Exhibit 3.1
TWENTY-EIGHTH
AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
VORNADO REALTY L.P.
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Dated as of December 30, 2004
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THIS TWENTY-EIGHTH AMENDMENT TO THE SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF VORNADO REALTY L.P. (this "Amendment"),
dated as of December 30, 2004, is hereby adopted by Vornado Realty Trust, a
Maryland real estate investment trust (defined in the Agreement, hereinafter
defined, as the "General Partner"), as the general partner of Vornado Realty
L.P., a Delaware limited partnership (the "Partnership"). For ease of reference,
capitalized terms used herein and not otherwise defined have the meanings
assigned to them in the Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P. dated as of October 20, 1997, as amended by
the Amendment to Second Amended and Restated Agreement of Limited Partnership of
Vornado Realty L.P., dated as of December 16, 1997, and further amended by the
Second Amendment to Second Amended and Restated Agreement of Limited Partnership
of Vornado Realty L.P., dated as of April 1, 1998, the Third Amendment to Second
Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P.,
dated as of November 12, 1998, the Fourth Amendment to Second Amended and
Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
November 30, 1998, the Fifth Amendment to Second Amended and Restated Agreement
of Limited Partnership of Vornado Realty L.P., dated as of March 3, 1999, the
Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership
of Vornado Realty L.P., dated as of March 17, 1999, the Seventh Amendment to
Second Amended and Restated Agreement of Limited Partnership of Vornado Realty
L.P., dated as of May 20, 1999, the Eighth Amendment to Second Amended and
Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
May 27, 1999, the Ninth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Vornado Realty L.P., dated
as of September 3, 1999, the Tenth Amendment to Second Amended and Restated
Agreement of Limited Partnership of Vornado Realty L.P., dated as of September
3, 1999, the Eleventh Amendment to Second Amended and Restated Agreement of
Limited Partnership of Vornado Realty L.P., dated as of November 24, 1999, the
Twelfth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P., dated as of May 1, 2000, the Thirteenth
Amendment to Second Amended and Restated Agreement of Limited Partnership of
Vornado Realty L.P., dated as of May 25, 2000, the Fourteenth Amendment to
Second Amended and Restated Agreement of Limited Partnership of Vornado Realty
L.P., dated as of December 8, 2000, the Fifteenth Amendment to Second Amended
and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as
of December 15, 2000, the Sixteenth Amendment to Second Amended and Restated
Agreement of Limited Partnership of Vornado Realty L.P., dated as of July 25,
2001, the Seventeenth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Vornado Realty L.P., dated as of September 21, 2001, the
Eighteenth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P., dated as of January 1, 2002, the Nineteenth
Amendment to Second Amended and Restated Agreement of Limited Partnership of
Vornado Realty L.P., dated as of July 1, 2002, the Twentieth Amendment to Second
Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P.,
dated as of April 9, 2003, the Twenty-First Amendment to Second Amended and
Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of
July 31, 2003, the Twenty-Second Amendment to Second Amended and Restated
Agreement of Limited Partnership of Vornado Realty L.P., dated as of November
17, 2003, the Twenty-Third Amendment to Second Amended and Restated Agreement of
Limited Partnership of Vornado Realty L.P., dated as of May 27, 2004, the
Twenty-Fourth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P., dated as of August 17, 2004, the
Twenty-Fifth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P., dated as of November 17, 2004, the
Twenty-Sixth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P., dated as of December 17, 2004 and the
Twenty-Seventh Amendment to Second Amended and Restated Agreement of Limited
Partnership of Vornado Realty L.P., dated as of December 20, 2004 (as so
amended, the "Agreement").
WHEREAS, the General Partner desires to establish and set forth the
terms of a new series of Partnership Interests designated as Series D-13
Preferred Units (the "Series D-13 Preferred Units") and to amend the Agreement
to accomplish the same;
WHEREAS, as of the date hereof, the Partnership and the General Partner
entered into a Private Placement Purchase Agreement with East Side Subsidiary
LLC, a Delaware limited liability company (the "Initial Series D-13 Purchaser"),
and Xxxxxx Xxxxxx, in his capacity as Manager of the Initial Series D-13
Purchaser, pursuant to which the Partnership agreed to issue to the Initial
Series D-13 Purchaser Series D-13 Preferred Units;
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WHEREAS, the General Partner has determined that it is in the best
interest of the Partnership to amend the Agreement to establish the Series D-13
Preferred Units and set forth the terms thereof to reflect the issuance of the
above-referenced Series D-13 Preferred Units;
WHEREAS, Section 14.1.B of the Agreement grants the General Partner
power and authority to amend the Agreement without the consent of any of the
Partnership's limited partners if the amendment does not adversely affect or
eliminate any right granted to a limited partner pursuant to any of the
provisions of the Agreement specified in Section 14.1.C or Section 14.1.D of the
Agreement as requiring a particular minimum vote;
WHEREAS, the General Partner has determined that the amendment effected
hereby does not adversely affect or eliminate any of the limited partner rights
specified in Section 14.1.C or Section 14.1.D of the Agreement; and
NOW, THEREFORE, the General Partner hereby amends the Agreement as
follows:
1. Exhibit AD, attached hereto as Attachment 1, is hereby incorporated
by reference into the Agreement and made a part thereof.
2. Section 4.2 of the Agreement is hereby supplemented by adding the
following paragraph to the end thereof:
"AD. Issuance of Series D-13 Preferred Units. From and after
the date hereof the Partnership shall be authorized to issue
Partnership Units of a new series, which Partnership Units are
hereby designated as "Series D-13 Preferred Units". Series
D-13 Preferred Units shall have the terms set forth in Exhibit
AD attached hereto and made part hereof."
3. In making distributions pursuant to Section 5.1(B) of the Agreement,
the General Partner of the Partnership shall take into account the provisions of
Paragraph 2 of Exhibit AD to the Agreement, including, but not limited to,
Paragraph 2.G(ii) thereof.
4. The Agreement is hereby supplemented by adding the following
paragraph at the end of Section 8.6 thereof:
Y. Series D-13 Preferred Unit Exception. Holders of Series
D-13 Preferred Units shall not be entitled to the Redemption
Right provided for in Section 8.6.A of this Agreement."
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5. Exhibit A of the Agreement is hereby deleted and is replaced in its
entirety by new Exhibit A attached hereto as Attachment 2.
6. Except as expressly amended hereby, the Agreement shall remain in
full force and effect.
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IN WITNESS WHEREOF, the General Partner has executed this Amendment as
of the date first written above.
VORNADO REALTY TRUST
By /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Executive Vice President -
Finance and Administration
and Chief Financial Officer
Attachment 1
EXHIBIT AD
DESIGNATION OF THE PREFERENCES, CONVERSION
AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS,
LIMITATIONS AS TO DISTRIBUTIONS, QUALIFICATIONS AND TERMS
AND CONDITIONS OF REDEMPTION
OF THE
SERIES D-13 PREFERRED UNITS
7. Definitions.
In addition to those terms defined in the Agreement, the following
definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in the Agreement and this Exhibit AD:
"Acquisition Agreement" shall have the meaning set forth in Section
2.E(i)(d)(III) hereof.
"Annual Distribution Rate" shall have the meaning set forth in Section
2.B(i) hereof.
"Common Shares" shall mean the common shares of beneficial interest of
the General Partner, par value $.04 per share.
"Distribution Payment Date" shall mean the first calendar day of
January, April, July and October, in each year, commencing on April 1, 2005;
provided, however, that if any Distribution Payment Date falls on any day other
than a Unit Business Day, the distribution payment due on such Distribution
Payment Date shall be paid on the first Unit Business Day immediately following
such Distribution Payment Date.
"Distribution Periods" shall mean quarterly distribution periods
commencing on January 1, April 1, July 1 and October 1 of each year and ending
on and including the day preceding the first day of the next succeeding
Distribution Period (other than the initial Distribution Period with respect to
each Series D-13 Preferred Unit, which shall commence on the date on which such
Series D-13 Preferred Unit was issued by the Partnership and end on and include
the day preceding the first day of the next succeeding Distribution Period).
"Junior Units" shall have the meaning set forth in Paragraph 2.G(i)(c)
below.
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"Liquidation Preference" shall have the meaning set forth in Section
2.C(i) hereof.
"New LLC" shall have the meaning set forth in Section 2.E(i)(d)(III)
hereof.
"Non-Recourse Debt" means indebtedness incurred by New LLC solely to
acquire Redemption Property and that is recourse solely to the Redemption
Property and by its terms is expressly non-recourse to any of New LLC, the
Partnership or any affiliate of the Partnership or any of their respective
properties or assets (other than the Redemption Property).
"Redemption Date" shall have the meaning set forth in Section 2.D(iii)
hereof.
"Redemption Price" shall have the meaning set forth in Section 2.D(i)
hereof.
"Redemption Property" shall have the meaning set forth in Section
2.E(i)(d)(I) hereof.
"Series D-13 Effective Date" shall be the sooner of: (y) December 30,
2006 or (z) the first Unit Business Day following any period in which the
Partnership has failed to make full distributions in respect of the Series D-13
Preferred Units for six (6) Distribution Periods, whether or not consecutive.
"Series D-13 Notice of Redemption" shall have the meaning set forth in
Section 2.E(i)(a) hereof.
"Series D-13 Preferred Unit" means a Partnership Unit issued by the
Partnership having the preferences, conversion and other rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms and
conditions of redemption as are set forth in this Exhibit AD.
"Series D-13 Redeeming Partner" shall have the meaning set forth in
Section 2.E(i)(a) hereof.
"Series D-13 Redemption Amount" shall have the meaning set forth in
Section 2.E(i)(a) hereof.
"Series D-13 Redemption Right" shall have the meaning set forth in
Section 2.E(i)(a) hereof.
"Series D-13 Specified Redemption Date" shall mean the sixtieth Unit
Business Day after receipt by the General Partner of a Series D-13 Notice of
Redemption in respect of the Series D-13 Units; provided, however, that if the
holder has not
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requested Redemption Property pursuant to Section 2.E(d) hereof, the Series D-13
Specified Redemption Date shall mean the tenth Unit Business Day after receipt
by the General Partner of a Series D-13 Notice of Redemption delivered in
respect of a redemption referred to in Treas. Reg. 1.7704-1(e)(1)(vi).
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Partnership or the General
Partner on behalf of the Partnership in its accounting ledgers of any accounting
or bookkeeping entry which indicates, pursuant to a declaration of a
distribution by the General Partner, the allocation of funds to be so paid on
any series or class of Partnership Units; provided, however, that if any funds
for any class or series of Junior Units (as defined below) or any class or
series of Partnership Units ranking on a parity with the Series D-13 Preferred
Units as to the payment of distributions are placed in a separate account of the
Partnership or delivered to a disbursing, paying or other similar agent, then
"set apart for payment" with respect to the Series D-13 Preferred Units shall
mean placing such funds in a separate account or delivering such funds to a
disbursing, paying or other similar agent.
"Third Party Redemption Date" shall have the meaning set forth in
Section 2.D(ii) hereof.
"Unit Business Day" shall mean any day other than a Saturday, Sunday or
a day on which state or federally chartered banking institutions in New York,
New York are not required to be open.
8. Terms of the Series D-13 Preferred Units.
A. Number. As of the close of business on the date of the amendment
pursuant to which this Exhibit AD was adopted, the total number of Series D-13
Preferred Units issued and outstanding will be 1,867,311. The Partnership may
issue additional Series D-13 Preferred Units from time to time in accordance
with the terms of the Agreement and, in connection with any such additional
issuance, the General Partner shall revise Exhibit A to the Agreement to reflect
the total number of Series D-13 Preferred Units then issued and outstanding.
B. Distributions. (i) The holders of the then outstanding Series D-13
Preferred Units shall be entitled to receive, when, as and if declared by the
General Partner, distributions payable in cash at the rate per annum of $0.75
per Series D-13 Preferred Unit (the "Annual Distribution Rate"). Such
distributions with respect to each Series D-13 Preferred Unit shall be
cumulative from the date of issuance of such Series D-13 Preferred Unit and
shall be payable quarterly, when, as and if authorized and declared by the
General Partner, in arrears on Distribution Payment Dates, commencing on the
first Distribution Payment Date. Distributions are cumulative from the most
recent Distribution Payment Date to which distributions have been paid; provided
that the amount per Series D-13 Preferred Unit to be paid in respect of the
initial Distribution
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Period, or any other period shorter or longer than a full Distribution Period,
shall be determined in accordance with paragraph (ii) below. Accumulated and
unpaid distributions for any past Distribution Periods may be declared and paid
at any time, without reference to any regular Distribution Payment Date.
(ii) The amount of distribution per Series D-13 Preferred Unit accruing
in each full Distribution Period shall be computed by dividing the Annual
Distribution Rate by four. The amount of distributions payable for the initial
Distribution Period, or any other period shorter or longer than a full
Distribution Period, on the Series D-13 Preferred Units shall be computed on the
basis of twelve 30-day months and a 360-day year. The holders of the then
outstanding Series D-13 Preferred Units shall not be entitled to any
distributions, whether payable in cash, property or securities, in excess of
cumulative distributions, as herein provided, on the Series D-13 Preferred
Units. No interest, or sum of money in lieu of interest, shall be payable in
respect of any distribution payment or payments on the Series D-13 Preferred
Units that may be in arrears.
(iii) So long as any Series D-13 Preferred Units are outstanding, no
distributions, except as described in the immediately following sentence, shall
be declared or paid or set apart for payment on any series or class or classes
of Parity Units (as defined below) for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on the
Series D-13 Preferred Units for all Distribution Periods terminating on or prior
to the distribution payment date on such class or series of Parity Units, except
in the case of distributions on the Series B-2 Restricted Preferred Units to the
extent not paid due to a lack of funds in the Nongovernmental Account. When
distributions are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all distributions declared upon Series D-13 Preferred
Units and all distributions declared upon any other series or class or classes
of Parity Units shall be declared ratably in proportion to the respective
amounts of distributions accumulated and unpaid on the Series D-13 Preferred
Units and such Parity Units, except in the case of distributions on the Series
B-2 Restricted Preferred Units to the extent not paid due to a lack of funds in
the Nongovernmental Account.
(iv) So long as any Series D-13 Preferred Units are outstanding, no
distributions (other than distributions paid solely in Junior Units or options,
warrants or rights to subscribe for or purchase Junior Units) shall be declared
or paid or set apart for payment or other distribution declared or made upon
Junior Units, nor shall any Junior Units be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of Junior Units
made in respect of a redemption, purchase or other acquisition of Common Shares
made for purposes of and in compliance with requirements of an employee
incentive or benefit plan of the General Partner or any subsidiary, or as
permitted under Article VI of the Declaration of Trust of the General Partner),
for any consideration (or any moneys to be paid to or made available for a
sinking fund for the redemption of any such Junior Units) by the General
Partner, directly or indirectly (except by conversion into or exchange for
Junior Units), unless in each case
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(a) the full cumulative distributions on all outstanding Series D-13 Preferred
Units and any other Parity Units of the Partnership shall have been paid or set
apart for payment for all past Distribution Periods with respect to the Series
D-13 Preferred Units and all past distribution periods with respect to such
Parity Units, except to the extent that distributions on the Series B-2
Restricted Preferred Units are not then able to be paid owing to a lack of funds
in the Nongovernmental Account, and (b) sufficient funds shall have been paid or
set apart for the payment of the distribution for the current Distribution
Period with respect to the Series D-13 Preferred Units and any Parity Units,
except to the extent that distributions on the Series B-2 Restricted Preferred
Units are not then able to be paid owing to a lack of funds in the
Nongovernmental Account.
C. Liquidation Preference. (i) In the event of any liquidation,
dissolution or winding up of the Partnership or the General Partner, whether
voluntary or involuntary, before any payment or distribution of the assets of
the Partnership shall be made to or set apart for the holders of Junior Units,
holders of the Series D-13 Preferred Units shall be entitled to receive an
amount equal to the holder's Capital Account in respect of those Series D-13
Preferred Units as of the date of such liquidation, dissolution or winding up
after the Carrying Values of all Partnership assets are adjusted pursuant to
Section 1.D of Exhibit B to the Agreement and the holder's Capital Account is
adjusted accordingly (the "Liquidation Preference"); but the holders of Series
D-13 Preferred Units shall not be entitled to any further payment. If, upon any
such liquidation, dissolution or winding up of the Partnership or the General
Partner, the assets of the Partnership, or proceeds thereof, distributable to
the holders of Series D-13 Preferred Units, shall be insufficient to pay in full
the preferential amount aforesaid and liquidating payments on any other Parity
Units, then such assets, or the proceeds thereof, shall be distributed among the
holders of the Series D-13 Preferred Units and the holders of any such other
Parity Units ratably in accordance with the respective amounts that would be
payable on such Series D-13 Preferred Units and any such other Parity Units if
all amounts payable thereon were paid in full. For the purposes of this Section
2.C, (i) a consolidation or merger of the Partnership or the General Partner
with one or more entities, (ii) a statutory share exchange by the Partnership or
the General Partner and (iii) a sale or transfer of all or substantially all of
the Partnership's or the General Partner's assets, shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Partnership or General Partner.
(ii) Subject to the rights of the holders of Partnership Units of any
series or class or classes of shares ranking on a parity with or prior to the
Series D-13 Preferred Units upon any liquidation, dissolution or winding up of
the General Partner or the Partnership, after payment shall have been made in
full to the holders of the Series D-13 Preferred Units, as provided in this
Section, any series or class or classes of Junior Units shall, subject to any
respective terms and provisions applying thereto, be entitled to receive any and
all assets remaining to be paid or distributed, and the holder of the Series
D-13 Preferred Units shall not be entitled to share therein.
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D. The Partnership's Right to Redeem the Series D-13 Preferred Units.
(i) Except as set forth in Section 2.E below, the Series D-13 Preferred Units
shall not be redeemable prior to December 30, 2011. Subject to the provisions of
Section 2.E below, on and after December 30, 2011, the General Partner may, at
its option, cause the Partnership to redeem the Series D-13 Preferred Units in
whole or in part, as set forth herein, subject to the provisions described
below, at a redemption price, payable in cash, in an amount equal to $25 per
unit for the Series D-13 Preferred Units being redeemed (the "Redemption
Price"). Upon any such redemption, the Partnership shall also pay any
accumulated and unpaid distributions owing in respect of the Series D-13
Preferred Units being redeemed.
(ii) If fewer than all of the outstanding Series D-13 Preferred Units
that are not held by the General Partner are to be redeemed, the Series D-13
Preferred Units to be redeemed from each holder (other than the General Partner)
shall be selected pro rata (as nearly as practicable without creating fractional
units). Any notice of redemption delivered pursuant to this Section 2.D(ii) will
be (x) faxed and (y) mailed by the Partnership, by certified mail, postage
prepaid, not less than 30 nor more than 60 days prior to the date upon which
such redemption is to occur (the "Third Party Redemption Date"), addressed to
each holder of record of the Series D-13 Preferred Units at their respective
addresses as they appear on the records of the Partnership. No failure to give
or defect in such notice shall affect the validity of the proceedings for the
redemption of any Series D-13 Preferred Units. In addition to any information
required by law, each such notice shall state: (a) the Third Party Redemption
Date, (b) the amount payable per Series D-13 Preferred Unit upon redemption,
including the Redemption Price and any amount payable pursuant to Section
2.D(iv) hereof, (c) the aggregate number of Series D-13 Preferred Units to be
redeemed and, if fewer than all of the outstanding Series D-13 Preferred Units
are to be redeemed, the number of Series D-13 Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series D-13
Preferred Units not held by the General Partner that the total number of Series
D-13 Preferred Units held by such holder represents and determined as nearly as
practicable without creating fractional interests) of the aggregate number of
Series D-13 Preferred Units to be redeemed, (d) the place or places where such
Series D-13 Preferred Units are to be surrendered for payment of the amount
payable upon redemption and (e) that payment of such amount will be made upon
presentation and surrender of such Series D-13 Preferred Units. If the
Partnership gives a notice of redemption in respect of Series D-13 Preferred
Units pursuant to this Section 2.D(ii), then, by 12:00 noon, New York City time,
on the Third Party Redemption Date, the Partnership will deposit irrevocably in
trust for the benefit of the holders of Series D-13 Preferred Units being
redeemed funds sufficient to pay the applicable amount payable with respect to
such Series D-13 Preferred Units and will give irrevocable instructions and
authority to pay such amount to the holders of the Series D-13 Preferred Units
upon surrender of the Series D-13 Preferred Units by such holders at the place
designated in the notice of redemption.
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(iii) Such Series D-13 Preferred Units as may be held by the General
Partner may be redeemed, in whole or in part, at the option of the General
Partner, at any time, upon payment by the Partnership to the General Partner of
the Redemption Price and any amount payable pursuant to Section 2.D (iv) hereof
with respect to such Series D-13 Preferred Units (such date is herein referred
to collectively with the Third Party Redemption Date as the "Redemption Date").
(iv) Upon any redemption of Series D-13 Preferred Units pursuant to
this Section 2.D, the Partnership shall pay any accumulated and unpaid
distributions for any Distribution Period, or any other period shorter than a
full Distribution Period, ending on or prior to the Redemption Date. On and
after the Redemption Date, distributions will cease to accumulate on the Series
D-13 Preferred Units called for redemption, unless the Partnership defaults in
payment therefor. If any date fixed for redemption of Series D-13 Preferred
Units is not a Unit Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Unit Business Day
(and without any interest or other payment in respect of any such delay) except
that, if such Unit Business Day falls in the next calendar year, such payment
will be made on the immediately preceding Unit Business Day, in each case with
the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price is improperly withheld or refused and not paid
by the Partnership, distributions on such Series D-13 Preferred Units will
continue to accumulate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable Redemption Price. Except
as provided above, the Partnership shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series D-13 Preferred Units called
for redemption under this Section 2.D.
(v) If full cumulative distributions on the Series D-13 Preferred Units
and any other series or class or classes of Parity Units of the Partnership have
not been paid or declared and set apart for payment, then except in fulfillment
of an exercise of the redemption rights set forth in Paragraph 2.E below or, in
the case of Parity Units, the exercise of any similar redemption, conversion or
other similar option granted concurrently with the issuance of such Parity
Units, and except to the extent that such distributions or amounts distributable
on the Series B-2 Restricted Preferred Units may not be payable due to a lack of
funds in the Nongovernmental Account, the Series D-13 Preferred Units may not be
redeemed in part and the Partnership may not purchase, redeem or otherwise
acquire Series D-13 Preferred Units or any Parity Units other than in exchange
for Junior Units.
Except as provided in Section 2.E below, as promptly as practicable
after the surrender of any such Series D-13 Preferred Units so redeemed, such
Series D-13 Preferred Units shall be exchanged for the amount of cash (without
interest thereon) payable therefore pursuant to Section 2.D(i). If fewer than
all the Series D-13 Preferred Units represented by any physical certificate are
redeemed, then the Partnership shall
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issue new certificates representing the unredeemed Series D-13 Preferred Units
without cost to the holder thereof.
(vi) Any redemption in accordance with this Section 2.D shall be
subject to the provisions of Section 2.E(i)(d) below to the extent applicable.
E. Series D-13 Preferred Unit Holder Redemption Right.
(i) General. (a) Subject to paragraphs (ii) and (iii) below, on or
after the Series D-13 Effective Date, the holder of the Series D-13 Preferred
Units shall have the right (the "Series D-13 Redemption Right") to require the
Partnership to redeem the Series D-13 Preferred Units on any Series D-13
Specified Redemption Date, in cash, in an amount equal to the holder's Capital
Account in respect of the Series D-13 Preferred Units being redeemed as of the
Series D-13 Specified Redemption Date after the Carrying Values of all
Partnership assets are adjusted pursuant to Section 1.D of Exhibit B to the
Agreement and the holder's Capital Account is adjusted accordingly for the
Series D-13 Preferred Units being redeemed (the "Series D-13 Redemption
Amount"). Any such Series D-13 Redemption Right shall be exercised pursuant to
notice of redemption comparable to the Notice of Redemption required under
Section 8.6 of the Agreement (a "Series D-13 Notice of Redemption") delivered to
the Partnership (with a copy to the General Partner) by the Limited Partner who
is exercising the Series D-13 Redemption Right (the "Series D-13 Redeeming
Partner"). A holder of the Series D-13 Preferred Units may only exercise the
Series D-13 Redemption Right in respect of all Series D-13 Preferred Units held
by such holder on the date of the applicable Series D-13 Redemption Notice
unless the amount of Series D-13 Preferred Units to be redeemed by such holder
equals or exceeds 800,000 Series D-13 Preferred Units. Any Series D-13
Redemption Right pursuant to which the holder seeks to acquire Redemption
Property as contemplated in paragraph (d) below must be in whole and not in
part. In addition, any redemption pursuant to the Series D-13 Redemption Right
shall be subject to all of the provisions of the Agreement governing redemptions
under Section 8.6 of the Agreement as if it were a redemption under that
section, except as otherwise provided herein.
(b) The Series D-13 Redeeming Partner shall have no right with
respect to any Series D-13 Preferred Units so redeemed to receive any
distributions paid after the Series D-13 Specified Redemption Date, unless
the record date for the distribution preceded the Series D-13 Specified
Redemption Date. If the record date for such distribution was a date prior
to the Series D-13 Specified Redemption Date and the Distribution Payment
Date in respect of such distribution was a date after the Series D-13
Specified Redemption Date, such Series D-13 Redeeming Partner shall be
required, as a condition of the redemption of such Series D-13 Preferred
Units, to pay the amount of such distribution to the Partnership.
(c) Subject to the limits in Section 2.I below in respect of the
right to request Redemption Property pursuant to paragraph (d) below, the
Assignee of
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any Limited Partner may exercise the rights of such Limited Partner
pursuant to this Section 2.E, and such Limited Partner shall be deemed to
have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Limited Partner's Assignee.
(d) (I) At the time the Partner holding Series D-13 Preferred
Units provides written notice to the Partnership of its election to request
the Partnership to redeem all, but not less than all, of its Series D-13
Preferred Units in accordance with Section 2.E(i)(a), the Series D-13
Redeeming Partner may request that the Partnership satisfy all of such
redemption request with property ("Redemption Property") designated by the
holder, in lieu of cash, so long as the holder includes such request in the
holder's Series D-13 Redemption Notice and the request otherwise complies
with the remainder of this paragraph (d). Similarly, upon receiving notice
of an election by the Partnership to redeem all or a portion of the Series
D-13 Preferred Units pursuant to Section 2.D(i) above, the receiving
Partner (references to the Series D-13 Redeeming Partner shall include, for
purposes of this paragraph (d), such receiving Partner) may request that
the Partnership satisfy all of the redemption with Redemption Property in
lieu of cash by providing written notice of its request to the Partnership
that complies with the remainder of this paragraph (d) not later than five
(5) Business Days after receipt by the Partner of the notice of redemption
contemplated in Section 2.D(ii) above. In the case of an election by the
Series D-13 Redeeming Partner pursuant to Section 2.E(i)(a), the Series
D-13 Redeeming Partner shall consult with the Partnership on the details of
any proposed redemption for a reasonable time in advance of making the
formal written request, and any such formal request for Redemption Property
in lieu of cash shall be accompanied by an explanation, in reasonable
detail, of the specific terms of the proposed redemption including, among
other things, the identity of the specific Redemption Property to be
delivered, the terms, including timing, upon which such property can be
acquired and the means by which the holder will ensure that the Partnership
can obtain and deliver the proposed Redemption Property to the holder free
and clear of debt, other than Non-Recourse Debt, and free and clear of
other liabilities or encumbrances, without any liability to the Partnership
or any of its affiliates (other than the purchase price therefore, which
amount shall not exceed the Series D-13 Redemption Amount of the Series
D-13 Preferred Units to be redeemed) and otherwise in a manner consistent
with the remainder of this Section. In the event that at any time there is
more than one holder of Series D-13 Preferred Units, a request to be
redeemed for Redemption Property must be made by all holders of Series D-13
Preferred Units.
(II) If the Series D-13 Redeeming Partner delivers a request for
Redemption Property in lieu of cash as contemplated above, the
Partnership shall consider the request in good faith, and if the nature
and character of the proposed Redemption Property (including, without
limitation, the effect that ownership of the property would have on the
14
Partnership and/or any of its direct or indirect partners), the terms
upon which it is available to the Partnership and can be delivered on
to the holder and the other terms and circumstances of the proposed
alternate redemption are acceptable to the Partnership, in its sole
discretion, then, as a prerequisite to the Partnership's obligation to
provide the alternate consideration, the Partnership and the holder
shall negotiate and enter into an agreement (a "Redemption Agreement")
on terms consistent with this Section and otherwise acceptable to the
Partnership in its discretion memorializing the parties' respective
obligations. If the proposed Redemption Property or the terms or other
circumstances of the proposed alternate redemption are not acceptable
to the Partnership in its sole discretion, the Partnership shall notify
the holder of its determination and, following such notice, the
Partnership will be entitled to proceed with the redemption in question
in accordance with the other provisions of the Partnership Agreement
and this Exhibit and as if the Series D-13 Redeeming Partner had not
requested Redemption Property; provided, however, that if the Series
D-13 Redeeming Partner initiated the redemption pursuant to this
Section 2.E, the Partnership will not complete the redemption until on
or after the sixth (6th) Business Day following receipt of such notice
by the Series D-13 Redeeming Partner; and provided further that if the
Partnership notifies the Series D-13 Redeeming Partner of a
determination that it will not proceed with the request for Redemption
Property in connection with a redemption that was initiated by the
Series D-13 Redeeming Partner, the Series D-13 Redeeming Partner may,
in its sole discretion, within five (5) Business Days of such notice
from the Partnership, deliver in writing to the Partnership a statement
revoking his request to be redeemed pursuant to this Section 2.E and
upon timely receipt of such statement by the Partnership, the
redemption request will be terminated and the holder will not be
redeemed as a result of such request.
(III) Unless otherwise agreed by the Partnership in its sole
discretion at the time of the proposed redemption, any such Redemption
Agreement shall reflect each of the following:
(A) The Partnership will form a limited liability company
("New LLC"), intended to be treated as a disregarded entity for
U.S. federal income tax purposes, to acquire the Redemption
Property and at no time will the Partnership or any of its other
affiliates assume or otherwise be liable for any obligations of
New LLC or any obligations arising in connection with or otherwise
relating to New LLC or the Redemption Property.
(B) Immediately prior to the purchase of the Redemption
Property, the Partnership will contribute cash to New LLC in an
15
amount equal to the purchase price of the Redemption Property (not
to exceed the Series D-13 Redemption Amount of the Series D-13
Preferred Units to be redeemed). Neither the Partnership nor any
of its affiliates will have any obligation to contribute any
additional capital to New LLC or obtain any financing for or
provide any financing to New LLC.
(C) The Series D-13 Redeeming Partner will take the lead in
negotiating the terms of the agreement pursuant to which New LLC
will acquire the Redemption Property (the "Acquisition
Agreement"), provided that the Partnership shall have access to
and the right, at the Series D-13 Redeeming Partner's cost, to
participate in such negotiations with counsel of the Partnership's
selection. Each holder of Series D-13 Preferred Units agrees that
it is not for any purpose an agent of New LLC, the Partnership or
any of their respective affiliates, and in no event shall it hold
itself out as an agent of New LLC, the Partnership of any of their
respective affiliates. The terms on which New LLC is to acquire
the Redemption Property shall be consistent with this Section and
otherwise subject to the Partnership's prior consent in the
Partnership's sole discretion. The closing of the purchase shall
occur on or as soon as reasonably possible following the
applicable Series D-13 Specified Redemption Date and in no event
shall the total purchase price for the Redemption Property exceed
the sum of (i) Series D-13 Redemption Amount for the Series D-13
Preferred Units to be redeemed plus (ii) the amount of any
Non-Recourse Debt. Except as set forth in the immediately
preceding sentence, New LLC will purchase the Redemption Property
free and clear of any financing or other similar liabilities or
other encumbrances.
(D) The Partnership acknowledges that the Series D-13
Redeeming Partner would be exercising this election for alternate
redemption arrangements with a view toward receiving all or some
portion of the distribution without recognition of gain or loss by
it as contemplated in Section 731 of the Code. If and to the
extent consistent with then-applicable law and regulations and
otherwise determined by the Partnership, after consulting with its
counsel and tax advisers and after taking into account the General
Partner's status as a Real Estate Investment Trust under the Code
and all other relevant tax and other considerations affecting the
Partnership and its Partners, to be reasonable and prudent, the
Partnership shall report the redemption in a manner consistent
with the foregoing objective. The Partnership obligations in this
regard shall be limited solely to the express requirements set
forth in this
16
Section and none of the Partnership nor any of its partners or
other affiliates shall have any responsibility for the success, or
any liability for any failure, of the Series D-13 Redeeming
Partner's to achieve their desired objective.
(E) Promptly following New LLC's acquisition of the
Redemption Property, the Partnership will deliver all of the
membership interests in New LLC to the holder for credit against
the Series D-13 Redemption Amount otherwise owing in respect of
the Series D-13 Preferred Units then being redeemed. The delivery
will occur concurrent with or as soon as practical following the
Series D-13 Specified Redemption Date for the Series D-13
Preferred Units in question, and the amount of such credit will be
an amount equal to the sum of (i) all capital contributed by the
Partnership to New LLC plus (ii) an amount equal to a return on
the amount of capital contributed by the Partnership to New LLC at
a rate per annum equal to the Partnership's per annum borrowing
rate under its then current unsecured line of credit (or its most
recent unsecured line of credit if none in effect at such time)
from the date of contribution to New LLC until the date of
redemption. The distribution of the Redemption Property to the
Series D-13 Redeeming Partner shall be in lieu of a distribution
to the Series D-13 Redeeming Partner of the Series D-13 Redemption
Amount, provided that if and to the extent the foregoing credit is
less than the Series D-13 Redemption Amount, the Partnership will
pay the amount of such deficiency to the Series D-13 Redeeming
Partner in cash or Common Shares (as contemplated in Section
2.E(ii) below) concurrently with the distribution of the
Redemption Property (except that if the Partnership has determined
that any costs or expenses owing or expected to be owing to the
Partnership or any of its affiliates in connection with the
redemption have not been paid, the Partnership will be entitled to
hold back its reasonable estimate of all such costs and expenses
and to apply any such holdback toward payment of any such costs or
expenses and the Partnership will return any excess of such
holdback over such costs to the Series D-13 Redeeming Partner as
soon as such excess amounts are able to be determined with
reasonable certainty).
(F) Any Series D-13 Notice of Redemption containing a request
for alternate redemption arrangements shall become irrevocable
upon execution by New LLC of any binding agreement relating to the
proposed purchase of the Redemption Property.
17
(G) Promptly upon request by the Partnership the Series D-13
Redeeming Partner will pay directly in cash, or reimburse the
Partnership in cash for, all costs and expenses incurred by the
Partnership and its affiliates (other than expenses paid by New
LLC with capital funded as contemplated in (C) above), including,
without limitation, all transfer taxes and recording charges and
all fees and disbursements of accountants, counsel and other
professional advisers, incurred in connection with or as a result
of the Series D-13 Redeeming Partner's request to have its Series
D-13 Preferred Units redeemed with Redemption Property, whether or
not the holder's Series D-13 Preferred Units are in fact redeemed
or the Redemption Property is ultimately acquired.
(H) Neither the Partnership nor any of its affiliates shall
be required to accept or assume any liability whatsoever,
including taxes or other similar charges, with respect to the
purchase and transfer or otherwise with respect to any Redemption
Property. The Partnership will not be required to effect or
cooperate in completing an alternate redemption as described above
unless the Series D-13 Redeeming Partner provides the Partnership
with a written agreement in form and substance satisfactory to the
Partnership and from a credit-worthy entity acceptable to the
Partnership in its discretion in which the granting party agrees
to indemnify and hold harmless the Partnership and the General
Partner (and their respective partners, members, trustees,
directors, officers, employees, agents and affiliates) against any
and all liabilities (including tax liabilities and penalties),
losses, claims, damages and expenses, including accountant's and
attorneys' fees and disbursements, in any way arising out of the
performance of the obligations of the Partnership under this
Section 2.E(i)(d).
(I) Any xxxxxxx money deposit or other similar security to be
provided in connection with the acquisition of any Redemption
Property shall be provided by the Series D-13 Redeeming Partner
and shall be treated as a loan by the Series D-13 Redeeming
Partner to New LLC bearing interest only at the rate actually
earned by New LLC on the deposit, if any, and only maturing at the
closing of the related acquisition and distribution.
(ii) General Partner Assumption of Right. (a) If the holder of the
Series D-13 Preferred Units has delivered a Series D-13 Notice of Redemption
pursuant to which the Partnership is required to redeem all or a portion of the
Series D-13 Preferred Units subject to such notice for cash, the General Partner
may, in its sole and absolute discretion (subject to any limitations on
ownership and transfer of Shares set forth in the Declaration of Trust), elect
to assume directly and satisfy the Series D-13
18
Redemption Right by paying to the Series D-13 Redeeming Partner either (x) an
amount, in cash, equal to the Series D-13 Redemption Amount for the Series D-13
Preferred Units being redeemed for cash or (y) a number of fully paid and
non-assessable Common Shares equal to the quotient of (A) the aggregate
Liquidation Preference of the Series D-13 Preferred Units being redeemed for
cash plus all accrued and unpaid distributions (whether or not declared) in
arrears on such Series D-13 Preferred Units for any Distribution Period ending
on or prior to the Series D-13 Specified Redemption Date divided by (B) the
Value of a Common Share (determined as of the Series D-13 Specified Redemption
Date). Unless the General Partner, in its sole and absolute discretion, shall
exercise its right to assume directly and satisfy the Series D-13 Redemption
Right, the General Partner shall not have any obligation to the Series D-13
Redeeming Partner or to the Partnership with respect to the Redeeming Partner's
exercise of the Series D-13 Redemption Right. In the event the General Partner
shall exercise its right to satisfy the Series D-13 Redemption Right in the
manner described in the first sentence of this paragraph (ii) and shall fully
perform its obligations in connection therewith, the Partnership shall have no
right or obligation to pay any amount to the Series D-13 Redeeming Partner with
respect to such Series D-13 Redeeming Partner's exercise of the Series D-13
Redemption Right, and each of the Series D-13 Redeeming Partner, the Partnership
and the General Partner shall, for federal income tax purposes, treat the
transaction between the General Partner and the Series D-13 Redeeming Partner as
a sale of the Series D-13 Redeeming Partner's Partnership Units to the General
Partner. Nothing contained in this paragraph (ii) shall imply any right of the
General Partner to require any holder of Series D-13 Preferred Units to exercise
the Series D-13 Redemption Right afforded pursuant to paragraph (i) above. No
fractional Common Shares shall be issued upon redemption of any Series D-13
Preferred Unit pursuant to this paragraph 2.E. Instead, the Partnership or
General Partner shall pay the Partner to which such fractional Common Share
would otherwise have been issuable an amount in lieu thereof in cash based upon
the Value of the Common Shares as of the date of redemption.
(b) In the event that the Partnership redeems Series D-13
Preferred Units for cash in accordance with Section 2.E(i)(a), the units so
redeemed shall be terminated. In the event that the General Partner
determines to pay the Series D-13 Redeeming Partner in the form of Common
Shares, the General Partner shall be treated for all purposes of the
Agreement as the owner of those Series D-13 Preferred Units so acquired and
concurrently with any such acquisition of Series D-13 Preferred Units by
the General Partner for Common Shares, the Series D-13 Preferred Units so
acquired shall automatically be converted into a number of fully paid and
non-assessable Class A Units obtained by dividing the sum of (x) the
aggregate Liquidation Preference of the Series D-13 Preferred Units so
acquired plus (y) all accrued and unpaid distributions (whether or not
declared) in arrears for any Distribution Period ending on or prior to the
Redemption Date by the product of the Value of a Common Share (determined
as of the Redemption Date) and the Conversion Factor as in effect on such
date. The Conversion Factor in effect as of the date hereof shall be deemed
to be 1.0 for all calculations in respect of the Series D-13
19
Preferred Units, and shall be adjusted as provided in the Partnership
Agreement. If fewer than all the Series D-13 Preferred Units represented by
any certificate are redeemed, the Partnership shall issue new certificates
representing the unredeemed Series D-13 Preferred Units without cost to the
holders thereof.
(c) In the event that there shall be outstanding at any time
Series D-13 Preferred Units and the General Partner shall be a party to any
transaction (including, without limitation, a merger, consolidation or
statutory share exchange with respect to the Common Shares), in each case
as a result of which the Common Shares are converted into the right to
receive shares of capital stock, other securities or other property
(including cash or any combination thereof), thereafter the consideration
deliverable by the General Partner in lieu of a Common Share shall be the
kind and amount of shares of capital stock and other securities and
property (including cash or any combination thereof) that was received upon
consummation of such transaction in return for one Common Share; and the
General Partner may not become a party to any such transaction unless the
terms thereof are consistent with the foregoing or it may not deliver
Common Shares hereunder.
(d) Each Series D-13 Redeeming Partner agrees to execute such
documents as the General Partner may reasonably require in connection with
the issuance of Common Shares upon exercise of the Series D-13 Redemption
Right.
(iii) Exceptions to Exercise of Redemption Right. Notwithstanding the
provisions of paragraphs (i) and (ii) above, if the Partnership receives a
redemption request for cash or a redemption request for Redemption Property that
the Partnership determines will not be satisfied with Redemption Property, the
Partner requesting such redemption shall not be entitled to exercise the Series
D-13 Redemption Right if (but only as long as) the delivery of Common Shares to
such Partner on the Series D-13 Specified Redemption Date (a) would be
prohibited under the Declaration of Trust, or (b) as long as the Common Shares
are Publicly Traded, would be prohibited under applicable federal or state
securities laws or regulations (assuming the General Partner would in fact
assume and satisfy the Series D-13 Redemption Right).
(iv) No Liens on Series D-13 Preferred Units Delivered for Redemption.
Each holder of any Series D-13 Preferred Units covenants and agrees with the
General Partner that all Series D-13 Preferred Units delivered for redemption
shall be delivered to the Partnership or the General Partner, as the case may
be, free and clear of all liens, and, notwithstanding anything contained herein
to the contrary, neither the General Partner nor the Partnership shall be under
any obligation to acquire Series D-13 Preferred Units which are or may be
subject to any liens. Each holder of Series D-13 Preferred Units further agrees
that, in the event any state or local property transfer tax is payable as a
result of the transfer of its Series D-13 Preferred Units to the Partnership or
the General Partner, such holder shall assume and pay such transfer tax.
20
(v) Requirements for Common Shares Delivered Upon Redemption of Series
D-13 Preferred Units. Any Common Shares delivered upon redemption of any Series
D-13 Preferred Units pursuant to Section 2.E hereof shall be (i) listed for
trading on the exchange or national market on which the Common Shares are
Publicly Traded and (ii) immediately saleable upon receipt by the Series D-13
Redeeming Partner, which may be pursuant to an effective registration statement
filed with the Securities and Exchange Commission providing for the resale of
such Common Shares as set forth therein, without further registration under the
Securities Act, or any state securities or blue sky law and with no volume,
holding period or other restrictions thereon pursuant to Rule 144 of the
Securities Act, or otherwise, unless the holder is an affiliate of the General
Partner. A holder of Series D-13 Preferred Units shall cooperate with and
provide to the General Partner information reasonably necessary for purposes of
satisfying information requirements applicable to any registration statement
filed in respect of Common Shares subject to this Section 2.E(v). Additional
obligations of the General Partner and the holders in respect of Common Shares
to be delivered in the event that the General Partner determines to satisfy a
redemption request with Common Shares that are covered by an effective resale
registration statement are set forth in Schedule 2 hereto.
F. Conversion. The Series D-13 Preferred Units are not convertible into
or redeemable or exchangeable for any other property or securities of the
General Partner Entity or the Partnership at the option of any holder of Series
D-13 Preferred Units, except as provided in Sections 2.D and 2.E hereof.
G. Ranking. (i) Any class or series of Partnership Units shall be
deemed to rank:
(a) prior to the Series D-13 Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation,
dissolution or winding up of the General Partner or the Partnership, if the
holders of such class or series of Partnership Units shall be entitled to
the receipt of distributions or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to
the holders of Series D-13 Preferred Units;
(b) on a parity with the Series D-13 Preferred Units, as to the
payment of distributions and as to the distribution of assets upon
liquidation, dissolution or winding up of the General Partner or the
Partnership, whether or not the distribution rates, distribution payment
dates or redemption or liquidation prices per Partnership Unit be different
from those of the Series D-13 Preferred Units, if the holders of such
Partnership Units of such class or series and the Series D-13 Preferred
Units shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up in proportion to
their respective amounts of accrued and unpaid distributions per
Partnership Unit or liquidation preferences, without preference or priority
one over the other, except to the extent that such distributions or amounts
distributable on the
21
Series B-2 Restricted Preferred Units may not be payable due to a lack of
funds in the Nongovernmental Account ("Parity Units"); and
(c) junior to the Series D-13 Preferred Units, as to the payment
of distributions or as to the distribution of assets upon liquidation,
dissolution or winding up of the General Partner or the Partnership, if
such class or series of Partnership Units shall be Class A Units or if the
holders of Series D-13 Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
Partnership Units of such class or series ("Junior Units").
(ii) The Series A Preferred Units, Series B Pass-Through Preferred
Units and Series C Pass-Through Preferred Units shall be Parity Units with
respect to the Series D-13 Preferred Units and the holders of the Series D-13
Preferred Units and Series A Preferred Units, Series B Pass-Through Preferred
Units and Series C Pass-Through Preferred Units shall be entitled to the receipt
of distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accumulated and unpaid
distributions per Partnership Unit or liquidation preferences, without
preference or priority one over the other, except in the case of distributions
on the Series B-2 Restricted Preferred Units to the extent not payable due to a
lack of funds in the Nongovernmental Account. The Series D-13 Preferred Units
shall be Preference Units and shall receive distributions on a basis pari passu
with other Partnership Units, if any, receiving distributions pursuant to
Section 5.1.B(i) of the Agreement, except to the extent that distributions on
the Series B-2 Restricted Preferred Units may not be paid due to a lack of funds
in the Nongovernmental Account. Distributions made pursuant to Subsections
G(ii)(a) and G(ii)(b) of this Exhibit AD shall be made pro rata with other
distributions made to other Partnership Units as to which they rank pari passu
based on the ratio of the amounts to be paid in respect of the Series D-13
Preferred Units and such other Partnership Units, as applicable, to the total
amounts to be paid in respect of the Series D-13 Preferred Units and such other
Partnership Units taken together on the Partnership Record Date, except in the
case of distributions on the Series B-2 Restricted Preferred Units to the extent
such distributions may not be paid due to a lack of funds in the Nongovernmental
Account.
(iii) For purposes of allocations of items made pursuant to Article VI
of the Agreement, the Series D-13 Preferred Units shall be Preference Units and
shall be allocated items pari passu with the allocation of items to holders of
Preference Units (i.e., as allocated in Section 6.1.A(ii) and Section 6.1.B (x)
of the Agreement) and shall share in those allocations in a pro rata manner
based on the distributions and allocations of items, as applicable, made to
Preference Units, as applicable; references to Preference Units in Article VI of
the Agreement shall be deemed to also refer to Series D-13 Preferred Units
except that references to distributions made to Preference Units shall be deemed
to refer to distributions made to the Series D-13 Preferred Units in a pro rata
manner with such distributions, if any, made to the Preference Units.
22
H. Voting. (i) Except as provided in this Section H or as required by
law, the holders of the Series D-13 Preferred Units shall not be entitled to
vote at any meeting of the Partners or for any other purpose or otherwise to
participate in any action taken by the Partnership or the Partners, or to
receive notice of any meeting of the Partners.
(ii) So long as any Series D-13 Preferred Units are outstanding, the
General Partner shall not authorize the creation of or cause the Partnership to
issue Partnership Units of any class or series or any interest in the
Partnership convertible into or exchangeable for Partnership Units of any class
or series ranking prior to the Series D-13 Preferred Units in the distribution
of assets on any liquidation, dissolution or winding up of the General Partner
or the Partnership or in the payment of distributions, or reclassify any
Partnership Units of the Partnership into any such senior Partnership Units.
I. Restrictions on Transfer. In addition to the restrictions on
transfer set forth in Article XI of the Agreement, any direct or indirect
transfer of these Series D-13 Units which results in (x) any Series D-13
Preferred Units not being (i) on December 30, 2004 through January 2, 2005,
owned indirectly by Host Marriott but controlled solely by Xxxxxx Xxxxxx and
(ii) on January 3, 2005 and thereafter, beneficially owned, directly or
indirectly, and controlled, solely by one or more of Xxxxxx Xxxxxx, members of
Xxxxxx Xxxxxx'x immediate family (i.e., his spouse, children, grandchildren and
the spouses of his children and grandchildren) or (y) the Series D-13 Preferred
Units having a tax basis at least equal to their Liquidation Preference shall in
each case terminate immediately the right of any holder of Series D-13 Preferred
Units to request Redemption Property pursuant to Section 2.E(i)(d) hereof.
J. General. (i) At such time, if any, as the General Partner becomes a
holder of Series D-13 Preferred Units, the rights of the General Partner, in its
capacity as the holder of the Series D-13 Preferred Units, will be in addition
to and not in limitation of any other rights or authority of the General
Partner, in any other capacity, under the Agreement. In addition, nothing
contained in this Exhibit AD shall be deemed to limit or otherwise restrict any
rights or authority of the General Partner under the Agreement, other than in
its capacity as the holder of Series D-13 Preferred Units.
23
[Schedule 1]
24
Schedule 2
I. RESALE REGISTRATION STATEMENT. Whenever the General Partner
satisfies a redemption request by providing a holder of Series D-13 Preferred
Units with Common Shares subject to a resale registration statement, the General
Partner shall:
(a) prepare and file with the Securities and Exchange
Commission (the "Commission") the requisite registration statement
to effect such registration, which registration statement shall
comply as to form in all material respects with the requirements
of the applicable form and include all financial statements
required by the Commission to be filed therewith; provided,
however, that before filing a registration statement or prospectus
or any amendments or supplements thereto, or comparable statements
under securities or blue sky laws of any jurisdiction, the General
Partner shall (i) provide the holder of such Common Shares with an
adequate and appropriate opportunity to participate in the
preparation of such registration statement and each prospectus
included therein (and each amendment or supplement thereto or
comparable statement) to be filed with the Commission and (ii) not
file any such registration statement or prospectus (or amendment
or supplement thereto or comparable statement) with the Commission
to which counsel to the holder of such Common Shares or any
underwriter shall have reasonably objected on the grounds that
such filing does not comply in all material respects with the
requirements of the Act or of the rules or regulations thereunder;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary (i) to keep such
registration statement effective and (ii) to comply with the
provisions of the Act with respect to the disposition of the
Common Shares covered by such registration statement, in each case
until such time as all of such Common Shares have been disposed of
in accordance with the intended methods of disposition by the
seller(s) thereof set forth in such registration statement;
provided, that such period need not extend beyond nine months
after the effective date of the registration statement and which
period, in any event, shall terminate when all the Common Shares
covered by such registration statement have been sold (but not
before the expiration of the time period referred to in Section
4(3) of the Act and Rule 174 thereunder, if applicable);
(c) furnish, without charge, to the holder of such Common
Shares and each underwriter, if any, of the securities covered by
such registration statement, such number of copies of such
registration statement, each amendment and supplement thereto (in
each case including all exhibits), and the prospectus included in
such registration statement (including each
2-1
preliminary prospectus) in conformity with the requirements of the
Act, and other documents, as holder of such Common Shares and such
underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Common Shares owned by the
holder of such Common Shares;
(d) prior to any public offering of Common Shares, use its
reasonable best efforts to register or qualify the Common Shares
covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as holder of such Common
Shares or the sole or lead managing underwriter, if any, may
reasonably request to enable the holder of such Common Shares to
consummate the disposition in such jurisdictions of the Common
Shares owned by holder and to continue such registration or
qualification in effect in each such jurisdiction for as long as
such registration statement remains in effect (including through
new filings or amendments or renewals), and do any and all other
acts and things which may be necessary or advisable to enable the
holder to consummate the disposition in such jurisdictions of the
Common Shares owned by it; provided, however, that the General
Partner shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this Section, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction;
(e) promptly notify the Holder of such Common Shares and the
sole or lead managing underwriter, if any: (i) when the
registration statement, any pre-effective amendment, the
Prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been
filed, and, with respect to the registration statement or any
post-effective amendment, when the same has become effective, (ii)
of any request by the Commission or any state securities or blue
sky authority for amendments or supplements to the registration
statement or the prospectus related thereto or for additional
information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement
or the initiation or threat of any proceedings for that purpose,
(iv) of the receipt by the General Partner of any notification
with respect to the suspension of the qualification of any Common
Shares for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose,
(v) of the existence of any fact of which the General Partner
becomes aware or the happening of any event which results in (A)
the registration statement containing an untrue statement of a
material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not
misleading or (B) the prospectus included in such registration
statement containing an untrue statement of a material fact or
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omitting to state a material fact required to be stated therein or
necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading and (vi)
of the General Partner's reasonable determination that a
post-effective amendment to a registration statement would be
appropriate or that there exist circumstances not yet disclosed to
the public which make further sales under such registration
statement inadvisable pending such disclosure and post-effective
amendment; and, if the notification relates to an event described
in any of the clauses (v) or (vi) of this Section I.(e), subject
to Section B below, the General Partner shall promptly prepare a
supplement or post-effective amendment to such registration
statement or related prospectus or any document incorporated
therein by reference or file any other required document so that
(1) such registration statement shall not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (2) as thereafter delivered to the
purchasers of the Common Shares being sold thereunder, such
prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading
(and shall furnish to the holder and each underwriter, if any, a
reasonable number of copies of such prospectus so supplemented or
amended); and if the notification relates to an event described in
clauses (ii) through (iv) of this Section I.(e), the General
Partner shall use its reasonable best efforts to remedy such
matters;
(f) make reasonably available for inspection by the holder of
such Common Shares, any sole or lead managing underwriter
participating in any disposition pursuant to such registration
statement, one counsel appointed by all holders of such Common
Shares and any attorney, accountant or other agent retained by any
underwriter material financial and other relevant information
concerning the business and operations of the General Partner and
the properties of the General Partner and any subsidiaries thereof
as may be in existence at such time as shall be necessary, in the
reasonable opinion of the holder's and such underwriters'
respective counsel, to enable them to conduct a reasonable
investigation within the meaning of the Act, and cause the General
Partner's and any subsidiaries' officers, directors and employees,
and the independent public accountants of the General Partner, to
supply such information as may be reasonably requested by any such
parties in connection with such registration statement;
(g) obtain an opinion from the General Partner's counsel and
a "cold comfort" letter from the General Partner's independent
public accountants who have certified the General Partner's
financial statements
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included or incorporated by reference in such registration
statement in customary form and covering such matters as are
customarily covered by such opinions and "cold comfort" letters
delivered to underwriters in underwritten public offerings, which
opinion and letter shall be reasonably satisfactory to the sole or
lead managing underwriter, if any, and to the holder, and furnish
to the holder participating in the offering and to each
underwriter, if any, a copy of such opinion and letter addressed
to the holder (in the case of the opinion) and underwriter (in the
case of the opinion and the "cold comfort" letter);
(h) in the case of an underwritten offering, make generally
available to its security holders as soon as practicable, but in
any event not later than eighteen months after the effective date
of the registration statement (as defined in Rule 158(c)), an
earnings statement of the General Partner and its subsidiaries
(which need not be audited) complying with Section 11(a) of the
Act and the rules and regulations of the Commission thereunder
(including, at the option of the General Partner, Rule 158);
(i) cause all such Common Shares to be listed on the exchange
or market on which the Common Shares are Publicly Traded;
(j) furnish to the holder and the sole or lead managing
underwriter, if any, without charge, at least one manually signed
copy of the registration statement and any post-effective
amendments thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits
(including those deemed to be incorporated by reference);
(k) if requested by the sole or lead managing underwriter or
the holder of Common Shares, incorporate in a prospectus
supplement or post-effective amendment such information concerning
such holders, the underwriters or the intended method of
distribution as the sole or lead managing underwriter or such
holders reasonably request to be included therein and as is
appropriate in the reasonable judgment of the General Partner,
including, without limitation, information with respect to the
number of Common Shares being sold to the underwriters, the
purchase price being paid therefor by such underwriters and any
other terms of the underwritten offering of the Common Shares to
be sold in such offering; and
(l) use its reasonable best efforts to take all other steps
necessary to expedite or facilitate the registration and
disposition of the Common Shares contemplated hereby, including
obtaining necessary governmental approvals and effecting required
filings; entering into customary agreements (including customary
underwriting agreements, if the public
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offering is underwritten); cooperating with the holder of such
Common Shares and any underwriters in connection with any filings
required by the National Association of Securities Dealers, Inc.
(the "NASD"); providing appropriate certificates not bearing
restrictive legends representing the Common Shares; and providing
a CUSIP number and maintaining a transfer agent and registrar for
the Common Shares.
II. SUSPENSION OF OFFERING. From and after the thirtieth day following
the initial issuance or delivery of Common Shares in satisfaction of a
redemption request, upon any notice by the General Partner that a negotiation or
consummation of a transaction by the General Partner or any of its subsidiaries
is pending or an event has occurred, which negotiation, consummation or event
would require additional disclosure by the General Partner in a registration
statement of material information which the General Partner has a bona fide
business purpose for keeping confidential and the nondisclosure of which in the
registration statement might cause the registration statement to fail to comply
with applicable disclosure requirements (a "Materiality Notice"), each holder of
Common Shares agrees that it will immediately discontinue offers and sales of
the Common Shares under the registration statement until the holder receives
copies of a supplemented or amended prospectus that corrects the misstatement(s)
or omission(s) referred to above and receives notice that any post-effective
amendment has become effective; provided, that the General Partner may delay,
suspend or withdraw the registration statement for such reason for no more than
sixty (60) days after delivery of the Materiality Notice at any one time; and
provided further that the period set forth above in Section I.(b) above shall be
extended by the number of days that any Materiality Notice is in effect. If so
directed by the General Partner, each holder will deliver to the General Partner
all copies of the prospectus covering the Common Shares current at the time of
receipt of any Materiality Notice.
III. INDEMNIFICATION BY THE GENERAL PARTNER. The General Partner agrees
to indemnify and hold harmless the holder and each person, if any, who controls
the holder of Common Shares within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement (or any amendment thereto)
pursuant to which the Common Shares were registered under the Act,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein
not misleading or arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained
in any prospectus (or any amendment or supplement thereto),
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact
necessary in order to
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make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent
of the General Partner; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case
whether or not a party, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant
to this Section III. does not apply with respect to any loss,
liability, claim, damage or expense to the extent arising out
of (A) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the General Partner by
a holder expressly for use in the registration statement (or
any amendment thereto) or the prospectus (or any amendment or
supplement thereto) or (B) a holder's failure to deliver an
amended or supplemental prospectus provided to the holder by
the General Partner if such loss, liability, claim, damage or
expense would not have arisen had such delivery occurred.
IV. INDEMNIFICATION BY THE HOLDER. Each holder (and each permitted
assignee of a holder, on a several basis) of Common Shares agrees to indemnify
and hold harmless the General Partner, and each of its trustees/directors and
officers (including each trustee/director and officer of the General Partner who
signed a registration statement), and each person, if any, who controls the
General Partner within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement (or any amendment thereto)
pursuant to which the Common Shares were registered under the Act,
including all documents
2-6
incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading
or arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any prospectus
(or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent
of the holder; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case
whether or not a party, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant
to this Section IV shall only apply with respect to any loss,
liability, claim, damage or expense to the extent arising out
of (A) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the General Partner by
the holder or its permitted assignee expressly for use in the
registration statement (or any amendment thereto) or the
prospectus (or any amendment or supplement thereto) or (B)
the Holder's or its permitted assignee's failure to deliver
an amended or supplemental prospectus provided to the holder
by the General Partner if such loss, liability, claim, damage
or expense would not have arisen had such delivery occurred.
Notwithstanding the provisions of this Section IV, the holder
and any permitted assignee shall not be required to indemnify
the General Partner, its officers, trustees/directors or
control persons with respect to any amount in excess of the
amount of the total proceeds to the holder or such
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permitted assignee, as the case may be, from sales of the
Common Shares of the holder under the registration statement.
V. CONDUCT OF INDEMNIFICATION PROCEEDINGS. An indemnified party
hereunder shall give reasonably prompt notice to the indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify the indemnifying party (i) shall not
relieve it from any liability which it may have under the indemnity agreement
provided in Section III or IV above, unless and to the extent it did not
otherwise learn of such action and the lack of notice by the indemnified party
results in the forfeiture by the indemnifying party of substantial rights and
defenses, and (ii) shall not, in any event, relieve the indemnifying party from
any obligations to the indemnified party other than the indemnification
obligation provided under Section III or IV above. If the indemnifying party so
elects within a reasonable time after receipt of such notice, the indemnifying
party may assume the defense of such action or proceeding at such indemnifying
party's own expense with counsel chosen by the indemnifying party and approved
by the indemnified party, which approval shall not be unreasonably withheld;
provided, however, that the indemnifying party will not settle any such action
or proceeding without the written consent of the indemnified party unless, as a
condition to such settlement, the indemnifying party secures the unconditional
release of the indemnified party; and provided further, that if the indemnified
party reasonably determines that a conflict of interest exists where it is
advisable for the indemnified party to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to it which
are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
indemnified party shall be entitled to separate counsel at the indemnifying
party's expense. If the indemnifying party is not entitled to assume the defense
of such action or proceeding as a result of the second proviso to the preceding
sentence, the indemnifying party's counsel shall be entitled to conduct the
indemnifying party's defense and counsel for the indemnified party shall be
entitled to conduct the defense of the indemnified party, it being understood
that both such counsel will cooperate with each other to conduct the defense of
such action or proceeding as efficiently as possible. If the indemnifying party
is not so entitled to assume the defense of such action or does not assume such
defense, after having received the notice referred to in the first sentence of
this Section, the indemnifying party will pay the reasonable fees and expenses
of counsel for the indemnified party. In such event, however, the indemnifying
party will not be liable for any settlement effected without the written consent
of the indemnifying party. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
Section, the indemnifying party shall not be liable for any fees and expenses of
counsel for the indemnified party incurred thereafter in connection with such
action or proceeding.
VI. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections III and IV above is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the General
Partner, on the one hand, and the
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holders, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the General Partner and the holders, (i) in such
proportion as is appropriate to reflect the relative fault of the General
Partner on the one hand and the holders on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative fault of, but also the relative benefits to, the
General Partner on the one hand and the holders on the other, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified party shall be
determined by reference to, among other things, the total proceeds received by
the indemnifying party and indemnified party in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, the indemnifying party or the indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section VI were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section VI, the holders shall not be
required to contribute any amount in excess of the amount of the total proceeds
to the holders from sales of the Common Shares of the holders under the
registration statement.
Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section VI, each person, if any, who
controls a holder within the meaning of Section 15 of the Act shall have the
same rights to contribution as the holder, and each trustee/director of the
General Partner, each officer of the General Partner who signed a registration
statement and each person, if any, who controls the General Partner within the
meaning of Section 15 of the Act shall have the same rights to contribution as
the General Partner.
VII. EXPENSES. The General Partner shall pay all expenses incident to
the performance by the General Partner of the General Partner's registration
obligations under Sections I and II, including (i) all stock exchange,
Commission and state securities registration, listing and filing fees, (ii) all
expenses incurred in connection with the preparation, printing and distributing
of any registration statement or registration statement and prospectus, (iii)
fees and disbursements of counsel for the General Partner
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and of the independent public accountants of the General Partner (including,
without limitation, the expenses of any annual or special audit and comfort
letter reasonably required by the underwriters in an underwritten offering, but
excluding underwriting discounts and commissions) and (iv) fees and expenses of
any other person retained by the General partner in connection with the
registration, including any experts, transfer agents or registrar retained by
the General Partner. The holders shall be responsible for the payment of any
brokerage and sales commissions, fees and disbursements of one counsel to the
holders, accountants and other advisors and any transfer taxes relating to the
sale or disposition of the Common Shares by the holders pursuant to Section I or
otherwise.
VIII. RULE 144 COMPLIANCE. The General Partner covenants that it will
use its commercially reasonable best efforts to timely file the reports required
to be filed by the General Partner under the Act and the Exchange Act so as to
enable the holder of Common Shares to sell such Common Shares pursuant to Rule
144 under the Act. In connection with any sale, transfer or other disposition by
the holder of any Common Shares pursuant to Rule 144 under the Act, the General
Partner shall cooperate with the holder to facilitate the timely preparation and
delivery of certificates representing Common Shares to be sold and not bearing
any Act legend, and enable certificates for such Common Shares to be for such
number of shares and registered in such names as a holder may reasonably request
at least ten (10) Business Days prior to any sale of Common Shares hereunder.
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