Exhibit 10.110
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXX-XXXX REALTY, L.P.
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 CONTINUATION OF THE PARTNERSHIP . . . . . . . . . . . . . . . . . 10
2.1 Continuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3 NAME AND OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Principal and Registered Offices. . . . . . . . . . . . . . . . . . 11
ARTICLE 4 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 5 TERM AND FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 6 CAPITAL CONTRIBUTIONS, ADDITIONAL FUNDING AND
CAPITAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Capital Contributions of the General Partner. . . . . . . . . . . . 12
6.2 Capital Contributions of the Limited Partners . . . . . . . . . . . 13
6.3 General Partner Option to Contribute Additional
Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 General Partner Option to Issue Additional
Partnership Units to Limited Partners . . . . . . . . . . . . 14
(a) Issuance of Additional Partnership Units . . . . . . . . . . . 14
(b) Additional Partnership Units and Percentage
Interest Adjustments. . . . . . . . . . . . . . . . . . . . . 16
(c) Adjustments to Partnership Units . . . . . . . . . . . . . . . 17
(d) Fractional Units . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Issuance of New Securities . . . . . . . . . . . . . . . . . . 17
6.5 Capital Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.6 Limited Liability . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.7 Return of Capital . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.8 No Interest on Capital Contributions. . . . . . . . . . . . . . . . 18
6.9 No Third Party Beneficiary. . . . . . . . . . . . . . . . . . . . . 18
6.10 Common Stock Option Plans. . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE 7 ALLOCATION OF PROFITS AND LOSSES. . . . . . . . . . . . . . . . . 19
7.1 General Allocation of Profits and Losses. . . . . . . . . . . . . . 19
7.2 Allocations with Respect to Transferred Interests . . . . . . . . . 19
7.3 Deficit Restoration Obligation. . . . . . . . . . . . . . . . . . . 19
7.4 Regulatory Allocations. . . . . . . . . . . . . . . . . . . . . . . 20
(a) Minimum Gain Chargeback . . . . . . . . . . . . . . . . . . . 20
(b) Exceptions to Section 7.3(a) . . . . . . . . . . . . . . . . . 20
(c) Qualified Income Offset. . . . . . . . . . . . . . . . . . . . 20
(d) Gross Income Allocation. . . . . . . . . . . . . . . . . . . . 21
(e) Partner Nonrecourse Debt . . . . . . . . . . . . . . . . . . . 21
(f) Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 21
(g) Curative Allocations . . . . . . . . . . . . . . . . . . . . . 21
7.5 Special Allocations with Respect to Contributed or
Revalued Property. . . . . . . . . . . . . . . . . . . . . . . 22
7.6 Allocations with Respect to Partnership Units other
than the OP Units. . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 8 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Distribution of Net Cash Flow . . . . . . . . . . . . . . . . . . . 22
8.2 Distributions in Kind . . . . . . . . . . . . . . . . . . . . . . . 23
8.3 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.4 Distributions with Respect to Partnership Units
other than OP Units. . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 9 MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.1 Management of Partnership Affairs . . . . . . . . . . . . . . . . . 24
9.2 Powers and Authorities of the General Partner . . . . . . . . . . . 24
9.3 Major Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Restrictions on General Partner's Authority . . . . . . . . . . . . 27
9.5 Engagements by the Partnership. . . . . . . . . . . . . . . . . . . 28
9.6 Engagement of Affiliates. . . . . . . . . . . . . . . . . . . . . . 28
9.7 Liability of the General Partner. . . . . . . . . . . . . . . . . . 28
9.8 Reimbursement of Certain Expenses of
the General Partner . . . . . . . . . . . . . . . . . . . . . . . 28
9.9 Outside Activities of the General Partner . . . . . . . . . . . . . 29
9.10 Operation in Accordance with REIT Requirements . . . . . . . . . . 29
9.11 Title Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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ARTICLE 10 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS . . . . . . . . . . . 29
10.1 No Participation in Management of Partnership;
Rights of Limited Partners to Certain Documents . . . . . . . 29
10.2 Withdrawal, Retirement, Death, Incompetency,
Insolvency or Dissolution of a Limited Partner. . . . . . . . 30
10.3 Redemption Rights. . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Grant of Rights. . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Delivery of Exercise Notices . . . . . . . . . . . . . . . . . 31
(c) Assumption by General Partner. . . . . . . . . . . . . . . . . 31
(d) Limitation on Exercise of Redemption Rights. . . . . . . . . . 32
(e) Computation of Number of Exchange Shares
and/or Cash To Be Paid . . . . . . . . . . . . . . . . . . . . 33
(f) Closing; Delivery of Election Notice . . . . . . . . . . . . . 33
(g) Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . 33
(h) Restrictions On Redemption of Partnership Units. . . . . . . . 34
(i) Term of Rights . . . . . . . . . . . . . . . . . . . . . . . . 34
(j) Covenants of the General Partner . . . . . . . . . . . . . . . 35
(k) Limited Partners' Covenant . . . . . . . . . . . . . . . . . . 36
ARTICLE 11 BANKING, RECORDS AND TAX MATTERS . . . . . . . . . . . . . . . . 36
11.1 Partnership Funds. . . . . . . . . . . . . . . . . . . . . . . . . 36
11.2 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . 37
11.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 37
11.4 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.5 Section 754 Matters. . . . . . . . . . . . . . . . . . . . . . . . 37
11.6 Tax Matter Partners. . . . . . . . . . . . . . . . . . . . . . . . 38
11.7 Other Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 12 TRANSFER OF GENERAL PARTNER INTERESTS. . . . . . . . . . . . . . 38
12.1 Transfer of Interest of the General Partner. . . . . . . . . . . . 38
12.2 Retirement of the General Partner. . . . . . . . . . . . . . . . . 38
12.3 Transferee of the General Partner's Interest . . . . . . . . . . . 39
12.4 Retirement of Last Remaining General Partner . . . . . . . . . . . 39
12.5 Continuation of Partnership. . . . . . . . . . . . . . . . . . . . 39
12.6 Merger or Consolidation of the General Partner . . . . . . . . . . 39
ARTICLE 13 TRANSFER OF LIMITED PARTNER INTERESTS. . . . . . . . . . . . . . 41
13.1 Transfer of Interest of a Limited Partner. . . . . . . . . . . . . 41
13.2 Assignee and Substitute Limited Partners . . . . . . . . . . . . . 41
13.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.4 Cost of Admission. . . . . . . . . . . . . . . . . . . . . . . . . 42
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ARTICLE 14 DISSOLUTION AND LIQUIDATION OF PARTNERSHIP . . . . . . . . . . . 42
14.1 Dissolution of the Partnership . . . . . . . . . . . . . . . . . . 43
14.2 Winding Up of Affairs. . . . . . . . . . . . . . . . . . . . . . . 43
14.3 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
14.4 Final Distribution of Partnership Property . . . . . . . . . . . . 44
14.5 Certificate of Cancellation. . . . . . . . . . . . . . . . . . . . 44
ARTICLE 15 POWER OF ATTORNEY. . . . . . . . . . . . . . . . . . . . . . . . 44
15.1 Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . . . 44
15.2 Grant of Authority Irrevocable . . . . . . . . . . . . . . . . . . 45
ARTICLE 16 AMENDMENT OF PARTNERSHIP AGREEMENT . . . . . . . . . . . . . . . 45
16.1 Amendments by Partners . . . . . . . . . . . . . . . . . . . . . . 45
16.2 Amendment by the General Partner . . . . . . . . . . . . . . . . . 46
16.3 Amendment of Certificate . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 17 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 47
17.1 Partnership Indemnification of Partner . . . . . . . . . . . . . . 47
17.2 Partner Indemnification of Partnership . . . . . . . . . . . . . . 47
ARTICLE 18 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . 47
18.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
18.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18.3 Parties Bound. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18.4 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18.5 Partition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18.6 Computation of Accountants . . . . . . . . . . . . . . . . . . . . 48
18.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
EXHIBITS
Exhibit A: Partners and Partnership Units
Exhibit B: Xxxx-Xxxx Realty, L.P. Unit Certificates
Exhibit C: Holders of Series A Preferred Units
Exhibit D: Holders of Series B Preferred Units
Exhibit E: Schedule of Percentage Interests
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXX-XXXX REALTY, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement") of XXXX-XXXX REALTY, L.P., a Delaware limited partnership (the
"Partnership"), is made and entered into as of the 11th day of December, 1997,
by and among XXXX-XXXX REALTY CORPORATION, a Maryland corporation, as general
partner, and those parties who are designated as limited partners upon Exhibit A
attached hereto and made a part hereof by this reference, as limited partners.
R E C I T A L S:
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WHEREAS, the Partnership was previously formed pursuant to that certain
Agreement of Limited Partnership, dated as of May 31, 1994 (the "Original
Agreement"), and that certain Certificate of Limited Partnership, dated as of
May 31, 1994, which was filed with the Secretary of State of Delaware on May 31,
1994;
WHEREAS, the Original Agreement was amended and restated pursuant to the
terms of that certain Agreement of Limited Partnership, dated as of August 31,
1994 and was further amended and restated pursuant to the terms of that Amended
and Restated Agreement of Limited Partnership, dated as of January 16, 1997 (the
"LP Agreement");
WHEREAS, the Partnership has entered into that certain Contribution and
Exchange Agreement dated September 18, 1997, as amended by a First Amendment to
the Contribution and Exchange Agreement dated as of December 11, 1997 (the
"Contribution Agreement"), with certain contributing partnerships and certain
other entities or persons affiliated with the Xxxx Company and Patriot American
Office Group pursuant to which the Partnership will acquire the Exchange
Property (as defined in the Contribution Agreement) in exchange for a
combination of Partnership Units, warrants and, in certain cases, cash;
WHEREAS, pursuant to the Contribution Agreement, the Partnership will
change its name to Xxxx-Xxxx Realty, L.P. upon the admission of additional
Limited Partners, the contribution of the Exchange Property to the Partnership
and the satisfaction of certain other conditions;
WHEREAS, the parties hereto desire to continue the Partnership under the
name Xxxx-Xxxx Realty, L.P., to admit additional Limited Partners and to amend
and restate the terms and provisions of the LP Agreement in its entirety, all
upon the terms and provisions, and subject to the conditions, set forth herein;
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NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, unless otherwise clearly indicated to the
contrary, the following terms have the meanings set forth below.
"Accountants" shall mean the firm or firms of independent certified public
accountants selected from time to time by the General Partner on behalf of the
Partnership to audit the books and records of the Partnership and to prepare
statements and reports in connection therewith.
"Act" shall mean the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time subsequent to the date hereof.
"Additional Partnership Units" shall have the definition assigned to such
term in Section 6.3 hereof.
"Additional Limited Partner" shall have the definition assigned to such
term in Section 6.4 hereof.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of whom are relevant for purposes of any of the provisions
of this Agreement), (i) any member of the Immediate Family of such Partner; (ii)
any trustee or beneficiary of a Partner; (iii) any legal representative,
successor or assignee of such Partner or any Person referred to in the preceding
clauses (i) and (ii); (iv) any trustee for the benefit of such Partner or any
Person referred to in the preceding clauses (i) through (iii); or (v) any Person
which directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such Partner or any Person
referred to in the preceding clauses (i) through (iv).
"Agreed Value" shall mean, with respect to any property contributed by a
Partner to the Partnership hereunder, an amount equal to (i) the Gross Asset
Value of the Capital Contribution determined as of the date of such
contribution, less (ii) the amount of any and all liabilities securing such
contributed property that the Partnership is considered to assume or take
subject to with respect to such property under Code Section 752 or the
Regulations promulgated thereunder.
"Board of Directors" shall mean the Board of Directors of the General
Partner.
"Capital Account" shall have the definition assigned to such term in
Section 6.5 hereof.
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"Capital Contribution" shall mean, with respect to any Partner, the amount
of money and the Agreed Value of any property (other than money) contributed to
the Partnership with respect to the Partnership Interest held by such Partner.
"Certificate" shall mean the Partnership's Certificate of Limited
Partnership, as amended from time to time in accordance with the terms hereof
and the Act.
"Closing Price" shall mean, on any date, with respect to a share of Common
Stock, the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, for one
share of Common Stock in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading, or if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or, if such system is no longer in use, the
principal other automated quotations system that may then be in use or, if the
Common Stock is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock as such person is selected from time to time by the Board of
Directors.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time or any successor statute thereto.
"Common Stock" shall mean the shares of the common stock, par value $.01
per share, of the General Partner.
"Completion of the Offering" shall mean the closing of the first sale of
Common Stock in the Offering.
"Contribution Agreement" shall have the meaning set forth in the Recitals
above.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership, or otherwise to select, or have the power to remove
and then select, a majority of those persons exercising governing authority over
any particular entity. In the case of a limited partnership, the sole general
partner, all of the general partners to the extent each has equal management
control and authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership and, in the
case of a trust, any trustee thereof or any Person having the right to select
any such trustee shall be deemed to have control of such trust.
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"Current Per Share Market Price", on any date, shall mean the average of
the Closing Price for the five (5) consecutive Trading Days ending on such date.
"Depreciation" shall mean, with respect to any asset of the Partnership for
any fiscal year or other period, the depreci ation, depletion, amortization or
other cost recovery deduction, as the case may be, allowed or allowable for
Federal income tax purposes in respect of such asset for such fiscal year or
other period; provided, however, that if there is a difference between the Gross
Asset Value and the adjusted tax basis of such asset, Depreciation shall mean
"book depreciation, depletion or amortization" as determined under Section
1.704-1(b)(2)(iv)(g)(3) of the Regulations.
"Excess Deficit Capital Account Balance" of any Partner shall be the
Capital Account balance of such Partner, adjusted as provided in the immediately
following sentence, to the extent, if any, that such balance is a deficit (after
adjustment). For purposes of determining the existence and amount of an Excess
Deficit Capital Account Balance, the Capital Account balance of a Partner shall
be adjusted by: (i) crediting thereto (A) that portion of any deficit Capital
Account balance that such Partner is required to restore under the terms of this
Agreement or any other document, and (B) the amount of such Partner's share of
Minimum Gain, including any Partner Nonrecourse Debt Minimum Gain; and (ii)
charging thereto the items described in Regulation Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) that apply to such Partner. The existence
and amount of Excess Deficit Capital Account Balance at the end of any year
shall be determined before any other allocations provided for in Article 7 for
such year have been made.
"Exercise Notice" shall mean the written notice as described in Section
10.3(b) hereof to be given by an Exercising Partner to the General Partner to
exercise Redemption Rights, the form of which Exercise Notice is attached to the
Unit Certificate as Attachment 1.
"Exercising Partners" shall have the meaning set forth in Section 10.3(b)
hereof.
"General Partner" shall mean Xxxx-Xxxx Realty Corporation, a Maryland
corporation, and any substitute or additional General Partner(s) duly admitted
pursuant to the terms of this Agreement, or, where the context so requires, any
successor General Partner(s) acting pursuant to the provisions of this
Agreement.
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership, such asset's adjusted basis for Federal income tax purposes, except
as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Partner shall be equal to the gross fair market value of such asset as
determined by the General Partner in its reasonable discretion; provided,
however that the Gross Asset Value of the assets contributed by a Limited
Partner concurrent with the Offering shall be equal to the product of (1)
the Partnership Units received by the Limited Partner at that time (as set
forth on Exhibit A) and (2) the initial offering price per share of Common
Stock in connection with the Offering.
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(b) If the General Partner reasonably determines that an adjustment
is necessary or appropriate to reflect the relative economic interests of
the Partners, the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, as of the following times:
(i) a Capital Contribution (other than a de minimis Capital
Contribution) to the Partnership by a new or existing
Limited Partner as consideration for a Partnership Interest;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership money or property as
consideration for the redemption of a Partnership Interest;
(iii) the liquidation of the Partnership within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(iv) any other time that such adjustment may be made under the
Code, the Regulations or any administrative pronouncement or
ruling by the IRS.
(c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset as reasonably
determined by the General Partner as of the date of distribution; and
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the General Partner reasonably
determines that an adjustment pursuant to paragraph (b) above is necessary
or appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Profits and Losses. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
clause (iii) of the definition of Profits and Losses in the case of adjustment
by Depreciation, and clause (iv) of said definition in all other cases.
"Immediate Family" shall mean, with respect to any individual Person, such
individual Person's spouse, parents, parents-in-law, descendants, nephews,
nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law.
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"IRS" means the Internal Revenue Service, which administers the federal tax
laws of the United States.
"Limited Partners" shall mean any Person named as a Limited Partner on the
Exhibit A attached hereto as such Exhibit may be amended from time to time, or
any substituted Limited Partner or additional Limited Partner duly admitted to
the Partnership pursuant to the terms of this Agreement.
"Liquidation" shall mean the disposition of all or substantially all of the
assets of the Partnership pursuant to a complete liquidation of the Partnership.
"Minimum Gain" shall have the meaning given such term in Regulation Section
1.704-2(d), and shall generally mean the amount by which the nonrecourse
liabilities secured by any assets of the Partnership exceed the adjusted tax
basis of such assets as of the date of determination. A Partner's share of
Minimum Gain (and any net decrease thereof) at any time shall be determined in
accordance with Treasury Regulation Section 1.704-2(g).
"Net Cash Flow" shall mean, with respect to any fiscal period of the
Partnership, the excess, if any, of "Receipts" over "Expenditures." For
purposes hereof, the term "Receipts" means the sum of (i) all cash receipts of
the Partnership from all sources for such period, including Net Sale Proceeds
and Net Financing Proceeds but excluding Capital Contributions, and (ii) any
amounts held as reserves as of the last day of the period immediately prior to
such fiscal period that the General Partner deemed necessary for any capital or
operating expenditure permitted hereunder. The term "Expenditures" means the
sum of (a) all cash expenses of the Partnership for such period, (b) the amount
of all payments of principal and interest on account of any indebtedness of the
Partnership including payments of principal and interest on account of any
indebtedness owed to a Partner during such period, (c) any amounts held as
reserves as of the last day of such fiscal period as the General Partner in its
sole discretion deems necessary for any capital or operating expenditures
permitted hereunder or reserves for any other purpose that the General Partner
in its sole discretion shall determine to be appropriate and (d) any amounts
held in working capital accounts or other cash or similar balances which the
General Partner determines to be necessary or appropriate in its sole
discretion. In the event the General Partner issues additional classes of
Partnership Units other than OP Units, the General Partner may, to the extent
necessary, in its sole discretion, determine the amount of Net Cash Flow
attributable to each class of Partnership Units and the timing of payment
thereof.
"Net Financing Proceeds" shall mean the cash proceeds received by the
Partnership in connection with any borrowing or refinancing of borrowing by or
on behalf of the Partnership (whether or not secured), after deduction of all
costs and expenses incurred by the Partnership in connection with such
borrowing, and after deduction of that portion of such proceeds used to repay
any other indebtedness of the Partnership, or any interest or premium thereon.
"Net Sale Proceeds" means the cash proceeds received by the Partnership in
connection with a sale of any asset by or on behalf of the Partnership after
deduction of any costs or
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expenses incurred by the Partnership, or payable specifically out of the
proceeds of such sale (including, without limitation, any repayment of any
indebtedness required to be repaid as a result of such sale or which the General
Partner elects to repay out of the proceeds of such sale, together with accrued
interest and premium, if any, thereon and any sales commissions or other costs
and expenses due and payable to any Person in connection with a sale, including
to a Partner or its Affiliates).
"Offered Units" shall mean the Partnership Units of the Exercising Partners
identified in an Exercise Notice which, pursuant to the exercise of a Redemption
Right, can be acquired by the General Partner under the terms hereof.
"Offering" shall mean the initial public offering of the General Partner's
Common Stock.
"OP Units" shall mean those common Partnership Units issued prior to the
date hereof and any additional common Partnership Units issued by the General
Partner pursuant to Article 6 hereof.
"Original Agreement" shall have the meaning assigned to such term in the
Recitals set forth above.
"Partner or Partners" shall mean, unless the context in which the term is
used requires otherwise, the General Partner and the Limited Partners.
"Partner Nonrecourse Debt" shall have the meaning assigned to such term in
Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning assigned to
such term in Regulation Section 1.704-2(i).
"Partnership" shall mean Cali Realty, L.P., a Delaware limited partnership.
"Partnership Agreement" shall mean this Agreement of Limited Partnership
and the Exhibits and Schedules hereto, and any amendments hereto from time to
time.
"Partnership Interest" shall mean the ownership interest of a Partner in
the Partnership from time to time, including such Partner's Percentage Interest
and Capital Account and any and all other benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement and under
applicable laws, together with all obligations of such Person to comply with the
terms and provisions of this Agreement.
"Partnership Interests Exchange Agreement" shall mean, with respect to a
particular Limited Partner, that certain Partnership Interests Exchange
Agreement, dated as of July 26, 1994, by and among the Partnership, such Limited
Partner, and the other parties thereto, pursuant to which such Limited Partner
is contributing to the Partnership, directly or indirectly, all of such
Partner's right, title and interest in and to a particular Property Partnership.
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"Partnership Unit" shall mean a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Article 6 hereof;
provided, however, that in the event the General Partner issues classes of
Partnership Units to Limited Partners other than the OP Units pursuant to
Section 6.4 hereof, the term Partnership Unit shall mean with respect to each
class of Partnership Units, a fractional, undivided share of the Partnership
Interests of all Partners in such class.
"Partnership Record Date" shall mean the record date established by the
General Partner for any particular distribution of Net Cash Flow pursuant to
Article 8 hereof, which record date shall be the same as the record date
established by the General Partner for distribution to its shareholders of some
or all of its portion of such distribution.
"Percentage Decrease" shall have the meaning set forth in Section 6.4(b) of
this Agreement.
"Percentage Increase" shall have the meaning set forth in Section 6.4(b) of
this Agreement.
"Percentage Interest" shall mean, with respect to a Partner holding a
Partnership Interest of any class issued hereunder, its interest in such class
determined by dividing the Partnership Units owned by such Partner by the total
number of Partnership Units of such class then outstanding multiplied by the
aggregate Percentage Interest allocable to such class of Partnership Interests.
For such time or times as the Partnership shall at any time have outstanding
more than one class of Partnership Interests, the Percentage Interest
attributable to each class of Partnership Interests shall be determined as set
forth in Section 6.4(b) hereof.
"Person" shall mean a natural person, corporation, trust, partnership,
estate, unincorporated association or other entity.
"Preferred Redemption Percentage" shall have meaning set forth in Section
6.4(b) of this Agreement.
"Preferred Units" shall mean the Series A Preferred Units, the Series B
Preferred Units and any other additional preferred Partnership Units issued by
the General Partner pursuant to Article 6 hereof.
"Profits or Losses" shall mean, for each fiscal year or other applicable
period, an amount equal to the Partnership's net income or loss for such year or
period as determined for Federal income tax purposes by the Accountants,
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a) of the Code shall be included in taxable income or
loss), with the following adjustments: (i) by including as an item of gross
income any tax-exempt income received by the Partnership; (ii) by treating as a
deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or
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incurred to organize the Partnership (unless an election is made pursuant to
Code Section 709(b)) or to promote the sale of interests in the Partnership and
by treating deductions for any losses incurred in connection with the sale or
exchange of Partnership property disallowed pursuant to Section 267(a)(1) or
Section 707(b) of the Code as expenditures described in Section 705(a)(2)(B) of
the Code); (iii) in lieu of depreciation, depletion, amortization and other cost
recovery deductions taken into account in computing total income or loss, there
shall be taken into account Depreciation; (iv) gain or loss resulting from any
disposition of Partnership property with respect to which gain or loss is
recognized for Federal income tax purposes shall be computed by reference to the
Gross Asset Value of such property rather than its adjusted tax basis; and (v)
in the event of an adjustment of the Gross Asset Value of any Partnership asset
which requires that the Capital Accounts of the Partnership be adjusted pursuant
to Regulation Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such
adjustment is to be taken into account as additional Profits or Losses pursuant
to Article 7.
"Property Partnership" shall mean each of the following (i.e., those
partnerships in which, pursuant to the Partnership Interests Exchange
Agreements, the Limited Partners are contributing to the Partnership, directly
or indirectly, all of their right, title and interest as partners in such
partnerships): (i) 00 Xxxxxxxx Xxxxx Associates, (ii) 0 Xxxxxxxx Xxxxx
Associates, (iii) Century Plaza Associates, (iv) C.W. Associates, (v) D.B.C.
Associates, (vi) Cali Building V Associates, (vii) 000 Xxxxxxxx Xxxxxxxx
Associates, (viii) Chestnut Ridge Associates, (ix) Roseland II Limited
Partnership, (x) Grove Street Associates of Jersey City Limited Partnership,
(xi) 00 Xxxxxxxx Xxxxx Associates, (xii) Tenby Chase Apartments and (xiii)
Office Associates, Ltd.
"Redemption Rights" shall have the meaning set forth in Section 10.3(a)
hereof.
"Registration Statement" shall mean the Registration Statement No. 33-79892
(including the prospectus contained therein) heretofore filed by the General
Partner with the United States Securities and Exchange Commission, and any
amendments at any time made thereto (other than post-effective amendments),
pursuant to which the General Partner proposes to offer and sell certain of its
Common Stock.
"Regulations" shall mean the Treasury regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section 7.3(g) of
this Agreement.
"REIT" shall mean a real estate investment trust under Section 856 of the
Code.
"REIT Requirements" shall mean any and all requirements that must be met to
qualify as a REIT under the Code and the Regulations.
"Remaining Units" shall have the meaning set forth in Section 6.4(b) of
this Agreement.
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"Series A Preferred Units" shall mean the preferred Partnership Units
issued to those Limited Partners set forth on Exhibit C attached hereto and any
additional Series A Preferred Units issued by the General Partner pursuant to
Article 6 hereof.
"Series B Preferred Units" shall mean the preferred Partnership Units
issued to those Limited Partners set forth on Exhibit D attached hereto and any
additional Series B Preferred Units issued by the General Partner pursuant to
Article 6 hereof.
"Surviving Partnership" shall have the meaning set forth in Section 12.6(b)
hereof.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Unit Certificate" shall have the meaning set forth in Section 6.2 hereof.
ARTICLE 2
CONTINUATION OF THE PARTNERSHIP
2.1 Continuation. The Partners hereby continue the Partnership as a
limited partnership formed under and pursuant to the terms and provisions of the
Act, and the rights and obligations of the Partners shall be as provided therein
except as otherwise expressly provided in this Agreement. The Partners agree to
execute such certificates or documents and do such filings and recordings and
all other acts, including the filing or recording of an amendment to the
Certificate and any assumed name certificates in the appropriate offices in the
State of Delaware and any other applicable jurisdictions as may be required to
comply with applicable law. The Partners agree that immediately after the
admission of one Limited Partner, the Organizational Limited Partner shall be
deemed to have withdrawn from the Partnership.
2.2 Entire Agreement. Each and every other agreement or understanding,
oral or written, relating in any way to the formation or operation of the
Partnership including, but not limited to, the Original Agreement, is hereby
superseded in its entirety. From and after the execution of this Agreement, the
same shall constitute the only Agreement of Limited Partnership of the
Partnership except as the same may hereafter be amended pursuant to the
provisions hereof. This Agreement represents the entire agreement (other than
any agreement entered into by Partners in connection with OP Unit transactions)
and understanding of the parties hereto concerning the Partnership and their
relationship as Partners, and all prior or concurrent agreements,
understandings, representations and warranties in regard to the subject matter
hereof including, but not limited to, the Original Agreement, are and have been
merged herein.
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ARTICLE 3
NAME AND OFFICES
3.1 Name. The business of the Partnership is currently being conducted
under the name of "Cali Realty, L.P.". Upon approval by the shareholders of the
General Partner and the consummation of the transactions contemplated by the
Contribution Agreement, the name of the Partnership shall be changed to
Xxxx-Xxxx Realty, L.P. and the business of the Partnership shall be continued
under that name.
3.2 Principal and Registered Offices. The principal place of business of
the Partnership shall be located at c/o the General Partner at 00 Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000. The registered agent of the Partnership
shall be The Xxxxxxxx-Xxxx Corporation System, Inc. The registered office of
the Partnership shall be 00 Xxxxxxxxxx Xxxxxx, Xxxxx X-000, Xxxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000. The General Partner may from time to time designate another
registered agent or another location for the registered office or principal
place of business of the Partnership upon notice to the other Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.
ARTICLE 4
PURPOSE
4.1 Purpose. The purpose and nature of the business to be conducted by
the Partnership is (i) to conduct any business that may be lawfully 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 for federal income
tax purposes, unless the General Partner has determined to cease to qualify as a
REIT, (ii) to enter into any partnership, joint venture or other similar
arrangements to engage in any of the foregoing or the ownership of interests in
any entity engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, and without
limiting the General Partner's right in its sole discretion to cease qualifying
as a REIT, the Partners acknowledge that the General Partner's status as a REIT
inures to the benefit of all of the Partners and not solely the General Partner.
4.2 Powers. The Partnership is empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described
herein and for the protection and benefit of the Partnership; provided, that the
Partnership shall not take, or shall refrain from taking, any action which, in
the judgment of the General Partner, in its sole and absolute discretion, (i)
could adversely affect the ability of the General Partner to continue to qualify
as a REIT, (ii) could subject the General Partner to any additional taxes under
Section 857 or Section 4981 of the Code or any successor or newly enacted
provisions of the Code imposing other additional taxes or penalties on the
General Partner, or (iii) could violate any law or regulation of any
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governmental body or agency having jurisdiction over the General Partner or its
securities, unless any such action (or inaction) under (i), (ii) or (iii) shall
have been specifically consented to by the General Partner in writing.
ARTICLE 5
TERM AND FISCAL YEAR
5.1 Term. The term of the Partnership commenced on May 31, 1994, the date
the Certificate was filed in the appropriate offices in the State of Delaware,
and shall continue until terminated pursuant to the provisions of Article 14 of
this Agreement.
5.2 Fiscal Year. The first fiscal year of the Partnership shall terminate
on December 31, 1994, and succeeding fiscal years shall terminate on December 31
of each year thereafter, or such other date as the Partnership shall terminate
as herein provided.
ARTICLE 6
CAPITAL CONTRIBUTIONS, ADDITIONAL FUNDING AND CAPITAL ACCOUNTS
6.1 Capital Contributions of the General Partner. Upon Completion of the
Offering, the General Partner shall contribute the proceeds of the Offering to
the Partnership, which proceeds will be net of the underwriter's discount and
other expenses. Notwithstanding the exact amount of such net proceeds which are
contributed to the Partnership, the General Partner shall be deemed to have made
a Capital Contribution to the Partnership in the amount of the gross proceeds of
the Offering and the Partnership shall be deemed simultaneously to have
reimbursed the General Partner pursuant to Section 9.8(c) hereof for the amount
of any such underwriter's discount or other expenses paid out of the gross
proceeds of the Offering. Notwithstanding the immediately preceding sentence,
the General Partner shall have the right, in its sole and absolute discretion,
to treat the contribution to the Partnership by the General Partner of any
proceeds from the Offering in a manner other than that described in the
immediately preceding sentence if, upon the advice of counsel to the General
Partner and/or the Partnership, such alternative treatment will provide a more
favorable federal and/or state tax consequence to the General Partner and/or the
Partnership. The General Partner shall initially be issued and thereafter shall
own Partnership Units in the amount set forth opposite its name on Exhibit A,
which number of Partnership Units shall be adjusted on such Exhibit A from time
to time by the General Partner to the extent necessary to reflect accurately
issuances, exchanges, redemptions, Capital Contributions, or similar events
having an effect on a Partner's Partnership Units. The Partners hereby
acknowledge and agree that the aggregate initial number of Partnership Units to
be issued to the General Partner shall be exactly equal to the number of shares
of Common Stock issued and outstanding immediately after the Completion of the
Offering. Upon any subsequent sales of shares of Common Stock pursuant to the
exercise of the over-allotment option in connection with the Offering, the
General Partner shall, subject to and in accordance with the terms and
conditions of this Section 6.1, contribute the proceeds of such subsequent sale
to the Partnership,
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and shall be issued additional Partnership Units in an amount exactly equal to
the number of shares of Common Stock subsequently sold in connection with the
Offering.
6.2 Capital Contributions of the Limited Partners. Concurrent with the
execution of this Agreement, each Limited Partner, pursuant to one or more
Partnership Interests Exchange Agreements, shall contribute to the Partnership,
directly or indirectly, as its initial Capital Contribution, all of such Limited
Partner's right, title and interest in and to the Property Partnerships. Each
Limited Partner shall initially be issued and thereafter shall own Partnership
Units in the amount set forth opposite such Limited Partner's name on Exhibit A,
which number of Partnership Units on such Exhibit A shall be adjusted from time
to time by the General Partner to the extent necessary to reflect accurately
exchanges, redemptions, Capital Contributions, or similar events having an
effect on such Partner's Partnership Units. The Partnership Units issued to
each Limited Partner shall be evidenced by the issuance of a certificate (the
"Unit Certificate") in substantially the form of Exhibit B attached hereto,
which Unit Certificate shall bear the following legend:
"THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP DATED AS OF DECEMBER 11, 1997 (A COPY OF
WHICH IS ON FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN
SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF THE PARTNERSHIP
HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER
THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE
RULES AND REGULATIONS IN EFFECT THEREUNDER."
On the date of admission of one or more Limited Partners to the Partnership, the
Organizational Limited Partner shall be entitled to a return of his Capital
Contribution, and shall be deemed to have withdrawn from the Partnership.
6.3 General Partner Option to Contribute Additional Capital. If the
Partnership requires funds at any time or from time to time in excess of funds
available to the Partnership through borrowings and prior or additional Capital
Contributions, the General Partner may, but shall not be required to, borrow
such funds from a financial institution or other lender or through public debt
offerings and lend such funds to the Partnership on the same terms and
conditions as
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are applicable to the General Partner. If, notwithstanding the foregoing, the
Partnership requires funds for any proper Partnership purpose in excess of any
other funds anticipated by the General Partner to be available to the
Partnership (including through borrowings and prior Capital Contributions), or
if the General Partner concludes that borrowings are inappropriate, the General
Partner may, but shall not be required to, raise such additional funds pursuant
to the issuance of shares of its Common Stock (any such issuance which is made
for the purpose of providing additional funds to the Partnership shall be
referred to herein as an "Additional Issuance"). In the event any such
Additional Issuance is consum mated, then (i) the General Partner shall
contribute the net amount of cash raised pursuant to such Additional Issuance to
the capital of the Partnership and (ii) the Partnership shall issue additional
Partnership Units ("Additional Partnership Units") to the General Partner, on
the date upon which such funds are contrib uted to the Partnership, in an amount
equal to that number of Partnership Units which, if such Additional Partnership
Units were redeemed as of their date of issuance by the General Partner for
shares of Common Stock pursuant to Section 10.3 hereof, would result in the
General Partner receiving that number of shares of Common Stock equal to the
number of shares of Common Stock that were issued pursuant to such Additional
Issuance. Notwith standing anything contained herein to the contrary, if the
proceeds actually received and thereafter contributed to the Partnership by the
General Partner pursuant to any Additional Issuance as described in this Section
6.3 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 a Capital
Contribution to the Partnership in the amount of the gross proceeds of such
issuance and the Partnership shall be deemed simultaneously to have reimbursed
the General Partner pursuant to Section 9.8(c) hereof for the amount of such
under writer's discount or other expenses. In addition, in the event that the
General Partner shall issue shares of Common Stock (and/or pay cash out of the
net proceeds of any Additional Issuance) in connection with any subsequent
merger, consolidation or other acquisition, the General Partner may contribute
the shares of stock, assets and/or other consideration received by the General
Partner in connection therewith to the capital of the Partnership in exchange
for Additional Partnership Units in an amount equal to that number of
Partnership Units which, if such Additional Partnership Units were redeemed as
of their date of issuance by the General Partner for shares of Common Stock
pursuant to Section 10.3 hereof, would result in the General Partner receiving
that number of shares of Common Stock equal to the number of shares of Common
Stock that were issued in connec tion with such merger, consolidation or other
acquisition and/or such Additional Issuance. Notwith standing the foregoing
sentence, the General Partner shall have the right, in its sole discretion, to
treat a contribution to the capital of the Partnership in a manner other than as
described above if, upon the advice of counsel to the General Partner and/or the
Partnership, such alternative treatment will provide a more favorable federal
and/or state tax consequence to the General Partner and/or the Partnership.
6.4 General Partner Option to Issue Additional Partnership Units to
Limited Partners.
(a) Issuance of Additional Partnership Units. At any time after the
date hereof without the consent of any Partner, but subject to the provisions of
Section 13.1 hereof, the General Partner may, upon its determination, which
shall be made in its sole and absolute discre tion, that the issuance of
Additional Partnership Units to new or existing limited partners is in the
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best commercial interests of the Partnership, cause the Partnership to issue
Additional Partnership Units to and admit as a limited partner in the
Partnership, any Person (an "Additional Limited Partner" herein) in exchange for
the contribution by such Person of cash and/or property desirable to further the
purposes of the Partnership under Article 4 hereof. In the event that
Additional Partnership Units are issued by the Partnership pursuant to this
Section 6.4, the amount of such Partnership Units issued to each Additional
Limited Partner shall, unless otherwise determined by the General Partner in the
exercise of its sole discretion but subject to its fiduciary duty to all Limited
Partners (i) be fixed by agreement between the General Partner and such
Additional Limited Partner in the General Partner's sole discretion or (ii) be
equal to that number of Partnership Units which, if such Additional Partnership
Units were redeemed as of their date of issuance by such Additional Limited
Partner pursuant to Section 10.3 hereof, would result in such Additional Limited
Partner receiving that number of shares of Common Stock equal to (x) the Agreed
Value of any property (as determined by the General Partner, in its sole and
absolute discretion), plus the amount of any cash contributed by the Additional
Limited Partner, as of the date of contribution to the Partnership divided by
(y) the Current Per Share Market Price (computed as of the Trading Day
immediately preceding the date of contribution to the Partnership or such other
date or average of Trading Days as the General Partner may agree with such
Additional Limited Partner in the exercise of its sole discretion). In
addition, the General Partner is hereby authorized to cause the Partnership from
time to time to issue to the Partners (including the General Partner) or other
Persons additional Partnership Units or such other Partnership Interests in one
or more classes, or one or more series of such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties, including rights, powers and duties which may be senior, pari
passu or junior to OP Units, all as shall be determined by the General Partner
in its sole and absolute discretion subject to Delaware 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 such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership;
provided that no such additional Partnership Units or other Partnership
Interests shall be issued to the General Partner unless either (A)(1) the
additional Partnership Interests are issued in connection with the issuance of
shares of Common Stock or other shares by the General Partner, which shares have
designations, preferences and other rights such that the economic interests
attributed to such shares are substantially similar to the designations,
preferences and other rights of the additional Partnership Interests issued to
the General Partner in accordance with this Section 6.4, and (2) 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 the
General Partner, or (B) the additional Partnership Units are issued to all the
Partners in proportion to their respective Percentage Interests. Any Additional
Limited Partner shall be issued a Unit Certificate representing the amount of
Partnership Units issued to such Additional Limited Partner and, in the event
the General Partner issues Partnership Units other than OP Units, indicating the
class, terms, prefer ences and other restrictions or rights of such Partnership
Unit. The General Partner shall be authorized on behalf of each of the Partners
to amend this Agreement to reflect the issuance of Additional Partnership Units
(including, without limitation, the issuance of new classes of Partnership
Units) and/or the admis sion of any Additional Limited Partner(s) in accordance
with the provisions of this Section 6.4, and the General Partner shall
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promptly deliver a copy of such amendment (which, in the event that new classes
of Partnership Units are issued, shall contain the terms of such new classes of
Partnership Units) to each Limited Partner. 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 interest of the
General Partner and the Partnership (for example, and not by way of limitation,
the issuance of Partnership Units pursuant to an employee purchase plan
providing for employee purchases of Partnership Units at a discount from fair
market value or employee options that have an exercise price that is less than
the fair market value of the Partnership Units, either at the time of issuance
or at the time of exercise).
(b) Additional Partnership Units and Percentage Interest Adjustments.
In the event that the General Partner issues additional Partnership Units
(including additional classes of Partnership Units, but excluding OP Units
issued upon the redemption of Preferred Units) the General Partner shall
allocate to such additional Partnership Units a Percentage Interest in the
Partnership equal to a fraction, the numerator of which is equal to the amount
of cash, if any, plus the Agreed Value of the property, if any, contributed with
respect to such additional Partnership Units and the denominator of which is
equal to the fair market value (as determined by the General Partner as of the
date of such contribution taking into account such contribution) of all the
Partnership Units for all outstanding classes of Partnership Units (including
such additional Partnership Units). To the extent that any such issuance of
additional Partnership Units results in an overall decrease (the "Percentage
Decrease") in the aggregate Percentage Interests in the Partnership represented
by all of the Partnership Units that were outstanding before the issuance of the
additional Partnership Units, the Percentage Decrease shall be allocated among
the classes of Partnership Units outstanding prior to the issuance of the
additional Partnership Units in accordance with such classes' respective
Percentage Interests in the Partnership as determined prior to the issuance of
the additional Partnership Units. Similarly, to the extent that a redemption by
the General Partner of any Partnership Units for cash results in an overall
increase (the "Percentage Increase") in the aggregate Percentage Interests in
the Partnership represented by the remaining Partnership Units outstanding after
the redemption (the "Remaining Units"), the Percentage Increase shall be
allocated among the classes of Remaining Units by multiplying the Percentage
Increase by a fraction equal to the aggregate pre-redemption Percentage
Interests of all Remaining Units of that particular class divided by the
aggregate pre-redemption Percentage Interests of all Remaining Units of all
classes. Upon the redemption of any Preferred Units for OP Units, the aggregate
Percentage Interest allocated to that class of Preferred Units shall be reduced
by the total Percentage Interests attributable to the redeemed Preferred Units
(the "Preferred Redemption Percentage"), and the aggregate Percentage Interest
allocated to the OP Units shall be increased by that Preferred Redemption
Percentage. Effective as of the date hereof, the General Partner has created
three classes of Units: OP Units, Series A Preferred Units and Series B
Preferred Units. The Percentage Interests allocated to each class of
Partnership Units are set forth in Exhibit E, attached hereto, which Exhibit may
be amended from time to time by the General Partner to reflect the issuance of
additional Partnership Units or the redemption of any outstanding Partnership
Units, and the respective Percentage Interests in the Partnership allocated to
each class of Partnership Units.
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(c) Adjustments to Partnership Units. If the Common Stock (or any
other class of stock of the General Partner for which a class of Partnership
Units may be redeemed) undergoes any split or reverse split, then without
further action or consent by the General Partner or any Limited Partner, each
corresponding class of Partnership Units that is redeemable for such stock shall
be split or combined in accordance with the same ratio used to split or combine
the stock. For example, if the Common Stock undergoes a reverse 2 for 1 split
(i.e., every two shares of old Common Stock are converted into one share of new
Common Stock) then the corresponding class of Partnership Units that are
redeemable for such Common Stock shall undergo a similar reverse split (i.e.,
every two old OP Units shall be converted into one new OP Unit). Similarly, if
any class of Partnership Units into which another class of Partnership Units is
convertible undergoes any split or reverse split, then without further action or
consent by the General Partner or any Limited Partner, the latter class of
Partnership Units shall be split or combined in accordance with the same ratio
used to split or combine the first class of Partnership Units.
(d) Fractional Units. The General Partner shall have the right to
issue fractional Partnership Units upon the conversion or exchange of one class
of Partnership Units for a second class of Partnership Units; provided, however,
that in accordance with Section 10.3(e) hereof no fractional shares of Common
Stock of the General Partner shall be issued upon the redemption of any class of
Partnership Units for Common Stock.
(e) Issuance of New Securities. After the date hereof, the General
Partner shall not issue any additional shares of Common Stock (other than shares
of Common Stock issued pursuant to Section 10.3 hereof), or rights, options,
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (collectively, "New
Securities"), other than to all holders of shares of Common Stock, unless (i)
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 New Securities, and (ii) the General Partner contributes to the
Partnership the proceeds from the issuance of such New Securities and from the
exercise of rights contained in such New Securities. Without limiting the
foregoing, the General Partner is expressly authorized to issue New Securities
for less than fair market value, and the General Partner is expressly authorized
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 interest of the General Partner and the
Partnership (for example, and not by way of limitation, the issuance of shares
of Common Stock and corresponding Units pursuant to an employee stock purchase
plan providing for employee purchases of shares of Common Stock at a discount
from fair market value or employee stock options that have an exercise price
that is less than the fair market value of the shares of Common Stock, either at
the time of issuance or at the time of exercise), and (y) the General Partner
contributes all proceeds from such issuance and exercise to the Partnership.
6.5 Capital Accounts. A separate capital account (a "Capital Account")
shall be maintained for each Partner in accordance with the Code and the
Regulations promulgated thereunder including, but not limited to, the rules
regarding the maintenance of partners' Capital
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Accounts set forth in Regulation Section 1.704-1. Subject to the immediately
preceding sentence, there shall be credited to each Partner's Capital Account:
(i) the amount of money contributed by the Partner to the Partnership (subject,
however, in the case of Additional Issuances of Common Stock, to the specific
provisions of Section 6.3 hereof regarding the amount of the Capital
Contribution by the General Partner under such circumstances), (ii) the Gross
Asset Value of any property contributed by the Partner to the Partnership, (iii)
the amount of any Partnership liabilities assumed by such Partner or which are
secured by any property distributed to such Partner and (iv) the Partner's share
of income or gain (or items thereof), including income and gain exempt from tax.
There shall be charged against each Partner's Capital Account: (w) the amount
of money distributed to the Partner by the Partnership, (x) the Gross Asset
Value of any property distributed to the Partner by the Partnership, (y) the
amount of any liabilities of such Partner assumed by the Partnership or which
are secured by any property contributed by such Partner to the Partnership and
(z) the Partner's share of loss and deduction (or items thereof). To the extent
a Partner's Capital Account is greater than zero, such excess is hereinafter
referred to as a "positive balance". To the extent a Partner's Capital Account
is less than zero, said amount is hereinafter referred to as a "deficit
balance".
6.6 Limited Liability. Notwithstanding anything in this Agreement to the
contrary, the personal liability of a Limited Partner arising out of or in any
manner relating to the Partnership shall be limited to and shall not exceed such
Limited Partner's Capital Contribution made or required to be made pursuant to
this Agreement. No Limited Partner shall have any personal liability for
liabilities or obligations of the Partnership, except to the extent of its
Capital Contribution, as aforesaid.
6.7 Return of Capital. Except as otherwise provided herein, (i) no
Partner shall be required to make any further or additional contributions to the
capital of the Partnership or to lend or advance funds to the Partnership for
any purpose and (ii) no Partner shall be entitled to the return of its capital,
except to the extent, if any, that distributions are made or deemed to be made
to such Partner otherwise than out of Profits pursuant to this Agreement.
6.8 No Interest on Capital Contributions. No interest or additional share
of Profits shall be paid or credited to the Partners on their Capital Accounts,
or on any undistributed Profits or funds left on deposit with the Partnership;
provided, however, that nothing contained herein shall be construed to prevent
or prohibit the payment of interest on account of loans made by the Partners to
the Partnership. Any loans made to the Partnership by a Partner shall not
increase its Capital Contribution or interest in the Profits, Losses or Net Cash
Flow of the Partnership, but shall be a debt due from the Partnership and repaid
accordingly.
6.9 No Third Party Beneficiary. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed among the parties hereto that the provisions of this Agreement shall
be solely for the benefit of, and may be enforced solely by, the parties hereto
and their respective successors and assigns. None of the rights or obligations
of the Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an
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asset of the Partnership for any purpose by any creditor or other third party,
nor may such rights or obligations be sold, transferred or assigned by the
Partnership or pledged or encumbered by the Partnership to secure any debt or
other obligation of the Partnership or of any of the Partners.
6.10 Common Stock Option Plans. The Partners hereby acknowledge that prior
to the Offering the General Partner has adopted, and the Partners hereby
acknowledge and agree that from and after the Offering the General Partner may
adopt, without the consent of any Limited Partner, one or more stock option or
incentive plans ("Stock Plans") pursuant to which officers, directors, trustees
and/or employees of the General Partner, the Partnership or any Affiliate of
either of them may acquire shares of Common Stock. On each date on which the
General Partner issues any shares of Common Stock to a person pursuant to a
Stock Plan (i) the consideration paid for each such share of Common Stock shall,
as soon as received by the General Partner, be contributed to the capital of the
Partnership and (ii) the General Partner shall be issued Partnership Units in an
amount equal to that number of Partnership Units which, if such Partnership
Units were redeemed as of their date of issuance by the General Partner for
shares of Common Stock pursuant to Section 10.3 hereof, would result in the
General Partner receiving that number of shares of Common Stock which are being
issued to any such person pursuant to the Stock Plan. For purposes of this
Section 6.10 only, shares of Common Stock issued subject to forfeiture or other
similar restrictions shall be deemed issued upon the lapse of such restrictions.
Notwithstanding anything herein to the contrary, the mere grant of options to
purchase shares of Common Stock pursuant to any Stock Plan shall not constitute
the grant or issuance of shares of Common Stock for purposes of this Section
6.10.
ARTICLE 7
ALLOCATION OF PROFITS AND LOSSES
7.1 General Allocation of Profits and Losses. Except as otherwise
provided in this Article 7, after giving effect to any and all special
allocations set forth in Sections 7.3 and 7.4 below, all Profits and Losses of
the Partnership (including all items of income and expense entering into the
determination of such Profits and Losses), as finally determined by the
Accountants for Federal income tax purposes for each fiscal year of the
Partnership, shall be allocated to and among the Partners in accordance with
their respective Percentage Interests.
7.2 Allocations with Respect to Transferred Interests. Unless otherwise
required by the Code and/or the Regulations as determined by the General
Partner, in its sole and absolute discretion, any Profits or Losses allocable to
an additional Partnership Interest issued during any year or any fiscal quarter
or to a Partnership Interest which has been transferred during any year shall be
allocated among the Persons who were holders of such Partnership Interest during
such year in the manner described in Section 13.3(c) below.
7.3 Deficit Restoration Obligation. In the event that any Limited Partner
hereto enters into a "deficit restoration obligation" to the Partnership
pursuant to this Section 7.3, and such Limited Partner has a deficit balance in
its Capital Account following the liquidation of its
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interest in the Partnership, as determined after taking into account all Capital
Account adjustments for the Partnership's taxable year during which the
liquidation occurs, such Limited Partner shall be unconditionally obligated to
restore the amount of such deficit balance to the Partnership by the later of
(i) the end of such taxable year, or (ii) 90 days after the date of the
liquidation of the Limited Partner's interest in the Partnership, which amount
shall, upon liquidation of the Partnership, be paid to creditors of the
Partnership or distributed to other Partners in accordance with their positive
Capital Account balances. For purposes hereof, a "deficit restoration
obligation" shall mean an unconditional agreement by a Limited Partner to
restore a deficit balance in its Capital Account (which may be limited in
amount) in the form thereof used by the Partnership. Any Limited Partner may,
but is not obligated to, enter into such an agreement at any time during the
term hereof but not more often than annually.
7.4 Regulatory Allocations.
(a) Minimum Gain Chargeback. Notwithstanding any other provision of
this Agreement (except as provided in Section 7.3(b) below), if there is a
net decrease in Minimum Gain for a Partnership taxable year, each Partner
shall be allocated, before any other allocation of Partnership items for
such taxable year, items of gross income and gain for such year (and, if
necessary, for subsequent years) in proportion to, and to the extent of,
the amount of such Partner's share of the net decrease in Minimum Gain
during such year. The income allocated pursuant to this Section 7.3(a) in
any taxable year shall consist first of gains recognized from the
disposition of property subject to one or more nonrecourse liabilities of
the Partnership, and any remainder shall consist of a pro rata portion of
other items of income or gain of the Partnership.
(b) Exceptions to Section 7.3(a). The allocation otherwise required
pursuant to Section 7.3(a) shall not apply to a Partner to the extent that:
(a) such Partner's share of the net decrease in Minimum Gain is caused by a
guarantee, refinancing or other change in the instrument evidencing a
nonrecourse debt of the Partnership which causes such debt to become a
partially or wholly recourse debt or a Partner Nonrecourse Debt, and such
Partner bears the economic risk of loss (within the meaning of Treasury
Regulation Section 1.752-2) for such changed debt; (b) such Partner's share
of the net decrease in Minimum Gain results from the repayment of a
nonrecourse liability of the Partnership, which repayment is made using
funds contributed by such Partner to the capital of the Partnership; (iii)
the IRS, pursuant to Treasury Regulation Section 1.704-2(f)(4), waives the
requirement of such allocation in response to a request for such waiver
made by the General Partner on behalf of the Partnership (which request the
General Partner may or may not make, in its sole discretion, if it
deter mines that the Partnership would be eligible therefor); or (iv)
additional exceptions to the requirement of such allocation are established
by revenue rulings issued by the IRS pursuant to Treasury Regulation
Section 1.704-2(f)(5), which exceptions apply to such Partner, as
determined by the General Partner in its sole discretion.
(c) Qualified Income Offset. Notwithstanding any other provision of
this Agreement, if a Partner unexpectedly receives an adjustment,
allocation or distribution
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described in Regulation Section 1.704-1(b)(2)(ii)(d)(4),(5) or (6) that
causes or increases an Excess Deficit Capital Account Balance with respect
to such Partner, items of Partnership gross income and gain shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate such Excess Deficit Capital Account Balance as quickly as
possible.
(d) Gross Income Allocation. If at the end of any Partnership taxable
year, a Partner has an Excess Deficit Capital Account Balance, such Partner
shall be specially allocated items of Partnership income or gain in an
amount and manner sufficient to eliminate such Excess Deficit Capital
Account Balance as quickly as possible, until all Excess Deficit Capital
Account Balances have been eliminated. To the extent that any class of
Partnership Units that are convertible into OP Units has received
distributions at the end of any Partnership taxable year (including any
prior taxable year) in excess of the amounts such class of Partnership
Units would have received during such taxable year or years if all of the
Partnership Units of such class had been converted into OP Units (such
excess being referred to hereinafter as "Excess Amounts"), such items of
gross income or gain shall then be allocated proportionately to and among
the holders of such class Partnership Units until such holders have been
allocated an amount equal to all Excess Amounts.
(e) Partner Nonrecourse Debt. Notwithstanding any other provision of
this Agreement, any item of Partnership Loss, deduction or expenditures
described in Code Section 705(a)(2)(B) that is attributable to a Partner
Nonrecourse Debt shall be allocated to those Partners that bear the
economic risk of loss for such Partner Nonrecourse Debt, and among such
Partners in accordance with the ratios in which they share such economic
risk, determined in accordance with Treasury Regulation Section 1.704-2(i).
If there is a net decrease for a Partnership taxable year in any Partner
Nonrecourse Debt Minimum Gain of the Partnership, each Partner with a share
of such Partner Nonrecourse Debt Minimum Gain as of the beginning of such
year shall be allocated items of gross income and gain in the manner and to
the extent provided in Treasury Regulation Section 1.704-2(i)(4).
(f) Interpretation. The foregoing provisions of this Section 7.3 are
intended to comply with Treasury Regulation Sections 1.704-1(b) and 1.704-2
and shall be interpreted consistently with this intention. Any terms used
in such provisions that are not specifically defined in this Agreement
shall have the meaning, if any, given such terms in the Regulations cited
above.
(g) Curative Allocations. If any allocation of gain, income, loss,
expense or any other item is made pursuant to Section 7.3(a), 7.3(c),
7.3(d) or 7.3(e) of this Agreement (the "Regulatory Allocations") with
respect to one or more Partners (the "Deficit Partners"), then the balance
of such items for the current and all subsequent fiscal years shall be
allocated among the Partners other than the Deficit Partners as if such
items were allocated among all the Partners (including the Deficit
Partners) without regard to this Section 7.3, until the amount of such
items that would have been allocated to the
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Deficit Partners but for the Regulatory Allocations equal the amount
allocated to the Deficit Partners pursuant to the Regulatory Allocations.
7.5 Special Allocations with Respect to Contributed or Revalued Property.
Notwithstanding anything contained herein to the contrary, taxable income, gain,
loss and deduction with respect to any Partnership property that is contributed
to the Partnership by a Partner shall be shared among the Partners for income
tax purposes pursuant to Regulations promulgated under Section 704(c) of the
Code, so as to take into account the variation, if any, between the basis of the
property to the Partnership and its initial Gross Asset Value. With respect to
Partnership property that is initially contributed to the Partnership upon its
formation, such variation between basis and initial Gross Asset Value shall be
taken into account under the "traditional method" as described in Treasury
Regulation Section 1.704-3(b), unless otherwise determined by the General
Partner and the contributing Partner. With respect to properties subsequently
contributed to the Partnership, the Partnership shall account for such variation
under any method approved under Section 704(c) of the Code and the applicable
regulations as chosen by the General Partner. In the event the Gross Asset
Value of any Partnership asset is adjusted pursuant to subparagraph (b) of the
definition of Gross Asset Value (as provided in Article 1 of this Agreement),
subsequent allocations of tax items with respect to such asset shall take
account of the variation, if any, between the adjusted basis of such asset and
its Gross Asset Value in the same manner as under Section 704(c) of the Code and
the applicable regulations.
7.6 Allocations with Respect to Partnership Units other than OP Units. In
the event the General Partner issues additional classes of Partnership Units
other than OP Units and the Series A and Series B Preferred Units to Limited
Partners, then the General Partner shall determine, in its sole discretion, the
Profits and Losses attributable to each class (subject to the requirement that
the Profits attributed to any class must bear a reasonable relationship to the
amount of cash distributions to that class) and shall allocate to Profits and
Losses of each class of Partnership Units among the Partners in such class in
proportion to their respective Percentage Interests in such class, after giving
effect to any and all special allocations set forth in Sections 7.3 and 7.4
above.
ARTICLE 8
DISTRIBUTIONS
8.1 Distribution of Net Cash Flow. Net Cash Flow of the Partnership, if
any, shall be distributed to and among the Partners as follows:
(a) If such Net Cash Flow has not arisen pursuant to a Liquidation of
the Partnership, such Net Cash Flow shall be distributed (i) first, to
holders of any class of Preferred Units in an amount equal to all
preferential distributions on such Preferred Units as set forth in the Unit
Certificate for such class, and (ii) thereafter, to the extent of the
remaining amount, to and among the other Partners in accordance with their
respective Percentage Interests; or
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(b) If such Net Cash Flow has arisen pursuant to a Liquidation of the
Partnership, such Net Cash Flow shall be distributed to and among the
Partners having positive balances in their Capital Accounts (after any and
all allocations of Profits and Losses and prior distributions are reflected
in such Capital Accounts), in proportion to and to the extent of such
positive balances.
Net Cash Flow shall be distributed to the Partners in such amounts and at such
intervals as the General Partner, in its sole discretion, may determine, but no
less frequently than quarterly. With respect to each and every distribution of
Net Cash Flow to the Partners hereunder, the General Partner shall distribute
such Net Cash Flow only to those Partners who are Partners on the Partnership
Record Date and whose Partnership Units were outstanding during the period to
which such distribution relates and, with respect to those Partners who were
issued additional Partnership Units during such period, the General Partner
shall distribute Net Cash Flow (i) on a pro-rated basis based upon the number of
days during such period that such Partners held such additional Partnership
Units or (ii) on such other reasonable basis as determined by the General
Partner in its sole discre tion; provided, however, in no event may a Partner
receive a distribution of Net Cash Flow with respect to any particular
Partnership Unit if such Partner is entitled to receive a distribution out of
such Net Cash Flow with respect to one or more shares of Common Stock for which
such Partnership Unit has been redeemed. Notwithstanding the fore going, the
General Partner shall take such reasonable efforts, as determined by it in its
sole and absolute discretion and consis tent with its qualification as a REIT,
to cause the Partnership to distribute sufficient amounts to enable the General
Partner to pay stock holder dividends that will (i) satisfy the REIT
Requirements and (ii) avoid any federal income or excise tax liability of the
General Partner.
8.2 Distributions in Kind. No right is given to any Partner to demand and
receive property or cash. The General Partner may determine, in its sole and
absolute discretion, to make a distribution in kind to the Partners of
Partnership assets, and such assets shall be distributed in such a fashion as to
ensure that the fair market value of such assets is distri buted and allocated
in accordance with Section 8.1 hereof.
8.3 Withholding. Each Limited Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local or foreign taxes that the General Partner
determines or reasonably believes that the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Limited
Partner pursuant to this Agreement, including, without limitation, any taxes
required to be withheld or paid by the Partnership pursuant to Code Sections
1441, 1442, 1445 or 1446. Any and all amounts withheld pursuant to this Section
8.3 with respect to any allocation, payment or distribution to any Partner
hereunder shall be treated as amounts distributed to such Partner pursuant to
Section 8.1 hereof for all purposes under this Agreement. If any amount is
withheld by the Partnership pursuant to this Section 8.3 with respect to a
particular Partner and such amount would not have been distributed to such
Partner pursuant to Section 8.1 hereof at any time on or before the date it is
withheld, then such Partner shall contribute to the capital of the Partnership
an amount equal to the amount so withheld as soon as practicable after the
delivery by the General Partner to such Partner of a notice requesting such
contribution to the
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Partnership. The General Partner, on behalf of the Partnership, shall have the
right to offset any obligation of a Partner to contribute additional funds to
the Partnership pursuant to the immediately preceding sentence of this Section
8.3 against any future distributions due to such Partner under Section 8.1
hereof.
8.4 Distributions with Respect to Partnership Units other than OP Units.
Notwithstanding the foregoing provisions of this Article 8, in the event the
General Partner issues additional classes of Partnership Units other than OP
Units or Series A and Series B Preferred Units to Limited Partners, then the
General Partner shall determine, in its sole discretion (subject to Section
7.6), the amount of distributions of Net Cash Flow attributable to each class
and shall distribute such Net Cash Flow to each class of Partnership Units among
the Partners in such class in proportion to their respective Percentage
Interests in such class or otherwise required pursuant to the terms of such
Partner's Unit Certificates.
ARTICLE 9
MANAGEMENT
9.1 Management of Partnership Affairs. Except as otherwise specifically
provided in this Agreement, the General Partner shall have full, exclusive and
complete responsibility and discretion in the management and control of the
business and affairs of the Partnership and shall make all decisions affecting
the Partnership's business and affairs. Subject to the fore going, the General
Partner shall have all the rights, powers and obligations of a general partner
as provided in the Act, and, except as otherwise provided, any action taken by
the General Partner (in its capacity as such) shall constitute the act of and
serve to legally bind the Partnership. Persons dealing with the Partnership
shall be entitled to rely conclusively on the power and authority of the General
Partner as set forth in this Agreement.
9.2 Powers and Authorities of the General Partner. Except as otherwise
specifically provided in this Agreement, and subject to Section 9.3 hereof, the
General Partner is hereby granted the right, power and authority to do on behalf
of the Partnership all things which, in its best business judgment, are
necessary, proper or desirable to carry out its duties and responsibilities,
including but not limited to, the right, power and authority:
(a) To manage, control, invest, reinvest, acquire by purchase, lease
or otherwise, develop, expand, sell, contract to purchase or sell, grant,
obtain or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge,
mortgage, abandon, improve, repair, maintain, insure, lease for any term
and otherwise deal with any and all property of whatsoever kind and nature,
and wheresoever situated, in furtherance of the purposes of the
Partnership;
(b) To acquire, directly or indirectly, interests in real estate of
any kind and of any type, and any and all kinds of interests therein, and
to determine the manner in which title thereto is to be held; to manage,
insure against loss, protect and subdivide any of the real estate,
interests therein or parts thereof; to improve, develop or redevelop and
expand
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any such real estate; to participate in the ownership and development of
any property; to dedicate for public use, to vacate any subdivisions or
parts thereof, to resubdivide, to contract to sell, to grant options to
purchase or lease, to sell on any terms; to convey, to mortgage, pledge or
otherwise encumber said property, or any part thereof; to lease said
property or any part thereof from time to time, upon any terms and for any
period of time, and to renew or extend leases, to amend, change or modify
the terms and provisions of any leases and to grant options to lease and
options to renew leases and options to purchase; to partition or to
exchange said real property, or any part thereof, for other real or
personal property; to grant easements or charges of any kind; to release,
convey or assign any right, title or interest in or about or easement
appurtenant to said property or any part thereof; to construct and
reconstruct, remodel, alter, repair, add to or take from buildings on said
premises; to insure any Person having an interest in or responsibility for
the care, management or repair of such property; to direct the trustee of
any land trust to mortgage, lease, convey or contract to convey the real
estate held in such land trust or to execute and deliver deeds, mortgages,
notes, and any and all documents pertaining to the property subject to such
land trust or in any matter regarding such trust; to execute assignments of
all or any part of the beneficial interest in such land trust;
(c) To employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the General Partner
for the operation and management of the Partnership business, including but
not limited to, contractors, subcontractors, engineers, architects,
surveyors, mechanics, consultants, accountants, attorneys, insurance
brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow money, procure loans and advances from any Person for
Partnership purposes, and to apply for and secure, from any Person, credit
or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to
repay, discharge, settle, adjust, compromise or liquidate any such loan,
advance, credit, obligation or liability;
(f) To pledge, hypothecate, mortgage, assign, deposit, deliver, enter
into sale and leaseback arrangements or otherwise give as security or as
additional or substitute security, or for sale or other disposition any and
all Partnership property, tangible or intangible, including, but not
limited to, real estate and beneficial interests in land trusts, and to
make substitutions thereof, and to receive any proceeds thereof upon the
release or surrender thereof; to sign, execute and deliver any and all
assignments, deeds and other contracts and instruments in writing; to
authorize, give, make, procure, accept and receive moneys, payments,
property, notices, demands, vouchers, receipts, releases, compromises and
adjustments; to waive notices, demands, protests and authorize and execute
waivers of every kind and nature; to enter into, make, execute, deliver and
receive written agreements, undertakings and instruments of every kind and
nature; to give oral instructions and make oral agreements; and generally
to do any and all other acts and
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things incidental to any of the foregoing or with reference to any dealings
or transactions which any attorney may deem necessary, proper or advisable;
(g) To acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any
purpose convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings, and other accounts
with such institutions as the General Partner shall deem appropriate; to
draw, sign, execute, accept, endorse, guarantee, deliver, receive and pay
any checks, drafts, bills of exchange, acceptances, notes, obligations,
undertakings and other instruments for or relating to the payment of money
in, into, or from any account in the Partnership's name; to execute,
procure, consent to and authorize extensions and renewals of the same; to
make deposits and withdraw the same and to negotiate or discount commercial
paper, acceptances, negotiable instruments, bills of exchange and dollar
drafts;
(i) To demand, xxx for, receive, and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property, to which
the Partnership may be entitled or which are or may become due to the
Partnership from any Person; to commence, prosecute or enforce, or to
defend answer or oppose, contest and abandon all legal proceedings in which
the Partnership is or may hereafter be interested; and to settle,
compromise or submit to arbitration any accounts, debts, claims, disputes
and matters which may arise between the Partnership and any other Person
and to grant an extension of time for the payment or satisfaction thereof
on any terms, with or without security;
(j) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the General Partner to cause any
approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance by
the Partnership with applicable arrangements, and other contractual
obligations and arrangements entered into by the Partnership from time to
including periodic reports as required to lenders and using all due
diligence to insure that the Partnership is in compliance with its
contractual obligations;
(l) To maintain the Partnership's books and records; and
(m) To prepare and deliver, or cause to be prepared and delivered by
the Partnership's Accountants, all financial and other reports with respect
to the operations of the Partnership, and preparation and filing of all
Federal and state tax returns and reports.
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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.
9.3 Major Decisions.
The General Partner shall not, without the prior consent of holders of
at least eighty-five percent (85%) of the Partnership Units taken as a single
class, on behalf of the Partnership, undertake any of all following actions:
(a) Cause or permit the merger of the Partnership into any Person
pursuant to a transaction in which the Partnership is not the surviving
entity, or take any other action which may have the effect of the
foregoing;
(b) Dissolve, liquidate or wind-up the Partnership; or
(c) Convey or otherwise transfer all or substantially all of the
Partnership's assets in one or a series of transactions.
9.4 Restrictions on General Partner's Authority.
(a) The General Partner may not take any action in contravention of
this Agreement, including, without limitation:
(i) Take any action that would make it impossible to carry on
the ordinary business of the Partnership, except as otherwise provided in
this Agreement;
(ii) Admit a Person as a Partner, except as otherwise provided in
this Agreement;
(iii) Perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other liability
except as provided herein or under the Act; or
(iv) Enter into any contract, mortgage, loan or other agreement
that prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of a Limited Partner to exercise its Redemption
Rights in full, except with the written consent of such Limited Partner.
(b) The General Partner may not, without the consent of all of the
Limited Partners, change its policy of holding its assets and conducting
its business solely through the Partnership, nor may any transactions
described in Section 12.6(a) or 12.6(b), without the
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consent of all the Limited Partners, be structured in a manner which will change
the General Partner's policy of holding its assets and conducting its business
through the Partnership (or the Surviving Partnership, if applicable) if the
result of such transaction is the recognition of gain by the Limited Partners.
9.5 Engagements by the Partnership. The General may engage, on behalf and
at the expense of the Partnership, such professional persons, firms or
corporations as the General Partner in its reasonable judgment shall deem
advisable for the conduct and operation of the business of the Partnership,
including, without limitation, brokers, mortgage bankers, lawyers, accountants,
architects, engineers, consultants, contractors and purveyors of other such
services for the Partnership on such terms and for such compensation or costs as
the General Partner, in its reasonable judgment, shall determine.
9.6 Engagement of Affiliates. The General Partner may, on behalf and at
the expense of the Partnership, engage the General Partner or a firm in which
the General Partner, a Limited Partner, or a Partner, officer, director,
stockholder or Affiliate of any of them, has an interest, to render services to
the Partnership and/or the assets of the Partnership, provided that the fees or
other compensation payable for such services are specifically authorized by the
terms of this Agreement or are comparable to those prevailing in arm's-length
transactions for similar services and are approved by the Board of Directors.
9.7 Liability of the General Partner. The General Partner and its
Affiliates, officers, directors, agents and employees shall not be liable,
responsible or accountable in damages or otherwise to the Partnership or any of
the Partners or their successors or assigns for any acts or omissions performed
or omitted within the scope of its authority as General Partner, or otherwise
conferred on the General Partner and such Affiliates, officers, directors,
agents and employees by this Agreement, provided that the General Partner or
such Affiliates, officers, directors, agents or employees shall act in good
faith and shall not be guilty of willful misconduct or gross negligence.
9.8 Reimbursement of Certain Expenses of the General Partner.
(a) Except as provided in this Section 9.8 and elsewhere in this
Agreement (including the provisions of Articles 7 and 8 regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general
partner of the Partnership.
(b) 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 expenses it incurs relating to the ownership
and operation of, or for the benefit of, the Partnership, including without
limitation, any expenses incurred by the General Partner in connection with
the management by the General Partner of any property owned by any Property
Partnership; provided, however, that the amount of any such reimbursement
shall be reduced by any interest earned by the General Partner with respect
to bank accounts or other instruments or accounts held by it on behalf of
the Partnership. The
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Limited Partners acknowledge that the General Partner's sole business is
the ownership of interests in and operation of the Partnership and that all
of the General Partner's expenses are incurred for the benefit of the
Partnership.
(c) The General Partner shall be deemed to be reimbursed in
accordance with the provisions of Sections 6.1 and 6.3 hereof for all
expenses it incurs relating to the Offering and any other offering and/or
issuance of Additional Partnership Units, Partnership Interests and/or
Common Stock as described in Sections 6.1 and 6.3 hereof.
9.9 Outside Activities of the General Partner. The General Partner shall
not directly or indirectly enter into or conduct any business, other than in
connection with the ownership, acquisition and disposition of Partnership
Interests as a General Partner and the management of the business of the
Partnership, and such activities as are incidental to same. The General Partner
shall not, directly or indirectly, participate in or otherwise acquire any
interest in any real or personal property, except its Partnership Interest as a
General Partner and as otherwise provided in this Agreement, and other than such
short-term liquid investments, bank accounts or similar instruments as it deems
necessary to carry out its responsibilities contemplated under this Agreement.
9.10 Operation in Accordance with REIT Requirements. The Partners
acknowledge and agree that the Partnership shall be operated in a manner that
will enable the General Partner to (i) satisfy the REIT Requirements and (ii)
avoid the imposition of any federal income or excise tax liability. The
Partnership shall avoid taking any action which would result in the General
Partner ceasing to satisfy the REIT Requirements or would result in the
imposition of any federal income or excise tax liability on the General Partner.
9.11 Title Holder. To the extent allowable under applicable law, title to
all or any part of the properties of the Partnership may be held in the name of
the Partnership or any other individual, corporation, partnership, trust or
otherwise, 100% of the beneficial interest in which shall at all times be vested
in the Partnership. Any such title holder shall perform any and all of its
respective functions to the extent and upon such terms and conditions as may be
determined from time to time by the General Partner.
ARTICLE 10
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
10.1 No Participation in Management of Partnership; Rights of Limited
Partners to Certain Documents
(a) The Limited Partners shall have such rights as are enumerated as
rights of limited partners under the Act. The Limited Partners, in such
capacity, shall not take part in, or interfere in any manner, with the
conduct or control of the Partnership's business and shall have no right or
authority to act for or bind the Partnership, said powers being vested
solely and exclusively in the General Partner. Except as specifically set
forth in
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this Agreement, the Limited Partners, in their capacities as such, shall
not have any right or power whatsoever to take any action with respect to
the conduct or control of the Partnership or its business including, but
not limited to, any right to vote on, or otherwise approve, any matters or
decisions, whether material, major or otherwise, in connection with the
business of the Partnership.
(b) In addition to any other rights provided in this Agreement or by
the Act, and except as limited by Section 10.1(c) below, each Limited
Partner shall have the right, for a purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership, upon
written demand with a statement of the purpose of such demand and at such
Limited Partner's own expense:
(i) to obtain a copy of the most recent annual and quarterly reports
filed with the Securities and Exchange Commission by the General
Partner pursuant to the Securities Exchange Act of 1934, as
amended, and each report sent to the stockholders of the General
Partner;
(ii) to obtain a copy of the Partnership's federal, state and local
income tax returns for each fiscal year of the Partnership;
(iii) to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers
of attorney pursuant to which this Agreement, the Certificate and
all amendments thereto have been executed; and
(v) to obtain true and full information regarding the amount of cash
and a description and statement of any other property or services
contributed by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a
Partner.
(c) Notwithstanding any other provisions of Section 10.1(b), the
General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in
the best interests of the Partnership or the General Partner or (ii) the
Partnership or the General Partner is required by law or by agreements with
unaffiliated third parties to keep confidential.
10.2 Withdrawal, Retirement, Death, Incompetency, Insolvency or Dissolution
of a Limited Partner. A Limited Partner shall have no right to withdraw, retire
or resign from the Partnership. The death, incompetency, insolvency or
dissolution of a Limited Partner shall not
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terminate the Partnership. Upon the death of a Limited Partner, his or her
executor, administrator or successor in interest shall have all of the rights
and duties of a Limited Partner for the purpose of settling his or her estate.
10.3 Redemption Rights.
(a) Grant of Rights. The General Partner does hereby grant to the
Limited Partners and the Limited Partners do hereby accept the right, but
not the obligation (such right shall be referred to hereinafter sometimes
as the "Redemption Rights"), to require the Partnership to redeem all or
part of their OP Units or other classes of Partnership Units as may be
designated by the General Partner for shares of Common Stock and/or cash,
at any time or from time to time after the date which is one (1) year after
the date on which such Partnership Units were issued (or such later date
after the date of issuance as may be specified in the Certificate of
Designation of any class of Partnership Units or otherwise determined by
the General Partner) on the terms and subject to the conditions and
restrictions contained in this Section 10.3. For purposes of this Section
10.3, OP Units issued upon the redemption of Series A or Series B Preferred
Units shall be deemed to have been issued on the date such Series A or
Series B Preferred Units were issued.
(b) Delivery of Exercise Notices. Any one or more Limited Partners
("Exercising Partners") may, subject to the limitations set forth in this
Section 10.3, deliver to the General Partner written notice in the form
attached to the Unit Certificate as Attachment 1 (the "Exercise Notice")
pursuant to which such Exercising Partners elect to exercise their
Redemption Rights with respect to all or any portion of their Partnership
Units. The Exercise Notice shall specify the specific number of
Partnership Units which the Limited Partner intends to require the
Partnership to redeem for shares of Common Stock and the specific number of
Partnership Units which the Limited Partner intends to require the
Partnership to redeem for cash. Only whole numbers of Partnership Units
may be redeemed. Once delivered, the Exercise Notice shall be irrevocable,
subject to payment by the General Partner of shares of Common Stock and/or
cash in respect of such Partnership Units in accordance with the terms
hereof.
(c) Assumption by General Partner. Notwithstanding anything
contained herein to the contrary, the General Partner may, in its sole and
absolute discretion, assume directly the obligation with respect to and
satisfy an Exercising Partner's exercise of a Redemption Right by paying to
the Exercising Partner, at the General Partner's election, shares of Common
Stock and/or cash, as determined in accordance with the provisions of
Section 10.3(e) below, whereupon the General Partner shall acquire the
Offered Units and shall be treated for all purposes of this Agreement as
the owner of such Offered Units. In the event the General Partner shall
exercise its right to satisfy the Redemption Right in the manner described
in the preceding sentence, the Partnership shall have no obligation to pay
any amount to the Exercising Partner with respect to such Exercising
Partner's exercise of the Redemption Right, and each of the Exercising
Partner, the Partnership and the General Partner shall treat the
transaction between the
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General Partner and the Exercising Partner as a sale of the Offered Units
to the General Partner for federal income tax purposes.
(d) Limitation on Exercise of Redemption Rights. Redemption Rights
may be exercised at any time and from time to time after the date which is
one (1) year after the date on which such Partnership Units were issued
(or such later date after the date of issuance as may be specified in the
Certificate of Designation of any class of Partnership Units or otherwise
determined by the General Partner), subject to the following limitations:
(i) A Limited Partner may not exercise its Redemption Rights
pursuant to any one particular Exercise Notice 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 Limited
Partner;
(ii) A Limited Partner shall not have the right to exercise its
Redemption Rights hereunder if, in the opinion of counsel
selected by the General Partner, in its sole and absolute
discretion, such exercise and/or issuance of shares of
Common Stock may or would (A) violate the General Partner's
Articles of Incorporation, as amended from time to time, (B)
cause the General Partner to fail any one or more of the
REIT Requirements or (C) constitute a violation of
applicable securities laws; and
(iii) Each Limited Partner acknowledges and agrees that the
issuance of shares of Common Stock pursuant to the
Redemption Rights will not be registered under the
Securities Act of 1933, as amended (the "Act"), or any state
securities laws. Accordingly, shares of Common Stock issued
to such Limited Partner may be required to be held
indefinitely and the General Partner shall have no
obligation to register such shares under the Act or any
state securities laws unless required to do so pursuant to a
separate written agreement entered into by the General
Partner at the time of the issuance. In addition, such
Limited Partner will be required to meet such other
requirements and to provide such other information and
representations as the General Partner may require, which
are required in the opinion of its counsel to lawfully allow
it to issue such shares without registration under the Act
and any applicable state securities laws. Each Limited
Partner acknowledges that the certificates representing
shares of Common Stock issued will also bear a legend with
respect to any restrictions on transfer required in the
opinion of counsel for the General Partner. The General
Partner acknowledges that the Limited Partners have been
granted the right, in certain circumstances and
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subject to certain limitations, to require the registration
under the Act of the shares of Common Stock issued pursuant
to the Redemption Rights.
(e) Computation of Number of Exchange Shares and/or Cash To Be Paid. Each
Partnership Unit which is to be redeemed for shares of Common Stock shall be
redeemed for one share of Common Stock, as adjusted from time to time as
provided in Section 10.3(i). Each Partnership Unit which is to be redeemed for
cash shall be redeemed for an amount of cash equal to the Current Per Share
Market Price (determined as of the Trading Day immediately preceding the date
upon which the closing of the redemption of Offered Units is to occur).
Notwithstanding anything contained herein to the contrary, the General Partner,
in its sole and absolute discretion, shall have the right either (i) to deliver
shares of Common Stock to each Exercising Partner in lieu of all or any portion
of the cash requested by such Exercising Partner, the number of which shares of
Common Stock shall be determined pursuant to the first sentence of this Section
10.3(e) or (ii) to cause the Partnership to pay cash to each Exercising Partner
in lieu of all or any portion of the number of shares of Common Stock requested
by such Exercising Partner, the amount of such cash per Partnership Unit shall
be determined pursuant to the second sentence of this Section 10.3(e). No
fractional shares of Common Stock shall be issued in return for Partnership
Units. If more than one Partnership Unit shall be requested to be redeemed at
the same time by the same Limited Partner, the number of full shares of Common
Stock that shall be issuable upon the redemption thereof shall be computed on
the basis of the aggregate number of shares of Common Stock represented by the
Partnership Units so presented. If any fraction of a share of Common Stock
would, except for the provisions of this Section 10.3(e), be issuable on the
redemption of any Partnership Units (or specified portion thereof), the General
Partner shall pay an amount in cash equal to the Current Per Share Market Price
(determined as of the Trading Day immediately preceding the date upon the
closing of the Redemption of the Offered Units is to occur), multiplied by such
fraction.
(f) Closing; Delivery of Election Notice. The closing of the redemption
of Offered Units shall, unless otherwise mutually agreed, be held at the
principal offices of the General Partner, on the date agreed to by the General
Partner and the Exercising Partners, which date shall in no event be later than:
(i) ten (10) business days after the date of delivery of the Exercise Notice to
the General Partner or (ii) the first date upon which all legal and other
conditions with respect to such redemption have been satisfied (which shall
include the expiration or termination of any applicable waiting periods).
(g) Closing Deliveries. At the closing of the redemption of Offered
Units, (i) the Exercising Partners shall execute and deliver (A) proper
instruments of transfer and assignment of the Offered Units, (B) a Unit
Certificate or Unit Certificates representing the number of Offered Units to be
so redeemed and (C) representations and warranties with respect to their due
authority to sell all of the right, title and interest in and to such Offered
Units to the General Partner and, with respect to the status of the Offered
Units, that such Offered Units are free and clear of all liens, claims and
encumbrances
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whatsoever, and (ii) the General Partner shall (A) if shares of Common Stock are
to be issued, execute and deliver representations and warranties with respect to
its due authority to issue the shares of Common Stock to be received in the
exchange; deliver an opinion of counsel for the General Partner, reasonably
satisfactory to the Exercising Partners, to the effect that such shares of
Common Stock have been duly authorized, are validly issued, fully-paid and
non-assessable; and deliver a stock certificate or certificates evidencing the
shares of Common Stock to be issued and registered in the name(s) of the
Exercising Partner(s) or its or their designee(s), and/or (B) if cash is to be
paid for Partnership Units, deliver a check in the amount of any cash due to the
Exercising Partner(s) at such closing. If any Exercising Partner shall have
delivered a Unit Certificate or Unit Certificates representing a number of
Partnership Units in excess of the number of Offered Units, the Partnership
shall issue to such Exercising Partner, at the expense of the Partnership, a new
Unit Certificate covering the number of Partnership Units representing the
unredeemed portion of the Unit Certificate or Unit Certificates so surrendered,
which new Unit Certificate shall entitle the holder thereof to such rights of
ownership of Partnership Units to the same extent as if the Unit Certificate
covering such unredeemed Partnership Units had not been surrendered for
redemption.
(h) Restriction on Redemption of Partnership Units. Notwithstanding
anything in paragraph (e) and (f) above, or any other provision of this Section
10.3 to the contrary, after the earlier of January 1, 2006, or the date on which
the number of Partners exceeds 500, upon delivery of the Exercise Notice, the
General Partner shall notify the Limited Partner, within 10 days thereof,
whether such Offered Units will be redeemed for cash or Common Stock and the
closing of the redemption of Offered Units shall not occur any earlier than the
later of (i) 10 days after such notification by the General Partner or (ii) the
fifteenth (15th) day after the date on which the Exercise Notice for such
Offered Units was delivered to the General Partner (or, if later, in both case
(i) and (ii), the first date upon which all legal and other conditions with
respect to such redemption have been satisfied, which shall include the
expiration or termination of any applicable waiting periods), and in no event
shall the current Per Share Market Price of any such Offered Units be determined
as of any Trading Date prior to the fourteenth (14th) business day after the
date of delivery of the Exercise Notice; provided, however, that the provisions
of this Section 10.3(h) shall cease to apply and shall have no further force or
effect on the date, if any, on which the Partnership receives either a ruling
from the IRS or an unqualified opinion from the General Partner's counsel to the
effect that, under the original provisions of paragraph (e) and (f) prior to any
modification thereof by this paragraph (h), the Partnership will not be treated
as a "publicly traded partnership" within the meaning of Section 7704 of the
Code or any successor provision.
(i) Term of Rights. Unless sooner terminated, the rights of the parties
with respect to the Redemption Rights shall commence as of the date which is one
(1) year after the date of this Agreement and lapse for all purposes and in all
respects upon the termination of the Partnership; provided, however, that the
parties hereto shall continue to
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be bound by an Exercise Notice delivered to the General Partner prior to such
termination.
(j) Covenants of the General Partner. To facilitate the General Partner's
ability to fully perform its obligations hereunder, the General Partner
covenants and agrees as follows:
(i) At all times during the pendency of the Redemption Rights, the
General Partner shall reserve for issuance such number of shares
of Common Stock as may be necessary to enable the General Partner
to issue such shares in full exchange for all Partnership Units
held by the Limited Partners which are from time to time issued
and outstanding;
(ii) During the pendency of the Redemption Rights, each Limited
Partner shall receive in a timely manner all reports and/or other
communications transmitted from time to time by the General
Partner to its shareholders generally; and
(iii) In case the General Partner shall issue rights or warrants to all
holders of shares of its Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less
than the Current Per Share Market Price as of the date
immediately prior to the date of such issuance, the General
Partner shall also issue to each holder of a Partnership Unit
such number of rights or warrants, as the case may be, as he
would have been entitled to receive had he required the
Partnership to redeem his Partnership Units immediately prior to
the record date for such issuance by the General Partner.
(iv) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares, the number of shares
of Common Stock for which each Partnership Unit thereafter may be
redeemed shall be increased proportionately, and, conversely, in
case outstanding shares of Common Stock each shall be combined
into a smaller number of shares, the number of shares of Common
Stock for which each Partnership Unit thereafter may be redeemed
shall be reduced proportionately, such increase or reduction as
the case may be, to become effective immediately after the
opening of business on the Trading Day following the day upon
which such subdivision or combination becomes effective.
(v) In case shares of Common Stock shall be changed into the same or
a different number of shares of any class or classes of shares of
beneficial interest, whether by capital reorganization,
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reclassification or otherwise (other than a subdivision or
combination of shares or a stock dividend described in Section
10.3(i)(iv) above) then and in each such event the Limited
Partners shall have the right thereafter to require the
Partnership to redeem their Partnership Units for the kind and
amount of shares and other securities and property which would
have been received upon such reorganization, reclassification or
other change by holders of the number of shares of Common Stock
for which the Partnership Units might have been redeemed
immediately prior to such reorganization, reclassification or
change.
(vi) The General Partner may, but shall not be required to, make such
adjustments to the number of shares of Common Stock issuable upon
redemption of a Partnership Unit, in addition to those required
by paragraphs (iii), (iv) and (v) of this Section 10.3(i), as the
Board of Directors considers to be advisable in order that any
event treated for Federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the recipients.
The Board of Directors shall have the power to resolve any
ambiguity or correct any error in the adjustments made pursuant
to this Section 10.3(i) and its actions in so doing shall be
final and conclusive.
(k) Limited Partners' Covenant. Each Limited Partner covenants and
agrees with the General Partner that all Offered Units tendered to the
General Partner in accordance with the exercise of Redemption Rights herein
provided shall be delivered to the General Partner free and clear of all
liens, claims and encumbrances whatsoever and should any such liens, claims
and/or encumbrances exist or arise with respect to such Offered Units, the
General Partner shall be under no obligation to acquire the same. 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 Offered
Units to the General Partner (or its designee), such Limited Partner shall
assume and pay such transfer tax.
ARTICLE 11
BANKING, RECORDS AND TAX MATTERS
11.1 Partnership Funds. All funds of the Partnership shall be deposited in
its name in accounts (with banks, "money-market funds," or securities of the
United States government or like investment or depository media) designated by
the General Partner, and the General Partner or its designees shall have the
right to draw checks or other orders of withdrawal thereon and make, deliver,
accept and endorse negotiable instruments in connection with the Partnership
business.
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11.2 Books and Records. The following books, records, and accounts shall
be maintained by the Partnership, showing its assets, liabilities, transactions,
and financial condition: a current list of the full name and last known address
of each Partner, separately identifying the General and Limited Partners and set
forth in alphabetical order and setting forth the amount of cash or a
description and statement of the Agreed Value of other property contributed or
agreed to be contributed by each partner; the date on which each became a
Partner; a copy of the Certificate and all amendments thereto; copies of the
Partnership's federal, state and local income tax returns and reports, if any,
for the six most recent years; copies of this Agreement and any amendments
thereto; and copies of any financial statements of the Partnership for the three
most recent years. The Partnership's books shall be maintained at the principal
office of the Partnership. Each Partner shall have the right to inspect and
copy such materials at all reasonable times and during ordinary business hours.
The General Partner is not required to deliver to any Limited Partner copies of
the Certificate or any amendments thereto, unless requested by such Limited
Partner. Notwithstanding the foregoing, the General Partner shall have the
authority to designate a transfer agent to maintain a record of all of the
Partners of the Partnership, and the appointment of the transfer agent shall
relieve the Partnership of any obligations to keep separate records with respect
to the matters recorded in the books and records maintained by the transfer
agent. The General Partner may, from time to time, demand a statement from the
Limited Partners of record requesting each Limited Partner to disclose the
actual owners of the Partnership Units, including the identity of individuals or
beneficial owners that have an interest directly or indirectly (through other
passthrough entities) in such Limited Partner. Each Limited Partner should
submit such statement to the General Partner within 30 days after such request
was made by the General Partner.
11.3 Financial Statements. Within ninety-five (95) days after the close of
each fiscal year of the Partnership, the General Partner shall cause to be
prepared (at the Partnership's expense) and furnished to each Person who was a
Partner during the fiscal year then ended, a balance sheet of the Partnership as
of the close of such fiscal year and statements of income or loss, and Net Cash
Flow, if any. Such statements shall be prepared in accordance with generally
accepted accounting principles and certified by the Accountants for the
Partnership, unless such certification is waived, in writing, by all of the
Partners.
11.4 Tax Returns. Within ninety (90) days following the close of each
fiscal year of the Partnership, the General Partner shall cause to be prepared
(at the Partnership's expense) a United States Partnership Return of Income and
cause to be furnished to each Person who was a Partner during the fiscal year a
schedule (a "K-1 Schedule") of each such Partner's share of income, credits, and
deductions on the form then prescribed by the IRS. All elections and options
available to, or determinations as to items of income or expense of, the
Partnership for federal or state income tax purposes shall be taken, rejected or
made by the Partnership in the sole discretion of the General Partner.
11.5 Section 754 Matters. The General Partner, on behalf of the
Partnership, shall file an election under Section 754 of the Code in accordance
with the procedures set forth in the applicable Regulations promulgated
thereunder, which shall be effective beginning with the first
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fiscal year of the Partnership with respect to which the Partnership is eligible
to make such election, which election, for such fiscal year, may not be revoked
for any reason.
11.6 Tax Matters Partner. The General Partner is hereby appointed the "tax
matters partner" of the Partnership for all purposes pursuant to Sections
6221-6231 of the Code. The Partnership shall reimburse the tax matters partner
for any and all out-of-pocket costs and expenses (including attorneys' and
accountants' fees) incurred or sustained by it in its capacity as tax matters
partner. The Partnership shall indemnify, defend and hold the tax matters
partner harmless from and against any loss, liability, damage, cost or expense
(including attorneys' and accountants' fees) sustained or incurred as a result
of any act or decision concerning the Partnership tax matters and within the
scope of its responsibility as tax matters partner.
11.7 Other Reports. The General Partner shall deliver to each Limited
Partner, in a timely manner, all reports and/or other communications transmitted
from time to time by the General Partner to its shareholders.
ARTICLE 12
TRANSFER OF GENERAL PARTNER INTERESTS
12.1 Transfer of Interest of the General Partner. No General Partner may
at any time sell, assign, transfer, pledge or encumber any or all of its
Partnership Interest in the Partnership or withdraw or retire from the
Partnership except as otherwise provided herein or with the prior written
consent of Partners owning eighty-five percent (85%) of the issued and
outstanding Partnership Units taken as a single class. Retirement or withdrawal
from the Partnership shall not relieve the General Partner of any obligation
theretofore incurred by it hereunder. Notwithstanding anything contained herein
to the contrary, the Limited Partners shall have no right whatsoever to remove
the General Partner from the Partnership.
12.2 Retirement of the General Partner. If a General Partner shall
liquidate or dissolve, be adjudged bankrupt, enter into an assignment for the
benefit of creditors, have a receiver appointed to administer its interest in
the Partnership, be the subject of a voluntary or involuntary petition for
bankruptcy that is not dismissed or vacated within ninety (90) days of filing,
or have its interest in the Partnership seized by a judgment creditor, or if
there shall be an individual general partner and he shall die, be adjudicated
incompetent or become permanently disabled (each of the foregoing events is
referred to hereinafter as an "Event of Retirement"), such General Partner,
without further act or notice, immediately shall be deemed to have retired as
General Partner of the Partnership. If the General Partner retires as General
Partner of the Partnership as aforesaid, (i) such General Partner (or its
administrator, executor, personal representative or successor) (a) shall become
a nonparticipating Limited Partner (a "Nonparticipating Limited Partner")
retaining the General Partner's former interest in the Profits, Losses and Net
Cash Flow of the Partnership, but shall not acquire any right or interest in any
payment or distribution to the Limited Partners, as such, pursuant hereto, (b)
shall have no right to participate in the management of the affairs of the
Partnership, and (c) shall be disregarded in determining whether any approval,
consent, or other action has been given or taken by the
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Limited Partners; and (ii) the surviving General Partner(s), if any, shall
remain as such and the Partners hereby agree and consent that the Partnership
shall continue in effect and shall not terminate, subject, however, to the
provisions of Section 12.5 hereof.
12.3 Transferee of the General Partner's Interest. Any Person, other than
the General Partner, who acquires, in any manner whatsoever (except as herein
otherwise provided) the interest, or any portion thereof, of the General
Partner, shall not be a General Partner, but shall be entitled to become a
Nonparticipating Limited Partner upon written acceptance and adoption of all of
the terms and provisions of this Agreement and compliance with the requirements
of Section 13.3 of this Agreement. Such Person shall, to the extent of the
interest acquired, be entitled only to the transferor General Partner's rights,
if any, in the Profits, Losses and Net Cash Flow of the Partnership, but shall
not acquire any right or interest in any payment or distribution to the Limited
Partners, as such, pursuant hereto. No such Person shall have any right to
participate in the management of the affairs of the Partnership, and the
interest acquired by such Person shall be disregarded in determining whether any
approval, consent or other action has been given or taken by the Limited
Partners.
12.4 Retirement of Last Remaining General Partner. If the last remaining
General Partner shall at any time withdraw or suffer an Event of Retirement, the
Limited Partners shall have the right, within ninety (90) days thereafter, by a
written consent executed and delivered by Limited Partners owning a majority of
the issued and outstanding Partnership Interests taken as a single class, to
appoint one or more new General Partners as replacement General Partners, unless
the Act requires a greater percentage of the Limited Partners to consent to the
continuation of the Partnership, in which case such higher percentage shall be
required for the continuation of the Partnership. In such event, the Limited
Partners shall create for such replacement General Partners such interest in the
Partnership Profits, Losses and Net Cash Flow as the Limited Partners may agree
upon from among their collective interests in the Partnership.
12.5 Continuation of Partnership. In the event of the timely appointment
of a replacement or new General Partner(s) pursuant to this Article 12, the
relationship of the Partners shall be governed by the provisions of this
Agreement, the Partnership shall be continued, and the replacement or new
General Partner(s) shall have all of the management rights, duties,
responsibilities, authority and powers provided the General Partner in this
Agreement. If the Limited Partners fail to select a replacement or new General
Partner(s), whichever the case may be, within ninety (90) days following
retirement of the last remaining General Partner, the Partnership shall dissolve
and terminate.
12.6 Merger or Consolidation of the General Partner.
(a) Whether or not Section 9.3 hereof is applicable, the General
Partner shall not, unless Section 12.6(b) is applicable, engage in any
merger, consolidation or other combination with or into another person,
sale of all or substantially all of its assets or any reclassification,
recapitalization or similar transaction (each, a "Termination
Transaction"), unless such Termination Transaction is one in connection
with which all Limited Partners either will receive, or will have the right
to elect to receive, for each
-39-
Partnership Unit, an amount of cash, securities, or other property equal to
the product of the number of shares of Common Stock into which such
Partnership Unit is convertible (or in the case of a Series A and Series B
Preferred Unit, the number of OP Units into which such Series A or Series B
Unit is convertible) and the greatest amount of cash, securities or other
property paid to a holder of one share of Common Stock in consideration of
one share of Common Stock pursuant to the terms of the Termination
Transaction; provided that; if, in connection with the Termination
Transaction, a purchase, tender or exchange offer shall have been made to
and accepted by the holders of the outstanding Common Stock, each holder of
Partnership Units (other than the Series A or Series B Preferred Units or
any other class of Partnership Units that are not directly redeemable for
Common Stock) shall receive, or shall have the right to elect to receive,
the greatest amount of cash, securities, or other property which such
holder would have received had it exercised its right to Redemption (as set
forth in Section 10.3)) and received Common Stock in exchange for its
Partnership Units immediately prior to the expiration of such purchase,
tender or exchange offer and had thereupon accepted such purchase, tender
or exchange offer and then such Termination Transaction shall have been
consummated.
(b) Whether or not Section 9.3 hereof is applicable, the General
Partner may merge, or otherwise combine its assets, with another entity
without satisfying the requirements of Section 12.6(a) hereof if: (i)
immediately after such merger or other combination, substantially all of
the assets directly or indirectly owned by the surviving entity, other than
Partnership Units held by such General Partner, are owned directly or
indirectly by the Partnership or another limited partnership or limited
liability company which is the survivor of a merger, consolidation or
combination of assets with the Partnership (in each case, the "Surviving
Partnership"); (ii) the Limited Partners own a percentage interest of the
Surviving Partnership based on the relative fair market value of the net
assets of the Partnership (as determined pursuant to Section 12.6(c)) and
the relative fair market value of the other net assets of the Surviving
Partnership (as determined pursuant to Section 12.6(c)) immediately prior
to the consummation of such transaction; (iii) the rights, preferences and
privileges of the Limited Partners in the Surviving Partnership are at
least as favorable as those in effect immediately prior to the consummation
of such transaction and as those applicable to any other limited partners
or non-managing members of the Surviving Partnership; and (iv) such rights
of the Limited Partners include the right to exchange their interests in
the Surviving Partnership for at least one of: (A) the consideration
available to such Limited Partners pursuant to Section 12.6(a), or (B) if
the ultimate controlling person of the Surviving Partnership has publicly
traded common equity securities, such common equity securities, with an
exchange ratio based on the relative fair market value of such securities
(as determined pursuant to Section 12.6(c)) and the Common Stock.
(c) In connection with any transaction permitted by Section 12.6(a)
or 12.6(b), the relative fair market values shall be reasonably determined
by the General Partner as of the time of such transaction and, to the
extent applicable, shall be no less
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favorable to the Limited Partners than the relative values reflected in the
terms of such transactions.
ARTICLE 13
TRANSFER OF LIMITED PARTNER INTERESTS
13.1 Transfer of Interest of a Limited Partner. Except as otherwise
specifically provided in this Agreement, no Limited Partner may sell, assign,
transfer, pledge, encumber or in any manner dispose of all or any part of its
Partnership Interest without the prior written consent of the General Partner,
which consent may not be unreasonably withheld. Notwithstanding the foregoing,
each Limited Partner shall have the right to (i) pledge or otherwise encumber
all or any portion of its Partnership Interest (subject, however, to applicable
securities laws) and/or (ii) transfer all or any portion of its Partnership
Interest to members of the Immediate Family of such Limited Partner and to one
or more trusts for the benefit of one or more members of the Immediate Family of
such Limited Partner for estate and/or gift tax purposes, upon prior written
notice to the General Partner. Without limiting the generality of the
foregoing, in no event shall the General Partner consent to an assignment of all
or any portion of the Partnership Interest of a Limited Partner in the
Partnership if, in the opinion of the General Partner (or of counsel
satisfactory to the General Partner), such assignment (i) will result in a
termination of the Partnership for federal income tax purposes or otherwise
result in adverse tax consequences to the Partnership or any Partner, (ii) will
result in the Partnership failing to qualify for an exemption from the
registration requirements of the federal or any applicable state securities
laws, (iii) will result in the imposition of fiduciary responsibility on the
Partnership or any Partner under the Employee Retirement Income Security Act of
1974, as amended from time to time, (iv) will result in a violation of any
provision of any mortgage or trust deed (or the note or bond secured thereby)
constituting a lien against any assets of the Partnership, or other instrument,
document or agreement to which the Partnership is a party or otherwise bound,
(v) represents a transfer of any component portion of a Partnership Interest,
such as the Capital Account, or rights to Net Cash Flow, separate and apart from
all other components of a Partnership Interest, or (vi) will cause the General
Partner to cease to comply with any and all REIT Requirements. Subject to
satisfaction of the conditions therefor set forth or referred to herein, each
Limited Partner hereby consents to the substitution or admission of any assignee
of a Limited Partner. Any sale, assignment, transfer, pledge, encumbrance,
hypothecation or other disposition by a Limited Partner of all or any part of
its Partnership Interest in violation of the provisions hereof shall be void ab
initio and of no force or effect whatsoever.
13.2 Assignee and Substitute Limited Partners. No Person shall be admitted
as an assignee or substituted Limited Partner under this Agreement unless and
until:
(a) An assignment is made in writing, signed by the assigning Partner
and accepted in writing by the assignee, and a duplicate original of such
assignment has been delivered to and approved by the General Partner;
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(b) The General Partner has received an opinion of counsel favorably
covering the matters described in clauses (i) through (vi) of Section 13.1
above, or waived all or any portion of this requirement;
(c) The prospective admittee executes and delivers to the General
Partner a written agreement in form reasonably satisfactory to the General
Partner pursuant to which said Person agrees to be bound by and confirms
the obligations, representations, warranties and power of attorney
contained in this Agreement; and
(d) An appropriate amendment to this Agreement is executed.
13.3 Assignment. In the event an assignment is made in accordance with the
terms hereof, unless otherwise required by the Code:
(a) The effective date of such assignment shall be the date the
written instrument of assignment is delivered to the Partnership and
approved by the General Partner;
(b) The Partnership and the General Partner shall be entitled to
treat the assignor of the assigned interest as the absolute owner thereof
in all respects and shall incur no liability for allocations of Profits or
Losses and distributions of Net Cash Flow made in good faith to such
assignor until such time as the written instrument of assignment has been
actually received and approved by the General Partner, and recorded in the
books of the Partnership; and
(c) The division and allocation of Profits or Losses, other than
Profits or Losses arising from a Liquidation of the Partnership,
attributable to the applicable Partnership Interests between the assignor
and assignee during any fiscal year of the Partnership shall be based upon
the length of time during such fiscal year, as measured by the effective
date of such assignment, that the assigned Partnership Interest was owned
by each of them and shall not be based upon the date or dates during such
fiscal year in which income was earned or losses were sustained by the
Partnership; provided, however, that the division and allocation of Profits
or Losses resulting from a Liquidation of the Partnership shall be based
upon the date or dates such income was earned or losses were sustained.
13.4 Cost of Admission. The cost of processing and perfecting an admission
contemplated by this Article 13 (including reasonable attorney's fees incurred
by the Partnership) shall be borne by the party seeking admission as a Partner
to the Partnership.
ARTICLE 14
DISSOLUTION AND LIQUIDATION OF PARTNERSHIP
14.1 Dissolution of the Partnership. The Partnership shall be dissolved
upon the happening of any of the following:
(a) An election to dissolve and wind up the affairs of the
Partnership by the General Partner (subject to Section 9.3 hereof);
(b) The occurrence of an Event of Retirement to the last remaining
General Partner, unless the Limited Partners elect to continue the business
of the Partnership pursuant to the provisions of Sections 12.4 and 12.5;
(c) Any event that makes it unlawful for the Partnership business to
be continued;
(d) The sale, disposition, or abandonment of all or substantially all
of the assets of the Partnership unless the General Partner, with the
written consent of Partners owning eighty-five percent (85%) of the
Partnership Interests taken as a single class (which consent may not be
unreasonably withheld), elects to continue the Partnership business for the
purpose of the receipt and the collection of indebtedness or the collection
of any other consideration to be received in exchange for the assets of the
Partnership (which activities shall be deemed to be part of the winding up
of the affairs of the Partnership);
(e) Dissolution required by operation of law; or
(f) December 31, 2093.
14.2 Winding Up of Affairs. In the event of the dissolution and
liquidation of the Partnership for any reason, the General Partner shall
commence to wind up the affairs of the Partnership and shall convert all of the
Partnership's assets to cash or cash equivalents within such reasonable period
of time as may be required to receive fair value therefor. All items of income,
gain, loss, deduction and credit during the period of liquidation shall be
allocated among the Partners in the same manner as before the dissolution. If
there is no General Partner to effect such Liquidation, then the Limited
Partners, pursuant to a vote of Limited Partners owning a majority of the issued
and outstanding Partnership Units owned by all Limited Partners, may designate
any person, firm or corporation, as a Liquidating Trustee, for that purpose who
shall have all of the rights, powers and authority of a General Partner stated
herein in connection therewith.
14.3 Accounting. In the case of the dissolution and termination of the
Partnership, prior to any distributions to Partners pursuant to Section 14.4(c)
below, a proper accounting shall be made of the Capital Accounts of the Partners
and of each item of income, gain, loss, deduction and credit of the Partnership
from the date of the last previous accounting to the date of dissolution. The
General Partner shall provide a copy of such accounting to all Partners.
-43-
14.4 Final Distribution of Partnership Property. Upon termination of the
Partnership, the General Partner shall apply and distribute the remaining
property of the Partnership, together with the proceeds of any sales of same, as
follows:
(a) first, all Partnership debts and liabilities shall be paid and
discharged, including debts owed to Partners and any Affiliates of
Partners;
(b) second, to establish any reserve for any contingent or unforeseen
liabilities or obligations of the Partnership. Such funds shall be placed
in escrow by the General Partner for the purposes of disbursing such funds
in payment of any of the contingencies, liabilities or obligations, and, at
the expiration of such period as the General Partner shall deem advisable,
the balance then remaining shall be distributed pursuant to subsection (c)
of this Section 14.4; and
(c) third, to distribute the balance to the Partners in the manner
and priority set forth in Article 8 hereof, with any and all Net Cash Flow
arising from the ordinary course of the Partnership's business during the
period of liquidation being distributed pursuant to Section 8.1(a) and any
and all Net Cash Flow arising pursuant to the sale and/or other liquidation
of Partnership property being distributed pursuant to Section 8.1(b)
hereof.
Distributions upon liquidation of the Partnership (or any Partner's
interest in the Partnership) and related adjustments shall be made by the end of
the taxable year of the liquidation (or, if later, within 90 days after the date
of such liquidation) or as otherwise permitted by the Regulations.
14.5 Certificate of Cancellation. Upon completion of the liquidation of
the Partnership and the distribution of all Partnership property, the
Partnership shall terminate and the General Partner shall have the authority to
execute and record one or more Certificates of Cancellation of the Partnership
as well as any and all other documents required or considered advisable by the
General Partner to effectuate the dissolution and termination of the
Partnership.
ARTICLE 15
POWER OF ATTORNEY
15.1 Power of Attorney. Each Partner, by its execution hereof, irrevocably
constitutes and appoints the General Partner, or any substitute or replacement
General Partner, with full power of substitution, as such Partner's true and
lawful attorney-in-fact, in its name, place and stead to make, execute, sign,
acknowledge, certify, deliver, file and record on its behalf and on behalf of
the Partnership, the following:
(a) This Agreement, all Certificates of Limited Partnership,
Certificates of Doing Business under an Assumed Name, amendments to any or
all of the foregoing, and
-44-
any other certificates or instruments which may be required to be filed by
the Partnership or the Partners under the laws of the State of Delaware or
any other jurisdiction;
(b) One or more Certificates of Cancellation of the Partnership and
such other instruments or documents as may be deemed necessary or desirable
by the General Partner upon termination of the Partnership business;
(c) Any and all amendments to this Agreement and to the instruments
described in subsections (a) and (b) above, provided such amendments are
either required by law or have been authorized by the Partner(s) in
accordance with Article 16 and/or any other provision of this Agreement
(including, without limitation, any amendment to this Agreement and to the
Certificate to reflect the substitution or admission of a Limited Partner
pursuant to this Agreement); and
(d) Any and all such other documents and instruments as may be deemed
necessary or desirable by said attorney to carry out fully the provisions
of this Agreement in accordance with its terms.
15.2 Grant of Authority Irrevocable. The foregoing grant of authority (a)
is a special power of attorney coupled with an interest, is irrevocable and
shall survive the death or incapacity of a Partner who is a natural person or,
in the case of a Partner that is not a natural person, the merger, dissolution
or other termination of its existence of the Partner, (b) may be exercised by
the General Partner on behalf of each Partner, by a facsimile signature or by
listing all of the Partners executing any instrument with a single signature as
attorney-in-fact for all of them, and (c) shall survive the assignment by a
Partner of the whole or any portion of his or its interest in the Partnership.
ARTICLE 16
AMENDMENT OF PARTNERSHIP AGREEMENT
16.1 Amendments by Partners. Except as may be specifically provided below
in this Section 16.1 and in Sections 16.2 and 9.3 hereof, this Agreement may
only be amended with the written concurrence of the General Partner and the
written consent of Partners owning a majority of the Partnership Units taken as
a single class (which shall mean that only the General Partner's consent is
necessary if the General Partner owns a majority of the Partnership Units, taken
as a single class, in which case the Limited Partners need not be solicited but
shall be informed of the amendment); provided, however, that absent the
concurrence of the General Partner and the approval of all of the Limited
Partners no amendment shall increase the obligation of any Partner to make
contributions to the capital of the Partnership; provided, further, however,
that absent (i) the concurrence of the General Partner, (ii) the approval of the
Limited Partners adversely affected and (iii) the approval of Limited Partners
owning eighty-five percent (85%) of the Partnership Units held by all Limited
Partners, taken as a single class, no amendment shall:
-45-
(a) modify the order of allocation of distributions of the Net Cash
Flow or liquidating distributions, or the allocation of Profits and Losses
among the Partners (other than as specifically provided for herein,
including without limitation, modifications pursuant to Section 6.4
hereof);
(b) change the Partnership to a general partnership;
(c) reduce the percentage of Limited Partners required to consent to
any matter in this Agreement; or
(d) amend Section 9.4(a)(iv) or 9.4(b) hereof or amend Section 10.3
hereof in any manner that prohibits or restricts, or has the effect of
prohibiting or restricting, the ability of a Limited Partner to exercise
its Redemption Rights in full;
(e) amend Section 12.6(a), (b) or (c); or
(f) amend this Article 16.
16.2 Amendment by the General Partner. Notwithstanding anything contained
in this Agreement to the contrary, the General Partner shall have the power,
without the consent of the Limited Partners, to amend this Agreement as may be
required to facilitate or implement any of the following purposes:
(a) To add to the obligations of the General Partner or surrender any
right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
(b) To reflect the admission, substitution, termination or withdrawal
of Partners in accordance with this Agreement, including without
limitation, the issuance of additional classes of Partnership Units to
Limited Partners pursuant to Section 6.4 hereof;
(c) To reflect a change that is of an inconsequential nature and does
not adversely affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement
not inconsistent with law or with other provisions, or make other changes
with respect to matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement;
(d) To satisfy any requirements, conditions or guidelines contained
in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law; and
(e) To amend the provisions of this Agreement that protect the
qualification of the General Partner as a REIT if such provisions are no
longer necessary because of a
-46-
change in applicable law (or an authoritative interpretation thereof), a
ruling of the IRS, or if the General Partner has determined to cease
qualifying as a REIT.
The General Partner will provide notice to the Limited Partners when any action
under this Section 16.2 is taken.
16.3 Amendment of Certificate. If this Agreement shall be amended pursuant
to this Article 16, the General Partner shall cause the Certificate to be
amended, to the extent required by applicable law, to reflect such change. The
Partners shall be promptly notified of any amendments made under this Article
16.
ARTICLE 17
INDEMNIFICATION
17.1 Partnership Indemnification of Partner. To the maximum extent
permitted from time to time under Delaware law, the Partnership shall indemnify,
defend and hold the General Partner (in its capacity as General Partner) and its
Affiliates, trustees, officers, directors, employees and agents, or their
respective successors, executors, administrators or personal representatives
harmless from and against any loss, liability, damage, cost or expense
(including reasonable attorneys' fees) sustained or incurred as a result of any
act or omission concerning the business or activities of the Partnership or
General Partner; provided such act or omission was not in violation of any term
or provision of this Agreement or any provision of law. The foregoing indemnity
shall not be enforceable against any Limited Partner personally but solely from
such Limited Partner's interest in the Partnership.
17.2 Partner Indemnification of Partnership. In the event the Partnership
is made a party to any litigation or otherwise incurs any loss or expense as a
result of or in connection with any Partner's personal obligations or
liabilities unrelated to Partnership business, such Partner shall indemnify and
reimburse the Partnership for all such loss and expense incurred, including
reasonable attorneys' fees, and the interest of such Partner in the Partnership
may be charged therefor. The liability of a Partner under this Section 17.2
shall not be limited to such Partner's interest in the Partnership, but shall be
enforceable against such Partner personally.
ARTICLE 18
MISCELLANEOUS PROVISIONS
18.1 Notices. All notices and demands required or permitted under this
Agreement shall be in writing and may be delivered personally to the Person to
whom it is authorized to be given, or sent by registered, certified or first
class mail, or by overnight delivery, postage prepaid, and if intended for the
Partnership, addressed to the Partnership at the principal office of the
Partnership, and if intended for a Partner, addressed to the Partner at its
address on the signature pages hereof, or to such other person or at such other
address designated by written
-47-
notice given to the Partnership. Any notice or demand mailed as aforesaid shall
be deemed to have been delivered two (2) days after the date that such notice or
demand is deposited in the mails.
18.2 Severability. If any provision of this Agreement or the application
of such provision to any Person or circumstance shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it is held invalid shall not be
affected.
18.3 Parties Bound. Any Person acquiring or claiming an interest in the
Partnership, in any manner whatsoever, shall be subject to and bound by all
terms, conditions and obligations of this Agreement to which his or its
predecessor in interest was subject or bound, without regard to whether such
Person has executed a counterpart hereof or any other document contemplated
hereby. No Person, including the legal representative, heir or legatee of a
deceased Partner, shall have any rights or obligations greater than those set
forth in this Agreement and no Person shall acquire an interest in the
Partnership or become a Partner thereof except as permitted by the terms of this
Agreement. This Agreement shall be binding upon the parties hereto, their
successors, heirs, devisees, assigns, legal representatives, executors and
administrators.
18.4 Applicable Law. The Partnership and this Agreement shall be governed
by the laws of the State of Delaware.
18.5 Partition. Each Partner hereby irrevocably waives during the term of
the Partnership any right that he or it may have to maintain any action for
partition with respect to any property of the Partnership.
18.6 Computation of Accountants. Except with respect to matters as to
which the General Partner is granted discretion under this Agreement, the
opinion of the Accountants shall be final and binding with respect to all
allocations made under Article 7 or distributions made under Article 8 or
Section 14.4 hereof.
18.7 Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision.
18.8 Counterparts. This Agreement may be executed in multiple counterparts
with separate signature pages, each such counterpart shall be considered an
original, but all of which together shall constitute one and the same
instrument.
-48-
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first set forth above, confirms his or its agreement to become a
General or Limited Partner, as the case may be, of the Partnership, agrees to be
bound by this Agreement and acknowledges the appointment of attorneys-in-fact as
set forth herein, and swears that the statements set forth herein are true and
correct.
GENERAL PARTNER:
XXXX-XXXX REALTY CORPORATION,
a Maryland corporation
By:
----------------------------------
Xxxxx X. Xxxxxx
Executive Vice President
Address: 00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
LIMITED PARTNERS:
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx X. Xxxx
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-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxxxxxx Xxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxx
TAR Investments, L.P.
By: TAR Realty Corp.,
general partner
By:
----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx X. Xxxx, President
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Spring
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Xxxx, Xx.
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxx Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx Xxxxxx, Xx.
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx X. Xxxxxx
-50-
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxxxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxxx Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx X. XxXxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx XxXxxx, Xx.
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx X. XxXxxx, Xx.
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-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Halberstradter
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx Halberstradter
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx Xxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx Xxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx Xxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx Xxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx Xxxx
-00-
Xxxxxx X. Xxxx Irrevocable Trust
dated January 28, 1975
f/b/o Xxxxxx Xxxx
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxx, Trustee
Xxxxxx X. Xxxx Irrevocable Trust
dated January 28, 1975
f/b/o Xxxx X. Xxxx
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxx, Trustee
Xxxxxx X. Xxxx Irrevocable Trust
dated January 28, 1975
f/b/o Xxxxxx Xxxx
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxx, Trustee
Xxxxxx X. Xxxx Irrevocable Trust
dated July 1, 1979
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx Xxxx, Trustee
Xxxx X. Xxxx Irrevocable Trust
dated July 1, 1979
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx X. Xxxx, Trustee
P.S.L. Associates
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx Xxxxx
-53-
-----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxxx Xxxxxxxxx
M.B.M. Associates
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx XxXxxxx
-----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxx Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx X. Xxxxx
RMC Development Company, LLC Executive
Deferred Compensation Plan HR Trust
By:
--------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx Xxxx, Trustee
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RMC Development Company, LLC Executive
Deferred Compensation Plan AG Trust
By:
----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxx X. Xxxxx Trustee
RMC Development Company, LLC Executive
Deferred Compensation Plan MG Trust
By:
----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxxx X. Xxxxxxxxxxx, Trustee
MSB Management, Inc.
By:
----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx X. Xxxxxx, President
RFW Management
By:
----------------------------------
Xxxxx X. Xxxxxx as attorney-in-fact
for Xxxxxx X. Xxxxxxxx, President
-55-
EXHIBIT A
PARTNERS AND COMMON PARTNERSHIP UNITS
NAME AND ADDRESS OF PARTNER COMMON PARTNERSHIP UNITS
GENERAL PARTNER
Xxxx-Xxxx Realty Corporation 36,664,332
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Limited Partners
Xxxx X. Xxxx 290,561
00 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxx 261,090
00 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx 307,916
0000 Xxxx Xxxxxx, Xxx. #00XX
Xxx Xxxx, XX 00000
Xxxxx X. Xxxx 149,501
000 Xxxxx Xxxx Xxx
Xxxxxxxxx, XX 00000
Xxxx X. Xxxx 83,951
000 Xxxxxx Xxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Xxxxxxxxxxx Xxxx 59,703
00 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
A-1
Xxxxx Xxxx-Xxxxxxx 51,912
0 Xxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
TAR Investments, L.P. 141,383
c/o Cali Realty Corporation
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxx Spring 42,029
00 Xxxxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Xxxxxx Xxxx, Xx. 21,026
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxxx 84,583
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxx Xxxxxxxxx 166,145
0000 Xxxx Xxxxxx, Xxx. #00XX
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxxx, Xx. 37,235
00 Xxxxxxxxx Xxxxx
Xxxxx, XX 00000
Xxxxxxx X. Xxxxxx 42,235
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
A-2
Xxxxxxxxxxx X. Xxxxxx 15,102
c/o Xxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 99,314
00 Xxxxxxxxx Xxxxx
Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 15,102
000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 12,504
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx Xx Xxx Xxx, XX 00000
Xxxx Xxxxxxxx 16,439
00 Xxxxxx Xxxx
Xxxxx, XX 00000
Xxxxxxxx Xxxxxxxx 13,504
c/o Xxxx Xxxxxxxx
00 Xxxxxx Xxxx
Xxxxx, XX 00000
Xxxxx Xxxxxx 66,042
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxx X. XxXxxx 92,215
000 Xxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
A-3
Xxxxxxx XxXxxx, Xx. 53,080
000 Xxxxx Xxxxxx, Xxx. 00X
Xxxxxxxxxx, XX 00000
Xxxxxxx X. XxXxxx, Xx. 19,231
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Xxxxxx Xxxxxxxxxxxxx 20,000
X.X. Xxx 000
Xxxxx Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxxxxx 43,684
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx Xxxxxxxxxx 659
c/o Xxxxx Xxxxxxx
3842 Wonderland Hill
Boulder, Co. 80304
Xxxxx Xxxxxxxxxx 000
x/x Xxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xx. 00000
Xxxx Xxxxxxxxxx 000
x/x Xxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xx. 00000
Xxxx Xxxxxxxxxx 2,964
Ravin, Sarasohn, Cook, Baumgarten,
Xxxxx & Xxxxx
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
A-4
Xxxxxxx Xxxxx 2,964
Ravin, Sarasohn, Cook, Baumgarten,
Xxxxx & Xxxxx
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Xxxxx Xxxxxx 14,783
000 Xxxxx Xxxx.
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx 5,618
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Xxxx Xxxx 2,663
00 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxx Irrevocable Trust 63,522
dated January 28, 1975 f/b/o
Xxxxxx Xxxx
c/o Xxxxxx Xxxxxxxxx
Cali Associates
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxx Irrevocable Trust 63,523
dated January 28, 1975 f/b/o
Xxxx X. Xxxx
c/o Xxxxxx Xxxxxxxxx
Cali Associates
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
A-5
Xxxxxx X. Xxxx Irrevocable Trust 63,523
dated January 28, 1975 f/b/o
Xxxxxx Xxxx
c/o Xxxxxx Xxxxxxxxx
Cali Associates
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxx Irrevocable Trust 44,291
dated July 1, 1979
c/o Xxxxxx Xxxxxxxxx
Cali Associates
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxx X. Xxxx Irrevocable Trust 44,291
dated July 1, 1979
c/o Xxxxxx Xxxxxxxxx
Cali Associates
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
P.S.L. Associates 76,918
x/x Xxxx Xxxxx
Xxxxxxxxx, Xxxxx & Xxxxx
00 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxxxxx X. Xxxxxxxxx 2,964
c\o Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
M.B.M. Associates 93,458
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
A-6
