AGREEMENT OF LIMITED PARTNERSHIP
OF
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
a California limited partnership
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN
FORM AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE
EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION
MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
dated as of August 22, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS 1
ARTICLE 2 ORGANIZATIONAL MATTERS 14
Section 2.1. Organization 14
Section 2.2. Name 14
Section 2.3. Registered Agent; Principal Office 14
Section 2.4. Power of Attorney 14
Section 2.5. Term 16
ARTICLE 3 PURPOSE 16
Section 3.1. Purpose and Business 16
Section 3.2. Powers 16
Section 3.3. Partnership Only for Purposes Specified 16
Section 3.4. Representations and Warranties by the Limited Partners
17
ARTICLE 4 CAPITAL CONTRIBUTIONS 18
Section 4.1. Capital Contributions of the Initial Partners18
Section 4.2. Additional Limited Partners 19
Section 4.3. Loans by Third Parties 19
Section 4.4. Additional Funding and Capital Contributions19
A. General 19
B. Notice of Additional Funds Requirement 19
C. General Partner Loans 19
D. Participating Partner Loans. 20
Section 4.5. No Interest; No Return 20
ARTICLE 5 DISTRIBUTIONS 20
Section 5.1. Requirement and Characterization of Distributions 20
Section 5.2. Distributions in Kind 20
Section 5.3. Amounts Withheld 20
Section 5.4. Distributions Upon Liquidation 21
Section 5.5. Restricted Distributions 21
ARTICLE 6 ALLOCATIONS 21
Section 6.1. Timing and Amount of Allocations of Net Income and Net
Loss 21
Section 6.2. General Allocations 21
Section 6.3. Additional Allocation Provisions 21
A. Regulatory Allocations 21
(a). Minimum Gain Chargeback 21
(b). Partner Minimum Gain Chargeback 22
(c). Nonrecourse Deductions and Partner Nonrecourse
Deductions 22
(d). Qualified Income Offset 22
(e). Gross Income Allocation 22
(f). Limitation on Allocation of Net Loss 23
(g). Section 754 Adjustment 23
(h). Curative Allocations 23
B. Allocation of Excess Nonrecourse Liabilities23
Section 6.4. Tax Allocations 23
A. In General 23
B. Allocations Respecting Section 704(c) Revaluations24
Section 6.5. Other Provisions 24
A. Other Allocations Upon Change in Law 24
B. Consistent Tax Reporting 24
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS 24
Section 7.1. Management 24
Section 7.2. Certificate of Limited Partnership 27
Section 7.3. Restrictions on General Partner's Authority 28
Section 7.4. Reimbursement of the General Partner 29
Section 7.5. Other Business of General Partner 30
Section 7.6. Contracts with Affiliates 31
Section 7.7. Indemnification 31
Section 7.8. Liability of the General Partner 33
Section 7.9. Other Matters Concerning the General Partner34
Section 7.10. Title to Partnership Assets 34
Section 7.11. Reliance by Third Parties 35
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 35
Section 8.1. Limitation of Liability 35
Section 8.2. Management of Business 35
Section 8.3. Outside Activities of Limited Partners 36
Section 8.4. Return of Capital 36
Section 8.5. Rights of Limited Partners Relating to the Partnership
36
Section 8.6. Intentionally Omitted 37
Section 8.7. Partnership Right to Call Limited Partner Interests 37
Section 8.8. Other Redemptions 37
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS 38
Section 9.1. Records and Accounting 38
Section 9.2. Fiscal Year 38
Section 9.3. Reports 38
ARTICLE 10 TAX MATTERS 39
Section 10.1. Preparation of Tax Returns 39
Section 10.2. Tax Elections 39
Section 10.3. Tax Matters Partner 39
Section 10.4. Withholding 40
ARTICLE 11 TRANSFERS AND WITHDRAWALS 41
Section 11.1. Transfer 41
Section 11.2. Transfer of General Partner's Partnership Interest 41
Section 11.3. Limited Partners' Rights to Transfer 42
A. General 42
(1) General Partner Right of First Refusal 42
(2) Qualified Transferee 42
(3) Minimum Transfer Restriction 42
(4) Transferee Agreement to Effect a Redemption 42
(5) No Further Transfers 43
(6) Exception for Permitted Transfers 43
B. Incapacity 43
C. Opinion of Counsel 43
D. Adverse Tax Consequences 43
Section 11.4. Substituted Limited Partners 44
Section 11.5. Assignees 44
Section 11.6. General Provisions 45
ARTICLE 12 ADMISSION OF PARTNERS 46
Section 12.1. Admission of Successor General Partner 46
Section 12.2. Admission of Additional Limited Partners 47
Section 12.3. Amendment of Agreement and Certificate of Limited
Partnership 47
Section 12.4. Admission of Initial Limited Partners 48
Section 12.5. Limit on Number of Partners 48
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION 48
Section 13.1. Dissolution 48
Section 13.2. Winding Up 49
Section 13.3. Deemed Distribution and Recontribution 50
Section 13.4. Rights of Limited Partners 50
Section 13.5. Notice of Dissolution 50
Section 13.6. Cancellation of Certificate of Limited Partnership 51
Section 13.7. Reasonable Time for Winding-Up 51
ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS;
MEETINGS 51
Section 14.1. Procedures for Actions and Consents of Partners51
Section 14.2. Amendments 51
Section 14.3. Meetings of the Partners 51
ARTICLE 15 GENERAL PROVISIONS 52
Section 15.1. Addresses and Notice 52
Section 15.2. Titles and Captions 52
Section 15.3. Pronouns and Plurals 53
Section 15.4. Further Action 53
Section 15.5. Binding Effect 53
Section 15.6. Waiver 53
Section 15.7. Counterparts 53
Section 15.8. Applicable Law 53
Section 15.9. Entire Agreement 54
Section 15.10. Invalidity of Provisions 54
Section 15.11. Limitation to Preserve REIT Status 54
Section 15.12. No Partition 55
Section 15.13. No Third-Party Rights Created Hereby 55
EXHIBIT A PARTNERS AND ADDRESSES 57
EXHIBIT B 58
EXHIBIT C NOTICE OF REDEMPTION 1
EXHIBIT D FORM OF PARTNER SCHEDULE 1
EXHIBIT E FORM OF PARTNERSHIP UNIT CERTIFICATE 1
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP OF THE PRICE REIT RENAISSANCE
PARTNERSHIP, L.P., dated as of August 22, 1997 (the "Effective Date"), is
entered into by and among The PRICE REIT, Inc., a Maryland corporation, as the
General Partner, and the Persons whose names are set forth on Exhibit A as
attached hereto, as the Limited Partners, together with any other Persons who
become Partners in the Partnership as provided herein.
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the California Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
"Actions" has the meaning set forth in Section 7.7 hereof.
"Additional Funds" has the meaning set forth in Section 4.4.A hereof.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 4.2 or Section 4.4.D and Section 12.2
hereof and who is shown as such on the books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:
(a) decrease such deficit by any amounts that such Partner is
obligated to restore pursuant to this Agreement or by operation of law upon
liquidation of such Partner's Partnership Interest or is deemed to be
obligated to restore pursuant to the penultimate sentence of each of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) increase such deficit by the items described in Regulations
Section 1.704-1 (b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of "Adjusted Capital Account Deficit" is intended
to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect
to any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Agreement of Limited Partnership of The Price REIT
Renaissance Partnership, L.P., as it may be amended, supplemented or restated
from time to time.
"Appraisal" means, with respect to any assets, the written opinion of an
independent third party experienced in the valuation of similar assets, selected
by the General Partner in good faith. Such opinion may be in the form of an
opinion by such independent third party that the value for such property or
asset as set by the General Partner is fair, from a financial point of view, to
the Partnership.
"Assignee" means a Person to whom one or more Partnership Units have been
Transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 11.5
hereof.
"Available Cash" means, with respect to any period for which such
calculation is being made,
(a) the sum, without duplication, of:
(1) the Partnership's Net Income or Net Loss (as the case may
be) for such period,
(2) Depreciation and all other noncash charges to the extent
deducted in determining Net Income or Net Loss for such period,
(3) the amount of any reduction in reserves of the Partnership
referred to in clause (b)(6) below (including, without limitation,
reductions resulting because the General Partner determines such
amounts are no longer necessary),
(4) the excess, if any, of the net cash proceeds from the sale,
exchange, disposition, financing or refinancing of Partnership
property for such period over the gain (or loss, as the case may be)
recognized from such sale, exchange, disposition, financing or
refinancing during such period (excluding Terminating Capital
Transactions), and
(5) all other cash received (including amounts previously
accrued as Net Income and amounts of deferred income) or any net
amounts borrowed by the Partnership for such period that was not
included in determining Net Income or Net Loss for such period;
(b) less the sum, without duplication, of:
(1) all principal debt payments made during such period by the
Partnership,
(2) capital expenditures made by the Partnership during such
period,
(3) investments in any entity (including loans made thereto),
(4) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period (including amounts
paid in respect of expenses previously accrued),
(5) any amount included in determining Net Income or Net Loss
for such period that was not received by the Partnership during such
period,
(6) the amount of any increase in reserves (including, without
limitation, working capital reserves) established during such period
that the General Partner determines are necessary or appropriate in
its sole and absolute discretion, and
(7) any amount distributed or paid in redemption of any Limited
Partner Interest or Partnership Units pursuant to Section 8.7 or
Section 8.8 hereof, including, without limitation, any Cash Amount
paid.
Notwithstanding the foregoing, Available Cash shall not include (i) any cash
received or reductions in reserves, or take into account any disbursements made,
or reserves established, after dissolution and the commencement of the
liquidation and winding up of the Partnership or (ii) any Capital Contributions,
whenever received.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Altamonte Springs, Florida, San Diego, California, Los
Angeles, California or New York, New York are authorized or required by law to
close.
"Call Notice" has the meaning set forth in Section 8.7.
"Capital Account" means, with respect to any Partner, the Capital Account
maintained by the General Partner for such Partner on the Partnership's books
and records in accordance with the following provisions:
(a) To each Partner's Capital Account, there shall be added such
Partner's Capital Contributions, such Partner's distributive share of Net
Income and any items in the nature of income or gain that are specially
allocated pursuant to Section 6.3 hereof, and the principal amount of any
Partnership liabilities assumed by such Partner or that are secured by any
property distributed to such Partner.
(b) From each Partner's Capital Account, there shall be subtracted
the amount of cash and the Gross Asset Value of any property distributed to
such Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Net Losses and any items in the nature of expenses or
losses that are specially allocated pursuant to Section 6.3 hereof, and the
principal amount of any liabilities of such Partner assumed by the
Partnership or that are secured by any property contributed by such Partner
to the Partnership.
(c) In the event any interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed
to the Capital Account of the transferor to the extent that it relates to
the Transferred interest.
(d) In determining the principal amount of any liability for purposes
of subsections (a) and (b) hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and
Regulations.
(e) The provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Regulations Sections 1.704-
1(b) and 1.704-2, and shall be interpreted and applied in a manner
consistent with such Regulations. If the General Partner shall determine
that it is prudent to modify the manner in which the Capital Accounts are
maintained in order to comply with such Regulations, the General Partner
may make such modification provided that such modification will not have a
material effect on the amounts distributable to any Partner without such
Partner's Consent. The General Partner also shall (i) make any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital reflected on
the Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make any
appropriate modifications in the event that unanticipated events might
otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b) or Section 1.704-2.
"Capital Contribution" means, with respect to any Partner, the amount of
money and the initial Gross Asset Value of any Contributed Property that such
Partner contributes to the Partnership pursuant to Section 4.1. Section 4.2 or
Section 4.4 hereof.
"Capitalization Rate" means eleven percent (11%).
"Cash Amount" means an amount of cash determined as follows:
(a) the Net Rent shall be divided by the Capitalization Rate and
(b) the resulting dividend shall be multiplied by the percentage resulting from
dividing the number of Tendered Units by the total number of Partnership Units
outstanding.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed in the office of the Secretary of State of the State of
California, as amended from time to time in accordance with the terms hereof and
the Act.
"Charter" means the Articles of Incorporation of the General Partner filed
with the Maryland State Department of Assessments and Taxation on September 18,
1991, as amended, supplemented or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time or any successor statute thereto, as interpreted by the
applicable Regulations thereunder. Arty reference herein to a specific section
or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
"Consent" means the consent to, approval of, or vote on a proposed action
by a Partner given in accordance with Article 14 hereof.
"Consent of the Limited Partners" means the consent of all of the Limited
Partners, which Consent shall be obtained prior to the taking of any action for
which it is required by this Agreement.
"Contributed Property" means each Property or other asset, in such form as
may be permitted by the Act, but excluding cash contributed or deemed
contributed to the Partnership (or deemed contributed to the Partnership on
termination and reconstitution thereof pursuant to Code Section 708).
"Controlled Entity" means, as to any Limited Partner, (a) any corporation
more than fifty percent (50%) of the outstanding voting stock of which is owned
by such Limited Partner or such Limited Partner's Family Members, (b) any trust,
whether or not revocable, of which such Limited Partner or such Limited
Partner's Family Members are the sole beneficiaries, (c) any partnership of
which such Limited Partner is the managing partner and in which such Limited
Partner or such Limited Partner's Family Members hold partnership interests
representing at least twenty-five percent (25%) of such partnership's capital
and profits and (d) any limited liability company of which such Limited Partner
is the manager and in which such Limited Partner or such Limited Partner's
Family Members hold membership interests representing at least twenty-five
percent (25%) of such limited liability company's capital and profits.
"Controlling Person" means any Person, whatever his or her title, who
performs executive or senior management functions for the General Partner or its
Affiliates similar to those of directors, executive management and senior
management, or any Person who either holds a two percent (2%) or more equity
interest in the General Partner or its Affiliates, or has the power to direct or
cause the direction of the General Partner or its Affiliates, whether through
the ownership of voting securities, by contract or otherwise, or, in the absence
of a specific role or title, any Person having the power to direct or cause the
direction of the management-level employees and policies of the General Partner
or its Affiliates. It is not intended that every Person who carries a title
such as vice president, senior vice president, secretary or treasurer be
included in the definition of a Controlling Person.
"Credit Tenants" means, as of the date of delivery of the Call Notice, a
Person which has (i) a net worth of at least one hundred million dollars
($100,000,000.00), or (ii) at least seventy-five (75) retail business locations
then open for business or (iii) a credit rating from Standard & Poor's Rating
Services, Xxxxx'x Investors Services, Inc. or Fitch Investors Service of
BBB/Baa3 (or the equivalent) or better.
"Debt" means, as to any Person, as of any date of determination, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.
"Depreciation" means, for each Fiscal Year or other applicable period, an
amount equal to the federal income tax depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that, if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that, if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Designated Parties" means the Persons designated as such on the Partner
Schedules then in effect.
"Effective Date" has the meaning set forth in the preamble to this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Existing Loan" means the loan secured by a first mortgage on the Property,
in favor of Barclays Bank PLC, New York Branch.
"Family Members" means, as to a Person that is an individual, (a) such
Person's spouse, (b) such Person's ancestors, (c) such Person's descendants
(whether by blood or by adoption), (d) such Person's brothers and sisters, (e)
inter vivos or testamentary trusts of which only such Person and/or his spouse,
ancestors, descendants (whether by blood or by adoption), brothers and/or
sisters are beneficiaries and (f) any partnership or limited liability company
all of whose partners or members, directly or indirectly, consist of such Person
and/or his spouse, ancestors, descendants (whether by blood or by adoption),
brothers and/or sisters and/or inter vivos or testamentary trusts of which only
such Person and/or his spouse, ancestors, descendants (whether by blood or by
adoption), brothers and/or sisters are beneficiaries.
"Fiscal Year" means the fiscal year of the Partnership, which shall be the
calendar year.
"Funding Debt" means any Debt incurred by or on behalf of the General
Partner for the purpose of providing funds to the Partnership.
"Funding Notice" has the meaning set forth in Section 4.4.B hereof.
"General Partner" means The Price REIT, Inc., a Maryland corporation, and
its successors and assigns, as the general partner of the Partnership in their
capacities as general partner of the Partnership.
"General Partner Interest" means the Partnership Interest held by the
General Partner, which Partnership Interest is an interest as a general partner
under the Act. A General Partner Interest may be expressed as a number of
Partnership Units.
"General Partner Loan" has the meaning set forth in Section 4.4.C hereof.
"Gross Asset Value" means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Limited Partner to the Partnership shall be set forth on the Partner
Schedule with respect to such Limited Partner.
(b) The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in clause (1), clause (2),
clause (3), clause (4) or clause (5) hereof shall be adjusted to equal
their respective gross fair market values, as determined by the General
Partner using such reasonable method of valuation as it may adopt, as of
the following times:
(1) the acquisition of an additional interest in the Partnership
(other than in connection with the execution of this Agreement but
including, without limitation, acquisitions pursuant to Section 4.4
hereof or contributions or deemed contributions by the General Partner
pursuant to Section 4.4 hereof) by a new or existing Partner in
exchange for more than a de minimis Capital Contribution, if the
General Partner reasonably determines that such adjustment is
necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(2) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration for
an interest in the Partnership, if the General Partner reasonably
determines that such adjustment is necessary or appropriate to reflect
the relative economic interests of the Partners in the Partnership;
(3) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g);
(4) upon the admission of a successor General Partner pursuant
to Section 12.1 hereof; and
(5) at such other times as the General Partner shall reasonably
determine necessary or advisable in order to comply with Regulations
Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the distributee and the General Partner,
provided that, if the distributee is the General Partner or if the
distributee and the General Partner cannot agree on such a determination,
such gross fair market value shall be determined by Appraisal.
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m);
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this subsection (d) to the extent that the General Partner reasonably
determines that an adjustment pursuant to subsection (b) above is necessary
or appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this subsection (d).
(e) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subsection (a), subsection (b) or
subsection (d) above, such Gross Asset Value shall thereafter be adjusted
by the Depreciation taken into account with respect to such asset for
purposes of computing Net Income and Net Losses.
"Holder" means either (a) a Partner or (b) an Assignee, owning a
Partnership Unit, that is treated as a member of the Partnership for federal
income tax purposes.
"Incapacity" or "Incapacitated" means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or limited liability company or the revocation
of its charter; (iii) as to any Partner that is a partnership or limited
liability company, the dissolution and commencement of winding up of the
partnership or limited liability company; (iv) as to any Partner that is an
estate, the distribution by the fiduciary of the estate's entire interest in the
Partnership; (v) as to any trustee of a trust that is a Partner, the termination
of the trust (but not the substitution of a new trustee); or (vi) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment, or (h) an appointment referred to in clause (g)
above is not vacated within ninety (90) days after the expiration of any such
stay.
"Indemnitee" means (i) any Person made a party to a proceeding by reason of
its status as (A) the General Partner or (B) a director of the General Partner
or an officer or employee of the Partnership or the General Partner and
(ii) such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.
"Initial Limited Partner" means the Limited Partner so designated on the
signature page hereof.
"Interest" means interest, original issue discount and other similar
payments or amounts paid by the Partnership for the use or forbearance of money.
"IRS" means the Internal Revenue Service, which administers the internal
revenue laws of the United States.
"Limited Partner" means any Person named as a Limited Partner in Exhibit A
attached hereto, as such Exhibit A may be amended from time to time, or any
Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"Limited Partner Interest" means a Partnership Interest of a Limited
Partner in the Partnership representing a fractional part of the Partnership
Interests of all Limited Partners and includes any and all benefits to which the
holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partner Interest may be expressed
as a number of Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1 hereof.
"Liquidator" has the meaning set forth in Section 13.2.A hereof.
"Majority in Interest of the Limited Partners" means those Limited Partners
(other than any Limited Partner fifty percent (50%) or more of whose equity is
owned, directly or indirectly, by the General Partner) holding in the aggregate
more than fifty percent (50%) of the aggregate Partnership Units of all Limited
Partners (other than any Limited Partner fifty percent (50%) or more of whose
equity is owned, directly or indirectly, by the General Partner).
"Net Income" or "Net Loss" means, for each Fiscal Year of the Partnership,
an amount equal to the Partnership's taxable income or loss for such year,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Income (or Net
Loss) pursuant to this definition of "Net Income" or "Net Loss" shall be
added to (or subtracted from, as the case may be) such taxable income (or
loss);
(b) Any expenditure of the Partnership described in Code
Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Net Income (or Net Loss) pursuant to this
definition of "Net Income" or "Net Loss," shall be subtracted from (or
added to, as the case may be) such taxable income (or loss);
(c) In the event that the Gross Asset Value of any Partnership asset
is adjusted pursuant to subsection (b) or subsection (c) of the definition
of "Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and other cost recovery
deductions that would otherwise be taken into account in computing such
taxable income or loss, there shall be taken into account Depreciation for
such Fiscal Year;
(f) To the extent that an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be
taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's interest in the
Partnership, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) from the disposition of the
asset and shall be taken into account for purposes of computing Net Income
or Net Loss; and
(g) Notwithstanding any other provision of this definition of "Net
Income" or "Net Loss," any item that is specially allocated pursuant to
Section 6.3 hereof shall not be taken into account in computing Net Income
or Net Loss. The amounts of the items of Partnership income, gain, loss or
deduction available to be specially allocated pursuant to Section 6.3
hereof shall be determined by applying rules analogous to those set forth
in this definition of "Net Income" or "Net Loss."
"Net Rent" shall mean:
(i) the annualized amount of base rent due from tenants of the
Property as of the date of delivery of the Call Notice;
(ii) less a management fee equal to three percent (3%) of the amount
determined pursuant to subclause (i) above;
(iii) less a capital expense reserve equal to ten cents ($.10)
multiplied by the number of rentable square feet comprising the
Property as of the date of the Call Notice;
(iv) less a vacancy allowance on non-Credit Tenants equal to five
percent (5%) of the amount of rent in subclause (i) above which
is due from tenants which are not Credit Tenants; provided
however that if the Occupancy Rate as of the date of delivery of
the Call Notice is more than ninety-five percent (95%), the
amount of the reduction pursuant to this clause (iv) shall be
zero (0);
(v) less unrecoverable triple net charges calculated on the greater
of (a) the rentable square feet of the Property which are not
occupied by tenants whose rent is included in subclause (i)
above, or (b) five percent (5%) of the rentable square feet of
the Property occupied by non-Credit Tenants as of the date of the
delivery of the Call Notice.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal
Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption substantially in the
form of Exhibit C attached to this Agreement.
"Occupancy Rate" means the fraction, expressed as a percentage, where the
numerator is the number of rentable square feet occupied by tenants whose rent
is included in subclause (i) of the definition of Net Rent divided by (ii) the
rentable square feet comprising the Property as of the date of delivery of the
Call Notice.
"Original Limited Partners" means the Persons executing a Partner Schedule
together with the General Partner and being admitted to the Partnership either
as an initial Limited Partner or as an Additional Limited Partner; provided,
however, that "Original Limited Partners" does not include any Assignee or other
transferee, including, without limitation, any Substituted Limited Partner
succeeding to all or any part of the Partnership Interest of any such Person.
The initial Original Limited Partners are listed on Exhibit A attached hereto.
"Ownership Limit" means the applicable restriction on ownership of shares
of the General Partner imposed under the Charter.
"Partner" means the General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(i)(2).
"Partner Schedule" means a schedule, substantially in the form attached
hereto as Exhibit D and executed by the General Partner and a Limited Partner
(including any Original Limited Partner and any Substituted Limited Partner),
that shall set forth, with respect to a Limited Partner to which Partnership
Units are issued pursuant to this Agreement, (a) the Gross Asset Values, as
determined by the General Partner and agreed to by the contributing Limited
Partner, for any Contributed Properties contributed by such contributing Limited
Partner and (b) the initial Partnership Units issued to such Limited Partner.
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of
Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Fiscal Year
shall be determined in accordance with the rules of Regulations Section 1.704-
2(d).
"Partnership Record Date" means the record date established by the General
Partner for the distribution of Available Cash pursuant to Section 5.1 hereof,
which record date shall generally be the same as the record date established by
the General Partner for a distribution to its shareholders of some or all of its
portion of a distribution.
"Partnership Unit" means a fractional share of the Partnership Interests of
all Partners issued pursuant to Section 4.1, Section 4.2 or Section 4.4 hereof,
provided, however, that the General Partner Interest and the Limited Partner
Interests shall have the differences in rights and privileges as specified in
this Agreement. The ownership of Partnership Units may (but need not, in the
sole and absolute discretion of the General Partner) be evidenced by the form of
certificate for Partnership Units attached hereto as Exhibit E.
"Permitted Transfer" has the meaning set forth in Section 11.3.A hereof.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.
"Pledge" has the meaning set forth in Section 11.3.A hereof.
"Primary Offering Notice" has the meaning set forth in Section 8.6.F(4)
hereof.
"Property" means any assets and property of the Partnership such as, but
not limited to, interests in real property and personal property, including,
without limitation, fee interests, interests in ground leases, interests in
limited liability companies, joint ventures or partnerships, interests in
mortgages, and Debt instruments as the Partnership may hold from time to time.
"Qualified Transferee" means an "accredited investor" as defined in Rule
501 promulgated under the Securities Act.
"Qualifying Party" means (a) an Original Limited Partner, (b) an Additional
Limited Partner (unless otherwise provided in the applicable Partner Schedule),
(c) a Designated Party that is either a Substituted Limited Partner or an
Assignee, (d) a Family Member, or a lending institution as the pledgee of a
Pledge, who is the transferee in a Permitted Transfer or (e) with respect to any
Notice of Redemption delivered to the General Partner within the time period set
forth in Section 11.3.A(4) hereof, a Substituted Limited Partner succeeding to
all or part of the Limited Partner Interest of (i) an Original Limited Partner,
(ii) an Additional Limited Partner (unless such Additional Limited Partner was
not a Qualifying Party), (iii) a Designated Party that is either a Substituted
Limited Partner or an Assignee or (iv) a Family Member, or a lending institution
as the pledgee of a Pledge, who is the transferee in a Permitted Transfer.
"Redemption" has the meaning set forth in Section 8.6.A hereof.
"Registrable Shares" has the meaning set forth in Section 8.6.D(2) hereof.
"Regulations" means the applicable income tax regulations under the Code,
whether such regulations are in proposed, temporary or final form, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section 6.3.B(h)
hereof.
"REIT" means a real estate investment trust qualifying under Code
Section 856.
"REIT Partner" means a Partner or Assignee that is, or has made an election
to qualify as, a REIT.
"REIT Payment" has the meaning set forth in Section 15.11 hereof.
"REIT Requirements" has the meaning set forth in Section 5.1 hereof.
"Related Party" means, with respect to any Person, any other Person whose
direct or indirect ownership of shares of the General Partner's capital stock
would be attributed to the first such Person under Code Section 544 (as modified
by Code Section 856(h)(1)(B)).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means tile Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Specified Redemption Date" means the later of the thirtieth (30th)
calendar day (or, if such day is not a Business Day, the next following Business
Day) after (a) the receipt by the General Partner of a Notice of Redemption or
(b) the date such Notice of Redemption was to have been submitted by a Limited
Partner pursuant to Section 8.7; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of
Tendered Units by the General Partner pursuant to Section 8.7 hereof, on any
Specified Redemption Date, may be deferred, in the General Partner's sole and
absolute discretion, for such time (but in any event not more than one hundred
fifty (150) days in the aggregate) as may reasonably be required to effect, as
applicable, (i) any necessary funding arrangements, (ii) compliance with the
Securities Act or other law (including, but not limited to, (a) state "blue sky"
or other securities laws and (b) the expiration or termination of the applicable
waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended) and (iii) satisfaction or waiver of other commercially
reasonable and customary closing conditions and requirements for a transaction
of such nature.
"Subsidiary" means. with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person; provided, however, that, with respect to the
Partnership, "Subsidiary" means solely a partnership or limited liability
company (taxed, for federal income tax purposes, as a partnership and not as an
association or publicly traded partnership taxable as a corporation) of which
the Partnership is a member unless the General Partner has received an
unqualified opinion from independent counsel of recognized standing, or a ruling
from the IRS, that the ownership of shares of stock of a corporation or other
entity will not jeopardize the General Partner's status as a REIT, in which
event the term "Subsidiary" shall include the corporation or other entity which
is the subject of such opinion or ruling.
"Substituted Limited Partner" means an Assignee who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4 hereof. The term
"Substituted Limited Partner" shall not include any Additional Limited Partner.
"Tax Items" has the meaning set forth in Section 6.4.A hereof.
"Tendered Units" has the meaning set forth in Section 8.7 hereof.
"Tendering Party" has the meaning set forth in Section 8.7 hereof.
"Terminating Capital Transaction" means any sale or other disposition of
all or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"Transfer," when used with respect to a Partnership Unit or all or any
portion of a Partnership Interest, means any sale, assignment, bequest,
conveyance, devise, gift (outright or in trust), Pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other disposition or act of
alienation, whether voluntary or involuntary or by operation of law; provided,
however, that, when the term is used in Article 11 hereof, Transfer does not
include any redemption of Partnership Units pursuant to Section 8.7 or
Section 8.8 hereof. The terms "Transferred" and "Transferring" have correlative
meanings.
"Twelve-Month Period" means a twelve-month period ending on the day before
the first (1st) anniversary of either (i) the admission of such Qualifying Party
as a Limited Partner in the Partnership or (ii) the Transfer of Partnership
Units to such Qualifying Party, or on the day before a subsequent anniversary
thereof (or, in the case of a period shorter than twelve (12) months, such other
period as may be provided in the relevant Partner Schedule).
"Unitholder" means the General Partner or a Holder of Partnership Units.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1. Organization
The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the term and subject to the conditions set forth
in this Agreement. Except as expressly provided herein to the contrary, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.
Section 2.2. Name
The name of the Partnership is The Price REIT Renaissance Partnership, L.P.
The Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Partners of such change in the next regular communication to the Partners.
Section 2.3. Registered Agent; Principal Office
The registered agent for service of process on the Partnership in the State
of California is HIQ Corporate Services, Inc., or such other agent as the
General Partner may from time to time designate. The principal office of the
Partnership is located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxxxxx,
XX 00000, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of California
as the General Partner deems advisable.
Section 2.4. Power of Attorney
A. Each Limited Partner and each Assignee hereby irrevocably constitutes
and appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorneys-in-fact,
with full power and authority in its name, place and stead to:
(1) execute, swear to, seal, acknowledge, deliver, file and record in
the appropriate public offices (a) all certificates, documents and other
instruments (including, without limitation, this Agreement and the
Certificate and all amendments, supplements or restatements thereof) that
the General Partner or the Liquidator deems appropriate or necessary to
form, qualify or continue the existence or qualification of the Partnership
as a limited partnership (or a partnership in which the limited partners
have limited liability to the extent provided by applicable law) in the
State of California and in all other jurisdictions in which the Partnership
may conduct business or own property; (b) all instruments that the General
Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms;
(c) all conveyances and other instruments or documents that the General
Partner or the Liquidator deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of
this Agreement, including, without limitation, a certificate of
cancellation; (d) all conveyances and other instruments or documents that
the General Partner or the Liquidator deems appropriate or necessary to
reflect the distribution or exchange of assets of the Partnership pursuant
to the terms of this Agreement; (e) all instruments relating to the
admission, withdrawal, removal, substitution or redemption of any Partner
pursuant to, or other events described in, Article 7, Article 11,
Article 12 or Article 13 hereof or the Capital Contribution of any Partner;
and (f) all certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges relating to
Partnership Interests; and
(2) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole and absolute discretion of the General Partner, to
make, evidence, give, confirm or ratify any vote, consent, approval,
agreement or other action that is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or appropriate or
necessary, in the sole and absolute discretion of the General Partner, to
effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable
and a special power coupled with an interest, in recognition of the fact that
each of the Limited Partners and Assignees will be relying upon the power of the
General Partner to act as contemplated by this Agreement in any filing or other
action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
Transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units or Partnership Interest and shall extend to such Limited
Partner's or Assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the General Partner, acting in good faith pursuant to
such power of attorney; and each such Limited Partner or Assignee hereby waives
any and all defenses that may be available to contest, negate or disaffirm, the
action of the General Partner, taken in good faith under such power of attorney.
Each Limited Partner or Assignee shall execute and deliver to the General
Partner or the Liquidator, within fifteen (15) days after receipt of the General
Partner's or the Liquidator's request therefor, such further designation, powers
of attorney and other instruments as the General Partner or the Liquidator, as
the case may be, deems necessary to effectuate this Agreement and the purposes
of the Partnership.
C. Nothing contained in this Section 2.4 shall be deemed to give the
General Partner, any Liquidator or the authorized officers and attorneys in fact
the power to act as attorney in fact for any Limited Partner in connection with
such Limited Partners right to approve, consent or vote in any matter for which
the Limited Partners approval or consent is required under this Agreement.
Section 2.5. Term
The term of the Partnership commenced on the Effective Date, the date that
the original Certificate was filed in the office of the Secretary of State of
California in accordance with the Act, and shall continue until January 2, 2010
unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 hereof or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1. Purpose and Business
The purpose and nature of the Partnership is to conduct any business,
enterprise or activity permitted by or under the Act relating to (i) conducting
the business of ownership, construction, development, operation and disposition
of the property commonly known as the Renaissance Centre located in Altamonte
Springs, Florida, as more particularly described in Exhibit B attached hereto
and incorporated herein by this reference; and (ii) doing anything necessary or
incidental to the foregoing; provided, however, such business may be limited to
and conducted in such a manner as to permit the General Partner, in its sole and
absolute discretion, at all times to be classified as a REIT.
Section 3.2. Powers
A. The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership.
B. Notwithstanding any other provision in this Agreement, the General
Partner may cause the Partnership to take, or to refrain from taking, any action
that, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner to
continue to qualify as a REIT, (ii) could subject the General Partner to any
additional taxes under Code Section 857 or Code Section 4981 or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner, its securities or the Partnership, unless
such action (or inaction) under clause (i), clause (ii) or clause (iii) above
shall have been specifically consented to by the General Partner in writing.
Section 3.3. Partnership Only for Purposes Specified
The Partnership shall be a limited partnership only for the purposes
specified in Section 3.1 hereof, and this Agreement shall not be deemed to
create a company, venture or partnership between or among the Partners with
respect to any activities whatsoever other than the activities within the
purposes of the Partnership as specified in Section 3.1 hereof. Except as
otherwise provided in this Agreement, no Partner shall have any authority to act
for, bind, commit or assume any obligation or responsibility on behalf of the
Partnership, its properties or any other Partner. No Partner, in its capacity
as a Partner under this Agreement, shall be responsible or liable for any
indebtedness or obligation of another Partner, nor shall the Partnership be
responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement
and the Act.
Section 3.4. Representations and Warranties by the Limited Partners
A. Each Limited Partner that is an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to the Partnership, the General Partner and
each other Limited Partner that (i) the consummation of the transactions
contemplated by this Agreement to be performed by such Limited Partner will not
result in a breach or violation of, or a default under, any material agreement
by which such Limited Partner or any of such Limited Partner's property is
bound, or any statute, regulation, order or other law to which such Limited
Partner is subject, (ii) such Limited Partner is neither a "foreign person"
within the meaning of Code Section 1445(f) nor a "foreign partner" within the
meaning of Code Section 1446(e), (iii) such Limited Partner does not own,
directly or indirectly (including by reason of the constructive ownership rules
of Code Section 856(d)(5)), (a) nine and eight-tenths percent (9.8%) or more of
the total combined voting power of all classes of stock entitled to vote, or
nine and eight-tenths percent (9.8%) or more of the total number of shares of
all classes of stock, of any corporation that is a tenant of either (I) the
General Partner, (II) the Partnership (including any tenant of a property that
will, in connection with the admission of such Limited Partner, become a
Contributed Property) or (III) any partnership, venture or limited liability
company of which the General Partner or the Partnership is a member or (b) an
interest of nine and eight-tenths percent (9.8%) or more in the assets or net
profits of any tenant of either (I) the General Partner, (II) the Partnership or
(including any tenant of a property that will, in connection with the admission
of such Limited Partner, become a Contributed Property) (III) any partnership,
venture or limited liability company of which the General Partner or the
Partnership is a member and (iv) this Agreement is binding upon, and enforceable
against, such Limited Partner in accordance with its terms.
B. Each Limited Partner that is not an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to the Partnership, the General Partner and
each other Limited Partner that (i) all transactions contemplated by this
Agreement to be performed by it have been duly authorized by all necessary
action, including, without limitation, that of its general partner(s),
committee(s), trustee(s), beneficiaries, directors and/or shareholder(s), as the
case may be, as required, (ii) the consummation of such transactions shall not
result in a breach or violation of, or a default under, its partnership or
operating agreement, trust agreement, charter or bylaws, as the case may be, any
material agreement by which such Limited Partner or any of such Limited
Partner's properties or any of its partners, members, beneficiaries, trustees or
shareholders, as the case may be, is or are bound, or any statute, regulation,
order or other law to which such Limited Partner or any of its partners,
members, trustees, beneficiaries or shareholders, as the case may be, is or are
subject, (iii) such Limited Partner is neither a "foreign person" within the
meaning of Code Section 1445(f) nor a "foreign partner" within the meaning of
Code Section 1446(e), (iv) such Limited Partner does not own, directly or
indirectly (including by reason of the constructive ownership rules of Code
Section 856(d)(5)), (a) nine and eight-tenths percent (9.8%) or more of the
total combined voting power of all classes of stock entitled to vote, or nine
and eight-tenths percent (9.8%) or more of the total number of shares of all
classes of stock, of any corporation that is a tenant of either (I) the General
Partner, (II) the Partnership (including any tenant of a property that will, in
connection with the admission of such Limited Partner, became a Contributed
Property) or (III) any partnership, venture or limited liability company of
which the General Partner or the Partnership is a member or (b) an interest of
nine and eight-tenths percent (9.8%) or more in the assets or net profits of any
tenant of either (I) the General Partner, (II) the Partnership (including any
tenant of a property that will, in connection with the admission of such Limited
Partner, became a Contributed Property) or (III) any partnership, venture or
limited liability company of which the General Partner or the Partnership is a
member and (v) this Agreement is binding upon, and enforceable against, such
Limited Partner in accordance with its terms.
C. Each Limited Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner)
represents, warrants and agrees that it has acquired and continues to hold its
interest in the Partnership for its own account for investment only and not for
the purpose of, or with a view toward, the resale or distribution of all or any
part thereof, nor with a view toward selling or otherwise distributing such
interest or any part thereof at any particular time or under any predetermined
circumstances. Each Limited Partner further represents and warrants that it is
a sophisticated investor, able and accustomed to handling sophisticated
financial matters for itself, particularly real estate investments, and that it
has a sufficiently high net worth that it does not anticipate a need for the
funds that it has invested in the Partnership in what it understands to be a
highly speculative and illiquid investment.
D. The representations and warranties contained in Sections 3.4.A, 3.4.B
and 3.4.C hereof shall survive the execution and delivery of this Agreement by
each Limited Partner (and, in the case of an Additional Limited Partner or a
Substituted Limited Partner, the admission of such Additional Limited Partner or
Substituted Limited Partner as a Limited Partner in the Partnership) and the
dissolution, liquidation and termination of the Partnership. The General
Partner may, in its sole and absolute discretion on behalf of the Partnership
and its Partners, grant waivers and exceptions to the representations and
warranties contained in Sections 3.4.A, 3.4.B and 3.4.C hereof, but any such
waiver or exception must be in writing, must refer to this Section 3.4.D) and
must describe with particularity the representation or warranty as to which such
waiver or exception shall apply.
E. Each Limited Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner) hereby
acknowledges that no representations as to potential profit, tax consequences of
any sort (including, without limitation, the tax consequences resulting from
making a Capital Contribution, being admitted to the Partnership or being
allocated Tax Items), cash flows, funds from operations or yield, if any, in
respect of the Partnership or the General Partner have been made by any Partner
or any employee or representative or Affiliate of any Partner, and that
projections and any other information, including, without limitation, financial
and descriptive information and documentation, that may have been in any manner
submitted to such Limited Partner shall not constitute any representation or
warranty of any kind or nature, express or implied.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions of the Initial Partners
At the time of the execution of this Agreement, each initial Limited
Partner shall make the Capital Contribution as set forth in the Partner Schedule
for such Partner, and the General Partner shall make the Capital Contribution
shown on Exhibit A attached hereto. Each initial Limited Partner shall own
Partnership Units in the amount set forth for such Partner in the Partner
Schedule with respect to such Partner, as the same may be amended from time to
time. The General Partner shall initially own Partnership Units in the amount
set forth for the General Partner on Exhibit A attached hereto. Except as
provided in a particular Partner Schedule, by law or in Section 4.4.D or
Section 10.4 hereof, the Partners shall have no obligation or right to make any
additional Capital Contributions or loans to the Partnership.
Section 4.2. Additional Limited Partners
The General Partner is authorized to admit one or more Additional Limited
Partners to the Partnership from time to time, on terms and conditions and for
such Capital Contributions as may established by the General Partner in its sole
and absolute discretion; provided, however, the Partnership may not acquire
additional Properties by means of Capital Contributions by other persons. No
action or consent by the Limited Partners shall be required in connection with
the admission of any Additional Limited Partner.
Section 4.3. Loans by Third Parties
The Partnership may incur or assume Debt, or enter into other similar
credit, guarantee, financing or refinancing arrangements, for any purpose, upon
such terms as the General Partner determines appropriate; provided, however,
that the Partnership shall not incur or assume any Debt under which a breach,
violation or default would be deemed to occur by virtue of the Transfer of any
Limited Partner Interest or General Partner Interest; provided, further, that
any Debt shall be nonrecourse to the General Partner unless the General Partner
otherwise agrees.
Section 4.4. Additional Funding and Capital Contributions
A. General. The General Partner may, at any time and from time to time,
determine that the Partnership requires additional funds ("Additional Funds")
for such purposes as the General Partner may determine. Additional Funds may be
raised by the Partnership, at the election of the General Partner, in any manner
provided in, and in accordance with, the terms of this Section 4.4 or,
alternatively, the terms of Section 4.3 hereof. No Person, including, without
limitation, any Partner or Assignee, shall have any preemptive, preferential,
participation or similar right or rights to subscribe for or acquire any
Partnership Interest.
B. Notice of Additional Funds Requirement. Other than with respect to
the Existing Loan, which is to be acquired by the General Partner upon the
contribution of the Property, the General Partner shall give written notice (the
"Funding Notice") to the Limited Partners of the need for Additional Funds and
the anticipated source(s) thereof.
C. General Partner Loans. If no irrevocable election to Loan its prorata
share of Additional Funds ("Loan Election"), is received by General Partner from
a Limited Partner within five (5) Business Days after the date of the Funding
Notice, the General Partner may enter into a Funding Debt and lend the
Additional Funds to the Partnership (a "General Partner Loan"). If the General
Partner enters into such a Funding Debt, the General Partner Loan will consist
of the net proceeds from such Funding Debt and, to the extent permitted by law,
will be on the same terms and conditions, including interest rate and repayment
schedule, and providing for the reimbursement of costs and expenses, as shall be
applicable with respect to or incurred in connection with such Funding Debt.
The parties hereto agree that the interest rate for a General Partner Loan shall
be equal to eleven percent (11%) per annum (so long as such interest rate is
then permitted under applicable law).
D. Participating Partner Loans. If a Funding Notice is given to the
Limited Partners, and a Loan Election is timely received from a Limited Partner,
the General Partner and Limited Partner may enter into a Funding Debt and lend
the Additional Funds to the Partnership (a "Partner Loan") on a prorata basis.
If the Partners enter into such a Funding Debt, the Partner Loan will consist of
the net proceeds from such Funding Debt and, to the extent permitted by law,
will be on the same terms and conditions, including interest rate and repayment
schedule, and providing for the reimbursement of costs and expenses, as shall be
applicable with respect to or incurred in connection with such Funding Debt.
The parties hereto agree that the interest rate for a Partner Loan shall be
equal to the Capitalization Rate (so long as such interest rate is then
permitted under applicable law).
Section 4.5. No Interest; No Return
No Partner shall be entitled to interest on its Capital Contribution or on
such Partner's Capital Account. Except as provided herein or by law, no Partner
shall have any right to demand or receive the return of its Capital Contribution
from the Partnership.
ARTICLE 5
DISTRIBUTIONS
Section 5.1. Requirement and Characterization of Distributions
The General Partner shall cause the Partnership to distribute quarterly
(or, with respect to a particular Holder of Partnership Units, in installments
upon such other frequency as may be provided in the relevant Partner Schedule)
such portion of Available Cash as the General Partner may determine in its sole
and absolute discretion to the Unitholders on the Partnership Record Date with
respect to such quarter (or other period as the General Partner may in its sole
and absolute discretion determine), (a) ninety-nine percent (99%) to the General
Partner and (b) one percent (1%) to the Limited Partners in proportion to their
Partnership Units as of the Partnership Record Date.
The General Partner in its sole and absolute discretion may distribute to
the Unitholders Available Cash in accordance with foregoing priorities on a more
frequent basis and provide for an appropriate record date. The General Partner
shall take such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the General Partner's qualification as a REIT, to
cause the Partnership to distribute sufficient amounts to enable the General
Partner to pay shareholder dividends that will (a) satisfy the requirements for
qualifying as a REIT under the Code and Regulations (the "REIT Requirements")
and (b) avoid any federal income or excise tax liability of the General Partner.
Section 5.2. Distributions in Kind
No right is given to any Unitholder to demand and receive property other
than cash as provided in this Agreement. The General Partner may determine, in
its sole and absolute discretion, to make a distribution in kind of Partnership
assets to the Unitholders, and, subject to Section 8.8 hereof, such assets shall
be distributed in such a fashion as to ensure that the fair market value is
distributed and allocated in accordance with Articles 5, 6 and 10 hereof.
Section 5.3. Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 10.4 hereof with respect to any allocation, payment or
distribution to any Unitholder shall be treated as amounts paid or distributed
to such Unitholder pursuant to Section 5.1 hereof for all purposes under this
Agreement.
Section 5.4. Distributions Upon Liquidation
Notwithstanding the other provisions of this Article 5, net proceeds from a
Terminating Capital Transaction, and any other cash received or reductions in
reserves made after commencement of the liquidation of the Partnership, shall be
distributed to the Unitholders in accordance with Section 13.2 hereof.
Section 5.5. Restricted Distributions
Notwithstanding any provision to the contrary contained in this Agreement,
neither the Partnership nor the General Partner, on behalf of the Partnership,
shall make a distribution to any Unitholder on account of its Partnership
Interest or interest in Partnership Units if such distribution would violate the
Act or other applicable law.
ARTICLE 6
ALLOCATIONS
Section 6.1. Timing and Amount of Allocations of Net Income and
Net Loss
Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each Fiscal Year of the Partnership as of the end of
each such year. Except as otherwise provided in this Article 6, and subject to
Section 11.6.C hereof, an allocation to a Unitholder of a share of Net Income or
Net Loss shall be treated as an allocation of the same share of each item of
income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.
Section 6.2. General Allocations
Except as otherwise provided in this Article 6 and subject to Section
11.6.C hereafter, Net Income and Net Loss shall be allocated as follows:
(1) ninety-nine percent (99%) to the General Partner; and
(2) one percent (1%) to the Limited Partners in proportion to their
respective Partnership Units at the end of each Fiscal Year.
Notwithstanding anything to the contrary in this Agreement, the Limited Partners
shall at all times while they are Limited Partners in the Partnership have no
less than one percent (1%) of the income, gain, deduction, loss, and credit of
the Partnership.
Section 6.3. Additional Allocation Provisions
Notwithstanding the foregoing provisions of this Article 6:
A. Regulatory Allocations
(a) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of
Section 6.2 hereof, or any other provision of this Article 6, if there is a
net decrease in Partnership Minimum Gain during any Fiscal Year, each
Unitholder shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal
to such Unitholder's share of the net decrease in Partnership Minimum Gain,
as determined under Regulations Section 1.704-2(g). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Unitholder pursuant thereto. The
items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(i)(2). This Section 6.3.B(a) is
intended to qualify as a "minimum gain chargeback" within the meaning of
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4) or in Section 6.3.B(a) hereof, if there
is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Unitholder who has a share of
the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Unitholder's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be allocated to
each General Partner, Limited Partner and other Holder pursuant thereto.
The items to be so allocated shall be determined in accordance with
Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
Section 6.3.B(b) is intended to qualify as a "chargeback of partner
nonrecourse debt minimum gain" within the meaning of Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.
(c) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any
Nonrecourse Deductions for any Fiscal Year shall be specially allocated to
the Holders of Partnership Units in accordance with their Partnership
Units. Any Partner Nonrecourse Deductions for any Fiscal Year shall be
special allocated to the Unitholder(s) who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable, in accordance with Regulations
Section 1.704-2(i).
(d) Qualified Income Offset. If any Unitholder unexpectedly receives
an adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4),(5) or (6), items of Partnership income and
gain shall be allocated, in accordance with Regulations Section 1.704-
l(b)(2)(ii)(d), to such Unitholder in an amount and manner sufficient to
eliminate, to the extent required by such Regulations, the Adjusted Capital
Account Deficit of such Unitholder as quickly as possible, provided that an
allocation pursuant to this Section 6.3.B(d) shall be made if and only to
the extent that such Unitholder would have an Adjusted Capital Account
Deficit after all other allocations provided in this Article 6 have been
tentatively made as if this Section 6.3.B(d) were not in the Agreement. It
is intended that this Section 6.3.B(d) qualify and be construed as a
"qualified income offset" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(e) Gross Income Allocation. In the event that any Unitholder has a
deficit Capital Account at the end of any Fiscal Year that is in excess of
the sum of (i) the amount (if any) that such Unitholder is obligated to
restore to the Partnership upon complete liquidation of such Unitholder's
Partnership Interest and (ii) the amount that such Unitholder is deemed to
be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Unitholder
shall be specially allocated items of Partnership income and gain in the
amount of such excess to eliminate such deficit as quickly as possible,
provided that an allocation pursuant to this Section 6.3.B(e) shall be made
if and only to the extent that such Unitholder would have a deficit Capital
Account in excess of such sum after all other allocations provided in this
Article 6 have been tentatively made as if this Section 6.3.B(e) and
Section 6.3.B(d) hereof were not in the Agreement.
(f) Limitation on Allocation of Net Loss. To the extent that any
allocation of Net Loss would cause or increase an Adjusted Capital Account
Deficit as to any Holder of Partnership Units, such allocation of Net Loss
shall be reallocated among the other Holders of Partnership Units in
accordance with their respective Partnership Units, subject to the
limitations of this Section 6.3.B(f).
(g) Section 754 Adjustment. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to Regulations Section 1.704-
1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be
taken into account in determining Capital Accounts as the result of a
distribution to a Holder of Partnership Units in complete liquidation of
its interest in the Partnership, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be specially allocated to the Holders
in accordance with their Partnership Units in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holders to whom such
distribution was made in the event that Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.
(h) Curative Allocations. The allocations set forth in Sections
6.3.B(a), (b), (c), (d), (e), (f) and (g) hereof (the "Regulatory
Allocations") are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 6.l hereof, the Regulatory
Allocations shall be taken into account in allocating other items of
income, gain, loss and deduction among the Unitholders so that, to the
extent possible without violating the requirements giving rise to the
Regulatory Allocations, the net amount of such allocations of other items
and the Regulatory Allocations to each Unitholder shall be equal to the net
amount that would have been allocated to each such Unitholder if the
Regulatory Allocations had not occurred.
B. Allocation of Excess Nonrecourse Liabilities. For purposes of
determining a Holder's proportional share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), each Holder's interest in Partnership profits shall be such Holder's
share of Partnership Units.
Section 6.4. Tax Allocations
A. In General. Except as otherwise provided in this Section 6.4, for
income tax purposes under the Code and the Regulations each Partnership item of
income, gain, loss and deduction (collectively, "Tax Items") shall be allocated
among the Unitholders in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3
hereof.
B. Allocations Respecting Section 704(c) Revaluations. Notwithstanding
Section 6.4.A hereof, Tax Items with respect to Property that is contributed to
the Partnership with a Gross Asset Value that varies from its basis in the hands
of the contributing Partner immediately preceding the date of contribution shall
be allocated among the Unitholders, for income tax purposes pursuant to
Regulations promulgated under Code Section 704(c) so as to take into account
such variation. The Partnership shall account for such variation under any
method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). In the event that the
Gross Asset Value of any Partnership asset is adjusted pursuant to subsection
(b) of the definition of "Gross Asset Value," subsequent allocations of Tax
Items with respect to such asset shall take account of the variation, if any,
between the adjusted basis of such asset and its Gross Asset Value in the same
manner as under Code Section 704(c) and the applicable Regulations.
Section 6.5. Other Provisions
A. Other Allocations Upon Change in Law. In the event that the Code or
any Regulations require allocations of items of income, gain, loss, deduction or
credit different from those set forth in this Article 6, the General Partner is
hereby authorized to make new allocations in reliance on the Code and such
Regulations, such new allocations shall be deemed to be made pursuant to the
fiduciary duty of the General Partner to the Partnership and the other Partners,
and no such new allocation shall give rise to any claim or cause of action by
any Partner.
B. Consistent Tax Reporting. The Partners acknowledge and are aware of
the income tax consequences of the allocations made by this Article 6 and hereby
agree to be bound by the provisions of this Article 6 in reporting their shares
of Net Income, Net Losses and other items of income, gain, loss, deduction and
credit for federal, state and local income tax purposes.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1. Management
A. Except as otherwise expressly provided in this Agreement including,
without limitation, Sections 7.3 B and 13.1 hereof, all management powers over
the business and affairs of the Partnership are and shall be exclusively vested
in the General Partner, and no Limited Partner shall have any right to
participate in or exercise control or management power over the business and
affairs of the Partnership. The General Partner may not be removed by the
Partners with or without cause, except with the Consent of the General Partner.
In addition to the powers now or hereafter granted a general partner of a
limited partnership under applicable law or that are granted to the General
Partner under any other provision of this Agreement, the General Partner,
subject to the other provisions hereof including Sections 7.3 B and 13.1, shall
have full power and authority to do all things deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all powers set forth
in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including without limitation:
(1) the making of any expenditures, the lending or borrowing of money
(including, without limitation, making prepayments on loans and borrowing
money to permit the Partnership to make distributions to its Partners in
such amounts as will permit the General Partner (so long as the General
Partner qualifies as a REIT) to avoid the payment of any federal income tax
including, for this purpose, any excise tax pursuant to Code Section 4981)
and to make distributions to its shareholders sufficient to permit the
General Partner to maintain REIT status or otherwise to satisfy the REIT
Requirements), the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by deed to secure debt,
mortgage, deed of trust or other lien or encumbrance on the Partnership's
assets) and the incurring of any obligations that it deems necessary for
the conduct of the activities of the Partnership;
(2) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(3) the acquisition, sale, transfer, exchange or other disposition of
any assets of the Partnership (including, but not limited to, the exercise
or grant of any conversion, option, privilege or subscription right or any
other right available in connection with any assets at any time held by the
Partnership) or the merger, consolidation, reorganization or other
combination of the Partnership with or into another entity;
(4) the mortgage, pledge, encumbrance or hypothecation of any assets
of the Partnership (including, without limitation, any Contributed
Property), the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement and on any terms that it sees fit, including, without limitation,
the financing of the operations and activities of the General Partner, the
Partnership or any of the Partnership's Subsidiaries, the lending of funds
to other Persons (including, without limitation, the Partnership's
Subsidiaries) and the repayment of obligations of the Partnership, its
Subsidiaries and any other Person in which it has an equity investment, and
the making of capital contributions to and equity investments in the
Partnership's Subsidiaries;
(5) the management, operation, leasing, landscaping, repair,
alteration, demolition, replacement or improvement of any Property,
including, without limitation, any Contributed Property, or other asset of
the Partnership or any Subsidiary;
(6) the negotiation, execution and performance of any contracts,
leases, conveyances or other instruments that the General Partner considers
useful or necessary to the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this Agreement,
including contracting with property managers (including, without
limitation, as to any Contributed Property or other Property, contracting
with the contributing or any other Limited Partner or its Affiliates for
property management services), contractors, developers, consultants,
accountants, legal counsel, other professional advisors and other agents
and the payment of their expenses and compensation out of the Partnership's
assets;
(7) the distribution of partnership cash or other Partnership assets
in accordance with this Agreement, the holding, management, investment and
reinvestment of cash and other assets of the Partnership, and the
collection and receipt of revenues, rents and income of the Partnership;
(8) the selection and dismissal of employees of the Partnership or
the General Partner (including, without limitation, employees having titles
or offices such as "president," "vice president," "secretary" and
"treasurer"), and agents, outside attorneys, accountants, consultants and
contractors of the Partnership or the General Partner and the determination
of their compensation and other terms of employment or hiring;
(9) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;
(10) the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general partnerships,
limited liability companies, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of property to, any Subsidiary and any
other Person in which it has an equity investment from time to time);
provided, however, that, as long as the General Partner has determined to
continue to qualify as a REIT, the General Partner may not engage in any
such formation, acquisition or contribution that would cause the General
Partner to fail to qualify as a REIT;
(11) the control of any matters affecting the rights and obligations
of the Partnership, including the settlement, compromise, submission to
arbitration or any other form of dispute resolution, or abandonment, of any
claim, cause of action, liability, debt or damages, due or owing to or from
the Partnership, the commencement or defense of suits, legal proceedings,
administrative proceedings, arbitrations or other forms of dispute
resolution, and the representation of the Partnership in all suits or legal
proceedings, administrative proceedings, arbitrations or other forms of
dispute resolution, the incurring of legal expense, and the indemnification
of any Person against liabilities and contingencies to the extent permitted
by law;
(12) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any Subsidiary or any other
Person (including, without limitation, the contribution or loan of funds by
the Partnership to such Persons);
(13) the determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of valuation as
it may adopt, provided that such methods are otherwise consistent with the
requirements of this Agreement;
(14) the enforcement of any rights against any Partner pursuant to
representations, warranties, covenants and indemnities relating to such
Partner's contribution of property or assets to the Partnership;
(15) the exercise, directly or indirectly, through any attorney-in-
fact acting under a general or limited power of attorney, of any right,
including the right to vote, appurtenant to any asset or investment held by
the Partnership;
(16) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any
Subsidiary of the Partnership or any other Person in which the Partnership
has a direct or indirect interest, or jointly with any such Subsidiary or
other Person;
(17) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which the
Partnership does not have an interest, pursuant to contractual or other
arrangements with such Person;
(18) the making, execution and delivery of any and all deeds, leases,
notes, deeds to secure debt, mortgages, deeds of trust, security
agreements, conveyances, contracts, guarantees, warranties, indemnities,
waivers, releases or legal instruments or agreements in writing necessary
or appropriate in the judgment of the General Partner for the
accomplishment of any of the powers of the General Partner enumerated in
this Agreement;
(19) the issuance of additional Partnership Units, as appropriate and
in the General Partner's sole and absolute discretion, in connection with
Capital Contributions by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4 hereof; and
(20) an election to dissolve the Partnership pursuant to
Section 13.1.C hereof.
B. Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement
(except as provided in Section 7.3 hereof), the Act or any applicable law, rule
or regulation. The execution, delivery or performance by the General Partner or
the Partnership of any agreement authorized or permitted under this Agreement
shall not constitute a breach by the General Partner of any duty that the
General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the Properties of the Partnership and (ii) liability insurance for
the Indemnitees hereunder.
D. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain working capital and other
reserves in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner (including the General Partner) of any action taken by it. The
General Partner and the Partnership shall not have liability to a Limited
Partner under any circumstances as a result of an income tax liability incurred
by such Limited Partner as a result of an action (or inaction) by the General
Partner pursuant to its authority under this Agreement so long as the action or
inaction is taken in good faith.
Section 7.2. Certificate of Limited Partnership
To the extent that such action is determined by the General Partner to be
reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of
California and each other state, the District of Columbia or any other
jurisdiction in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not
be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner. The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the limited partners have limited
liability to the extent provided by applicable law) in the State of California
and any other state, or the District of Columbia or other jurisdiction in which
the Partnership may elect to do business or own property.
Section 7.3. Restrictions on General Partner's Authority
A. The General Partner may not take any action in contravention of this
Agreement. Specifically (but without limitation), the General Partner may not:
(1) take any action that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement;
(2) possess Partnership property, or assign any rights in specific
Partnership property, for other than a Partnership purpose except as
otherwise provided in this Agreement;
(3) admit a Person as a Partner, except as otherwise provided in this
Agreement, or
(4) perform any act that would subject a Limited Partner to liability
as a general partner in any jurisdiction or any other liability except as
provided herein or under the Act.
B. The General Partner shall not, without the prior consent of all the
Limited Partners, undertake, on behalf of the Partnership, any of the following
actions or enter into any transaction that would have the effect of such
transactions:
(1) except as otherwise specifically provided in this Agreement,
amend, modify or terminate this Agreement other than to reflect the
admission, substitution, termination or withdrawal of Partners pursuant to
Article 11 or Article 12 hereof;
(2) make a general assignment for the benefit of creditors or appoint
or acquiesce in the appointment of a custodian, receiver or trustee for all
or any part of the assets of the Partnership;
(3) institute any proceeding for bankruptcy on behalf of the
Partnership;
(4) subject to the rights of Transfer provided in Section 11.2
hereof, approve or acquiesce to the Transfer of the Partnership Interest of
the General Partner, or admit into the Partnership any additional or
successor General Partners; or
(5) on or prior to January 2, 2005, sell, convey, contribute or
otherwise transfer the Property or satisfy or pay down the principal of the
$7,000,000 loan secured by the Property; or
(6) after January 2, 2001 sell, convey, contribute or otherwise
transfer the Property or satisfy or pay down the principal of the
$7,000,000 loan secured by the Property unless (i) in General Partner's
reasonable judgment, a material adverse change has occurred in the economic
condition of the Property and (ii) the sale, conveyance or other transfer
is a bona fide transfer to a Person unaffiliated with the General Partner.
C. Notwithstanding Section 7.3.B hereof, the General Partner shall have
the power, without the Consent of the Limited Partners, to amend this Agreement
as may be required to facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner or surrender any
right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution or withdrawal of Partners
or the termination of the Partnership in accordance with this Agreement,
and to amend Exhibit A in connection with such admission, substitution or
withdrawal;
(3) to reflect a change that is of an inconsequential nature and does
not adversely affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement
not inconsistent with law or with other provisions, or make other changes
with respect to matters, arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement;
(4) to satisfy any requirements, conditions or guidelines contained
in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law;
(5) to reflect such changes as are reasonably necessary for the
General Partner to maintain its status as a REIT or to satisfy the REIT
Requirements; and
(6) to modify the manner in which Capital Accounts are computed (but
only to the extent set forth in the definition of "Capital Account" or
contemplated by the Code or the Regulations).
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.C is taken.
D. Notwithstanding Section 7.3.B and 7.3.C hereof, this Agreement shall
not be amended, and no action may be taken by the General Partner, without the
Consent of each Partner adversely affected, if such amendment or action would
(i) convert a Limited Partner Interest in the Partnership into a General Partner
Interest (except as a result of the General Partner acquiring such Partnership
Interest), (ii) modify the limited liability of a Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5 or
Section 13.2.A(4) hereof, or the allocations specified in Article 6 hereof
(except in any case as permitted pursuant to Sections 4.4 and 7.3.C hereof),
(iv) alter or modify the Cash Amount or (v) amend this Section 7.3.D. Further,
no amendment may alter the restrictions on the General Partner's authority set
forth elsewhere in this Section 7.3 without the Consent specified therein. Any
such amendment or action consented to by any Partner shall be effective as to
that Partner, notwithstanding the absence of such consent by any other Partner.
Section 7.4. Reimbursement of the General Partner
A. The General Partner shall not be compensated for its services as
general partner of the Partnership except as provided elsewhere in this
Agreement (including the provisions of Articles 5 and 6 hereof regarding
distributions, payments and allocations to which it may be entitled in its
capacity as the General Partner).
B. Subject to Sections 7.4.C and 15.11 hereof, the Partnership shall be
liable, and shall reimburse the General Partner on a monthly basis (or such
other basis as the General Partner may determine in its sole and absolute
discretion), for all sums expended in connection with the Partnership's
business. Any such reimbursements shall be in addition to any reimbursement of
the General Partner as a result of indemnification pursuant to Section 7.7
hereof. Notwithstanding the foregoing, the Initial Limited Partner agrees that
it shall be liable, and shall reimburse the Partnership on a monthly basis (or
such other basis but not more frequently than monthly as the General Partner may
determine in its sole and absolute discretion), for all sums expended in
connection with the formation and/or maintenance of the Partnership
(noninclusive of sums expended with respect to the management and operation of
the Property, which shall be reimbursable to the General Partner by the
Partnership), including the actual cost of (i) filing fees, (ii) Partnership
accounting, (iii) communications with Partners, (iv) legal services, and (v) tax
services. The Limited Partners further agree that, notwithstanding anything to
the contrary in this Agreement, the General Partner may pay to the Partnership,
from any distributions due to the Limited Partners hereunder, the full amount of
any such reimbursements which have not been paid by the Limited Partners as of
the date of such disbursement.
C. To the extent practicable, Partnership expenses shall be billed
directly to and paid by the Partnership. Subject to Section 15.11 hereof,
reimbursements to the General Partner or any of its Affiliates by the
Partnership shall be allowed for the actual cost to the General Partner or any
of its Affiliates of operating and other expenses of the Partnership, including,
without limitation, the actual cost of goods, materials and administrative
services related to (i) Partnership operations, (ii) Partnership accounting,
(iii) communications with Partners, (iv) legal services, (v) tax services, (vi)
computer services, (vii) risk management, (viii) mileage and travel expenses and
(ix) such other related operational and administrative expenses as are necessary
for the prudent organization and operation of the Partnership. "Actual cost of
goods and materials" means the actual cost to the General Partner or any of its
Affiliates of goods and materials used for or by the Partnership obtained from
entities not affiliated with the General Partner, and "actual cost of
administrative services" means the pro rata cost of personnel (as if such
persons were employees of the Partnership) providing administrative services to
the Partnership. The cost for such services to be reimbursed to the General
Partner or any Affiliate thereof shall be the lesser of the General Partner's or
Affiliate's actual cost, or the amount the Partnership would be required to pay
to independent parties for comparable administrative services in the same
geographic location. Notwithstanding the foregoing, the Partnership shall not
reimburse the General Partner or any Affiliate thereof under this Section 7.4
for:
(1) Any rent, depreciation, utilities or other administrative items
generally constituting the General Partner's or Affiliate's overhead; or
(2) Any of the salaries or fringe benefits incurred or allocated to
any Controlling Person of any General Partner or any Affiliate thereof.
Subject to Section 15.11 hereof, reimbursements to the General Partner or any of
its Affiliates by the Partnership pursuant to this Section 7.4 shall be treated
as "guaranteed payments" within the meaning of Code Section 707(c).
Section 7.5. Other Business of General Partner
The General Partner may engage independently or with others in other
business ventures of every nature and description, including, without
limitation, the ownership of other properties and the making or management of
other investments. Nothing in this Agreement shall be deemed to prohibit the
General Partner or any Affiliate of the General Partner from dealing, or
otherwise engaging in business with, Persons transacting business with the
Partnership, or from providing services related to the purchase, sale,
financing, management, development or operation of real or personal property and
receiving compensation therefor, not involving any rebate or reciprocal
arrangement that would have the effect of circumventing any restriction set
forth herein upon dealings with the General Partner or any Affiliate of the
General Partner. Neither the Partnership nor any Partner shall have any right
by virtue of this Agreement or the Partnership relationship created hereby in or
to such other ventures or activities or to the income or proceeds derived
therefrom, and the pursuit of such ventures, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper.
Section 7.6. Contracts with Affiliates
A. Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property to
the Partnership, directly or indirectly, except pursuant to transactions that
are determined by the General Partner in good faith to be fair and reasonable.
B. The General Partner is expressly authorized to enter into, in the name
and on behalf of the Partnership, a right of first opportunity arrangement and
other conflict avoidance agreements with various Affiliates of the Partnership
and the General Partner, on such terms as the General Partner, in its sole and
absolute discretion, believes are advisable.
Section 7.7. Indemnification
A. To the fullest extent permitted by applicable law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorney's fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that
relate to the operations of the Partnership ("Actions") as set forth in this
Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) for willful misconduct or a knowing violation of
the law, (ii) for any transaction for which such Indemnitee received an improper
personal benefit in violation or breach of any provision of this Agreement or
(iii) for its obligation under any guaranty. Without limitation, the foregoing
indemnity shall extend to any liability of any Indemnitee, pursuant to a loan
guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary
of the Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and the General Partner is hereby authorized and empowered, on behalf of
the Partnership, to enter into one or more indemnity agreements consistent with
the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such indebtedness. It is the intention of
this Section 7.7.A that the Partnership indemnify each Indemnitee to the fullest
extent permitted by law. The termination of any proceeding by judgment, order
or settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct set forth in this Section 7.7A. The termination
of any proceeding by conviction of an Indemnitee or upon a plea of nolo
contendere or its equivalent by an Indemnitee, or an entry of an order of
probation against an Indemnitee prior to judgment, does not create a presumption
that such Indemnitee acted in a manner contrary to that specified in this
Section 7.7.A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, and neither the General Partner nor any Limited
Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.
B. To the fullest extent permitted by law, expenses incurred by an
Indemnitee who is a party to a proceeding or otherwise subject to or the focus
of or is involved in any Action shall be paid or reimbursed by the Partnership
as incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee
of the Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.7.A has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met.
C. The indemnification provided by this Section 7.7 shall be in addition
to any other rights to which an Indemnitee or any other Person may be entitled
under any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other Person,
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
E. Any liabilities which an Indemnitee incurs as a result of acting on
behalf of the Partnership or the General Partner (whether as a fiduciary or
otherwise) in connection with the operation, administration or maintenance of an
employee benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS, penalties
assessed by the Department of Labor, restitutions to such a plan or trust or
other funding mechanism or to a participant or beneficiary of such plan, trust
or other funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.7, unless such liabilities arise as a
result of (i) such Indemnitee's intentional misconduct or knowing violation of
the law, (ii) any transaction in which such Indemnitee received a personal
benefit in violation or breach of any provision of this Agreement or applicable
law, or (iii) any obligation under a guaranty.
F. In no event may an Indemnitee subject any of the Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in part
under this Section 7.7 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. It is the intent of the Partners that any amounts paid by the
Partnership to the General Partner pursuant to this Section 7.7 shall be treated
as "guaranteed payments" within the meaning of Code Section 707(c).
Section 7.8. Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this Agreement,
neither the General Partner nor any of its directors or officers shall be liable
or accountable in damages or otherwise to the Partnership, any Partners or any
Assignees for losses sustained, liabilities incurred or benefits not derived as
a result of errors in judgment or mistakes of fact or law or of any act or
omission if the General Partner or such director or officer acted in good faith.
B. The Limited Partners expressly acknowledge that the General Partner is
acting for the benefit of the Partnership, the Limited Partners and the General
Partner's shareholders collectively and that the General Partner is under no
obligation to give priority to the separate interests of the Limited Partners or
the General Partner's shareholders (including, without limitation, the tax
consequences to Limited Partners, Assignees or the General Partner's
shareholders) in deciding whether to cause the Partnership to take (or decline
to take) any actions.
C. Subject to its obligations and duties as General Partner set forth in
Section 7.1.A hereof, the General Partner may exercise any of the powers granted
to it by this Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its employees or agents (subject to the
supervision and control of the General Partner). The General Partner shall not
be responsible for any misconduct or negligence on the part of any such agent
appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's, and its officers' and directors',
liability to the Partnership and the Limited Partners under this Section 7.8 as
in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.
E. Notwithstanding anything herein to the contrary, except for fraud,
willful misconduct or gross negligence, or pursuant to any express indemnities
given to the Partnership by any Partner pursuant to any other written
instrument, no Partner shall have any personal liability whatsoever, to the
Partnership or to the other Partner(s), for the debts or liabilities of the
Partnership or the Partnership's obligations hereunder, and the full recourse of
the other Partner(s) shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, director or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (i) active and deliberate dishonesty established by a non-
appealable final judgment or (ii) actual receipt of an improper benefit or
profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any
such express indemnity, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of the General
Partner solely as officers of the same and not in their own individual
capacities.
F. To the extent that, at law or in equity, the General Partner has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Limited Partners, the General Partner shall not be liable to
the Partnership or to any other Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of the General Partner otherwise
existing at law or in equity, are agreed by the Partners to replace such other
duties and liabilities of such General Partner.
Section 7.9. Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it, and
any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters that the General Partner reasonably believes to be within
such Person's professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty that
is permitted or required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision of
the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT, (ii) for the General Partner otherwise to satisfy the REIT
Requirements or (iii) to avoid the General Partner incurring any taxes under
Code Section 857 or Code Section 4981, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
Section 7.10. Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively with other Partners or
Persons, she have any ownership interest in such Partnership assets or any
portion thereof. Title to any or all of the Partnership assets may be held in
the name of the Partnership, the General Partner or one or more nominees, as the
General Partner may determine, including Affiliates of the General Partner. The
General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
Section 7.11. Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without the consent or approval of any
other Partner or Person, to encumber, sell or otherwise use in any manner any
and all assets of the Partnership and to enter into any contracts on behalf of
the Partnership, and take any and all actions on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially,. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expediency of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1. Limitation of Liability
The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement (including, without limitation,
Section 10.4 hereof) or under the Act.
Section 8.2. Management of Business
No Limited Partner or Assignee (other than the General Partner, any of its
Affiliates or any officer, director, member, employee, partner, agent or trustee
of the General Partner, the Partnership or any of their Affiliates, in their
capacity as such) shall take part in the operations, management or control
(within the meaning of the Act) of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, member,
employee, partner, agent, representative, or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
Section 8.3. Outside Activities of Limited Partners
Subject to any agreements entered into pursuant to Section 7.6.D hereof and
any other agreements entered into by a Limited Partner or its Affiliates with
the General Partner, the Partnership or a Subsidiary (including, without
limitation, any employment agreement), any Limited Partner and any Assignee,
officer, director, employee, agent, trustee, Affiliate or partner of any Limited
Partner shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities that are in direct or indirect competition
with the Partnership or that are enhanced by the activities of the Partnership.
Neither the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. Subject
to such agreements, none of the Limited Partners nor any other Person shall have
any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person (other than the
General Partner, to the extent expressly provided herein), and such Person shall
have no obligation pursuant to this Agreement, subject to Section 7.6.D hereof
and any other agreements entered into by a Limited Partner or its Affiliates
with the General Partner, the Partnership or a Subsidiary, to offer any interest
in any such business ventures to the Partnership, any Limited Partner or any
such other Person, even if such opportunity is of a character that, if presented
to the Partnership, any Limited Partner or such other Person, could be taken by
such Person.
Section 8.4. Return of Capital
No Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein.
Except to the extent provided in Article 6 hereof or otherwise expressly
provided in this Agreement, no Limited Partner or Assignee shall have priority
over any other Limited Partner or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions.
Section 8.5. Rights of Limited Partners Relating to the Partnership
A. In addition to other rights provided by this Agreement or by the Act,
each Limited Partner shall have the right, for a purpose reasonably related to
such Limited Partner's interest as a Limited Partner in the Partnership, upon
written demand with a statement of the purpose of such demand and at such
Limited Partner's own expense:
(1) to obtain a copy of (i) the most recent annual and quarterly
reports filed with the SEC by the General Partner pursuant to the Exchange
Act and (ii) each report or other written communication sent to the
shareholders of the General Partner;
(2) to obtain a copy of the Partnership's federal, state and local
income tax returns for each Fiscal Year;
(3) to obtain a current list of the name and last known business,
residence or mailing address of each Partner,
(4) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all amendments
thereto have been executed; and
(5) to obtain true and full information regarding the amount of cash
and a description and statement of any other property or services
contributed by each Partner and that each Partner has agreed to contribute
in the future, and the date on which each became a Partner.
B. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion, any
information that (i) the General Partner believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in good
faith believes is not in the best interests of the Partnership or the General
Partner or (ii) the Partnership or the General Partner is required by law or by
agreements with unaffiliated third parties to keep confidential.
Section 8.6. Intentionally Omitted
Section 8.7. Partnership Right to Call Limited Partner Interests
Notwithstanding any other provision of this Agreement, after January 2,
2005, the Partnership shall have the right, but not the obligation, from time to
time and at any time to redeem any and all outstanding Limited Partner Interests
by notice to such Limited Partner ("Call Notice") that the Partnership has
elected to exercise its rights under this Section 8.7. Within ten (10) Business
Days after receipt of the Call Notice, the Tendering Party shall deliver to the
General Partner a Notice of Redemption and, on the Specified Redemption Date the
Tendering Party shall sell the Tendered Units to the General Partner in exchange
for the Cash Amount. In such event, the Limited Partner holding the Limited
Partner Interest to be redeemed shall be the "Tendering Party" and the entirety
of such Limited Partner Interest shall be the "Tendered Units." In the event
that Tendering Party fails to deliver a Notice of Redemption to the General
Partner as required above, an executed Notice of Redemption shall be deemed
delivered as of ten (10) Business Days after receipt of the Call Notice, the
Cash Amount shall be paid in a manner consistent with the last distribution to
Tendering Party pursuant to this Agreement and the General Partner may take such
steps as necessary to transfer the Tendered Units to General Partner, including
cancellation and reissuance of the Tendered Units. All Partnership Units
acquired by the General Partner pursuant to this Section 8.7 hereof shall
automatically, and without further action required, be converted into and deemed
to be General Partner Interests comprised of the same number of Partnership
Units.
Section 8.8. Other Redemptions
Nothing in this Agreement shall preclude the redemption of a Limited
Partner Interest or Partnership Units by the Partnership upon such terms and
conditions as may be negotiated between the Limited Partner or Assignee holding
such Limited Partner Interest or Partnership Units, on the one hand, and the
General Partner, on the other hand, in their sole and absolute discretion. Such
a redemption may include, without limitation, the payment of cash by the
Partnership to the Limited Partner or Assignee, in a lump sum or in
installments, or the distribution in kind of Partnership assets to such Limited
Partner or Assignee (which assets may be encumbered), including assets to be
designated by the Limited Partner or Assignee and acquired (with or without debt
financing) by the Partnership. Upon any such redemption, the Partnership Units
and Limited Partner Interest redeemed and the applicable Partner Schedule shall
be canceled and Exhibit A shall be amended as appropriate to reflect such
redemption. In effecting any such redemption by negotiated agreement, none of
the Partnership, the General Partner, the Limited Partner and the Assignee, as
the case may be, shall incur any liability to any other Holder of Partnership
Units or have any duty to offer the same or similar terms for redemption of any
other Limited Partner Interest or Partnership Units.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1. Records and Accounting
A. The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be maintained
by the Act and other books and records deemed by the General Partner to be
appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5.A or Section 9.3 hereof. Any records maintained by or on behalf
of the Partnership in the regular course of its business may be kept on, or be
in the form of, punch cards, magnetic tape, photographs, micrographics or any
other information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time.
B. The books of the Partnership shall be maintained, for financial and
tax reporting purposes, on an accrual basis in accordance with generally
accepted accounting principles, or on such other basis as the General Partner
determines to be necessary or appropriate. To the extent permitted by sound
accounting practices and principles, the Partnership and the General Partner may
operate with integrated or consolidated accounting records, operations and
principles.
Section 9.2. Fiscal Year
The Fiscal Year of the Partnership shall be the calendar year.
Section 9.3. Reports
A. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each Fiscal Year, the General Partner shall cause
to be mailed to each Limited Partner of record as of the close of the Fiscal
Year, an annual report containing financial statements of the Partnership, or of
the General Partner if such statements are prepared solely on a consolidated
basis with the General Partner, for such Fiscal Year, presented in accordance
with generally accepted accounting principles. Such statements of the
Partnership need not be audited if such statements are consolidated with audited
financial statements of the General Partner.
B. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each calendar quarter (except the last calendar
quarter of each year), the General Partner shall cause to be mailed to each
Limited Partner, of record as of the last day of the calendar quarter, a report
containing unaudited financial statements of the Partnership, or of the General
Partner, if such statements are prepared solely on a consolidated basis with the
General Partner, and such other information as may be required by applicable law
or regulation or as the General Partner determines to be appropriate.
ARTICLE 10
TAX MATTERS
Section 10.1. Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing of
all returns with respect to Partnership income, gains, deductions, losses and
other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes. The
Limited Partners shall promptly provide the General Partner with such
information relating to the Contributed Properties, including tax basis and
other relevant information, as may be reasonably requested by the General
Partner from time to time.
Section 10.2. Tax Elections
Except as otherwise provided herein, the General Partner shall, in its sole
and absolute discretion, determine whether to make any available election
pursuant to the Code, including, but not limited to, the election under Code
Section 754 and the election to use the "recurring item" method of accounting
provided under Code Section 461(h) with respect to property taxes imposed on the
Partnership's Properties; provided, however, that, if the "recurring item"
method of accounting is elected with respect to such property taxes, the
Partnership shall pay the applicable property taxes prior to the date provided
in Code Section 461(h) for purposes of determining economic performance. The
General Partner shall have the right to seek to revoke any such election
(including, without limitation, any election under Code Sections 461(h) and 754)
upon the General Partner's determination in its sole and absolute discretion
that such revocation is in the best interests of the Partners.
Section 10.3. Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes. The tax matters partner shall
receive no compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such (including
legal and accounting fees and expenses) shall be borne by the Partnership in
addition to any reimbursement pursuant to Section 7.4 hereof. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
to assist the tax matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such services is reasonable. At
the request of any Limited Partner, the General Partner agrees to consult with
such Limited Partner with respect to the preparation and filing of any returns
and with respect to any subsequent audit or litigation relating to such returns;
provided, however, that the filing of such returns shall be in the sole and
absolute discretion of the General Partner.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership
items required to be taken into account by a Partner for income tax
purposes (such administrative proceedings being referred to as a "tax
audit" and such judicial proceedings being referred to as "judicial
review"), and in the settlement agreement the tax matters partner may
expressly state that such agreement shall bind all Partners, except that
such settlement agreement shall not bind any Partner (i) who (within the
time prescribed pursuant to the Code and Regulations) files a statement
with the IRS providing that the tax matters partner shall not have the
authority to enter into a settlement agreement on behalf of such Partner or
(ii) who is a "notice partner" (as defined in Code Section 6231) or a
member of a "notice group" (as defined in Code Section 6223(b)(2));
(2) in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into account by a
Partner for tax purposes (a "final adjustment") is mailed to the tax
matters partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the United States
Tax Court or the United States Claims Court, or the filing of a complaint
for refund with the District Court of the United States for the district in
which the Partnership's principal place of business is located;
(3) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with the IRS
at any time and, if any part of such request is not allowed by the IRS, to
file an appropriate pleading (petition or complaint) for judicial review
with respect to such request;
(5) to enter into an agreement with the IRS to extend the period for
assessing any tax that is attributable to any item required to be taken
into account by a Partner for tax purposes, or an item affected by such
item; and
(6) to take any other action on behalf of the Partners in connection
with any tax audit or judicial review proceeding to the extent permitted by
applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 hereof shall be fully applicable to the tax
matters partner in its capacity as such.
Section 10.4. Withholding
Each Limited Partner hereby authorizes the Partnership to withhold from or
pay on behalf of or with respect to such Limited Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Section 1441, Code Section 1442, Code Section 1445
or Code Section 1446. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner,
which loan shall be repaid by such Limited Partner within fifteen (15) days
after notice from the General Partner that such payment must be made unless
(i) the Partnership withholds such payment from a distribution that would
otherwise be made to the Limited Partner or (ii) the General Partner determines,
in its sole and absolute discretion, that such payment may be satisfied out of
the Available Funds of the Partnership that would, but for such payment, be
distributed to the Limited Partner. Each Limited Partner hereby unconditionally
and irrevocably grants to the Partnership a security interest in such Limited
Partner's Partnership Interest to secure such Limited Partner's obligation to
pay to the Partnership any amounts required to be paid pursuant to this
Section 10.4. In the event that a Limited Partner fails to pay any amounts owed
to the Partnership pursuant to this Section 10.4 when due, the General Partner
may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner (including, without limitation, the right to receive
distributions). Any amounts payable by a Limited Partner hereunder shall bear
interest at the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the WALL STREET JOURNAL,
plus four (4) percentage points (but not higher than the maximum lawful rate)
from the date such amount is due (i.e., fifteen (15) days after demand) until
such amount is paid in full. Each Limited Partner shall take such actions as
the Partnership or the General Partner shall request in order to perfect or
enforce the security interest created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1. Transfer
A. No part of the interest of a Partner shall be subject to the claims of
any creditor, to the claims of any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered
except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be Transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article 11.
Any Transfer or purported Transfer of a Partnership Interest not made in
accordance with this Article 11 shall be null and void ab initio.
Section 11.2. Transfer of General Partner's Partnership Interest
A. The General Partner may not Transfer any of its General Partner
Interest or withdraw from the Partnership except as provided in Sections 11.2.B
and 11.2.C hereof.
B. The General Partner shall not withdraw from the Partnership and shall
not Transfer all or any portion of its interest in the Partnership (whether by
sale, disposition, statutory merger or consolidation, liquidation or otherwise)
without the Consent of the Limited Partners, which Consent may be given or
withheld in the sole and absolute discretion of the Limited Partners; provided
that no Consent of the Limited Partners shall be necessary (a) after January 2,
2005, nor (b) after January 2, 2001 pursuant to Section 7.3(B)(6), nor (c) if
the General Partner shall Transfer its interest in the Partnership to a Person
who will assume the obligations of General Partner. Upon any Transfer of such a
Partnership Interest pursuant to the Consent of the Limited Partners and
otherwise in accordance with the provisions of this Section 11.2.B, the
transferee shall become a successor General Partner for all purposes herein, and
shall be vested with the powers and rights of the transferor General Partner,
and shall be liable for all obligations and responsible for all duties of the
General Partner, once such transferee has executed such instruments as may be
necessary to effectuate such admission and to confirm the agreement of such
transferee to be bound by all the terms and provisions of this Agreement with
respect to the Partnership Interest so acquired. It is a condition to any
Transfer otherwise permitted hereunder that the transferee assumes, by operation
of law or express agreement, all of the obligations of the transferor General
Partner under this Agreement with respect to such Transferred Partnership
Interest, and such Transfer shall relieve the transferor General Partner of its
obligations under this Agreement without the Consent of the Limited Partners.
In the event that the General Partner withdraws from the Partnership, in
violation of this Agreement or otherwise, or otherwise dissolves or terminates,
or upon the bankruptcy of the General Partner, a majority in interest of the
remaining Partners may elect to continue the Partnership business by selecting a
successor General Partner in accordance with the Act.
Section 11.3. Limited Partners' Rights to Transfer
A. General. No Limited Partner shall Transfer all or any portion of its
Partnership Interest to any transferee without the consent of the General
Partner, which consent may be withheld in its sole and absolute discretion;
provided, however, that any Limited Partner may, at any time, without the
consent of the General Partner, transfer all or part of its Partnership Interest
to any Designated Party, any Controlled Entity or any Affiliate, provided that
the transferee is, in any such case, a Qualified Transferee (any Transfer
permitted by this proviso is hereinafter referred to as a "Permitted Transfer"),
subject to the provisions of Section 11.6 hereof and to satisfaction of each of
the following conditions:
(1) General Partner Right of First Refusal. The transferring Partner
shall give written notice of the proposed Transfer to the General Partner,
which notice shall state (i) the identity of the proposed transferee and
(ii) the amount, type and timing of consideration proposed to be received
for the Transferred Partnership Units. The General Partner shall have ten
(10) Business Days upon which to give the Transferring Partner notice of
its election to acquire the Partnership Units on the proposed terms. If it
so elects, it shall purchase the Partnership Units on such terms within ten
(10) Business Days after giving notice of such election. If it does not so
elect, the Transferring Partner may Transfer such Partnership Units to a
third party, on terms no more favorable to the transferee than the proposed
terms provided to the General Partner pursuant to clause (ii) above,
subject to the other conditions of this Section 11.3.
(2) Qualified Transferee. Any Transfer of a Partnership Interest
shall be made only to a single Qualified Transferee; provided, however,
that, for such purposes, all Qualified Transferees that are Affiliates, or
that comprise investment accounts or funds managed by a single Qualified
Transferee and its Affiliates, shall be considered together to be a single
Qualified Transferee; provided, further, that each Transfer meeting the
minimum Transfer restriction of Section 11.3.A(3) hereof may be to a
separate Qualified Transferee.
(3) Minimum Transfer Restriction. Any Transferring Partner must
Transfer not less than all of the remaining Partnership Units owned by such
Transferring Partner; provided, however, that, for purposes of determining
compliance with the foregoing restriction, all Partnership Units owned by
Affiliates of a Limited Partner shall be considered to be owned by such
Limited Partner.
(4) Transferee Agreement to Effect a Redemption. Any proposed
transferee shall deliver to the General Partner a written agreement
reasonably satisfactory to the General Partner to the effect that the
transferee will, within six (6) months after consummation of the
Partnership Units Transfer, tender its Partnership Units for Redemption in
accordance with the terms of the Redemption rights provided in Section 8.6
hereof.
(5) No Further Transfers. The transferee (other than a Designated
Party) shall not be permitted to effect any further Transfer of the
Partnership Units, other than to the General Partner.
(6) The proposed transferee shall deliver to the General Partner the
representations in clauses (ii) and (iii) of Section 3.4.A, in the case of
a proposed transferee that is an individual, or clauses (iii) and (iv) of
Section 3.4.B, in the case of any other proposed transferee.
It is a condition to any Transfer otherwise permitted hereunder (whether or not
such Transfer is a Permitted Transfer that the transferee assume by operation of
law or express agreement all of the obligations of the transferor Limited
Partner under this Agreement with respect to such Transferred Partnership
Interest, and no such Transfer (other than pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor Partner
are assumed by a successor corporation by operation of law) shall relieve the
transferor Partner of its obligations under this Agreement without the approval
of the General Partner, in its sole and absolute discretion. Notwithstanding
the foregoing, any transferee of any Transferred Partnership Interest shall be
subject to any and all ownership limitations contained in the Charter that may
limit or restrict such transferee's ability to exercise its Redemption rights,
including, without limitation, the Ownership Limit. Any transferee, whether or
not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary Transfer, by operation of
law or otherwise, shall have any rights hereunder, other than the rights of an
Assignee as provided in Section 11.5 hereof.
B. Incapacity. If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or receiver
of such Limited Partner's estate shall have all the rights of a Limited Partner,
but not more rights than those enjoyed by other Limited Partners, for the
purpose of settling or managing the estate, and such power as the Incapacitated
Limited Partner possessed to Transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
C. Opinion of Counsel. In connection with any Transfer of a Limited
Partner Interest, the General Partner shall have the right to receive an opinion
of counsel reasonably satisfactory to it to the effect that the proposed
Transfer may be effected without registration under the Securities Act and will
not otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred. If, in
the opinion of such counsel, such Transfer would require the filing of a
registration statement under the Securities Act or would otherwise violate any
federal or state securities laws or regulations applicable to the Partnership or
the Partnership Units, the General Partner may prohibit any Transfer otherwise
permitted under this Section 11.3 by a Limited Partner of Partnership Interests.
D. Adverse Tax Consequences. No Transfer by a Limited Partner of its
Partnership Interests (including any Redemption, any other acquisition of
Partnership Units by the General Partner or any acquisition of Partnership Units
by the Partnership) may be made to any person if (i) in the opinion of legal
counsel for the Partnership, it would create a material risk of the Partnership
being treated as an association taxable as a corporation, or (ii) such Transfer
is effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Code
Section 7704.
Section 11.4. Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a transferee
(including any Designated Party or other transferees pursuant to Transfers
permitted by Section 11.3 hereof) as a Limited Partner in its place. A
transferee (including, but not limited to, any Designated Party) of a Limited
Partner may be admitted as a Substituted Limited Partner only with the Consent
of the General Partner, which Consent may be given or withheld by the General
Partner in its sole and absolute discretion. The failure or refusal by the
General Partner to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or the General Partner. Subject to the foregoing, an Assignee
shall not be admitted as a Substituted Limited Partner until and unless it
furnishes to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all the terms, conditions and
applicable obligations of this Agreement, including, without limitation, the
power of attorney granted in Section 2.4 hereof, (ii) a Partner Schedule
executed by such Assignee and (iii) such other documents and instruments as may
be required or advisable, in the sole and absolute discretion of the General
Partner, to effect such Assignee's admission as a Substituted Limited Partner.
B. A transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name and address of such
Substituted Limited Partner and to eliminate, if necessary, the name and address
of the predecessor of such Substituted Limited Partner. In addition, the
Substituted Limited Partner and the General Partner shall execute a Partner
Schedule with respect to such Substituted Limited Partner, which Partner
Schedule shall supersede, to the extent necessary, the Partner Schedule for the
predecessor of such Substituted Limited Partner.
Section 11.5. Assignees
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 hereof
as a Substituted Limited Partner, as described in Section 11.4 hereof, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions
from the Partnership and the share of Net Income, Net Losses and other items of
income, gain, loss, deduction and credit of the Partnership attributable to the
Partnership Units assigned to such transferee and the rights to Transfer the
Partnership Units provided in this Article 11, but shall not be deemed to be a
holder of Partnership Units for any other purpose under this Agreement (other
than as expressly provided in Section 8.6 hereof with respect to a Qualifying
Party that becomes a Tendering Party), and shall not be entitled to effect a
Consent or vote with respect to such Partnership Units on any matter presented
to the Limited Partners for approval (such right to Consent or vote, to the
extent provided in this Agreement or under the Act, fully remaining with the
transferor Limited Partner). In the event that any such transferee desires to
make a further assignment of any such Partnership Units, such transferee shall
be subject to all the provisions of this Article 11 to the same extent and in
the same manner as any Limited Partner desiring to make an assignment of
Partnership Units.
Section 11.6. General Provisions
A. No Limited Partner may withdraw from the Partnership other than as a
result of a permitted Transfer of all of such Limited Partner's Partnership
Units in accordance with this Article 11, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to a Redemption (or
acquisition by the General Partner) of all of its Partnership Units under
Section 8.6 hereof.
B. Any Limited Partner who shall Transfer all of its Partnership Units in
a Transfer (i) permitted pursuant to this Article 11 where the transferee was
admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of its
rights to effect a Redemption of all of its Partnership Units under Section 8.6
hereof or (iii) to the General Partner, whether or not pursuant to Section 8.6.B
hereof, shall cease to be a Limited Partner.
C. If any Partnership Unit is Transferred in compliance with the
provisions of this Article 11, or is redeemed by the Partnership or acquired by
the General Partner pursuant to Section 8.6 hereof, on any day other than the
first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and
all other items of income, gain, loss, deduction and credit attributable to such
Partnership Unit for such Fiscal Year shall be allocated to the transferor
Partner or the Tendering Party, as the case may be, and, in the case of a
Transfer or assignment other than a Redemption, to the transferee Partner
(including, without limitation, the General Partner in the case of an
acquisition of Partnership Units pursuant to Section 8.6 hereof) or Assignee, by
taking into account their varying interests during the Fiscal Year in accordance
with Code Section 706(d), using the "daily proration" or "interim closing of the
books" method or another permissible method selected by the General Partner in
its sole and absolute discretion. Solely for purposes of making such
allocations, the General Partner, in its sole and absolute discretion, may
determine that each of such items for the calendar month in which a Transfer
occurs shall be allocated to the transferee Partner or Assignee and none of such
items for the calendar month in which a Transfer or a Redemption occurs shall be
allocated to the transferor Partner or the Tendering Party, as the case may be,
if such Transfer occurs on or after the fifteenth (15th) day of the month;
otherwise such items for such calendar month shall be allocated to the
transferor. All distributions of Available Cash attributable to such
Partnership Unit with respect to which the Partnership Record Date is before the
date of such Transfer, assignment or Redemption shall be made to the transferor
Partner or the Tendering Party, as the case may be, and, in the case of a
Transfer other than a Redemption, all distributions of Available Cash thereafter
attributable to such Partnership Unit shall be made to the transferee Partner or
Assignee.
D. In addition to any other restrictions on Transfer herein contained, in
no event may any Transfer or assignment of a Partnership Interest by any Partner
(including any Redemption, any acquisition of Partnership Units by the General
Partner or any other acquisition of Partnership Units by the Partnership) be
made:
(a) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest;
(b) in violation of applicable law;
(c) of any component portion of a Partnership Interest, such as the
Capital Account, or rights to distributions, separate and apart from all
other components of a Partnership Interest;
(d) in the event that such Transfer would cause the General Partner
to cease to comply with the REIT Requirements;
(e) if such Transfer would, in the opinion of counsel to the
Partnership or the General Partner, cause a termination of the Partnership,
in either case for federal or state income tax purposes (except as a result
of the Redemption (or acquisition by the General Partner) of all
Partnership Units held by all Limited Partners);
(f) if such Transfer would, in the opinion of legal counsel to the
Partnership, cause the Partnership either (i) to cease to be classified as
a partnership or (ii) to be classified as a publicly traded partnership, in
either case for federal income tax purposes (except as a result of the
Redemption (or acquisition by the General Partner) of all Partnership Units
held by all Limited Partners);
(g) if such Transfer would cause the Partnership to become, with
respect to any employee benefit plan subject to Title I of ERISA, a "party-
in-interest" (as defined in ERISA Section 3(14)) or a "disqualified person"
(as defined in Code Section 4975(c));
(h) if such Transfer would, in the opinion of legal counsel to the
Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of
Labor Regulations Section 2510.2-101;
(i) if such Transfer requires the registration of such Partnership
Interest pursuant to any applicable federal or state securities laws;
(j) if such Transfer would cause the Partnership to have more than
one hundred (100) partners (including as partners those persons indirectly
owning an interest in the Partnership through a partnership, limited
liability company, subchapter S corporation or grantor trust);
(k) if such Transfer causes the Partnership (as opposed to the
General Partner) to become a reporting company under the Exchange Act; or
(1) if such Transfer subjects the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or
ERISA, each as amended.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1. Admission of Successor General Partner
A successor to all of the General Partner's General Partner Interest
pursuant to Section 11.2 hereof who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as the General Partner,
effective immediately prior to such Transfer. Any such successor shall carry on
the business of the Partnership without dissolution. In each case, the
admission shall be subject to the successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms, conditions and
applicable obligations of this Agreement and such other documents or instruments
as may be required to effect the admission.
Section 12.2. Admission of Additional Limited Partners
A. After the admission to the Partnership of the initial Limited Partners
on the date hereof, a Person (other than an existing Partner) who makes a
Capital Contribution to the Partnership in accordance with this Agreement shall
be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms, conditions
and applicable of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a Partner Schedule executed by such
Person and (iii) such other documents or instruments as may be required in the
sole and absolute discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the Partnership on
any day other than the first day of a Fiscal Year, then Net Income, Net Losses,
each item thereof and all other items of income, gain, loss, deduction and
credit allocable among Partners and Assignees for such Fiscal Year shall be
allocated among such Additional Limited Partner and all other Partners and
Assignees by taking into account their varying interests during the Fiscal Year
in accordance with Code Section 706(d), using the "interim closing of the books"
method or another permissible method selected by the General Partner in its sole
and absolute discretion. Solely for purposes of making such allocations, each
of such items for the calendar month in which an admission of any Additional
Limited Partner occurs shall be allocated among all the Partners and Assignees
including such Additional Limited Partner, in accordance with the principles
described in Section 11.6.C hereof. All distributions of Available Cash with
respect to which the Partnership Record Date is before the date of such
admission shall be made solely to Partners and Assignees other than the
Additional Limited Partner, and all distributions of Available Cash thereafter
shall be made to all the Partners and Assignees including such Additional
Limited Partner.
Section 12.3. Amendment of Agreement and
Certificate of Limited Partnership
For the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend the
records of the Partnership and, if necessary, to prepare as soon as practical an
amendment of this Agreement (including an amendment of Exhibit A) and, if
required by law, shall prepare and file an amendment to the Certificate and may
for this purpose exercise the power of attorney granted pursuant to Section 2.4
hereof.
Section 12.4. Admission of Initial Limited Partners
The Persons listed on Exhibit A as limited partners of the Partnership
shall be admitted to the Partnership as Limited Partners upon their execution
and delivery of this Agreement.
Section 12.5. Limit on Number of Partners
No Person shall be admitted to the Partnership as a Substituted Limited
Partner or an Additional Limited Partner if the effect of such admission would
be to cause the Partnership to have more than one hundred (100) Partners,
including as Partners for this purpose those Persons indirectly owning an
interest in the Partnership through another partnership, a limited liability
company, a subchapter S corporation or a grantor trust, or otherwise cause the
Partnership to become a reporting company under the Exchange Act.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1. Dissolution
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership without dissolution. However, the
Partnership shall dissolve, and its affairs shall be wound up, upon the first to
occur of any of the following (each a "Liquidating Event"):
A. the expiration of its term as provided in Section 2.5 hereof;
B. an event of withdrawal, as defined in the Act (including, without
limitation, bankruptcy), of the sole General Partner unless, within ninety
(90) days after the withdrawal, a "majority in interest" of the remaining
Partners agree in writing, in their sole and absolute discretion, to
continue the business of the Partnership and to the appointment, effective
as of the date of withdrawal, of a successor General Partner;
C. an election to dissolve the Partnership made by the General
Partner on or after the date of delivery of the Call Notice, in its sole
and absolute discretion, with or without the consent of all the Limited
Partners;
D. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
E. the occurrence of a Terminating Capital Transaction in accordance
with the terms of this Agreement; or
F. the redemption (or acquisition by the General Partner) of all
Partnership Units other than Partnership Units held by the General Partner;
or
G. upon the consent of all the Limited Partners and the General
Partner.
Section 13.2. Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and Partners.
After the occurrence of a Liquidating Event, no Partner shall take any action
that is inconsistent with, or not necessary to or appropriate for, the winding
up of the Partnership's business and affairs. The General Partner (or, in the
event that there is no remaining General Partner or the General Partner has
dissolved, become bankrupt within the meaning of the Act or ceased to operate,
any Person elected by a Majority in Interest of the Limited Partners (the
General Partner or such other Person being referred to herein as the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property, and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the General Partner) shall be applied and distributed
in the following order:
(1) First, to the satisfaction of all of the Partnership's debts and
liabilities to creditors other than the Partners and their Assignees
(whether by payment or the making of reasonable provision for payment
thereof);
(2) Second, to the satisfaction of all of the Partnership's debts and
liabilities to the General Partner (whether by payment or the making of
reasonable provision for payment thereof), including, but not limited to,
amounts due as reimbursements under Section 7.4 hereof;
(3) Third, to the satisfaction of all of the Partnership's debts and
liabilities to the other Partners and any Assignees (whether by payment or
the making of reasonable provision for payment thereof); and
(4) The balance, if any, to the General Partner, the Limited Partners
and any Assignees in accordance with and in proportion to their positive
Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof that require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
C. In the event that the Partnership is "liquidated" within the meaning
of Regulations Section 1.704-1 (b)(2)(i)(g), distributions shall be made
pursuant to this Article 13 to the Partners and Assignees that have positive
Capital Accounts in compliance with Regulations Section 1.704- 1(b)(2)(ii)(b)(2)
to the extent of, and in proportion to, positive Capital Account balances. If
any Partner has a deficit balance in its Capital Account (after giving effect to
all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs), such Partner shall
have no obligation to make any contribution to the capital of the Partnership
with respect to such deficit, and such deficit shall not be considered a debt
owed to the Partnership or to any other Person for any purpose whatsoever. In
the sole and absolute discretion of the General Partner or the Liquidator, a pro
rata portion of the distributions that would otherwise be made to the Partners
pursuant to this Article 13 may be withheld or escrowed to provide a reasonable
reserve for Partnership liabilities (contingent or otherwise) and to reflect the
unrealized portion of any installment obligations owed to the Partnership,
provided that such withheld or escrowed amounts shall be distributed to the
General Partner and Limited Partners in the manner and order of priority set
forth in Section 13.2.A hereof as soon as practicable.
Section 13.3. Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the event that
the Partnership is liquidated within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g), but no Liquidating Event has occurred, the Partnership's
Property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be treated for federal income tax purposes as
having either (a) distributed the Properties in kind to the Partners and the
Assignees, who shall be deemed to have assumed and taken such Property subject
to all Partnership liabilities, all in accordance with their respective Capital
Accounts, followed by a deemed recontribution of the Partnership Property in
kind to the Partnership, which shall be deemed to have assumed and taken such
Property subject to all such liabilities, or (b) contributed the Properties to a
new partnership in exchange for interests in such new partnership and then
liquidated, distributing the interests in such new Partnership to the Partners
in accordance with their Capital Accounts, as required by the then-applicable
Code and Regulations; provided, however, that nothing in this Section 13.4 shall
be deemed to have constituted any Assignee as a Substituted Limited Partner
without compliance with the provisions of Section 11.4 hereof.
Section 13.4. Rights of Limited Partners
Except as otherwise provided in this Agreement, (a) each Limited Partner
shall look solely to the assets of the Partnership for the return of its Capital
Contribution, (b) no Limited Partner shall have the right or power to demand or
receive property other than cash from the Partnership and (c) no Limited Partner
shall have priority over any other Limited Partner as to the return of its
Capital Contributions, distributions or allocations.
Section 13.5. Notice of Dissolution
In the event that a Liquidating Event occurs or an event occurs that would,
but for an election or objection by one or more Partners pursuant to
Section 13.1 hereof, result in a dissolution of the Partnership, the General
Partner shall, within thirty (30) days thereafter, provide written notice
thereof to each of the Partners and, in the General Partner's sole and absolute
discretion or as required by the Act, to all other parties with whom the
Partnership regularly conducts business (as determined in the sole and absolute
discretion of the General Partner), and the General Partner may, or, if required
by the Act, shall, publish notice thereof in a newspaper of general circulation
in each place in which the Partnership regularly conduct business (as determined
in the sole and absolute discretion of the General Partner).
Section 13.6. Cancellation of Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership cash and property
as provided in Section 13.2 hereof, the Partnership shall be terminated, a
certificate of cancellation shall be filed with the State of California, all
qualifications of the Partnership as a foreign limited partnership or
association in jurisdictions other than the State of California shall be
canceled, and such other actions as may be necessary to terminate the
Partnership shall be taken.
Section 13.7. Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.
ARTICLE 14
PROCEDURES FOR ACTIONS AND CONSENTS
OF PARTNERS; AMENDMENTS; MEETINGS
Section 14.1. Procedures for Actions and Consents of Partners
The actions requiring consent or approval of Limited Partners pursuant to
this Agreement, including Section 7.3 hereof, or otherwise pursuant to
applicable law, are subject to the procedures set forth in this Article 14.
Section 14.2. Amendments
Amendments to this Agreement may be proposed by the General Partner or by a
Majority in Interest of the Limited Partners. Following such proposal, the
General Partner shall submit any proposed amendment to the Limited Partners.
The General Partner shall seek the written consent of the Limited Partners on
the proposed amendment or shall call a meeting to vote thereon and to transact
any other business that the General Partner may deem appropriate. For purposes
of obtaining a written consent, the General Partner may require a response
within a reasonable specified time, but not less than fifteen (15) days, and
failure to respond in such time period shall constitute a consent that is
consistent with the General Partner's recommendation with respect to the
proposal; provided, however, that an action shall become effective at such time
as requisite consents are received even if prior to such specified time.
Section 14.3. Meetings of the Partners
A. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
a Majority in Interest of the Limited Partners. The call shall state the nature
of the business to be transacted. Notice of any such meeting shall be given to
all Partners not less than seven (7) days nor more than thirty (30) days prior
to the date of such meeting. Partners may vote in person or by proxy at such
meeting. Whenever the vote or Consent of Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of Partners
or may be given in accordance with the procedure prescribed in Section 14.3.B
hereof.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by Partners holding a majority of the Partnership
Units (or such other percentage as is expressly required by this Agreement for
the action in question). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of Partners
holding a majority of the Partnership Units (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to act for
such Limited Partner by proxy on all matters in which a Limited Partner is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Limited Partner
or its attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy (or
there is receipt of a proxy authorizing a later date). Every proxy shall be
revocable at the pleasure of the Limited Partner executing it, such revocation
to be effective upon the Partnership's receipt of written notice of such
revocation from the Limited Partner executing such proxy.
D. Each meeting of Partners shall be conducted by the General Partner or
such other Person as the General Partner may appoint pursuant to such rules for
the conduct of the meeting as the General Partner or such other Person deems
appropriate in its sole and absolute discretion. Without limitation, meetings
of Partners may be conducted in the same manner as meetings of the General
Partner's shareholders and may be held at the same time as, and as part of, the
meetings of the General Partner's shareholders.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1. Addresses and Notice
Any notice, demand, request or report required or permitted to be given or
made to a Partner or Assignee under this Agreement shall be in writing and shall
be deemed given or made when delivered in person or when sent by first class
United States mail or by other means of written communication (including by
telecopy, facsimile, or commercial courier service) (i) in the case of a
Partner, to such Partner at the address set forth in Exhibit A (or, if Exhibit A
has not been amended to reflect the address of any such Partner, the Partner
Schedule with respect to such Partner) or such other address of which the
Partner shall notify the General Partner in writing and (ii) in the case of an
Assignee, to the address of which such Assignee shall notify the General Partner
in writing.
Section 15.2. Titles and Captions
All article or section titles or Captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" or
"Sections" are to Articles and Sections of this Agreement.
Section 15.3. Pronouns and Plurals
Whenever the context may requires any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa.
Section 15.4. Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5. Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
Section 15.6. Waiver
A. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
B. The restrictions, conditions and other limitations on the rights and
benefits of the Limited Partners contained in this Agreement. and the
representations, duties, covenants and other requirements of performance or
notice by the Limited Partners, are for the benefit of the Partnership and,
except for an obligation to pay money to the Partnership, may be waived or
relinquished by the General Partner, in its sole and absolute discretion, on
behalf of the Partnership in one or more instances from time to time and at any
time: provided, however, that any such waiver or relinquishment may not made if
it would have the effect of (i) creating liability for any other Limited
Partner, (ii) causing the Partnership to cease to qualify as a limited
partnership, (iii) reducing the amount of cash otherwise distributable to the
Limited Partners, (iv) resulting in the classification of the Partnership as an
association or publicly traded partnership taxable as a corporation or
(v) violating the Securities Act, the Exchange Act or any state "blue sky" or
other securities laws; provided, further, that any waiver relating to compliance
with the Ownership Limit or other restrictions in the Charter shall be made and
shall be effective only as provided in the Charter.
Section 15.7. Counterparts
This Agreement may be executed in counterparts, all of which together shall
constitute one agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto or upon execution of a Partner Schedule.
Section 15.8. Applicable Law
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of California, without regard to the
principles of conflicts of law. In the event of a conflict between any
provision of this Agreement and any non-mandatory provision of the Act, the
provisions of this Agreement shall control and take precedence.
Section 15.9. Entire Agreement
This Agreement contains all of the understandings and agreements between
and among the Partners with respect to the subject matter of this Agreement and
the rights, interests and obligations of the Partners with respect to the
Partnership.
Section 15.10. Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
Section 15.11. Limitation to Preserve REIT Status
Notwithstanding anything else in this Agreement, to the extent that the
amount paid, credited, distributed or reimbursed by the Partnership to, for or
with respect to any REIT Partner or its officers, directors, employees or
agents, whether as a reimbursement, fee, expense or indemnity (a "REIT
Payment"), would constitute gross income to the REIT Partner for purposes of
Code Section 856(c)(2) or Code Section 856(c)(3), then, notwithstanding any
other provision of this Agreement, the amount of such REIT Payments, as selected
by the General Partner in its discretion from among items of potential
distribution, reimbursement, fees, expenses and indemnities, shall be reduced
for any Fiscal Year so that the REIT Payments, as so reduced, to, for or with
respect to such REIT Partner shall not exceed the lesser of:
(a) an amount equal to the excess, if any, of (i) four and nine-
tenths percent (4.9%) of the REIT Partner's total gross income (but
excluding the amount of any REIT Payments) for the Fiscal Year that is
described in subsections (A) through (H) of Code Section 856(c)(2) over
(ii) the amount of gross income (within the meaning of Code
Section 856(c)(2)) derived by the REIT Partner from sources other than
those described in subsections (A) through (H) of Code Section 856(c)(2)
(but not including the amount of any REIT Payments); or
(b) an amount equal to the excess, if any, of (i) twenty-four percent
(24%) of the REIT Partner's total gross income (but excluding the amount of
any REIT Payments) for the Fiscal Year that is described in subsections (A)
through (I) of Code Section 856(c)(3) over (ii) the amount of .gross income
(within the meaning of Code Section 856(c)(3)) derived by the REIT Partner
from sources other than those described in subsections (A) through (I) of
Code Section 856(c)(3) (but not including the amount of any REIT Payments);
provided, however, that REIT Payments in excess of the amounts set forth in
clauses (a) and (b) above may be made if the General Partner, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts shall not adversely affect the REIT Partner's ability to qualify as a
REIT. To the extent that REIT Payments may not be made in a Fiscal Year as a
consequence of the limitations set forth in this Section 15.11, such REIT
Payments shall carry over and shall be treated as arising in the following
Fiscal Year. The purpose of the limitations contained in this Section 15.11 is
to prevent any REIT Partner from failing to qualify as a REIT under the Code by
reason of such REIT Partner's share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or indirectly
from the Partnership, and this Section 15.11 shall be interpreted and applied to
effectuate such purpose.
Section 15.12. No Partition
No Partner nor any successor-in-interest to a Partner shall have the right
while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute to any proceeding at law or in
equity to have such property of the Partnership partitioned, and each Partner,
on behalf of itself and its successors and assigns hereby waives any such right.
It is the intention of the Partners that the rights of the parties hereto and
their successors-in-interest to Partnership property, as among themselves, shall
be governed by the terms of this Agreement, and that the rights of the Partners
and their successors-in-interest shall be subject to the limitations and
restrictions as set forth in this Agreement.
Section 15.13. No Third-Party Rights Created Hereby
The provisions of this Agreement are solely for the purpose of defining the
interests of the Partners, inter se; and no other person, firm or entity (i.e.,
a party who is not a signatory hereto or a permitted successor to such signatory
hereto) shall have any right, power, title or interest by way of subrogation or
otherwise, in and to the rights, powers, title and provisions of this Agreement.
No creditor or other third party having dealings with the Partnership shall have
the right to enforce the right or obligation of any Partner to make Capital
Contributions or loans to the Partnership or to pursue any other right or remedy
hereunder or at law or in equity. None of the rights or obligations of the
Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may any such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or any of
the Partners.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER: INITIAL LIMITED PARTNER:
THE PRICE REIT, INC., ALTAMONTE JOINT VENTURE,
a Maryland corporation a Florida general partnership
By: /XXXXXX XXXXXXXXXX/ By: RIDA Renaissance Limited Partnership,
Name: Xxxxxx Xxxxxxxxxx a Florida limited partnership and a
Title: President/CEO general partner therein
By: RIDA Realty Investments of Florida,
Inc., a Florida corporation and a
general partner therein
By: /XXX XXXXXXX/
Name: Xxx Xxxxxxx
Title: Vice President
By: Lemac Equities Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By: /XXX XXXXXXX/
Name: Xxx Xxxxxxx
Title: Vice President
EXHIBIT A
PARTNERS AND ADDRESSES
GENERAL PARTNER
The Price REIT, Inc. Initial cash contribution: $26,433,000.00
plus closing costs
000 Xxxxx Xxxxxxx Xxxxxx Initial Partnership Units: 26,433,000
Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
LIMITED PARTNER
Altamonte Joint Venture Initial cash contribution: 0
c/o Rida Development Corporation Initial Partnership Units: 267,000
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
EXHIBIT B
LEGAL DESCRIPTION
EXHIBIT C
NOTICE OF REDEMPTION
To: The Price REIT, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
The undersigned Limited Partner or Assignee hereby irrevocably tenders
Partnership Units in The PRICE REIT Renaissance Partnership, L.P. for redemption
in accordance with the terms of the Agreement of Limited Partnership of The
PRICE REIT Renaissance Partnership, L.P., dated as of August [21], 1997, as
amended (the "Agreement"). The undersigned Limited Partner or Assignee:
(a) undertakes (i) to surrender such Partnership Units and any
certificate therefor on the Specified Redemption Date and (ii) to furnish
to the General Partner, prior to the Specified Redemption Date, the
documentation, instruments and information required under the Agreement;
(b) directs that the certified check representing the Cash Amount
deliverable on the Specified Redemption Date be delivered to the address
specified below;
(c) represents, warrants, certifies and agrees that:
(1) the undersigned Limited Partner or Assignee is a Qualifying
Party,
(2) the undersigned Limited Partner or Assignee has, and on the
Specified Redemption Date will have, good, marketable and unencumbered
title to such Partnership Units, free and clear of the rights or
interests of any other person or entity,
(3) the undersigned Limited Partner or Assignee has, and on the
Specified Redemption Date will have, the full right, power and
authority to tender and surrender such Partnership Units as provided
herein, and
(4) the undermined Limited Partner or Assignee has obtained the
consent or approval of all persons and entities, if any, having the
right to consent to or approve such tender and surrender; and
(d) acknowledges that the undersigned will continue to own such
Partnership Units until such redemption transaction closes.
All capitalized terms used herein and not otherwise defined shall have the
same meaning ascribed to them respectively in the Agreement.
Dated:
Name of Limited Partner
or Assignee:
(Signature of Limited Partner or Assignee)
(Street Address)
(City) (State)
(Zip Code)
Signature Guaranteed by:
Issue Check Payable to:
Please insert social security or identifying number:
EXHIBIT D
FORM OF PARTNER SCHEDULE
[initial or Additional Limited Partner
version]
PARTNER SCHEDULE
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
THIS PARTNER SCHEDULE is executed by The Price REIT, Inc., a Maryland
corporation (the "General Partner"), and the party named below (the "Limited
Partner") in respect of The PRICE REIT Renaissance Partnership, L.P., a
California limited partnership (the "Partnership").
1. Name, Address and Taxpayer Identification Number of Limited Partner
Altamonte Joint Venture
x/x Xxxx Xxxxxxxxxxx Xxxxxxxxxxx
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
TIN:
2. Capital Contributions by Limited Partner
Cash contribution: $ 0
Contributed Properties:
Contributed Property Gross Asset Value Indebtedness Assumed Net Asset Value
or Taken Subject to
-------------------- ----------------- -------------------- ---------------
Renaissance Center $33,700,000 $33,433,000 $267,000
3. Partnership Units
Partnership Units issued to Limited Partner: 267,000
4. Admission of Limited Partner
The Limited Partner is admitted to the Partnership as a Limited Partner.
The General Partner hereby consents to such admission.
5. Designated Parties
None
6. Agreement
The Limited Partner acknowledges receipt of a copy of, and agrees to be
bound by, the Agreement of Limited Partnership, as amended, for the Partnership.
The Limited Partner specifically confirms (a) the representations and warranties
contained in Section 3.4 of such Agreement of Limited Partnership, as amended,
for the Partnership and (b) the grant of the power of attorney set forth in
Section 2.4 of such Agreement.
7. Additional Terms and Conditions
None
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as of
the date indicated below.
Dated: August , 1997 "General Partner":
THE PRICE REIT, INC., as General Partner of THE
PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
By
"Limited Partner":
ALTAMONTE JOINT VENTURE,
a Florida general partnership
By: RIDA Renaissance Limited Partnership,
a Florida limited partnership and a general
partner therein
By: RIDA Realty Investments of Florida,
Inc., a Florida corporation and a
general partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
[Substituted Limited Partner version]
PARTNER SCHEDULE
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
THIS PARTNER SCHEDULE is executed by The Price REIT, Inc., a Maryland
corporation (the "General Partner"), and the party named below (the "Substituted
Partner") in respect of The PRICE REIT Renaissance Partnership, L.P., a
California limited partnership (the "Partnership").
1. Name, Address and Taxpayer Identification Number of Substituted Partner
TIN:
2. Capital Contributions by Predecessor Partner
The Substituted Partner has succeeded to the following Capital
Contributions made to the Partnership by its predecessor:
Name of Predecessor:
Cash contribution: $
Contributed Properties:
Contributed Property Gross Asset Value Indebtedness Assumed Net Asset Value
or Taken Subject to
3. Partnership Units,
Partnership Units held by Substituted Partner:
4. Admission of Substituted Partner
The Substituted Partner is admitted to the Partnership as a Substituted
Limited Partner. The General Partner hereby consents to such admission.
5. Designated Parties
6. Agreement
The Substituted Partner acknowledges receipt of a copy of, and agrees to be
bound by, the Agreement of Limited Partnership, as amended, for the Partnership.
The Substituted Partner specifically confirms (a) the representations and
warranties contained in Section 3.4 of such Agreement of Limited Partnership, as
amended, for the Partnership and (b) the grant of the power of attorney set
forth in Section 2.4 of such Agreement.
7. Additional Terms and Conditions
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as of
the date indicated below.
Dated: , 199_
"General Partner":
THE PRICE REIT, INC., as General Partner of THE
PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
By
"Substituted Partner":
By
EXHIBIT E
FORM OF PARTNERSHIP UNIT CERTIFICATE
THIS PARTNERSHIP UNIT CERTIFICATE is executed by The Price REIT, Inc., a
Maryland corporation, in respect of The PRICE REIT Renaissance Partnership,
L.P., a California limited partnership (the "Partnership"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Agreement of Limited Partnership of The PRICE REIT Renaissance
Partnership, L.P. dated as of August 22, 1997, as amended from time to time.
In its capacity as the general partner of the Partnership, The Price REIT,
Inc. hereby certifies to Altamonte Joint Venture that the following is a
complete and accurate representation of the ownership of Partnership Units of
the Partnership as of the date of this Certificate:
Owner Nature of Interest Number of Partnership Units Percentage of
Outstanding
Partnership Units
----- ------------------ --------------------------- -----------------
The Price General Partner 26,433,000 99%
REIT, Inc. Interest
Altamonte Limited Partner 267,000 1%
Joint Interest
Venture
-------------------------- ------------------
Total: 26,700,000 Total: 100%
This Certificate is executed as of the ___ day of _________________, 199__.
THE PRICE REIT, INC.,
a Maryland corporation
By:
Name:
Title: