EXHIBIT 10 (vi)
THIRD AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
UNITED DOMINION REALTY, L.P.
Dated as of December 7, 1998
TABLE OF CONTENTS
ARTICLE I
DEFINED TERMS
1.01. Defined Terms........................................................................................................2
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01. Defined Terms........................................................................................................9
2.02. Name, Office and Registered Agent....................................................................................9
2.03. Partners.............................................................................................................9
2.04. Term and Dissolution.................................................................................................9
2.05. Filing of Certificate and Perfection of Limited Partnership.........................................................10
2.06. Certificates Describing Partnership Units...........................................................................10
ARTICLE III
BUSINESS OF THE PARTNERSHIP
3.01. Business of the Partnership.........................................................................................11
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01. Capital Contributions...............................................................................................11
4.02. Additional Capital Contributions and Issuances of Additional
Partnership Interests........................................................................................11
4.03. Loans to the Partnership............................................................................................13
4.04. Capital Accounts....................................................................................................13
4.05. Percentage Interests................................................................................................13
4.06. No Interest on Contributions........................................................................................14
4.07. Return of Capital Contributions.....................................................................................14
4.08. No Third Party Beneficiary..........................................................................................14
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01. Allocation of Profit and Loss.......................................................................................15
5.02. Distribution of Cash................................................................................................17
5.03. REIT Distribution Requirements......................................................................................18
5.04. No Right to Distributions in Kind...................................................................................19
5.05. Limitations on Return of Capital Contributions......................................................................19
5.06. Distributions Upon Liquidation......................................................................................19
5.07. Substantial Economic Effect.........................................................................................19
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01. Management of the Partnership.......................................................................................20
6.02. Delegation of Authority.............................................................................................23
6.03. Indemnification and Exculpation of Indemnitees......................................................................23
6.04. Liability of the General Partner....................................................................................24
6.05. Partnership Expenses................................................................................................25
6.06. Outside Activities..................................................................................................25
6.07. Employment or Retention of Affiliates...............................................................................26
6.08. Title to Partnership Assets.........................................................................................26
ARTICLE VII
CHANGES IN GENERAL PARTNER AND THE COMPANY
7.01. Transfer of a General Partner's Partnership Interest; Transactions Involving the Company............................26
7.02. Admission of a Substitute or Additional General Partner.............................................................28
7.03. Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner........................................29
7.04. Removal of a General Partner........................................................................................30
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01. Management of the Partnership.......................................................................................31
8.02. Power of Attorney...................................................................................................31
8.03. Limitation on Liability of Limited Partners.........................................................................31
8.04. Ownership by Limited Partner of Corporate General Partner or Affiliate..............................................31
8.05. Redemption Right....................................................................................................32
8.06. NYSE Listing and Securities Act Registration of REIT Shares.........................................................35
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
9.01. Purchase for Investment.............................................................................................35
9.02. Restrictions on Transfer of Limited Partnership Interests...........................................................35
9.03. Admission of Substitute Limited Partner.............................................................................36
9.04. Rights of Assignees of Partnership Interests........................................................................38
9.05. Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.......................................38
9.06. Joint Ownership of Interests........................................................................................38
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01. Books and Records..................................................................................................39
10.02. Custody of Partnership Funds; Bank Accounts........................................................................39
10.03. Fiscal and Taxable Year............................................................................................40
10.04. Annual Tax Information and Report..................................................................................40
10.05. Tax Matters Partner; Tax Elections; Special Basis Adjustments......................................................40
10.06. Reports to Limited Partners........................................................................................40
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER; NOTICE
11.01. Amendment of Agreement; Merger.....................................................................................41
11.02. Notice to Limited Partners.........................................................................................42
ARTICLE XII
GENERAL PROVISIONS
12.01. Notices............................................................................................................42
12.02. Survival of Rights.................................................................................................42
12.03. Additional Documents...............................................................................................42
12.04. Severability.......................................................................................................42
12.05. Entire Agreement...................................................................................................42
12.06. Rules of Construction..............................................................................................42
12.07. Headings...........................................................................................................43
12.08. Counterparts.......................................................................................................43
12.09. Governing Law......................................................................................................43
EXHIBITS
EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - Notice of Exercise of Redemption Right
THIRD AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
UNITED DOMINION REALTY, L.P.
Dated as of December 7, 1998
RECITALS
United Dominion Realty, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the Commonwealth of Virginia by a
Certificate of Limited Partnership filed with the Clerk of the State Corporation
Commission of Virginia on October 23, 1995 and commenced operations on November
4, 1995. The Second Amended and Restated Agreement of Limited Partnership of the
Partnership was entered into as of August 30, 1997 (the "Second Restatement").
This Third Amended and Restated Agreement of Limited Partnership is entered into
this 7th day of December, 1998 by and among United Dominion Realty Trust, Inc.
(the "Company") as the general partner (in such capacity, the "General Partner")
and the Limited Partners set forth on Exhibit A hereto, for the purpose of
amending and restating the Second Restatement.
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 Second Restatement to read in its entirety as
follows:
ARTICLE I
DEFINED TERMS
1.01.00 Defined Terms.
The following defined terms used in this Agreement shall have the
meanings specified below:
"Act" means the Virginia Revised Uniform Limited Partnership Act, as
it may be amended from time to time.
"Additional Funds" is defined in Section 4.03.
"Additional Limited Partner" means a Person admitted to this
Partnership as a Limited Partner pursuant to Section 4.02.
"Affiliate" means, (i) any Person that, directly or indirectly,
controls or is controlled by or is under common control with such Person, (ii)
any other Person that owns, beneficially, directly or indirectly, 10% or more of
the outstanding capital stock, shares or equity interests of such Person, or
(iii) any officer, director, employee, partner or trustee of such Person or any
Person controlling, controlled by or under common control with such Person
(excluding trustees and persons serving in similar capacities who are not
otherwise an Affiliate of such Person). For the purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities or partnership interests or otherwise.
"Agreed Value" means the fair market value of a Partner's non-cash
Capital Contribution as of the date of contribution as agreed to by the such
Partner and the General Partner. The name and address of each Partner, number of
Partnership Units issued to such Partner, and the Agreed Value of such Partner's
non-cash Capital Contributions as of the date of contribution thereof is set
forth on Exhibit A.
"Agreement" means this Third Amended and Restated Agreement of
Limited Partnership, as amended from time to time.
"Available Cash" means, for any period, the excess, if any, of (i)
the cash receipts of the Partnership (other than from the sale, exchange or
other disposition of the assets of the Partnership), including amounts withdrawn
from reserves, over (ii) the disbursements of cash by the Partnership (other
than distributions to Partners and amounts paid with the receipts from the sale,
exchange or other disposition of the assets of the Partnership), including
amounts deposited in reserves. Available Cash for any period shall be determined
by the General Partner in its reasonable discretion.
"Capital Account" is defined in Section 4.04.
"Capital Contribution" means the total amount of capital contributed
to the Partnership by each Partner. 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. The paid-in Capital Contribution shall
mean the cash amount or the Agreed Value of other assets actually contributed by
each Partner to the capital of the Partnership.
"Capital Transaction" means the refinancing, sale, exchange,
condemnation, recovery of a damage award or insurance proceeds (other than
business or rental interruption insurance proceeds not reinvested in the repair
or reconstruction of Properties), or other disposition of any Property (or the
Partnership's interest therein).
"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 General
Partner of a Notice of Redemption.
"Certificate" means any instrument or document that is required
under the laws of the Commonwealth of Virginia, or any other jurisdiction in
which the Partnership conducts business, to be signed 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) and filed for
recording in the appropriate public offices within the Commonwealth of Virginia
or such other jurisdiction to perfect or maintain the Partnership as a limited
partnership, to effect the admission, withdrawal, or substitution of any Partner
of the Partnership, or to protect the limited liability of the Limited Partners
as limited partners under the laws of the Commonwealth of Virginia or such other
jurisdiction.
"Charter" means the Articles of Incorporation of the Company, as
amended from time to time.
"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 Securities and Exchange Commission.
"Company" means United Dominion Realty Trust, Inc., a Virginia
corporation.
"Conversion Factor" means 1.0, as adjusted pursuant to Section
8.05(f).
"Dividend Equivalent" as to any Partner means the amount of
distributions such Partner would have received for the quarter (or other
distribution period) from REIT Shares if such Partner owned the number of REIT
Shares equal to the product to such Partner's Partnership Units and the
Conversion Factor for the Partnership Record Date pertaining to such quarter (or
other distribution period).
"Event of Bankruptcy" as to any Person means the filing of a
petition for relief as to such Person as debtor or bankrupt under the Bankruptcy
Code of 1978 or similar provision of law of any jurisdiction (except if such
petition is contested by such Person and has been dismissed within 90 days);
insolvency or bankruptcy of such Person as finally determined by a court
proceeding; filing by such Person of a petition or application to accomplish the
same or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings relating to such
Person as a debtor under any other reorganization, arrangement, insolvency,
adjustment of debt or liquidation law of any jurisdiction, whether now in
existence or hereinafter in effect, either by such Person or by another,
provided that if such proceeding is commenced by another, such Person indicates
his approval of such proceeding, consents thereto or acquiesces therein, or such
proceeding is contested by such Person and has not been finally dismissed within
90 days.
"General Partner" means the Company and any Person who becomes a
substitute or additional General Partner as provided herein, and any of their
successors as General Partner. At any time at which the Partnership has two or
more General Partners, all such General Partners shall designate one of such
General Partners as managing General Partner and may from time to time designate
a successor managing General Partner and, unless the context otherwise requires,
references to the General Partner shall mean the General Partner at the time so
designated as managing 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 such Person's status as the General Partner or a director, officer or
employee of the Partnership or the General Partner, and (ii) such other Persons
(including Affiliates of the General Partner or the Partnership) as the General
Partner may designate from time to time, in its sole and absolute discretion.
"Investment Agreement" means the contribution, investment,
subscription or other agreement or agreements pursuant to which a Limited
Partner contributes property or cash to the Partnership in exchange for a
Partnership Interest.
"Limited Partner" means any Person named as a Limited Partner on
Exhibit A attached hereto, and any Person who becomes a Substitute or Additional
Limited Partner, in such Person's capacity as a Limited Partner in the
Partnership.
"Limited Partnership Interest" means the ownership interest of a
Limited Partner in the Partnership at any particular time, including the right
of such Limited Partner to any and all benefits to which such Limited Partner
may be entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"Loss" is defined in Section 5.01(f).
"Minimum Limited Partnership Interest" means the lesser of (i) 1% or
(ii) if the total Capital Contributions to the Partnership exceeds $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 and includes any other
national securities exchange on which the REIT Shares are listed at the
determination date.
"Offer" is defined in Section 7.01(c).
"Original Limited Partner" means UDRT of North Carolina, L.L.C., a
North Carolina limited liability company.
"Outside Partner" means any Partner other than a UDR Partner.
"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, which
record date shall be the same as the record date established by the General
Partner for a distribution to the holders of the REIT Shares.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued hereunder. The allocation of
Partnership Units among the Partners shall be as set forth on Exhibit A, as may
be amended from time to time.
"Percentage Interest" means at any time the percentage ownership
interest in the Partnership of each Partner, as determined by dividing the
Partnership Units owned by such Partner by the total number of Partnership Units
outstanding at such time. The Percentage Interest of each Partner shall be as
set forth on Exhibit A, as may be amended from time to time.
"Percentage Interest Adjustment Date" means the effective date of an
adjustment of the Partners' Percentage Interests pursuant to Section 4.05.
"Person" means any individual, partnership, corporation, joint
venture, trust or other entity.
"Profit" is defined in Section 5.01(f).
"Property" means any apartment property or other investment in which
the Partnership holds an ownership interest.
"Redeeming Partner" is defined in Section 8.05(a).
"Redemption Amount" means either the Cash Amount or the REIT Shares
Amount, as selected by the General Partner in its sole and absolute discretion
pursuant to Section 8.05(b).
"Redemption Right" is defined in Section 8.05(a).
"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
continuity of existence of the Company and its Subsidiaries (all such entities
shall, for purposes of this section, be included within the definition of
Company), including, without limitation, taxes, fees and assessments associated
therewith and any costs, expenses or fees payable to any director, officer or
employee of the Company (including, without limitation, any costs of
indemnification), (ii) costs and expenses relating to any offer or registration
of REIT Shares or other securities by the Company and all statements, reports,
fees and expenses incidental thereto, including, without limitation,
underwriting discounts and selling commissions applicable to any such offer of
securities and any costs and expenses associated with any claims made by any
holders of such securities or any underwriters or placement agents thereof,
(iii) costs and expenses incurred in connection with the 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 issuance or redemption of
Partnership Interests, and (viii) all other operating or administrative costs
incurred by the Company in connection with the ordinary course of the Company's
or the Partnership's business (including the business of any Subsidiary
thereof).
"REIT Share" means a share of common stock of the Company, $1 par
value per share, or a share of the common stock of any Successor Entity.
"REIT Shares Amount" shall mean a whole number of REIT Shares equal
to the product of the number of Partnership Units offered for redemption by a
Redeeming Partner, multiplied by the Conversion Factor as adjusted to and
including the Specified Redemption Date plus cash in lieu of any fractional REIT
Shares based on the Value of a REIT Share as of the date of receipt by the
General Partner of a Notice of Redemption; provided that in the event the
Company issues to all holders of REIT Shares rights, options, warrants or
convertible or exchangeable securities entitling the shareholders to subscribe
for or purchase REIT Shares, or any other securities or property (collectively,
the "rights"), and the rights have not expired at the Specified Redemption Date,
then the REIT Shares Amount shall also include the rights issuable to a holder
of the REIT Shares Amount of REIT Shares on the record date fixed for purposes
of determining the holders of REIT Shares entitled to rights.
"Securities Act" means the Securities Act of 1933, as amended.
"Service" means the Internal Revenue Service.
"Specified Redemption Date" means (i) with respect to Partnership
Units to be redeemed for a Cash Amount, the first Business Day of the month that
is at least 20 business days after the receipt by the General Partner of the
Notice of Redemption, as the same may be extended pursuant to Section 8.05(d)
and (ii) with respect to Partnership Units to be redeemed for a REIT Shares
Amount, the fifth Business Day following the date of the General Partner's
notice of its election to purchase such Partnership Units pursuant to Section
8.05(b).
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities (including general partners' interests) or (ii) the outstanding
equity interests is owned, directly or indirectly, by such Person.
"Subsidiary Partnership" means any partnership of which the majority
of the limited or general partnership interests therein are owned, directly or
indirectly, by the Partnership.
"Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03.
"Transaction" is defined in Section 7.01(c).
"Transfer" is defined in Section 9.02(a).
"UDR Partner" means the Company and any Partner that is an Affiliate
of the Company.
"Value" means, with respect to any security, the average of the
daily market price of such security for the twenty (20) consecutive trading days
immediately preceding the date of such valuation. The market price for each such
trading day shall be: (i) if such security is listed or admitted to trading on
any securities exchange or The Nasdaq National Market, the closing price,
regular way, on such day or, if no sale takes place on such day, the average of
the closing bid and asked prices on such day, (ii) if such security is not
listed or admitted to trading on any securities exchange or The Nasdaq National
Market, the last reported sale price on such day or, if no sale takes place on
such day, the average of the closing bid and asked prices on such day, as
reported by a recognized quotation source designated by the Company, or (iii) if
such security is not listed or admitted to trading on any securities exchange or
The Nasdaq National Market 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 recognized quotation source
designated by the General Partner, or if there shall be no bid and asked prices
on such day, the average of the high bid and low asked prices, as so reported,
on the most recent day (not more than twenty (20) 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 twenty (20) days prior to the date in
question, the value of such security shall be determined by the General Partner
acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate. In the event that any
security includes any additional rights the value of which is not included
within such price, then the value of such rights shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate, and
included in determining the "Value" of such security.
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01.00 Defined Terms. The Partners hereby agree to continue the
Partnership pursuant to the Act and upon the terms and conditions set forth in
this Agreement.
2.02.00 Name, Office and Registered Agent. The name of the
Partnership shall be United Dominion Realty, L.P. The specified office and place
of business of the Partnership shall be 00 Xxxxx 0xx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000-0000. The General Partner may at any time change the location of such
office, provided the General Partner gives notice to the Partners of any such
change. The name and address of the Partnership's registered agent is Xxxxxxxx
X. Surface, United Dominion Realty Trust, Inc., 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx
Xxxxxxxx 00000-0000. The sole duty of the registered agent as such is to forward
to the Partnership any notice that is served on her as registered agent.
2.03.00 Partners.
(a) The General Partner of the Partnership is the Company. Its
principal place of business shall be the same as that of the Partnership.
(b) The Limited Partners shall be those Persons identified as
Limited Partners on Exhibit A hereto, as amended from time to time.
2.04.00 Term and Dissolution.
(a) The term of the Partnership shall continue in full force and
effect until December 31, 2051, except that the General Partner, in its sole and
absolute discretion, may extend the term of the Partnership and the Partnership
shall be dissolved upon the first to occur of any of the following events:
(i) The occurrence of an Event of Bankruptcy
as to a General Partner or the dissolution, death or
withdrawal of a General Partner unless the Partnership
is continued pursuant to Section 2.04(c); provided, that
if a General Partner is on the date of such occurrence a
partnership, the dissolution of such General Partner as
a result of the dissolution, death, withdrawal, removal
or Event of Bankruptcy of a partner in such partnership
shall not be an event of dissolution of the Partnership
if the business of such General Partner is continued by
the remaining partner or partners, either alone or with
additional partners, and such General Partner and such
partners comply with any other applicable requirements
of this Agreement;
(ii) The passage of 90 days after the sale
or other disposition of all or substantially all of the
assets of the Partnership (provided that if the
Partnership receives one or more obligations 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 all of such obligations are paid or satisfied in
full);
(iii) The redemption of all Limited
Partnership Interests (other than any of such interests
held by the Company or any Subsidiary thereof); or
(iv) The election by the General Partner
that the Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the
Partnership is continued pursuant to Section 2.04(c)), 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. 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.
(c) Notwithstanding Section 2.04(a)(i), upon the
occurrence of an Event of Bankruptcy as to a General Partner or the dissolution,
death or withdrawal of a General Partner, the Limited Partners, within 90 days
after such occurrence, may elect to continue the Partnership for the balance of
the term specified in Section 2.04(a) by selecting, subject to Section 7.02 and
any other provisions of this Agreement, a substitute General Partner by consent
of a majority in interest of the Limited Partners. If the Limited Partners elect
to continue the 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.
2.05.00 Filing of Certificate and Perfection of Limited Partnership.
The General Partner shall execute, acknowledge, record and file at the expense
of the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.06.00 Certificates Describing Partnership Units. At the request of
a Limited Partner, the General Partner, at its option, may issue a certificate
summarizing the terms of such Limited Partner's interest in the Partnership,
including the number of Partnership Units owned and the Percentage Interest
represented by such Partnership Units as of the date of such certificate. Any
such certificate (i) shall be in form and substance as approved by the General
Partner, (ii) shall not be negotiable and (iii) shall bear the following legend:
This certificate is not negotiable. The Partnership
Units represented by this certificate are governed by
and transferable only in accordance with the provisions
of the Agreement of Limited Partnership of United
Dominion Realty, L.P., as amended from time to time.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
3.01.00 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 acknowledge that the Company may terminate its status as a REIT under
the Code at any time to the full extent permitted by the Charter. Subject to
Article XI hereof, the General Partner shall also be empowered (but shall not be
required) to do any and all acts and things necessary or prudent to ensure that
the Partnership will not be classified as a "publicly traded partnership" for
purposes of Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01.00 Capital Contributions. The General Partner and the Limited
Partners have contributed to the capital of the Partnership cash or property in
an amount or having an Agreed Value set forth opposite their names on Exhibit A,
as amended from time to time.
4.02.00 Additional Capital Contributions and Issuances of Additional
Partnership Interests. Except as provided in this Section 4.02 or in Section
4.03, the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The Partners, with the
consent of the General Partner, which consent may be withheld in its sole and
absolute discretion, 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. 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) or to other Persons for such consideration and on such
terms and conditions as shall be established by the General Partner in its sole
and absolute discretion, all without the approval of any Limited Partners. Any
additional Partnership Interests issued thereby may be issued in one or more
classes, or one or more series of any of such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties, including rights, powers and duties senior to Limited
Partnership Interests, all as shall be determined by the General Partner in its
sole and absolute discretion and without the approval of any Limited Partner,
subject to Virginia law, including, without limitation, (i) the allocations of
items of Partnership income, gain, loss, deduction and credit to each such class
or series of Partnership Interests; (ii) the right of each such 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. 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 and the
Partnership. Upon each issuance of Partnership Units hereunder, the General
Partner shall amend Exhibit A attached hereto to reflect such issuance.
(b) Certain Deemed Contributions of Proceeds of Issuance
of Company Securities. If (i) the Company issues securities and contributes some
or all the proceeds raised in connection with such issuance to the Partnership
and (ii) the proceeds actually received and contributed by the Company to the
Partnership are less than the Partnership's share (as determined by the General
Partner, in its sole and absolute discretion) of 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 be deemed to
have made Capital Contributions to the Partnership in the aggregate amount of
the Partnership's share of the gross proceeds of such issuance that are
contributed to the Partnership and the Partnership shall be deemed
simultaneously to have paid such offering expenses in connection with the
issuance of additional Partnership Units to the Company for such Capital
Contributions pursuant to Section 4.02(a). In any case in which the Company
contributes less than all of the proceeds of such issuance to the Partnership,
it shall be deemed to have contributed the gross proceeds of issuance of the
number of units of the issued security (or the number of dollars of principal in
the case of debt securities) equal to the quotient of the division of the amount
of proceeds contributed by the net proceeds per unit (or per dollar), and the
Partnership shall be deemed to have paid offering expenses equal to the product
of such number of units (or dollars) times the per unit (or per dollar) offering
expenses.
(c) Minimum Limited Partnership Interest. In the event
that either a redemption pursuant to Section 8.05 or additional Capital
Contributions by the General Partner and the Original Limited Partner would
result in the Limited Partners (other than the Original Limited Partner), in the
aggregate, owning less than the Minimum Limited Partnership Interest, the
General Partner and the Limited Partners (other than the Original Limited
Partner) shall form another partnership and contribute sufficient Limited
Partnership Interests together with such other Limited Partners so that the
Limited Partners (other than the Original Limited Partner), in the aggregate,
own at least the Minimum Limited Partnership Interest.
4.03.00 Loans to the Partnership. If the General Partner determines
that it is in the best interests of the Company and 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 Company or a Subsidiary or
Subsidiaries of the Company loan such Additional Funds to the Partnership. The
loans to the Partnership shall be in exchange 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.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue debt securities 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 and the Partnership.
4.04.00 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.
4.05.00 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 several parts of the year (a)
beginning on the first day of the year and ending on the next following
Percentage Interest Adjustment Date, (b) beginning on the day following a
Percentage Interest Adjustment Date and ending on the next following Percentage
Interest Adjustment Date, and/or (c) beginning on the first day following the
last Percentage Interest Adjustment Date occurring during the year and ending on
the last day of the year, as may be appropriate, either (i) as if the taxable
year had ended on the last day of each part 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 among the Partners
of Profits and Losses allocated to any part of the year shall be based on the
Percentage Interests determined as of the first day of such part.
4.06.00 No Interest on Contributions. No Partner shall be entitled
to interest on its Capital Contribution.
4.07.00 Return of Capital Contributions. No Partner shall be
entitled to withdraw any part of its Capital Contribution or its Capital Account
or to receive any distribution from the Partnership, except as specifically
provided in this Agreement. Except as otherwise provided herein, there shall be
no obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.08.00 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
5.01.00 Allocation of Profit and Loss. (a) General.
(i) Profit of the Partnership for each
fiscal year of the Partnership shall be allocated in the
following order of priority:
(A) First, to the Partners in
proportion to and up to the amount of cash
distributed to each such Partner pursuant to
Section 5.02 for the fiscal year; and
(B) Thereafter, to the Partners
in accordance with their respective
Percentage Interests.
(ii) Loss of the Partnership for each fiscal
year of the Partnership shall be allocated to the
Partners in accordance with their respective Percentage
Interests.
(iii) Depreciation and amortization expenses
of the Partnership shall be allocated among the Partners
in accordance with their respective Percentage
Interests.
(b) Minimum Gain Chargeback. Notwithstanding any
provision to the contrary, (i) any expense of the Partnership that is a
"nonrecourse deduction" within the meaning of Regulations Section 1.704-2(b)(1)
shall be allocated in accordance with the Partners' respective Percentage
Interests, (ii) any expense of the Partnership that is a "partner nonrecourse
deduction" within the meaning of Regulations Section 1.704-2(i)(2) shall be
allocated 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, 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, items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Regulations Section 1.704-2(j). A Partner's "interest in
partnership profits" for purposes of determining its share of the nonrecourse
liabilities of the Partnership within the meaning of Regulations Section
1.752-3(a)(3) shall be such Partner's Percentage Interest.
(c) Qualified Income Offset. If a Limited 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 negative 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 negative 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 Limited Partner in accordance
with this Section 5.01(c), to the extent permitted by Regulations Section
1.704-1(b) and Section 5.01(d), items of expense or loss shall be allocated to
such Partner in an amount necessary to offset the income or gain previously
allocated to such Partner under this Section 5.01(c).
(d) Capital Account Deficits. Loss shall not be
allocated to a Limited Partner to the extent that such allocation would cause a
deficit in such Partner's Capital Account (after reduction to reflect the items
described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed
the sum of such Partner's shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain. Any Loss in excess of that limitation shall be
allocated to the General Partner. After the occurrence of an allocation of Loss
to the General Partner in accordance with this Section 5.01(d), to the extent
permitted by Regulations Section 1.704-1(b), Profit shall be allocated to such
Partner in an amount necessary to offset the Loss previously allocated to such
Partner under this Section 5.01(d).
(e) Allocations Between Transferor and Transferee. If a
Partner transfers any part or all of its Partnership Interest, the distributive
shares of the various items of Profit and Loss allocable among the Partners
during such fiscal year of the Partnership shall be allocated between the
transferor and the transferee Partner either (i) as if the Partnership's fiscal
year had ended on the date of the transfer, or (ii) based on the number of days
of such fiscal year that each was a Partner without regard to the results of
Partnership activities in the respective portions of such fiscal year in which
the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to
allocate the distributive shares of the various items of Profit and Loss between
the transferor and the transferee Partner.
(f) Definition of Profit and Loss. "Profit" and "Loss"
and any items of income, gain, expense, or loss referred to in this Agreement
shall be determined in accordance with federal income tax accounting principles,
as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and
Loss shall not include items of income, gain and expense that are specially
allocated pursuant to Section 5.01(a)(iii), 5.01(b), 5.01(c), or 5.01(d). All
allocations of income, Profit, gain, Loss, and expense (and all items contained
therein) for federal income tax purposes shall be identical to all allocations
of such items set forth in this Section 5.01, except as otherwise required by
Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). The General
Partner shall have the authority to elect the method to be used by the
Partnership for allocating items of income, gain, and expense as required by
Section 704(c) of the Code (including a method that may result in a Partner
receiving a disproportionately larger share of the Partnership's tax
depreciation deductions) and such election shall be binding on all Partners.
5.02.00 Distribution of Cash.
(a) The General Partner shall be required make
distributions of Available Cash pursuant to Sections 5.02(a)(i), 5.02(a)(ii) and
5.02(a)(iii) on a quarterly (or, at the election of the General Partner, more
frequent) basis to the Partners who are Partners on the Partnership Record Date
with respect to such quarter (or other distribution period). The amount and
frequency of the distributions of Available Cash pursuant to Section 5.02(a)(iv)
shall be determined by the General Partner in its sole discretion. Available
Cash shall be distributed to the Partners in the following order of priority:
(i) First, to the Outside Partners, in
proportion to their respective Percentage Interests on
the Partnership Record Date, until each Outside Partner
has received an amount equal to its Dividend Equivalent
for such quarter (or other distribution period);
(ii) Second, to the UDR Partners, in
proportion to their respective Percentage Interests on
the Partnership Record Date, until each UDR Partner has
received an amount equal to the excess, if any, of (A)
the amount that such UDR Partner would have received
pursuant to Sections 5.02(a)(iii) and 5.02(a)(iv) in the
absence of Section 5.02(a)(i) and this Section
5.02(a)(ii) from the date of this Agreement to the end
of the period to which the distribution relates
(assuming that distributions under Section 5.02(a)(iv),
like the distributions under Sections 5.02(a)(i) through
5.02(a)(iii), were required to be made on a quarterly or
more frequent basis), over (B) the sum of all prior
distributions to such UDR Partner pursuant to this
Section 5.02(a)(ii), Section 5.02(a)(iii) and Section
5.02(a)(iv);
(iii) Third, to the Partners, in accordance
with their respective Percentage Interests on the
Partnership Record Date, until each Outside Partner has
received an amount equal to the excess, if any, of (A)
the amount equal to its Dividend Equivalent from the
date of this Agreement to the end of the period to which
the distribution relates, over (B) the sum of all prior
distributions to such Outside Partner pursuant to
Section 5.02(a)(i) and this Section 5.02(a)(iii); and
(iv) Thereafter, to the Partners in
accordance with their respective Percentage Interests on
the Partnership Record Date.
The amount and frequency of distributions of any cash other than Available Cash
shall be determined by the General Partner in its sole discretion and, if
distributed, such cash shall be distributed to the Partners in accordance with
this Section 5.02(a). 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 for the Partnership Record Date following the
issuance of such additional Partnership Interest shall be reduced in the
proportion that the number of days that such additional Partnership Interest is
held by such Partner bears to the number of days between such Partnership Record
Date and the immediately preceding Partnership Record Date.
(b) Notwithstanding any other provision of this
Agreement, the General Partner is authorized to take any action that it
determines to be necessary or appropriate to cause the Partnership to comply
with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445, and 1446 of the Code. If 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 its assignee (including by
reason of Section 1446 of the Code) and if the 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 Withheld Amount shall
be treated as a distribution of cash to such Partner. If, however, the
Distributable Amount is less than the Withheld Amount, no amount shall be
distributed to the Partner, the Distributable Amount shall be treated as a
distribution of cash to such Partner, and 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 excess
to a taxing authority. A Partnership Loan may be repaid, at the election of the
General Partner in its sole and absolute discretion, either (i) through
withholding by the Partnership with respect to subsequent distributions to the
applicable Partner or assignee, or (ii) at any time more than twelve (12) months
after a Partnership Loan arises, by cancellation of Partnership Units with a
value equal to the unpaid balance of the Partnership Loan (including accrued
interest). Any amounts treated as a Partnership Loan pursuant to this Section
5.02(b) shall bear interest at the lesser of (i) the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in The Wall Street Journal (or an equivalent successor
publication), or (ii) the maximum lawful rate of interest on such obligation,
such interest to accrue from the date the Partnership is deemed to extend the
loan until such loan is repaid in full.
(c) In no event may a Partner receive a distribution of
cash with respect to a Partnership Unit if such Partner is entitled to receive a
cash dividend as the holder of record of a REIT Share for which all or part of
such Partnership Unit has been or will be exchanged.
5.03.00 REIT Distribution Requirements. Notwithstanding anything to
the contrary in this Agreement, the General Partner, if it is not able to borrow
money from the Partnership, may 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(a)(1) of the Code and (ii) avoid any federal income
or excise tax liability imposed by the Code.
5.04.00 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.
5.05.00 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.
5.06.00 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. For purposes of the
preceding sentence, the Capital Account of each Partner shall be determined
after all adjustments made in accordance with Sections 5.01 and 5.02 resulting
from Partnership operations and from all sales and dispositions of all or any
part of the Partnership's assets. 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.
(b) If the General Partner has a negative balance in its
Capital Account following a liquidation of the Partnership, as determined after
taking into account all Capital Account adjustments in accordance with Sections
5.01 and 5.02 resulting from Partnership operations and from all sales and
dispositions of all or any part of the Partnership's assets, the General Partner
shall contribute to the Partnership an amount of cash equal to the negative
balance in its Capital Account and such cash shall be paid or distributed by the
Partnership to creditors, if any, and then to the Limited Partners in accordance
with Section 5.06(a). Such contribution by the General Partner 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).
5.07.00 Substantial Economic Effect. It is the intent of the
Partners that the allocations of Profit and Loss under the Agreement have
substantial economic effect (or be consistent with the Partners' interests in
the Partnership in the case of the allocation of losses attributable to
nonrecourse debt) within the meaning of Section 704(b) of the Code as
interpreted by the Regulations promulgated pursuant thereto. Article V and other
relevant provisions of this Agreement shall be interpreted in a manner
consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01.00 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, without limitation,
equity interests in other REITs, mortgage loans and
participations therein, that the General Partner
determines are necessary or appropriate or in the best
interests of the business of the Company and 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 such indebtedness by mortgage, deed of trust,
pledge or other lien on the Partnership's assets;
(v) to guarantee or become a comaker of
indebtedness of the Company or any Subsidiary thereof,
refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment
of, any such guarantee or indebtedness, and secure such
guarantee or indebtedness by mortgage, deed of trust,
pledge or other lien on the Partnership's assets;
(vi) to use assets of the Partnership
(including, without limitation, cash on hand) for any
purpose consistent with this Agreement, including,
without limitation, payment, either directly or by
reimbursement, of all operating costs and general
administrative expenses of the Company, the Partnership,
or any Subsidiary of either to third parties or to the
Company as set forth in this Agreement;
(vii) 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;
(viii) to prosecute, defend, arbitrate, or
compromise any and all claims or liabilities in favor of
or against the Partnership, on such terms and in such
manner as the General Partner may reasonably determine,
and similarly to prosecute, settle or defend litigation
with respect to the Partners, the Partnership, or the
Partnership's assets; provided, however, that the
General Partner may not, without the consent of the
Limited Partners (other than the Original Limited
Partner) holding more than 50% of the Percentage
Interests of the Limited Partners (other than the
Original Limited Partner), confess a judgment against
the Partnership;
(ix) 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;
(x) to make or revoke any election permitted
or required of the Partnership by any taxing authority;
(xi) 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;
(xii) to determine whether or not to apply
any insurance proceeds for any property to the
restoration of such property or to distribute the same;
(xiii) 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
engage legal counsel, accountants, consultants, real
estate brokers, and other professionals, as the General
Partner may deem necessary or appropriate in connection
with the Partnership business, on such terms (including
provisions for compensation and eligibility to
participate in employee benefit plans, stock option
plans and similar plans funded by the Partnership) as
the General Partner may deem reasonable and proper;
(xiv) 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;
(xv) 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;
(xvi) to maintain accurate accounting
records and to file promptly all federal, state and
local income tax returns on behalf of the Partnership;
(xvii) to distribute Partnership cash or
other Partnership assets in accordance with this
Agreement;
(xviii) to form or acquire an interest in,
and contribute property to, any further limited or
general partnerships, joint ventures or other
relationships that it deems desirable (including,
without limitation, the acquisition of interests in, and
the contributions of property to, its Subsidiaries and
any other Person in which it has an equity interest from
time to time);
(xix) to establish Partnership reserves for
working capital, capital expenditures, contingent
liabilities, or any other valid Partnership purpose;
(xx) subject to Article XI, to merge,
consolidate or combine the Partnership with or into
another Person;
(xxi) subject to Article XI, 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
General Partner at all times to qualify as a REIT unless
the General Partner 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.
6.02.00 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.
6.03.00 Indemnification and Exculpation of Indemnitees.
(a) The Partnership shall indemnify an Indemnitee from
and against any and all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement
in which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.
(b) The Partnership may reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 6.03 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 an Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited
Partners to personal liability by reason of the indemnification provisions set
forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in
whole or in part under this Section 6.03 because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the
benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other
Persons.
6.04.00 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, the Company and the
Company's shareholders collectively, that the General Partner is under no
obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or the
tax consequences of some, but not all, of the Limited Partners) in deciding
whether to cause the Partnership to take (or decline to take) any actions. In
any case in which the General Partner determines in good faith that the
interests of the Limited Partners and the General Partner's shareholders may
conflict, the Limited Partners further acknowledge and agree that the General
Partner shall be deemed to have discharged its fiduciary duties to the Limited
Partners by discharging such duties to the General Partner's shareholders. The
General Partner shall not be liable for monetary damages for losses sustained,
liabilities incurred, or benefits not derived by Limited Partners in connection
with any 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, the General Partner may exercise any of the
powers granted to it under this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
(d) Notwithstanding any other provisions of this
Agreement or the Act, any action of the General Partner on behalf of the
Partnership or any decision of the General Partner to refrain from acting on
behalf of the Partnership, undertaken in the good faith belief that such action
or omission is necessary or advisable in order (i) to protect the ability of the
Company to continue to qualify as a REIT or (ii) to prevent the Company from
incurring any taxes under Section 857, Section 4981, or any other provision of
the Code, is expressly authorized under this Agreement and is deemed approved by
all of the Limited Partners.
(e) Any amendment, modification or repeal of this
Section 6.04 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the General Partner's liability to the
Partnership and the Limited Partners under this Section 6.04 as in effect
immediately prior to such amendment, modification or repeal with respect to
matters occurring, in whole or in part, prior to such amendment, modification or
repeal, regardless of when claims relating to such matters may arise or be
asserted.
6.05.00 Partnership Expenses. In addition to the expenses that are
directly attributable to the Partnership, the Partnership shall pay the REIT
Expenses that are allocable to the Partnership. The General Partner, in its sole
and absolute discretion, shall determine what portion of the REIT Expenses are
allocable to the Partnership. If any REIT Expenses determined by the General
Partner to be allocable to the Partnership are paid by the General Partner, the
General Partner shall be reimbursed by the Partnership therefor.
6.06.00 Outside Activities. The Partners and any officer, director,
employee, agent, trustee, Affiliate, Subsidiary, or shareholder of any Partner
shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business
interests and activities substantially similar or identical to those of the
Partnership. Neither the Partnership nor any of the 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 Partners 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 Partner, even if such opportunity is of a character
which, if presented to the Partnership or any Partner, could be taken by such
Person.
6.07.00 Employment or Retention of Affiliates.
(a) Any Affiliate of the General Partner may be employed
or retained by the Partnership and may otherwise deal with the Partnership
(whether as a buyer, lessor, lessee, manager, furnisher of goods or services,
broker, agent, lender or otherwise) and may receive from the Partnership any
compensation, price, or other payment therefor which the General Partner
determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its
Subsidiaries or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint
ventures, other partnerships, corporations or other business entities in which
it is or thereby becomes a participant upon such terms and subject to such
conditions as the General Partner deems are consistent with this Agreement and
applicable law.
6.08.00 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.
ARTICLE VII
CHANGES IN GENERAL PARTNER AND THE COMPANY
7.01.00 Transfer of a General Partner's Partnership Interest;
Transactions Involving the Company.
(a) Except as provided in Section 7.01(c), 7.01(d) or
7.03(a), a General Partner shall not transfer all or any portion of its General
Partnership Interest or withdraw as General Partner.
(b) Except as provided in Section 7.01(c) or 7.01(d),
the General Partner (or all General Partners if at any time there are two or
more General Partners) and the Original Limited Partner will at all times own in
the aggregate at least a 1% Percentage Interest.
(c) Except as otherwise provided in Section 7.01(d), the
Company shall not merge, consolidate or otherwise combine with or into another
Person or sell all or substantially all of its assets (other than in connection
with a change in the Company's state of incorporation or organizational form) (a
"Transaction"), unless one of the following conditions is met:
(i) the consent of Limited Partners (other
than the Company or any Subsidiary of the Company)
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) is obtained;
(ii) the Transaction also includes a merger,
consolidation or combination of the Partnership or sale
of substantially all of the assets of the Partnership or
other transaction as a result of which all Limited
Partners (other than the Company or any Subsidiary) will
receive for each Partnership Unit an amount of cash,
securities, or other property (or a partnership interest
or other security readily convertible into such cash,
securities, or other property) 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) paid in the Transaction in
consideration for 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 percent of the
outstanding REIT Shares, all Limited Partners (other
than the Company or any Subsidiary) will receive no less
than the amount of cash and the fair market value of
securities or other consideration that they would have
received had they (A) exercised their 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;
(iii) the Company is the surviving entity in
the Transaction and either (A) the holders of REIT
Shares do not receive cash, securities, or other
property in the Transaction or (B) all Limited Partners
(other than the Company or any Subsidiary) receive an
amount of cash, securities, or other property (expressed
as an amount per Partnership Unit) 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; or
(iv) the Company merges, consolidates, or
combines with or into another entity and, immediately
after such merger, (A) substantially all of the assets
of the surviving entity, other than Partnership Units
and the ownership interests in any wholly-owned
Subsidiaries held by the Company, are contributed to the
Partnership as a Capital Contribution in exchange for
Partnership Units with a fair market value equal to the
value of the assets so contributed as determined
pursuant to Section 704(c) of the Code, (B) any
successor or surviving corporation expressly agrees to
assume all obligations of the Company hereunder, and (C)
the Conversion Factor is adjusted appropriately to
reflect the ratio at which REIT Shares are converted
into shares of the surviving entity.
The General Partner shall give the Limited Partners notice of any Transaction at
least 20 business days prior to the effective date of such Transaction,
provided, however, that the General Partner need not give any such notice prior
to the date on which the holders of REIT Shares are first notified of such
Transaction by the Company.
(d) Notwithstanding Sections 7.01(a), 7.01(b) and
7.01(c),
(i) a General Partner may transfer all or
any portion of its General Partnership Interest to (A) a
wholly-owned Subsidiary of such General Partner or (B)
the owner of all of the ownership interests of such
General Partner, and following a transfer of all of its
General Partnership Interest, may withdraw as General
Partner; and
(ii) the Company may engage in a Transaction
not required by law or by the rules of any national
securities exchange on which the REIT Shares are listed
to be submitted to the vote of the holders of the REIT
Shares and the General Partner shall not be required to
give notice to the Limited Partners of any such
Transaction as provided by Section 7.01(c).
7.02.00 Admission of a Substitute or Additional General Partner. A
Person shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:
(a) the Person to be admitted as a substitute or
additional General Partner shall have accepted and agreed to be bound by all the
terms and provisions of this Agreement by executing a counterpart thereof and
such other documents or instruments as may be required or appropriate in order
to effect the admission of such Person as a General Partner, and a certificate
evidencing the admission of such Person as a General Partner shall have been
filed for recordation and all other actions required by Section 2.05 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.
7.03.00 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a
General Partner.
(a) Upon the occurrence of an Event of Bankruptcy as to
a General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to or removal of a partner in such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.
(b) Following the occurrence of an Event of Bankruptcy
as to a General Partner (and its removal pursuant to Section 7.04(a) hereof) or
the withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to or removal of a partner in such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Limited Partners, within 90 days after such occurrence, may elect
to continue the business of the Partnership for the balance of the term
specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof
and any other provisions of this Agreement, a substitute General Partner by
consent of the Limited Partners holding more than 50% of the Percentage
Interests of the Limited Partners. If the Limited Partners elect to continue the
business of the Partnership and admit a substitute General Partner, the
relationship with the Partners and of any Person who has acquired an interest of
a Partner in the Partnership shall be governed by this Agreement.
7.04.00 Removal of a General Partner.
(a) Upon the occurrence of an Event of Bankruptcy as to,
or the dissolution of, a General Partner, such General Partner shall be deemed
to be removed automatically; provided, however, that if a General Partner is on
the date of such occurrence a partnership, the withdrawal, death, dissolution,
Event of Bankruptcy as to or removal of a partner in such partnership shall be
deemed not to be a dissolution of the General Partner if the business of such
General Partner is continued by the remaining partner or partners. The Limited
Partners may not remove the General Partner, with or without cause.
(b) If a General Partner has been removed pursuant to
this Section 7.04 and the Partnership is continued pursuant to Section 7.03
hereof, such General Partner shall promptly transfer and assign its General
Partnership Interest in the Partnership (i) to the substitute General Partner
approved by 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 General Partner and a majority in interest of the
Limited Partners each shall select an appraiser, each of which appraisers shall
complete an appraisal of the fair market value of the General Partner's General
Partnership Interest within 30 days of the General Partner's removal, and the
fair market value of the 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 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 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, expenses, Profit, gain or Loss, distributions or
allocations, as the case may be, payable or allocable to the Limited Partners as
such. Instead, such removed General Partner shall receive and be entitled to
retain only distributions or allocations of such items which 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 7.04.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01.00 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.
8.02.00 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 and record, at the
appropriate public offices, any and all documents, certificates, and instruments
as may be deemed necessary or desirable by the General Partner to carry out
fully the provisions of this Agreement and the Act in accordance with their
terms, which power of attorney is coupled with an interest and shall survive the
death, dissolution or legal incapacity of the Limited Partner, or the transfer
by the Limited Partner of any part or all of its Partnership Interest.
8.03.00 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.
8.04.00 Ownership by Limited Partner of Corporate General Partner or
Affiliate. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
8.05.00 Redemption Right.
(a) Subject to Sections 8.05(b), 8.05(c), 8.05(d), and
8.05(e), and the provisions of any agreement between the Partnership and any
Limited Partner with respect to Partnership Units held by such Limited Partners,
each Limited Partner, other than the Original Limited Partner, 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 held by such
Limited Partner at a redemption price equal to and in the form of the Cash
Amount to be paid by the Partnership, provided, that such Partnership Units
shall have been outstanding for at least one year. 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 Partner"); provided, however, that the
Partnership shall not be obligated to satisfy such Redemption Right if the
General Partner elects to purchase the Partnership Units subject to the Notice
of Redemption pursuant to Section 8.05(b); 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 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 8.05(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 General Partner, and the General Partner may, in its sole and absolute
discretion but subject to the last sentence of this subsection (b), elect to
purchase directly and acquire such Partnership Units by paying to the Redeeming
Partner either the Cash Amount or the REIT Shares Amount, as elected by the
General Partner (in its sole and absolute discretion), on the Specified
Redemption Date, whereupon the General Partner shall acquire the Partnership
Units offered for redemption by the Redeeming Partner and shall be treated for
all purposes of this Agreement as the owner of such Partnership Units. If the
General Partner shall elect to exercise its right to purchase Partnership Units
under this Section 8.05(b) with respect to a Notice of Redemption, it shall so
notify the Redeeming Partner within five Business Days after the receipt by the
General Partner of such Notice of Redemption. Such notice shall indicate whether
the General Partner will pay the Cash Amount or the REIT Shares Amount. Unless
the General Partner (in its sole and absolute discretion) shall exercise its
right to purchase Partnership Units from the Redeeming Partner pursuant to this
Section 8.05(b), the General Partner shall not have any obligation to the
Redeeming Partner or the Partnership with respect to the Redeeming Partner's
exercise of the Redemption Right. In the event the General Partner shall
exercise its right to purchase Partnership Units with respect to the exercise of
a Redemption Right in the manner described in the first sentence of this Section
8.05(b), the Partnership shall have no obligation to pay any amount to the
Redeeming Partner with respect to such Redeeming Partner's exercise of such
Redemption Right, and each of the Redeeming Partner, the Partnership, and the
General Partner shall treat the transaction between the General Partner and the
Redeeming Partner for federal income tax purposes as a sale of the Redeeming
Partner's Partnership Units to the General Partner. Each Redeeming Partner
agrees to execute such documents as the Partnership may reasonably require in
connection with the issuance of REIT Shares upon exercise of the Redemption
Right. If Section 5.05 hereof shall prevent the Partnership from satisfying, in
whole or in part, any exercise of the Redemption Right by a Redeeming Partner,
then the Company (whether or not it is then the General Partner) shall be deemed
to have elected pursuant to this Section 8.05(b) to purchase, and hereby agrees
to purchase, directly from such Redeeming Partner, such number of Partnership
Units as the Partnership is unable to redeem due to the operation of Section
5.05.
(c) Notwithstanding the provisions of Section 8.05(a)
and 8.05(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 8.05(b) (regardless of whether or not
the Company would in fact exercise its rights under Section 8.05(b)) would (i)
result in REIT Shares being owned by fewer than 100 persons (determined without
reference to any rules of attribution), (ii) result in the Company being
"closely held" within the meaning of Section 856(h) of the Code, (iii) cause the
Company to own, directly or constructively, 10% or more of the ownership
interests in a tenant of the Company's, the Partnership's or a Subsidiary's real
property, within the meaning of Section 856(d)(2)(B) of the Code, (iv) in the
good faith opinion of the Board of Directors of the Company, otherwise
disqualify the Company as a REIT, or (v) in the opinion of counsel for the
Company, constitute or result in a violation of Section 5 of the Securities Act
of 1933, as amended (the "Securities Act"), or cause the acquisition of REIT
Shares by such Partner to be "integrated" with any other distribution of REIT
Shares for purposes of complying with the registration provisions of the
Securities Act. The Company, in its sole and absolute discretion, may waive the
restriction on redemption set forth in this Section 8.05(c); provided, however,
that in the event such restriction is waived, the Redeeming Partner shall be
paid the Cash Amount.
(d) Any Cash Amount to be paid to a Redeeming Partner
pursuant to this Section 8.05 shall be paid within 20 Business Days after the
initial date of receipt by the General Partner of the Notice of Redemption
relating to the Partnership Units to be redeemed; provided, however, that such
20-Business Day period may be extended for up to an additional 180-day period to
the extent required for the Company to issue and sell securities the proceeds of
which will be contributed to the Partnership to provide cash for payment of the
Cash Amount. Notwithstanding the foregoing, the General Partner 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 may 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 which states that, in the opinion of such counsel,
such restrictions are necessary in order to avoid the Partnership being treated
as a "publicly traded partnership" under Section 7704 of the Code.
(f) The Conversion Factor shall be adjusted from time to
time as follows:
(i) In the event that the Company (A)
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,
(B) subdivides its outstanding REIT Shares, or (C)
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.
(ii) In the event that the Company declares
or pays a dividend or other distribution on its
outstanding REIT Shares (other than (a) ordinary cash
dividends or (b) dividends payable in REIT Shares that
give rise to an adjustment in the Conversion Factor
under subsection (i) hereof) and the Value of the REIT
Shares on the 20th trading day following the record date
("Record Date") for such dividend or distribution (the
"Post-Distribution Value") is less than the Value of the
REIT Shares on the Business Day immediately preceding
such Record Date (the "Pre-Distribution Value"), then
the Conversion Factor in effect after the Record Date
shall be adjusted by multiplying the Conversion Factor
in effect prior to the Record Date by a fraction, the
numerator of which is the Pre-Distribution Value and the
denominator of which is the Post-Distribution Value,
provided, however, that no adjustment shall be made if
(a) with respect to any cash dividend or distribution
with respect to REIT shares, the Partnership distributes
with respect to each Partnership Unit an amount equal to
the amount of such dividend or distribution multiplied
by the Conversion Factor or (b) with respect to any
dividend or distribution of securities or property other
than cash, the Partnership distributes with respect to
each Partnership Unit an amount of securities or other
property equal to the amount distributed with respect to
each REIT share multiplied by the Conversion Ratio or a
partnership interest or other security readily
convertible into such securities or other property.
(iii) Any adjustment to the Conversion
Factor shall become effective immediately after the
effective date of any of the events described in
subsections (i) and (ii), retroactive to the record
date, if any, for such event, provided, however, that if
the Partnership receives a Notice of Redemption after
the record date, but prior to the payment date or
effective date, of any dividend, distribution,
subdivision or combination referred to in subsection (i)
or (ii), the Conversion Factor shall be determined as if
the Company had received the Notice of Exchange
immediately prior to the record date for such dividend,
distribution, subdivision or combination.
(iv) If the rights (the "Shareholder
Rights") governed by the Rights Agreement, dated as of
January 27, 1998 (the "Rights Agreement"), by and
between the General Partner and ChaseMellon Shareholder
Services L.L.C., are issued and exercised, the
Conversion Factor shall be equitably adjusted to take
into account the resulting dilution in the REIT Shares,
provided, however, that the Conversion Factor shall not
be adjusted with respect to any Partnership Units held
by any person to which the provisions of Section 7(e) of
the Rights Agreement apply or would apply if such person
were a holder of Shareholder Rights.
8.06.00 NYSE Listing and Securities Act Registration of REIT Shares.
In the event that the General Partner elects to acquire a Redeeming Partner's
Partnership Units by paying to such Partner the REIT Shares Amount, the REIT
Shares issued to the Redeeming Partner if and to the extent provided in such
Redeeming Partner's Registration Rights Agreement (a) registered under the
Securities Act and/or entitled to rights to Securities Act registration and (b)
listed on the NYSE.
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
9.01.00 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 Interest is made as a principal for his account for investment
purposes only and not with a view to the resale or distribution of such
Partnership Interest.
(b) Each Limited Partner agrees that he will not sell,
assign or otherwise transfer his Partnership Interest or any fraction thereof,
whether voluntarily or by operation of law or at judicial sale or otherwise, to
any Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.
9.02.00 Restrictions on Transfer of Limited Partnership Interests.
(a) Except as otherwise provided in this Article IX, no
Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise
transfer his Limited Partnership Interest, in whole or in part, whether
voluntarily or by operation of law or at judicial sale or otherwise
(collectively, a "Transfer") without the written consent of the General Partner,
which consent may be withheld in the sole and absolute discretion of the General
Partner. The General Partner may require, as a condition of any Transfer, that
the transferor assume all costs incurred by the Partnership in connection
therewith.
(b) No Limited Partner may effect a Transfer of its
Limited Partnership Interest, in whole or in part, if, in the opinion of legal
counsel for the Partnership, such proposed Transfer would require the
registration of the Limited Partnership Interest under the Securities Act or
would otherwise violate any applicable federal or state securities or blue sky
law (including investment suitability standards).
(c) No Transfer by a Limited Partner of its Partnership
Units, in whole or in part, may be made to any Person if (i) in the opinion of
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 counsel for the Partnership, the Transfer would adversely affect the
ability of the Company to continue to qualify as a REIT or subject the Company
to any additional taxes under Section 857 or Section 4981 of the Code, or (iii)
such Transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code.
(d) No transfer of any Partnership Units may be made to
a lender to the Partnership or any Person who is related (within the meaning of
Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan
constitutes a nonrecourse liability (within the meaning of Regulations Section
1.752-1(a)(2)), without the consent of the General Partner, which may be
withheld in its sole and absolute discretion, provided that as a condition to
such consent the lender will be required to enter into an arrangement with the
Partnership and the General Partner to exchange or redeem for the Cash Amount
any Partnership Units in which a security interest is held simultaneously with
the time at which such lender would be deemed to be a partner in the Partnership
for purposes of allocating liabilities to such lender under Section 752 of the
Code.
(e) Section 9.02(a) shall not apply to any Transfer by a
Limited Partner pursuant to the exercise of its Redemption Right under Section
8.05 hereof.
(f) Any Transfer in contravention of any of the
provisions of this Article IX shall be void and ineffectual and shall not be
binding upon, or recognized by, the Partnership.
9.03.00 Admission of Substitute Limited Partner.
(a) Subject to the other provisions of this Article IX,
an assignee of the Limited Partnership Interest of a Limited Partner (which
shall be understood to include any purchaser, transferee, donee, or other
recipient of any disposition of such Limited Partnership Interest) shall be
deemed admitted as a Limited Partner of the Partnership only 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) and the agreement set forth in Section
9.01(b).
(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.
(vi) The assignee shall have paid all
reasonable legal fees of the Partnership and the General
Partner and filing and publication costs in connection
with its substitution as a Limited Partner.
(vii) The assignee has obtained the prior
written consent of the General Partner to its admission
as a Substitute Limited Partner, which consent may be
given or denied in the exercise of the General Partner's
sole and absolute discretion.
(b) For the purpose of allocating Profits and Losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the Certificate described in
Section 9.03(a)(ii) 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.
9.04.00 Rights of Assignees of Partnership Interests.
(a) Subject to the provisions of Sections 9.01 and 9.02,
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.
(c) The General Partner shall have the right, in its
sole and absolute discretion, to redeem the Limited Partnership Interest
assigned by any Limited Partner (an "Assigning Limited Partner") to any person
who does not, within 20 business days following the date of such assignment,
become a Substitute Limited Partner (an "Assignee"). In such case, the Assigning
Limited Partner and the Assignee shall be deemed to have tendered irrevocably to
the General Partner a Notice of Redemption with respect to all of the Limited
Partnership Interest assigned.
9.05.00 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.
9.06.00 Joint Ownership of Interests. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; provided, however, that the
written consent of only one joint owner will be required if the Partnership has
been provided with evidence satisfactory to the counsel for the Partnership that
the actions of a single joint owner can bind both owners under the applicable
laws of the state of residence of such joint owners. Upon the death of one owner
of a Partnership Interest held in a joint tenancy with a right of survivorship,
the Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one of the owners of a jointly-held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner, the General Partner shall cause the Partnership Interest to be divided
into two equal Partnership Interests, which shall thereafter be owned separately
by each of the former owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01.00 Books and Records. At all times during the continuance of
the Partnership, the General Partner shall keep or cause to be kept at the
Partnership's specified office true and complete books of account in accordance
with generally accepted accounting principles, including: (a) a current list of
the full name and last known business address of each Partner, (b) a copy of the
Certificate of Limited Partnership and all certificates of amendment thereto,
(c) copies of the Partnership's federal, state and local income tax returns and
reports, (d) copies of the Agreement and any financial statements of the
Partnership for the three most recent years and (e) all documents and
information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing,
shall be entitled to inspect or copy such records during ordinary business
hours.
10.02.00 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).
10.03.00 Fiscal and Taxable Year. The fiscal and taxable year of the
Partnership shall be the calendar year.
10.04.00 Annual Tax Information and Report. Within 75 days after the
end of each fiscal year of the Partnership, the General Partner shall furnish to
each person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
10.05.00 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.
10.06.00 Reports to Limited Partners.
(a) As soon as practicable after the close of each
fiscal quarter (other than the last quarter of the fiscal year), the General
Partner shall cause to be mailed to each Limited Partner a quarterly report
containing financial statements of the Partnership, or of the Company if such
statements are prepared solely on a consolidated basis with the Company, for
such fiscal quarter, presented in accordance with generally accepted accounting
principles. As soon as practicable after the close of each fiscal year, the
General Partner shall cause to be mailed to each Limited Partner an annual
report containing financial statements of the Partnership, or of the Company if
such statements are prepared solely on a consolidated basis with the Company,
for such fiscal year, presented in accordance with generally accepted accounting
principles. The annual financial statements shall be audited by accountants
selected by the General Partner.
(b) Any Partner shall further have the right to a
private audit of the books and records of the Partnership, provided such audit
is made for Partnership purposes, at the expense of the Partner desiring it and
is made during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER; NOTICE
11.01.00 Amendment of Agreement; Merger. The General Partner's
consent shall be required for any amendment to the Agreement or any merger,
consolidation or combination of the Partnership. The General Partner, without
the consent of the Limited Partners, may amend this Agreement in any respect or
cause the Partnership to merge, consolidate or combine with or into any other
partnership, limited partnership, limited liability company or corporation as
contemplated in Section 7.01(c) or (d) hereof; provided, however, that the
following amendments and any other such merger, consolidation or combination of
the Partnership (a "Merger") shall require the consent of Limited Partners
(other than the Company or any Subsidiary of the Company) holding more than 50%
of the Percentage Interests of the Limited Partners (other than the Company or
any Subsidiary of the Company):
(a) any amendment affecting the operation of the
Conversion Factor or the Redemption Right (except as provided in Sections
7.01(c) or 8.05(e)) 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;
(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; or
(d) any amendment to this Article XI.
The consent of each Limited Partner shall be required
for any amendment that would impose on the Limited Partners any obligation to
make additional Capital Contributions to the Partnership.
11.02.00 Notice to Limited Partners. The General Partner shall
notify the Limited Partners of the substance of any amendment or Merger
requiring the consent of the Limited Partners pursuant to Section 11.01 at least
20 business days prior to the effective date of such amendment or Merger.
ARTICLE XII
GENERAL PROVISIONS
12.01.00 Notices. All communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A attached hereto; provided, however, that any Partner may
specify a different address by notifying the General Partner in writing of such
different address. Notices to the Partnership shall be delivered at or mailed to
its specified office.
12.02.00 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.
12.03.00 Additional Documents. Each Partner agrees to perform all
further acts and execute, swear to, acknowledge and deliver all further
documents which may be reasonable, necessary, appropriate or desirable to carry
out the provisions of this Agreement or the Act.
12.04.00 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.
12.05.00 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.
12.06.00 Rules of Construction. 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. Unless the context otherwise
indicates, references to particular Articles and Sections are references to
Articles and Sections of this Agreement.
12.07.00 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.
12.08.00 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.
12.09.00 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the ____ day of _____________, 1998.
GENERAL PARTNER:
UNITED DOMINION REALTY TRUST, INC.
By:
Name: Xxxxxxxx X. Surface
Title: Senior Vice President
LIMITED PARTNERS:
UDRT OF NORTH CAROLINA, L.L.C.
By: United Dominion Realty Trust, Inc.,
sole managing member
By:
Name: Xxxxxxxx X. Surface
Title: Senior Vice President
[Additional limited partners on following pages.]
Signature page to Third Amended and Restated Agreement of Limited Partnership,
dated _______________, 199__.
The Partnership and American Apartment Communities Operating
Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp. and American
Apartment Communities III, L.P. (the "AAC Limited Partners") agree that
notwithstanding the proviso to the first sentence of Section 8.05(a) hereof (i)
the AAC Limited Partners shall be entitled to exercise their Redemption Rights
as provided in Section 5(c)(ii) and (iii) of the Partnership Interest Purchase
and Exchange Agreement, dated as of September 10, 1998, among the AAC Limited
Partners, the Partnership and the General Partner, among others, and (ii) the
Redemption Rights of the AAC Limited Partners shall be modified as set forth in
Section 3.1(b) of the Investment Agreement, dated as of September 10, 1998,
among the General Partner, the Partnership and the AAC Limited Partners, among
others. The Partnership, the General Partner and the AAC Limited Partners agree
that the foregoing modifications shall be deemed to be an amendment to this
Agreement binding upon each of them.
GENERAL PARTNER:
UNITED DOMINION REALTY TRUST, INC.
By:
Name: Xxxxxxxx X. Surface
Title: Senior Vice President
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the ____ day of _____________, 1998.
The Partnership and American Apartment Communities Operating
Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp. and American
Apartment Communities III, L.P. (the "AAC Limited Partners") agree that
notwithstanding the proviso to the first sentence of Section 8.05(a) hereof (i)
the AAC Limited Partners shall be entitled to exercise their Redemption Rights
as provided in Section 5(c)(ii) and (iii) of the Partnership Interest Purchase
and Exchange Agreement, dated as of September 10, 1998, among the AAC Limited
Partners, the Partnership and the General Partner, among others, and (ii) the
Redemption Rights of the AAC Limited Partners shall be modified as set forth in
Section 3.1(b) of the Investment Agreement, dated as of September 10, 1998,
among the General Partner, the Partnership and the AAC Limited Partners, among
others. The Partnership, the General Partner and the AAC Limited Partners agree
that the foregoing modifications shall be deemed to be an amendment to this
Agreement binding upon each of them.
LIMITED PARTNER:
AMERICAN APARTMENT COMMUNITIES
OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: American Apartment Communities, Inc.,
its General Partner
By:
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
Number of Units :
Date Issued :
SSN or EIN : 00-0000000
Address : 000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the ____ day of _____________, 1998.
The Partnership and American Apartment Communities Operating
Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp. and American
Apartment Communities III, L.P. (the "AAC Limited Partners") agree that
notwithstanding the proviso to the first sentence of Section 8.05(a) hereof (i)
the AAC Limited Partners shall be entitled to exercise their Redemption Rights
as provided in Section 5(c)(ii) and (iii) of the Partnership Interest Purchase
and Exchange Agreement, dated as of September 10, 1998, among the AAC Limited
Partners, the Partnership and the General Partner, among others, and (ii) the
Redemption Rights of the AAC Limited Partners shall be modified as set forth in
Section 3.1(b) of the Investment Agreement, dated as of September 10, 1998,
among the General Partner, the Partnership and the AAC Limited Partners, among
others. The Partnership, the General Partner and the AAC Limited Partners agree
that the foregoing modifications shall be deemed to be an amendment to this
Agreement binding upon each of them.
LIMITED PARTNER:
AAC MANAGEMENT LLC, a Delaware
limited liability company
By:
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
Number of Units :
Date Issued :
SSN or EIN : 00-0000000
Address : 000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the ____ day of _____________, 1998.
The Partnership and American Apartment Communities Operating
Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp. and American
Apartment Communities III, L.P. (the "AAC Limited Partners") agree that
notwithstanding the proviso to the first sentence of Section 8.05(a) hereof (i)
the AAC Limited Partners shall be entitled to exercise their Redemption Rights
as provided in Section 5(c)(ii) and (iii) of the Partnership Interest Purchase
and Exchange Agreement, dated as of September 10, 1998, among the AAC Limited
Partners, the Partnership and the General Partner, among others, and (ii) the
Redemption Rights of the AAC Limited Partners shall be modified as set forth in
Section 3.1(b) of the Investment Agreement, dated as of September 10, 1998,
among the General Partner, the Partnership and the AAC Limited Partners, among
others. The Partnership, the General Partner and the AAC Limited Partners agree
that the foregoing modifications shall be deemed to be an amendment to this
Agreement binding upon each of them.
LIMITED PARTNER:
SCHNITZER INVESTMENT CORP.,
an Oregon corporation
By:
Name:
Title:
Number of Units :
Date Issued :
SSN or EIN :
Address: 0000 Xxxxxxxxx Xxxx Xxxxxx
Xxxxxxxx, Xx 00000
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the ____ day of _____________, 1998.
The Partnership and American Apartment Communities Operating
Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp. and American
Apartment Communities III, L.P. (the "AAC Limited Partners") agree that
notwithstanding the proviso to the first sentence of Section 8.05(a) hereof (i)
the AAC Limited Partners shall be entitled to exercise their Redemption Rights
as provided in Section 5(c)(ii) and (iii) of the Partnership Interest Purchase
and Exchange Agreement, dated as of September 10, 1998, among the AAC Limited
Partners, the Partnership and the General Partner, among others, and (ii) the
Redemption Rights of the AAC Limited Partners shall be modified as set forth in
Section 3.1(b) of the Investment Agreement, dated as of September 10, 1998,
among the General Partner, the Partnership and the AAC Limited Partners, among
others. The Partnership, the General Partner and the AAC Limited Partners agree
that the foregoing modifications shall be deemed to be an amendment to this
Agreement binding upon each of them.
LIMITED PARTNER:
AMERICAN APARTMENT COMMUNITIES III,
L.P., a Delaware limited partnership
By: American Apartment Communities III, Inc.,
its General Partner
By:
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
Number of Units :
Date Issued :
SSN or EIN : 00-0000000
Address : 000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the ____ day of _____________, 1998.
The Partnership and American Apartment Communities Operating
Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp. and American
Apartment Communities III, L.P. (the "AAC Limited Partners") agree that
notwithstanding the proviso to the first sentence of Section 8.05(a) hereof (i)
the AAC Limited Partners shall be entitled to exercise their Redemption Rights
as provided in Section 5(c)(ii) and (iii) of the Partnership Interest Purchase
and Exchange Agreement, dated as of September 10, 1998, among the AAC Limited
Partners, the Partnership and the General Partner, among others, and (ii) the
Redemption Rights of the AAC Limited Partners shall be modified as set forth in
Section 3.1(b) of the Investment Agreement, dated as of September 10, 1998,
among the General Partner, the Partnership and the AAC Limited Partners, among
others. The Partnership, the General Partner and the AAC Limited Partners agree
that the foregoing modifications shall be deemed to be an amendment to this
Agreement binding upon each of them.
LIMITED PARTNER:
UNITED DOMINION REALTY TRUST, INC.,
Attorney-in-fact for the other Limited
Partners listed on Exhibit A to the Agreement
By:
Name: Xxxxxxxx X. Surface
Title: Vice President
EXHIBIT A
Agreed Value
of
Partner Cash Non-Cash Partnership Percentage
and Address Contribution Contribution Units Interest
----------- ------------- ------------ ------------ ----------
General Partner:
United Dominion Realty Trust, Inc.
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Limited Partners:
UDRT of North Carolina, L.L.C.
c/o United Dominion Realty Trust, Inc.
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
[UPDATE TO COME
FROM UDRT]
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.05 of the Third Amended and Restated
Agreement of Limited Partnership (the "Agreement") of United Dominion Realty,
L.P., the undersigned hereby irrevocably (i) presents for redemption ________
Partnership Units in United Dominion Realty, L.P. in accordance with the terms
of the Agreement and the Redemption Right referred to in Section 8.05 thereof,
(ii) surrenders such Partnership Units and all right, title and interest
therein, and (iii) directs that the Cash Amount or REIT Shares Amount (as
defined in the Agreement) as determined by the General Partner deliverable upon
exercise of the 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:
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(Signature of Limited Partner)
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(Mailing Address)
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(City) (State) (Zip Code)
Signature Guaranteed by:
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If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
