CM-05-06-09706/01/2005 15:32 FAX 218 3286
Round Rock Planning
Request for City Council/City Manager Action
® City Council o. City Manager
,��:,% • s. � -� ->,� '; of .,.� _r;ar.,�' �' ;iL' � �.
Department Name: Planning Department
Contact Person:
Protect
Manager/Resource: Nicole CrutcNeld
air- 05-0(s - 097
i o r
Project Coordinator Nicole Crutchtteld
Assigned Attorney:
Charlie Crd«^-fietd
Connell or
City Manager
Agenda Date: Chi Manager -5-13-05
Blue Sheet Wording
i 002/002
Project Name: license Agreamcnt for Enclave at Town Center
ContractorNendor
Funding Source:
Amount
None
None
So.o0
Consider a resolution authorizing the City Manager to execute a License Agreement with RR/Bandon Duren Ltd. For the right to install landscaping and Irrigation in the public rIghts-of way of
Joyce lane and Rachel Lane purzvant to the construction plans approved e/ao/04.
Finance Information
Is Funding Required? ® Yes o No
O Initial Constriction Contract
Construction Contract Amendment #
E^ Change order
f I Change In Quantity
Unforeseen Circumstances
Initial Professional Services Agreement
Supplemental Professional Svcs. Agr. #
Purchasing/Servica Agreement
Purchase Order
Item(s) to be purchased'
Amount
Q Other (Please dearly identify action on lines below)
Finance Approval
ElFinance
o finance
ID Purchasing
El Budget
n/a L Olean
n/a E: Wilson
N/A NB
N/A CYD
Date
Date
Date
Data
5/11/2005
5/10/2005
5/11/2005
6/10/2005
Fofvkmisa)on to City Manager Only
Project Mgr. Signature:
Dept. Director Signature:
City ARomeySigr lure`_
City Manager Signature:
Date:
Data:
Date:
Data:
o 05
r
65
L proval is roguing, (oral Items r quart ng City Manager's approver.
Updated .B.os
Request for City Council/City Manager Action
❑❑ City Council a City Manager
Submit completed form for all City M elr'and
Department Name: Planning Department
Contact Person: Vickie Moreno/Kathy Miller
Project
Manager/Resource: Nicole Crutchfield
Project Coordinator: Nicole Crutchfield
Assigned Attorney: Charlie Crossfield
Council or
City Manager
Agenda Date: Cty Manager - 5-13-05
Blue Sheet Wording
For Administration Use ONLY
Tag #
Documents
Received:
Retum to:
Return date:
CC: Lynn Olsen
Project Name: License Agreement for Enclave at Town Center
ContractorNendor: None
Funding Source: None
Amount:
$0.00
Consider a resolution authorizing the City Manager to execute a License Agreement with RR/Bandon Dunes Ltd. For the right to install landscaping and irrigation in the public rights -of way of
Joyce Lane and Rachel Lane pursuant to the construction plans approved 8/30/04.
Finance Information
Is Funding Required? Yes E1 No
0
Purchasing/Service Agreement
Purchase Order
Item(s) to be purchased:
Initial Construction Contract
Construction Contract Amendment
Change Order #
Change in Quantity
Unforeseen Circumstances
Initial Professional Services Agreement
Supplemental Professional Svcs. Agr. #
Q Other (Please clearly identify action on lines below)
Finance Approval
❑ Finance
El Finance
❑ Purchasing
0 Budget
n/a L. Olsen
n/a E. Wilson
N/A HB
N/A CYD
Date
Date
Date
Date
Amount
5/11/2005
5/10/2005
5/11/2005
5/10/2005
For Submission to City Manager Only
Project Mgr. Signature: Date:
Dept. Director Signature: Date:
City Attorney Signature*: Date:
City Manager Signature: Date:
* Legal Approval is required for all items requesting City Manager's approval.
Updated 3-9-05
June 3, 2005 Staff Meeting
Agenda Items
City Manager Signature (Scheduled for City Manager review and signature)
1. Consider a resolution authorizing the City Manager to execute a License
Agreement with RR/Bandon Dunes Ltd. for the right to install
landscaping and irrigation in the public rights-of-way of Joyce Lane and
Rachel Lane pursuant to the construction plans approved 8/30/04.
DATE: June 1, 2005
SUBJECT: City Manager Approval at the June 3, 2005 Staff Meeting
ITEM: Consider a resolution authorizing the City
Manager to execute a License Agreement with
RR/Bandon Dunes Ltd. for the right to install
landscaping and irrigation in the public rights-
of-way within the Enclave at Town Center
Subdivision. The rights-of-way include Joyce
Lane (South of Gattis School Road) and
Rachel Lane pursuant to the construction
plans approved 8/30/04.
Department: Planning
Staff Person: Jim Stendebach, Planning Director
Nicole Crutchfield, Sr. Planner
Justification:
To beautify the City of Round Rock's residential
communities and to execute the requirements as
indicated by the PUD 56 Agreement.
Funding:
Cost:
Source of funds:
Outside Resources:
Background Information:
None
None
N/A
The construction plans have been approved
by the Development Review Committee,
which includes review by the Planning
Department and Engineering and
Development Services Department.
Public Comment: None required.
Attachments for Enclave at Town Center License Agreement
1. License Agreement
2. Exhbit "A" - Map of R.O.W. limits
3. Exhibit "B" — Construction Plans as approved by the
Development Review Committee and Engineering and
Development Services
4. Back up material for the Legal Department:
a. Original Application
b. Copy of Recorded Subdivision Plat
c. Copy of Agreement of Limited Partnership
LICENSE AGREEMENT
-llThis License Agreement (hereinafter, "Agreement") is made this $r`` day of
Jfl Yl CJ , 2005, by and between the CITY OF ROUND ROCK, (hereinafter
"Licensor"), a Texas home rule municipality, and the ENCLAVE AT TOWN CENTRE
OWNER'S ASSOCIATION, INC., (hereinafter, "Licensee", whether one or more).
WHEREAS, Licensor is the owner of the real property (hereinafter, "Property"), which is
the public right-of-way as depicted in Exhibit "A", attached hereto and incorporated herein; and
WHEREAS, Licensee desires to exercise certain rights and privileges upon public rights-
of-way located within the Property; and
WHEREAS, Licensor desires to grant Licensee certain rights and privileges upon public
rights-of-way within the Property; and
NOW, THEREFORE, it is agreed as follows:
License
1. Licensee shall have the right to install, construct, operate, maintain, upgrade, and
repair landscaping and irrigation systems in, over and upon public rights-of-way located within
the Property, as described in Exhibit "A", and to install a Monument Sign, in accordance with the
City of Round Rock Sign Ordinance, in the median of Joyce Lane at its intersection with Gattis
School Road.
It is understood that this Agreement creates a license only and that Licensee does not and
shall not claim at any time any interest or estate of any kind in the public rights-of-way located
within the Property by virtue of this license.
It is further understood that the landscape and irrigation construction plans attached as
Exhibit "B" has been approved by the Director of Planning and the City Engineer. Before the
installation of any subsequent landscaping or irrigation systems, Licensee shall present a detailed
construction and/or landscaping plan to the Director of Planning and the City Engineer for
review and approval.
It is further understood that Licensee must comply with all other requirements of the
Code of Ordinances of the City of Round Rock, Texas.
It is further understood that Licensor has no duty to maintain, operate, replace, upgrade,
or repair any improvement in or upon the Property, including the payment of any fees of any
kind associated with any improvements.
Enclave623
CI 1 c - o(s-o-L
Consideration
2. In consideration for this license, Licensee shall pay Licensor $10.00 and other
valuable consideration paid by Licensee to Licensor.
Nonassignable
3. This license granted in this Agreement is personal to Licensee or any property owners
association created to maintain Licensee's Improvements. This Agreement is not assignable. Any
assignment of this Agreement will automatically terminate the license. Notwithstanding the
foregoing, Licensee shall be permitted to assign Licensee's license under this Agreement for any
entity acquiring all or a portion of Licensee's property adjacent to the Property provided such
assignee assumes Licensee's obligations and rights granted under this Agreement, and Licensee
shall be released from any and all obligations hereunder accruing after such assignment.
Terminable at Will
4. This Agreement is terminable by either party at will by the giving of actual notice to
the other party. Upon termination, any improvements to Property will become the property of
Licensor and it is agreed that Licensor will not need to reimburse Licensee for any costs
expended for said improvements.
Indemnity
5. Licensee shall comply with the requirements of all applicable laws, rules and
regulations, and shall indemnify and hold harmless Licensor, its officers, agents and employees
from and against any and all claims, losses, damages, causes of action, expenses of litigation,
court costs, and attorney's fees, for injury to or death of any person, or for damage to any
property, arising out of or in connection with Licensee's exercise of the license under this
Agreement.
Release
6. Licensee assumes full responsibility for its exercise of the license, and hereby
releases, relinquishes and discharges Licensor, its officers, agents and employees, from all
claims, demands, and causes of action of every kind and character, including the cost of defense
thereof, for any injury to, including death, of person (whether they be third persons, contractor,
or employees of either of the parties hereto) and any loss of or damage to property (whether the
same be that either of the parties hereto or of third parties) caused by or alleged to be caused,
arising out of, or in connection with Licensee's exercise of the license under this Agreement
whether or not said claims, demands and causes of action in whole or in part are covered by
insurance.
2.
Venue
7. This Agreement shall be construed under and according with the laws of the State of
Texas, and all obligations of the parties created hereunder are performable in Williamson
County, Texas.
Notice
8. Notice shall be mailed to the addresses designated herein or as may be designated in
writing by the parties from time to time and shall be deemed received when sent postage prepaid
U.S. mail to the following addresses:
CITY: City of Round Rock
ATTN: City Manager
221 East Main Street
Round Rock, Texas 78664
COMPANY: ENCLAVE AT TOWN CENTRE ONWER'S
ASSOCIATION, INC.
Attn: Theresa Canchola
4314 W. Braker Lane, Suite 250
Austin, TX 78746
IN WITNESS WHEREOF, this AGREEMENT is executed on the dates indicated.
CITY OF ROUND ROCK
By:
Date ' L ned:
JAMES R. NUSE, City Manager
Enclave at Town Centre Owner's Association, Inc.
By: /l G'f� 1-7,,,e---(-----
Printed Name: Robert D. Wunsch, President
Date Signed: '/-/ -01
3.
STATE OF TEXAS
COUNTY OF WILLIAMSON
)
)
)
BEFORE ME, the undersigned, a notary public in and for said county and state, on this
day personally appeared James R. Nuse, as City Manager of the City of Round Rock, a Texas
Home Rule Municipality, on behalf of said municipality, known to me to be the person whose
name is subscribed to the foregoing instrument, and acknowledged to me that he executed the
same for the purpose and consideration therein expressed.
Given under my hand and seal of office on this the 4 3 r day of
1 U YI C/ , 2005.
STATE OF TEXAS
SHERRI tviONROE
Notary Public, State of Texas
My Commission Expires
MAY 7, 2007
COUNTY OF TRAVIS
)
)
)
NOTARY PUBLIC in and for the
State of Texas
BEFORE ME, the undersigned, a notary public in and for said county and state, on this
day personally appeared Robert D. Wunsch, President of The Enclave at Town Centre Owner's
Association, Inc., on behalf of said business, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he executed the same for
the purpose and consideration therein expressed.
Givyn under my hand and seal of office on this the day of
, 2005.
4.
NOTARY PUBLIC in and for the
State of Texas
T. CANCHOIA
imaniucsootwuras
comma axnim:
NOVEMBER e, 2007
After Recording, Please Return To:
Sheets & Crossfield, P.C.
309 East Main
Round Rock, Texas 78664
5.
EXHIBIT "A"
Enclave at Town Centre
License Agreement
Gattis School Rd
Rachel Ln
1rr
Rachel Ln
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THE ENCLAVE AT TOWN CENTRE
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CITY OF ROUND ROCK, TEXAS
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CONSTRUCTION DETAILS
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THE ENCLAVE AT TOWN CENTRE
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PLANTING PLAN
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EXHIBIT "D-2"
STREETSCAPE PLAN
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Catalyst Engineering Group
0. JANs301 Wew (1121412-720
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curl evc eT TOWN CENTRE PHASE TWO— CONSTRUCTION PLAt
Support Material for Legal Department's Reference
urt/U ,' tint IU: . -44 rna cle 0‘00
CASE NO.
An application i
and or within thi
(Give addresses,
a. survey of the a
Application of r(
into and/or with
xouna xocx rianning
APPLICATION FOR LICENSE AGREEMENT
tJuusiulb
DATE:
hereby requested for a license agreement to allow encroachment and improvements into
public property and/or public easement as described below
location or common description of the street or area requested for licensing and provide
•e u, accordance with procedure.)
quest for a license agreement to allow the following encroachment or improvements
n Lblic property and/or easement. List all appurtenances:
Legal descriptio i of area(s) to be licensed
03 gC/GS L ii-Ppo e XGA. e ci< �i � Aez,e 2
PO,d ei Q,�� �. �� ,0Jj/
WCAD parcel # 1....054670 Subdivision Name: 6-2 E LC 't. 1 414.5
Have the impros ements / encroachments been installed prior this application 4,0
Name of Contra, :tor: 6Wiroti-h Q Phone: ,335- 7q
Name of Contra, torthat will execute maintenance of improvements / encroachments:
Name: W-2- b7 -14/0/141110–e., /Phone: A35 --971g
Are there existir. ; license agreements in place at this location? If yes, provide file number:
Land Owner's I\ amt.: e//- / evYtGtp— DwhCS L- _
Address: 4(3/q 1..L,_e_ y `e, Z50
Phone: 3 I -12P Fax: 38142-4'O
City: sIi State: Zip '717
Licensee (Tenan ) Name:
Address :
Phone: Fax:
City: State: Zip:
/�-L
08/08/2003 10:24 FAX 218 3286 Round Rock Planning 4004/015
Applicant's Nat te: 1 btL5A &iiciw( (/l tik--kJ S%c (/4 )
L43LL1 W- &- Gam, 5 2-5
Address :
Phone: 3 �I -128o Fax: 3Y - /2P -
City: _ vIJ//N State: k Zip 7H5-1
�i1�-e5
Contact Person
Phone: 3Y/- /.940
Proposed use of Right -of -Way (described): /ail.
I the undersign
application is va
processed in acc
processing will
acceptance of th
value of the Rig
Rock, Planning
understood that
Owner/Tenant/F
Owner/Tenant/Application/Agent declare that the information provided in this
id and correct. I have read and understand that the processing of the application will be
rdance with the Produce for requesting a License Agreement. And that no action on
,e taken without payment of the non-refundable processing fee. I understand that
s application in no way obligates the City to license the subject area. I understand the
r -Way, if recommended to be licensed, will be determined by the City of Round
;orrumunity & Development Department and city council for approval. It is further
he City of Round Rock is not responsible for any cost or inconvenience incurred by the
ppl:cant/Agent/ when the application is not approved.
Signed by:
Owner/Tenant/Applicant/Agent
VICINITY MAP
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THE LIMITED PARTNERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSIONER OF ANY STATE IN RELIANCE UPON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS. LIMITED PARTNERSHIP INTERESTS MAY NOT BE SOLD, TRANSFERRED, OR
ASSIGNED, NOR MAY A SECURITY INTEREST BE CREATED THEREIN, UNLESS THE PURCHASER, TRANSFEREE,
ASSIGNEE, OR HOLDER OF SUCH SECURITY INTEREST COMPLIES WITH ALL STATE AND FEDERAL SECURITIES
LAWS AND WITH THE LIMITATIONS ON THE TRANSFERABILITY OF LIMITED PARTNERSHIP INTERESTS SET FORTH IN
THIS AGREEMENT. TRANSFERABILITY OF LIMITED PARTNERSHIP INTERESTS IS THEREFORE LIMITED, AND
INVESTORS MUST BEAR THE ECONOMIC RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
Agreement of
Limited Partnership of
ROUND ROCK / BANDON DUNES, LTD.
This Agreement of Limited Partnership is made and entered into as of the date indicated
on the signature page below by RR / BANDON DUNES COMPANY, L.L.C., whose address is
set forth on the signature page hereof, as General Partner (the "General Partner"), and the
persons and entities whose names and addresses are in the files of the General Partner (the
"Limited Partners").
The parties hereto agree and state as follows:
1. DEFINITIONS. The words and terms below shall have the meaning and definition herein
stated, or as defined in the Glossary attached hereto; or, if not defined, then according to normal
industry standards.
2. ORGANIZATION.
2.1. Formation. The parties do hereby enter into this Limited Partnership Agreement,
under and pursuant to the Act.
2.2. Name. The name of the Partnership is as set forth above. The business of the
Partnership may be conducted under any name chosen by the General Partner, and the
General Partner may in its sole discretion from time to time change the name of the
Partnership by written notice to the Partners; provided, however, no such name shall
include the name of any Limited Partner.
2.3. Additional Terms of the Offering of Interests. The General Partner shall have sole
and complete discretion in determining the terms and conditions of the offering and sale
of Units including the length of the offering period and the General Partner is authorized
and directed to do all things which it deems to be necessary, convenient, appropriate or
AGREEMENT OF LIMITED PARTNERSHIP .1.
• I
advisable in connection therewith, including but not limited to the preparation and filing
on behalf of the Partnership of a registration statement with the Texas State Securities
Board, and the execution or performance of agreements with underwriters and others
concerning the marketing of Units on such basis and upon such terms as the General
Partners shall determine. The General Partner will not directly or indirectly pay or award
any compensation to a third party engaged as an investment advisor by a potential
investor as inducement to advise favorably towards the Partnership.
3. PRINCIPAL PLACE OF BUSINESS. The principal office, the principal place of business,
the Registered Agent, and the registered office of the Partnership will be:
Robert D. Wunsch
4314 W. Braker Lane, Suite 250
Austin, TX 78759
or at such other place as the General Partner may from time to time designate by written notice to
the Partners.
4. BUSINESS. The character of the principal business and purpose of the Partnership will be
to do all things which, in the sole opinion of the General Partner, are in the best interest of the
Partnership, including but not limited to: acquire, own, hold, manage, operate, improve,
subdivide, re -zone, obtain utilities to, rent, lease, maintain, sell, dispose of, lease, mortgage,
encumber, or otherwise deal with all or any part of the Property and to acquire other property,
real or personal, on such terms and conditions as the General Partner may approve. In
connection therewith, the Partnership may from time to time borrow money (and pledge all or
any part of the Partnership's property as collateral) and enter into other partnerships, joint
ventures, corporations, limited partnerships (as a general or limited partner) or associations,
including arrangements with lenders to accomplish "participation" loans. In addition, the
Partnership may engage in such other business and activities as the General Partner may from
time to time deem to be appropriate and which do not prevent the conduct of the principal
business of the Partnership.
5. TERM. The term of the Partnership will commence on the earlier of: the date that the
Property is first acquired; or the date that the Certificate is filed with the Secretary of State of the
State of Texas, and will continue for thirty years after such date, unless terminated sooner
because of the dissolution and winding up of the Partnership in accordance with the provisions of
this Agreement.
6. CAPITAL CONTRIBUTIONS & DEFAULT.
6.1. Capital Contribution of General Partner. The General Partner will make a cash
contribution as General Partner in the amount of $100.00.
6.2. Initial Capital Contribution of Limited Partner. Each Limited Partner will make
an initial cash contribution to the capital of the Partnership equal to the sum of the
product obtained by multiplying each Limited Partner's Ownership Percentage by the
cash required at the initial purchase of the Property, or as otherwise determined by the
General Partner. The initial cash contribution will be payable by the Limited Partners
AGREEMENT OF LIMITED PARTNERSHIP .2.
upon the execution by such person of either a Subscription Agreement, or this Partnership
Agreement.
6.3. Additional Capital Contributions Required. The Partners understand that in
purchasing the Property, the Partnership will be required to pay substantial sums of
money each year for expenses related to the ownership, improvement and management of
the Property such as debt service (if any), ad valorem taxes, legal fees, accounting fees
and expenses related to improving the Property, obtaining and upgrading utilities,
subdividing, re -zoning, and other expenses. Therefore, THE LIMITED PARTNERS
SHALL BE REQUIRED TO MAKE ADDITIONAL CONTRIBUTIONS AT TIMES,
AND IN AMOUNTS, WHICH IN THE SOLE DISCRETION OF THE GENERAL
PARTNER ARE NECESSARY OR APPROPRIATE FOR THE PARTNERSHIP.
6.4. Interest. Contributions to the capital of the Partnership will not bear interest.
6.5. Failure to Make Additional Contributions. The failure of any Limited Partner to
timely make the additional capital contributions required and the continuation of such
failure for 21 days after receipt of written notice thereof by such Limited Partner from the
General Partner, will constitute a default under this Agreement, and the General Partner
may, in its sole and absolute discretion, apply any remedy provided for in this
Agreement. Each default in the payment of a required capital contribution (or any
portion thereof) hereunder will be deemed a separate event of default by the defaulting
Limited Partner and the provisions hereof will apply to each such default. The General
Partner, acting on behalf of the Partnership, may apply, at its sole & absolute discretion,
any one, or all, or none, of the following provisions:
6.5.1. The General Partner or any non -defaulting Limited Partner may make the
contribution for the defaulting Partner. In such event, the contributing Partner
may elect either that: (i) the contributing Partner and the defaulting Limited
Partner will then own the defaulting Limited Partner's Ownership Percentage in
the proportion of capital contributions made by each one; or (ii) consider the
contributions for the defaulting Partner to be a loan to such Partner, bearing
interest at eighteen percent (18%) per annum from the date the contribution is
made, and repayable on a preferred basis from the first of all distributions from
the Partnership to such defaulting Limited Partner, until repaid in full, principal
and interest.
6.5.2. Alternatively, the General Partner may solicit the contribution from a non -
partner. If a non -partner makes the contribution, then the contributing non -
partner may apply either of the provisions above or the one below, at its sole
discretion. The General Partner shall, upon such default, first notify all non -
defaulting limited partners that he is soliciting contributions and shall afford them
a reasonable opportunity to make such contributions [i.e., not less than five (5)
days, nor more than sixty (60) days after the General Partner mails the notice of
default].
AGREEMENT OF LIMITED PARTNERSHIP .3.
•
6.5.2.1. In the event that a non -partner makes the contribution to cover the
delinquency of a defaulting Limited Partner and the contributing non -
partner does not elect one of the remedies set out in §6.5.1 above, then the
contributing person and the defaulting Limited Partner will own the
defaulting Limited Partner's interest together, in proportion of the
contributions made by the non -partner and the defaulting Limited Partner.
Then the defaulting Limited Partner's right to distributions from the
Partnership shall be limited to the return of such Limited Partner's capital
account, which return shall be subordinate to the return of the contributing
person's capital contributions, plus a preferred return of eighteen percent
(18%) per annum. However, if the defaulting Limited Partner's capital
account is zero, or less, at the time of default, then the defaulting Limited
Partner and the contributing person shall own the interest of the defaulting
Limited Partner equally (50/50), except that the distributions paid to that
interest shall be paid first to the contributing person in an amount equal to
all of his unrecouped contributions, plus eighteen percent (18%) interest
per annum, and then split equally.
6.5.3. Any person or entity who becomes a defaulting Limited Partner hereby
irrevocably grants to the General Partner an irrevocable limited power of attorney
to take all actions necessary on his behalf to modify and amend this Agreement,
and the defaulting Limited Partner's Ownership Percentage, in order to carry out
the remedies above.
6.5.4. The General Partner is hereby authorized to take any other action, whether
or not expressly provided for in this Agreement, which, in its sole and absolute
discretion, he deems appropriate to deal with a defaulting Limited Partner, subject
only to the limitations imposed by the Act and those expressly set out below in
§6.5.5.
6.5.5. Creditors of the Partnership are hereby notified that no Limited Partner
shall be personally liable to the Partnership or any person for failure to make any
additional capital contributions, and the rights, obligations, and consequences
arising from the failure to make any such contribution shall be governed solely by
the provisions of this Agreement.
6.6. General Default. In the event a Partner has committed a violation of the terms of
this Agreement other than a failure to make a capital contribution, then the General
Partner shall send the defaulting Partner a written notice of said default and the defaulting
Partner shall have 30 days after the mailing of said notice in which to cure such default.
If the defaulting Partner does not cure said default within said 30 -day period then the
General Partner may institute the provisions of §§ 6.5.1 through 6.5.5 above.
6.7. Limited Liability. A Limited Partner will not be bound by, or personally liable for,
the expenses, liabilities, or obligations of the Partnership, except as provided in the Act.
Except as provided in this §6 or in the Act, no Limited Partner will be required or
obligated to make further contributions of any sort whatsoever to the capital of the
Partnership.
AGREEMENT OF LIMITED PARTNERSHIP ,4.
6.8. Role of Limited Partner. Except as otherwise provided in this Agreement, a
Limited Partner will take no part in or interfere in any manner with the conduct or control
of the business of the Partnership and will have no right or authority to act for or bind the
Partnership. This section is intended to provide each Limited Partner the maximum
protection available under the Act, from liability to any creditor who may assert that the
Limited Partner should be treated as a General Partner, including, but not limited to the
"safe harbor" protections mentioned in the Act.
6.9. Withdrawal of Capital Contribution. No Limited Partner will have the right to
withdraw or reduce his contribution to the capital of the Partnership without the consent
of the General Partner which consent may be given or denied by the General Partner, in
its sole discretion, for any reason, or for no reason. No Limited Partner will have the
right to demand or receive property other than cash in return for his contribution, and no
Limited Partner shall have priority over any other Limited Partner, either as to the return
of his contribution of capital or as to profits, losses, or distributions.
7. EXPENSES & FEES TO BE PAID BY THE PARTNERSHIP.
7.1. Expenses of General Partner. The General Partner may charge the Partnership for
any reasonable expenses incurred by it in connection with the Partnership's business, and
all allocable portions of expenses incurred by it in connection with both Partnership and
other activities, which allocation will be determined on any basis selected by the General
Partner consistent with good accounting practices.
7.2. Other Expenses. The Partners acknowledge and agree that the Partnership will
pay, in addition to the expenses of the Partnership and the Property enumerated above, all
costs, fees, and expenses paid or incurred by Robert D. Wunsch and/or Waterstone
Development related to the acquisition of, and the improvement of, the Property, and the
organization of the Partnership.
8. CASH DISTRIBUTIONS; ALLOCATION OF INCOME & Loss.
8.1. Distributions From Cash Flow. Positive cash flow from all sources (but not
including Capital Contributions, Interim and Terminating Capital Transactions), without
deduction for depreciation or amortization, but after deducting cash funds to pay all
expenses, costs, fees, and debt payments related to the Partnership and the Property; and,
the cost of all capital improvements and replacements to the Property; and, to create or
restore reserves, shall be distributed to the Partners as cash payments annually, or at such
other intervals as the General Partner, in its sole discretion, may determine as follows:
First, to the General Partner for reimbursement of all expenses incurred on behalf of the
Partnership; then second, to the non -defaulting Limited Partners until they have received
a sum equal to their unrecouped contributions; then third, to the non -defaulting Limited
Partners in the amounts provided in §6 above, if applicable; then fourth, to the General
Partner until it has received a sum equal to its unrecouped contributions; then fifth, an
amount to the defaulting Limited Partner(s) as provided in §6 above; then sixth, ninety-
nine percent (99%) to the non -defaulting Limited Partners, and one percent (1.0%) to the
General Partner.
AGREEMENT OF LIMITED PARTNERSHIP .5.
• ,
8.2. Distributions From Interim & Terminating Capital Transactions. The Net
Proceeds of a Terminating Capital Transaction will be made in accordance with the
Partners' Capital Account balances after taking into account all capital account
adjustments for the Partnership taxable year during which the liquidation occurs. The
Net Proceeds of an Interim Capital Transaction will, after the payment of the debts,
expenses, costs, fees, and liabilities of the Partnership and the expenses of the transaction,
(and, in the case of an Interim Capital Transaction, after deleting money set aside by the
General Partner as reserves, in its sole discretion) be distributed to the Partners in the
following order of priority:
8.2.1. First: To the General Partner for reimbursement of all expenses incurred
on behalf of the Partnership; then
8.2.2. Second: To the non -defaulting Limited Partners in the amounts provided
in §6 above, if applicable; then
8.2.3. Third: To the non -defaulting Limited Partners in the amounts provided in
§6 above, if applicable; then
8.2.4. Fourth: To the General Partner an amount equal to its unrecouped capital
contributions; then
8.2.5. Fifth: An amount to the defaulting Limited Partner(s) as provided in §6
above if applicable; then
8.2.6. Sixth: One percent (1.0%) to the General Partner and ninety-nine percent
(99%) to the non -defaulting Limited Partners, divided in accordance with their
Ownership Percentages.
8.3. Allocation of Net Income & Loss from Operations.
8.3.1. Certain Definitions. The following definitions shall be applicable to the
terms set forth below as used in this section and elsewhere in this Agreement.
8.3.1.1. Capital Accounts. The Partnership will maintain a Capital
Account for the General Partner and each Limited Partner as defined in §1
of this Agreement.
8.3.1.1.1. Except as specifically provided herein, no Limited
Partner or the General Partner may contribute capital to, or
withdraw capital from the Partnership. To the extent any monies
which any Limited Partner or the General Partner is entitled to
receive pursuant to §8 or any other provision of this Agreement
would constitute a return of capital, each of the Limited Partners
and the General Partner consents to the withdrawal of such capital.
8.3.1.1.2. Loans by a Limited Partner or the General Partner to the
Partnership will not be considered contributions to the capital of
AGREEMENT OF LIMITED PARTNERSHIP .6.
the Partnership and will not increase the Capital Account of the
lending party. Any loan may be made by a Limited Partner or the
General Partner to the Partnership if approved by the General
Partner.
8.3.1.1.3. No interest will be paid on any capital contributed to the
Partnership.
8.3.1.2. Net Proceeds. "Net Proceeds" means the proceeds as shown on
the closing statement as being payable to Seller; i.e., gross sales price less
the costs and expenses incurred in selling Property as are normal,
including but not limited to the real estate commission to the real estate
brokers involved in the sale and the payment of all debts of the Property
subject of the sale.
8.3.2. Allocation. For federal income tax purposes, the income or loss of the
Partnership from other than a Capital Transaction shall be allocated as follows:
8.3.2.1. First, an amount of Net Income (to the extent such amount has
not been theretofore allocated under this subsection) equal to the amount,
if any, by which the aggregate amount of Net Losses allocated to the
Partners pursuant to §8.3.3 exceeds the aggregate amount of all Capital
Contributions of the Partners shall be allocated to the Partners in the
proportion that each Partner's share of such excess amount bears to the
aggregate excess amount.
8.3.2.2. Then, Net Income shall be allocated pro rata to the Partners in
accordance with actual distributions from Cash Available for Distribution
to the Partners for such period pursuant to §8.1; provided, however, that if
no distributions are made for such period pursuant to §8.1, Net Income
shall be allocated ninety-nine percent (99%) to the Limited Partners in
accordance with their Ownership Percentages and one percent (1.0%) to
the General Partner.
8.3.3. Allocation of Net Loss. For federal income tax purposes, the Net Loss, if
any, of the Partnership for each fiscal year (or portion thereof) shall be allocated
ninety-nine percent (99%) to the Limited Partners in accordance with their
Ownership Percentages and one percent (1.0%) to the General Partner.
8.4. Allocation of Income & Loss from Capital Transactions. For federal income tax
purposes, the income (including gain), if any, from Capital Transactions shall be
allocated in the same manner as set out in §8.2 above.
8.5. Allocation of Net Income & Net Loss, and Distributions in Respect to Units
Transferred. If a Partner's Ownership Interest is transferred during any fiscal year of
the partnership, the net income or net loss attributable to such Unit or Units for such
fiscal year will be divided and allocated proportionately between the transferor and
AGREEMENT OF LIMITED PARTNERSHIP .7.
transferee based upon the number of days during such fiscal year for which each party
was the Partner; provided, however, if the Partnership receives a written notice stating
that such parties have agreed that the net income or net loss is to be allocated between
them based upon an interim closing of the Partnership's books and that such parties have
agreed to pay all expenses of the Partnership in connection with such interim closing of
the books and records of the Partnership in connection therewith, then all such net
income or net Loss will be allocated between the transferor and the transferee based upon
an interim closing of the Partnership's books. Distributions of Partnership assets will be
made only to persons who, according to the books and records of the Partnership, are the
holders of record of the Interest (i.e., Limited Partners) in respect of which such
distributions are made as determined by the General Partner as of the date on which the
Limited Partners are entitled to receive such distributions. The General Partner and the
Partnership will incur no liability for making distributions in accordance with the
provisions of the preceding sentence, whether or not the General Partner or the
Partnership has knowledge or notice of any transfer of ownership of any Unit or Units.
Notwithstanding anything above to the contrary, allocable cash basis items, as defined by
the Code, shall be allocated among the transferee and transferor by assigning the
appropriate portion of each such item to each day in the period to which it is attributable,
and by allocating the portion assigned to any such day among the Partners in proportion
to their interests in the Partnership at the close of such day. Any item attributable to any
period before the beginning or after the end of the taxable year shall be assigned to the
first or last (respectively) day of the taxable year.
8.6. Limitation on Loss Allocation. In no event shall loss be allocated in excess of a
Partner's Capital Account, plus the amount of his unfunded, required, additional
contributions.
8.7. Allocation & Distributions to the General Partners. All amounts allocated to and
all amounts distributed to the General Partners shall be allocated and distributed equally
among each of the General Partners, if more than one. These proportions may be altered
by agreement among the General Partners without amendment of the Partnership
Agreement or consent of the Limited Partners.
8.8. Reserves. The General Partner shall make provisions for adequate reserves by
retention of a reasonable percentage of proceeds from the offering and from regular
receipts from operations or sales and refinancings, for normal repairs, replacements and
contingencies; such reserves initially may be five percent (5%) of the total proceeds of
the initial capital contributions. Such reserves specifically may be created by
withholding amounts specified in the definitions of the terms Cash Available for
Distribution and Interim Capital Proceeds.
8.9. Disputes as to Computations. Except with respect to matters as to which the
General Partner is granted discretion hereunder, the opinion of independent public
accountants retained by the Partnership from time to time shall be final and binding with
respect to all disputes as to computations and determinations required to be made under
this Article 8 (including computations and determinations in connection with any
distribution pursuant to any other Article or Section).
AGREEMENT OF LIMITED PARTNERSHIP $
8.10. Special Allocations. The following special allocations shall be made in the
following order:
8.10.1. Minimum Gain Charieback. Notwithstanding any other provision of
this section, if there is a net decrease in Partnership Minimum Gain during any
Partnership fiscal year, each Partner who would otherwise have an Adjusted
Capital Account Deficit at the end of such year shall be specially allocated items
of Partnership income and gain for such year. The items so allocated shall be
determined in accordance with Regulations Section 1.704-1T(b)(iv)(e). This
section is intended to comply with the minimum gain chargeback requirement in
such Section of the Regulations and shall be interpreted consistently therewith.
8.10.2. Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Regulations Section
1.704- 1 (b) (2) (ii) (d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1 (b) (2) (ii) (d) (6), items of
Partnership income and gain shall be specially allocated to each such Partner in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as
possible, provided that an allocation pursuant to this section shall be made if and
only to the extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this section have been tentatively
made as if this section were not in the Agreement.
8.10.3. Gross Income Allocation. In the event any Partner has a deficit Capital
Account at the end of any Partnership taxable year that is in excess of the sum of:
(i) the amount such Partner is obligated to restore; (ii) the amount such Partner is
deemed to be obligated to restore pursuant to the penultimate sentence of
Regulations Section 1.704-1(b)(4)(iv)(f); and (iii) the amount such Partner would
be deemed obligated to restore if Partner Loan Nonrecourse Deductions were
treated as Nonrecourse Deductions, each such Partner shall be specially allocated
items of Partnership income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this section shall be made if and
only to the extent that such Partner would have a deficit Capital Account in excess
of such sum after all other allocations provided for in this section have been
tentatively made as if the Qualified Income Offset hereof and this Gross Income
Allocation were not in the Agreement.
8.10.4. Curative Allocations. The allocations set forth in §8.10. are intended to
comply with certain requirements of Code 704(b) Regulations. Notwithstanding
any other provisions of this section, the Regulatory Allocations shall be taken into
account in allocating other Profits, Losses, and items of income, gain, loss, and
deduction among the Partners so that, to the extent possible, the net amount of
such allocations of other Profits, Losses, and other items and the Regulatory
Allocations to each Partner shall be equal to the net amount that would have been
allocated to each such Partner and if the Regulatory Allocations had not occurred.
AGREEMENT OF LIMITED PARTNERSHIP .9.
8.11. Compliance With Internal Revenue Laws & Regulations. The foregoing
provisions and the other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with, and shall be interpreted and applied in a
manner consistent with Treasury Regulations. In the event the General Partner[s] shall
determine that it is prudent to modify the manner in which the Capital Accounts, or any
debits or credits thereto, are computed in order to comply with such Regulations, the
General Partner[s] may make such modification, provided that it is not likely to have a
material effect on the amounts distributable to any Partner upon the dissolution of the
Partnership.
9. RIGHTS, POWERS, & OBLIGATIONS OF THE GENERAL PARTNER.
9.1. Powers. The management and control of the Partnership and its business and affairs
will rest exclusively with the General Partner, each officer of which, or, if more than one
General Partner, then each one of whom may act individually on behalf of the Partnership
without the necessity of all joining such action. The General Partner[s] will have all the
rights and powers which may be necessary, appropriate or prudent, in the sole opinion of
the General Partner, to carry out the business and purposes of the Partnership or which, in
the sole opinion of the General Partner, are in the best interests of the Partnership.
Included within these rights and powers are those which may be possessed by a general
partner pursuant to the Act, and such rights and powers as are otherwise conferred by
law, or are necessary, advisable, or convenient in the sole opinion of the General Partner
to the discharge of its duties under this Agreement and to the management of the business
and affairs of the Partnership. Without limiting the generality of the foregoing, the
General Partner, and each of its officers (or, if more than one General Partner, then each
General Partner, acting alone, without the necessity of joinder by any other General
Partner) will have the following rights and powers, which it may exercise at the cost,
expense, and risk of the Partnership (but subject to the limitations set out in 9.3 below):
9.1.1. To spend the capital and net income of the Partnership in the exercise of
any rights or powers possessed by the General Partner hereunder, including,
without limiting the generality of the foregoing, the use of the contributions to the
capital of the Partnership as and to the extent set forth in §4 hereof and in this §9.
9.1.2. To acquire the Property and additional property (both real and personal); to
sell all or a part or an interest in the Property; to encumber the fee interest in all or
any part of the Property and the Project; to pledge all or any part of the Property
as security for any loan to the Partnership, or any Partner; to develop and improve
and construct improvements on the Property; to obtain utilities to the Property at
whatever cost the General Partner, in its sole discretion, approves; to obtain new
zoning classification(s) for the Property; to execute and deliver any contracts of
sale, notes, mortgages, deeds of trust, ground leases, deeds, loan agreements
(including participating loan arrangements), or any other documents whatsoever
in connection with such transactions; to operate, manage, lease, improve, and
maintain the Property; and to enter into agreements with others with respect to
such ownership, development, financing, operation, management, leasing,
improvement, or maintenance, which documents and agreements may contain
such terms, provisions and conditions as the General Partner in its sole and
AGREEMENT OF LIMITED PARTNERSHIP .10.
absolute discretion shall approve (including partnership, joint venture and
corporate agreements).
9.1.3. To purchase from or through others contracts of liability, casualty, and
other insurance which the General Partner deems advisable, appropriate, or
convenient for the protection of the assets and affairs of the Partnership or for any
purpose convenient or beneficial to the Partnership.
9.1.4. To borrow money upon such terms and conditions as the General Partner
in its sole and absolute discretion shall approve from any Partner or others
(including, but not limited to, banks and other financial institutions and
commercial lenders), to: discharge the Partnership's obligations (including,
without limitation, any loan obligations incurred in connection with the
acquisition of Property); or to finance on an interim construction, long-term, or
permanent basis the improvement of the Property and the acquisition of
ownership of the Property; or to protect and preserve the assets of the Partnership;
or to refinance any loans or other indebtedness of the Partnership, or any Partner;
and to incur any other indebtedness in the ordinary course of business of the
Partnership.
9.1.5. To execute and deliver any notes, mortgages, deeds of trust, loan
agreements, or any other documents whatsoever to evidence or secure the
repayment of any borrowing or indebtedness permitted by this §9, which
documents may contain such terms, provisions, and conditions as the General
Partner in its sole and absolute discretion may approve.
9.1.6. To lease the Property, or any part thereof, to such tenants and upon such
terms, conditions, and provisions as the General Partner in its sole and absolute
discretion may approve.
9.1.7. To sell, dispose of, trade, exchange, convey, quitclaim, surrender, release,
or abandon, upon such terms and conditions as the General Partner may deem
advisable, appropriate, or convenient, all or any part of or interest in the Property
and other assets of the Partnership.
9.1.8. To admit from time to time substituted or additional General or Limited
Partners as and when the General Partner may deem such admissions advisable,
appropriate, or convenient, upon such terms and conditions as the General Partner
may deem advisable, appropriate, or convenient, whether or not the addition of
such Partner dilutes the interest or Ownership Percentage of any other Partner.
9.1.9. To create additional classes or groups of General or Limited Partners with
rights, powers or duties which may be senior to those of one or more existing
classes or groups of Limited or General Partners. The consent of one or more
classes of Limited Partners shall not be required. The purpose of this provision is
to provide the partnership with flexibility in financing matters, should the need
arise.
AGREEMENT OF LIMITED PARTNERSHIP .11.
9.1.10. To employ agents for the lease, management or sale of the Property,
including Affiliates, and to employ consultants, including, but not limited to,
engineers, brokers, realtors, attorneys, accountants, or any other person the
General Partner may deem necessary or desirable for the purposes or organization
of the Partnership and the sale of the Property and to pay appropriate fees to any
of them.
9.1.11. To delegate all or any of its duties hereunder and, in furtherance of any
such delegation, to appoint, employ, or contract with any person it may in its sole
discretion deem necessary or desirable for the transaction of the business of the
Partnership, which persons may, under the supervision of the General Partner,
administer the day-to-day operations of the Partnership; may serve as the
Partnership's advisors and consultants, accountants, engineers, correspondents,
attorneys, brokers, escrow agents, or in any other capacity deemed by the General
Partner necessary or desirable; may investigate, select, and, on behalf of the
Partnership, conduct relations with persons acting in such capacities and may pay
appropriate reasonable fees to, and enter into appropriate contracts with, or
employ, or retain services performed or to be performed by, any of them in
connection with the business of the Partnership; may perform or assist in the
performance of such administrative or managerial functions necessary in the
management of the Partnership as may be agreed upon with the General Partner;
and may perform such other acts or services for the Partnership as the General
Partner in its sole discretion may approve.
9.1.12. To pay any and all fees and expenses incurred in the organization of the
Partnership and in accomplishing the purposes and business of the Partnership; to
reimburse the General Partner for and pay any and all fees and expenses incurred
in connection with the acquisition of the Property, the subdivision of the property,
and the improvement and operation of the Property, and the operation and
business and affairs of the Partnership, in such order of priority as the General
Partner may in its sole and absolute discretion deem advisable, appropriate, or
convenient, except as expressly set forth in this Agreement to the contrary.
9.1.13. To execute any documents necessary or appropriate, in the sole discretion
of the General Partner, to enter into or further the business of the Partnership.
9.1.14. To submit any Partnership claim or liability to arbitration.
9.2. Duties. The General Partner will manage and control the Partnership, its business
and affairs, and will carry out the purposes and business of the Partnership. The General
Partner will devote itself to the business of the Partnership to the extent that it, in its sole
and absolute discretion, determines is necessary for the efficient carrying on thereof.
Whenever reasonably requested by the Limited Partners, the General Partner will render
a just and faithful account of all dealings and transactions relating to the business of the
Partnership.
AGREEMENT OF LIMITED PARTNERSHIP .12.
9.3. Certain Limitations.
9.3.1. The General Partner and each Limited Partner will not do any of the
following:
9.3.1.1. Act in contravention of this Agreement.
9.3.1.2. Do any act which would make it impossible to carry on the
ordinary business of the Partnership.
9.3.1.3. Confess a judgment against the Partnership.
9.3.1.4. Admit a person as a General Partner or as a Limited Partner,
except as otherwise provided in this Agreement.
9.3.1.5. Execute or deliver any assignment for the benefit of the creditors
of the Partnership.
9.3.1.6. Possess Partnership property, or sell, transfer, assign, pledge, or
subject to mortgage or security interest any Partnership property for other
than a Partnership purpose.
9.4. Independent Activities / Conflict of Interest. The General Partner, and each
officer and director thereof, and each Limited Partner may, notwithstanding the existence
of this Agreement, engage in whatever activities they choose, whether the same be
competitive with the Partnership or otherwise, without having or incurring any obligation
to offer any interest in such activities to the partnership or any party hereto. Neither this
Agreement nor any activity undertaken pursuant hereto will prevent any General Partner
from engaging in such activities, or require any General Partner to permit the Partnership
or any Limited Partner to participate in any such activities, and, as a material part of the
consideration for the General Partner's execution hereof and admission of such Limited
Partner, each Limited Partner hereby waives, relinquishes, and renounces any such right,
claim, or participation.
9.5. Representations & Warranties of the General Partner. The General Partner
represents and warrants to the Limited Partners that the Partnership will be duly
organized upon the filing of the Certificate and Agreement of Limited Partnership of the
Partnership.
9.6. Limited Liability of General Partner. The General Partner shall exercise ordinary
business judgment in managing the affairs of the Partnership. Unless fraud, gross
negligence or willful misconduct be involved, the General Partner shall not be liable for
any damages, losses, problems, failures, or mistakes of fact or judgment. The General
Partner does not, in any way, guarantee or promise the return of any Limited Partner's
capital contribution or investment or the success of the Partnership's business.
NEITHER THE GENERAL PARTNER, NOR ANY OF ITS OFFICERS, NOR ANY
OTHER PARTNER, HAS MADE, AND DOES NOT MAKE, ANY
AGREEMENT OF LIMITED PARTNERSHIP .13.
REPRESENTATION OR WARRANTY AS TO ANY MATTER CONCERNING THE
PARTNERSHIP, ITS BUSINESS, OR THE PROPERTY, UNLESS IT IS SET FORTH
IN THIS CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP. ALL
ORAL OR CONTRARY WRITTEN REPRESENTATIONS, STATEMENTS,
PROMISES, OR WARRANTIES, IF ANY, MADE, OR CLAIMED TO BE MADE, BY
THE GENERAL PARTNER OR ITS EMPLOYEES, AGENTS, OR
REPRESENTATIVES ARE HEREBY DECLARED NULL AND VOID.
10. TRANSFERS BY PARTNERS OF INTEREST IN PARTNERSHIP.
10.1. Restrictions. Except as permitted by this §10, a Partner may not sell, transfer, or
assign all or any part of his interest in the Partnership, and any act in violation of this §10
shall be null and void ab initio. A Partner may make its right to distributions hereunder
(but not the interest itself) subject to a security interest. In the event a Partner desires to
sell its interest, then such may be permitted, provided that:
10.1.1. Such sale may not be with respect to a fraction of a Unit, unless such
Partner originally acquired and owns only a fraction of a Unit; and
10.1.2. If such sale is of less than all of the Units held by such Partner, such
Partner and his purchaser, transferee, assignee, or holder of such security interest
shall immediately thereafter each hold at least one (1) full Unit; and
10.1.3. The instruments of transfer executed by such Partner and its purchaser,
transferee, assignee, or holder of such instruments of transfer and assignment with
respect to such transaction are in form and substance satisfactory to the General
Partner, including, without limitation, any representations and warranties in
addition to those required pursuant to §10.1.4; and
10.1.4. Such Partner must furnish an opinion of counsel, in form and substance
satisfactory to the Partnership's counsel, to the effect that the sale, transfer,
assignment, or creation of a security interest will not impair the ability of the
Partnership to be taxed as a partnership or to take advantage of accelerated
depreciation under the federal income tax laws and will not violate any applicable
federal or state securities law; and
10.1.5. The purchaser, transferee, assignee, or holder of such security interest
must represent in writing that it is acquiring the Units for its own account for
investment and not with a view to distribution thereof; and
10.1.6. Such Partner must pay the Partnership a transfer fee which is sufficient to
pay all reasonable expenses of the Partnership in connection with such
transaction; and
10.1.7. That such Purchaser, transferee, assignee, or holder of such security
interest (or any person who purchases such Units upon foreclosure of such
security interest) shall not become a substituted Limited Partner with the meaning
of the Act unless the General Partner consents in writing to such person becoming
AGREEMENT OF LIMITED PARTNERSHIP .14.
a substituted Limited Partner, which consent may be given or withheld in the sole
discretion of the General Partner; and
10.1.8. That prior to any sale of a partnership interest pursuant to this §10, the
Partner desiring to sell shall first offer to sell his partnership interest, at the price
and terms he is willing to accept, to all other Partners. The selling Partner shall
send written notice of this offer to the General Partner, who shall send a copy of it
to all Limited Partners. This offer shall remain open for thirty (30) days
following the date the General Partner receives the written notice of the offer.
The offer may be accepted by written notice sent to the General Partner and the
selling Partner. If not accepted in writing by the other Partners within the thirty
days, the offer shall be deemed rejected. If the offer is accepted by more than one
other Partner„ then all accepting Partners will be entitled, and obligated,
proportionately, and the transaction shall close within thirty (30) days. The
selling Partner shall provide the General Partner copies of all acceptances,
counter-offers, rejections, or other responses prior to any sale. If the offer is
rejected by all the other Partners, then the selling Partner may offer his interest for
sale to any person. If a person who is not a Partner offers to buy all or a part of
the interest, then the selling Partner may sell to him provided the terms and price
are the same as, or more expensive than, those offered to the other Partners. If the
sale to an outsider is not consummated within ninety (90) days following rejection
of the offer by the Partners, the Partners' right of first refusal described herein
shall be remade under the procedures identified above.
10.2. Substituted Limited Partners. If the General Partner consents to the admission
of a person as a substituted Limited Partner within the meaning of the Act, and such
person:
10.2.1. Elects to become a substituted Limited Partner by delivering a written
notice of such election to the General Partner;
10.2.2. Executes and acknowledges such other instruments as the General Partner
may deem necessary or advisable to effect the admission of such person as a
substituted Limited Partner, including, without limitation, the written acceptance
and adoption by such person of the provisions of this Agreement; and
10.2.3. Pays a transfer fee to the Partnership which is sufficient to cover all
reasonable expenses in connection with the admission of such person as a
substituted Limited Partner within the meaning of the Act, including, without
limitation, the cost of preparing and filing for record an amendment to this
Agreement in accordance with the Act; this Agreement will be amended and the
amended certificate and agreement of limited partnership of the Partnership will
be filed in accordance with the provisions of the Act as promptly as possible; all
other steps will be taken which, in the opinion of the General Partner, are
reasonably necessary to admit such person under the Act as a substituted Limited
Partner; and such person will thereupon become a substituted Limited Partner
within the meaning of the Act.
AGREEMENT OF LIMITED PARTNERSHIP .15.
10.3. Purchase of Units by General Partner. The General Partner may acquire all or
part of a Limited Partner's Interest in the Partnership from any Limited Partner or from
the Partnership provided the price paid is the same as that provided for in this Agreement.
If the General Partner becomes a substituted Limited Partner, within the meaning of the
Act, such General Partner will enjoy all rights and be subject to all obligations and duties
of a Limited Partner.
10.4. Death of a Limited Partner or Spouse of a Limited Partner. The death of any
Limited Partner will not have the effect of terminating or dissolving the Partnership.
Upon the death of a Limited Partner, his estate, devisee, or heirs will succeed to his
Interest and will be bound by the terms and provisions of this Agreement; however, in the
event that the Interest of the deceased Limited Partner does not pass to a single trust or
pass to more than one heir or devisee, or, upon termination of any such trust, are
distributed to more than one beneficiary, then, in that event, such heirs, devisees, or
beneficiaries ("Distributees") must, within ninety (90) days after distribution by the estate
of the deceased Limited Partner or by the trustee under any trust established by the
deceased Limited Partner, execute and deliver to the General Partner a written instrument
(including a power of attorney) appointing one person, firm or corporation as and to be
the agent of and for such Distributees. Such agent will be responsible for collecting,
receiving, and making all payments and contributions required hereunder, will vote all
the Interest of the Distributees, and will perform all other obligations of such Distributees
performable by reason of or arising from their Interest. All payments and distributions
required to be made hereunder will be deemed to have been validly made to such
Distributees by paying the same to such duly designated agent. In the event that such
Distributees for any reason fail to designate such agent in writing in the manner and
within the time prescribed and continue to fail to cure such default after ten (10) days'
written notice from the General Partner to correct the same, the General Partner will have
the right, at its election, to withhold all sums that are payable with respect to the Interest
of the Distributees, until such time as the Partnership is dissolved or such default is cured.
So long as such default exists with respect to any Interest, such Interest may not be voted
on any matter on which the vote or consent of Limited Partners is required or permitted
herein. Whenever an Interest may not be voted on a transaction, the percentage required
herein for approval of such transaction will be appropriately adjusted to require such
percentage only of those Limited Partners permitted to vote. Upon the death of a Limited
Partner's spouse having a community property interest in the Limited Partner, the
foregoing provisions of this §10.4 will apply to all of the deceased spouse's community
property interest in the surviving spouse's Interest in the Partnership which do not pass to
the surviving spouse by will or through operation of law, and such provisions will be
applied to such Interest as though the Limited Partner had owned such Interest and had
died on the date of his spouse's death leaving such Units to the actual recipients thereof.
10.5. Exceptions. The following transfers of a Partner's interest shall be completely free
from the restrictions set out above: (i) transfers by death, descent, or divorce; or (ii) the
transfer or conveyance by a Partner of all or any portion of his interest to his spouse, his
children, a trust for the benefit of his spouse or children, or to a family limited partnership
or corporation.
AGREEMENT OF LIMITED PARTNERSHIP .16.
11. RESIGNATION OR REMOVAL OF GENERAL PARTNER; ELECTION OF GENERAL PARTNER.
11.1. Resignation of General Partner. The General Partner or any one of them may
resign from the Partnership by delivering notice to the Limited Partners and remaining
General Partners. Such resignation will not be effective earlier than sixty (60) days after
the General Partner delivers its written notice of resignation. Such General Partner will
have no liability to the Partnership or its creditors or Partners for any events or accruals
occurring after any such resignation or withdrawal, and the Limited Partners hereby grant
to the General Partner the full right and authority to execute and file on behalf of the
Partnership and the Limited Partners any documents necessary to effect notice of the
withdrawal or resignation of the General Partner in compliance with this §11. In the
event that a General Partner resigns from the Partnership, his interest in the Partnership
will be converted to a limited partnership interest, without any change in the amount of
income, loss or cash allocable or distributable to the General Partner. For purposes of
determining the voting rights of the General partner with respect to such limited
partnership interest, such limited partnership interest will be deemed to represent a
number of Units which bears the same ratio to the total number of Units outstanding
immediately prior to such resignation as the General Partner's Adjusted Capital Account
bears to the aggregate Capital Accounts of all Partners (calculated as of the date of the
resignation of the General Partner). If, at the time of the resignation of the General
Partner, the Partnership is indebted to the General Partner in respect of funds advanced
by the General Partner the Partnership will, concurrently with the resignation, either: (i)
pay to the General Partner the full amount of such indebtedness; or (ii) pay the General
Partner an amount equal to ten percent (10%) of such indebtedness and execute and
deliver to the General Partner a promissory note in a principal amount equal to the
balance of such indebtedness. The principal of such note will be payable upon
termination of the Partnership and will bear interest at the rate of ten percent (10%) per
annum. Any such note shall be secured by a lien and security interest in all assets of the
Partnership, unless prohibited by any instrument or agreement to which the Partnership is
a party.
11.2. Removal of General Partner. A General Partner may be removed and cease to be
a General Partner of the Partnership:
11.2.1. Subject to §§ 11.4 through 11.8 hereof, upon the death of such General
Partner; or
11.2.2. Subject to §§ 11.4 through 11.8 hereof, if the General Partner is other
than a natural person, immediately upon its dissolution or liquidation; or
11.2.3. Subject to §§ 11.4 through 11.8, upon the removal of the General Partner
by the Limited Partners pursuant to §11.3.
11.3. Vote by Limited Partners to Remove a General Partner. Limited Partners
having an aggregate Partnership Percentage of seventy-six percent (76%) or more have
the right to remove for cause any one or all of the General Partners and substitute a new
General Partner to operate and carry on the business of the Partnership. Notwithstanding
AGREEMENT OF LIMITED PARTNERSHIP .17.
these provisions, the removal of the General Partner will be effective only if and when
the following conditions have been satisfied:
11.3.1. The removal is "for cause", which is defined as being fraud, gross
negligence or willful misconduct.
11.3.2. A new General Partner will have been elected by the Limited Partners
pursuant to §11.10, and he has agreed to accept the responsibilities of the
removed General Partner, and has made arrangements satisfactory to the removed
General Partner to absolve the removed General Partner from personal liability on
any Partnership debt. If the Partnership creditors will not consent to such
removal, the new General Partner or all of the Limited Partners will be required to
indemnify the removed General Partner for any subsequent liabilities, and pledge
collateral satisfactory to the removed General Partner to secure such indemnity;
11.3.3. The provisions of §§ 11.4 through 11.10 have been met; and
11.3.4. The Agreement has been amended to name the new General Partner.
Without limiting the power of attorney granted pursuant to §14, the new or
successor General Partner is hereby granted an irrevocable power of attorney,
with full power of substitution and coupled with an interest, from each Limited
Partner, by which power of attorney the new successor General Partner may
execute any and all amended Agreements on behalf of each Limited Partner.
11.3.5. However, notwithstanding §11.3.2, the Limited Partners do not have to
elect a new General Partner if less than all General Partners are removed. If they
choose not to, then the remaining General Partners will constitute the General
Partner.
11.4. Removal or Death of Less than All of the General Partners. In the event less
than all of the General Partners are removed according to this section, or in the event less
than all of the General Partners die, then the remaining General Partner(s) have the right
to continue as the only General Partners if they purchase the interest of the removed or
deceased General Partner on terms and conditions mutually acceptable.
11.5. Death of One or All of the General Partners. In the event of the death of less
than all of the General Partners, the Partnership shall continue and the Limited Partners
may either elect a new General Partner in accordance with this §11 or may choose not to,
in which event the remaining General Partners may continue to act pursuant to this
Agreement. In any case, the Partnership shall pay to the estate of the deceased General
Partner his interest in the Partnership in accordance with the requirements for payment to
a removed General Partner.
11.6. Adjusted Capital Accounts. At the time that the General Partner is removed in
accordance with this §11, the General Partner's Adjusted Capital Account shall be
computed in the following manner:
11.6.1. First: The General Partner's Capital Account, as it exists immediately
prior to the removal event, shall be adjusted in accordance with §8 hereof with
AGREEMENT OF LIMITED PARTNERSHIP .18.
respect to all Partnership operations occurring prior to or at the time of the
removal event.
11.6.2. Second: The General Partner's Capital Account, after being adjusted in
accordance with §8, shall be further adjusted by: (i) assuming the sale of the
Property for cash at its Appraised Value; and (ii) debiting or crediting the Capital
Account of the General Partner with its pro forma share of the hypothetical
income or loss resulting from such assumed sale.
11.7. Liability of General Partner after Resignation or Removal. If a General
Partner resigns or is removed in accordance with the provisions of this Agreement, its
liability for all matters shall cease and the Partnership shall promptly take all steps
reasonably necessary under the Act to cause such cessation of liability.
11.8. Election of Substitute General Partner. If all of the General Partners resign or
are removed in accordance with this Agreement and if pursuant to § 12.3 hereof the
Limited Partners elect to continue the business of the Partnership, a substitute General
Partner will be elected by the Limited Partners. Such election will be accomplished as
follows: Any one or more of the Limited Partners will promptly after the election to so
continue, nominate a person for election as a substitute General Partner; such nominee
will not become a General Partner unless by a vote (which may be by written consent) of
Limited Partners having an aggregate Partnership Percentage of more than fifty percent
(50%). In the event that such nominee is not elected, any one or more of the Limited
Partners will as soon as practicable thereafter nominate another substitute General Partner
and will continue to do so until a substitute General Partner is elected or the Partnership
is dissolved pursuant to §12.1 hereof. The exercise of the right to elect a successor
General Partner will not in any way constitute any Limited Partner a General Partner or
impose a personal liability on any Limited Partner. Unless at the time of any selection of
a substitute General Partner: (i) the construction of improvements which the Partnership
has theretofore either commenced or obligated itself to complete has been completed; and
(ii) all of the short-term construction loan indebtedness incurred by the Partnership in
connection with the construction of such improvements has been paid in full or made a
part of one or more long-term construction loans (i.e., the so-called permanent loans
usually placed in effect upon completion of, and to replace the short-term construction
loan or loans made to finance improvements), the substitute General Partner must be
satisfactory to each mortgagee or beneficiary under each mortgage and deed of trust
securing such short-term construction loan indebtedness. Unless the matters referred to
in clauses (i) & (ii) of the next preceding sentence have theretofore been accomplished,
the substitute General Partner, in winding up the affairs of the Partnership, will complete
the construction of improvements and will be fully authorized for this purpose to incur
both short-term construction loan indebtedness and long-term construction loan
indebtedness and to execute such instruments (including but not limited to lease
agreements covering all or any part of such improvements) and do any and all other
things deemed necessary by the substitute General Partner in order to complete such
improvements and place all related long-term construction loans in effect up to the
maximum amount of the commitments therefor.
AGREEMENT OF LIMITED PARTNERSHIP .19.
12. DISSOLUTION & WINDING UP OF THE PARTNERSHIP.
12.1. Dissolution of the Partnership. The Partnership will be dissolved upon the first
to occur of any of the following events:
12.1.1. The expiration of the term of the Partnership; or
12.1.2. The sale of all of the assets of the Partnership, unless promissory notes,
payable to the order of the Partnership, are received by the Partnership as a
portion of the consideration for the sale of all or a portion of the assets of the
Partnership; or
12.1.3. The formal adjudication of all of the General Partners as bankrupt;
12.1.4. The resignation or removal of all of the General Partners and a new
General Partner is not elected according to this Agreement.
12.2. Reconstitution. Immediately, upon the occurrence of any other event which by
operation of law may cause the dissolution of the Partnership, the Partnership shall
automatically be reconstituted and shall be composed of the remaining Partners, who may
continue the business of the Partnership, either alone or with others, without winding up
and liquidating the Partnership.
12.3. Election Upon Dissolution. Upon a dissolution of the Partnership pursuant to
§12.1.4 hereof, any one or more of the Limited Partners will, promptly after such
dissolution, give notification thereof to the other Limited Partners, and will call for a vote
of the Limited Partners to continue the business of the Partnership or to wind up the
Partnership pursuant to §12.4 hereof. If Limited Partners having an aggregate
Partnership Percentage of one hundred percent (100%) elect affirmatively to wind up the
Partnership or fail within ninety (90) days of any such dissolution to elect to continue the
business of the Partnership, the Partnership will be wound up pursuant to § 12.4 hereof. If
Limited Partners having an aggregate Partnership Percentage of one hundred percent
(100%) elect to continue the business of the Partnership, and there is no General Partner,
a substitute General Partner will be elected pursuant to §11.
12.4. Winding up of the Partnership. Upon the election of the Limited Partners to
wind up the Partnership or the failure of the Limited Partners to elect to continue the
business of the Partnership, or upon a dissolution of the Partnership pursuant to §12
hereof, the General Partner [or if there is no General Partner, a substituted General
Partner elected by Limited Partners having a Partnership Percentage of more than fifty
percent (50%)] will take full account of the Partnership's assets and liabilities, the assets
will be liquidated as promptly as is consistent with obtaining the fair value thereof, and
the proceeds therefrom to the extent sufficient therefor, will be applied and distributed in
the following order:
12.4.1. To the payment and discharge of all of the Partnership's debts and
liabilities to persons, including Partners, or former Partners who are creditors
(other than Partners who are creditors solely as a result of becoming entitled to
receive a distribution under §§ 8 and 12.4.2), and to the expenses of liquidation;
AGREEMENT OF LIMITED PARTNERSHIP 20
12.4.2. The remainder of such proceeds shall be distributed in accordance with
the provisions of §8.
13. BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, FISCAL YEAR, BANKING, & TAX
ELECTION.
13.1. Books of Account. The Partnership's books and records and this Agreement will
be maintained at the principal office of the Partnership and each Partner will have access
thereto at all reasonable times during normal business hours. The books and records will
be kept on the cash receipts and disbursements method of accounting applied in a
consistent manner by the Partnership and will reflect all Partnership transactions and be
appropriate and adequate for the Partnership's business.
13.2. Accounting & Reports. The General Partner shall furnish to each Partner a copy
of the balance sheet of the Partnership as of the last day of year period and a statement of
income or loss of the Partnership for such period, and a statement showing the amounts
allocated to or allocated against such Partner pursuant to this Agreement during or in
respect of such period, and annually report as to any items of income, deduction, credit,
or loss allocated to him for purposes of the Code and any applicable state or local income
tax laws pursuant to this Agreement. Such balance sheet and statements of income will
be prepared by the General Partner on the cash receipts and disbursements method of
accounting. The Partnership's book will be examined annually by the Partnership's
accountant. The General Partner shall select the accountant and inform the Limited
Partners of his name, firm, and address. The cost of preparing the reports, audits,
statements, and balance sheets shall be borne by the Partnership.
13.3. Fiscal Year. The fiscal year of the Partnership shall be the calendar year.
13.4. Banking. All funds of the Partnership shall be deposited in a separate bank
account or accounts or in an account or accounts of a savings and loan association as will
be determined by the General Partner, but such funds will be invested or deposited only
in an institution, the accounts or deposits of which are insured by an agency of the United
State Government.
13.5. Tax Election. Upon the transfer of an interest in the Partnership or in the event of
a distribution of the Partnership's Property, the Partnership may elect pursuant to Section
754 of the Internal Revenue Code of 1954, as amended, to adjust the basis of the
Partnership's property as allowed by Section 734(b) and Section 743(b) thereof.
13.5.1. The transferee partner agrees to pay a one-time fee of $350.00to the
Partnership in reimbursement of the additional expenses incurred by the
Partnership in accounting for and reporting the tax basis disparity and related
amortization or depreciation, if any, arising as a result of the election. This fee
shall be in addition to any other fees provided in this agreement.
AGREEMENT OF LIMITED PARTNERSHIP .21.
13.6. Partnership Returns. The General Partner will, for each fiscal year, file on behalf
of the Partnership a Partnership Return within the time prescribed by law (including
extensions) for such filing. The General Partner will also file on behalf of the Partnership
such state and city income tax returns as may be required by law. In addition, the
General Partner will make all reasonable efforts to deliver, by March 15th of the next
calendar year, to the Limited Partners, all information regarding the Partnership that is
necessary for the preparation of their individual federal income tax returns.
13.7. Tax Matters Partner. The General Partner will be treated as the Tax Matters
Partner of the Partnership pursuant to Section 6231(a)(7) of the Code. The General
Partner shall inform the Limited Partners of all matters which may come to his attention
in his capacity as Tax Matters Partner by giving the Limited Partners notice thereof
within ten (10) days. The General Partner shall take no action under Sections 6222
through 6232 of the Code unless it has given notice of the action and received approval
from Limited Partners holding an aggregate Partnership Percentage of more than fifty
percent (50%).
14. POWER OF ATTORNEY.
14.1. Each Limited Partner hereby makes, constitutes, and appoints each person or entity
comprising the General Partner, (who may act individually or together) and any successor
General Partner, with full power of substitution and resubstitution, its true and lawful
attorney for him and in his name, place, and stead and for his use and benefit, to:
(i) sign, execute, certify, acknowledge, swear to, file, and record all certificates,
documents, affidavits, and instruments which the General Partner deems
necessary or appropriate to (a) qualify or to continue the Partnership as a limited
partnership or (b) to conduct the business of the Partnership, including the
execution and delivery of such agreements, contracts, deeds, deeds of trust, notes,
loan documents, partnership, joint venture and co -ownership agreements,
indemnities, waivers, affidavits and other documents necessary or appropriate to
take any action which the General Partner is authorized to take or which the
Partnership may take, or to buy, develop, improve, maintain, re -zone, obtain
utilities to, lease, subdivide, deal with or sell the Partnership Property; and
(ii) sign, execute, certify, acknowledge, file and record all instruments amending
this Agreement or any such certificates or instruments, as now or hereafter
amended, that may be appropriate, including, without limitation, agreements or
other instruments or documents (a) to reflect the exercise by the General Partner
of any of the powers granted to it under this Agreement; (b) to reflect any
amendments made to this Agreement by the Partners pursuant to this Agreement;
(c) to reflect the admission to the Partnership of any substituted Limited Partner
or the withdrawal of any Partner in the manner prescribed in this Agreement; or
(d) which may be required of the Partnership or of the Partners by the laws of the
State of Texas or any other jurisdiction; or (e) which the General Partner, in its
sole discretion, deems appropriate.
14.2. Each Limited Partner authorizes each such attorney-in-fact to take any further
action which such attorney-in-fact shall consider necessary or advisable in connection
AGREEMENT OF LIMITED PARTNERSHIP .22.
with any of the foregoing, hereby giving such attorney-in-fact full power and authority to
do and perform each and every act or thing whatsoever requisite or advisable to be done
in and about the foregoing as fully as such Limited Partner might or could do if
personally present, and hereby ratifying and confirming all that each such attorney-in-fact
shall lawfully do or cause to be done by virtue hereof.
14.3. The power of attorney granted pursuant to § 14.1 hereof:
14.3.1. Is a special power of attorney coupled with an interest and is irrevocable;
14.3.2. May be exercised by all or each such attorney-in-fact, individually or
together, by executing any agreement, certificate, instrument, or document with
the single signature of such attorney-in-fact acting as attorney-in-fact for the
Partnership and for all of the limited and general partners; and
14.3.3. Will survive the delivery of an assignment by a Limited Partner of the
whole or a portion of its interest in the Partnership.
14.3.4. May be exercised by any officer of the General Partner, or if more than
one General Partner, by any one of the General Partners, acting alone, without the
joinder of any other General Partner.
15. LIABILITY & INDEMNIFICATION OF THE GENERAL PARTNER.
15.1. Exoneration. Except in case of fraud, gross negligence, or willful misconduct, the
doing of any act or the failure to do any act by the General Partner, the effect of which
may cause or result in loss or damage to the Partnership or to a Partner, if done pursuant
to the advice of legal counsel employed by any General Partner on behalf of the
Partnership, or if done in good faith to promote the best interests of the Partnership, will
not subject such General Partner to any liability to the Limited Partners or the Holders of
Units or the Partnership.
15.2. Indemnification. The Partnership will indemnify and hold harmless the General
Partner, its partners, and its or their officers, directors, shareholders, Affiliates,
employees, and its or their successors or assigns, any Trustee, and each Partnership
employee or agent against any and all claims, actions, demands, losses, costs, expenses
(including attorneys' fees), damages, loss, and threat of loss, as a result of any claim or
legal proceeding relating to the performance or non-performance of any act concerning
the activities of the Partnership, provided, however the party against whom the claim is
made, or legal proceeding is directed, must not have been guilty of fraud, gross
negligence, or willful misconduct. However, this paragraph shall not be construed to
mean that the Limited Partner's do not have the limited liability as expressed in this
Agreement nor shall they have any liability to creditors of the Partnership nor shall they
have any obligation to the Partnership or the General Partner except as provided
elsewhere in this Agreement.
AGREEMENT OF LIMITED PARTNERSHIP .23.
15.3. Derivative Actions. In the event one or more Limited Partner brings a lawsuit
against one or more of the General Partners, to recover judgment in the Partnership's
favor, the Partners bringing suit will be required to post bond for the reasonable expenses,
including reasonable attorney's fees incurred or expected to be incurred by the defendants
in defense of the action.
15.4. No Personal Liability. Anything in this Agreement to the contrary
notwithstanding, the General Partner will not be personally liable for the return of the
capital contribution of the Limited Partners, or any portion thereof, it being expressly
understood that any such return will be made solely from Partnership assets.
16. OTHER IMPORTANT PROVISIONS.
16.1. Notices. Any notice, payment, demand, offer, or communication required or
permitted to be given by any provision of this Agreement will be deemed to have been
delivered and given for all purposes: (i) if delivered personally to the party or to an
officer or general partner of the party to whom the same is directed; or (ii) whether or not
the same is actually received, if sent by registered or certified mail, postage and charges
prepaid, addressed as follows: if to the General Partner, at the address set forth on the
signature page of this Agreement or to such other address as the General Partner may
from time to time specify by written notice to the Limited Partners; and, if to a Limited
Partner, at such Limited Partner's address set forth on the signature page hereof, or to
such other address as such Limited Partner may from time to time specify by written
notice to the General Partner. Any such notice will be deemed to be given as of the date
so delivered if delivered personally, or three (3) days after the date on which the same
was deposited in a regularly maintained receptacle for the deposit of the United States
mail, addressed and sent as aforesaid.
16.2. Section Captions. Section and other captions contained in this Agreement are for
reference purposes only and are in no way intended to describe, interpret, define, or limit
the scope, extent, or intent of this Agreement of any provision hereof.
16.3. Severability. Every provision of this Agreement is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity will not affect the validity of the remainder of this Agreement.
16.4. Amendments & Other Matters. Amendments to this Agreement, and other
matters which require the consent or approval of the Limited Partners, may be proposed
by the General Partner or by Limited Partners having an aggregate Partnership
Percentage of fifty percent (50%) or more. Following such proposal, the General Partner
will submit to the Limited Partners a verbatim statement of the matter to be voted on, or
any proposed amendment, and will include in any such submission its recommendation to
the proposal. The General Partner will seek the written vote of the Limited Partners on
the proposal or will call a meeting of the Partners to vote thereon and to transact any
other business that it may deem appropriate. For purposes of obtaining a vote, the
General Partner may require a response within a specified time, but not less that three (3)
days, and failure to respond in such time period will constitute a vote which is consistent
with the General Partner's recommendation with respect to the proposal. Except as
otherwise provided in this Agreement, any such proposal will be adopted and effective as
AGREEMENT OF LIMITED PARTNERSHIP .24.
an amendment hereto if it receives the affirmative vote of Limited Partners having an
aggregate Partnership Percentage which is greater than seventy-six percent (76%);
provided, however: (i) no approval of the General Partner is required to effect a removal
of the General Partner pursuant to §11.3; and (ii) the vote required by any other section
of this Agreement which specifically requires a manner of vote or consent (such as §§ 9.3
& 11.3) shall control over this § 16.4. Not withstanding anything else in this § 16.4, no
amendment will be effective which changes the vested rights or the Ownership
Percentage of a Partner who is not in default, without such Partner's written consent.
16.5. Meetings & Means of Voting. Meetings of the Partners may be called by the
General Partner or by Limited Partners having an aggregate Partnership Percentage of
fifty percent (50%) or more. The call will state the reason for calling the meeting.
Notice of any such meeting will be delivered to all Partners in the manner prescribed in
§16.1 hereof not less than three (3) days nor more than thirty (30) days prior to the date
of such meeting. Partners must vote in person; however, the General Partner may in its
sole discretion, allow voting by proxy at any such meeting.
16.5. Voting. Whenever the vote or consent of Partners is permitted or required
under this Agreement, such vote or consent may be given by voice vote, or
written ballot at a meeting of Partners; or may be given in writing in accordance
with the procedure for obtaining written votes prescribed in § 16.4 hereof. Any
Partner may waive notice of or attendance at any meeting of the Partners. All
meetings or votes may, at the General Partner's sole discretion, be by telephone.
16.6. Right to Rely Upon the Authority of General Partner. No person dealing with
the General Partner will be required to determine its authority to make any commitment
or undertaking on behalf of the Partnership, nor to determine any fact or circumstance
bearing upon the existence of its authority. In addition, no purchaser of any asset owned
by the partnership will be required to determine the sole and exclusive authority of the
General Partner to sign and deliver on behalf of the Partnership any such instrument of
transfer, or to see the application or distribution of revenues or proceeds paid or credited
in connection therewith, unless such purchaser has received written notice from the
Partnership affecting the same.
16.7. Litigation. The General Partner will prosecute and defend at the expense of the
Partnership such actions at law or in equity as may be necessary to enforce or protect the
interests of the General Partner or the Partnership. The Partnership and the General
Partner will respond to any final decree, judgment, or decision of any court, board, or
authority having jurisdiction in the premises. The General Partner will satisfy any such
judgment, decree, or decision first out of any insurance proceeds available therefor, next
out of the assets of the Partnership, and finally out of the assets of the General Partner.
16.8. Texas Law. The local, internal laws of Texas govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights and duties of
the parties, irrespective of the jurisdiction in which Subscription Agreements for units are
executed and irrespective of the jurisdiction in which subsequent transfers of Units are
AGREEMENT OF LIMITED PARTNERSHIP .25.
made. Venue for all lawsuits related to this Agreement, the Partnership, the General
Partner or a Limited Partner, shall be maintained in Travis County, Texas.
16.9. Waiver of Action for Partition. Each of the parties hereto irrevocably waives,
during the term of the Partnership and during the period of its liquidation following any
dissolution, any right that it may have to maintain any action for partition with respect to
any of the assets of the Partnership.
16.10. Counterpart Execution. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same document.
All counterparts will be construed together and will constitute one (1) Agreement.
16.11. Parties in Interest. Subject to the provisions contained in §10 hereof, each and
every covenant, term, provision, and agreement herein contained will be binding upon
and inure to the benefit of the heirs, successors and assigns of the respective parties
hereto.
16.12. Time. Time is of the essence with respect to this Agreement.
16.13. Integrated Agreement. This Agreement constitutes the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof, and there
are no agreements, understandings, restrictions, representations, or warranties among the
parties other than those set forth herein or herein provided for or contained in the
Subscription Agreement.
16.14. Right to Rely Upon Authority of Person Signing Agreement. In the event that
a Limited Partner is a trust (with or without disclosed beneficiaries), partnership, limited
partnership, joint venture, corporation, or any other entity other than a natural person, the
Partnership and the General Partner will: (i) not be required to determine the authority of
the person signing this Agreement or any amendment hereto to make any commitment or
undertaking on behalf of such entity, nor to determine any fact or circumstance bearing
upon the existence of his authority; (ii) not be required to see the application or
distribution of revenues or proceeds paid or credited to the person signing this Agreement
or any amendment thereto on behalf of such entity in connection with any matter for
which consent is permissible or required hereunder; and (iii) be entitled to rely upon the
authority of any General Partner, joint venturer, co -trustee or successor trustee, or
president or vice-president (as the case may be) of any such entity, the same as though
such person were the person originally signing this Agreement or any amendment hereto
on behalf of such entity.
16.15. Merger & Consolidation. The Partnership may merge or consolidate with other
organizations. A merger or consolidation shall not occur except by amendment of this
agreement in compliance with the procedures set forth in § 16.4.
16.16. Consent as to Name. The Partnership consents to the General Partner's use of its
name, even though it is similar to the Partnership's name.
16.17. Legal Counsel / Conflict of Interest Waiver. The General Partner may employ
such legal services as are necessary or desirable to conduct the business of the
AGREEMENT OF LIMITED PARTNERSHIP .26.
Partnership. The Partners acknowledge that RASH CHAPMAN SCHREIBER & PORTER,
L.L.P., of Austin, Texas, has represented the General Partner in the negotiation of this
Agreement, represents the Partnership (and the General Partner) in the purchase of the
Property, and may represent the Partnership (and the General Partner) in future matters
related to, or unrelated to, the Property. THE PARTNERS HEREBY WAIVE ANY CONFLICT OF
INTEREST CREATED BY SUCH REPRESENTATION. The Partners acknowledge that RASH
CHAPMAN SCHREIBER & PORTER, L.L.P., does now and may in the future represent the
General Partner, members of the General Partner and/or entities owned or controlled by
the General Partner or its members in other matters not related to the Partnership or the
Property. THE PARTNERS HEREBY CONSENT TO SUCH REPRESENTATION AND WAIVE ANY
CONFLICT OF INTEREST THAT MAY BE CREATED THEREBY. Each Partner hereby
acknowledges that he has read this Agreement, has had the opportunity to ask any
questions he had about the Agreement, and understands that all of the terms and
provisions of this Agreement are fully enforceable notwithstanding the decision of a
Partner not to employ separate independent counsel. Each Partner further acknowledges
that he has either employed separate and independent counsel of his own choosing prior
to entering into this Agreement, or has waived his right to do so.
IN WITNESS WHEREOF, this Agreement of Limited Partnership has been
executed on the date shown below, to be effective on the 24/7' day of
/qov, 2003.
GENERAL PARTNER: RR / BANDON DUNES COMPANY, L.L.C.
a Texas Limited Liability Company
Date: VU 3 By:
Robert D. Wunsch, President
ADDRESS: 4314 W. Braker Lane - Suite #250
Austin, TX 78759
Attachment: Limited Partners' Acceptance and Capital Contributions
AGREEMENT OF LIMITED PARTNERSHIP .27.
LIMITED PARTNERS' ACCEPTANCE AND CAPITAL CONTRIBUTIONS
We are all of the Limited Partners of ROUND ROCK / BANDON DUNES, LTD. We
acknowledge having read the LIMITED PARTNERSHIP AGREEMENT OF ROUND
ROCK / BANDON DUNES, LTD. (copy attached hereto), and we have agreed to be Limited
Partners pursuant to the Agreement. The General Partner shall have a 1 % Partnership
Ownership Percentage; and the Limited Partners listed below shall own the remaining 99%
Partnership Ownership Percentages in the ratios set forth below.
LIMITED PARTNER
PRINTED NAME, SSN OR TAX ID No.,
& SIGNATURE
INITIAL CAPITAL
CONTRIBUTION
LIMITED PARTNER
OWNERSHIP PERCENTAGE
ROBERT D. WUNSCH
Social Security # 565-94-1505
2G✓��/ . /. Signature
$900
90%
THE ANW 2001 TRUST
Tax ID #56-6627345
� ,,2 /moi—' Trustee Signature
$50
5%
2-20,',
THE BCW 2001 TRUST
Tax ID #56-6627344
/ J
/.j Trustee Signature
/Rd .I.,/„C.--Trustee
$50
5%
TOTAL
$1,000
100%
AGREEMENT OF LIMITED PARTNERSHIP
.28.
Glossary
Terms & Definitions
Limited Partnership Agreement
1. "Act" means the Texas Revised Uniform Limited Partnership Act.
2. "Affiliate" of any first person means: (i) any person directly or indirectly owning, controlling, or
holding with power to vote ten percent (10%) or more of the outstanding voting securities of such first
person; (ii) any person ten percent (10%) or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held with power to vote by such first person; (iii) any person directly or
indirectly controlling, controlled by, or under common control with such first person; and (iv) if such first
person is used in the definition of the power to direct or cause the direction of the management and policies
of a person, whether through ownership of voting securities, by contract or otherwise, and the term
"person" means any individual or any corporation, trust, partnership, or other entity.
3. "Agreement" means this Agreement of Limited Partnership of the Partnership, as amended from time to
time.
4. "Adjusted Capital Account Deficit" means, with respect to any Partner, the deficit balance, if any,
in such Partner's Capital Account as of the end of the relevant fiscal year, after giving effect to the
following adjustments:
4.1. Credit to such Capital Account any amounts which such Partner is obligated to restore (pursuant to
the terms of such Partner's Promissory Note or otherwise) or is deemed to be obligated to restore pursuant
to the penultimate sentence of Regulations §1.704-1(b)(4)(iv)( or would be deemed obligated to restore if
Partner Loan Nonrecourse Deductions were treated as Nonrecourse Deductions; and
4.2. Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(11)(d)(4), 1.704-
1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of
Section 1.704(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.
5. "Adjusted Capital Contribution" means, as of any day, a Partner's Capital Contributions adjusted
as follows:
5.1. Increased by the amount of any Partnership liabilities which, in connection with distributions
pursuant to §8 hereof, are assumed by such Partner or are secured by any Partnership Property distributed
to such Partner, and
5.2. Reduced by the amount of cash and the Gross Asset Value of any Partnership Property distributed
by such Partner pursuant to §8 hereof and the amount of any liabilities of such Partner assumed by the
Partnership or which are secured by any property contributed by such Partner to the Partnership.
5.3. In the event any Partner transfers all or any portion of his Partnership Percentage in accordance
with the terms of this Agreement, his transferee shall succeed to the Adjusted Capital Contribution of the
transferor to the extent it relates to the transferred Partnership Percentage.
6. "Allocation Percentage" in respect of any Partner means the same as Partnership Percentage.
AGREEMENT OF LIMITED PARTNERSHIP .29.
7. "Appraised Value" of the Property means the then estimated amount for which the Property would be
salable in a bona fide sale by a willing seller to a willing buyer, as determined by a certified real estate
appraiser selected by the General Partner from the county in which the Property is located.
8. "Available Cash Flow" of the Partnership shall mean all cash funds of the Partnership (except cash
funds obtained as contributions to the capital of the Partnership by the Limited Partners or cash funds
obtained by the Partnership as loans) on hand from time to time after: (i) payment of all expenses of the
Partnership as of such time, (ii) provision for payment of all outstanding and unpaid current obligations of
the Partnership as of such time; and (iii) provision for an adequate reserve determined by the General
Partner in its sole discretion to be reasonably necessary for the future business of the Partnership.
9. "Capital Account" means, with respect to any Partner, the Capital Account maintained for such
Partner in accordance with the following provisions:
9.1. To each Partner's Capital Account there shall be credited such Partner's Capital Contributions,
such Partner's distributive share of Net Income and any items in the nature of income or gain which are
specially allocated pursuant to §8 hereof, and the amount of any Partnership liabilities assumed by such
Partner or which are secured by any Partnership Property distributed to such Partner.
9.2. To each Partner Capital Account there shall be debited the amount of cash and the Gross Asset
Value of any Partnership Property distributed to such Partner pursuant to any provision of this Agreement,
such Partner's distributive share of Losses and any items in the nature of expenses or losses that are
specially allocated pursuant to §8 hereof, and the amount of any liabilities of such Partner assumed by the
Partnership or which are secured by any property contributed by such Partner to the Partnership.
9.3. In the event any interest in the Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to
the transferred interest.
9.4. In determining the amount of any liability for purposes of this section relating to "Adjusted
Capital Contribution", there shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations §1.704-1(b), and shall be interpreted and applied in a
manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent
to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order
to comply with such Regulations, the General Partner may make such modification, provided that it is not
likely to have a material effect on the amounts distributable to any Partner pursuant to §8 hereof upon the
dissolution of the Partnership.
10. "Capital Contribution" in respect of any Partner, including any Limited Partner, means the amount
of all cash contributed (whether by original contributions, or otherwise) by such Partner and any
predecessor in interest of such Partner to the capital of the Partnership. Also included is the initial Gross
Asset Value contributed to the Partnership by a Partner.
11. "Capital Transaction" means an Interim Capital Transaction and/or a Terminating Capital
Transaction.
12. "Cash Flow" means cash funds from all sources (not including Capital Contributions, loan proceeds,
Interim and Terminating Capital Transactions), without deduction for depreciation or amortization, but
after deducting cash funds used to pay all other expenses, debt payments, capital improvements and
replacements and to create or restore reserves.
13. "Code" means the INTERNAL REVENUE CODE of 1986, as amended (or any corresponding provisions of
succeeding law).
14. "Commission" means the Securities and Exchange Commission.
AGREEMENT OF LIMITED PARTNERSHIP .30.
15. "Depreciation" means, for each fiscal year or other period, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect to an asset for such year or other
period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the
same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or
other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization, or other cost recovery
deduction for such year is zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.
16. "General Partner" means the person(s) designated as "General Partner" in the first paragraph of this
Agreement and any substitutes as provided by this Agreement.
17. "Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax
purposes, except as follows:
17.1. The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the
gross fair market value of such asset, as determined by the contributing Partner and the Partnership;
17.2. The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross
fair market values, as determined by the General Partner, as of the following times: (a) the acquisition of
an additional interest in the Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (b) the distribution by the Partnership to a Partner of more than a de minimis
amount of Partnership Property as consideration for an interest in the Partnership; and (c) the liquidation of
the Partnership within the meaning of Regulations §1.704-1(b)(2)(ii)(g); provided, however, that the
adjustments pursuant to clauses (a) & (b) above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
17.3. The Gross Asset Value of any Partnership asset distributed to any Partner shall be the gross fair
market value of such asset on the date of distribution; and
17.4. The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b),
but only to the extent that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations §1.704-1(b)(2)(iv)(m).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to this section, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset
for purposes of computing Profits and Losses.
18. "Interim Capital Transaction" means any of the following events: (i) the sale of part of the
Property; (ii) the recovery of insurance proceeds or other damage recoveries by the Partnership in respect
of a casualty loss exceeding the cost of restoration; (iii) the receipt of proceeds from condemnation of part
of the Property; and (iv) the refinancing of loans to the Partnership or the original acquisition of debt
financing, to the extent that the proceeds are not applied to expenses incurred in the repair or restoration of
the Property, or set aside for or applied to the payment of liabilities relating to the acquisition, improvement
or operation of the Property.
19. "Land" means the real property owned by the Partnership.
20. "Limited Partners" are those persons or entities who are, from time to time, admitted to the
Partnership as limited partners (including substituted Limited Partners) and whose names, residence
addresses, and the Partnership Percentage of each are contained in the records of the General Partner.
AGREEMENT OF LIMITED PARTNERSHIP .31.
•
21. "Nonrecourse Deductions" has the meaning set forth in Regulations §1.704-2(b)(1). The amount of
Nonrecourse Deductions for a Partnership taxable year equals the net increase, if any, in the amount of
Partnership Minimum Gain during that taxable year, over the aggregate amount of any distributions during
such year of proceeds of a nonrecourse liability that are allocable to an increase in partnership minimum
gain, and as further defined in Regulations §1.704-2.
22. "Net Income & Net Loss" means, for each fiscal year or other period, an amount equal to the
Partnership's taxable income or loss for such year or period, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following
adjustments:
22.1. Any income of the Partnership that is exempt from federal income tax and not otherwise taken into
account in computing Net Income or Losses pursuant to this section shall be added to such taxable income
or loss;
22.2. Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Regulations §1.704-1(b)(2)(iv)(1), and not otherwise taken
into account in computing Profits or Losses pursuant to this section shall be subtracted from such taxable
income or loss;
22.3. In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to that section, the
amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for
purposes of computing Net Income or Losses;
22.4. Gain or loss resulting from any disposition of Partnership Property with respect to which gain or
loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value
of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;
22.5. In lieu of depreciation, amortization, and other cost recovery deductions taken into account in
computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year
or other period, computed in accordance with that section;
22.6. Notwithstanding any other provisions of this section, any items which are specially allocated
pursuant to §8.10 hereof shall not be taken into account in computing Profits or Losses.
23. "Ownership Percentage" means the same as Partnership Percentage.
24. "Partners" means, collectively, the General Partners and the Limited Partners.
25. "Partnership" means the Limited Partnership being formed pursuant to this Agreement.
26. "Partnership Minimum Gain" has the meaning set forth in Regulations §1.704-1T. The amount of
Partnership Minimum Gain is determined by computing with respect to each nonrecourse liability of the
Partnership, the amount of gain, if any, that would be realized by the Partnership if it disposed of the
Partnership Property subject to such liability in full satisfaction thereof and then by aggregating the
amounts so computed and as further defined in Regulations §1.704-2.
27. "Partnership Percentage" in respect of any Limited Partner means that fraction, expressed as a
percentage, having as its numerator the Capital Contribution of such Limited Partner and having as its
denominator the total Capital Contributions of all Limited Partners.
28. "Partnership Return" means the U.S. Partnership Return of Income of the Partnership.
29. "Property" means the real property owned by the Partnership.
AGREEMENT OF LIMITED PARTNERSHIP .32.
30. "Regulations" means the Income Tax Regulations promulgated under the Code, as such Regulations
may be amended from time to time (including corresponding provisions of succeeding provisions).
31. "Subscription Agreement" means that agreement signed by each Limited Partner upon subscribing
to be a Limited Partner.
32. "Terminating Capital Transaction" means the sale or other disposition of all of the Partnership's
assets in connection with the dissolution and termination of the Partnership or, in the case of any
Partnership assets that are not sold or disposed of in connection with the dissolution and termination of the
Partnership but rather are distributed in kind to the Partners, the fair market value of such assets.
33. "UCC" means the UNIFORM COMMERCIAL CODE of the State of Texas.
34. "Unrecouped Capital Contributions" means the aggregate Capital Contributions of all Partners
minus all amounts of money which may have been distributed to the Partners prior to termination of the
Partnership.
Last revised. 11 20.03
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AGREEMENT OF LIMITED PARTNERSHIP .33.