Agreement of Limited Partnership of 150 CCM Black Oak, Ltd., dated as of March 20, 2014, by and among 150 Black Oak GP, Inc. and CCM Development USA Corporation, American Real Estate Investments, LLC and the Fogarty Family Trust II

 

 

THIS AGREEMENT OF LIMITED PARTNERSHIP (the “Agreement”) is made and entered into effective the 20th day of March, 2014 by and between 150 Black Oak GP, Inc., a Texas corporation, whose address is 340 North Sam Houston Parkway East, Suite 140, Houston, Texas 77060, as general partner (“General Partner”), and each of the individuals or entities whose names are set forth on Exhibit “A” attached to this Agreement as limited partners (“Limited Partners”).

 

 

 

 

 

 

 

The following terms used in this Agreement shall, unless otherwise expressly provided in this Agreement or unless the context otherwise requires, have the following respective meanings:

 

 

 

 

2.4     Budgets shall mean, jointly, the Annual Budget and the Budget and Development Plan.

 

2.5     Class A Limited Partner shall mean CCM Development USA Corporation. Duties charged in this Agreement to the Class A Limited Partner may be performed by its designee.

 

2.6     Consultants shall mean, collectively, CCM Development USA Corporation, a Delaware corporation, American Real Estate Investments, LLC, a Missouri limited liability company, and Arete Real Estate and Development Company, a Texas corporation.

 

 

 

2.17   Preferred Return shall mean with respect to the Class A Limited Partner (i) a sum that accrues and accumulates at the rate of five percent (5%) per annum on the unreturned Capital Contributions made by such Class A Limited Partner to the Partnership, less (ii) any distributions paid to such Class A Limited Partner under Section 5.1 hereof, as determined by the General Partner.

 

2.18   Property shall mean that certain tract(s) or parcel(s) of land described on Exhibit “B”, which is attached to this Agreement and made a part hereof for all purposes.

 

 

 

 

3.2     Additional Contributions. If additional capital is needed for the purposes of the Partnership as determined by the General Partner, subject to any limitations as may be hereinafter provided, after contributions have been made by the Partners pursuant to Section 3.1 hereof, then the General Partner shall attempt to borrow such additional capital on behalf of the Partnership first from any one or more of the Partners and then from any third party. Any such loans shall be on commercially reasonably terms, and if from any one or more of the Partners, such loan or loans shall bear interest at the rate of fifteen percent (15%) per annum.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)            Personally liable because of his or her Interest in the Partnership for any losses of any other Limited Partner:

 

 

 

 

 

 

 

 

 

9.2           Powers and Duties of the General Partner. Subject to the other provisions of this Agreement, the General Partner shall have all the powers and duties necessary or incidental to the proper administration of the affairs of the Partnership and may, at the Partnership’s expense, do all such acts and things deemed by it to be necessary or appropriate in furtherance of the Partnership’s purpose. Except as otherwise provided in this Agreement, the General Partner shall have sole authority to cause the development of the Property and otherwise take actions on behalf of the Partnership. Notwithstanding anything to the contrary herein, the General Partner shall have complete authority to operate and manage the business of the Partnership so long as such operation and management is in accordance with the Budgets. Further, notwithstanding anything to the contrary herein, the General Partner is not guaranteeing the completion of the Property in accordance with the Budgets, and the General Partner shall not be liable if such becomes unfeasible due to causes not within its reasonable control or not caused by its negligence or greater fault, including, but not limited to, economic or market conditions.

 

9.3           Insurance. At the expense of the Partnership, the General Partner shall cause the Partnership to maintain adequate and reasonable insurance covering the injury or death of employees or others, as well as insurance against fire and other risks, and to adjust all losses and claims pertaining to or arising out of such insurance.

 

9.4           Employment of Others. The General Partner shall be authorized to appoint, employ, or contract with, at the expense of the Partnership, generally any Person it may deem necessary or desirable for the transaction of the business of the Partnership. Specifically, the General Partner shall appoint, employ or contract with a project manager (the “Project Manager”) to provide field supervision of the development and contraction of the Project. The Project Manager shall be compensated as provided in the Budgets.

 

9.5           Budget and Development Plan. The General Partner shall periodically update the Budget and Development Plan, as approved by a Majority in Interest of Limited Partners, and provide copies thereof to the other Limited Partners.

 

 

 

9.6           Annual Budget. The General Partner agrees to prepare and deliver to the Partners within forty-five (45) days after the execution of this Agreement with respect to the initial Fiscal Year, and at least forty-five (45) days prior to the beginning of each subsequent Fiscal Year, a proposed Annual Budget for such Fiscal Year for the management and operation of the Partnership and the acquisition, development, management, operation, financing and sale of the Property, setting forth (a) any proposed expenditures and reserves for the forthcoming Fiscal Year, (b) any discretionary expenditures which the General Partner determines to be necessary or advisable to maintain the Property or facilitate the development and sale of lots developed on the Property, and (c) a projected cash flow analysis for the forthcoming Fiscal Year setting forth the estimated receipts and expenditures of the Partnership. Each Partner shall have a period of twenty (20) days to review and approve the proposed Annual Budget for the forthcoming Fiscal Year. Once approved by a Majority in Interest of Limited Partners, such approved Annual Budget for the period of time covered thereby shall be binding upon the Partners unless otherwise mutually agreed. Notwithstanding the foregoing, (i) should any Partner fail to notify the General Partner of its disapproval of the proposed Annual Budget prior to the expiration of the twenty (20) day review period described above, the proposed Annual Budget shall be deemed to be approved by such Partner, and (ii) should any Partnership lender require that the Partnership make expenditures or establish reserves during any Fiscal Year, all such required expenditures and reserves shall be deemed Approved by a Majority in Interest of Limited Partners after such lender requirements are sent to the Partners. The General Partner may, from time to time, submit proposed revisions to the Annual Budget, and the Partners shall consider and review such proposed revisions in the manner and time frames set forth above in order to determine whether to approve same, or to make such revisions thereto as they may mutually agree, or to agree not to revise the Annual Budget.

 

9.7           Approval of Budget and Development Plan and Annual Budget. Notwithstanding anything to the contrary provided in this Agreement, the Budget and Development and each Annual Budget shall be submitted to the Consultants prior to submitting same to the Partners for approval. If approved by the Consultants as providing in the Consultant Agreement, then the General Partner shall submit same to the Partners for approval as provided in Sections 9.5 and 9.6 hereof.

 

9.8           Licenses. The General Partner shall, at its own expense, qualify to do business and obtain and maintain such licenses as may be required for the performance by the General Partner of its services hereunder.

 

9.9           Third Party Obligations. All debts and liabilities to any third Persons incurred by the General Partner in the authorized course of its operation and management of the Property shall be the debts and liabilities of the Partnership only and the General Partner shall not be liable for any such obligations by reason of its management, supervision and direction of the Property for the Partnership. The General Partner may so inform third parties with whom it deals on behalf of the Partnership and may take any other reasonable steps to carry out the intent of this Section 9.9.

 

 

 

9.10           Indemnification. The Partnership shall indemnify, save harmless and pay all judgments arising against the General Partner and its shareholders, directors, employees and agents from any cost, expense, claim, liability or damage incurred by reason of such Person’s relationship to the Partnership or any act performed or omitted to be performed by them in connection with this Article IX or the business of the Partnership, including attorney’s fees and costs incurred by them in connection with the defense of any action based on any such act or omission, which attorneys’ fees and costs may be paid as incurred, [including all such liabilities under any Federal or state securities act (including the Securities Act of 1933, as amended)] as permitted by law, except that the Partnership shall have no indemnification obligation hereunder with respect to any act or omission of any Person that constitutes willful misconduct, gross negligence, or was outside the scope of such Person’s authority under this Article VI. All judgments against the Partnership with respect to which any Person is entitled to indemnification may only be satisfied from the Partnership’s assets. Any Person entitled to be indemnified hereunder shall also be entitled to recover its attorney’s fees and costs of enforcing this indemnity from the Partnership’s assets.

 

9.11           Power of Attorney. By the execution of this Agreement, each Limited Partner and any assignee or transferee of a Limited Partner's Partnership Interest irrevocably constitutes and appoints the General Partner his or her true and lawful attorney-in-fact and agent to execute, acknowledge, verify, swear to, deliver, record, and file in that Partner's or assignee's name, place and stead, all documents which may from time to time be required by any federal or state law, including the execution, verification, acknowledgment, delivery, filing and recording of this Agreement, as well as all authorized amendments to any such document, all assumed name certificates, documents, bills of sale, assignments, and other instruments or conveyances, leases, contracts, loan documents and/or counterparts of any such document, and all other documents that may be required to effect a continuation of the Partnership and that the General Partner deems necessary or reasonably appropriate. The power of attorney granted in this paragraph shall be deemed to be coupled with an interest, shall be irrevocable and survive the death, bankruptcy, incompetency or legal disability of a Limited Partner, and shall extend to that Limited Partner's heirs successors and assigns. Each Limited Partner agrees to be bound by any representations made by the General Partner acting in good faith pursuant to the Power of Attorney, and each Limited Partner waives any and all defenses that may be available to contest, negate, or disaffirm any action of the General Partner taken in good faith under this Power of Attorney.

 

9.12           Limitations on Power and Authority of the General Partner. It is hereby understood and agreed by the General Partner that it shall not take any of the following actions on behalf of the Partnership, the Partners or the Property, which actions shall be deemed Major Decisions for purposes of this Agreement, unless such Major Decisions have been approved by a Majority in Interest of the Limited Partners:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The dissolution shall be effective on the day on which the event causing dissolution occurs, but the Partnership shall not terminate until its assets have been distributed in accordance with the provisions of this Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the date and year first above written.