1
EXHIBIT 10.1
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXX HOTEL PROPERTIES, L.P.
DATED: ______________, 1996
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TABLE OF CONTENTS
Page
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PARTNERSHIP CONTINUATION; ADMISSION OF LIMITED
PARTNERS; NAME; PLACE OF BUSINESS AND REGISTERED AGENT . . . . . . . . . . . . . . . . . . . . . 8
Section 2.1 Continuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2 Restated Certificate of Limited Partnership; Other Filings . . . . . . . . . . . . . . 8
Section 2.3 Limited Partners; Additional Limited Partners . . . . . . . . . . . . . . . . . . . . 8
Section 2.4 Name, Office and Registered Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III BUSINESS AND TERM OF PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.1 General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.2 Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.3 Additional Capital Contributions and Issuances of Additional
Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.4 Additional Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.5 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.6 Return of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V PROFITS, LOSSES AND ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.1 Allocation of Profits and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.2 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.3 Partners' Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.4 Section 754 Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING
OF GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.1 Powers of General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.2 Delegation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.3 Duties of General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.4 Liabilities of General Partner; Indemnification . . . . . . . . . . . . . . . . . . . 17
Section 6.5 Compensation of General Partner; Reimbursement . . . . . . . . . . . . . . . . . . . . 19
Section 6.6 Reliance on Act of General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.7 Outside Services; Dealings with Affiliates; Outside Activities . . . . . . . . . . . . 19
Section 6.8 Initial Loan to the Partnership; Additional Loans to the Partnership . . . . . . . . . 20
Section 6.9 Contribution of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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ARTICLE VII RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH
RESPECT TO LIMITED PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.1 Rights of Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.2 Prohibitions with Respect to the Limited Partners . . . . . . . . . . . . . . . . 21
Section 7.3 Ownership by Limited Partner of Corporate General Partner or
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.4 Redemption Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.5 Warranties and Representations of the Limited Partners . . . . . . . . . . . . . . 23
Section 7.6 Indemnification by Limited Partners . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.7 Notice of Sale or Refinancing . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.8 Basis Analysis And Limited Partner Guarantees . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII DISTRIBUTIONS AND PAYMENTS TO PARTNERS . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.1 Distributions of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.2 REIT Distribution Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.3 No Right to Distributions in Kind . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.4 Disposition Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.5 Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX TRANSFERS OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.1 General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.2 Admission of a Substitute or Additional General Partner . . . . . . . . . . . . . 26
Section 9.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General
Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.4 Removal of a General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.5 Restrictions on Transfer of Limited Partnership Interests . . . . . . . . . . . . 27
Section 9.6 Admission of Substitute Limited Partner . . . . . . . . . . . . . . . . . . . . . 28
Section 9.7 Rights of Assignees of Partnership Interests . . . . . . . . . . . . . . . . . . . 29
Section 9.8 Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.9 Joint Ownership of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.10 Transferees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.11 Absolute Restriction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.12 Investment Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE X TERMINATION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.2 Payment of Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.3 Debts to Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.4 Remaining Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.5 Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.6 Final Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XI AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 11.1 Authority to Amend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 11.2 Notice of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(ii)
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ARTICLE XII POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.1 Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.2 Survival of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XIII CONSENTS, APPROVALS, VOTING AND MEETINGS . . . . . . . . . . . . . . . . . . . . 33
Section 13.1 Method of Giving Consent or Approval . . . . . . . . . . . . . . . . . . . . . 33
Section 13.2 Meetings of Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 13.3 Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 13.4 Submissions to Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XIV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.2 Agreement for Further Execution . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.6 Titles and Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.8 Pronouns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.9 Survival of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
EXHIBIT A LIST OF PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
EXHIBIT B FEDERAL INCOME TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
EXHIBIT C INITIAL HOTELS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
EXHIBIT D NOTICE OF EXERCISE OF REDEMPTION RIGHT . . . . . . . . . . . . . . . . . . . . . . . 64
EXHIBIT E INTERCOMPANY CONVERTIBLE NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(iii)
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXX HOTEL PROPERTIES, L.P.
RECITALS:
Xxxxxx Hotel Properties, L.P. (the "Partnership"), was formed
as a limited partnership under the laws of the State of Ohio by the filing of a
Certificate of Limited Partnership with the Secretary of State of Ohio on
February 12, 1996. The Partnership is governed by a Limited Partnership
Agreement maintained at the offices of the Partnership (the "Original
Agreement"). The current parties to the Original Agreement are Xxxxxx Lodging
Company, an Ohio corporation (the "Corporation" and in its capacity as the
General Partner, the "General Partner") and Xxxxxx X. Xxxxxx (the "Original
Limited Partner").
The General Partner and the Original Limited Partner desire
to (i) admit additional Limited Partners to the Partnership, and (ii) with the
Limited Partners, amend and restate the Original Agreement in its entirety.
NOW, THEREFORE, in consideration of the foregoing, of the
mutual covenants between the parties hereto, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree to amend and restate the Original Agreement to read in
its entirety as follows:
ARTICLE I
DEFINED TERMS
Whenever used in this Agreement, the following terms shall
have the meanings respectively assigned to them in this Article I, unless
otherwise expressly provided herein or unless the context otherwise requires:
ACT: "Act" shall mean the Uniform Limited Partnership Act,
Ohio Revised Code Section Section 1782.01 ET SEQ., as in effect from time to
time in the State of Ohio.
ADDITIONAL FUNDS: "Additional Funds" has the meaning set
forth in Section 4.4 hereof.
ADDITIONAL LIMITED PARTNER: "Additional Limited Partner"
shall mean a Person admitted to this Partnership as a Limited Partner pursuant
to and in accordance with Section 2.3(b) of this Agreement.
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ADDITIONAL SECURITIES: "Additional Securities" means any
additional REIT Shares (other than REIT Shares issued in connection with a
redemption Pursuant to Section 7.4 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase REIT Shares, as set forth in Section 4.3(a)(ii).
AFFILIATE: "Affiliate" of another Person shall mean (a) any
Person directly or indirectly owning, controlling or holding with power to vote
ten percent (10%) or more of the outstanding voting securities of such other
Person; (b) any Person ten percent (10%) or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with power to
vote by such other Person; (c) any Person directly or indirectly controlling,
controlled by, or under common control with, such other Person; (d) any
officer, director, member or partner of such other Person; and (e) if such
other Person is an officer, director, member or partner in a company, the
company for which such Person acts in any such capacity.
AGREED VALUE: "Agreed Value" shall mean the fair market value
of Contributed Property as agreed to by the Contributing Partner and the
Partnership, using such reasonable method of valuation as they may adopt.
AGREEMENT: "Agreement" shall mean this Agreement of Limited
Partnership of Xxxxxx Hotel Properties, L.P., as amended from time to time.
ARTICLES OF INCORPORATION: "Articles of Incorporation" means
the Amended and Restated Articles of Incorporation of the General Partner filed
with the Secretary of State of the State of Ohio, as amended or restated from
time to time.
BANKRUPTCY CODE: "Bankruptcy Code" shall mean the United
States Bankruptcy Code, as amended, 11 U.S.C. Section Section 101 ET SEQ., and
as hereafter amended from time to time.
XXXXXXX: "Xxxxxxx" shall mean Xxxxxx X. Xxxxxx and Xxxx X.
Xxxxxx, their spouses and lineal ascendants and lineal descendants, and any
person employed on a full-time basis at any time during the five (5) year
period ending on the date of this Agreement by any entity owned (directly or
indirectly) more than fifty percent (50%) by Xxxxxx X. Xxxxxx and/or Xxxx X.
Xxxxxx.
BUSINESS DAY: "Business Day" shall mean any day when the New
York Stock Exchange is open for trading.
CAPITAL ACCOUNT: "Capital Account" shall mean, as to any
Partner, the account established and maintained for such Partner pursuant to
Section 5.3 hereof.
CAPITAL CONTRIBUTION: "Capital Contribution" shall mean the
amount in cash or the Agreed Value of Contributed Property contributed by each
Partner (or his original predecessor in interest) to the capital of the
Partnership for his interest in the Partnership.
CASH AMOUNT: "Cash Amount" means an amount of cash per
Partnership Unit equal to the Value on the Valuation Date of the REIT Shares
Amount.
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CASH FLOW: "Cash Flow" shall mean the excess of cash revenues
actually received by the Partnership in respect of Partnership operations for
any period, less Operating Expenses for such period. Cash Flow shall not
include Disposition Proceeds.
CODE: "Code" shall mean the Internal Revenue Code of 1986, as
amended, and as hereafter amended from time to time. Reference to any
particular provision of the Code shall mean that provision in the Code at the
date hereof and any succeeding provision of the Code.
COMMISSION: "Commission" shall mean the U.S. Securities and
Exchange Commission.
CONTRIBUTED PARTNERSHIPS: "Contributed Partnerships" shall
mean the various limited partnerships that own the Initial Hotels prior to the
formation transaction.
CONTRIBUTED PROPERTY: "Contributed Property" shall mean a
Partner's interest in property or other consideration (excluding services and
cash) contributed to the Partnership by such Partner.
CONVERSION FACTOR: "Conversion Factor" shall mean 1.0;
provided, however, that in the event the General Partner (i) declares or pays a
dividend on its outstanding REIT Shares in REIT Shares or makes a distribution
to all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides
its outstanding REIT Shares, or (iii) combines its outstanding REIT Shares into
a smaller number of REIT Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall
be the number of REIT Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, subdivision or combination. Any
adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event; PROVIDED, HOWEVER, that if the General Partner receives a Notice of
Redemption after the record date, but prior to the effective date of such
dividend, distribution, subdivision or combination, the Conversion Factor shall
be determined as if the General Partner had received the Notice of Redemption
immediately prior to the record date for such dividend, distribution,
subdivision or combination.
DISPOSITION PROCEEDS: "Disposition Proceeds" shall mean the
excess of the proceeds received by the Partnership from the refinancing, sale,
exchange or other disposition of all or substantially all of the Partnership's
Property less any expenses incurred or paid by the Partnership in connection
with such transaction.
EVENT OF BANKRUPTCY: "Event of Bankruptcy" shall mean as to
any Person the filing of a petition for relief as to such Person as debtor or
bankrupt under the Bankruptcy Code or similar provision of law of any
jurisdiction (except if such petition is contested by such Person and has been
dismissed within ninety (90) days of the filing thereof); insolvency of such
Person as finally determined by a court of competent jurisdiction; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
such Person's assets; commencement of any proceedings relating
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to such Person as a debtor under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction, whether
now in existence or hereinafter in effect, either by such Person or by another;
provided, however, that if such proceeding is commenced by another, such Person
indicates his approval of such proceeding, consents thereto or acquiesces
therein, or such proceeding, consents thereto or acquiesces therein, or such
proceeding is contested by such Person and has not been finally dismissed
within ninety (90) days.
GENERAL PARTNER: "General Partner" shall mean Xxxxxx Lodging
Company, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.
GENERAL PARTNERSHIP INTEREST: "General Partnership Interest"
shall mean the ownership interest of a General Partner in the Partnership.
INDEMNITEE: "Indemnitee" shall mean (i) any Person made a
party to a proceeding by reason of its status as (A) the General Partner, or
(B) a director or officer of 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, in its sole and absolute discretion.
INDEPENDENT DIRECTOR: "Independent Director" shall mean a
director of the General Partner who is not an officer or employee of the
General Partner, any Affiliate of an officer or employee or any Affiliate of
(i) any lessee of any property of the General Partner or any Subsidiary of the
General Partner, (ii) any Subsidiary of the General Partner, (iii) any
partnership that is an Affiliate of the General Partner, or (iv) any Person who
acts on a regular basis as an individual or representative of an organization
serving as a professional advisor, legal counsel or consultant to management
if, in the opinion of the Board of Directors of the General Partner, that
relationship is material to the General Partner or the Partnership, that
Person, or the organization represented.
INITIAL HOTELS: "Initial Hotels" shall mean those properties
listed on Exhibit C hereto.
INITIAL LOAN: "Initial Loan" shall have the meaning provided
in Section 6.8(a) hereof.
INTERCOMPANY CONVERTIBLE NOTES: "Intercompany Convertible
Note" shall mean that certain Loan Agreement dated as of , 1996,
between the General Partner and the Partnership, a copy of which is attached as
Exhibit E hereto.
IRS: "IRS" shall mean the Internal Revenue Service.
LIMITED PARTNER: "Limited Partner" shall mean any Person
named as a Limited Partner on Exhibit A attached hereto and any Person who
becomes a Substitute Limited Partner pursuant to Section 9.6 hereof or an
Additional Limited Partner pursuant to Section 2.3(b) hereof, in such Person's
capacity as a Limited Partner in the Partnership.
LIMITED PARTNERSHIP INTEREST: "Limited Partnership Interest"
shall mean the ownership interest of a Limited Partner in the Partnership at
any particular time, including the
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right of such Limited Partner to any and all
benefits to which such Limited Partner may be entitled as provided in this
Agreement and in the Act, together with the obligations of such Limited Partner
to comply with all the provisions of this Agreement and of the Act.
MINIMUM LIMITED PARTNERSHIP INTEREST: "Minimum Limited
Partnership Interest" means a one percent (1%) Limited Partnership Interest.
NOTICE OF REDEMPTION: "Notice of Redemption" shall mean the
Notice of Exercise of Redemption Right substantially in the form attached as
Exhibit D hereto.
OFFERING: "Offering" shall mean the offer and sale by the
General Partner and the purchase by the Underwriters (as defined in the
Prospectus) of REIT Shares for sale to the public.
OPERATING EXPENSES: "Operating Expenses" shall mean (i) all
administrative and operating costs and expenses incurred by the Partnership,
(ii) those administrative costs and expenses of the General Partner, including
any salaries or other payments to directors, officers or employees of the
General Partner, and any accounting and legal expense of the General Partner,
which expenses, the Partners have agreed, are expenses of the Partnership and
not the General Partner, and (iii) to the extent not included in clause (ii)
above, REIT Expenses; PROVIDED, HOWEVER, that Administrative Expenses shall not
include any administrative costs and expenses incurred by the General Partner
that are attributable to Properties or partnership interests in a Subsidiary
that are owned by the General Partner directly.
ORIGINAL LIMITED PARTNER: "Original Limited Partner" shall
mean Xxxxxx X. Xxxxxx.
PARTNER: "Partner" shall mean the General Partner or any
Limited Partner.
PARTNERSHIP: "Partnership" shall mean Xxxxxx Hotel
Properties, L.P., an Ohio limited partnership.
PARTNERSHIP INTEREST: "Partnership Interest" shall mean 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 an ownership interest may be entitled as
provided in this Agreement or the Act, together with all obligations of such
Person to comply with the terms and provisions of this Agreement and the Act.
PARTNERSHIP RECORD DATE: "Partnership Record Date" shall mean
the record date established by the General Partner for the distribution of Cash
Flow pursuant to Section 8.1 hereof, which record date shall 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 such distribution.
PARTNERSHIP UNIT: "Partnership Unit" shall mean a fractional,
undivided share of the Partnership Interests of all Partners issued hereunder.
As of the date of this Agreement, there shall be considered to be seven million
five hundred forty-seven thousand (7,547,000) Partnership Units outstanding,
with each Partnership Unit representing a ____ percent (____%) Percentage
Interest in the Partnership. At all times there shall be maintained an
equivalency of Partnership
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Units and REIT Shares, except that the conversion of the Subordinated
Convertible Debt shall be effected without the issuance of additional REIT
shares.
PERCENTAGE INTEREST: "Percentage Interest" shall mean the
percentage ownership interest in the Partnership of each Partner, as determined
by dividing the Partnership Units owned by a Partner by the total number of
Partnership Units then outstanding.
PERSON: "Person" shall mean any individual partnership,
corporation, limited liability company, trust or other entity.
PROPERTY: "Property" shall mean any hotel property or other
investment in which the Partnership holds an ownership interest.
PROSPECTUS: "Prospectus" shall mean the final prospectus
delivered to purchasers of REIT Shares in the Offering.
PUBLIC OFFERING PRICE: "Public Offering Price" shall mean the
price set forth in the Prospectus.
REDEEMING PARTNER: "Redeeming Partner" shall have the meaning
provided in Section 7.4(a) hereof.
REDEMPTION RIGHT: "Redemption Right" shall have the meaning
provided in Section 7.4(a) hereof.
REIT: "REIT" shall mean a real estate investment trust under
Sections 856 through 860, inclusive, of the Code.
REIT EXPENSES: "REIT Expenses" means (i) costs and expenses
relating to the formation and continuity of existence of the General Partner
and any Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be
included within the definition of General Partner), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable
to any director, officer, or employee of the General Partner, (ii) costs and
expenses relating to the public offering and registration of securities or
private offering of securities by the General Partner and all statements,
reports, fees and expenses incidental thereto, including underwriting discounts
and selling commissions applicable to any such offering of securities, (iii)
costs and expenses associated with the preparation and filing of any periodic
reports by the General Partner under federal, state or local laws or
regulations, including filings with the Commission, (iv) costs and expenses
associated with compliance by the General Partner with laws, rules and
regulations promulgated by any regulatory body, including the Commission, and
(v) all other operating or administrative costs of the General Partner,
including, without limitation, insurance premiums, and legal, accounting and
directors fees, incurred in the ordinary course of its business on behalf of or
in connection with the Partnership.
REIT SHARE: "REIT Share" shall mean a share of the common
shares of the General Partner.
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REIT SHARES AMOUNT: "REIT Shares Amount" shall mean a whole
number of REIT Shares equal to the product of the number of Partnership Units
offered for redemption by a Redeeming Partner, multiplied by the Conversion
Factor (rounded down to the nearest whole number in the event such product is
not a whole number); provided, however, that in the event the General Partner
at any time issues to all holders of REIT Shares rights, options, warrants or
convertible or exchangeable securities entitling the shareholders to subscribe
for or purchase REIT Shares, or any other securities or property (collectively,
the "Rights"), which Rights have not expired pursuant to their terms, then the
REIT Shares Amount thereafter shall also include such Rights that a holder of
that number of REIT Shares would be entitled to receive.
SPECIFIED REDEMPTION DATE: "Specified Redemption Date" shall
mean, with respect to a given Partner, the tenth (10th) Business Day after
receipt by the General Partner of a Notice of Redemption; provided, however,
that no Specified Redemption Date shall occur with respect to the Xxxxxxx (as
defined herein) before three (3) years from the date of this Agreement;
provided, further, that if the General Partner combines its outstanding REIT
Shares, no Specified Redemption Date shall occur after the record date and
prior to the effective date of such combination.
SUBORDINATED CONVERTIBLE DEBT: "Subordinated Convertible
Debt" shall mean the indebtedness of the Partnership to the General Partner
evidenced by the Intercompany Convertible Note.
SUBSIDIARY: "Subsidiary" shall mean, 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
are owned directly or indirectly, by the Person.
SUBSTITUTE GENERAL PARTNER: "Substitute General Partner" has
the meaning set forth in Section 9.2.
SUBSTITUTE LIMITED PARTNER: "Substitute Limited Partner"
shall mean any Person admitted to the Partnership as a Limited Partner pursuant
to Section 9.6 hereof.
SURVIVING GENERAL PARTNER: "Surviving General Partner" has
the meaning set forth in Section 9.1(d) hereof.
TRANSACTION: "Transaction" has the meaning set forth in
Section 9.1(c) hereof.
TRANSFER: "Transfer" has the meaning set forth in Section
9.5(a) hereof.
VALUATION DATE: "Valuation Date" shall mean the date of
receipt by the General Partner of a Notice of Redemption or, if such date is
not a Business Day, the first Business Day thereafter.
VALUE: "Value" shall mean, with respect to a REIT Share, the
average of the daily market price for the ten (10) consecutive trading days
immediately preceding the Valuation Date. The market price for each such
trading day shall be: (i) if the REIT Shares are listed or admitted to trading
on any securities exchange or the NASDAQ-National Market System, the closing
price, regular way, on such day, or if no such sale takes place on such day,
the average of the closing
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bid and asked prices on such day; (ii) if the REIT Shares are not listed or
admitted to trading on any securities exchange or the NASDAQ-National Market
System, the last reported sale price on such day or, if no sale takes place on
such day, the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by the General Partner; or
(iii) if the REIT Shares are not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation
source designated by the General Partner, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than ten (10) days prior to the date
in question) for which prices have been so reported; provided, however, that if
there are no bid and asked prices reported during the ten (10) days prior to the
date in question, the Value of the REIT Shares shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the REIT Shares Amount includes rights that a holder of REIT Shares would
be entitled to receive, and the General Partner acting in good faith determines
that the value of such rights is not reflected in the Value of the REIT Shares
determined as aforesaid, then the Value of such rights shall be determined by
the General Partner acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable judgment, appropriate.
ARTICLE II
PARTNERSHIP CONTINUATION;
ADMISSION OF LIMITED PARTNERS;
NAME; PLACE OF BUSINESS AND REGISTERED AGENT
Section 2.1 CONTINUATION. The Partners hereby agree to
continue the Partnership pursuant to the Act and upon the terms and conditions
set forth in this Agreement.
Section 2.2 RESTATED CERTIFICATE OF LIMITED PARTNERSHIP;
OTHER FILINGS. The General Partner shall prepare (or caused to be prepared),
execute, acknowledge, record and file at the expense of the Partnership, a
Restated Certificate of Limited Partnership and all requisite fictitious name
statements and notices in such places and jurisdictions as may be required by
the Act or necessary to cause the Partnership to be treated as a limited
partnership under, and otherwise to comply with, the laws of each state or
other jurisdiction in which the Partnership conducts business.
Section 2.3 LIMITED PARTNERS; ADDITIONAL LIMITED PARTNERS.
(a) The Limited Partners shall be those Persons
identified as Limited Partners on Exhibit A attached hereto, as amended from
time to time pursuant to the terms of this Agreement, and such Persons are
hereby admitted to the Partnership as Limited Partners.
(b) The General Partner shall in timely fashion
amend this Agreement and, if required by the Act, the Certificate of Limited
Partnership filed for record to reflect the admission pursuant to the terms of
this Agreement of a Person as a Limited Partner.
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Section 2.4 NAME, OFFICE AND REGISTERED AGENT. The name of
the Partnership shall be Xxxxxx Hotel Properties, L.P. The principal place of
business of the Partnership shall be at Xxxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxxxx, Xxxx, 00000. The General Partner may at any time change the
location of such office, provided the General Partner gives notice to the
Partners of any such change. The name and address of the Partnership's statutory
agent for service of process on the Partnership is Xxxxxx Lodging Company,
Terminal Tower, 00 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx, 00000.
ARTICLE III
BUSINESS AND TERM OF PARTNERSHIP
Section 3.1 BUSINESS. The purpose and nature of the business
of the Partnership is to conduct any business that may lawfully be conducted by
a limited partnership organized pursuant to the Act; provided, however, that
such business shall be limited to and conducted in such a manner as to permit
the General Partner at all times to be classified as a REIT, unless the Board of
the General Partner determines to cease to qualify as a REIT. To consummate the
foregoing and to carry out the obligations of the Partnership in connection
therewith or incidental thereto, the General Partner shall have the authority,
in accordance with and subject to the limitations set forth elsewhere in this
Agreement, to make, enter into, perform and carry out any arrangements,
contracts and/or agreements of every kind for any lawful purpose, without limit
as to amount or otherwise, with any corporation, association, partnership,
limited liability company, firm, trustee, syndicate, individual and/or any
political or governmental division, subdivision or agency, domestic or foreign,
and generally to make and perform agreements and contracts of every kind and
description and to do any and all things necessary or incidental to the
foregoing for the protection and enhancement of the assets of the Partnership.
Section 3.2 TERM. The Partnership as herein constituted
shall continue until December 31, 2050, unless earlier dissolved or terminated
pursuant to law or the provisions of this Agreement.
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section 4.1 GENERAL PARTNER.
(a) The General Partner has contributed cash to
the capital of the Partnership in the amount set forth opposite the name of the
General Partner on Exhibit A attached hereto.
(b) Upon the termination and dissolution of the
Partnership, the General Partner shall contribute an amount equal to the lesser
of (i) the aggregate deficit balance in the General Partner's Capital Account,
or (ii) the excess of 1.01% of the aggregate capital previously contributed by
the Limited Partners over the aggregate amount of capital previously
contributed by the General Partner, to the Partnership.
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Section 4.2 LIMITED PARTNERS. The Limited Partners have
contributed their respective ownership interests in the Contributed
Partnerships to the capital of the Partnership. The Agreed Values of the
Limited Partners' proportionate ownership interests in the Contributed
Partnerships are set forth on Exhibit A attached hereto.
Section 4.3 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF
ADDITIONAL PARTNERSHIP INTERESTS. Except as provided in this Section 4.3 or in
Section 4.4, the Partners shall have no right or obligation to make any
additional Capital Contributions or loans to the Partnership. The General
Partner may contribute additional capital to the Partnership, from time to
time, and receive additional Partnership Interests in respect thereof, in the
manner contemplated in this Section 4.3.
(a) ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.
(i) GENERAL. The General Partner is hereby
authorized to cause the Partnership to issue such additional
Partnership Interests in the form of Partnership Units for any
Partnership purpose at any time or from time to time, to the Partners
or to other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in its sole
and absolute discretion, all without the approval of any of the
Limited Partners. Any additional Partnership Interest issued thereby
may be issued in one or more classes, or one or more series of any of
such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to Limited Partnership
Interests, all as shall be determined by the General Partner in its
sole and absolute discretion and without the approval of any Limited
Partner, subject to Ohio law, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Interests; (ii) the
right of each such class or series of Partnership Interests to share
in Partnership distributions; and (iii) the rights of each class or
series of Partnership Interests upon dissolution and liquidation of
the Partnership; PROVIDED, HOWEVER, that no additional Partnership
Interests shall be issued to the General Partner unless either:
(1) (A) The additional Partnership Interests are
issued in connection with an issuance of REIT Shares of or
other interests in the General Partner, which shares or
interests have designations, preferences and other rights, all
such that the economic interests are substantially similar to
the designations, preferences and other rights of the
additional Partnership Interests issued to the General Partner
by the Partnership in accordance with this Section 4.3 and (B)
the General Partner shall make a Capital Contribution to the
Partnership in an amount equal to the proceeds raised in
connection with the issuance of such shares of stock of or
other interests in the General Partner, or
(2) the additional Partnership Interests are issued
in connection with the conversion of the Subordinated
Convertible Debt at a conversion rate of Twenty-two and no/100
Dollars ($22.00) of principal amount of such debt per one
Partnership Unit, or
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(3) the additional Partnership Interests are issued
to all Partners in proportion to their respective Percentage
Interests.
Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Partnership Units for
less than fair market value, so long as the General Partner concludes
in good faith that such issuance is in the best interests of the
General Partner and the Partnership.
(ii) UPON ISSUANCE OF ADDITIONAL SECURITIES. After
the Offering, the Company shall not issue any additional REIT Shares
(other than REIT Shares issued in connection with a redemption
pursuant to Section 7.4 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to
subscribe for or purchase REIT Shares (collectively, "Additional
Securities") other than to all holders of REIT Shares, unless (A) the
General Partner shall cause the Partnership to issue to the General
Partner Partnership Interests or rights, options, warrants or
convertible or exchangeable securities of the Partnership having
designations, preferences and other rights, all such that the economic
interests are substantially similar to those of the Additional
Securities, and (B) the General Partner contributes the proceeds from
the issuance of such Additional Securities and from any exercise of
rights contained in such Additional Securities to the Partnership.
Without limiting the foregoing, the General Partner is expressly
authorized to issue Additional Securities for less than fair market
value, and to cause the Partnership to issue to the General Partner
corresponding Partnership Interests, so long as (x) the General
Partner concludes in good faith that such issuance is in the best
interests of the General Partner and the Partnership, and (y) the
General Partner contributes all proceeds from such issuance to the
Partnership. For example, in the event the General Partner issues
REIT Shares for a cash purchase price and contributes all of the
proceeds of such issuance to the Partnership as required hereunder,
the General Partner shall be issued a number of additional Partnership
Units equal to the product of (A) the number of such REIT Shares
issued by the General Partner, the proceeds of which were so
contributed, multiplied by (B) a fraction, the numerator of which is
100%, and the denominator of which is the Conversion Factor in effect
on the date of such contribution.
(b) CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF
ISSUANCE OF REIT SHARES. In connection with any and all issuances of REIT
Shares, the General Partner shall contribute all of the proceeds raised in
connection with such issuance to the Partnership as Capital Contributions,
PROVIDED THAT if the proceeds actually received and contributed by the General
Partner are less than the gross proceeds of such issuance as a result of any
underwriter's discount or other expenses paid or incurred in connection with
such issuance, then the General Partner shall be deemed to have made Capital
Contributions to the Partnership in the aggregate amount of the gross proceeds
of such issuance and the Partnership shall be deemed simultaneously to have
paid such offering expenses in connection with the required issuance of
additional Partnership Units to the General Partner for such Capital
Contributions pursuant to Section 4.3(a) hereof.
(c) MINIMUM LIMITED PARTNERSHIP INTEREST. In the
event that either a redemption pursuant to Section 7.4 hereof or additional
Capital Contributions by the General Partner would result in the Limited
Partners, in the aggregate, owning less than the Minimum Limited Partnership
Interest, the General Partner and the Limited Partners shall form another
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partnership and contribute sufficient Limited Partnership Interests together
with such other Limited Partners so that the limited partners of such
partnership own at least the Minimum Limited Partnership Interest.
Section 4.4 ADDITIONAL FUNDING. If the General Partner
determines that it is in the best interests of the Partnership to provide for
additional Partnership funds ("Additional Funds") for any Partnership purpose,
the General Partner may (i) cause the Partnership to obtain such funds from
outside borrowings, or (ii) elect to have the General Partner provide such
Additional Funds to the Partnership through loans or otherwise.
Section 4.5 INTEREST. No interest shall be paid on the
Capital Contribution of any Partner.
Section 4.6 RETURN OF CAPITAL. Except as expressly provided
in this Agreement, no Partner shall be entitled to demand or receive the return
of his Capital Contribution.
ARTICLE V
PROFITS, LOSSES AND ACCOUNTING
Section 5.1 ALLOCATION OF PROFITS AND LOSSES. Except as
otherwise provided herein or in Exhibit B, profits earned and losses incurred
by the Partnership shall be allocated among the Partners in accordance with
their respective Percentage Interests.
Section 5.2 ACCOUNTING.
(a) The books of the Partnership shall be kept on
the accrual basis and in accordance with generally accepted accounting
principles consistently applied.
(b) The fiscal year of the Partnership shall be the
calendar year.
(c) The terms "profits" and "losses," as used
herein, shall mean all items of income, gain, expense or loss as determined
utilizing federal income tax accounting principles and shall also include each
Partner's share of income described in Section 705(a)(1)(B) of the Code, any
expenditures described in Section 705(a)(2)(B) of the Code, any expenditures
described in Section 709(a) of the Code which are not deducted or amortized in
accordance with Section 709(b) of the Code, losses not deductible pursuant to
Sections 267(a) and 707(b) of the Code and adjustments made pursuant to Exhibit
B attached hereto.
(d) The General Partner shall be the Tax Matters
Partner of the Partnership within the meaning of Section 6231(a)(7) of the
Code. As Tax Matters Partner, the General Partner shall have the right and
obligation to take all actions authorized and required, respectively, by the
Code for the Tax Matters Partner. The General Partner shall have the right to
retain professional assistance in respect of any audit of the Partnership by
the IRS, and all out-of-pocket expenses and fees incurred by the General
Partner on behalf of the Partnership as Tax Matters Partner shall constitute
Operating Expenses of the Partnership. In the event the General Partner
receives notice of a final Partnership adjustment under Section 6223(a)(2) of
the Code,
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the General Partner shall either (i) file a court petition for judicial review
of such final adjustment within the period provided under Section 6226(a) of
the Code, a copy of which petition shall be mailed to each Limited Partner on
the date such petition is filed, or (ii) mail a written notice to each Limited
Partner, within such period, that describes the General Partner's reasons for
determining not to file such a petition.
(e) Except as specifically provided herein, all
elections required or permitted to be made by the Partnership under the Code
shall be made by the General Partner in its sole discretion.
(f) Any Partner shall have the right to a private
audit of the books and records of the Partnership, provided such audit is made
at the expense of the Partner desiring it, and it is made during normal
business hours.
Section 5.3 PARTNERS' ACCOUNTS.
(a) There shall be maintained a Capital Account for
each Partner in accordance with this Section 5.3 and the principles set forth
in Exhibit B attached hereto and made a part hereof. The amount of cash and
the net fair market value of property contributed to the Partnership by each
Partner, net of liabilities assumed by the Partnership, shall be credited to
its Capital Account, and from time to time, but not less often than annually,
the share of each Partner in profits, losses and fair market value of
distributions shall be credited or charged to its Capital Account. The
determination of Partners' Capital Accounts, and any adjustments thereto, shall
be made consistent with tax accounting and other principles set forth in
Section 704(b) of the Code and applicable regulations thereunder and Exhibit B
attached hereto.
(b) Except as otherwise specifically provided herein
or in a guarantee of a Partnership liability, signed by a Limited Partner, no
Limited Partner shall be required to make any further contribution to the
capital of the Partnership to restore a loss, to discharge any liability of the
Partnership or for any other purpose, nor shall any Limited Partner personally
be liable for any liabilities of the Partnership or of the General Partner
except as provided by law or this Agreement. All Limited Partners hereby waive
their right of contribution which they may have against other Partners in
respect of any payments made by them under any guarantee of Partnership debt.
(c) Immediately following the transfer of any
Partnership Interest, the Capital Account of the transferee Partner shall be
equal to the Capital Account of the transferor Partner attributable to the
transferred interest, and such Capital Account shall not be adjusted to reflect
any basis adjustment under Section 743 of the Code.
(d) For purposes of computing the amount of any item
of income, gain, deduction or loss to be reflected in the Partners' Capital
Accounts, the determination, recognition and classification of any such item
shall be the same as its determination, recognition and classification for
federal income tax purposes, taking into account any adjustments required
pursuant to Section 704(b) of the Code and the applicable regulations
thereunder as more fully described in Exhibit B attached hereto.
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Section 5.4 SECTION 754 ELECTIONS. The General Partner shall
elect, pursuant to Section 754 of the Code, to adjust the basis of the
Partnership's assets for all transfers of Partnership interests if such
election would benefit any Partner or the Partnership.
ARTICLE VI
POWERS, DUTIES, LIABILITIES,
COMPENSATION AND VOTING OF GENERAL PARTNER
Section 6.1 POWERS OF GENERAL PARTNER. Notwithstanding any
provision of this Agreement to the contrary, the General Partner's discretion
and authority are subject to the limitations imposed by law, by the General
Partners articles of incorporation and code of regulations. Subject to the
foregoing and to other limitations imposed by this Agreement, the General
Partner shall have full, complete and exclusive discretion to manage and
control the business and affairs of the Partnership and make all decisions
affecting the business and assets of the Partnership. Without limiting the
generality of the foregoing (but subject to the restrictions specifically
contained in this Agreement), the General Partner shall have the power and
authority to take the following actions on behalf of the Partnership:
(a) to acquire, purchase, own, lease and dispose of
any real property and any other property or assets that the General Partner
determines are necessary or appropriate or in the best interests of conducting
the business of the Partnership;
(b) to construct buildings and make other
improvements (including renovations) on or to the properties owned or leased by
the Partnership;
(c) to borrow money for the Partnership, issue
evidences of indebtedness in connection therewith, refinance, guarantee,
increase the amount of, modify, amend or change the terms of, or extend the
time for the payment of, any indebtedness or obligation of or to the
Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or
other lien on the Partnership's assets;
(d) to pay, either directly or by reimbursement, for
all Operating Expenses to third parties or to the General Partner (as set forth
in this Agreement);
(e) to lease all or any portion of any of the
Partnership's assets, whether or not the terms of such leases extend beyond the
termination date of the Partnership and whether or not any portion of the
Partnership's assets so leased are to be occupied by the lessee, or, in turn,
subleased in whole or in part to others, for such consideration and on such
terms as the General Partner may determine;
(f) to prosecute, defend, arbitrate, or compromise
any and all claims or liabilities in favor of or against the Partnership, on
such terms and in such manner as the General Partner may reasonably determine,
and similarly to prosecute, settle or defend litigation with respect to the
Partners, the Partnership, or the Partnership's assets; provided, however, that
the General Partner may not, without the consent of all of the Partners,
confess a judgment against the Partnership;
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(g) to file applications, communicate, and otherwise
deal with any and all governmental agencies having jurisdiction over, or in any
way affecting, the Partnership's assets or any other aspect of the Partnership
business;
(h) to make or revoke any election permitted or
required of the Partnership by any taxing authority;
(i) to maintain such insurance coverage for public
liability, fire and casualty, and any and all other insurance for the
protection of the Partnership, for the conservation of Partnership assets, or
for any other purpose convenient or beneficial to the Partnership, in such
amounts and such types as the General Partner shall determine from time to
time;
(j) to determine whether or not to apply any
insurance proceeds for any Property to the restoration of such Property or to
distribute the same;
(k) to retain providers of services of any kind or
nature in connection with the Partnership business and to pay therefor such
reasonable remuneration as the General Partner may deem proper;
(l) to negotiate and conclude agreements on behalf
of the Partnership with respect to any of the rights, powers and authority
conferred upon the General Partner, including, without limitation, management
agreements, franchise agreements, agreements with federal, state or local
liquor licensing agencies and agreements with operators of restaurants and
bars;
(m) to maintain accurate accounting records and to
file promptly all federal, state and local income tax returns on behalf of the
Partnership;
(n) to form or acquire an interest in, and
contribute property to, any further limited or general partnerships, joint
ventures or other relationships that it deems desirable (including, without
limitation, the acquisition of interests in, and the contributions of property
to, its Subsidiaries and any other Person in which it has an equity interest
from time to time);
(o) to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(p) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities or any other valid
Partnership purpose;
(q) to take whatever action the General Partner
deems appropriate to maintain an equivalency of Partnership Units and REIT
Shares; and
(r) to take such other action, execute, acknowledge,
swear to or deliver such other documents and instruments, and perform any and
all other acts the General Partner deems necessary or appropriate for the
formation, continuation and conduct of the business and affairs of the
Partnership (including, without limitation, all actions consistent with
qualification of the General Partner as a REIT) and to possess and enjoy all of
the rights and powers of a general partner as provided by the Act.
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Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
Partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require
the General Partner, in its capacity as such, to expend its individual funds
for payment to third parties or to undertake any individual liability or
obligation on behalf of the Partnership.
Section 6.2 DELEGATION OF AUTHORITY. The General Partner may
delegate any or all of its powers, rights and obligations hereunder, and may
appoint, employ, contract or otherwise deal with any Person for the transaction
of the business of the Partnership, which Person may, under supervision of the
General Partner, perform any acts or services for the Partnership as the
General Partner may approve.
Section 6.3 DUTIES OF GENERAL PARTNER.
(a) The General Partner, subject to the limitations
contained elsewhere in this Agreement, shall manage or cause to be managed the
affairs of the Partnership in a prudent and businesslike manner and shall
devote sufficient time and effort to the Partnership affairs.
(b) In carrying out its obligations, the General
Partner shall:
(i) Render annual reports to all Partners with
respect to the operations of the Partnership;
(ii) On or before March 31st of every year, mail
to all persons who were Partners at any time during the Partnership's
prior fiscal year an annual report of the Partnership, including all
necessary tax information, and any other information regarding the
Partnership and its operations during the prior fiscal year deemed by
the General Partner to be material;
(iii) Maintain complete and accurate records of all
business conducted by the Partnership and complete and accurate books
of account (containing such information as shall be necessary to
record allocations and distributions), and make such records and books
of account available for inspection and audit by any Partner or such
Partner's duly authorized representative (at the sole expense of such
Partner) during regular business hours and at the principal office of
the Partnership; and
(iv) Cause to be filed such certificates and do
such other acts as may be required by law to qualify and maintain the
Partnership as a limited partnership under the laws of the State of
Ohio.
(c) The General Partner shall take such actions as it
deems necessary to maintain an equivalency of Partnership Units and REIT Shares.
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Section 6.4 LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION.
(a) The General Partner shall not be liable for the
return of all or any part of the Capital Contributions of the Limited Partners.
Any returns shall be made solely from the assets of the Partnership according
to the terms of this Agreement.
(b) In carrying out its duties hereunder, the
General Partner shall not be liable to the Partnership or to any other Partner
for any actions taken in good faith and reasonably believed to be in the best
interests of the Partnership, or for errors of judgment, but shall be liable
only for fraud, gross negligence or breach of its fiduciary duties. The
Limited Partners expressly acknowledge that the General Partner is acting on
behalf of the Partnership, the General Partner and the General Partner's
shareholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners) in deciding whether to
cause the Partnership to take (or decline to take) any actions. In the event
of a conflict between the interests of the shareholders of the General Partner
on one hand and the Limited Partners on the other, the General Partner shall
endeavor in good faith to resolve the conflict in a manner not adverse to
either the shareholders of the General Partner or the Limited Partners;
provided, however, that for so long as the General Partner owns a controlling
interest in the Partnership, any such conflict that cannot be resolved in a
manner not adverse to either the shareholders of the General Partner or the
Limited Partners shall be resolved in favor of the shareholders. The General
Partner shall not be liable for monetary damages for losses sustained,
liabilities incurred, or benefits not derived by Limited Partners in connection
with such decisions, provided that the General Partner has acted in good faith.
Any amendment, modification or repeal of this Section 6.4 or any provision
hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.4 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.
(c) The Partnership shall indemnify an Indemnitee to
the fullest extent permitted by law, and save and hold it harmless from and
against, and in respect of, all: (i) fees, costs and expenses (including
reasonable attorney fees) incurred in connection with or resulting from any
claim, action or demand against any Indemnitee or the Partnership that arises
out of or in any way relates to the Partnership, (ii) claims, actions and
demands arising out of or in any way related to the Partnership, and any losses
or damages resulting from such claims, actions and demands, including, without
limitation, reasonable costs and expenses of litigation and appeal and amounts
paid in settlement or compromise of any such claim, action or demand; provided,
however, that this indemnification shall not apply if: (A) the act or omission
of the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (B) the Indemnitee actually received an improper personal benefit
in money, property or services; or (C) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. 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 6.4(c). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent,
or an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this
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Section 6.4(c). Any indemnification pursuant to this Section 6.4 shall be made
only out of the assets of the Partnership.
(d) The Partnership may reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding 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 6.4 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.
(e) The indemnification provided by this Section 6.4
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.
(f) The Partnership may purchase and maintain
insurance on behalf of the Indemnities, and such other Persons 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.
(g) For purposes of this Section 6.4, the
Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by the
Indemnitee of its duties to the Partnership also imposes duties on, or
otherwise involves services by the Indemnitee, to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section 6.4; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by the Indemnitee to be in the
interest of the participants and beneficiaries of the plan shall be deemed to
be for a purpose which is not opposed to the best interests of the Partnership.
(h) In no event may an Indemnitee subject the
Limited Partners to personal liability by reason of the indemnification
provisions set forth in this Agreement.
(i) An Indemnitee shall not be denied
indemnification in whole or in part under this Section 6.4 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.
(j) The provisions of this Section 6.4 are for the
benefit of the Indemnities, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other
persons.
(k) 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
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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, or (ii) to prevent the
General Partner from incurring any taxes under Section 857 or Section 4981 of
the Code, is expressly authorized under this Agreement and is deemed approved by
all of the Limited Partners. Further, any provision of this Agreement that
might jeopardize the General Partner's REIT status shall be (i) void and of no
effect, or (ii) reformed, as necessary, to avoid the General Partner's loss of
REIT status.
Section 6.5 COMPENSATION OF GENERAL PARTNER; REIMBURSEMENT.
The General Partner, as such, shall not receive any compensation for services
rendered to the Partnership. Notwithstanding the preceding sentence, the
General Partner shall be entitled to its allocable share of the profits and
distributable Cash Flow of the Partnership and shall be entitled, in accordance
with the provisions of Section 6.7 below, to pay reasonable compensation to its
Affiliates and other entities in which it may be associated for services
performed. The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all REIT Expenses.
Section 6.6 RELIANCE ON ACT OF GENERAL PARTNER. No financial
institution or any other person, firm or corporation dealing with the General
Partner or the Partnership shall be required to ascertain whether the General
Partner is acting in accordance with this Agreement, but such financial
institution or such other person, firm or corporation shall be protected in
relying solely upon the assurance of and the execution of any instrument or
instruments by the General Partner.
Section 6.7 OUTSIDE SERVICES; DEALINGS WITH AFFILIATES;
OUTSIDE ACTIVITIES.
(a) Notwithstanding any provision of this Article VI
to the contrary, the General Partner may employ such agents, accountants,
attorneys and others as it shall deem advisable, including its directors,
officers, shareholders, and its Affiliates and entities with which the General
Partner, any Limited Partner or their respective Affiliates may be associated,
and may pay them reasonable compensation from Partnership funds for services
performed, which compensation shall be reasonably believed by the General
Partner to be comparable to and competitive with fees charged by unrelated
Persons who render comparable services which could reasonably be made available
to the Partnership. The General Partner shall not be liable for the neglect,
omission or wrongdoing of any such Person so long as it was not grossly
negligent in appointing such Person.
(b) The Partnership may lend or contribute to its
Subsidiaries or other Persons in which it has an equity investment Partnership
funds on terms and conditions established in the sole and absolute discretion
of the General Partner. The foregoing authority shall not create any right or
benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint
ventures, other partnerships, corporations or other business entities in which
it is or thereby becomes a participant upon such terms and subject to such
conditions consistent with this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement,
neither the General Partner nor any of its Affiliates nor any Limited Partner
shall sell, transfer or convey any
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property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.
(e) Subject to the Articles of Incorporation and any
agreements entered into by the General Partner or its Affiliates with the
Partnership or a Subsidiary, any officer, director, employee, agent, trustee,
Affiliate or shareholder of the General 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
substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any business ventures of such person.
(f) In the event the General Partner exercises its
rights under its Articles of Incorporation to redeem REIT Shares, then the
General Partner shall cause the Partnership to purchase from it a number of
Partnership Units as determined based on the application of the Conversion
Factor on the same terms that the General Partner redeemed such REIT Shares.
Section 6.8 INITIAL LOAN TO THE PARTNERSHIP; ADDITIONAL LOANS
TO THE PARTNERSHIP.
(a) Upon its receipt of the proceeds from the
closing of the Offering, the General Partner shall make a loan to the
Partnership in accordance with and on the terms and conditions set forth in the
Intercompany Convertible Note (the "Initial Loan").
(b) If additional funds are required by the
Partnership for any purpose relating to the business of the Partnership or for
any of its obligations, expenses, costs, or expenditures, including operating
deficits, the Partnership may borrow such funds as are needed from time to time
from any Person (including, without limitation, the General Partner or any
Affiliate of the General Partner; provided, however, that the terms of any loan
from the General Partner or any Affiliate of the General Partner shall be
substantially equivalent to the terms that could be obtained from a third party
on an arm's-length basis) on such terms as the General Partner and such other
Person may agree.
Section 6.9 CONTRIBUTION OF ASSETS. The General Partner
shall contribute to the capital of the Partnership from time to time each asset
it owns from time to time during the existence of the Partnership (excluding
its General Partnership Interest in the Partnership, the Initial Loan, and
interest on the Initial Loan). The General Partner hereby represents that it
has contributed to the capital of the Partnership each asset it owns as of the
date of this Agreement.
ARTICLE VII
RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT
TO LIMITED PARTNERS
Section 7.1 RIGHTS OF LIMITED PARTNERS.
(a) The Partnership may engage the Limited Partners
or persons or firms associated with them for specific purposes and may
otherwise deal with such Partners on terms and for compensation to be agreed
upon by any such Partner and the Partnership; provided,
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however, that no Limited Partner shall be entitled to participate in the
management or control of the business of the Partnership.
(b) Each Limited Partner shall be entitled to have
the Partnership books kept at the principal place of business of the
Partnership and at all times, during reasonable business hours and at such
Partner's sole expense, shall be entitled to inspect and copy any of them and
have on demand true and full information of all things affecting the
Partnership and a formal accounting of Partnership affairs whenever
circumstances render it just and reasonable.
(c) No Limited Partner shall be liable for any
debts, liabilities, contracts or obligations of the Partnership. A Limited
Partner shall be liable to the Partnership only to make payments of its Capital
Contribution, if any, as and when due hereunder. After its Capital
Contribution is fully paid, no Limited Partner shall, except as otherwise
required by the Act, be required to make any further Capital Contributions or
other payments or lend any funds to the Partnership.
Section 7.2 PROHIBITIONS WITH RESPECT TO THE LIMITED
PARTNERS. No Limited Partner shall have the right:
(a) To take part in the control or management of the
Partnership business, to transact business for or on behalf of the Partnership
or to sign for or to bind the Partnership, such powers being vested solely in
the General Partner as set forth herein;
(b) To have such Partner's Capital Contributions
repaid except to the extent provided in this Agreement;
(c) To require partition of Partnership property or
to compel any sale or appraisement of Partnership assets or sale of a deceased
Partner's interests therein, notwithstanding any provisions of law to the
contrary; or
(d) To sell or assign all or any portion of such
Partner's Limited Partnership Interest in the Partnership or to constitute the
vendee or assignee thereunder a Substitute Limited Partner, except as provided
in Article IX hereof.
Section 7.3 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL
PARTNER OR AFFILIATE. No Limited Partner shall at any time, either directly or
indirectly, own any shares or other interest in the General Partner or in any
Affiliate thereof if such ownership by itself or in conjunction with other
shares or other interests owned by other Limited Partners would, in the opinion
of counsel for the Partnership, jeopardize the classification of the
Partnership as a partnership or the General Partner as a REIT for federal
income tax purposes. The General Partner shall be entitled to make such
reasonable inquiry of the Limited Partners as is required to establish
compliance by the Limited Partners with the provisions of this Section 7.3 and
the Limited Partners shall promptly and fully respond to such inquiries.
Section 7.4 REDEMPTION RIGHT.
(a) Subject to Section 7.4(c), on or after a
Partner's Specified Redemption Date, such Limited Partner, other than the
General Partner, shall have the right (the "Redemption
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Right") to require the Partnership to redeem on a Specified Redemption Date all
or a portion of the Partnership Units held by such Limited Partner at a
redemption price equal to and in the form of the Cash Amount to be paid by the
Partnership. The Partnership shall have up to one (1) year (the "Payout
Period") following exercise of a Redemption Right to pay the Cash Amount to the
Limited Partner who is exercising the redemption right (the "Redeeming
Partner"). From and after the Specified Redemption Date, the Cash Amount (or
portion thereof) due and payable to a Redeeming Partner with respect to such
Redeeming Partner's exercise of its Redemption Right shall bear interest at the
rate equal to the lower of (i) the General Partner's annual dividend rate for
the prior twelve (12) month period, and (ii) eight percent (8%) per annum, until
the Cash Amount (or portion thereof) shall be paid in full by the Partnership.
The Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner) by the
Redeeming Partner. A Limited Partner may not exercise the Redemption Right for
less than one thousand (1,000) Partnership Units or, if such Limited Partner
holds less than one thousand (1,000) Partnership Units, all of the Partnership
Units held by such Partner. Neither the Redeeming Partner nor any Assignee of
any Limited Partner shall have any right with respect to any Partnership Units
so redeemed to receive any distributions paid after the Specified Redemption
Date. The Assignee of any Limited Partner may exercise the rights of such
Limited Partner pursuant to this Section 7.4, and such Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Limited Partner's Assignee. In connection with
any exercise of such rights by such Assignee on behalf of such Limited Partner,
the Cash Amount shall be paid by the Partnership directly to such Assignee and
not to such Limited Partner. Neither the Redeeming Partner nor any Assignee of
any Limited Partner shall have any right, with respect to any Partnership units
so redeemed, to receive any distributions paid after the Specified Redemption
Date. Each Redeeming Partner agrees to provide such representations and related
indemnities regarding good and unencumbered title, and to execute such documents
as the General Partner may reasonably require in connection with any redemption.
(b) Notwithstanding the provisions of Section
7.4(a), in the event a Limited Partner elects to exercise the Redemption Right,
the General Partner may, in its sole and absolute discretion, elect to assume
directly and satisfy a Redemption Right by paying to the Redeeming Partner
either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT
Shares Amount, as elected by the General Partner (in its sole and absolute
discretion) on the Specified Redemption Date, the General Partner shall acquire
the Partnership Units offered for redemption by the Redeeming Partner and shall
be treated for all purposes of this Agreement as the owner of such Partnership
Units. Unless the General Partner (in its sole and absolute discretion) shall
exercise its right to assume directly and satisfy the Redemption Right, the
General Partner itself shall have no obligation to the Redeeming Partner or to
the Partnership with respect to the Redeeming Partner's exercise of the
Redemption Right. In the event the General Partner shall exercise its right to
satisfy the Redemption Right in the manner described in the first sentence of
this Section 7.4(b), the Partnership shall have no obligation to pay any amount
to the Redeeming Partner with respect to such Redeeming Partner's exercise of
the Redemption Right, and each of the Redeeming Partner, the Partnership, and
the General Partner shall treat the transaction between the General Partner and
the Redeeming Partner for federal income tax purposes as a sale of the
Redeeming Partner's Partnership Units to the General Partner. Each Redeeming
Partner agrees to provide such representations and related indemnities
regarding good title, and to execute such documents as the General Partner may
reasonably require in connection with the issuance of REIT Shares upon exercise
of the Redemption Right. If the Redemption
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Right is satisfied by the delivery of REIT Shares, the Redeeming Partner shall
be deemed to become a holder of REIT Shares as of the close of business on the
Specified Redemption Date.
(c) Notwithstanding the provisions of Section 7.4(a)
and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT
Shares if the delivery of REIT Shares to such Partner on the Specified
Redemption Date by the General Partner pursuant to Section 7.4(b) would be
prohibited under the Articles of Incorporation of the General Partner. Without
limitation on the preceding sentence, no Person shall be permitted to receive
REIT Shares if as a result of, and after giving effect to, such exercise any
Person would Beneficially Own (as defined in the Articles of Incorporation of
the General Partner) more than 9.9% of the total number of issued and
outstanding REIT Shares. The Cash Amount shall be paid in such instances, in
accordance with the terms set forth in Section 7.4(a).
(d) Each Limited Partner covenants and agrees with
the General Partner that all Partnership Units delivered for redemption shall
be delivered to the Partnership or the General Partner, as the case may be,
free and clear of all liens and, notwithstanding anything herein contained to
the contrary, neither the General Partner nor the Partnership shall be under
any obligation to acquire Partnership Units which are or may be subject to any
liens. Each Limited Partner further agrees that, in the event any state or
local property transfer tax is payable as a result of the transfer of its
Partnership Units to the Partnership or the General Partner, such Limited
Partner shall assume and pay such transfer tax.
Section 7.5 WARRANTIES AND REPRESENTATIONS OF THE LIMITED
PARTNERS. Each Limited Partner hereby warrants and represents to and for the
benefit of the General Partner and the Partnership that such Limited Partner
owns good, valid and marketable title to the ownership interests in the
Contributed Partnerships being contributed to the capital of the Partnership by
such Limited Partner (the "Ownership Interests") and that such Ownership
Interests are free and clear of all mortgages, pledges, liens, security
interests, encumbrances and restrictions of any nature whatsoever. Each
Limited Partner further warrants and represents to and for the benefit of the
General Partner and the Partnership that such Limited Partner has all necessary
power and authority to transfer the Ownership Interests to the Partnership
without the consent or authorization of, or notice to, any third party, except
those third parties to whom such consents or authorizations have been obtained.
Section 7.6 INDEMNIFICATION BY LIMITED PARTNERS. Each
Limited Partner hereby agrees to indemnify the General Partner and the
Partnership and hold the General Partner, its officers and directors and the
Partnership and its partners and each of their respective representatives,
successors and assigns harmless from and against any and all claims, demands,
losses, liabilities, damages and expenses (including reasonable attorneys'
fees) arising out of or in connection with (i) the inaccuracy of the warranties
and representations made by such Limited Partner under Section 7.5 above, or
(ii) the ownership of the Ownership Interests by such Limited Partner and any
activities, obligations or liabilities of the Contributed Partnership to which
such Ownership Interest relates for all periods prior to the date of this
Agreement.
Section 7.7 NOTICE OF SALE OR REFINANCING. The General
Partner shall notify the Limited Partners no less than thirty (30) days prior
to any sale, refinancing, reduction (other than scheduled periodic amortization
of principal) of debt or other event that will reduce the amount
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of any nonrecourse liabilities of the Partnership that a Limited Partner may
include in the tax basis of their Partnership Interests.
Section 7.8 BASIS ANALYSIS AND LIMITED PARTNER GUARANTEES.
(a) Upon the request of any Limited Partner but
subject to the General Partner's agreement, which may be withheld in the
General Partner's sole discretion, the General Partner may, prior to the end of
each calendar year, beginning in 1997, cause accountants to prepare and provide
to the Limited Partners a study analyzing each refinancing, reduction (other
than scheduled periodic amortization of principal) of debt or other event
that occurred during that year that reduced the amount of any nonrecourse
liabilities of the Partnership that a Limited Partner may include in the tax
basis of their Partnership Interests.
(b) Upon the request of the General Partner, or upon
its own election, a Limited Partner (the "Initiating Limited Partner") from
time to time, may, but shall not be required to, guarantee or otherwise provide
credit support for Partnership indebtedness as such Limited Partner may elect;
provided, however, that the Limited Partner shall be entitled to take such
action(s) only if the General Partner determines that any such action would not
have a material adverse effect on the tax position of the General Partner. All
Partners are entitled to notice of any such guarantee(s) or credit support, and
shall have the right to provide guarantees or credit support on the same terms
and conditions as the Initiating Limited Partner does, and all Limited Partners
interested in providing such guarantee or credit support shall cooperate with
the General Partner and each other in considering any guarantee or credit
support proposal, and the General Partner will cooperate in permitting or
obtaining any consents for such guarantees or credit support.
ARTICLE VIII
DISTRIBUTIONS AND PAYMENTS TO PARTNERS
Section 8.1 DISTRIBUTIONS OF CASH FLOW.
(a) The General Partner shall distribute on a
quarterly basis such portion of the Cash Flow of the Partnership as the General
Partner shall determine in its sole discretion. Except as provided in Section
10.4, all such distributions of Cash Flow shall be made to Partners who are
Partners on the Partnership Record Date in accordance with such Partner's
respective Percentage Interests on such Partnership Record Date.
(b) In no event may a Partner receive a distribution
of Cash Flow with respect to a Partnership Unit if such Partner is entitled to
receive a dividend out of the General Partner's share of such Cash Flow with
respect to a REIT Share for which all or part of such Partnership Unit has been
exchanged.
Section 8.2 REIT DISTRIBUTION REQUIREMENTS. Unless the
General Partner determines that such a distribution would not be in the best
interests of the Partnership, the Partnership shall make a distribution of Cash
Flow for each fiscal year of the Partnership to enable the General Partner (i)
to meet its distribution requirement for qualification as a REIT as
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set forth in Section 857(a)(1) of the Code, and (ii) to avoid the excise tax
imposed by Section 4981 of the Code.
Section 8.3 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner
shall be entitled to demand property other than cash in connection with any
distribution by the Partnership.
Section 8.4 DISPOSITION PROCEEDS. Disposition Proceeds (less
reasonable reserves set aside by the General Partner for reasonably anticipated
expenses or needs of the Partnership) shall be distributed to the Partners in
accordance with their respective Percentage Interests in the Partnership.
Section 8.5 WITHDRAWALS. No Partner shall be entitled to
make withdrawals from its Capital Account except as provided herein.
ARTICLE IX
TRANSFERS OF INTERESTS
Section 9.1 GENERAL PARTNER.
(a) The General Partner may not transfer any of its
General Partnership Interest or Limited Partnership interests or withdraw as
General Partner except as provided in Section 9.1(c) or in connection with a
transaction described in Section 9.1(d).
(b) The General Partner agrees that it will at all
times own at least twenty percent (20%) of the Partnership Interests in the
form of a General Partnership Interest.
(c) Except as otherwise provided in Section 6.7 or
Section 9.1(d), the General Partner shall not engage in any merger,
consolidation or other combination with or into another Person or sale of all
or substantially all of its assets, or any reclassification, or
recapitalization or change of outstanding REIT Shares (other than a change in
par value, or from par value to no par value, or as a result of a subdivision
or combination as described in the definition of "Conversion Factor") (each of
the foregoing being herein referred to as a "Transaction"), unless the
Transaction also includes a merger of the Partnership or sale of substantially
all of the assets of the Partnership or other transaction as a result of which
all Limited Partners will receive for each Partnership Unit an amount of cash,
securities, or other property equal to the product of the Conversion Factor and
the greatest amount of cash, securities or other property paid to a holder of
one REIT Share in consideration of one REIT Share as a result of the
Transaction; provided, however, that if, in connection with the Transaction, a
purchase, tender or exchange offer shall have been made to and accepted by the
holders of more than fifty percent (50%) of the outstanding REIT Shares, the
holders of Partnership Units shall receive the greatest amount of cash,
securities, or other property which a Limited Partner would have received had
it exercised the Redemption Right and the Company had exercised its election to
satisfy the Redemption Right by the issuance of REIT Shares immediately prior
to the expiration of such purchase, tender or exchange offer.
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(d) Notwithstanding Section 9.1(c), the General
Partner may merge into or consolidate with another entity if immediately after
such merger or consolidation (i) substantially all of the assets of the
successor or surviving entity (the "Surviving General Partner"), other than
Partnership Units held by the General Partner, are contributed to the
Partnership as a Capital Contribution in exchange for Partnership Units with a
fair market value equal to the value of the assets so contributed as determined
by the Surviving General Partner in good faith and (ii) the Surviving General
Partner expressly agrees to assume all obligations of the General Partner
hereunder. Upon such contribution and assumption, the Surviving General
Partner shall have the right and duty to amend this Agreement as set forth in
this Section 9.1(d). The Surviving General Partner shall in good faith arrive
at a new method for the calculation of the Cash Amount and Conversion Factor
for a Partnership Unit after any such merger or consolidations as to
approximate the existing method for such calculation as closely as reasonably
possible. Such calculation shall take into account, among other things, the
kind and amount of securities, cash and other property that was receivable upon
such merger consolidation by a holder of REIT Shares or options, warrants or
other rights relating thereto, and to which a holder of Partnership Units could
have acquired had such Partnership Units been redeemed immediately prior to such
merger or consolidation. Such amendment to this Agreement shall provide for
adjustment to such method of calculation, which shall be as nearly equivalent as
may be practicable to the adjustments provided for with respect to the
Conversion Factor. The above provisions of this Section 9.1(d) shall similarly
apply to successive mergers or consolidations permitted hereunder.
Section 9.2 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL
PARTNER. A Person shall be admitted as a Substitute or Additional General
Partner of the Partnership only if the transaction giving rise to such
substitution or admission is otherwise permitted under this Agreement and the
following terms and conditions are satisfied:
(a) the Person to be admitted as a Substitute or
Additional General Partner shall have accepted and agreed to be bound by all
the terms and provisions of this Agreement by executing a counterpart thereof
and such other documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a General Partner, and a
certificate evidencing the admission of such Person as a General Partner shall
have been filed for recordation and all other actions required by the Act in
connection with such admission shall have been performed;
(b) if the Person to be admitted as a Substitute or
Additional General Partner is a corporation or a partnership, it shall have
provided the Partnership with evidence satisfactory to counsel for the
Partnership of such Person's authority to become a General Partner and to be
bound by the terms and provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered
an opinion (relying on such opinions from counsel and the state or any other
jurisdiction as may be necessary) that the admission of the Person to be
admitted as a Substitute or Additional General Partner is in conformity with
the Act and that none of the actions taken in connection with the admission of
such Person as a Substitute or Additional General Partner will cause the
termination of the Partnership under Section 708 of the Code, or will cause it
to be classified other than a partnership for federal income tax purposes, or
will result in the loss of any Limited Partner's limited liability status.
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Section 9.3 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR
DISSOLUTION OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as
to a General Partner or the withdrawal, removal or dissolution of a General
Partner (except that, if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or
removal of a partner in such partnership shall be deemed not to be a
dissolution of such General Partner if the business of such General Partner is
continued within ninety (90) days by the remaining general partners or all
remaining members of such partnership), the Partnership shall be dissolved and
terminated unless the Partnership is continued pursuant to Section 9.3(b).
(b) Following the occurrence of an Event of
Bankruptcy as to a General Partner or the withdrawal, removal or dissolution of
a General Partner (except that, if a General Partner is on the date of such
occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed
not be a dissolution of such General Partner if the business of such General
Partner is continued within ninety (90) days by the remaining general partners
or all remaining members of such partnership), persons holding at least a
majority of the Limited Partnership interests, within ninety (90) days after
such occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 3.2 by selecting, subject to Section
9.2 and any other provisions of this Agreement, a Substitute General Partner by
unanimous consent of the Limited Partners. If the Limited Partners elect to
reconstitute the Partnership and admit a Substitute General Partner, the
relationship between the Partners and any Person who has acquired an interest
of a Partner in the Partnership shall be governed by this Agreement.
Section 9.4 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as
to, or the dissolution of, a General Partner, such General Partner shall be
deemed to be removed automatically; provided, however, that if a General
Partner is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to or removal of a partner in such
partnership shall be deemed not to be a dissolution of the General Partner if
the business of such General Partner is continued within ninety (90) days by
the remaining general partners or all remaining members of such Partnership.
(b) If a General Partner has been removed pursuant
to this Section 9.4 and the Partnership is not continued pursuant to Section
9.3(b), the partnership shall be dissolved.
Section 9.5 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP
INTERESTS.
(a) Except as otherwise provided in this Article IX,
no Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise
transfer its Limited Partnership Interest, in whole or in part, whether
voluntarily or by operation of law or at judicial sale or otherwise
(collectively, a "Transfer"), without the written consent of the General
Partner, which consent may be withheld in the sole and absolute discretion of
the General Partner. The General Partner may require, as a condition of any
Transfer, that the transferor assume all costs incurred by the Partnership in
connection therewith.
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(b) No Limited Partner may effect a Transfer of its
Limited Partnership Interest if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would require the registration of the
Limited Partnership Interest under the Securities Act of 1933, as amended, or
would otherwise violate any applicable federal or state securities or "Blue
Sky" law (including investment suitability standards).
(c) No Transfer by a Limited Partner of its
Partnership Units may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the Transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a
qualified REIT subsidiary within the meaning of Section 856(i) of the Code),
(ii) such transfer is effectuated through an "established securities market"
or a "secondary market" (or the substantial equivalent thereof) within the
meaning of Section 7704 of the Code, or (iii) the Transfer would create a
risk that the General Partner would not be taxed as a REIT for federal income
tax purposes.
(d) Section 9.5(a) shall not prevent any donative
Transfer by an individual Limited Partner to his immediate family members or
any trust in which the individual or his immediate family members own,
collectively, one hundred percent (100%) of the beneficial interests, provided
that the transferor assumes all costs of the Partnership in connection
therewith and any such transferee shall not have the rights of a Substitute
Limited Partner (unless and until admitted as a Substitute Limited Partner
pursuant to this Section 9.5 and Section 9.6 of this Agreement).
(e) Any Transfer in contravention of any of the
provisions of this Article IX shall be void and ineffectual and shall not be
binding upon, or recognized by, the Partnership.
Section 9.6 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article
IX (including, without limitation, the provisions of Section 9.5(a) regarding
consent of the General Partner), an assignee of the Limited Partnership
Interest of a Limited Partner (including, without limitation, any purchaser,
transferee, donee, or other recipient of any disposition of such Limited
Partnership Interest) shall be deemed admitted as a Limited Partner of the
Partnership only upon the satisfactory completion of the following:
(i) the assignee shall have accepted and agreed
to be bound by the terms and provisions of this Agreement by executing
a counterpart or an amendment thereof, including a revised Exhibit A,
and such other documents or instruments as the General Partner may
require in order to effect the admission of such Person as a Limited
Partner;
(ii) to the extent required, an amended
certificate of limited partnership evidencing the admission of such
Person as a Limited Partner shall have been signed, acknowledged and
filed for record in accordance with the Act;
(iii) the assignee shall have delivered a letter
containing the representation and warranty set forth in Section 9.12
and the agreement set forth in Section 9.12;
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(iv) if the assignee is a corporation, partnership
or trust, the assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of the assignee's
authority to become a Limited Partner under the terms and provisions
of this Agreement;
(v) the assignee shall have executed a power of
attorney containing the terms and provisions set forth in Article XII;
and
(vi) the assignee shall have paid all reasonable
legal fees of the Partnership and the General Partner and all filing
and publication costs incurred in connection with its substitution as
a Limited Partner.
(b) For the purpose of allocating profits and losses
and distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the certificate described in
Section 9.6(a)(ii) or, if no such filing is required, the later of the date
specified in the transfer documents, or the date on which the General Partner
has received all necessary instruments of transfer and substitution.
(c) The General Partner shall cooperate with the
Person seeking to become a Substitute Limited Partner by preparing the
documentation required by this Section and making all official filings and
publications. The Partnership shall take all such action as promptly as
practicable after the satisfaction of the conditions in this Article IX to
effectuate the admission of such Person as a Limited Partner of the
Partnership.
Section 9.7 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.5 and
9.6 hereof, except as required by operation of law, the Partnership shall not
be obligated for any purposes whatsoever to recognize the assignment by any
Limited Partner of his Partnership Interest until the Partnership has received
notice thereof.
(b) Any Person who is the assignee of all or any
portion of a Limited Partner's Limited Partnership Interest, but does not
become a Substitute Limited Partner and desires to make a further assignment of
such Limited Partnership Interest, shall be subject to all the provisions of
this Article IX to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of its Limited Partnership Interest.
Section 9.8 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR
TERMINATION OF A LIMITED PARTNER. The occurrence of an Event of Bankruptcy as
to a Limited Partner, the death of a Limited Partner or a final adjudication
that a Limited Partner is incompetent (which term shall include, but not be
limited to, insanity) shall not cause the termination or dissolution of the
Partnership, and the business of the Partnership shall continue. If an order
for relief in a bankruptcy proceeding is entered against an individual Limited
Partner, the trustee or receiver of his estate or, if he dies, his executor,
administrator or trustee, or, if he is finally adjudicated incompetent, his
committee, guardian or conservator, shall have the rights of such Limited
Partner for the purpose of settling or managing his estate property and such
power as the bankrupt, deceased or incompetent Limited Partner possessed to
assign all or any part of his Partnership
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Interest and to join with the assignee in satisfying conditions precedent to
the admission of the assignee as a Substitute Limited Partner.
Section 9.9 JOINT OWNERSHIP OF INTERESTS. A Partnership
Interest may be acquired by two (2) individuals as joint tenants with right of
survivorship (but not as tenants in common), provided that such individuals
either are married or are related and share the same home as tenants in common.
The written consent or vote of both owners of any such jointly held Partnership
Interest shall be required to constitute the action of the owners of such
Partnership Interest; provided, however, that the written consent of only
one (1) joint owner will be required if the Partnership has been provided with
evidence satisfactory to counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state
of residence of such joint owners. Upon the death of one (1) owner of a
Partnership Interest held in a joint tenancy with a right of survivorship, the
Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one (1) of the owners of a jointly held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner, the General Partner shall cause the Partnership Interest to be divided
into two (2) equal Partnership Interests, which shall thereafter be owned
separately by each of the former owners.
Section 9.10 TRANSFEREES. Any Partnership Interests owned by
the Partners and transferred pursuant to this Article IX shall be and remain
subject to all of the provisions of this Agreement.
Section 9.11 ABSOLUTE RESTRICTION. Notwithstanding any
provision of this Agreement to the contrary, the sale or exchange of any
interest in the Partnership will not be permitted if the interest sought to be
sold or exchanged, when added to the total of all other interests sold or
exchanged within the period of twelve (12) consecutive months ending with the
proposed date of the sale or exchange, would result in the termination of the
Partnership under Section 708 of the Code, if such termination would materially
and adversely affect the Partnership or any Partner.
Section 9.12 INVESTMENT REPRESENTATION. Each Limited Partner
hereby represents and warrants to the General Partner and to the Partnership
that the acquisition of his Partnership Interest is made as a principal for his
account for investment purposes only and not with a view to the resale or
distribution of such Partnership Interest. Each Limited Partner agrees that he
will not sell, assign or otherwise transfer his Partnership Interest or any
fraction thereof, whether voluntarily or by operation of law or at judicial
sale or otherwise, to any Person who does not similarly represent and warrant
and similarly agree not to sell, assign or transfer such Partnership Interest
or fraction thereof to any Person who does not similarly represent, warrant and
agree.
ARTICLE X
TERMINATION OF THE PARTNERSHIP
Section 10.1 TERMINATION. The Partnership shall be dissolved
upon (i) an Event of Bankruptcy as to the General Partner or the dissolution or
withdrawal of the General Partner (unless within ninety (90) days thereafter
Limited Partners holding more than fifty percent (50%)
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of the Limited Partnership Interests in the Partnership elect to continue the
Partnership and to elect one or more persons to serve as the General Partner or
General Partners of the Partnership), (ii) ninety (90) days following the sale
of all or substantially all of the Partnership's assets (provided that if the
Partnership receives an installment obligation as consideration for such sale or
other disposition, the Partnership shall continue, unless sooner dissolved under
the provisions of this Agreement, until such time as such note or notes are paid
in full), (iii) the expiration of the term specified in Section 3.2, (iv) the
redemption of all Limited Partnership Interests (other than any of such
interests held by the General Partner), or (v) the election by the General
Partner (but only in accordance with and as permitted by applicable law) that
the Partnership should be dissolved. Upon dissolution of the Partnership
(unless the business of the Partnership is continued as set forth above), the
General Partner (or its trustee, receiver, successor or legal representative)
shall proceed with the winding up of the Partnership, and its assets shall be
applied and distributed as herein provided.
Section 10.2 PAYMENT OF DEBTS. The assets shall first be
applied to the payment of the liabilities of the Partnership (other than any
loans or advances that may have been made by Partners to the Partnership) and
the expenses of liquidation. A reasonable time shall be allowed for the
orderly liquidation of the assets of the Partnership and the discharge of
liabilities to creditors so as to enable the General Partner to minimize any
losses resulting from liquidation.
Section 10.3 DEBTS TO PARTNERS. The remaining assets shall
next be applied to the repayment of any loans made by any Partner to the
Partnership.
Section 10.4 REMAINING DISTRIBUTION. The remaining assets
shall then be distributed to the Partners in accordance with the Partners'
positive Capital Account balances, after making the adjustments for allocations
under Article V hereof.
Section 10.5 RESERVE. Notwithstanding the provisions of
Sections 10.3 and 10.4, the General Partner may retain such amount as it deems
necessary as a reserve for any contingent liabilities or obligations of the
Partnership, which reserve, after the passage of a reasonable period of time,
shall be distributed pursuant to the provisions of this Article X.
Section 10.6 FINAL ACCOUNTING. Each of the Partner s shall
be furnished with a statement examined by the Partnership's independent
accountants, which shall set forth the assets and liabilities of the
Partnership as of the date of the complete liquidation. Upon the compliance by
the General Partner with the foregoing distribution plan, the Limited Partners
shall cease to be such, and the General Partner, as the sole remaining Partner
of the Partnership, shall execute and cause to be filed a Certificate of
Cancellation of the Partnership and any and all other documents necessary with
respect to termination and cancellation of the Partnership.
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ARTICLE XI
AMENDMENTS
Section 11.1 AUTHORITY TO AMEND.
(a) This Agreement may be amended by the General
Partner without the approval of any other Partner if such amendment is solely
for the purpose of clarification and does not change the substance hereof and
the Partnership has obtained an opinion of counsel to that effect.
(b) This Agreement may be amended by the General
Partner without the approval of any other Partner if such amendment is for the
purpose of adding or substituting Limited Partners.
(c) This Agreement may be amended by the General
Partner without the approval of any other Partner if such amendment is, in the
opinion of counsel for the Partnership, necessary or appropriate to satisfy
requirements of the Code with respect to partnerships or REITs or of any
federal or state securities laws or regulations. Any amendment made pursuant
to this Section 11.1(c) may be made effective as of the date of this Agreement.
(d) Notwithstanding any contrary provision of this
Agreement, any amendment to this Agreement or other act which would (i)
adversely affect the limited liabilities of the Limited Partners, (ii) change
the method of allocation of profit and loss as provided in Article V or the
distribution provisions of Articles VIII and X hereof, (iii) seek to impose
personal liability on the Limited Partners, or (iv) affect the operation of the
Conversion Factor of the Redemption Right shall require the consent and
approval of Limited Partners holding more than sixty-six and two-thirds percent
(66 2/3%) of the Percentage Interests of the Limited Partners.
(e) Except as otherwise specifically provided in
this Section 11.1, amendments to this Agreement shall require the approval of
the General Partner and Limited Partners holding more than fifty percent (50%)
of the Percentage Interests of the Limited Partners.
Section 11.2 NOTICE OF AMENDMENTS. A copy of any amendment
to be approved by the Partners pursuant to Sections 11.1(d) or 11.1(e) shall be
mailed in advance to such Partners. Partners shall be notified as to the
substance of any amendment pursuant to Sections 11.1(a), (b) or (c), and upon
request shall be furnished a copy thereof.
ARTICLE XII
POWER OF ATTORNEY
Section 12.1 POWER. Each of the Limited Partners irrevocably
constitutes and appoints the General Partner as such Limited Partner's true and
lawful attorney in such Limited Partner's name, place and stead to make,
execute, swear to, acknowledge, deliver and file:
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(a) Any certificates or other instruments which may
be required to be filed by the Partnership under the laws of the State of Ohio
or of any other state or jurisdiction in which the General Partner shall deem
it advisable to file;
(b) Any documents, certificates or other
instruments, including, but not limited to, any and all amendments and
modifications of this Agreement or of the instruments described in Section
12.1(a) which may be required or deemed desirable by the General Partner to
effectuate the provisions of any part of this Agreement and, by way of
extension and not in limitation, to do all such other things as shall be
necessary to continue and to carry on the business of the Partnership; and
(c) All documents, certificates or other instruments
which may be required to effectuate the dissolution and termination of the
Partnership, to the extent such dissolution and termination is authorized
hereby. The power of attorney granted hereby shall not constitute a waiver of,
or be used to avoid, the rights of the Partners to approve certain amendments
to this Agreement pursuant to Sections 11.1(d) and 11.1(e) or be used in any
other manner inconsistent with the status of the Partnership as a limited
partnership or inconsistent with the provisions of this Agreement.
Section 12.2 SURVIVAL OF POWER. It is expressly intended by
each of the Partners that the foregoing power of attorney is coupled with an
interest, is irrevocable and shall survive the death, incompetence,
dissolution, liquidation or adjudication of insanity or bankruptcy or
insolvency of each such Partner. The foregoing power of attorney shall survive
the delivery of an assignment by any of the Partners of such Partner's entire
interest in the Partnership, except that where an assignee of such entire
interest has become a substitute Limited Partner, then the foregoing power of
attorney of the assignor Partner shall survive the delivery of such assignment
for the sole purpose of enabling the General Partner to execute, acknowledge
and file any and all instruments necessary to effectuate such substitution.
ARTICLE XIII
CONSENTS, APPROVALS, VOTING AND MEETINGS
Section 13.1 METHOD OF GIVING CONSENT OR APPROVAL. Any
consent or approval required by this Agreement may be given as follows:
(a) by a written consent given by the consenting
Partner and received by the General Partner at or prior to the doing of the act
or thing for which the consent is solicited, provided that such consent shall
not have been nullified by:
(i) Notice to the General Partner of such
nullification by the consenting Partner prior to the doing of any act
or thing, the doing of which is not subject to approval at a meeting
called pursuant to Section 13.2, or
(ii) Notice to the General Partner of such
nullification by the consenting Partner prior to the time of any
meeting called pursuant to Section 13.2 to consider the doing of such
act or thing, or
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(iii) The negative vote by such consenting Partner
at any meeting called pursuant to Section 13.2 to consider the doing
of such act or thing;
(b) by the affirmative vote by the consenting
Partner to the doing of the act or thing for which the consent is solicited at
any meeting called pursuant to Section 13.2 to consider the doing of such act
or thing; or
(c) by the failure of the Partner to respond or
object to a request from the General Partner for such Partner's consent within
thirty (30) days from its receipt of such request (or such shorter period of
time as the General Partner may indicate in such request in order to ensure
that the General Partner has sufficient time to respond, if required, to any
third party with respect to the subject matter of such request).
Section 13.2 MEETINGS OF LIMITED PARTNERS. Any matter
requiring the consent or vote of all or any of the Partners may be considered
at a meeting of the Partners held not less than five (5) nor more than sixty
(60) days after notice thereof shall have been given by the General Partner to
all Partners. Such notice (i) may be given by the General Partner, in its
discretion, at any time, or (ii) shall be given by the General Partner within
fifteen (15) days after receipt from Limited Partners holding more than fifty
percent (50%) of the Percentage Interests of the Limited Partners of a request
for such meeting.
Section 13.3 OPINION. Except for Consents obtained pursuant
to Sections 13.1 or 13.2, no Limited Partner shall exercise any consent or
voting rights unless either (a) at the time of the giving of consent or casting
of any vote by the Partners hereunder, counsel for the Partnership or counsel
employed by the Limited Partners shall have delivered to the Partnership an
opinion satisfactory to the Partners to the effect that such conduct (i) is
permitted by the Act, (ii) will not impair the limited liability of the Limited
Partners, and (iii) will not adversely affect the classification of the
Partnership as a partnership for federal income tax purposes, or (b)
irrespective of the delivery or nondelivery of such opinion of counsel, Limited
Partners holding more than seventy-five percent (75%) of the Percentage
Interests of the Limited Partners determine to exercise their consent and/or
voting rights.
Section 13.4 SUBMISSIONS TO PARTNERS. The General Partner
shall give the Partners notice of any proposal or other matter required by any
provision of this Agreement, or by law, to be submitted for consideration and
approval of the Partners. Such notice shall include any information required
by the relevant provision or by law.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 GOVERNING LAW. The Partnership and this
Agreement shall be governed by and construed in accordance with the laws of the
State of Ohio.
Section 14.2 AGREEMENT FOR FURTHER EXECUTION. At any time or
times upon the request of the General Partner, the Limited Partners hereby
agree to sign, swear to, acknowledge and deliver all further documents and
certificates required by the laws of Ohio, or any other
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jurisdiction in which the Partnership does, or proposes to do, business, or
which may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act. This Section 14.2 shall not prejudice
or affect the rights of the Limited Partners to approve certain amendments to
this Agreement pursuant to Sections 11.1(d) and 11.1(e).
Section 14.3 ENTIRE AGREEMENT. This Agreement and the
exhibits attached hereto contain the entire understanding among the parties and
supersede any prior understandings or agreements among them respecting the
within subject matter. There are no representations, agreements, arrangements
or understandings, oral or written, between or among the parties hereto
relating to the subject matter of this Agreement which are not fully expressed
herein.
Section 14.4 SEVERABILITY. This Agreement is intended to
be performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations of the jurisdictions in which
the Partnership does business. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
Section 14.5 NOTICES. Notices to Partners or to the
Partnership shall be deemed to have been given when personally delivered or
mailed, by prepaid registered or certified mail, addressed as set forth in
Exhibit A attached hereto, unless a notice of change of address has previously
been given in writing by the addressee to the addressor, in which case such
notice shall be addressed to the address set forth in such notice of change of
address.
Section 14.6 TITLES AND CAPTIONS. All titles and captions
are for convenience only, do not form a substantive part of this Agreement, and
shall not restrict or enlarge any substantive provisions of this Agreement.
Section 14.7 COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each one of which shall constitute an original executed
copy of this Agreement.
Section 14.8 PRONOUNS. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the identity of the person or persons may require.
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Section 14.9 SURVIVAL OF RIGHTS. Subject to the provisions
hereof limiting transfers, this Agreement shall be binding upon and inure to
the benefit of the Partners and the Partnership and their respective legal
representatives, successors, transferees and assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands
as of the day and year first above written.
GENERAL PARTNER:
Xxxxxx Lodging Company,
an Ohio corporation
By:
------------------------------
Xxxxxx X. Xxxxxx, President
LIMITED PARTNERS:
(See attached limited partner
signature pages)
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LIMITED PARTNERSHIP SIGNATURE PAGE
The undersigned, desiring to become a Limited Partner of
Xxxxxx Hotel Properties, L.P., hereby agrees to all of the terms of the
Agreement of Limited Partnership of Xxxxxx Hotel Properties, L.P. and agrees to
be bound by the terms and provisions thereof.
Executed by the undersigned as a Limited Partner of Xxxxxx
Hotel Properties, L.P.
LIMITED PARTNER:
_______________________________________
(Signature of Limited Partner)
_______________________________________
(Print Name of Limited Partner)
_______________________________________
(Residence Xxxxxx Xxxxxxx)
_______________________________________
(City State Zip Code)
_______________________________________
(Taxpayer Identification or
Social Security Number)
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EXHIBIT A
---------
LIST OF PARTNERS
Capital Percentage
Partners Contribution Interest
-------- ------------ ------------
General Partner:
---------------
Xxxxxx Lodging Company %
Xxxxxxxx Xxxxx, Xxxxx 0000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Limited Partners:
----------------
%
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EXHIBIT B
FEDERAL INCOME TAX MATTERS
For purposes of interpreting and implementing Article V of the
Partnership Agreement, the following rules shall apply and shall be treated as
part of the terms of the Partnership Agreement:
A. SPECIAL ALLOCATION PROVISIONS.
1. For purposes of determining the amount of
gain or loss to be allocated pursuant to Article V of the Partnership
Agreement, any basis adjustments permitted pursuant to Section 743 of the Code
shall be disregarded.
2. When Partnership Interests are transferred
during any taxable year, the General Partner intends to allocate Partnership
income, loss, deductions and credits using the closing of the books method.
3. Notwithstanding any other provision of the
Partnership Agreement, to the extent required by law, income, gain, loss and
deduction attributable to property contributed to the Partnership by a Partner
shall be shared among the Partners so as to take into account any variation
between the basis of the property and the fair market value of the property at
the time of contribution in accordance with the requirements of Section 704(c)
of the Code and the applicable regulations thereunder as more fully described
in Part B hereof. Treasury regulations under Section 704(c) of the Code allow
partnerships to use any reasonable method for accounting for Book-Tax
Differences for contributions of property so that a contributing partner
receives the tax benefits and burdens of any built-in gain or loss associated
with contributed property. The Operating Partnership shall account for
Book-Tax Differences using a method specifically approved in the regulations,
the traditional method. An allocation of remaining built-in gain under Section
704(c) will be made when Section 704(c) property is sold.
4. Notwithstanding any other provision of the
Partnership Agreement, in the event the Partnership is entitled to a deduction
for interest imputed under any provision of the Code on any loan or advance
from a Partner (whether such interest is currently deducted, capitalized or
amortized), such deduction shall be allocated solely to such Partner.
5. Notwithstanding any provision of the
Partnership Agreement to the contrary, to the extent any payments in the nature
of fees made to a Partner or reimbursements of expenses to any Partner are
finally determined by the Internal Revenue Service to be distributions to a
Partner for federal income tax purposes, there will be a gross income
allocation to such Partner in the amount of such distribution.
6. (a) Notwithstanding any provision of the
Partnership Agreement to the contrary and subject to the exceptions set forth
in Section 1.704-2(f)(2)-(5) of the Treasury Regulations, if there is a net
decrease in Partnership Minimum Gain during any Partnership fiscal year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net
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decrease in Partnership Minimum Gain determined in accordance with Section
1.704-2(g)(2) of the Treasury Regulations. Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Section 1.704-2(f) of the
Treasury Regulations. This paragraph 6(a) is intended to comply with the
minimum gain chargeback requirement in such Section of the Regulations and
shall be interpreted consistently therewith. To the extent permitted by such
Section of the Regulations and for purposes of this paragraph 6(a) only, each
Partner's Adjusted Capital Account Balance shall be determined prior to any
other allocations pursuant to Article V of the Partnership Agreement with
respect to such fiscal year and without regard to any net decrease in Partner
Minimum Gain during such fiscal year.
(b) Notwithstanding any provision of the
Partnership Agreement to the contrary, except paragraph 6(a) of this Exhibit
and subject to the exceptions set forth in Section 1.704-2(i)(4) of the
Treasury Regulations, if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain during any Partnership fiscal year, each Partner who has a share
of the Partner Nonrecourse Debt Minimum Gain, determined in accordance with
Section 1.704-2(i)(3) of the Treasury Regulations, shall be specially allocated
items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner's share of the net
decrease in Partner Nonrecourse Debt Minimum Gain, determined in accordance
with Section 1.704-2(i)(5) of the Treasury Regulations. Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Section 1.704-2(i)(4) of the
Treasury Regulations. This paragraph 6(b) is intended to comply with the
minimum gain chargeback requirement in such Section of the Treasury Regulations
and shall be interpreted consistently therewith. Solely for purposes of this
paragraph 6(b), each Partner's Adjusted Capital Account Balance shall be
determined prior to any other allocations pursuant to Article V of the
Partnership Agreement with respect to such fiscal year, other than allocations
pursuant to paragraph 6(a) hereof.
7. Notwithstanding any provision of the
Partnership Agreement to the contrary, in the event any Partners unexpectedly
receive any adjustments, allocations or distributions described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be
specially allocated to such Partners in an amount and manner sufficient to
eliminate the deficits in their Adjusted Capital Account Balances created by
such adjustments, allocations or distributions as quickly as possible.
8. No loss shall be allocated to any Partner to
the extent that such allocation would result in a deficit in its Adjusted
Capital Account Balance while any other Partner continues to have a positive
Adjusted Capital Account Balance; in such event, losses shall first be
allocated to any Partners with positive Adjusted Capital Account Balances, and
in proportion to such balances, to the extent necessary to reduce their
positive Adjusted Capital Account Balances to zero. Any excess shall be
allocated to the General Partner.
9. Any special allocations of items pursuant to
this Part A shall be taken into account in computing subsequent allocations so
that the net amount of any items so allocated and the profits, losses and all
other items allocated to each such Partner pursuant to
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Article V of the Partnership Agreement shall, to the extent possible, be equal
to the net amount that would have been allocated to each such Partner pursuant
to the provisions of Article V of the Partnership Agreement if such special
allocations had not occurred.
10. Notwithstanding any provision of the
Partnership Agreement to the contrary, Nonrecourse Deductions for any fiscal
year or other period shall be specially allocated to the Partners in the manner
and in accordance with the percentages set forth in Section 5.1 of the
Partnership Agreement.
11. Notwithstanding any provision of the
Partnership Agreement to the contrary, any Partner Nonrecourse Deduction for
any fiscal year or other period shall be specially allocated to the Partner 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
Section 1.704-2(i) of the Treasury Regulations.
B. CAPITAL ACCOUNT ADJUSTMENTS AND 704(C) TAX
ALLOCATIONS.
1. For purposes of computing the amount of any
item of income, gain, deduction or loss to be reflected in the Partners'
capital accounts, the determination, recognition and classification of any such
item shall be the same as its determination, recognition and classification for
federal income tax purposes; provided, however, that:
(a) Any income, gain or loss attributable to
the taxable disposition of any property shall be determined by the
Partnership as if the adjusted basis of such property as of such date
of disposition was equal in amount to (i) the Agreed Value in the case
of the Initial Hotels or other contributed properties, or (ii) the
Carrying Value with respect to property subsequently purchased.
(b) The computation of all items of income,
gain, loss and deduction shall be made by the Partnership and, as to
those items described in Section 705(a)(1)(B) or Section 705(a)(2)(B)
of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor
capitalizable for federal income tax purposes.
2. A transferee of a Partnership interest will
succeed to the capital account relating to the Partnership interest
transferred; provided, however, that if the transfer causes a termination of
the Partnership under Section 708(b)(1)(B) of the Code, the Partnership
properties shall be deemed to have been distributed in liquidation of the
Partnership to the Partners (including the transferee of a Partnership
interest) and recontributed by such Partners and transferees in reconstitution
of the Partnership. The capital accounts of such reconstituted Partnership
shall be maintained in accordance with the principles set forth herein.
3. Upon an issuance of additional Partnership
interests for cash, the capital accounts of all Partners (and the Agreed Values
of all Partnership properties) shall, immediately prior to such issuance, be
adjusted (consistent with the provisions hereof) upward or downward to reflect
any unrealized gain or unrealized loss attributable to each Partnership
property (as if such unrealized gain or unrealized loss had been recognized
upon an actual sale of such property at the fair market value thereof,
immediately prior to such issuance, and had
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been allocated to the Partners, at such time, pursuant to Article V of the
Partnership Agreement). In determining such unrealized gain or unrealized loss
attributable to the properties, the fair market value of Partnership properties
shall be determined by the General Partner using such reasonable methods of
valuation as it may adopt.
4. Immediately prior to the distribution of any
Partnership property in liquidation of the Partnership, the capital accounts of
all Partners shall be adjusted (consistent with the provisions hereof and
Section 704 of the Code) upward or downward to reflect any unrealized gain or
unrealized loss attributable to the Partnership property (as if such unrealized
gain or unrealized loss had been recognized upon an actual sale of each such
property, immediately prior to such distribution, and had been allocated to the
Partners, at such time, pursuant to Article V of the Partnership Agreement).
In determining such unrealized gain or unrealized loss attributable to
property, the fair market value of Partnership property shall be determined by
the General Partner using such reasonable methods of valuation as it may adopt.
5. In accordance with Section 704(c) of the Code
and the regulations thereunder, income, gain, loss and deduction with respect
to any property shall, solely for tax purposes, and not for capital account
purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes.
6. In the event the Agreed Value of any
Partnership asset is adjusted as described in paragraph 3 above, subsequent
allocations of income, gain, loss and deduction with respect to such asset
shall take account of any variation between the adjusted basis of such asset
for federal income tax purposes and its Agreed Value in the same manner as
under Section 704(c) of the Code and the regulations thereunder.
7. Any elections or other decisions relating to
such allocations shall be made by the General Partner in any manner that
reasonably reflects the purpose and intention of this Agreement.
C. DEFINITIONS. For the purposes of this Exhibit, the
following terms shall have the meanings indicated unless the context clearly
indicates otherwise:
"ADJUSTED CAPITAL ACCOUNT BALANCE": means the
balance in the capital account of a Partner as of the end of the relevant
fiscal year of the Partnership, after giving effect to the following: (i)
credit to such capital account any amounts the Partner is obligated to restore,
pursuant to the terms of this Agreement or otherwise, or is deemed obligated to
restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Treasury Regulations, and (ii) debit to such capital
account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of
the Regulations.
"AGREED VALUE": means the net fair market value of
Contributed Property as agreed to by the Contributing Partner and the
Partnership (or other property subsequently adjusted to reflect contributions),
using such reasonable method of valuation as they may adopt.
"CARRYING VALUE": means the adjusted basis of such
property for federal income tax purposes as of the time of determination.
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"NONRECOURSE DEDUCTIONS": shall have the meaning set
forth in Section 1.704-2(b)(1) of the Treasury Regulations. The amount of
Nonrecourse Deductions for a Partnership fiscal year equals the excess, if any,
of the net increase, if any, in the amount of Partnership Minimum Gain during
that fiscal year over the aggregate amount of any distributions during that
fiscal year of proceeds of a Nonrecourse Liability, that are allocable to an
increase in Partnership Minimum Gain, determined according to the provisions of
Section 1.704- 2(c) of the Treasury Regulations.
"NONRECOURSE LIABILITY": shall have the meaning set
forth in Section 1.704-2(b)(3) of the Treasury Regulations.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN": means an
amount, with respect to each Partner Nonrecourse Debt, determined in accordance
with Section 1.704-2(i) of the Treasury Regulations.
"PARTNER NONRECOURSE DEBT": shall have the meaning
set forth in Section 1.704-2(b)(4) of the Treasury Regulations.
"PARTNER NONRECOURSE DEDUCTIONS": shall have the
meaning set forth in Section 1.704-2(i)(2) of the Treasury Regulations. For
any Partnership taxable year, the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt equal the net increase during the year,
if any, in the amount of Partner Nonrecourse Debt Minimum Gain reduced (but not
below zero) by proceeds of the liability that are both attributable to the
liability and allocable to an increase in the Partner Nonrecourse Debt Minimum
Gain.
"PARTNERSHIP AGREEMENT": shall mean this Amended and
Restated Limited Partnership Agreement of Xxxxxx Hotel Properties, L.P.
"PARTNERSHIP MINIMUM GAIN": shall have the meaning
set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.
For purposes of this Exhibit, all other capitalized terms will have
the same definition as in the Partnership Agreement.
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EXHIBIT C
---------
INITIAL HOTELS
Number
Hotel of Rooms Location
----- -------- --------
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EXHIBIT D
---------
NOTICE OF EXERCISE OF REDEMPTION RIGHT
The undersigned hereby irrevocably (i) presents for redemption
_________ Partnership Units (as defined in the Partnership Agreement defined
below) in Xxxxxx Hotel Properties, L.P., in accordance with the terms of the
Agreement of Limited Partnership of Xxxxxx Hotel Properties, L.P. (the
"Partnership Agreement"), and the Redemption Right (as defined in the
Partnership Agreement) referred to therein, (ii) surrenders such Partnership
Units and all right, title and interest therein, and (iii) directs that the
Cash Amount or REIT Shares (both as defined in the Partnership Agreement)
deliverable upon exercise of the Redemption Right be delivered to the address
specified below, and if REIT Shares are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the addresses specified below.
Dated: ___________________ Name of Limited Partner:
_______________________________________
_______________________________________
(Signature of Limited Partner)
_______________________________________
(Xxxxxx Xxxxxxx)
_______________________________________
(City State Zip Code)
IF REIT Shares are to be issued, issue to:
_____________________________
(Name)
_____________________________
(Social Security or
Identifying Number)
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EXHIBIT E
INTERCOMPANY CONVERTIBLE NOTE
[SEE EXHIBIT 10.9]
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