) The occurrence of any Event of Dissolution;
(b) The expiration of the term of the Partnership
pursuant to Section 1.5;
(c) The unanimous vote of the Partners;
(d) The sale of substantially all of the Assets.
12.2 TERMINATION. Upon dissolution, the Partnership shall be wound up
and terminated unless, in the case of dissolution under Section 12.1(a), within
90 days thereafter the Limited Partner shall elect to admit one or more new
General Partners and to continue the business of the Partnership. Expenses
incurred in the reformation or attempted reformation of the Partnership shall be
deemed expenses of the Partnership.
12.3 DISTRIBUTION OF ASSETS. Upon a dissolution of the Partnership,
unless it is continued pursuant to Section 12.2, the General Partner (or, if
there is no General Partner then remaining, such other Person(s) designated by
the Limited Partner shall take full account of the Partnership assets and
liabilities, shall liquidate the assets as promptly as is consistent with
obtaining the fair value thereof, and shall apply and distribute the proceeds
therefrom in the following order:
(a) To the payment of the expenses of liquidation and the
debts and liabilities of the Partnership (other than any loans or advances that
may have been made by the Partners to the Partnership);
(b) To the setting up of any reserves which the General
Partner may deem necessary or appropriate for any anticipated obligations or
contingencies of the Partnership or of the General Partner arising out of or in
connection with the operation or business of the Partnership. Such reserves may
be paid over by the General Partner to an escrow agent or trustee selected by
the General Partner to be disbursed by such escrow agent or trustee in payment
of any of the aforementioned obligations or contingencies and, if any balance
remains at the expiration of such period as the General Partner shall deem
advisable, to be distributed by such escrow agent or trustee in the manner
hereinafter provided;
(c) To the repayment of any loans or advances which may have
been made by any of the Partners to the Partnership, but if the amount available
for such repayment shall be insufficient, then proportionately on account
thereof; and
(d) To the Partners in accordance with the balances in their
respective capital accounts.
If at the time of liquidation the General Partner shall determine that an
immediate sale of some or all of the Assets would cause undue loss to the
Partners, the General Partner may, in order to avoid such loss, defer
liquidation.
ARTICLE XIII
MISCELLANEOUS
13.1 NOTICES. Notices to the General Partner shall be sent to the
principal office of the Partnership. Notices to the Limited Partner shall be
sent to its address as set forth on Exhibit A attached hereto. Any Partner may
require notices to be sent to a different address by giving notice to the other
Partners in accordance with this Section 13.1. Any notice or other communication
required or permitted hereunder shall be in writing, and shall be deemed to have
been given with receipt confirmed if and when delivered personally, given by
prepaid telegram or mailed first class, postage prepaid, to such Partners at
such address.
13.2 MEETINGS. a meeting of the Partners may be called by the
General Partner at any time, and shall be called by the General Partner at
the written request of the Limited Partner. Written notice stating the place
and time of the meeting, and the purpose thereof shall be given by the
General Partner to the Limited Partner at least ten (10) days before the
meeting.
13.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any prior agreement or understanding between
them respecting the subject matter of this Agreement.
13.4 HEADINGS. All article and section headings in this Agreement are
for convenience of reference only and are not intended to qualify the meaning of
any article or section.
13.5 CERTAIN PROVISIONS. If the operation of any provision of this
Agreement would contravene the provisions of the Delaware Revised Uniform
Limited Partnership Act, or would result in the imposition of general liability
on the Limited Partner, such provision shall be void and ineffectual.
13.6 SAVING CLAUSE. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those as to which it is held invalid,
shall not be affect thereby.
13.7 BINDING AGREEMENT. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto, their successors, heirs, legatees,
devisees, assigns, legal representatives, executors and administrators, except
as otherwise provided herein.
13.8 COUNTERPARTS. This Agreement may be executed in
several counterparts, and all so executed shall constitute one agreement,
binding on all the parties hereto, even though all parties are not signatory
to the original or the same counterpart. Any counterpart of either
this Agreement or the Certificate shall for all purposes be deemed a fully
executed instrument.
13.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
General Partner: CRIIMI MAE INC.
By: /s/ XXXXX X. XXXXXXX
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
Limited Partner: CRIIMI MAE SERVICES LIMITED
PARTNERSHIP
By: CRIIMI MAE Services, Inc.
its general partner
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
SCHEDULE A
INFORMATION REGARDING PARTNERS
General partner: CRIIMI MAE Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
99% ownership interest
Taxpayer identification #:
Limited partner: CRIIMI MAE Services Limited Partnership
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
1% ownership interest
Taxpayer identification #:
SCHEDULE B
SCHEDULE OF ASSETS
1. CRIIMI MAE CMBS Corp. Commercial Mortgage Loan Trust Certificates, Series
1998-1, Class D Certificates, having an initial principal balance of
$29,749,535.
2. CRIIMI MAE CMBS Corp. Commercial Mortgage Loan Trust Certificates, Series
1998-1, Class E Certificates, having an initial principal balance
of$16,114,331.
