Frisco Summit, LP and Frisco Summit, LP Derivatively and on Behalf of Frisco Multifamily Land Partners, LP v. Frisco Multifamily Land GP, LLC, Carleton Development, Ltd., GH Southwest II, Inc., Frisco Summit I, LP, Frisco Summit I GP, LLC, Salt River Capital, Inc.,Frisco Summit II, LP, Frisco Summit II GP, LLC, Printice L. Gary, Jeffrey D. Fulenchek, and Neal R. Hildebrand

Count 2-Breach of Contract (which can be found at page 121r 45 and pages 9 and 101r 35 of Plaintiffs Original Petition):

promote fee earned by Carleton from the development of that

Phase of the project;

Ir 35(b) the failure to timely develop Phase II and Phase III of the MOTION

NA; DENIED 1r 35(c): as to failing to sell property for its fair market value at MOTION

the time of the transaction with an affiliate; GRANTED

Ir 35(c): as to engaging in the Salt River capital refinance as MOTION

referenced hereinabove; GRANTED

2

5199

Summit Property;

Jr35(d) failing to provide timely information regarding the project MOTION

partnership or partnerships formed or to be formed by the GRANTED

Individual Defendants in connection with the development contemplated by the JV A;

Jr 35(e) Failing to provide documentation regarding the interests MOTION

referenced in paragraph Jr 35(a); DENIED Jr 35(f) as to failing to provide timely access to information MOTION

regarding the conduct of the business operations of FMLP, GRANTED

including agreements entered into by FMLP with respect to the Phase II and Phase III developments contemplated by the JV A.

Count 3 - Breach of Fiduciary Duty (which can be found at page 13 of Plaintiffs Original Petition) -

MOTION GRANTED; Count 4 -- Conspiracy (which can be found at page 14 of Plaintiffs Original Petition)-

MOTION GRANTED; Count 5 - Aiding and Abetting (which can be found at page 14 of Plaintiffs Original

CHRISTINE A. NOW AK

JUDGE PRESIDING

3

5200

3/14/2025 SCANNED Page 1 CAUSE NO. 493-01132-2023 Frisco Summit, LP and Frisco Summit, § IN THE DISTRICT COURT LP derivatively on behalf of Frisco §

Multifamily Land Partners, LP, § §

Plaintiffs, § §

v. § 493rd JUDICIAL DISTRICT

§

Frisco Multifamily Land GP, LLC; §

Carleton Development, Ltd.; GH §

Southwest II, Inc.; Frisco Summit I, LP; §

Frisco Summit I GP, LLC; Salt River §

Capital, Inc.; Frisco Summit II, LP; §

Frisco Summit II GP, LLC; Printice L. §

Gary; Jeffrey D. Fulenchek; and Neal R. §

Hildebrandt, § § •

Defendants. § COLLIN COUNTY, TEXAS

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Findings of Fact

1. Frisco Summit, LP ("Frisco Summit") and Frisco Multifamily Land GP, LLC (the

"GP") entered into a Limited Partnership Agreement, dated December 27, 20 13 (the "LPA''), in which Frisco Multifamily Land Partners, LP was formed. The partnership was formed to refinance the debt that encumbered a certain piece of real property in Frisco, Texas, an approximately 21.166 acre tract, and then to develop that property into residential apartment communities in multiple separate phases.

2. The LP A provides that it contains the entire agreement between the parties relating to the ownership and operation of the partnership. The LP A is a fully integrated contract.

3. The LPA Section 7.l(d)(i)(A), (B), and (C) states a minimum purchase price for the property in each phase. More specifically, under the LP A Section 7 .1 ( d)(i), the GP is authorized to sell land to Carleton Development, Ltd. ("Carleton") at $7.00 per square foot for Phase 1, $8.00

FINDINGS OF FACT AND CONCLUSIONS OF LAW Page 1 of 4

5964

per square foot for Phase 2, and $9.00 per square foot for Phase 3. There is no obligation in the LP A to sell land for the current fair market value. Frisco Summit is a sophisticated party and was represented by counsel during the negotiations of the LP A. If there was an agreement to sell land for the current fair market value, it would have been included in the LP A.

4. There is no development timeline provided in the LP A. There are no specific time limits on development in the LP A. Frisco Summit is a sophisticated party and was represented by counsel during the negotiations of the LP A. If there was a development timeline intended by or agreed to by the parties, it would have been included in the LP A. There was no development timeline agreed to by the parties.

5. The LPA provides that the partnership will continue until December 31 , 2040, if it is not otherwise previously dissolved, at which point its assets would be liquidated and distributed.

6. Section 7 .1 (d )(i) of the LP A is not premised upon any development timeline.

7. Frisco Summit received $2,871 ,718.47 for the Promote Fee for Phase 1. Defendants provided Frisco Summit and Frisco Summit' s accountant with a detailed accounting of its interest in Phase 1, and with a detailed accounting of the Promote Fee for Phase 1.

8. Defendants did not engage in unauthorized related party transactions in violation of Section 8.2 of the LP A.

9. The GP and Carleton did not breach the LPA.

10. Defendants prevailed on all claims brought in this action. Taking into consideration the Court' s file and all evidence that was presented, it is equitable and just to award Defendants their costs and reasonable and necessary attorney's fees.

11. It is equitable and just to award Defendants their reasonable and necessary attorney' s fees incurred in the trial court in the amount of $242,099.50. Defendants incurred

FINDINGS OF FACT AND CONCLUSIONS OF LAW Page 2 of 4

5965

attorney' s fees in excess of this amount. In the event of an appeal to the Fifth Court of Appeals at Dallas, it is equitable and just to award Defendants reasonable and necessary attorney ' s fees in the amount of$ I 0,000.00. Defendants would incur at least this amount in the event of an appeal. In the event of a petition for review to the Texas Supreme Court involving full briefing, it is equitable and just to award Defendants reasonable and necessary attorney' s fees in the amount of $10,000.00. Defendants would incur at least this amount in the event of full briefing before the Texas Supreme Court.

12. It is equitable and just to award Defendants reasonable and necessary costs incurred in the trial court in the amount of$1 l,506.75 . Defendants incurred costs of at least this amount.

Conclusions of Law

13. The LP A is a fully integrated contract.

14. Section 7 .1 (d )(i) of the LP A is not premised upon any development timeline.

15. Defendants did not fail to provide Frisco Summit with an accounting of its interest in Phase 1, nor did they fail to provide Defendants with an accounting of the Promote Fee for Phase 1, nor did they fail to provide documentation regarding Frisco Summit' s interests.

16. Defendants did not fail to timely develop Phases 2 and 3.

17. Defendants did not enter into agreements with entities owned or controlled by the Individual Defendants in contravention of the LP A.

18. The GP and Carleton did not breach the LP A.

19. Plaintiff should take nothing on its claims.

20. It is equitable and just to award Defendants their reasonable and necessary attorney' s fees incurred in the trial court in the amount of $242,099.50. In the event of an appeal to the Fifth Court of Appeals at Dallas, it is equitable and just to award Defendants reasonable and

FINDINGS OF FACT AND CONCLUSIONS OF LAW Page 3 of 4

5966

necessary attorney' s fees in the amount of$10,000.00. In the event ofa petition for review to the Texas Supreme Court involving full briefing, it is equitable and just to award Defendants reasonable and necessary attorney' s fees in the amount of $10,000.00.

21. It is equitable and just to award Defendants reasonable and necessary costs incurred in the trial court in the amount of$1 l ,506.75.

22. All sums awarded to Defendants shall bear interest from the date ofj udgment at the rate of 7.75% per annum, compounded annually.

The headings contained herein are provided for convenience only. Any finding of fact which is more properly construed as a conclusion oflaw shall be considered a conclusion oflaw, and vice versa.

Signed_~-l,-------¥f t_ v_v(_S __

FINDINGS OF FACT AND CONCLUSIONS OF LAW Page 4 of 4

5967

Filed: 3/28/2025 1:43 PM Michael Gould

District Clerk

Collin County, Texas By Darcey Bonnet Deputy Envelope ID: 99022714 Cause No. 493-01132-2023 FRISCO SUMMIT, LP, and FRISCO § IN THE DISTRICT COURT SUMMIT, LP DERIVATIVELY ON §

BEHALF OF FRISCO §

MULTIFAMILY LAND §

PARTNERS, LP, §

§

Plaintiffs § 493RD JUDICIAL DISTRICT

§

v. § §

FRISCO MULTIFAMILY LAND § GP, LLC, et al., § §

Defendants § COLLIN COUNTY, TEXAS _____________________________________________________________________

PLAINTIFFS' REQUEST FOR ADDITIONAL AND AMENDED FINDINGS

OF FACT AND CONCLUSIONS OF LAW

______________________________________________________________________ Frisco Summit LP, and Frisco Summit, LP derivatively on behalf of Frisco Multifamily Land Partners, LP (collectively "Plaintiffs") in connection with the Judgment rendered on January 24, 2025, and the entry of original findings of fact and conclusions of law signed on March 12, 2025,¹respectfully request that the Court make and send to the parties further, additional, and amended findings of fact and conclusions of law pursuant to Tex. R. Civ. P. 298 and, in support, respectfully show the Court as follows:

23

I. PLAINTIFFS' RESERVATION OF RIGHTS AND NON-WAIVER

Plaintiffs disagree with the take-nothing Judgment entered by the Court on their claims, not only not only on their tort claims, but also on their claims for breach of the LPA; breach of the Joint Venture Agreement that the Plaintiffs have alleged existed between them and the Defendants Carleton Development, Ltd.,² Printice L. Gary,³Jeffrey D. Fulenchek,⁴and Neal R. Hildebrandt;⁵and, related Requests for Declaratory Judgment. In connection therewith, the Plaintiffs contend that the Court made erroneous determinations of law and, to the extent necessary or applicable for the issues left to be tried to the Court after Summary Judgment, made erroneous factual determinations. Accordingly, the following requests for amendments to the Court's original Findings of Fact and Conclusions of Law (as set forth in Section III below) and the following requests for additional findings of fact and conclusions of law (as set forth in Section IV. below) are for the purpose of preserving issues for appellate review, and by so doing the Plaintiffs do not admit that the matters as set forth therein are true and correct, nor do Plaintiffs waive their right to appeal such Findings of Fact and Conclusions of Law should they be adopted by the Court.

24

II. PERTINENT HISTORY AND RELEVANT AUTHORITIES

A. Summary Judgment and the Claims Tried

The Court will recall that prior to the commencement of the bench trial, the Court solicited the parties' confirmation of its entry of a detailed Order granting in part and denying in part the Defendants' Traditional and No Evidence Motions for Summary Judgment. For ease of reference, a true and correct copy of the Order that was signed on August 2, 2024 by the Court after that deliberative process is attached hereto as Exhibit A and incorporated by reference as though set forth herein at length.

In that regard, the Court, granted summary judgment in favor of the Defendants on Count 3 - Breach of Fiduciary Duty, Count 4 - Conspiracy, and Count 5 - Aiding and Abetting Breach, in their entirety. The Court also granted summary judgment, in part, on the Plaintiffs' Count 1 - Request for Declaratory Relief, and on the Plaintiffs' Breach of Contract claims Count 2. Accordingly, the sole matters left to be tried to the Court were as follows:

1. Count 1 - Request for Declaratory Relief: Paragraph 40(c) whether the price per square foot provision of §§7.1(d)(i)(A), (B), and (C) of the FMLP LPA were premised upon development of the Frisco Summit Property within a reasonable time;

2. Count 2 - Breach of Contract: Paragraph 35(a) the failure to provide or account for Plaintiffs' interest in the Phase I Project Partnership (Frisco Summit I, LLP) and the promote fee earned by Carleton from the development of that Phase of the Project;

25

3. Count 2 - Breach of Contract: Paragraph 35(b) the failure to timely develop Phase II and Phase III of the JVA;

4. Count 2 - Breach of Contract: Paragraph 35(c) as to entering into agreements with entities owned or controlled by the Individual Defendants regarding the Frisco Summit Property;

5. Count 2 - Breach of Contract: Paragraph 35(e) Failing to provide documentation regarding the interests referenced in paragraph 35(a); and

6. Count 2 - Breach of Contract: Paragraph 35(f) as to failing to provide timely access to information regarding the conduct of the business operations of FMLP, including agreements entered into by FMLP with respect to the Phase II and Phase III developments contemplated by the

JVA.

B. Findings of Fact and Conclusions of Law on Matters of Summary Judgment are Improper.

Findings of fact are not appropriate for the purposes of summary judgments. See IKB Indus. v. Pro-Line Corp., 938 S.W.2d 440, 442 (Tex. 1997), and Hous. Auth. Of El Paso v. Beltran Elec. Contrs., Inc., 550 S.W.3d 707, 711 (Tex. App.- El Paso 2018).

Accordingly, the Findings of Fact entered by the Court which relate solely to matters or issues which were the subject of the Trial Court's summary judgment are inappropriate and those Court's Findings and Conclusions should be amended accordingly.

26

C. Construction of Contract is a Question of Law for the Court. It is well-settled in Texas that construction of a written contract is a question of law for the court's determination. See Sundown Energy Ltd. P'ship v. HJSA No. 3, Ltd. P'ship, 622 S.W.3d 884, 888 (Tex. 2021).

D. Contract Ambiguity is a Question of Law for the Court.

It is well settled in Texas that a question of whether or not a term or provision in a contact is ambiguous is a question of law for the court. See Nettye Engler Energy, LP v. BlueStone Nat. Res. II, LLC, 639 S.W.3d 682, 690 (Tex. 2022). Accordingly, such matters of contract interpretation are to be set forth in the conclusions of law and not findings of fact, and the Court's Findings and Conclusions should be amended accordingly.

III. PLAINTIFFS' REQUEST FOR AMENDMENTS TO FINDINGS OF FACT

AND CONCLUSIONS OF LAW

To Section I above, Plaintiffs request the following amendments to the Court's Findings of Fact and Conclusions of Law:

Findings of Fact:

Paragraph 1 - no change; Paragraph 2 - deleted in its entirety (see paragraph I.A. and B. above); Paragraph 3 - deleted in its entirety. (As stated, this is a Conclusion of Law. At the conclusion of the evidence, the Court announced that under the terms of the LPA, the General Partner had no obligations to develop the Property referencing Section 7.1(iii));

27

Paragraph 4 - deleted in its entirety (As stated, this is a Conclusion of Law)(see paragraph I.C. and D. above);

Paragraph 5 - deleted in its entirety. (see proposed additional Findings of Fact III.A., 1 and 2 below);

Paragraph 6 - deleted in its entirety. (As stated, this is a Conclusion of Law. Moreover, the only Defendant which is a party to the LPA is the GP); Paragraph 12 - deleted in its entirety. (As stated, this is a Conclusion of Law. Moreover, the only Defendant which is a party to the LPA is the GP); Paragraph 13 - deleted in its entirety. (As stated, this is a Conclusion of Law);

Paragraph 15 - deleted in its entirety. (As stated, this is a Conclusion of Law);

Conclusions of Law:

Paragraph 16 - No change; Paragraph 17 - deleted in its entirety (see proposed additional Conclusion of Law No. III.B.1.);

Paragraph 18 - deleted in its entirety (see proposed additional Conclusion of Law No. III.B.2.);

Paragraph 19 - deleted in its entirety (see proposed additional Conclusion of Law No. III.B.1.);

Paragraph 20 - deleted in its entirety (see proposed additional Conclusion of Law No. III.B.3.);

Paragraph 21 - amended to delete the reference to Carleton as Carleton was not a party to the LPA;

Paragraph 22 - no change;

28

Paragraph 23 - amended to replace the term "Defendants" with "the GP"; Paragraph 24 - amended to replace the term "Defendants" with "the GP"; Paragraph 25 - amended to replace the term "Defendants" with "the GP";

IV. PLAINTIFFS' REQUEST FOR ADDITIONAL FINDINGS OF

FACT AND CONCLUSIONS OF LAW

To Section I above, Plaintiffs request the following additional Findings of Fact and Conclusions of Law.

A. Findings of Fact.

1. The GP provided Frisco Summit with its interest in the Promote Fee as required pursuant to section 7.1(d)(ii)(ii) regarding, "provides for the Limited Partner to receive a 50% of any Promote Fee."

2. The GP provided Frisco Summit with its interests as set forth in Section 7.1(d)(ii)(i) regarding, "provides for the limited partner to be admitted as a Special Limited Partner in such Project Partnership without any obligations or liabilities of any kind.

3. Carleton assigned its rights under the Phase 1 Purchase Contract with respect to Project Partnership.

4. Neither Carleton nor the Individual Defendants entered into a Joint Venture Agreement with Frisco Summit regarding the development of the Property.

29

5. The terms of any Joint Venture Agreement between Carleton and the Individual Defendants on the one hand, and Frisco Summit on the other, did not include an obligation on the part of Carleton and/or the Individual Defendants to develop the Property in three Phases.

6. The terms of any Joint Venture Agreement between Carleton and the Individual Defendants on the one hand, and Frisco Summit on the other, did not include an obligation on the part of Carleton or the Individual Defendants to timely develop the Property in three phases.

B. Conclusions of Law

1. Under the LPA, the GP did not have the obligation to develop the Property.

2. The GP did not violate the requirements of Section 7.1(d)(ii)(ii) or Section 7.1(i)(a) of the LPA.

3. The provisions of Section 7.1(d)(i)(c) and the definitions of Purchase Contract and Project Partnership as set forth in the LPA did not prevent Carleton from entering into a separate Purchase Agreement with the Project Partnership.

4. There was no valid or enforceable Joint Venture Agreement between Carleton and the Individual Defendants on the one hand, and Frisco Summit on the other.

30

5. Neither Carleton nor the Individual Defendants violated any of their obligations under any Joint Venture Agreement with Frisco Summit. Respectfully submitted,

/s/ Mitchell Madden

Mitchell Madden (Attorney-in-Charge)

State Bar No. 12789350

mmadden@hjmmlegal.com

skinney@hjmmlegal.com

Melissa Johnson

State Bar No. 19142900

Melissa@hjmmlegal.com

HOLMGREN JOHNSON:

MITCHELL MADDEN, LLP

12810 N. Central Expressway, Suite 140 Dallas, TX 75243

Tele: 972/484-7780

Fax: 972/484-7743

ATTORNEYS FOR PLAINTIFFS

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the above and foregoing was served on all counsel of record in accordance with the Texas Rules of Civil Procedure on March 28, 2025.

/s/ Mitchell Madden

Mitchell Madden

31

8/5/2024 12:45 PM SCANNED CAUSE NO. 493-01132-2023 Frisco Summit, LP and Frisco Summit, ^§ IN THE DISTRICT COURT LP derivatively on behalf of Frisco §

Multifamily Land Partners, LP, § §

Plaintiffs, § §

~ § 493rd JUDICIAL DISTRICT

§

Frisco Multifamily Land GP, LLC; §

Carleton Development, Ltd.; GH §

Southwest II, Inc.; Frisco Summit I, LP; §

Frisco Summit I GP, LLC; Salt River §

Capital, Inc.; Frisco Summit II, LP; §

_Frisco Summit II GP, LLC; Printice L. §

Gary; Jeffrey D. Fulenchek; and Neal R. §

Hildebrandt, § §

Defendants. § COLLIN COUNTY, TEXAS

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS'

TRADITIONAL AND NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT

Upon review and consideration of all applicable pleadings/filings, and counsel's arguments at the summary judgment hearing, the Court HEREBY GRANTS IN PART, AND DENIES IN PART, Defendants' Traditional and No-Evidence Motion for Summary Judgment (the "Motion") and rules as follows:

IT IS ORDERED, ADJUDGED, AND DECREED as to

Count 1 - Request for Declaratory Relief (which can be found at page 11 Jr 40 of Plaintiffs' Original Petition):

Jr 40(a) whether the price per square foot provisions as set forth in MOTION

§§7.l(d)(i)(A), (B), and (C) oftheFMLP LP A provided minimum GRANTED

amounts or set forth the specific actual purchase price for each phase;

32

Count 2-Breach of Contract (which can be found at page 121r 45 and pages 9 and 101r 35 of Plaintiffs Original Petition):

promote fee earned by Carleton from the development of that

Phase of the project;

Ir 35(b) the failure to timely develop Phase II and Phase III of the MOTION

NA; DENIED 1r 35(c): as to failing to sell property for its fair market value at MOTION

the time of the transaction with an affiliate; GRANTED

Ir 35(c): as to engaging in the Salt River capital refinance as MOTION

referenced hereinabove; GRANTED

2

33

Summit Property;

Jr35(d) failing to provide timely information regarding the project MOTION

partnership or partnerships formed or to be formed by the GRANTED

Individual Defendants in connection with the development contemplated by the JV A;

Jr 35(e) Failing to provide documentation regarding the interests MOTION

referenced in paragraph Jr 35(a); DENIED Jr 35(f) as to failing to provide timely access to information MOTION

regarding the conduct of the business operations of FMLP, GRANTED

including agreements entered into by FMLP with respect to the Phase II and Phase III developments contemplated by the JV A.

Count 3 - Breach of Fiduciary Duty (which can be found at page 13 of Plaintiffs Original Petition) -

MOTION GRANTED; Count 4 -- Conspiracy (which can be found at page 14 of Plaintiffs Original Petition)-

MOTION GRANTED; Count 5 - Aiding and Abetting (which can be found at page 14 of Plaintiffs Original

CHRISTINE A. NOW AK

JUDGE PRESIDING

3

34

Automated Certificate of eService

This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Tania Flores on behalf of Mitchell Madden

Bar No. 12789350

tflores@hjmmlegal.com

Envelope ID: 99022714

Filing Code Description: Request for Findings of Fact and Conclusions of Law

Filing Description: Plaintiffs' Request for Additional and Amended Findings of Fact and Conclusions of Law

Status as of 3/31/2025 11:02 AM CST

Case Contacts

35

Exhibit P-54

LIMITED PARTNERSHIP AGREEMENT

OF

FRISCO MULTIFAMILY LAND PARTNERS, LP

A TEXAS LIMITED PARTNERSHIP

This Limited Partnership Agreement (the "Agreement") is made and entered into as of the date set forth below, by and among FRISCO MULTIFAMILY LAND GP, LLC, a Texas limited liability company, as the "General Partner'', and FRISCO SUMMIT, L.P., a Texas limited partnership, as the "Limited Partner" (with the General Partner and the Limited Partner hereinafter collective]y sometimes referred to as ''Partners").

RECITALS:

WHEREAS, the Partners desire to fonn a limited partnership to hold the Property (defined herein) for investment and evidence their agreements relative to the Property. NOW, THEREFORE, in consideration of the premises set forth herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Partners hereby agree as folJows:

ARTICLE l

ADDITIONAL DEFINITIONS

Section l.1 Definitions. The defined tenns used in this Agreement shall, unless the context otherwise requires, have the respective meanings specified in this Section 1.1.

"Accountants" mean_s any independent certified pubJic accountant, or firm thereof, as may be engaged by the General Partner. •

"Acquisition Lender" means Happy State Bank, or any other lender acceptable to the General Partner, in an amount and on terms acceptable to the General Partner, which Acquisition Loan shall be secured by liens against the Property

"Acquisition Loan" means that certain loan secured by a first lien against the Property, as described in Section 5.7, and all subsequent renewals, modifications, or refinancings of such loan,

"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 period, after giving effect to the following adjustments:

LIMITED PARTNERSHJP AGREEMENT

OF FRISCO MULTIFAMIL y LAND PARTNERS, tr - Pase I EXHIBIT 021s0.121

PLTF003366

122

(i) Credit to sueh Capital Account any amounts which such Partner is deemed to be obligated to restore for purposes of Treasury Regulations Section 1. 704-l(b )(2)(ii)(c ) , including such Partner's Minimum Gain Share and such Partner's share of Partner Minimum Gain; and

(ii) Debit to such Capital Account the ·items described in Treasury Regulations Sections I.704-l(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section l.704-l(b)(2)(ii)(d) and shall be interpreted consistently therewith.

"Affiliate" means, when used with reference to a specified Person, (i) any Person that, directly or indirectly, is the beneficial owner of 50% or more of each class of voting securities of the specified Person or of which the specified Person js directly or indirectly the beneficial owner of 50% or more of each class of voting securities, (ii) any member of the immediate family of the specified Person or any legal representative or trustee for the benefit of such member or any grantor trust or testamentary trust created by such Person and (iii) any Person that is an Affiliate of a Person described in clause (ii) above by reason of clause (i) above. ''Agreement" means this Limited Partnership Agreement, as originally executed and as hereafter amended or modified from time to time.

"Approved Budget" means the pro fonna line item budget of all costs and expenses anticipated to be required to maintain the Property for the period of time covered by the budget, and that has been prepared in accordance with Section 7.2(d).

"Bankruptcy" shall be deemed to have occurred as to any Person when (a) such Person makes a general assignment_ for the benefit of creditors; (b) such Person mes a voluntary bankruptcy petition; (c) such Person becomes the subject qf an order for relief or is declared insolvent i11 any federal or state bankruptcy or insolvency proceeding; (d) such Person files a petition or answer seeking its reorgaruzation, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any law; (e) such Person files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against sucti Person in a proceeding of the types described in clauses (a) through (d) above; (f) such Person seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of such Person or of all or any substantial part of such Person's properties; (g) 60 days expire after the date of the commencement against such Person of a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law if the pro.ceeding has not been previously dismissed; or (h) 60 days expire after the date of the appointment, without such ·Person's consent or acquiescence, of a ttustee, receiver, or liquidator of such Person or of all or any substantial part of such Person's properties if the appointment has not previously been vacated or stayed, or 60 days expire after the date of expiration of a stay, if the appointment has not previously been vacated.

"Book Value" means, with respect to any asset, the asset's adjusted basis for federal LIMITED PARTNERSHIP ACiREEMEJ-.'T

OF F!llSCO MULTIFAMILY LAJ..'D-PARTNERS, LP. P•s• 2 021so.m

PLTF003367

123

income tax purposes, except (a) the initial Book Value of any asset contributed by a Partner to the Partnership· shall be the fair market value of such asset; (b) the· Book Value of all Partnership assets shall be adjusted in the event of'a revaluation as provided in Section 5.5(d); (c) the Book Value of any Part_n~r~hip asset distributed to any .Partner shall be the fair market value of such asset on the date of distribution as determined by the General Partner; and (d) such Book Value shall be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Loss·es.

"Capital Account" means, with respect to any Partner, the account maintained for such Partner in a manner which the Gene_ral Partner detennined is in accordance with Treasury Regulations Section l.704-l(b)(2)(iv) and Section 5.5 hereof.

"Capital Contribution" or "Capital Contributions" means, with respect to any Partner, the amount of money and fair market value of property (as determined pursuant to the definition of Book Value above) contributed to the Partnership by such Partner, including but not limited to any contributions made by the Partner pursuant to Article V hereof.

"Cash Proceeds" means the net proceeds derived by the Partnership from any sale or refinancing of the l_>roperty, after payment of all expenses of such transaction.

"Certificate" means the Certificate of Fonnation for the Partnership filed with the Secretary of State of the State of Texas, as such Certificate shall be amended and filed from time to time.

"Code" means the Internal Revenue Code of 1986, as amended from time to time ( or any corresponding provision or provisions of succeeding law).

"Cumulative Net Loss" means the amount, if any, by which the aggregate amount of Losse$ and other items of loss or deduction aJlocated to a Partner (or precjecessor in interest) in the current and all prior Fiscal Years exceeds th~ aggregate amount of Profits and other items of income or gain allocated to such Partner {or predecessor in interest) in such period.

"Cumulative Net Profits" means the amount, if any, by which the aggregate amount of Profits and other items of income or gain allocated to a Partner (or predecessor in interest) in the current and all prior Fiscal Years exceeds the aggregate amourtt of Losses and other items of loss or deduction allocated to such Partner (or predecessor in interest) in such period.

"Depreciation" means, for each Fiscal Year or other period, an amount equal to the depreciatioh, amortization or other cost recovery deduction allowable with respect to an asset for such year. or other period, except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period (as a result of property contributions or adjustments to such values pursuant to Section 5.5(d) hereof), Depreciation shall be adjusteq as necessary so as to be an amount which bears the same ratio to such begirthing Book 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 inc-0me tax depreciation, amortization, or other cost LIMITED"PARTNERSHIP AGREEMENT

OF fltlSCO MULTIF AMIL V LAND PARTNERS, lJ>- Por,c 3 0l!S0.121

PLTF003368

124

recovery deduction for such year or other period is zero, Depreciation for such year or other period shall be determined with reference to such beginning Book Value using any reasonable method selected by the General Partner.

"Developer" means Carleton Development, Ltd., a Texas limited partnership, and an Affiliate ofthe General Partner.

"Disposition" means any transfer, pledge, mortgage, granting of a security interest or other encumbrance or any other disposition of all or any portion of an Interest whatsoever, whether vol~ntary or involuntary.

"Event of Withdrawal" means (a) the assignment by a General Partner of all of its rights as a General Partner (b) the death of a General Partner that is a natural person, (c) the dissolution or termination of a General Partner that is hot a natural person, (d ) resignation or withdrawal of a General Partner, (e) the entry by a court of competent jurisdiction adjudicating a General Partner who is a natural person incompetent to manage the General Partner's person or property, or (f) the Bankruptcy of a General Partner.

"Fiscal Year" means the fiscal year of the Partnership as established in Section 14. l hereof.

"General Pattner" means Frisco Multifamily Land GP, LLC, a Texas limited liability company, in its capacity as the general partner of the Partnership, and its permitted successors and assigns.

"Interest" means the entire percentage ownership interest of a Partner in the Partnership at any particular time, including the right of such Partner to any and an benefits to which a Partner may be entitled as provided in this Agreement, together with the obligations of such · Partner to comply with all the terms and provisions of this Agreement, but excluding any rights as a creditor of the Partnership.

"IRS" means the Internal Revenue Service.

"Limited Partner'' means the Limited Partner, as listed on Schedule l attached hereto, in their capacity as limited partners of the Partnership, and their respective permitted successors and assigns.

"Major Decision" means a decision of the Limited Partner on any of the items set forth in Section 7 .3 hereof.

"Minimum Gain" means, with respect to all nonrecourse l_iabilities of the Partnership, the minimum amount of gain that would be realized by the Partnership if the Partnership disposed of the Partnership property subject to such liability in full satisfaction thereof ~omputed strictly in accordance with Treasury Regulation Sections l.704-2(b) and l.7O4-2(c).

"Minimum Gain Share" means, for each Partner, such Partner's share of Minimum Gain LIMITED PARTNERSHIP AGREEME!'

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for the Fiscal Year (after taking into account any decrease in Minimum Gain for such year), as determined under Treasury Regulations Section I.7 04-2(b) (2).

"New Allocation" shall mean the tetm as defined in Section 9.1 (e). ''Nonrecourse Deductions" means, for each Fiscal Year or other period, an amount of Partnership deductions that are characterized as "nonrecourse deductions" under Treasury Regulations Sectfon 1.704-2(6)(1). The amount of Nonrecourse Deductions for a Partnership fiscal year equals the net increase, if any, in the amount of Minimum Gain during that Fiscal Year, determined according to the prnvisions of Section 1.704-2(b)(2) of the Treasury Regulations.

''Partner Minimum Gain" means an amount determined by computing, with respect to each Partner Nonrecourse Debt, the Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a nonrecourse liability, determined in accordance with Treasury Regulations Section 1. 704-2(b).

"Partner Nonrecourse Debt" means nonrecourse Partnership debt for which one or more Partners bears an economic risk of loss, as defined in Treasury Regulations Section I.704- 2(b)(4).

"Partner Nonrecourse Deductions"· means, for each Fiscal Year, the Partnership deducticms which are attributable to Partner Nonrecourse Debt and are characterized as "partner nonrecourse deductions" under Treasury Regulations Section l .704-2(b).

"Partners" means the General Partner and the Limited Partner.

"Partnership" means this limited partnership, as the same· may from time to time be constituted and, if necessary, reconstituted, in accordance with the TLPL and any other applicable laws and regulations.

"Person" means an individual, firm, corporation, partnership, trust or other legal entity. ''Profits" and "Losses" mean, 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)(l) shali be included in taxable income or loss), with the following adjustments:

(a) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing· Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

(b) Any expe_nditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-l(b)(2){fv)(i), and not otherwise taken into account in computing Profits or LIMITED PARTNERStUP AGREEMENT

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Losses pursuant to th1s definition, shall be subtracted from such taxable income or loss;

(c) 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 Book Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from such Book Value;

(d) In lieu of the 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 the definition of "Depreciation" herein; and

(e) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 9. l(b)(ii), (iii), (iv), (v) and (vi) hereof shall not be taken into account in computing Profits or Losses.

"Project Partnerships" means, collectively, the entities that will ultimately acquire portions of the Property pursuant to the Purchase Contracts, that is the entities to whom Carleton Development wUl assign the Purchase Contracts. Any Partner, and any Affiliate of any Partner, may be a partner in the Project Partnership. "Project Partnership" mearis ariy one of the Project Partnerships.

"Project Partnership Agreement" means the written agreement governing the rights, interests, duties and obligations of the Persons owning an interest in a Project Partnership.

"Promote Fee" means the fee Carleton Development anticipates receiving from each Project Partnership after the limited partners in the Project Partnership have received the required (i.e., the negotiated) internal rate of return.

"Property" or "Project" means that certain approximately 21.166 acre tract of real property as more particularly outlined and crosshatched on Exhibit "A" hereto, arid all rights appurtenant thereto. The Property has been contributed to the Partnership by the Limited Partner.

"Purchase Contracts" means, collectively, Purchase Contract Phase I, Purchase.Contract Phase 2 and Purchase Contract Phase 3, as such terms are defined in Section 7.l(d). "Purchase Contract" means any one of the Purchase Contracts.

''Substitute Limited Partner" means any Person admitted to the Partnership as the Limited Partner pursuant to the provisions of Section 10.2 hereof.

•~Treasury 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 regulations).

"TLPL" means the Texas Limited Partnership Law as adopted and from time to time as LlMITED PARTNERSHIP AOREEMEl-.'T

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amended by the State of Texas.

ARTICLE II

FORMATION OF PARTNERSHIP, NAME AND OFFICE. PURPOSE

Section 2.1 Fonnaiion of Partnership. The Partners hereby form the Partnership. From and after the effective date of this Agreement, the Interests of all of the Partners shall be as set forth on Sehedule 1 attached hereto and made a part hereof for all purposes, as same may be amended and modified from time to time, as set forth herein. The Partners hereby acknowledge and agree that the Partnership is fanned and shaII be governed in accordance with and pursuant to the TLPL for the purposes and upon the tenns and conditions herein set forth. Section 2.2 Name. The business of the Partnership shall be "Frisco Multifamily Land Partners1 LP/' or such other name as the General Partner shall hereafter designate by notice to the Limited Partner and by amendment to the Certificate.

Section 2.3 Registered Agent and Office. The address of the registered office of the Partnership is 5485 Belt Line Road, Suite 300, Dallas, Texas 75254, and the name of the registered agent for service of process required to be maintained by the TLPL is David Cohenour. The General Partner is hereby authorized and instructed to file the necessary amendment to the Certificate to change the registered office of the Partnersh1p. The General Partner may designate a new registered agent for the Partnership and/or a new office of the Partnership by giving notice to the Limited Partner and filing a proper amendment to the Certificate with the Secretary of State of Texas.

Section 2.4 Office for Records. The location of the principal office of the Partnership in the United States where records are to be kept or made available under the JLPL is 5485 Belt Line Road, Suite 300, Dallas, Texas 75254, or such other address as the General Partner may determine by giving notice to the Limited Partner and filing a proper amendment to the Certificate with the Secretary of State of Texas. The General Partner is hereby authorized and instructed to file the necessary amendment to the Certificate to change the principal office of the Partnership to the address provided herein.

Section 2.5 Purpose. The purpose pf ~he Partnership is strictly limited to the acquisition, ownership, and operation of the Property for investment purposes. This Partnership shall have all requisite power and authority to take all actions necessary or convenient to own, operate, manage and sell the Property and to conduct any lawful business relating thereto as determined by th~ Partners in accordance with this Agreement.

Section. 2.6 Authority of the Partnership. To carry out its purpose and not in limitation thereof, the Partnership is empowered and authorized to 'do any and all acts and things nec·essary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of its purpose, and for the protection and benefit of the Partnership, in accordance with and subject to the limitations in this Agreement and in accordance with the TLPL. •

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ARTICLE III

TERM

Section 3.1 Dissolution. The tenn of the Partnership commenced upon the filing of the Certificate and shall continue until December 3 l, 2040, on which date the Partnership shall dissolye, or upon the occurrence of any of the following events of dissolution:

(a) Event of Withdrawal. An Event of Withdrawal of a General Partner unless the Partnership is continued pursuant to Section 11.2 hereof;

(b) Elec.tion. The election in writing by the General Partner and all of the Limited Partner to dissolve the Partnership;

{c) Court Decree. A decree of court;

(d) Sale. The sale or other disposition of aU or substantially all of the assets of the Paitnership, after the Partnership has collected all money and received all other consideration therefor; or

(e) Accordance with TLPL. In accordance with the provisions of the TLPL not inconsistent with this Agreement.

ARTICLE IV

GENERAL PARTNER AND LIMITED PARTNER

Section 4.1 General Partner. The General Partner is and s_hall continue to be Frisco Multifamily Land GP, LLC, whose business address is 5485 Belt Line Road, Suite 300, Dallas, Texas 75254. The Interest of the General Partner shall be one percent (1%). Section 4.2 Limited .Partner. The Limited Partner is and shall be that Person listed on S·chedule l. The Interests of the Limited Partner shall be ninety-nine percent (99%).

ARTICLEV

CAPITAL CONTRIBUTIONS, DEFAULTS

Section S.1 Initial Capital Contributions of Partners.

(a) Required Contributions to Capital. The Partners shall make or have made the initial Capital Contributions (the "Initial Capital Contribution(s)") to the Partnership as set forth on Schedule l attached hereto and incorporated herein.

(b) Required Methods of Initial Capital Contributions. The General Partner has LfMITED.PART_NERSHll' AGREEMENT

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made or shall make its required Initial Capital Contributions in the form of cash or other evidence of good funds. The Limited Partner shall make its required Initial Capital Contribution as follows:

CD Concurrently with the execution and delivery of this Agreement, the Limited Partner shall make its required contribution of $450,000 in cash or other evidence of good funds. The Limited Partner acknowledges and agrees that its cash contribution shall be made to Carleton Development on behalf of the Partnership, pending the establishment of the Partnership's bank accounts.

(ii) Concurrently with the execution and delivery of this Agreement, the Limited Partner shall transfer and convey the Property to the Partnership by Special Warranty Deed. As additional consideration for the covenants contained in this Agreement, the Limited Partner has made the representations and warrantie~ which appear on Schedule 2 attached hereto and incorporated herein. The Limited Partner has made the representations on Schedule 2 with the understanding that the General Partner has relied .and, is relying, on the truth and accuracy of such statements in connection with its involvement with the Property and the Partnership.

Section 5.2 Additional Capital Contributions. In the event the Partnership requires funds in addition to the Capital Contributions made by the Partners pursuant to Section 5. l(a) hereof, and the proceeds of the Acquisition Loan, all such additional contributions shall be made only by the Limited Partner, and the General Partner shall have no duty or obligation to make any such contributions, provided, however, the Limited Partner will not be obligated to advance such funds to the Partnership unless such additional Capital Contributions, and the timing of such contributions, are approved by the Limited Partner in accordance with Section 7 .3 hereof. Sectfon 5.3 Partn·er Loans.

(a) Authorization. The Partnership shall be authorized to borrow money, if necessary, from any Partner or any related Person for authorized Partnership purposes to the extent deemed requirec;I by the General Partner and approved in writing by the Limited Partner in accordance with Section 7.3 hereof. The -amount of any loan made to the Partnership by a Partner shall not be considered. an increase in such Partner's Capital Account or otherwise a contribution to the Partnership, nor shall the making of such loan affect the Interests. No Partner shall be obligated to make any loans to the Partnership.

(b) Terms. In the event a Partner makes a loan to the Partnership as permitted by Section 5.3(a), it shall be entitled to receive interest for such loan at a rate equal to the same rate being charged by Acquisition .Lender on the Acquisition Loan, subject to applicable usury Jaws. A Partner may not receive any security from the Partnership for such fo an unless otherwise approved by the Partners. All loans from a Partner, together with interest thereon, shall be repai.d prior to mak;ing any distributions to Partners. Upon a dissolution of the Partnership after which the Partnership is not reconstituted, any unpaid_ loans from Partners shall be tlien immediately due and payable.

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Section 5.4 Return or Withdrawal of Capital Contributions: Distributions. Except as otherwise expressly provided in this Agreement, a one of the Partners shall be entitled to demand a refund or return of any Capital Contributions or to withdraw any part of its Capital Account nor to receive any distribution from the Partnership. The General Partner shall not be personal1y liable for the return of the Capital Contributions of the Limited Partner, or any portion thereof, it being expressly understood that any such returri shall be made solely from P~nership assets. The General Partner shall not be required to pay to the Partnership or any Partner any deficit in any Partner's Capital Account upon dissolution or otherwise. No Partner shall have the right to demand or receive property other than cash for its Interest.

Section 5.5 Capital Accounts.

(a) Establishment of Capital Accounts. A Capital Account shall be established and maintained for each Partner.

(b) Credits to Capital Accounts. A Partner's Capital Account shall be credited with (i) the amount of cash and the initial Book Value of any property contributed to the Partnership, (ii) such Partner's allocable share of Profits, and (iii) the amount of any Partnership liabilities that are expressly assumed by such Partner or that are secured by any Partnership property distributed to ··such Partner.

(c) Debits to Capital Accounts. A Partners Capital Account shall be debited with

(i) the amount of cash and the fair market value of any Partnership property distributed to such Partner pursuant to any provision of this Agreement, (ii) such Partner's allocable share of Losses, and (iii) the amount of any liabilities of such Partner that are expressly assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership.

(d) Adjusrmehts to Capital Accounts. Upon the occurrence of certain events as described in Treasury Regulations Section l.704-l(b)(2)(iv)(t), the General Partner may increas~ or decrease the Capital Accounts of the Partners to reflect a revaluation of Partnership property on the :Partnership's books, provided such adjustment of the Capital Accounts is made in accordance with the rules in Treasury Regulations Section 1 .704- l(b )(2)(iv)(t).

(e) Transferred Interest in the Partnership. 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 Interest (or portion thereof) transferred.

(f) Modifications to Capital Accounts. From time to time as it deems appropriate, the General Partner may make such modifications to the manner in which the Capital Accounts are computed to comply with Treasury Regulations Section 1. 704-l(b) provided that such modification is (in the reasonable judgment of the General Partner) not likely to have a material effect on the amounts distributable tb any Partner pursuant to this LlMITED PARTNERSHJP AGREEMENT

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.Agr~ement.

(g) Compliance with Treasury Regulations. The foregoing provisions and the other provisiqns of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section l .704-l(b), and shall be interpreted and applied ih a manner consistent with such Treasury Regulations.

(b) Negative Capital Accounts. Upon any dissolu~ion and liquidation of the Partnership, n:q Partner shall be Hable to repay to the Partnership the negative balance of such Partner's Capital Account.

Section 5.6 Interest on Capital Contributions. No interest shall be paid to any Partner on his Ciipital Contributions or Capital Preferences. •

Section 5.7 Acquisition Loan. The Partnership sh;dl obtain an acquisition loan (the

"Acquisition Loan") for use in the purchase of the Property · from Acquisition Lender. The Partners hereby specifically authorize the General Partner to execute any and all documents and instruments that may be determined to be reasonably desirable or required by the holder of the Acquisition Loan to evidence the Acquisition Loan. The Limited Partner further specifically authorizes the General Partner to refmance, recast, modify or extend (but not increase) the Acquisition Loan as may be deemed reasonably necessary by the General Partner.

ARTICLE VI

LIMITED PARTNERS

Section 6.1 Powers. The Limited Partner, as such, shall not participate in the management or control of the Partnership's business, nor shall the Limited Partner transact any ~usiness for the Partnership, nor shall the Limited Partner have ihe power to sign for or bind the Partnership, said powers being vested solely and exclusively in the General Partner. The Limited Partner and aU Persons affiliated with the Limited Partner shall be entitled at all times to devote itself and themselves to any other business or investment, whether or not similar or competitive in nature to the business of the Partnership, without offering any interest or participation therein to any other Partner or the Partnership. Except as expressly provided herein, or as required by law, the Limited Partner shall have no righ~ to call meetings of the Partners, nor shall he have the right as the Limited Partner to participate in any decision affecting the Partnership or to approve any actions of the General Partner or the Partnership.

Section 6.2 Limitation of Liability. Notwithstanding anything elsewhere provided in this Agreement to the contrary:

(a) No Liability for Partnership Debts. The Limited Partner shall not be liable for any debts, liabilities, contracts, or any other obHgations of th.e Partnership, except as required by law or in accordance with any separate guarantee that may be executed by the Limited Partner.

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(b) No Liabflit;y in Excess of Amounts Contributed. The Limited Partner shall not be liable to the Partnership or its creditors for an amount in excess of the amount of contributions the Limited Partner is obligated to make to the Partnership pursuant to Section 5.1 hereof, and the Limited Partner shall not be required to lend any funds to the Partnership.

Section 6.3 Meetings of the Partners.

(a) Call of Meetings. Meetings of the Partners may be called by the General Partner and may also be called on a frequency no more than once per calendar month upon the written request of the Limited Partner. The call shall state the nature of the business to be transacted. Notice of any meeting shall be given to all Partners not less than five days nor more than 15 days prior to the date of such meeting. The Limited Partner may vote in person or by proxy at such meeting. Whenever the vote or consent of the Limited Partner is permitted or required under this Agreement, such vote or consent may be g1ven at a meeting of the Partners or may be given in accordance with the procedures prescribecj in Section 6J(e) below.

(b) Intentionally Deleted.

(c) Proxy. The Limited Partner may authorize any person or persons to act for him by proxy on all matters on which the Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy shall be signeq by the Limited Partner or his attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the- date thereof unless otherwise provided in the proxy. A proxy may be revoked by the Limited Partner upon written notice of such revocation to the General Partner.

(d ) Conduct of Meeting. Each meeting of the Partners shall be conducted by the General Partner or such other person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other person deems appropriate.

(e) Action Without a Meeting. Any action that may be taken at a meeting of the Partners may be taken without a meeting _if a consent in writing setting forth the action to be taken is signed by the Limited Partner. The General Partner may, if applicable, specify that any written ballot submitted to the Limited Partner for the purpose of taking action without a meeting shall be returned to the Partnership within the time, not less than that specified by the General Partner. TI1e failure of the Limited Partner to approve or disapprove any requested action within IO days after receipt of the notice from the General Partner requesting approval shall be deemed the approval by the Limited Partner of the action so requested by the General Partner.

(f) Telephone and Similar Meetings. The Limited Partner may participate in and hold a meeting by means of a conference telephone or similar communications equipment by met:1ns of which persons participating in the meeting can hear each other.

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P11rticipatio11 in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened.

ARTICLE VII

GENERAL PARTNER

Section 7 .1 Powers. Actions.

(a) Responsibilities. The General Partner shall have responsibility for the day-to- day management, operation and controJ of the business and affairs of the Partnership, subject to the tenns of this Agreement. Except as otherwise provided her~in, the General Partner may, without the joinder or consent of the Limited Partner, take any action on behalf of the Partnership deemed necessary or convenient by the General Partner to carry out the purposes of the Partnership in accordance with the tenns of this Agreement.

(b) Enumerated Powers. Without limiting the generality of subsection (a) above, but subject in all instances to the terms of Section 7.3 hereat the General Partner shall have full power, without requiring the consent of the Limited Partner, except as provided herein:

(i) To clos·e the acquisition of the Property and to obtain the Acquisition Loan, including the execution and delivery of all documents and instruments necessary or advisable to consummate such transaction;

(ii) To collect all income accruing in or to the Partliership;

(iii) To pay all costs and expenses of ownership, operation and sale of the Property in accordance with the Approved Budget;

(iv) To render for and pay all of the taxes, levies and assessments against the Property or the Partnership;

(v) To prepare (or have prepared) and file all tax returns for and on behalf of the Partnership (but not the tax returns or other rep9rting of the individual Partners [other than Schedule K-l's to the Partnership tax returns, which will be supplied to the Limited Partner at least two (2) weeks prior to filing with the IR.SJ or oftheir respective heirs, representative, executors or assigns, in their individual capacities);

(vi) To maintain and operate the Property or any part or parts thereof;

(vii) to employ, tenninate the employment, supervise and compen~ate such persons, firms or corporations for and in connection with the business of the LIMlTED PARTNERSHIP AGREEMENT

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Partnership or the acquisition, operation, maintenance, management, financing, refinancing, sale, exchange or other disposition of the Property or any interest therein, as may be necessary or desirable, it being understood that any Partner may be so employed to perform any of such services by the General Partner;

(viii) To administer all matters pertaining to insurance with respect to the Property, including to obtain and pay for a policy or policies of insurance insuring the Partnership against any liability to the public, or any person or risk to its properties, inci.dent to the operation of the Property in such amounts and upon such terms as the General Partner shall reasonably deem necessary or appropriate under the circumstances, and such policies of insurance shall name the Partnership as a party insured;

(ix) To keep all books or account and other records of the Partnership;

(x) To the extent that funds of the Partnership are avai !able therefor, to pay aII debts and other obligations of the Partnership, including amounts due under any loans to the Partnership and costs of operation, maintenance and sale of the Property;

(xi) To coordinate the management, operation and sale of the Property, or any portions thereof;

(xii) To pay all taxes, assessments, and other impositions applicable to the Property, using its best efforts to pay same before delinquency and prior to the addition thereto of interest or penalties and undertake when appropri~te any action or proceeding seeking to reduce such taxes, assessments, rents or other impositions; and

(xiii} To deposit all monies received by the General Partner for or on behalf of the Partnership in such national or state banking institutions as rnay be designated by the General Partner and to disburse and pay all funds on deposit on behalf of and in the name of the Partnership in such amounts and at such times as the same are required in connection with the ownership, development, maintenance, operation and sale of the Property.

All of the foregoing powers may be exercised at such prices, rental or amount, for cash, securities or other property, and upon such tenns as the General Partner shall reasonably deem appropriate and in the best interest of the Partnership, subject to the provisions of this Agreement requiring approval of such actions by the Limited Partner. •

(c) Certification. A.ny Person dealing with tl1e Partnership or the General Partner may rely upon a certificate signed by the General Partner as to:

(i) the identities bf the General Partner or the Limited Partner;

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(ii) the existence or non-existence of any fact or facts which constittlte a condition precedent to the ac.ts by the General Partner or are in any other manner .germane to the affairs of the Partnership;

(iii) the Persons who ar:e authotizec,I to execute and deliver any instrument or document of the Partnership;

(iv) any act or failure to act by the Partnership or any other matter whatsoever involving the Partnership or any Partner; and

(v) the authority of the Partnership to take and of the General Partner to cause the Partnership to take action in accordance with the terms and conditions of this Agreement.

(d) Specific Authority. Without limiting the generality of subsections (a) and (b) above, the G~neral Partner shall full power without requiring the consent of the Limited Partner to perform the following:

(i) The General Partner shall have full power to enter into Purchase Contracts with Carleton Development provided the Purchase Contracts reflect the tenns and conditions. set forth below.

(A) Purchase Contract Phase I (herein so called) shall (1) provide for the sale of approximately 7 acres of the Property; (2) reflect a purchase price equal to or greater than $7.00 per square foot; and (3) provide for the buyer under the Purchase Contract (i.e., the purchasing Project Partnership) to pay the rolloack taxes applicable to such portion of the Property.

(B) Purchase Contract Phase 2 (herein so called) shall (1) provide for the sale of approximately 7 acres of the Property; (2) reflect a purchase price equal to or greater than $8.00 per square foot, plus the accrued interest under the Acquisition Loan; an.d (3) provide for the buyer under the Purchase Contract (i.e., the purchasing Project Partnership) to pay the rollback taxes applicable to such portion of the Property.

(C) Purchase Contract Phase 3 (herein so called) shall (1) provide for the sale of the remaining Property; (2) reflect a purchase price equal to or greater than $9.00 per square foot, plus the accrued interest under the Acquisition Loan; and (3) provide for the buyer under the Purchase Contract (i.e., the purchasing Project Partnership) to pay the rollback taxes applicable to such portion of the Property.

The Purchase Contracts shall reflect such other terms and conditions as the General Partner shall deem necessary so long as such other terms and conditions do not conflict with the above.

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(ii) Notwithstanding the authority given to the General Partner to enter into the Purchase· Contracts with Carleton Development, the General Partner shall not have the power or authority to consummate the sales contemplated by the Purchase Contracts (i,e., tne General Partner may not execute any warranty deed conveying any portion of the Property to a Project Partnership) unless the Project Partnership Agreement for the Project Partnership then acquiring a portion of the Prope1ty (i) provides for the Limited Partner to be admitted as a special limited partner in such Project Partnership without any obligations or liabiJities of any kind, and (ii) provides for the Limitec! Partner to receive 50% of any Promote Fee. The General Partner and Carleton Development aclrnowledge and agree that the Limited Partner's receipt pf 50% of the Promote Fee is a material inducement to the Limited Partner entering into this Agreement.

(iii) The Partners acknowledge and agree that the rezoning of the Property in a manner that facilitates the development of the Property into residential apartment ·communities is a critical component of the General Partner's involvement in the Partnership, as well as the involvement of Carleton Development, and that the rezoning must occur pri'or to the contemplated sales to the Project Partnerships. Accordingly, in the event the Property cannot be rezoned in a manner acceptable to the General Partner in its sole discretion, the Generai Partner shall full _power without requiring the consent of the Limited Partner to list the Prope1ty for sale for a price sufficient to pay off the Acquisition Lban and all other liabilities of the Partnership.

Section 7.2 General Duties and Obligations of the General Partner.

(a) Time. During the tem1 of the Partnership, the General Partner shall diligently and faithfully devote such time to the management of the business of the Partnership as may be reasonably necessary to serve the ihterests of the Partnership.

(b) Reserves. During the tenn of the Acquisition Loan, or any refinancing thereof, the General Partner shall establish all reserves or escrow funds as may be required in accordance with the terms and conditions of the Acquisition Loan, or any successor loan. (c ) Filings. If required by law, the General Partner shall file or cause to be filed of record in the office of the appropriate authorities of the State of Texas, such certificates (including limited partnership and fictitious name certificates) and other documents which are required by the applicable statutes, rules or regulations of Texas or as are necessary to reflect the identity of the Partne.rs and the amounts of their respective Capital Contributions, or for any other purpose.

(d) Budget. By November 1st of each year, the General Partner shall prepare and present a proposed detailed annual budget and annual pro forma income and ex_pense statement for the following calendar year for review, comment and approval of the Limited Partner. The Limited Partner will submit comments, if any, and/or approve or LIMITED PARTNERSHIP AGIU!EMENT

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disapprove such proposed budget and proforma statement no later than December 1st of such year. The Limited Partner's approval of such proposed budget shall not be unreasonably withheld. A failure to respond by December 1st shall constitute approval of that proposed budget and pro fom1a statement by the Limited Partner. If the proposec! budget and pro forma statement is approved by the Limited Partner, then that proposed budget. and pro forma statement shall be deemed thereafter to constitute the Approved Budget-for the calendar year in question for all purposes hereof: The Partners shal1 use their best efforts to resolve any issues and to agree upon the Approved Budget for the calendar year in question.

Section 7) Restrictions on General Partner. Notwithstanding the provisions of Section 1J. above, the General Partner agrees that it shall not and will not have authority to do any of the following matters on behalf of the Partnership unless approved in writing by the Limited Partner:

(a) to borrow money, whether on a secured or unsecured basis, on behalf of the Partnership, excluding, however, the Acquisition Loan, which is approved as an authorized borrowing of the Partnership;

(b) to seJI, exchange or otherwise dispose of all or any portion of the Property, except as permitted by Section 7. l(d);

(c) to acquire any additional land or interest therein;

(d) to determin~ whether the Limited Partner shall be required to make additional Capital Contributions to the Partnership, and, if required, the amount of such additional Capital Contributions that may be required;

(e) to determine whether distributions should be made to the Partners, other than as provided in Section 9.2. Section 9.3 or Section B.2 hereof; or

(f) to make any expenditure or incur any obligation by or on behalf of the Partnership involving a sum in excess of $20,000.00, for any "transaction or group Qf similar transactions ex.cept as herein express1y permitted, or as pennitted in an Approved Budget.

Section 7.4 Liability; Indemnification. The General Partner shall have no liability

to the Partnership or any Partner for any loss suffered by the Partnership which arises out

of any action or inaction by the General Partner if the General Partner, in good faith, determined that such cours·e of conduct was. in the best interests of the Partnership, and af such course of conduct was not the result of the General Partner's negligence or willful misconduct. Further, to the full extent permitted by the TLPL, the Partnership shall and hereby does indemnify and hold harmless the General Partner from any claim. cause of action, cost, loss, damage, or liability, inc1uding, but not limited. to, reasonable attorneys' fees and expenses incurred by it by reason of any act performed by-the General Partner on behalf of the Partnership or in furtherance.of the Partnership's interest or by reason of being a General Partner except if due to the fraud, bad faith, willful malfeasance or LIMITED PAR.TNF..RSl:IIP AGREE.\-lENT

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negligence of such General Partner or a material breach by the Genera) Partner of its material obligations. under this Agreement; provided, however, if {a) the General Partner is found liable to the Partnership or (b) the General Partner is found liable on the basis that the Gene.ra)Partner improperly received a benefit, the Partnership shall not indemnify and hold harmless the General P.artner. •

ARTICLE VIlI

REPRESENTATIONS; WARRANTIES; COVENANTS

Section 8.1 Representations and Warranties of the Limited Partner. The Limited Partner represents and warrants that he:

~a) No Registration. Is aware that the Partnership has not been registered under the Federal Securities Act of 1933 (the "Act") or the securities laws of any State, and that the sale to it of its Interest is predicated upon such sale being exempt from registration as an exempt tninsaction under Section 4(2) of the Act, Section 5.l(a) of the Texas Securities Act and comparable provisions of o1}1er state securities laws, and such Limited Partper understands that no state or federal governmental authorities have made any finding or determination relating to the fairness for investment in its Interest and that no state or federal governmental authority has or will recommend or endorse these interests, and that no portion of its Interest may be resold unless it is registered under the Act (and applicable blue sky regulations) or unless an exemption from registration is available;

(b) High Degree of Risk. Is aware that this investment involves a high degree of risk and is a speculative venture, and such Limited Partner has been advised by independent counsel, and is not relying upon any representations by the General Partner or its counsel as to the tax consequences from this investment;

(c) An Accredited Investor. ls an Accredited Investor (as defined in Rule 501 of Regulation D adopted under the Act), and alone or with a purchaser representative (as defined in Rule 501 of such Regulation D) such Limited Partner has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of investing in the Partnership;

(d ) Solely for Own Use. Is acquiring its Interest solely for such Limited Partner's own account for investment and without any present view of making a distribution or sale of such Interest and-such Limited Partner has the financial ability to hold the Interest for an indetenninate period of time and has no reason to anticipate any change in its financial condition or circumstances which would cause a need to sell or otherwise dispose of the Interest;

(e) No Public Market. Recognizes ~hat ther.e has been no public market for Interests in the Partnership and no public market for Interests is anticipated or likely, and such Limited Partner understands that the transferability of its Interest is highly restricted; LIMITEDP.AR.TNERSHIP AGR.El!MENT

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(f) Information Regarding Partnership. Has receiv.ed information concerning the Partnership, understands the nature .of the risks involved in the proposed investment, and has asked any questions of the General Partner which it desires to ask and has received the ani,wers or other information from the General Partner with respect to all $UCh questions; and

(g) Negotiations. Has a prior business or·personal relationship with officers of the General Partner and is investing in the Partnership as a result of negotiations with the General Partner and its representatives.

The Limited Partner agree. to. indemnify and hold harmless the Partnersliip and any

other Partners, their respective agents and representatives, from and against any and all

loss, claims, .damage or liability directly related to any breach of the foregoing

repres.entations and warranties (including any misrepresentations or omissions related thereto, whether existing on the date hereof or subsequent .hereto) by such Limited Partner, including, but without limitation, costs and attorneys' fees in respect of any matter related hereto.

Section 8.2 Contracts with Related Parties. Except as expressly provided in this Agreement, the General Partner shall not enter into any contract, agreement, lease or other arrangement for the· furnishing to or by the Partnership of goods, services or space with any party or entity related to or affiliated.with the General Partner or with respect to which any Affiliate of the General Partner has any direct or indirect ownership or control unless such contract, agreement, lease or other arrangement has been approved by the General Partner and the Limited Partner. Such prohibition on related party contracts shall speci'fically include, without limitation, contracts, agreements or fees relative to real estate commissions or similar payments arising on the sale of any portion of the Property. All contracts, agreements, leases or other arrangements for the furnishing to or by the Partnership of goods, services or space shall be bona fide, at competitive prices, in Dailas County, Texas, and for goods, services, materials or sp~ce as reasonably needed for the business of th~ Partnership. Nothing contained herein shall prohibit the Oenetal Partner from entering into the Purchase Contracts with the Developer, or from entering into any other agreements or µnderstandings with Carleton Development as deemed reasonably necessary by the General Partner to accomplish the sale of the Property to the Project Partnerships.

Section 8.3 Other Business Ventures. Nothing contained in this Agreement shall prohibit any Partner or any Affiliate of any Partner from owning, operating or investing in a real estate development not owned or operated by the Partnership, wherever located, even if competitive with the Property. Each Partner agrees that the other Partners or Affiliate of such Partner may engage in or possess an interest in other business ventures, of any kind, independently or with others, including but not limited to the ownership, finani,ing, sale, leasing, operation, management, syndication, brokerage and development of real property, and neither the Partnership nor the Partners shall have any rights by virtue of this Agreement in and to such other venturers or to the income or profits derived therefrom.

ARTICLE IX

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ALLOCA TlONS OF PROFITS: LOSSES: DISTRIBUTIONS Section 9.1 Allocations of Profits and Losses.

(a) Annually. Except to the extent otherwise provided in Section 9.5 hereof, Profits and Losses of the Partnership for each Fiscal Year shall be aUocated as follows:

(i) Profits shall be allocated as follows:

(A) First, pro-rata to any Partners with a Cumulative Net Loss, in accordance with and to the extent of such Cumulative Net Losses, until no Partner has a Cumulative Net Loss;

(B) Then, pro-rata to the Partners in accordance with their distributions set forth in Section 9.2 and Section 9.3.

(ii) Losses shall be allocated as follows:

(A) Except as provided below, Losses shall be allocated to the Partners in percentage-amounts based on comparison of the Capital Account balances dfthe Partners at the end of each. Fiscal Year of the Partnership in order that Losses allocated to the Partners will proportionately reduce their respective Capital Account balances until each Partner's Capital Account balance is equal to zero; and then, the balance of Losses shall be allocated to the Partners, pro rata, based on their respective Interests.

(B) No Losses shall be allocated to the Limited Partner under Subsection. {A) to the extent that such allocation would cause such Limited Partner to have an Adjusted Capital Account Deficit at the end. of such Fiscal Year {or increase the amount of such Adjusted Capital Account Deficit). All Losses in excess of the limitation set forth in this Subsection (B) shall be allocated to the Gene.ral Part!ler, in accordance with Treasury Regulations Section l.704-l(b)(3). Notwithstanding Subsection 9.l(a)(i) above, the first Profits after any allocation of Losses to the General Partner in accordance with the preceding sentence shall be allocated to the General Partner until the General Partner has been allocated Profits in an amount equal to J:he Losses so allocated.

(C) All Nonrecourse Ded.uctions for each Fiscal Year shall be allocated to the Partners in accordance with their relative Capital Accounts.

(D) AU Partner Nonrecourse Deductions for each Fiscal Year shall be allocated to the Partner or Partners who bear the economic risk of loss wlth respect to the Partner Nonre.course Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with the ratio in which the Partners bear such economic risk of loss and Trtasury Regulations Section l.704-2(i)(l).

(b) General. Notwithstanding anything to the contrary m Section 9.l(a), the

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following provisions shall apply to all a11ocations:

(i) All al]ocations of Profits and Losses for a Fiscal Year, shall be applied

(A) after giving effect to distributions, if any, during such Fiscal Year under Section 9.2. Section 9.3 and Section 13.2(b); and (B) as if all distributions and allocations were made at the end of such Fiscal Year.

(ii) In the event there is any recapture of Depreciation the a1Jocation of g1;tin pr income attributable to such recapture shall be shared by the Partners in the same proportion as the c;leduction for si.ich Depreciation was shared.

(iii) Any interest income realized in connection with any promissory no~e received by the Partnership in connection with the sale of its assets, net of any interest expense accrued by the Partnership on any underlying obligations related to such asset shall be allocated to the Partners pro rata in accordance with the remaining amount to be distributed to them upon receipt of the principal payments made on such promissory note.

(iv) Prior to any allocations for a Fiscal Year under Se"Ction 9. l{a). but after the application of Sections 9.I(b)(v) and .61} below. in the event any Partner tinexpectedly receives any adjustments, allocations or distributions described in treasury Regulations Section l.704-l(b)(2)(ii)(d)(4), (5) or (6) and such adjustment, allocation, or distribution, results in any Partner having an Adjusted Capital Account Deficit, then 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 Treasury Regulations, the excess deficit of such Partner as quickly as possible. This Section 9.l(b){iv) is intende-d to comply with the "qualified income offset" requirement in Treasury Regulations Section l .704-l(b)(2)(ii)(d )(3), and shall be interpreted consistently therewith.

(v) Prior to the application for a Fiscal Year of any other provision of this Section 9.1, if there is a net decrease in Minimum Gain during a Fiscal Year, then before any other allocation is made for such year, the Partners shall be allocated Items of gross income and gain for such year (and, if necessary, subsequent years) in the amount and in the proportions necessary to satisfy the requirements of a

"minimum gain chargeback" under Treasury Regulation Section 1.704-2(b)(2).

(vi) After the application of Section 9.l(b)(v) above, but prior to the application for such Fiscal Year of any other provision of this Section 9.1, if there is a net qecrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during a Fiscal Year, then any Partner with a share of the Partner Minimum Gain- attributable to such debt at tl1e beginning of such year shall be. allocated items of income and gain for such year (and, if necessary, subsequent years) in the amount and proportions necessary to satisfy the provisions of Treasury Regulation Section 1. 704-2(j).

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(c) Contributed Property. In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its initial Book Value. In the event the Book Value of any Partnership pr.operty is adjusted pursuant to Section 5.S(d) hereof, subsequent allocations of income-, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of ~uch asset for federal income tax purposes and such Book Value in the same manner as under Code Section 704(c) ~d the Treasury Regulations thereunder. Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the pwpose and intention of this Agreement. Allocations pursuant to this Subsection (cl are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreem.ent.

(d) Distributions In-Kind. Upon a distribution in-kind of Partnership assets; at the time of liqµidation pursuant to Section 13.2, or otherwise, for purposes of determining the balance in each Partr)er's Capital Account, each -such asset shall be deemed sold by the Partnership for the amount of such asset's fair market value (as determined in accordance with the method for determining Book Value, or by the Special Liquidator, as the case may be), and any gain· or loss deemed realized on such deemed sale shall be properly ch~rged to the Capital Accounts of the Partners according to Section 9.1 as if such assets were sold,

(e) Authority of General Partner to Amend Allocations. The Partners intend that all allocations of Partnership taxable income and loss (or any separate item thereof) shall be detennined and allocated in accordance with this Section 9.1 to the fullest ex.tent permitted by Code Section 704(b). However, the General Partner is authorized to allocate any or all items of Partnership taxable income or loss in a manner differently from that set forth in this Section 9. l during any Partnership fiscal year if the General Partner believes that as a result of the IRS issuing regulations or other official statements under or in connection with Code Section 704(b) or, as a result of other developments in the law, the IRS is- likely to Sl!ccessfolly challenge the allocations of any or all items of Partnership taxable income or loss, or recategorize Partnership distributions, or is likely to successfully assert any position that would substantially reduce or eliminate the Partners' distributive shares of Partnership tax losses. Any amendment to the allocations ma9e pur1;uant to this Section 9.l{e) shall be deemed to be a complete substitute for any allocation otherwise provided for in this Section 9 .1. and no amendment of this Agreement shall be required.

(f) Advice of Accountants and/or Counsel. In making any New Allocation under Section 9. l(e), the General Partner is authorized to act only after having been advised by its accountants and/or legal counsel that the New Allocation is necessary to comply with any issued regulations or other official CRS statement under or in connection with Code LlMITEQ PARTNERSHIP AGREEMENT

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Section 704(b) or other developments in the Jaw, and the New Allocation, in the best judgment of the General Parti1er's accountant and/or legal counsel, is the minimum modification of the allocations otherwise provided for in this Section 9.1 necessary to satisfy the applicable criteria that, either in the then current qr in any preceding Partnership ffacal ye·ar, ea~h P·artner's distributive share of Partnership taxable income or loss is determined and allocated in accordance with this Sectlon 9.1 to the fullest extent pennitted by Code Section 704(b).

(g) Subsequent Allocations. If the General Partner exercises its authority under Section 9.l(e) to make any New Allocation in a manner less favorable to any Partner than is otherwise provided for in this Section 9. l, then the General Partner is authorized and directeq to allocate Partnership taxable income or loss arising in later Partnership fiscal years in such manner so as to bring tlJe allocations of Partnership taxable income or loss to the Partners as near as possible to the tax allocations originally set forth in this Section 9.1, insofar as- it is advised by its accountants and/or legal counsel that such tax allocations comply with Code Section 704(b).

(h) Reliance by General Partner. New Allocations made by the General Partner under Section 9.1 in reliance l!pon the advice of its accountants and/or legal counsel shall be deemed to be made pursuant to the fiduciary obligation of the General Partner to the Partnership, and. no such allocation shall give rise to any claim or cause of action by any Limited Partner.

Section 9.2 Distributions of Cash Proceeds from Sales. Cash Proceeds from any sale of the Property shall be distributed at such time as may be determined by the General Partner. Cash Proceeds from such transaction shall be applied and Qistributed in the following order of priority:

(a) First, to repay then existing loans of the Partnership, including the Acquisition Loan, but excluding debts and liabilities of the Partnership to Partners or any Affiliates;

(b) Second, to the payment of any debts and liabilities (im;luding unpaid fees) -owed to the Partners or any Affiliates by the Partnership for Partnership obligations;

(c) Third, to the Limited Partner, in an amount equal to any Capital Contributions previously contributed by the Limited Partner to the Partnership and not previously reimbursed by the Partnership; and

(c) After r~p~yments of the Limited Partner Capital Contributions all remaining Cash Proceeds from the sale of the Property will be distributed on a ratable basis to each of the Partners, based on the futerest of each Partner in effect at the time of such distribution.

Section 9.3 Distributions of Cash Proceeds from Refinancings. Cash Proceeds from any refinancing of the Acquisition Loan or any other loan obtained by the Partnership which is _secured by the Property, or any portion thereof, shall be distributed at such time as may be determined by the General Partner. Cash Proceeds from such transaction shall be applied and LIMITED rARTNERSRIP AOIU::EMENT

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distributed in the following order of priority:

(a) First, if the Cash Proceeds from such refinancing exceed the cost or outstanding debt secured by the Property, then the Cash Proceeds shall be distril;iuted to the Limited Partner until the Limited Partner has received an amount equal to its Capital Contribution made to the Partnership and not prev-iously reimbursed to such Partner;· and

(b) Then, a11 remaining Cash Proceeds from the refinancing df the Property will be distributed to all Partners on a ratable basis based on the Interest of each Partner in effect at the time of such distributiort.

Section 9.4 Division and Treatment of Allocations and Distributions. Except as otherwise expressly provided in this Agreement:

(a) Record Party. Except as otherwise expressly provided elsewhere in this Agreement, distributions of cash or other property shall be made only to such Persons who appear as Partners on the books of the Partnership on the date of distribution.

(b) Amounts Withheld. A.II amounts withheld pursuant to the Code ot any provision of any state or lo~al tax law with respect to any payment or distribution to the Partnership or a-Partner shall be treated as amounts distributed to the Partners pursuant to Section 9.2 or Section 9.3, as applicable, for all purposes under this Agreement. Section 9.5 Profit or Loss from the Liquidation of the Partnership.

(a) Profit. After adjusting the Capital Accounts for distributions made under Section 9.2 and Section 9.3 and allocations under Section 9.l(a) through (hl for the applicable Fiscal Year of the Partnership, the Profit resulting from a sale of the Partnership's assets upon the dissolution and termination of the Partnership shall be allocated to the Partners in the foliowing order and priority:

(i) First, if the Capital Account of any Partner has a negative balance, to such Partner to the extent of such negative balance. If the Capital Accounts of more than one Partner have a negative balance, Profit, to the extent of the aggregate negative balances in the Capital Accounts of the Partners, shall be allocated to such Partners in proportion to their respective negative balances;

(ii) Second, after the Capital Accounts of the Partners are adjusted for the allocations of Profits under Section 9.4(a)(i) and@, thereafter, the balance of Profits shall be allocated to the Partners in accordance with their respective Interest in effect at the time applicable distributions are made hereunder.

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(b) Loss. After adjusting the Capital Accounts for distributions made under Section 9.2 and Section 9.3 and allocations under Section 9.l(a) through .(hl for the applicable Fiscal Year of the Partnership, Losses resulting from a sale ofthb Partnership's assets upon the di'ssolution and termina~iori of the :Partnership shall be allocated to the Partners in the following order and priority:

(i) First, to those Partners in the least amount necessary and to the extent possible so that the Partners' Level One Balances (as hereinafter defined) are as closely as possible in the ratio of their relative Interests and then to all the Partners in proportion to their Level One Balances until the Lev~l One Balances are reduced to zero. A Partner's "Level One Balance" is defined as the amount, if any, by which the positive balance in its Capital Account exceeds the aggregate amount of its unpaid Capital Contributions.

(ii) Second, to the Partners with positive Capital Account balances in proportion to such positive balances until such balances are reduced to zero.

(iii) Third, to the Partners in accordance with their Partnership percentages as determined under Treasµry Regulation Section 1. 704-1 (b )(3).

ARTICLEX

DISPOSITION OF A LIMITED PAR1NER'S INTEREST AND WITHDRAWAL Section 10.1 Restrictions on Transfer. Except for transfers of their respective Interests to Affiliates, which transfers may be made by the Limited Partner without requiring any consent or approval from the General Partner and which transferees shall be admitted as Substitute Limited Partner without the consent or vote of any Partners, and except for withdrawals or transfers expressly authorized or permitted hereunder, the Limited Partner shall not have the right to withdraw as such, nor may it make any other Dispos·ition of all or any part of its Interest in the Partnership without the prior written consent of the General Partner, the giving or withholding of which is exclusively within the discretion of the General Partner.

Section I 0.2 Substitute Limited Partner: Other Transferees: Transferor. (a:) Subsdtution. Other than Affiliates of the Limited Partner, no other Person may become a Substitute Limited Partner, nor may such right of substitution be granted by the Limited Partner to any assignee by operation of law or otherwise, without the prior written consent of the General Partner, the grantirig of which shall be in its sole and uncontrolled discretion, and otherwise complying with the applicable tenns and conditions of this Article X and Article XII, and such Person shall become a Substitute Limited Pa11ner only when the General Partner has accepted such Person as the Limited Partner of the Partnership, without further ·c onsent or approval by or of any Limited Partner.

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(b) Death. Incompetency or Bankruptcy of the Limited Partner. If the Limited Partner dies, the executor, admin.istrator or trustee, or, if such Limited Partner is adjudicated incompetent or insane, its-guardian or conservator, or, if a Bankruptcy occurs as to the Limited Partner, the trustee or receiver of the estate; shall have all the rights of such Limited Partner for the purpose of settling or managing the estate's or incompetent's affairs, and the power to assign all or any part of the Interest to the extent permitted by Section 10.1 above, and to join with the assignee thereof in satisfying conditions precedent to such assignee becoming a Substitute Limited Partner. The death, adjudication of incompetence or Bankruptcy of the Limited Partner in and of itself shall not dissolve the Partnership.

(c) Limits for Assignee. An assignee of the Limited Partner who does not become a Substitute Limited Partner shall have no right to vote or otherwise act as the Limited Partner under any of the pt:'Qvisions of this Agreement, including, but not limited to, the right to require any information or account of the Partnership's transactions or to inspect the Partl).ership's books. Except as required by operation of law, any such assignee who does not become a Substitute Limited Partner (including, but not limited to, an intestate successor, a receiver, trustee, legal representative, guardian or other successor in interest), and who desires to make a further transfer of all or any part of his, her or its Interest in the Partnership shall be subject to all of the provisions of this Article X and Article XII to the same extent and in the same manner as any Limited Partner desiring to make an assignment of all or part of its Interest in the Parthership.

(d) Assignor Limited Partner. If the Limited Partner transfers all of his Interest in the Partnership, he shall cease to be the Limited Partner of the Partnership, and shall no longer have any rights or privileges of the Limited Partner except that, unless and until the assignee of such Limited Partner is admitted as a Substitute Limited Paitner in accordance with this Section 10.2, said transferring Limited Partner shall retain the statutory rights and obligations of an assignor Limited Partner under the TLPL.

ARTICLE XI

DfSPOSITION OF A GENERAL PARTNER'S INTEREST AND WITHDRAW AL Section 11.1 Limitations on Transfer.

(a) Transfer Prohibited. Except as provided in this Article XL the General Partner shall not with.draw or attempt to withdraw from the Partnership, nor shall the General Partner make ~y Disposition of any portion of its Interest in the Partnership, without the consent of the Limited Partner.

(b) Assigrunent to Affiliates. A General Partner shall be permitted to assign to an Affiliate any portion but not all of its Interest, including its interest in the Profits, Losses, Cash Available for Distribution, Net Profits and other allocations and distributions, provided that such General Partner retains art interest of at least one percent (I%) of Partnership capital, Profits, Losses, Cash Proceeds, Net Profits and other allocations and LIMITED PARTNERSHIP AGREEMEN'I'

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distributions. Notwithstanding the assignment by a General Partner of a portion of its Interest pursuant to the foregoing, upon any such assignment (A) such General Partner shall not cease to be a general partner of'the Partnership, and sha!l continue to be the General Partner of the Partnership, and (B) such General Partner shall continue to have any and all rights, powers and obligations of a General Partner under this Agreement and the TLPL, and the power to exercise any and all rights, powers and obligations of a General Partner under-this Agreement and the TLPL, and the assignee shall not acquire any such rights and powers of a General .Partner.

Section 11.2 Continuation ofrartnership.

(a) Jf, upon an Event of Withdrawal of a General Partner, there remains at least one General Partner, (A) the withdrawing General Partner shall thereupon be deemed to have retired as and ceased to be a General Partner and (B) the Partnership shall be reconstituted and its business continued without being wound up and the remaining General Partner(s) shall continue the business of the Partnership.

(b) If, upon an Event of Withdrawal of a General Partner, there remains no other General Partner, notice of such Event of Withdrawal shall promptly be sent by such withdrawing General Partner or its representative to the Limited Partner. In such event, the Partnership shall be reconstituted and its business continued without being wound up, if th.e Limited Partner elect within ninety (90) days of such Event of Withdrawal to continue the business of the Pai:tnership and appoint a substitute General Partner effective as of the Event of Withdrawal of the departing General Partner. Such substitute General Partner shall be required to own at least a one percent (1 %) Interest in the Partnership, and must otherwise agree to be bound by the terms of t!lis Agreement. Section 11.3 Continuing Obligation. If a General Partner shali cease to be a General Partner of the Partnership, it shall be and remain liable for all oblig~tions and liabilities incurred by it as a General Partner prior to or at the time such withdrawal shall have become effective, but it shall be free of any obl1gation or liability incurred after the time such withdrawal shall have become effective.

ARTICLE XII

DISPOSITION OF ANYPARTNER'S INTEREST; PROCEDURES; EFFECT; POWERS Section 12.l Procedures.

(a) Transfer on Books. Except as otherwise expressly provided in this Agreement and subject in- ail respects to the provisions of Articles X and XI hereof, the transfer of any Interest in the Partnership shall be accomplfshed only by the submission to the General Partner by the transferor or transferee of all documents and instruments requested by the General Partner, including without limitation the instrument making such transfer, and instrument signifying the transferee's representations regarding his, her

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or its investment and agreement to be bound by all of the provisions of this Agreement and afl of the transferor's obligations, each duly executed and acknowledged and in such fo1m and substance as shall be satisfactory to the General Partner in its sole discretion.

(b) Costs. All costs and expens~s incum;d by the Partnership in connection with any transfer of an Interest, or- any part thereof, including, but not limited to, any filing, recording and publishing _costs and the fees and disbursements of counsel, shalJ be paid by the Partner disposing of such Interest or such part thereof or, if not so paid, then by the transferee of such Interest.

Section 12.2 Effects of Transfers.

(a) Allocations and Distributions. When an Interest, or any part thereof, of a Partner 'in the Partnership is effectively transferred during any fiscal period pursuant to Articles X or XI, or thls Article XII, Profits, Losses, each item thereof and all other items attributable to such Interest for such period shall be divided and allocated between such Partner (the "Transferor") and the Person to whom the Interest or part thereof is transferred (the "Transferee") by taking into account their varying interests during the period in accordance with Code Section 706(d), using any conventions permitted by law and selected by the General Partner. All distributions on or before the date of such transfer shall be made to the Transferor, and all ·distributions thereafter shall be made to the Transferee; provided, however, that the Partnership and the General Partner shall be exonerated from any and all liability under this Section 12.t(a) with respect to distributions made prior to the date of transfer of any Interest to any Person who at the time of such distribution appears on the books of the Partnership as the Partner entitled thereto.

(b) Void. Except as otherwise expressly required by applicable law or as otherwise consented to by all of the Partners, any act or attempted act by any Partner in violation of Article X, XI or this A1ticle XTI shall be null and void ab initio. Section 12.3 Effectuating Action. The General Partner shall take all action, including, but not limited to, the transfer of any Interests, any amendment of this Agreement and/or the Certificate and/or the effectuation of any new Certificate of Limited Partnership, all as may be required to effectuate any of the provisions of Articles X. XI or this Article XII. Section 12.4 Third Party Sale or Disposition and Right of First Refusal. Any Pl,lrtner who receives a bona fide offer from an unaffiliated thirc:I party to purchase all or any part of its Interest iri the Partnership (and which offer such Partner desires to accept) shall provide to the other Partner(s) written notice of its intention to sell. The selling Partner (herein called

"Offeror") shall include in such notice an offer to sell the Interest in the Partnt;rship aftected by such offer to the other Partner(s) (herein collectively called the "Offeree"). all according to the following tem1s and conditions:

(a) Such offer shall be in writing and shall be sent by facsimile or by United States certified or registered mail, postage prepaid, return receipt requested, to the LIMITED l'ARTNERSHIP AGREEMENT

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r Offeree's address, stating the tenns of the bona fide offer received by the Offeror and the closing date -and giving the Offeree the right to purchase Offeror's Interest on the same ter.ms. In addition, such offer shall fully disclose the identity of such third party making such offer, and, to the ex.tent known or made available to the Offeror, the fin1:1ncial status of the third party 11:iaking such bona fide offer, and, to the full extent known or otherwise available to the Offerer, the Offeror sh.all provide such infom1ation as the Offeree may reasonably require concerning the true party-in-interest making such bona fide offer to Offeror.

(b) The Offeree shall have ten (l 0) days- after the receipt of such notice within which to indicate in writing whether it will buy the Interest of the Offeror in accordance with such offer. If the Offeree indicates that it will buy in accordance with such notice within such time provided, the Offerer will be bound accordingly to complete the transaction as hereinafter provided. lf the Offeree does not indicate within the said ten (IQ) days, it shall be deemed to have elected not to buy the Offerer's Interest on the terms indicated in the written offer made by Offerer.

(c) If the Offeree accepts such offer, the Offeree shall consummate the purchase of the Interest of the Offeror on the date provided in and in accordance with the temis of said offer. Upon payment -or tender of the consideration due for the Interest to be purchased and sold as aforesaid, the Offeror shall forthwith execute and deliver to the Offeree such bills of sale, assignments and conveyances as shall be necessary to transfer all of the Offerer's rights, title and interest in and. to the Partnership, and the assets thereof, to the Offeree. Upon the consummation of a sale under the above stated provisions, all subsequently resulting losses, profits, gains, credits or distributions from the development, operation and sale of the Interest so purchased shall be solely attributable to and be borne by the Offeree.

(d ) In the event the Offeree does not exercise its right to purchase the Offerot's Interest herein, then the Offeror may sell its Interest to the third party purchas~r on the same terms and conditions of the offer submitted to the Offeree herein; provided, however, that in the event the Interest in the Partnership is offered to such third party at a price lower than the price at which it was offered to the Offeree, or on more favorable tenns, or in the event the sale to such third party is not consummated within the time period provided in the offer, the Offerer again must offer to the Offeree the right of first refusal at the lower price or more favorable terms, or in the latter event, upon the same terms, under the same procedure described above. In the event th~t an Interest in the Partnership is sol(:! to a third party purchaser under this Section, the third party purchaser shall become an assignee of the selling Partner's Interest and shall expressly assume in writing all of the duties, responsibilities and liabilities of the selling Partnership.

(e) In the event the Offeree consists of more than one person or entity, the offer shall be transmitted simultaneously by the Offerer to all parties comprising the Offeree,. and each party comprising the Offeree may exercise the right to purchase the Interest covered by sucl1 offer in the same proportion that the Interest of each person comprising the Offeree bears to the total of all Interests held by all persons comprising

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the Offe ree. In the event that more than one person or entity comprises the Offeree, hbwever, each person comprising the Offeree shall be required to notify the other persons comprising the Offeree within five (5) business days following the receipt of such offer whether they will elect to purchase the Interest covered by such offer. In the event one or more of such. persons comprising the} Offeree desire to accept such offer, and one or more of such persons comprising the Offeree desire to decline such offer, the parties desiring to accept such offer may elect to purchase the Interest subject to such offer in such proportions as they may detennine, and in the absence of agreement, each party desiring to pµrchase ;;hall be entitled to pur:chase a part of the Interest covered by such offer in the same proportion that tpe Interest of each person desiring to purchase bears to the total Interests of all persons desiring to purchase. In the event, however, that the persons desiring to purchase the Interest covered by such offer do not e]ect to purchase the entire Interest covered by such offer, the Offeree shall be deemed to have elected not to purchase the Interest of the Offeror pursuant to such offer.

Section 12.5 Intentionally Deleted.

Section 12.6 Intentionally Deleted.

ARTICLE XIII

DISSOLUTION

Section 13 .1 Liquidation of Partnership. In the event of a dissolution of the Partnership pursuant to Section 3J of this Agreement after which the Partnership is not reconstituted and its business continued, the General Pa1iner or, in the event of a dissolution in which thete is no General Partner, a special liquidator ("Special Liquidator") appointed by the Limited Partner shall immediately commence to wind up Partnership affairs and shall liquidate the assets of the Partnership as promptly as possible in an orderly and. business-like manner so as not to involve undue sacrifice, as the General Partner (or Special Liquidator, as the case may be) in its discretion snail determine.

Section 13.2 Procedures on Liquidation,

(a) Examinatidn. Upon dissolution of the Partnership, to the extent Partnership funds are available therefor, the General Partner (or Special Liquidator, as the case may be) may cause the ,Accountants to perfonn an examination of the assets and liabilities of the Partnership as of the date of dissolution, and such statement shall be furnished to all Partners as soon thereafter as is practicable.

(b) Distribution. In the event of liquidation, the. assets of the Partnership or the Cash Proceeds thereof shall be applied and distributed in the following order of priority:

(i) to the payment of the debts and liabilities of the Partnership (o ther than Partners. who are creditors solely as a result of application of the TLPL), and the expenses of liquidation, including, but not limited to, the reasonable fees of the

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Special Liquidator, jfappJicable; (ii} to the setting up of any reserves which the General Partner (o r Special Liquidator, as the case. may be) may deem reasonably necessary for any contingent or unforeseen liabilities or obligaiions of the Partnership, which reserves shail be paid over to a bank, as escrow-holder, to be held by it for the purpose of disbursing (under the direction of the GerietaJ Partner or Special Liquidator, as the case may be) such reser.ves in payment of any of the aforementioned liabilities and obligations and, at the expiration of such period as the General Partner (or Special Liquidator, as the case may be) may deem advisable, for distribution in the manner hereinafter provided;

(iii) to the payment of debts and liabilities of the Partnership to Partners to the extent they are creditors solely as a result of application of the TLPL;

(vi) to the extent that the Partners have not previously received distributions in accordance with Section 9.2 or Section 9.3 in an amount equal to the sum of all Capital Contributions previously made by the Partners, to the Partners, on a pror1;1ta basis, until they have each received distributions equal to the amount of all Capital Contributions previously made by them to the Partnership; then

(vii) to the extent there remains any additional assets of the Partnership or Cash Proceeds, they shall be distributed to the Partners prorata based on the Interest of each Partner in effect at the time of such distribution. Section 13.3 No Release. No dissolution of the Partnership shall release or relieve any of the Partners or any of their respective successors, assigns, heirs or legal representatives, from any previous br~ch or default of, or from any obligations· theretofore incurred or accrued under, any of the provisions of this Agreement, except to tlie extent o.therwise expressly provided herein.

ARTICLE XIV

ACCOUNTS AND RECORDS: ACCOUNTANTS

Section 14.1 Accounting Methods; Fiscal Year. The books of account of the Partnership shall be kept on the method selected by the General Partner. The Fiscal Year of the Partnership shall be the calendar year.

Section 14.2 Records and Books of Account.

(a) Maintenance. The Gen~ral Partner shall maintain, or cause to be maintained, complete and accurate records and books of account of all transactions of the Partnership wherein shall be entered all transactions, matters and things relating to ·the Partnership's business as are usually entered into books of account kept by persons engaged in a business of a like character, all on the LfMITED PAR.Th'ERSHIP AGREEMENT

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method of accounting selected by the General Partner.

(b) Location. All of such records and books of account together with all other documents and files of the Partnership, including, but not limited to, copies of all documents prepared by the ·General Partner and all correspondence and drafts of documents, shall, at all times, be kept at the office for records of the Partnership established pursuant to Section 2.4, and all such records, books of account, documents and files shall be the exclusive property of the Partnership. Upon an Event of Withdrawal of a General Partner, all such records, books of account, documents and files shall remain in the exclusive possession of the Partnership. At any time and from time to time while the Partnership continues and until its complete liquidation (but only during reasonable business hours), the Limited Partner, and/or any accountant or other professional or representative employed by it may, at -such Limited Partner's own expense and upon at least five business days' prior written notice to the General Partner, fully examine, inspect, make copies and audit the Partnership's books, records, accounts and assets. Section 14.3 Elections and Adjustments. The General Partner, in its sole discretion, shall be permitted in any Fiscal Year to make such tax elections as it may from time to time deem necessary or appropriate. In addition, upon receipt of a notice from any Partner requesting that the Partnership file an election purs1,1ant to Section 754 of the Code, the Partnership shall file such election. In the case of a Section 754 election, any additional fees or expenses resulting from the initial accounting set-up for such election shall be bome by the Persons for whom the pennitted ~djustments to basis as provided for in Code Section 734 and 743 are made. If a Section 754 election is filed, the General Partner will be required to provide additional accounting or tax information with respect to any adjustment to basis for the Limited Partner, provided such information is reasonably within the General Partner's knowledge. The Partners agree to provide the Partnership with such information as they possess which is required to give effect to any Section 154 election made by the Partnership.

Section 14.4 Tax. Returns. As soon as practicable after the end of each Fiscal Year of the Partnership, and no later than March 31 of each Fiscal Year, the General Partner shall deliver to the Limited Partner such information as shall be necessary for the preparation by the Limited Partner of their federal income tax return. The General Partner shall also prepare or cause to be prepared all tax and infonnation returns which the Partnership is required to file and the same shall be filed by the General Partner within the time prescribed by law for the filing of each such return.

Section 14.5 Tax Matters Partner. In accordance with the provisions of Section 6231 of the Code, the General Pa1tner will be treated as the "tax matters partner" of the Partnership pursuant to Section 623 t (a){7) of the Code. The General Partner shall t~ke such ·action as may be necessary to cause all Partners to become "notice partners" within the applicable provisions of the Code. The General Partner shall keep all other Partners informed of all matters which may come to the attention of the General Partner in its capacity as tax matters partner by giving the other Partners notice thereof within thirty (30) days after the General Partner becomes informed of any such matter. The General Partner may not take any action contemplated by Sections 6222

LIMITED PARTNERSHIP AGREEMENT

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through 6232 of the Code without the consent of a Majority Interest of the Limited Pru.mer, but this sentence does not authorize the General Partner to take any action left to the determination of an individual Partner under Sections 6222 through 6232 of the Code.

ARTICLE XV

CONSENT OF LIMITED PARTNERS

Whenever the consent of· the Limited Partner is required under this Agreement or applicable lay,, .or is otherwise requested by the General Partner in connection with any proposed action, tlie General Partner shall give notice of such proposed action to the Limited Partner. If after ten (10) business days the Limited Pru.tner has not objected to the taking of such action by delivering such proper notice of its objection to the General Partner, the Limited Partner will be 9eemedto have consented to the taking of the action. The foregoing shall not apply in the case of an Event of Withdrawal of a sole General Partner as described in Section I J. 2(b). In that event, such General Partner will be required to give notice of the Event of Withdrawal as provided in Section l 1.2(b). but the LirnJted Partner must affirmatively elect to continue the Partnership business and appoint a substitute General Partner.

ARTICLE XVI

MISCELLANEOUS

Section 16.1 Recipient of Distributions and Payments. All distributions and payments of cash or property to be made pursuant to the provisions of this Agreement shall be made directly to the parties who are entitled thereto at their respective addresses indicated i1,1 the records of the Partnership or at such other address as shall have been set forth in a notice sent pursuant to the provisions of Section 16.2 hereof.

Section 16.2 Communications. Except as otherwise expressly provided in this Agreement, any election, approval, consent, objection, request, waiver, notice or other document required or permitted to be made or given pursuant. to any provisions of this Agreement, shall be deemed duly made or given, as the case may ~. if in writing, signed by or on behalf of the Person making or giving the same, and shall be deemed completed whei1 either (a) personally delivered (with receipt acknowledged by the recipient), or (b) sent by electronic facsimile, provided a copy of such docum~nt is sent to such party the same day by one of the other methods set forth. herein, OJ," (c) deposited for delivery by Federal Express or other similar overnight courier service; addressed to the Person or Persons to whom such election, approval, consent, objection, request, waiver, notice or other document is to be made or given at their respective addresses, as reflected in the records of the Partnership. Any party hereto shall have the right to change its address· hereunder by sending notice to all other parties hereto pursuant to this Section. Section 16.3 "Entire Agreement; Applicable Law: Effect. This Agreement contains the entire agreement by and among the parties with respect to the ownership and operation of the Partnership. The parties have now and expect to have in the future agreements that affect the Partners, such as matters relating to competition, and other business relationships of the Partners. LIMITED rARlNERSHIP AGREEMENT

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This A~reement sbalJ be construed, enforced and _governed in conformity with the laws of the State of Texas and the· TLPL, without giving effect to prirtcip1es of conflicts of law, and shall be binding upon the parties hereto, their successors, heirs, devisees, pennitted assigns, legal representatives, executors and administrators, but .shall not be deemed for the benefit of creditqrs or any other Persons.

Section 16.4 Modification: Waiver or Tenn:ination. Except as otherwise expressly provided in this Agreement, no modification. waiver or termination of this Agreement, or any part hereof, shall be effective unless made in writing signed by the party sought to be bound thereby, and no failure to pursue or elect any remedy shall constitute a waiver of any default under or breach of any provision of this Agreement, nor shall any waiver of any default under or breach of any provision of this Agreement be deemed to be a waiver of any other subsequent similar or different default under or breach of such or any other provision or of any election or remedies availabie in connection therewith. Receipt by any party of any money or other consideration due under this Agreement, with or without knowledge of any breach of default, shall not constitute a waiver of such breach or default of any provision of this AgreemenL Section 16.5 Counterparts. This Agreement may be executed in one or more counterparts and, notwithstanding that all of the parties did not execute the same counterpart, each of such counterparts ~hall, for all purposes, be deemed tQ be an original, and all of such counterparts shall constitute one and the same instrument binding on all of the parties hereto. Section 16.6 Separability. Each provision of this Agreement shall be considered separable and (a) if for any reason any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid, and (b) if for any reason any provision or provisions of this Agreement would subject the Limited Partner to any personal liability for the obligations of the Partnership under the laws of the State of Texas or any other laws, as the same may now or hereafter exist, such provision or provisions shall be deemed void and of no effect.

Section 16.7 Article and Section Headings. Article and section titles or captions contained in this Agreement are inserted oply as a matter of convenience and for reference, and shall not be construed in any way to define, limit, extend or describe the scope of any of the provisions hereof.

Section 16.8 Word Meanings. The words such as "herein," "hereinafter "hereof," and

"hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words ~ppear unless the context otherwise requires. The singular shall include the plural and the mascu_line gender shall in.elude the feminine and neuter, and vice versa, unless the context otherwise requires.

Section 16.9 Exhibits. All exhibits annexed hereto are expressly made a part of this Agreement, as fully as though completely set forth herein.

Section 16.10 Survival of Covenants. Etc. The covenants and other statements set forth

LIMITED PARTNERSHIP AGREEMENT

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in this Agreement shall survive execution and delivery hereof and making of the Capital Contributions provided for herein. AIJ of the same shall be deemed to be independently material and to have been relied upon by the party or parties to whom made. Section 16.l I Further Actions. Each of the Partners shall hereafter execute and deliver such further instruments and do such further acts and things as may be required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the provisions hereof.

ARTICLE XVII

PROHIBITfON RE PARTITION Each of the parties hereto does hereby permanently waive and relinquish any and all rights he or it may have to cause any asset of the Partnership "to be partitioned, it being the intention of the parties to prohibit any party hereto from bringing a suit for partition against the Partnership or the othei- parties hereto.

(Signature Page Follows)

(I'he remainder oft his page was intentionally lefi blank.)

LIMITED PARTNERSHIP AGREEMENT

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IN WITNESS WHEREOF, the parties hereto 11ave executed this Agreement as of (though. not necessarily on) the 27th day of December, 2013.

GENERAL PARTNER:

FRISCO MULTIFAMlL Y LAND GP, LLC, a Texas limited liaru1·· !1¥-COJ:lllllmY

LIMITED PARTNERS:

FRISCO SUMMIT, L.P., a Texas limited pattnership

By: Frisco Summit GP, LLC, a Texas limited liability company, General Partner By: ____________

Stanley V. Graff, Manager

LIMITED PAR.TNERSHII' AGREEMENT OF FRISCOMULTIFAMIJ.,YtAND PARTNERS, LP •PoJ!_e3G OlUO.lll

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of (though not necessarily on) the 27th day of December, 2013.

GENERAL PARTNER:

FRISCO MULT IF AMILY LAND GP, LLC, a Texas limited liability company By: ____________

Printice L. Gary

Manager

LIMITED PARTNERS:

FRISCO SUMMIT, L.P., a Texas limited partnership

By: it G , LLC, a Texas limited p , General Partner

Stanley V. Graff, Manager LIMITED PARTNeRSH!P AGREEMENT OF FRISCO MULTIFAMILY LAND PARTNERS, LP• Page 16 02150.121

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SCHEDULEl to

Agreement of Limited Partnership of Frisco.Multifamily Land Partners, LP Initial

Partner/Address Interest Contribution General Partner

Frisco Multifamily Land GP, LLC 5485 Beltline Road, Suite 300 1% $10.00 in cash Dallas, Texas 75254

Limited Partner

Frisco Summit, L.P. The Property and 8901 Governor's Row 99% $450,000 in cash Dallas, Texas 75247

100%

UMJTEO PARTNERSfl!P AGREEMENT OF FRISCO MULTIFAMILY LAND PAATNERS, LP-l'ago37 02lS0.12I

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SCHEDULE2

to

Agreement of Limited Partnership of Frisco Multifamily Land Partners, LP Representations and Warranties of the Limited Partner The following representations and warranties are made as of the date this Agreement is executed after having been carefully read and con finned by the Limited Partner.

I. The Limited Partner has not received any notice of any violation of any ordinance, regulation, law or statute from any governmental agency regarding the Property which has not been complied with.

2. To the best of the Limited Partner's knowledge, the documents and information provided, or made available, to the Partnership regarding the Property are true, correct and complete originals or copies, as the· case may be, of what they purport to be.

3. No party has been granted any license, lease, or other right relating to the use or possession of the Property, or any part thereof, except (a) the tenant under that certain grazing lease which affords the owner of the Property an ad valorern tax exemption (the

"Grazing Lease"), and (b) as may be disclosed in that certain Commitment for Title Insurance issued by Fidelity National Title Insurance Company under GF No. FTDAL34-

4403400502.

4. The Limited Partner has not received any notice.f rom any insurance company or board of fire underwriters requesting the performance of·any work or alteration with respect to the Property that has not been performed, or requiring an increase in the insurance rates applicable to the Property.

5. To the best of the Limited Partner's knowledge, there are no pending condemnation actions with respect to the Property. The Limited Partner has not received any written notice of any such condemnation action being contemplated. To the bes.t of the Limited Partner' s knowledge, there are no contemplated public improvements which will or would result in any charge being levied or assessed against, or in the creation of any lien upon, the Property.

6. Other than the Grazing Lease, there are no options, purchase contracts or leases, written or oral, -whereunder or whereby any person has or could claim or assert any right, title or interest in, or right to acquire, the Property.

7. There is no litigation, action or proceeding pending or, to the best of the Limited Partner's knowledge, threatened, against the Limited Partner or the Property before any court or administrative agency relating to the Property.

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8. There are no management, maintenance, operating, service or any 9ther contracts or leases affecting the Property which are not tenninable upon the delivery of thirty (30) days priorwritten notice.

9. The Limited Partner has· received no written notice from any governmental authority staclng that the Property is in violation of any law relating to the manufacture, disposal or storage of any substance which is designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, pollutant or contaminant under any local, state or federal law.

10. Neither this Agreement nor anything provided to be done hereunder, including, without limitation, the contribution and transfer of the Property to the Partnership, violates or shall violate any written or oral contract, agreement or instrument to which the Limited Partner is a party or which affects the Property.

11. The execution, delivery and performance of this Agreement by the Limited Partner, and the contribution and transfer of the Property to the Paitnership by the Limited Partner, have-been duly and validly authorized by all necessary action and proceedings, and no further actjon or authorization is necessary on the part of the Limited Partner in orderto consummate the transactions contemplated herein. This Agreement is the legal, valid and binding obligations of the Limited Partner, enforceable in accordance with its terms.

12. Ail income and ordinary operating expenses of the Property, including, without limitation, public utility charges, maintenance, management, and other service charges, leasing commissions, and all other normal operating charges with respect to the Property have been paid and extinguished by the Limited Partner as of the date of this Agreement.

13. Except for Roger Gault (the "Broker"), the Limited Partner has not contacted or entered into any agreement with any real estate broker or other broker, agent, finder, or any other party in connection with the Property, and that, except for payments due to the Broker in accordance with a separate agreement a copy of which has been provided to the General Partner, the Limited Partner bas. not taken any action which would result in any real estate broker's, finder's, or other fees or commissions being due or payable to any party with respect to the Property.

THE LIMITED PARTNER HEREBY INDEMNIFIES AND AGREES TO HOLD THE

PARTNERSIDP AND THE GENERAL PARTNER HARMLESS FROM ANY LOSS,

LIABILITY, DAMAGE, COST, OR EXPENSE (INCLUDING, BUT NOT LIMITED TO,

REASON~LE ATTORNEY'S FEES) RESULTING TO THE PARTNERSHIP BY

REASON OF A BREACH OF THE REPRESENTATIONS AND WARRANTIES MADE

BY THE LIMITED PARTNER IN THIS SCHEDULE 2.

LIMITED PARTNERSHIP AGREEMENT

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EXHIBIT "A''

DESCRIPTION OF PROPERTY

-~~ 91 H!lOOllfll. SI SJ.01

....... '-".9 ....

m11µ11,l+'1.m11 .LJYY!> HYU LIMITED PAATNl:RSJ:OP AGR~1ENT OF FRISCO MtlLTIFAMILY LAND PARTNERS, LI'. Page ◄0 02150.121

Cause No. 493-01132-2023 FRISCO SUMMIT, LP, and FRISCO § IN THE DISTRICT COURT SUMMIT, LP DERIVATIVELY ON §

Partnership Agreement between the parties which provided that the Plaintiffs have the following economic interests in that Partnership:

8. Indeed, the IPA report correctly discloses (See Exhibit 7 page Defendant472) that all of the available land zoned for multi-family development within the sub-market of this Project had either been developed or was under construction by the Summer of 2021. See also page ___ as to the status of all construction within the sub-market. Indeed, the same would have been true for the area in north Plano along Legacy Parkway to the south and the area immediately to the east in west McKinney. For example, prior to the COVID-19 pandemic, immediately to the east of the location of Echelon at the Summit and the Huntington in southeast Frisco, a 3-phase 1800-unit development had been completed at the project known as Craig's Ranch. See true and correct copy of the article, attached as Exhibit 9. Moreover, by the end of 2019, it was well known that the City of Plano was no longer zoning additional multi-family development in the north Plano/Legacy sub-market. See the information regarding the City Council's denial of zoning and development to develop a large multi-family development at the JC Penney site true and correct copies of which are attached hereto as Exhibits 10 and 11.

12. None of this type of information had been produced with respect to the development of either Phase II or Phase III. For example, documents necessary to determine issues regarding timely development of Phases II and III, would have included, among others, the following which were identified in the deposition of the individual Defendants:

k. Loan commitments and preliminary loan commitments from potential construction lenders for Phase II of the Property.

provided to the Plaintiffs with respect to a calculation of the Plaintiffs' interest in the Defendants'

C. Documents still not produced in supplemental production April 26, 2024

22. As is set forth in the supporting documents referenced therein in Plaintiffs' original Motion to Compel, the Defendants failed to properly comply with the Rules with respect to the production. In particular, the Defendants filed an omnibus response and did not identify which party or parties were producing the documents and whether or not one or more of the parties had no such documents. Moreover, despite requests Defendants have failed to identify documents by bates label which documents are responsive to which request. In part, this was addressed by a paragraph in the Agreed Order of April 24, 2024 that for purposes of Rule 193.7 the Defendants stipulated that all documents were, in effect, produced by all Defendants.

f) December 8, 2015 Email with Bank of America regarding Due Diligence Checklist (Defendants14729-14730);

the JV and again in 2015 when they were getting ready to commence the construction of Phase I.

Up; Permit Set Plans-Budget; Hard Cost Budget; Construction Services Report (Preliminary Budget); Pre Construction Summary and Bid Submission Reports.)

Automated Certificate of eService