EXHIBIT 3-A
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(Carlyle-XIII)
EXHIBIT A
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII
AGREEMENT OF LIMITED PARTNERSHIP, made and entered into by and
between CARLYLE-XIII MANAGERS, INC. (an Illinois corporation) and REALTY
ASSOCIATES-XIII (an Illinois limited partnership) (the "General Partners"),
and JMB REALTY CORPORATION (a Delaware corporation) and those other parties
who from time to time execute this Agreement or counter parts hereof as
limited partners (the "Limited Partners").
ARTICLE I
FORMATION OF LIMITED PARTNERSHIP
The parties hereby enter into a limited partnership under the
provisions of the Uniform Limited Partnership Act of the State of Illinois
and the rights and liabilities of the Partners shall be as provided in that
Act except as herein otherwise expressly provided.
ARTICLE II
NAME
The business of the Partnership shall be conducted under the name of
"CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII" or such other name as the
Corporate General Partner shall hereafter designate in writing to the
Limited Partners.
ARTICLE III
DEFINITIONS
"Acquisition Expenses" means those expenses including but not limited
to legal fees and expenses, travel and communications expenses, costs of
appraisals, non-refundable option payments on property not acquired,
accounting fees and expenses, title insurance, and miscellaneous expenses
related to selection and acquisition of real property investments by the
Partnership, whether or not acquired.
"Acquisition Fees" means the total of all fees and commissions paid
by any person to any person including the Corporate General Partner or its
Affiliates in connection with the selection, purchase, construction or
development of any real property investments by the Partnership (except a
development fee paid to a person who is not an Affiliated Person of the
General Partners in connection with a Property actually acquired), real
estate commissions, selection fees, development fees, construction fees,
non-recurring management fees, or any fee of a similar nature, however
designated and however treated for tax or accounting purposes.
"Adjusted Capital Account" means, with respect to any calendar
quarter, the Limited Partners' aggregate initial Capital Investment in the
Partnership reduced by any distributions of Sale or Refinancing Proceeds
made to the Limited Partners up to and including any such distributions
made with respect to such calendar quarter.
"Affiliate" or "Affiliated Person" means, when used with reference to
a specified person, (i) any person that directly or indirectly through one
or more intermediaries controls or is controlled by or is under common
control with the specified person, (ii) any person which is an officer,
partner
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or trustee of, or serves in a similar capacity with respect to, the
specified person or of which the specified person is an officer, partner or
trustee, or with respect to which the specified person serves in a similar
capacity, (iii) any person which, directly or indirectly, is the beneficial
owner of 10% or more of any class of voting securities of, or otherwise has
a substantial beneficial interest in, the specified person or of which the
specified person is directly or indirectly the owner of 10% or more of any
class of voting securities or in which the specified person has a
substantial beneficial interest and (iv) any relative or spouse of the
specified person. "Person" means any individual, partnership, corporation,
trust or other entity. Affiliate or Affiliated Person of the Partnership or
the General Partners does not include a person who is a partner in a
partnership with the Partnership or with any other Affiliated Person, which
person is not otherwise an Affiliate or Affiliated Person of the
Partnership or the General Partners.
"Agreement" means this Agreement of Limited Partnership, as amended,
modified or supplemented from time to time.
"Associate General Partner" means Realty Associates-XIII, so long as
it is not exercising the rights of the Corporate General Partner hereunder,
or any successor to its interest, or any portion thereof, in the
Partnership.
"Capital Account" means, with respect to any Partner, the aggregate
initial capital contribution of such Partner (1) reduced by (a) any losses
allocated to such Partner under Article X and any charge or expense
relating to the offering of Interests under Article VIII allocated to such
Partner's capital account and (b) any distributions of Net Cash Receipts or
Sale or Refinancing Proceeds under Article IX, and (2) increased by any
profits allocated to such Partner under Article X.
"Capital Investment" means, with respect to any Limited Partner,
$1,000 per Interest.
"Corporate General Partner" means Carlyle-XIII Managers, Inc. in its
capacity as such or any successor to its interest, or any portion thereof,
in the Partnership.
"Current Capital Account" means, with respect to any calendar year or
portion thereof, the average of the Limited Partners' Adjusted Capital
Accounts for each of the four calendar quarters of such year (or all
preceding calendar quarters of such year if a determination is being made
prior to the end of the fourth calendar quarter of such year).
"Front-End Fees" means the fees and expenses paid by any person for
any services rendered in connection with the organizational or acquisition
phase of the Partnership, including Organization and Offering Expenses,
Acquisition Fees, Acquisition Expenses, and any other similar fees, however
designated (except a development fee paid to a person who is not an
Affiliate of the General Partners in connection with a Property actually
acquired).
"Gross Proceeds of the Offering" means the aggregate of Capital
Investments of Limited Partners received and retained by the Partnership
from the offering contemplated by Section 8.3.
"Investment in Properties" means the amount of Gross Proceeds of the
Offering actually paid or allocated to the purchase, development,
construction or improvement of properties acquired by the Partnership,
including the purchase of properties, working capital reserves allocable
thereto (except that working capital reserves in excess of 5% of Gross
Proceeds of the Offering shall not be included), and other cash payments,
such as interest, taxes, and other similar items, or which are paid to or
for the account of a seller of a property to the Partnership or an
Affiliated Person of such seller, and which are paid for from the Gross
Proceeds of the Offering to the Limited Partners in connection with the
Partnership's acquisition of its interest in a Property, but excluding
Front-End Fees.
"Limited Partners" means JMB Realty Corporation in its capacity as
such and the other parties who execute this Agreement or counterparts
hereof as Limited Partners and any party admitted as a substituted Limited
Partner pursuant to Article XVI.
"Net Cash Receipts" means all cash revenues and funds received by the
Partnership (other than funds received as capital contributions or the
proceeds of any refinancing or sales of Partnership assets), less the sum
of the following to the extent made from such cash revenues and
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funds received by the Partnership (but not to the extent made from any
other sources, including without limitation, from Sale Proceeds, Financing
Proceeds, or cash reserves maintained pursuant to Section 15.19): (i) all
principal and interest payments on mortgage and other indebtedness of the
Partnership and all other sums paid to lenders; (ii) all cash expenditures
(including expenditures for capital improvements) incurred incident to the
normal operation of the Partnership's business, including those expenses of
the Corporate General Partner reimbursed by the Partnership pursuant to
Section 9.5; and (iii) such additions to cash reserves, maintained pursuant
to Section 15.19, as the Corporate General Partner shall determine.
"Net Capital Account" means, with respect to any Partnership
Interest, the aggregate initial Capital Investment represented by such
Interest (1) reduced by (a) any losses allocated to such Interest under
Article X and (b) any distributions of Net Cash Receipts or Sale or
Refinancing Proceeds under Article IX, and (2) increased by any profits
allocated to such Interest under Article X.
"Organizational and Offering Expenses" means those expenses incurred
in connection with the formation, qualification and registration of the
Partnership under applicable Federal and state law and in marketing,
distributing and issuing the Interests, and any other expenses actually
incurred and directly related to the offering and sale of the Interests
including such expenses as: (a) fees paid to underwriters' attorneys, (b)
registration fees, filing fees and taxes,(c) the costs of qualifying,
printing, amending, supplementing, mailing and distributing the
Registration Statement and Prospectus, including telephone and telegraphic
costs,(d) the costs of qualifying, printing, amending, supplementing,
mailing and distributing sales materials used in connection with the
issuance and marketing of the Interests, including telegraph and telephone
costs, (e) salaries and direct expenses of officers and employees of the
Corporate General Partner and its Affiliates while directly engaged in
organizing and registering the Partnership and in marketing, distributing,
processing and establishing records of the Interests and establishing
records and paying underwriters' commissions, (f) accounting and legal fees
incurred in connection therewith, and (g) all advertising expenses incurred
in connection therewith, including the costs related to investor and
broker/dealer sales meetings.
"Partners" means all General Partners and all Limited Partners, where
no distinction is required by the context in which the term is used herein.
"Partnership Interest" or "Interest" means the interest in the
capital of the Partnership representing a capital contribution of $1,000 by
a Limited Partner.
"Partnership Properties" means the real properties described in the
Prospectus, or real properties not so described but which are purchased out
of the proceeds of Capital Investments of the Limited Partners or out of
the proceeds (other than Sale or Refinancing Proceeds) of a disposition of
property by the Partnership, and all improvements thereon and all repairs,
replacements or renewals thereof, together with all personal property
acquired by the Partnership which is from time to time located thereon or
specifically used in connection therewith and, in the case of any Property
owned by another partnership or joint venture in which the Partnership
shall be a partner, the term "Properties" shall include any real property
which is so owned. "Property" shall mean any of the Partnership Properties.
"Prospectus" means the prospectus contained in the registration
statement filed with the Securities and Exchange Commission for the
registration of Limited Partners' Interests under the Securities Act of
1933, in the final form in which said prospectus is filed with said
Commission and as thereafter supplemented pursuant to Rule 424 under said
Act.
"Sale or Refinancing Proceeds" means the net cash proceeds of
refinancing or of sale or other disposition of Partnership Property
received by the Partnership, after deducting any expenses incurred in
connection therewith and after application of any of such proceeds, at the
sole discretion of the Corporate General Partner, toward the payment of any
indebtedness of the Partnership, the purchase of land underlying any
Partnership Property, the purchase or financing of any improvements or
expansion of any Partnership Property, the purchase of any interest in a
joint venture
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partnership which owns a particular Partnership Property, which interest is
owned by a joint venture partner, and the payment of any other expenses or
the establishment of any reserves deemed reasonably necessary by the
Corporate General Partner; provided, however, that if the Partnership
acquires properties for which no permanent financing has been obtained, and
the Partnership obtains such financing for such properties (including the
sale of a partial equity interest in the property as a means of financing)
in the future, the proceeds of such financing shall not be deemed Sale or
Refinancing Proceeds in the event that the General Partners determine to
reinvest such proceeds in additional real property investments; further
provided, however, that proceeds of any sale or refinancing as set forth
above may not be utilized as set forth above, except to pay any
indebtedness of the Partnership or the creation of reserves deemed
reasonably necessary, unless the distribution of the proceeds of such sale
or refinancing to the Limited Partners pursuant to Section 9.3 would be at
least equal to the Federal or state income tax payable by the Limited
Partners by reason of their investment in the Partnership for the year in
which such sale or refinancing occurs (assuming taxation of such Limited
Partners' ordinary income at a 35% rate). "Sale or Refinancing Proceeds"
shall also include the net interest (except that such net interest shall be
treated as "Net Cash Receipts" to the extent necessary to cause the Limited
Partners' cumulative distribution of "Net Cash Receipts" with respect to
all fiscal quarters through the end of the year of such distribution to
equal 6% of their current capital accounts for such years commencing with
the third calendar quarter following the termination of the offering of
Interests to the public as described in the Prospectus), principal or other
cash proceeds received by the Partnership pursuant to purchase money
obligations arising from any sale or disposition of Partnership Property.
The disposition of a Partnership Property to JMB or an Affiliate or by
transfer back to the seller or an affiliate thereof, whether in the form of
a recession exchange, resale or otherwise, shall not be deemed to be a sale
and to result in Sale or Refinancing Proceeds hereunder, and any
refinancing of a Partnership Property as contemplated in the Prospectus or
as otherwise contemplated at the time of acquisition of such Partnership
Property, shall not be deemed a refinancing, and any proceeds therefrom
shall not be deemed Sale or Refinancing Proceeds, but any proceeds thereby
recovered by the Partnership shall be subject to investment by the General
Partners as original capital of the Partnership.
ARTICLE IV
PURPOSE
The business of the Partnership is to invest in, acquire, hold,
maintain, operate, improve, develop, lease and otherwise use real
properties and interests therein for profit (and in connection therewith
the Partnership shall have the power to dispose in any manner any such real
properties or interests therein) and to engage in any and all activities
related or incidental thereto.
ARTICLE V
NAMES AND ADDRESSES OF PARTNERS
The names and addresses of the General Partners and the names, addresses
and capital contributions of the Limited Partners are as set forth in
Schedule A attached hereto and incorporated herein by reference.
ARTICLE VI
TERM
The term of the Partnership shall be from the date hereof to December
31, 2033, unless sooner terminated as hereinafter provided.
ARTICLE VII
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the Partnership shall be 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. The Corporate General Partner may
from time to time change the principal place of business and in such event,
the Corporate General Partner shall notify the Limited
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Partners in writing within 20 days of the effective date of such change.
The Corporate General Partner may in its discretion establish additional
places of business of the Partnership.
ARTICLE VIII
CAPITAL AND CONTRIBUTIONS
SECTION 8.1. The capital of the Partnership shall be the amount
stated to be such from time to time in Schedule A attached hereto and
incorporated herein by reference. No Limited Partner shall have any right
to demand or receive the return of his capital contribution to the
Partnership. It is the intent of the Partners that no distribution (or any
part of any distribution) made to any Limited Partner pursuant to this
Agreement shall (unless otherwise reflected in an appropriate amendment to
the Partnership's Certificate of Limited Partnership) be deemed a return or
withdrawal of capital, even if such distribution represents (in full or in
part) a distribution of depreciation or any other non-cash item accounted
for as a loss or deduction from or offset to the Partnership's income and
that no Limited Partner shall be obligated to pay any such amount to or for
the account of the Partnership or any creditor of the Partnership. However,
if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Limited Partner is obligated to make any
such payment, such obligation shall be the obligation of such Limited
Partner and not of the General Partners.
SECTION 8.2. Except as set forth in Schedule A and in Sections 9.3,
10.2 and 18.4, the General Partners shall not, as General Partners, make
any contribution to the capital of the Partnership. In the event that any
of the General Partners shall purchase any Interests, such General Partner
shall in all respects be treated as a Limited Partner to the extent of the
Interests purchased by him.
SECTION 8.3. The Corporate General Partner is hereby authorized to
raise capital for the Partnership by offering and selling to the public
260,000 Interests or such higher maximum amount (not to exceed 300,000
Interests) as the Corporate General Partner shall from time to time
determine (in addition to the five Interests acquired by JMB Realty
Corporation as the initial Limited Partner). All subscriptions for
Interests shall be accepted or rejected by the Corporate General Partner
within 30 days of receipt. If not rejected within 30 days of receipt by the
Partnership, any subscriptions shall be deemed to be accepted. Except as
provided in Section 8.7, no sale shall be made of fewer than five Interests
(or such greater minimum number of Interests as may be required by
applicable state or Federal laws) to any person, and no sale of Interests
shall be consummated unless and until the Partnership has received
subscriptions for the purchase of at least 6,000 Interests. Pending the
receipt of subscriptions for not less than 6,000 Interests, all
subscription proceeds shall be kept by the Corporate General Partner
separate and apart from all other funds, and shall be deposited and held in
trust in one or more interest-bearing or non-interest-bearing accounts, in
the discretion of the Corporate General Partner. All funds paid in by
investors to whom the Interests are offered shall continue to be their
property and shall be held in trust in an escrow account for their benefit
until such time as the Partnership has received subscriptions to purchase
6,000 Interests; in the event that the Partnership has not received
subscriptions to purchase 6,000 Interests by December 31, 1983, the
Corporate General Partner shall terminate the offering and all subscription
payments shall be refunded in full to the subscribers together with a pro
rata share of any net earnings thereon based on the amount of the
subscription proceeds of each subscriber and the number of days such
subscription proceeds were held in the escrow account. All persons whose
subscriptions for Interests are accepted by the Partnership prior to
October 31, 1983, or such earlier date in 1983 as selected by the Corporate
General Partner, shall be admitted as Limited Partners as of a date within
30 days thereof, as determined by the Corporate General Partner and as
reflected on the books of the Partnership (the "First 1983 Admission
Date"), all persons whose subscriptions are accepted by the Partnership
after October 31, 1983 (or such earlier date as selected by the Corporate
General Partner for determining admission of Limited Partners on the First
1983 Admission Date) shall be admitted as Limited Partners as of the date
on or about the termination of the Partnership's acceptance
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of subscriptions for Interests in 1983 as determined by the General
Partners and as reflected on the books of the Partnership (the "Second 1983
Admission Date"), and all persons whose subscriptions for Interests are
accepted by the Partnership in 1984 shall be admitted as Limited Partners
as of the dates on or about the last day of the month in which the
Partnership accepts such subscriptions as determined by the General
Partners and as reflected on the books of the Partnership ("1984 Admission
Dates").
SECTION 8.4. In the event the required minimum in subscriptions is
received and the offering is consummated a Limited Partner admitted in 1983
shall be entitled to receive from the Partnership a distribution equal to
the earnings on the proceeds of his subscription from the day after his
subscription proceeds are received in the escrow account for each month or
portion thereof prior to the earlier of (i) December 1, 1983 or (ii) the
Second 1983 Admission Date as defined above. A Limited Partner admitted in
1984 shall be entitled to receive from the Partnership a distribution equal
to the earnings on his subscription proceeds for the period from the day
after his subscription proceeds are received in the escrow account until
two weeks prior to the termination of the offering of Interests to the
public under Section 8.3. Payment of such distributions for 1983 and 1984
shall be made on or before December 31, 1983 and 60 days after the final
1984 Admission Date, respectively, and shall be made prior to, and without
regard to any other cash distributions to which holders of Interests are
entitled hereunder.
SECTION 8.5. The Partnership shall pay Organizational and Offering
Expenses incurred in the creation of the Partnership and the sale of
Interests to the public. The foregoing expenses may be paid directly by the
Partnership or may be reimbursed by the Partnership to Affiliates of the
Corporate General Partner.
SECTION 8.6. Except as otherwise provided in Section 8.3, the
Corporate General Partner shall have sole and complete discretion in
determining the terms and conditions of the public offering and sale of
Interests and the Corporate General Partner is authorized and directed to
do all things which it deems to be necessary, convenient, appropriate or
advisable in connection therewith, including, but not limited to, the
preparation and filing on behalf of the Partnership of a registration
statement with the Securities and Exchange Commission and the securities
commissions (or similar agencies or offices) of such jurisdictions as the
Corporate General Partner shall determine and the execution or performance
of agreements with underwriters and others concerning the marketing of
Interests on such basis and upon such terms as the Corporate General
Partner shall determine. It is expressly agreed that Carlyle Securities
Corporation, which is an Affiliate of the Corporate General Partner, may
participate in such offering as the dealer manager and may receive selling
commissions or concessions on the same terms as other dealers in connection
therewith.
SECTION 8.7. Interests (including partial Interests) may be sold to
any Limited Partners who elect to reinvest any cash distribution in the
Partnership and to any limited partners in the prior Carlyle real estate
limited partnerships who elect to participate in the program for the
reinvestment of their cash distributions from such partnerships in the
Partnership, provided, however, that such distributions which are to be
reinvested will be placed in an escrow account by the Corporate General
Partner for the benefit of such reinvesting Limited Partner until a minimum
of $250 is available for investment (to be invested in $10 increments); and
provided, further, however, that each such Limited Partner electing to have
such distributions from prior Carlyle real estate limited partnerships or
the Partnership reinvested will receive, with each confirmation of
distribution, a notice advising such Limited Partner that he is entitled to
change his election with respect to subsequent distributions, by return of
a notice to the Partnership by a date to be specified by the Corporate
General Partner. All such funds received by the Partnership will be held in
escrow as provided in Section 8.3. If prior to achieving the minimum
reinvestment amount of $250, a Limited Partner changes his distribution
election, the amount held in escrow will be refunded together with a pro
rata share of any net interest actually earned thereon. In addition,
Limited Partners and limited partners in prior Carlyle real estate limited
partnerships who elect to reinvest their distributions from such
partnerships in the Partnership may acquire Interests (or partial
Interests) in the Partnership by additional contributions to the
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Partnership of $500 or more (in $10 increments). A Limited Partner electing
to participate in the program for the reinvestment of his distributions may
have his distributions reinvested in a subsequent Carlyle real estate
limited partnership only if prior to the time of such reinvestment he has
received the final prospectus (and any supplements thereto) offering
interests in the current Carlyle real estate limited partnership, and such
prospectus provides for a distribution reinvestment program, a registration
statement covering the interests in the current Carlyle real estate limited
partnership has been declared effective under the Securities Act of 1933,
the offering of such interests is qualified for sale under the applicable
state securities laws and the participant qualifies under the applicable
investor suitability standards as contained in the prospectus for the then
effective Carlyle real estate limited partnership. If any of the foregoing
conditions are not satisfied at the time of a distribution, such
distribution will be paid in cash. The distribution election form signed
by each Limited Partner electing to participate in the distribution
election program will require the reinvesting Limited Partner to agree
that, if, at any time, he fails to meet the applicable Carlyle real estate
limited partnership investor suitability requirements or cannot make the
other investor representations or warranties set forth in the then current
Carlyle real estate limited partnership prospectus, he will promptly notify
JMB Investor Services Corporation in writing. If any attempted election is
ineffective for any reason, the prior election of the Limited Partner will
remain in effect until a new distribution election is submitted to the
Partnership.
ARTICLE IX
DISTRIBUTIONS AND COMPENSATIONS
SECTION 9.1. No portion of Net Cash Receipts shall be used by the
Partnership for the acquisition of additional real properties by the
Partnership, nor shall cash reserves therefrom be established by the
Corporate General Partner for the acquisition of additional real property
investments.
SECTION 9.2. Disbursements of Net Cash Receipts shall be made in such
amounts and at such times as the Corporate General Partner may determine
but not less frequently than once each calendar quarter (commencing with
the third calendar quarter of 1984). Such disbursements of Net Cash
Receipts shall be made as follows:
(a) 6.25% of the amount being disbursed shall be paid to the
Corporate General Partner as a fee for managing the affairs of the
Partnership;
(b) The remainder of the amount being disbursed shall be
distributed to the General Partners and the Limited Partners as their
distributive shares in the same respective proportions in which they are
allocated net profits or losses of the Partnership pursuant to Section 10.1
(i.e., 96% to the Limited Partners and 4% to the General Partners).
SECTION 9.3. All Sale or Refinancing Proceeds shall be distributed as
follows:
(i) first, 99% to the Limited Partners and 1% to the General
Partners to the extent that all previous distributions to the Limited
Partners under this Section 9.3(i) do not equal the Limited Partners'
initial Capital Investment; (ii) second, 99% to the Limited Partners and 1%
to the General Partners until the Limited Partners have received an amount
equal to (a) the sum of the amounts by which, for all fiscal years
commencing with the third calendar quarter of 1984 and continuing through
the fiscal year for which such distribution is made, the amount of Net Cash
Receipts distributed to the Limited Partners pursuant to Section 9.2 for
such years was less than 6% per annum of their Current Capital Accounts for
such years (so that for the purposes of the computation of such deficiency,
the amount by which distributions of Net Cash Receipts for any fiscal years
were in excess of 6% per annum of the Current Capital Accounts of Limited
Partners shall be credited to reduce any deficiency for any other fiscal
year) less (b) the sum of all previous distributions made to the Limited
Partners out of Sale or Refinancing Proceeds pursuant to this Section
9.3(ii);
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(iii) third, in the case of sales of Properties by the
Partnership or by a partnership, venture or other entity which owns a
particular Property, subject to the limitations set forth in Section 15.9,
an amount to the General Partners equal to 3% of the selling price of the
Property being sold plus up to 3% of the aggregate selling prices of
Properties previously sold to the extent the General Partners have not
previously received such 3% of the selling prices of such Properties by
reason of clauses (i) and (ii) of this Section 9.3 (the selling price or
prices of all such Properties to include the amount of any indebtedness to
which such Property or Properties are subject or which is assumed by the
buyer); and
(iv) fourth, the balance 85% to the Limited Partners and 15%
to the General Partners.
The calculations provided under this Section 9.3 shall be made on a
cumulative basis so that if it is determined, on any date on which a
distribution of Sale or Refinancing Proceeds is to be made, that
distributions previously made under clause (ii) hereof plus cumulative
distributions of Net Cash Receipts made to the Limited Partners under
Section 9.2 exceed 6% per annum of the Limited Partners' Current Capital
Accounts for each year or part thereof (beginning with the third calendar
quarter following the termination of the offering of Interests to the
public as described in the Prospectus), ("excess distributions"), then the
General Partners shall receive distributions from such Sale or Refinancing
Proceeds in an amount equal to the sum of (a) the amount of such Sale or
Refinancing Proceeds (undiminished by the amount determined under (b)
hereof) to which the General Partners are entitled pursuant to clauses
(iii) and (iv) hereof, plus (b) the amount the General Partners would have
received if the excess distributions had been distributed to the Partners
at the time of the prior Sales or Refinancing pursuant to clauses (iii) and
(iv) hereof.
In the event that Acquisition Fees paid to anyone exceed 17% of the
gross proceeds of the offering contemplated by Section 8.3, the amount
distributable to the General Partners pursuant to Section 9.3(i) and (ii)
shall be reduced by the amount of any such excess.
If, upon the completion of the liquidation of the Partnership and the
distribution of all Partnership funds, the sum of the Limited Partners'
initial Capital Investment plus the maximum amount distributable to the
Limited Partners under Section 9.3(ii) exceeds the distributions of Sale or
Re-financing Proceeds to the Limited Partners pursuant to Sections 9.3(i)
and (ii) (said excess is hereinafter referred to as the "Excess Amount"),
the General Partners shall make capital contributions to the Partnership
(which contributions shall be credited to their capital accounts) in an
amount equal to the lesser of the Excess Amount or the amounts of Sale or
Refinancing Proceeds received by the General Partners pursuant to Sections
9.3(i) and (ii). Such capital contributions are to be made 50% by the
Corporate General Partner and 50% by the Associate General Partner and
shall be distributed to the Limited Partners.
All distributions of Sale or Refinancing Proceeds shall be
distributed to the recognized owners of the Interests (pursuant to Article
XVI) as of the last day of the quarterly period with respect to which such
distribution is to be made.
SECTION 9.4. If the Net Capital Accounts with respect to all
Interests are equal at the time of any distribution of Net Cash Receipts or
Sale or Refinancing Proceeds to the Limited Partners, such distribution
shall be made with respect to each Interest outstanding at the time of such
distribution in the proportion which such Interest bears to the total
number of Limited Partnership Interests then outstanding. If the Net
Capital Accounts with respect to all Interests are not equal at the time of
any such distribution of Net Cash Receipts or Sale or Refinancing Proceeds
to the Limited Partners, any such distribution of Net Cash Receipts or Sale
or Refinancing Proceeds distributable to the Limited Partners shall be made
first with respect to any Interests with a Net Capital Account immediately
prior to such distribution showing a balance which is greater in amount (or
lesser in deficit) than the Net Capital Account for any other Interests,
such distribution to be made with respect to and among the holders of such
Interests showing such a greater balance in their Net Capital Accounts in a
manner so as to equalize to the extent possible the Net Capital Accounts
for all Interests following such distribution; provided that in the event
the Corporate General Partner reasonably anticipates that the Net Capital
Accounts with respect to all Interests
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will, apart from such distribution, be equal at the end of the fiscal year
for which such distribution is made, such distribution shall be made in
accordance with the preceding sentence in the same manner as if such Net
Capital Accounts were equal at the time of such distribution.
SECTION 9.5. All of the Partnership's expenses shall be billed
directly to and paid by the Partnership. Reimbursements (other than for
Organizational and Offering Expenses as provided in Section 8.5) to the
General Partners or any Affiliates shall not be allowed, except for (i) the
actual cost to the General Partners or such Affiliates of goods, materials
and services used for or by the Partnership and obtained from entities
which are not affiliated with the General Partners; (ii) salaries and
related salary expenses for services which could be performed directly for
the Partnership by independent parties, such as legal, accounting, transfer
agent, data processing, duplicating and other such services; (iii)
Partnership reports and communications to investors; and (iv)
administrative services necessary to the prudent operation of the
Partnership. No reimbursement under clauses (ii) through (iv) above shall
be permitted for services for which the General Partners or Affiliates
receive a separate fee or for (x) the salaries and related salary expenses
incurred by any Controlling Person and (y) any indirect expenses incurred
by them in performing services for the Partnership, such as rent,
depreciation charges relating to capital equipment, utilities and other
administrative items. "Controlling Person" for purposes of this Section 9.5
shall mean any person, regardless of title, who performs executive or
senior management functions for the General Partners or Affiliates similar
to those of directors, executive management and senior management, or any
person who either holds 5% or more equity interest in the General Partners
or Affiliates or has the power to direct or cause the direction of the
General Partners or Affiliates, whether through the ownership of voting
securities, by contract, or otherwise, or, in the absence of a specific
role or title, any person having the power to direct or cause the direction
of the management level employees and policies of the General Partners or
Affiliates. It is not intended that every person who carries a title such
as vice president, senior vice president, secretary or treasurer be
included in the definition of Controlling Person. In no event shall any
amount charged to the Partnership as a reimbursable expense by the General
Partners exceed the lesser of (a) the actual cost of such services, or (b)
the amount which the Partnership would be required to pay to independent
parties for comparable services. In the Partnership's annual report to
Limited Partners, there shall be provided an itemized breakdown of
reimbursements made to the Corporate General Partner and any Affiliates in
the categories of legal, accounting, transfer agent, data processing and
duplicating services. The reimbursement for expenses provided in this
Section 9.5 shall be made to the General Partners regardless of whether any
distributions are made to the Limited Partners under the provisions of
Section 9.2.
SECTION 9.6. Distributions to the General Partners of Net Cash
Receipts and Sale or Refinancing Proceeds pursuant to this Article IX shall
be allocated between the Corporate and Associate General Partners as
follows:
(a) Net Cash Receipts distributable to the General Partners
pursuant to Section 9.2(b) shall be allocated between the Associate General
Partner and the Corporate General Partner in the same respective
proportions as profits or losses of the Partnership (other than any profits
or losses attributable to the sale or other disposition of Partnership
Properties) are allocated pursuant to Section 10.7(a); and
(b) Sale or Refinancing Proceeds distributable to the General
Partners pursuant to Section 9.3 shall be allocated between the Corporate
General Partner and the Associate General Partner in the same respective
proportions as profits or losses from the sale or other disposition of
Partnership Properties are allocated pursuant to Section 10.7(b).
SECTION 9.7. Except with respect to matters as to which the Corporate
General Partner is granted discretion hereunder, the opinion of the
independent certified public accountants retained by the Partnership from
time to time shall be final and binding with respect to all computations
and determinations required to be made under this Article IX (including
computations and determinations in connection with any distribution
pursuant to Article XVIII).
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ARTICLE X
ALLOCATIONS OF PROFITS AND LOSSES
SECTION 10.1. The net profits or losses of the Partnership (other
than any profits or losses attributable to the sale or other disposition of
Partnership Properties) shall be allocated as follows: 96% of such net
profits or losses shall be allocated to the Limited Partners and 4% of such
net profits or losses shall be allocated to the General Partners; except
that any such profits or losses for the period through the First 1983
Admission Date shall be allocated 99% to the General Partners and 1% to the
initial Limited Partner.
SECTION 10.2. The net profit of the Partnership from any sale or
other disposition of Partnership Property shall be allocated as follows:
first, there shall be allocated to the General Partners the greater of (i)
1% of such net profit or (ii) the amount distributable to the General
Partners as Sale or Refinancing Proceeds from such sale or other
disposition in accordance with Section 93; then, all remaining profits
shall be allocated to the Limited Partners. Notwithstanding the allocation
in the first sentence of this Section 10.2, if, after such allocation, the
aggregate deficit balances, if any, in the Capital Accounts of the General
Partners would exceed the Potential Unrealized Gain of the Partnership on
the date of such allocation (allocated pro rata between the General
Partners in proportion to the negative balances in their respective Capital
Accounts), then the allocation of gain to the Limited Partners under this
Section 10.2 shall be reduced and the allocation of gain to the General
Partners under this Section 10.2 shall be increased (to be shared by them
in proportion to the deficit balances in their respective Capital Accounts)
to the extent necessary to cause the aggregate deficit balances in the
Capital Accounts of the General Partners after such allocation to equal the
Potential Unrealized Gain. Notwithstanding the allocation in the first
sentence of this Section 10.2, if, at any time gain is realized by the
Partnership on the sale or other disposition of a Property, any current or
anticipated reduction of the Partnership's indebtedness would cause the
deficit balances in the Capital Accounts of either or both of the General
Partners to be greater than its or their share of the Partnership's
indebtedness after such reduction, then an allocation of gain to each
General Partner shall be made to the extent necessary to cause the deficit
balance in each General Partner's Capital Account to be no less than such
General Partner's share of the Partnership's indebtedness after such
reduction. "Potential Unrealized Gain" shall equal the amount of gain which
would be realized for Federal income tax purposes (to be shared pro rata in
proportion to the respective deficit balances of the General Partners) if
all Partnership Properties were sold for their fair market value as
determined by the Corporate General Partner (and all installment
receivables of the Partnership were collected) on the date of such
allocation. Notwithstanding anything to the contrary in this Agreement,
upon the ultimate liquidation of the Partnership, if a General Partner has
a deficit balance in its Capital Account, such General Partner will make a
capital contribution equal to such deficit balance.
SECTION 10.3. The net loss of the Partnership from any sale or other
disposition of Partnership Property shall be allocated as follows: 99% of
such net loss shall be allocated to the Limited Partners and 1% of such net
loss shall be allocated to the General Partners.
SECTION 10.4. Except as otherwise set forth in this Section 10.4 and
in Section 10.5 below, all profits or losses allocable to the Limited
Partners shall be allocated among the Limited Partners as of the end of
each calendar year in proportion to the ratio which the number of Interests
owned by each of them bears to the total number of Interests owned by all
such Limited Partners as of the end of such calendar year. All profits or
losses (other than any profits or losses attributable to the sale or other
disposition of Partnership Properties) for a calendar year allocable with
respect to any Interest which may have been transferred during such year
shall be allocated between the transferor and the transferee based upon the
number of quarterly periods that each was recognized (pursuant to Article
XVI) as the owner of the Interest, without regard to the results of
Partnership operations during particular quarterly periods of such calendar
year and without regard to whether cash distributions were made to the
transferor or transferee. All profits or losses of the Partnership
attributable to the sale or refinancing of Partnership Properties and
allocable with respect to the Interests shall be allocated to the
recognized owners of the Interests (pursuant to Article XVI) as of the last
day of the quarterly period in which the Partnership recognized such
profits or losses for tax purposes.
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SECTION 10.5. The net profits or losses of the Partnership allocable
to the Limited Partners for the calendar years 1983 and 1984 shall be
allocated on the basis of interim closings of the Partnership's books on a
cash basis on the First 1983 Admission Date, on the Second 1983 Admission
Date, on December 31, 1983, on each 1984 Admission Date, and on December
31, 1984, and profits or losses for such respective period shall be
allocated as follows:
All profits or losses allocable to the Limited Partners for the
period through the First 1983 Admission Date shall be allocated to JMB
Realty Corporation in its capacity as the Initial Limited Partner.
All profits or losses allocable to the Limited Partners for the
period from the First 1983 Admission Date through December 31, 1984 shall
be allocated among the Limited Partners as follows:
(a) Profits or losses for the period from the First 1983
Admission Date through the Second 1983 Admission Date shall be allocated to
all Limited Partners admitted into the Partnership as of the First 1983
Admission Date in proportion to the ratio which the number of Interests
owned by each of them bears to the number of Interests held by all such
Limited Partners as of such date;
(b) Profits or losses for the period from the Second 1983
Admission Date through December 31, 1983 shall be allocated to all Limited
Partners admitted into the Partnership as of the Second 1983 Admission Date
(including those admitted as of the First 1983 Admission Date) in a ratio
such that, taking into account all prior allocations of profits or losses,
the profits or losses allocated to the Limited Partners admitted on the
First 1983 Admission Date will be 137-1/2% of the profits or losses
allocated to the Limited Partners admitted on the Second 1983 Admission
Date and, with respect to the allocation among Limited Partners admitted as
of each Admission Date, in proportion to the ratio which the number of
Interests owned by each of them bears to the number of Interests held by
all such Limited Partners as of such 1983 Admission Date;
(c) Profits or losses for the period from January 1, 1984
through the first 1984 Admission Date shall be allocated to all Limited
Partners admitted into the Partnership as of the Second 1983 Admission Date
(including those admitted as of the First 1983 Admission Date) in
proportion to the ratio which the number of Interests owned by each of them
bears to the number of Interests held by all such Limited Partners as of
such date;
(d) Profits or losses for the period from any 1984 Admission
Date in 1984 through the next succeeding 1984 Admission Date shall be
allocated to all Limited Partners who were admitted into the Partnership at
or prior to such preceding 1984 Admission Date in proportion to the ratio
which the number of Interests owned by each of them bears to the number of
Interests held by all such Limited Partners as of such date; and
(e) Profits or losses for the period from the last 1984
Admission Date through December 31, 1984 shall be allocated as follows:
First, to and among the Limited Partners admitted into the
Partnership in 1984 until the Net Capital Account with respect to each
Interest purchased in 1984 (taking into account any profits or losses
allocated with respect to such Interest under sub paragraph (d) above) is
equal to the Net Capital Account with respect to an Interest purchased at
the Second 1983 Admission Date.
Second, to and among the Limited Partners admitted into the
Partnership on, but not prior to, the Second 1983 Admission Date and in
1984 until the Net Capital Account with respect to each Interest purchased
in 1984 and the Net Capital Account with respect to each Interest purchased
at the Second 1983 Admission Date (taking into account any profits or
losses allocated with respect to such Interest under subparagraphs (c) and
(d) above) is equal to the Net Capital Account with respect to an Interest
(other
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than the Interest of the initial Limited Partner) purchased at the First
1983 Admission Date.
Thereafter, to all Limited Partners in proportion to the ratio
which the number of Interests owned by each of them bears to the number of
Interests held by all Limited Partners as of December 31, 1984.
Further in the event profits or losses allocable to the Limited
Partners for the period from the last 1984 Admission Date through December
31, 1984 are insufficient to permit the allocation set forth under "First"
and "Second" in clause (e) above, profits or losses allocable to the
Limited Partners for any subsequent year shall first be allocated to and
among Limited Partners in accordance with such provisions.
SECTION 10.6. "Profits" or "losses" as used herein includes, without
limitation, each item of Partnership income, gain, loss and deduction. Any
credits of the Partnership for a calendar year shall be allocated as
profits or losses of the Partnership (other than any profits or losses
attributable to the sale or other disposition of Partnership properties) in
accordance with Section 10.1.
SECTION 10.7. Profits or losses allocable to the General Partners
pursuant to this Article X shall be allocated between the Corporate and
Associate General Partners as follows:
(a) Profits or losses allocable to the General Partners
pursuant to Section 10.1 shall be allocated 80% to the Associate General
Partner and 20% to the Corporate General Partner; and
(b) Profits or losses allocable to the General Partners
pursuant to the first sentence of Section 10.2 and pursuant to Section 10.3
shall be allocated 50% to the Corporate General Partner and 50% to the
Associate General Partner.
ARTICLE XI
BOOKS OF ACCOUNT, RECORDS AND REPORTS
SECTION 11.1. The Corporate General Partner shall keep proper and
complete records and books of account in which shall be entered fully and
accurately all transactions and other matters relating to the Partnership's
business as are usually entered into records and books of account
maintained by persons engaged in businesses of a like character. The
Partnership books and records of account shall be kept on the cash basis,
except as the Corporate General Partner may otherwise determine. The books
and records shall at all times be maintained at the principal office of the
Partnership and shall be open to the inspection and examination of the
Partners or their duly authorized representatives during reasonable
business hours. The Corporate General Partner shall furnish a list of names
and addresses of all Limited Partners (including the number of Interests
owned by each of them) to any Limited Partner who requests such a list in
writing and who pays the costs of collection, duplication and mailing
thereof.
SECTION 11.2. Within 60 days after the end of each of the first three
fiscal quarters of each year, the Corporate General Partner shall send to
each person who was a holder of Interests at any time during the quarter
then ended the following (none of which need be audited): (i) a balance
sheet, (ii) a profit and loss statement, (iii) a cash flow statement, (iv)
a statement of cash distributions for such quarter, (v) a statement
describing the amount of all fees and other compensation and distributions
paid by the Partnership for such quarter to any General Partner or any
Affiliate of any General Partner, (vi) a report of any material acquisition
or disposition of real property during such fiscal quarter describing such
Property and the terms and conditions of its acquisition or disposition,
and (vii) until the capital contributions of the Partnership are fully
invested, a special report of property acquisitions during the preceding
quarter including a complete description of the Properties purchased, the
purchase price and the terms of the purchase including the Partnership's
cash investment, the amount and date of the appraisal of any such Property,
all fees paid to Affiliates
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of the General Partners in connection with such acquisitions and the amount
of capital contributions which remains unexpended or uncommitted (stated in
terms of dollar amount and as a percentage of capital contributions).
SECTION 11.3. Within 75 days after the end of each fiscal year, the
Corporate General Partner shall send to each person who was a holder of
Interests at any time during the fiscal year then ended such tax
information as shall be necessary for the preparation by such holder of his
Federal income tax return and state income and other tax returns with
regard to jurisdiction in which the Partnership is formed or qualified.
SECTION 11.4. Within 120 days after the end of each fiscal year, the
Corporate General Partner shall send to each person who was a holder of
Interests at any time during the fiscal year then ended (i) a balance sheet
as of the end of such fiscal year and statements of income, Partners'
equity and changes in financial position for such fiscal year, all of which
shall be prepared in accordance with generally accepted accounting
principles and accompanied by an auditor's report containing an unqualified
opinion of a firm of independent certified public accountants (or, if
qualified, stating the basis for such qualification), (ii) a cash flow
statement (which need not be audited), (iii) a report summarizing the fees
and other remuneration paid by the Partnership for such fiscal year to any
General Partner or any Affiliate of any General Partner, (iv) a report of
the activities of the Partnership during such fiscal year and (v) a
statement (which need not be audited) showing the Net Cash Receipts and
Sale or Refinancing Proceeds distributed to holders of Interests in respect
of such year, which statement shall identify Net Cash Receipts distributed
from operations during the year (including payments under management
agreements and lease payments under net leases, if any, with sellers), and
net Cash Receipts from operations during the prior year and from uninvested
reserves held from the proceeds of the offering of Interests.
SECTION 11.5. The Corporate General Partner shall prepare and file
with appropriate state authorities all reports required to be filed by
state securities or "Blue Sky" authorities.
ARTICLE XII
FISCAL YEAR
The fiscal year of the Partnership shall end on the thirty-first day
of December in each year.
ARTICLE XIII
PARTNERSHIP FUNDS
The funds of the Partnership shall be deposited in such bank account
or accounts, or invested in such interest-bearing or non-interest-bearing
investments, as shall be designated by the Corporate General Partner. Such
funds shall not be commingled with funds of any other real estate limited
partnership or other entity managed or advised by the Corporate General
Partner or its Affiliates. All withdrawals from any of such bank accounts
shall be made by the duly authorized agent or agents of the Corporate
General Partner.
ARTICLE XIV
STATUS OF LIMITED PARTNERS
SECTION 14.1. The Limited Partners shall not participate in the
management or control of the Partnership's business nor shall they transact
any business for the Partnership, nor shall they have the power to act for
or bind the Partnership, said powers being vested solely and exclusively in
the General Partners. The Limited Partners shall have no interest in the
stock or assets of the Corporate General Partner, or in any proceeds of any
sales thereof (which sales shall not be restricted in any respect) by
virtue of acquiring or owning Interests of the Partnership.
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SECTION 14.2. No Limited Partner shall have any personal liability
whatever, whether to the Partnership, to any of the Partners or to the
creditors of the Partnership, for the debts of the Partnership or any of
its losses beyond the amount committed by him to the capital of the
Partnership as set forth opposite his name in Schedule A. Each Interest
shall be fully paid and non-assessable.
SECTION 14.3. The death or legal incapacity of a Limited Partner
shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the profits and losses of the Partnership, to
receive distributions of Partnership funds and to assign a Partnership
Interest pursuant to Article XVI hereof shall, on the happening of such an
event, devolve upon his personal representative, or in the event of the
death of one whose limited partnership Interest is held in joint tenancy,
shall pass to the surviving joint tenant, subject to the terms and
conditions of this Agreement, and the Partnership shall continue as a
limited partnership. The estate of the deceased Limited Partner or such
surviving joint tenant, as the case may be, shall be liable for all the
obligations of the deceased Limited Partner. However, in no event shall
such personal representative or surviving joint tenant become a substituted
Limited Partner, except with the consent of the Corporate General Partner
in accordance with Section 16.1 hereof.
ARTICLE XV
POWERS, RIGHTS AND DUTIES OF THE GENERAL PARTNERS
SECTION 15.1. The Corporate General Partner shall have exclusive
authority to manage the operations and affairs of the Partnership and to
make all decisions regarding the business of the Partnership with the sole
exception that all purchases and sales of any Partnership Property which
are recommended by the Corporate General Partner must be approved by the
managing partners of the Associate General Partner, provided that
Partnership Property shall not be purchased at a price (including a pro
rata portion of Acquisition Fees which shall be attributable to such
Property) in excess of the value thereof as determined by an independent
appraisal (which appraisal shall be retained for at least five years).
Except as aforesaid, the Associate General Partner shall have no authority
to manage or control the business and affairs of the Partnership. Pursuant
to the foregoing, it is understood and agreed that the Corporate General
Partner shall have all of the rights and powers of a general partner as
provided in the Illinois Uniform Limited Partnership Act and as otherwise
provided by law and any action taken by the Corporate General Partner shall
constitute the act of and serve to bind the Partnership. It is further
understood and agreed that the Chairman, President or any Vice President of
the Corporate General Partner (including any partner of the Associate
General Partner who is Chairman, President or a Vice President of the
Corporate General Partner) may act for and in the name of the Corporate
General Partner in the exercise by the Corporate General Partner of any of
its rights and powers hereunder. In dealing with the Corporate General
Partner (or the Chairman, President or any Vice President thereof) acting
on behalf of the Partnership, no person shall be required to inquire into
the authority of such Partner or such individual to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively upon
the power and authority of each General Partner (and of the Chairman,
President or any Vice President of the Corporate General Partner) as set
forth in this Agreement.
SECTION 15.2. The Corporate General Partner is hereby granted the
right, power and authority to do on behalf of the Partnership all things
which, in its sole judgment, are necessary, proper or desirable to carry
out the aforementioned duties and responsibilities, including, but not
limited to, the right, power and authority: to incur all reasonable
expenditures; to employ and dismiss from employment any and all employees,
agents, independent contractors, real estate managers, brokers, attorneys
and accountants; to let or lease all or any portion of any property
(except that the Partnership shall not be the owner of a leasehold estate
in property in which JMB or its affiliates have an ownership interest) for
any purpose and without limit as to the term thereof, whether or not such
term (including renewal terms) shall extend beyond the date of the
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termination of the Partnership and whether or not the portion so leased is
to be occupied by the lessee or, in turn, subleased in whole or in part to
others; to create, by grant or otherwise, easements and servitudes (whether
for charitable purposes or otherwise); to borrow money and as security
therefor to mortgage all or any part of any property; to construct, alter,
improve, repair, raze, replace or rebuild any Property; to obtain
replacements of any mortgage or mortgages related in any way to the
Property owned by the Partnership, and to prepay in whole or in part,
refinance, recast, modify, consolidate or extend any mortgages affecting
any such Property; to do any and all of the foregoing at such price, rental
or amount, for cash, securities or other property and upon such terms as
the Corporate General Partner deems proper (provided, how ever, that in
connection with the borrowing of money recourse for the repayment of which
is limited solely to Partnership Property, no lender shall be granted or
acquire, at any time as a result of making such a loan, any direct or
indirect interest in the profits, capital or property of the Partnership
other than as a secured creditor); to place record title to any Property in
its name or in the name of a nominee or a trustee for the purpose of
mortgage financing or any other convenience or benefit of the Partnership;
and to execute, acknowledge and deliver any and all instruments to
effectuate any and all of the foregoing. In the event the Partnership
utilizes any all-inclusive note, said note shall provide that the
Partnership shall receive credit on its obligation under said note for
payments made by the Partnership directly on the underlying encumbrance and
that a bank, escrow company or other paying agent shall collect payments
(other than amounts not to be applied to the underlying encumbrance) on the
all-inclusive note and make disbursements therefrom to the holder of the
underlying encumbrance prior to making any disbursements to the holder of
the all-inclusive note or, in the alternative, all payments on the
all-inclusive note and underlying notes shall be made directly by the
Partnership. The General Partners shall not, in connection with the
purchase of real properties for the Partnership, incur aggregate mortgage
indebtedness in excess of the lesser of (i) 80% of the aggregate
independently appraised value of all Properties, or (ii) 90% of the
aggregate purchase prices plus other initial cash payments made or required
in connection with the purchase of all Properties.
SECTION 15.3. Subject to the approval of the managing partners of the
Associate General Partner when required by the provisions of Section 15.1,
the Corporate General Partner shall have the right, power and authority to
lease, sell, exchange or refinance, or grant an option for the sale of, all
or any portion of any Property of the Partnership at such rental, price or
amount, for cash, securities or other property and upon such other terms as
the Corporate General Partner in its sole discretion deems proper;
provided, that (subject to Section 17.5) the sale or other disposition of
all or substantially all of the Partnership's assets (except for the sale
or other disposition of the final property remaining as a result of sales
of properties as contemplated by the Prospectus) shall require the
approval of Limited Partners holding a majority of the then outstanding
Interests. No Affiliate of the General Partners shall receive any
commission on the sale of any property by the Partnership.
SECTION 15.4. The Corporate General Partner shall devote such time to
the Partnership business as it, in its sole discretion, shall deem to be
necessary to manage and supervise the Partnership business and affairs in
an efficient manner; but nothing in this Agreement shall preclude the
employment, at the expense of the Partnership, of any agent or third party
to manage or provide other services in respect of the Partnership property
subject to the control of the Corporate General Partner.
SECTION 15.5. The General Partners shall not be required to manage
the Partnership as their sole and exclusive functions, and they may have
other business interests and may engage in other activities in addition to
those relating to the Partnership, including the rendering of advice or
services of any kind to other investors and the making or management of
other investments. Neither the Partnership nor any Partner shall have any
right by virtue of this Agreement or the partnership relationship created
hereby in or to such other ventures or activities or to the income
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or proceeds derived therefrom and the pursuit of such ventures, even if
competitive with the business of the Partnership, shall not be deemed
wrongful or improper. Neither the Associate General Partner nor the
Corporate General Partner nor any Affiliate of any General Partner shall be
obligated to present any particular investment opportunity to the
Partnership even if such opportunity is of a character which, if presented
to the Partnership, could be taken by the Partnership and each of them
shall have the right to take for its own account (individually or
otherwise) or to recommend to others any such particular investment
opportunity. In the event that any particular investment opportunity is
presented to the General Partners or an Affiliate which might be made by
the Partnership and by any Affiliate of the General Partners a decision a
to the suitability of the investment for the Partnership will be based on a
review of its investment portfolio, and upon a review of such factors as
the cash flow of the investment, the effect of the acquisition on the
diversification of the Partnership's investments generally, the size of
the investment compared to the capitalization of the Partnership and the
amount it has available for investment, the expected income tax effect of
such investment, the Partnership's policies relating to leverage, and the
length of time that the Partnership has had funds available for investment.
To the extent that a particular investment opportunity might be determined
to be suitable for the Partnership and one or more such Affiliates,
priority will generally be given to the entity having had uninvested funds
for the longest period of time
SECTION 15.6. The Partnership may (i) obtain financing (other than
permanent financing) from an Affiliate of the General Partners in
connection with the purchase of Properties or purchase improved Properties
with improvements under construction for which an Affiliate of the General
Partners has provided financing or (ii) invest in joint venture
partnerships with other persons (which may include Affiliates), which such
joint venture partnerships own and operate a particular Property (in which
event the Partnership would have either a right of first refusal to
purchase the joint venture partner's interest in the Property or be
entitled to receive preferential amount from the proceeds of sale of the
Property); provided, however, that in connection with such financing (a)
the Affiliate of the General Partners may not receive interest and other
financing charges or fees in excess of the lesser of (i) the amounts which
would be charged by unrelated lending institutions on comparable loans for
the same purpose in the locality of the property, and (ii) the rate per
annum equal to 2% plus the prime commercial rate of Continental Illinois
National Bank and Trust Company of Chicago, and (b) no prepayment charge or
penalty may be required by the Affiliate of the General Partners on a loan
to the Partnership secured by a junior or all-inclusive enemcumbrance on
the property, except to the extent that such prepayment charge or penalty
is attributable to the underlying encumbrance; and further provided that
(x) the Partnership shall not make any such investment in a joint venture
partnership unless the Partnership (together with any Affiliate) acquires a
controlling interest in such other joint venture partnership and (y) in the
case of joint venture investments with Affiliates, (A) the Partnership and
the Affiliate of the General Partners shall have substantially identical
investment objectives, (B) the Partnership's investment is on substantially
the same terms and conditions as the investment of such Affiliate, (C) the
purchase price of the Partnership's investment has been confirmed by
independent appraisal as not greater than the fair market value of such
investment, (D) the compensation to the General Partners is substantially
identical to the compensation received by such Affiliate, (E) such
investment shall not result in the impairment, abrogation or circumvention
of any of the terms or provisions of his Agreement and (F) the investments
shall not be in public or private limited partnerships or other public real
estate investment entities (except as otherwise expressly permitted by this
Section with respect to private limited partnerships). In addition, the
payment of duplicate property management or other fees in connection with
investments in joint venture partnerships is prohibited and the operation
and management of such a joint venture partnership shall in all other
respects be consistent with the provisions and limitations contained in
this Agreement. The Partnership and any joint venture partner shall be
required to pay only their respective or their proportionate share of legal
fees and other expenses in connection with the acquisition of a Property by
a joint venture partnership.
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SECTION 15.7. The Partnership shall not purchase real property from
any General Partner or any Affiliate of the General Partners which is
selling such property for its own account and not as a broker or agent for
persons who are not Affiliates of the General Partners, nor shall the
Partnership sell any real property to any General Partner or any Affiliate
of the General Partners (except that the Partnership may sell a Property or
Properties to the General Partners or Affiliates of the General Partners in
the event that insufficient Interests are sold pursuant to Section 8.3 to
make required payments on such Property or Properties, as described in the
Prospectus). Notwithstanding the foregoing, the Corporate General Partner
may purchase Property in its own name, or that of a nominee and assume
loans in connection therewith and temporarily hold title thereto for the
purpose of facilitating the acquisition of such Property or the borrowing
of money or obtaining of financing for the Partnership, or completion of
construction of the Property, or any other purpose related to the business
of the Partnership, provided that such Property is purchased by the
Partnership for a cash investment no greater than the cash investment in
such Property by the Corporate General Partner and that no other payment
directly or indirectly arising out of such transaction is received by any
General Partner or Affiliated Person thereof apart from compensation
otherwise permitted by this Agreement. The Partnership shall not make any
loans to any General Partner or any Affiliate of the General Partners. The
foregoing provision shall not, however, prohibit (i) transfers incident to
the formation of joint ventures with Affiliates of the General Partners
permitted by Section 15.6, or (ii) the making of loans or advances by the
Partnership to a joint venture partnership which owns and operates a
particular Partnership Property as provided for in Section 15.6. The
General Partners or their Affiliates may lease office or other space in
Partnership Properties; provided, however, that any such lease (a) shall be
for rentals and on terms not less favorable to the Partnership than those
available to the Partnership from unaffiliated tenants, (b) shall be
terminable on 60 days' prior written notice by the Partnership without
penalty and (c) shall provide that any rentals from subleases relating
thereto which are in excess of the rentals from such lease shall be paid to
the Partnership and, provided further, that no more than 15% of the office
space of the Partnership Properties shall be leased to JMB or its
Affiliates.
SECTION 15.8. The Corporate General Partner is hereby expressly
authorized in the name of and on behalf of the Partnership, to pay or cause
to be paid to JMB Realty Corporation ("JMB") (the parent company of the
Corporate General Partner) or its Affiliates or to purchase Properties in
connection with the purchase of which JMB or its Affiliates shall receive
from the sellers there of, Acquisition Fees in the aggregate amount, in
connection with the evaluation, investigation, negotiation, selection and
purchase of all Partnership Properties, not to exceed 14-7/8% of the Gross
Proceeds of the Offering; provided, however, that, in no event shall the
total of all Acquisition Fees paid to anyone in connection with the
purchase of all Partnership Properties exceed 18% of the Gross Proceeds of
the Offering, (which 18% limitation contained in this proviso shall be
computed on that portion of the gross proceeds of the Offering (including a
proportionate share of uninvested reserves and a proportionate share of
Front-End Fees incurred in connection with the offering) applicable to the
Property which is the subject of the transaction and to the Properties
previously acquired by, or contracted for by, the Partnership); and
provided further, however, that in no event shall the total of all
Acquisition Fees paid to anyone exceed the compensation customarily charged
by others rendering similar services as an on-going public activity in
connection with comparable acquisition of comparable property. In addition
the Corporate General Partner shall commit a percentage of Gross Proceeds
of the Offering to Investment in Properties which, at a minimum, is equal
to the greater of: (i) 80% of the Gross Proceeds of the Offering reduced by
..1625% for each 1% of the aggregate indebtedness secured or to be secured
by all liens and mortgages encumbering Partnership Properties; or (ii) 67%
of Gross Proceeds of the Offering. For purposes of this calculation,
"aggregate indebtedness secured or to be secured by all liens and mortgages
encumbering Partnership Properties" is the percentage resulting when such
aggregate indebtedness is divided by the aggregate of the purchase price of
all Partnership Properties, excluding Front-End Fees. If the aggregate
Acquisition Fees payable in connection with the purchase of real properties
by the Partnership should exceed either of the foregoing amounts, or if
Front-End
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Fees must be reduced for the Partnership to commit the minimum percentage
of Gross Proceeds of the Offering to Investment in Properties as set forth
above, the General Partners shall cause JMB to reimburse the Partnership
for the amount of any such excess Acquisition Fees received by it. Such
Acquisition Fees paid to JMB or its Affiliates shall compensate JMB or its
Affiliates for the evaluation, investigation and negotiation of investments
in properties, including those which are ultimately not acquired by the
Partnership.
SECTION 15.9. The amount distributable to the General Partners under
Section 9.3(iii) in connection with sale of a Partnership Property shall in
no event exceed 50% of the amount customarily charged in connection with
sales of properties in arm's-length transactions by non-affiliates of JMB
rendering real estate brokerage services as an on-going public activity in
the same geographical location and for comparable property; provided,
however, that the amount distributable to the General Partners under
Section 9.3(iii) plus the real estate commission paid to anyone in
connection with the sale of a Partnership Property shall in no event exceed
the lesser of (i) 6% of the gross purchase price of the Property paid
to the Partnership by the purchaser, or (ii) the amount customarily
charged in connection with sales of properties in arm's-length transactions
by non-affiliates of JMB rendering real estate brokerage services as an
on-going public activity in the same geographical location and for
comparable property. No commission shall be paid to JMB or an Affiliate of
JMB in connection with the purchase of a Property purchased with Sale or
Refinancing Proceeds (provided, however, that JMB or an Affiliate of JMB
may receive such commission in connection with the purchase of a property
which is in substitution for a property transferred back to a seller as
described in the definition of "Sale or Refinancing Proceeds", provided
that no commission was paid and retained in connection with the purchase of
the Property so transferred back). Notwithstanding all other provisions of
this Section 15.9 no Affiliate of the General Partners shall be given the
exclusive right to sell or exclusive employment to sell any property of the
Partnership and no amounts shall be distributable to the General Partners
under Section 9.3(iii) unless JMB or an Affiliate of JMB performs services
in connection with the sale of a property.
SECTION 15.10. Affiliates of the General Partners may be employed by
or retained by the Partnership to provide property management and leasing
services for the Partnership (it being understood and agreed that the
provision of such services does not constitute a part of the duties or
obligations of the General Partners as general partners of the
Partnership); provided that the Corporate General Partner shall not enter
into any agreement for property management with an Affiliate on terms less
favorable to the Partnership than those customarily charged for similar
services in the relevant geographical area and in no event shall fees to an
Affiliate of the General Partners for property management and leasing
services exceed the following schedule:
(i) in the case of residential property, the maximum fee
(including all rent-up, leasing,and re-leasing fees and bonuses, and
leasing related services, except for locator services performed by
non-affiliated parties) shall be 5% of the gross receipts from the property
being managed;
(ii) in the case of industrial or commercial property, except
as set forth in (iii) below, the maximum fee from such property shall be 6%
of the gross receipts from the property being managed where the Affiliates
of the General Partners performs leasing re-leasing and leasing related
services, and the maximum fee shall be 3% of gross receipts from the
property being managed if the Affiliate of the General Partners does not
perform leasing, releasing and leasing-related services with respect to the
property;
(iii) in the case of industrial or commercial properties which
are leased for ten or more years on a net (or similar) basis, the maximum
fee shall be 1% of the gross receipts from the property being managed,
except for a one time initial leasing fee of 3 /o of the gross receipts on
each lease payable over the first five full years of the original term of
the lease.
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In addition, any property management agreements with Affiliates shall be
terminable by either party, without penalty, upon 60 days' prior written
notice.
SECTION 15.11. The Corporate General Partner may enter into
agreements with Affiliates of the General Partners to provide insurance
brokerage services to the Partnership; provided that (i) before any such
brokerage services are provided, there shall have been obtained quotes from
three independent insurance brokers relating to the proposed coverage,
which quotes shall be upon coverage and terms comparable to those proposed
to be provided by such Affiliate and such Affiliate shall not provide such
insurance brokerage services unless it can obtain such insurance at a cost
which is no greater than the lowest of the three unaffiliated insurance
broker quotes, (ii) at any time JMB Insurance Agency, Inc. ceases to derive
at least 75% of its gross income from insurance commissions with respect to
insurance written for persons who are not Affiliates of any of the General
Partners, JMB Insurance Agency, Inc. shall not write any further insurance
on behalf of the Partnership or any property then owned by it and (iii) any
agreement with Affiliates to provide insurance brokerage services to the
Partnership shall be terminable by either party, without penalty, upon 60
days' prior written notice.
SECTION 15.12. The validity of any transaction, agreement or payment
involving the Partnership and the General Partners or any Affiliate thereof
otherwise permitted by the terms of this Agreement shall not be affected by
reason of the relationship between the Partnership or the General Partners
and such Affiliate or the approval of said transaction, agreement or
payment by directors of the Corporate General Partner or by partners of the
Associate General Partner, all or some of whom are officers or directors of
or are otherwise interested in or related to such Affiliate. All
transactions, agreements or payments involving the Partnership and the
General Partners or any Affiliate thereof shall be on terms no less
favorable to the Partnership than those available to the Partnership in
similar dealings with unaffiliated third parties, and all agreements and
transactions shall, to the extent not earned or performed, be terminable,
without penalty, on 60 days' prior written notice by the Partnership.
SECTION 15.13. The General Partners or any Affiliate thereof shall
not directly or indirectly pay or award any finder's fee, commission or
other compensation to any person engaged by a potential investor for
investment advice as an inducement to such advisor to advise the purchase
of Interests; provided, however, that this provision shall not prohibit the
normal selling commission payable to a registered broker-dealer or other
properly licensed person (including Affiliates of the General Partners) for
selling Interests. The Corporate General Partner shall not receive, in
connection with the performance of any services by any Affiliate thereof,
any rebates or give-ups,nor may the Corporate General Partner participate
in any reciprocal business arrangements which would have the effect of
circumventing restrictions set forth herein upon dealings with its
Affiliates. Nothing contained in this Agreement shall be deemed to prohibit
the Corporate General Partner or any Affiliate of the General Partners from
dealing, or otherwise engaging in business with, persons (other than
Affiliates of the General Partners) transacting business with the
Partnership or from providing services relating to the purchase, sale,
ownership, management, development or operation of real property and
receiving compensation therefor, not involving any direct or indirect
payment by the Partnership or any rebate or reciprocal arrangement as
described in the foregoing sentences, from any person who has provided or
may in the future provide any services to, sell property to, or purchase
property from, the Partnership
SECTION 15.14. The Corporate General Partner shall have a fiduciary
responsibility for the safekeeping and use of all funds and assets of the
Partnership, whether or not in its immediate possession or control, and the
Corporate General Partner shall not employ or permit another to employ such
funds or assets in any manner except for the exclusive benefit of the
Partnership.
SECTION 15.15. Neither the General Partners nor any officer or
director of the Corporate General Partner nor any partner of the Associate
General Partner shall be liable, responsible or accountable in damages or
otherwise to the Partnership or any Limited Partner for any action taken
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or failure to act on behalf of the Partnership within the scope of the
authority conferred on the General Partners by this Agreement or by law
unless such action or omission was performed or omitted fraudulently or in
bad faith or constituted misconduct or negligence (gross or ordinary).
SECTION 15.16. The Partnership shall indemnify and hold harmless each
General Partner and each partner of the Associate General Partner (herein
the "Indemnified Parties") from and as any loss expense, damage or injury
suffered or sustained by him by reason of any acts, omission or alleged
acts or omissions arising out of his activities on behalf of the
Partnership or in furtherance of the interests of the Partnership,
including, but not limited to, any, judgment, award,settlement,reasonable
attorney's fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim and
including any payments made by the Corporate General Partner to any of its
officers or directors pursuant to an indemnification agreement no broader
than this Section 15.16; provided that the acts, omissions or alleged acts
or omissions upon which such actual or threatened action, proceeding or
claims are based were in good faith and were not performed or omitted
fraudulently or in bad faith or as a result of misconduct or negligence
(gross or ordinary) by such Indemnified Party. Such indemnification shall
be made only to the extent of assets of the Partnership.
SECTION 15.17. The Corporate General Partner may, in its sole
discretion, make or revoke the election referred to in Section 754 of the
Internal Revenue Code of 1954 or any similar provision enacted in lieu
thereof. Each of the Partners will, upon request, supply the information
necessary to properly give effect to such election.
SECTION 15.18. The General Partners shall not, on behalf of the
Partnership, acquire any property in exchange for Interests in the
Partnership.
SECTION 15.19. The Corporate General Partner shall initially, upon
completion of the offering contemplated by the Prospectus, establish
reserves for working capital and to pay taxes, insurance, debt service,
repairs, replacements or renewals, or other cost and expenses incident to
the ownership or operation of the Partnership's properties and for such
other purposes as the Corporate General Partner may determine, in an amount
equal to not less than 3% of the gross proceeds of Such offering and
thereafter shall maintain such reserves in such amounts as the Corporate
General Partner deems appropriate under the circumstances from time to
time.
SECTION 15.20. The Corporate General Partner, in its capacity as a
general partner in any partnership or joint venture which may hold title to
any Property, shall not do, or cause any of its subsidiaries acting in such
capacity to do, any act which would not be permitted under this agreement
to be done by it as the Corporate General Partner , if title to such
Property were held directly by the Partnership and shall, in general, act,
and cause any such subsidiary to act, in such capacity in the same manner
as if title to such property were held directly by the Partnership.
SECTION 15.21. The Corporate General Partner may, in its sole
discretion, at any time after the Partnership has received subscriptions
for the purchase of at least 6,000 Interests, obtain financing to pay the
selling commissions, initially payable to Carlyle Securities Corporation,
in connection with the solicitation for the subscriptions received by the
Partnership to the date of such payment.
SECTION 15.22. The Corporate General Partner may at any time, on
behalf of the Partnership borrow money and otherwise enter into banking
transactions in the ordinary course of business with Continental Illinois
National Bank and Trust Company of Chicago or acquire properties subject to
indebtedness owed to such Bank.
ARTICLE XVI
TRANSFER OF PARTNERSHIP INTERESTS
SECTION 16.1. A Limited Partner may, after the termination of the
initial public offering of the lnterests of the Partnership pursuant to
Section 8.3, assign the whole or any part of his Interest
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in the Partnership (but only in whole Interests or in whole and partial
Interests if simultaneously assigning the whole of his Interest), and such
assignment shall confer upon the assignee the right to become a substituted
Limited Partner in the following manner and subject to the following
conditions:
(i) An instrument of assignment executed by both the assignor
and the assignee of the Interests satisfactory in form to the Corporate
General Partner shall be delivered to the Corporate General Partner.
(ii) The instrument of assignment shall be accompanied by a
transfer fee not in excess of $100 which shall be paid to the Partnership
to cover all reasonable fees and filing costs in connection with such
transfer.
(iii) No assignment shall be effective until the first day of
the calendar quarter following the calendar quarter in which the Corporate
General Partner actually receives the instrument of assignment which
complies with the requirements of subparagraph (i) above.
(iv) No assignment (other than by gift, bequest, inheritance
or operation of law) shall be effective prior to termination of the
offering of Interests to the public as contemplated by Section 8.3.
(v) No assignment shall be effective if such assignment would,
in the opinion of counsel for the Corporate General Partner, result in the
termination of the Partnership for purposes of the then applicable
provisions of the Internal Revenue Code of 1954.
(vi) No assignment shall be effective if the assignment would,
to the knowledge of the Corporate General Partner, violate the provisions
of any applicable state securities law.
(vii) No assignment to a minor or incompetent shall be
effective in any respect.
(viii) The right of an assignee to become a substituted
Limited Partner shall be subject to the written consent of the Corporate
General Partner, which consent may be granted or denied in the sole and
absolute discretion of the Corporate General Partner and prior to the
giving of which consent, such substitution shall not be effective. The
written consent or a notice of denial of consent shall be given to the
assignee not later than the last day of the calendar month following the
month the Corporate General Partner actually receives the instrument of
assignment which complies with the requirements of subparagraph (i) above.
There shall be no other restrictions on the assignment of Interests.
SECTION 16.2. Upon effectiveness of an assignment of Interests under
Section 16.1, the Corporate General Partner shall, subject to Section 16.1,
execute, file and record with the appropriate governmental agencies such
documents (including amendments to this Agreement) as are required to
accomplish the substitution of the assignee as a substituted Limited
Partner. In no event shall the consent of any Limited Partner (other than
the assignor) be required to effect such substitution. The Partnership
shall treat such person entitled to become a substituted Limited Partner
(pursuant to the provisions of Section 16.1) as the substituted Limited
Partner with respect to the Interests assigned from the date such
assignment is effective under Section 16.1, notwithstanding the time
consumed in preparing and filing the necessary documents with governmental
agencies necessary to effectuate the substitution. The rights of an
assignee who does not become a substituted Limited Partner, by reason of
non-consent thereto by the Corporate General Partner, shall be limited to
receipt of his share of cash distributions and Partnership profits or
losses as determined under Articles IX and X, and the assignment to such an
assignee shall be recognized not later than the last day of the calendar
month following receipt of the instrument of assignment which complies with
the requirements of subparagraph (i) of Section 16.1.
SECTION 16.3. With the consent of all the other General Partners and
of such number of the Limited Partners as are then required under the
Uniform Limited Partnership Act of the State of Illinois and under the laws
of such other jurisdictions in which the Partnership is formed or
qualified, to consent to or ratify the admission of a General Partner, but
in no event with the
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consent of less than a majority in interest of the Limited Partners, any
General Partner may at any time designate one or more persons to be
successors to such General Partner or to be additional General Partners, in
each case with such participation in such General Partner's Interest as
such General Partner and such successors or additional General Partners may
agree upon, provided that the Interests of the Limited Partners shall not
be affected thereby. In the event of the addition or substitution of a
General Partner in accordance with the provisions of this Section 16.3, the
Corporate General Partner shall execute, file and record with the
appropriate governmental agencies such documents (including amendments to
this Agreement) as are required to reflect the substitution or admission of
such substituted or additional General Partner.
SECTION 16.4. Any person who acquires Interests or is admitted to
the Partnership as a substituted Limited Partner or as a successor or
additional General Partner shall be subject to and bound by all the
provisions of this Agreement as if originally a party to this Agreement.
ARTICLE XVII
DISSOLUTION OF THE PARTNERSHIP
SECTION 17.1. The dissolution, bankruptcy or withdrawal from the
Partnership of a General Partner shall dissolve the Partnership unless
within 60 days thereafter the remaining General Partner shall elect to
continue the Partnership business. In the event of such election, the
Partnership shall not be dissolved, but shall continue with the remaining
General Partner as a General Partner, and in the event the sole remaining
General Partner shall be the Associate General Partner, all rights, power
and authority vested by this Agreement in the Corporate General Partner
shall be vested in the Associate General Partner. In the event no such
election is made, the Partnership shall be dissolved and terminated in
accordance with Article XVIII hereof. In the event of the bankruptcy,
dissolution or withdrawal of either of the General Partners during the
first 10 years of the Partnership or during such time as the Partnership
retains its original properties whichever is shorter, the remaining General
Partner will elect to continue the Partnership for such period. In the
event of the bankruptcy, dissolution or withdrawal of a General Partner at
any time during the life of the Partnership, the remaining General Partner
shall promptly give the Limited Partners notice of the occurrence of an
event constituting such bankruptcy, dissolution or withdrawal The sole
remaining General Partner shall give the Limited Partners 60 days' prior
written notice of its intent to voluntarily withdraw as a General Partner
of the Partnership. The Corporate General Partner hereby agrees not to
withdraw as a General Partner of the Partnership during the period of 10
years following commencement of the public offering of Interests in the
Partnership unless prior to such withdrawal, the Limited Partners have
exercised their right pursuant to Section 17.5 (and subject to the
conditions set forth therein) to elect a new General Partner.
SECTION 17.2. The happening of any one of the following events shall
work an immediate dissolution of the Partnership:
(i) the bankruptcy, dissolution or withdrawal of the last
remaining General Partner;
(ii) the sale of all the real estate assets (which
shall include purchase money security interests) of the
Partnership;
(iii) the agreement in writing by Limited Partners
holding a majority of all the then outstanding Interests to dissolve
the Partnership (subject to Section 17.5); or
(iv) the termination of the term of the Partnership pursuant
to Article VI of this Agreement.
SECTION 17 3 For purposes of this Agreement, the "bankruptcy" of a
General Partner shall be deemed to have occurred upon the expiration of 60
days following the happening of any of the following: (i) the filing of an
application by such General Partner for, or a consent to, the appointment
of a trustee of his assets, (ii) the filing by such General Partner of a
voluntary petition
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in bankruptcy or the filing of a pleading in any court of record admitting
in writing his inability to pay his debts as they come due, (iii) the
making by such General Partner of a general assignment for the benefit of
creditors, (iv) the filing by such General Partner of an answer admitting
the material allegations of, or his consenting to, or defaulting in
answering, a bankruptcy petition filed against him in any bankruptcy
proceeding or (v) the entry of an order, judgment or decree by any court of
competent jurisdiction adjudicating such General Partner a bankrupt or
appointing a trustee of his assets.
SECTION 17.4. For purposes of this Agreement, the dissolution of a
General Partner shall not include a dissolution of Realty Associates-XIII
by reason of the death, bankruptcy, adjudication of incompetency or
withdrawal (whether voluntary or involuntary) of one or more of the general
partners thereof so long as the remaining general partner or partners of
Realty Associates-XIII elect to continue the business of such partnership.
SECTION 17.5. Upon the written consent or affirmative vote of Limited
Partners holding a majority of the then outstanding Interests, any General
Partner may be removed; provided, however, that this Section 17.5 shall not
become effective prior to the termination of the offering of Interests
pursuant to Section 8.3. Any General Partner so removed shall, for the
purpose of this Agreement, be deemed to have "withdrawn" from the
Partnership. Unless the General Partner so removed was the last remaining
General Partner, a new General Partner may be elected within 60 days
following the effective date of such removal by the written consent or
affirmative vote of Limited Partners holding a majority of the then
outstanding Interests. If, at any time during the existence of the
Partnership, there is only one General Partner, the majority in interest of
the Limited Partners may elect an additional General Partner. The removal
of a General Partner shall in no way derogate from any rights of such
General Partner attributable to the period prior to the date of such
removal. Notwithstanding the foregoing and any other provisions of this
Agreement, the rights of the Limited Partners to remove a General Partner
and to elect a new General Partner and the rights of the Limited Partners
to dissolve the Partnership under Section 17.2, to amend the Partnership
Agreement under Section 21.1 and to approve the sale of all or
substantially all of the Partnership's assets under Section 15.3 shall not
be exercised in any manner unless and until (i) the Partnership has
received an opinion of counsel satisfactory to the holders of a majority of
the outstanding Interests as to the legality of such action, and (ii)
either (A) the Partnership has received an opinion of counsel satisfactory
to the holders of a majority of the outstanding Interests that such action
may be effected without adversely affecting the status of Limited Partners
as limited partners of the Partnership, or (B) a state court having
original jurisdiction in the premises has entered a judgment which has
become final to the foregoing effect as to the laws of the State of
Illinois and an opinion of counsel as provided in subsection (ii)(A) has
been obtained as to the laws of such jurisdictions, other than the State of
Illinois, in which the Partnership is formed, reformed, reorganized or
otherwise qualified. For purposes of this Section 17.5, counsel will be
deemed satisfactory to the Limited Partners if proposed by the Corporate
General Partner and affirmatively approved within 45 days by a majority in
interest of the Limited Partners; provided, that if the holders of 10% or
more of the outstanding Interests propose counsel for this purpose, such
proposed counsel, and not counsel proposed by the General Partners, shall
be submitted for approval by the Limited Partners and will be deemed
approved by the Limited Partners unless objected to in writing by the
holders of a majority of the outstanding Interests within 45 days.
SECTION 17.6. In the event of the removal of any General Partner
under Section 17.5, or the bankruptcy, dissolution, or withdrawal of a
General Partner under Section 17.1, its interest (including the value of
all of its interest in Net Cash Receipts, Sale or Refinancing Proceeds and
all net losses for tax purposes) as such General Partner shall be purchased
by the Partnership from such General Partner for a purchase price equal to
the fair market value of such interest. Such value shall first be
determined by agreement between such General Partner and the Partnership
(acting only after approval by majority vote of the Limited Partners). Such
General Partner and the Partnership shall initially agree on such fair
market value and submit it to
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the Limited Partners. The Partnership's agreement on the fair market value
of the interest of such General Partner in the Partnership shall become
effective only after the affirmative vote of a majority in interest of the
Limited Partners. If the General Partner and the Partnership cannot agree
upon the fair market value of such interest within 60 days after the
occurrence of the event upon which the interest of such General Partner is
to be purchased by the Partnership, the fair market value thereof shall be
determined by appraisals by two independent appraisers one selected by the
person who ceases to be a General Partner under Section 17.5 or 17.1 and
one by the Limited Partners. In the event that such two appraisers are
unable to agree on the value of the Interest of the person who ceases to be
a General Partner under Section 17.5 or 17.1, they shall jointly appoint a
third independent appraiser whose determination shall be final and binding.
The Partnership shall pay the person ceasing to be a General Partner for
the value of its interest in the Partnership as so determined by delivery
of a promissory note payable to such General Partner or its order in a face
amount equal to such fair market value (either as agreed or as determined
by appraisal) containing acceleration and other similar provisions as would
be usual and customary in a commercial promissory note, and bearing simple
interest at a rate per annum equal to the lesser of the prime commercial
lending rate from time to time announced by Continental Illinois National
Bank and Trust Company of Chicago plus two percent (2%) per annum, or ten
percent (10%) per annum with all principal and accrued interest subject to
mandatory payment from time to time from all Sale or Refinancing Proceeds
realized by the Partnership. Payment in full of all principal and interest
on the promissory note received by such General Partner pursuant to this
Section 17.6 shall constitute complete and full discharge for all amounts
owing to such General Partner on account of its interest in the
Partnership. For purposes of this Section 17.6, the independent appraiser
selected by the Limited Partners shall be selected in the following manner:
A list of three qualified MAl (Member of Appraisal Institute) appraisers
shall be obtained (by a General Partner not being removed) from the Chicago
Chapter of the American Institute of Real Estate Appraisers and one of said
three appraisers shall be selected by random number and proposed by such
General Partner for selection by the Limited Partners. Such appraiser shall
be deemed selected by the Limited Partners unless objected to in writing by
a majority in interest of the Limited Partners within 45 days after
notification thereof is sent by such General Partner.
SECTION 17.7. In the event that a replacement General Partner is
elected by the Limited Partners under Section 17.5, such replacement or
successor General Partner (the "Acquiring Partner") shall purchase from the
Partnership, within 60 days of the date on which it becomes a General
Partner, the interest in the Partnership which the Partnership purchased
from the person ceasing to be a General Partner as provided in Section 17.6
above. For such interest, the Acquiring Partner shall pay the amount
determined pursuant to Section 17.6 to be the fair market value of such
interest. Payment shall be made by a promissory note bearing simple
interest at a rate per annum equal to the lesser of the prime rate from
time to time announced by Continental Illinois National Bank and Trust
Company of Chicago plus two percent (2%) per annum or 10% interest per
annum on the unpaid principal amount of the promissory note and shall be
secured by assignment by the Acquiring Partner to the Partnership of all
its future distributions of Net Cash Receipts or Sale or Refinancing
Proceeds from the Partnership to the Acquiring Partner. The principal
amount of such promissory note, together with accrued interest, shall be
payable only at such times and only in such amounts as are equal to
seventy-five percent (75%) of such distributions until such time as the
principal amount together with accrued interest is paid in full.
ARTICLE XVIII
ADDITIONAL PROVISIONS CONCERNING DISSOLUTION OF THE PARTNERSHIP
SECTION 18.1. In the event of the dissolution of the Partnership
for any reason, the Corporate General Partner shall commence to wind up the
affairs of the Partnership and to liquidate its investments. The Limited
Partners shall continue to share profits and losses during the period of
liquidation in the same proportion as before the dissolution. The Corporate
General Partner shall have full right and unlimited discretion to determine
the time, manner and terms of any sale or
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sales of Partnership property pursuant to such liquidation having due
regard to the activity and condition of the relevant market and general
financial and economic conditions.
SECTION 18.2. Following the payment of all debts and liabilities
of the Partnership and all expenses of liquidation and subject to the right
of the Corporate General Partner to set up such cash reserves as it may
deem reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Partnership, the proceeds of the liquidation and any
other funds of the Partnership shall be distributed (as Net Cash Receipts
or Sale or Financing Proceeds as the case may be) in accordance with
Article IX hereof.
SECTION 18.3. Within a reasonable time following the completion
of the liquidation of the Partnership's Properties, the Corporate General
Partner shall supply to each of the Partners a statement audited by the
Partnership's independent accountants which shall set forth the assets
and the liabilities of the Partnership as of the date of complete
liquidation, each Interest holder's pro rata portion of distributions
pursuant to Section 18.2 and the amount distributed to the General Partners
pursuant to Section 18.2.
SECTION 18.4. Each Limited Partner shall look solely to the
assets of the Partnership for all distributions with respect to the
Partnership and his capital contribution thereto and share of profits or
losses thereof and shall have no recourse therefor (upon dissolution or
otherwise) against any General Partner or any Limited Partner; provided,
however, that upon dissolution and termination of the Partnership, the
General Partners will contribute to the Partnership in the proportion set
forth below an aggregate amount equal to (and except as provided in Section
10.2 shall not be obligated to contribute more than) the amount which is
determined to be the smallest of (i) the deficit balance in their Capital
Accounts at such termination, (ii) 1.01% of the capital contributions
made by the Limited Partners, minus any capital contributions made by the
General Partners pursuant to Section 9.3 or (iii) the deficit balance in a
hypothetical capital account of the General Partners assuming they together
had only an aggregate 1% of each material item of Partnership income, gain,
loss, deduction or credit at all times during the existence of the
Partnership. In calculating the amount of such capital contribution under
(iii) and the deficit balance in such hypothetical capital account, the
General Partners together will take into account an amount equal to the
smaller of (a) 1 percent of the aggregate cash distributions made over the
life of the Partnership in excess of the sum of the aggregate initial
Capital Investments by the Limited Partners plus an amount equal to 6%
per annum (for all fiscal years or any portion thereof commencing with the
third calendar quarter of 1984) of the Limited Partners' Current Capital
Accounts; or (b) 1 percent of each cash distribution made by the
Partnership except to the extent that the General Partners received less
than such 1 percent of a distribution, or received, but did not or might
not have retained, such 1 percent of a distribution, by reason of
limitations contained in this Agreement. Such capital contribution under
(i), (ii) or (iii) above is to be made 80% by the Corporate General Partner
and 20% by the Associate General Partner. No Limited Partner shall have any
right to demand or receive property, other than cash upon dissolution and
termination of the Partnership.
SECTION 18.5. Upon the completion of the liquidation of the
Partnership and the distribution of all Partnership funds, the Partnership
shall terminate and the Corporate General Partner shall have the authority
to execute and record a Certificate of Cancellation of the Partnership as
well as any and all other documents required to effectuate the dissolution
and termination of the Partnership.
ARTICLE XIX
POWER OF ATTORNEY
SECTION 19.1. The Limited Partners, by their execution hereof,
jointly and severally hereby irrevocably constitute and appoint the
Corporate General Partner, with full power of substitution,
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their true and lawful attorney-in-fact, in their name, place and xxxxx to
make, execute, sign, acknowledge, record and file, on behalf of them and on
behalf of the Partnership, the following:
(i) a Certificate of Limited Partnership, a Certificate of
Doing Business Under an Assumed Name and any other certificates or
instruments which may be required to be filed by the Partnership or the
Partners under the laws of the State of Illinois and any other jurisdiction
whose laws may be applicable;
(ii) a Certificate of Cancellation of the Partnership and
such other instruments or documents as may be deemed necessary or
desirable by the Corporate General Partner upon the termination of the
Partnership business;
(iii) any and all amendments of the instruments described in
subsections 19.1(i) and 19.1 (ii) above, provided such amendments are
either required by law to be filed, or are consistent with this Agreement
(including, without limitation, any amendments admitting or substituting
assignees of Interests as Limited Partners or admitting or substituting an
additional or successor General Partner) or have been authorized by the
particular Limited Partner or Partners;
(iv) any and all such other instruments as may be deemed
necessary or desirable by the Corporate General Partner to carry out fully
the provisions of this Agreement in accordance with its terms.
SECTION 19.2. The foregoing grant of authority:
(i) is a Special Power of Attorney coupled with an
interest, is irrevocable and shall survive the death or incapacity of
the Limited Partner granting the power;
(ii) may be exercised by the Corporate General Partner on
behalf of each Limited Partner by a facsimile signature or by listing all
of the Limited Partners executing any instrument with a single signature as
attorney-in-fact for all of them; and
(iii) shall survive the delivery of an assignment by a
Limited Partner of the whole or any portion of his Interest.
ARTICLE XX
NOTICES
All notices and demands required or permitted under this Agreement
shall be in writing and may (except in the event of a mail strike) be sent
by mail, postage prepaid, to the Partners at their addresses as shown from
time to time on the records of the Partnership. Any Partner may specify a
different address by notifying the Corporate General Partner in writing of
such different address.
ARTICLE XXI
AMENDMENT OF LIMITED PARTNERSHIP AGREEMENT; MEETINGS OF LIMITED PARTNERS
SECTION 21.1. Except as otherwise required by law and subject to
Section 17.5, this Agreement may be amended in any respect after the
termination of the offering of Interests pursuant to Section 8.3 upon the
affirmative vote of Limited Partners holding a majority of the then
outstanding Interests; provided, however, that without the consent of the
Partners to be adversely affected by the amendment, this Agreement may not
be amended so as to (i) convert a Limited Partner into a General Partner;
(ii) modify the limited liability of a Limited Partner; or (iii) alter the
interest of a General or Limited Partner in profits or losses or in cash
distributions of the Partnership If Limited Partners holding 10% or more of
the then outstanding Interests request in writing that the Corporate
General Partner submit to a vote of the Limited Partners a particular
proposed amendment to this Agreement, the Corporate General Partner shall
do so. Any vote of the Limited Partners may be accomplished at a meeting of
Limited Partners called for such purpose by the
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Corporate General Partner upon not less than 10 days' prior notice or, in
lieu of a meeting, by the written consent of the required percentage of
Limited Partners.
SECTION 21.2. In addition to any amendments otherwise authorized
herein, this Agreement may be amended from time to time by the Corporate
General Partner without the consent of any of the Limited Partners (i) to
add to the representations, duties or obligations of the General Partners
or surrender any right or power granted to the General Partners herein, for
the benefit of the Limited Partners; (ii) to cure any ambiguity, to correct
or supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Agreement which will not be inconsistent
with the provisions of this Agreement; and (iii) to delete or add any
provision of this Agreement required to be so deleted or added by the Staff
of the Securities and Exchange Commission or other Federal agency or by a
State "Blue Sky" commissioner or similar such official, which addition or
deletion is deemed by such Commission, agency or official to be for the
benefit or protection of the Limited Partners; provided, however, that no
amendment shall be adopted pursuant to this Section 21.2 unless the
adoption thereof (1) is for the benefit of or not adverse to the interests
of the Limited Partners; (2) is consistent with Article XV hereof; (3) does
not alter the interest of a General or Limited Partner in profits or losses
or in cash distributions of the Partnership; and (4) does not, in the
opinion of counsel for the Partnership, by its terms alter the limited
liability of the Limited Partners or the status of the Partnership as a
partnership for Federal income tax purposes.
SECTION 21.3. In the event this Agreement shall be amended
pursuant to this Article XXI, the Corporate General Partner shall amend the
Certificate of Limited Partnership to reflect such change if it deems such
amendment of the Certificate to be necessary.
SECTION 21.4. Upon the written request of Limited Partners
holding more than 10% of the then outstanding Interests, the Corporate
General Partner shall call a meeting of the Limited Partners for any of the
matters for which the Limited Partners may vote as set forth in this
Agreement. Notice of such meeting shall be given within 10 days after, and
the meeting shall be held within not less than 15 nor more than 60 days
after, receipt of such request.
ARTICLE XXII
MISCELLANEOUS
SECTION 22.1. The Partners agree that the Partnership properties
are not and will not be suitable for partition. Accordingly, each of the
Partners hereby irrevocably waives any and all rights that he may have to
maintain any action for partition of any of the Partnership property.
SECTION 22.2. This Agreement constitutes the entire agreement
among the parties. It supersedes any prior agreement or understandings
among them, and it may not be modified or amended in any manner other than
as set forth herein.
SECTION 22.3. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws
of the State of Illinois.
SECTION 22.4. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, heirs, administrators, executors,
successors and assigns.
SECTION 22.5. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the
singular and the plural and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and
neuter.
SECTION 22.6. Captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the
scope or intent of this Agreement or any provision hereof.
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SECTION 22.7. 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 to which it is held
invalid, shall not be affected thereby.
SECTION 22.8. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument. In addition, this Agreement
may contain more than one counterpart of the signature page, and this
Agreement may be executed by the affixing of the signatures of each of the
Partners to one of such counterpart signature pages; all of such
counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the 9th day of June,1983.
GENERAL PARTNERS
CARLYLE-XIII MANAGERS, INC.
By /s/ XXXX X. YORK
------------------------------
Its: Vice President
REALTY ASSOCIATES-XIII
By: /s/ XXXX X. XXXXX
------------------------------
Managing General Partner
LIMITED PARTNER
JMB REALTY CORPORATION
By: /s/ XXXX X. YORK
------------------------------
Its: Vice President
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EXHIBIT B
SUBSCRIPTION AGREEMENT
To: Carlyle Real Estate Limited Partnership-XIII
Gentlemen:
By executing the Signature Page and Power of Attorney attached hereto
I hereby subscribe for (minimum of five) Limited Partnership Interests of
Carlyle Real Estate Limited Partnership-XIII at a purchase price of $1,000
per Interest as set forth in the Prospectus.
I further:
(a) acknowledge receipt of the Prospectus of the Partnership and
understand that the Interests being acquired will be governed by the
terms of the Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A thereto by which 1 agree to be bound in all respects;
(b) represent that (unless resident in New York, California or
South Carolina) I have either (i) a net worth (excluding home, home
furnishings and automobiles) of at least $50,000 and estimate that (without
regard to investment in the Partnership) I will have income during the
current tax year taxable at a combined rate of 35% for Federal and state
income tax purposes or (ii) a net worth (excluding home, home furnishings
and automobiles) of at least $200,000; if resident in Mississippi, I also
represent that either (x) I have a net worth (excluding home, home
furnishings and automobiles) equal to three times the amount of my
investment in the Partnership, or (y) I have a net worth (as computed
above) equal to two times the amount of my investment in the Partnership
and I will have income during the current year taxable at a marginal rate
of at least 40% for Federal income tax purposes; if a resident in
Pennsylvania, I also represent that my investment in the Partnership does
not exceed the greater of (x) 10% of my net worth or (y) 10% of my annual
gross income (the lower of current or estimated); if resident in New York,
I represent that either (i) I have a net worth (excluding home, home
furnishings and automobiles) of at least $50,000 and that (without regard
to investment in the Partnership) I will have income during the current
year taxable at a combined marginal rate of at least 40% for Federal and
state income tax purposes, or (ii) that I have a net worth (excluding home,
home furnishings and automobiles) of at least $200,000; if resident in
California, I represent that I have either (i) net worth (excluding home,
home furnishings and automobiles) of at least $50,000 and that (without
regard to investment in the Partnership) I will have gross annual income
during the current year of at least $65,000, or (ii) that I have a net
worth (excluding home, home furnishings and automobiles) of at least
$200,000; if resident in South Carolina, I represent either (i) that I
estimate that I will have during the current tax year "adjusted gross
income" as defined in the Internal Revenue Code of 1954, as amended,
subject to Federal income tax at a marginal rate of at least 36%, or (ii)
that I have a net worth (excluding home, home furnishings and automobiles)
of at least $200,000;
(c) represent and acknowledge that (i) I have received the
Prospectus, (ii) I understand that the transferability of the Interests
is restricted, that it is not anticipated that there will be any public
market for Interests and that it may not be possible to sell or dispose of
the Interests being acquired, (iii) I understand that the management and
control of the Partnership is vested in the General Partners and that I
will have no right to participate in the management of the Partnership and
(iv) I have reviewed and understand the Federal income tax aspects of
investment in the Partnership with such advice from qualified sources such
as an attorney, accountant or tax advisor as I deem necessary;
(d) if executing the Subscription Agreement in a representative or
fiduciary capacity, I represent and warrant individually that I have full
power and authority to execute and deliver
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this Subscription Agreement on behalf of the subscribing individual, xxxx,
partnership trust estate, corporation or other entity for whom I am
executing this Subscriptions Agreement, and that such individual, xxxx,
partnership, trust, estate, corporation or other entity had full right and
power to execute, deliver, and perform pursuant to such Subscription
Agreement and become a limited partner in the Partnership pursuant to the
Amended and Restated Agreement of Limited Partnership;
(e) if electing to reinvest distributions in Carlyle Real Estate
Limited Partnership-XIII and, subject to the availability of a distribution
reinvestment program and the satisfaction of the terms and conditions
relating thereto as described in the Prospectus to participate in the
distribution reinvestment program for future Carlyle real estate limited
partnerships by execution of the Carlyle Limited Partner Signature Page and
Power of Attorney and selection of the distribution election option
contained thereon, I acknowledge and understand that I have granted a power
of attorney to JMB Investor Services Corporation to act as an attorney-
in-fact on my behalf for the purposes stated thereon, that any such
investment will be subject to my prior receipt of, and will be subject to
all of the terms and conditions of the distribution reinvestment program as
described in, the Prospectus and the final prospectus for each such future
Carlyle real estate limited partnership providing for the distribution
reinvestment program, and that I agree to notify the JMB Investor Services
Corporation in writing if, at any time, I fail to meet the applicable
Carlyle real estate limited partnership investor suitability standards, or
if I am unable to make any of the other representations and warranties, as
set forth in the prospectus for the then current Carlyle real estate
limited partnership prospectus; an investor's ongoing participation in the
distribution reinvestment program for subsequent Carlyle real estate
limited partnerships may be subject to other requirements from time to time
under applicable Federal and state securities laws, including those
relating to investor suitability; and
(f) represent, if I have elected to reinvest distributions from
prior Carlyle real estate limited partnerships in Carlyle Real Estate
Limited Partnership-XIII and in future Carlyle real estate limited
partnerships, either (i) I have contacted the account executive identified
my Subscription Agreement as to my intention to invest such distributions
in the Partnership and he has advised me with respect to the
appropriateness of my participation in the offering, or (ii) if I have not
identified an account executive, I have reviewed, and believe that I
satisfy, the applicable investor suitability standards set forth in
paragraph (b) above, and have also reviewed the investment objectives of
the Partnership and my own financial condition and believe that
participation in the distribution reinvestment program is appropriate for
me.
It is understood that the Partnership shall have the right to accept
or reject this subscription in whole or in part. As used above the
singular includes the plural in all respects if Interests are being
acquired by more than one person. This Agreement and all rights hereunder
shall be governed by, and interpreted in accordance with, the laws of the
State of Illinois.
TRANSFER RESTRICTIONS
Sale or transfer of Interests to an Illinois or South Dakota resident
is permissible only if such resident meets the standards set forth in
paragraph (b) of the Subscription Agreement.
Attention California Residents: It is unlawful to consummate a sale
or transfer of the Interests or any interest therein, or to receive any
consideration therefor, without the prior written consent of the
Commissioner of Corporations of the State of California, except as
permitted in the Commissioner's rules. In addition, assignment of
Interests by California residents will not be permitted if, after giving
effect to an assignment, the assignor would hold less than five Interests,
if any.
Attention Minnesota Residents: Assignment of Interests by Minnesota
residents will not be permitted if, after giving effect to an assignment,
the assignor or the assignee would hold less than five Interests, if any.
Attention Texas Residents: Assignment of Interests by Texas residents
will not be permitted it, after giving effect to an assignment, the
assignor would hold less than five Interests, if any.
Other states may impose additional restrictions upon transfer of
Interests as described in the Prospectus.
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