EXHIBIT 99.4
AMENDED AND RESTATED
AGREEMENT OF
LIMITED PARTNERSHIP
OF
JAMESTOWN 1290, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement"), dated as of May 16, 2002, of XXXXXXXXX 0000, L.P., a Delaware
limited partnership (the "Partnership"), by and among JT 1290 CORP., a Georgia
corporation ("General Partner" or "JT Corp"), JAMESTOWN 1290 PARTNERS, a Georgia
general partnership ("Jamestown Partners", and AP-1290 PARTNERS LLC, a Delaware
limited liability company ("AP-1290"); AP-1290 and Jamestown Partners are
collectively the "Limited Partners"). The General Partner and the Limited
Partners are sometimes herein collectively referred to as the "Partners".
Background
WHEREAS, the Partnership was formed on April 16, 2002 pursuant to that
certain Certificate of Limited Partnership of JAMESTOWN 1290, L.P.; and
WHEREAS, the Partnership is the Purchaser under a certain Amended and
Restated Purchase Agreement (as hereinafter amended, the "Purchase Agreement")
dated as of May 7, 2002, pursuant to which the Partnership has agreed to
acquire, and Metropolis Realty Trust, Inc. (the "Seller") has agreed to sell to
the Partnership, those certain plots, pieces and parcels of land (collectively,
the "Land") commonly known as 1290 Avenue of the Americas, New York, New York,
and more particularly described in Schedule A, together with the buildings and
other improvements located on the Land (the building located on the Land being
referred to as the "Building"; the Building and the Land being collectively
referred to as the "Property"); and
WHEREAS, the General Partner, Jamestown Partners and AP-1290 are parties
to the Agreement of Limited Partnership of JAMESTOWN 1290, L.P. dated as of
April 16, 2002 (the "Original Partnership Agreement"), and the General Partner,
Jamestown Partners and AP-1290 hereby desire to amend and restate the Original
Partnership Agreement in its entirety in accordance with the terms and
conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and other good and valuable consideration, the parties hereto
agree as follows:
SECTION I
GENERAL PROVISIONS
1.01. Existence and Filings. The Partners hereby agree to continue the
Partnership as a limited partnership under and pursuant to the Revised Uniform
Limited Partnership Act of the State of Delaware, 6 Del. c. ss. 17-101 et seq.,
as amended from time to time (the "Act"). This Agreement shall constitute the
agreement of limited partnership among the Partners. The General Partner shall
execute, deliver and file any and all certificates, documents and instruments,
in each case with the Delaware Secretary of State or otherwise as appropriate,
and shall make such other filings as may be required under the Act or the laws
of any other jurisdiction in which the Partnership shall carry on its business.
The Partners agree to execute such documents and to take such other action as
may from time to time be deemed necessary or appropriate by the General Partner
(a) under the Laws of the State of Delaware with respect to the formation,
operation and continued good standing of the Partnership as a limited
partnership, and (b) under the laws of the State of New York or the laws of any
other jurisdiction to qualify to do business in such state or to otherwise carry
on the business of the Partnership.
1.02. Name. The business of the Partnership shall be conducted under the
name of JAMESTOWN 1290, L.P. or such other name as may be designated by the
General Partner, subject to the reasonable consent of the Limited Partners.
1.03. Term. The term ("Term") of the Partnership shall commence as of the
date of filing of the Certificate, and shall continue until the earlier of (a)
December 31, 2022, or (b) the dissolution, liquidation and termination of the
Partnership pursuant to the provisions of Section X.
1.04. Business Purpose and Powers.
(a) Purpose. The sole purpose of the Partnership is to acquire, own,
manage, develop, condominiumize, operate, improve, build upon, rehabilitate,
alter, lease, license, repair, finance or refinance, securitize, sell and
otherwise deal with and dispose of the Property and to engage in any and all
activities necessary, appropriate or advisable thereto, including entering into
the First Mortgage Loan. The Partnership shall not engage in any business or own
any assets other than those related to the Property or otherwise in furtherance
of the purpose of the Partnership. So long as the First Mortgage Loan remains
outstanding, the Partnership shall not incur any indebtedness other than the
First Mortgage Loan or any refinancing thereof and debt incurred in the ordinary
course of the Partnership's business in connection with the operation of the
Property.
(b) Powers. The Partnership shall have the power and authority to take any
and all actions necessary, appropriate, proper, advisable, incidental or
convenient to, or for the furtherance of, the purpose set forth in Section
1.04(a) above, including, without limitation, the power:
(i) To conduct its business, carry on its operations and have and exercise
the powers granted to a limited partnership pursuant to the Act in any state,
territory, district or possession of
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the United States, or in any foreign country that may be necessary, appropriate,
proper, advisable, incidental or convenient to the accomplishment of the purpose
of the Partnership;
(ii) To acquire the Property and to take all action as may be required for
the Partnership to satisfy all of its obligations and duties under the Purchase
Agreement;
(iii) To, either directly or indirectly, lend money, to invest and
reinvest its funds, and to take and hold real, personal and mixed property,
either directly or indirectly, as security for the payment of funds loaned or
invested, in each case to the extent necessary, appropriate, proper, advisable,
incidental or convenient to the accomplishment of the purpose of the
Partnership; and
(iv) To enter into and execute the Management Agreement and Leasing
Agreement;
(v) Subject to the other terms of this Agreement, to conduct all
activities determined by the General Partner to be necessary, appropriate,
proper, advisable, incidental or convenient to the accomplishment of the
purposes of the Partnership.
1.05. Compliance.
(a) Principal Place of Business. The principal place of business of the
Partnership shall be located x/x XXXXXXXXX, Xxx Xxxxx Xxxx, Xxxxx 0000, 0000
Xxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, or at such other location as may
hereafter be determined by the General Partner. The General Partner shall notify
each other Partner in writing of any change in the principal place of business
of the Partnership.
(b) Office and Agent. The Partnership shall at all times maintain a
registered agent and office in the State of Delaware. The registered office of
the Partnership in the State of Delaware is Corporation Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, in New Castle County. The
Partnership's registered agent for service of process in the State of Delaware
is The Corporation Trust Company. The General Partner may change the
Partnership's registered office and/or registered agent from time to time as
permitted under the Act. The General Partner shall notify each other Partner in
writing of any change in the Partnership's registered office and registered
agent for service of process.
1.06. Partners.
(a) The General Partner of the Partnership is JT Corp. Except as expressly
provided in this Agreement, no other Person (as hereinafter defined) shall be
admitted as an additional or substitute General Partner of the Partnership.
(b) The Limited Partners of the Partnership are AP-1290 and Jamestown
Partners. Except as expressly provided in this Agreement, no other Person shall
be admitted as an additional or substitute Limited Partner of the Partnership.
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SECTION II
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
"Act" has the meaning set forth in Section 1.01 of this Agreement.
"Additional Capital Loans" means, with respect to each Partner any Loans
made by such Partner pursuant to Section 3.01(b) which do not constitute
Shortfall Loans.
"Additional Capital Loan Interest" means, with respect to each Partner, at
any moment in time, for any fiscal period in question, a return on its weighted
average Unrecovered " Loan during such fiscal period equal to 10% per annum
(with no compounding). The Additional Capital Loan Interest shall be computed on
the basis of a 360-day year with twelve 30-day months.
"Affiliate" means, with reference to a Person, any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with the first Person.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as the same may be amended, supplemented or modified from time to
time.
"AP-1290" has the meaning set forth in the Preamble.
"Approved Budget" shall mean the Partnership budgets as approved by the
Partners in accordance with this Agreement.
"Call Notice" has the meaning set forth in Section 3.01(b)(ii).
"Capital Account" has the meaning set forth in Section 3.02(a).
"Capital Event Distribution Threshold" means an amount equal to
$250,000,000 for Capital Transactions occurring from and after the date hereof
through and including December 31, 2009. Thereafter, the Capital Event
Distribution Threshold shall be increased by $25,000,000 at January 1 of each
succeeding calendar year.
"Capital Transaction" means a sale of a portion of the Property, or an
interest therein, a financing, refinancing, insurance award, partial
condemnation, easement, sale or other transaction which, in accordance with
generally accepted accounting principles, consistently applied, is treated as a
capital transaction.
"Certificate" means the Certificate of Limited Partnership of the
Partnership, as the same may be amended, supplemented or modified from time to
time.
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"Class A Capital Event Additional Distribution Amount" means, with respect
to the Class A Limited Partner, at any moment in time, an amount equal to
77.207% of the amount shown on Schedule B for the year in which the relevant
Capital Transaction occurs.
"Class A Limited Partner" means Jamestown Partners initially, or any other
Person which hereafter holds the Class A Limited Partnership Interest in
accordance with the terms hereof.
"Class A Limited Partnership Interest" means the Partnership Interest held
by the Class A Limited Partner.
"Class A Preferred Return" means, with respect to the General Partner and
the Class A Limited Partner, in the aggregate at any moment in time, for any
fiscal period in question, a return equal to $23,975,000 per annum (the "initial
Class A Preferred Return Amount") on their Initial Capital. This Class A
Preferred Return is intended to be cumulative. The Class A Preferred Return
shall be pro-rated for partial years based on the actual number of days elapsed,
and shall be reduced after each distribution of capital is made to the Class A
Limited Partner under Section 5.02(d) by an amount determined by multiplying the
initial Class A Preferred Return Amount by a fraction, the numerator of which is
the amount by which the Class A Limited Partner's and the General Partner's
Unrecovered Initial Capital Loan has been reduced by such distribution of
capital and the denominator of which is the Class A Limited Partner's Initial
Capital.
"Class A Replacement Capital Loan Interest" means, at any moment in time,
for any fiscal period in question, a return on the Class A Limited Partner's
weighted average Unrecovered Replacement Capital Loan during such fiscal period,
equal to 8.26% per annum (with no compounding). The Class A Replacement Capital
Return Loan Interest shall be computed on the basis of the Euro-Method.
"Class B Capital Event Additional Distribution Amount" means, with respect
to the Class B Limited Partner, at any moment in time, an amount equal to
22.793% of the amount shown on Schedule B for the year in which the relevant
Capital Transaction occurs.
"Class B Limited Partner" means AP-1290 initially, or any other Person
which hereafter holds the Class B Limited Partnership Interest in accordance
with the terms hereof.
"Class B Limited Partnership Interest" means the Partnership Interest held
by the Class B Limited Partner.
"Class B Preferred Return" means, with respect to the Class B Limited
Partner, at any moment in time, for any fiscal period in question, a return
equal to $6,925,000 per annum (the "initial Class B Preferred Return Amount") on
its Initial Capital. This Class B Preferred Return is intended to be cumulative.
The Class B Preferred Return shall be pro-rated for partial years based on the
actual number of days elapsed, and shall be reduced after each distribution of
capital is made to the Class B Limited Partner under Section 5.02(f) by an
amount determined by multiplying the initial Class B Preferred Return Amount by
a fraction, the numerator of which is the amount by which the Class B Limited
Partner's Unrecovered Initial Capital has been reduced
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by such distribution of capital and the denominator of which is the Class B
Limited Partner's Initial Capital.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contributing Partner" has the meaning set forth in Section 3.02(b)(iii).
"Control" and "Controlled by" mean the ability, directly or indirectly,
whether through the ownership of voting securities, by contract, or otherwise
(including by being the general partner, managing member, officer or director of
the Person in question), to (i) direct or cause the direction of the management
and policies of an entity, or (ii) conduct the day-to-day business operations of
a Person. A Person or Persons shall be deemed to direct or cause the direction
of the management and policies of a Person (and accordingly satisfy clause (i)
of the foregoing test for "Control") if the consent or approval of such
Person(s) shall be required with respect to major decisions concerning such
entity.
"Designated Representatives" of the Partners shall mean the individuals
set forth on Schedule C to this Agreement, as the same may be modified from time
to time in accordance with Section 6.01 or otherwise in writing by the Partners;
provided, however, that the number of Designated Representatives shall not be
increased or reduced without the written approval of the General Partner.
"Euro-Method" shall have the meaning ascribed to such term in Section 5.04
hereof.
"Event of Withdrawal" means, with respect to any Partner, the death,
incapacity, dissolution, withdrawal, insolvency or bankruptcy of such Partner.
For the purposes of this Agreement, the "bankruptcy" of a Partner shall be
deemed to occur only (i) when such Partner shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, or shall file any answer admitting
(or shall fail to contest) the material allegations of a petition filed against
such entity in any such proceeding or shall seek or consent to or acquiesce in
the judicial appointment of any trustee, fiscal agent, receiver or liquidator of
such entity or of all or any substantial part of its properties or shall take
any action looking to its dissolution or liquidation; or (ii) if, within sixty
(60) days after the commencement of an action against such Partner seeking any
bankruptcy, reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such action shall not have been dismissed or all orders or
proceedings thereunder affecting the operations or the business of such entity
stayed, or if the stay of any such order or proceeding thereafter shall be set
aside, or if, within sixty (60) days after the judicial appointment, without the
consent or acquiescence of such entity, of any trustee, fiscal agent, receiver
or liquidator of such entity or of all or any substantial part of its
properties, such appointment shall not have been vacated. For purposes of this
Agreement, the "insolvency" of a Partner shall be deemed to occur only when such
Partner shall make an assignment for the benefit of creditors or shall admit in
writing that its assets are insufficient to pay its liabilities as they come
due.
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"First Mortgage Loan" has the meaning set forth in Section XI.
"First Mortgage Loan Term Sheet" has the meaning set forth in Section XI.
"General Partner" has the meaning set forth in the Preamble.
"Initial Capital" means, with respect to each Partner, the amount
specified on Schedule D for such Partner; provided, however, that in the even
that a Partner contributes less than the amount specified on Schedule D, such
Partner's Initial Capital shall be the amount actually contributed or deemed to
have been contributed to the Partnership by such Partner, and such Partner's
Percentage Interest and Class A Preferred Return or Class B Preferred Return, as
the case may be, shall be reduced on a pro rata basis.
"Interest Rate" has the meaning set forth in Section 3.01(b)(iii).
"IO Portion" shall have the meaning defined in the First Mortgage Loan
Term Sheet.
"IO Portion Maximum Amount" means an amount equal to $55,000,000.
"Jamestown Entities" means, collectively, Jamestown Partners, JT Corp and
any Partner who is a successor in interest to any Class A Limited Partnership
Interest held by any of the foregoing Persons.
"Jamestown Partners" has the meaning set forth in the Preamble.
"JT Corp" has the meaning set forth in the Preamble.
"Leasing Agreement" means that certain Leasing Agreement by and between
the Partnership, as owner, and AP Leasing LLC, as leasing agent.
"Lender" means Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. or its
successor or assignee under the Mortgage.
"LIBOR" means the one month the London Interbank Offered Rate as published
by the Wall Street Journal on the date of determination (or, if not published on
such date, the rate most recently published prior to such date of
determination).
"Limited Partner" has the meaning set forth in the Preamble.
"Liquidation Event" means the sale or other disposition of all or
substantially all of the assets of the Partnership, or any other event resulting
in the dissolution and termination of the Partnership in accordance with Section
X hereof.
"Loan Interest Rate" has the meaning set forth in Section 5.04.
"Management Agreement" means that certain Management Agreement by and
between the Partnership, as owner, and JAMESTOWN 1290 Management, L.P., as
manager.
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"Mortgage" means the Mortgage executed by the Partnership securing the
First Mortgage Loan.
"Mortgage Notes" means the Promissory Note or Notes, other evidences of
indebtedness or other payment obligations to be issued by the Partnership
evidencing the First Mortgage Loan or the later refinancing of such
indebtedness.
"Net Cash Flow" means, for any fiscal period, (i) any operating receipts
of the Partnership for such fiscal period (other than any unapplied security
deposits, prepaid rentals or other deposits by any tenant at the Property), plus
(ii) other revenues of the Partnership other than Net Proceeds, less without
duplication (iii) (A) any amounts required to pay the costs and expenses
(including capital expenditures and reserves) of the Partnership incurred for
such fiscal period which are not paid from any Net Proceeds, including, without
limitation, leasehold improvements, repairs, leasing commissions and similar
items (or reasonable reserves therefor) that are not paid from Net Proceeds, (B)
any debt service payments (including amortization) on any Partnership
indebtedness (including, but not limited to, the First Mortgage Loan) other than
Shortfall Loans, and (C) any increases in the Partnership's reserves (x) as
provided for in an Approved Budget or (y) as determined to be necessary by the
General Partner in its good faith discretion because of a material adverse
change in the Property or the Partnership, plus (iv) any released Partnership
reserves, as determined by the General Partner in its reasonable discretion.
"Net Proceeds" means the net proceeds (including any released reserves) of
a Capital Transaction or a Liquidation Event, after payment of (i) the debts and
liabilities of the Partnership to the extent paid or satisfied in connection
with such transaction, including, without limitation, outstanding loans
(including, but not limited to, the First Mortgage Loan) and any accrued
interest thereon, (ii) if appropriate, the application of such proceeds to their
intended use (e.g., capital or leasehold improvements or repairs (or reserves
therefor), or repayment of any outstanding loans), (iii) any and all costs and
expenses incurred in connection with the transaction, including, without
limitation, attorneys' fees and disbursements, brokerage fees, transfer or
similar taxes, any and all reasonable and customary transaction costs, including
fees paid to Partners or their Affiliates, including without limitation any
sales fee paid pursuant to Section 6.04(c), and, if appropriate, the costs and
expenses incurred in connection with the dissolution and liquidation of the
Partnership, and (iv) reserves established from time to time in such amounts and
for such purposes as the General Partner shall determine in its reasonable
discretion.
"New York Courts" has the meaning set forth in Section 12.03(b).
"Non-Contributing Partner" has the meaning set forth in Section
3.01(b)(iii).
"Nonrecourse Parties" has the meaning set forth in Section 12.17.
"Over Target Amount" has the meaning set forth in Section 5.04.
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"Partners" means JT Corp, AP-1290 and Jamestown Partners initially and
hereinafter shall include any other Person admitted as a Partner of the
Partnership in accordance with this Agreement, for so long as such Person is a
Partner under the terms of this Agreement.
"Partnership" means JAMESTOWN 1290, L.P., a Delaware limited partnership.
"Partnership Accountant" has the meaning set forth in Section 8.05(b)
hereof.
"Partnership Interest" means, with respect to each Partner, its total
economic interest in the Partnership as a Partner, including, without
limitation, its right to receive distributions of cash and allocations of
income, gain and loss in accordance with this Agreement.
"Percentage Interest" means, with respect to each Partner, the percentage
set forth on Schedule D.
"Person" means a corporation, an association, a partnership (general or
limited), a joint venture, an estate, a trust, a limited liability company, a
limited liability partnership, any other legal entity, or an individual.
"Property" has the meaning set forth in the recitals under the Background
section of this Agreement.
"Purchase Agreement" has the meaning set forth in the recitals under the
Background section of this Agreement.
"Quarterly Distribution Dates" means the 15th day of each January, April,
July and October occurring during the term of this Agreement.
"Regulations" means regulations, proposed regulations, and temporary
regulations promulgated under the Code from time to time.
"Replacement Loans" means any loans made by the Class A Limited Partner
pursuant to Section 3.01(c).
"Seller" has the meaning set forth in the recitals under the Background
section of this Agreement.
"Shortfall Loans" have the meaning set forth in Section 3.01(b).
"Target Rate" has the meaning set forth in Section 5.04.
"Term" has the meaning set forth in Section 1.03 of this Agreement.
"Undistributed Capital Event Distribution Threshold" means the total
Capital Event Distribution Threshold less any amount distributed to the Partners
pursuant to the terms of Section 5.02(h).
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"Unrecovered Additional Capital Loans" means, with respect to each
Partner, the total amount of Additional Capital Loans made by such Partner less
any principal distributed to such Partner pursuant to the terms of Section
5.02(c).
"Unrecovered Capital Event Additional Distribution Amount" means, with
respect to each Partner, the Class A Capital Event Additional Distribution
Amount or the Class B Capital Event Additional Distribution Amount, as
applicable, less any capital distributed to such Partner pursuant to the terms
of Section 5.02(e) or 5.02(g), as applicable.
"Unrecovered Initial Capital" means, with respect to each Partner, the
total amount of Initial Capital of such Partner less any capital distributed to
such Partner pursuant to the terms of Section 5.02(d) or 5.02(f), as applicable.
"Unrecovered Replacement Capital Loan" means, with respect to the Class A
Limited Partner, the total amount of Replacement Capital Loans made by such
Partner less any principal distributed to such Partner pursuant to the terms of
Section 5.02(a) or 5.03.
SECTION III
CAPITAL CONTRIBUTIONS
3.01. Capital Contributions.
(a) (i) Concurrently with the closing of the transactions
contemplated by the Purchase Agreement, each Partner shall
contribute to the capital of the Partnership the Initial Capital set
forth opposite its name on Schedule D in immediately available funds
to such account or accounts as may be directed by the General
Partner (with the Class A Partner receiving a credit for the Deposit
(as defined in the Purchase Agreement)). The obligation of each
Partner to make such capital contribution is contingent upon the
closing and funding of the First Mortgage Loan and the closing of
the transactions contemplated by the Purchase Agreement, and the
obligation of each Partner to make such capital contribution is
further contingent upon the payment by each other Partner of its
Initial Capital hereunder. In the event the Class B Limited Partner
causes the Contribution Note (as hereinafter defined) to be
delivered to Seller at the closing of the acquisition of the
Property, and the Partnership receives a credit against the purchase
price of the Property pursuant to Section 4(h) of the Purchase
Agreement, the Class B Limited Partner shall be deemed to have
contributed an amount equal to the difference between the amount of
the Contribution Note credited against the purchase price of the
Property and $1,100,000.
(ii) The Class B Limited Partner has caused Apollo Real Estate
Investment Fund, L.P. to execute a promissory note in favor of
Seller in the original principal balance of $79,725,000 (the
"Contribution Note"), which Contribution Note is being held in
escrow. If the Class B Limited Partner fails to contribute all or
part of its Initial Capital to the Partnership concurrently with or
prior to the closing of the acquisition of the Property, the
Partnership has the right to cause the
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Contribution Note to be delivered to the Seller in payment of a
portion of the purchase price of the Property not contributed by the
Class B Limited Partner.
(b) (i) If at any time, and from time to time, the Partnership is in
need of additional funds for operational and/or capital needs or to
otherwise meet the obligations of the Partnership and, in the good
faith determination of the General Partner, the Partnership is
unable to obtain such additional funds from institutional third
party lenders, then the General Partner shall deliver to the other
Partners a written notice of the Partnership's need for such funds.
(ii) Each Partner, upon receipt of notice (each a "Call
Notice") from the General Partner pursuant to subclause (i) of this
Section 3.01(b), shall thereupon have the right, but not the
obligation, to lend the following percentages of the amount set
forth in the Call Notice: 77.207% from the General Partner and the
Class A Limited Partner, pari passu based on their respective
Percentage Interests, and 22.793% from the Class B Limited Partner.
Any such Additional Capital Loans shall mature at the earlier of
five (5) years or the sale of the property, shall be payable upon
maturity prior to any distributions to the Partners, and shall be
treated as indebtedness for tax purposes.
(iii) Any Partner who has contributed all of its pro rata
share of any additional capital loans requested by the General
Partner in a Call Notice and whose Affiliate Partners have also
loaned all of their pro rata share of such loans is called a
"Contributing Partner". If any Partner (a "Non-Contributing
Partner") fails or elects not to lend any portion of its pro rata
share of any additional capital loans requested by the General
Partner in a Call Notice, then each Contributing Partner may, but
shall not be required to, provide a loan (a "Shortfall Loan") to the
Partnership for all or part of the amount of the additional capital
loans which any Non-Contributing Partner has failed or elected not
to lend. If there shall be a Non-Contributing Partner and more than
one Contributing Partner elects to make a Shortfall Loan in respect
of the loans which such Non-Contributing Partner has failed or
elected not to lend, then, in such event, such Shortfall Loan shall
be provided by such electing Contributing Partners pro rata based on
their Percentage Interests or in such other proportion as they may
agree. If there shall be a Non-Contributing Partner, the additional
capital loans made by each Contributing Partner pursuant to Section
3.01(b)(ii) above shall also constitute Shortfall Loans. Each
Shortfall Loan shall bear interest and compound monthly at a rate
(the "Interest Rate"), determined on the date of the making of such
Shortfall Loan, equal to the greater of: 500 basis points above
LIBOR or 10%, each such rate shall remain in effect for the
applicable Shortfall Loan so long as such Shortfall Loan shall
remain outstanding. Shortfall Loans, and interest thereon, shall be
repaid prior to any distributions to Partners, except as set forth
in Section 5.01(a) and Section 5.01(b), but shall be unconditionally
payable prior to any distribution to Partners upon maturity.
Payments made in respect of Shortfall Loans shall be deemed first to
be repayment
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of interest accrued on such Shortfall Loans and then to repayment of
the principal amount thereof.
(c) The Class A Limited Partner shall have the right, at any time
and from time to time, to make additional capital loans (each, a "Replacement
Capital Loans") up to the IO Portion Maximum Amount to enable the Partnership to
reduce the outstanding principal balance of the First Mortgage Loan. At no time
and in no event shall the sum of (i) the aggregate amount of Unrecovered
Replacement Capital Loans and (ii) the outstanding principal balance of the IO
Portion exceed the IO Portion Maximum Amount.
(d) All capital contributions shall be made in cash and not in kind.
No Partner shall have any personal liability with respect to the return of any
capital contributions made to the Partnership. No Partner shall have the right
to withdraw any part of its capital contributions, or receive any distribution
of its Partnership Interest or any interest thereon, except as specifically
provided in this Agreement. Except as specifically provided in this Agreement,
no time has been agreed upon for the return of any Partner's capital
contributions. No Partner shall at any time withdraw from the Partnership,
except as expressly provided in this Agreement.
(e) Subject to Sections 3.01(b) and 5.06(b), no Partner shall be
required to make any additional capital loans to the Partnership, and no Partner
shall be liable for any debts of the Partnership. No Partner shall be required
to restore any negative balance in its Capital Account.
3.02. Capital Accounts.
(a) A capital account ("Capital Account") shall be maintained for
each Partner.
(b) Each Partner's Capital Account shall be maintained and adjusted
in accordance with Treasury Regulation Sections 1.704-1(b) and 1.704-2.
Consistent with such Regulations, there shall be credited to each Partner's
Capital Account (i) the amount of any cash contributed by such Partner to the
capital of the Partnership, (ii) the fair market value of any property
contributed by such Partner to the capital of the Partnership (net of any
liability secured by such property that the Partnership is considered to assume
or take subject to under Section 752 of the Code, (iii) such Partner's share of
Net Profits (as determined in accordance with Section 4.02) and (iv) any gross
income allocated to such Partner pursuant to Section 4.02 or 4.03, and there
shall be charged against each Partner's Capital Account (A) the amount of all
cash distributions to such Partner, (B) the fair market value of any property
distributed to such Partner by the Partnership (net of any liability secured by
such property that the Partner is considered to assume or take subject to under
Section 752 of the Code), (C) such Partner's share of Net Losses (as determined
in accordance with Section 4.02), and (D) any gross deductions allocated to such
Partner pursuant to Section 4.02 or 4.03. Any liabilities of a Partner assumed
by the Partnership and any liabilities of the Partnership assumed by a Partner
shall be treated in a manner consistent with Treasury Regulation Section
1.704-1(b)(2)(iv)(c).
(c) The initial Capital Account balance of the Partners shall equal
their initial capital account balances as set forth on Schedule D.
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(d) Except as otherwise provided in this Agreement, whenever it is
necessary to determine the Capital Account of any Partner, the Capital Account
of such Partner shall be determined after giving effect to all allocations
pursuant to Section IV and all contributions and distributions made prior to the
time as of which such determination is to be made.
SECTION IV
TAX MATTERS; ALLOCATION OF NET PROFITS AND NET LOSSES
4.01. Certain Allocation Definitions.
4.01.1. The terms "Net Profits" and "Net Losses" for any period mean the
taxable income or loss, respectively, of the Partnership for such period in each
case as determined for U.S. federal income tax purposes, but computed with the
following adjustments:
(a) items of income, gain, loss and deduction (including, without
limitation, gain or loss on the disposition of any Partnership asset and
depreciation or other cost recovery deduction or expense) shall be computed (in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g)) based upon the
Book Values of the Partnership's assets rather than upon the assets' adjusted
bases for U.S. federal income tax purposes;
(b) any tax-exempt income received by the Partnership shall increase
Net Profit or reduce Net Losses;
(c) any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (or treated as described therein pursuant to Treasury
Regulations under Section 704(b) of the Code) shall be treated as a deductible
expense;
(d) there shall be taken into account any separately stated items
under Section 702(a) of the Code;
(e) if the Book Value of any Partnership asset is adjusted pursuant
to the definition thereof, the amount of such adjustment shall be taken into
account in the taxable year of adjustment as gain or loss from the disposition
or deemed disposition of such asset for purposes of computing Net Profit and Net
Loss; and
(f) items of income, gain, loss, or deduction or credit allocated
pursuant to Sections 4.02(b) through (f) or 4.03 shall not be taken into
account.
4.01.2. "Book Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) the initial Book Value of any asset contributed (or deemed
contributed) to the Partnership shall be such asset's gross fair market value at
the time of such contribution;
(b) at the option of the Partners, the Book Values of all
Partnership assets shall be adjusted to equal their respective gross fair market
values at the times specified in Treasury Regulation Section
1.704-1(b)(2)(iv)(f);
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(c) any adjustments to the adjusted basis of any asset of the
Partnership pursuant to Sections 734 or 743 of the Code shall be taken into
account in determining such asset's Book Value in a manner consistent with
Treasury Regulation Section 1.704-1(b)(2)(iv)(m); and
(d) if the Book Value of an asset has been determined pursuant to
paragraph (a), (b) or (c) of this Section 4.01.2, such Book Value shall
thereafter be adjusted in the same manner as would the asset's adjusted basis
for federal income tax purposes, except that depreciation deductions shall be
computed based on the asset's Book Value as so determined, rather than on its
adjusted tax basis.
4.02. Allocation of Net Profits and Net Losses.
(a) Net Profit or Net Loss for each taxable year (or portion
thereof) shall be allocated (after all allocations for such period pursuant to
Section 4.03) among the Partners (and credited or debited to their Capital
Accounts) in such manner that if the Partnership were to liquidate completely
immediately after the end of such period and in connection with such liquidation
sell all of its assets for cash for their then Book Values (i.e., without any
Net Profits or Net Losses resulting therefrom) and satisfy all liabilities
according to their terms (limited with respect to each nonrecourse liability to
the Book Value of the assets securing such liability): (i) the distribution by
the Partnership of any remaining cash to the Partners in accordance with their
respective positive Capital Account balances (after crediting or debiting their
Capital Accounts for any actual (and not hypothetical) Net Profits or Net Losses
for such period) would correspond as closely as possible to the distributions
that would result if the liquidating distributions had instead been made in
accordance with the provisions of Section 5.02 ("Target Amount"), and (ii) any
resulting deficit Capital Account balances (after crediting or debiting Capital
Accounts for Net Profits or Net Losses for such period) would correspond as
closely as possible to the manner in which economic responsibility for
Partnership deficit balances (as determined in accordance with the principles of
Treasury Regulations under Section 704 of the Code) would be borne by the
Partners under the terms of this Agreement. For purposes of applying this
Section 4.02(a), a Partner's Capital Account shall be increased by such
Partner's share of "partnership minimum gain" and "partner minimum gain," within
the meaning of and in accordance with the rules of Treasury Regulation Section
1.704-2(g)(1) and 1.704-2(i)(5). If the allocation otherwise provided in this
Section 4.02(a) would not cause the Capital Account balances to equal the Target
Amount, the Partnership shall allocate items of income and gain or deduction and
loss comprising Net Profit or Net Loss for the taxable year to make (as nearly
as possible) the positive Capital Account balances of the Partners equal their
respective Target Amount, in a manner that allocates as few items as possible.
(b) For U.S. federal income tax purposes, all items of income, gain,
loss, deduction, expense and credit, other than tax items corresponding to items
allocated pursuant to Section 4.03, shall be allocated to the Partners in the
same manner as are Net Profits and Net Losses or items comprising thereto;
provided, however, that in accordance with Section 704(c) of the Code, the
Treasury Regulations promulgated thereunder and Treasury Regulation ss.
1.704-1(b)(4)(i), items of income, gain, loss, deduction, expense and credit
with respect to any property whose Book Value differs from its adjusted basis
for U.S. federal income tax purposes shall, solely
14
for such tax purposes, be allocated among the Partners so as to take account of
any such variation pursuant to the "traditional" allocation method set forth in
Treasury Regulation Section 1.704-3(b).
(c) Notwithstanding any other provision of this Agreement, in no
event shall Net Losses be allocated to a Partner for any period if such
allocation would result in such Partner having a deficit balance in its Capital
Account as of the end of such period in excess of the amount, if any, that such
Partner is obligated to restore or is treated as obligated to restore pursuant
to Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3) and 1.704-1(b)(2)(ii)(c)
or is deemed to be obligated to restore pursuant to the penultimate sentences of
Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) (determined after
taking into account any "nonrecourse deductions" and "minimum gain chargeback"
for such period, as provided in Section 4.03(a) and (b)). In determining whether
any Partner would have such an excess deficit balance in its Capital Account for
any period, such Partner's Capital Account shall be reduced by any adjustment,
allocation or distribution described in paragraph (4), (5) or (6) of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).
(d) Notwithstanding any other provision of this Agreement, except
for Section 4.02(f)(ii) hereof, for each fiscal period, an amount of gross
rental income equal to the aggregate amount of the Class A Replacement Capital
Loan Interest distributed to the Class A Limited Partner with respect to such
period shall be specially allocated to the Class A Limited Partner.
(e) Notwithstanding any other provision of this Agreement, except
for Section 4.02(f)(ii) hereof, if and to the extent the Loan Interest Rate
exceeds the Target Rate for any period, an amount of interest expense equal to
the Over Target Amount shall be specially allocated to the Class A Limited
Partner for such period, and if and to the extent the Target Rate exceeds the
Loan Interest Rate for any period, an amount of gross rental income equal to the
Loan Savings Amount shall be specially allocated to the Class A Limited Partner
for such period.
(f) Notwithstanding any other provision of this Agreement:
(i) all allocations under this Section IV may be adjusted insofar as
may be required in the judgment of the General Partner to minimize the
recognition of "unrelated business taxable income," as defined in the Code
(hereinafter, "UBTI") by any Partner which is a "qualified organization" within
the meaning of Section 514(c)(9)(C) of the Code, or has as a partner or limited
liability company member such a qualified organization; and
(ii) although the Partners confirm their good faith belief that the
terms of this Agreement meet the requirements of Section 514(c)(9)(E) of the
Code and the Treasury Regulations thereunder, and that all allocations hereunder
will have "substantial economic effect" within the meaning of Section 704(b) of
the Code (or in the case of an allocation that cannot have economic effect, are
in accordance with the provisions of applicable Treasury Regulations), as to
each Partner which is a qualified organization or has as a partner or limited
liability company member such a qualified organization, all allocations under
this Agreement shall be adjusted insofar as may be required to enable the
Partnership to meet such requirements. As a result, except as otherwise
permitted under Treasury Regulation Section 1-5.14(c)-2:
15
(A) any such Partner's percentage share of the Partnership's
"overall partnership income" within the meaning of Section
514(c)(9)(E)(i)(I) of the Code) shall not, for any taxable year of
the Partnership, be greater than such Partner's "fractions rule
percentage," as hereinafter defined; and
(B) any such Partner's percentage share of the Partnership's
"overall partnership loss" (within the meaning of Section
514(c)(9)(E)(i)(I) of the Code) shall not, for any taxable year of
the Partnership, be less than such Partner's fractions rule
percentage.
For the purposes of this Section 4.02(g), the term "fractions rule
percentage" shall mean a Partner's percentage share of overall partnership loss
for the taxable year for which that Partner's percentage share of overall
partnership loss will be the smallest.
4.03. Allocations of Nonrecourse Deductions; Excess Nonrecourse
Liabilities; Minimum Gain Chargeback; Qualified Income Offset.
(a) Notwithstanding any other provision of this Agreement, (i)
"partner nonrecourse deductions" (as defined in Treasury Regulation Section
1.704-2(i)), if any, of the Partnership shall be allocated for each period to
the Partner that bears the economic risk of loss within the meaning of Treasury
Regulation Section 1.704-2(i), and (ii) "nonrecourse deductions" (as such term
is defined in Treasury Regulation Section 1.704-2(b)) and "excess nonrecourse
liabilities" (as such term is defined in Treasury Regulation Section
1.752-3(a)), if any, of the Partnership shall be allocated 22.793% to the Class
B Limited Partner and 77.209% to the Class A Limited Partner, pari passu based
on their respective Percentage Interests.
(b) This Agreement shall be deemed to include "qualified income
offset," "minimum gain chargeback" and "partner nonrecourse debt minimum gain
chargeback" provisions within the meaning of Treasury Regulations under Section
704(b) of the Code. Accordingly, notwithstanding any other provision of this
Agreement, items of gross income shall be allocated to the Partners on a
priority basis to the extent and in the manner required by such provisions.
SECTION V
DISTRIBUTIONS
5.01. Operations. Subject to Section 5.04 below, Net Cash Flow shall be
distributed to the Partners not less frequently than each Quarterly Distribution
Date in the following order of priority:
(a) First, to the Class A Limited Partner until the
Partnership has distributed to the Class A Limited Partner, on an
annual cumulative basis, pursuant to this Section 5.01(a) and/or
5.02(a), its accrued and unpaid Class A Replacement Loan;
(b) Second, an amount equal to the outstanding balance of all
Shortfall Loans, together with all accrued interest thereon, shall
be distributed to the
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Contributing Partners that have made Shortfall Loans (payments made
in respect of Shortfall Loans shall be applied in reverse order in
time to which Shortfall Loans are made (i.e., payments made in
respect of Shortfall Loans shall be applied first to the Shortfall
Loans made last in time and last to the Shortfall Loans made first
in time));
(c) Third, to the Partners, pari passu based on their
respective Percentage Interests, until the Partnership has
distributed to each of the Partners, on an annual cumulative basis,
pursuant to this Section 5.01(c) and/or Section 5.02(c), the accrued
and unpaid Additional Capital Loan Interest of such Partner;
(d) Fourth, to the General Partner and the Class A Limited
Partner, pari passu based on their respective Percentage Interests,
until the Partnership has distributed to each of the General Partner
and the Class A Limited Partner, on an annual cumulative basis,
pursuant to this Section 5.01(d) and/or Section 5.02(d), its accrued
and unpaid Class A Preferred Return;
(e) Fifth, to the Class B Limited Partner until the
Partnership has distributed to the Class B Limited Partner, on an
annual cumulative basis, pursuant to this Section 5.01(e) and/or
Section 5.02(f), its accrued and unpaid Class B Preferred Return;
and
(f) Thereafter, 56.25% in the aggregate to the General Partner
and the Class A Limited Partner, pari passu based on their
respective Percentage Interests, and 43.75% to the Class B Limited
Partner.
5.02. Capital Transactions. Net Proceeds from a Capital Transaction and/or
a Liquidation Event shall be distributed to the Partners with reasonable
promptness after each such Capital Transaction and/or a Liquidation Event occurs
in the following order of priority:
(a) First, to the Class A Limited Partner, until the
Partnership has distributed to the Class A Limited Partner an amount
equal to all accrued and unpaid Class A Replacement Loan plus the
then outstanding Unrecovered Replacement Loan of the Class A Limited
Partner;
(b) Second, an amount equal to all Shortfall Loans, together
with all accrued interest thereon, shall be distributed to the
Contributing Partners that have made Shortfall Loans (payments made
in respect of Shortfall Loans shall be applied in reverse order in
time to which Shortfall Loans are made (i.e., payments made in
respect of Shortfall Loans shall be applied first to the Shortfall
Loans made last in time and last to the Shortfall Loans made first
in time));
(c) Third, to the Partners, pari passu based on their
respective Percentage Interests, until the Partnership has
distributed to each of the Partners an amount equal to all accrued
and unpaid Additional Capital Loan Interest of such Partner plus the
then outstanding Unrecovered Additional Capital Loans of such
Partner;
17
(d) Fourth, to the General Partner and the Class A Limited
Partner, pari passu based on their respective Percentage Interests,
until the Partnership has distributed to the General Partner and the
Class A Limited Partner an amount equal to all accrued and unpaid
Class A Preferred Return plus the then outstanding Unrecovered
Initial Capital of the General Partner and the Class A Limited
Partner;
(e) Fifth, to the General Partner and the Class A Limited
Partner, pari passu based on their respective Percentage Interests,
until the Partnership has distributed to the General Partner and the
Class A Limited Partner an amount equal to the then outstanding
Unrecovered Capital Event Additional Distribution Amount of such
Partners;
(f) Sixth, to the Class B Limited Partner until the
Partnership has distributed to the Class B Limited Partner an amount
equal to all accrued and unpaid Class B Preferred Return plus the
then outstanding Unrecovered Initial Capital of the Class B Limited
Partner;
(g) Seventh, to the Class B Limited Partner until the
Partnership has distributed to the Class B Limited Partner an amount
equal to its then outstanding Unrecovered Capital Event Additional
Distribution Amount;
(h) Eighth, 62.5% in the aggregate to the General Partner and
the Class A Limited Partner, pari passu based on their respective
Percentage Interests, and 37.5% to the Class B Limited Partner until
the Partnership has distributed an aggregate amount equal to the
then outstanding Undistributed Capital Event Distribution Threshold
under this Section 5.02(h); and
(i) Thereafter, 50% in the aggregate to the General Partner
and the Class A Limited Partner, pari passu based on their
respective Percentage Interests, and 50% to the Class B Limited
Partner.
5.03 Special Distributions of Replacement Capital Loan Amounts. The Class
A Limited Partner shall have the right, at any time and from time to time, to
request that the Partnership distribute to the Class A Limited Partner all or
part of its Unrecovered Replacement Capital Loans, and the General Partner
shall, subject to the availability of advances under the First Mortgage Loan,
make such distribution to the Class A Limited Partner within 10 days after each
such request is made; provided, however, that the Partnership shall, subject to
such availability, borrow additional amounts under the First Mortgage Loan (up
to the IO Portion Maximum Amount) to enable the Partnership to make such
distribution or distributions.
5.04 Target Interest Rate Provisions. Notwithstanding the foregoing,
during the first seven loan years, so long as the annual interest rate
calculated on the "Euro-Method" (based on the actual number of days elapsed and
an assumed 360-day year) on the First Mortgage Loan (the "Loan Interest Rate")
exceeds, as to the Amortizing Portion (as defined in the First Mortgage Loan
Term Sheet), 6.82%, and/or, as to the IO Portion (as defined in the First
Mortgage Loan Term Sheet), 8.26% (each respectively, the applicable "Target
Rate"), then the Class A Preferred
18
Return, if any, that would otherwise be payable to the Class A Limited Partner
shall be reduced, but only with respect to the period of time that the Loan
Interest Rate exceeds the Target Rate (and without affecting the provisions in
the definition of "Class A Preferred Return" for reducing same after each
distribution of capital), by an amount equal to the difference between (i) the
annual interest payable on such Loan at the Loan Interest Rate and (ii) the
annual interest which would be payable on such Loan if the annual interest rate
on such Loan were the Target Rate (such difference is the "Over Target Amount").
If the Loan Interest Rate is less than the Target Rate, then the Class A
Preferred Return, if any, payable to the Class A Limited Partner shall be
increased, but only with respect to the period of time that the Target Rate
exceeds the Loan Interest Rate (and without affecting the definition of "Class A
Preferred Return" for reducing same after each distribution of capital), by an
amount equal to the difference between (i) the annual interest which would be
payable on such Loan if the annual interest rate on such Loan were the Target
Rate and (ii) the annual interest payable on such Loan at the Loan Interest Rate
(such amount is the "Loan Savings Amount"). The determination of the Over Target
Amount and the Loan Savings Amount shall be made on annual basis, and the lower
of such amounts for any fiscal year shall be subtracted from the higher of such
amounts for such fiscal year to determine whichever is applicable for such
fiscal year of the Net Average Amount or the Net Savings Amount. For any fiscal
year as to which the Over Target Amount is the higher amount, the "Net Average
Amount" shall be the excess of the Over Target Amount over the Loan Savings
Amount. For any fiscal year as to which the Loan Savings Amount is the higher
amount, the "Net Savings Amount" shall be the excess of the Loan Savings Amount
over the Over Target Amount. To the extent that Net Cash Flow or Net Proceeds
are not available to pay the Class A Preferred Return, as increased by any Net
Savings Amount in accordance with the terms hereof, any Net Savings Amount shall
accumulate and shall be paid to the Class A Limited Partner by the Partnership
out of first available Net Cash Flow or Net Proceeds, before any other
distributions are made hereunder. If for any fiscal year the Class A Preferred
Return of the Class A Limited Partner is not sufficient to pay the Net Overage
Amount for such fiscal year, the Class A Limited Partner shall pay such
deficiency within 10 business days after request therefor by the General Partner
or the Class B Limited Partner. Any payments not made within such 10 business
days shall bear interest at 8.26% per annum from that date. Any such payment
shall not constitute an Additional Capital Loan by the Class A Limited Partner.
The Net Overage Amount shall be a direct obligation of the Class A Limited
Partner to the Partnership that may be enforced by the Class B Limited Partner.
If such payment is not timely made, the General Partner will offset such amount
against any future distributions to the Class A Limited Partner under this
Agreement.
5.05. Distributions in Kind. If any assets of the Partnership shall
be distributed in kind with the approval of all Partners, such assets shall be
distributed to the Partners as tenants-in-common (if real property) or joint
owners without right of survivorship (if personal property) in the same
proportion as the Partners would have been entitled to cash distributions. The
amount by which the fair market value of any property to be distributed in kind
to the Partners exceeds or is less than the book value of such property shall,
to the extent not otherwise recognized by the Partnership, be taken into account
for purposes of computing the allocation of Net Profits or Net Losses (or gain
or loss items) under Section IV hereof, and the distributions under Section V
hereof. If the assets of the Partnership are sold in a transaction in which, by
reason of the
19
provisions of Section 453 of the Code or any successor thereto, gain is realized
but not recognized, such gain shall be taken into account in computing the
allocation of Net Profits or Net Losses (or gain or loss items) under Section IV
hereof, and distributions of proceeds to the Partners under Section V hereof
(provided, however, that the Partnership shall not be obligated to distribute
cash not yet received), and the Partnership shall be deemed to have been
dissolved and terminated, notwithstanding any election by the Partners to
continue the Partnership.
5.06. Limitations on Distributions.
(a) The Partnership shall not make a distribution to a Partner to
the extent that, at the time of the distribution, after giving effect to the
distribution, all liabilities of the Partnership, other than liabilities to
Partners on account of their Partnership Interests and liabilities for which
recourse of creditors is limited to specified property of the Partnership,
exceed the fair market value of the assets of the Partnership, except that the
fair market value of property that is subject to a liability for which the
recourse of creditors is limited shall be included in the assets of the
Partnership only to the extent that the fair value of such property exceeds such
liability.
(b) A Partner who receives a distribution in violation of
subdivision (a) of this section, regardless of whether or not such Partner has
knowledge that such distribution is wrongful, and is subsequently so notified by
the Partnership, shall be liable to the Partnership for the amount of the
distribution, until such time as such amount is collected in full by the
Partnership.
5.07. Reconciliation of Distributions. Notwithstanding that Net Cash Flow
may be distributed by the General Partner more frequently than annually, Net
Cash Flow shall be ultimately determined on an annual basis, based upon the
annual audited report of the Partnership within 30 days after completion of such
report but in no event later than April 30th of each year. If, based upon such
annual audited report, it is determined after review and approval of the Class B
Limited Partner that there was (i) an overdistribution of Net Cash Flow to a
Partner, the General Partner shall upon written notice to all Partners of such
distribution deduct the overdistribution from the next distribution of Net Cash
Flow due to such Partner or (ii) an underdistribution of Net Cash Flow to a
Partner, such underdistribution shall within 10 days after receipt of such
annual audited report be paid to such Partner upon written notice to all
Partners of such distribution.
5.08. Withholding Taxes.
(a) The General Partner shall be entitled to withhold or cause to be
withheld from any Limited Partner's distributions from the Partnership such
amounts on account of taxes or similar charges, if any, as are required by
applicable law. Each Limited Partner shall furnish to the General Partner from
time to time all such information as is required by applicable law or otherwise
reasonably requested by the General Partner (including certificates in the form
prescribed by the Code or Regulations thereunder or applicable state, local or
foreign law) to permit the General Partner to ascertain whether and in what
amount withholding is required in respect of such Limited Partner.
Notwithstanding the foregoing, the General Partner shall have no liability to
the Partnership or any Limited Partner for failure to request or obtain such
20
information from any Limited Partner, or for failure to withhold in respect of
any Partner who has not furnished such information to the General Partner.
(b) If the Partnership or the General Partner itself pays any tax
(including penalties or interest) or similar charge on behalf of any Limited
Partner or pays any amount (including any tax, penalty, or interest) in respect
of any failure to withhold from any Limited Partner as required by applicable
law, such Limited Partner shall on written demand reimburse the Partnership or
the General Partner (as the case may be) for the amount of such payment plus
interest thereon (accruing from the later of (x) the date such payment was made
by the Person entitled to reimbursement and (y) the date written notice was
given to the Limited Partner requesting reimbursement) at the Interest Rate then
in effect. Each Person paying an amount (including any taxes, penalties, and
interest) in respect of a Limited Partner's tax shall have a security interest
in the Partnership Interest of any Limited Partner who owes money to such paying
Person pursuant to this Section 5.08(b) until such time as such Person is
reimbursed in full and, in addition to all other rights and remedies of such
paying Person with respect to such security interest or otherwise available at
law or in equity, the General Partner shall have the right to offset, or cause
to be offset, against any such Limited Partner's distributions under this
Agreement all amounts owed by such Limited Partner to such paying person
pursuant to this Section 5.08(b).
(c) Any amounts withheld or offset by the General Partner in
accordance with Section 5.08(a) or 5.08(b) of this Agreement shall nevertheless,
for purposes of this Agreement, be deemed to have been distributed to the
Limited Partner in respect of which they are withheld. Notwithstanding anything
to the contrary contained in this Agreement, Section 5.08(b) hereof and this
Section 5.08(c) shall survive the termination of this Agreement.
SECTION VI
MANAGEMENT DECISIONS AND RELATED MATTERS
6.01. Management.
(a) The business, affairs and assets of the Partnership shall be
managed, arranged and caused to be coordinated by the General Partner, who shall
have, subject to the terms of Section 6.01(b) or elsewhere in this Agreement,
full, exclusive and complete discretion with respect thereto. Subject to and in
accordance with the provisions of this Agreement, the General Partner shall have
all necessary and appropriate powers to carry out the purposes of the
Partnership set forth in Section 1.04 hereof and the power to appoint officers
of the Partnership and delegate to such officers the power to perform any of the
acts that the General Partner is authorized to perform including, without
limitation, the power to execute and deliver documents on behalf of the
Partnership. The General Partner shall exercise its authority as such in its
capacity as a Partner of the Partnership. Except as set forth in Section 6.01(b)
or elsewhere in this Agreement, none of the Partners other than the General
Partner shall participate in the management or control of the Partnership or
have any right to approve, vote on or otherwise consent to any matter relating
to the business, affairs or assets of the Partnership. Without limiting the
generality of the foregoing, the General Partner shall have the right to appoint
the manager and any submanagers of the Property
21
and to enter into the Management Agreement, the Leasing Agreement, any other
property management agreements, and any replacement management agreements, all
on behalf of the Partnership; provided, however, that the terms of any such
other or replacement property management agreements shall be on prevailing
market terms and conditions. The General Partner (x) as general partner of the
Partnership, shall not have the right to terminate the Management Agreement or
any such other or replacement management agreements on behalf of the Partnership
without the prior written consent of the Class B Limited Partner; and (y) as
general partner of Jamestown 1290 Management, L.P. ("Jamestown 1290
Management"), shall not have the right to terminate the Management Agreement or
any such other or replacement management agreements on behalf of Jamestown 1290
Management without the prior written consent of the Partnership as its sole
limited partner.
Notwithstanding anything to the contrary contained in this
Agreement, except for Section 6.01(d) hereof, the General Partner or Jamestown
Partners shall have the right on behalf of the Partnership to enter into
mezzanine lending agreements with lenders providing funds to Jamestown Partners,
including lockbox arrangements which pledge a portion of Net Cash Flow to such
mezzanine lenders, provided that such agreements and arrangements do not affect
in any respect the distributions contemplated in Article V to the Class B
Limited Partner.
Notwithstanding anything to the contrary contained in this
Agreement, the Class B Limited Partner shall have the authority to enforce on
behalf of the Partnership any agreement that the Partnership may have with
affiliates of the General Partner or the Class A Limited Partner. Unless
authorized in writing to do so by this Agreement or by the General Partner, no
attorney-in-fact, employee or other agent of the Partnership shall have any
power or authority to bind the Partnership in any way, to pledge its credit or
to render it liable pecuniarily for any purpose. No Partner shall have any power
or authority to bind the Partnership unless the Partner has been authorized in
writing by the General Partner to act as an agent of the Partnership in
accordance with the previous sentence.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the General Partner shall not take any action with respect to any
Major Matter (as hereinafter defined), unless authorized in writing by the Class
A Limited Partner and the Class B Limited Partner; it being understood and
agreed that the Limited Partners shall not unreasonably withhold, condition or
delay their approval of a Major Matter. "Major Matter" means any of the
following:
(i) except as provided in Section VII, the sale of all or any
substantial portion of the Property by the Partnership;
(ii) the approval of any financing or refinancing by the
Partnership in excess of Two Million and Five Hundred Thousand
Dollars ($2,500,000), except the First Mortgage Loan and any and all
borrowings thereunder, and the Shortfall Loans;
(iii) the approval of the merger or consolidation of the
Partnership with any other entity;
22
(iv) a change or amendment in the purpose of the Partnership;
(v) affiliate transactions by the General Partner and/or the
Class A Limited Partner, other than as specifically contemplated
herein;
(vi) the issuance of additional Partnership Interests, equity
interests in the Partnership or options, rights, warrants or other
securities exchangeable or convertible into equity interests in the
Partnership;
(vii) the liquidation, dissolution or bankruptcy of the
Partnership;
(viii) any action with respect to any Major Matter set forth
in Section 3.3 of the Management Agreement or Section 5.01(b) of the
Agreement of Limited Partnership of Jamestown 1290 Management;
(ix) the termination by Owner of the Management Agreement;
(x) the approval of Partnership budgets; or
(xi) the removal of the General Partner.
(c) Whenever the approval of the Limited Partners is requested
pursuant to Section 6.01(b) with respect to any Major Matter, such approval
shall be deemed to not have been given if the Limited Partner shall not have
responded to the General Partner within ten (10) business days after the General
Partner shall have delivered to each Designated Representative of the Limited
Partner a written request for such approval. The Designated Representative of
each of the Limited Partners, acting alone, shall be authorized on behalf of the
applicable Limited Partner to provide its written approval of any Major Matter,
or its approval of any other matter requiring the approval or consent of the
Limited Partner under this Agreement and the General Partner may rely on such
authority in connection therewith.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the General Partner will use its best efforts to avoid the incurrence
by any Partner and the direct or indirect beneficial owners of such Partner of
"unrelated business taxable income" within the meaning of Sections 511 through
514 of the Code and the Regulations promulgated thereunder.
6.02. Liability and Indemnification of Partners.
(a) No Partner shall have any liability to the Partnership or to any
other Partner for any loss suffered by the Partnership or any other Partner
which arises out of any action or inaction of such Partner if such course of
conduct did not constitute criminal conduct, willful misconduct, fraud or gross
negligence of such Partner. In no event shall any Affiliate of any Partner
(other than any such Affiliate which is a Partner itself) nor any of such
Affiliate's officers, directors, members, managers, shareholders, employees or
agents have, by reason of this Agreement or the existence of the Partnership,
any liability to the Partnership, any Partner or any other Person for any loss
suffered by the Partnership, any Partner or such other Person. Nothing
23
contained in this Section 6.02(a) shall limit, restrict or otherwise affect the
rights or obligations of a Partner, or any of its Affiliates under this
Agreement or any other agreement to which it is a party. Notwithstanding
anything contained herein to the contrary, both the Class A Limited and the
Class B Limited Partner agree to execute "bad boy" guarantees of certain
obligations on behalf of the Partnership in favor of its lenders if required to
do so by such lenders.
(b) The Class A Limited Partner and the General Partner shall
indemnify, defend and hold harmless the Class B Limited Partner and/or its
Affiliates, any of their respective officers, directors, partners, members,
managers, shareholders, employees or agents (the "Class B Indemnitees") from and
against any Damages (as hereinafter defined) of any nature whatsoever arising
out of or in connection with the transactions contemplated by the Purchase
Agreement; provided, however, that the Class A Limited Partner and the General
Partner shall have no obligation to indemnify the Class B Indemnitees for
Damages resulting from (x) the failure on the part of the Class B Limited
Partner to make all or any part of its capital contribution as and when required
to do so pursuant to the terms of Section 3.01(a) or (y) monetary
reconciliations as provided in Section 7 of the Purchase Agreement.
(c) The Partnership shall indemnify, defend and hold harmless each
Partner and/or its Affiliates, any of their respective officers, directors,
partners, members, managers, shareholders, employees or agents (each, an
"Indemnitee") from and against any and all claims or liabilities of any nature
whatsoever arising out of the business of the Partnership, including, without
limitation, reasonable attorneys' fees and disbursements arising out of or in
connection with any action taken or omitted by it pursuant to the authority
granted by this Agreement; provided, however, that no indemnification may be
made to or on behalf of any Indemnitee if a judgment or final adjudication
adverse to such Indemnitee, and which is not subject to further appeal,
establishes that such Indemnitee's acts constituted criminal conduct, willful
misconduct, fraud or gross negligence.
(d) If any third party claim, demand, action, suit, litigation or
other proceeding (a "Claim") is commenced in which any Indemnitee is a party
that may give rise to a Claim for indemnification hereunder (an "Indemnification
Claim"), then such Indemnitee will promptly give written notice to the
Partnership of such Claim. Failure to notify the Partnership of such Claim will
not relieve the Partnership of any liability that the Partnership may have to
the Indemnitee. The Partnership will have the right to defend against an
Indemnification Claim, at the Partnership's expense, with counsel of its choice
reasonably satisfactory to the Indemnitee if (i) within fifteen (15) days
following the receipt of written notice of the Indemnification Claim, the
Partnership notifies the Indemnitee in writing that the Partnership will
indemnify the Indemnitee from and against the entirety of any Claims, losses,
damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) (collectively, "Damages") such
Indemnitee may suffer resulting from, relating to, arising out of, or
attributable to the Indemnification Claim; (ii) the Indemnification Claim
involves only money Damages and does not seek an injunction or other equitable
relief and (iii) the Partnership continuously conducts the defense of the
Indemnification Claim actively and diligently. So long as the indemnifying party
is conducting the defense of the Indemnification Claim in accordance with this
Section 6.02(d), (i) the Indemnitee may retain separate co-counsel at its own
cost and expense and participate in the
24
defense of the Indemnification Claim, (ii) the Indemnitee will not consent to
any settlement or the entry of any writ, decree, order, judgment, injunction
and/or ruling, of or by a governmental authority with respect to the
Indemnification Claim without the prior written consent of the Partnership (not
to be withheld unreasonably) and (iii) the Partnership will not consent to any
settlement or the entry of any writ, decree, order, judgment, injunction and/or
ruling, of or by a governmental authority with respect to the Indemnification
Claim without the prior written consent of the Indemnitee (not to be withheld
unreasonably).
(e) Notwithstanding any other provision herein to the contrary, the
liability of the Partners under this Agreement shall be limited to each
Partner's respective Partnership Interest in the Partnership. No direct or
indirect partner, shareholder, member or manager in or of any Partner (and no
officer, director, member, manager, employee or agent of such direct or indirect
partner, shareholder, member or manager) shall have any personal liability under
this Agreement.
(f) Notwithstanding the foregoing, any indemnification of the
General Partner by the Partnership shall be fully subordinate to any and all
obligations imposed by the Mortgage or the Mortgage Notes, and such
indemnification shall not constitute a claim against the Partnership in the
event that the cash flow of the Partnership is insufficient to pay the
obligations under the Mortgage.
6.03. Certain Conflicts of Interest.
(a) Partners and their Affiliates may engage in and possess
interests alone or in other business ventures, including, without limitation,
the ownership, development, operation, origination, financing and management of
mortgage loans, real property and other real estate related assets,
independently or with others (including, without limitation, activities which
may compete with the Partnership), and such activity shall not breach any
Partner's fiduciary duty to the Partnership and the other Partners. Neither the
Partnership nor any Partner shall by virtue of this Agreement have any right,
title or interest in such ventures.
(b) The Partners and the Partnership may enter into agreements with
Affiliates of the Partners, provided that the terms of any such agreements shall
not be materially in excess of the terms of other agreements then being
generally entered into by owners of first class office buildings with affiliates
of such owners providing similar services to such other buildings.
(c) The terms of the Management Agreement and the Leasing Agreement
(and any extensions or renewals thereof) are hereby approved by the Partners.
6.04. Compensation; Reimbursement for Expenses; Other Expenses; Fees to
Affiliates.
(a) Except as otherwise provided in an Approved Budget, no Partner
and no employee of any Partner, as such, shall be entitled to any salary or
other compensation for any services rendered or to be rendered by it to the
Partnership; provided, however, that the reasonable and documented out-of-pocket
expenses incurred by the General Partner from time to time hereunder in
connection with its services as General Partner of the Partnership shall be
reimbursed by the Partnership upon written demand of the General Partner.
25
(b) Except as otherwise provided in the Purchase Agreement, after
acquiring the Property, all fees and disbursements of accountants and attorneys
retained by the Partnership and incurred in connection with the transactions
contemplated hereby and the preparation of any and all documents related to the
Partnership shall be paid by the Partnership.
(c) Upon a sale of the Property, the Partnership shall pay a sales
fee in an amount equal to 3% of the gross sales price of the Property. AP-1290
Manager L.P., a Delaware limited partnership ("AP-Manager") or one of its
affiliates shall be entitled to receive 40% of the sales fee, and Jamestown
Partners or one of its affiliates shall be entitled to receive 60% of the sales
fee. Each of AP-Manager (or its affiliate) and Jamestown Partners (or its
affiliate) shall be responsible for its pro rata share of any outside broker's
fees or commissions on such sale.
6.05. TI and Leasing Commissions Reserve Account. On the date of the
consummation of the transactions contemplated under the Purchase Agreement (the
"Sale Closing Date"), the General Partner shall establish a reserve from the
initial capital contribution made by the Partners to the Partnership in the
amount of $10,000,000, which amount is to be used by the Partnership to pay
leasing commissions, tenant improvements, landlords' work, and rent abatements,
including, without limitation, the amounts specified in "Exhibit Q" to the
Purchase Agreement or such other obligations of the Partnership that may arise.
6.06 Code Elections. The General Partner may, in its sole discretion, make
(and if made, may revoke) such federal, state, local or other tax elections as
the General Partner shall determine to be in the best interests of the
Partnership. The General Partner shall make a timely election under Section 754
of the Code.
6.07. Independent Directors. Until such time as the First Mortgage Loan
shall be fully paid in accordance with its terms or the lien thereof shall be
released from the Property, the General Partner of the Partnership shall be a
corporation, the sole purpose of which is to act as independent general partner
of the Partnership, which, for itself, satisfies the covenants of Sections 8.08
and 8.09 hereof, and which has two "Independent Directors". Each Independent
Director shall be a person who is not and for the prior five years has not been
and will not be while serving (i) a shareholder, partner, officer, director
(other than as an "Independent Director"), member or employee of the General
Partner, the Partnership, or any parent, subsidiary or Affiliate thereof, (ii) a
member of the immediate family of any such shareholder, director, partner,
officer, director, member, employee, customer or supplier of the General
Partner, the Partnership, or any parent, subsidiary or Affiliate thereof, (iii)
a customer or supplier for, or any other person who derives any of its income
from, the General Partner, the Partnership, or Affiliate thereof, or (iv) a
person or entity under the common control or controlling any such shareholder,
partner, officer, director, member, employee, customer or supplier.
6.08. Actions Requiring Unanimous Consent. Notwithstanding any other
provisions of this Agreement and any provision of law that otherwise so empowers
the Partnership, until such time as the First Mortgage Loan shall have been
discharged, or the lien of the Mortgage shall be released, the Partnership shall
not, without the unanimous consent of the General Partner (including the vote of
its two Independent Directors) and the Limited Partner, file a voluntary
26
petition or otherwise initiate or consent to proceedings to be adjudicated
insolvent or seeking an order for relief as a debtor under the United States
Bankruptcy Code, as amended (11 U.S.C. ss. ss. 101, et seq.) (the "Bankruptcy
Code"), or file or consent to the filing of any petition seeking any
composition, reorganization, readjustment, liquidation, dissolution or similar
relief under the present or any future federal bankruptcy laws or any other
present or future applicable federal, state or other statute or law relative to
bankruptcy, insolvency or other relief for debtors; or seek or consent to the
appointment of any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of the Partnership or of all
or any substantial part of the properties and assets of the Partnership, or make
or consent to any general assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
6.09. Certain Actions. Neither the General Partner nor the Limited
Partners shall take any steps to effect any of the following actions so long as
the Mortgage shall be in effect:
(a) dissolve or liquidate, in whole or in part, consolidate or merge with
or into any other entity or convey, sell or transfer its properties and assets
substantially as an entirety to any entity, except as otherwise may be permitted
under the Mortgage; or
(b) cause the Partnership to engage in any business or activity other than
as set forth in this Agreement.
6.10. Certain Actions of the Limited Partners. Notwithstanding anything in
this Agreement to the contrary, until such time as the First Mortgage Loan shall
be fully paid in accordance with its terms or the lien of the Mortgage shall be
released from the Property, no Limited Partner shall take any action:
(a) to elect any additional or substitute General Partner if the existing
General Partner has not been dissolved, removed in accordance with Section 9.04
hereof, or otherwise disassociated from the Partnership;
(b) which would constitute an "Event of Default" under the Mortgage or any
of the other documents evidencing or securing the obligations secured by the
Mortgage; or
(c) sell, transfer, exchange, convey, encumber or dispose of, except as
permitted by the Mortgage, any of its partnership interests in the Partnership.
SECTION VII
PARTNERSHIP INTEREST RIGHT OF FIRST OFFER
7.01. Right of First Offer.
(a) (i) If, at any time after January 1, 2009, any Partner (or
Partners) (collectively, the "Selling Partners"; it being acknowledged and
agreed that the Selling Partner
27
and all Partners who are Affiliates of such Selling Partner shall automatically
be deemed to collectively constitute the Selling Partners for purposes of this
Section VII) shall desire to sell the Property, then, so long as the Partnership
is not then subject to any prohibition on the sale of the Property pursuant to
loan documents or other agreements binding upon the Partnership (or if it is so
subject, either the loan(s) evidenced by such loan documents can be prepaid at
the time of such sale or such prohibition is waived prior to the closing date of
any such sale of the Property in accordance with the terms hereof, as the case
may be), the Selling Partners shall give the other Partners (the "Remaining
Partners") a written notice (the "Sale Notice") which Sale Notice shall set
forth the Selling Partners' determination of the fair market value (the
"Property Value"), in dollars, of the Property, free and clear of all
liabilities secured by or otherwise relating to the Property.
(ii) Within a period (the "Acceptance Period") of 60 days following
the receipt of the Sale Notice, the Remaining Partners shall have the right to
deliver to the Selling Partners a notice (the "Acceptance Notice") stating their
desire to purchase the Selling Partners' Partnership Interests; provided, that
simultaneously with such notice the Remaining Partners shall deliver to a
national title company, as escrow agent pursuant to an escrow agreement
containing terms substantially similar to the terms set forth in Article 4 of
the Purchase Agreement, a deposit (the "Acceptance Deposit") in an amount equal
to $5,000,000. If the Remaining Partners timely give the Acceptance Notice and
make the Acceptance Deposit, then on the 120th day after receipt of the
Acceptance Notice (the "Closing Date"), such Remaining Partners shall purchase
from the Selling Partners, and the Selling Partners shall sell to the Remaining
Partners, the Selling Partners' Partnership Interests for the Purchase Price (as
defined below), subject to the further terms and conditions hereof.
(iii) Following the delivery of the Sale Notice, the General Partner
shall request the Partnership Accountant (as hereinafter defined) to promptly
calculate the amount (the "Purchase Price") that would be distributed to the
Selling Partners if the Property was sold for cash in an amount equal to the
Property Value set forth in the Sale Notice and the Net Proceeds of such sale
were distributed to the Partners pursuant to Section 5.02; provided, that for
purposes of such calculation, there shall be deducted from such Net Proceeds an
amount equal to the customary transaction expenses that would be incurred if the
Property was sold for the Property Value, including the sales fee contemplated
in Section 6.04(c) (such expenses to be determined by the Partnership
Accountant). The failure of the Partnership Accountant to complete the
calculation of the Purchase Price (as defined below) prior to the last day of
the Acceptance Period shall not extend the Acceptance Period.
(b) On the Closing Date:
(i) the Selling Partners shall deliver to the applicable
Remaining Partner a duly executed and acknowledged instrument of
assignment conveying the Selling Partners' Partnership Interests to such
Remaining Partner or its designee(s) free and clear of all liens and
encumbrances other than liens and encumbrances that may exist in
connection with any financing undertaken for the benefit of the
Partnership, which
28
instrument shall contain a surviving representation concerning the absence
of such liens and encumbrances;
(ii) the Selling Partners shall pay (A) all transfer, gains,
stamp or similar taxes, if any, due in connection with the conveyance of
the Selling Partners' Partnership Interests and (B) any amounts due to the
Remaining Partners or the Partnership under this Agreement;
(iii) the Remaining Partners shall pay the Purchase Price
(minus the Acceptance Deposit, together with any interest accrued thereon,
and as adjusted by the credits and apportionments herein set forth) to the
Selling Partners in immediately available funds and the Remaining Partners
and the Selling Partners shall execute, exchange and/or deliver any
instruments of assumption, indemnities, guarantees or other security with
respect to material liabilities for which the Selling Partners are or will
be personally liable;
(iv) the Partnership Accountant shall close the books of the
Partnership as of the Closing Date, and all items of the Partnership which
are customarily apportioned in the sale of properties comparable to the
Property shall be apportioned between the Selling Partners and the
Remaining Partners in proportion to their respective shares of Net Cash
Flow for the current calendar period as of 11:59 p.m. on the day preceding
the Closing Date in accordance with the customs and practices usual in
transactions involving properties comparable to the Property in New York
City;
(v) Net Cash Flow and Net Proceeds through the Closing Date
shall be distributed in accordance with the provisions of Section V;
(vi) the Purchase Price shall (A) be increased by the
aggregate amount of all Additional Capital loans made by the Selling
Partners on account of the Selling Partners' Partnership Interests in the
period between the date of the Sale Notice and the Closing Date and (B) be
decreased by any Net Proceeds distributed to the Selling Partners pursuant
to Section 5.02 on account of the Selling Partners' Partnership Interests
during such period; and
(vii) the Partners shall execute all amendments to fictitious
name, partnership or similar certificates necessary to reflect the
withdrawal of the Selling Partners from the Partnership, the admission of
any new Partner to the Partnership, if applicable, the termination of the
Partnership, or as may otherwise be required by law.
(c) If none of the Remaining Partners delivers an Acceptance Notice
to the Selling Partners and makes the Acceptance Deposit on or before the close
of the Acceptance Period (time being of the essence), the Selling Partners may
market and sell the Property on behalf of the Partnership to an unaffiliated
third party, provided that (A) the gross purchase price (without deduction for
any brokerage or similar fees payable in connection with such sale) is equal to
or greater than 96% of the Property Value, (B) an agreement for such sale is
entered into not later than 183 days after the expiration of the Acceptance
Period, and (C) the closing of such
29
sale shall occur not later than 365 days after the expiration of the Acceptance
Period (the "365-Day Period"). The Remaining Partners shall within ten (10)
business days after written request therefor from the Selling Partners, execute
such documentation as the Selling Partners shall reasonably request (i)
evidencing the Remaining Partners' declining (or deemed declining) of the right
to purchase the Selling Partners' Partnership Interests and (ii) in the case of
the General Partner, effecting on behalf of the Partnership all actions the
Selling Partners determine, in accordance with this Section, to be necessary or
appropriate.
(d) If the General Partner does not close a sale of the Property
which satisfies the requirements of paragraph (c) above and paragraph (e) below
within the 365-Day Period, then the Selling Partner may not sell the Property in
accordance with this Section without again giving a Sale Notice to the Remaining
Partners pursuant to paragraph (a) above.
(e) If the Selling Partners shall default in their obligation to
close the sale of the Partnership Interests to the Remaining Partners
contemplated by this Section VII on the Closing Date, then the Remaining
Partners may seek specific performance of the Selling Partners' obligations or
pursue its remedies at law or in equity (in which case such Remaining Partners
shall be entitled to the return of the Acceptance Deposit, together with all
interest accrued thereon). If the Remaining Partners shall default in their
obligation to close such sale on the Closing Date, then the Selling Partners
shall be entitled to retain the Acceptance Deposit, together with all interest
accrued thereon, as liquidated damages and may sell the Property at any price to
an unaffiliated third party within 365 days following the anticipated Closing
Date.
SECTION VIII
BOOKS, RECORDS AND BANK ACCOUNTS
8.01. Fiscal Year. The fiscal year of the Partnership shall be the
calendar year.
8.02. Maintenance of Accounts. The General Partner, at the expense of the
Partnership, shall maintain and prepare all accounts required under this
Agreement on a federal income tax basis. Complete and accurate books, records
and accounts shall be kept and maintained for the Partnership by the General
Partner at the principal place of business of the Partnership at the expense of
the Partnership. Each Partner or its Designated Representative shall at all
reasonable times have access to, and may inspect and make copies of, such books,
records and accounts. The General Partner shall send to the Class B Limited
Partner within 20 days after the end of each month and within 60 days after the
end of each quarter, a statement of receipts and expenditures by the Partnership
during the preceding month or quarter (as applicable) and such other operating
and financial data as any Limited Partner shall reasonably request. The General
Partner will deliver to the Class B Limited Partner within 90 days after the end
of each fiscal year, true and correct copies of the financial statements for the
Partnership, including a balance sheet, income statement, and statement of cash
flows for the fiscal year ended, together with copies of material correspondence
with the Partnership's lenders and its major tenants.
30
8.03. Right to Consult with General Partner. For so long as the Class B
Limited Partner owns, directly or indirectly, any interest in the Partnership,
the Class B Limited Partner shall have the right to consult with the General
Partner (including the right to meet with the General Partner periodically, and
at least quarterly, at the Class B Limited Partner's request) on matters
relating to the management and operation of the Property, including without
limitation:
(a) the adoption of annual operating and capital budgets with respect to
the Property;
(b) the adoption of leasing parameters for the Property's leases;
(c) the execution of leases of a material portion of the Property; and
(d) the appointment or termination of any manager with respect to the
Property.
8.04 Right to Participate in Management Activities. The parties hereto
acknowledge that the provisions of this Agreement are intended to provide the
Class B Limited Partner with the right to substantially participate directly in
management and development activities with respect to the Property for purposes
of the U.S. Department of Labor Regulations at 29 C.F.R. ss. 2510.3-101. The
rights and benefits of Sections 8.02 through and including 8.04 are not intended
to, and shall not be deemed to, limit, amend or modify any of the rights and
benefits inuring to the Class B Limited Partner, or any of its affiliates, under
this Agreement or any other formation documents of the Partnership.
8.05. Preparation of Tax Returns; Tax Audits.
(a) The General Partner shall, at the expense of the Partnership,
furnish to each Partner by March 31 in each year during the term of this
Partnership, sufficient information to permit such Partner to prepare its tax
returns with respect to the prior Fiscal Year.
(b) The General Partner shall provide an accounting firm selected by
the General Partner (the "Partnership Accountant") with all information
available to the General Partner required to complete the Partnership's annual
audited financial statements and the Partnership's tax returns within one
hundred and twenty (120) days after the end of its fiscal year. Such financial
statements shall be prepared on a federal income tax basis and on a GAAP basis.
8.06. Bank Accounts; Temporary Investments. All receipts, funds and income
of the Partnership shall be deposited in the name of the Partnership in such
bank account or accounts of a commercial bank, savings and loan association or
other financial institution as the General Partner from time to time shall
determine. Withdrawals from said banks shall be made on the signature of such
Persons designated by the General Partner, and there shall be no commingling of
the moneys and funds of the Partnership with moneys and funds of any other
entity or Person. Notwithstanding the foregoing, the General Partner on behalf
of the Partnership shall be authorized to invest Partnership funds not needed
for Partnership purposes temporarily in United States Treasury obligations,
money market funds, certificates of deposit, bankers' acceptances, or any other
similar money market instruments or funds (including those issued or managed by
an
31
Affiliate of a Partner) and such other similar money market instruments or funds
and such other short term investments as the General Partner shall select.
8.07. Tax Elections.
(a) The General Partner shall at all times constitute, and have full
powers and responsibilities as, the "tax matters partner" of the Partnership for
purposes of Section 6231(a)(7) of the Code. At the General Partner's sole
discretion, the General Partner may cause the Partnership to make or refrain
from making any and all elections permitted by the Code and the Regulations and
any other tax election including, without limitation, elections relating to
methods of depreciation; provided that such elections do not have a material
adverse impact on the Class B Limited Partner.
(b) Decisions of the Partnership with respect to all audits relating
solely to the Partnership shall require only the approval of the General
Partner. All expenses (i) incurred in connection with any audit, investigation,
settlement or review of the Partnership and (ii) of the tax matters partner
shall be borne by the Partnership.
(c) The General Partner shall not have full authority to extend the
statute of limitations and to control any tax audit or other proceeding on
behalf of the Partnership without the prior written consent of the other
Partners, and the other Partners shall not be bound by any settlements entered
into by the General Partner with any governmental authority pertaining to taxes,
unless the General Partner shall have obtained the prior written consent of the
other Partners with respect to such settlements. All expenses (a) incurred in
connection with any audit, investigation, settlement or review of the
Partnership and (b) of the General Partner in connection with its service as tax
matters partner shall be borne by the Partnership.
8.08. Separateness. The Partnership shall (i) observe all partnership
formalities, including the maintenance of current minute books, (ii) maintain
its own separate and distinct books of account, bank accounts, and partnership
records, (iii) cause its financial statements to be prepared in accordance with
generally accepted accounting principles in a manner that indicates the separate
existence of the Partnership and its assets and liabilities, (iv) pay all its
liabilities out of its own funds, (v) in all dealings with the public, identify
itself, and conduct its business and hold all of its own assets in its own name
and as a separate and distinct entity, (vi) independently make decisions with
respect to its business and daily operations, (vii) maintain commercially
reasonable relationships with its Affiliates, (viii) pay the salaries of its own
employees, (ix) allocate fairly and reasonably any overhead for shared office
space, (x) use separate stationery, invoices and checks, (xi) at all times
remain solvent, (xii) file its own tax return, (xiii) maintain adequate capital
sufficient to carry out these enumerated covenants and conduct its business as
described therein, (xiv) correct any known misunderstandings regarding its
separate identity, and (xv) not identify itself as a division of any other
entity.
8.09. No Commingling. The Partnership shall not (i) commingle its assets
with those of, or pledge its assets for the benefit of, any other person other
than the pledge of its assets pursuant to the First Mortgage Loan, (ii) assume,
guarantee or become obligated, or hold out its
32
credit as being available to satisfy, the debts, liabilities or obligations of
any other person, (iii) except for the payment of a management fee to Jamestown
1290 Management, L.P., a Delaware limited partnership and a 99.999% subsidiary
of the Partnership ("Jamestown Management"), pursuant to the terms of the
Management Agreement, acquire obligations or securities of, or make loans or
advances to, any Affiliates, (iv) incur any indebtedness except in accordance
with the Mortgage or as permitted under Section 1.04 hereof, (v) buy or hold
evidences of indebtedness issued by others, or (vi) except for Jamestown
Management, hold, form or acquire any subsidiaries.
SECTION IX
ASSIGNABILITY OF PARTNERSHIP INTERESTS
9.01. Restrictions on Transfer or Assignment of Partnership Interests.
(a) Except as specifically provided in this Section IX, no Partner
shall, directly or indirectly, sell, transfer, assign or otherwise dispose of
(collectively, "Transfer") all or any portion of its Partnership Interest or
permit or suffer such a Transfer or contract to do so without the written
consent of the other Partners, which consent may not unreasonably be withheld so
long as the proposed transferee is an entity of comparable or better reputation,
capacity and quality, and the right of first refusal provisions contained in
Section 9.01(c) have been complied with. Notwithstanding anything appearing in
this Section 9.01 to the contrary, each Partner shall be entitled to Transfer
all or any portion of its Partnership Interest (or the proceeds thereof) to any
Person so long as following such Transfer such Partner continues to be
Controlled by an Eligible Affiliate of such Partner. As used herein, "Eligible
Affiliate" means: (i) with respect to AP-1290, Apollo Real Estate Advisors, L.P.
("AREA") or any Person Controlled by AREA ("AREA Affiliate"), so long as some
combination of the following persons shall Control AREA or the AREA Affiliate:
Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxx and/or Xxxxxx Xxxxxx,
provided, that if any of the foregoing persons shall individually cease to be a
member, director, partner, officer and/or employee of AREA or the AREA Affiliate
(whether by death, resignation or otherwise), then, some combination of the
remaining persons shall Control AREA or the AREA Affiliate; and (ii) with
respect to the Jamestown Entities, any Person Controlled by at least one or more
of the following individuals: Xxxxxxxxx X. Xxxx and Xxxxxxx X. Xxxxxx. For
purposes of this Section 9.01, any Transfer of a direct or indirect ownership
interest in either Partner (including any ownership interest in any partner or
member of such Partner) shall be deemed to constitute a transfer of the
Partnership Interest of such Partner if, following such Transfer, such Partner
would no longer be Controlled by an "Eligible Affiliate" of such Partner.
(b) Any purported Transfer in violation of this Section IX shall be
void ab initio, and shall not bind the Partnership, and the Partner making such
purported Transfer shall indemnify and hold the Partnership and the other
Partners harmless from and against any federal, state or local income taxes, or
transfer taxes, including without limitation, transfer gain taxes, arising as a
result of, or caused directly or indirectly by, such purported Transfer. The
giving of any consent to a Transfer in any one or more instances shall not limit
or waive the need for such consent in any other or subsequent instances.
Notwithstanding the foregoing, unless a transferee is admitted as a substitute
Partner to the Partnership in accordance with the provisions of
33
Section 9.01(d) hereof, the transferor shall not be relieved of any liability
hereunder, and the transferee shall not be entitled to any of the rights granted
to a Partner hereunder, including, without limitation, the right to receive all
or part of the share of the income, gain, losses or cash distributions to which
its transferor would otherwise be entitled.
(c) Except as set forth in Section 7 and Section 9.01(a) with
respect to Transfers to Partners Controlled by Eligible Affiliates, no Partner
may Transfer its Partnership Interest without first complying with the
provisions of this Section 9.01(c). Before any Partnership Interest can be
transferred, the Partner proposing such a Transfer (hereinafter referred to as
the "Offering Partner") must first offer to transfer its Partnership Interest to
the other Partners (hereinafter referred to as the "Offeree Partners"). The
offer must be in writing and must designate the proposed sale price and the
identity of the proposed purchaser and must include a description of the
Partnership Interest being offered for sale and the proposed terms of payment.
Within 30 days after receiving the offer, each Offeree Partner shall notify the
Offering Partner in writing whether it accepts the offer. If an Offeree Partner
fails to give the Offering Partner such notice within such 30-day period, then
the Offeree Partner shall be deemed to have rejected the offer. Following an
Offeree Partner's timely acceptance of an offer, the Offering Partner shall be
obligated to sell, and the Offeree Partner shall be obligated to purchase, the
Partnership Interest which was offered for sale at the price and on the terms
set forth in the offer, within 90 days of such acceptance. Upon notice by the
Offeree Partners of their intention not to accept the offer or the failure of
the Offeree Partners timely to accept within the aforesaid 30-day period, the
Offering Partner shall have a period of 180 days within which to transfer its
Partnership Interest to one Person at a price no less than that specified in the
offer and upon terms no more favorable to the purchaser than those set forth in
the offer, subject to the conditions contained in the balance of this Section
9.01, which apply to all transfers.
(d) A permitted transferee of the Partnership Interest of a Partner
shall become a substitute Partner entitled to all the rights, and subject to all
of the obligations and restrictions, of such Partners if, and only if:
(i) the transferors give the transferee such right;
(ii) the transferors or transferee pay to the Partnership all
costs and expenses incurred in connection with such substitution;
(iii) the transferee executes and delivers such instruments,
in form and substance satisfactory to the General Partner, as it may
deem necessary or desirable to effect such substitution and to
confirm the agreement of the transferee to be bound by all of the
terms and provisions of this Agreement, and the restrictions against
transfer set forth in this Section IX;
(iv) the transferee executes and delivers a statement that it
is acquiring the Partnership Interests for its own account for
investment and not with a view to the resale or distribution thereof
and that it will only Transfer the acquired
34
Partnership Interests (subject to the terms of this Section IX) to a
Person who so similarly represents and warrants;
(v) if required by the General Partner, the Partnership
receives the written opinion of responsible counsel (who may be
counsel to the Partnership), in form and substance satisfactory to
the General Partner, that such Transfer does not violate federal or
state securities laws or any representation or warranty of such
transferring Partners given in connection with the acquisition of
their Partnership Interests; and
(vi) if required by the General Partner, counsel to the
Partnership delivers to the Partnership an opinion in writing that
such Transfer (A) will not result in a termination of the
Partnership under Section 708 of the Code; (B) will not cause the
Partnership to lose its characterization as a partnership for United
States federal income tax purposes; and (C) will not cause the
Partnership to become subject to the Investment Company Act of 1940,
as amended.
(e) Upon the Transfer of all of the Partnership Interest by a
Partner as hereinabove provided, the income, loss, gain, deduction and credit
attributable to the interest so transferred shall be allocated between the
transferor and transferee based upon the number of days during the applicable
fiscal year of the Partnership that the interest so transferred was held by each
of them, without regard to the results of Partnership activities during the
period in which each was the holder; provided, however, that the General Partner
shall at the request and expense of the transferring Partners, cause an interim
closing of the Partnership's books as of the effective date of Transfer for
purposes of allocating such items between the transferors and transferee.
The Partnership shall be entitled to treat the record owner of any
Partnership Interest as the absolute owner thereof, and shall incur no liability
for distributions of cash or other property or allocations of income, gain,
loss, deduction or credit made in good faith to such owner until such time as a
written assignment of such Partnership Interest has been received, accepted and
recorded on the books of the Company.
(f) Notwithstanding anything contained in this Agreement to the
contrary, no Transfer of a direct or indirect ownership interest of the
Partnership shall be made such that the transferee possesses in the aggregate,
with the interests of all its Affiliates and family members, more than a 49%
interest in the Partnership, unless either (x) until the First Mortgage Loan
shall have been discharged, or the lien of the Mortgage shall have been released
(i) the Lender consents, (ii) a new non-consolidation opinion is provided to the
Lender and the applicable rating agencies, and (iii) the applicable rating
agencies confirm that the transfer will not result in a qualification,
withdrawal or downgrade of any securities rating, and (y) after clause (x) above
ceases to apply (i) the holder(s) of any mortgage(s) which encumber the
Property, or any material portion thereof consent to the extent required under
such mortgage(s), (ii) to the extent required under any such mortgage(s), a new
non-consolidation opinion is provided to the applicable mortgagee(s) and the
applicable rating agencies, and (iii) to the extent required under any such
mortgage(s), the applicable rating agencies confirm that the transfer will not
result in a
35
qualification, withdrawal or downgrade of any securities rating; provided,
however, that unless the Lender or such mortgage(s), as the case may be, have a
consent right under the applicable loan documents and refuse to consent to such
Transfer, Jamestown Partners shall have the right to Transfer all or any part of
its Partnership Interest to a nominee, who will hold such Partnership Interest
as nominee for Jamestown Partners, and said nominee shall have the right to
Transfer all or any part of such Partnership Interest to Jamestown Partners,
without complying with any of the provisions of this Section IX.
9.02 [INTENTIONALLY OMITTED]
9.03 Events of Withdrawal of a Partner. In the Event of Withdrawal of any
Partner other than a voluntary withdrawal (the "Withdrawing Partner"), the legal
representative of the Withdrawing Partner shall have such power as the
Withdrawing Partner possessed to constitute a successor as an assignee of its
Partnership Interest and to join with such assignee in making application to
substitute such assignee as a Partner. Such legal representative shall succeed
to the rights of the Withdrawing Partner to receive distributions from the
Partnership and allocations of income, gain, loss, deduction and credit;
provided, however, that such legal representative shall not have the right to
become a substitute Partner in the place of the Withdrawing Partner unless the
conditions of Section 9.01(b) hereof are first satisfied.
9.04 Removal of General Partner. (a) The General Partner may be removed as
a general partner of the Partnership by (A) the Class B Limited Partner if, in
connection with the furtherance of its obligations and duties as the General
Partner, the General Partner shall have been liable or guilty of any of the
following actions: (i) embezzlement, (ii) fraud, (iii) willful misconduct, and
(iv) criminal conviction, or (B) by the vote of Partners holding at least a
majority of Percentage Interests.
(b) Prior to or simultaneously with the removal of the General
Partner by the Class B Limited Partner upon the occurrence of any of the
foregoing events described above in subclause (A), the Class B Limited Partner
shall notify the Class A Limited Partner, on behalf of the limited partners of
the Class A Limited Partner, in writing of the name of the Class B Limited
Partner's proposed replacement General Partner.
(c) If the General Partner is removed by the Class A Limited
Partner, the Class A Limited Partner shall have the right to appoint a
replacement General Partner reasonably acceptable to the Class B Limited
Partner.
(d) If the newly appointed General Partner proposed by the Class A
Limited Partner or the Class B Limited Partner, as the case may be, shall not be
reasonably acceptable to other Limited Partner, the Class A Limited Partner or
the Class B Limited Partner, as the case may be, shall so notify the other
Limited Partner in writing, and the Class A Limited Partners or the Class B
Limited Partner, as the case may be, and the other Limited Partner shall
cooperate in appointing a new General Partner.
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(e) Upon any removal of the General Partner as herein provided, the
removed General Partner's future liability, obligations, and duties as a general
partner of the Partnership shall immediately cease, and the Partnership shall
indemnify and hold the removed General Partner harmless from and against any and
all losses, costs, claims, and damages arising from or relating to any action or
omissions of the Partnership from and after such removal of the General Partner.
(f) Notwithstanding anything contained herein to the contrary, if
the General Partner withdraws or is removed, so long as the Mortgage is
outstanding, a new general partner meeting the requirements of Section 6.06 as a
single-purpose general partner shall be appointed, and the Partnership shall not
be dissolved but shall continue. Upon the appointment of a new General Partner
pursuant hereto, a new non-consolidation opinion shall be delivered to the
Lender and the applicable rating agencies and confirmation shall be obtained
from the applicable rating agencies that the addition of the new General Partner
shall not result in a qualification, withdrawal or downgrade of any securities
rating.
SECTION X
DISSOLUTION AND TERMINATION
10.01. Events of Dissolution.
(a) The Partnership shall be dissolved upon the earliest to occur of
the following:
(i) on a date mutually agreed upon by the Partners;
(ii) the sale by the Partnership of all or substantially all
of its assets (unless the General Partner shall elect to continue
the existence of the Partnership pending collection of the deferred
balance of any sales proceeds);
(iii) December 31, 2022; or
(iv) In the event of the removal of the General Partner in
accordance with Section 9.04 hereof, unless, within ninety (90) days
following the occurrence of such event, a replacement General
Partner is named in accordance with Section 9.04 hereof.
10.02. Winding-Up, Liquidation and Distribution of Assets.
(a) Upon dissolution of the Partnership, an accounting shall be made
by the Partnership Accountant of the accounts of the Partnership and of the
Partnership's assets, liabilities and operations, from the date of the
immediately preceding accounting until the date of dissolution. The General
Partner shall immediately proceed to wind up the affairs of the Partnership.
37
(b) If the Partnership is dissolved and its affairs are to be wound
up, the General Partner shall:
(i) sell or otherwise liquidate all of the Partnership's
assets as promptly as practicable;
(ii) allocate any profit or loss resulting from such sales to
the Partner's Capital Accounts in accordance with Section IV hereof;
(iii) discharge all liabilities of the Partnership, including,
without limitation, liabilities to Partners who are creditors, to
the extent otherwise permitted by law, other than liabilities to
Partners for distributions, and establish such reserves as may be
reasonably necessary to provide for contingent liabilities of the
Partnership (for purposes of determining the Capital Accounts of
Partners, the amounts of such reserves shall be deemed to be an
expense of the Partnership); and
(iv) distribute the remaining assets as follows:
(x) after giving effect to Section 10.02(b)(ii), to the
Partners in accordance with their respective Capital Account
balances; and
(y) if any assets of the Partnership are to be
distributed in kind, the net fair market value of such assets
as of the date of dissolution shall be determined by
independent appraisal or by agreement of the Partners. Such
assets shall be deemed to have been sold as of the date of
dissolution for their fair market value, and the Capital
Accounts of the Partners shall be adjusted pursuant to Section
IV hereof to reflect such deemed sale.
(c) Upon completion of the winding-up, liquidation and distribution
of the assets, the Partnership shall be deemed terminated.
(d) The General Partner shall comply with any applicable
requirements of applicable law pertaining to the winding-up of the affairs of
the Partnership and the final distribution of its assets.
10.03 Rights of Mortgagee. Upon dissolution of the Partnership, the
mortgagee under the Mortgage or its successors or assigns shall have the
independent ability (i) to retain the collateral securing the obligations under
the Mortgage (the "Collateral") and (ii) to continue to pay the scheduled debt
service under the Mortgage or liquidate the Collateral in the event that the
proceeds from the sale of the Collateral would be insufficient to repay the
obligations under the Mortgage.
10.04. Articles of Dissolution. When all debts, liabilities and
obligations of the Partnership have been paid and discharged or adequate
provisions have been made therefor and all of the remaining property and assets
of the Partnership have been distributed, articles of dissolution as
38
required by the Act shall be executed and filed by the General Partner with the
Delaware Secretary of State.
10.04. Effect of Filing of Articles of Dissolution. Upon the filing of
articles of dissolution with the Delaware Secretary of State, the existence of
the Partnership shall cease, except for the purpose of suits, other proceedings
and appropriate action as provided in the Act. The General Partner shall have
the authority to distribute any Partnership property discovered after
dissolution, to convey real estate and to take such other action as may be
necessary on behalf of and in the name of the Partnership.
10.05. Return of Contribution Nonrecourse to Other Partners. Except as
provided by law or as expressly provided in this Agreement, upon dissolution,
each Partner shall look solely to the assets of the Partnership for the return
of its capital contributions. If the Partnership property remaining after the
payment or discharge of the debts and liabilities of the Partnership is
insufficient to return the capital contributions of one or more Partners, such
Partner or Partners shall have no recourse against any other Partner.
10.06 Termination of Agreement. If the Purchase Agreement is terminated
and/or the transactions contemplated thereby are not consummated, then this
Agreement shall terminate automatically and without any action on the part of
any Partner, and no party hereto shall have any further rights or obligations
hereunder other than those which are expressly provided to survive the
termination hereof. Notwithstanding anything contained herein to the contrary,
in the event the Break Up Fee (as defined in the Purchase Agreement) is paid to
the Partnership as a result of the termination of the Partnership Agreement, the
Break Up Fee shall be applied first to reimburse Jamestown Partners for costs,
fees and expenses incurred by it and its affiliates in connection with the
Purchase Agreement and the transactions contemplated thereby, this Partnership
Agreement, and the proposed or actual syndication of interests in one or more
entities owning interests, directly or indirectly, in Jamestown Partners,
including, without limitation, expenses incurred in connection with its due
diligence investigation of the Property, legal and accounting fees and expenses
incurred by it, the Deposit (as defined in the Purchase Agreement), fees and
expenses incurred in connection with applications for the First Mortgage Loan
and any other financing sought or obtained by Jamestown Partners or any of its
affiliates in connection with its investment in the Property, costs incurred in
the preparation of syndication materials by Jamestown Partners and any of its
affiliates, and sales commissions paid or owed in connection with its
syndication efforts. The balance remaining after such reimbursement shall be
distributed 77.207% to the General Partner and the Class A Limited Partner, pari
passu, and 22.793% to the Class B Limited Partner.
SECTION XI
FIRST MORTGAGE LOAN
Concurrently with the closing of the transactions contemplated by the
Purchase Agreement, a loan (the "First Mortgage Loan") will be made to the
Partnership by the Lender, which First Mortgage Loan will be secured by the a
Mortgage on the Property, on the terms contained in that certain Term Sheet
dated as of May 1, 2002 from Lender to JAMESTOWN, as such Term Sheet may be
amended or supplemented from time to time (the "First Mortgage Loan
39
Term Sheet").
SECTION XII
MISCELLANEOUS
12.01. Notices. Any and all notices, requests, consents, waivers or
demands permitted or required to be made under this Agreement shall be in
writing, signed by the Partner giving such notice, request, consent, waiver or
demand and shall be delivered (i) personally, (ii) by overnight mail, or (iii)
by registered or certified mail, return receipt requested. All such notices,
requests, consents, waivers or demands shall be deemed delivered, as applicable:
(a) on the first business day on or after the date of the personal
delivery;
(b) on the first business day on or after the date of the signed
receipt for certified or registered mail; or
(c) on the next business day for overnight mail.
Notices directed to a Partner shall be delivered to the parties at the address
as set forth below, or at such other address as may be supplied by written
notice given in conformity with the terms of this Section 12.01:
If to AP-1290, to:
AP-1290 LLC
c/o Apollo Real Estate Advisors, L.P.
0000 Xxxxxx xx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X.X. Xxxxxxxxx
with a copy to (which shall not constitute notice):
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
If to Jamestown Partners or JT CORP, to:
Xxxxxxxxx
Xxx Xxxxx Xxxx, Xxxxx 0000
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx and Xxxx Xxxxxxxx
40
with a copy to (which shall not constitute notice):
Holland & Knight LLP
0000 X. Xxxxxxxxx Xxxxxx, XX
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: X. Xxxxxx Xxx III, Esq.
with a copy to (which shall not constitute notice):
King and Spalding LLP
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Any counsel designated above or any replacement counsel which may be
designated respectively by any Partner or such counsel by written notice to the
other parties is hereby authorized to give notices hereunder on behalf of its
respective client.
12.02. Successors and Assigns. Subject to the restrictions on Transfers
set forth herein, this Agreement and each and every provision hereof shall be
binding upon and shall inure to the benefit of the Partners, their respective
successors, successors-in-title, heirs and assigns, and each and every
successor-in-interest to any Partner, whether such successor acquires such
interest by way of gift, purchase, foreclosure, or by any other method, shall
hold such interest subject to all of the terms and provisions of this Agreement.
12.03. Governing Law; Choice of Forum.
(a) This Agreement and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the internal laws of the State of
Delaware, without reference to the rules regarding conflict or choice of laws of
such State.
(b) Each Partner hereby irrevocably and unconditionally (i) submits
itself and its property, solely for the purposes of any legal action or
proceeding relating to this Agreement or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive jurisdiction of the Supreme
Court of the State of New York, New York County, the courts of the United States
of America for the Southern District of New York, and appellate courts thereof
(collectively, the "New York Courts"), (ii) consents to the bringing of any such
action or proceeding in an inconvenient court, and agrees not to plead or
otherwise assert the same, (iii) agrees to service upon it or him of any and all
process in any such action or proceeding at the address set forth in Section
12.01 hereof, (iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law, and (v) agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other
41
jurisdictions by suit on the judgment or in any other manner provided by law.
The parties hereto agree that any legal action or proceeding relating to this
Agreement shall be brought in the New York Courts or the Delaware Court of
Chancery only; provided, however, that if any Partner breaches or seeks to
resist any term, covenant or condition set forth in this Section 12.03(b) the
other Partners shall not be bound by the limitations of this sentence with
respect to such Partner's breaching or seeking to resist any term, covenant or
condition of this Section 12.03(b).
12.04. No Waiver. The failure of any Partner to insist upon strict
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not be a waiver of
such Partner's right to demand strict compliance in the future. No consent or
waiver, express or implied, to or of any breach or default in the performance of
any obligation hereunder, shall constitute a consent or waiver to or of any
other breach or default in the performance of the same or any other obligation
hereunder.
12.05. Entire Agreement. This Agreement together with the Exhibits and
Schedules hereto represents the entire agreement of the parties with respect to
the subject matter hereof and supersedes any and all prior agreements, writings
or understandings between the parties with respect to the subject matter hereof.
Except as otherwise expressly provided herein, no amendment or modification to
this Agreement shall be binding unless same shall be in writing and signed by
the Person against whom enforcement is sought.
12.06. Captions. Titles or captions of Sections contained in this
Agreement are inserted only as a matter of convenience and for reference, and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof.
12.07. Counterparts. This Agreement may be executed in several
counterparts, all of which together shall for all purposes constitute one
Agreement, binding on all the Partners and the Partnership notwithstanding that
all the Partners and the Partnership have not signed the same counterpart.
12.08. Waivers. Except as otherwise expressly provided herein, each
Partner irrevocably waives during the term of the Partnership any right that it
may have:
(a) To cause the Partnership or any of its assets to be partitioned;
(b) To cause the appointment of a receiver for all or any portion of
the assets of the Partnership;
(c) To compel any sale of all or any portion of the assets of the
Partnership pursuant to applicable law; or
(d) To file a complaint, or to institute any proceeding at law or in
equity, or to cause the termination, dissolution or liquidation of the
Partnership.
42
12.09. Interpretation.
(a) The singular includes the plural and the plural includes the
singular.
(b) The word "or" is not exclusive and the word "including" is not
limiting.
(c) References to a law include any rule or regulation issued under
the law and any amendment to the law, rule or regulation.
(d) References (without specification of a different document) to an
Article, Section, Exhibit or Schedule mean an Article, Section, Exhibit or
Schedule contained in or attached to this Agreement.
(e) References to any decision making authority of the General
Partner or a Limited Partner in this Agreement shall, unless expressly provided
to the contrary, be deemed to authorize it to make such decisions in its sole
and absolute discretion.
(f) This Agreement will be interpreted and enforced in accordance
with its provisions and without the aid of any custom or rule of law requiring
or suggesting construction against the party drafting or causing the drafting of
the provisions in question.
12.10. Further Assurances. Each party covenants and agrees that it will at
any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as may reasonably be required by the parties hereto in
order to carry out and effectuate fully the transactions herein contemplated in
accordance with this Agreement; provided, however, no party shall be obligated
to provide any further assurance that would materially increase the liabilities
or obligations of such party hereunder or materially reduce the rights and
benefits of such party hereunder.
12.11. Right to Specific Performance. The failure or refusal by a Partner
to comply with any or all of the provisions of this Agreement shall entitle the
other Partners to specific performance of the terms, covenants and conditions of
this Agreement or any part hereof in addition to any and all other remedies
available to such Partners at law or in equity.
12.12. Relationship of Parties. The relationships between the parties
hereto shall be that of a limited partnership, for the sole and limited purpose
of carrying on the business of the Partnership. Except insofar as otherwise
provided for in this Agreement, nothing herein shall be deemed to create an
agency, partnership, limited liability company or other agreement, understanding
or arrangement between the Partners for the carrying on of business outside the
scope of this Agreement, nor shall any Partner have the ability to act as agent
for any other Partner.
12.13. No Third Party Rights. Except as expressly provided herein or in
the Act, this Agreement is for the sole benefit of the Partners and their
respective permitted successors and assignees, and shall not confer directly,
indirectly, contingently, or otherwise, any rights or benefits on any person or
party other than Partners and their permitted successors and assigns.
43
12.14. Usury. If any rate of interest or other charge otherwise payable
under this Agreement shall at any time exceed the maximum amount chargeable by
applicable law, then the applicable rate of interest shall be the maximum rate
permitted by applicable law.
12.15. Attorneys' Fees; Waiver of Jury Trial.
(1) In the event of any litigation between the Partners to enforce
or interpret any provision or right hereunder, the unsuccessful party to such
litigation covenants and agrees to pay the successful party all costs and
expenses reasonably incurred, including, without limitation, reasonable
attorneys' fees and disbursements, it being understood and agreed that the
determination of the "successful party" shall be included in the matters which
are the subject of such litigation.
(2) EACH PARTNER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER IN
CONNECTION WITH ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT, THE RELATIONSHIP OF THE PARTNERS OR ANY CLAIM OF INJURY OR
DAMAGE RELATING TO ANY OF THE FOREGOING, OR THE ENFORCEMENT OF ANY REMEDY UNDER
ANY STATUTE WITH RESPECT THERETO.
12.16. Incorporation of Exhibits and Appendices. All exhibits, schedules
and appendices attached and referred to in this Agreement are hereby
incorporated herein as if fully set forth in this Agreement.
12.17. Exculpation. Except as otherwise expressly provided to the contrary
herein, none of the Partners, nor any direct or indirect partner, shareholder,
member, manager, owner, officer, director, trustee or employee in or of any
Partner (collectively, the "Nonrecourse Parties") shall be personally liable in
any manner or to any extent under or in connection with this Agreement, and
neither any Partner nor the Partnership shall have any recourse to any assets of
a Nonrecourse Party other than such party's Partnership Interest to satisfy any
liability, judgment or claim that may be obtained or made against any such
Nonrecourse Party under this Agreement; except that the foregoing shall not
apply in the event of the gross negligence, bad faith and/or willful misconduct
of such Nonrecourse Party. The limitation of liability provided in this Section
12.17 is in addition to, and not in limitation of, any limitation on liability
applicable to a Nonrecourse Party provided by law or by this Agreement or any
other contract, agreement or instrument.
12.18. Partner Estoppel Certificates. Upon the written request of a
Partner, the other Partners shall, within fifteen (15) days of its receipt of
such request, execute and deliver a written statement certifying: (A) that this
Agreement is unmodified and in full force and effect (or, if modified, that this
Agreement is in full force and effect as modified and stating any and all
modifications), (B) that such Partner is not in default hereunder, in each case
except as specified in such statement, (C) that to the actual knowledge of the
certifying Partner, no event has occurred which with the passage of time or the
giving of notice, or both, would ripen into a default hereunder, except as
specified in such statement, and (D) as to the then current balances
44
of the certifying Partner's accounts provided for herein. Such written statement
may be relied upon by a Partner's prospective purchasers, investors or lenders.
12.19. Construction. The Partners have each been represented by counsel of
their respective choice in connection with this Agreement, the terms of which
have been fully and fairly negotiated. The language in all parts of this
Agreement shall in all cases be construed simply according to the fair meaning
thereof and not strictly against the party which drafted such language.
12.20. Representations and Warranties. Each Partner hereby represents,
warrants and covenants to the other Partners (and each Person admitted to the
Partnership shall represent, warrant and covenant as a condition to its
admission) as follows:
(a) It is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or formation, with all
requisite power and authority to enter into and perform this Agreement.
(b) This Agreement has been duly authorized, executed and delivered
by such Partner and constitutes the legal, valid and binding obligation of such
Partner, enforceable in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the rights of creditors generally.
(c) No consents or approvals are required from any governmental
authority or other Person for such Partner to enter into this Agreement and form
the Partnership. All limited liability company, corporate or partnership action
on the part of such Partner necessary for the authorization, execution and
delivery of this Agreement, and the consummation of the transactions
contemplation hereby, have been duly taken.
(d) Neither the execution and delivery of this Agreement by such
Partner, nor the consummation of the transactions contemplated hereby, conflict
with or contravene the provisions of its organizational documents or any
agreement or instrument by which it or its properties are bound, or any law,
rule, regulation, order or decree to which it or its properties are subject.
(e) On behalf of itself and each assignee or transferee of it, that
such Partner is acquiring its Partnership Interest for its own account for
investment and not with a view to the distribution or resale thereof, or with
the present intention of distributing or reselling such interest, and that it
will not transfer or attempt to transfer its Partnership Interest in violation
of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, or any other applicable federal, state or local securities law.
Nothing herein shall be construed to create or impose on the Partnership or any
Partner an obligation to register any transfer of any Partnership Interest or
any portion thereof.
12.21. Broker. Each Partner represents and warrants to the other Partners
that there are no agent or broker commissions or fees payable in connection with
this Agreement and/or the Purchase Agreement. Each Partner covenants and agrees
to pay, indemnify, defend and hold the
45
other Partners harmless from and against any and all losses, costs, liabilities,
claims, damages or expenses (including, without limitation, reasonable
attorneys' fees and expense) arising out of its breach of the representation and
warranty set forth in the immediately preceding sentence. The obligations of
each Partner under this Section 12.21 shall survive the expiration or
termination of this Agreement.
46
IN WITNESS WHEREOF, the parties hereto hereby execute this Amended and
Restated Agreement of Limited Partnership of JAMESTOWN 1290, L.P.
AP-1290 PARTNERS LLC
By:_______________________________________
Xxxx X.X. Xxxxxxxxx, Authorized Officer
JT 1290 CORP.
By:_______________________________________
Xxxxxxx X. Xxxxxx, President
JAMESTOWN 1290 PARTNERS
by JAMESTOWN 23 Classic, L.P., a
Georgia limited partnership, one of
its general partners, by JAMESTOWN
23 Investment Services, L.P., a
Georgia limited partnership, its
sole general partner, by JAMESTOWN
Corporation, a Georgia corporation,
its sole general partner
By:_______________________________________
Xxxxxxx X. Xxxxxx, President
by JAMESTOWN 23 kompakt, L.P., a
Georgia limited partnership, one of
its general partners, by JAMESTOWN
23 Investment Services, L.P., a
Georgia limited partnership, its
sole general partner, by JAMESTOWN
Corporation, a Georgia corporation,
its sole general partner
By:_______________________________________
Xxxxxxx X. Xxxxxx, President
47
by JAMESTOWN 23 US, LLC, a Georgia
limited liability company, one of
its general partners, by JAMESTOWN
23 Investment Services, L.P., a
Georgia limited partnership, its
manager, by JAMESTOWN Corporation, a
Georgia corporation, its sole
general partner
By:_______________________________________
Xxxxxxx X. Xxxxxx, President
by XXXXXXXXX 00 Xxxxxxxxxxx, L.P., a
Georgia limited partnership, one of
its general partners, by JAMESTOWN
23 Investment Services, L.P., a
Georgia limited partnership, its
sole general partner, by JAMESTOWN
Corporation, a Georgia corporation,
its sole general partner
By:_______________________________________
Xxxxxxx X. Xxxxxx, President
48
Schedule A
Description of Land
(See attached)
49
Schedule B
Year in Which Capital Event Occurs Capital Event Additional
From the Sale Closing Date through the Distribution Amount
Year 5 Anniversary 000
Year 6 11,221,398
Year 7 23,182,411
Year 8 35,931,788
Year 9 49,521,490
Year 10 64,006,904
Year 11 79,447,069
Year 12 95,904,912
Year 13 113,447,509
Year 14 132,146,359
Year 15 152,077,670
Year 16 173,322,677
Year 17 195,967,965
Year 18 220,105,830
Year 19 245,834,648
Year 20 273,259,281
Year 21 302,491,502
Year 22 333,650,452
Year 23 366,863,122
Year 24 402,264,877
Year 25 and thereafter 440,000,000
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Schedule C
Designated Representatives
Class A Limited Partner Class B Limited Partner
----------------------- -----------------------
Xxxxxxx X. Xxxxxx Xxx X. Xxxxxxx
Xxxx X. Xxxxxxxx Xxxx X.X. Xxxxxxxxx
Xxxxxx X. Xxxxx
Schedule D
Initial Capital, Percentage Interests and Capital Account Balances
Initial Capital Capital Account
Name Under Section 3.01(a)(I) Balances Percentage Interests
---- ------------------------ -------- --------------------
Jamestown Partners $266,374,900 $266,374,900 77.21%
AP-1290 $ 78,625,000 $ 78,625,000 22.79%
JT Corp. $ 100 $ 100 00.0001%
AMENDED AND RESTATED
AGREEMENT OF
LIMITED PARTNERSHIP
OF
JAMESTOWN 1290, L.P.
53
