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EXHIBIT 10.1
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
PRESIDIO GOLF LIMITED PARTNERSHIP
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Dated as of _________, 1998
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TABLE OF CONTENTS
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ARTICLE PAGE
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I DEFINED TERMS......................................................................... 1
II ORGANIZATIONAL MATTERS................................................................14
2.1 Withdrawal of Original General Partner/Continuation..............................14
2.2 Name.............................................................................14
2.3 Registered Office and Agent; Principal Office....................................15
2.4 Term.............................................................................15
III
PURPOSE...............................................................................15
3.1 Purpose and Business.............................................................15
3.2 Powers...........................................................................15
IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP
INTERESTS.............................................................................16
4.1 Capital Contributions of the Partners............................................16
4.2 Issuances of Partnership Interests...............................................16
4.3 No Preemptive Rights.............................................................18
4.4 Other Contribution Provisions....................................................18
4.5 No Interest on Capital...........................................................18
V DISTRIBUTIONS.........................................................................18
5.1 Requirement and Characterization of Distributions................................18
5.2 Amounts Withheld.................................................................19
5.3 Distributions Upon Liquidation...................................................19
5.4 Revisions to Reflect Issuance of Partnership Interests...........................19
VI ALLOCATIONS...........................................................................19
6.1 Allocations for Capital Account Purposes.........................................19
6.2 Revisions to Allocations to Reflect Issuance of Partnership Interests............20
VII MANAGEMENT AND OPERATIONS OF BUSINESS.................................................21
7.1 Management.......................................................................21
7.2 Certificate of Limited Partnership...............................................25
7.3 Title to Partnership Assets......................................................26
7.4 Reimbursement of the General Partners............................................26
7.5 Ownership of Limited Partnership Interests by the General Partner;
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Relationship of Shares to Partnership Units; Funding Debt........................27
7.6 Transactions with Affiliates.....................................................29
7.7 Indemnification..................................................................29
7.8 Liability of the General Partner.................................................31
7.9 Other Matters Concerning the General Partner.....................................32
7.10 Reliance by Third Parties.......................................................34
7.11 Restrictions on General Partner's Authority.....................................34
7.12 Loans by Third Parties..........................................................34
VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS............................................35
8.1 Limitation of Liability..........................................................35
8.2 Management of Business...........................................................35
8.3 Return of Capital................................................................35
8.4 Rights of Limited Partners Relating to the Partnership...........................35
8.5 Redemption Right.................................................................37
IX BOOKS, RECORDS, ACCOUNTING AND REPORTS................................................39
9.1 Records and Accounting...........................................................39
9.2 Fiscal Year......................................................................39
9.3 Reports..........................................................................39
X TAX MATTERS...........................................................................40
10.1 Preparation of Tax Returns......................................................40
10.2 Tax Elections...................................................................40
10.3 Tax Matters Partner.............................................................40
10.4 Organizational Expenses.........................................................42
10.5 Withholding.....................................................................42
XI TRANSFERS AND WITHDRAWALS.............................................................43
11.1 Transfer........................................................................43
11.2 Transfers of Partnership Interests of General Partners..........................43
11.3 Limited Partners' Rights to Transfer............................................44
11.4 Substituted Limited Partners....................................................46
11.5 Assignees.......................................................................47
11.6 General Provisions..............................................................47
XII ADMISSION OF PARTNERS.................................................................49
12.1 Admission of a Successor General Partner........................................49
12.2 Admission of Additional Limited Partners........................................49
12.3 Amendment of Agreement and Certificate of Limited Partnership...................50
XIII DISSOLUTION AND LIQUIDATION...........................................................50
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13.1 Dissolution.....................................................................50
13.2 Winding Up......................................................................51
13.3 Compliance with Timing Requirements of Regulations..............................52
13.4 Deemed Distribution and Recontribution..........................................53
13.5 Rights of Limited Partners......................................................53
13.6 Notice of Dissolution...........................................................53
13.7 Cancellation of Certificate of Limited Partnership..............................53
13.8 Reasonable Time for Winding Up..................................................53
13.9 Waiver of Partition.............................................................54
13.10 Liability of Liquidator........................................................54
XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS..........................................54
14.1 Amendments......................................................................54
14.2 Meetings of the Partners........................................................55
XV GENERAL PROVISIONS....................................................................56
15.1 Addresses and Notice............................................................56
15.2 Titles and Captions.............................................................56
15.3 Pronouns and Plurals............................................................56
15.4 Further Action..................................................................57
15.5 Binding Effect..................................................................57
15.6 Creditors.......................................................................57
15.7 Waiver..........................................................................57
15.8 Counterparts....................................................................57
15.9 Applicable Law..................................................................57
15.10 Invalidity of Provisions.......................................................57
15.11 Power of Attorney..............................................................58
15.12 Entire Agreement...............................................................59
15.13 No Rights as Shareholders......................................................59
15.14 Outside Activities of Partners.................................................59
15.15 Limitation to Preserve REIT Status.............................................60
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EXHIBIT A
PARTNERS AND PARTNERSHIP INTERESTS
EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
EXHIBIT C
SPECIAL ALLOCATION RULES
EXHIBIT D
NOTICE OF REDEMPTION
EXHIBIT E
VALUE OF CONTRIBUTED PROPERTY
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
PRESIDIO GOLF LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
___________, 1998, is entered into by and among Presidio Golf Trust, a Maryland
real estate investment trust, as the General Partner, and the Persons whose
names are set forth on Exhibit A hereto as Limited Partners, together with any
other Persons who become Partners in the Partnership as provided herein.
WHEREAS, the Partnership was formed as a limited partnership under the
laws of the State of Delaware by a Certificate of Limited Partnership filed with
the Secretary of State of Delaware on October 17, 1997, and prior to the date
hereof was governed by that certain Agreement of Limited Partnership of APGM
Limited Partnership (the "Original Agreement"), dated October 17, 1997, as
amended, by and between Xxxxxx Xxxxxx Golf Management, LLC, a Delaware limited
liability company, as the sole general partner (the "Original General Partner"),
and Xxxxxx Management, LLC, a Delaware limited liability company, as the sole
limited partner; and
WHEREAS, the parties hereto now desire to cause: (i) the Original
General Partner to withdraw as the general partner of the Partnership and to be
admitted as a Limited Partner of the Partnership; (ii) the name of the
Partnership to be changed to "Presidio Golf Limited Partnership" and (iii) the
Original Agreement to be restated in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree to
form the Partnership as a limited partnership under the Delaware Revised Uniform
Limited Partnership Act, as amended from time to time, as follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
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"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 12.2 hereof and who is shown as such on
the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each Partnership Year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii)
decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704- 1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Adjusted Capital Account as of
the end of the relevant Partnership Year.
"Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Exhibit B.
"Adjustment Date" has the meaning set forth in Section 4.2.B.
"Affiliate" means, with respect to any Person, (i) any Person directly
or indirectly controlling, controlled by or under common control with such
Person, (ii) any Person owning or controlling ten percent (10%) or more of the
outstanding voting interests of such Person, (iii) any Person of which such
Person owns or controls ten percent (10%) or more of the voting interests or(iv)
any officer, director, general partner or trustee of such Person or any Person
referred to in clauses (i), (ii), and (iii) above. For purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreed Value" means (i) in the case of any Contributed Property
contributed to the Partnership, the amount set forth on Exhibit E as the Agreed
Value of such Property; (ii) in the case of any other Contributed Property, the
704(c) Value of such property as of the time of its contribution to the
Partnership, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed; and
(iii) in the case of any property distributed to a Partner by the Partnership,
the Partnership's Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the regulations
thereunder.
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"Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented or restated from time to time.
"Assignee" means a Person to whom one or more Partnership Units have
been transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5.
"Available Cash" means, with respect to any period for which such
calculation is being made:
(a) all cash revenues and funds received by the Partnership from
whatever source (excluding the proceeds of any Capital Contribution) plus the
amount of any reduction (including, without limitation, a reduction resulting
because the General Partner determines such amounts are no longer necessary) in
reserves of the Partnership, which reserves are referred to in clause (b)(iv)
below;
(b) less the sum of the following (except to the extent made with the
proceeds of any Capital Contribution):
(i) all interest, principal and other debt payments made
during such period by the Partnership,
(ii) all cash expenditures (including capital expenditures)
made by the Partnership during such period,
(iii) investments in any entity (including loans made thereto)
to the extent that such investments are permitted under this Agreement and are
not otherwise described in clauses (b)(i) or (ii), and
(iv) the amount of any increase in reserves established during
such period which the General Partner determines is necessary or appropriate in
its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any
cash received or reductions in reserves, or take into account any disbursements
made or reserves established, after commencement of the dissolution and
liquidation of the Partnership.
"Book-Tax Disparities" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property shall be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B and the
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hypothetical balance of such Partner's Capital Account computed as if it had
been maintained strictly in accordance with federal income tax accounting
principles.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois are authorized or required by law to
close.
"Capital Account" means the Capital Account maintained for a Partner
pursuant to Exhibit B.
"Capital Contribution" means, with respect to any Partner, any cash,
cash equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Section
4.1 or 4.2.
"Carrying Value" means (i) with respect to a Contributed Property or
Adjusted Property, the 704(c) Value of such property reduced (but not below
zero) by all Depreciation with respect to such Contributed Property or Adjusted
Property, as the case may be, charged to the Partners' Capital Accounts and (ii)
with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to time in
accordance with Exhibit B, and to reflect changes, additions (including capital
improvements thereto) or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed appropriate
by the General Partner.
"Cash Amount" means an amount of cash equal to the Value on the
Valuation Date of the Shares Amount.
"Certificate" means the Certificate of Limited Partnership relating to
the Partnership filed in the office of the Delaware Secretary of State, as
amended from time to time in accordance with the terms hereof and the Act.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Consent" means the consent or approval of a proposed action by a
Partner given in accordance with Section 14.2.
"Consent of the Outside Limited Partners" means the Consent of Limited
Partners holding a majority of the Percentage Interests held by Limited Partners
(excluding for this purpose any Limited Partnership Interests held directly or
indirectly by the General Partner).
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"Contributed Property" means each property or other asset contributed
to the Partnership, in such form as may be permitted by the Act, but excluding
cash contributed or deemed contributed to the Partnership. Once the Carrying
Value of a Contributed Property is adjusted pursuant to Exhibit B, such property
shall no longer constitute a Contributed Property for purposes of Exhibit B, but
shall be deemed an Adjusted Property for such purposes.
"Conversion Factor" means 1.0; provided that, if the General Partner
Entity (i) declares or pays a dividend on its outstanding Shares in Shares or
makes a distribution to all holders of its outstanding Shares in Shares, (ii)
subdivides its outstanding Shares or (iii) combines its outstanding Shares into
a smaller number of Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall be
the number of Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination; and provided
further that if an entity shall cease to be the General Partner Entity (the
"Predecessor Entity") and another entity shall become the General Partner Entity
(the "Successor Entity"), the Conversion Factor shall be adjusted by multiplying
the conversion factor by a fraction, the numerator of which is the Value of one
Share of the Predecessor Entity, determined as of the date when the Successor
Entity becomes the General Partner Entity, and the denominator of which is the
Value of one Share of the Successor Entity, determined as of that same date.
(For purposes of the second proviso in the preceding sentence, if any
shareholders of the Predecessor Entity will receive consideration in connection
with the transaction in which the Successor Entity becomes the General Partner
Entity, the numerator in the fraction described above for determining the
adjustment to the Conversion Factor (that is, the Value of one Share of the
Predecessor Entity) shall be the sum of the greatest amount of cash and the fair
market value (as determined in good faith by the General Partner) of any
securities and other consideration that the holder of one Share in the
Predecessor Entity could have received in such transaction (determined without
regard to any provisions governing fractional shares.) Any adjustment to the
Conversion Factor shall become effective immediately after the effective date of
the event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are to
be made only to the extent necessary to avoid unintended dilution or
anti-dilution as a result of transactions in which Shares are issued, redeemed
or exchanged without a corresponding issuance, redemption or exchange of
Partnership Units and (y) if a Specified Redemption Date shall fall between the
record date and the effective date of any event of the type described above,
that the Conversion Factor applicable to such redemption shall be adjusted to
take into account such event.
"Convertible Funding Debt" has the meaning set forth in Section 7.5.F.
"Debt" means, as to any Person, as of any date of determination, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (ii)
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all amounts owed by such Person to banks or other Persons in respect of
reimbursement obligations under letters of credit, surety bonds and other
similar instruments guaranteeing payment or other performance of obligations by
such Person, (iii) all indebtedness for borrowed money or for the deferred
purchase price of property or services secured by any lien on any property owned
by such Person, to the extent attributable to such Person's interest in such
property, even though such Person has not assumed or become liable for the
payment thereof, and (iv) obligations of such Person incurred in connection with
entering into a lease which, in accordance with generally accepted accounting
principles, should be capitalized.
"Declaration of Trust" means the Declaration of Trust of Presidio Golf
Trust filed in the State of Maryland on April 20, 1998, as amended and/or
amended and restated from time to time.
"Deemed Partnership Interest Value" means, as of any date with respect
to any class of Partnership Interests, the Deemed Value of the Partnership
Interest of such class multiplied by the applicable Partner's Percentage
Interest of such class.
"Deemed Value of the Partnership Interest" means, as of any date with
respect to any class of Partnership Interests, (a) if the common shares of
beneficial interest (or other comparable equity interests) of the General
Partner Entity are Publicly Traded, the quotient of (i) the total number of
shares of beneficial interest (or other comparable equity interest) of the
General Partner Entity corresponding to such class of Partnership Interest (as
provided for in Section 4.2.B) issued and outstanding as of the close of
business on such date (excluding any treasury shares) multiplied by the Value of
a share of such beneficial interest (or other comparable equity interest) on
such date divided by (ii) the Percentage Interest of the General Partner in such
class of Partnership Interests on such date, and (b) otherwise, the aggregate
Value of such class of Partnership Interests determined as set forth in the
fourth and fifth sentences of the definition of Value.
"Depreciation" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year, except that if the Carrying
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.
"Effective Date" means the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"ERISA Plan" means an "employee benefit plan" as that term is defined
in 29 U.S.C. Section 1002(3), and which is not exempt from regulation under
ERISA by virtue of 29 U.S.C. Section 1003(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Funding Debt" means the incurrence of any Debt by or on behalf of the
General Partner Entity for the purpose of providing funds to the Partnership.
"General Partner" means Presidio Golf Trust or its successors as
general partners.
"General Partner Entity" means the General Partner; provided, however,
that if (i) the common shares of beneficial interest (or other comparable equity
interests) of the General Partner are at any time not Publicly Traded and (ii)
the common shares of beneficial interest (or other comparable equity interests)
of an entity that owns, directly or indirectly, fifty percent (50%) or more of
the common shares of beneficial interest (or other comparable equity interests)
of the General Partner are Publicly Traded, the term "General Partner Entity"
shall refer to such entity whose common shares of beneficial interest (or other
comparable equity securities) are Publicly Traded. If both requirements set
forth in clauses (i) and (ii) above are not satisfied, then the term "General
Partner Entity" shall mean the General Partner.
"General Partner Payment" has the meaning set forth in Section 15.15
hereof.
"General Partnership Interest" means a Partnership Interest held by a
General Partner that is a general partnership interest. A General Partnership
Interest may be expressed as a number of Partnership Units.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.
"Immediate Family" means, with respect to any natural Person, such
natural Person's spouse, parents, descendants, nephews, nieces, brothers, and
sisters.
"Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her Person
or estate, (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter, (iii) as to any partnership or limited liability
company which is a Partner, the dissolution and commencement of winding up of
the partnership or limited liability company, (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership, (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee) or (vi) as
to any Partner, the bankruptcy of such Partner. For
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purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (b) the Partner is adjudged as
bankrupt or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver of liquidator has not been vacated or stayed within ninety
(90) days of such appointment or (h) an appointment referred to in clause (g) is
not vacated within ninety (90) days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding by
reason of its status as (A) a General Partner, (B) a Limited Partner, or (C) a
trustee, director or officer of the Partnership, or any General Partner and (ii)
such other Persons (including Affiliates of any General Partner, a Limited
Partner or the Partnership) as the General Partner may designate from time to
time (whether before or after the event giving rise to potential liability), in
its sole and absolute discretion.
"Limited Partner" means any Person named as a Limited Partner in
Exhibit A, as such Exhibit may be amended from time to time, or any Substituted
Limited Partner or Additional Limited Partner, in such Person's capacity as a
Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of a
Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and includes any and all benefits
to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with
the terms and provisions of this Agreement. A Limited Partnership Interest may
be expressed as a number of Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1.
"Liquidator" has the meaning set forth in Section 13.2.A.
"Net Income" means, for any taxable period, the excess, if any, of the
Partnership's items of income and gain for such taxable period over the
Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in
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accordance with Exhibit B. If an item of income, gain, loss or deduction that
has been included in the initial computation of Net Income is subjected to the
special allocation rules in Exhibit C, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"Net Loss" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction for such taxable period over the
Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Loss is subjected to the special allocation
rules in Exhibit C, Net Loss or the resulting Net Income, whichever the case may
be, shall be recomputed without regard to such item.
"New Securities" means (i) any rights, options, warrants or convertible
or exchangeable securities having the right to subscribe for or purchase shares
of beneficial interest (or other comparable equity interest) of the General
Partner, excluding grants under any Share Option Plan, or (ii) any Debt issued
by the General Partner that provides any of the rights described in clause (i).
"Nonrecourse Built-in Gain" means, with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such
properties were disposed of in a taxable transaction in full satisfaction of
such liabilities and for no other consideration.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means a Notice of Redemption substantially in
the form of Exhibit D.
"Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partners and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704- 2(i)(3).
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"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704- 2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704- 2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act upon
the terms and conditions set forth in this Agreement, or any successor to such
limited partnership.
"Partnership Interest" means a Limited Partnership Interest or a
General Partnership Interest and includes any and all benefits to which the
holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Partnership Interest may be expressed as a
number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704- 2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).
"Partnership Record Date" means the record date established by the
General Partner either (i) for the distribution of Available Cash pursuant to
Section 5.1 hereof, which record date shall be the same as the record date
established by the General Partner Entity for a distribution to its shareholders
of some or all of its portion of such distribution, or (ii) if applicable, for
determining the Partners entitled to vote on or consent to any proposed action
for which the consent or approval of the Partners is sought pursuant to Section
14.2 hereof.
"Partnership Unit" means a fractional share of the Partnership
Interests of all Partners issued pursuant to Sections 4.1 and 4.2, and includes
any classes or series of Partnership Units established after the date hereof.
The number of Partnership Units outstanding are set forth in Exhibit A, as such
Exhibit may be amended from time to time.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Percentage Interest" means, as to a Partner holding a class of
Partnership Interests, its interest in such class, determined by dividing the
Partnership Units of such class owned by such Partner by the total number of
Partnership Units of such class then outstanding as specified in Exhibit A, as
such exhibit may be amended from time to time, multiplied by the aggregate
Percentage Interest allocable to such class of Partnership Interests. If the
Partnership shall at any
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time have outstanding more than one class of Partnership Interests, the
Percentage Interest attributable to each class of Partnership Interests shall be
determined as set forth in Section 4.2.B.
"Person" means a natural person, partnership (whether general or
limited), trust, estate, association, corporation, limited liability company,
unincorporated organization, custodian, nominee or any other individual or
entity in its own or any representative capacity.
"Predecessor Entity" has the meaning set forth in the definition of
"Conversion Factor" herein.
"Publicly Traded" means listed or admitted to trading on the New York
Stock Exchange, the American Stock Exchange or another national securities
exchange or designated for quotation on the NASDAQ National Market, or any
successor to any of the foregoing.
"Qualified REIT Subsidiary" means any Subsidiary of the General Partner
that is a "qualified REIT subsidiary" within the meaning of Section 856(i) of
the Code.
"Qualified Transferee" means an "Accredited Investor" as defined in
Rule 501 promulgated under the Securities Act.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Redeeming Partner" has the meaning set forth in Section 8.5.A.
"Redemption Amount" means either the Cash Amount or the Shares Amount,
as determined by the General Partner, in its sole and absolute discretion;
provided that if the Shares are not Publicly Traded at the time a Redeeming
Partner exercises its Redemption Right, the Redemption Amount shall be paid only
in the form of the Cash Amount unless the Redeeming Partner, in its sole and
absolute discretion, consents to payment of the Redemption Amount in the form of
the Shares Amount. A Redeeming Partner shall have no right, without the General
Partner's consent, in its sole and absolute discretion, to receive the
Redemption Amount in the form of the Shares Amount.
"Redemption Right" has the meaning set forth in Section 8.5.A.
"Regulation" or "Regulations" means the Income Tax Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
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"REIT" means a real estate investment trust under Section 856 of the
Code.
"REIT Requirements" has the meaning set forth in Section 5.1.A.
"Residual Gain" or "Residual Loss" means any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate Book- Tax
Disparities.
"Safe Harbor" has the meaning set forth in Section 11.6.F.
"Securities Act" means the Securities Act of 1933, as amended.
"704(c) Value" of any Contributed Property means the fair market value
of such property at the time of contribution as determined by the General
Partner using such reasonable method of valuation as it may adopt; provided,
however, subject to Exhibit B, the General Partner shall, in its sole and
absolute discretion, use such method as they deem reasonable and appropriate to
allocate the aggregate of the 704(c) Value of Contributed Properties in a single
or integrated transaction among each separate property on a basis proportional
to its fair market values.
"Share" means a share of beneficial interest (or other comparable
equity interest) of the General Partner Entity. Shares may be issued in one or
more classes or series in accordance with the terms of the Declaration of Trust
(or, if the General Partner is not the General Partner Entity, the
organizational documents of the General Partner Entity). If there is more than
one class or series of Shares, the term "Shares" shall, as the context requires,
be deemed to refer to the class or series of Shares that correspond to the class
or series of Partnership Interests for which the reference to Shares is made.
"Shares Amount" means a number of Shares equal to the product of the
number of Partnership Units offered for redemption by a Redeeming Partner times
the Conversion Factor; provided that, if the General Partner Entity issues to
all holders of Shares rights, options, warrants or convertible or exchangeable
securities entitling such holders to subscribe for or purchase Shares or any
other securities or property (collectively, the "rights"), then the Shares
Amount shall also include such rights that a holder of that number of Shares
would be entitled to receive.
"Share Option Plan" means any equity incentive plan of the General
Partner, the Partnership and/or any Affiliate of the Partnership.
"Specified Redemption Date" means the tenth Business Day after receipt
by the General Partner of a Notice of Redemption; provided that, if the Shares
are not Publicly Traded, the
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Specified Redemption Date means the thirtieth Business Day after the date of
receipt by the General Partner of a Notice of Redemption.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, trust, partnership or joint venture, or other entity
of which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests is owned, directly or indirectly, by such
Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.
"Successor Entity" has the meaning set forth in the definition of
"Conversion Factor" herein.
"Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership for cash or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership for
cash.
"Termination Transaction" has the meaning set forth in Section 11.2.B.
"Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the fair
market value of such property (as determined under Exhibit B) as of such date,
over (ii) the Carrying Value of such property (prior to any adjustment to be
made pursuant to Exhibit B) as of such date.
"Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the Carrying
Value of such property (prior to any adjustment to be made pursuant to Exhibit
B) as of such date, over (ii) the fair market value of such property (as
determined under Exhibit B) as of such date.
"Valuation Date" means the date of receipt by the General Partner of a
Notice of Redemption or, if such date is not a Business Day, the first Business
Day thereafter.
"Value" means, with respect to any outstanding Shares of the General
Partner Entity that are Publicly Traded, the average of the daily market price
for the ten consecutive trading days immediately preceding the date with respect
to which value is being determined. The market price for each such trading day
shall be the closing price, regular way, on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices on such day.
If the outstanding Shares of the General Partner Entity are Publicly Traded and
the Shares Amount includes rights that a holder of Shares would be entitled to
receive, then the Value of such rights shall be determined by the General
Partner acting in good faith on the basis of such quotations and
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other information as it considers, in its reasonable judgment, appropriate. If
the Shares of the General Partner Entity are not Publicly Traded, the Value of
the Shares Amount per Partnership Unit offered for redemption (which will be the
Cash Amount per Partnership Unit offered for redemption payable pursuant to
Section 8.5.A) means the amount that a holder of one Partnership Unit would
receive if each of the assets of the Partnership were to be sold for its fair
market value on the Specified Redemption Date, the Partnership were to pay all
of its outstanding liabilities, and the remaining proceeds were to be
distributed to the Partners in accordance with the terms of this Agreement. Such
Value shall be determined by the General Partner, acting in good faith and based
upon a commercially reasonable estimate of the amount that would be realized by
the Partnership if each asset of the Partnership (and each asset of each
partnership, limited liability company, trust, joint venture or other entity in
which the Partnership owns a direct or indirect interest) were sold to an
unrelated purchaser in an arms' length transaction where neither the purchaser
nor the seller were under economic compulsion to enter into the transaction
(without regard to any discount in value as a result of the Partnership's
minority interest in any property or any illiquidity of the Partnership's
interest in any property). In connection with determining the Deemed Value of
the Partnership Interest for purposes of determining the number of additional
Partnership Units issuable upon a Capital Contribution funded by an underwritten
public offering or an arm's length private placement of shares of beneficial
interest (or other comparable equity interest) of the General Partner, the Value
of such shares shall be the public offering or arm's length private placement
price per share of such class of beneficial interest (or other comparable equity
interest) sold.
ARTICLE II
ORGANIZATIONAL MATTERS
2.1 WITHDRAWAL OF ORIGINAL GENERAL PARTNER/CONTINUATION.
The Original General Partner hereby withdraws as General Partner and is
hereby admitted to the Partnership as a Limited Partner. Presidio Golf Trust, a
Maryland real estate investment trust, is hereby admitted to the Partnership as
General Partner. The Partners hereby agree to continue the Partnership pursuant
to the provisions of the Act and upon the terms and conditions set forth in this
Agreement.
2.2 NAME.
The name of the Partnership is Presidio Golf Limited Partnership. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of any of the General
Partners or any Affiliate thereof. The words "Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be included in the Partnership's name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.
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2.3 REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE.
The address of the registered office of the Partnership in the State of
Delaware shall be located at Corporation Service Company, 0000 Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, and the registered agent for service of process on
the Partnership in the State of Delaware at such registered office shall be
Corporation Service Company. The principal office of the Partnership shall be
Building 000, Xxxxxxxxxx Xxxxxx, Presidio Main Post, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner deems advisable.
2.4 TERM.
The term of the Partnership commenced on October 17, 1997 and shall
continue until December 31, 2096, unless it is dissolved sooner pursuant to the
provisions of Article XIII or as otherwise provided by law.
ARTICLE III
PURPOSE
3.1 PURPOSE AND BUSINESS.
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in a manner as to permit the General
Partner Entity at all times to be classified as a REIT, unless the General
Partner Entity ceases to qualify or is not qualified as a REIT for any reason or
reasons not related to the business conducted by the Partnership, (ii) to enter
into any corporation, partnership, joint venture, trust, limited liability
company or other similar arrangement to engage in any of the foregoing or the
ownership of interests in any entity engaged, directly or indirectly, in any of
the foregoing and (iii) to do anything necessary or incidental to the foregoing.
In connection with the foregoing, the Partners acknowledge that the status of
the General Partner Entity as a REIT inures to the benefit of all the Partners
and not solely to the General Partner Entity or its Affiliates.
3.2 POWERS.
The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership, including, without
limitation, full power and authority, directly or through its ownership interest
in other entities, to enter into, perform and carry out contracts of any kind,
borrow money and issue evidences of indebtedness, whether or not secured by
mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and
develop real property, and lease, sell, transfer and dispose of real property;
provided, however, that the Partnership shall not take, or refrain from taking,
any action which, in the judgment of the General Partner, in its sole and
absolute
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discretion, (i) could adversely affect the ability of the General Partner Entity
to continue to qualify as a REIT, (ii) could subject the General Partner Entity
to any additional taxes under Section 857 or Section 4981 of the Code or (iii)
could violate any law or regulation of any governmental body or agency having
jurisdiction over any General Partner or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS
4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS.
On the Effective Date, the Partners shall make or shall have made the
Capital Contributions as set forth in Exhibit A. The Partners shall own
Partnership Units in the amounts set forth in Exhibit A and shall have an
initial Percentage Interest in the Partnership as determined hereunder, which
Percentage Interest shall be adjusted from time to time by the General Partner
to the extent necessary to reflect accurately redemptions, Capital
Contributions, the issuance of additional Partnership Units or similar events
having an effect on a Partner's Percentage Interest. A number of Partnership
Units held by the General Partner equal to one percent (1%) of all outstanding
Partnership Units outstanding from time to time shall be deemed to be the
General Partner Partnership Units and shall be the General Partnership Interest
of such General Partner. All other Partnership Units held by the General Partner
shall be deemed to be Limited Partnership Interests and shall be held by the
General Partner in its capacity as a Limited Partner in the Partnership. Except
as provided in Sections 7.5 and 10.5 hereof, the Partners shall have no
obligation to make any additional capital Contributions or provide any
additional funding to the Partnership (whether in the form of loans, repayments
of loans or otherwise). Except as otherwise agreed to, in writing, by a
particular Partner, no Partner shall have any obligation to restore any deficit
that may exist in its Capital Account, either upon a liquidation of the
Partnership or otherwise.
4.2 ISSUANCES OF PARTNERSHIP INTERESTS.
A. General. The General Partner is hereby authorized to cause the
Partnership from time to time to issue to Partners (including the General
Partner and its Affiliates) or other Persons (including, without limitation, in
connection with the contribution of property to the Partnership) Partnership
Units or other Partnership Interests in one or more classes or options to
acquire such interests, or in one or more series of any of such classes, with
such designations, preferences and relative, participating, optional or other
special rights, powers and duties, including rights, powers and duties senior to
Limited Partnership Interests, all as shall be determined, subject to applicable
Delaware law, by the General Partner in its sole and absolute discretion,
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions and (iii) the rights
of each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership; provided that, no such Partnership Units or
other Partnership Interests shall be issued to the General Partner unless either
(a) the Partnership Interests are issued in connection with the grant, award or
issuance of Shares or other equity interests in the General Partner having
designations, preferences
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and other rights such that the economic interests attributable to such Shares or
other equity interests are substantially similar to the designations,
preferences and other rights (except voting rights) of the Partnership Interests
issued to the General Partner in accordance with this Section 4.2.A or (b) the
additional Partnership Interests are issued to all Partners holding Partnership
Interests in the same class in proportion to their respective Percentage
Interests in such class. If the Partnership issues Partnership Interests
pursuant to this Section 4.2.A, the General Partner shall make such revisions to
this Agreement (including but not limited to the revisions described in Section
5.4, Section 6.2 and Section 8.5) as it deems necessary to reflect the issuance
of such Partnership Interests.
B. Percentage Interest Adjustments. Upon the acceptance of additional
Capital Contributions in exchange for Partnership Units and if the Partnership
shall have outstanding more than one class of Partnership Interests, the
Percentage Interest related thereto shall be equal to a fraction, the numerator
of which is equal to the amount of cash, if any, plus the Agreed Value of
Contributed Property, if any, contributed with respect to such additional
Partnership Units and the denominator of which is equal to the sum of (i) the
Deemed Value of the Partnership Interests for all outstanding classes (computed
as of the Business Day immediately preceding the date on which the additional
Capital Contributions are made (an "Adjustment Date")) plus (ii) the aggregate
amount of additional Capital Contributions contributed to the Partnership on
such Adjustment Date in respect of such additional Partnership Units. The
Percentage Interest of each other Partner holding Partnership Interests not
making a full pro rata Capital Contribution shall be adjusted to a fraction the
numerator of which is equal to the sum of (i) the Deemed Partnership Interest
Value of such Limited Partner (computed as of the Business Day immediately
preceding the Adjustment Date) plus (ii) the amount of additional Capital
Contributions (such amount being equal to the amount of cash, if any, plus the
Agreed Value of Contributed Property, if any, so contributed), if any, made by
such Partner to the Partnership in respect of such Partnership Interest as of
such Adjustment Date and the denominator of which is equal to the sum of (i) the
Deemed Value of the Partnership Interests of all outstanding classes (computed
as of the Business Day immediately preceding such Adjustment Date) plus (ii) the
aggregate amount of the additional Capital Contributions contributed to the
Partnership on such Adjustment Date in respect of such additional Partnership
Interests. For purposes of calculating a Partner's Percentage Interest pursuant
to this Section 4.2.B, cash Capital Contributions by the General Partner will be
deemed to equal the cash contributed by the General Partner plus (a) in the case
of cash contributions funded by an offering of any equity interests in or other
securities of the General Partner, the offering costs attributable to the cash
contributed to the Partnership, and (b) in the case of Partnership Units issued
pursuant to Section 7.5.E, an amount equal to the difference between the Value
of the Shares sold pursuant to any Share Option Plan and the net proceeds of
such sale.
4.3 NO PREEMPTIVE RIGHTS.
Except to the extent expressly granted by the Partnership pursuant to
another agreement, no Person shall have any preemptive, preferential or other
similar right with respect to (i) additional Capital Contributions or loans to
the Partnership or (ii) issuance or sale of any Partnership Units or other
Partnership Interests.
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4.4 OTHER CONTRIBUTION PROVISIONS.
A. Contribution of Services. If any Partner is admitted to the
Partnership and is given a Capital Account in exchange for services rendered to
the Partnership, such transaction shall be treated by the Partnership and the
affected Partner as if the Partnership had compensated such Partner in cash, and
the Partner had contributed such cash to the capital of the Partnership.
B. Certain Deemed Contributions of Proceeds of Issuance of Shares. If
in connection with any and all issuances of Shares, the proceeds actually
received by and contributed by the General Partner Entity to the Partnership are
less than the gross proceeds of such issuance as a result of any underwriter's
discount or other expenses paid or incurred in connection with such issuance,
then the General Partner Entity shall be deemed to have made a Capital
Contribution to the Partnership in the amount of the gross proceeds of such
issuance, and the Partnership shall be deemed simultaneously to have paid such
offering expenses in connection with the required issuance of additional
Partnership Units to the General Partner Entity for such Capital Contribution.
4.5 NO INTEREST ON CAPITAL.
No Partner shall be entitled to interest on its Capital Contributions
or its Capital Account.
ARTICLE V
DISTRIBUTIONS
5.1 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS.
A. General. The General Partner shall, in its discretion, distribute
Available Cash generated by the Partnership during each quarter or other period
selected by the General Partner to the Partners who are Partners on the
Partnership Record Date with respect to such quarter or other period, in the
manner provided for in Section 5.1.B. Unless otherwise expressly provided for
herein or in an agreement at the time a new class of Partnership Interests is
created in accordance with Article IV hereof, no Partnership Interest shall be
entitled to a distribution in preference to any other Partnership Interest. The
General Partner shall make such reasonable efforts, as determined by it in its
sole and absolute discretion and consistent with the qualification of the
General Partner Entity as a REIT, to distribute Available Cash (a) to Limited
Partners so as to preclude any such distribution or portion thereof from being
treated as part of a sale of property of the Partnership by a Limited Partner
under Section 707 of the Code or the Regulations thereunder; provided that, the
General Partner and the Partnership shall not have liability to a Limited
Partner under any circumstances as a result of any distribution to a Limited
Partner being so treated, and (b) to the General Partner in an amount sufficient
to enable the General Partner Entity to pay shareholder dividends that will (1)
cause the General Partner Entity to satisfy the requirements for qualification
as a REIT under the Code and the Regulations (the "REIT Requirements"), and (2)
cause the General Partner Entity to avoid any federal income or excise tax
liability for the General Partner Entity.
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B. Method. (i) Each holder of Partnership Interests that is entitled to
any preference in distribution shall be entitled to a distribution in accordance
with the rights of any such class of Partnership Interests (and, within such
class, pro rata in proportion to the respective Percentage Interests on such
Partnership Record Date); and
(ii) To the extent there is Available Cash remaining after the payment
of any preference in distribution in accordance with the foregoing clause (i),
with respect to Partnership Interests that are not entitled to any preference in
distribution, pro rata to each such class in accordance with the terms of such
class (and, within each such class, pro rata in proportion to the respective
Percentage Interests on such Partnership Record Date).
5.2 AMOUNTS WITHHELD.
All amounts withheld pursuant to the Code or any provisions of any
state or local tax law and Section 10.5 with respect to any allocation, payment
or distribution to the General Partner, the Limited Partners or Assignees shall
be treated as amounts distributed to the General Partner, Limited Partners or
Assignees pursuant to Section 5.1 for all purposes under this Agreement.
5.3 DISTRIBUTIONS UPON LIQUIDATION.
Proceeds from a Terminating Capital Transaction shall be distributed to
the Partners in accordance with Section 13.2.
5.4 REVISIONS TO REFLECT ISSUANCE OF PARTNERSHIP INTERESTS.
If the Partnership issues Partnership Interests to the General Partner
or any Additional Limited Partner pursuant to Article IV hereof, the General
Partner shall make such revisions to this Article V and Exhibit A as it deems
necessary to reflect the issuance of such additional Partnership Interests
without the requirements for any other consents or approvals.
ARTICLE VI
ALLOCATIONS
6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES.
For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Exhibit B) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.
A. Net Income. After giving effect to the special allocations set forth
in Section 1 of Exhibit C, Net Income shall be allocated: (i) first, to reverse
any prior allocations of Net Losses pursuant to Section 6.1.B below (in reverse
order to the order in which such Net Losses were previously allocated to the
Partners) to the extent not previously reversed pursuant to this clause (i) of
Section 6.1.A; (ii) second, to the holders of any Partnership Interests that are
entitled to any
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preference in distribution in accordance with the rights of any such class of
Partnership Interests until each such Partnership Interest has been allocated,
on a cumulative basis pursuant to this clause (ii), Net Income equal to the
amount of distributions received which are attributable to the preference of
such class of Partnership Interests (and, within such class, pro rata in
proportion to the respective cumulative distributions made with respect to each
Partnership Interest as of the last day of the period for which such allocation
is being made); and (iii) third, with respect to Partnership Interests that are
not entitled to any preference in the allocation of Net Income, pro rata to each
such class in accordance with the terms of such class (and, within such class,
pro rata in proportion to the respective Percentage Interests as of the last day
of the period for which such allocation is being made).
B. Net Losses. After giving effect to the special allocations set forth
in Section 1 of Exhibit C, Net Losses shall be allocated: (i) first, with
respect to classes of Partnership Interests that are not entitled to any
preference in distribution, pro rata to each such class in accordance with the
terms of such class (and, within such class, pro rata in proportion to the
respective Percentage Interests as of the last day of the period for which such
allocation is being made); ; (ii) second, to the holders of Partnership
Interests that are entitled to any preference in distribution, in reverse order
to the order of the preference in distribution of such Partnership Interests
(and, within such classes, pro rata in proportion to the respective Percentage
Interests as of the last day of the period for which such allocation is being
made); and (iii) third, all remaining Net Losses shall be allocated to the
General Partner; provided that Net Losses shall not be allocated to any Partner
pursuant to this Section 6.1.B(i) or (ii) to the extent that such allocation
would cause such Partner to have an Adjusted Capital Account Deficit (excluding
for this purpose any increase to such Adjusted Capital Account Deficit for a
Partner's actual obligation to fund any deficit in such Partner's Capital
Account pursuant to the terms of this Agreement) at the end of such taxable year
(or portion thereof)
C. Allocation of Nonrecourse Debt. For purposes of Regulation Section
1.752-3(a), the Partners agree that Nonrecourse Liabilities of the Partnership
in excess of the sum of (i) the amount of Partnership Minimum Gain and (ii) the
total amount of Nonrecourse Built-in Gain shall be allocated among the Partners
in accordance with their respective Percentage Interests, provided, however,
that to the extent the Partnership is permitted to utilize alternative methods
to allocate such Nonrecourse Liabilities among the Partners, the General Partner
shall have the authority to elect the method to be used by the Partnership, and
such election shall be binding on the Partners.
D. Recapture Income. Any gain allocated to the Partners upon the sale
or other taxable disposition of any Partnership asset shall, to the extent
possible after taking into account other required allocations of gain pursuant
to Exhibit C, be characterized as Recapture Income in the same proportions and
to the same extent as such Partners have been allocated any deductions directly
or indirectly giving rise to the treatment of such gains as Recapture Income.
6.2 REVISIONS TO ALLOCATIONS TO REFLECT ISSUANCE OF PARTNERSHIP INTERESTS.
If the Partnership issues Partnership Interests to the General Partner
or any Additional Limited Partner pursuant to Article IV hereof, the General
Partner shall make such revisions to this Article VI and Exhibit A as it deems
necessary to reflect the terms of the issuance of such
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Partnership Interests, including making preferential allocations to classes of
Partnership Interests that are entitled thereto. Such revisions shall not
require the consent or approval of any other Partner. In addition, if a Partner
shall enter into an agreement to restore any deficit that may exist in its
Capital Account, either upon liquidation or otherwise, or enter into any similar
agreement with the Partnership, the General Partner shall have the authority to
make revisions to this Article VI without the consent or approval of any other
Partner, provided that such revisions do not have an adverse effect on any
Partner who is not a party to such agreement.
ARTICLE VII
MANAGEMENT AND OPERATIONS OF BUSINESS
7.1 MANAGEMENT.
X. Xxxxxx of General Partners. Except as otherwise expressly provided
in this Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership. The General
Partner may not be removed by the Limited Partners with or without cause. In
addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
Section 7.11, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 and to effectuate the purposes set
forth in Section 3.1, including, without limitation:
(1) the making of any expenditures, the lending
or borrowing of money (including, without
limitation, making prepayments on loans and
borrowing money to permit the Partnership to
make distributions to its Partners in such
amounts as are required to permit the
General Partner Entity (so long as the
General Partner Entity qualifies as REIT) to
avoid the payment of any federal income tax
(including, for this purpose, any excise tax
pursuant to Section 4981 of the Code) and to
make distributions to its shareholders
sufficient to permit the General Partner
Entity to maintain REIT status), the
assumption or guarantee of, or other
contracting for, indebtedness and other
liabilities, the issuance of evidences of
indebtedness (including the securing of same
by mortgage, deed of trust or other lien or
encumbrance on the Partnership's assets) and
the incurring of any obligations the General
Partner Entity deems necessary for the
conduct of the activities of the
Partnership;
(2) the making of tax, regulatory and other
filings, or rendering of periodic or other
reports to governmental or other agencies
having jurisdiction over the business or
assets of the Partnership;
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(3) the acquisition, disposition, mortgage,
pledge, encumbrance, hypothecation or
exchange of any or all of the assets of the
Partnership (including the exercise or grant
of any conversion, option, privilege or
subscription right or other right available
in connection with any assets at any time
held by the Partnership) or the merger or
other combination of the Partnership with or
into another entity on such terms as the
General Partner deems proper;
(4) the use of the assets of the Partnership
(including, without limitation, cash on
hand) for any purpose consistent with the
terms of this Agreement and on any terms it
sees fit, including, without limitation, the
financing of the conduct of the operations
of the General Partner, the Partnership or
any of the Partnership's Subsidiaries, the
lending of funds to other Persons
(including, without limitation, the General
Partner, its Subsidiaries and the
Partnership's Subsidiaries) and the
repayment of obligations of the Partnership
and its Subsidiaries and any other Person in
which the Partnership has an equity
investment and the making of capital
contributions to its Subsidiaries;
(5) the management, operation, landscaping,
repair, alteration, demolition or
improvement of any real property or
improvements owned by the Partnership or any
Subsidiary of the Partnership or any Person
in which the Partnership has made a direct
or indirect equity investment; and the
leasing of all or any portion of any of the
Partnership's assets, whether or not the
terms of such leases extend beyond the
termination date of the Partnership and
whether or not any portion of the
Partnership's assets so leased are to be
occupied by the lessee, or, in turn,
subleased in whole or in part to others, for
such consideration and on such terms as the
General Partner may determine in its sole
and absolute discretion;
(6) the negotiation, execution, and performance
of any contracts, conveyances or other
instruments that the General Partner
considers useful or necessary to the conduct
of the Partnership's operations or the
implementation of the General Partner's
powers under this Agreement, including
contracting with contractors, developers,
consultants, accountants, legal counsel,
other professional advisors and other agents
and the payment of their expenses and
compensation out of the Partnership's
assets;
(7) the mortgage, pledge, encumbrance or
hypothecation of any assets of the
Partnership, and the use of the assets of
the Partnership (including, without
limitation, cash on hand) for any purpose
consistent with the terms of this Agreement
and on any terms it sees fit, including,
without limitation, the financing of the
conduct or the
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operations of the General Partner or the
Partnership, the lending of funds to other
Persons (including, without limitation, any
Subsidiaries of the Partnership) and the
repayment of obligations of the
Partnership, any of its Subsidiaries and
any other Person in which it has an equity
investment;
(8) the distribution of Partnership cash or
other Partnership assets in accordance with
this Agreement;
(9) the holding, managing, investing and
reinvesting of cash and other assets of the
Partnership;
(10) the collection and receipt of revenues and
income of the Partnership;
(11) the selection, designation of powers,
authority and duties and the dismal of
employees of the Partnership (including,
without limitation, employees having titles
such as "president," "vice president,"
"secretary" and "treasurer") and agents,
outside attorneys, accountants, consultants
and contractors of the Partnership and the
determination of their compensation and
other terms of employment or hiring;
(12) the maintenance of such insurance for the
benefit of the Partnership and the Partners
as it deems necessary or appropriate;
(13) the formation of, or acquisition of an
interest (including non-voting interests in
entities controlled by Affiliates of the
Partnership or third parties) in, and the
contribution of property to, any further
limited or general partnerships, joint
ventures, limited liability companies or
other relationships that it deems desirable
(including, without limitation, the
acquisition of interests in, and the
contributions of funds or property to, or
making of loans to, its Subsidiaries and any
other Person in which it has an equity
investment from time to time, or the
incurrence of indebtedness on behalf of such
Persons or the guarantee of the obligations
of such Persons); provided that, as long as
the General Partner has determined to
continue to qualify as a REIT, the
Partnership may not engage in any such
formation, acquisition or contribution that
would cause the General Partner to fail to
qualify as a REIT;
(14) the control of any matters affecting the
rights and obligations of the Partnership,
including the settlement, compromise,
submission to arbitration or any other form
of dispute resolution or abandonment of any
claim, cause of action, liability, debt or
damages due or owing to or from the
Partnership, the commencement or defense of
suits, legal proceedings, administrative
proceedings, arbitrations or
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other forms of dispute resolution, the
representation of the Partnership in all
suits or legal proceedings, administrative
proceedings, arbitrations or other forms of
dispute resolution, the incurring of legal
expense and the indemnification of any
Person against liabilities and
contingencies to the extent permitted by
law;
(15) the determination of the fair market value
of any Partnership property distributed in
kind, using such reasonable method of
valuation as the General Partner may adopt;
(16) the exercise, directly or indirectly,
through any attorney-in-fact acting under a
general or limited power of attorney, of any
right, including the right to vote,
appurtenant to any assets or investment held
by the Partnership;
(17) the exercise of any of the powers of the
General Partner enumerated in this Agreement
on behalf of or in connection with any
Subsidiary of the Partnership or any other
Person in which the Partnership has a direct
or indirect interest, individually or
jointly with any such Subsidiary or other
Person;
(18) the exercise of any of the powers of the
General Partner enumerated in this Agreement
on behalf of any Person in which the
Partnership does not have any interest
pursuant to contractual or other
arrangements with such Person;
(19) the making, executing and delivering of any
and all deeds, leases, notes, deeds to
secure debt, mortgages, deeds of trust,
security agreements, conveyances, contracts,
guarantees, warranties, indemnities,
waivers, releases or other legal instruments
or agreements in writing necessary or
appropriate in the judgment of the General
Partner for the accomplishment of any of the
powers of the General Partner enumerated in
this Agreement;
(20) the distribution of cash to acquire
Partnership Units held by a Limited Partner
in connection with a Limited Partner's
exercise of its Redemption Right under
Section 8.5; and
(21) the amendment and restatement of
Exhibit A to reflect accurately at all
times the Capital Contributions and
Partnership Units of the Partners as the
same are adjusted from time to time to the
extent necessary to reflect redemptions,
Capital Contributions, the issuance of
Partnership Units, the admission of any
Additional Limited Partner or any
Substituted Limited Partner or otherwise,
which amendment and restatement,
notwithstanding anything in this
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Agreement to the contrary, shall not be
deemed an amendment of this Agreement, as
long as the matter or event being reflected
in Exhibit A otherwise is authorized by
this Agreement.
B. No Approval by Limited Partners. Except as provided in Section 7.11,
each of the Limited Partners agrees that the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement, the Act or any
applicable law, rule or regulation, to the full extent permitted under the Act
or other applicable law. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
C. Insurance. At all times from and after the date hereof, the General
Partner may cause the Partnership to obtain and maintain (i) casualty, liability
and other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder and (iii) such other insurance as the
General Partner, in its sole and absolute discretion, determines to be
necessary.
D. Working Capital and Other Reserves. At all times from and after the
date hereof, the General Partner may cause the Partnership to establish and
maintain working capital reserves in such amounts as the General Partner, in its
sole and absolute discretion, deems appropriate and reasonable from time to
time, including upon liquidation of the Partnership under Section 13.
E. No Obligations to Consider Tax Consequences of Limited Partners.
Subject to the terms of any agreement between the Partnership and a Limited
Partner, in exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner (including the General Partner) of any action taken (or not
taken) by any of them. The General Partner and the Partnership shall not have
liability to a Limited Partner for monetary damages or otherwise for losses
sustained, liabilities incurred or benefits not derived by such Limited Partner
in connection with such decisions, provided that the General Partner have acted
in good faith and pursuant to their authority under this Agreement.
7.2 CERTIFICATE OF LIMITED PARTNERSHIP.
The General Partner has previously filed the Certificate with the
Secretary of State of Delaware and an amendment to the Certificate. To the
extent that such action is determined by the General Partner to be reasonable
and necessary or appropriate, the General Partner shall file further amendments
to and restatements of the Certificate and do all the things to maintain the
Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) under the laws of the State of Delaware and
each other state, or other jurisdiction in which the Partnership may elect to do
business or own property. Subject to the terms of Section 8.4.A(4), the General
Partner shall not be required, before or after filing, to deliver or mail a copy
of the Certificate or any amendment thereto to any Limited Partner. The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be
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reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability) in the State of Delaware and any
other state, the District of Columbia or other jurisdiction in which the
Partnership may elect to do business or own property.
7.3 TITLE TO PARTNERSHIP ASSETS.
Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partners, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of any General Partner or any nominee or Affiliate of the
General Partner shall be held by that General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.
7.4 REIMBURSEMENT OF THE GENERAL PARTNERS.
A. No Compensation. Except as provided in this Section 7.4 and
elsewhere in this Agreement (including the provisions of Articles V and VI
regarding distributions, payments and allocations to which it may be entitled),
the General Partner shall not be compensated for its services as a general
partner of the Partnership.
B. Responsibility for Partnership Expenses. The Partnership shall be
responsible for and shall pay all expenses relating to the Partnership's
organization, the ownership of its assets and its operations. The General
Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine in its sole and absolute discretion, for all
expenses it incurs relating to the ownership and operation of, or for the
benefit of, the Partnership (including, without limitation, expenses related to
the operations of the General Partner and to the management and administration
of any Subsidiaries of the General Partner or the Partnership or Affiliates of
the Partnership, such as auditing expenses and filing fees); provided that, the
amount of any such reimbursement shall be reduced by (i) any interest earned by
the General Partner with respect to bank accounts or other instruments or
accounts held by it on behalf of the Partnership as permitted in Section 7.5.A
(which interest is considered to belong to the Partnership and shall be paid
over to the Partnership to the extent not applied to reimburse the General
Partner for expenses hereunder); and (ii) any amount derived by the General
Partner from any investments permitted in Section 7.5.A. The General Partner
shall determine in good faith the amount of expenses incurred by it related to
the ownership and operation of, or for the benefit of, the Partnership. If
certain expenses are incurred for the benefit of the Partnership and other
entities (including the General Partner), such expenses will be allocated to the
Partnership and such other entities in such a manner as the General Partner in
its sole and absolute discretion deems fair and reasonable. Such reimbursements
shall be in addition to any reimbursement to the General Partner pursuant to
Section 10.3.C and as a result of indemnification pursuant to Section 7.7. All
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payments and reimbursements hereunder shall be characterized for federal income
tax purposes as expenses of the Partnership incurred on its behalf, and not as
expenses of the General Partner.
C. Partnership Interest Issuance Expenses. The General Partner shall
also be reimbursed for all expenses it incurs relating to any issuance of
Partnership Interests, Shares, Debt of the Partnership or the General Partner or
rights, options, warrants or convertible or exchangeable securities pursuant to
Article IV (including, without limitation, all costs, expenses, damages and
other payments resulting from or arising in connection with litigation related
to any of the foregoing), all of which expenses are considered by the Partners
to constitute expenses of, and for the benefit of, the Partnership.
D. Purchases of Shares by the General Partner. If the General Partner
exercises its rights under the Declaration of Trust to purchase Shares or
otherwise elects to purchase from its shareholders Shares in connection with a
share repurchase or similar program or for the purpose of delivering such Shares
to satisfy an obligation under any dividend reinvestment or equity purchase
program adopted by the General Partner, any employee equity purchase plan
adopted by the General Partner or any similar obligation or arrangement
undertaken by the General Partner in the future, the purchase price paid by the
General Partner for those Shares and any other expenses incurred by the General
Partner in connection with such purchase shall be considered expenses of the
Partnership and shall be reimbursable to the General Partner, subject to the
conditions that: (i) if those Shares subsequently are to be sold by the General
Partner, the General Partner shall pay to the Partnership any proceeds received
by the General Partner for those Shares (provided that a transfer of Shares for
Partnership Units pursuant to Section 8.5 would not be considered a sale for
such purposes); and (ii) if such Shares are not retransferred by the General
Partner within thirty (30) days after the purchase thereof, the General Partner
shall cause the Partnership to cancel a number of Partnership Units (rounded to
the nearest whole Partnership Unit) held by the General Partner equal to the
product attained by multiplying the number of those Shares by a fraction, the
numerator of which is one and the denominator of which is the Conversion Factor.
E. Reimbursement not a Distribution. If and to the extent any
reimbursement made pursuant to this Section 7.4 is determined for federal income
tax purposes not to constitute a payment of expenses of the Partnership, the
amount so determined shall constitute a guaranteed payment with respect to
capital within the meaning of Section 707(c) of the Code, shall be treated
consistently therewith by the Partnership and all Partners and shall not be
treated as a distribution for purposes of computing the Partners' Capital
Accounts.
7.5 OWNERSHIP OF LIMITED PARTNERSHIP INTERESTS BY THE GENERAL PARTNER;
RELATIONSHIP OF SHARES TO PARTNERSHIP UNITS; FUNDING DEBT.
A. Ownership of Limited Partnership Interests. Without the Consent of
the Outside Limited Partners, the General Partner shall not, directly or
indirectly, enter into or conduct any business other than in connection with the
ownership, acquisition and disposition of Partnership Interests as a General
Partner or Limited Partner and the management of the business of the Partnership
and such activities as are incidental thereto. The Partners acknowledge and
agree that the General Partner shall be permitted to acquire, directly or
through a "qualified REIT
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subsidiary" (as defined in Section 856(i) of the Code), up to a one percent (1%)
interest in any entity not classified as a corporation under the Code, provided
that at least ninety-nine percent (99%) of the ownership interests in such
entity are owned, directly or indirectly, by the Partnership. Subject to the
foregoing, the General Partner and any of its Affiliates may acquire Limited
Partnership Interests and shall be entitled to exercise all rights of a Limited
Partner relating to such Limited Partnership Interests.
B. Repurchase of Shares. If the General Partner exercises its rights
under the Declaration of Trust to purchase Shares or otherwise elects to
purchase from its shareholders Shares in connection with a share repurchase or
similar program or for the purpose of delivering such Shares to satisfy an
obligation under any dividend reinvestment or share purchase program adopted by
the General Partner, any employee share purchase plan adopted by the General
Partner or any similar obligation or arrangement undertaken by the General
Partner in the future, then the General Partner shall cause the Partnership to
purchase from the General Partner that number of Partnership Units of the
appropriate class equal to the product obtained by multiplying the number of
Shares purchased by the General Partner times a fraction, the numerator of which
is one and the denominator of which is the Conversion Factor, on the same terms
and for the same aggregate price that the General Partner purchased such Shares.
C. Forfeiture of Shares. If the Partnership or the General Partner
acquires Shares as a result of the forfeiture of such Shares under a restricted
or similar share plan, then the General Partner shall cause the Partnership to
cancel that number of Partnership Units equal to the number of Shares so
acquired, and, if the Partnership acquired such Shares, it shall transfer such
Shares to the General Partner for cancellation.
D. Issuances of Shares. After the Effective Date, the General Partner
shall not grant, award, or issue any additional Shares (other than Shares issued
pursuant to Section 8.5 hereof or pursuant to a dividend or distribution
(including any share split) of Shares to all of its shareholders), other equity
securities of the General Partner, New Securities or Convertible Funding Debt
unless (i) the General Partner shall cause, pursuant to Section 4.2.A hereof,
the Partnership to issue to the General Partner Partnership Interests or rights,
options, warrants or convertible or exchangeable securities of the Partnership
having designations, preferences and other rights, all such that the economic
interests are substantially the same as those of such additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be, and (ii) the General Partner transfers to the Partnership, as an additional
Capital Contribution, the proceeds from the grant, award, or issuance of such
additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be, or from the exercise of rights contained in
such additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be. Without limiting the foregoing, the General
Partner is expressly authorized to issue additional Shares, other equity
securities, New Securities or Convertible Funding Debt, as the case may be, for
less than fair market value, and the General Partner is expressly authorized,
pursuant to Section 4.2.A hereof, to cause the Partnership to issue to the
General Partner corresponding Partnership Interests, as long as (a) the General
Partner concludes in good faith that such issuance is in the interests of the
General Partner and the Partnership (for example, and not by way of limitation,
the issuance of Shares and corresponding Partnership Units pursuant to a share
purchase plan providing for purchases of Shares, either by
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employees or shareholders, at a discount from fair market value or pursuant to
employee share options that have an exercise price that is less than the fair
market value of the Shares, either at the time of issuance or at the time of
exercise) and (b) the General Partner transfers all proceeds from any such
issuance or exercise to the Partnership as an additional Capital Contribution.
E. Share Option Plan. If at any time or from time to time, the General
Partner sells Shares pursuant to any Share Option Plan, the General Partner
shall transfer the net proceeds of the sale of such Shares to the Partnership as
an additional Capital Contribution in exchange for an amount of additional
Partnership Units equal to the number of Shares so sold divided by the
Conversion Factor.
F. Funding Debt. The General Partner may incur a Funding Debt,
including, without limitation, a Funding Debt that is convertible into Shares or
otherwise constitutes a class of New Securities ("Convertible Funding Debt"),
subject to the condition that the General Partner lend to the Partnership the
net proceeds of such Funding Debt; provided, that Convertible Funding Debt shall
be issued pursuant to Section 7.5.D above; and, provided further, that the
General Partner shall not be obligated to lend the net proceeds of any Funding
Debt to the Partnership in a manner that would be inconsistent with the General
Partner's ability to remain qualified as a REIT. If the General Partner enters
into any Funding Debt, the loan to the Partnership shall be on comparable terms
and conditions, including interest rate, repayment schedule and costs and
expenses, as are applicable with respect to or incurred in connection with such
Funding Debt.
7.6 TRANSACTIONS WITH AFFILIATES.
A. Transactions with Certain Affiliates. Except as expressly permitted
by this Agreement, the Partnership shall not, directly or indirectly, sell,
transfer or convey any property to, or purchase any property from, or borrow
funds from, or lend funds to, any Partner or any Affiliate of the Partnership
that is not also a Subsidiary of the Partnership, except pursuant to
transactions that are on terms that are fair and reasonable and no less
favorable to the Partnership than would be obtained from an unaffiliated third
party.
B. Conflict Avoidance. The General Partner is expressly authorized to
enter into, in the name and on behalf of the Partnership, a right of first
opportunity arrangement and other conflict avoidance agreements with various
Affiliates of the Partnership and General Partner on such terms as the General
Partner, in its sole and absolute discretion, believe are advisable.
C. Benefit Plans Sponsored by the Partnership. The General Partner in
its sole and absolute discretion and without the approval of the Limited
Partners, may propose and adopt on behalf of the Partnership employee benefit
plans funded by the Partnership for the benefit of employees of the General
Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate of
any of them.
7.7 INDEMNIFICATION.
A. General. The Partnership shall indemnify each Indemnitee to the
fullest extent provided by the Act from and against any and all losses, claims,
damages, liabilities, joint or
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several, expenses (including, without limitation, attorneys fees and other legal
fees and expenses), judgments, fines, settlements and other amounts arising from
or in connection with any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, incurred by the
Indemnitee and relating to the Partnership or the General Partner or the
operation of, or the ownership of property by, any of them as set forth in this
Agreement in which any such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, unless it is established by a final
determination of a court of competent jurisdiction that: (i) the act or omission
of the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) the Indemnitee actually received an improper personal benefit
in money, property or services or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual
obligation for any indebtedness or other obligation or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 7.7.A. The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, and any insurance proceeds from the liability policy
covering the General Partner and any Indemnitee, and neither a General Partner
nor any Limited Partner shall have any obligation to contribute to the capital
of the Partnership or otherwise provide funds to enable the Partnership to fund
its obligations under this Section 7.7.
B. Advancement of Expenses. Reasonable expenses expected to be incurred
by an Indemnitee shall be paid or reimbursed by the Partnership in advance of
the final disposition of any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative made or threatened
against an Indemnitee upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 7.7.A has been met and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
C. No Limitation of Rights. The indemnification provided by this
Section 7.7 shall be in addition to any other rights to which an Indemnitee or
any other Person may be entitled under any agreement, pursuant to any vote of
the Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.
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D. Insurance. The Partnership may purchase and maintain insurance on
behalf of the Indemnitees and such other Persons as the General Partner shall
determine against any liability that may be asserted against or expenses that
may be incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
E. Benefit Plan Fiduciary. For purposes of this Section 7.7, (i) excise
taxes assessed on an Indemnitee, of for which the Indemnitee is otherwise found
liable, with respect to an ERISA Plan pursuant to applicable law shall
constitute fines within the meaning of this Section 7.7 and (iii) actions taken
or omitted by the Indemnitee with respect to an ERISA Plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of such ERISA Plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Partnership.
F. No Personal Liability for Limited Partners. In no event may an
Indemnitee subject any of the Partners to personal liability by reason of the
indemnification provisions set forth in this Agreement.
G. Interested Transactions. An Indemnitee shall not be denied
indemnification in whole or in part under this Section 7.7 because the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms
of this Agreement.
H. Benefit. The provisions of this Section 7.7 are for the benefit of
the Indemnitees, their employees, officers, directors, trustees, heirs,
successors, assigns and administrators and shall not be deemed to create any
rights for the benefit of any other Persons. Any amendment, modification or
repeal of this Section 7.7, or any provision hereof, shall be prospective only
and shall not in any way affect the limitation on the Partnership's liability to
any Indemnitee under this Section 7.7 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or related
to matters occurring, in whole or in part, prior to such amendment, modification
or repeal, regardless of when such claims may arise or be asserted.
I. Indemnification Payments Not Distributions. If and to the extent any
payments to the General Partner pursuant to this Section 7.7 constitute gross
income to the General Partner (as opposed to the repayment of advances made on
behalf of the Partnership), such amounts shall constitute guaranteed payments
within the meaning of Section 707(c) of the Code, shall be treated consistently
therewith by the Partnership and all Partners, and shall not be treated as
distributions for purposes of computing the Partners' Capital Accounts.
J. Exception to Indemnification. Notwithstanding anything to the
contrary in this Agreement, a General Partner shall not be entitled to
indemnification hereunder for any loss, claim, damage, liability or expense for
which such General Partner is obligated to indemnify the Partnership under any
other agreement between such General Partner and the Partnership.
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7.8 LIABILITY OF THE GENERAL PARTNER.
A. General. Notwithstanding anything to the contrary set forth in this
Agreement, no General Partner shall be liable for monetary damages to the
Partnership, any Partners or any Assignees for losses sustained, liabilities
incurred or benefits not derived as a result of errors in judgment or mistakes
of fact or law or of any act or omission unless that General Partner acted in
bad faith and the act or omission was material to the matter giving rise to the
loss, liability or benefit not derived.
B. No Obligation to Consider Separate Interests of Limited Partners or
Shareholders. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, that the General Partner is
under no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or
Assignees) in deciding whether to cause the Partnership to take (or decline to
take) any actions, and that the General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner has acted in good faith.
C. Actions of Agents. Subject to their obligations and duties as the
General Partner sets forth in Section 7.1.A, the General Partner may exercise
any of the powers granted to them by this Agreement and perform any of the
duties imposed upon them hereunder either directly or by or through their
agents. The General Partner shall not be responsible for any misconduct or
negligence on the part of any such agent appointed by the General Partner in
good faith.
D. Effect of Amendment. Notwithstanding any other provision contained
herein, any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
7.9 OTHER MATTERS CONCERNING THE GENERAL PARTNER.
A. Reliance on Documents. A General Partner may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties.
B. Reliance on Advisors. The General Partner may consult with legal
counsel, accountants, appraisers, management consultants, investment bankers and
other consultants and advisers selected by them, and any act taken or omitted to
be taken in reliance upon the opinion of such Persons as to matters which the
General Partner reasonably believes to be within such Person's professional or
expert competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.
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C. Action Through Agents. The General Partner shall have the right, in
respect of any of its powers or obligations hereunder, to act through any of its
duly authorized officers and a duly appointed attorney or attorneys-in-fact.
Each such attorney shall, to the extent provided by the General Partner in the
power of attorney, have full power and authority to do and perform all and every
act and duty which is permitted or required to be done by the General Partner
hereunder.
D. Actions to Maintain REIT Status. Notwithstanding any other
provisions of this Agreement or the Act, any action of the General Partner on
behalf of the Partnership or any decision of a General Partner to refrain from
acting on behalf of the Partnership undertaken in the good faith belief that
such action or omission is necessary or advisable in order (i) to protect the
ability of the General Partner Entity to continue to qualify as a REIT or (ii)
to allow the General Partner Entity to avoid incurring any liability for taxes
under Section 857 or 4981 of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
E. Actions to Maintain REOC Status. If and so long as the Partnership
Interests of "benefit plan investors" is "significant" (as such terms, or terms
succeeding thereto with the same objective, are used in 29 C.F.R. Section
2510.3-101(f) (such regulation or successor regulation being known as the "Plan
Assets Regulation")), then the General Partner shall use its best efforts to
conduct the affairs of the Partnership in compliance with the exception for a
real estate operating company ("REOC") as provided in the Plan Assets
Regulation, and so that the assets of the Partnership will not be "plan assets"
(as such term is defined in the Plan Assets Regulations) of any ERISA Partner.
(i) If the General Partner, pursuant to this Section 7.9.E,
intends to conduct the affairs of the Partnership as a REOC, the General Partner
shall promptly deliver to each ERISA Partner an opinion of counsel reasonably
acceptable to each such ERISA Partner with respect to the "initial valuation
date" and each "annual valuation period" (as those terms, or terms succeeding
thereto with the same objective, are defined in the Plan Assets Regulation).
Such opinion of counsel shall state, (A) as to the opinion respecting the
"initial valuation date," that the Partnership shall qualify or qualified as a
REOC for the period beginning on such "initial valuation date" and ending on the
last day of the first "annual valuation period," and (B) as to each annual
opinion respecting each "annual valuation period," that the Partnership shall
qualify or qualified as a REOC for the 12-month period following the last day of
such "annual valuation period." Each opinion referred to in the prior two
sentences may rely upon, among other things, a certificate of the General
Partner as to the exercise of management rights with respect to one or more
investments during the appropriate period and as to a description of such
investments, and such counsel opinion also shall state whether the Partnership
has included in a certification to opinion counsel a statement to the effect
that on such "initial valuation date" or during such "annual valuation period"
at least 50 percent of Partnership assets (other than short-term investments
pending long-term commitment or distribution to investors), valued at cost, were
invested in real estate investments as described in the Plan Assets Regulation.
(ii) If the opinion described in this subsection is not
provided in the affirmative, or if any ERISA Partner shall obtain and deliver to
the General Partner an opinion of counsel to such ERISA Partner (which opinion
shall be reasonably satisfactory to the General Partner) that
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there is a reasonable probability that either (A) the Partnership was or will
not be a REOC for any period in which either participation by benefit plan
investors in the Partnership is significant, or (B) the assets of the
Partnership were or will be "plan assets" of ERISA Plan investors, then the
General Partner is hereby authorized and empowered to take such actions as it
deems necessary and appropriate to mitigate, prevent, or cure such adverse
consequences resulting to the ERISA Plan investors or requesting General
Partner, including modifying the manner in which the Partnership conducts its
business, or requiring each ERISA Partner (on a pro rata basis unless otherwise
consented to by all ERISA Partners) to transfer all or a portion of its interest
at a price not less than the fair value of such interest or portion thereof.
Such calculation of fair value of an interest or of any Partnership asset shall
be made by the General Partner.
7.10 RELIANCE BY THIRD PARTIES.
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without consent or approval of any other
Partner or Person, to encumber, sell or otherwise use in any manner any and all
assets of the Partnership, to enter into any contracts on behalf of the
Partnership and to take any and all actions on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if the General
Partner were the Partnership's sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such dealing.
In no event shall any Person dealing with the General Partner or its
representatives be obligated to ascertain that the terms of this Agreement have
been complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (i) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership, and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.
7.11 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY.
A. Consent Required. The General Partner may not take any action in
contravention of an express prohibition or limitation of this Agreement without
the written Consent of (i) all Partners adversely affected or (ii) such lower
percentage of the Limited Partnership Interests as may be specifically provided
for under a provision of this Agreement or the Act.
B. Sale of All Assets of the Partnership. Except as provided in Article
XIII, the General Partner may not, directly or indirectly, cause the Partnership
to sell, exchange, transfer or otherwise dispose of all or substantially all of
the Partnership's assets in a single transaction or a series of related
transactions (including by way of merger (including a triangular merger),
consolidation or other combination with any other Persons) if such merger, sale
or other
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transaction is in connection with a Termination Transaction permitted under
Section 11.2.B hereof, without the Consent of the Partners holding at least a
majority of the then outstanding Partnership Units (including any Partnership
Units held by the General Partner).
7.12 LOANS BY THIRD PARTIES.
The Partnership may incur Debt, or enter into similar credit,
guarantee, financing or refinancing arrangements for any purpose (including,
without limitation, in connection with any acquisition of property) with any
Person that is not a General Partner upon such terms as the General Partner
determines appropriate; provided that, the Partnership shall not incur any Debt
that is recourse to a General Partner, except to the extent otherwise agreed to
by such General Partner in its sole discretion.
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
8.1 LIMITATION OF LIABILITY.
The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement, including Section 10.5, or under
the Act.
8.2 MANAGEMENT OF BUSINESS.
No Limited Partner or Assignee (other than the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
a General Partner, the Partnership or any of their Affiliates, in their capacity
as such) shall take part in the operation, management or control (within the
meaning of the Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. The transaction of any such business by the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
the General Partner, the Partnership or any of their Affiliates, in their
capacity as such, shall not affect, impair or eliminate the limitations on the
liability of the Limited Partners or Assignees under this Agreement.
8.3 RETURN OF CAPITAL.
Except pursuant to the right of redemption set forth in Section 8.5, no
Limited Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein. No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted
by Section 4.2.A) or, except to the extent provided by Exhibit C or as permitted
by Sections 4.2.A, 5.1.B(i), 6.1.A(ii) and 6.1.B(i), or otherwise expressly
provided in this Agreement, as to profits, losses, distributions or credits.
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8.4 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP.
A. General. In addition to other rights provided by this Agreement or
by the Act, and except as limited by Section 8.4.D, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense:
(1) to obtain a copy of the most recent annual
and quarterly reports filed with the
Securities and Exchange Commission by the
General Partner Entity pursuant to the
Exchange Act;
(2) to obtain a copy of the Partnership's
federal, state and local income tax returns
for each Partnership Year;
(3) to obtain a current list of the name and
last known business, residence or mailing
address of each Partner;
(4) to obtain a copy of this Agreement and the
Certificate and all amendments thereto,
together with executed copies of all powers
of attorney pursuant to which this
Agreement, the Certificate and all
amendments thereto have been executed; and
(5) to obtain true and full information
regarding the amount of cash and a
description and statement of any other
property or services contributed by each
Partner and which each Partner has agreed to
contribute in the future, and the date on
which each became a Partner.
B. Notice of Conversion Factor. The Partnership shall notify each
Limited Partner upon request of the then current Conversion Factor and any
changes that have been made thereto.
C. Notice of Extraordinary Transaction of the General Partner Entity.
The General Partner Entity shall not make any extraordinary distributions of
property to its shareholders or effect a merger (including, without limitation,
a triangular merger), a sale of all or substantially all of its assets or any
other similar extraordinary transaction without notifying the Limited Partners
of its intention to make such distribution or effect such merger, sale or other
extraordinary transaction at least ten (10) Business Days prior to the record
date to determine shareholders eligible to receive such distribution (or, if no
such record date is applicable, at least twenty (20) business days before
consummation of such merger, sale or other extraordinary transaction). This
provision for such notice shall not be deemed (i) to permit any transaction that
otherwise is prohibited by this Agreement or requires a Consent of the Partners
or (ii) to require a Consent of the Limited Partners to a transaction that does
not otherwise require Consent under this Agreement. Each Limited Partner agrees,
as a condition to the receipt of the notice pursuant hereto, to keep
confidential the information set forth therein until such time as the General
Partner Entity has made public disclosure thereof and to use such information
during such period of
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confidentiality solely for purposes of determining whether to exercise the
Redemption Right; provided, however, that a Limited Partner may disclose such
information to its attorney, accountant and/or financial advisor for purposes of
obtaining advice with respect to such exercise so long as such attorney,
accountant and/or financial advisor agrees to receive and hold such information
subject to this confidentiality requirement.
D. Confidentiality. Notwithstanding any other provision of this Section
8.4, the General Partner may keep confidential from the Limited Partners, for
such period of time as the General Partner determine in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or could damage the Partnership or its
business or (ii) the Partnership is required by law or by agreements with
unaffiliated third parties to keep confidential.
8.5 REDEMPTION RIGHT.
A. General. (i) Subject to Section 8.5.C and unless otherwise provided
in an agreement between the Partnership and a Limited Partner entered into upon
the issuance of a Partnership Unit to a Limited Partner, at any time on or after
the first anniversary date of the issuance of a Partnership Unit to a Limited
Partner pursuant to Article IV hereof (which one-year period shall commence upon
the issuance of such Partnership Unit), or on or after such date prior to the
expiration of such one-year period as the General Partner, in its sole and
absolute discretion, designates with respect to any or all Partnership Units
then outstanding, the holder of a Partnership Unit (if other than the General
Partner or the General Partner Entity or any Subsidiary of either the General
Partner or the General Partner Entity) shall have the right (the "Redemption
Right") to require the Partnership to redeem such Partnership Unit, with such
redemption to occur on the Specified Redemption Date and at a redemption price
equal to and in the form of the Cash Amount to be paid by the Partnership. Any
such Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner) by the Limited
Partner who is exercising the Redemption Right (the "Redeeming Partner"). A
Limited Partner may exercise the Redemption Right from time to time, without
limitation as to frequency, with respect to part or all of the Units that it
owns, as selected by the Limited Partner, provided that a Limited Partner may
not exercise the Redemption Right for less than one thousand (1,000) Partnership
Units unless such Redeeming Partner then holds less than one thousand (1,000)
Partnership Units, in which event the Redeeming Partner must exercise the
Redemption Right for all of the Partnership Units held by such Redeeming
Partner.
(ii) The Redeeming Partner shall have no right with respect to
any Partnership Units so redeemed to receive any distributions paid with respect
to a Partnership Record Date on or after the Specified Redemption Date with
respect to such Partnership Units.
(iii) The Assignee of any Limited Partner may exercise the
rights of such Limited Partner pursuant to this Section 8.5, and such Limited
Partner shall be deemed to have assigned such rights to such Assignee and shall
be bound by the exercise of such rights by such Limited Partner's Assignee. In
connection with any exercise of such rights by such Assignee on behalf
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of such Limited Partner, the Cash Amount shall be paid by the Partnership
directly to such Assignee and not to such Limited Partner.
(iv) If the General Partner provides notice to the Limited
Partners, pursuant to Section 8.4.C hereof, the Redemption Right shall be
exercisable, without regard to whether the Partnership Units have been
outstanding for any specified period, during the period commencing on the date
on which the General Partner provides such notice and ending on the record date
to determine shareholders eligible to receive such distribution (or, if no such
record date is applicable, at least ten (10) business days before the
consummation of such merger, sale or other extraordinary transaction). If this
subparagraph (iv) applies, the Specified Redemption Date is the date on which
the Partnership and the General Partner receive notice of exercise of the
Redemption Right, rather than ten (10) Business Days after receipt of the notice
of redemption.
B. General Partner Assumption of Right. (i) If a Limited Partner has
delivered a Notice of Redemption, the General Partner may, in its sole and
absolute discretion (subject to the limitations on ownership and transfer of
Shares set forth in the Declaration of Trust), elect to assume directly and
satisfy a Redemption Right by paying to the Redeeming Partner either the Cash
Amount or the Shares Amount, as the General Partner determines in its sole and
absolute discretion (provided that payment of the Redemption Amount in the form
of Shares shall be in Shares of a class which are registered under Section 12 of
the Exchange Act and listed for trading on the exchange or national market on
which the Shares are Publicly Traded, and provided further that, if the Shares
are not Publicly Traded at the time a Redeeming Partner exercises its Redemption
Right, the Redemption Amount shall be paid only in the form of the Cash Amount
unless the Redeeming Partner, in its sole and absolute discretion, consents to
payment of the Redemption Amount in the form of the Shares Amount), on the
Specified Redemption Date, whereupon the General Partner shall acquire the
Partnership Units offered for redemption by the Redeeming Partner and shall be
treated for all purposes of this Agreement as the owner of such Partnership
Units. Unless the General Partner, in its sole and absolute discretion, shall
exercise its right to assume directly and satisfy the Redemption Right, the
General Partner shall not have any obligation to the Redeeming Partner or to the
Partnership with respect to the Redeeming Partner's exercise of the Redemption
Right. If the General Partner shall exercise its right to satisfy the Redemption
Right in the manner described in the first sentence of this Section 8.5B and
shall fully perform its obligations in connection therewith, the Partnership
shall have no right or obligation to pay any amount to the Redeeming Partner
with respect to such Redeeming Partner's exercise of the Redemption Right, and
each of the Redeeming Partner, the Partnership and the General Partner shall,
for federal income tax purposes, treat the transaction between the General
Partner and the Redeeming Partner as a sale of the Redeeming Partner's
Partnership Units to the General Partner. Nothing contained in this Section
8.5.B shall imply any right of the General Partner to require any Limited
Partner to exercise the Redemption Right afforded to such Limited Partner
pursuant to Section 8.5.A.
(ii) If the General Partner determines to pay the Redeeming
Partner the Redemption Amount in the form of Shares, the total number of Shares
to be paid to the Redeeming Partner in exchange for the Redeeming Partner's
Partnership Units shall be the applicable Shares Amount. If this amount is not a
whole number of Shares, the Redeeming Partner shall be paid (i) that number of
Shares which equals the nearest whole number less than such amount plus (ii) an
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amount of cash which the General Partner determines, in its reasonable
discretion, to represent the fair value of the remaining fractional Share which
would otherwise be payable to the Redeeming Partner.
(iii) Each Redeeming Partner agrees to execute such documents
as the General Partner may reasonably require in connection with the issuance of
Shares upon exercise of the Redemption Right, including, but not limited to, any
investment representation required by the General Partner.
C. Exceptions to Exercise of Redemption Right. Notwithstanding the
provisions of Sections 8.5.A and 8.5.B, a Partner shall not be entitled to
exercise the Redemption Right pursuant to Section 8.5.A if (but only as long as)
the delivery of Shares to such Partner on the Specified Redemption Date (i)
would be prohibited under the Declaration of Trust or (ii) would violate
applicable federal or state securities laws or regulations (in each case
regardless of whether the General Partner would in fact assume and satisfy the
Redemption Right).
D. No Liens on Partnership Units Delivered for Redemption. Each Limited
Partner covenants and agrees with the General Partner that all Partnership Units
delivered for redemption shall be delivered to the Partnership or the General
Partner, as the case may be, free and clear of all liens, and, notwithstanding
anything contained herein to the contrary, neither the General Partner nor the
Partnership shall be under any obligation to acquire Partnership Units which are
or may be subject to any liens. Each Limited Partner further agrees that, if any
state or local property transfer tax is payable as a result of the transfer of
its Partnership Units to the Partnership or the General Partner, such Limited
Partner shall assume and pay such transfer tax.
E. Additional Partnership Interests. If the Partnership issues
Partnership Interests to any Additional Limited Partner pursuant to Article IV,
the General Partner shall make such revisions to this Section 8.5 as it
determines are necessary to reflect the issuance of such Partnership Interests
(including setting forth any restrictions on the exercise of the Redemption
Right with respect to such Partnership Interests).
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
9.1 RECORDS AND ACCOUNTING.
The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership's business, including, without limitation, all books and records
necessary to provide to the Limited Partners any information, lists and copies
of documents required to be provided pursuant to Section 9.3. Any records
maintained by or on behalf of the Partnership in the regular course of its
business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographics or any other information storage device, provided
that the records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
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maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.
9.2 FISCAL YEAR.
The fiscal year of the Partnership shall be the calendar year.
9.3 REPORTS.
A. Annual Reports. As soon as practicable, but in no event later than
the date on which the General Partner Entity mails its annual report to its
shareholders, the General Partner Entity shall cause to be mailed to each
Limited Partner an annual report, as of the close of the most recently ended
Partnership Year, containing financial statements of the Partnership, or of the
General Partner Entity if such statements are prepared solely on a consolidated
basis with the Partnership, for such Partnership Year, presented in accordance
with generally accepted accounting principles, such statements to be audited by
a nationally recognized firm of independent public accountants selected by the
General Partner Entity.
B. Quarterly Reports. If and to the extent that the General Partner
Entity mails quarterly reports to its shareholders, as soon as practicable, but
in no event later than the date on such reports are mailed, the General Partner
Entity shall cause to be mailed to each Limited Partner a report containing
unaudited financial statements, as of the last day of such calendar quarter, of
the Partnership, or of the General Partner Entity if such statements are
prepared solely on a consolidated basis with the Partnership, and such other
information as may be required by applicable law or regulation, or as the
General Partner determines to be appropriate.
ARTICLE X
TAX MATTERS
10.1 PREPARATION OF TAX RETURNS.
The General Partner shall arrange for the preparation and timely filing
of all returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the close of
each taxable year, the tax information reasonably required by Limited Partners
for federal and state income tax reporting purposes.
10.2 TAX ELECTIONS.
Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
pursuant to the Code, including, without limitation, the election under Section
754 of the Code in accordance with applicable regulations thereunder. The
General Partner shall have the right to seek to revoke any such election
(including, without limitation, the election under Section 754 of the Code) upon
the
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General Partner's determination in its sole and absolute discretion that such
revocation is in the best interests of the Partners.
10.3 TAX MATTERS PARTNER.
A. General. The General Partner shall be the "tax matters partner" of
the Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3)
of the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address, tax payer identification
number and profit interest of each of the Limited Partners and any Assignees;
provided, however, that such information is provided to the Partnership by the
Limited Partners.
X. Xxxxxx. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS
with respect to any administrative or
judicial proceedings for the adjustment of
Partnership items required to be taken into
account by a Partner for income tax purposes
(such administrative proceedings being
referred to as a "tax audit" and such
judicial proceedings being referred to as
"judicial review"), and in the settlement
agreement the tax matters partner may
expressly state that such agreement shall
bind all Partners, except that such
settlement agreement shall not bind any
Partner (i) who (within the time prescribed
pursuant to the Code and Regulations) files
a statement with the IRS providing that the
tax matters partner shall not have the
authority to enter into a settlement
agreement on behalf of such Partner or (ii)
who is a "notice partner" (as defined in
Section 6231(a)(8) of the Code) or a member
of a "notice group" (as defined in Section
6223(b)(2) of the Code);
(2) if a notice of a final administrative
adjustment at the Partnership level of any
item required to be taken into account by a
Partner for tax purposes (a "final
adjustment") is mailed to the tax matters
partner, to seek judicial review of such
final adjustment, including the filing of a
petition for readjustment with the Tax Court
or the filing of a complaint for refund with
the United States Claims Court or the
District Court of the United States for the
district in which the Partnership's
principal place of business is located;
(3) to intervene in any action brought by any
other Partner for judicial review of a final
adjustment;
(4) to file a request for an administrative
adjustment with the IRS at any time and, if
any part of such request is not allowed by
the IRS, to file an appropriate pleading
(petition or complaint) for judicial review
with respect to such request;
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(5) to enter into an agreement with the IRS to
extend the period for assessing any tax
which is attributable to any item required
to be taken into account by a Partner for
tax purposes, or an item affected by such
item; and
(6) to take any other action on behalf of the
Partners of the Partnership in connection
with any tax audit or judicial review
proceeding to the extent permitted by
applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 shall be fully applicable to the tax matters
partner in its capacity as such.
C. Reimbursement. The tax matters partner shall receive no compensation
for its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm and/or
law firm to assist the tax matters partner in discharging its duties hereunder,
so long as the compensation paid by the Partnership for such services is
reasonable.
10.4 ORGANIZATIONAL EXPENSES.
The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60) month period as provided
in Section 709 of the Code.
10.5 WITHHOLDING.
Each Limited Partner hereby authorizes the Partnership to withhold from
or pay on behalf of or with respect to such Limited Partner any amount of
federal, state, local, or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by
such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited Partner
or (ii) the General Partner determines, in its sole and absolute discretion,
that such payment may be satisfied out of the available funds of the Partnership
which would, but for such payment, be distributed to the Limited Partner. Any
amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated
as having been distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner's Partnership Interest to secure such Limited Partner's
obligation to pay to the Partnership any amounts required to be paid pursuant
to this Section 10.5. If a Limited Partner fails to pay
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any amounts owed to the Partnership pursuant to this Section 10.5 when
due, the General Partner may, in its sole and absolute discretion, elect to
make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in the Wall Street Journal, plus four (4) percentage points (but
not higher than the maximum lawful rate under the laws of the State of
Delaware) from the date such amount is due (i.e., fifteen (15) days after
demand) until such amount is paid in full. Each Limited Partner shall take such
actions as the Partnership or the General Partner shall request to perfect or
enforce the security interest created hereunder.
ARTICLE XI
TRANSFERS AND WITHDRAWALS
11.1 TRANSFER.
A. Definition. The term "transfer," when used in this Article XI with
respect to a Partnership Interest or a Partnership Unit, shall be deemed to
refer to a transaction by which the General Partner purports to assign all or
any part of its General Partnership Interest to another Person or by which a
Limited Partner purports to assign all or any part of its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise. The term "transfer" when used in this Article XI does not include
any redemption or repurchase of Partnership Units by the Partnership from a
Partner or acquisition of Partnership Units from a Limited Partner by the
General Partner pursuant to Section 8.5 or otherwise. No part of the interest of
a Limited Partner shall be subject to the claims of any creditor, any spouse for
alimony or support, or to legal process, and may not be voluntarily or
involuntarily alienated or encumbered except as may be specifically provided for
in this Agreement.
B. General. No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article XI. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article XI shall be null and void.
11.2 TRANSFERS OF PARTNERSHIP INTERESTS OF GENERAL PARTNERS.
A. Restriction on Transfer. Except for transfers of Partnership Units
to the Partnership as provided in Section 7.5 or Section 8.5, the General
Partner may not transfer any of its Partnership Interest (including both its
General Partnership Interest and its Limited Partnership Interest) except in
connection with a transaction described in Section 11.2.B or as otherwise
expressly permitted under this Agreement, nor shall the General Partner withdraw
as a General Partner except in connection with a transaction described in
Section 11.2.B.
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B. Merger or Other Combination. The General Partner shall not engage in
any merger (including a triangular merger), consolidation or other combination
with or into another person, sale of all or substantially all of its assets or
any reclassification, recapitalization or change of outstanding Shares (other
than a change in par value, or from par value to no par value, or as a result of
a subdivision or combination as described in the definition of "Conversion
Factor") ("Termination Transaction"), unless the Termination Transaction has
been approved by the Consent of the Partners holding at least a majority of the
then outstanding Partnership Units (including any Partnership Units held by the
General Partner) and in connection with which all Limited Partners either will
receive, or will have the right to elect to receive, for each Partnership Unit
an amount of cash, securities, or other property equal to the product of the
Conversion Factor multiplied by the greatest amount of cash, securities or other
property paid to a holder of Shares corresponding to such Partnership Unit in
consideration of one such Share at any time during the period from and after the
date on which the Termination Transaction is consummated; provided that, if, in
connection with the Termination Transaction, a purchase, tender or exchange
offer shall have been made to and accepted by the holders of more than fifty
percent (50%) of the outstanding Shares, each holder of Partnership Units shall
receive, or shall have the right to elect to receive without any right of
Consent set forth above in this subsection B, the greatest amount of cash,
securities, or other property which such holder would have received had it
exercised the Redemption Right and received Shares in exchange for its
Partnership Units immediately prior to the expiration of such purchase, tender
or exchange offer and had thereupon accepted such purchase, tender or exchange
offer.
11.3 LIMITED PARTNERS' RIGHTS TO TRANSFER.
A. General. Subject to the provisions of Sections 11.3.C, 11.3.D,
11.3.E, 11.4 and 11.6, a Limited Partner (other than a General Partner) may
transfer with or without the consent of the General Partner, all or any portion
of its Partnership Interest, or any of such Limited Partner's rights as a
Limited Partner, provided that prior written notice of such proposed transfer is
delivered to the General Partner. Notwithstanding the foregoing, any Limited
Partner may, at any time, without the consent of the General Partner, (i)
transfer all or any portion of its Partnership Interest to the General Partner,
(ii) transfer all or any portion of its Partnership Interest to an Affiliate,
another original Limited Partner or to an Immediate Family member, subject to
the provisions of Section 11.6, (iii) transfer all or any portion of its
Partnership Interest to a trust for the benefit of a charitable beneficiary or
to a charitable foundation, subject to the provisions of Section 11.6, and (iv)
subject to the provisions of Section 11.6, pledge (a "Pledge") all or any
portion of its Partnership Interest to a lending institution, which is not an
Affiliate of such Limited Partner, as collateral or security for a bona fide
loan or other extension of credit, and transfer such pledged Partnership
Interest to such lending institution in connection with the exercise of remedies
under such loan or extension or credit. Each Limited Partner or Assignee
(resulting from a transfer made pursuant to clauses (i) - (iv) of the proviso of
the preceding sentence) shall have the right to transfer all or any portion of
its Partnership Interest, subject to the provisions of Section 11.6 and the
satisfaction of each of the following conditions (in addition to the right of
each such Limited Partner or Assignee to continue to make any such transfer
permitted by clauses (i) - (iv) of such proviso without satisfying either of the
following conditions):
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(i) The transferring Partner shall give written notice of
the proposed transfer to the General Partner, which
notice shall state (i) the identity of the proposed
transferee, and (ii) the amount and type of
consideration proposed to be received for the
transferred Partnership Units. The General Partner
shall have ten (10) days upon which to give the
transferring Partner notice of its election to
acquire the Partnership Units on the proposed terms.
If it so elects, it shall purchase the Partnership
Units on such terms within ten (10) days after giving
notice of such election. If it does not so elect, the
transferring Partner may transfer such Partnership
Units to a third party, on economic terms no more
favorable to the transferee than the proposed terms,
subject to the other condition of this Section 11.3.
(ii) Any transfer of a Partnership Interest shall be made
only to Qualified Transferees.
It is a condition to any transfer otherwise permitted
hereunder (excluding Pledges of a Partnership Interest, but including any
transfer of the pledged Partnership Interest, whether to the secured party or
otherwise, pursuant to the secured party's exercise of its remedies under such
Pledge or the related loan or extension of credit) that the transferee assumes
by operation of law or express agreement all of the obligations of the
transferor Limited Partner under this Agreement with respect to such transferred
Partnership Interest and no such transfer (other than pursuant to a statutory
merger or consolidation wherein all obligations and liabilities of the
transferor Partner are assumed by a successor corporation by operation of law)
shall relieve the transferor Partner of its obligations under this Agreement
without the approval of the General Partner, in its reasonable discretion.
Notwithstanding the foregoing, any transferee of any transferred Partnership
Interest shall be subject to any and all ownership limitations contained in the
Declaration of Trust. Any transferee, whether or not admitted as a Substituted
Limited Partner, shall take subject to the obligations of the transferor
hereunder. Unless admitted as a Substitute Limited Partner, no transferee,
whether by a voluntary transfer, by operation of law or otherwise, shall have
rights hereunder, other than the rights of an Assignee as provided in Section
11.5.
B. Incapacitated Limited Partners. If a Limited Partner is subject to
Incapacity, the executor, administrator, trustee, committee, guardian,
conservator or receiver of such Limited Partner's estate shall have all the
rights of a Limited Partner, but not more rights than those enjoyed by other
Limited Partners for the purpose of settling or managing the estate and such
power as the Incapacitated Limited Partner possessed to transfer all or any part
of its interest in the Partnership. The Incapacity of a Limited Partner, in and
of itself, shall not dissolve or terminate the Partnership.
C. No Transfers Violating Securities Laws. The General Partner may
prohibit any transfer of Partnership Units by a Limited Partner unless it
receives a written opinion of legal counsel (which opinion and counsel shall be
reasonably satisfactory to the Partnership) to such Limited Partner that such
transfer would not require filing of a registration statement under the
Securities Act or would not otherwise violate or cause the Partnership to
violate any federal, or
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state securities laws or regulations applicable to the Partnership or the
Partnership Unit or, at the option of the Partnership, an opinion of legal
counsel to the Partnership to the same effect.
D. No Transfers Affecting Tax Status of Partnership. No transfer of
Partnership Units by a Limited Partner (including a redemption or exchange
pursuant to Section 8.5) may be made to any Person if (i) in the opinion of
legal counsel for the Partnership, it would result in the Partnership being
treated as an association taxable as a corporation for federal income tax
purposes or would result in a termination of the Partnership for federal income
tax purposes (except as a result of the redemption or exchange for Shares of all
Partnership Units held by all Limited Partners other than the General Partner or
the General Partner Entity or any Subsidiary of either the General Partner or
the General Partner Entity or pursuant to a transaction expressly permitted
under Section 7.11.B or Section 11.2), (ii) in the opinion of legal counsel for
the Partnership, it would adversely affect the ability of the General Partner
Entity to continue to qualify as a REIT or would subject the General Partner
Entity to any additional taxes under Section 857 or Section 4981 of the Code or
(iii) such transfer is effectuated through an "established securities market" or
a "secondary market (or the substantial equivalent thereof)" within the meaning
of Section 7704 of the Code.
E. No Transfers to Holders of Nonrecourse Liabilities. No Pledge or
transfer of any Partnership Units may be made to a lender to the Partnership or
any Person who is related (within the meaning of Section 1.752-4(b) of the
Regulations) to any lender to the Partnership whose loan constitutes a
Nonrecourse Liability unless (i) the General Partner is provided notice thereof
and (ii) the lender enters into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Redemption Amount any Partnership
Units in which a security interest is held simultaneously with the time at which
such lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.
11.4 SUBSTITUTED LIMITED PARTNERS.
A. Consent of General Partner. No Limited Partner shall have the right
to substitute a transferee as a Limited Partner in its place. The General
Partner shall, however, have the right to consent to the admission of a
transferee of the interest of a Limited Partner pursuant to this Section 11.4 as
a Substituted Limited Partner, which consent may be, given or withheld by the
General Partner in its sole and absolute discretion. The General Partner's
failure or refusal to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner. The General Partner hereby grants its consent to
the admission as a Substituted Limited Partner to any bona fide financial
institution that loans money or otherwise extends credit to a holder of Units
and thereafter becomes the owner of such Units pursuant to the exercise by such
financial institution of its rights under a Pledge of such Units granted in
connection with such loan or extension of credit.
B. Rights of Substituted Limited Partner. A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article XI
shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement. The admission of any
transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all the
terms and conditions
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of this Agreement (including, without limitation, the provisions of Section
15.11) and such other documents or instruments as may be required to effect the
admission.
C. Amendment of Exhibit A. Upon the admission of a Substituted Limited
Partner, the General Partner shall amend Exhibit A to reflect the name, address,
Capital Account, and number of Partnership Units of such Substituted Limited
Partner and to eliminate or adjust, if necessary, the name, address, Capital
Account and Partnership Units of the predecessor of such Substituted Limited
Partner.
11.5 ASSIGNEES.
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 as a
Substituted Limited Partner, as described in Section 11.4, such transferee shall
be considered an Assignee for purposes of this Agreement. An Assignee shall be
entitled to all the rights of an assignee of a limited partnership interest
under the Act, including the right to receive distributions from the Partnership
and the share of Net Income, Net Losses, gain, loss and Recapture Income
attributable to the Partnership Units assigned to such transferee, and shall
have the rights granted to the Limited Partners under Section 8.5, but shall not
be deemed to be a holder of Partnership Units for any other purpose under this
Agreement, and shall not be entitled to vote such Partnership Units in any
matter presented to the Limited Partners for a vote (such Partnership Units
being deemed to have been voted on such matter in the same proportion as all
other Partnership Units held by Limited Partners are voted). If any such
transferee desires to make a further assignment of any such Partnership Units,
such transferee shall be subject to all the provisions of this Article XI to the
same extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.
11.6 GENERAL PROVISIONS.
A. Withdrawal of Limited Partner. No Limited Partner may withdraw from
the Partnership other than as a result of a permitted transfer of all of such
Limited Partner's Partnership Units in accordance with this Article XI or
pursuant to redemption of all of its Partnership Units under Section 8.5.
B. Termination of Status as Limited Partner. Any Limited Partner who
shall transfer all of its Partnership Units in a transfer permitted pursuant to
this Article XI or pursuant to redemption of all of its Partnership Units under
Section 8.5 shall cease to be a Limited Partner.
C. Timing of Transfers. Transfers pursuant to this Article XI may only
be made upon three business days prior notice, unless the General Partner
otherwise agrees.
D. Allocations. If any Partnership Interest is transferred during any
quarterly segment of the Partnership's fiscal year in compliance with the
provisions of this Article XI or redeemed or transferred pursuant to Section
8.5, Net Income, Net Losses, each item thereof and all other items attributable
to such interest for such fiscal year shall be divided and allocated between the
transferor Partner and the transferee Partner by taking into account their
varying interests during the fiscal year in accordance with Section 706(d) of
the Code, using the interim closing of the
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books method (unless the General Partner, in its sole and absolute discretion,
elects to adopt a daily, weekly, or a monthly proration period, in which event
Net Income, Net Losses, each item thereof and all other items attributable to
such interest for such fiscal year shall be prorated based upon the applicable
method selected by the General Partner). Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer or
redemption occurs shall be allocated to the Person who is a Partner as of
midnight on the last day of said month. All distributions of Available Cash
attributable to any Partnership Unit with respect to which the Partnership
Record Date is before the date of such transfer, assignment or redemption shall
be made to the transferor Partner or the Redeeming Partner, as the case may be,
and, in the case of a transfer or assignment other than a redemption, all
distributions of Available Cash thereafter attributable to such Partnership Unit
shall be made to the transferee Partner.
E. Additional Restrictions. In addition to any other restrictions on
transfer herein contained, including without limitation the provisions of this
Article XI, in no event may any transfer or assignment of a Partnership Interest
by any Partner (including pursuant to Section 8.5) be made without the express
consent of the General Partner, in its sole and absolute discretion, (i) to any
person or entity who lacks the legal right, power or capacity to own a
Partnership Interest; (ii) in violation of applicable law; (iii) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership
such transfer would cause a termination of the Partnership for federal or state
income tax purposes (except as a result of the redemption or exchange for Shares
of all Partnership Units held by all Limited Partners or pursuant to a
transaction expressly permitted under Section 7.11.B or Section 11.2); (v) if in
the opinion of counsel to the Partnership, such transfer would cause the
Partnership to cease to be classified as a partnership for federal income tax
purposes (except as a result of the redemption or exchange for Shares of all
Partnership Units held by all Limited Partners or pursuant to a transaction
expressly permitted under Section 7.11.B or Section 11.2); (vi) if such transfer
would cause the Partnership Interests of "benefit plan investors" to become
"significant," as those terms are used in Section 7.9.E., or would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(c) of the Code); (vii) if
such transfer would, in the opinion of counsel to the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.1-101;
(viii) if such transfer requires the registration of such Partnership Interest
pursuant to any applicable federal or state securities laws; (ix) if such
transfer is effectuated through an "established securities market" or a
"secondary market" (or the substantial equivalent thereof) within the meaning of
Section 7704 of the Code or such transfer causes the Partnership to become a
"publicly traded partnership," as such term is defined in Section 469(k)(2) or
Section 7704(b) of the Code (provided that this clause (ix) shall not be the
basis for limiting or restricting in any manner the exercise of the Redemption
Right under Section 8.5 unless, and only to the extent that, outside tax counsel
provides to the General Partner an opinion to the effect that, in the absence of
such limitation or restriction, there is a significant risk that the Partnership
will be treated as a "publicly traded partnership" and, by reason thereof,
taxable as a corporation); (x) if such transfer subjects the Partnership to
regulation under the Investment Company Act of 1940, the Investment Advisors Act
of 1940 or ERISA, each as amended; (xi) such transfer could adversely affect the
ability of the General Partner Entity to
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remain qualified as a REIT; or (xii) if in the opinion of legal counsel for the
transferring Partner (which opinion and counsel shall be reasonably satisfactory
to the Partnership) or legal counsel for the Partnership, such transfer would
adversely affect the ability of the General Partner Entity to continue to
qualify as a REIT or subject the General Partner Entity to any additional taxes
under Section 857 or Section 4981 of the Code.
F. Avoidance of "Publicly Traded Partnership" Status. The General
Partner shall monitor the transfers of interests in the Partnership to determine
(i) if such interests are being traded on an "established securities market" or
a "secondary market (or the substantial equivalent thereof)" within the meaning
of Section 7704 of the Code and (ii) whether additional transfers of interests
would result in the Partnership being unable to qualify for at least one of the
"safe harbors" set forth in Regulations Section 1.7704-1 (or such other guidance
subsequently published by the IRS setting forth safe harbors under which
interests will not be treated as "readily tradable on a secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704 of the Code)
(the "Safe Harbors"). The General Partner shall take all steps reasonably
necessary or appropriate to prevent any trading of interests or any recognition
by the Partnership of transfers made on such markets and, except as otherwise
provided herein, to insure that at least one of the Safe Harbors is met;
provided, however, that the foregoing shall not authorize the General Partner to
limit or restrict in any manner the right of any holder of a Partnership Unit to
exercise the Redemption Right in accordance with the terms of Section 8.5
unless, and only to the extent that, outside tax counsel provides to the General
Partner an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a "publicly traded partnership" and, by reason thereof, taxable as a
corporation.
ARTICLE XII
ADMISSION OF PARTNERS
12.1 ADMISSION OF A SUCCESSOR GENERAL PARTNER.
A successor to all of the General Partner's General Partnership
Interest pursuant to Section 11.2 who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as a General Partner,
effective upon such transfer. Any such transferee shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be
subject to such successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.
12.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS.
A. General. No Person shall be admitted as an Additional Limited
Partner without the consent of the General Partner, which consent shall be given
or withheld in the General Partner's sole and absolute discretion. A Person who
makes a Capital Contribution to the Partnership in accordance with this
Agreement, including without limitation, under Section 4.1.C, or who exercises
an option to receive Partnership Units shall be admitted to the Partnership as
an Additional Limited Partner only with the consent of the General Partner and
only upon furnishing
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to the General Partner (i) evidence of acceptance in form satisfactory to the
General Partner of all of the terms and conditions of this Agreement, including,
without limitation, the power of attorney granted in Section 15.11 and (ii) such
other documents or instruments as may be required in the discretion of the
General Partner to effect such Person's admission as an Additional Limited
Partner. The admission of any Person as an Additional Limited Partner shall
become effective on the date upon which the name of such Person is recorded on
the books and records of the Partnership, following the consent of the General
Partner to such admission.
B. Allocations to Additional Limited Partners. If any Additional
Limited Partner is admitted to the Partnership on any day other than the first
day of a Partnership Year, then Net Income, Net Losses, each item thereof and
all other items allocable among Partners and Assignees for such Partnership Year
shall be allocated among such Additional Limited Partner and all other Partners
and Assignees by taking into account their varying interests during the
Partnership Year in accordance with Section 706(d) of the Code, using the
interim closing of the books method (unless the General Partner, in its sole and
absolute discretion, elects to adopt a daily, weekly or monthly proration
method, in which event Net Income, Net Losses, and each item thereof would be
prorated based upon the applicable period selected by the General Partner).
Solely for purposes of making such allocations, each of such items for the
calendar month in which an admission of any Additional Limited Partner occurs
shall be allocated among all the Partners and Assignees including such
Additional Limited Partner. All distributions of Available Cash with respect to
which the Partnership Record Date is before the date of such admission shall be
made solely to Partners and Assignees other than the Additional Limited Partner,
and all distributions of Available Cash thereafter shall be made to all the
Partners and Assignees including such Additional Limited Partner.
12.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP.
For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 15.11 hereof.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.1 DISSOLUTION.
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of a General Partner, the remaining General Partners and any
successor General Partner shall continue the business of the Partnership. The
Partnership shall dissolve, and its affairs shall be wound up, upon the first to
occur of any of the following ("Liquidating Events"):
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(i) the expiration of its term as provided in Section 2.4
hereof;
(ii) an event of withdrawal of a General Partner, as defined
in the Act (other than an event of bankruptcy), unless (1) there is at least one
other General Partner, in which case the remaining General Partners shall
continue the business of the Partnership, or (2) within ninety (90) days after
the withdrawal a "majority in interest" (as defined below) of the remaining
Partners Consent in writing to continue the business of the Partnership and to
the appointment, effective as of the date of withdrawal, of a substitute General
Partner;
(iii) an election to dissolve the Partnership made by the
General Partner, in its sole and absolute discretion;
(iv) entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act;
(v) the sale of all or substantially all of the assets and
properties of the Partnership for cash or for marketable securities; or
(vi) a final and non-appealable judgment is entered by a court
of competent jurisdiction ruling that the remaining General Partner(s) is
bankrupt or insolvent, or a final and non-appealable order for relief is entered
by a court with appropriate jurisdiction against the remaining General
Partner(s), in each case under any federal or state bankruptcy or insolvency
laws as now or hereafter in effect, unless prior to or at the time of the entry
of such order or judgment a "majority in interest" (as defined below) of the
remaining Partners Consent in writing to continue the business of the
Partnership and to the appointment, effective as of a date prior to the date of
such order or judgment, of a substitute General Partner.
As used herein, a "majority in interest" shall refer to Partners
(excluding the General Partners) who hold more than fifty percent (50%) of the
outstanding Percentage Interests not held by the General Partners.
13.2 WINDING UP.
A. General. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs. The General Partner (or, if there is no remaining General Partner,
any Person elected by a majority in interest of the Limited Partners (the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include equity or other securities of the General Partner or any other entity)
shall be applied and distributed in the following order:
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(1) First, to the payment and discharge of all
of the Partnership's debts and liabilities
to creditors other than the Partners;
(2) Second, to the payment and discharge of all
of the Partnership's debts and liabilities
to the General Partner;
(3) Third, to the payment and discharge of all
of the Partnership's debts and liabilities
to the Limited Partners; and
(4) The balance, if any, to the Partners in
accordance with their Capital Accounts,
after giving effect to all contributions,
distributions, and allocations for all
periods. In connection therewith, income,
gain and loss of the Partnership (and to the
extent necessary to achieve the purposes
hereof, items of gross income and deduction)
with respect to the sale or other
disposition of all or substantially all of
the Partnership's assets and/or the
Partnership's operations in connection
therewith (whether or not attributable to
the taxable year in which the distribution
pursuant to this Section 13.2.A(4) is to be
made or a preceding taxable year) shall be
allocated among the Partners so that each
Partner's Capital Account shall equal, after
taking into account the prior balance
(positive or negative) in such Partner's
Capital Account and the effect of such
allocation, the amount that such Partner
would be entitled to receive if the
Partnership were to make a distribution to
the Partners pursuant to the provisions of
Section 5.1 hereof in an amount equal to the
remaining liquidation proceeds to be
distributed under this Section 13.2.A(4).
The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article XIII.
B. Deferred Liquidation. Notwithstanding the provisions of Section
13.2.A which require liquidation of the assets of the Partnership, but subject
to the order of priorities set forth therein, if prior to or upon dissolution of
the Partnership the Liquidator determines that an immediate sale of part or all
of the Partnership's assets would be impractical or would cause undue loss to
the Partners, the Liquidator may, in its sole and absolute discretion, defer for
a reasonable time the liquidation of any assets except those necessary to
satisfy liabilities of the Partnership (including to those Partners as
creditors) or distribute to the Partners, in lieu of cash, as tenants in common
and in accordance with the provisions of Section 13.2.A, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
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13.3 COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS.
Subject to Section 13.4, if the Partnership is "liquidated" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
under this Article XIII to the General Partner and Limited Partners who have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs),
such Partner shall have no obligation to make any contribution to the capital of
the Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever. In the discretion of the General Partner, a pro rata portion of the
distributions that would otherwise be made to the General Partner and Limited
Partners pursuant to this Article XIII may be: (A) distributed to a trust
established for the benefit of the General Partner and Limited Partners for the
purposes of liquidating Partnership assets, collecting amounts owed to the
Partnership and paying any contingent or unforeseen liabilities or obligations
of the Partnership or of the General Partner arising out of or in connection
with the Partnership (in which case the assets of any such trust shall be
distributed to the General Partner and Limited Partners from time to time, in
the reasonable discretion of the General Partner, in the same proportions as the
amount distributed to such trust by the Partnership would otherwise have been
distributed to the General Partner and Limited Partners pursuant to this
Agreement); or (B) withheld to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Partnership, provided that such withheld
amounts shall be distributed to the General Partner and Limited Partners as soon
as practicable.
13.4 DEEMED DISTRIBUTION AND RECONTRIBUTION.
Notwithstanding any other provision of this Article XIII, if the
Partnership is deemed liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged and the Partnership's affairs shall not be wound up. Instead,
for federal income tax purposes and for purposes of maintaining Capital Accounts
pursuant to Exhibit B, the Partnership shall be deemed to have distributed its
assets in kind to the General Partner and Limited Partners, who shall be deemed
to have assumed and taken such assets subject to all Partnership liabilities,
all in accordance with their respective Capital Accounts. Immediately
thereafter, the General Partner and Limited Partners shall be deemed to have
recontributed the Partnership assets in kind to the Partnership, which shall be
deemed to have assumed and taken such assets subject to all such liabilities.
13.5 RIGHTS OF LIMITED PARTNERS.
Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right or power to demand or receive property
other than cash from the Partnership. Except as otherwise expressly provided in
this Agreement, no Limited Partner shall have priority over any other Limited
Partner as to the return of its Capital Contributions, distributions, or
allocations.
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13.6 NOTICE OF DISSOLUTION.
If a Liquidating Event occurs or an event occurs that would, but for
provisions of an election or objection by one or more Partners pursuant to
Section 13.1, result in a dissolution of the Partnership, the General Partner
shall, within thirty (30) days thereafter, provide written notice thereof to
each of the Partners and to all other parties with whom the Partnership
regularly conducts business (as determined in the discretion of the General
Partner).
13.7 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP.
Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2, the Partnership shall be terminated and
the Certificate and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.
13.8 REASONABLE TIME FOR WINDING UP.
A reasonable time shall be allowed for the orderly winding up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2, to minimize any losses otherwise attendant upon such
winding-up, and the provisions of this Agreement shall remain in effect among
the Partners during the period of liquidation.
13.9 WAIVER OF PARTITION.
Each Partner hereby waives any right to partition of the Partnership
property.
13.10 LIABILITY OF LIQUIDATOR.
The Liquidator shall be indemnified and held harmless by the
Partnership in the same manner and to the same degree as an Indemnitee may be
indemnified pursuant to Section 7.7.
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
14.1 AMENDMENTS.
A. General. Amendments to this Agreement may be proposed by the General
Partner or by any Limited Partners holding twenty-five percent (25%) or more of
the Partnership Interests. Following such proposal (except an amendment pursuant
to Section 14.1.B), the General Partner shall submit any proposed amendment to
the Limited Partners. The General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that the General Partner may deem appropriate.
For purposes of obtaining a written vote, the General Partner may require a
response within a reasonable specified time, but not less than fifteen (15) days
after notice is given, and failure to respond in such time period shall
constitute a vote which is consistent with the General Partner's recommendation
with
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respect to the proposal. Except as provided in Section 14.1.B, 14.1.C or 14.1.D,
a proposed amendment shall be adopted and be effective as an amendment hereto if
(i) it is approved by the General Partner and (ii) it receives the Consent of
Partners holding a majority of the Percentage Interests of the Limited Partners
(including Limited Partnership Interests held by the General Partner).
B. Amendments Not Requiring Limited Partner Approval. Notwithstanding
Section 14.1.A or 14.1.C, the General Partner shall have the power, without the
consent of the Limited Partners, to amend this Agreement as may be required to
facilitate or implement any of the following purposes:
(1) to add to the obligations of the General
Partner or surrender any right or power
granted to the General Partner or any
Affiliate of the General Partner for the
benefit of the Limited Partners;
(2) to reflect the admission, substitution,
termination, or withdrawal of Partners in
accordance with this Agreement (which may be
effected through the replacement of Exhibit
A with an amended Exhibit A);
(3) to set forth the designations, rights,
powers, duties, and preferences of the
holders of any additional Partnership
Interests issued pursuant to Article IV;
(4) to reflect a change that does not adversely
affect the Limited Partners in any material
respect, or to cure any ambiguity, correct
or supplement any provision in this
Agreement not inconsistent with law or with
other provisions of this Agreement, or make
other changes with respect to matters
arising under this Agreement that will not
be inconsistent with law or with the
provisions of this Agreement; and
(5) to satisfy any requirements, conditions, or
guidelines contained in any order,
directive, opinion, ruling or regulation of
a federal, state or local agency or
contained in federal, state or local law.
The General Partner shall notify the Limited Partners when any action
under this Section 14.1.B is taken in the next regular communication to the
Limited Partners.
C. Amendments Requiring Limited Partner Approval (Excluding General
Partner). Notwithstanding Section 14.1.A, without the Consent of the Outside
Limited Partners, the General Partner shall not amend Section 4.2.A, Section
7.1.A (second sentence only), Section 7.6, Section 7.8, Section 7.11.B, Section
11.2, Section 13.1, the last sentence of Section 11.4.A (provided that no such
amendment shall in any event adversely affect the rights of any lender who made
a loan or who extended credit and received in connection therewith a Pledge of
Partnership Units prior to the date such amendment is adopted unless, and only
to the extent such lender consents thereto), this Section 14.1.C or Section
14.2.
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D. Other Amendments Requiring Certain Limited Partner Approval.
Notwithstanding anything in this Section 14.1 to the contrary, this Agreement
shall not be amended with respect to any Partner adversely affected without the
Consent of such Partner adversely affected if such amendment would (i) convert a
Limited Partner's interest in the Partnership into a general partner's interest,
(ii) modify the limited liability of a Limited Partner, (iii) amend Section
7.11.A, (iv) amend Article V or Article VI (except as permitted pursuant to
Sections 4.2, 5.1.E, 5.4, 6.2 and 14.1(B)(3)), (v) amend Section 8.5 or any
defined terms set forth in Article I that relate to the Redemption Right (except
as permitted in Section 8.5.E), or (vi) amend this Section 14.1.D. This Section
14.1.D does not require unanimous consent of all Partners adversely affected
unless the amendment is to be effective against all Partners adversely affected.
14.2 MEETINGS OF THE PARTNERS.
A. General. Meetings of the Partners may be called by the General
Partner and shall be called upon the receipt by the General Partner of a written
request by Limited Partners holding twenty-five percent (25%) or more of the
Partnership Interests. The call shall state the nature of the business to be
transacted. Notice of any such meeting shall be given to all Partners not less
than seven (7) days nor more than thirty (30) days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Whenever the
vote or Consent of Partners is permitted or required under this Agreement, such
vote or Consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 14.1.A. Except as otherwise
expressly provided in this Agreement, the Consent of holders of a majority of
the Percentage Interests held by Limited Partners (including Limited Partnership
Interests held by the General Partner) shall control.
B. Actions Without a Meeting. Any action required or permitted to be
taken at a meeting of the Partners may be taken without a meeting if a written
consent setting forth the action so taken is signed by a majority of the
Percentage Interests of the Partners (or such other percentage as is expressly
required by this Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of
the Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Proxy. Each Limited Partner may authorize any Person or Persons to
act for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it, such
revocation to be effective upon the Partnership's receipt of written notice
thereof.
D. Conduct of Meeting. Each meeting of Partners shall be conducted by
the General Partner or such other Person as the General Partner may appoint
pursuant to such rules for the conduct of the meeting as the General Partner or
such other Person deem appropriate.
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ARTICLE XV
GENERAL PROVISIONS
15.1 ADDRESSES AND NOTICE.
Any notice, demand, request or report required or permitted to be given
or made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made on the date delivered in person or on the date
sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address set forth in Exhibit A
or such other address as the Partners shall notify the General Partner in
writing. Any notice is received only when actually received.
15.2 TITLES AND CAPTIONS.
All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" "Sections"
and "Exhibits" are to Articles, Sections and Exhibits of this Agreement.
15.3 PRONOUNS AND PLURALS.
Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
15.4 FURTHER ACTION.
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
15.5 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
15.6 CREDITORS.
Other than as expressly set forth herein with regard to any Indemnitee,
none of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership.
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15.7 WAIVER.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
15.8 COUNTERPARTS.
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
15.9 APPLICABLE LAW.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law.
15.10 INVALIDITY OF PROVISIONS.
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
15.11 POWER OF ATTORNEY.
A. General. Each Limited Partner and each Assignee who accepts
Partnership Units (or any rights, benefits or privileges associated therewith)
is deemed to irrevocably constitute and appoint the General Partner, any
Liquidator and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to:
(1) execute, swear to, acknowledge, deliver,
file and record in the appropriate public
offices (a) all certificates, documents and
other instruments (including, without
limitation, this Agreement and the
Certificate and all amendments or
restatements thereof) that the General
Partner or any Liquidator deems appropriate
or necessary to form, qualify or continue
the existence or qualification of the
Partnership as a limited partnership (or a
partnership in which the limited partners
have limited liability) in the State of
Delaware and in all other jurisdictions in
which the Partnership may conduct business
or own property, (b) all instruments that
the General Partner or any Liquidator deem
appropriate or necessary to reflect any
amendment, change, modification or
restatement of this Agreement in accordance
with its terms, (c) all conveyances and
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other instruments or documents that the
General Partner or any Liquidator deems
appropriate or necessary to reflect the
dissolution and liquidation of the
Partnership pursuant to the terms of this
Agreement, including, without limitation, a
certificate of cancellation, (d) all
instruments relating to the admission,
withdrawal, removal or substitution of any
Partner pursuant to, or other events
described in, Article XI, XII or XIII hereof
or the Capital Contribution of any Partner
and (e) all certificates, documents and
other instruments relating to the
determination of the rights, preferences and
privileges of Partnership Interests; and
(2) execute, swear to, acknowledge and file all
ballots, consents, approvals, waivers,
certificates and other instruments
appropriate or necessary, in the sole and
absolute discretion of the General Partner
or any Liquidator, to make, evidence, give,
confirm or ratify any vote, consent,
approval, agreement or other action which is
made or given by the Partners hereunder or
is consistent with the terms of this
Agreement or appropriate or necessary, in
the sole discretion of the General Partner
or any Liquidator, to effectuate the terms
or intent of this Agreement.
Nothing contained in this Section 15.11 shall be construed as
authorizing the General Partner or any Liquidator to amend this Agreement except
in accordance with Article XIV hereof or as may be otherwise expressly provided
for in this Agreement.
B. Irrevocable Nature. The foregoing power of attorney is hereby
declared to be irrevocable and a power coupled with an interest, in recognition
of the fact that each of the Partners will be relying upon the power of the
General Partner or any Liquidator to act as contemplated by this Agreement in
any filing or other action by it on behalf of the Partnership, and it shall
survive and not be affected by the subsequent Incapacity of any Limited Partner
or Assignee and the transfer of all or any portion of such Limited Partner's or
Assignee's Partnership Units and shall extend to such Limited Partner's or
Assignee's heirs, successors, assigns and personal representatives. Each such
Limited Partner or Assignee hereby agrees to be bound by any representation made
by the General Partner or any Liquidator, acting in good faith pursuant to such
power of attorney; and each such Limited Partner or Assignee hereby waives any
and all defenses which may be available to contest, negate or disaffirm the
action of the General Partner or any Liquidator, taken in good faith under such
power of attorney. Each Limited Partner or Assignee shall execute and deliver to
the General Partner or the Liquidator, within fifteen (15) days after receipt of
the General Partner's or Liquidator's request therefor, such further
designation, powers of attorney and other instruments as the General Partner or
the Liquidator, as the case may be, deems necessary to effectuate this Agreement
and the purposes of the Partnership.
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15.12 ENTIRE AGREEMENT.
This Agreement contains the entire understanding and agreement among
the Partners with respect to the subject matter hereof and supersedes any prior
written oral understandings or agreements among them with respect thereto.
15.13 NO RIGHTS AS SHAREHOLDERS.
Nothing contained in this Agreement shall be construed as conferring
upon the holders of the Partnership Units any rights whatsoever as partners or
shareholders of the General Partner, including, without limitation, any right to
receive dividends or other distributions made to shareholders of the General
Partner or to vote or to consent or receive notice as shareholders in respect to
any meeting of shareholders for the election of trustees of the General Partner
or any other matter.
15.14 OUTSIDE ACTIVITIES OF PARTNERS.
Subject to Section 7.5 hereof, and subject to any agreements entered
into pursuant to Section 7.6.B hereof and to any other agreements entered into
by a Partner or its Affiliates with the Partnership or a Subsidiary, any Partner
and any officer, director, employee, agent, trustee, Affiliate or shareholder of
any Partner shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities in direct or indirect competition with the
Partnership. Neither the Partnership nor any Partners shall have any rights by
virtue of this Agreement or the partnership relationship established hereby in
any such business activities, interests or ventures. Subject to any agreements
entered into by a Partner or its Affiliates with the Partnership or a
Subsidiary, neither the Partners nor any other Person shall have any rights, by
virtue of this Agreement or the partnership relationship established hereby, in
any business ventures of any other Person, and such Person shall have no
obligation pursuant to this Agreement to offer any interest in any such business
ventures to the Partnership, any Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Partner or such other Person, could be taken by such Person.
15.15 LIMITATION TO PRESERVE REIT STATUS.
To the extent that any amount paid or credited to the General Partner
or any of its officers, directors, trustees, employees or agents pursuant to
Section 7.4 or Section 7.7 would constitute gross income to the General Partner
for purposes of Section 856(c)(2) or 856(c)(3) of the Code (a "General Partner
Payment") then, notwithstanding any other provision of this Agreement, the
amount of such General Partner Payment for any fiscal year shall not exceed the
lesser of:
(i) an amount equal to the excess, if any, of (a) 4.20% of the
General Partner's total gross income (but not including the amount of any
General Partner Payments) for the fiscal year which is described in subsections
(A) though (H) of Section 856(c)(2) of the Code over (b) the amount of gross
income (within the meaning of Section 856(c)(2) of the Code) derived by the
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General Partner from sources other than those described in subsections (A)
through (H) of Section 856(c)(2) of the Code (but not including the amount of
any General Partner Payments); or
(ii) an amount equal to the excess, if any of (a) 25% of the
General Partner's total gross income (but not including the amount of any
General Partner Payments) for the fiscal year which is described in subsections
(A) through (I) of Section 856(c)(3) of the Code over (b) the amount of gross
income (within the meaning of Section 856(c)(3) of the Code) derived by the
General Partner from sources other than those described in subsections (A)
through (I) of Section 856(c)(3) of the Code (but not including the amount of
any General Partner Payments);
Notwithstanding the foregoing, General Partner Payments in
excess of the amounts set forth in subparagraphs (i) and (ii) above may be made
if the General Partner, as a condition precedent, obtains an opinion of tax
counsel that the receipt of such excess amounts would not adversely affect the
General Partner's ability to qualify as a REIT. To the extent General Partner
Payments may not be made in a year due to the foregoing limitations, such
General Partner Payments shall carry over and be treated as arising in the
following year, provided, however, that such amounts shall not carry over for
more than five years, and if not paid within such five year period, shall
expire; provided further, that (i) as General Partner Payments are made, such
payments shall be applied first to carry over amounts outstanding, if any, and
(ii) with respect to carry over amounts for more than one Partnership Year, such
payments shall be applied to the earliest Partnership Year first.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
PRESIDIO GOLF TRUST
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
LIMITED PARTNERS:
By: PRESIDIO GOLF TRUST,
as Attorney-in-Fact for the Limited
Partners
By:
---------------------------
Name:
-------------------------
Title:
------------------------
The Original General Partner hereby withdraws as General Partner of the
Partnership.
ORIGINAL GENERAL PARTNER:
XXXXXX XXXXXX GOLF MANAGEMENT,
LLC, a Delaware limited liability
company
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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EXHIBIT A
PARTNERS AND PARTNERSHIP INTERESTS
Partnership Capital Contribution
Name and Address of Partner Units
--------------------------------------------------------------------------------
GENERAL PARTNER:
Presidio Golf Trust
-----------------------
-----------------------
-----------------------
LIMITED PARTNERS:
TOTAL
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EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
1. CAPITAL ACCOUNTS OF THE PARTNERS
A. The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Regulations Section l.704-l(b)(2)(iv).
Such Capital Account shall be increased by (i) the amount of all Capital
Contributions and any other deemed contributions made by such Partner to the
Partnership pursuant to this Agreement and (ii) all items of Partnership income
and gain (including income and gain exempt from tax) computed in accordance with
Section 1.B hereof and allocated to such Partner pursuant to Section 6.1 of the
Agreement and Exhibit C thereof, and decreased by (x) the amount of cash or
Agreed Value of all actual and deemed distributions of cash or property made to
such Partner pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 1.B hereof and allocated
to such Partner pursuant to Section 6.1 of the Agreement and Exhibit C thereof.
B. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, unless
otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a) (1) of the Code shall be included in taxable income or loss),
with the following adjustments:
(1) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of
income, gain, loss and deduction shall be made
without regard to any election under Section 754 of
the Code which may be made by the Partnership,
provided that the amounts of any adjustments to the
adjusted bases of the assets of the Partnership made
pursuant to Section 734 of the Code as a result of
the distribution of property by the Partnership to a
Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital
Accounts) shall be reflected in the Capital Accounts
of the Partners in the manner and subject to the
limitations prescribed in Regulations Section
l.704-1(b)(2)(iv) (m)(4).
(2) The computation of all items of income, gain, and
deduction shall be made without regard to the fact
that items described in Sections 705(a)(l)(B) or
705(a)(2)(B) of the Code are not includable in gross
income or are neither currently deductible nor
capitalized for federal income tax purposes.
(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be
determined as if the adjusted basis of such property
as of such date of disposition were equal in amount
to the Partnership's Carrying Value with respect to
such property as of such date.
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(4) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in
computing such taxable income or loss, there shall be
taken into account Depreciation for such fiscal year.
(5) In the event the Carrying Value of any Partnership
Asset is adjusted pursuant to Section 1.D hereof, the
amount of any such adjustment shall be taken into
account as gain or loss from the disposition of such
asset.
(6) Any items specially allocated under Section 2 of
Exhibit C hereof shall not be taken into account.
C. A transferee (including any Assignee) of a Partnership Unit shall
succeed to a pro rata portion of the Capital Account of the transferor. If the
transfer causes a termination of the Partnership under Section 708(b)(l)(B) of
the Code, the Partnership's properties shall be deemed, solely for federal
income tax purposes, to have been contributed to a new partnership in exchange
for an interest in the new partnership, and the interest in such new partnership
shall be deemed to have been distributed to the Partners in proportion to their
respective interest in the Partnership in liquidation of the Partnership. In
such event, pursuant to Regulations Section 1.704- 1(b)(2)(iv)(m)(2), the
Capital Accounts of the Partners in the new partnership will be equal to their
Capital Accounts in the Partnership, and the Carrying Values of the Partnership
properties shall not be adjusted.
D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section
1.D(2), the Carrying Values of all Partnership assets
shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to
such Partnership property, as of the times of the
adjustments provided in Section 1.D(2) hereof, as if
such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property
and allocated pursuant to Section 6.1 of the
Agreement.
(2) Such adjustments shall be made as of the following
times: (a) immediately prior to the acquisition of an
additional interest in the Partnership by any new or
existing Partner in exchange for more than a de
minimis Capital Contribution; (b) immediately prior
to the distribution by the Partnership to a Partner
of more than a de minimis amount of property as
consideration for an interest in the Partnership; and
(c) immediately prior to the liquidation of the
Partnership within the meaning of Regulations Section
1.704-l(b)(2)(ii)(g), provided however that
adjustments pursuant to clauses (a) and (b) above
shall be made only if the General Partner determines
that such adjustments are necessary or appropriate to
reflect the relative economic interests of the
Partners in the Partnership.
(3) In accordance with Regulations Section 1.704-
l(b)(2)(iv)(e), the Carrying Value of Partnership
assets distributed in kind shall be adjusted upward
or
B-2
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downward to reflect any Unrealized Gain or Unrealized
Loss attributable to such Partnership property, as of
the time any such asset is distributed.
(4) In determining Unrealized Gain or Unrealized Loss for
purposes of this Exhibit B, the aggregate cash amount
and fair market value of all Partnership assets
(including cash or cash equivalents) shall be
determined by the General Partner using such
reasonable method of valuation as it may adopt, or in
the case of a liquidating distribution pursuant to
Article XIII of the Agreement, shall be determined
and allocated by the Liquidator using such reasonable
methods of valuation as it may adopt. The General
Partner, or the Liquidator, as the case may be, shall
allocate such aggregate fair market value among the
assets of the Partnership in such manner as it
determines in its sole and absolute discretion to
arrive at a fair market value for individual
properties.
E. The provisions of the Agreement (including this Exhibit B and the
other Exhibits to the Agreement) relating to the maintenance of Capital Accounts
are intended to comply with Regulations Section 1.704-1(b), and shall be
interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities which
are secured by contributed or distributed property or which are assumed by the
Partnership, the General Partner, or the Limited Partners) are computed in order
to comply with such Regulations, the General Partner may make such modification
without regard to Article XIV of the Agreement, provided that it is not likely
to have a material effect on the amounts distributable to any Person pursuant to
Article XIII of the Agreement upon the dissolution of the Partnership. The
General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership's balance
sheet, as computed for book purposes, in accordance with Regulations Section
l.704-l(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section l.704-1(b).
2. NO INTEREST
No interest shall be paid by the Partnership on Capital Contributions
or on balances in Partners' Capital Accounts.
3. NO WITHDRAWAL
No Partner shall be entitled to withdraw any part of its Capital
Contribution or Capital Account or to receive any distribution from the
Partnership, except as provided in Articles IV, V, VII and XIII of the
Agreement.
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EXHIBIT C
SPECIAL ALLOCATION RULES
1. SPECIAL ALLOCATION RULES.
Notwithstanding any other provision of the Agreement or this Exhibit C,
the following special allocations shall be made in the following order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of Section
6.1 of the Agreement or any other provisions of this Exhibit C, if there is a
net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
1.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of this Section 1.A only, each
Partner's Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of this Agreement with respect to such
Partnership Year and without regard to any decrease in Partner Minimum Gain
during such Partnership Year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other provision
of Section 6.1 of this Agreement or any other provisions of this Exhibit C
(except Section 1.A hereof), if there is a net decrease in Partner Minimum Gain
attributable to a Partner Nonrecourse Debt during any Partnership Year, each
Partner who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)
(5), shall be specially allocated items of Partnership income and gain for such
year (and, if necessary, subsequent years) in an amount equal to such Partner's
share of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)
(5). Allocations pursuant to the previous sentence shall be made in proportion
to the respective amounts required to be allocated to each General Partner and
Limited Partner pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2(i) (4). This Section
1.B is intended to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently therewith.
Solely for purposes of this Section 1.B, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of the Agreement or this Exhibit with respect to such Partnership Year,
other than allocations pursuant to Section 1.A hereof.
C. Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-
l(b)(2)(ii)(d)(6), and after giving effect to the allocations required under
Sections 1.A and 1.B hereof with respect to such Partnership Year, such Partner
has an Adjusted Capital Account Deficit, items of Partnership income and gain
(consisting of a pro rata
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portion of each item of Partnership income, including gross income and gain for
the Partnership Year) shall be specifically allocated to such Partner in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, its Adjusted Capital Account Deficit created by such adjustments,
allocations or distributions as quickly as possible. This Section 1.C is
intended to constitute a "qualified income offset" under Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
X. Xxxxx Income Allocation. In the event that any Partner has an
Adjusted Capital Account Deficit at the end of any Partnership Year (after
taking into account allocations to be made under the preceding paragraphs hereof
with respect to such Partnership Year), each such Partner shall be specially
allocated items of Partnership income and gain (consisting of a pro rata portion
of each item of Partnership income, including gross income and gain for the
Partnership Year) in an amount and manner sufficient to eliminate, to the extent
required by the Regulations, its Adjusted Capital Account Deficit.
E. Nonrecourse Deductions. Nonrecourse Deductions for any Partnership
Year shall be allocated to the Partners in accordance with their respective
Percentage Interests. If the General Partner determines in its good faith
discretion that the Partnership's Nonrecourse Deductions must be allocated in a
different ratio to satisfy the safe harbor requirements of the Regulations
promulgated under Section 704(b) of the Code, the General Partner is authorized,
upon notice to the Limited Partners, to revise the prescribed ratio for such
Partnership Year to the numerically closest ratio which would satisfy such
requirements.
F. Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any Partnership Year shall be specially allocated to the Partner who bears
the economic risk of loss with respect to the Partner Nonrecourse Debt to which
such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
G. Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Regulations Section 1.704-l(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.
2. ALLOCATIONS FOR TAX PURPOSES
A. Except as otherwise provided in this Section 2, for federal income
tax purposes, each item of income, gain, loss and deduction shall be allocated
among the Partners in the same manner as its correlative item of "book" income,
gain, loss or deduction is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit C.
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B. In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss, and
deduction shall be allocated for federal income tax purposes among the Partners
as follows:
(1) (a) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the
Partners consistent with the principles of Section
704(c) of the Code to take into account the variation
between the 704(c) Value of such property and its
adjusted basis at the time of contribution (taking
into account Section 2.C of this Exhibit C); and
(b) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be
allocated among the Partners in the same manner as
its correlative item of "book" gain or loss is
allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit C.
(2) (a) In the case of an Adjusted Property, such items
shall
(i) first, be allocated among the Partners
in a manner consistent with the principles of Section
704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to
such property and the allocations thereof pursuant to
Exhibit B;
(ii) second, in the event such property was
originally a Contributed Property, be allocated among
the Partners in a manner consistent with Section
2.B(1) of this Exhibit C; and
(b) any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be
allocated among the Partners in the same manner its
correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section
1 of this Exhibit C.
(3) all other items of income, gain, loss and deduction shall
be allocated among the Partners the same manner as their
correlative item of "book" gain or loss is allocated pursuant
to Section 6.1 of the Agreement and Section 1 of this Exhibit
C.
C. To the extent Regulations promulgated pursuant to Section 704(c) of
the Code permit a Partnership to utilize alternative methods to eliminate the
disparities between the Carrying Value of property and its adjusted basis, the
General Partner shall have the authority to elect the method to be used by the
Partnership, and such election shall be binding on all Partners.
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EXHIBIT D
NOTICE OF REDEMPTION
The undersigned hereby irrevocably (i) redeems _________ Partnership
Units in Presidio Golf Limited Partnership (the "Partnership") in accordance
with the terms of the Amended and Restated Agreement of Limited Partnership of
the Partnership, as amended, and the Redemption Right referred to therein, and
(ii) surrenders such Partnership Units and all right, title and interest
therein. The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such Partnership Units,
free and clear of the rights of or interests of any other person or entity, (b)
has the full right, power and authority to redeem and surrender such Partnership
Units as provided herein and (c) has obtained the consent or approval of all
persons or entities, if any, having the right to consult or approve such
redemption and surrender.
Dated: Name of Limited Partner:
------- --------------------
-----------------------------------
(Signature of Limited Partner)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
Please insert social security or identifying number:
----------------------------
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EXHIBIT E
VALUE OF CONTRIBUTED PROPERTY
PROPERTY 704(C) VALUE AGREED VALUE
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