LIQUIDATING TRUST AGREEMENT Dated as of February 16, 2011 by and among Behringer Harvard Mid-Term Value Enhancement Fund I LP individually as Grantor and Behringer Harvard Advisors I LP as Managing Trustee and CSC Trust Company of Delaware as Resident...
Dated
as of February 16, 2011
by and
among
Behringer
Harvard Mid-Term Value Enhancement Fund I LP
individually
as Grantor
and
Behringer
Harvard Advisors I LP
as
Managing Trustee
and
CSC Trust
Company of Delaware
as
Resident Trustee
TABLE
OF CONTENTS
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Page
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1
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RECITALS:
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1
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ARTICLE
I
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NAME
AND DEFINITIONS
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1
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1.1
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Name
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1
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1.2
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Certain
Terms Defined
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1
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ARTICLE
II
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NATURE
OF TRANSFER
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3
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2.1
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Purpose
of the Trust
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3
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2.2
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No
Reversion to the Partnership
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4
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2.3
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Payment
of Liabilities
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4
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2.4
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Xxxx
of Sale, Assignment, Acceptance and Assumption Agreement; Instruments of
Further Assurance
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4
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2.5
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Incidents
of Ownership
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4
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2.6
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Notice
to Unlocated Holders of Partnership Units
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4
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ARTICLE
III
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BENEFICIARIES
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4
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3.1
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Beneficial
Interests
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4
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3.2
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Rights
of Beneficiaries
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5
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3.3
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No
Transfer of Interests of Beneficiaries
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5
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3.4
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Managing
Trustee as Beneficiary
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5
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ARTICLE
IV
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DURATION
AND TERMINATION OF TRUST
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5
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4.1
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Duration
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6
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4.2
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Other
Obligations of the Managing Trustee upon Termination
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6
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ARTICLE
V
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ADMINISTRATION
OF TRUST ASSETS
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6
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5.1
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Sale
of Trust Assets
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6
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5.2
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Authorized
Activities
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6
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5.3
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Payment
of Claims, Expenses and Liabilities
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6
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5.4
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Interim
Distributions
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6
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5.5
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Final
Distribution
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7
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5.5
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Reports
to Beneficiaries and Others
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7
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5.6
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Federal
Income Tax Information
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7
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5.7
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Employment
of Manager
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7
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ARTICLE
VI
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MANAGING
TRUSTEE
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7
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6.1
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General
Powers of the Managing Trustee
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8
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6.2
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Specific
Powers of the Managing Trustee
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8
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6.3
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Property
Management Services
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9
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6.4
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Asset
Management Fee
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10
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6.5
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Insurance
Services
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10
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-i-
TABLE
OF CONTENTS
(continued)
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Page
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6.6
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Real
Estate Commissions on Resale of Properties
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11
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6.7
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Rebates,
Give-ups and Reciprocal Arrangements
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11
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6.8
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Other
Compensation
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11
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ARTICLE
VII
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RESIDENT
TRUSTEE
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11
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7.1
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Generally
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11
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7.2
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Compensation
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12
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7.3
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Miscellaneous
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12
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ARTICLE
VIII
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CONCERNING
THE MANAGING TRUSTEE, BENEFICIARIES, EMPLOYEES AND AGENTS
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12
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8.1
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Generally
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12
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8.2
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Reliance
by the Managing Trustee
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13
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8.3
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Limitation
on Liability to Third Persons
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13
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8.4
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Recitals
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14
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8.5
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Indemnification
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14
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8.6
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Rights
of Managing Trustees, Employees, Independent Contractors and Agents to Own
Trust Units or Other Property and to Engage in Other
Business
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14
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ARTICLE
IX
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PROTECTION
OF PERSONS DEALING WITH THE MANAGING TRUSTEE
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15
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9.1
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Reliance
on Statements by the Managing Trustee
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15
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ARTICLE
X
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REIMBURSEMENT
TO THE MANAGING TRUSTEE
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15
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10.1
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Expenses
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15
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ARTICLE
XI
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THE
MANAGING TRUSTEE AND SUCCESSOR MANAGING TRUSTEE
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15
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11.1
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Number
and Qualification of Managing Trustees
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15
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11.2
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Resignation
and Removal
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16
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11.3
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Appointment
of Successor
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16
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11.4
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Acceptance
of Appointment by Successor Managing Trustee
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16
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11.5
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Bonds
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16
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ARTICLE
XII
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CONCERNING
THE BENEFICIARIES
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16
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12.1
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Evidence
of Action by Beneficiaries
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16
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12.2
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Limitation
on Suits by Beneficiaries
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16
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12.3
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Requirement
of Undertaking
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16
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ARTICLE
XIII
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MEETING
OF BENEFICIARIES
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16
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13.1
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Purpose
of Meetings
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16
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13.2
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Meeting
Called by the Managing Trustee
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16
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13.3
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Meeting
Called on Request of Beneficiaries
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17
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13.4
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Persons
Entitled to Vote at Meeting of Beneficiaries
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17
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13.5
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Quorum
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17
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13.6
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Adjournment
of Meeting
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17
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-ii-
TABLE
OF CONTENTS
(continued)
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Page
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13.7
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Conduct
of Meeting
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17
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ARTICLE
XIV
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AMENDMENTS
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17
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14.1
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Consent
of Beneficiaries
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17
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14.2
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Effect
of Amendment
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18
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14.3
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Managing
Trustee’s Declining to Execute Documents
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18
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ARTICLE
XV
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MISCELLANEOUS
PROVISIONS
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18
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15.1
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Filing
Documents
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18
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15.2
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Beneficiaries
Have No Rights or Privileges as Holders of Partnership
Units
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18
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15.3
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Laws
as to Construction
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18
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15.4
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Severability
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18
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15.5
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Notices
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18
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15.6
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Counterparts
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19
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EXHIBIT
A
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-iii-
This
LIQUIDATING TRUST AGREEMENT (this “Agreement”), dated as of February 16, 2011
(the “Effective Date”), by and between Behringer Harvard Mid-Term Value
Enhancement Fund I LP, a Texas limited partnership, as Grantor (the
“Partnership”), Behringer Harvard Advisors I LP, a Texas limited partnership, as
Managing Trustee (the “Managing Trustee”), and CSC Trust Company of Delaware, a
Delaware corporation, as Resident Trustee (the “Resident Trustee” and, with the
Managing Trustee, the “Trustees”).
RECITALS:
WHEREAS,
the principal purpose for which the Partnership was organized was to acquire,
develop, construct, own, operate, improve, lease and otherwise manage for
investment purposes, either alone or in association with others, a diversified
portfolio of income-producing commercial or industrial properties as should from
time to time be acquired by the Partnership and to engage in any or all general
business activities related to or incidental to such principal
purpose;
WHEREAS,
Xxxxxx X. Xxxxxxxxx, a Texas resident, and Behringer Harvard Advisors I LP, a
Texas limited partnership (the “General Partners”) believe it to be in the best
interest of the Partnership to dissolve and wind down its affairs;
WHEREAS,
the Partnership will transfer all of its assets (the “Partnership Assets”) and
liabilities to a trust (the “Liquidating Trust” or “Trust”) with Behringer
Harvard Advisors I LP serving as its initial Managing Trustee, including cash
reserves set aside for the contingent and existing obligations of the
Partnership and the Liquidating Trust (the “Cash Reserves”); and
WHEREAS,
the Partnership will distribute the beneficial interests in the Trust to its
partners in liquidation of the Partnership in accordance with the terms
hereof.
WHEREAS,
the Managing Trustee shall administer the Liquidating Trust pursuant to the
terms of this Agreement and, upon satisfaction of all liabilities and
obligations of the Partnership and the Liquidating Trust, the Managing Trustee
shall distribute the residue of the proceeds of the liquidation of the assets of
the Partnership in accordance with the terms hereof.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Partnership hereby agrees to grant, release,
assign, convey and deliver unto the Managing Trustee for the benefit of the
Beneficiaries (as hereinafter defined), all of the right, title and interest of
the Partnership in and to the Partnership Assets and Cash Reserves for the uses
and purposes stated herein on the Effective Date, subject to the terms and
provisions set out below, and the Managing Trustee hereby agrees to accept such
Partnership Assets and Cash Reserves and such Trust, subject to the following
terms and provisions:
ARTICLE
I
NAME
AND DEFINITIONS
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1.1
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Name. This
Trust shall be known as the Behringer Harvard Mid-Term Value Enhancement
Liquidating Trust.
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1.2
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Certain Terms
Defined. For all purposes of this instrument, unless the
context otherwise requires:
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(a)
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“AFFILIATE”
shall mean, with respect to any Person, (a) any other Person directly
or indirectly controlling, controlled by or under common control with such
Person, (b) any officer, director or partner of such Person,
(c) any other Person owning or controlling 10% or more of the
outstanding voting securities of such Person and (d) if such Person
is an officer, director or partner, any other person for which such Person
acts in such capacity.
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(b)
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“AGGREGATE
ASSETS VALUE” shall mean the aggregate book value of the assets of the
Partnership (other than investments in bank accounts, money market funds
and other current assets) at the time of measurement before deducting
depreciation, bad debts or other similar non-cash reserves and without
reduction for any debt secured by or relating to such
assets.
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(c)
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“AGREEMENT”
shall mean this instrument as originally executed or as it may from time
to time be amended pursuant to the terms
hereof.
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(d)
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“ASSET
MANAGEMENT FEE” shall mean the fee paid to the Managing Trustee or its
Affiliates pursuant to Section 6.4 hereof for day-to-day professional
management services in connection with the Trust and its
affairs.
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(e)
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“BENEFICIAL
INTEREST” shall mean each Beneficiary’s proportionate share of the Trust
Assets in the Trust determined by the ratio of the number of Partnership
Units held by the Initial Beneficiary on the close of business on the
Record Date in the Partnership over the total number of Partnership Units
existing on such Record Date in the Partnership and thereafter each
Beneficiary’s proportional beneficial interest in the Trust represented by
Trust Units.
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1
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(f)
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“BENEFICIARIES”
shall mean the holders of Trust Units from time to time on or after the
Record Date, including the Initial Beneficiaries and the Subsequent
Beneficiaries.
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(g)
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“CAPITAL
CONTRIBUTION” shall mean, with respect to any Beneficiary, the
Beneficiary’s “Capital Contribution” as defined in the Partnership
Agreement and as of the Effective
Date.
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(h)
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“CODE”
shall mean the Internal Revenue Code of 1986, as
amended.
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(i)
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“GRANTOR”
shall mean the Partnership.
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(j)
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“GROSS
REVENUES” shall mean all amounts actually collected as rents or other
charges for the use and occupancy of Trust Assets, but shall exclude
interest and other investment income of the Trust and proceeds received by
the Trust from a sale, exchange, condemnation, eminent domain taking,
casualty or other disposition of assets of the
Trust.
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(k)
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“INITIAL
BENEFICIARIES” shall mean the initial holders of Trust
Units.
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(l)
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“LIMITED
PARTNERS” shall mean the limited partners under the Partnership
Agreement.
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(m)
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“LIQUIDATING
DISTRIBUTIONS” shall mean the net cash proceeds received by the Trust from
(a) the sale, exchange, condemnation, eminent domain taking, casualty or
other disposition of substantially all of the assets of the Trust or the
last remaining assets of the Trust or (b) a liquidation of the Trust
Assets in connection with a dissolution of the Trust, after (i) payment of
all expenses of such sale, exchange, condemnation, eminent domain taking,
casualty or other disposition or liquidation, including real estate
commissions, if applicable, (ii) the payment of any outstanding
indebtedness and other liabilities of the Trust, (iii) any amounts used to
restore any such assets of the Trust, and (iv) any amounts set aside as
reserves which the Managing Trustee in its sole discretion may deem
necessary or desirable.
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(n)
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“LIQUIDATING
TRUST” shall mean the liquidating trust maintained by the Managing Trustee
holding the Trust Assets of the Partnership, identified as the “Behringer
Harvard Mid-Term Value Enhancement Liquidating Trust”; also referred to
herein as the “Trust.”
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(o)
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“MANAGER”
shall mean such Person or Persons who have been employed by, or who have
contracted with, the Managing Trustee to assist in the management of the
Trust, and for the avoidance of doubt, the Manager may be one or both of
the General Partners or any Affiliate of the General
Partners.
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(p)
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“MAJORITY
VOTE” shall mean the affirmative vote or written consent of Beneficiaries
then owning of record more than fifty percent (50%) of the outstanding
Trust Units; provided, however, that any Trust Units owned or otherwise
controlled by the Managing Trustee or its Affiliates may not be voted and
will not be included in the total number of outstanding Trust Units for
purposes of this definition unless such Trust Units are the only Trust
Units outstanding as of the date of
determination.
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(q)
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“NASAA
GUIDELINES” shall mean the Statement of Policy Regarding Real Estate
Programs of the North American Securities Administrators Association,
Inc., effective September 29, 1993, as
amended.
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(r)
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“NET
CAPITAL CONTRIBUTION” shall mean, with respect to any Beneficiary, the
Beneficiary’s “Net Capital Contribution” as defined in the Partnership
Agreement and as of the Effective Date, and as reduced from time to time
by distributions to such Beneficiary from the Trust of Non-Liquidating Net
Sale Proceeds and Liquidating Distributions, but without reduction for
interim distributions of Net Cash From Operations, if any, made pursuant
to Section 5.4 hereof.
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|
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(s)
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“NET
CASH FROM OPERATIONS” shall mean cash funds from operations of the Trust
(including without limitation interest and other investment income and
without deduction for depreciation or amortization after deducting funds
used to pay or to provide for the payment of all operating expenses of the
Trust and each Trust Asset and debt service, if any, capital improvements
and replacements), less the amounts set aside for restoration or creation
of reserves.
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|
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(t)
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“NON-LIQUIDATING
NET SALE PROCEEDS” shall mean the net cash proceeds received by the Trust
from a sale, exchange, condemnation, eminent domain taking, casualty or
other disposition of assets of the Trust, which does not constitute
substantially all of the remaining assets of the Trust, after (a) payment
of all expenses of such sale, exchange, condemnation, eminent domain
taking, casualty or other disposition, including real estate commissions,
if applicable, (b) the payment of any outstanding indebtedness and other
Trust liabilities relating to such disposed assets, (c) any amounts used
to restore any such disposed assets or purchase additional assets with the
proceeds thereof, and (d) any amounts set aside as reserves which the
Managing Trustee in its sole discretion may deem necessary or desirable
(including for the purchase of additional
assets).
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2
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(u)
|
“PARTNERSHIP
AGREEMENT” shall mean the Agreement of Limited Partnership of Behringer
Harvard Mid-Term Value Enhancement Fund I LP, dated as of July 30, 2002,
as amended on June 2, 2003 and further amended on March 29,
2006.
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(v)
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“PARTNERSHIP
UNITS” shall mean the limited partnership units in the Partnership held by
each of the Beneficiaries as of the Record
Date.
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(w)
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“PERSON”
shall mean any natural person, partnership, trust, corporation,
association or other legal entity, including, but not limited to, the
General Partners and any Affiliate of the General
Partners.
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(x)
|
“PURCHASE PRICE” shall mean the price
paid by the Partnership for Trust Assets (including all Acquisition Fees
as defined by the Partnership Agreement, liens and mortgages on the
properties, but excluding points and prepaid interest) plus all costs of
improvements, if any, reasonably and properly allocable to the Trust
Assets.
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(y)
|
“RECORD
DATE” shall mean the date selected by the Grantor for determination of the
holders of Partnership Units entitled to become
Beneficiaries.
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(z)
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“SUBSEQUENT
BENEFICIARIES” shall mean Beneficiaries as reflected on the books and
records of the Trust from time to time after the Effective Date, other
than the Initial Beneficiaries.
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(aa)
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“TREASURY
REGULATIONS” shall mean the Income Tax Regulations promulgated under the
Code by the United States Treasury
Department.
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(bb)
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(cc)
|
“TRUST
ASSETS” shall mean all the property held from time to time by the Managing
Trustee under this Agreement, which initially shall consist of the
Partnership Assets of the Partnership granted, assigned and conveyed to
the Managing Trustee by the Partnership, the Cash Reserves, and, in
addition, shall thereafter include all proceeds and other receipts of,
from, or attributable to any assets, causes of actions or claims held by
the Trust.
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(dd)
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“TRUST
UNITS” shall mean those equal, undivided portions into which the
Beneficial Interests in the Trust Assets are divided, as evidenced on the
books and records of the Trust and as shall not be certificated or
represented by any form of other
instrument.
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(ee)
|
“TRUSTEE(S)”
shall mean the original Trustee(s) under this Agreement and their
successor(s) and assignee(s), if
any.
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ARTICLE
II
NATURE
OF TRANSFER
|
2.1
|
Purpose of the
Trust.
|
|
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(a)
|
It
is expected that the Partnership shall dissolve and liquidate prior to
fully winding up its affairs, including, but not limited to, the sale of
its remaining assets, the collection of any receivables and the payment of
any unsatisfied debts, claims, liabilities, commitments, suits and other
obligations, whether contingent or fixed or otherwise (the “Liabilities”),
except for such liabilities and obligations for which the Partnership has
previously established reserves by the retention of the Cash Reserves as
described in the recitals hereto. The Trust hereby is organized
for the sole purpose of winding up the affairs of the Partnership as
promptly as reasonably possible and with no objective to continue or
engage in the conduct of a trade or business except as necessary for the
orderly liquidation of the Trust
Assets.
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(b)
|
The
Cash Reserves and Partnership Assets to be granted, assigned and conveyed
to the Managing Trustee as of the Effective Date will be held in the
Trust, and the Managing Trustee will: (i) further
liquidate the Trust Assets as it deems necessary to carry out the purpose
of the Trust and facilitate distribution of the Trust Assets;
(ii) protect, conserve and manage the Trust Assets in accordance with
the terms and conditions hereof; and (iii) distribute the Trust
Assets in accordance with the terms and conditions
hereof.
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3
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(c)
|
It
is intended that for federal, state and local income tax purposes the
Trust shall be treated as a business trust under Treasury Regulation
Section 301.7701-4(b), that the Trust will be classified for federal
income tax purposes as a partnership under Treasury Regulation Section
301.7701-3(b)(1)(i) and any analogous provision of state or local law, and
that the Beneficiaries of the Trust shall be treated as partners for
federal tax purposes and any analogous provision of state or local law and
shall be taxed on their respective share of the Trust’s taxable income
(including both ordinary income and capital gains) pursuant to Section 704
of the Code and any analogous provision of state or local
law. It is further intended that the Partnership business shall
continue in the Trust, that the partnership shall not terminate under 708
of the Code, that the taxable year of the partnership shall not close, and
that the Trust may use the Partnership’s taxpayer identification
number.
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|
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(d)
|
The
Managing Trustee shall file all tax returns required to be filed with any
governmental agency consistent with Section 2.1(c). To the
extent that the Managing Trustee becomes liable for the payment of taxes,
including withholding taxes, with respect to income derived from the
investment of funds held hereunder or any payment made hereunder
(collectively, the “Taxes”), the Managing Trustee may pay such
Taxes. The Managing Trustee may withhold from any payment of
the Trust Assets such amount as the Managing Trustee estimates to be
sufficient to provide for the payment of such Taxes not yet paid, and may
use the sum withheld for that purpose. The Managing Trustee
shall be indemnified and held harmless against any liability for Taxes and
for any penalties or interest with respect to Taxes on such investment
income or payments in the manner provided
herein.
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2.2
|
No Reversion to the
Partnership. In no event shall any part of the Trust
Assets revert to or be distributed to the
Partnership.
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|
2.3
|
Payment of
Liabilities. The Trust hereby agrees to assume all
Liabilities of the Partnership on the Effective Date. Should
any Liability be asserted against the Trust as the transferee of the Trust
Assets or as a result of the assumption of the Liabilities, the Managing
Trustee may use such part of the Trust Assets as may be necessary in
contesting any such Liability or in payment thereof. In no
event shall the Managing Trustee, Beneficiaries or employees or agents of
the Trust be personally liable, nor shall any personal property of such
Persons or any other Trust Assets be subject to attachment, in the event
the Trust Assets are not sufficient to satisfy the Liabilities asserted
against or payable out of the Partnership’s available Trust Assets in the
Trust.
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2.4
|
Xxxx of Sale, Assignment,
Acceptance and Assumption Agreement; Instruments of Further
Assurance. On the Effective Date, the Partnership and
the Trust shall execute a Xxxx of Sale, Assignment, Acceptance and
Assumption Agreement conveying the Partnership Assets, Cash Reserves and
Liabilities to the Trust, a copy of which is attached as Exhibit A
hereto. After the dissolution of the Partnership, such Persons
who shall have the right and power to so act, will, upon reasonable
request of the Managing Trustee, execute, acknowledge, and deliver such
further instruments and do such further acts as may be necessary or proper
to carry out effectively the purposes of this Agreement, to confirm or
effectuate the transfer to the Managing Trustee of any property intended
to be covered hereby, and to vest in the Managing Trustee, its successors
and assigns, the estate, powers, instruments or funds in trust
hereunder.
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2.5
|
Incidents of
Ownership. The holders of Partnership Units as of the
Record Date shall be the Initial Beneficiaries of the Trust as holders of
Trust Units in the Trust, and the Managing Trustee shall retain only such
incidents of legal ownership as are necessary to undertake the actions and
transactions authorized herein.
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|
2.6
|
Notice to Unlocated Holders of
Partnership Units. If the Trust holds Trust Assets for
the benefit of unlocated holders of any Partnership Units, due notice
shall be given to such unlocated holders of Partnership Units in
accordance with Texas and Delaware law, as
applicable.
|
ARTICLE
III
BENEFICIARIES
|
3.1
|
Beneficial
Interests.
|
|
|
(a)
|
The
Beneficial Interest of each Initial Beneficiary hereof shall be determined
by the Partnership in accordance with the Partnership’s list of
Partnership Unit holders as of the Record Date (the
“List”). The Partnership will deliver the List to the Managing
Trustee promptly after the Record Date specifying the Partnership Units of
each Partner in the Partnership. Each Partnership Unit owned by
a Partner shall be converted into Beneficial Interests in the
Trust. For ease of administration, the List shall express the
Beneficial Interest of each Initial Beneficiary in terms of units and it
is intended that each unit shall represent one Trust Unit in the
Trust.
|
4
|
|
(b)
|
In
the case of the Partnership Unit holders, book-entry or other records or
any other evidence of ownership satisfactory to the Managing Trustee will
be deemed to evidence the Beneficial Interest in the Trust of each such
Beneficiary.
|
|
|
(c)
|
If
any conflicting claims or demands are made or asserted with respect to the
ownership of any Trust Units, or if there should be any disagreement
between the transferees, assignees, heirs, representatives or legatees
succeeding to all or part of the interest of any Beneficiary resulting in
adverse claims or demands being made in connection with such Trust Units,
then, in any of such events, the Managing Trustee shall be entitled, at
its sole election, to refuse to comply with any such conflicting claims or
demands. In so refusing, the Managing Trustee may elect to make no payment
or distribution with respect to such Trust Units, or to make such payment
to a court of competent jurisdiction or an escrow agent, and in so doing
the Managing Trustee shall not be or become liable to any of such parties
for their failure or refusal to comply with any of such conflicting claims
or demands, nor shall the Managing Trustee be liable for interest on any
funds which it may so withhold. The Managing Trustee shall be
entitled to refrain and refuse to act until either (i) the rights of
the adverse claimants have been adjudicated by a final non-appealable
judgment of a court of competent jurisdiction, (ii) all differences
have been adjusted by valid written agreement between all of such parties,
and the Managing Trustee shall have been furnished with an executed
counterpart of such agreement, or (iii) there is furnished to the
Managing Trustee a surety bond or other security satisfactory to the
Managing Trustee, as it shall deem appropriate, to fully indemnify it as
between all conflicting claims or
demands.
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3.2
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Rights of
Beneficiaries. Each Beneficiary shall be entitled to
participate in the rights and benefits due to a Beneficiary hereunder
according to his Beneficial Interest. Each Beneficiary shall
take and hold the same subject to all the terms and provisions of this
Agreement. The interest of the Beneficiary hereby is declared
and shall be in all respects personal property and upon the death of an
individual Beneficiary, his Beneficial Interest shall pass as personal
property to his legal representative and such death shall in no way
terminate or affect the validity of this Agreement, provided that the
Managing Trustee shall not be required to evidence a book entry transfer
of a deceased Beneficiary’s Beneficial Interest to his legal
representative until the Managing Trustee shall have received Letters
Testamentary or Letters of Administration and written notice of the death
of the deceased Beneficiary. A Beneficiary shall have no title or right
to, or possession, management or control of, the Trust Assets except as
herein expressly provided. No widower, widow, heir, or devisee
of any Person who may be a Beneficiary shall have any right of dower,
homestead, or inheritance, or of partition, or of any other right,
statutory or otherwise, in any property forming a part of Trust Assets but
the whole title to the Trust Assets shall be vested in the Managing
Trustee and the sole interest of the applicable Beneficiaries shall be the
rights and benefits given to such Persons under this
Agreement.
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3.3
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No Transfer of Interests of
Beneficiaries. No Beneficial Interest may be transferred
by any Beneficiary in person or by a duly authorized agent or attorney, or
by the properly appointed legal representatives of the
Beneficiary. No Beneficiary has authority or power to sell,
assign, transfer, encumber, or in any other manner dispose of his
Beneficial Interest; provided, however, that the Beneficial Interest shall
be assignable or transferable by will, intestate succession, or operation
of law; further provided that a Beneficiary shall be allowed to assign or
transfer a Beneficial Interest held by a tax-qualified employee retirement
plan or account (including a regular XXX, a Xxxxx plan or a 401(k) plan)
to the plan participant or account owner (or their beneficiaries), but
only if and to the extent that (x) a distribution from the plan or account
is required to be made in order to satisfy the required minimum
distribution (“RMD”) provisions applicable to such plan or account, and
(y) such RMD requirements cannot be satisfied by distributing other assets
from such plan or account, or from other accounts of such account owner;
and further provided, that the executor or administrator of the estate of
a Beneficiary may mortgage, pledge, grant a security interest in,
hypothecate or otherwise encumber, the Beneficial Interest held by the
estate of such Beneficiary if necessary in order to borrow money to pay
estate, succession or inheritance taxes or the expenses of administering
the estate of the Beneficiary, upon written notice to and upon written
consent of the Managing Trustee, which consent may be withheld in the
Managing Trustee’s sole discretion.
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Except as
may be otherwise required by law, the Beneficial Interests of the Beneficiaries
hereunder shall not be subject to attachment, execution, sequestration or any
order of a court, nor shall such Beneficial Interests be subject to the
contracts, debts, obligations, engagements or liabilities of any Beneficiary,
but the Beneficial Interest of a Beneficiary shall be paid by the Managing
Trustee to the Beneficiary free and clear of all assignments, attachments,
anticipations, levies, executions, decrees and sequestrations and shall become
the property of the Beneficiary only when actually received by such
Beneficiary.
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3.4
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Managing Trustee as
Beneficiary. The Managing Trustee, either individually
or in a representative or fiduciary capacity, may be a Beneficiary to the
same extent as if it were not a Managing Trustee hereunder and shall have
all the rights of a Beneficiary, including, without limitation, the right
to vote and to receive distributions, to the same extent as if it were not
the Managing Trustee hereunder.
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5
ARTICLE
IV
DURATION
AND TERMINATION OF TRUST
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4.1
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Duration. The
existence of this Trust shall terminate upon the earliest of (i) a
termination required by the applicable laws of the State of Delaware,
(ii) the termination due to the distribution of all Trust Assets as
provided in Section 5.5, or (iii) February 16, 2014, provided,
however, that the Managing Trustee, in its discretion, may extend the
existence of this Trust to such later date as it may designate, if it
determines that an extension is reasonably necessary to wind up the
affairs of this Trust and, if necessary, has requested and obtained
additional no-action assurances from the staff of the U.S. Securities and
Exchange Commission (the “Commission”) regarding relief from registration
and reporting requirements under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) prior to any such extension. Upon
winding up the affairs of the Trust the Managing Trustee shall provide the
Resident Trustee written confirmation of the dissolution and the
completion of winding up of the Trust and shall authorize and direct the
Resident Trustee to execute and file in the office of the Secretary of
State a certificate of cancellation in accordance with the Delaware
Statutory Trust Act.
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4.2
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Other Obligations of the
Managing Trustee upon Termination. Upon distribution of
all the Trust Assets, the Managing Trustee shall pay or make reasonable
provision to pay all claims and obligations, including all contingent,
conditional or unmatured claims and obligations, known to the Trust, but
for which the identity of the claimant is unknown and not known to the
Trust, but based on the facts known to the Trust, are likely to arise or
to become known to the Trust within 10 years after the date of
dissolution. Except as otherwise specifically provided herein,
upon the distribution of all Trust Assets in the Trust, the Managing
Trustee shall have no further duties or obligations
hereunder.
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ARTICLE
V
ADMINISTRATION
OF TRUST ASSETS
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5.1
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Sale of Trust
Assets. The Managing Trustee is hereby authorized and
directed, at such times as it may deem appropriate, to transfer, assign,
or otherwise dispose of all or any part of the Trust Assets as it deems
appropriate at public auction or at private sale for cash, securities or
other property, or upon credit (either secured or unsecured as the
Managing Trustee shall determine, in its sole
discretion).
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5.2
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Authorized
Activities. The Trust and the Managing Trustee are
hereby authorized to continue and engage in the conduct of any trade or
business on behalf of the Trust or the Beneficiaries and all of the terms
and conditions hereof shall be construed
accordingly.
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5.3
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Payment of Claims, Expenses and
Liabilities. Provided the Managing Trustee has been
advised in writing with respect to such claims, expenses, charges,
liabilities and obligations, the Managing Trustee shall pay from the Trust
Assets all claims, expenses, charges, liabilities, and obligations of the
Trust Assets and all Liabilities relating to the Trust Assets and
obligations which the Managing Trustee specifically assumes and agrees to
pay pursuant to this Agreement and such transferee liabilities which the
Managing Trustee may be obligated to pay as transferee of the Trust
Assets, including, without limitation, interest, penalties, taxes,
assessments, and public charges of every kind and nature and the costs,
charges, and expenses connected with or growing out of the execution or
administration of this Trust and such other payments and disbursements as
are provided in this Agreement or which may be determined to be a proper
charge against the Trust Assets by the Managing
Trustee.
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5.4
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Interim
Distributions. Subject to Section 5.5 below with respect
to a final distribution, at such times as may be determined by it in its
sole discretion, the Managing Trustee shall distribute, or cause to be
distributed, to the Beneficiaries such cash or other property comprising a
portion of the Trust Assets as the Managing Trustee may, in its sole
discretion, determine may be distributed without detriment to the
conservation and protection of the Trust Assets in the Trust, as
follows:
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(a)
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First,
to the Beneficiaries on a per Trust Unit basis until each of such
Beneficiaries has received distributions of Net Cash From Operations equal
to eight percent (8%) per annum of his Net Capital Contribution,
commencing on the date such Beneficiary (or predecessor in interest) first
contributed capital to the Partnership, and assuming for purposes of this
clause that distributions of Net Cash From Operations include prior
distributions of “Net Cash From
Operations” as defined under,
and made pursuant to, the Partnership Agreement, that all
distributions by the Partnership to the General Partners were paid to the
Managing Trustee, that all distributions by the Partnership to the Limited
Partners were paid to the Beneficiaries, and that during any period prior
to the Effective Date, each Beneficiary’s Net Capital Contribution was his
or her “Net Capital Contribution” as defined under the Partnership
Agreement;
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(b)
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Then
to the Beneficiaries on a per Trust Unit basis until each Beneficiary has
received or has been deemed to have received one hundred percent (100%) of
his Net Capital Contribution; and
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6
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(c)
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Thereafter,
eighty-five percent (85%) to the Beneficiaries on a per Trust Unit basis,
and fifteen percent (15%) to the Managing
Trustee.
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Notwithstanding
the foregoing, assuming for purposes of this paragraph that all distributions by
the Partnership to the General Partners were paid to the Managing Trustee, and
that all distributions by the Partnership to the Limited Partners were paid to
the Beneficiaries, in no event will the Managing Trustee be allocated or receive
distributions under the Partnership Agreement and this Agreement if such
distributions would not be permitted to be paid to the Managing Trustee pursuant
to the NASAA Guidelines, as defined herein. It is the intent of the foregoing
proviso that the Managing Trustee receives no more of the Net Cash From
Operations, Non-Liquidating Net Sale Proceeds or Liquidating Distributions than
is allowed pursuant to Article IV, Section E.2. of the NASAA Guidelines, and in
the event the allocations pursuant to this Article V would otherwise result in
the Managing Trustee receiving any such excess distributions, such excess
distributions otherwise distributable to the Managing Trustee will instead be
reallocated in favor of and distributed to the Beneficiaries on a per Trust Unit
basis, and if sufficient funds are not available for such reallocation to the
Beneficiaries, the Managing Trustee will refund the amount of the excess
distribution to the Trust for reallocation in favor of and distribution to the
Beneficiaries on a per Trust Unit basis.
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5.5
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Final
Distribution. If the Managing Trustee determines that
(a) all of the real properties of the Trust have been sold, with the
proceeds from such sales and any amounts held in reserve for such
properties distributed pursuant to Section 5.4, and the Liabilities and
all other claims, expenses, charges, liabilities and obligations of the
Trust have been paid or discharged, or (b) if the existence of the Trust
shall terminate pursuant to Section 4.1 hereof and not have been extended
pursuant to such Section 4.1, then in the event of (a) or (b) above
Managing Trustee shall, consistent with the conservation and protection of
the Trust Assets, expeditiously distribute the Trust Assets to the
Beneficiaries pro rata according to the number of Trust Units held by each
Beneficiary in the Trust based on the List submitted to the Managing
Trustee by the Partnership pursuant to Section 3.1 above, as such List may
be amended. The Managing Trustee shall hold in the Trust and thereafter
make disposition of all liquidating distributions and other payments due
any Beneficiaries who have not been located subject to applicable state
laws regarding escheat and abandoned property. It is understood
that the Managing Trustee and the Beneficiary’s bank in any funds transfer
may rely solely upon any account numbers or similar identifying number
provided by the parties hereto to identify (i) the Beneficiary,
(ii) the Beneficiary’s bank, or (iii) an intermediary
bank. The Managing Trustee may apply any of the Trust Assets
for any payment order it executes using any such identifying number, even
where its use may result in a person other than the Beneficiary being
paid, or the transfer of funds to a bank other than the Beneficiary’s
bank, or an intermediary bank
designated.
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5.5
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Reports to Beneficiaries and
Others. As soon as practicable after the end of each
taxable year of the Trust on a timeline as though the Trust were a
non-accelerated filer thereunder, the Managing Trustee shall file an
annual report under cover of Form 10-K with the Commission showing the
assets and liabilities of the Trust at the end of each calendar year and
the receipts and disbursements of the Managing Trustee with respect to the
Trust for such period covered by the report. The annual report
will also describe the changes in the assets of the Trust and the actions
taken by the Managing Trustee during such period covered by the
report. The financial statements contained with in such annual
report need not be audited but will be prepared on a liquidation basis in
accordance with generally accepted accounting principles The
Managing Trustee will also file periodic reports under cover of Form 8-K
with the Commission whenever an event occurs for which a Form 8-K would
have been required to be filed for the Trust or whenever, in the opinion
of the Managing Trustee, any other material event relating to the Trust or
its assets has occurred. The taxable year of the Trust shall
end on December 31 of each year unless the Managing Trustee deems it
advisable to establish some other date as the date on which the taxable
year of the Trust shall end.
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5.6
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Federal Income Tax
Information. Within seventy-five (75) days after the end
of each fiscal year (in the event of a calendar taxable year of the Trust,
or within one hundred twenty (120) days thereafter in the even the Trust
has changed to a non-calendar taxable year), the Managing Trustee shall
direct its agent to mail to each Person who was a Beneficiary at the close
of the year, a schedule K-1 stating the Beneficiary’s share of taxable
income and tax deductions. In addition, after receipt of a good
faith written request, or in its discretion without such request or if
required by applicable law, such agent (or if it cannot, the Managing
Trustee) shall furnish to any Person who has been a Beneficiary at any
time during the preceding year a statement containing such further
information as is reasonably available to the agent or Managing Trustee,
respectively, which shall be helpful in determining the amount of taxable
income which such Person should include in such Person’s federal income
tax return for such preceding taxable
year.
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5.7
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Employment of
Manager.
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(a)
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The
Managing Trustee shall conduct the affairs of the Trust, devoting such
time thereto as it, in its sole discretion, shall determine to be
necessary to manage Trust affairs in an efficient manner. The
Managing Trustee shall have the power to appoint, employ or contract with
any Person or Persons as the Managing Trustee may deem necessary or proper
for the transaction of the activities of the Trust, including the
Manager. The Managing Trustee may grant or delegate such
authority to the Manager as the Managing Trustee may in its sole
discretion deem necessary or desirable to carry out the purpose of the
Trust without regard to whether such authority is normally granted or
delegated by trustees.
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7
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(b)
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The
Manager or other Persons shall not be required to administer the Trust as
its sole and exclusive function and may have other business interests and
may engage in other activities similar or in addition to those relating to
the Trust, including the rendering of advice or services of any kind to
investors or any other Persons and the management of other
investments.
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ARTICLE
VI
MANAGING
TRUSTEE
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6.1
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General Powers of the Managing
Trustee. The Managing Trustee shall have the power to
enter into or engage in any trade or business on behalf of the Trust and
the Beneficiaries, and may use, hold, or dispose of any Trust Asset in the
furtherance of such trade or business, including the power to make
additional investments (to the extent of available cash) in debt or equity
securities.
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6.2
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Specific Powers of the Managing
Trustee. In addition to the provisions of Section 6.1,
the Managing Trustee shall have the following specific powers in addition
to any powers conferred upon it by any other Section or provision of this
Agreement or any statutory laws of the State of Delaware; provided,
however, that the enumeration of the following powers shall not be
considered in any way to limit or control the power of the Managing
Trustee to act as specifically authorized by any other Section or
provision of this Agreement and to act in such a manner as the Managing
Trustee may deem necessary or appropriate to conserve and protect any
Trust Assets or to confer on the Beneficiaries the benefits intended to be
conferred upon them by this
Agreement:
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(a)
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To
determine the nature and amount of the consideration to be received with
respect to the sale or other disposition of, or the grant of interests in,
any Trust Assets.
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(b)
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To
collect, liquidate or otherwise convert into cash, or such other property
as the Managing Trustee deems appropriate, all property, assets and rights
in any Trust Assets, and to pay, discharge and satisfy all other claims,
expenses, charges, liabilities, and obligations existing with respect to
any Trust Assets, the Trust or the Managing
Trustee.
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(c)
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To
elect, appoint, engage, retain or employ any Persons as agents,
representatives, employees, or independent contractors (including, without
limitation, real estate advisors, investment advisors, accountants,
transfer agents, custodians, attorneys-at-law, managers, appraisers,
brokers, or otherwise) in one or more capacities, and to pay compensation
from the Trust Assets for services in as many capacities as such Person
may be so elected, appointed, engaged, retained or employed, to prescribe
the titles, powers and duties, terms of service and other terms and
conditions of the election, appointment, engagement, retention or
employment of such Persons and, except as prohibited by law, to delegate
any of the powers and duties of the Managing Trustee to any one or more
Trustees, agents, representatives, employers, independent contractors or
other Persons.
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(d)
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To
retain and set aside such funds out of the Trust as the Managing Trustee
shall deem necessary or expedient to pay, or provide for the payment of
(i) unpaid claims, expenses, charges, liabilities, and obligations of
the Trust or the Partnership, except to the extent that liabilities for
which the Partnership has previously reserved Cash Reserves are satisfied
with funds from said Cash Reserves; (ii) contingencies; and
(iii) the expenses of administering the Trust
Assets.
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(e)
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To
do and perform any and all acts necessary or appropriate for the
conservation and protection of the Trust Assets, including acts or things
necessary or appropriate to maintain Trust Assets held by the Managing
Trustee pending sale or other disposition thereof or distribution thereof
to the Beneficiaries.
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(f)
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To
hold legal title to property of the Trust in the name of the Trust, or in
the name of the Managing Trustee, or of any other Person, without
disclosure of the interest of the Trust
therein.
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(g)
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To
cause any investments of any part of the Trust Assets to be registered and
held in the name of any one or more of its names or in the names of a
nominee or nominees without increase or decrease of liability with respect
thereto.
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(h)
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To
institute or defend actions or declaratory judgments or other actions and
to take such other action, in the name of the Trust or the Partnership or
as otherwise required, as the Managing Trustee may deem necessary or
desirable to enforce any instruments, contracts, agreements, causes of
action, claims or rights relating to or forming a part of the Trust
Assets.
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8
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(i)
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To
determine conclusively from time to time the value of and to revalue the
securities and other property of the Trust, in accordance with independent
appraisals or other information as it deems necessary or
appropriate.
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(j)
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To
cancel, terminate, or amend any instruments, contracts, agreements,
obligations or causes of action relating to or forming a part of any Trust
Assets, and to execute new instruments, contracts, agreements, obligations
or causes of action notwithstanding that the terms of any such
instruments, contracts, agreements, obligations or causes of action may
extend beyond the terms of this
Trust.
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(k)
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To
vote by proxy or otherwise on behalf of the Beneficiaries and with full
power of substitution all shares of stock and all securities held by the
Managing Trustee hereunder and to exercise every power, election,
discretion, option and subscription right and give every notice, make
every demand, and to do every act or thing in respect to any shares of
stock or any securities held by the Managing Trustee which the Managing
Trustee might or could do if the Managing Trustee was the absolute owner
thereof.
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(l)
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To
undertake or join in any merger, plan of reorganization, consolidation,
liquidation, dissolution, readjustment or other transaction of any
corporation, any of whose shares of stock or other securities,
obligations, or properties may at any time constitute a part of any Trust
Assets, and to accept the substituted shares of stock, bonds, securities,
obligations and properties and to hold the same in trust in accordance
with the provisions hereof.
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(m)
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In
connection with the sale or other disposition or distribution of any
securities held by the Managing Trustee, to comply with the applicable
federal and state securities laws, and to enter into agreements relating
to the sale or other disposition or distribution
thereof.
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(n)
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To
authorize transactions between corporations or other entities whose
securities, or other interests therein (either in the nature of debt or
equity) are held by the Managing Trustee as part of any Trust
Assets.
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(o)
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To
terminate and dissolve any entities owned by the
Trust.
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(p)
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To
have a judicial settlement of its account of the Trust at any time to the
extent it determines necessary or
advisable.
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(q)
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To
perform any act authorized, permitted, or required under any instrument,
contract, agreement, right, obligation or cause of action relating to or
forming a part of any Trust Assets whether in the nature of an approval,
consent, demand or notice thereunder or otherwise, unless such act would
require the consent of the Beneficiaries in accordance with the express
provisions of this Agreement.
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6.3
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Property Management
Services. The Managing Trustee shall cause the Trust to
employ a property management company (which may be an Affiliate of the
Managing Trustee) to perform professional property management and leasing
services for the Trust. In the event the property management company is an
Affiliate of the Managing Trustee, the compensation payable to such
Affiliate shall be equal to the lesser of (a) fees which are competitive
for similar services in the same geographic area, or (b) four percent (4%)
of Gross Revenues of the properties managed. In the case of industrial and
commercial properties which are leased on a long-term (ten or more years)
net lease basis, the maximum property management fee from such leases
shall be one percent (1%) of Gross Revenues, except for a one time initial
leasing fee of three percent (3%) of Gross Revenues on each lease payable
over the first five full years of the original term of the lease. As used
herein, the term “net lease” shall mean a lease which requires the tenant
to coordinate and pay directly all real estate taxes, sales and use taxes,
utilities, insurance and other operating expenses relating to the leased
property. Included within such fees should be bookkeeping services and
fees paid to non-related Persons for property management services. In
addition, the Trust will also pay a separate fee for the leases of new
tenants and renewals of leases with existing tenants in an amount not to
exceed the fee customarily charged by others rendering similar services in
the same geographic area except to the extent such compensation is
specifically included in the foregoing property management
fees.
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The Trust
may also pay to non-affiliated third party leasing agents leasing fees for
procuring tenants and negotiating the terms of tenant leases. In no event may
the aggregate of all property management and leasing fees paid to Affiliates of
the Managing Trustee exceed six percent (6%) of Gross Revenues. The foregoing
limitation will include all leasing, re-leasing and leasing related services
provided, however, that such limitation is not intended to preclude the charging
of a separate competitive fee for the one-time initial rent-up or leasing-up of
a newly constructed property or total rehabilitation of a property if such
service is not included in the Purchase Price of the Trust Asset.
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6.4
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Asset Management
Fee. The Managing Trustee and its Affiliates shall
perform asset management services in connection with the operation and
holding of the Trust Assets, which will
include:
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(a)
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Analysis
and management of utilization of Trust Assets and financial performance of
Trust Assets;
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(b)
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Analysis
of the maximization of return with respect to Trust Assets and advice as
to the timing of disposition and terms and conditions of disposition of
such assets;
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(c)
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Daily
management of Trust Assets, including entering into leases of real
property and service contracts, and, to the extent necessary, performing
all other operational functions for the maintenance and administration of
such assets;
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(d)
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Investigate,
select and, on behalf of the Trust, engage and conduct business with such
Persons as the Managing Trustee and its Affiliates deems necessary to the
proper performance of its obligations hereunder, including but not limited
to consultants, accountants, correspondents, lenders, technical advisors,
attorneys, brokers, underwriters, corporate fiduciaries, escrow agents,
depositaries, custodians, agents for collection, insurers, insurance
agents, banks, builders, developers, property owners, mortgagors, property
management companies, transfer agents and any and all agents for any of
the foregoing, including Affiliates, and Persons acting in any other
capacity deemed by the Managing Trustee and its Affiliates necessary or
desirable for the performance of any of the foregoing services, including
but not limited to entering into contracts in the name of the Trust with
any of the foregoing; and
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(e)
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Provide
the Trust with all necessary cash management
services.
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In
consideration for such services, the Managing Trustee or its Affiliates shall be
paid an annual Asset Management Fee of not more than one-half percent (.5%) of
the Aggregate Asset Value, provided, however, that such Asset Management Fee
shall be reduced to the extent that the sum of such amount plus the amount of
interim distributions of Net Cash From Operations and Non-Liquidating Net Sale
Proceeds, if any, made by the Trust from cash available for distribution
pursuant to Section 5.4 hereof for any year, exceeds the sum of three-quarters
percent (.75%) of the amount by which the fair market value of the Trust’s real
properties plus any working capital reserves, as determined by the Managing
Trustee in good faith, exceeds the outstanding debt secured by the Trust’s
properties, if any.
The fee
will be payable on the tenth day of each month in an amount equal to one-twelfth
of one-half percent (1/12th of .5%) of Aggregate Assets Value as of the last day
of the immediately preceding month. Accrued but unpaid Asset Management Fees for
any period shall be deferred without interest and shall be payable in subsequent
periods from any funds available to the Trust after payment of all other costs
and expenses of the Trust, including any reserves then determined by the
Managing Trustee to no longer be necessary to be retained by the Trust or from
Non-Liquidating Net Sale Proceeds or Liquidating Distributions. In addition to
such fees, the Trust shall bear the expenses of any independent appraisers,
market analysts or other Persons not affiliated with the Managing Trustee who
may be engaged by the Managing Trustee to evaluate the assets of the Trust for
purposes of the foregoing.
Asset
Management Fees may be accrued without interest when funds are not available for
their payment. Any accrued Asset Management Fees may be paid from the next
available cash flow or net proceeds from sale or refinancing of properties. No
Asset Management Fees may be paid from the Trust’s reserves. If a Managing
Trustee is terminated and is entitled to compensation from the Trust, as
provided for herein and as governed by Section II.F of the NASAA Guidelines, the
Managing Trustee shall be paid Asset Management Fees through the date of such
termination.
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6.5
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Insurance
Services. The Managing Trustee or any of its Affiliates
may provide insurance brokerage services in connection with obtaining
insurance on the Trust Assets so long as the cost of providing such
service, including the cost of the insurance, is no greater than the
lowest quote obtained from two unaffiliated insurance agencies and the
coverage and terms are likewise comparable. In no event may such services
be provided by the Managing Trustee or any of its Affiliates unless they
are independently engaged in the business of providing such services to
Persons other than Affiliates and at least seventy-five percent (75%) of
their insurance brokerage service gross revenue is derived from Persons
other than Affiliates.
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10
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6.6
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Real Estate Commissions on
Resale of Properties. The Managing Trustee and its
Affiliates may perform real estate brokerage services for the Trust in
connection with the sale of property by the Trust; provided that the
compensation therefor to the Managing Trustee or its Affiliates in
connection with the sale of a particular property shall not exceed the
lesser of (a) fifty percent (50%) of the reasonable, customary and
competitive real estate brokerage commission normally and customarily paid
for the sale of a comparable property in light of the size, type and
location of the property, or (b) three percent (3%) of the gross sales
price of the property; and provided, further, that payments of said
compensation shall be deferred and made only after, assuming for purposes
of this paragraph that all distributions by the Partnership to the General
Partners were paid to the Managing Trustee, and that all distributions by
the Partnership to the Limited Partners were paid to the Beneficiaries,
the Partnership and the Trust have distributed to each Beneficiary or his
Assignee from Non-Liquidating Net Sale Proceeds or Liquidating
Distributions, as the case may be, an aggregate amount in cash which is
equal to one hundred percent (100%) of his Capital Contribution (less all
amounts, if any, theretofore distributed as a return of unused capital
pursuant to Section 8.10 of the Partnership Agreement), and has
distributed to each Beneficiary or Assignee from all sources an additional
amount equal to an eight percent (8%) per annum cumulative (but not
compounded) return on his Net Capital Contribution, calculated from the
date of his admission into the Partnership; and provided, further, that
the Managing Trustee and its Affiliates may receive such real estate
commission only if they provide substantial services in connection with
the sales effort. The aggregate real estate commission paid to all parties
involved in the sale of a Trust Asset shall not exceed the lesser of: (a)
the reasonable, customary and competitive real estate brokerage commission
normally and customarily paid for the sale of a comparable property in
light of the size, type and location of the property, or (b) six percent
(6%) of the gross sales price of such property. Notwithstanding the
foregoing, neither the Managing Trustee nor any of its Affiliates shall be
granted an exclusive right to sell or exclusive employment to sell any
property on behalf of the Trust.
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6.7
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Rebates, Give-ups and
Reciprocal Arrangements. No rebates or give-ups may be
received by the Managing Trustee or its Affiliates nor may the Managing
Trustee or its Affiliates participate in any reciprocal business
arrangements which would circumvent the provisions of this
Agreement.
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6.8
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Other
Compensation. Other than as specifically provided in
this Agreement, neither the Managing Trustee nor its Affiliates shall be
compensated for services rendered to the Trust. The Managing Trustee and
its Affiliates cannot receive any fees or other compensation from the
Trust except as specifically provided for in this Agreement except as
permitted by the NASAA Guidelines.
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ARTICLE
VII
RESIDENT
TRUSTEE
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7.1
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Generally. The
Resident Trustee is appointed to serve as the trustee of the Trust in the
State of Delaware for the purpose of satisfying the requirement of Section
3807(a) of the Delaware Statutory Trust Act that the Trust have at least
one trustee with a principal place of business in Delaware. It is
understood and agreed by the parties hereto that the Resident Trustee
shall have none of the duties or liabilities of the Managing Trustee or
the Trust and no such duties shall be implied. The duties of the Resident
Trustee shall be limited to (i) accepting legal process served on the
Trust in the State of Delaware, (ii) the execution of any certificates
required to be filed with the Secretary of State of the State of Delaware
which the Resident Trustee is required to execute under Section 3811 of
the Delaware Statutory Trust Act, and (iii) any other duties specifically
allocated to the Resident Trustee in the Trust Agreement or under Delaware
law. The Resident Trustee shall provide prompt notice to the Managing
Trustee of its performance of any such acts. To the extent
that, at law or in equity, the Resident Trustee has duties (including
fiduciary duties) and liabilities relating thereto to the Trust or the
Beneficiary, it is hereby understood and agreed by the other parties
hereto that such duties and liabilities are replaced by the duties and
liabilities of the Resident Trustee expressly set forth in this Agreement
to the extent permitted by law.
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The
Resident Trust shall not be entitled to exercise any powers of the Managing
Trustee. The Resident Trustee shall not be liable for the acts or
omissions of the Managing Trustee, nor shall the Resident Trustee be liable for
supervising or monitoring the performance and the duties and obligations of the
Managing Trustee or the Trust under this Agreement. The Resident
Trustee shall not be personally liable under any circumstances, except for its
own willful misconduct, bad faith or gross negligence. In particular,
but not by way of limitation:
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(i)
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the
Resident Trustee shall not be personally liable for any error of judgment
made in good faith, except to the extent such error of judgment
constitutes gross negligence on its
part;
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(ii)
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no
provision of this Agreement shall require the Resident Trustee to expend
or risk its personal funds or otherwise incur any financial liability in
the performance of its rights or powers hereunder, if the Resident Trustee
shall have reasonable grounds for believing that the payment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
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(iii)
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under
no circumstances shall the Resident Trustee be personally liable for any
representation, warranty, covenant, agreement, or indebtedness of the
Trust;
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(iv)
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the
Resident Trustee shall not be personally responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution
hereof by the Managing Trustee;
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11
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(v)
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the
Resident Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by
the proper party or parties. The Resident Trustee may accept a
certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full
force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically prescribed herein, the Resident
Trustee may for all purposes hereof rely on a certificate, signed by the
Managing Trustee, as to such fact or matter, and such certificate shall
constitute full protection to the Resident Trustee for any action taken or
omitted to be taken by it in good faith in reliance
thereon;
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(vi)
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in
the exercise or administration of the trust hereunder, the Resident
Trustee (a) may act directly or through agents or attorneys pursuant to
agreements entered into with any of them, and the Resident Trustee shall
not be liable for the default or misconduct of such agents or attorneys if
such agents or attorneys shall have been selected by the Resident Trustee
in good faith and with due care and (b) may consult with counsel,
accountants and other skilled persons to be selected by it in good faith
and with due care and employed by it, and it shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel, accountants or other skilled
persons; and
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(vii)
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except
as expressly provided in this Section, in accepting and performing the
trust hereby created the Resident Trustee acts solely as Resident Trustee
hereunder and not in its individual capacity, and all persons having any
claim against the Resident Trustee by reason of the transactions
contemplated by this Agreement or the Trust Agreement shall look only to
the Trust's property for payment or satisfaction
thereof.
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7.2
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Compensation. The
Resident Trustee (or any successor Resident Trustee) shall be entitled to
receive compensation from the Managing Trustee or from the Trust for its
services in accordance with such schedules as shall have been separately
agreed to from time to time by the Resident Trustee and the
Trustee. The Resident Trustee may consult with counsel (who may
be counsel for the Managing Trustee, for the Trust or for the Resident
Trustee). The reasonable legal fees incurred in connection with
such consultation shall be reimbursed to the Resident Trustee pursuant to
this Section, provided that no such fees shall be payable to the extent
that they are incurred as a result of the Resident Trustee's gross
negligence, bad faith or willful
misconduct.
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7.3
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Miscellaneous. The
Resident Trustee shall serve for the duration of the Trust and until the
earlier of (i) the effective date of the Resident Trustee's resignation,
or (ii) the effective date of the removal of the Resident
Trustee. The Resident Trustee may resign at any time by giving
thirty (30) days written notice to the Managing Trustee; provided,
however, said resignation shall not be effective until such time as a
successor Resident Trustee has accepted such appointment. The
Resident Trustee may be removed at any time by the Managing Trustee by
providing thirty (30) days written notice to the Resident Trustee;
provided, however, such removal shall not be effective until such time as
a successor Resident Trustee has accepted such
appointment. Upon the resignation or removal of the Resident
Trustee, the Managing Trustee shall appoint a successor Resident
Trustee. If no successor Resident Trustee shall have been
appointed and shall have accepted such appointment within forty five (45)
days after the giving of such notice of resignation or removal, the
Resident Trustee may petition any court of competent jurisdiction for the
appointment of a successor Resident Trustee. Any successor
Resident Trustee appointed pursuant to this Section shall be eligible to
act in such capacity in accordance with this Agreement and, following
compliance with this Section, shall become fully vested with the rights,
powers, duties and obligations of its predecessor under this Agreement,
with like effect as if originally named as Resident Trustee. Any such
successor Resident Trustee shall notify the Resident Trustee of its
appointment by providing a written instrument to the Resident
Trustee. At such time the Resident Trustee shall be discharged
of its duties herein.
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The
Resident Trustee or any officer, affiliate, director, employee, or agent of the
Resident Trustee each an "Indemnified Person") shall be entitled to
indemnification from the Trust, to the fullest extent permitted by law, from and
against any and all losses, claims, taxes, damages, reasonable expenses, and
liabilities (including liabilities under state or federal securities laws) of
any kind and nature whatsoever (collectively, "Expenses"), to the extent that
such Expenses arise out of or are imposed upon or asserted against such
Indemnified Persons with respect to the creation, operation or termination of
the Trust, the execution, delivery or performance of this Agreement or the
transactions contemplated hereby; provided, however, that the Trust shall not be
required to indemnify any Indemnified Person for any Expenses which are a result
of the willful misconduct, bad faith or gross negligence of such Indemnified
Person. The obligations of the Trust to indemnify the Indemnified
Persons as provided herein shall survive the termination of this
Agreement.
The
Resident Trustee shall not be obligated to give any bond or other security for
the performance of any of its duties hereunder.
ARTICLE
VIII
CONCERNING
THE MANAGING TRUSTEE, BENEFICIARIES, EMPLOYEES AND AGENTS
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8.1
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Generally. The
Managing Trustee accepts and undertakes to discharge the Trust created by
this Agreement, upon the terms and conditions thereof on behalf of the
Beneficiaries. The Managing Trustee shall exercise such rights
and powers vested in it by this Agreement, and use the same degree of care
and skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs. No provision
of this Agreement shall be construed to relieve the Managing Trustee from
liability for its own willful misconduct, knowingly and intentionally
committed in bad faith, except
that:
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12
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(a)
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No
successor Managing Trustee shall be in any way responsible for the acts or
omissions of the Managing Trustee in office prior to the date on which it
became a Managing Trustee.
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(b)
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The
Managing Trustee shall not be liable for the performance of such duties
and obligations as are specifically set forth in this Agreement except for
its bad faith or willful misconduct, and no implied covenants or
obligations shall be read into this Agreement against the Managing
Trustee.
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(c)
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The
Managing Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Managing Trustee and conforming
to the requirements of this
Agreement.
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(d)
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The
Managing Trustee shall not be liable for any act which the Managing
Trustee may do or omit to do hereunder, or for any mistake of fact or law,
or for any error of judgment, or for the misconduct of any employee,
agent, representative or attorney appointed by it, or for anything that it
may do or refrain from doing in connection with this Agreement while
acting in good faith; unless caused by or arising from gross negligence,
willful misconduct, fraud or any other breach of fiduciary duty of the
Trustee or any of its employees, agents, representatives or
attorneys.
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(e)
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The
duties and obligations of the Managing Trustee shall be limited to and
determined solely by the express provisions of this Agreement, and no
implied duties or obligations shall be read into this Agreement against
the Managing Trustee.
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8.2
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Reliance by the Managing
Trustee. Except as otherwise provided in Section 7.1 of
this Agreement:
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(a)
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The
Managing Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties.
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(b)
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The
Managing Trustee may consult with legal counsel, auditors or other experts
to be selected by it, including firms with which the Managing Trustee may
be an Affiliate, and the advice or opinion of such counsel, accountants,
auditors or other experts shall be full and complete protection to the
Managing Trustee, the employees and the agents of the Managing Trustee in
respect of any action taken or omitted or suffered by them in good faith
and in reliance on, or in accordance with, such advice or
opinion.
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(c)
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Persons
dealing with the Managing Trustee shall look only to the Trust Assets to
satisfy any liability incurred by the Managing Trustee to such Person in
carrying out the terms of this Agreement, and the Managing Trustee shall
have no personal obligation to satisfy any such
liability.
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(d)
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As
far as practicable and except as expressly permitted above, the Managing
Trustee shall cause any written instrument creating an obligation of the
Trust to include a reference to this Agreement and to provide that neither
the Beneficiaries, the Managing Trustee nor their agents shall be liable
thereunder and that the other parties to such instrument shall look solely
to the Trust Assets for the payment of any claim thereunder or the
performance thereof; provided, however, that the omission of such
provision from any such instrument shall not render the Beneficiaries, the
Managing Trustee, or their agents liable, nor shall the Managing Trustee
be liable to anyone for such
omission.
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8.3
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Limitation on Liability to
Third Persons. No Beneficiary shall be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any
Person in connection with the Trust Assets or the affairs of the Trust;
and neither the Managing Trustee nor any employee or agent of the Trust
shall be subject to any personal liability whatsoever, in tort, contract
or otherwise, to any Person in connection with any Trust Assets or the
affairs of the Trust, except for such Person’s own willful misconduct,
knowingly and intentionally committed in bad faith; and all such other
Persons shall look solely to any Trust Assets for satisfaction of claims
of any nature arising in connection with the affairs of the Trust. The
Managing Trustee shall purchase and maintain insurance as it deems
reasonably necessary for the protection of all Trust Assets, its
Beneficiaries, the Trustee and its employees and agents in such amount as
the Managing Trustee shall deem adequate to cover all foreseeable
liability to the extent available at reasonable
rates.
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13
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8.4
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Recitals. Any
written instrument creating an obligation of the Trust shall be
conclusively taken to have been executed or done by the Managing Trustee,
or the employee or agent of this Trust only in its capacity as Managing
Trustee under this Agreement or in its capacity as employee or agent of
the Trust.
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8.5
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Indemnification. The
Managing Trustee and each of its employees and agents, including the
Manager, (each an “Indemnified Person” and collectively, the “Indemnified
Persons”) shall be indemnified out of all Trust Assets against all
liabilities and expenses, including amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and all costs and
expenses, including, but not limited to, reasonable counsel fees and
disbursements paid or incurred in investigating or defending against any
such claim, demand, action, suit or proceeding by the Indemnified Persons
in connection with the defense or disposition of any action, suit or other
proceeding by the Trust or any other Person, whether civil or criminal, in
which the Indemnified Person may be involved or with which the Indemnified
Person may be threatened while in office or thereafter, by reason of its
or his being or having been such a Managing Trustee, employee or agent;
provided, however, that the Indemnified Person shall not be entitled to
such indemnification in respect of any matter as to which the Indemnified
Person shall have been adjudicated to have acted in bad faith or with
willful malfeasance or in reckless disregard of the Indemnified Person’s
duties. The rights accruing to any Indemnified Person under these
provisions shall not exclude any other right to which the Indemnified
Person may be lawfully entitled. The Managing Trustee shall
make advance payments in connection with indemnification under this
Section, provided that the Indemnified Person shall have given a written
undertaking to repay any amount advanced to the Indemnified Person and to
reimburse the Trust in the event it is subsequently determined in a final
adjudication by a court of law that the Indemnified Person is not entitled
to such indemnification. The Managing Trustee may purchase such
insurance as it believes, in the exercise of its discretion, adequately
insures that each Indemnified Person shall be indemnified against any such
loss, liability or damage pursuant to this Section. The rights
accruing to any Indemnified Person by reason of the foregoing shall not be
deemed to exclude any other right to which he may legally be entitled nor
shall anything else contained herein restrict the right of the Managing
Trustee to indemnify or reimburse such Indemnified Person in any proper
case even though not specifically provided for herein, nor shall anything
contained herein restrict the right of any such Indemnified Person to
contribution under applicable law. As security for the timely
and full payment and satisfaction of all of the present and future
obligations of the parties to the Managing Trustee under this Agreement,
including, without limitation, the indemnity obligations hereunder,
whether joint or several, the Trust (and by accepting distributions
hereunder, each Beneficiary) hereby grants to the Managing Trustee a
continuing security interest in and to any and all of the Trust Assets,
whether now existing or hereafter acquired or created, together with the
products and proceeds thereof, all payments and other distributions with
respect thereto, and any and all investments, renewals, substitutions,
modifications and extensions of any and all of the foregoing. The Managing
Trustee shall have all of the rights and remedies of a secured party under
the Uniform Commercial Code. In addition, in the event the
Managing Trustee has not received any payment, indemnity, reimbursement or
other amount due it under this Agreement, then, notwithstanding any other
term or provision of this Agreement, the Managing Trustee may, in its
discretion, set off and apply any of the Trust Assets as is required to
pay and satisfy those obligations. Promptly after the receipt
by the Managing Trustee of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Managing Trustee
shall, if a claim in respect thereof is to be made against any of the
other parties hereto, notify such other parties thereof in writing; but
the failure by the Managing Trustee to give such notice shall not relieve
any party from any liability which such party may have to the Managing
Trustee hereunder. Notwithstanding any obligation to make
payments and deliveries hereunder, the Managing Trustee may retain and
hold for such time as it reasonably deems necessary such amount of the
Trust Assets as it shall from time to time, in its sole discretion,
reasonably deem sufficient to indemnify itself for any such loss or
expense and for any amounts due it hereunder. Except as
required by law or as expressly provided herein, the Managing Trustee
shall be under no duty to institute any suit, or to take any remedial
procedures under this Agreement, or to enter any appearance or in any way
defend any suit in which it may be made a defendant hereunder until it
shall be indemnified as provided above, except as expressly set forth
herein.
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8.6
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Rights of Managing Trustees,
Employees, Independent Contractors and Agents to Own Trust Units or Other
Property and to Engage in Other Business. Any Managing
Trustee, employee, independent contractor or agent, including the Manager,
may own, hold and dispose of Trust Units for its individual account, and
may exercise all rights thereof and thereunder to the same extent and in
the same manner as if it were not a Managing Trustee, employee,
independent contractor or agent. Any Managing Trustee,
employee, independent contractor or agent, including the Manager, may, in
its personal capacity or in the capacity of trustee, manager, officer,
director, shareholder, partner, member, advisor, employee of any Person or
otherwise, have business interests and holdings similar to or in addition
to those relating to the Trust. Any Managing Trustee, employee,
independent contractor or agent of the Trust, including the Manager, may
be a trustee, manager, officer, director, shareholder, partner, member,
advisor, employee or independent contractor of, or otherwise have a direct
or indirect interest in, any Person who may be engaged to render advice or
services to the Trust, and may receive compensation from such Person as
well as compensation as Trustee, employee, independent contractor or
agent, including as Manager, or otherwise hereunder so long as such
interest is disclosed to the Managing Trustee. None of these activities in
and of themselves shall be deemed to conflict with its duties as Managing
Trustee, employee, independent contractor or agent, including as
Manager.
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ARTICLE
IX
PROTECTION
OF PERSONS DEALING WITH THE MANAGING TRUSTEE
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9.1
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Reliance on Statements by the
Managing Trustee. Any Person dealing with the Managing
Trustee shall be fully protected in relying upon the Managing Trustee’s
certificate or instrument signed by the Managing Trustee that it has
authority to take any action under this
Trust.
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ARTICLE
X
REIMBURSEMENT
TO THE MANAGING TRUSTEE
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10.1
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Expenses.
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(a)
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Subject
to Sections 10.1(b) and 10.1(c) below, the Trust shall reimburse the
Managing Trustee and its Affiliates for the actual cost to them of goods
and materials used for or by the Trust and obtained from entities
unaffiliated with the Managing
Trustee.
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(b)
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Except
as provided below, all of the Trust’s expenses shall be billed directly to
and paid by the Trust. The Managing Trustee may be reimbursed for the
administrative services necessary to the prudent operation of the Trust;
provided that the reimbursement shall be at the lower of the Managing
Trustee’s actual cost or the amount the Trust would be required to pay to
independent parties for comparable administrative services in the same
geographic location. No payment or reimbursement will be made for services
for which the Managing Trustee is entitled to compensation by way of a
separate fee. Excluded from allowable reimbursements shall be: (i) rent or
depreciation, utilities, capital equipment, other administrative items;
and (ii) salaries, fringe benefits, travel expenses and other
administrative items incurred by or allocated to any controlling Persons
of the Managing Trustee or its Affiliates. A controlling Person, for
purposes of this Section 10.1(b), shall be deemed to include, but not be
limited to, any Person, whatever his title, who performs functions for the
Managing Trustee similar to those of: (A) chairman or member of the Board
of Directors; (B) executive management, including the President, Chief
Operating Officer, Vice President, Executive Vice President or Senior Vice
President, Corporate Secretary and Treasurer; (C) senior management, such
as the Vice President of an operating division, who reports directly to
executive management; or (D) those holding a five percent (5%) or more
equity interest in Behringer Harvard Advisors I LP or a Person having the
power to direct or cause the direction of the Managing Trustee, whether
through the ownership of voting securities, by contract or otherwise. It
is not intended that every person who carries a title such as vice
president, secretary or treasurer be considered a controlling
Person. The annual report to Beneficiaries filed by the
Managing Trustee shall include a breakdown of the costs reimbursed to the
Managing Trustee pursuant to this
subsection.
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(c)
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The
Managing Trustee or its Affiliates shall pay, at no additional cost to the
Trust (i) overhead expenses of the Managing Trustee and its Affiliates;
(ii) expenses and salaries related to the performance of those services
for which the Managing Trustee and its Affiliates are entitled to
compensation by way of asset management and property management fees or
real estate brokerage commissions related to the sale of Trust Assets
(provided, however, that the foregoing shall in no way limit the payment
or reimbursement of legal, travel, employee-related expenses and other
out-of-pocket expenses which are directly related to a particular Trust
Asset and not prohibited by Section 10.1(b) above); and (iii) all other
administrative expenses which are unrelated to the affairs of the
Trust.
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(d)
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Subject
to the provisions of subsections (b) and (c) of this Section 10.1, the
Trust shall bear all other expenses of the
Trust.
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ARTICLE
XI
THE
MANAGING TRUSTEE AND SUCCESSOR MANAGING TRUSTEE
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11.1
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Number and Qualification of
Managing Trustees. Subject to the provisions of Section
11.3 of the Agreement relating to the period pending the appointment of a
successor Managing Trustee, there shall be one Managing Trustee of this
Trust, which shall be a citizen and resident of or a corporation or other
entity which is incorporated or formed under the laws of a state of the
United States. The number of Managing Trustees may be increased
or decreased from time to time by the Managing
Trustee.
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If any
entity Managing Trustee shall change its name, or shall reorganize or
reincorporate, or shall merge with or into or consolidate with any other entity
such entity Managing Trustee shall be deemed to be a continuing entity and shall
continue to act as a Managing Trustee hereunder with the same liabilities,
duties, powers, titles, discretions and privileges as are herein specified for a
Managing Trustee.
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11.2
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Resignation and
Removal. Except as otherwise provided in this Section
11.2, until the dissolution of the Trust, the Managing Trustee shall not
take any voluntary step to dissolve itself or to resign as Managing
Trustee. The Managing Trustee shall have the right to resign voluntarily
as Managing Trustee or to dissolve itself with the concurrence of the
Beneficiaries by a Majority Vote; provided, however, that the Managing
Trustee may, without the consent of the Beneficiaries, to the extent
permitted by law, substitute in its stead as Managing Trustee any entity
which has, by merger, consolidation or otherwise, acquired substantially
all of such Managing Trustee’s assets, stock or other evidence of equity
interest and continued its business. Any Managing Trustee may
be removed only upon the Majority Vote of Beneficiaries. All
obligations of the Managing Trustee hereunder shall cease and terminate on
the effective date of its resignation or removal and its sole
responsibility thereafter shall be to hold the Trust Assets for a period
of thirty (30) calendar days following the effective date of resignation
or removal, at which time, if a successor Managing Trustee shall have been
appointed and have accepted such appointment in a writing to the
Beneficiaries, then upon written notice thereof given by the successor
Managing Trustee to the resigning Managing Trustee, the resigning Managing
Trustee shall deliver the Trust Assets to the successor Managing Trustee.
If a successor Managing Trustee shall not have been appointed within a
thirty (30) day period from the predecessor Managing Trustee’s resignation
or removal, for any reason whatsoever, the resigning Managing Trustee
shall deliver the Trust Assets to a court of competent jurisdiction in the
county in which the Trust Assets are there being held and give written
notice of the same to the parties
hereto.
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The
resigning Managing Trustee shall be entitled to payment of any unpaid fees
(which shall be pro-rated as of the effective date of the resignation or
removal) and expenses and to reimbursement by the Beneficiaries out of the Trust
Assets for any expenses incurred in connection with the transfer of the Trust
Assets pursuant to and in accordance with the provisions of this Section 11.2 of
this Agreement.
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11.3
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Appointment of
Successor. Should at any time a Managing Trustee resign
or be removed, unless any remaining Managing Trustees shall decrease the
number of Managing Trustees of the Trust pursuant to Section 11.1 hereof,
a vacancy shall be deemed to exist and a successor shall be appointed by
any remaining Managing Trustees. If there are no remaining
Managing Trustees, the Beneficiaries may, pursuant to Article XIII hereof,
call a meeting to appoint a successor Managing Trustee upon the Majority
Vote of Beneficiaries. If such a vacancy is not filled by any
remaining Managing Trustees within ninety (90) days, the remaining
Managing Trustees must notify the Beneficiaries of their inability to fill
such vacancy, and the Beneficiaries may, pursuant to Article XIII hereof,
call a meeting to appoint a successor Managing Trustee by a Majority Vote
of Beneficiaries. Pending the appointment of a successor
Managing Trustee, the remaining Managing Trustee or Trustees then serving
may take any action in the manner set forth in this
Agreement.
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11.4
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Acceptance of Appointment by
Successor Managing Trustee. Any successor Managing
Trustee appointed hereunder shall execute an instrument accepting such
appointment hereunder. Thereupon such successor Managing
Trustee shall, without any further act, become vested with all the
estates, properties, rights, powers, trusts and duties of his or its
predecessor in the Trust hereunder with like effect as if originally named
therein.
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11.5
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Bonds. No
bond shall be required of the original Managing Trustee hereunder, and no
bond shall be required of any successor Managing Trustee
hereunder. If a bond is required by law, no surety or security
with respect to such bond shall be required unless required by
law.
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ARTICLE
XII
CONCERNING
THE BENEFICIARIES
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12.1
|
Evidence of Action by
Beneficiaries. Whenever in this Agreement it is provided
that the Beneficiaries may take any action (including the making of any
demand or request, the giving of any notice, consent, or waiver, the
removal of a Trustee, the appointment of a successor Trustee, or the
taking of any other action), the fact that at the time of taking any such
action such Beneficiaries have joined therein may be evidenced (i) by
any instrument or any number of instruments of similar tenor executed by
Beneficiaries in person or by agent or attorney appointed in writing, or
(ii) by the record of the Beneficiaries voting in favor thereof at
any meeting of Beneficiaries duly called and held in accordance with the
provisions of Article XIII of this agreement. Such meeting or
writing may take any form permitted under Delaware
law.
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12.2
|
Limitation on Suits by
Beneficiaries. No Beneficiary shall have any right by
virtue of any provision of this Agreement to institute any action or
proceeding at law or in equity against any party other than the Trustees
upon or under or with respect to any Trust Assets or the agreements
relating to or forming part of any Trust Assets, and the Beneficiaries do
hereby waive any such right.
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12.3
|
Requirement of
Undertaking. The Managing Trustee may request any court
to require, and any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Agreement, or in any
suit against the Managing Trustee for any action taken or omitted by it as
Managing Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant;
provided, however, that the provisions of this Section shall not apply to
any suit by the Managing Trustee.
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16
ARTICLE
XIII
MEETING
OF BENEFICIARIES
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13.1
|
Purpose of
Meetings. A meeting of the Beneficiaries may be called
at any time and from time to time pursuant to the provisions of this
Article for the purposes of taking any action which the terms of this
Agreement permit a Beneficiary having a specified aggregate Beneficial
Interest to take either acting alone or with the Managing
Trustee.
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13.2
|
Meeting Called by the Managing
Trustee. The Managing Trustee may at any time call a
meeting of the Beneficiaries of the Trust to be held at such time and at
such place as the Managing Trustee shall determine. Written
notice of every meeting of the Beneficiaries shall be given by the
Managing Trustee (except as provided in Section 13.3 of this Agreement),
which written notice will set forth the time and place of such meeting and
in general terms the action proposed to be taken at such meeting, and
shall be mailed not more than sixty (60) nor less than fifteen (15) days
before such meeting is to be held to all of the Beneficiaries of record
not more than fifty (50) days nor less than ten (10) days before the date
of such meeting. The notice shall be directed to the Beneficiaries at
their respective addresses as they appear in the records of the
Trust.
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13.3
|
Meeting Called on Request of
Beneficiaries. Within ten (10) days after written
request to the Managing Trustee by Beneficiaries holding Trust Units
representing at least 10% of the aggregate Beneficial Interests to call a
meeting of all of the Beneficiaries, which written request shall specify
in reasonable detail the action proposed to be taken, the Managing Trustee
shall proceed under the provisions of Section 13.2 of this Agreement to
call a meeting of the
Beneficiaries.
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13.4
|
Persons Entitled to Vote at
Meeting of Beneficiaries. Each Beneficiary shall be
entitled to vote at a meeting of the Beneficiaries of the Trust either in
person or by his proxy duly authorized in writing. The vote of
each Beneficiary shall be weighted based on the number of Trust Units held
by each Beneficiary determined pursuant to the List described in Section
3.1, as such list is amended hereby. The signature of the
Beneficiary on such written authorization need not be witnessed or
notarized.
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13.5
|
Quorum. At
any meeting of Beneficiaries, the presence in person or by proxy of
Beneficiaries holding Trust Units representing at least a majority of the
aggregate Beneficial Interests shall constitute a quorum; but if less than
a quorum be present, Beneficiaries having a majority of the Beneficial
Interests so present and so represented may adjourn such meeting with the
same effect and for all intents and purposes as though a quorum had been
present.
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13.6
|
Adjournment of
Meeting. Subject to Section 13.5 hereof, any meeting of
Beneficiaries of the Trust may be adjourned from time to time and a
meeting may be held at such adjourned time and place without further
notice.
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13.7
|
Conduct of
Meeting. At each meeting of the Beneficiaries, the
Beneficiaries present or represented by proxy may adopt such rules for the
conduct of such meeting as they shall deem appropriate, provided that such
rules shall not be inconsistent with the provisions of this
Agreement.
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ARTICLE
XIV
AMENDMENTS
|
14.1
|
Consent of
Beneficiaries. Upon the Majority Vote of Beneficiaries,
or such greater percentage as shall be specified in this Agreement for the
taking of an action by the Beneficiaries under the affected provision of
this Agreement, the Managing Trustee shall promptly make and execute a
declaration amending this Agreement for the purpose of adding any material
provisions to or changing in any material manner or eliminating any of the
material provisions of this Agreement or amendments thereto as they apply
to the Trust; provided, however, that no such amendment shall affect the
Beneficiaries’ rights to receive their pro rata shares of the Trust Assets
at the time of distribution; provided further, however, that, so long as
such amendment has been approved by the Managing Trustee, no consent of
the Beneficiaries shall be required with respect to any amendment made (a)
solely for the purpose of facilitating the transferability by
Beneficiaries of Trust Units, (b) to comply with applicable laws,
including tax laws or to satisfy any requirements, conditions, guidelines
or opinions contained in any opinion, directive, order, ruling or
regulation of the Commission, the Internal Revenue Service or any other
U.S. federal or state or non-U.S. governmental agency, compliance with
which the Managing Trustee deems to be in the best interest of the
Beneficiaries as a whole, (c) to obtain no-action assurances from the
staff of the Commission regarding relief from registration and reporting
requirements under the Exchange Act, which relief the Managing Trustee
deems to be in the best interest of the Beneficiaries as a whole, (d) to
cause the Trust to be treated as a liquidating trust under Treasury
Regulation Section 301.7701-4(d) and any analogous provision of state or
local law, if the Managing Trustee deems it to be in the best interests of
the Beneficiaries as a whole, or (e) to cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent with any other
provision herein, or to add any other provision with respect to matters or
questions arising under this Agreement which will not be inconsistent with
the provisions of this Agreement.
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17
Notwithstanding
anything to the contrary in this Agreement, this Agreement shall in no event be
amended to change the limited liability of the Beneficiaries without the vote or
consent of all of the Beneficiaries, nor shall this Agreement be amended to
diminish the rights or benefits to which any of the Managing Trustee or
Beneficiaries are entitled under the provisions of this Agreement, without the
consent of a majority of the Trust Units held by the Beneficiaries who would be
adversely affected thereby, and in the case of the Managing Trustee being
singularly affected, then by the Managing Trustee.
No
amendment of this Agreement which affects the rights, duties, liabilities,
indemnities or immunities of the Resident Trustee, shall be effective without,
in each specific instance, the prior written approval of the Resident
Trustee.
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14.2
|
Effect of
Amendment. Upon the execution of any such declaration of
amendment by the Managing Trustee, this Agreement shall be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties, and immunities of the Managing
Trustee and the Beneficiaries under this Agreement with respect to the
Trust shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modification and amendments, and all the
terms and conditions of any such amendment shall be thereby deemed to be
part of the terms and conditions of this Agreement for any and all
purposes.
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|
14.3
|
Managing Trustee’s Declining to
Execute Documents. If, in the reasonable opinion of the
Managing Trustee, any document required to be executed pursuant to the
terms of Section 14.2 hereof adversely affects any right, obligation,
immunity or indemnity in favor of the Managing Trustee under this
Agreement, the Managing Trustee may in its discretion decline to execute
such document.
|
ARTICLE
XV
MISCELLANEOUS
PROVISIONS
|
15.1
|
Filing
Documents. This Agreement shall be filed or recorded in
such office or offices as the Managing Trustee may determine to be
necessary or desirable. A copy of this Agreement and all
amendments thereof shall be maintained in the office of the Managing
Trustee. The Managing Trustee shall file or record any
amendment of this Agreement and any instrument which relates to any change
in the office of the Managing
Trustee.
|
|
15.2
|
Beneficiaries Have No Rights or
Privileges as Holders of Partnership Units. Except as
expressly provided in this Agreement or under applicable law, the
Beneficiaries shall have no rights or privileges attributable to their
former status as holders of Partnership
Units.
|
|
15.3
|
Laws as to
Construction. The Trustees, and the Beneficiaries (by
their acceptance of any distributions made to them pursuant to this
Agreement), consent and agree that this Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of
Delaware, without reference to the choice of law principles
thereof.
|
|
15.4
|
Severability. In
the event any provision of this Agreement or the application thereof to
any Person or circumstances shall be finally determined by a court of
proper jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to
persons or circumstances other than those as to which it is held invalid
or unenforceable, shall not be affected thereby, and each provision of
this Agreement shall be valid and enforced to the fullest extent permitted
by law.
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|
15.5
|
Notices. Any
notice or other communication shall be in writing and shall be deemed to
have been sufficiently given, for all purposes, when delivered personally
or sent by fax or 48 hours after being sent by a nationally-recognized
courier or deposited in the U.S. mail, as certified or registered mail,
with postage prepaid.
|
If
to the Managing Trustee:
Behringer
Harvard Advisors I LP
00000
Xxxxxx Xxxxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Fax: 000-000-0000
Attn: Chief
Legal Officer
18
If to the Resident Trustee:
CSC Trust
Company of Delaware
0000
Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Fax: 000-000-0000
Attn: Trust
Administration
If
to the Beneficiary:
The
address of such Beneficiary as shown in the records of the Trust.
|
15.6
|
Counterparts. This
Agreement may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but
one and the same instrument.
|
[The
remainder of this page is left intentionally blank.]
19
IN
WITNESS WHEREOF, the General Partners of the Grantor have caused this Agreement
to be executed by an authorized officer, and the Trustees hereunder have
executed this Agreement, as Trustees and not as individuals, as of the date
first set forth herein.
|
GRANTOR:
|
|||
|
Behringer
Harvard Mid-Term Value Enhancement Fund I LP
|
|||
|
By:
Behringer Harvard Advisors I LP, its General Partner
|
|||
|
By:
|
/s/ Xxxxxx X. Xxxxxxx,
III
|
||
|
Name:
|
Xxxxxx
X. Xxxxxxx, III
|
||
|
Title:
|
Executive
Vice President-Corporate
|
||
|
Development
and Legal and Assistant Secretary
|
|||
|
/s/ Xxxxxx X. Xxxxxxxxx
|
|||
|
Xxxxxx
X. Xxxxxxxxx, its General Partner
|
|||
|
MANAGING
TRUSTEE:
|
|||
|
Behringer
Harvard Advisors I LP
|
|||
|
By:
|
/s/ Xxxxxx X. Xxxxxxx,
III
|
||
|
Name:
|
Xxxxxx
X. Xxxxxxx, III
|
||
|
Title:
|
Executive
Vice President-Corporate
|
||
|
Development
and Legal and Assistant Secretary
|
|||
|
RESIDENT
TRUSTEE:
|
|||
|
CSC
Trust Company of Delaware
|
|||
|
By:
|
/s/ Xxxx X. Xxxxxxx
|
||
|
Name:
|
Xxxx
X. Xxxxxxx
|
||
|
Title:
|
Vice
President
|
||
