EXHIBIT 10.2
GENERAL PARTNER COMPENSATION AGREEMENT
THIS GENERAL PARTNER COMPENSATION AGREEMENT (this "Agreement") is made
and entered into as of December 1, 2008 (the "Effective Date") by and among
JUSTICE INVESTORS, a California limited partnership ("Justice"), PORTSMOUTH
SQUARE, INC., a California corporation ("Portsmouth" or "Managing General
Partner") , and XXXX CORPORATION, a California corporation ("Xxxx" or "Co-
General Partner") (Justice, Portsmouth and Xxxx, each a "Party" and
collectively, the "Parties").
RECITALS
A. Portsmouth and Xxxx and are the general partners (collectively, the
"General Partners") of Justice. Xxxx was formerly known as Xxxx Garage
Corporation, a California corporation. The General Partners operate and
provide essential asset management services to Justice.
B. Justice is the owner of that certain real property located at 000
Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (the "Property"), on which a hotel
(the "Hotel") and a garage (the "Garage") are located.
C. Effective as of the Effective Date, Portsmouth is the Managing
General Partner of Justice and Xxxx is the Co-General Partner of Justice.
The duties and responsibilities of Xxxx and Portsmouth are set forth in that
certain Amended Limited Partnership Agreement dated January 1, 1979, as
amended by that certain Amendment of Partnership Agreement dated as of June
27, 2005, as amended by that certain 2008 Amendment to Limited Partnership
Agreement dated as of the Effective Date (collectively, the "Partnership
Agreement").
D. The Partnership Agreement provides that Xxxx and Portsmouth are to
receive compensation from Justice for acting as its General Partners and
assuming the responsibilities and performing their respective duties and are
authorized to enter into a Compensation Agreement for the purpose of setting
such compensation.
E. Justice receives substantially all its revenues from operating and/or
leasing the Property.
F. Justice, Portsmouth and Xxxx have previously executed that certain
Amended and Restated General Partner Compensation Agreement that became
effective as of February 23, 2006 (the "Prior Agreement"). Upon the
Effective Date and subject to the payment of all compensation due under the
Prior Agreement (as pro-rated through the Effective Date), the Parties desire
the Prior Agreement to be terminated and superseded by this Agreement.
G. NOW, THEREFORE, for in consideration of the mutual covenants herein
contained, the Parties agree as follows:
AGREEMENT
1. Definitions. The capitalized words set forth below shall have the
meanings ascribed thereto as used in this Agreement.
a. "Asset Manager Fee Contribution". The Asset Manager Fee
Contribution shall be $75,000.
b. "Gross Revenue". Gross Revenue shall mean all of the revenue
received by Justice in any given calendar year on account of the Hotel, the
Garage and all leases of the Property, net of hotel tax, parking tax and
similar taxes and fees on gross revenue.
c. "Minimum Annual Base Compensation". Minimum Annual Base
Compensation shall be $285,275.00.
2. Special Provisions for Compensation in 2008. The compensation of
the General Partners beginning as of January 1, 2008 through the Effective
Date shall be determined using the terms and conditions of the Prior
Agreement (as pro-rated for the number of days between January 1, 2008
through the Effective Date). The compensation of the General Partners
beginning as of the Effective Date through December 31, 2008 shall be
determined using the terms and conditions of this Agreement (as pro-rated
from the Effective Date through December 31, 2008).
3. Base Compensation. During each calendar year, Justice shall pay
Base Compensation to the General Partners in an amount equal to the product
of one and one-half percent (1.5 %) times Gross Revenue, such product being
reduced by the Asset Manager Fee Contribution; provided that in no event will
the Base Compensation be less than the Minimum Annual Base Compensation. The
parties acknowledge and agree that Base Compensation will not limited by any
maximum, nor will compensation to the General Partners be increased by any
inflation adjustment or incentive compensation in excess of the Base
Compensation calculated in accordance with this paragraph.
a. First Level of Division of Base Compensation. The Minimum
Annual Base Compensation paid to the General Partners in each calendar year
shall be divided between Portsmouth and Xxxx as follows: (i) eighty percent
(80.0 %) shall be paid to Portsmouth for its services as Managing General
Partner; and (ii) twenty percent (20.0 %) shall be paid to Xxxx for its
services as Co-General Partner.
b. Second Level of Division of Base Compensation. Base
Compensation earned by the General Partners in each calendar year that is in
excess of the Minimum Annual Base Compensation shall be payable in equal
fifty percent (50.0 %) shares to Portsmouth and to Xxxx.
4. Payments of Base Compensation. The Minimum Annual Base Compensation
shall be payable on a prorated basis to the General Partners by Justice in
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twelve (12) equal monthly installments. Base Compensation in sums greater
than the Minimum Annual Base Compensation shall be payable to the General
Partners by Justice in installments to be determined by agreement of both the
General Partners in their reasonable discretion based upon (i) the cash
available to Justice to make such payments in a fiscally responsible manner;
and (ii) a reasonable estimate made by the General Partners of the total
amount of Base Compensation that will be earned by each General Partner
during the calendar year ("Estimated Installments"). Within ninety (90) days
after the end of each calendar year, Justice shall pay to the General
Partners all Base Compensation that was earned by the General Partners during
the previous calendar year that has not then been paid.
5. Repayment of Excess Estimated Installments of Base Compensation. In
the event that either or both of the General Partners receives Estimated
Installments of Base Compensation that are in excess of the Base Compensation
actually earned during the calendar year, such excess shall be repaid to
Justice by the General Partner that received the excess within thirty (30)
days of demand therefor by the other General Partner.
6. Term This Agreement shall commence as of the Effective Date and
continue in effect until the earlier of: (i) the date on which either party
ceases to be a General Partner of Justice; (ii) the date on which Justice no
longer is the owner of the Property; or (iii) is otherwise terminated by the
agreement of the General Partners (the "Term").
7. Counterpart; Facsimile. This Agreement may be executed in
counterparts, each of which when executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. A facsimile or other electronically transmitted copy of
this Agreement shall have the same force and effect as an original hereof
personally delivered to the intended recipient.
8. Further Assurances. The General Partners each agree to execute and
deliver such agreements, documents and instruments, and do such further acts
as may reasonably be necessary or appropriate to create, preserve, perfect or
evidence the actions contemplated by this Agreement.
9. Recitals. The Recitals are true and correct and are incorporated
herein by reference.
10. Notices. Any notice which either party may be required or may desire
to give to the other party under any provision of this Agreement shall be in
writing and given by personal delivery, by facsimile or by overnight
delivery, such as FedEx, to the Parties at the addresses set forth next to
their respective signatures below. Any notice, request or other
communication sent by overnight delivery shall be effective when received by
the addressee thereof. Any notice sent by facsimile shall be effective as of
the time that a printed confirmation sheet shows a communication has been
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completed. The Parties hereto may change the addresses to which all notices,
requests and other communications are to be sent by giving notice of which
change in address to the other Parties in conformity with the preceding
section.
11. Dispute Resolution. If a dispute, controversy or claim: (i)
occurs, in law or in equity; (ii) involves any Party to this Agreement; and
(iii) arises under, out of, in connection with, or in relation to this
Agreement and any amendments to this Agreement or a breach of this Agreement,
the procedures outlined in Section 11 of the Partnership Agreement, as
defined herein, shall govern the resolution of any such dispute, controversy
or claim.
12. Confidentiality. Each Party shall maintain confidentiality with
respect to all documents, data and other information derived with respect to
the Agreement. Notwithstanding the foregoing, the Parties may disclose the
existence and contents of this Agreement to potential lenders to the Parties
and as may be required by law.
13. Choice of Law. The validity, construction and effect of this
Agreement shall be governed by the laws of the State of California.
14. Modification. This Agreement can be modified only by a writing
signed by the Parties, or if there is only one General Partner, as set forth
in the Partnership Agreement.
15. Time. Time is of the essence in this Agreement.
16. Successors and Assigns. All rights of each party hereunder inure to
the benefit of their respective successors and assigns and shall be valid and
fully enforceable.
17. Integration. This Agreement is intended by the Parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof. Acceptance of or acquiescence
in a course of performance rendered under this Agreement shall not be
relevant in determining the meaning of this Agreement, even though the
accepting or acquiescing party had knowledge of the nature of the performance
and opportunity for objection.
18. Captions. The captions in this Agreement are for convenience of
reference only and shall not modify or alter the operative provisions hereof.
IN WITNESS WHEREOF, the Parties each have caused this Agreement to be
executed on their behalf as of the Effective date.
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"JUSTICE"
JUSTICE INVESTORS,
a California limited partnership
By its Managing General Partner:
PORTSMOUTH SQUARE, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XXXXXX
Vice President and Secretary
By its Co-General Partner:
XXXX CORPORATION
a California corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
XXXXXXX X. XXXXX, XX.
Chairman, Board of Directors
By: /s/ Xxxxx X. Xxxxx
------------------
XXXXX X. XXXXX
Secretary
Address for Notice:
Justice Investors
c/x Xxxx Corporation
000 Xxxxxx Xxxxxx, Xxxx 000
Xxx Xxxxxxxxx, XX 00000
Facsimile (000) 000-0000
With copy to:
Justice Investors
c/o President of Portsmouth Square, Inc.
X.X. Xxx 000000
Xxx Xxxxx, XX 00000-0000
Facsimile: (000) 000-0000
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"XXXX"
XXXX CORPORATION
a California corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
XXXXXXX X. XXXXX, XX.
Chairman, Board of Directors
By: /s/ Xxxxx X. Xxxxx
------------------
XXXXX X. XXXXX
Secretary
Address for Notice:
c/x Xxxx Corporation
000 Xxxxxx Xxxxxx, Xxxx 000
Xxx Xxxxxxxxx, XX 00000
Facsimile (000) 000-0000
"PORTSMOUTH"
PORTSMOUTH SQUARE, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XXXXXX
Vice President and Secretary
Address for Notice:
c/o President of Portsmouth
X.X. Xxx 000000
Xxx Xxxxx, XX 00000-0000
Facsimile: (000) 000-0000
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