Exhibit 3.3
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FIRST STATES GROUP, L.P.
ARTICLE I
DEFINED TERMS......................................................................................... 1
ARTICLE II
FORMATION OF PARTNERSHIP.............................................................................. 8
2.01 Name, Office and Registered Agent........................................................... 8
2.02 Partners.................................................................................... 8
2.03 Term and Dissolution........................................................................ 8
2.04 Filing of Certificate and Perfection of Limited Partnership................................. 9
2.05 Certificates Describing Partnership Units................................................... 9
ARTICLE III
BUSINESS OF THE PARTNERSHIP........................................................................... 10
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS.................................................................... 10
4.01 Capital Contributions....................................................................... 10
4.02 Additional Capital Contributions and Issuances of Additional Partnership Interests.......... 10
4.03 Additional Funding.......................................................................... 13
4.04 Capital Accounts............................................................................ 13
4.05 Percentage Interests........................................................................ 13
4.06 No Interest on Contributions................................................................ 13
4.07 Return of Capital Contributions............................................................. 13
4.08 No Third Party Beneficiary.................................................................. 14
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS..................................................................... 14
5.01 Allocation of Profit and Loss............................................................... 14
5.02 Distribution of Cash........................................................................ 16
5.03 REIT Distribution Requirements.............................................................. 17
5.04 No Right to Distributions in Kind........................................................... 17
5.05 Limitations on Return of Capital Contributions.............................................. 17
5.06 Distributions Upon Liquidation.............................................................. 17
5.07 Substantial Economic Effect................................................................. 18
5.08 Guaranteed Payment.......................................................................... 18
ARTICLE VI
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER................................................. 18
6.01 Management of the Partnership............................................................... 18
6.02 Delegation of Authority..................................................................... 21
6.03 Indemnification and Exculpation of Indemnitees.............................................. 21
6.04 Liability of the General Partner............................................................ 23
6.05 Partnership Obligations..................................................................... 24
6.06 Outside Activities.......................................................................... 24
6.07 Employment or Retention of Affiliates....................................................... 24
6.08 General Partner Participation............................................................... 25
6.09 Title to Partnership Assets................................................................. 25
6.10 Miscellaneous............................................................................... 25
ARTICLE VII
CHANGES IN GENERAL PARTNER AND COMPANY................................................................ 25
7.01 Transfer of the General Partner's and Company's Partnership Interest........................ 25
7.02 Admission of a Substitute or Additional General Partner..................................... 27
7.03 Effect of Bankruptcy, Withdrawal, or Dissolution of a General Partner...................... 28
7.04 Removal of the General Partner.............................................................. 28
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS........................................................ 30
8.01 Management of the Partnership............................................................... 30
8.02 Power of Attorney........................................................................... 30
8.03 Limitation on Liability of Limited Partners................................................. 30
8.04 Redemption Right............................................................................ 30
ARTICLE IX
TRANSFERS OF PARTNERSHIP INTERESTS.................................................................... 32
9.01 Purchase for Investment..................................................................... 32
9.02 Restrictions on Transfer of Partnership Interests........................................... 33
9.03 Admission of Substitute Limited Partner..................................................... 34
9.04 Rights of Assignees of Partnership Interests................................................ 35
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner............... 35
9.06 Joint Ownership of Interests................................................................ 35
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS............................................................ 36
10.01 Books and Records........................................................................... 36
10.02 Custody of Partnership Funds; Bank Accounts................................................. 36
10.03 Fiscal and Taxable Year..................................................................... 36
10.04 Annual Tax Information and Report........................................................... 37
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments............................... 37
10.06 Reports to Limited Partners................................................................. 37
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER........................................................................ 38
ARTICLE XII
GENERAL PROVISIONS.................................................................................... 38
12.01 Notices..................................................................................... 38
12.02 Survival of Rights.......................................................................... 39
12.03 Additional Documents........................................................................ 39
12.04 Severability................................................................................ 39
12.05 Entire Agreement............................................................................ 39
12.06 Pronouns and Plurals........................................................................ 39
12.07 Headings.................................................................................... 39
12.08 Counterparts................................................................................ 39
12.09 Governing Law............................................................................... 39
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FIRST STATES GROUP, L.P.
RECITALS
FIRST STATES GROUP, L.P. (the "Partnership") was formed as a limited
partnership under the laws of the State of Delaware, pursuant to a Certificate
of Limited Partnership filed with the Secretary of State of the State of
Delaware effective as of May 22, 2002 and an Agreement of Limited Partnership
entered into as of May 22, 2002, by and between First States Group, LLC (the
"General Partner") and Xxxxx Xxxxxxxxxx (the "Original Limited Partner").
Concurrently with the execution of the First Amended and Restated Agreement of
Limited Partnership on May 24, 2002, the Original Limited Partner withdrew from
the Partnership and American Financial Realty Trust (the "Company") and
Friedman, Billings, Xxxxxx & Co., Inc. were admitted as Limited Partners. This
Amended and Restated Agreement of Limited Partnership is entered into this 10th
day of September, 2002 among the General Partner and the Limited Partners set
forth on Exhibit A hereto, for the purposes of amending and restating the First
Amended and Restated Agreement of Limited Partnership and admitting additional
Limited Partners.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the First Amended and Restated Agreement of Limited Partnership
to read in its entirety as follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the
meanings specified below:
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"Additional Funds" has the meaning set forth in Section 4.03 hereof.
"Additional Securities" means any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to Section 8.04
hereof) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in
Section 4.02(a)(ii).
"Administrative Expenses" means (i) all administrative and operating
costs and expenses incurred by the Partnership, (ii) any administrative or
operating costs and expenses of the General Partner and the Company, including
any salaries or other payments to directors, officers or employees of the
General Partner and the Company, and any accounting and legal expenses of the
General Partner and the Company (other than costs and expenses relating to any
properties or other investments held directly by the General Partner or the
Company), and (iii) to the extent not included in clause (i) or (ii) above, REIT
Expenses.
"Affiliate" means, (i) any Person that, directly or indirectly, controls
or is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 10% or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, partner, member, manager or trustee of such
Person or any Person controlling, controlled by or under common control with
such Person (excluding trustees and persons serving in similar capacities who
are not otherwise an Affiliate of such Person). For the purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities or partnership interests or
otherwise.
"Agreed Value" means the fair market value of a Partner's non-cash
Capital Contribution as of the date of contribution as agreed to by such Partner
and the General Partner. The names and addresses of the Partners, number of
Partnership Units issued to each Partner, and the Agreed Value of non-cash
Capital Contributions as of the date of contribution is set forth on Exhibit A.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership.
"Board of Trustees" means the Board of Trustees of the Company.
"Capital Account" has the meaning provided in Section 4.04 hereof.
"Capital Contribution" means the total amount of cash, cash equivalents,
and the Agreed Value of any Property or other asset contributed or agreed to be
contributed, as the context requires, to the Partnership by each Partner
pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
"Cash Amount" means an amount of cash per Partnership Unit equal to the
Value of the REIT Shares Amount on the date of receipt by the Company of a
Notice of Redemption.
"Certificate" means any instrument or document that is required under
the laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal or
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substitution of any Partner of the Partnership, or to protect the limited
liability of the Limited Partners as limited partners under the laws of the
State of Delaware or such other jurisdiction.
"Code" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Share" means one common share of beneficial interest of the
Company.
"Company" means American Financial Realty Trust, a Maryland real estate
investment trust.
"Contribution Agreement" means the Contribution Agreement between the
individuals and entities set forth on Schedule 1 thereto and the Partnership,
dated as of __________ __, 2002.
"Conversion Factor" means 1.0, provided that in the event that the
Company (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on such date and, provided further, that in the event
that an entity other than an Affiliate of the Company shall become General
Partner pursuant to any merger, consolidation or combination of the Company with
or into another entity (the "Successor Entity"), the Conversion Factor shall be
adjusted by multiplying the Conversion Factor by the number of shares of the
Successor Entity into which one REIT Share is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation or combination. Any adjustment to the Conversion Factor shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event; provided, however, that if the
Company receives a Notice of Redemption after the record date, but prior to the
effective date of such dividend, distribution, subdivision or combination, the
Conversion Factor shall be determined as if the Company had received the Notice
of Redemption immediately prior to the record date for such dividend,
distribution, subdivision or combination.
"Declaration of Trust" means the Declaration of Trust of the Company
filed with the Maryland State Department of Assessments and Taxation, as amended
or restated from time to time.
"Event of Bankruptcy" as to any Person means the filing of a petition
for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of
1978, as amended, or similar provision of law of any jurisdiction (except if
such petition is contested by such Person and has
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been dismissed within 90 days); insolvency or bankruptcy of such Person as
finally determined by a court proceeding; filing by such Person of a petition or
application to accomplish the same or for the appointment of a receiver or a
trustee for such Person or a substantial part of his assets; commencement of any
proceedings relating to such Person as a debtor under any other reorganization,
arrangement, insolvency, adjustment of debt or liquidation law of any
jurisdiction, whether now in existence or hereinafter in effect, either by such
Person or by another, provided that if such proceeding is commenced by another,
such Person indicates his approval of such proceeding, consents thereto or
acquiesces therein, or such proceeding is contested by such Person and has not
been finally dismissed within 90 days.
"General Partner" means First States Group, LLC and any Person who
becomes a substitute or additional general partner as provided herein, and any
of their successors as General Partner.
"General Partnership Interest" means a Partnership Interest held by the
General Partner that is a general partnership interest.
"Indemnitee" means (i) any Person made a party to a proceeding by reason
of its status as the Company, the General Partner or a trustee, officer, manager
or employee of the Company, the Partnership or the General Partner, and (ii)
such other Persons (including Affiliates of the Company, General Partner or the
Partnership) as the General Partner may designate from time to time, in its sole
and absolute discretion.
"Independent Trustee" means a person who is not an officer or employee
of the Company, General Partner, Partnership or an Affiliate thereof or a lessee
of any Property.
"Limited Partner" means any Person named as a Limited Partner on Exhibit
A attached hereto, and any Person who becomes a Substitute or Additional Limited
Partner, in such Person's capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest held by a
Limited Partner that is a limited partnership interest.
"Loss" has the meaning provided in Section 5.01(g) hereof.
"Majority in Interest" of the Limited Partners means Limited Partners
holding a majority of the Limited Partnership Interests.
"Minimum Limited Partnership Interest" means the lesser of (i) 1% or
(ii) if the total Capital Contributions to the Partnership exceed $50 million,
1% divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
shall not be less than 0.2% at any time.
"Notice of Redemption" means the Notice of Exercise of Redemption Right
substantially in the form attached as Exhibit B hereto.
"NYSE" means the New York Stock Exchange.
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"Offer" has the meaning set forth in Section 7.01(b) hereof.
"Offering" means the initial offer and sale by the Company and the
purchase by the initial purchaser (as defined in the Offering Memorandum) of
Common Shares for sale.
"Offering Memorandum" means the final offering memorandum delivered to
purchasers of REIT Shares in the Offering.
"Original Limited Partner" means Xxxxx Xxxxxxxxxx.
"Partner" means any General Partner or Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).
"Partnership Interest" means an ownership interest in the Partnership
held by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is determined by first computing, for each
Partnership nonrecourse liability, any gain the Partnership would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately
computed gains. A Partner's share of Partnership Minimum Gain shall be
determined in accordance with Regulations Section 1.704-2(g)(1).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of cash pursuant to Section 5.02 hereof,
which record date shall be the same as the record date established by the
Company for a distribution to its shareholders of some or all of its portion of
such distribution.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of the Partners issued hereunder. The allocation of
Partnership Units among the Partners shall be as set forth on Exhibit A, as may
be amended from time to time.
"Percentage Interest" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
may be amended from time to time.
"Person" means any individual, general partnership, limited partnership,
corporation, joint venture, trust, limited liability company, cooperative,
association, unincorporated organization, benefit plan or governmental,
quasi-governmental, judicial or regulatory entity or any department, agency or
political subdivision thereof.
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"Profit" has the meaning provided in Section 5.01(g) hereof.
"Property" means any property or other investment in which the
Partnership holds an ownership interest.
"Redemption Amount" means either the Cash Amount or the REIT Shares
Amount, as determined in accordance with Section 8.04(b) hereof.
"Redemption Right" has the meaning provided in Section 8.04(a) hereof.
"Redeeming Limited Partner" has the meaning provided in Section 8.04(a)
hereof.
"Regulations" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through
860 of the Code.
"REIT Expenses" means (i) costs and expenses relating to the formation
and continuity of existence and operation of the Company and any Subsidiaries
thereof (which Subsidiaries shall, for purposes hereof, be included within the
definition of Company), including taxes, fees and assessments associated
therewith, any and all costs, expenses or fees payable to any trustee, director,
officer or employee of the Company, (ii) costs and expenses relating to any
public offering and registration of securities by the Company, including the
Offering, and all statements, reports, fees and expenses incidental thereto,
including, without limitation, underwriting and other discounts and selling
commissions applicable to any such offering of securities, and any costs and
expenses associated with any claims made by any holders of such securities or
any underwriters, initial purchasers or placement agents thereof, (iii) costs
and expenses associated with any repurchase of any securities by the Company,
(iv) costs and expenses associated with the preparation and filing of any
periodic or other reports and communications by the Company under federal, state
or local laws or regulations, including filings with the Commission, (v) costs
and expenses associated with compliance by the Company with laws, rules and
regulations promulgated by any regulatory body, including the Commission and any
securities exchange, (vi) costs and expenses associated with any 401(k) plan,
incentive plan, bonus plan or other plan providing for compensation for the
employees of the Company, (vii) costs and expenses incurred by the Company
relating to any issuing or redemption of Partnership Interests and (viii) all
other operating or administrative costs of the Company incurred in the ordinary
course of its business on behalf of or in connection with the Partnership.
"REIT Share" means a Common Share of the Company (or Successor Entity,
as the case may be).
"REIT Shares Amount" means a number of REIT Shares equal to the product
of the number of Partnership Units offered for redemption by a Redeeming Limited
Partner, multiplied by the Conversion Factor as adjusted to and including the
Specified Redemption Date; provided
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that in the event the Company issues to all holders of REIT Shares rights,
options, warrants or convertible or exchangeable securities entitling the
shareholders to subscribe for or purchase REIT Shares, or any other securities
or property (collectively, the "rights"), and the rights have not expired at the
Specified Redemption Date, then the REIT Shares Amount shall also include the
rights issuable to a holder of the REIT Shares Amount on the record date fixed
for purposes of determining the holders of REIT Shares entitled to rights.
"Securities Act" means the Securities Act of 1933, as amended.
"Service" means the Internal Revenue Service.
"Specified Redemption Date" means the first business day of the month
that is at least 60 calendar days after the receipt by the Company of a Notice
of Redemption.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person.
"Subsidiary Partnership" means any partnership or limited liability
company in which the Company, a wholly-owned subsidiary of the Company or the
Partnership owns a partnership interest or membership interest.
"Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03 hereof.
"Successor Entity" has the meaning provided in the definition of
"Conversion Factor" contained herein.
"Survivor" has the meaning set forth in Section 7.01(c) hereof.
"Trading Day" means a day on which the principal national securities
exchange on which a security is listed or admitted to trading is open for the
transaction of business or, if a security is not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Transaction" has the meaning set forth in Section 7.01(b) hereof.
"Transfer" has the meaning set forth in Section 9.02(a) hereof.
"Value" means, with respect to any security, the average of the daily
market price of such security for the ten consecutive Trading Days immediately
preceding the date of such valuation. The market price for each such Trading Day
shall be: (i) if the security is listed or admitted to trading on any securities
exchange or the NYSE, the last reported sale price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day, (ii) if the security is not listed or
admitted to trading on any securities exchange or the NYSE, the last reported
sale price on such day or, if no sale takes
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place on such day, the average of the closing bid and asked prices on such day,
as reported by a reliable quotation source designated by the Company, or (iii)
if the security is not listed or admitted to trading on any securities exchange
or the NYSE and no such last reported sale price or closing bid and asked prices
are available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the Company, or if
there shall be no bid and asked prices on such day, the average of the high bid
and low asked prices, as so reported, on the most recent day (not more than ten
days prior to the date in question) for which prices have been so reported;
provided that if there are no bid and asked prices reported during the ten days
prior to the date in question, the value of the security shall be determined by
the Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the security includes any additional rights, then the value of such rights
shall be determined by the Company acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate.
ARTICLE II
FORMATION OF PARTNERSHIP
2.01 Name, Office and Registered Agent. The name of the Partnership
is FIRST STATES GROUP, L.P. The specified office and place of business of the
Partnership shall be 0000 Xxx Xxxxxxx, Xxxxxxxxxx, XX 00000. The General Partner
may at any time change the location of such office, provided the General Partner
gives notice to the Partners of any such change. The name of the Partnership's
registered agent is Incorporating Services, Ltd., whose business address is 00
Xxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000. The sole duty of the registered agent
as such is to forward to the Partnership any notice that is served on him as
registered agent.
2.02 Partners.
(a) The General Partner of the Partnership is First States
Group, LLC, a wholly owned subsidiary of the Company. Its principal place of
business is the same as that of the Partnership.
(b) The Limited Partners are those Persons identified as
Limited Partners on Exhibit A hereto, as amended from time to time.
2.03 Term and Dissolution.
(a) The Partnership's existence shall be perpetual, except
that the Partnership shall be dissolved upon the first to occur of any of the
following events:
(i) The occurrence of an Event of Bankruptcy of the
General Partner or the dissolution, removal or withdrawal of the
General Partner unless the business of the Partnership is
continued pursuant to Section 7.03(b) hereof; provided that if
the General Partner is on the date of such occurrence a
partnership, the dissolution of such General Partner as a result
of the dissolution, withdrawal, removal or Event of Bankruptcy
of a partner in such partnership shall
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not be an event of dissolution of the Partnership if the
business of such General Partner is continued by the remaining
partner or partners, either alone or with additional partners,
and such General Partner and such partners comply with any other
applicable requirements of this Agreement;
(ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the
Partnership (provided that if the Partnership receives an
installment obligation as consideration for such sale or other
disposition, the Partnership shall continue, unless sooner
dissolved under the provisions of this Agreement, until such
time as such note or notes are paid in full);
(iii) The redemption of all Limited Partnership
Interests (other than Limited Partnership Interests held by the
Company); or
(iv) The election by the General Partner that the
Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the business
of the Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.
2.04 Filing of Certificate and Perfection of Limited Partnership. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.05 Certificates Describing Partnership Units. At the request of a
Limited Partner, the General Partner, at its option, may issue a certificate
summarizing the terms of the Limited Partnership Interest, including the number
of Partnership Units owned and the Percentage Interest represented by such
Partnership Units as of the date of such certificate. Any such certificate (i)
shall be in form and substance as approved by the General Partner, (ii) shall
not be negotiable and (iii) shall bear a legend to the following effect:
This certificate is not negotiable. The Partnership Units
represented by this certificate are governed by and
transferable only in accordance with the provisions of the
Amended and Restated Agreement of Limited Partnership of First
States Group, L.P., as amended from time to time.
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ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
Company at all times to qualify as a REIT, unless the Company otherwise ceases
to qualify as a REIT, (ii) to enter into any partnership, joint venture or other
similar arrangement to engage in any of the foregoing or the ownership of
interests in any entity engaged in any of the foregoing and (iii) to do anything
necessary or incidental to the foregoing. In connection with the foregoing, and
without limiting the Company's right in its sole and absolute discretion to
cease qualifying as a REIT, the Partners acknowledge that the Company's current
status as a REIT and the avoidance of income and excise taxes on the Company
inures to the benefit of all the Partners and not solely to the Company.
Notwithstanding the foregoing, the Limited Partners agree that the Company may
terminate its status as a REIT under the Code at any time. The General Partner
shall also be empowered to do any and all acts and things necessary or prudent
to ensure that the Partnership will not be classified as a "publicly traded
partnership" taxable as a corporation for purposes of Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 Capital Contributions. The General Partner and the Limited
Partners have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A, as amended
from time to time.
4.02 Additional Capital Contributions and Issuances of Additional
Partnership Interests. Except as provided in this Section 4.02 or in Section
4.03, the Partners shall have no obligation to make any additional Capital
Contributions or loans to the Partnership. The General Partner and/or the
Company may contribute additional capital to the Partnership, from time to time,
and receive additional Partnership Interests in respect thereof, in the manner
contemplated in this Section 4.02.
(a) Issuances of Additional Partnership Interests.
(i) General. The General Partner is hereby
authorized to cause the Partnership to issue such additional
Partnership Interests in the form of Partnership Units for any
Partnership purpose at any time or from time to time to the
Partners (including the General Partner and the Company) or to
other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in its
sole and absolute discretion, all without the approval of any
Limited Partners. Any additional Partnership Interests issued
thereby may be issued in one or more classes, or one or more
series of any of such classes, with such designations,
preferences and relative, participating, optional or other
special
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rights, powers and duties, including rights, powers and duties
senior to Limited Partnership Interests, all as shall be
determined by the General Partner in its sole and absolute
discretion and without the approval of any Limited Partner,
subject to Delaware law, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss,
deduction and credit to each such class or series of Partnership
Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and
(iii) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership;
provided, however, that no additional Partnership Interests
shall be issued to the General Partner or the Company unless:
(1) (A) the additional Partnership Interests
are issued in connection with an issuance of REIT Shares
of or other interests in the Company, which shares or
interests have designations, preferences and other
rights, all such that the economic interests are
substantially similar to the designations, preferences
and other rights of the additional Partnership Interests
issued to the General Partner and/or Company by the
Partnership in accordance with this Section 4.02 and (B)
the General Partner and/or Company shall make a Capital
Contribution to the Partnership in an amount equal to
the cash consideration received by the Company from the
issuance of such shares of stock of or other interests
in the Company;
(2) the additional Partnership Interests are
issued in exchange for property owned by the Company or
the General Partner, as the case may be, with a fair
market value, as determined by the Company, in good
faith, equal to the value of the Partnership Interests;
or
(3) the additional Partnership Interests are
issued to all Partners in proportion to their respective
Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the best interests of the Company or the Partnership.
(ii) Upon Issuance of Additional Securities. The
Company shall not issue any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to
Section 8.04 hereof) or rights, options, warrants or convertible
or exchangeable securities containing the right to subscribe for
or purchase REIT Shares (collectively, "Additional Securities")
other than to all holders of REIT Shares, unless (A) the General
Partner shall cause the Partnership to issue to the Company
Partnership Interests or rights, options, warrants or
convertible or exchangeable securities of the Partnership having
designations, preferences and other rights, all such that the
economic interests are substantially similar to those of the
Additional Securities, and (B) the Company contributes the
proceeds from the issuance of such Additional Securities and
from any exercise of
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rights contained in such Additional Securities to the
Partnership. Without limiting the foregoing, the Company is
expressly authorized to issue Additional Securities for less
than fair market value, and, upon such issuance the General
Partner is expressly authorized to cause the Partnership to
issue to the Company corresponding Partnership Interests, so
long as (x) the General Partner concludes in good faith that
such issuance is in the best interests of the Company and the
Partnership and (y) the Company contributes all proceeds from
such issuance to the Partnership, including without limitation,
the issuance of REIT Shares and corresponding Partnership Units
pursuant to a share purchase plan providing for purchases of
REIT Shares at a discount from fair market value or employee
stock options that have an exercise price that is less than the
fair market value of the REIT Shares, either at the time of
issuance or at the time of exercise. For example, in the event
the Company issues REIT Shares for a cash purchase price and
contributes all of the proceeds of such issuance to the
Partnership as required hereunder, the General Partner shall be
issued a number of additional Partnership Units equal to the
product of (A) the number of such REIT Shares issued by the
Company, the proceeds of which were so contributed, multiplied
by (B) a fraction, the numerator of which is 100%, and the
denominator of which is the Conversion Factor in effect on the
date of such contribution.
(b) Certain Contributions of Proceeds of Issuance of REIT
Shares. In connection with any and all issuances of REIT Shares, the Company
shall make Capital Contributions to the Partnership of the proceeds therefrom,
provided that if the proceeds actually received and contributed by the Company
are less than the gross proceeds of such issuance as a result of any
underwriter's discount or other expenses paid or incurred in connection with
such issuance, then the Company shall make a Capital Contribution of such net
proceeds to the Partnership but shall receive additional Partnership Units with
a value equal to the aggregate amount of the gross proceeds of such issuance
pursuant to Section 4.02(a) hereof. Upon any such Capital Contribution by the
Company, the Company's Capital Account shall be increased by the actual amount
of its Capital Contribution pursuant to Section 4.04 hereof.
(c) Minimum Limited Partnership Interest. In the event that
either a redemption pursuant to Section 8.04 hereof or additional Capital
Contributions by the Company would result in the Limited Partners (other than
the Company), in the aggregate, owning less than the Minimum Limited Partnership
Interest, the General Partner and the Limited Partners shall form another
partnership and contribute sufficient Limited Partnership Interests together
with such other Limited Partners so that the limited partners (other than the
General Partner) of such partnership own at least the Minimum Limited
Partnership Interest.
(d) Company Repurchase of Capital Stock. If the Company
shall repurchase shares of any class of the Company's capital stock, the
purchase price thereof and all costs incurred in connection with such repurchase
shall be reimbursed to the Company by the Partnership pursuant to Section 6.05
hereof and the General Partner shall cause the Partnership to cancel a number of
Partnership Interests of the appropriate class held by the Company equal to the
quotient of the number of such shares of the Company's capital stock divided by
the Conversion Factor.
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4.03 Additional Funding. If the General Partner determines that it is
in the best interest of the Partnership to provide for additional Partnership
funds ("Additional Funds") for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner, the Company or any of their Affiliates
provide such Additional Funds to the Partnership through loans or otherwise.
4.04 Capital Accounts. A separate capital account (a "Capital
Account") shall be established and maintained for each Partner in accordance
with Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner
acquires an additional Partnership Interest in exchange for more than a de
minimis Capital Contribution, (ii) the Partnership distributes to a Partner more
than a de minimis amount of Partnership property as consideration for a
Partnership Interest or (iii) the Partnership is liquidated within the meaning
of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue
the property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the General
Partner, the Capital Accounts of the Partners shall be adjusted in accordance
with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to reflect the manner in which the
unrealized gain or loss inherent in such property (that has not been reflected
in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.01 if there were a taxable disposition of such property
for its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) on the
date of the revaluation.
4.05 Percentage Interests. If the number of outstanding Partnership
Units increases or decreases during a taxable year, each Partner's Percentage
Interest shall be adjusted by the General Partner effective as of the effective
date of each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.05, the Profits and Losses for the taxable year in which the adjustment occurs
shall be allocated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.
4.06 No Interest on Contributions. No Partner shall be entitled to
interest on its Capital Contribution.
4.07 Return of Capital Contributions. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided
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herein, there shall be no obligation to return to any Partner or withdrawn
Partner any part of such Partner's Capital Contribution for so long as the
Partnership continues in existence.
4.08 No Third Party Beneficiary. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 Allocation of Profit and Loss.
(a) Profit. Profit of the Partnership for each fiscal year
of the Partnership shall be allocated to the Partners in accordance with their
respective Percentage Interests.
(b) Loss. Loss of the Partnership for each fiscal year of
the Partnership shall be allocated to the Partners in accordance with their
respective Percentage Interests.
(c) Minimum Gain Chargeback. Notwithstanding any provision
to the contrary, (i) any expense of the Partnership that is a "nonrecourse
deduction" within the meaning of Regulations Section 1.704-2(b)(1) shall be
allocated in accordance with the Partners' respective Percentage Interests, (ii)
any expense of the Partnership that is a "partner nonrecourse deduction" within
the meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the
Partner that bears the "economic risk of loss" of such deduction in accordance
with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section
1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j),
and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership
taxable year, then, subject to the exceptions set forth in
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Regulations Section 1.704(2)(g), items of gain and income shall be allocated
among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the
ordering rules contained in Regulations Section 1.704-2(j). A Partner's
"interest in partnership profits" for purposes of determining its share of the
nonrecourse liabilities of the Partnership within the meaning of Regulations
Section 1.752-3(a)(3) shall be such Partner's Percentage Interest.
(d) Qualified Income Offset. If a Partner receives in any
taxable year an adjustment, allocation or distribution described in
subparagraphs (4), (5) or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that
causes or increases a deficit balance in such Partner's Capital Account that
exceeds the sum of such Partner's shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations
Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially
for such taxable year (and, if necessary, later taxable years) items of income
and gain in an amount and manner sufficient to eliminate such deficit Capital
Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to
a Partner in accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-1(b), items of expense or loss shall be allocated to
such Partner in an amount necessary to offset the income or gain previously
allocated to such Partner under this Section 5.01(d).
(e) Capital Account Deficits. Loss shall not be allocated to
a Limited Partner to the extent that such allocation would cause a deficit in
such Partner's Capital Account (after reduction to reflect the items described
in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum
of such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain. Any Loss in excess of that limitation shall be allocated to
the General Partner. After the occurrence of an allocation of Loss to the
General Partner in accordance with this Section 5.01(e), to the extent permitted
by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in
an amount necessary to offset the Loss previously allocated to each Partner
under this Section 5.01(e).
(f) Allocations Between Transferor and Transferee. If a
Partner transfers any part or all of its Partnership Interest, the distributive
shares of the various items of Profit and Loss allocable among the Partners
during such fiscal year of the Partnership shall be allocated between the
transferor and the transferee Partner either (i) as if the Partnership's fiscal
year had ended on the date of the transfer, or (ii) based on the number of days
of such fiscal year that each was a Partner without regard to the results of
Partnership activities in the respective portions of such fiscal year in which
the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to
allocate the distributive shares of the various items of Profit and Loss between
the transferor and the transferee Partner.
(g) Definition of Profit and Loss. "Profit" and "Loss" and
any items of income, gain, expense or loss referred to in this Agreement shall
be determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.01(c), 5.01(d) or 5.01(e). All allocations of income,
Profit, gain, Loss and expense (and all items contained therein) for federal
income tax
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purposes shall be identical to all allocations of such items set forth in this
Section 5.01, except as otherwise required by Section 704(c) of the Code and
Regulations Section 1.704-1(b)(4). The Partnership shall use the traditional
method for allocating items of income, gain and expense as required by Section
704(c) of the Code with respect to the properties acquired by the Partnership in
connection with the Offering. With respect to other properties acquired by the
Partnership, the General Partner shall have the authority to elect the method to
be used by the Partnership for allocating items of income, gain and expense as
required by Section 704(c) of the Code with respect to such properties, and such
election shall be binding on all Partners.
5.02 Distribution of Cash.
(a) Subject to Section 5.02(c) hereof and except with
respect to distributions in connection with a liquidation of the Partnership
pursuant to Section 5.06(a), the Partnership shall distribute cash at such times
and in such amounts as are determined by the General Partner in its sole and
absolute discretion, to the Partners who are Partners on the Partnership Record
Date with respect to such quarter (or other distribution period) in accordance
with their respective Percentage Interests on the Partnership Record Date.
(b) If a new or existing Partner acquires an additional
Partnership Interest in exchange for a Capital Contribution on any date other
than a Partnership Record Date, the cash distribution attributable to such
additional Partnership Interest relating to the Partnership Record Date next
following the issuance of such additional Partnership Interest shall be reduced
in the proportion to (i) the number of days that such additional Partnership
Interest is held by such Partner bears to (ii) the number of days between such
Partnership Record Date and the immediately preceding Partnership Record Date.
(c) Notwithstanding any other provision of this Agreement,
the General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to a Partner or assignee (including by reason of Section
1446 of the Code), either (i) if the actual amount to be distributed to the
Partner (the "Distributable Amount") equals or exceeds the amount required to be
withheld by the Partnership (the "Withheld Amount"), the entire Distributable
Amount shall be treated as a distribution of cash to such Partner, or (ii) if
the Distributable Amount is less than the Withheld Amount, the excess of the
Withheld Amount over the Distributable Amount shall be treated as a loan (a
"Partnership Loan") from the Partnership to the Partner on the day the
Partnership pays over such amount to a taxing authority. A Partnership Loan
shall be repaid through withholding by the Partnership with respect to
subsequent distributions to the applicable Partner or assignee. In the event
that a Limited Partner (a "Defaulting Limited Partner") fails to pay any amount
owed to the Partnership with respect to the Partnership Loan within 15 days
after demand for payment thereof is made by the Partnership on the Limited
Partner, the General Partner or Company, in its sole and absolute discretion,
may elect to make the payment to the Partnership on behalf of such Defaulting
Limited Partner. In such event, on the date of payment, the General Partner or
Company, as the
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case may be, shall be deemed to have extended a loan (a "Withholding Tax Loan")
to the Defaulting Limited Partner in the amount of the payment made by the
General Partner or Company and shall succeed to all rights and remedies of the
Partnership against the Defaulting Limited Partner as to that amount. Without
limitation, the General Partner or Company shall have the right to receive any
distributions that otherwise would be made by the Partnership to the Defaulting
Limited Partner until such time as the Withholding Tax Loan has been paid in
full, and any such distributions so received by the General Partner or Company
shall be treated as having been received by the Defaulting Limited Partner and
immediately paid to the General Partner or Company.
Any amounts treated as a Partnership Loan or a
Withholding Tax Loan pursuant to this Section 5.02(d) shall bear interest at the
lesser of (i) the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in The Wall Street
Journal, or (ii) the maximum lawful rate of interest on such obligation, such
interest to accrue from the date the Partnership, the General Partner or
Company, as applicable, is deemed to extend the loan until such loan is repaid
in full.
(d) In no event may a Partner receive a distribution of cash
with respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend as the holder of record of a REIT Share for which all or part of such
Partnership Unit has been or will be redeemed.
5.03 REIT Distribution Requirements. The General Partner shall use
its reasonable efforts to cause the Partnership to distribute amounts sufficient
to enable the Company to pay shareholder dividends that will allow the Company
to (i) meet its distribution requirement for qualification as a REIT as set
forth in Section 857 of the Code and (ii) avoid any federal income or excise tax
liability imposed by the Code, other than to the extent the Company elects to
retain and pay income tax on its net capital gain.
5.04 No Right to Distributions in Kind. No Partner shall be entitled
to demand property other than cash in connection with any distributions by the
Partnership.
5.05 Limitations on Return of Capital Contributions. Notwithstanding
any of the provisions of this Article V, no Partner shall have the right to
receive, and the General Partner shall not have the right to make, a
distribution that includes a return of all or part of a Partner's Capital
Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities
to a Partner for the return of his Capital Contribution, does not exceed the
fair market value of the Partnership's assets.
5.06 Distributions Upon Liquidation.
(a) Upon liquidation of the Partnership, after payment of,
or adequate provision for, debts and obligations of the Partnership, including
any Partner loans, any remaining assets of the Partnership shall be distributed
to all Partners with positive Capital Accounts in accordance with their
respective positive Capital Account balances.
(b) For purposes of Section 5.06(a), the Capital Account of
each Partner shall be determined after the following adjustments: (i) all
adjustments made in accordance with
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Sections 5.01 and 5.02 resulting from Partnership operations and from all sales
and dispositions of all or any part of the Partnership's assets, and (ii)
allocating to the General Partner and/or the Company an amount equal to the
excess of (A) the value of the Partnership Units it received in exchange for
Capital Contributions of the proceeds of an issuance of REIT Shares pursuant to
Section 4.02(b) hereof over (B) the actual amount of its Capital Contributions
pursuant to Section 4.02(b) hereof (i.e., as a result of any underwriters'
discount or other expenses paid or incurred in connection with such issuance).
(c) Any distributions pursuant to this Section 5.06 shall be
made by the end of the Partnership's taxable year in which the liquidation
occurs (or, if later, within 90 days after the date of the liquidation). To the
extent deemed advisable by the General Partner, appropriate arrangements
(including the use of a liquidating trust) may be made to assure that adequate
funds are available to pay any contingent debts or obligations.
5.07 Substantial Economic Effect. It is the intent of the Partners
that the allocations of Profit and Loss under the Agreement have substantial
economic effect (or be consistent with the Partners' interests in the
Partnership in the case of the allocation of losses attributable to nonrecourse
debt) within the meaning of Section 704(b) of the Code as interpreted by the
Regulations promulgated pursuant thereto. Article V and other relevant
provisions of this Agreement shall be interpreted in a manner consistent with
such intent.
5.08 Guaranteed Payment. In the event the Partnership has breached
its covenant not to dispose of certain assets as set forth in Section 8.3 of the
Contribution Agreement, the Partnership shall pay to Limited Partners who were
Contributors (as defined in the Contribution Agreement) an amount equal to the
Tax Indemnity Payment (as defined in the Contribution Agreement) of such Limited
Partner, such payment to be made the last day of the Partnership's fiscal year
in which the disposition occurred. Any Tax Indemnity Payment shall be treated as
a guaranteed payment with the meaning of Section 707(c) of the Code.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01 Management of the Partnership.
(a) Except as otherwise expressly provided in this
Agreement, the General Partner shall have full, complete and exclusive
discretion to manage and control the business of the Partnership for the
purposes herein stated, and shall make all decisions affecting the business and
assets of the Partnership. Subject to the restrictions specifically contained in
this Agreement, the powers of the General Partner shall include, without
limitation, the authority to take the following actions on behalf of the
Partnership:
(i) to acquire, purchase, own, operate, lease and
dispose of any real property and any other property or assets
including, but not limited to, notes and
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mortgages that the General Partner determines are necessary or
appropriate in the business of the Partnership;
(ii) to construct buildings and make other
improvements on the properties owned or leased by the
Partnership;
(iii) to authorize, issue, sell, redeem or otherwise
purchase any Partnership Interests or any securities (including
secured and unsecured debt obligations of the Partnership, debt
obligations of the Partnership convertible into any class or
series of Partnership Interests, or options, rights, warrants or
appreciation rights relating to any Partnership Interests) of
the Partnership;
(iv) to borrow or lend money for the Partnership,
issue or receive evidences of indebtedness in connection
therewith, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any
such indebtedness, and secure indebtedness by mortgage, deed of
trust, pledge or other lien on the Partnership's assets;
(v) to pay, either directly or by reimbursement, for
all operating costs and general administrative expenses of the
Partnership to third parties or to the General Partner or its
Affiliates as set forth in this Agreement;
(vi) to guarantee or become a co-maker of
indebtedness of any Subsidiary of the Company, refinance,
increase the amount of, modify, amend or change the terms of, or
extend the time for the payment of, any such guarantee or
indebtedness, and secure such guarantee or indebtedness by
mortgage, deed of trust, pledge or other lien on the
Partnership's assets;
(vii) to use assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent
with this Agreement, including, without limitation, payment,
either directly or by reimbursement, of all operating costs and
general and administrative expenses of the General Partner, the
Partnership, any Subsidiary of either or their Affiliates, to
third parties or to the General Partner as set forth in this
Agreement;
(viii) to lease all or any portion of any of the
Partnership's assets, whether or not the terms of such leases
extend beyond the termination date of the Partnership and
whether or not any portion of the Partnership's assets so leased
are to be occupied by the lessee, or, in turn, subleased in
whole or in part to others, for such consideration and on such
terms as the General Partner may determine;
(ix) to prosecute, defend, arbitrate or compromise
any and all claims or liabilities in favor of or against the
Partnership, on such terms and in such manner as the General
Partner may reasonably determine, and similarly to prosecute,
settle or defend litigation with respect to the Partners, the
Partnership or the Partnership's assets;
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(x) to file applications, communicate and otherwise
deal with any and all governmental agencies having jurisdiction
over, or in any way affecting, the Partnership's assets or any
other aspect of the Partnership business;
(xi) to make or revoke any election permitted or
required of the Partnership by any taxing authority;
(xii) to maintain such insurance coverage for public
liability, fire and casualty, and any and all other insurance
for the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or
beneficial to the Partnership, in such amounts and such types,
as it shall determine from time to time;
(xiii) to determine whether or not to apply any
insurance proceeds for any property to the restoration of such
property or to distribute the same;
(xiv) to establish one or more divisions of the
Partnership, to hire and dismiss employees of the Partnership or
any division of the Partnership, and to retain legal counsel,
accountants, consultants, real estate brokers and such other
persons as the General Partner may deem necessary or appropriate
in connection with the Partnership business and to pay therefor
such reasonable remuneration as the General Partner may deem
reasonable and proper;
(xv) to retain other services of any kind or nature
in connection with the Partnership business, and to pay therefor
such remuneration as the General Partner may deem reasonable and
proper;
(xvi) to negotiate and conclude agreements on behalf
of the Partnership with respect to any of the rights, powers and
authority conferred upon the General Partner;
(xvii) to maintain accurate accounting records and to
file promptly all federal, state and local income tax returns on
behalf of the Partnership;
(xviii) to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(xix) to form or acquire an interest in, and
contribute property to, any Subsidiary Partnerships, joint
ventures or other relationships that it deems desirable
(including, without limitation, the acquisition of interests in,
and the contributions of property to, its Subsidiaries and any
other Person in which it has an equity interest from time to
time);
(xx) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities or any
other valid Partnership purpose;
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(xxi) to do any and all acts and things necessary or
prudent to ensure that the Partnership will not be classified as
a "publicly traded partnership" for purposes of Section 7704 of
the Code; and
(xxii) to take such other action, execute, acknowledge,
swear to or deliver such other documents and instruments, and
perform any and all other acts that the General Partner deems
necessary or appropriate for the formation, continuation and
conduct of the business and affairs of the Partnership
(including, without limitation, all actions consistent with
allowing the Company at all times to qualify as a REIT unless
the Company voluntarily terminates its REIT status) and to
possess and enjoy all of the rights and powers of a general
partner as provided by the Act.
(b) Except as otherwise provided herein, to the extent the
duties of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.
6.02 Delegation of Authority. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.
6.03 Indemnification and Exculpation of Indemnitees.
(a) The Partnership shall indemnify an Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement
in which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.
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(b) The Partnership shall reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 6.03 has been met, and (ii) a
written undertaking by or on behalf of the Indemnitee to repay the amount if it
shall ultimately be determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 6.03 shall
be in addition to any other rights to which an Indemnitee or any other Person
may be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance, on
behalf of the Indemnitees and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.03, the Partnership shall
be deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose that is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited
Partners to personal liability by reason of the indemnification provisions set
forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in
whole or in part under this Section 6.03 because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the benefit
of the Indemnitees, their heirs, successors, assigns and administrators and
shall not be deemed to create any rights for the benefit of any other Persons.
(i) Any amendment, modification or repeal of this Section
6.03 or any provision hereof shall be prospective only and shall not in any way
affect the indemnification of an Indemnitee by the Partnership under this
Section 6.03 as in effect immediately prior to such amendment, modification or
repeal with respect to matters occurring, in whole or in part, prior to
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such amendment, modification or repeal, regardless of when claims relating to
such matters may arise or be asserted.
6.04 Liability of the General Partner.
(a) Notwithstanding anything to the contrary set forth in
this Agreement, the General Partner shall not be liable for monetary damages to
the Partnership or any Partners for losses sustained or liabilities incurred as
a result of errors in judgment or of any act or omission if the General Partner
acted in good faith. The General Partner shall not be in breach of any duty that
the General Partner may owe to the Limited Partners or the Partnership or any
other Persons under this Agreement or of any duty stated or implied by law or
equity provided the General Partner, acting in good faith, abides by the terms
of this Agreement.
(b) The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership and the Company's
shareholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or the tax consequences of
some, but not all, of the Limited Partners) in deciding whether to cause the
Partnership to take (or decline to take) any actions. In the event of a conflict
between the interests of the shareholders of the Company on one hand and the
Limited Partners on the other, the General Partner shall endeavor in good faith
to resolve the conflict in a manner not adverse to either the shareholders of
the Company or the Limited Partners; provided, however, that for so long as the
General Partner and Company own a controlling interest in the Partnership, any
such conflict that the General Partner, in its sole and absolute discretion,
determines cannot be resolved in a manner not adverse to either the shareholders
of the Company or the Limited Partners shall be resolved in favor of the
shareholders of the Company. The General Partner shall not be liable for
monetary damages for losses sustained, liabilities incurred or benefits not
derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith.
(c) Subject to its obligations and duties as General Partner
set forth in Section 6.01 hereof, the General Partner may exercise any of the
powers granted to it under this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
(d) Notwithstanding any other provisions of this Agreement
or the Act, any action of the General Partner on behalf of the Partnership or
any decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the Company to
continue to qualify as a REIT or (ii) to prevent the Company from incurring any
taxes under Section 857, Section 4981, or any other provision of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.
(e) Any amendment, modification or repeal of this Section
6.04 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the
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General Partner's liability to the Partnership and the Limited Partners under
this Section 6.04 as in effect immediately prior to such amendment, modification
or repeal with respect to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when claims relating to such
matters may arise or be asserted.
6.05 Partnership Obligations.
(a) Except as provided in this Section 6.05 and elsewhere in
this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
(b) All REIT Expenses and Administrative Expenses shall be
obligations of the Partnership, and the General Partner and the Company shall be
entitled to reimbursement by the Partnership for any expenditure (including
Administrative Expenses) incurred by it on behalf of the Partnership that shall
be made other than out of the funds of the Partnership.
6.06 Outside Activities. Subject to Section 6.08 hereof, the
Declaration of Trust and any agreements entered into by the General Partner or
its Affiliates with the Partnership or a Subsidiary, any officer, director,
employee, agent, trustee, Affiliate or shareholder of the Company or the General
Partner, the General Partner and the Company shall be entitled to and may have
business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any such business ventures, interest or activities. None of
the Limited Partners nor any other Person shall have any rights by virtue of
this Agreement or the partnership relationship established hereby in any such
business ventures, interests or activities, and the General Partner and the
Company shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures, interests and activities to the
Partnership or any Limited Partner, even if such opportunity is of a character
that, if presented to the Partnership or any Limited Partner, could be taken by
such Person.
6.07 Employment or Retention of Affiliates.
(a) Any Affiliate of the General Partner or the Company may
be employed or retained by the Partnership and may otherwise deal with the
Partnership (whether as a buyer, lessor, lessee, manager, furnisher of goods or
services, broker, agent, lender or otherwise) and may receive from the
Partnership any compensation, price or other payment therefor that the General
Partner determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its
Subsidiaries or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
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(c) The Partnership may transfer assets to joint ventures,
other partnerships, corporations or other business entities in which it is or
thereby becomes a participant upon such terms and subject to such conditions as
the General Partner deems are consistent with this Agreement and applicable law.
6.08 General Partner Participation. The General Partner agrees that
all business activities of the General Partner and the Company, including
activities pertaining to the acquisition, development or ownership of real
property, shall be conducted through the Partnership or one or more Subsidiary
Partnerships; provided, however, that the General Partner is allowed to make a
direct acquisition, but if and only if, such acquisition is made in connection
with the issuance of Additional Securities, which direct acquisition and
issuance have been approved and determined to be in the best interests of the
General Partner and the Partnership by a majority of the Independent Trustees.
6.09 Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner, individually
or collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.10 Miscellaneous. In the event the Company redeems any REIT Shares,
then the General Partner shall cause the Partnership to purchase from the
General Partner and the Company a number of Partnership Units as determined
based on the application of the Conversion Factor on the same terms that the
Company redeemed such REIT Shares. Moreover, if the Company makes a cash tender
offer or other offer to acquire REIT Shares, then the General Partner shall
cause the Partnership to make a corresponding offer to the Company to acquire an
equal number of Partnership Units held by the Company. In the event any REIT
Shares are redeemed by the Company pursuant to such offer, the Partnership shall
redeem an equivalent number of the General Partner's Partnership Units for an
equivalent purchase price based on the application of the Conversion Factor.
ARTICLE VII
CHANGES IN GENERAL PARTNER AND COMPANY
7.01 Transfer of the General Partner's and Company's Partnership
Interest.
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(a) Neither the General Partner nor the Company shall
transfer all or any portion of its Partnership Interest or withdraw as General
Partner except as provided in or in connection with a transaction contemplated
by Section 7.01(c) or (d).
(b) Except as otherwise provided in Section 7.01(c) or (d)
hereof, neither the General Partner nor the Company shall engage in any merger,
consolidation or other combination with or into another Person or sale of all or
substantially all of its assets (other than in connection with a change in the
General Partner's or Company's state of incorporation or organizational form),
in each case which results in a change of control of the General Partner or the
Company (a "Transaction"), unless:
(i) the consent of Limited Partners (other than the
General Partner or any Subsidiary) holding more than 50% of the
Percentage Interests of the Limited Partners (other than those
held by the General Partner, Company or any Subsidiary) is
obtained;
(ii) as a result of such Transaction all Limited
Partners will receive for each Partnership Unit an amount of
cash, securities or other property equal to the product of the
Conversion Factor and the greatest per share amount of cash,
securities or other property paid in the Transaction to a holder
of REIT Shares in consideration of REIT Shares, provided that
if, in connection with the Transaction, a purchase, tender or
exchange offer ("Offer") shall have been made to and accepted by
the holders of more than 50% of the outstanding REIT Shares,
each holder of Partnership Units shall be given the option to
exchange its Partnership Units for the greatest amount of cash,
securities or other property that a Limited Partner would have
received had it (A) exercised its Redemption Right and (B) sold,
tendered or exchanged pursuant to the Offer the REIT Shares
received upon exercise of the Redemption Right immediately prior
to the expiration of the Offer; or
(iii) the General Partner or the Company is the
surviving entity in the Transaction and either (A) the holders
of REIT Shares do not receive cash, securities or other property
in the Transaction or (B) all Limited Partners (other than the
General Partner, Company or any Subsidiary) receive an amount of
cash, securities or other property (expressed as an amount per
REIT Share) that is no less than the product of the Conversion
Factor and the greatest amount of cash, securities or other
property (expressed as an amount per REIT Share) received in the
Transaction by any holder of REIT Shares.
(c) Notwithstanding Section 7.01(b), the General Partner or
the Company may merge with or into or consolidate with another entity if
immediately after such merger or consolidation (i) substantially all of the
assets of the successor or surviving entity (the "Survivor"), other than
Partnership Units held by the General Partner and the Company, are contributed,
directly or indirectly, to the Partnership as a Capital Contribution in exchange
for Partnership Units with a fair market value equal to the value of the assets
so contributed as determined by the Survivor in good faith and (ii) the Survivor
expressly agrees to assume all
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obligations of the General Partner and the Company hereunder. Upon such
contribution and assumption, the Survivor shall have the right and duty to amend
this Agreement as set forth in this Section 7.01(c). The Survivor shall in good
faith arrive at a new method for the calculation of the Cash Amount, the REIT
Shares Amount and Conversion Factor for a Partnership Unit after any such merger
or consolidation so as to approximate the existing method for such calculation
as closely as reasonably possible. Such calculation shall take into account,
among other things, the kind and amount of securities, cash and other property
that was receivable upon such merger or consolidation by a holder of REIT Shares
or options, warrants or other rights relating thereto, and which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Survivor also shall in good faith
modify the definition of REIT Shares and make such amendments to Section 8.04
hereof so as to approximate the existing rights and obligations set forth in
Section 8.04 as closely as reasonably possible. The above provisions of this
Section 7.01(c) shall similarly apply to successive mergers or consolidations
permitted hereunder.
In respect of any transaction described in the preceding
Paragraph, the General Partner is required to use its commercially reasonable
efforts to structure such transaction to avoid causing the Limited Partners to
recognize a gain for federal income tax purposes by virtue of the occurrence of
or their participation in such transaction, provided such efforts are consistent
with the exercise of the Board of Trustees' fiduciary duties to the shareholders
of the Company under applicable law.
(d) Notwithstanding anything in this Article VII,
(i) the General Partner may transfer all or any
portion of its General Partnership Interest to (A) the Company
or (B) any direct or indirect wholly-owned Subsidiary of the
Company, and following a transfer of all of its General
Partnership Interest, may withdraw as General Partner; and
(ii) the General Partner may engage in a transaction
required by law or by the rules of any national securities
exchange on which the REIT Shares are listed.
7.02 Admission of a Substitute or Additional General Partner. A
Person shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:
(a) the Person to be admitted as a substitute or additional
General Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
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recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;
(b) if the Person to be admitted as a substitute or
additional General Partner is a corporation or a partnership, it shall have
provided the Partnership with evidence satisfactory to counsel for the
Partnership of such Person's authority to become a General Partner and to be
bound by the terms and provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an
opinion (relying on such opinions from other counsel and the state or any other
jurisdiction as may be necessary) that the admission of the Person to be
admitted as a substitute or additional General Partner is in conformity with the
Act, that none of the actions taken in connection with the admission of such
Person as a substitute or additional General Partner will cause (i) the
Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner's limited liability.
7.03 Effect of Bankruptcy, Withdrawal, or Dissolution of a General
Partner.
(a) Upon the occurrence of an Event of Bankruptcy as to the
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
withdrawal, removal or dissolution of the General Partner (except that, if the
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.
(b) Following the occurrence of an Event of Bankruptcy as to
the General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
withdrawal, removal or dissolution of the General Partner (except that, if the
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Limited Partners, within 90 days after such occurrence, may elect
to continue the business of the Partnership by selecting, subject to Section
7.02 hereof and any other provisions of this Agreement, a substitute General
Partner by consent of a Majority in Interest of the Limited Partners (excluding
the Company). If the Limited Partners elect to continue the business of the
Partnership and admit a substitute General Partner, the relationship with the
Partners and of any Person who has acquired an interest of a Partner in the
Partnership shall be governed by this Agreement.
7.04 Removal of the General Partner.
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(a) Upon the occurrence of an Event of Bankruptcy as to, or
the dissolution of, the General Partner, the General Partner shall be deemed to
be removed automatically; provided, however, that the General Partner is on the
date of such occurrence a partnership, the withdrawal, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not
to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.
(b) If the General Partner has been removed pursuant to this
Section 7.04 and the Partnership is continued pursuant to Section 7.03 hereof,
the General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
Majority in Interest of the Limited Partners in accordance with Section 7.03(b)
hereof and otherwise admitted to the Partnership in accordance with Section 7.02
hereof. At the time of assignment, the removed General Partner shall be entitled
to receive from the substitute General Partner the fair market value of the
General Partnership Interest of such removed General Partner as reduced by any
damages caused to the Partnership by such General Partner. Such fair market
value shall be determined by an appraiser mutually agreed upon by the General
Partner and a Majority in Interest of the Limited Partners within 10 days
following the removal of the General Partner. In the event that the parties are
unable to agree upon an appraiser, the removed General Partner and a Majority in
Interest of the Limited Partners (excluding the Company) each shall select an
appraiser. Each such appraiser shall complete an appraisal of the fair market
value of the removed General Partner's General Partnership Interest within 30
days of the General Partner's removal, and the fair market value of the removed
General Partner's General Partnership Interest shall be the average of the two
appraisals; provided, however, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the removed General Partner's General Partnership Interest no
later than 60 days after the removal of the General Partner. In such case, the
fair market value of the removed General Partner's General Partnership Interest
shall be the average of the two appraisals closest in value.
(c) The General Partnership Interest of a removed General
Partner, during the time after default until transfer under Section 7.04(b),
shall be converted to that of a special Limited Partner; provided, however, such
removed General Partner shall not have any rights to participate in the
management and affairs of the Partnership, and shall not be entitled to any
portion of the income, expense, profit, gain or loss allocations or cash
distributions allocable or payable, as the case may be, to the Limited Partners.
Instead, such removed General Partner shall receive and be entitled only to
retain distributions or allocations of such items that it would have been
entitled to receive in its capacity as General Partner, until the transfer is
effective pursuant to Section 7.04(b).
(d) All Partners shall have given and hereby do give such
consents, shall take such actions and shall execute such documents as shall be
legally necessary and sufficient to effect all the foregoing provisions of this
Section.
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ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01 Management of the Partnership. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.
8.02 Power of Attorney. Each Limited Partner hereby irrevocably
appoints the General Partner its true and lawful attorney-in-fact, who may act
for each Limited Partner and in its name, place and stead, and for its use and
benefit, to sign, acknowledge, swear to, deliver, file or record, at the
appropriate public offices, any and all documents, certificates and instruments
as may be deemed necessary or desirable by the General Partner to carry out
fully the provisions of this Agreement and the Act in accordance with their
terms, including amendments hereto, which power of attorney is coupled with an
interest and shall survive the death, dissolution or legal incapacity of the
Limited Partner, or the transfer by the Limited Partner of any part or all of
its Partnership Interest.
8.03 Limitation on Liability of Limited Partners. No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due hereunder. After
its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital
Contributions or other payments or lend any funds to the Partnership.
8.04 Redemption Right.
(a) Subject to Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e)
and 8.04(f), and the provisions of any agreements between the Partnership and
one or more Limited Partners with respect to Partnership Units held by them and
any restriction agreed to in writing between the Redeeming Limited Partner and
the General Partner, each Limited Partner, other than the Company, shall have
the right (the "Redemption Right") to require the Partnership to redeem on a
Specified Redemption Date all or a portion of the Partnership Units that have
been held by such Limited Partner for at least one year (or such lesser time as
determined by the General Partner in its sole and absolute discretion) at a
redemption price equal to and in the form of the Redemption Amount to be paid by
the Partnership. The Redemption Right shall be exercised pursuant to a Notice of
Redemption delivered to the Partnership (with a copy to the General Partner) by
the Limited Partner who is exercising the Redemption Right (the "Redeeming
Limited Partner"); provided, however, that the Partnership shall not be
obligated to satisfy such Redemption Right if the Company elects to purchase the
Partnership Units subject to the Notice of Redemption; and provided, further,
that no Limited Partner may deliver more than two Notices of Redemption during
each calendar year. A Limited Partner may not exercise the Redemption Right for
less than 1,000 Partnership Units or, if such Limited Partner holds less than
1,000 Partnership Units, all of the Partnership Units held by such Partner. The
Redeeming
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Limited Partner shall have no right, with respect to any Partnership Units so
redeemed, to receive any distribution paid with respect to Partnership Units if
the record date for such distribution is on or after the Specified Redemption
Date.
(b) Notwithstanding the provisions of Section 8.04(a), a
Limited Partner that exercises the Redemption Right shall be deemed to have
offered to sell the Partnership Units described in the Notice of Redemption to
the Company, and the Company may, in its sole and absolute discretion, elect to
purchase directly and acquire such Partnership Units by paying to the Redeeming
Limited Partner either the Cash Amount or the REIT Shares Amount, as elected by
the Company (in its sole and absolute discretion), on the Specified Redemption
Date, whereupon the Company shall acquire the Partnership Units offered for
redemption by the Redeeming Limited Partner and shall be treated for all
purposes of this Agreement as the owner of such Partnership Units. If the
Company shall elect to exercise its right to purchase Partnership Units under
this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify
the Redeeming Limited Partner within five Business Days after the receipt by the
General Partner of such Notice of Redemption. In the event the Company shall
exercise its right to purchase Partnership Units with respect to the exercise of
a Redemption Right, the Partnership shall have no obligation to pay any amount
to the Redeeming Limited Partner with respect to such Redeeming Limited
Partner's exercise of such Redemption Right, and each of the Redeeming Limited
Partner, the Partnership, the Company and the General Partner shall treat the
transaction between the Company and the Redeeming Limited Partner for federal
income tax purposes as a sale of the Redeeming Limited Partner's Partnership
Units to the Company. Each Redeeming Limited Partner agrees to execute such
documents as the Company may reasonably require in connection with the issuance
of REIT Shares upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.04(a) and
8.04(b), a Limited Partner shall not be entitled to exercise the Redemption
Right if the delivery of REIT Shares to such Partner on the Specified Redemption
Date by the Company pursuant to Section 8.04(b) (regardless of whether or not
the Company would in fact exercise its rights under Section 8.04(b)) would (i)
result in such Partner or any other person owning, directly or indirectly, REIT
Shares in excess of the Ownership Limitation (as defined in the Declaration of
Trust) and calculated in accordance therewith, except as provided in the
Declaration of Trust, (ii) result in REIT Shares being owned by fewer than 100
persons (determined without reference to any rules of attribution), (iii) result
in the Company being "closely held" within the meaning of Section 856(h) of the
Code, (iv) cause the Company to own, directly or constructively, 10% or more of
the ownership interests in a tenant of the General Partner's, the Partnership's
or a Subsidiary Partnership's real property, within the meaning of Section
856(d)(2)(B) of the Code, or (v) be likely to cause the acquisition of REIT
Shares by such Partner to be "integrated" with any other distribution of REIT
Shares or Partnership Units for purposes of complying with the registration
provisions of the Securities Act. The General Partner or the Company, in its
sole and absolute discretion, may waive the restriction on redemption set forth
in this Section 8.04(c).
(d) Any Cash Amount to be paid to a Redeeming Limited
Partner pursuant to this Section 8.04 shall be paid on the Specified Redemption
Date; provided, however, that the General Partner may elect to cause the
Specified Redemption Date to be delayed for up to an additional 90 days to the
extent required for the Company to cause additional REIT Shares to be
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issued to provide financing to be used to make such payment of the Cash Amount.
Notwithstanding the foregoing, the General Partner and the Company each agrees
to use its best efforts to cause the closing of the acquisition of redeemed
Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement,
the General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
that apply upon a Redeeming Limited Partner's exercise of the Redemption Right.
If a Redeeming Limited Partner believes that it is exempt from such withholding
upon the exercise of the Redemption Right, such Partner must furnish the General
Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If
the Partnership, the Company or the General Partner is required to withhold and
pay over to any taxing authority any amount upon a Redeeming Limited Partner's
exercise of the Redemption Right and if the Redemption Amount equals or exceeds
the Withheld Amount, the Withheld Amount shall be treated as an amount received
by such Partner in redemption of its Partnership Units. If, however, the
Redemption Amount is less than the Withheld Amount, the Redeeming Limited
Partner shall not receive any portion of the Redemption Amount, the Redemption
Amount shall be treated as an amount received by such Partner in redemption of
its Partnership Units, and the Partner shall contribute the excess of the
Withheld Amount over the Redemption Amount to the Partnership before the
Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement,
the General Partner shall place appropriate restrictions on the ability of the
Limited Partners to exercise their Redemption Rights as and if deemed necessary
to ensure that the Partnership does not constitute a "publicly traded
partnership" under section 7704 of the Code. If and when the General Partner
determines that imposing such restrictions is necessary, the General Partner
shall give prompt written notice thereof (a "Restriction Notice") to each of the
Limited Partners, which notice shall be accompanied by a copy of an opinion of
counsel to the Partnership that states that, in the opinion of such counsel,
restrictions are necessary in order to avoid the Partnership being treated as a
"publicly traded partnership" under section 7704 of the Code.
ARTICLE IX
TRANSFERS OF PARTNERSHIP INTERESTS
9.01 Purchase for Investment.
(a) Each Limited Partner hereby represents and warrants to
the General Partner and to the Partnership that the acquisition of his
Partnership Interests is made as a principal for his account for investment
purposes only and not with a view to the resale or distribution of such
Partnership Interest.
(b) Subject to the provisions of Section 9.02, each Limited
Partner agrees that he, she or it will not sell, assign or otherwise transfer
his Partnership Interest or any fraction thereof, whether voluntarily or by
operation of law or at judicial sale or otherwise, to any Person
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who does not make the representations and warranties to the General Partner set
forth in Section 9.01(a) above.
9.02 Restrictions on Transfer of Partnership Interests.
(a) Subject to the provisions of Sections 9.02(b), (c) and
(d), no Limited Partner may offer, sell, assign, hypothecate, pledge or
otherwise transfer all or any portion of his Partnership Interest, or any of
such Limited Partner's economic rights as a Limited Partner, whether voluntarily
or by operation of law or at judicial sale or otherwise (collectively, a
"Transfer") without the consent of the General Partner, which consent may be
granted or withheld in its sole and absolute discretion. The General Partner may
require, as a condition of any Transfer to which it consents, that the
transferor assume all costs incurred by the Partnership in connection therewith.
(b) No Limited Partner may withdraw from the Partnership
other than as a result of a permitted Transfer (i.e., a Transfer consented to as
contemplated by clause (a) above or clause (c) below or a Transfer pursuant to
Section 9.05 below) of all of his, her or its Partnership Units pursuant to this
Article IX or pursuant to a redemption of all of his, her or its Partnership
Units pursuant to Section 8.04. Upon the permitted Transfer or redemption of all
of a Limited Partner's Partnership Units, such Limited Partner shall cease to be
a Limited Partner.
(c) Subject to Sections 9.02(d), (e) and (f) below, a
Limited Partner may Transfer his, her or its Partnership Units, with the consent
of the General Partner, which consent may not be unreasonably withheld, to the
transferee in an "Exempt Transfer." The term Exempt Transfer shall mean a
transfer to (i) a parent or parent's spouse of any Limited Partner, (ii) a
spouse of any Limited Partner, (iii) a natural or adopted descendant or
descendants of any Limited Partner, (iv) a spouse of any Limited Partner's
descendant, (v) a brother or sister of any Limited Partner, (vi) any trust
created by any Limited Partner for the primary benefit of any Limited Partner
and/or any such persons described in (i) through (v) above of which trust any
Limited Partner or any such person(s) or bank or other commercial entity in the
business of acting as a fiduciary in its ordinary course of business and having
an equity capitalization of at least $100,000,000 is a Trustee, (vii) a
corporation, partnership or limited liability company controlled by a Person or
Persons named in (i) through (v) above or (viii) to the beneficial owners of any
entity which is a Limited Partner.
(d) No Limited Partner may effect a Transfer of its
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Partnership Interest under the Securities Act or would otherwise violate any
applicable federal or state securities or blue sky law (including investment
suitability standards).
(e) No Transfer by a Limited Partner of its Partnership
Interest, in whole or in part, may be made to any Person if (i) in the opinion
of legal counsel for the Partnership, the transfer would result in the
Partnership's being treated as an association taxable as a corporation (other
than a qualified REIT subsidiary within the meaning of Section 856(i) of the
Code), (ii) in the opinion of legal counsel for the Partnership, it would
adversely affect the ability of the
-33-
Company to continue to qualify as a REIT or subject the Company to any
additional taxes under Section 857 or Section 4981 of the Code or (iii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code.
(f) Any purported Transfer in contravention of any of the
provisions of this Article IX shall be void ab initio and ineffectual and shall
not be binding upon, or recognized by, the General Partner or the Partnership.
(g) Prior to the consummation of any Transfer under this
Article IX, the transferor and/or the transferee shall deliver to the General
Partner such opinions, certificates and other documents as the General Partner
shall request in connection with such Transfer.
9.03 Admission of Substitute Limited Partner.
(a) Subject to the other provisions of this Article IX, an
assignee of the Partnership Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee or other recipient of any
disposition of such Partnership Interest) shall be deemed admitted as a Limited
Partner of the Partnership only with the consent of the General Partner and upon
the satisfactory completion of the following:
(i) The assignee shall have accepted and agreed to
be bound by the terms and provisions of this Agreement by
executing a counterpart or an amendment thereof, including a
revised Exhibit A, and such other documents or instruments as
the General Partner may require in order to effect the admission
of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate
evidencing the admission of such Person as a Limited Partner
shall have been signed, acknowledged and filed for record in
accordance with the Act.
(iii) The assignee shall have delivered a letter
containing the representation set forth in Section 9.01(a)
hereof and the agreement set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership or
trust, the assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of the
assignee's authority to become a Limited Partner under the terms
and provisions of this Agreement.
(v) The assignee shall have executed a power of
attorney containing the terms and provisions set forth in
Section 8.02 hereof.
(vi) The assignee shall have paid all legal fees and
other expenses of the Partnership and the General Partner and
filing and publication costs in connection with its substitution
as a Limited Partner.
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(vii) The assignee has obtained the prior written
consent of the General Partner to its admission as a Substitute
Limited Partner, which consent may be given or denied in the
exercise of the General Partner's sole and absolute discretion.
(b) For the purpose of allocating Profits and Losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the Certificate described in
Section 9.03(a)(ii) hereof or, if no such filing is required, the later of the
date specified in the transfer documents or the date on which the General
Partner has received all necessary instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person
seeking to become a Substitute Limited Partner by preparing the documentation
required by this Section and making all official filings and publications. The
Partnership shall take all such action as promptly as practicable after the
satisfaction of the conditions in this Article IX to the admission of such
Person as a Limited Partner of the Partnership.
9.04 Rights of Assignees of Partnership Interests.
(a) Subject to the provisions of Sections 9.01 and 9.02
hereof, except as required by operation of law, the Partnership shall not be
obligated for any purposes whatsoever to recognize the assignment by any Limited
Partner of its Partnership Interest until the Partnership has received notice
thereof.
(b) Any Person who is the assignee of all or any portion of
a Limited Partner's Limited Partnership Interest, but does not become a
Substitute Limited Partner and desires to make a further assignment of such
Limited Partnership Interest, shall be subject to all the provisions of this
Article IX to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of its Limited Partnership Interest.
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue if an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if he dies, his executor, administrator or trustee,
or, if he is finally adjudicated incompetent, his committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.
9.06 Joint Ownership of Interests. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are
-35-
married or are related and share the same home as tenants in common. The written
consent or vote of both owners of any such jointly held Partnership Interest
shall be required to constitute the action of the owners of such Partnership
Interest; provided, however, that the written consent of only one joint owner
will be required if the Partnership has been provided with evidence satisfactory
to the counsel for the Partnership that the actions of a single joint owner can
bind both owners under the applicable laws of the state of residence of such
joint owners. Upon the death of one owner of a Partnership Interest held in a
joint tenancy with a right of survivorship, the Partnership Interest shall
become owned solely by the survivor as a Limited Partner and not as an assignee.
The Partnership need not recognize the death of one of the owners of a
jointly-held Partnership Interest until it shall have received notice of such
death. Upon notice to the General Partner from either owner, the General Partner
shall cause the Partnership Interest to be divided into two equal Partnership
Interests, which shall thereafter be owned separately by each of the former
owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 Books and Records. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, (c) copies of
the Partnership's federal, state and local income tax returns and reports, (d)
copies of this Agreement and any financial statements of the Partnership for the
three most recent years and (e) all documents and information required under the
Act. Any Partner or its duly authorized representative, upon paying the costs of
collection, duplication and mailing, shall be entitled to inspect or copy such
records during ordinary business hours.
10.02 Custody of Partnership Funds; Bank Accounts.
(a) All funds of the Partnership not otherwise invested
shall be deposited in one or more accounts maintained in such banking or
brokerage institutions as the General Partner shall determine, and withdrawals
shall be made only on such signature or signatures as the General Partner may,
from time to time, determine.
(b) All deposits and other funds not needed in the operation
of the business of the Partnership may be invested by the General Partner in
investment grade instruments (or investment companies whose portfolio consists
primarily thereof), government obligations, certificates of deposit, bankers'
acceptances and municipal notes and bonds. The funds of the Partnership shall
not be commingled with the funds of any other Person except for such commingling
as may necessarily result from an investment in those investment companies
permitted by this Section 10.02(b).
10.03 Fiscal and Taxable Year. The fiscal and taxable year of the
Partnership shall be the calendar year.
-36-
10.04 Annual Tax Information and Report. Within 90 days after the end
of each fiscal year of the Partnership, the General Partner shall furnish to
each person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.
(a) The General Partner shall be the Tax Matters Partner of
the Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax
Matters Partner, the General Partner shall have the right and obligation to take
all actions authorized and required, respectively, by the Code for the Tax
Matters Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.
(b) All elections required or permitted to be made by the
Partnership under the Code or any applicable state or local tax law shall be
made by the General Partner in its sole and absolute discretion.
(c) In the event of a transfer of all or any part of the
Partnership Interest of any Partner, the Partnership, at the option of the
General Partner, may elect pursuant to Section 754 of the Code to adjust the
basis of the Properties. Notwithstanding anything contained in Article V of this
Agreement, any adjustments made pursuant to Section 754 shall affect only the
successor in interest to the transferring Partner and in no event shall be taken
into account in establishing, maintaining or computing Capital Accounts for the
other Partners for any purpose under this Agreement. Each Partner will furnish
the Partnership with all information necessary to give effect to such election.
10.06 Reports to Limited Partners.
(a) If the Company is required to furnish an annual report
to its shareholders containing financial statements of the Company, the Company
will, at the same time and in the same manner, furnish such annual report to
each Limited Partner. The annual financial statements shall be audited by
accountants selected by the General Partner.
(b) Any Partner shall further have the right to a private
audit of the books and records of the Partnership, provided such audit is made
for Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
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ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER
The General Partner's consent shall be required for any amendment to
this Agreement. The General Partner, without the consent of the Limited
Partners, may amend this Agreement in any respect; provided, however, that the
following amendments shall require the consent of Limited Partners (other than
the Company or any Subsidiary of the Company or General Partner) holding more
than 50% of the Percentage Interests of the Limited Partners (other than those
held by the Company or any Subsidiary of the Company or General Partner):
(a) any amendment affecting the operation of the Conversion
Factor or the Redemption Right (except as otherwise provided herein) in a manner
adverse to the Limited Partners;
(b) any amendment that would adversely affect the rights of
the Limited Partners to receive the distributions payable to them hereunder,
other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.02 hereof;
(c) any amendment that would alter the Partnership's
allocations of Profit and Loss to the Limited Partners, other than with respect
to the issuance of additional Partnership Units pursuant to Section 4.02 hereof;
(d) any amendment that would impose on the Limited Partners
any obligation to make additional Capital Contributions to the Partnership; or
(e) any amendment to this Article XI.
and provided further, however, that the following amendments shall
require the consent of Limited Partners (other than those held by the Company or
any Subsidiary of the Company or General Partner) holding more than 66.66% of
the Percentage Interests of the Limited Partners (other than those held by the
Company or any Subsidiary of the Company or General Partner):
(x) the merger or consolidate the Partnership with or into
any other domestic or foreign partnership, limited partnership, limited
liability company or corporation; or
(y) the sale of all or substantially all of the assets of
the Partnership.
ARTICLE XII
GENERAL PROVISIONS
12.01 Notices. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A attached hereto; provided, however, that any Partner may
specify
-38-
a different address by notifying the General Partner in writing of such
different address. Notices to the Partnership shall be delivered at or mailed to
its specified office.
12.02 Survival of Rights. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.
12.03 Additional Documents. Each Partner agrees to perform all further
acts and execute, swear to, acknowledge and deliver all further documents that
may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act.
12.04 Severability. If any provision of this Agreement shall be
declared illegal, invalid or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or
unenforceability shall not affect the remainder hereof.
12.05 Entire Agreement. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
12.06 Pronouns and Plurals. When the context in which words are used
in the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.
12.07 Headings. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
12.08 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.
12.09 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have hereunder affixed
their signatures to this Amended and Restated Agreement of Limited Partnership,
all as of the 10th day of September, 2002.
GENERAL PARTNER
FIRST STATES GROUP, LLC
By:
--------------------------------------------
Name:
Title:
LIMITED PARTNERS
American Financial Realty Trust
-------------------------------------
Name:
Title:
Friedman, Billings, Xxxxxx & Co., Inc.
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx, III
-------------------------------------
Xxxxx X. Xxxxxxxx
Irrevocable Agreement of Trust of
Xxxxx Xxxx
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxx Xxxxxxxx, III
-------------------------------------
Xxxxxxx Xxxx
-------------------------------------
Xxxxxxx Xxxx, Xx.
L.D.D. Investment Company
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxxxx Xxxxxxxx
-------------------------------------
Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxx
Holy Redeemer Health System
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxx Xxxx
-------------------------------------
Xxxxxxx Xxxxx
Willow Grove Life Insurance Company
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxx X. Xxxxx, Xx.
X.X. Xxxxx Industries, Inc.
-------------------------------------
Name:
Title:
Osiris Limited Liability Partnership
-------------------------------------
Name:
Title:
Sisters of Holy Redeemer, Inc.
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxxx
X.X. Joint Ventures, Inc.
-------------------------------------
Name:
Title:
-------------------------------------
Xxxxx Xxxxxxxxx
-------------------------------------
J. Rock Xxxxxx
EXHIBIT A
Agreed Value
of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
------- ------------ ------------ ----------- ----------
GENERAL PARTNER:
First States Group, LLC
LIMITED PARTNERS:
American Financial Realty Trust
Friedman, Billings, Xxxxxx &
Co., Inc.
Xxxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, III
Xxxxx X. Xxxxxxxx
Irrevocable Agreement of Trust of
Xxxxx Xxxx
Xxxxx Xxxxxxxx, III
Xxxxxxx Xxxx
Xxxxxxx Xxxx, Xx.
L.D.D. Investment Company
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxx
Holy Redeemer Health System
Xxxxx Xxxx
Xxxxxxx Xxxxx
Willow Grove Life Insurance Company
Xxxxx X. Xxxxx, Xx.
X.X. Xxxxx Industries, Inc.
Osiris Limited Liability
Partnership
Sisters of Holy Redeemer, Inc.
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxxxx
Xxxxxxxx X. Xxxxxxxxx
X. X. Joint Ventures, Inc.
Xxxxx Xxxxxxxxx
J. Rock Xxxxxx
Totals 100.00000%
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.04 of the Amended and Restated Agreement of
Limited Partnership (the "Agreement") of First States Group, L.P., the
undersigned hereby irrevocably (i) presents for redemption ________ Partnership
Units in First States Group, L.P. in accordance with the terms of the Agreement
and the Redemption Right referred to in Section 8.04 thereof, (ii) surrenders
such Partnership Units and all right, title and interest therein and (iii)
directs that the Cash Amount or REIT Shares Amount (as defined in the Agreement)
as determined by the General Partner and the Company deliverable upon exercise
of the Redemption Right be delivered to the address specified below, and if REIT
Shares (as defined in the Agreement) are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the address(es) specified below.
Dated:________ __, _____
Name of Limited Partner:
_____________________________________
(Signature of Limited Partner)
_____________________________________
(Mailing Address)
_____________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
_____________________________________
If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
EXHIBIT C
For Redeeming Limited Partners that are entities:
CERTIFICATION OF NON-FOREIGN STATUS
Under section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), in the event of a disposition by a non-U.S. person of a
partnership interest in a partnership in which (i) 50% or more of the value of
the gross assets consists of United States real property interests ("USRPIs"),
as defined in section 897(c) of the Code, and (ii) 90% or more of the value of
the gross assets consists of USRPIs, cash, and cash equivalents, the transferee
will be required to withhold 10% of the amount realized by the non-U.S. person
upon the disposition. To inform First States Group, L.P. (the "Partnership")
that no withholding is required with respect to the redemption by ____________
("Partner") of its units of limited partnership interest in the Partnership, the
undersigned hereby certifies the following on behalf of Partner:
1. Partner is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate, as those terms are defined in the Code and the
Treasury regulations thereunder.
2. The U.S. employer identification number of Partner is _____________.
3. The principal business address of Partner is:___________________________
______________________________________ and Partner's place of incorporation is
__________.
4. Partner agrees to inform the General Partner of the Partnership if it
becomes a foreign person at any time during the three-year period immediately
following the date of this notice.
5. Partner understands that this certification may be disclosed to the
Internal Revenue Service by the General Partner of the Partnership and that any
false statement contained herein could be punished by fine, imprisonment, or
both.
PARTNER
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further declare that I have authority to sign this document on behalf of
Partner.
Date:_______________
[NAME]
_________________________________
Title
For Redeeming Limited Partners that are individuals:
CERTIFICATION OF NON-FOREIGN STATUS
Under section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), in the event of a disposition by a non-U.S. person of a
partnership interest in a partnership in which (i) 50% or more of the value of
the gross assets consists of United States real property interests ("USRPIs"),
as defined in section 897(c) of the Code, and (ii) 90% or more of the value of
the gross assets consists of USRPIs, cash, and cash equivalents, the transferee
will be required to withhold 10% of the amount realized by the non-U.S. person
upon the disposition. To inform First States Group, L.P. (the "Partnership")
that no withholding is required with respect to my redemption of my units of
limited partnership interest in the Partnership, I, ___________, hereby certify
the following:
1. I am not a nonresident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identification number (social security number) is
_____________.
3. My home address is:____________________________________________________.
4. I agree to inform the General Partner of the Partnership promptly if I
become a nonresident alien at any time during the three-year period immediately
following the date of this notice.
5. I understand that this certification may be disclosed to the Internal
Revenue Service by the General Partner of the Partnership and that any false
statement contained herein could be punished by fine, imprisonment, or both.
_________________________________
Name:
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete.
Date:________________
_________________________________
Name:
