THIRD AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
OCWEN PARTNERSHIP, L.P.
RECITALS
Ocwen Partnership, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the Commonwealth of Virginia pursuant to a
Certificate of Limited Partnership filed with the State Corporation Commission
of Virginia effective as of March 3, 1997. This Third Amended and Restated
Agreement of Limited Partnership is entered into as of the 5th day of May, 1998
among Ocwen General, Inc., a Virginia corporation (the "General Partner"), and
the Limited Partners set forth on Exhibit A hereto, for the purpose of amending
and restating the Second Amended and Restated Agreement of Limited Partnership,
the Amended and Restated Agreement of Limited Partnership and the Limited
Partnership Agreement (collectively, the "Initial Agreement").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual
covenants between the parties hereto, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree to amend the Initial Agreement to read in its entirety as
follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have
the meanings specified below:
"ACT" means the Virginia Revised Uniform Limited Partnership
Act, as it may be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03
hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares
(other than REIT Shares issued in connection with an exchange pursuant to
Section 8.05 hereof) or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase REIT Shares, as set
forth in Section 4.02(a)(ii).
"ADMINISTRATIVE EXPENSES" means (i) all administrative and
operating costs and expenses incurred by the Partnership, (ii) those
administrative costs and expenses of the General Partner, including any salaries
or other payments to directors, officers or employees of the General Partner,
and any accounting and legal expenses of the General Partner, which expenses,
the Partners have agreed, are expenses of the Partnership and not the General
Partner, and (iii) to the extent not included in clause (ii) above, REIT
Expenses; PROVIDED, HOWEVER, that Administrative Expenses shall not include any
administrative costs and expenses incurred by the Company that are attributable
to Properties or partnership interests in a Subsidiary Partnership that are
owned by the Company directly.
"AFFILIATE" means, (i) any Person that, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (ii) any other Person that owns, beneficially, directly or indirectly,
10% or more of the outstanding capital stock, shares or equity interests of such
Person, or (iii) any officer, director, employee, partner or trustee of such
Person or any Person controlling, controlled by or under common control with
such Person (excluding trustees and persons serving in similar capacities who
are not otherwise an Affiliate of such Person). For the purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled
by" and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities or partnership interests or otherwise.
"AGREED VALUE" means the fair market value of a Partner's
non-cash Capital Contribution as of the date of contribution as agreed to by
such Partner and the General Partner. The names and addresses of the Partners,
number of Partnership Units issued to each Partner, and the Agreed Value of
non-cash Capital Contributions as of the date of contribution is set forth on
EXHIBIT A.
"AGREEMENT" means this Third Amended and Restated Agreement of
Limited Partnership, as amended or restated from time to time.
"AMENDED AND RESTATED ARTICLES OF INCORPORATION" means the
amended and restated articles of incorporation of the Company filed with the
State Corporation Commission of Virginia, as amended or restated from time to
time.
"CAPITAL ACCOUNT" has the meaning provided in Section 4.04
hereof.
"CAPITAL CONTRIBUTION" means the total amount of cash, cash
equivalents, and the Agreed Value of any Property or other asset contributed or
agreed to be contributed, as the context requires, to the Partnership by each
Partner pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
"CASH AMOUNT" means an amount of cash per Partnership Unit
equal to the Value of the REIT Shares Amount on the date of receipt by the
Company of a Notice of Exchange.
"CERTIFICATE" means any instrument or document that is
required under the laws of the Commonwealth of Virginia, or any other
jurisdiction in which the Partnership conducts business, to be signed or sworn
to by the Partners of the Partnership (either by themselves or pursuant to the
power-of-attorney granted to the General Partner in Section 8.02 hereof) and
filed for recording in the appropriate public offices in the Commonwealth of
Virginia or such other jurisdiction to perfect or maintain the Partnership as a
limited partnership, to effect the admission, withdrawal, or substitution of any
Partner of the Partnership, or to protect the limited liability of the Limited
Partners as limited partners under the laws of the Commonwealth of Virginia or
such other jurisdiction.
"CODE" means the Internal Revenue Code of 1986, as amended,
and as hereafter amended from time to time. Reference to any particular
provision of the Code shall mean that provision in the Code at the date hereof
and any successor provision of the Code.
"COMMISSION" means the U.S. Securities and Exchange
Commission.
"COMPANY" means Ocwen Asset Investment Corp., a Virginia
corporation organized as a real estate investment trust.
"CONVERSION FACTOR" means 1.0, PROVIDED THAT, (a) in the event
that the Company (i) declares or pays a dividend on its outstanding REIT Shares
in REIT Shares or makes a distribution to all holders of its outstanding REIT
Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time), and the denominator of
which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date; and (b) in the event that the
Company declares or pays a dividend or other distribution on its outstanding
REIT Shares (other than (A) cash dividends payable in the ordinary course of the
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Company's business or (B) dividends payable in REIT Shares that give rise to an
adjustment in the Conversion Factor under subsection (a) hereof) and the Value
of the REIT Shares on the 20th trading day following the record date ("Record
Date") for such dividend or distribution (the "Post-Distribution Value") is less
than the Value of the REIT Shares on the Business Day immediately preceding such
Record Date (the "Pre-Distribution Value"), then the Conversion Factor in effect
after the Record Date shall be adjusted by multiplying the Conversion Factor in
effect prior to the Record Date by a fraction, the numerator of which is the
Pre-Distribution Value and the denominator of which is the Post-Distribution
Value, PROVIDED, HOWEVER, that no adjustment shall be made if (x) with respect
to any cash dividend or distribution with respect to REIT shares, the
Partnership distributes with respect to each Partnership Unit an amount equal to
the amount of such dividend or distribution multiplied by the Conversion Factor
or (y) with respect to any dividend or distribution of securities or property
other than cash, the Partnership distributes with respect to each Partnership
Unit an amount of securities or other property equal to the amount distributed
with respect to each REIT share multiplied by the Conversion Ratio or a
partnership interest or other security readily convertible into such securities
or other property. Any adjustment to the Conversion Factor shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event; PROVIDED, HOWEVER, that if the Company
receives a Notice of Exchange after the record date, but prior to the effective
date of such dividend, distribution, subdivision or combination, the Conversion
Factor shall be determined as if the Company had received the Notice of Exchange
immediately prior to the record date for such dividend, distribution,
subdivision or combination.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a
petition for relief as to such Person as debtor or bankrupt under the Bankruptcy
Code of 1978 or similar provision of law of any jurisdiction (except if such
petition is contested by such Person and has been dismissed within 90 days);
insolvency or bankruptcy of such Person as finally determined by a court
proceeding; filing by such Person of a petition or application to accomplish the
same or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings relating to such
Person as a debtor under any other reorganization, arrangement, insolvency,
adjustment of debt or liquidation law of any jurisdiction, whether now in
existence or hereinafter in effect, either by such Person or by another,
PROVIDED that if such proceeding is commenced by another, such Person indicates
his approval of such proceeding, consents thereto or acquiesces therein, or such
proceeding is contested by such Person and has not been finally dismissed within
90 days.
"EXCHANGE AMOUNT" means either the Cash Amount or the REIT
Shares Amount, as selected by the General Partner or the Company in its sole and
absolute discretion pursuant to Section 8.05(b) hereof.
"EXCHANGE RIGHT" has the meaning provided in Section 8.05(a)
hereof.
"EXCHANGING PARTNER" has the meaning provided in Section
8.05(a) hereof.
"GENERAL PARTNER" means Ocwen General, Inc., a Virginia
corporation, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.
"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest
held by the General Partner that is a general partnership interest.
"INDEMNITEE" means (i) any Person made a party to a proceeding
by reason of its status as the Company, the General Partner or a director,
officer or employee of the Company, the Partnership or the General Partner, and
(ii) such other Persons (including Affiliates of the Company, General Partner or
the Partnership) as the General Partner may designate from time to time, in its
sole and absolute discretion.
"INDEPENDENT DIRECTOR" means a director of the Company who is
not an officer or employee of the Company, any Affiliate of an officer or
employee or any Affiliate of (i) any lessee of any property of the Company or
any Subsidiary of the Company, (ii) any Subsidiary of the Company, or (iii) any
partnership that is an Affiliate of the Company.
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"LIMITED PARTNER" means any Person named as a Limited Partner
on EXHIBIT A attached hereto, and any Person who becomes a Substitute or
Additional Limited Partner, in such Person's capacity as a Limited Partner in
the Partnership.
"LIMITED PARTNERSHIP INTEREST" means the ownership interest of
a Limited Partner in the Partnership at any particular time, including the right
of such Limited Partner to any and all benefits to which such Limited Partner
may be entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"LOSS" has the meaning provided in Section 5.01(f) hereof.
"NOTICE OF EXCHANGE" means the Notice of Exercise of Exchange
Right substantially in the form attached as EXHIBIT B hereto.
"NASDAQ" means the Nasdaq Stock Market.
"OFFER" has the meaning set forth in Section 7.01(c) hereof.
"OFFERING" means the initial offer and sale by the Company and
the purchase by the Underwriters (as defined in the Prospectus) of REIT Shares
for sale to the public.
"ORIGINAL LIMITED PARTNER" means Ocwen Limited, Inc., a
Virginia corporation.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set
forth in Regulations Section 1.704-2(i). A Partner's share of Partner
Nonrecourse Debt Minimum Gain shall be determined in accordance with Regulations
Section 1.704-2(i)(5).
"PARTNERSHIP INTEREST" means an ownership interest in the
Partnership held by either a Limited Partner or the General Partner and includes
any and all benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in
Regulations Section 1.704-2(d). In accordance with Regulations Section
1.704-2(d), the amount of Partnership Minimum Gain is determined by first
computing, for each Partnership nonrecourse liability, any gain the Partnership
would realize if it disposed of the property subject to that liability for no
consideration other than full satisfaction of the liability, and then
aggregating the separately computed gains. A Partner's share of Partnership
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(g)(1).
"PARTNERSHIP RECORD DATE" means the record date established by
the General Partner for the distribution of cash pursuant to Section 5.02
hereof, which record date shall be the same as the record date established by
the Company for a distribution to its shareholders of some or all of its portion
of such distribution.
"PARTNERSHIP UNIT" means a fractional, undivided share of the
Partnership Interests of all Partners issued hereunder. The allocation of
Partnership Units among the Partners shall be as set forth on EXHIBIT A, as may
be amended from time to time.
"PERCENTAGE INTEREST" means the percentage ownership interest
in the Partnership of each Partner, as determined by dividing the Partnership
Units owned by a Partner by the total number of Partnership Units then
outstanding. The Percentage Interest of each Partner shall be as set forth on
EXHIBIT A, as may be amended from time to time.
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"PERSON" means any individual, partnership, corporation, joint
venture, trust or other entity.
"PROFIT" has the meaning provided in Section 5.01(f) hereof.
"PROPERTY" means any office or industrial property or other
investment in which the Partnership holds an ownership interest.
"PROSPECTUS" means the final prospectus delivered to
purchasers of REIT Shares in the Offering.
"REGULATIONS" means the Federal Income Tax Regulations issued
under the Code, as amended and as hereafter amended from time to time. Reference
to any particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856
through 860 of the Code.
"REIT EXPENSES" means (i) costs and expenses relating to the
formation and continuity of existence and operation of the Company and any
Subsidiaries thereof, including Ocwen General, Inc. (which Subsidiaries shall,
for purposes hereof, be included within the definition of Company), including
taxes, fees and assessments associated therewith, any and all costs, expenses or
fees payable to any director, officer, or employee of the Company, (ii) costs
and expenses relating to any public offering and registration of securities by
the Company and all statements, reports, fees and expenses incidental thereto,
including, without limitation, underwriting discounts and selling commissions
applicable to any such offering of securities, and any costs and expenses
associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (iii) costs and expenses associated
with any repurchase of any securities by the Company, (iv) costs and expenses
associated with the preparation and filing of any periodic or other reports and
communications by the Company under federal, state or local laws or regulations,
including filings with the Commission, (v) costs and expenses associated with
compliance by the Company with laws, rules and regulations promulgated by any
regulatory body, including the Commission and any securities exchange, (vi)
costs and expenses associated with any 401(k) plan, incentive plan, bonus plan
or other plan providing for compensation for the employees of the Company, (vii)
costs and expenses incurred by the Company relating to any issuing or redemption
of Partnership Interests, and (viii) all other operating or administrative costs
of the Company incurred in the ordinary course of its business on behalf of or
in connection with the Partnership.
"REIT SHARE" means a common share of beneficial interest in
the Company (or successor Entity, as the case may be).
"REIT SHARES AMOUNT" means a number of REIT Shares equal to
the product of the number of Partnership Units offered for exchange by an
Exchanging Partner, multiplied by the Conversion Factor as adjusted to and
including the Specified Exchange Date; PROVIDED THAT in the event the Company
issues to all holders of REIT Shares rights, options, warrants or convertible or
exchangeable securities entitling the shareholders to subscribe for or purchase
REIT Shares, or any other securities or property (collectively, the "rights"),
and the rights have not expired at the Specified Exchange Date, then the REIT
Shares Amount shall also include the rights issuable to a holder of the REIT
Shares Amount of REIT Shares on the record date fixed for purposes of
determining the holders of REIT Shares entitled to rights.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERVICE" means the Internal Revenue Service.
"SPECIFIED EXCHANGE DATE" means the first business day of the
month that is at least 60 business days after the receipt by the Company of the
Notice of Exchange.
"SHARE INCENTIVE PLANS" means the Ocwen Asset Investment Corp.
non-qualified stock option plan, as amended from time to time, or any stock
incentive plan adopted in the future by the Company.
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"SUBSIDIARY" means, with respect to any Person, any
corporation or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership of which the
partnership interests therein are owned by the Company or a wholly-owned
subsidiary of the Company.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03 hereof.
"SURVIVING GENERAL PARTNER" has the meaning set forth in
Section 7.01(d) hereof.
"TRANSACTION" has the meaning set forth in Section 7.01(c)
hereof.
"TRANSFER" has the meaning set forth in Section 9.02(a)
hereof.
"VALUE" means, with respect to any security, the average of
the daily market price of such security for the ten consecutive trading days
immediately preceding the date of such valuation. The market price for each such
trading day shall be: (i) if security is listed or admitted to trading on any
securities exchange or NASDAQ, the sale price, regular way, on such day, or if
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, on such day, (ii) if security is not listed or admitted to
trading on any securities exchange or NASDAQ takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the Company, or (iii) if security is not
listed or admitted to trading on any securities exchange or NASDAQ and no such
last reported sale price or closing bid and asked prices are available, the
average of the reported high bid and low asked prices on such day, as reported
by a reliable quotation source designated by the Company, or if there shall be
no bid and asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than ten days prior to
the date in question) for which prices have been so reported; PROVIDED THAT if
there are no bid and asked prices reported during the ten days prior to the date
in question, the value of the security shall be determined by the Company acting
in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate. In the event the security
includes any additional rights, then the value of such rights shall be
determined by the Company acting in good faith on the basis of such quotations
and other information as it considers, in its reasonable judgment, appropriate.
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01. CONTINUATION.
The Partners hereby agree to continue the Partnership pursuant
to the Act and upon the terms and conditions set forth in this Agreement.
2.02. NAME, OFFICE AND REGISTERED AGENT.
The name of the Partnership is Ocwen Partnership, L.P. The
specified office and place of business of the Partnership shall be 0000 Xxxx
Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000. The General Partner
may at any time change the location of such office, provided the General Partner
gives notice to the Partners of any such change. The initial registered agent is
Xxxxxx X. Xxxxxx, III, who is a resident of Virginia and a member of the
Virginia State Bar, and whose business address is Xxxxxxxxxx Xxxxx, 000 Xxxx
Xxxx Xxxxxx in the City of Richmond. The sole duty of the registered agent as
such is to forward to the Partnership any notice that is served on him as
registered agent.
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2.03. PARTNERS.
(a)THE GENERAL PARTNER OF THE PARTNERSHIP IS OCWEN GENERAL,
INC., A VIRGINIA CORPORATION. ITS PRINCIPAL PLACE OF BUSINESS IS THE SAME AS
THAT OF THE PARTNERSHIP. (b)THE LIMITED PARTNERS ARE THOSE PERSONS IDENTIFIED AS
LIMITED PARTNERS ON EXHIBIT A HERETO, AS AMENDED FROM TIME TO TIME.
2.04. TERM AND DISSOLUTION.
(a)THE TERM OF THE PARTNERSHIP SHALL CONTINUE IN FULL FORCE
AND EFFECT UNTIL DECEMBER 31, 2050, EXCEPT THAT THE PARTNERSHIP SHALL BE
DISSOLVED UPON THE FIRST TO OCCUR OF ANY OF THE FOLLOWING EVENTS:
(i) The occurrence of an Event of Bankruptcy as to a
General Partner or the dissolution, death, removal or
withdrawal of a General Partner unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof;
PROVIDED THAT if a General Partner is on the date of such
occurrence a partnership, the dissolution of such General
Partner as a result of the dissolution, death, withdrawal,
removal or Event of Bankruptcy of a partner in such
partnership shall not be an event of dissolution of the
Partnership if the business of such General Partner is
continued by the remaining partner or partners, either alone
or with additional partners, and such General Partner and such
partners comply with any other applicable requirements of this
Agreement;
(ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the
Partnership (PROVIDED THAT if the Partnership receives an
installment obligation as consideration for such sale or other
disposition, the Partnership shall continue, unless sooner
dissolved under the provisions of this Agreement, until such
time as such note or notes are paid in full);
(iii) The exchange of all Limited Partnership
Interests (other than any of such interests held by the
General Partner or Affiliates of the General Partner); or
(iv) The election by the General Partner that the
Partnership should be dissolved.
(b)UPON DISSOLUTION OF THE PARTNERSHIP (UNLESS THE BUSINESS OF
THE PARTNERSHIP IS CONTINUED PURSUANT TO SECTION 7.03(b) HEREOF), THE GENERAL
PARTNER (OR ITS TRUSTEE, RECEIVER, SUCCESSOR OR LEGAL REPRESENTATIVE) SHALL
AMEND OR CANCEL THE CERTIFICATE AND LIQUIDATE THE PARTNERSHIP'S ASSETS AND APPLY
AND DISTRIBUTE THE PROCEEDS THEREOF IN ACCORDANCE WITH SECTION 5.06 HEREOF.
NOTWITHSTANDING THE FOREGOING, THE LIQUIDATING GENERAL PARTNER MAY EITHER (i)
DEFER LIQUIDATION OF, OR WITHHOLD FROM DISTRIBUTION FOR A REASONABLE TIME, ANY
ASSETS OF THE PARTNERSHIP (INCLUDING THOSE NECESSARY TO SATISFY THE
PARTNERSHIP'S DEBTS AND OBLIGATIONS), OR (ii) DISTRIBUTE THE ASSETS TO THE
PARTNERS IN KIND.
2.05. FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP.
The General Partner shall execute, acknowledge, record and
file at the expense of the Partnership, the Certificate and any and all
amendments thereto and all requisite fictitious name statements and notices in
such places and jurisdictions as may be necessary to cause the Partnership to be
treated as a limited partnership under, and otherwise to comply with, the laws
of each state or other jurisdiction in which the Partnership conducts business.
2.06. CERTIFICATES DESCRIBING PARTNERSHIP UNITS.
At the request of a Limited Partner, the General Partner, at
its option, may issue a certificate summarizing the terms of such Limited
Partner's interest in the Partnership, including the number of Partnership Units
owned and the Percentage Interest represented by such Partnership Units as of
the date of such certificate. Any such certificate (i) shall be in form and
substance as approved by the General Partner, (ii) shall not be negotiable and
(iii) shall bear a legend to the following effect:
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This certificate is not negotiable. The Partnership Units
represented by this certificate are governed by and
transferable only in accordance with the provisions of the
Agreement of Limited Partnership of Ocwen Partnership, L.P.,
as amended from time to time.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
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
Company at all times to qualify as a REIT, unless the Company otherwise ceases
to qualify as a REIT, (ii) to enter into any partnership, joint venture or other
similar arrangement 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 Company's right in its sole and absolute discretion to
cease qualifying as a REIT, the Partners acknowledge that the Company's current
status as a REIT and the avoidance of income and excise taxes on the Company
inures to the benefit of all the Partners and not solely to the Company.
Notwithstanding the foregoing, the Limited Partners agree that the Company may
terminate its status as a REIT under the Code at any time to the full extent
permitted under its Amended and Restated Articles of Incorporation. The General
Partner shall also be empowered to do any and all acts and things necessary or
prudent to ensure that the Partnership will not be classified as a "publicly
traded partnership" for purposes of Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01. CAPITAL CONTRIBUTIONS.
The General Partner and the Limited Partners have made capital
contributions to the Partnership in exchange for the Partnership Interests set
forth opposite their names on Exhibit A, as amended from time to time.
4.02. ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS.
Except as provided in this Section 4.02 or in Section 4.03,
the Partners shall have no right or obligation to make any additional Capital
Contributions or loans to the Partnership. The General Partner may contribute
additional capital to the Partnership, from time to time, and receive additional
Partnership Interests in respect thereof, in the manner contemplated in this
Section 4.02.
(a)ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.
(i) GENERAL. The General Partner is hereby
authorized to cause the Partnership to issue such additional
Partnership Interests in the form of Partnership Units for any
Partnership purpose at any time or from time to time, to the
Partners (including the General Partner and the Company) or to
other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in
its sole and absolute discretion, all without the approval of
any Limited Partners. Any additional Partnership Interests
issued thereby may be issued in one or more classes, or one or
more series of any of such classes, with such designations,
preferences and relative, participating, optional or other
special rights, powers and duties, including rights, powers
and duties senior to Limited Partnership Interests, all as
shall be determined by the General Partner in its sole and
absolute discretion and without the approval of any Limited
Partner, subject to Virginia 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
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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, HOWEVER, that no
additional Partnership Interests shall be issued to the
General Partner or the Company unless:
(1) (A) the additional Partnership Interests
are issued in connection with an issuance of REIT
Shares of or other interests in the Company, which
shares or interests have designations, preferences
and other rights, all such that the economic
interests are substantially similar to the
designations, preferences and other rights of the
additional Partnership Interests issued to the
General Partner or the Company by the Partnership in
accordance with this Section 4.02 and (B) the General
Partner or the Company shall make a Capital
Contribution to the Partnership in an amount equal to
the proceeds raised in connection with the issuance
of such shares of stock of or other interests in the
Company;
(2) the additional Partnership Interests are
issued in exchange for property owned by the Company
or the General Partner with a fair market value, as
determined by the General Partner, in good faith,
equal to the value of the Partnership Interests; or
(3) the additional Partnership Interests are
issued to all Partners in proportion to their
respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the best interests of the General Partner and the Partnership.
(ii) UPON ISSUANCE OF ADDITIONAL SECURITIES. The
Company shall not issue any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to
Section 8.05 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to
subscribe for or purchase REIT Shares (collectively,
"Additional Securities") other than to all holders of REIT
Shares, unless (A) the General Partner shall cause the
Partnership to issue to the General Partner and the Company,
as the Company may designate, Partnership Interests or rights,
options, warrants or convertible or exchangeable securities of
the Partnership having designations, preferences and other
rights, all such that the economic interests are substantially
similar to those of the Additional Securities, and (B) the
Company contributes the proceeds from the issuance of such
Additional Securities and from any exercise of rights
contained in such Additional Securities, directly and through
the General Partner, to the Partnership; PROVIDED, HOWEVER,
that the Company is allowed to issue Additional Securities in
connection with an acquisition of a property to be held
directly by the Company, but if and only if, such direct
acquisition and issuance of Additional Securities have been
approved and determined to be in the best interests of the
Company and the Partnership by a majority of the Independent
Directors. Without limiting the foregoing, the Company is
expressly authorized to issue Additional Securities for less
than fair market value, and to cause the Partnership to issue
to the General Partner and the Company corresponding
Partnership Interests, so long as (x) the General Partner
concludes in good faith that such issuance is in the best
interests of the General Partner, the Company and the
Partnership, including without limitation, the issuance of
REIT Shares and corresponding Partnership Units pursuant to an
employee share purchase plan providing for employee purchases
of REIT Shares 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 REIT Shares, either at
the time of issuance or at the time of exercise, and (y) the
Company contributes all proceeds from such issuance, directly
or through the General Partner, to the Partnership. For
example, in the event the Company issues REIT Shares for a
cash purchase price and contributes all of the proceeds of
such issuance, directly and through the General Partner, to
the Partnership as required hereunder, the General Partner and
the Company, as the Company may so designate, shall be issued
a number of additional Partnership Units equal to the product
of (A) the number of such REIT Shares issued by the Company,
9
the proceeds of which were so contributed, multiplied by (B) a
fraction, the numerator of which is 100%, and the denominator
of which is the Conversion Factor in effect on the date of
such contribution.
(b)CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE OF
REIT SHARES. IN CONNECTION WITH ANY AND ALL ISSUANCES OF REIT SHARES, THE
COMPANY AND THE GENERAL PARTNER, AS THE COMPANY DETERMINES, SHALL MAKE CAPITAL
CONTRIBUTIONS TO THE PARTNERSHIP OF THE PROCEEDS THEREFROM, PROVIDED THAT IF THE
PROCEEDS ACTUALLY RECEIVED AND CONTRIBUTED BY THE COMPANY, DIRECTLY OR THROUGH
THE GENERAL PARTNER, ARE LESS THAN THE GROSS PROCEEDS OF SUCH ISSUANCE AS A
RESULT OF ANY UNDERWRITER'S DISCOUNT OR OTHER EXPENSES PAID OR INCURRED IN
CONNECTION WITH SUCH ISSUANCE, THEN THE GENERAL PARTNER AND THE COMPANY SHALL BE
DEEMED TO HAVE MADE CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP IN THE AGGREGATE
AMOUNT OF THE GROSS PROCEEDS OF SUCH ISSUANCE AND THE PARTNERSHIP SHALL BE
DEEMED SIMULTANEOUSLY TO HAVE PAID SUCH OFFERING EXPENSES IN ACCORDANCE WITH
SECTION 6.05 HEREOF AND IN CONNECTION WITH THE REQUIRED ISSUANCE OF ADDITIONAL
PARTNERSHIP UNITS TO THE GENERAL PARTNER AND THE COMPANY FOR SUCH CAPITAL
CONTRIBUTIONS PURSUANT TO SECTION 4.02(a) HEREOF.
(c)IN THE EVENT THE COMPANY PURCHASES ANY REIT SHARES OR OTHER
SHARES OF ANY CLASS OF THE COMPANY'S CAPITAL STOCK, THEN THE GENERAL PARTNER
SHALL CAUSE THE PARTNERSHIP TO PURCHASE A NUMBER OF PARTNERSHIP UNITS HELD,
DIRECTLY OR INDIRECTLY, BY THE COMPANY, AS THE COMPANY MAY DESIGNATE, EQUAL TO
THE QUOTIENT OF THE NUMBER OF SUCH REIT SHARES OR SUCH SHARES OF THE COMPANY'S
CAPITAL STOCK DIVIDED BY THE CONVERSION FACTOR AND ON THE SAME TERMS THAT THE
COMPANY EXCHANGED SUCH REIT SHARES OR SUCH SHARES OF THE COMPANY'S CAPITAL
STOCK. MOREOVER, IF THE COMPANY MAKES A CASH TENDER OFFER OR OTHER OFFER TO
ACQUIRE REIT SHARES OR OTHER SHARES OF ANY CLASS OF THE COMPANY'S CAPITAL STOCK,
THEN THE GENERAL PARTNER SHALL CAUSE THE PARTNERSHIP TO MAKE A CORRESPONDING
OFFER TO THE COMPANY, OR THE DIRECT OR INDIRECT SUBSIDIARIES THROUGH WHICH THE
COMPANY HOLDS PARTNERSHIP UNITS, AS THE COMPANY MAY DESIGNATE, TO ACQUIRE AN
EQUAL NUMBER OF PARTNERSHIP UNITS HELD, DIRECTLY OR INDIRECTLY, BY THE COMPANY.
IN THE EVENT ANY REIT SHARES OR OTHER SHARES OF ANY CLASS OF THE COMPANY'S
CAPITAL STOCK ARE ACQUIRED BY THE COMPANY PURSUANT TO SUCH TENDER OR OTHER
OFFER, THE PARTNERSHIP SHALL PURCHASE AN EQUIVALENT NUMBER OF PARTNERSHIP UNITS
HELD, DIRECTLY OR INDIRECTLY, BY THE COMPANY, AS THE COMPANY MAY DESIGNATE, FOR
AN EQUIVALENT PURCHASE PRICE BASED ON THE APPLICATION OF THE CONVERSION FACTOR.
LASTLY, IF THE COMPANY SHALL REPURCHASE ANY REIT SHARES OR ANY SHARES OF ANY
CLASS OF THE COMPANY'S CAPITAL STOCK PURSUANT TO THIS SECTION, ALL COSTS
INCURRED IN CONNECTION WITH SUCH REPURCHASE SHALL BE REIMBURSED TO THE GENERAL
PARTNER BY THE PARTNERSHIP PURSUANT TO SECTION 6.05 HEREOF.
4.03. ADDITIONAL FUNDING.
If the General Partner determines that it is in the best
interests of the Partnership to provide for additional Partnership funds
("Additional Funds") for any Partnership purpose, the General Partner may (i)
cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner or the Company provide such Additional Funds
to the Partnership through loans or otherwise.
4.04. CAPITAL ACCOUNTS.
A separate capital account (a "Capital Account") shall be
established and maintained for each Partner in accordance with Regulations
Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an
additional Partnership Interest in exchange for more than a DE MINIMIS Capital
Contribution, (ii) the Partnership distributes to a Partner more than a DE
MINIMIS amount of Partnership property as consideration for a Partnership
Interest, or (iii) the Partnership is liquidated within the meaning of
Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the General
Partner, the Capital Accounts of the Partners shall be adjusted in accordance
with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to reflect the manner in which the
unrealized gain or loss inherent in such property (that has not been reflected
in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.01 if there were a taxable disposition of such property
for its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) on the
date of the revaluation.
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4.05. PERCENTAGE INTERESTS.
If the number of outstanding Partnership Units increases or
decreases during a taxable year, each Partner's Percentage Interest shall be
adjusted by the General Partner effective as of the effective date of each such
increase or decrease to a percentage equal to the number of Partnership Units
held by such Partner divided by the aggregate number of Partnership Units
outstanding after giving effect to such increase or decrease. If the Partners'
Percentage Interests are adjusted pursuant to this Section 4.05, the Profits and
Losses for the taxable year in which the adjustment occurs shall be allocated
between the part of the year ending on the day when the Partnership's property
is revalued by the General Partner and the part of the year beginning on the
following day either (i) as if the taxable year had ended on the date of the
adjustment or (ii) based on the number of days in each part. The General
Partner, in its sole and absolute discretion, shall determine which method shall
be used to allocate Profits and Losses for the taxable year in which the
adjustment occurs. The allocation of Profits and Losses for the earlier part of
the year shall be based on the Percentage Interests before adjustment, and the
allocation of Profits and Losses for the later part shall be based on the
adjusted Percentage Interests.
4.06. NO INTEREST ON CONTRIBUTIONS.
No Partner shall be entitled to interest on its Capital
Contribution.
4.07. RETURN OF CAPITAL CONTRIBUTIONS.
No Partner shall be entitled to withdraw any part of its
Capital Contribution or its Capital Account or to receive any distribution from
the Partnership, except as specifically provided in this Agreement. Except as
otherwise provided herein, there shall be no obligation to return to any Partner
or withdrawn Partner any part of such Partner's Capital Contribution for so long
as the Partnership continues in existence.
4.08. 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 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 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. In addition, it is the
intent of the parties hereto that no distribution to any Limited Partner shall
be deemed a return of money or other property in violation of the Act. However,
if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Limited Partner is obligated to return such
money or property, such obligation shall be the obligation of such Limited
Partner and not of the General Partner. Without limiting the generality of the
foregoing, a deficit Capital Account of a Partner shall not be deemed to be a
liability of such Partner nor an asset or property of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01. ALLOCATION OF PROFIT AND LOSS.
(a) GENERAL. PROFIT AND LOSS OF THE PARTNERSHIP FOR EACH
FISCAL YEAR OF THE PARTNERSHIP SHALL BE ALLOCATED AMONG THE PARTNERS IN
ACCORDANCE WITH THEIR RESPECTIVE PERCENTAGE INTERESTS.
(b) MINIMUM GAIN CHARGEBACK. NOTWITHSTANDING ANY PROVISION TO
THE CONTRARY, (i) ANY EXPENSE OF THE PARTNERSHIP THAT IS A "NONRECOURSE
DEDUCTION" WITHIN THE MEANING OF REGULATIONS SECTION 1.704-2(b)(1) SHALL BE
ALLOCATED IN ACCORDANCE WITH THE PARTNERS' RESPECTIVE PERCENTAGE INTERESTS, (ii)
ANY EXPENSE OF THE PARTNERSHIP THAT IS A "PARTNER NONRECOURSE DEDUCTION" WITHIN
THE MEANING OF REGULATIONS SECTION 1.704-2(i)(2) SHALL BE ALLOCATED TO THE
PARTNER THAT BEARS THE "ECONOMIC RISK OF LOSS" OF SUCH DEDUCTION IN ACCORDANCE
WITH REGULATIONS SECTION 1.704-2(i)(i), (iii) IF THERE IS A NET DECREASE IN
PARTNERSHIP MINIMUM GAIN WITHIN THE MEANING OF REGULATIONS SECTION 1.704-2(f)(1)
FOR ANY PARTNERSHIP TAXABLE YEAR, THEN, SUBJECT TO THE EXCEPTIONS SET FORTH IN
REGULATIONS SECTION 1.704-2(f)(2),(3), (4) AND (5), ITEMS OF GAIN AND INCOME
SHALL BE ALLOCATED AMONG THE PARTNERS IN ACCORDANCE WITH REGULATIONS SECTION
1.704-2(f) AND THE ORDERING RULES CONTAINED IN REGULATIONS SECTION 1.704-2(j),
AND (iv) IF THERE IS A NET DECREASE IN PARTNER NONRECOURSE DEBT MINIMUM GAIN
WITHIN THE MEANING OF REGULATIONS SECTION 1.704-2(i)(4) FOR ANY PARTNERSHIP
TAXABLE YEAR, THEN, SUBJECT TO THE EXCEPTIONS SET FORTH IN REGULATIONS SECTION
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1.704(2)(g), ITEMS OF GAIN AND INCOME SHALL BE ALLOCATED AMONG THE PARTNERS IN
ACCORDANCE WITH REGULATIONS SECTION 1.704-2(i)(4) AND THE ORDERING RULES
CONTAINED IN REGULATIONS SECTION 1.704-2(j). A PARTNER'S "INTEREST IN
PARTNERSHIP PROFITS" FOR PURPOSES OF DETERMINING ITS SHARE OF THE NONRECOURSE
LIABILITIES OF THE PARTNERSHIP WITHIN THE MEANING OF REGULATIONS SECTION
1.752-3(a)(3) SHALL BE SUCH PARTNER'S PERCENTAGE INTEREST.
(c) QUALIFIED INCOME OFFSET. IF A PARTNER RECEIVES IN ANY
TAXABLE YEAR AN ADJUSTMENT, ALLOCATION, OR DISTRIBUTION DESCRIBED IN
SUBPARAGRAPHS (4), (5), OR (6) OF REGULATIONS SECTION 1.704-1(b)(2)(ii)(d) THAT
CAUSES OR INCREASES A DEFICIT BALANCE IN SUCH PARTNER'S CAPITAL ACCOUNT THAT
EXCEEDS THE SUM OF SUCH PARTNER'S SHARES OF PARTNERSHIP MINIMUM GAIN AND PARTNER
NONRECOURSE DEBT MINIMUM GAIN, AS DETERMINED IN ACCORDANCE WITH REGULATIONS
SECTIONS 1.704-2(g) AND 1.704-2(i), SUCH PARTNER SHALL BE ALLOCATED SPECIALLY
FOR SUCH TAXABLE YEAR (AND, IF NECESSARY, LATER TAXABLE YEARS) ITEMS OF INCOME
AND GAIN IN AN AMOUNT AND MANNER SUFFICIENT TO ELIMINATE SUCH DEFICIT CAPITAL
ACCOUNT BALANCE AS QUICKLY AS POSSIBLE AS PROVIDED IN REGULATIONS SECTION
1.704-1(b)(2)(ii)(d). AFTER THE OCCURRENCE OF AN ALLOCATION OF INCOME OR GAIN TO
A PARTNER IN ACCORDANCE WITH THIS SECTION 5.01(c), TO THE EXTENT PERMITTED BY
REGULATIONS SECTION 1.704-1(b), ITEMS OF EXPENSE OR LOSS SHALL BE ALLOCATED TO
SUCH PARTNER IN AN AMOUNT NECESSARY TO OFFSET THE INCOME OR GAIN PREVIOUSLY
ALLOCATED TO SUCH PARTNER UNDER THIS SECTION 5.01(c).
(d) CAPITAL ACCOUNT DEFICITS. LOSS SHALL NOT BE ALLOCATED TO A
LIMITED PARTNER TO THE EXTENT THAT SUCH ALLOCATION WOULD CAUSE A DEFICIT IN SUCH
PARTNER'S CAPITAL ACCOUNT (AFTER REDUCTION TO REFLECT THE ITEMS DESCRIBED IN
REGULATIONS SECTION 1.704-1(b)(2)(ii)(d)(4), (5) AND (6)) TO EXCEED THE SUM OF
SUCH PARTNER'S SHARES OF PARTNERSHIP MINIMUM GAIN AND PARTNER NONRECOURSE DEBT
MINIMUM GAIN. ANY LOSS IN EXCESS OF THAT LIMITATION SHALL BE ALLOCATED TO THE
GENERAL PARTNER. AFTER THE OCCURRENCE OF AN ALLOCATION OF LOSS TO THE GENERAL
PARTNER IN ACCORDANCE WITH THIS SECTION 5.01(d), TO THE EXTENT PERMITTED BY
REGULATIONS SECTION 1.704-1(b), PROFIT SHALL BE ALLOCATED TO SUCH PARTNER IN AN
AMOUNT NECESSARY TO OFFSET THE LOSS PREVIOUSLY ALLOCATED TO EACH PARTNER UNDER
THIS SECTION 5.01(d).
(e) ALLOCATIONS BETWEEN TRANSFEROR AND TRANSFEREE. IF A
PARTNER TRANSFERS ANY PART OR ALL OF ITS PARTNERSHIP INTEREST, THE DISTRIBUTIVE
SHARES OF THE VARIOUS ITEMS OF PROFIT AND LOSS ALLOCABLE AMONG THE PARTNERS
DURING SUCH FISCAL YEAR OF THE PARTNERSHIP SHALL BE ALLOCATED BETWEEN THE
TRANSFEROR AND THE TRANSFEREE PARTNER EITHER (i) AS IF THE PARTNERSHIP'S FISCAL
YEAR HAD ENDED ON THE DATE OF THE TRANSFER, OR (ii) BASED ON THE NUMBER OF DAYS
OF SUCH FISCAL YEAR THAT EACH WAS A PARTNER WITHOUT REGARD TO THE RESULTS OF
PARTNERSHIP ACTIVITIES IN THE RESPECTIVE PORTIONS OF SUCH FISCAL YEAR IN WHICH
THE TRANSFEROR AND THE TRANSFEREE WERE PARTNERS. THE GENERAL PARTNER, IN ITS
SOLE AND ABSOLUTE DISCRETION, SHALL DETERMINE WHICH METHOD SHALL BE USED TO
ALLOCATE THE DISTRIBUTIVE SHARES OF THE VARIOUS ITEMS OF PROFIT AND LOSS BETWEEN
THE TRANSFEROR AND THE TRANSFEREE PARTNER.
(f) DEFINITION OF PROFIT AND LOSS. "PROFIT" AND "LOSS" AND ANY
ITEMS OF INCOME, GAIN, EXPENSE, OR LOSS REFERRED TO IN THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH FEDERAL INCOME TAX ACCOUNTING PRINCIPLES, AS
MODIFIED BY REGULATIONS SECTION 1.704-1(b)(2)(iv), EXCEPT THAT PROFIT AND LOSS
SHALL NOT INCLUDE ITEMS OF INCOME, GAIN AND EXPENSE THAT ARE SPECIALLY ALLOCATED
PURSUANT TO SECTIONS 5.01(b), 5.01(c), OR 5.01(d). ALL ALLOCATIONS OF INCOME,
PROFIT, GAIN, LOSS, AND EXPENSE (AND ALL ITEMS CONTAINED THEREIN) FOR FEDERAL
INCOME TAX PURPOSES SHALL BE IDENTICAL TO ALL ALLOCATIONS OF SUCH ITEMS SET
FORTH IN THIS SECTION 5.01, EXCEPT AS OTHERWISE REQUIRED BY SECTION 704(c) OF
THE CODE AND REGULATIONS SECTION 1.704-1(b)(4). THE GENERAL PARTNER SHALL HAVE
THE AUTHORITY TO ELECT THE METHOD TO BE USED BY THE PARTNERSHIP FOR ALLOCATING
ITEMS OF INCOME, GAIN, AND EXPENSE AS REQUIRED BY SECTION 704(c) OF THE CODE
INCLUDING A METHOD THAT MAY RESULT IN A PARTNER RECEIVING A DISPROPORTIONATELY
LARGER SHARE OF THE PARTNERSHIP TAX DEPRECIATION DEDUCTIONS, AND SUCH ELECTION
SHALL BE BINDING ON ALL PARTNERS.
5.02. DISTRIBUTION OF CASH.
(a)THE PARTNERSHIP SHALL DISTRIBUTE CASH ON A QUARTERLY (OR,
AT THE ELECTION OF THE GENERAL PARTNER, MORE FREQUENT) BASIS, IN AN AMOUNT
DETERMINED BY THE GENERAL PARTNER IN ITS SOLE AND ABSOLUTE DISCRETION, TO THE
12
PARTNERS WHO ARE PARTNERS ON THE PARTNERSHIP RECORD DATE WITH RESPECT TO SUCH
QUARTER (OR OTHER DISTRIBUTION PERIOD) IN ACCORDANCE WITH THEIR RESPECTIVE
PERCENTAGE INTERESTS ON THE PARTNERSHIP RECORD DATE; PROVIDED, HOWEVER, THAT IF
A NEW OR EXISTING PARTNER ACQUIRES AN ADDITIONAL PARTNERSHIP INTEREST IN
EXCHANGE FOR A CAPITAL CONTRIBUTION ON ANY DATE OTHER THAN A PARTNERSHIP RECORD
DATE, THE CASH DISTRIBUTION ATTRIBUTABLE TO SUCH ADDITIONAL PARTNERSHIP INTEREST
RELATING TO THE PARTNERSHIP RECORD DATE NEXT FOLLOWING THE ISSUANCE OF SUCH
ADDITIONAL PARTNERSHIP INTEREST SHALL BE REDUCED IN THE PROPORTION TO (i) THE
NUMBER OF DAYS THAT SUCH ADDITIONAL PARTNERSHIP INTEREST IS HELD BY SUCH PARTNER
BEARS TO (ii) THE NUMBER OF DAYS BETWEEN SUCH PARTNERSHIP RECORD DATE AND THE
IMMEDIATELY PRECEDING PARTNERSHIP RECORD DATE.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE
GENERAL PARTNER IS AUTHORIZED TO TAKE ANY ACTION THAT IT DETERMINES TO BE
NECESSARY OR APPROPRIATE TO CAUSE THE PARTNERSHIP TO COMPLY WITH ANY WITHHOLDING
REQUIREMENTS ESTABLISHED UNDER THE CODE OR ANY OTHER FEDERAL, STATE OR LOCAL LAW
INCLUDING, WITHOUT LIMITATION, PURSUANT TO SECTIONS 1441, 1442, 1445 AND 1446 OF
THE CODE. TO THE EXTENT THAT THE PARTNERSHIP IS REQUIRED TO WITHHOLD AND PAY
OVER TO ANY TAXING AUTHORITY ANY AMOUNT RESULTING FROM THE ALLOCATION OR
DISTRIBUTION OF INCOME TO THE PARTNER OR ASSIGNEE (INCLUDING BY REASON OF
SECTION 1446 OF THE CODE), EITHER (i) IF THE ACTUAL AMOUNT TO BE DISTRIBUTED TO
THE PARTNER EQUALS OR EXCEEDS THE AMOUNT REQUIRED TO BE WITHHELD BY THE
PARTNERSHIP, THE AMOUNT WITHHELD SHALL BE TREATED AS A DISTRIBUTION OF CASH IN
THE AMOUNT OF SUCH WITHHOLDING TO SUCH PARTNER, OR (ii) IF THE ACTUAL AMOUNT TO
BE DISTRIBUTED TO THE PARTNER IS LESS THAN THE AMOUNT REQUIRED TO BE WITHHELD BY
THE PARTNERSHIP, THE AMOUNT REQUIRED TO BE WITHHELD SHALL BE TREATED AS A LOAN
(A "PARTNERSHIP LOAN") FROM THE PARTNERSHIP TO THE PARTNER ON THE DAY THE
PARTNERSHIP PAYS OVER SUCH AMOUNT TO A TAXING AUTHORITY. A PARTNERSHIP LOAN
SHALL BE REPAID THROUGH WITHHOLDING BY THE PARTNERSHIP WITH RESPECT TO
SUBSEQUENT DISTRIBUTIONS TO THE APPLICABLE PARTNER OR ASSIGNEE. IN THE EVENT
THAT A LIMITED PARTNER (A "DEFAULTING LIMITED PARTNER") FAILS TO PAY ANY AMOUNT
OWED TO THE PARTNERSHIP WITH RESPECT TO THE PARTNERSHIP LOAN WITHIN 15 DAYS
AFTER DEMAND FOR PAYMENT THEREOF IS MADE BY THE PARTNERSHIP ON THE LIMITED
PARTNER, THE GENERAL PARTNER, IN ITS SOLE AND ABSOLUTE DISCRETION, MAY ELECT TO
MAKE THE PAYMENT TO THE PARTNERSHIP ON BEHALF OF SUCH DEFAULTING LIMITED
PARTNER. IN SUCH EVENT, ON THE DATE OF PAYMENT, THE GENERAL PARTNER SHALL BE
DEEMED TO HAVE EXTENDED A LOAN (A "GENERAL PARTNER LOAN") TO THE DEFAULTING
LIMITED PARTNER IN THE AMOUNT OF THE PAYMENT MADE BY THE GENERAL PARTNER AND
SHALL SUCCEED TO ALL RIGHTS AND REMEDIES OF THE PARTNERSHIP AGAINST THE
DEFAULTING LIMITED PARTNER AS TO THAT AMOUNT. WITHOUT LIMITATION, THE GENERAL
PARTNER SHALL HAVE THE RIGHT TO RECEIVE ANY DISTRIBUTIONS THAT OTHERWISE WOULD
BE MADE BY THE PARTNERSHIP TO THE DEFAULTING LIMITED PARTNER UNTIL SUCH TIME AS
THE GENERAL PARTNER LOAN HAS BEEN PAID IN FULL, AND ANY SUCH DISTRIBUTIONS SO
RECEIVED BY THE GENERAL PARTNER SHALL BE TREATED AS HAVING BEEN RECEIVED BY THE
DEFAULTING LIMITED PARTNER AND IMMEDIATELY PAID TO THE GENERAL PARTNER.
Any amounts treated as a Partnership Loan or a General Partner
Loan pursuant to this Section 5.02(b) shall bear interest at the lesser of (i)
the base rate on corporate loans at large United States money center commercial
banks, as published from time to time in THE WALL STREET JOURNAL, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.
(c) IN NO EVENT MAY A PARTNER RECEIVE A DISTRIBUTION OF CASH
WITH RESPECT TO A PARTNERSHIP UNIT IF SUCH PARTNER IS ENTITLED TO RECEIVE A CASH
DIVIDEND AS THE HOLDER OF RECORD OF A REIT SHARE FOR WHICH ALL OR PART OF SUCH
PARTNERSHIP UNIT HAS BEEN OR WILL BE EXCHANGED.
5.03. REIT DISTRIBUTION REQUIREMENTS.
The General Partner shall use its reasonable efforts to cause
the Partnership to distribute amounts sufficient to enable the Company to pay
shareholder dividends that will allow the Company to (i) meet its distribution
requirement for qualification as a REIT as set forth in Section 857 of the Code
and (ii) avoid any federal income or excise tax liability imposed by the Code.
5.04. DISTRIBUTIONS IN KIND.
(a)SUBJECT TO SUBSECTION (b) HEREOF, NO PARTNER SHALL BE
ENTITLED TO DEMAND PROPERTY OTHER THAN CASH IN CONNECTION WITH ANY DISTRIBUTIONS
BY THE PARTNERSHIP.
(b)IF THE COMPANY DECIDES TO SECURITIZE MORTGAGE LOANS AND/OR
LEASES OF REAL ESTATE THROUGH THE ISSUANCE OF COLLATERALIZED MORTGAGE
OBLIGATIONS, EACH OF THE GENERAL PARTNER AND THE ORIGINAL LIMITED PARTNER HAS
THE
13
RIGHT TO REDEEM A PORTION OF ITS PARTNERSHIP INTEREST IN EXCHANGE FOR THE
MORTGAGE LOANS AND/OR LEASES TO BE SECURITIZED. THE PORTION OF A PARTNERSHIP
INTEREST REDEEMED PURSUANT TO THIS SECTION WILL BE DETERMINED BASED ON THE FAIR
MARKET VALUE OF THE MORTGAGE LOANS AND/OR LEASES DISTRIBUTED TO THE GENERAL
PARTNER OR ORIGINAL LIMITED PARTNER. SUCH FAIR MARKET VALUE WILL BE DETERMINED
BY THE GENERAL PARTNER, BUT WILL BE SUBJECT TO THE REVIEW OF THE INDEPENDENT
DIRECTORS.
5.05. LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS.
Notwithstanding any of the provisions of this Article V, no
Partner shall have the right to receive and the General Partner shall not have
the right to make, a distribution that includes a return of all or part of a
Partner's Capital Contributions, unless after giving effect to the return of a
Capital Contribution, the sum of all Partnership liabilities, other than the
liabilities to a Partner for the return of his Capital Contribution, does not
exceed the fair market value of the Partnership's assets.
5.06. DISTRIBUTIONS UPON LIQUIDATION.
Upon liquidation of the Partnership, after payment of, or
adequate provision for, debts and obligations of the Partnership, including any
Partner loans, any remaining assets of the Partnership shall be distributed to
all Partners with positive Capital Accounts in accordance with their respective
positive Capital Account balances. For purposes of the preceding sentence, the
Capital Account of each Partner shall be determined after all adjustments made
in accordance with Sections 5.01 and 5.02 resulting from Partnership operations
and from all sales and dispositions of all or any part of the Partnership's
assets. To the extent deemed advisable by the General Partner, appropriate
arrangements (including the use of a liquidating trust) may be made to assure
that adequate funds are available to pay any contingent debts or obligations.
5.07. SUBSTANTIAL ECONOMIC EFFECT.
It is the intent of the Partners that the allocations of
Profit and Loss under the Agreement have substantial economic effect (or be
consistent with the Partners' interests in the Partnership in the case of the
allocation of losses attributable to nonrecourse debt) within the meaning of
Section 704(b) of the Code as interpreted by the Regulations promulgated
pursuant thereto. Article V and other relevant provisions of this Agreement
shall be interpreted in a manner consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01. MANAGEMENT OF THE PARTNERSHIP.
(a)EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
THE GENERAL PARTNER SHALL HAVE FULL, COMPLETE AND EXCLUSIVE DISCRETION TO MANAGE
AND CONTROL THE BUSINESS OF THE PARTNERSHIP FOR THE PURPOSES HEREIN STATED, AND
SHALL MAKE ALL DECISIONS AFFECTING THE BUSINESS AND ASSETS OF THE PARTNERSHIP.
SUBJECT TO THE RESTRICTIONS SPECIFICALLY CONTAINED IN THIS AGREEMENT, THE POWERS
OF THE GENERAL PARTNER SHALL INCLUDE, WITHOUT LIMITATION, THE AUTHORITY TO TAKE
THE FOLLOWING ACTIONS ON BEHALF OF THE PARTNERSHIP:
(i) to acquire, purchase, own, operate, lease and
dispose of any real property and any other property or assets
including, but not limited to notes and mortgages, that the
General Partner determines are necessary or appropriate or in
the best interests of the business of the Partnership;
(ii) to construct buildings and make other
improvements on the properties owned or leased by the
Partnership;
(iii) to authorize, issue, sell, redeem or otherwise
purchase any Partnership Interests or any securities
(including secured and unsecured debt obligations of the
Partnership, debt
14
obligations of the Partnership convertible into any class or
series of Partnership Interests, or options, rights, warrants
or appreciation rights relating to any Partnership Interests)
of the Partnership;
(iv) to borrow or lend money for the Partnership,
issue or receive evidences of indebtedness in connection
therewith, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of,
any such indebtedness, and secure such indebtedness by
mortgage, deed of trust, pledge or other lien on the
Partnership's assets;
(v) to pay, either directly or by reimbursement,
for all operating costs and general administrative expenses of
the Partnership to third parties or to the General Partner or
its Affiliates as set forth in this Agreement,
(vi) to guarantee or become a comaker of
indebtedness of the Company or any Subsidiary thereof,
refinance, increase the amount of, modify, amend or change the
terms of, or extend the time for the payment of, any such
guarantee or indebtedness, and secure such guarantee or
indebtedness by mortgage, deed of trust, pledge or other lien
on the Partnership's assets;
(vii) to use assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent
with this Agreement, including, without limitation, payment,
either directly or by reimbursement, of all operating costs
and general administrative expenses of the Company, the
General Partner, the Partnership or any Subsidiary of either,
to third parties or to the General Partner as set forth in
this Agreement;
(viii) to lease all or any portion of any of the
Partnership's assets, whether or not the terms of such leases
extend beyond the termination date of the Partnership and
whether or not any portion of the Partnership's assets so
leased are to be occupied by the lessee, or, in turn,
subleased in whole or in part to others, for such
consideration and on such terms as the General Partner may
determine;
(ix) to prosecute, defend, arbitrate, or compromise
any and all claims or liabilities in favor of or against the
Partnership, on such terms and in such manner as the General
Partner may reasonably determine, and similarly to prosecute,
settle or defend litigation with respect to the Partners, the
Partnership, or the Partnership's assets; provided, HOWEVER,
that the General Partner may not, without the consent of all
of the Partners, confess a judgment against the Partnership
that is in excess of $20,000 or is not covered by insurance;
(x) to file applications, communicate, and
otherwise deal with any and all governmental agencies having
jurisdiction over, or in any way affecting, the Partnership's
assets or any other aspect of the Partnership business;
(xi) to make or revoke any election permitted or
required of the Partnership by any taxing authority;
(xii) to maintain such insurance coverage for public
liability, fire and casualty, and any and all other insurance
for the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or
beneficial to the Partnership, in such amounts and such types,
as it shall determine from time to time;
(xiii) to determine whether or not to apply any
insurance proceeds for any property to the restoration of such
property or to distribute the same;
(xiv) to establish one or more divisions of the
Partnership, to hire and dismiss employees of the Partnership
or any division of the Partnership, and to retain legal
counsel,
15
accountants, consultants, real estate brokers, and such other
persons, as the General Partner may deem necessary or
appropriate in connection with the Partnership business and to
pay therefor such reasonable remuneration as the General
Partner may deem reasonable and proper;
(xv) to retain other services of any kind or nature
in connection with the Partnership business, and to pay
therefor such remuneration as the General Partner may deem
reasonable and proper;
(xvi) to negotiate and conclude agreements on behalf
of the Partnership with respect to any of the rights, powers
and authority conferred upon the General Partner;
(xvii) to maintain accurate accounting records and to
file promptly all federal, state and local income tax returns
on behalf of the Partnership;
(xviii)to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(xix) to form or acquire an interest in, and
contribute property to, any further limited or general
partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property
to, its Subsidiaries and any other Person in which it has an
equity interest from time to time);
(xx) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities, or any
other valid Partnership purpose; and
(xxi) to merge, consolidate or combine the
Partnership with or into another person (to the extent
permitted by applicable law);
(xxii) to do any and all acts and things necessary or
prudent to ensure that the Partnership will not be classified
as a "publicly traded partnership" for purposes of Section
7704 of the Code; and
(xxiii)to take such other action, execute,
acknowledge, swear to or deliver such other documents and
instruments, and perform any and all other acts that the
General Partner deems necessary or appropriate for the
formation, continuation and conduct of the business and
affairs of the Partnership (including, without limitation, all
actions consistent with allowing the Company at all times to
qualify as a REIT unless the Company voluntarily terminates
its REIT status) and to possess and enjoy all of the rights
and powers of a general partner as provided by the Act.
(b)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.
6.02. DELEGATION OF AUTHORITY.
The General Partner may delegate any or all of its powers,
rights and obligations hereunder, and may appoint, employ, contract or otherwise
deal with any Person for the transaction of the business of the Partnership,
which Person may, under supervision of the General Partner, perform any acts or
services for the Partnership as the General Partner may approve.
16
6.03. INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
(a)THE PARTNERSHIP SHALL INDEMNIFY AN INDEMNITEE FROM AND
AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES, JOINT OR SEVERAL,
EXPENSES (INCLUDING REASONABLE LEGAL FEES AND EXPENSES), JUDGMENTS, FINES,
SETTLEMENTS, AND OTHER AMOUNTS ARISING FROM ANY AND ALL CLAIMS, DEMANDS,
ACTIONS, SUITS OR PROCEEDINGS, CIVIL, CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE,
THAT RELATE TO THE OPERATIONS OF THE PARTNERSHIP AS SET FORTH IN THIS AGREEMENT
IN WHICH ANY INDEMNITEE MAY BE INVOLVED, OR IS THREATENED TO BE INVOLVED, AS A
PARTY OR OTHERWISE, UNLESS IT IS ESTABLISHED THAT: (i) THE ACT OR OMISSION OF
THE INDEMNITEE WAS MATERIAL TO THE MATTER GIVING RISE TO THE PROCEEDING AND
EITHER WAS COMMITTED IN BAD FAITH OR WAS THE RESULT OF ACTIVE AND DELIBERATE
DISHONESTY; (ii) THE INDEMNITEE ACTUALLY RECEIVED AN IMPROPER PERSONAL BENEFIT
IN MONEY, PROPERTY OR SERVICES; OR (iii) IN THE CASE OF ANY CRIMINAL PROCEEDING,
THE INDEMNITEE HAD REASONABLE CAUSE TO BELIEVE THAT THE ACT OR OMISSION WAS
UNLAWFUL. THE TERMINATION OF ANY PROCEEDING BY JUDGMENT, ORDER OR SETTLEMENT
DOES NOT CREATE A PRESUMPTION THAT THE INDEMNITEE DID NOT MEET THE REQUISITE
STANDARD OF CONDUCT SET FORTH IN THIS SECTION 6.03(a). THE TERMINATION OF ANY
PROCEEDING BY CONVICTION OR UPON A PLEA OF NOLO CONTENDERE OR ITS EQUIVALENT, OR
AN ENTRY OF AN ORDER OF PROBATION PRIOR TO JUDGMENT, CREATES A REBUTTABLE
PRESUMPTION THAT THE INDEMNITEE ACTED IN A MANNER CONTRARY TO THAT SPECIFIED IN
THIS SECTION 6.03(a). ANY INDEMNIFICATION PURSUANT TO THIS SECTION 6.03 SHALL BE
MADE ONLY OUT OF THE ASSETS OF THE PARTNERSHIP.
(b)THE PARTNERSHIP SHALL REIMBURSE AN INDEMNITEE FOR
REASONABLE EXPENSES INCURRED BY AN INDEMNITEE WHO IS A PARTY TO A PROCEEDING IN
ADVANCE OF THE FINAL DISPOSITION OF THE PROCEEDING UPON RECEIPT BY THE
PARTNERSHIP OF (i) A WRITTEN AFFIRMATION BY THE INDEMNITEE OF THE INDEMNITEE'S
GOOD FAITH BELIEF THAT THE STANDARD OF CONDUCT NECESSARY FOR INDEMNIFICATION BY
THE PARTNERSHIP AS AUTHORIZED IN THIS SECTION 6.03 HAS BEEN MET, AND (ii) A
WRITTEN UNDERTAKING BY OR ON BEHALF OF THE INDEMNITEE TO REPAY THE AMOUNT IF IT
SHALL ULTIMATELY BE DETERMINED THAT THE STANDARD OF CONDUCT HAS NOT BEEN MET.
(c)THE INDEMNIFICATION PROVIDED BY THIS SECTION 6.03 SHALL BE
IN ADDITION TO ANY OTHER RIGHTS TO WHICH AN INDEMNITEE OR ANY OTHER PERSON MAY
BE ENTITLED UNDER ANY AGREEMENT, PURSUANT TO ANY VOTE OF THE PARTNERS, AS A
MATTER OF LAW OR OTHERWISE, AND SHALL CONTINUE AS TO AN INDEMNITEE WHO HAS
CEASED TO SERVE IN SUCH CAPACITY.
(d)THE PARTNERSHIP MAY PURCHASE AND MAINTAIN INSURANCE, ON
BEHALF OF THE INDEMNITEES AND SUCH OTHER PERSONS AS THE GENERAL PARTNER SHALL
DETERMINE, AGAINST ANY LIABILITY THAT MAY BE ASSERTED AGAINST OR EXPENSES THAT
MAY BE INCURRED BY SUCH PERSON IN CONNECTION WITH THE PARTNERSHIP'S ACTIVITIES,
REGARDLESS OF WHETHER THE PARTNERSHIP WOULD HAVE THE POWER TO INDEMNIFY SUCH
PERSON AGAINST SUCH LIABILITY UNDER THE PROVISIONS OF THIS AGREEMENT.
(e)FOR PURPOSES OF THIS SECTION 6.03, THE PARTNERSHIP SHALL BE
DEEMED TO HAVE REQUESTED AN INDEMNITEE TO SERVE AS FIDUCIARY OF AN EMPLOYEE
BENEFIT PLAN WHENEVER THE PERFORMANCE BY IT OF ITS DUTIES TO THE PARTNERSHIP
ALSO IMPOSES DUTIES ON, OR OTHERWISE INVOLVES SERVICES BY, IT TO THE PLAN OR
PARTICIPANTS OR BENEFICIARIES OF THE PLAN; EXCISE TAXES ASSESSED ON AN
INDEMNITEE WITH RESPECT TO AN EMPLOYEE BENEFIT PLAN PURSUANT TO APPLICABLE LAW
SHALL CONSTITUTE FINES WITHIN THE MEANING OF THIS SECTION 6.03; AND ACTIONS
TAKEN OR OMITTED BY THE INDEMNITEE WITH RESPECT TO AN EMPLOYEE BENEFIT PLAN IN
THE PERFORMANCE OF ITS DUTIES FOR A PURPOSE REASONABLY BELIEVED BY IT TO BE IN
THE INTEREST OF THE PARTICIPANTS AND BENEFICIARIES OF THE PLAN SHALL BE DEEMED
TO BE FOR A PURPOSE WHICH IS NOT OPPOSED TO THE BEST INTERESTS OF THE
PARTNERSHIP.
(f)IN NO EVENT MAY AN INDEMNITEE SUBJECT THE LIMITED PARTNERS
TO PERSONAL LIABILITY BY REASON OF THE INDEMNIFICATION PROVISIONS SET FORTH IN
THIS AGREEMENT.
(g)AN INDEMNITEE SHALL NOT BE DENIED INDEMNIFICATION IN WHOLE
OR IN PART UNDER THIS SECTION 6.03 BECAUSE THE INDEMNITEE HAD AN INTEREST IN THE
TRANSACTION WITH RESPECT TO WHICH THE INDEMNIFICATION APPLIES IF THE TRANSACTION
WAS OTHERWISE PERMITTED BY THE TERMS OF THIS AGREEMENT.
(h)THE PROVISIONS OF THIS SECTION 6.03 ARE FOR THE BENEFIT OF
THE INDEMNITEES, THEIR HEIRS, SUCCESSORS, ASSIGNS AND ADMINISTRATORS AND SHALL
NOT BE DEEMED TO CREATE ANY RIGHTS FOR THE BENEFIT OF ANY OTHER PERSONS.
6.04. LIABILITY OF THE GENERAL PARTNER.
(a)NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT, THE GENERAL PARTNER SHALL NOT BE LIABLE FOR MONETARY DAMAGES TO THE
PARTNERSHIP OR ANY PARTNERS FOR LOSSES SUSTAINED OR LIABILITIES INCURRED AS A
RESULT OF ERRORS IN JUDGMENT OR OF ANY ACT OR OMISSION IF THE GENERAL PARTNER
ACTED IN GOOD FAITH. THE GENERAL PARTNER SHALL NOT BE IN BREACH OF ANY DUTY THAT
THE GENERAL PARTNER MAY OWE TO THE LIMITED PARTNERS OR THE PARTNERSHIP OR ANY
OTHER PERSONS UNDER THIS AGREEMENT OR OF ANY DUTY STATED OR IMPLIED BY LAW OR
EQUITY PROVIDED THE GENERAL PARTNER, ACTING IN GOOD FAITH, ABIDES BY THE TERMS
OF THIS AGREEMENT.
17
(b)THE LIMITED PARTNERS EXPRESSLY ACKNOWLEDGE THAT THE GENERAL
PARTNER IS ACTING ON BEHALF OF THE PARTNERSHIP, THE COMPANY AND THE COMPANY'S
SHAREHOLDERS COLLECTIVELY, THAT THE GENERAL PARTNER IS UNDER NO OBLIGATION TO
CONSIDER THE SEPARATE INTERESTS OF THE LIMITED PARTNERS (INCLUDING, WITHOUT
LIMITATION, THE TAX CONSEQUENCES TO LIMITED PARTNERS OR THE TAX CONSEQUENCES OF
SAME, BUT NOT ALL, OF THE LIMITED PARTNERS) IN DECIDING WHETHER TO CAUSE THE
PARTNERSHIP TO TAKE (OR DECLINE TO TAKE) ANY ACTIONS. IN THE EVENT OF A CONFLICT
BETWEEN THE INTERESTS OF THE SHAREHOLDERS OF THE COMPANY ON ONE HAND AND THE
LIMITED PARTNERS ON THE OTHER, THE GENERAL PARTNER SHALL ENDEAVOR IN GOOD FAITH
TO RESOLVE THE CONFLICT IN A MANNER NOT ADVERSE TO EITHER THE SHAREHOLDERS OF
THE COMPANY OR THE LIMITED PARTNERS; PROVIDED, HOWEVER, THAT FOR SO LONG AS THE
COMPANY, DIRECTLY OR THE GENERAL PARTNER OWNS A CONTROLLING INTEREST IN THE
PARTNERSHIP, ANY SUCH CONFLICT THAT THE GENERAL PARTNER, IN ITS SOLE AND
ABSOLUTE DISCRETION, DETERMINES CANNOT BE RESOLVED IN A MANNER NOT ADVERSE TO
EITHER THE SHAREHOLDERS OF THE COMPANY OR THE LIMITED PARTNERS SHALL BE RESOLVED
IN FAVOR OF THE SHAREHOLDERS. THE GENERAL PARTNER SHALL NOT BE LIABLE FOR
MONETARY DAMAGES FOR LOSSES SUSTAINED, LIABILITIES INCURRED, OR BENEFITS NOT
DERIVED BY LIMITED PARTNERS IN CONNECTION WITH SUCH DECISIONS, PROVIDED THAT THE
GENERAL PARTNER HAS ACTED IN GOOD FAITH.
(c)SUBJECT TO ITS OBLIGATIONS AND DUTIES AS GENERAL PARTNER
SET FORTH IN SECTION 6.01 HEREOF, THE GENERAL PARTNER MAY EXERCISE ANY OF THE
POWERS GRANTED TO IT UNDER THIS AGREEMENT AND PERFORM ANY OF THE DUTIES IMPOSED
UPON IT HEREUNDER EITHER DIRECTLY OR BY OR THROUGH ITS AGENTS. THE GENERAL
PARTNER SHALL NOT BE RESPONSIBLE FOR ANY MISCONDUCT OR NEGLIGENCE ON THE PART OF
ANY SUCH AGENT APPOINTED BY IT IN GOOD FAITH.
(d)NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT OR
THE ACT, ANY ACTION OF THE GENERAL PARTNER ON BEHALF OF THE PARTNERSHIP OR ANY
DECISION OF THE GENERAL PARTNER TO REFRAIN FROM ACTING ON BEHALF OF THE
PARTNERSHIP, UNDERTAKEN IN THE GOOD FAITH BELIEF THAT SUCH ACTION OR OMISSION IS
NECESSARY OR ADVISABLE IN ORDER (i) TO PROTECT THE ABILITY OF THE COMPANY TO
CONTINUE TO QUALIFY AS A REIT OR (ii) TO PREVENT THE COMPANY FROM INCURRING ANY
TAXES UNDER SECTION 857, SECTION 4981, OR ANY OTHER PROVISION OF THE CODE, IS
EXPRESSLY AUTHORIZED UNDER THIS AGREEMENT AND IS DEEMED APPROVED BY ALL OF THE
LIMITED PARTNERS.
(e)ANY AMENDMENT, MODIFICATION OR REPEAL OF THIS SECTION 6.04
OR ANY PROVISION HEREOF SHALL BE PROSPECTIVE ONLY AND SHALL NOT IN ANY WAY
AFFECT THE LIMITATIONS ON THE GENERAL PARTNER'S LIABILITY TO THE PARTNERSHIP AND
THE LIMITED PARTNERS UNDER THIS SECTION 6.04 AS IN EFFECT IMMEDIATELY PRIOR TO
SUCH AMENDMENT, MODIFICATION OR REPEAL WITH RESPECT TO MATTERS OCCURRING, IN
WHOLE OR IN PART, PRIOR TO SUCH AMENDMENT, MODIFICATION OR REPEAL, REGARDLESS OF
WHEN CLAIMS RELATING TO SUCH MATTERS MAY ARISE OR BE ASSERTED.
6.05. REIMBURSEMENT OF GENERAL PARTNER.
(a)EXCEPT AS PROVIDED IN THIS SECTION 6.05 AND ELSEWHERE IN
THIS AGREEMENT (INCLUDING THE PROVISIONS OF ARTICLES 5 AND 6 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 REIT EXPENSES AND ADMINISTRATIVE EXPENSES.
6.06. OUTSIDE ACTIVITIES.
The Partners and any officer, director, employee, agent,
trustee, Affiliate, Subsidiary, or shareholder of any Partner shall be entitled
to and may have business interests and engage in business activities in addition
to those relating to the Partnership, including business interests and
activities substantially similar or identical to those of the Partnership.
Neither the Partnership nor any of the Limited Partners shall have any rights by
virtue of this Agreement in any such business ventures, interest or activities.
None of the Limited Partners nor any other Person shall have any rights by
virtue of this Agreement or the partnership relationship established hereby in
any such business ventures, interests or activities, and the General Partner
shall have no obligation pursuant to this Agreement to offer any interest in any
such business ventures, interests and activities to the Partnership or any
Limited Partner, even if such opportunity is of a character which, if presented
to the Partnership or any Limited Partner, could be taken by such Person.
6.07. EMPLOYMENT OR RETENTION OF AFFILIATES.
(a)ANY AFFILIATE OF THE GENERAL PARTNER MAY BE EMPLOYED OR
RETAINED BY THE PARTNERSHIP AND MAY OTHERWISE DEAL WITH THE PARTNERSHIP (WHETHER
AS A BUYER, LESSOR, LESSEE, MANAGER, FURNISHER OF GOODS OR SERVICES, BROKER,
18
AGENT, LENDER OR OTHERWISE) AND MAY RECEIVE FROM THE PARTNERSHIP ANY
COMPENSATION, PRICE, OR OTHER PAYMENT THEREFOR WHICH THE GENERAL PARTNER
DETERMINES TO BE FAIR AND REASONABLE.
(b)THE PARTNERSHIP MAY LEND OR CONTRIBUTE TO ITS SUBSIDIARIES
OR OTHER PERSONS IN WHICH IT HAS AN EQUITY INVESTMENT, AND SUCH PERSONS MAY
BORROW FUNDS FROM THE PARTNERSHIP, ON TERMS AND CONDITIONS ESTABLISHED IN THE
SOLE AND ABSOLUTE DISCRETION OF THE GENERAL PARTNER. THE FOREGOING AUTHORITY
SHALL NOT CREATE ANY RIGHT OR BENEFIT IN FAVOR OF ANY SUBSIDIARY OR ANY OTHER
PERSON.
(c)THE PARTNERSHIP MAY TRANSFER ASSETS TO JOINT VENTURES,
OTHER PARTNERSHIPS, CORPORATIONS OR OTHER BUSINESS ENTITIES IN WHICH IT IS OR
THEREBY BECOMES A PARTICIPANT UPON SUCH TERMS AND SUBJECT TO SUCH CONDITIONS AS
THE GENERAL PARTNER DEEMS ARE CONSISTENT WITH THIS AGREEMENT AND APPLICABLE LAW.
(d)EXCEPT AS EXPRESSLY PERMITTED BY THIS AGREEMENT, NEITHER
THE GENERAL PARTNER NOR ANY OF ITS AFFILIATES SHALL SELL, TRANSFER OR CONVEY ANY
PROPERTY TO, OR PURCHASE ANY PROPERTY FROM, THE PARTNERSHIP, DIRECTLY OR
INDIRECTLY, EXCEPT PURSUANT TO TRANSACTIONS THAT ARE ON TERMS THAT ARE FAIR AND
REASONABLE TO THE PARTNERSHIP.
6.08. GENERAL PARTNER PARTICIPATION.
The General Partner agrees, on behalf of the Company that all
business activities of the Company shall generally be conducted through the
Partnership or one or more Subsidiary Partnerships, unless otherwise determined
by the Independent Directors.
6.9. TITLE TO PARTNERSHIP ASSETS.
Title to Partnership assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively, shall
have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General Partner
may determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement; PROVIDED,
HOWEVER, that the General Partner shall use its best efforts to cause beneficial
and record title to such assets to be vested in the Partnership as soon as
reasonably practicable. All Partnership assets shall be recorded as the property
of the Partnership in its books and records, irrespective of the name in which
legal title to such Partnership assets is held.
6.10. [INTENTIONALLY OMITTED].
ARTICLE VII
CHANGES IN GENERAL PARTNER
7.01. TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a)THE GENERAL PARTNER SHALL NOT TRANSFER ALL OR ANY PORTION
OF ITS GENERAL PARTNERSHIP INTEREST OR WITHDRAW AS GENERAL PARTNER EXCEPT AS
PROVIDED IN OR IN CONNECTION WITH A TRANSACTION CONTEMPLATED BY SECTION 7.01(c),
(d) OR (e).
(b)THE GENERAL PARTNER AGREE THAT THE PERCENTAGE INTEREST FOR
IT AND THE COMPANY WILL AT ALL TIMES BE IN THE AGGREGATE, AT LEAST 1%.
(c)EXCEPT AS OTHERWISE PROVIDED IN SECTION 6.04(b) OR SECTION
7.01(d) OR (e) HEREOF, THE COMPANY SHALL NOT ENGAGE IN ANY MERGER, CONSOLIDATION
OR OTHER COMBINATION WITH OR INTO ANOTHER PERSON OR SALE OF ALL OR SUBSTANTIALLY
ALL OF ITS ASSETS, (OTHER THAN IN CONNECTION WITH A CHANGE IN THE COMPANY'S
STATE OF INCORPORATION OR ORGANIZATIONAL FORM) IN EACH CASE WHICH RESULTS IN A
CHANGE OF CONTROL OF THE COMPANY (A "TRANSACTION"), UNLESS:
(i) the consent of Limited Partners (other than
the General Partner or any Subsidiary) holding more than 50%
of the Percentage Interests of the Limited Partners (other
than those held by the General Partner or any Subsidiary) is
obtained;
19
(ii) as a result of such Transaction all Limited
Partners will receive for each Partnership Unit an amount of
cash, securities, or other property equal to the product of
the Conversion Factor and the greatest amount of cash,
securities or other property paid in the Transaction to a
holder of one REIT Share in consideration of one REIT Share,
PROVIDED THAT if, in connection with the Transaction, a
purchase, tender or exchange offer ("Offer") shall have been
made to and accepted by the holders of more than 50% of the
outstanding REIT Shares, each holder of Partnership Units
shall be given the option to exchange its Partnership Units
for the greatest amount of cash, securities, or other property
which a Limited Partner would have received had it (A)
exercised its Exchange Right and (B) sold, tendered or
exchanged pursuant to the Offer the REIT Shares received upon
exercise of the Exchange Right immediately prior to the
expiration of the Offer; or
(iii) the Company is the surviving entity in the
Transaction and either (A) the holders of REIT Shares do not
receive cash, securities, or other property in the Transaction
or (B) all Limited Partners (other than the General Partner or
any Subsidiary) receive an amount of cash, securities, or
other property (expressed as an amount per REIT Share) that is
no less than the product of the Conversion Factor and the
greatest amount of cash, securities, or other property
(expressed as an amount per REIT Share) received in the
Transaction by any holder of REIT Shares.
(d)NOTWITHSTANDING SECTION 7.01(c), THE COMPANY OR THE GENERAL
PARTNER MAY MERGE WITH OR INTO OR CONSOLIDATE WITH ANOTHER ENTITY IF IMMEDIATELY
AFTER SUCH MERGER OR CONSOLIDATION (i) SUBSTANTIALLY ALL OF THE ASSETS OF THE
SUCCESSOR OR SURVIVING ENTITY (THE "SURVIVOR"), OTHER THAN PARTNERSHIP UNITS
HELD BY THE COMPANY OR THE GENERAL PARTNER, ARE CONTRIBUTED, DIRECTLY OR
INDIRECTLY, TO THE PARTNERSHIP AS A CAPITAL CONTRIBUTION IN EXCHANGE FOR
PARTNERSHIP UNITS WITH A FAIR MARKET VALUE EQUAL TO THE VALUE OF THE ASSETS SO
CONTRIBUTED AS DETERMINED BY THE SURVIVOR IN GOOD FAITH AND (ii) THE SURVIVOR
EXPRESSLY AGREES TO ASSUME ALL OBLIGATIONS OF THE GENERAL PARTNER OR THE
COMPANY, AS APPROPRIATE, HEREUNDER. UPON SUCH CONTRIBUTION AND ASSUMPTION, THE
SURVIVOR SHALL HAVE THE RIGHT AND DUTY TO AMEND THIS AGREEMENT AS SET FORTH IN
THIS SECTION 7.01(d). THE SURVIVOR SHALL IN GOOD FAITH ARRIVE AT A NEW METHOD
FOR THE CALCULATION OF THE CASH AMOUNT, THE REIT SHARES AMOUNT AND CONVERSION
FACTOR FOR A PARTNERSHIP UNIT AFTER ANY SUCH MERGER OR CONSOLIDATION SO AS TO
APPROXIMATE THE EXISTING METHOD FOR SUCH CALCULATION AS CLOSELY AS REASONABLY
POSSIBLE. SUCH CALCULATION SHALL TAKE INTO ACCOUNT, AMONG OTHER THINGS, THE KIND
AND AMOUNT OF SECURITIES, CASH AND OTHER PROPERTY THAT WAS RECEIVABLE UPON SUCH
MERGER OR CONSOLIDATION BY A HOLDER OF REIT SHARES OR OPTIONS, WARRANTS OR OTHER
RIGHTS RELATING THERETO, AND TO WHICH A HOLDER OF PARTNERSHIP UNITS COULD HAVE
ACQUIRED HAD SUCH PARTNERSHIP UNITS BEEN EXCHANGED IMMEDIATELY PRIOR TO SUCH
MERGER OR CONSOLIDATION. SUCH AMENDMENT TO THIS AGREEMENT SHALL PROVIDE FOR
ADJUSTMENT TO SUCH METHOD OF CALCULATION, WHICH SHALL BE AS NEARLY EQUIVALENT AS
MAY BE PRACTICABLE TO THE ADJUSTMENTS PROVIDED FOR WITH RESPECT TO THE
CONVERSION FACTOR. THE SURVIVOR ALSO SHALL IN GOOD FAITH MODIFY THE DEFINITION
OF REIT SHARES AND MAKE SUCH AMENDMENTS TO SECTION 8.05 HEREOF SO AS TO
APPROXIMATE THE EXISTING RIGHTS AND OBLIGATIONS SET FORTH IN SECTION 8.05 AS
CLOSELY AS REASONABLY POSSIBLE. THE ABOVE PROVISIONS OF THIS SECTION 7.01(d)
SHALL SIMILARLY APPLY TO SUCCESSIVE MERGERS OR CONSOLIDATIONS PERMITTED
HEREUNDER.
In respect of any transaction described in the preceding
Paragraph, the Company is required to use its commercially reasonable efforts to
structure such transaction to avoid causing the Limited Partners to recognize a
gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, provided such efforts are consistent with the
exercise of the Board of Directors' fiduciary duties to the shareholders of the
Company under applicable law.
(e)NOTWITHSTANDING SECTION 7.01(c),
(i) a General Partner may transfer all or any
portion of its General Partnership Interest to (A) a
wholly-owned Subsidiary of such General Partner or (B) the
owner of all of the ownership interests of such General
Partner, and following a transfer of all of its General
Partnership Interest, may withdraw as General Partner; and
20
(ii) the Company may engage in a transaction not
required by law or by the rules of any national securities
exchange on which the REIT Shares are listed to be submitted
to the vote of the holders of the REIT Shares.
7.02. ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER.
A Person shall be admitted as a substitute or additional
General Partner of the Partnership only if the following terms and conditions
are satisfied:
(a)THE PERSON TO BE ADMITTED AS A SUBSTITUTE OR ADDITIONAL
GENERAL PARTNER SHALL HAVE ACCEPTED AND AGREED TO BE BOUND BY ALL THE TERMS AND
PROVISIONS OF THIS AGREEMENT BY EXECUTING A COUNTERPART THEREOF AND SUCH OTHER
DOCUMENTS OR INSTRUMENTS AS MAY BE REQUIRED OR APPROPRIATE IN ORDER TO EFFECT
THE ADMISSION OF SUCH PERSON AS A GENERAL PARTNER, AND A CERTIFICATE EVIDENCING
THE ADMISSION OF SUCH PERSON AS A GENERAL PARTNER SHALL HAVE BEEN FILED FOR
RECORDATION AND ALL OTHER ACTIONS REQUIRED BY SECTION 2.05 HEREOF IN CONNECTION
WITH SUCH ADMISSION SHALL HAVE BEEN PERFORMED;
(b)IF THE PERSON TO BE ADMITTED AS A SUBSTITUTE OR ADDITIONAL
GENERAL PARTNER IS A CORPORATION OR A PARTNERSHIP IT SHALL HAVE PROVIDED THE
PARTNERSHIP WITH EVIDENCE SATISFACTORY TO COUNSEL FOR THE PARTNERSHIP OF SUCH
PERSON'S AUTHORITY TO BECOME A GENERAL PARTNER AND TO BE BOUND BY THE TERMS AND
PROVISIONS OF THIS AGREEMENT; AND
(c)COUNSEL FOR THE PARTNERSHIP SHALL HAVE RENDERED AN OPINION
(RELYING ON SUCH OPINIONS FROM OTHER COUNSEL AND THE STATE OR ANY OTHER
JURISDICTION AS MAY BE NECESSARY) THAT THE ADMISSION OF THE PERSON TO BE
ADMITTED AS A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER IS IN CONFORMITY WITH THE
ACT, THAT NONE OF THE ACTIONS TAKEN IN CONNECTION WITH THE ADMISSION OF SUCH
PERSON AS A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER WILL CAUSE (i) THE
PARTNERSHIP TO BE CLASSIFIED OTHER THAN AS A PARTNERSHIP FOR FEDERAL INCOME TAX
PURPOSES, OR (ii) THE LOSS OF ANY LIMITED PARTNER'S LIMITED LIABILITY.
7.03. EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER.
(a)UPON THE OCCURRENCE OF AN EVENT OF BANKRUPTCY AS TO A
GENERAL PARTNER (AND ITS REMOVAL PURSUANT TO SECTION 7.04(a) HEREOF) OR THE
DEATH, WITHDRAWAL, REMOVAL OR DISSOLUTION OF A GENERAL PARTNER (EXCEPT THAT, IF
A GENERAL PARTNER IS ON THE DATE OF SUCH OCCURRENCE A PARTNERSHIP, THE
WITHDRAWAL, DEATH, DISSOLUTION, EVENT OF BANKRUPTCY AS TO, OR REMOVAL OF A
PARTNER IN, SUCH PARTNERSHIP SHALL BE DEEMED NOT TO BE A DISSOLUTION OF SUCH
GENERAL PARTNER IF THE BUSINESS OF SUCH GENERAL PARTNER IS CONTINUED BY THE
REMAINING PARTNER OR PARTNERS), THE PARTNERSHIP SHALL BE DISSOLVED AND
TERMINATED UNLESS THE PARTNERSHIP IS CONTINUED PURSUANT TO SECTION 7.03(b)
HEREOF. THE MERGER OF THE GENERAL PARTNER WITH OR INTO ANY ENTITY THAT IS
ADMITTED AS A SUBSTITUTE OR SUCCESSOR GENERAL PARTNER PURSUANT TO SECTION 7.02
HEREOF SHALL NOT BE DEEMED TO BE THE WITHDRAWAL, DISSOLUTION OR REMOVAL OF THE
GENERAL PARTNER.
(b)FOLLOWING THE OCCURRENCE OF AN EVENT OF BANKRUPTCY AS TO A
GENERAL PARTNER (AND ITS REMOVAL PURSUANT TO SECTION 7.04(a) HEREOF) OR THE
DEATH, WITHDRAWAL, REMOVAL OR DISSOLUTION OF A GENERAL PARTNER (EXCEPT THAT, IF
A GENERAL PARTNER IS ON THE DATE OF SUCH OCCURRENCE A PARTNERSHIP, THE
WITHDRAWAL, DEATH, DISSOLUTION, EVENT OF BANKRUPTCY AS TO, OR REMOVAL OF A
PARTNER IN, SUCH PARTNERSHIP SHALL BE DEEMED NOT TO BE A DISSOLUTION OF SUCH
GENERAL PARTNER IF THE BUSINESS OF SUCH GENERAL PARTNER IS CONTINUED BY THE
REMAINING PARTNER OR PARTNERS), THE LIMITED PARTNERS, WITHIN 90 DAYS AFTER SUCH
OCCURRENCE, MAY ELECT TO CONTINUE THE BUSINESS OF THE PARTNERSHIP FOR THE
BALANCE OF THE TERM SPECIFIED IN SECTION 2.04 HEREOF BY SELECTING, SUBJECT TO
SECTION 7.02 HEREOF AND ANY OTHER PROVISIONS OF THIS AGREEMENT, A SUBSTITUTE
GENERAL PARTNER BY CONSENT OF A MAJORITY IN INTEREST OF THE LIMITED PARTNERS. IF
THE LIMITED PARTNERS ELECT TO CONTINUE THE BUSINESS OF THE PARTNERSHIP AND ADMIT
A SUBSTITUTE GENERAL PARTNER, THE RELATIONSHIP WITH THE PARTNERS AND OF ANY
PERSON WHO HAS ACQUIRED AN INTEREST OF A PARTNER IN THE PARTNERSHIP SHALL BE
GOVERNED BY THIS AGREEMENT.
7.04. REMOVAL OF A GENERAL PARTNER.
(a)UPON THE OCCURRENCE OF AN EVENT OF BANKRUPTCY AS TO, OR THE
DISSOLUTION OF, A GENERAL PARTNER, SUCH GENERAL PARTNER SHALL BE DEEMED TO BE
REMOVED AUTOMATICALLY; PROVIDED, HOWEVER, THAT IF A GENERAL PARTNER IS ON THE
DATE OF SUCH OCCURRENCE A PARTNERSHIP, THE WITHDRAWAL, DEATH, DISSOLUTION, EVENT
OF BANKRUPTCY AS TO OR REMOVAL OF A PARTNER IN SUCH PARTNERSHIP SHALL BE DEEMED
NOT TO BE A DISSOLUTION OF THE GENERAL PARTNER IF
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THE BUSINESS OF SUCH GENERAL PARTNER IS CONTINUED BY THE REMAINING PARTNER OR
PARTNERS. THE LIMITED PARTNERS MAY NOT REMOVE THE GENERAL PARTNER, WITH OR
WITHOUT CAUSE.
(b)IF A GENERAL PARTNER HAS BEEN REMOVED PURSUANT TO THIS
SECTION 7.04 AND THE PARTNERSHIP IS CONTINUED PURSUANT TO SECTION 7.03 HEREOF,
SUCH GENERAL PARTNER SHALL PROMPTLY TRANSFER AND ASSIGN ITS GENERAL PARTNERSHIP
INTEREST IN THE PARTNERSHIP TO THE SUBSTITUTE GENERAL PARTNER APPROVED BY A
MAJORITY IN INTEREST OF THE LIMITED PARTNERS IN ACCORDANCE WITH SECTION 7.03(b)
HEREOF AND OTHERWISE ADMITTED TO THE PARTNERSHIP IN ACCORDANCE WITH SECTION 7.02
HEREOF. AT THE TIME OF ASSIGNMENT, THE REMOVED GENERAL PARTNER SHALL BE ENTITLED
TO RECEIVE FROM THE SUBSTITUTE GENERAL PARTNER THE FAIR MARKET VALUE OF THE
GENERAL PARTNERSHIP INTEREST OF SUCH REMOVED GENERAL PARTNER AS REDUCED BY ANY
DAMAGES CAUSED TO THE PARTNERSHIP BY SUCH GENERAL PARTNER. SUCH FAIR MARKET
VALUE SHALL BE DETERMINED BY AN APPRAISER MUTUALLY AGREED UPON BY THE GENERAL
PARTNER AND A MAJORITY IN INTEREST OF THE LIMITED PARTNERS WITHIN 10 DAYS
FOLLOWING THE REMOVAL OF THE GENERAL PARTNER. IN THE EVENT THAT THE PARTIES ARE
UNABLE TO AGREE UPON AN APPRAISER, THE REMOVED GENERAL PARTNER AND A MAJORITY IN
INTEREST OF THE LIMITED PARTNERS EACH SHALL SELECT AN APPRAISER. EACH SUCH
APPRAISER SHALL COMPLETE AN APPRAISAL OF THE FAIR MARKET VALUE OF THE REMOVED
GENERAL PARTNER'S GENERAL PARTNERSHIP INTEREST WITHIN 30 DAYS OF THE GENERAL
PARTNER'S REMOVAL, AND THE FAIR MARKET VALUE OF THE REMOVED GENERAL PARTNER'S
GENERAL PARTNERSHIP INTEREST SHALL BE THE AVERAGE OF THE TWO APPRAISALS;
PROVIDED, HOWEVER, THAT IF THE HIGHER APPRAISAL EXCEEDS THE LOWER APPRAISAL BY
MORE THAN 20% OF THE AMOUNT OF THE LOWER APPRAISAL, THE TWO APPRAISERS, NO LATER
THAN 40 DAYS AFTER THE REMOVAL OF THE GENERAL PARTNER, SHALL SELECT A THIRD
APPRAISER WHO SHALL COMPLETE AN APPRAISAL OF THE FAIR MARKET VALUE OF THE
REMOVED GENERAL PARTNER'S GENERAL PARTNERSHIP INTEREST NO LATER THAN 60 DAYS
AFTER THE REMOVAL OF THE GENERAL PARTNER. IN SUCH CASE, THE FAIR MARKET VALUE OF
THE REMOVED GENERAL PARTNER'S GENERAL PARTNERSHIP INTEREST SHALL BE THE AVERAGE
OF THE TWO APPRAISALS CLOSEST IN VALUE.
(c)THE GENERAL PARTNERSHIP INTEREST OF A REMOVED GENERAL
PARTNER, DURING THE TIME AFTER DEFAULT UNTIL TRANSFER UNDER SECTION 7.04(b),
SHALL BE CONVERTED TO THAT OF A SPECIAL LIMITED PARTNER; PROVIDED, HOWEVER, SUCH
REMOVED GENERAL PARTNER SHALL NOT HAVE ANY RIGHTS TO PARTICIPATE IN THE
MANAGEMENT AND AFFAIRS OF THE PARTNERSHIP, AND SHALL NOT BE ENTITLED TO ANY
PORTION OF THE INCOME, EXPENSE, PROFIT, GAIN OR LOSS ALLOCATIONS OR CASH
DISTRIBUTIONS ALLOCABLE OR PAYABLE, AS THE CASE MAY BE, TO THE LIMITED PARTNERS.
INSTEAD, SUCH REMOVED GENERAL PARTNER SHALL RECEIVE AND BE ENTITLED ONLY TO
RETAIN DISTRIBUTIONS OR ALLOCATIONS OF SUCH ITEMS THAT IT WOULD HAVE BEEN
ENTITLED TO RECEIVE IN ITS CAPACITY AS GENERAL PARTNER, UNTIL THE TRANSFER IS
EFFECTIVE PURSUANT TO SECTION 7.04(b).
(d)ALL PARTNERS SHALL HAVE GIVEN AND HEREBY DO GIVE SUCH
CONSENTS, SHALL TAKE SUCH ACTIONS AND SHALL EXECUTE SUCH DOCUMENTS AS SHALL BE
LEGALLY NECESSARY AND SUFFICIENT TO EFFECT ALL THE FOREGOING PROVISIONS OF THIS
SECTION.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01. MANAGEMENT OF THE PARTNERSHIP.
The Limited Partners shall not participate in the management
or control of Partnership business nor shall they transact any business for the
Partnership, nor shall they have the power to sign for or bind the Partnership,
such powers being vested solely and exclusively in the General Partner.
8.02. POWER OF ATTORNEY.
Each Limited Partner hereby irrevocably appoints the General
Partner its true and lawful attorney-in-fact, who may act for each Limited
Partner and in its name, place and stead, and for its use and benefit, to sign,
acknowledge, swear to, deliver, file or record, at the appropriate public
offices, any and all documents, certificates, and instruments as may be deemed
necessary or desirable by the General Partner to carry out fully the provisions
of this Agreement and the Act in accordance with their terms, which power of
attorney is coupled with an interest and shall survive the death, dissolution or
legal incapacity of the Limited Partner, or the transfer by the Limited Partner
of any part or all of its Partnership Interest.
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8.03. LIMITATION ON LIABILITY OF LIMITED PARTNERS.
No Limited Partner shall be liable for any debts, liabilities,
contracts or obligations of the Partnership. A Limited Partner shall be liable
to the Partnership only to make payments of its Capital Contribution, if any, as
and when due hereunder. After its Capital Contribution is fully paid, no Limited
Partner shall, except as otherwise required by the Act, be required to make any
further Capital Contributions or other payments or lend any funds to the
Partnership.
8.04. OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR
AFFILIATE.
No Limited Partner shall at any time, either directly or
indirectly, own any stock or other interest in the General Partner or in any
Affiliate thereof, if such ownership by itself or in conjunction with other
stock or other interests owned by other Limited Partners would, in the opinion
of counsel for the Partnership, jeopardize the classification of the Partnership
as a partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
8.05. EXCHANGE RIGHT.
(a)SUBJECT TO SECTIONS 8.05(b), 8.05(c), 8.05(d), 8.05(e) AND
8.05(f) AND THE PROVISIONS OF ANY AGREEMENTS BETWEEN THE PARTNERSHIP AND ONE OR
MORE LIMITED PARTNERS WITH RESPECT TO PARTNERSHIP UNITS HELD BY THEM, EACH
LIMITED PARTNER, OTHER THAN THE COMPANY, SHALL HAVE THE RIGHT (THE "EXCHANGE
RIGHT") TO REQUIRE THE PARTNERSHIP TO REDEEM ON A SPECIFIED EXCHANGE DATE ALL OR
A PORTION OF THE PARTNERSHIP UNITS HELD BY SUCH LIMITED PARTNER AT AN EXCHANGE
PRICE EQUAL TO AND IN THE FORM OF THE CASH AMOUNT TO BE PAID BY THE PARTNERSHIP,
PROVIDED THAT SUCH PARTNERSHIP UNITS SHALL HAVE BEEN OUTSTANDING FOR AT LEAST
ONE YEAR. THE EXCHANGE RIGHT SHALL BE EXERCISED PURSUANT TO A NOTICE OF EXCHANGE
DELIVERED TO THE PARTNERSHIP (WITH A COPY TO THE GENERAL PARTNER) BY THE LIMITED
PARTNER WHO IS EXERCISING THE EXCHANGE RIGHT (THE "EXCHANGING PARTNER");
PROVIDED, HOWEVER, THAT THE PARTNERSHIP SHALL NOT BE OBLIGATED TO SATISFY SUCH
EXCHANGE RIGHT IF THE COMPANY AND/OR THE GENERAL PARTNER ELECTS TO PURCHASE THE
PARTNERSHIP UNITS SUBJECT TO THE NOTICE OF EXCHANGE PURSUANT TO SECTION 8.05(b);
AND PROVIDED, FURTHER, THAT NO LIMITED PARTNER MAY DELIVER MORE THAN TWO NOTICES
OF EXCHANGE DURING EACH CALENDAR YEAR. A LIMITED PARTNER MAY NOT EXERCISE THE
EXCHANGE RIGHT FOR LESS THAN 1,000 PARTNERSHIP UNITS OR, IF SUCH LIMITED PARTNER
HOLDS LESS THAN 1,000 PARTNERSHIP UNITS, ALL OF THE PARTNERSHIP UNITS HELD BY
SUCH PARTNER. THE EXCHANGING PARTNER SHALL HAVE NO RIGHT, WITH RESPECT TO ANY
PARTNERSHIP UNITS SO EXCHANGED, TO RECEIVE ANY DISTRIBUTION PAID WITH RESPECT TO
PARTNERSHIP UNITS IF THE RECORD DATE FOR SUCH DISTRIBUTION IS ON OR AFTER THE
SPECIFIED EXCHANGE DATE.
(b)NOTWITHSTANDING THE PROVISIONS OF SECTION 8.05(a), A
LIMITED PARTNER THAT EXERCISES THE EXCHANGE RIGHT SHALL BE DEEMED TO HAVE
OFFERED TO SELL THE PARTNERSHIP UNITS DESCRIBED IN THE NOTICE OF EXCHANGE TO THE
GENERAL PARTNER AND THE COMPANY, AND EITHER OF THE GENERAL PARTNER OR THE
COMPANY (OR BOTH) MAY, IN ITS SOLE AND ABSOLUTE DISCRETION, ELECT TO PURCHASE
DIRECTLY AND ACQUIRE SUCH PARTNERSHIP UNITS BY PAYING TO THE EXCHANGING PARTNER
EITHER THE CASH AMOUNT OR THE REIT SHARES AMOUNT, AS ELECTED BY THE GENERAL
PARTNER OR THE COMPANY (IN ITS SOLE AND ABSOLUTE DISCRETION), ON THE SPECIFIED
EXCHANGE DATE, WHEREUPON THE GENERAL PARTNER OR THE COMPANY SHALL ACQUIRE THE
PARTNERSHIP UNITS OFFERED FOR EXCHANGE BY THE EXCHANGING PARTNER AND SHALL BE
TREATED FOR ALL PURPOSES OF THIS AGREEMENT AS THE OWNER OF SUCH PARTNERSHIP
UNITS. IF THE GENERAL PARTNER AND/OR THE COMPANY SHALL ELECT TO EXERCISE ITS
RIGHT TO PURCHASE PARTNERSHIP UNITS UNDER THIS SECTION 8.05(b) WITH RESPECT TO A
NOTICE OF EXCHANGE, THEY SHALL SO NOTIFY THE EXCHANGING PARTNER WITHIN FIVE
BUSINESS DAYS AFTER THE RECEIPT BY THE GENERAL PARTNER OF SUCH NOTICE OF
EXCHANGE. UNLESS THE GENERAL PARTNER AND/OR THE COMPANY (IN ITS SOLE AND
ABSOLUTE DISCRETION) SHALL EXERCISE ITS RIGHT TO PURCHASE PARTNERSHIP UNITS FROM
THE EXCHANGING PARTNER PURSUANT TO THIS SECTION 8.05(b), NEITHER THE GENERAL
PARTNER NOR THE COMPANY SHALL HAVE ANY OBLIGATION TO THE EXCHANGING PARTNER OR
THE PARTNERSHIP WITH RESPECT TO THE EXCHANGING PARTNER'S EXERCISE OF THE
EXCHANGE RIGHT. IN THE EVENT THE GENERAL PARTNER OR THE COMPANY SHALL EXERCISE
ITS RIGHT TO PURCHASE PARTNERSHIP UNITS WITH RESPECT TO THE EXERCISE OF A
EXCHANGE RIGHT IN THE MANNER DESCRIBED IN THE FIRST SENTENCE OF THIS SECTION
8.05(b), THE PARTNERSHIP SHALL HAVE NO OBLIGATION TO PAY ANY AMOUNT TO THE
EXCHANGING PARTNER WITH RESPECT TO SUCH EXCHANGING PARTNER'S EXERCISE OF SUCH
EXCHANGE RIGHT, AND EACH OF THE EXCHANGING PARTNER, THE PARTNERSHIP, AND THE
GENERAL PARTNER OR THE COMPANY, AS THE CASE MAY BE, SHALL TREAT THE TRANSACTION
BETWEEN THE GENERAL PARTNER OR THE COMPANY, AS THE CASE MAY BE,
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AND THE EXCHANGING PARTNER FOR FEDERAL INCOME TAX PURPOSES AS A SALE OF THE
EXCHANGING PARTNER'S PARTNERSHIP UNITS TO THE GENERAL PARTNER OR THE COMPANY, AS
THE CASE MAY BE. EACH EXCHANGING PARTNER AGREES TO EXECUTE SUCH DOCUMENTS AS THE
GENERAL PARTNER MAY REASONABLY REQUIRE IN CONNECTION WITH THE ISSUANCE OF REIT
SHARES UPON EXERCISE OF THE EXCHANGE RIGHT.
(c)NOTWITHSTANDING THE PROVISIONS OF SECTION 8.05(a) AND
8.05(b), A LIMITED PARTNER SHALL NOT BE ENTITLED TO EXERCISE THE EXCHANGE RIGHT
IF THE DELIVERY OF REIT SHARES TO SUCH PARTNER ON THE SPECIFIED EXCHANGE DATE BY
THE GENERAL PARTNER OR THE COMPANY PURSUANT TO SECTION 8.05(b) (REGARDLESS OF
WHETHER OR NOT THE GENERAL PARTNER OR THE COMPANY WOULD IN FACT EXERCISE ITS
RIGHTS UNDER SECTION 8.05(b)) WOULD (i) RESULT IN SUCH PARTNER OR ANY OTHER
PERSON OWNING, DIRECTLY OR INDIRECTLY, REIT SHARES IN EXCESS OF THE OWNERSHIP
LIMITATION (AS DEFINED IN THE AMENDED AND RESTATED ARTICLES OF INCORPORATION)
AND CALCULATED IN ACCORDANCE THEREWITH, EXCEPT AS PROVIDED IN THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION, (ii) RESULT IN REIT SHARES BEING OWNED BY
FEWER THAN 100 PERSONS (DETERMINED WITHOUT REFERENCE TO ANY RULES OF
ATTRIBUTION), EXCEPT AS PROVIDED IN THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION, (iii) RESULT IN THE COMPANY BEING "CLOSELY HELD" WITHIN THE
MEANING OF SECTION 856(h) OF THE CODE, (iv) CAUSE THE COMPANY TO OWN, DIRECTLY
OR CONSTRUCTIVELY, 10% OR MORE OF THE OWNERSHIP INTERESTS IN A TENANT OF THE
GENERAL PARTNER'S, THE PARTNERSHIP'S, OR A SUBSIDIARY PARTNERSHIP'S, REAL
PROPERTY, WITHIN THE MEANING OF SECTION 856(d)(2)(b) OF THE CODE, OR (v) CAUSE
THE ACQUISITION OF REIT SHARES BY SUCH PARTNER TO BE "INTEGRATED" WITH ANY OTHER
DISTRIBUTION OF REIT SHARES FOR PURPOSES OF COMPLYING WITH THE REGISTRATION
PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
GENERAL PARTNER OR THE COMPANY, IN THEIR SOLE AND ABSOLUTE DISCRETION, MAY WAIVE
THE RESTRICTION ON EXCHANGE SET FORTH IN THIS SECTION 8.05(c); PROVIDED,
HOWEVER, THAT IN THE EVENT SUCH RESTRICTION IS WAIVED, THE EXCHANGING PARTNER
SHALL BE PAID THE CASH AMOUNT.
(d)ANY CASH AMOUNT TO BE PAID TO AN EXCHANGING PARTNER
PURSUANT TO THIS SECTION 8.05 SHALL BE PAID ON THE SPECIFIED EXCHANGE DATE;
PROVIDED, HOWEVER, THAT THE COMPANY OR THE GENERAL PARTNER MAY ELECT TO CAUSE
THE SPECIFIED EXCHANGE DATE TO BE DELAYED FOR UP TO AN ADDITIONAL 180 DAYS TO
THE EXTENT REQUIRED FOR THE COMPANY TO CAUSE ADDITIONAL REIT SHARES TO BE ISSUED
TO PROVIDE FINANCING TO BE USED TO MAKE SUCH PAYMENT OF THE CASH AMOUNT.
NOTWITHSTANDING THE FOREGOING, THE COMPANY AND THE GENERAL PARTNER AGREE TO USE
THEIR BEST EFFORTS TO CAUSE THE CLOSING OF THE ACQUISITION OF EXCHANGED
PARTNERSHIP UNITS HEREUNDER TO OCCUR AS QUICKLY AS REASONABLY POSSIBLE.
(e)NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE
GENERAL PARTNER SHALL PLACE APPROPRIATE RESTRICTIONS ON THE ABILITY OF THE
LIMITED PARTNERS TO EXERCISE THEIR EXCHANGE RIGHTS AS AND IF DEEMED NECESSARY TO
ENSURE THAT THE PARTNERSHIP DOES NOT CONSTITUTE A "PUBLICLY TRADED PARTNERSHIP"
UNDER SECTION 7704 OF THE CODE. IF AND WHEN THE GENERAL PARTNER DETERMINES THAT
IMPOSING SUCH RESTRICTIONS IS NECESSARY, THE GENERAL PARTNER SHALL GIVE PROMPT
WRITTEN NOTICE THEREOF (A "RESTRICTION NOTICE") TO EACH OF THE LIMITED PARTNERS,
WHICH NOTICE SHALL BE ACCOMPANIED BY A COPY OF AN OPINION OF COUNSEL TO THE
PARTNERSHIP WHICH STATES THAT, IN THE OPINION OF SUCH COUNSEL, RESTRICTIONS ARE
NECESSARY IN ORDER TO AVOID THE PARTNERSHIP BEING TREATED AS A "PUBLICLY TRADED
PARTNERSHIP" UNDER SECTION 7704 OF THE CODE.
8.06. REGISTRATION.
Subject to the terms of any agreement between the Company or
the General Partner and one or more Limited Partners with respect to Partnership
Units held by them:
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(a)SHELF REGISTRATION OF THE COMMON STOCK. WITHIN TWO WEEKS
PRIOR OR SUBSEQUENT TO THE FIRST DATE UPON WHICH THE PARTNERSHIP UNITS OWNED BY
ANY LIMITED PARTNER MAY BE EXCHANGED (OR SUCH LATER DATE AS MAY BE REQUIRED
UNDER APPLICABLE PROVISIONS OF THE SECURITIES ACT), THE COMPANY AGREES TO FILE
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"), A SHELF
REGISTRATION STATEMENT ON FORM S-3 UNDER RULE 415 OF THE SECURITIES ACT (A
"REGISTRATION STATEMENT"), OR ANY SIMILAR RULE THAT MAY BE ADOPTED BY THE
COMMISSION, WITH RESPECT TO ALL OF THE SHARES OF COMMON STOCK THAT MAY BE ISSUED
UPON EXCHANGE OF SUCH PARTNERSHIP UNITS PURSUANT TO SECTION 8.05 HEREOF
("EXCHANGE SHARES"). THE COMPANY WILL USE ITS BEST EFFORTS TO HAVE THE
REGISTRATION STATEMENT DECLARED EFFECTIVE UNDER THE SECURITIES ACT. THE COMPANY
NEED NOT FILE A SEPARATE REGISTRATION STATEMENT, BUT MAY FILE ONE REGISTRATION
STATEMENT COVERING EXCHANGE SHARES ISSUABLE TO MORE THAN ONE LIMITED PARTNER.
THE COMPANY FURTHER AGREES TO SUPPLEMENT OR MAKE AMENDMENTS TO EACH REGISTRATION
STATEMENT, IF REQUIRED BY THE RULES, REGULATIONS OR INSTRUCTIONS APPLICABLE TO
THE REGISTRATION FORM UTILIZED BY THE COMPANY OR BY THE SECURITIES ACT OR RULES
AND REGULATIONS THEREUNDER FOR SUCH REGISTRATION STATEMENT.
(b)LISTING ON SECURITIES EXCHANGE. IF THE COMPANY SHALL LIST
OR MAINTAIN THE LISTING OF ANY SHARES OF COMMON STOCK ON ANY SECURITIES EXCHANGE
OR NATIONAL MARKET SYSTEM, IT WILL AT ITS EXPENSE AND AS NECESSARY TO PERMIT THE
REGISTRATION AND SALE OF THE EXCHANGE SHARES HEREUNDER, LIST THEREON, MAINTAIN
AND, WHEN NECESSARY, INCREASE SUCH LISTING TO INCLUDE SUCH EXCHANGE SHARES.
(c)REGISTRATION NOT REQUIRED. NOTWITHSTANDING THE FOREGOING,
THE COMPANY SHALL NOT BE REQUIRED TO FILE OR MAINTAIN THE EFFECTIVENESS OF A
REGISTRATION STATEMENT RELATING TO EXCHANGE SHARES AFTER THE FIRST DATE UPON
WHICH, IN THE OPINION OF COUNSEL TO THE COMPANY, ALL OF THE EXCHANGE SHARES
COVERED THEREBY COULD BE SOLD BY THE HOLDERS THEREOF IN ANY PERIOD OF THREE
MONTHS PURSUANT TO RULE 144 UNDER THE SECURITIES ACT, OR ANY SUCCESSOR RULE
THERETO.
ARTICLE IX
TRANSFER OF LIMITED PARTNERSHIP INTERESTS
9.01. PURCHASE FOR INVESTMENT.
(a)EACH LIMITED PARTNER HEREBY REPRESENTS AND WARRANTS TO THE
GENERAL PARTNER, TO THE COMPANY AND TO THE PARTNERSHIP THAT THE ACQUISITION OF
HIS PARTNERSHIP INTERESTS IS MADE AS A PRINCIPAL FOR HIS ACCOUNT FOR INVESTMENT
PURPOSES ONLY AND NOT WITH A VIEW TO THE RESALE OR DISTRIBUTION OF SUCH
PARTNERSHIP INTEREST.
(b)EACH LIMITED PARTNER AGREES THAT HE WILL NOT SELL, ASSIGN
OR OTHERWISE TRANSFER HIS PARTNERSHIP INTEREST OR ANY FRACTION THEREOF, WHETHER
VOLUNTARILY OR BY OPERATION OF LAW OR AT JUDICIAL SALE OR OTHERWISE, TO ANY
PERSON WHO DOES NOT MAKE THE REPRESENTATIONS AND WARRANTIES TO THE GENERAL
PARTNER SET FORTH IN SECTION 9.01(a) ABOVE AND SIMILARLY AGREE NOT TO SELL,
ASSIGN OR TRANSFER SUCH PARTNERSHIP INTEREST OR FRACTION THEREOF TO ANY PERSON
WHO DOES NOT SIMILARLY REPRESENT, WARRANT AND AGREE.
9.02. RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
(a)SUBJECT TO THE PROVISIONS OF 9.02(b), (c) AND (d), NO
LIMITED PARTNER MAY OFFER, SELL, ASSIGN, HYPOTHECATE, PLEDGE OR OTHERWISE
TRANSFER ALL OR ANY PORTION OF HIS LIMITED PARTNERSHIP INTEREST, OR ANY OF SUCH
LIMITED PARTNER'S ECONOMIC RIGHTS AS A LIMITED PARTNER, WHETHER VOLUNTARILY OR
BY OPERATION OF LAW OR AT JUDICIAL SALE OR OTHERWISE (COLLECTIVELY, A
"TRANSFER") WITHOUT THE CONSENT OF THE GENERAL PARTNER, WHICH CONSENT MAY BE
GRANTED OR WITHHELD IN ITS SOLE AND ABSOLUTE DISCRETION. ANY SUCH PURPORTED
TRANSFER UNDERTAKEN WITHOUT SUCH CONSENT SHALL BE CONSIDERED TO BE NULL AND VOID
AB INITIO AND SHALL NOT BE GIVEN EFFECT. THE GENERAL PARTNER MAY REQUIRE, AS A
CONDITION OF ANY TRANSFER TO WHICH IT CONSENTS, THAT THE TRANSFEROR ASSUME ALL
COSTS INCURRED BY THE PARTNERSHIP IN CONNECTION THEREWITH.
(b)NO LIMITED PARTNER MAY WITHDRAW FROM THE PARTNERSHIP OTHER
THAN AS A RESULT OF A PERMITTED TRANSFER (i.e., A TRANSFER CONSENTED TO AS
CONTEMPLATED BY CLAUSE (a) ABOVE OR CLAUSE (c) BELOW OR A TRANSFER PURSUANT TO
9.05 BELOW) OF ALL OF HIS PARTNERSHIP UNITS PURSUANT TO THIS ARTICLE IX OR
PURSUANT TO AN EXCHANGE OF ALL OF HIS PARTNERSHIP UNITS PURSUANT TO 8.05. UPON
THE PERMITTED TRANSFER OR REDEMPTION OF ALL OF A LIMITED PARTNER'S PARTNERSHIP
UNITS, SUCH LIMITED PARTNER SHALL CEASE TO BE A LIMITED PARTNER.
(c)SUBJECT TO 9.02(d), (e) AND (f) BELOW, A LIMITED PARTNER
MAY TRANSFER, WITH THE CONSENT OF THE GENERAL PARTNER, ALL OR A PORTION OF HIS
PARTNERSHIP UNITS TO (i) A PARENT OR PARENT'S SPOUSE, NATURAL OR ADOPTED
DESCENDANT OR DESCENDANTS, SPOUSE OF SUCH DESCENDANT, OR BROTHER OR SISTER, OR A
TRUST CREATED BY SUCH LIMITED
25
PARTNER FOR THE BENEFIT OF SUCH LIMITED PARTNER AND/OR ANY SUCH PERSON(S), OF
WHICH TRUST SUCH LIMITED PARTNER OR ANY SUCH PERSON(S) IS A TRUSTEE, (ii) A
CORPORATION CONTROLLED BY A PERSON OR PERSONS NAMED IN (i) ABOVE, OR (iii) IF
THE LIMITED PARTNER IS AN ENTITY, ITS BENEFICIAL OWNERS.
(d)NO LIMITED PARTNER MAY EFFECT A TRANSFER OF ITS LIMITED
PARTNERSHIP INTEREST, IN WHOLE OR IN PART, IF, IN THE OPINION OF LEGAL COUNSEL
FOR THE PARTNERSHIP, SUCH PROPOSED TRANSFER WOULD REQUIRE THE REGISTRATION OF
THE LIMITED PARTNERSHIP INTEREST UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR WOULD OTHERWISE VIOLATE ANY APPLICABLE FEDERAL OR STATE SECURITIES OR BLUE
SKY LAW (INCLUDING INVESTMENT SUITABILITY STANDARDS).
(e)NO TRANSFER BY A LIMITED PARTNER OF ITS PARTNERSHIP UNITS,
IN WHOLE OR IN PART, MAY BE MADE TO ANY PERSON IF (i) IN THE OPINION OF LEGAL
COUNSEL FOR THE PARTNERSHIP, THE TRANSFER WOULD RESULT IN THE PARTNERSHIP'S
BEING TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION (OTHER THAN A QUALIFIED
REIT SUBSIDIARY WITHIN THE MEANING OF SECTION 856(i) OF THE CODE), (ii) IN THE
OPINION OF LEGAL COUNSEL FOR THE PARTNERSHIP, IT WOULD ADVERSELY AFFECT THE
ABILITY OF THE COMPANY TO CONTINUE TO QUALIFY AS A REIT OR SUBJECT THE COMPANY
TO ANY ADDITIONAL TAXES UNDER SECTION 857 OR SECTION 4981 OF THE CODE, OR (iii)
SUCH TRANSFER IS EFFECTUATED THROUGH AN "ESTABLISHED SECURITIES MARKET" OR A
"SECONDARY MARKET (OR THE SUBSTANTIAL EQUIVALENT THEREOF)" WITHIN THE MEANING OF
SECTION 7704 OF THE CODE.
(f)NO TRANSFER OF ANY PARTNERSHIP UNITS MAY BE MADE TO A
LENDER TO THE PARTNERSHIP OR ANY PERSON WHO IS RELATED (WITHIN THE MEANING OF
REGULATIONS SECTION 1.752-4(b)) TO ANY LENDER TO THE PARTNERSHIP WHOSE LOAN
CONSTITUTES A NONRECOURSE LIABILITY (WITHIN THE MEANING OF REGULATIONS SECTION
1.752-1(a)(2)), WITHOUT THE CONSENT OF THE GENERAL PARTNER, WHICH MAY BE
WITHHELD IN ITS SOLE AND ABSOLUTE DISCRETION, PROVIDED THAT AS A CONDITION TO
SUCH CONSENT THE LENDER WILL BE REQUIRED TO ENTER INTO AN ARRANGEMENT WITH THE
PARTNERSHIP AND THE GENERAL PARTNER TO EXCHANGE OR REDEEM FOR THE CASH AMOUNT
ANY PARTNERSHIP UNITS IN WHICH A SECURITY INTEREST IS HELD SIMULTANEOUSLY WITH
THE TIME AT WHICH SUCH LENDER WOULD BE DEEMED TO BE A PARTNER IN THE PARTNERSHIP
FOR PURPOSES OF ALLOCATING LIABILITIES TO SUCH LENDER UNDER SECTION 752 OF THE
CODE.
(g)ANY TRANSFER IN CONTRAVENTION OF ANY OF THE PROVISIONS OF
THIS ARTICLE IX SHALL BE VOID AND INEFFECTUAL AND SHALL NOT BE BINDING UPON, OR
RECOGNIZED BY, THE PARTNERSHIP.
(h)PRIOR TO THE CONSUMMATION OF ANY TRANSFER UNDER THIS
ARTICLE IX, THE TRANSFEROR AND/OR THE TRANSFEREE SHALL DELIVER TO THE GENERAL
PARTNER SUCH OPINIONS, CERTIFICATES AND OTHER DOCUMENTS AS THE GENERAL PARTNER
SHALL REQUEST IN CONNECTION WITH SUCH TRANSFER.
9.03. ADMISSION OF A SUBSTITUTE LIMITED PARTNER.
(a)SUBJECT TO THE OTHER PROVISIONS OF THIS ARTICLE IX, AN
ASSIGNEE OF THE LIMITED PARTNERSHIP INTEREST OF A LIMITED PARTNER (WHICH SHALL
BE UNDERSTOOD TO INCLUDE ANY PURCHASER, TRANSFEREE, DONEE, OR OTHER RECIPIENT OF
ANY DISPOSITION OF SUCH LIMITED PARTNERSHIP INTEREST) SHALL BE DEEMED ADMITTED
AS A LIMITED PARTNER OF THE PARTNERSHIP ONLY WITH THE CONSENT OF THE GENERAL
PARTNER AND UPON THE SATISFACTORY COMPLETION OF THE FOLLOWING:
(i) The assignee shall have accepted and agreed to
be bound by the terms and provisions of this Agreement by
executing a counterpart or an amendment thereof, including a
revised EXHIBIT A, and such other documents or instruments as
the General Partner may require in order to effect the
admission of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate
evidencing the admission of such Person as a Limited Partner
shall have been signed, acknowledged and filed for record in
accordance with the Act.
(iii) The assignee shall have delivered a letter
containing the representation set forth in Section 9.01(a)
hereof and the agreement set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership
or trust, the assignee shall have provided the General Partner
with evidence satisfactory to counsel for the Partnership of
the assignee's authority to become a Limited Partner under the
terms and provisions of this Agreement.
(v) The assignee shall have executed a power of
attorney containing the terms and provisions set forth in
Section 8.02 hereof.
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(vi) The assignee shall have paid all legal fees
and other expenses of the Partnership and the General Partner
and filing and publication costs in connection with its
substitution as a Limited Partner.
(vii) The assignee has obtained the prior written
consent of the General Partner to its admission as a
Substitute Limited Partner, which consent may be given or
denied in the exercise of the General Partner's sole and
absolute discretion.
(b)FOR THE PURPOSE OF ALLOCATING PROFITS AND LOSSES AND
DISTRIBUTING CASH RECEIVED BY THE PARTNERSHIP, A SUBSTITUTE LIMITED PARTNER
SHALL BE TREATED AS HAVING BECOME, AND APPEARING IN THE RECORDS OF THE
PARTNERSHIP AS, A PARTNER UPON THE FILING OF THE CERTIFICATE DESCRIBED IN
SECTION 9.03(a)(ii) HEREOF OR, IF NO SUCH FILING IS REQUIRED, THE LATER OF THE
DATE SPECIFIED IN THE TRANSFER DOCUMENTS OR THE DATE ON WHICH THE GENERAL
PARTNER HAS RECEIVED ALL NECESSARY INSTRUMENTS OF TRANSFER AND SUBSTITUTION.
(c)THE GENERAL PARTNER SHALL COOPERATE WITH THE PERSON SEEKING
TO BECOME A SUBSTITUTE LIMITED PARTNER BY PREPARING THE DOCUMENTATION REQUIRED
BY THIS SECTION AND MAKING ALL OFFICIAL FILINGS AND PUBLICATIONS. THE
PARTNERSHIP SHALL TAKE ALL SUCH ACTION AS PROMPTLY AS PRACTICABLE AFTER THE
SATISFACTION OF THE CONDITIONS IN THIS ARTICLE IX TO THE ADMISSION OF SUCH
PERSON AS A LIMITED PARTNER OF THE PARTNERSHIP.
9.04. RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a)SUBJECT TO THE PROVISIONS OF SECTIONS 9.01 AND 9.02 HEREOF,
EXCEPT AS REQUIRED BY OPERATION OF LAW, THE PARTNERSHIP SHALL NOT BE OBLIGATED
FOR ANY PURPOSES WHATSOEVER TO RECOGNIZE THE ASSIGNMENT BY ANY LIMITED PARTNER
OF ITS PARTNERSHIP INTEREST UNTIL THE PARTNERSHIP HAS RECEIVED NOTICE THEREOF.
(b)ANY PERSON WHO IS THE ASSIGNEE OF ALL OR ANY PORTION OF A
LIMITED PARTNER'S LIMITED PARTNERSHIP INTEREST, BUT DOES NOT BECOME A SUBSTITUTE
LIMITED PARTNER AND DESIRES TO MAKE A FURTHER ASSIGNMENT OF SUCH LIMITED
PARTNERSHIP INTEREST, SHALL BE SUBJECT TO ALL THE PROVISIONS OF THIS ARTICLE IX
TO THE SAME EXTENT AND IN THE SAME MANNER AS ANY LIMITED PARTNER DESIRING TO
MAKE AN ASSIGNMENT OF ITS LIMITED PARTNERSHIP INTEREST.
9.05. EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER.
The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue if an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if he dies, his executor, administrator or trustee,
or, if he is finally adjudicated incompetent, his committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.
9.06. JOINT OWNERSHIP OF INTERESTS.
A Partnership Interest may be acquired by two individuals as
joint tenants with right of survivorship, provided that such individuals either
are married or are related and share the same home as tenants in common. The
written consent or vote of both owners of any such jointly held Partnership
Interest shall be required to constitute the action of the owners of such
Partnership Interest; provided, however, that the written consent of only one
joint owner will be required if the Partnership has been provided with evidence
satisfactory to the counsel for the Partnership that the actions of a single
joint owner can bind both owners under the applicable laws of the state of
residence of such joint owners. Upon the death of one owner of a Partnership
Interest held in a joint tenancy with a right of survivorship, the Partnership
Interest shall become owned solely by the survivor as a Limited Partner and not
as an assignee. The Partnership need not recognize the death of one of the
owners of a jointly-held Partnership Interest until it shall have received
notice of such death. Upon notice to the General Partner from either owner, the
General Partner shall cause the Partnership Interest to be divided into two
equal Partnership Interests, which shall thereafter be owned separately by each
of the former owners.
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ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01. BOOKS AND RECORDS.
At all times during the continuance of the Partnership, the
Partners shall keep or cause to be kept at the Partnership's specified office
true and complete books of account in accordance with generally accepted
accounting principles, including: (a) a current list of the full name and last
known business address of each Partner, (b) a copy of the Certificate of Limited
Partnership and all certificates of amendment thereto, (c) copies of the
Partnership's federal, state and local income tax returns and reports, (d)
copies of the Agreement and any financial statements of the Partnership for the
three most recent years and (e) all documents and information required under the
Act. Any Partner or its duly authorized representative, upon paying the costs of
collection, duplication and mailing, shall be entitled to inspect or copy such
records during ordinary business hours.
10.02. CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a)ALL FUNDS OF THE PARTNERSHIP NOT OTHERWISE INVESTED SHALL
BE DEPOSITED IN ONE OR MORE ACCOUNTS MAINTAINED IN SUCH BANKING OR BROKERAGE
INSTITUTIONS AS THE GENERAL PARTNER SHALL DETERMINE, AND WITHDRAWALS SHALL BE
MADE ONLY ON SUCH SIGNATURE OR SIGNATURES AS THE GENERAL PARTNER MAY, FROM TIME
TO TIME, DETERMINE.
(b)ALL DEPOSITS AND OTHER FUNDS NOT NEEDED IN THE OPERATION OF
THE BUSINESS OF THE PARTNERSHIP MAY BE INVESTED BY THE GENERAL PARTNER IN
INVESTMENT GRADE INSTRUMENTS (OR INVESTMENT COMPANIES WHOSE PORTFOLIO CONSISTS
PRIMARILY THEREOF), GOVERNMENT OBLIGATIONS, CERTIFICATES OF DEPOSIT, BANKERS'
ACCEPTANCES AND MUNICIPAL NOTES AND BONDS. THE FUNDS OF THE PARTNERSHIP SHALL
NOT BE COMMINGLED WITH THE FUNDS OF ANY OTHER PERSON EXCEPT FOR SUCH COMMINGLING
AS MAY NECESSARILY RESULT FROM AN INVESTMENT IN THOSE INVESTMENT COMPANIES
PERMITTED BY THIS SECTION 10.02(b).
10.03. FISCAL AND TAXABLE YEAR.
The fiscal and taxable year of the Partnership shall be the
calendar year.
10.04. ANNUAL TAX INFORMATION AND REPORT.
Within 75 days after the end of each fiscal year of the
Partnership, the General Partner shall furnish to each person who was a Limited
Partner at any time during such year the tax information necessary to file such
Limited Partner's individual tax returns as shall be reasonably required by law.
10.05. TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
(a)THE GENERAL PARTNER SHALL BE THE TAX MATTERS PARTNER OF THE
PARTNERSHIP WITHIN THE MEANING OF SECTION 6231(a)(7) OF THE CODE. AS TAX MATTERS
PARTNER, THE GENERAL PARTNER SHALL HAVE THE RIGHT AND OBLIGATION TO TAKE ALL
ACTIONS AUTHORIZED AND REQUIRED, RESPECTIVELY, BY THE CODE FOR THE TAX MATTERS
PARTNER. THE GENERAL PARTNER SHALL HAVE THE RIGHT TO RETAIN PROFESSIONAL
ASSISTANCE IN RESPECT OF ANY AUDIT OF THE PARTNERSHIP BY THE SERVICE AND ALL
OUT-OF-POCKET EXPENSES AND FEES INCURRED BY THE GENERAL PARTNER ON BEHALF OF THE
PARTNERSHIP AS TAX MATTERS PARTNER SHALL CONSTITUTE PARTNERSHIP EXPENSES. IN THE
EVENT THE GENERAL PARTNER RECEIVES NOTICE OF A FINAL PARTNERSHIP ADJUSTMENT
UNDER SECTION 6223(a)(2) OF THE CODE, THE GENERAL PARTNER SHALL EITHER (i) FILE
A COURT PETITION FOR JUDICIAL REVIEW OF SUCH FINAL ADJUSTMENT WITHIN THE PERIOD
PROVIDED UNDER SECTION 6226(a) OF THE CODE, A COPY OF WHICH PETITION SHALL BE
MAILED TO ALL LIMITED PARTNERS ON THE DATE SUCH PETITION IS FILED, OR (ii) MAIL
A WRITTEN NOTICE TO ALL LIMITED PARTNERS, WITHIN SUCH PERIOD, THAT DESCRIBES THE
GENERAL PARTNER'S REASONS FOR DETERMINING NOT TO FILE SUCH A PETITION.
(b)ALL ELECTIONS REQUIRED OR PERMITTED TO BE MADE BY THE
PARTNERSHIP UNDER THE CODE OR ANY APPLICABLE STATE OR LOCAL TAX LAW SHALL BE
MADE BY THE GENERAL PARTNER IN ITS SOLE AND ABSOLUTE DISCRETION.
(c)IN THE EVENT OF A TRANSFER OF ALL OR ANY PART OF THE
PARTNERSHIP INTEREST OF ANY PARTNER, THE PARTNERSHIP, AT THE OPTION OF THE
GENERAL PARTNER, MAY ELECT PURSUANT TO SECTION 754 OF THE CODE TO ADJUST THE
BASIS OF THE PROPERTIES. NOTWITHSTANDING ANYTHING CONTAINED IN ARTICLE V OF THIS
AGREEMENT, ANY ADJUSTMENTS MADE PURSUANT TO SECTION 754 SHALL AFFECT ONLY THE
SUCCESSOR IN INTEREST TO THE TRANSFERRING PARTNER AND IN NO EVENT
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SHALL BE TAKEN INTO ACCOUNT IN ESTABLISHING, MAINTAINING OR COMPUTING CAPITAL
ACCOUNTS FOR THE OTHER PARTNERS FOR ANY PURPOSE UNDER THIS AGREEMENT. EACH
PARTNER WILL FURNISH THE PARTNERSHIP WITH ALL INFORMATION NECESSARY TO GIVE
EFFECT TO SUCH ELECTION.
10.06. REPORTS TO LIMITED PARTNERS.
(a)AS SOON AS PRACTICABLE AFTER THE CLOSE OF EACH FISCAL
QUARTER (OTHER THAN THE LAST QUARTER OF THE FISCAL YEAR), THE GENERAL PARTNER
SHALL CAUSE TO BE MAILED TO EACH LIMITED PARTNER A QUARTERLY REPORT CONTAINING
FINANCIAL STATEMENTS OF THE PARTNERSHIP, OR OF THE COMPANY IF SUCH STATEMENTS
ARE PREPARED SOLELY ON A CONSOLIDATED BASIS WITH THE COMPANY, FOR SUCH FISCAL
QUARTER, PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
AS SOON AS PRACTICABLE AFTER THE CLOSE OF EACH FISCAL YEAR, THE GENERAL PARTNER
SHALL CAUSE TO BE MAILED TO EACH LIMITED PARTNER AN ANNUAL REPORT CONTAINING
FINANCIAL STATEMENTS OF THE PARTNERSHIP, OR OF THE COMPANY IF SUCH STATEMENTS
ARE PREPARED SOLELY ON A CONSOLIDATED BASIS WITH THE COMPANY, FOR SUCH FISCAL
YEAR, PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE
ANNUAL FINANCIAL STATEMENTS SHALL BE AUDITED BY ACCOUNTANTS SELECTED BY THE
GENERAL PARTNER.
(b)ANY PARTNER SHALL FURTHER HAVE THE RIGHT TO A PRIVATE AUDIT
OF THE BOOKS AND RECORDS OF THE PARTNERSHIP, PROVIDED SUCH AUDIT IS MADE FOR
PARTNERSHIP PURPOSES, AT THE EXPENSE OF THE PARTNER DESIRING IT AND IS MADE
DURING NORMAL BUSINESS HOURS.
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER
The General Partner's consent shall be required for any
amendment to this Agreement. The General Partner, without the consent of the
Limited Partners, may amend this Agreement in any respect or merge or
consolidate the Partnership with or into any other partnership or business
entity (as defined in ss. 17-211 of the Act) in a transaction pursuant to
Section 7.01(c), (d) or (e) hereof; PROVIDED, HOWEVER, that the following
amendments and any other merger or consolidation of the Partnership shall
require the consent of Limited Partners (other than the Company) holding more
than 50% of the Percentage Interests of the Limited Partners (other than the
Company):
(a)ANY AMENDMENT AFFECTING THE OPERATION OF THE CONVERSION
FACTOR OR THE EXCHANGE RIGHT (EXCEPT AS PROVIDED IN SECTION 8.05(d) OR 7.01(d)
HEREOF) IN A MANNER ADVERSE TO THE LIMITED PARTNERS;
(b)ANY AMENDMENT THAT WOULD ADVERSELY AFFECT THE RIGHTS OF THE
LIMITED PARTNERS TO RECEIVE THE DISTRIBUTIONS PAYABLE TO THEM HEREUNDER, OTHER
THAN WITH RESPECT TO THE ISSUANCE OF ADDITIONAL PARTNERSHIP UNITS PURSUANT TO
SECTION 4.02 HEREOF;
(c)ANY AMENDMENT THAT WOULD ALTER THE PARTNERSHIP'S
ALLOCATIONS OF PROFIT AND LOSS TO THE LIMITED PARTNERS, OTHER THAN WITH RESPECT
TO THE ISSUANCE OF ADDITIONAL PARTNERSHIP UNITS PURSUANT TO SECTION 4.02 HEREOF;
OR
(d)ANY AMENDMENT THAT WOULD IMPOSE ON THE LIMITED PARTNERS ANY
OBLIGATION TO MAKE ADDITIONAL CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP.
ARTICLE XII
GENERAL PROVISIONS
12.01. NOTICES.
All communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or upon deposit in the United States mail, registered, postage
prepaid return receipt requested, to the Partners at the addresses set forth in
EXHIBIT A attached hereto; PROVIDED, HOWEVER, that any Partner may specify a
different address by notifying the General Partner in writing of such different
address. Notices to the Partnership shall be delivered at or mailed to its
specified office.
12.02. SURVIVAL OF RIGHTS.
Subject to the provisions hereof limiting transfers, this
Agreement shall be binding upon and inure to the benefit of the Partners and the
Partnership and their respective legal representatives, successors, transferees
and assigns.
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12.03. ADDITIONAL DOCUMENTS.
Each Partner agrees to perform all further acts and execute,
swear to, acknowledge and deliver all further documents which may be reasonable,
necessary, appropriate or desirable to carry out the provisions of this
Agreement or the Act.
12.04. SEVERABILITY.
If any provision of this Agreement shall be declared illegal,
invalid, or unenforceable in any jurisdiction, then such provision shall be
deemed to be severable from this Agreement (to the extent permitted by law) and
in any event such illegality, invalidity or unenforceability shall not affect
the remainder hereof.
12.05. ENTIRE AGREEMENT.
This Agreement and exhibits attached hereto constitute the
entire Agreement of the Partners and supersede all prior written agreements and
prior and contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
12.06. PRONOUNS AND PLURALS.
When the context in which words are used in the Agreement
indicates that such is the intent, words in the singular number shall include
the plural and the masculine gender shall include the neuter or female gender as
the context may require.
12.07. HEADINGS.
The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article.
12.08. COUNTERPARTS.
This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original copy and all of which together shall
constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.
12.09. GOVERNING LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have hereunder affixed
their signatures to this Third Amended and Restated Agreement of Limited
Partnership, all as of the date first above written.
OCWEN GENERAL, INC.
By: /s/ XXXXXXX X. XXXXX
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
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EXHIBIT A
AGREED
VALUE OF
CASH CAPITAL PARTNERSHIP PERCENTAGE
PARTNER CONTRIBUTION CONTRIBUTION UNITS INTEREST
------- ------------ ------------ ----- --------
GENERAL PARTNER:
Ocwen General, Inc. $ 3,005,191 189,650 .9129%
0000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
LIMITED PARTNERS:
Ocwen Limited, Inc. $297,513,897 18,775,350 90.3802%
0000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
Investors Mortgage Insurance $ 30,587,787 1,808,733 8.7068%
Holding Company
0000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
TOTAL: $331,106,875 20,773,733 100.00%
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EXHIBIT B
NOTICE OF EXERCISE OF EXCHANGE RIGHT
In accordance with Section 8.05 of the Amended and Restated
Agreement of Limited Partnership (the "Agreement") of Ocwen Partnership, L.P.,
the undersigned hereby irrevocably (i) presents for exchange ________
Partnership Units in Ocwen Partnership, L.P. in accordance with the terms of the
Agreement and the Exchange Right referred to in Section 8.05 thereof, (ii)
surrenders such Partnership Units and all right, title and interest therein, and
(iii) directs that the Cash Amount or REIT Shares Amount (as defined in the
Agreement) as determined by the General Partner deliverable upon exercise of the
Exchange Right be delivered to the address specified below, and if REIT Shares
(as defined in the Agreement) are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the address(es) specified below.
Dated:________ __, _____
Name of Limited Partner:
------------------------------
(Signature of Limited Partner)
------------------------------
(Mailing Address)
------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
------------------------------
If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
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