EXHIBIT (10C)
THE PRUDENTIAL VARIABLE CONTRACT
REAL PROPERTY PARTNERSHIP
--------------------------------
PARTNERSHIP AGREEMENT
BETWEEN
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
AND
PRUCO LIFE INSURANCE COMPANY
AND
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
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PARTNERSHIP AGREEMENT
This PARTNERSHIP AGREEMENT made and entered into on April 29, 1988, by and
between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Prudential"), a New Jersey
corporation, on behalf of The Prudential Variable Contract Real Property Account
("Prudential Account"), PRUCO LIFE INSURANCE COMPANY ("Pruco Life"), an Arizona
corporation authorized to do business in New Jersey, on behalf of the Pruco Life
Variable Contract Real Property Account ("Pruco Life Account") and PRUCO LIFE
INSURANCE COMPANY OF NEW JERSEY ("Pruco Life N.J."), a New Jersey corporation,
on behalf of the Pruco Life of New Jersey Variable Contract Real Property
Account ("New Jersey Account").
RECITALS
A. Pruco Life is the owner of, and holds in the Pruco Life Account, several
improved parcels of real property, loans secured by mortgages on real property
and other assets being more particularly described in the financial statements,
together with the accompanying Schedule of Investments, set forth in Exhibit A
attached hereto.
B. Pruco Life intends to contribute all of the assets held in the Pruco
Life Account at the close of business on April 29, 1988, subject to all the
liabilities of the Account other than the liabilities to variable life insurance
contract owners,
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to a partnership to be formed with Prudential and Pruco Life N.J. and
Prudential and Pruco Life N.J. each intend on April 29, 1988, to contribute
$100,000.00 in cash. The partnership will thereafter own, and will invest and
reinvest the assets contributed on such date together with such other assets as
the partnership may hereafter acquire by contribution from one or more of the
partners or by purchase or other means (collectively, the "Property").
C. Prudential, Pruco Life and Pruco Life N.J. desire to form a partnership
pertaining to the Property for the limited purposes and upon the terms and
conditions hereinafter specified.
NOW, THEREFORE, in order to carry out their intent as expressed above and
in consideration of the mutual agreements hereinafter contained, Prudential,
Pruco Life and Pruco Life N.J. hereby covenant and agree as follows:
ARTICLE 1. FORMATION OF VENTURE
1.1 Formation. Prudential, Pruco Life and Pruco Life N.J. (the "Partners")
hereby form a partnership (the "Partnership") for the limited purposes
hereinafter set forth.
1.2 Name. The name of the Partnership shall be "THE PRUDENTIAL VARIABLE
CONTRACT REAL PROPERTY PARTNERSHIP." The Partnership shall execute all assumed
or fictitious name certificates required by law to be published and filed, or
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either, in connection with the formation and operations of the Partnership.
1.3 Principal Office. The principal office of the Partnership shall be at
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Partners may from time to time determine.
1.4 Partnership Act: Ownership. Except as otherwise stated herein, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the New Jersey Uniform Partnership Law,
N.J.S.A. ss.42:1-1, et. seq., as it may be amended from time to time, except as
the Partners may provide otherwise. The interest of each Partner in the
Partnership shall be personal property for all purposes. Legal title to real and
other property owned by the Partnership may be held in the name of either the
Partnership or any one or more of the Partners.
1.5 Purposes. The purposes of the Partnership shall be (1) to provide a
means for the investment of the assets held in the separate accounts of the
Partners in accordance with the investment policies and practices set forth in
the registration statements filed on behalf of those accounts; (2) to own,
operate, sell, lend money secured by an interest in real property and to acquire
additional real property; and (3) to engage in such other operations and
businesses as the Partners or the Investment Manager deem necessary or
appropriate to the foregoing
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purposes. The Partnership shall not engage in any other business.
1.6 No Individual Authority. Except as otherwise expressly provided in this
Agreement, no Partner, acting alone, shall have any authority to act for,
undertake or assume any obligations or responsibility on behalf of another
Partner or the Partnership.
1.7 No Restrictions. Nothing contained in this Agreement shall be construed
so as to prohibit any Partner or any firm or corporation controlled by or
controlling such Partner from owning, operating or investing in any real estate
or real estate development not owned or operated by the Partnership, wherever
located. Each Partner agrees that the other Partners, or any director, officer,
employee, partner or other person or entity related to any Partner may engage in
or possess an interest in another business venture or ventures of any nature and
description, independently or with others, including but not limited to the
ownership, financing, leasing, operation, management, syndication, brokerage and
development of real property, and no Partner nor the Partnership shall have any
rights by virture of this Agreement in and to said independent ventures or to
the income or profits derived therefrom.
1.8. Neither Responsible for Other's Commitments. No Partner nor the
Partnership shall be responsible or liable for any indebtedness or obligation of
any other Partner incurred
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either before or after the execution of this Agreement, except as to those
joint responsibilities, liabilities, debts or obligations incurred pursuant to
the terms of this Agreement, and each indemnifies and agrees to hold the others
harmless from such obligations and debts except as aforesaid.
1.9. Action by Subsidiaries. Any and all activities to be performed by
Prudential hereunder may be performed by officers or employees of one or more
direct or indirect subsidiaries of Prudential provided that all actions taken by
such persons on behalf of Prudential in connection with this Agreement shall be
binding upon Prudential.
ARTICLE 2. TERM
2.1. Term. The Partnership shall commence on the date first above written
and shall continue until the first to occur of the following:
(a) 99 years shall have elapsed since the commencement of the Partnership;
or
(b) Sale or other disposition of all or substantially all of the Property,
other than to a nominee or trustee of the Partnership for financial or
other business purposes; or
(c) Dissolution of the Partnership pursuant to the express provisions of
Article 8; or
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(d) Proceedings in bankruptcy, receivership, reorganization, conservation,
or liquidation are instituted with respect to any of the Partners.
ARTICLE 3. CAPITAL CONTRIBUTIONS OF THE PARTNERS
3.1 Capital of the Partnership. The initial capital of the Partnership
shall be the amounts contributed on April 29, 1988, by the Partners. Thereafter,
the capital shall be equal to the fair market value of the assets owned by it,
minus the liabilities of the Partnership plus such other assets as may hereafter
be contributed to the Partnership by any of the Partners as provided in Section
3.4.
3.2 Initial Contribution of Pruco Life. Pruco Life as its initial capital
contribution to the Partnership, will on April 29, 1988 convey or assign to the
Partnership, all of the assets held on the close of business on that date in the
Pruco Life Account, subject to the liabilities of the Account (other than the
liabilities to life insurance contract owners), which the Partnership hereby
agrees to assume. The amount of that contribution shall be the fair market value
of the net assets of the Pruco Life Account at the end of the day on April 29,
1988, determined in the manner set forth in the prospectus relating to interests
in the Pruco Life Account, dated January 1, 1988.
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3.3 Initial Contribution by Prudential and Pruco Life N.J. Upon the
contribution to the Partnership by Pruco Life on or before the date specified in
Section 3.2 and in the manner therein provided, Prudential and Pruco Life N.J.
will each, on the same date, make a cash contribution of $100,000.00 to the
Partnership, as their respective initial capital contribution.
3.4 Subsequent Contributions. Any Partner may, on any business day, make
additional cash contributions to the Partnership.
3.5 No Other Required Contributions. Except as expressly required by this
Article 3, no Partner shall have any obligation to make any contribution to the
Partnership nor to advance any funds thereto.
3.6 No Interest Payable. No Partner shall receive any interest on its
contributions to the capital of the Partnership.
3.7 Withdrawals. Any Partner may, on any business day, request the
withdrawal of cash from the Partnership, in any amount up to the value of the
Partner's interest in the Partnership in accordance with the provisions of
Article 4.1. Ordinarily payment of the amount requested will be made on the day
following the request. The Partnership reserves the right to defer such payments
for a period of up to six months if the Partners or the Investment Manager
determine that there is insufficient cash available and prompt disposition of
investments
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held by the Partnership cannot be made on commercially reasonable terms.
ARTICLE 4. INTERESTS IN THE PARTNERSHIP
4.1 Partners' Percentage Interests in the Partnership. The value of each
partner's interest in the Partnership at the close of business on April 29,
1988, is equal to the net amount contributed by the Partner on that date. The
value of a Partner's interest on any subsequent day is determined by dividing
the value of the net assets of the Partnership at the end of that day (ignoring,
for these purposes, all contributions made on such day and all payments to be
made on that day to Partners as the result of requests for withdrawals) by the
value of the net assets of the Partnership at the end of the preceding business
day, multiplying the result by the value of the Partner's interest on the
preceding business day and then adding any contributions made by such Partner on
such day and subtracting any distributions made to such Partner on such day. The
Percentage Interest of each Partner on any day is equal to the value of such
Partner's interest in the Partnership on the preceding day divided by the
aggregate value of the interests of all the Partners on that day multiplied by
100.
4.2 Valuation of the Net Assets of the Partnership. The net assets of the
Partnership shall be valued in a manner determined by the Partners which will
conform to the
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manner of valuation set forth in the registration statements filed by each of
the Partners with respect to interests in each of their respective separate
accounts.
4.3. Capital Accounts. The capital account of each Partner on any business
day shall be equal to the value of such Partner's interest in the Partnership at
the end of such business day. The capital account of each Partner on any
non-business day shall be equal to its capital account on the next preceding
business day.
4.4 Allocation of Income, Gains and Losses. Except as the Partners may
determine otherwise in order to comply with the Internal Revenue Code and the
regulations thereunder, all items of Partnership income, gains, losses,
deductions and credits shall be allocated among the Partners on the day each
such item is actually received, accrued or realized by the Partnership in
accordance with each Partner's Percentage Interest on such date. The amount of
depreciation on property of the Partnership and taxable gain or loss upon the
sale of any property of the Partnership shall be allocated so as to take proper
account of the difference between the adjusted tax basis of the property to the
Partnership and the value of the property as determined under Article 4.2.
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ARTICLE 5. MANAGEMENT OF THE VENTURE
5.1 Rights and Procedures in Management. Each Partner shall have one vote
in the management of the affairs of the Partnership, irrespective of the amounts
which each Partner has contributed, or may contribute, to the Partnership. The
affirmative votes of two Partners shall be sufficient to authorize any action to
be taken by the Partnership or on behalf of the Partners. Each Partner may
designate any of its officers or employees or any of the officers or employees
of any partner to act as its agent and attorney in connection with the affairs
of the Partnership by naming such officer or employee in a written designation
of agent and power of attorney delivered to the other Partners. Such agent and
attorney may thereafter, without the necessity of further authorization, cast
the vote of such Partner in connection with the management of the Partnership,
otherwise bind such Partner in all matters pertaining to the Partnership, and
execute all documents pertaining to the affairs of the Partnership on behalf of
such Partner. A Partner may revoke or amend any such designation and power of
attorney in a writing delivered to the other Partners.
5.2. Management Agreement. The Partners hereby authorize any Partner, on
behalf of the Partnership, to enter into an Investment Management Agreement with
Prudential, pursuant to which Prudential or subsidiaries of Prudential selected
by it, shall serve as Investment Manager for the Partnership and, in that
capacity, invest and reinvest the assets of the Partnership
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in accordance with its investment objectives and practices and shall purchase
and sell the properties and securities owned by the Partnership.
5.3 Bank Accounts. The Partnership will maintain separate bank accounts in
such banks as the Partners may designate exclusively for the deposit and
disbursement of all funds of the Partnership. All funds of the Partnership shall
be promptly deposited in such accounts. The Partners from time to time shall
authorize signatories for such accounts.
5.4. Reimbursement for Costs and Expenses. The Partners will fix the
amounts, if any, by which the Partnership will reimburse each Partner for all
costs and expenses incurred by such Partner on behalf and for the benefit of the
Partnership; provided, however, that no overhead or general administrative
expenses of anyone other than the Partnership itself shall be allocated to the
operation of the Partnership, and no salaries, fees, commissions or other
compensations shall be paid by the Partnership to any Partner or to any officer,
employee or affiliate of any Partner for any services rendered to the
Partnership except as may be expressly provided herein or by other written
agreement.
ARTICLE 6. BOOKS AND RECORDS, AUDITS, TAXES, ETC.
6.1 Books; Statements. The Partnership shall keep such books and records as
the Partners shall determine. The
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books and records shall be prepared in accordance with generally accepted
accounting principles consistently applied, except to the extent provided for in
this Agreement or by the Partners. The Partners shall determine the methods to
be used in the preparation of financial statements.
Following the initial contributions to the Partnership pursuant to Article
3 hereof,
(a) on each business day during the term of this Agreement, the Partnership
shall maintain a record of the Percentage Interest of each Partner and of the
value of the interest of each Partner at the end of the day; the value of the
interest of each Partner shall be expressed in dollars and, in addition, in the
discretion of the Partner, in units of Partnership interest, the value of which
shall be determined on each business day.
(b) as soon as practicable after the end of each fiscal year of the
Partnership, a general accounting and audit shall be made by independent
certified public accountants of recognized standing, selected by the Partners
and retained by the Partnership, covering the assets, properties, liabilities
and net worth of the Partnership, and its dealings, transactions and operations
during such fiscal year, and all matters and things customarily included in such
accounts and audits, and such statement shall be furnished to each Partner
within 90 days after the end of such fiscal year, showing each Partner's capital
in
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the partnership, together with a report of the audit scope and audit
findings in the form of a management audit report with an internal control
memorandum.
6.2 Where Maintained. The books, accounts and records of the Partnership
shall be at all times maintained at its principal office.
6.3. Tax Returns. The Partnership shall be treated and shall file its tax
returns as a partnership for Federal, State, municipal and other governmental
income tax and other tax purposes. The Partnership shall cause to be prepared
all Federal, State and municipal partnership tax returns required to be filed.
The Partnership shall submit the returns to each Partner for review and approval
no later than thirty (30) days prior to the due date of the returns. Each
Partner shall notify the other Partners upon receipt of any notice of tax
examination of the Partnership by Federal, State or local authorities.
6.4. Tax Matters Partner. Prudential is hereby designated as the tax
matters partner, as defined in Section 6231(a)(7) of the Internal Revenue Code
of 1986, with respect to operations conducted by the Partnership during the
period that Prudential is a Partner. Prudential shall comply with the
requirements of Section 6221 through 6232 of the Code.
6.5 Tax Policy. The Partnership shall make any and all tax accounting and
reporting elections and adopt such procedures as Prudential may determine.
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6.6. Section 754 Election. The Partnership does not intend to make the
election permitted by Section 754 of the Code.
ARTICLE 7. FISCAL YEAR
7.1. Calendar Year. The fiscal year of the Partnership shall be the
calendar year, unless (subject to obtaining consent of the Internal Revenue
Service) the parties shall hereafter in writing agree otherwise.
ARTICLE 8. DISSOLUTION
8.1 Winding Up by Partners. Upon dissolution of the Partnership by
expiration of the term hereof, by operation of law, by any provision of this
Agreement or by agreement between the Partners, the Partnership's business shall
be wound up and all its assets distributed in liquidation. In such dissolution
the Partners shall be co-liquidating Partners. In such an event the Partners
shall proceed to cause the Partnership's property to be sold and to distribute
the proceeds of sale as provided in Section 8.3. Except in respect of (i) all
assets on which a single, non-severable mortgage or other lien will be in effect
after such distribution, and (ii) any assets which the Partners shall determine
are not readily severable or distributable in kind, the Partners, to the extent
that liquidation of such assets is not required to fulfill the payments, if any,
under subsections (a), (b), (c) and (d) of Section 8.3, shall, if they
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agree, have the right to distribute, in kind, all or a portion of the assets
of the Partnership to the Partners pro rata in accordance with their
respective Percentage Interest at the time of distribution.
8.2 Distributions of Operating Cash Flow. Upon the dissolution of the
Partnership for any reason, the Partners shall continue to share profits and
losses for all tax and other purposes as provided elsewhere in this Agreement
during the period of liquidation and until final termination of the Partnership.
8.3 Distributions of Proceeds of Liquidation. The proceeds of liquidation
shall be applied in the following order of priority:
(a) First. To the payment of:
(1) debts and liabilities of the Partnership except:
(x) loans that may have been made by any Partner to the
Partnership, and
(y) debts secured by lien on property sold subject thereto,
provided that neither the Partnership nor any Partner shall be
personally liable on, or they shall be released from such
debts, and
(2) expenses of liquidation;
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(b) Second. To the setting up of any reserves which the Partners may deem
necessary for any contingent or unforeseen liabilities or obligations
of the Partnership or of the Partners arising out of or in connection
with the Partnership. Said reserves may be deposited by the Partnership
in a bank or trust company acceptable to the Partners, as an escrow
agent, to be held by it for the purpose of disbursing such reserves in
payment of any of the aforementioned liabilities or obligations, and at
the expiration of such period as the Partners shall deem advisable,
distributing the balance, if any, thereafter remaining, in a manner
hereinafter provided;
(c) Third. To the repayment of any loans that may have been made by any of
the Partners.
(d) Fourth. Any balance remaining shall be distributed to the Partners in
proportion to their respective Percentage Interest.
8.4 Orderly Liquidation. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Partnership and the discharge of liabilities to
creditors so as to enable the Partners to minimize the losses normally attendant
upon a liquidation.
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8.5 Financial Statements. During the period of winding up, the
Partnership's then independent certified public accountants shall prepare and
furnish to each of the Partners, until complete liquidation is accomplished, all
the financial statements provided for in Section 6.1.
ARTICLE 9. NOTICES
9.1 In Writing; Address. All notices, elections, offers, acceptances,
demands, consents and reports (collectively "notice") provided for in this
Agreement shall be in writing and shall be given to the Partnership, the
Partners or the other Partners at the addresses set forth below or at such other
address as the Partnership or any of the parties hereto may hereafter specify in
writing.
Prudential: The Prudential Insurance Company of America
Attention: Prudential Realty Group
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Pruco Life & ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ Life N.J.: ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Partnership: c/o The Prudential Insurance Company of America
Attention: Prudential Realty Group
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▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
A copy of any notice or any written communication from the Internal Revenue
Service to the Partnership shall be given to each Partner at the addresses
provided for above.
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9.2 Method. Such notice or other communication may be made in any suitable
way.
9.3 Copies. A copy of any notice, service of process, or other document in
the nature thereof, received by any Partner from anyone other than another
Partner, shall be delivered by the receiving Partner to the other Partners as
soon as practicable.
ARTICLE 10. MISCELLANEOUS
10.1 Additional Documents and Acts. In connection with this Agreement as
well as all transactions contemplated by this Agreement, each Partner agrees to
execute and deliver such additional documents and instruments, and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement, and
all such transactions. All approvals of any party hereunder shall be in writing.
10.2 Interpretation This Agreement and the rights and obligations of the
Partners hereunder shall be interpreted in accordance with the laws of the State
of New Jersey.
10.3 Entire Agreement. This instrument contains all of the understandings
and agreements of whatsoever kind and nature existing between the parties hereto
with respect to this Agreement and the rights, interests, understandings,
agreements and obligations of the respective parties pertaining to the
Partnership.
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10.4 References to This Agreement. Numbered or lettered articles, sections
and subsections herein contained refer to articles, sections and subsections of
this Agreement unless otherwise expressly stated.
10.5 Headings. All headings herein are inserted only for convenience and
ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
10.6 Binding Effect. Except as herein otherwise expressly stipulated to the
contrary, this Agreement shall be binding upon and inure to the benefit of the
parties signatory hereto, and their respective distributees, successors and
assigns.
11.7 Amendments. This Agreement may not be amended, altered or modified
except by a written instrument signed by all parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the day and year first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ SPECIMEN
----------------------------
Senior Vice President
and Actuary
ATTEST:
SPECIMEN
------------------------
Secretary
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PRUCO LIFE INSURANCE COMPANY
By: /s/
-------------------------
President
ATTEST:
/s/
--------------------------
Assistant Secretary
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
By: /s/
-------------------------
President
ATTEST:
/s/
---------------------------
Assistant Secretary
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