AGREEMENT OF LIMITED PARTNERSHIP
OF
MONARCH PROPERTIES, LP
AS OF APRIL 17, 1998
TABLE OF CONTENTS
PAGE
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INTRODUCTORY STATEMENT..................................................................................1
ARTICLE 1. DEFINED TERMS.........................................................................1
ARTICLE 2. ORGANIZATIONAL MATTERS...............................................................13
Section 2.1. Formation...................................................................13
Section 2.2. Name........................................................................14
Section 2.3. Registered Office and Agent; Principal Office...............................14
Section 2.4. Term........................................................................14
ARTICLE 3. PURPOSE..............................................................................14
Section 3.1. Purpose and Business........................................................14
Section 3.2. Powers......................................................................15
Section 3.3. Representations and Warranties by the Parties...............................15
ARTICLE 4. CAPITAL CONTRIBUTIONS................................................................16
Section 4.1. Capital Contributions of the Partners.......................................16
Section 4.2. Issuances of Additional Partnership Interests...............................17
Section 4.3. Additional Funds and Capital Contributions..................................19
Section 4.4. Stock Plans.................................................................21
Section 4.5. No Preemptive Rights........................................................22
Section 4.6. Other Contribution Provisions...............................................22
ARTICLE 5. DISTRIBUTIONS........................................................................22
Section 5.1. Requirement and Characterization of Distributions...........................22
Section 5.2. Amounts Withheld............................................................23
Section 5.3. Distributions Upon Liquidation..............................................23
Section 5.4. Revisions to Reflect Issuance of Additional Partnership Interests...........23
ARTICLE 6. ALLOCATIONS..........................................................................23
Section 6.1. Allocations For Capital Account Purposes....................................23
Section 6.2. Revisions to Allocations to Reflect Issuance of Partnership Interests.......24
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS................................................24
Section 7.1. Management..................................................................24
Section 7.2. Certificate of Limited Partnership..........................................28
Section 7.3. Restrictions on General Partner Authority...................................29
Section 7.4. Reimbursement of the General Partner and the Company........................29
Section 7.5. Outside Activities of the General Partner...................................30
Section 7.6. Contracts with Affiliates...................................................31
Section 7.7. Indemnification.............................................................31
Section 7.8. Liability of the General Partner............................................33
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Section 7.9. Other Matters Concerning the General Partner................................34
Section 7.10. Title to Partnership Assets.................................................34
Section 7.11. Reliance by Third Parties...................................................35
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS...........................................35
Section 8.1. Limitation of Liability.....................................................35
Section 8.2. Management of Business......................................................35
Section 8.3. Outside Activities of Limited Partners......................................36
Section 8.4. Return of Capital...........................................................36
Section 8.5. Rights of Limited Partners Relating to the Partnership......................36
Section 8.6. Conversion Right............................................................37
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS...............................................38
Section 9.1. Records and Accounting......................................................38
Section 9.2. Fiscal Year.................................................................39
Section 9.3. Reports.....................................................................39
ARTICLE 10. TAX MATTERS...............................................................................39
Section 10.1. Preparation of Tax Returns..................................................39
Section 10.2. Tax Elections...............................................................39
Section 10.3. Tax Matters Partner.........................................................40
Section 10.4. Organizational Expenses.....................................................41
Section 10.5. Withholding.................................................................41
ARTICLE 11. TRANSFERS AND WITHDRAWALS.................................................................42
Section 11.1. Transfer....................................................................42
Section 11.2. Transfer of the Partnership Interests of General Partner and MP:
Extraordinary Transactions..................................................43
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Section 11.3. Limited Partners' Rights to Transfer........................................45
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Section 11.4. Substituted Limited Partners................................................47
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Section 11.5. Assignees...................................................................47
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Section 11.6. General Provisions..........................................................48
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ARTICLE 12. ADMISSION OF PARTNERS.....................................................................49
Section 12.1. Admission of Successor General Partner......................................49
Section 12.2. Admission of Additional Limited Partners....................................49
Section 12.3. Amendment of Agreement and Certificate of Limited Partnership...............50
ARTICLE 13. DISSOLUTION, LIQUIDATION AND TERMINATION..................................................50
Section 13.1. Dissolution.................................................................50
Section 13.2. Winding Up..................................................................51
Section 13.3. Compliance with Timing Requirements of Regulations..........................52
Section 13.4. Deemed Distribution and Recontribution......................................53
Section 13.5. Rights of Limited Partners..................................................53
Section 13.6. Notice of Dissolution.......................................................53
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Section 13.7. Termination of Partnership and Cancellation of Certificate of Limited
Partnership.................................................................53
Section 13.8. Reasonable Time for Winding-Up..............................................53
Section 13.9. Waiver of Partition.........................................................54
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS..............................................54
Section 14.1. Amendments..................................................................54
Section 14.2. Meetings of the Partners....................................................55
ARTICLE 15. GENERAL PROVISIONS........................................................................56
Section 15.1. Addresses and Notice.......................................................56
Section 15.2. Titles and Captions........................................................56
Section 15.3. Pronouns and Plurals.......................................................57
Section 15.4. Further Action.............................................................57
Section 15.5. Binding Effect.............................................................57
Section 15.6. Creditors..................................................................57
Section 15.7. Waiver.....................................................................57
Section 15.8. Counterparts...............................................................57
Section 15.9. Applicable Law.............................................................57
Section 15.10. Invalidity of Provisions...................................................58
Section 15.11. Power of Attorney..........................................................58
Section 15.12. Entire Agreement...........................................................59
EXHIBITS
Exhibit A - Partner Contributions and Partnership Interests
Exhibit B - Capital Account Maintenance
Exhibit C - Special Allocation Rules
Exhibit D - Notice of Conversion
Exhibit E - Value of Contributed Property
Exhibit F - Recourse Debt Level Schedule
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AGREEMENT OF LIMITED PARTNERSHIP
OF
MONARCH PROPERTIES, LP
THIS AGREEMENT OF LIMITED PARTNERSHIP OF MONARCH PROPERTIES, L.P. (this
"Agreement"), dated as of __________ ___, 1998, is entered into among MP
OPERATING INC., a Delaware corporation ("General Partner"), as General Partner
of the Partnership, MP PROPERTIES LP, INC., a Delaware corporation ("MP"), a
Limited 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.
INTRODUCTORY STATEMENT
General Partner and MP are wholly owned subsidiaries of Monarch
Properties, Inc. (the "Company"), a Maryland corporation, which was formed to
make equity and mortgage investments in healthcare-related real estate and
expects to qualify as a real estate investment trust for federal income tax
purposes. General Partner and MP desire to form this limited partnership (the
"Partnership") to transact the business of the Company and to own certain
properties of the Company.
General Partner shall be the sole general partner of the Partnership.
MP shall be, initially, the sole limited partner. The initial capital
contribution of MP to the Partnership shall consist of the proceeds of the
initial public offering of the shares of the Company, and the initial capital
contribution of the General Partner shall consist of a cash contribution.
The Certificate of Limited Partnership of the Partnership was filed in
the Office of the Secretary of State of Delaware on April 17, 1998. General
Partner and MP desire to enter into this Agreement to organize the Partnership
as more particularly set forth below.
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1. 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.
"Additional Funds" has the meaning set forth in Section 4.3(a).
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Sections 4.2 and 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 taxable year (a) 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 (b) 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 taxable year.
"Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Exhibit B hereof.
"Affiliate" means, with respect to any Person, (a) any Person directly
or indirectly controlling, controlled by or under common control with such
Person; (b) any Person owning or controlling ten percent (10%) or more of the
outstanding voting interests of such Person; (c) any Person of which such Person
owns or controls ten percent (10%) or more of the voting interests; or (d) any
officer, director, general partner or trustee of such Person or of any Person
referred to in clauses (a), (b), and (c) 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 (a) in the case of any Contributed Property as of
the time of its contribution to the Partnership, the 704(c) Value of such
property, reduced by any liabilities either assumed by the Partnership upon such
contribution or to which such property is subject when contributed, and (b) 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. The Agreed Value of each Contributed Property contributed or deemed
contributed by each Partner as of the date hereof is as set forth in Exhibit E.
"Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented or restated from time to time.
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"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, (i) the sum of:
(a) the Partnership's Net Income or Net Loss (as the case may be)
for such period (without regard to adjustments resulting from
allocations described in Sections 1.1 through 1.5 of Exhibit
C);
(b) Depreciation and all other noncash charges deducted in
determining Net Income or Net Loss for such period;
(c) the amount of any reduction in the reserves of the Partnership
referred to in clause (ii)(f) below (including, without
limitation, reductions resulting because the General Partner
determines such amounts are no longer necessary);
(d) the excess, if any, of the net cash proceeds from the sale,
exchange, disposition, or refinancing of Partnership property
for such period over the gain recognized from such sale,
exchange, disposition, or refinancing during such period
(excluding Terminating Capital Transactions); and
(e) all other cash received by the Partnership for such period
that was not included in determining Net Income or Net Loss
for such period (excluding the proceeds of any Capital
Contribution);
(ii) less the sum of (except to the extent made with the proceeds of any Capital
Contribution):
(a) all principal debt payments made by the Partnership during
such period;
(b) capital expenditures made by the Partnership during such
period;
(c) investments made by the Partnership during such period in any
entity (including loans made thereto) to the extent that such
investments are not otherwise described in clause (ii)(a) or
(ii)(b);
(d) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period;
(e) any amount included in determining Net Income or Net Loss for
such period that was not received or disbursed by the
Partnership during such period;
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(f) the amount of any increase in reserves during such period
which the General Partner determines to be necessary or
appropriate in its sole and absolute discretion; and
(g) the amount of any working capital accounts and other cash or
similar balances which the General Partner determines to be
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 will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B and the 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 New York, New York are authorized or required by law
to close.
"Capital Account" means the Capital Account maintained for a Partner
pursuant to Exhibit B hereto. The initial Capital Account balance for each
Partner who is a Partner on the Effective Date shall be the amount set forth
opposite such Partner's name on Exhibit A hereto and shall be equal to the
initial Capital Contribution of the Partner.
"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, 4.2 or 4.3 hereof.
"Carrying Value" means (a) 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
following the contribution of or adjustment with respect to such Property; and
(b) 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 hereof, and to reflect changes, additions 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 per Partnership Unit equal to the
Value on the Valuation Date of the REIT Shares Amount.
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"Certificate of Incorporation" means the Articles of Incorporation or
other organizational document governing the Company, as amended or restated from
time to time.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership relating to the Partnership to be 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 or any successor statute, 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.
"Company" means Monarch Properties, Inc., a Maryland corporation.
"Company Loans" has the meaning set forth in Section 4.3(d).
"Consent" means the consent or approval of or vote in favor of a
proposed action by a Partner given in accordance with Section 14.2 hereof.
"Contributed Property" means each property or other asset, 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 hereof, such property shall no longer
constitute a Contributed Property for purposes of Exhibit B hereof, but shall be
deemed an Adjusted Property for such purposes.
"Conversion Factor" means 1.0, provided that in the event that
(a) the Company (i) declares or pays a dividend on its outstanding REIT
Shares in REIT Shares or makes a distribution to all holders of its outstanding
REIT Shares in REIT Shares; (ii) splits or subdivides its outstanding REIT
Shares; or (iii) effects a reverse stock split or otherwise combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purpose that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination;
(b) the Company distributes any rights, options or warrants to all
holders of its REIT Shares to subscribe for or to purchase or to otherwise
acquire REIT Shares (or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares) at a price per share less than
the Value of a REIT Share on the record date for such distribution (each a
"Distributed Right"), then the Conversion Factor shall be adjusted by
multiplying the Conversion Factor previously in effect by a fraction (i) the
numerator of which shall be the number of REIT Shares
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issued and outstanding on the record date plus the maximum number of REIT Shares
purchasable under such Distributed Rights and (ii) the denominator of which
shall be the number of REIT Shares issued and outstanding on the record date
plus a fraction (A) the numerator of which is the maximum number of REIT Shares
purchasable under such Distributed Rights times the minimum purchase price per
REIT Share under such Distributed Rights and (B) the denominator of which is the
Value of a REIT Share as of the record date; provided, however, that, if any
such Distributed Rights expire or become no longer exercisable, then the
Conversion Factor shall be adjusted, effective retroactive to the date of
distribution of the Distributed Rights, to reflect a reduced maximum number of
REIT Shares or any change in the minimum purchase price for the purposes of the
above fraction; and
(c) the Company shall, by dividend or otherwise, distribute to all
holders of its REIT Shares evidences of its indebtedness or assets (including
securities, but excluding any dividend or distribution referred to in subsection
(a) above), which evidences of indebtedness or assets relate to assets not
received by the Company pursuant to a pro rata distribution by the Partnership,
then the Conversion Factor shall be adjusted to equal the amount determined by
multiplying the Conversion Factor in effect immediately prior to the close of
business on the date fixed for determination of shareholders entitled to receive
such distribution by a fraction (i) the numerator of which shall be such Value
of a REIT Share on the date fixed for such determination and (ii) the
denominator of which shall be the Value of a REIT Share on the dates fixed for
such determination less the then fair market value (as determined by the General
Partner, whose determination shall be conclusive) of the portion of the
evidences of indebtedness or assets so distributed applicable to one REIT Share.
Any adjustment to the Conversion Factor shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event (provided, however, if a Notice of Conversion is
given prior to such a record date and the Specified Conversion Date is after
such a record date, then the adjustment to the Conversion Factor shall, with
respect to such Converting Partner, be retroactive to the date of such Notice of
Conversion). It is intended that adjustments to the Conversion Factor are to be
made in order to avoid unintended dilution or anti-dilution as a result of
transactions in which REIT Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units.
"Conversion Right" has the meaning set forth in Section 8.6.
"Converting Partner" has the meaning set forth in Section 8.6.
"Convertible Partnership Units" means Partnership Units which are
convertible into REIT Shares pursuant to Section 8.6 hereof.
"Debt" means, as to any Person, as of any date of determination, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (b) 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
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performance of obligations by such Person; (c) 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 (d) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.
"Depreciation" means, for each taxable 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.
"Distributed Right" has the meaning set forth in the definition of
"Conversion Factor."
"Effective Date" means the date of closing the initial issuance of
Partnership Units by the Partnership.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Exempt Transaction" has the meaning set forth in Section 8.7 hereof.
"Extraordinary Transaction" means, with respect to the Company, the
occurrence of one or more of the following events: (a) a merger (including a
triangular merger), consolidation or other combination with or into another
Person; (b) the direct or indirect sale, lease, exchange or other transfer of
all or substantially all of its assets in one transaction or a series of
transactions; (c) any reclassification, recapitalization or change of its
outstanding equity interests (other than a change in par value, or from par
value to no par value, or as a result of a split, dividend or similar
subdivision); (d) any issuance of equity securities of the Company in exchange
for assets (other than an issuance of securities for cash or an issuance of
securities pursuant to an employee benefit plan); or (e) the adoption of any
plan of liquidation or dissolution of the Company (whether or not in compliance
with the provisions of this Agreement).
"Funding Debt" means any Debt incurred by or on behalf of the General
Partner for the purpose of providing funds to the Partnership.
"General Partner Interest" means a Partnership Interest held by the
General Partner, in its capacity as general partner. A General Partner Interest
may be expressed as a number of Partnership Units.
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"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, (a) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his or her Person or estate;
(b) 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; (c) 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; (d) as to any estate which is a Partner, the
distribution by the fiduciary of the estate's entire interest in the
Partnership; (e) 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 (f) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (i) 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; (ii) 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; (iii) the
Partner executes and delivers a general assignment for the benefit of the
Partner's creditors; (iv) 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 (ii)
above; (v) 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; (vi) any proceeding seeking liquidation,
reorganization or other relief of or against such Partner 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;
(vii) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment; or (viii) an appointment referred to in clause
(vii) which has been stayed is not vacated within ninety (90) days after the
expiration of any such stay.
"Indemnitee" means (a) the Company, any Person made a party to a
proceeding by reason of his status as the General Partner, a Limited Partner, or
as a partner, shareholder, member, manager, director, officer or employee of the
Company, the Partnership, the General Partner, or his or its liabilities,
pursuant to a loan guarantee 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 assets subject to); and (b) such other Persons (including
Affiliates of the 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 (including MP) named as a Limited
Partner in Exhibit A attached hereto, as such Exhibit may be amended from time
to time, or any Substituted Limited
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Partner or Additional Limited Partner, in such Person's capacity as a Limited
Partner of 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 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.
"Limited Partner Recourse Debt Percentage" means with respect to
certain of the Limited Partners the percentage listed with respect to such
Limited Partner on the recourse debt level schedule attached hereto as Exhibit
F.
"Liquidating Event" has the meaning set forth in Section 13.1.
"Liquidator" has the meaning set forth in Section 13.2.
"Lyric" means Lyric Health Care Holdings III, Inc., a Delaware
corporation.
"Master Lease" means that certain Master Lease, dated as of the
Effective Date, of certain properties owned by the Partnership, between the
Partnership and Lyric.
"Monarch REIT Group" means the Company, the General Partner, MP and any
wholly owned Subsidiaries of the Company, MP or the General Partner.
"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 accordance with
federal income tax accounting principles, subject to the specific adjustments
provided for in Exhibit B.
"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
federal income tax accounting principles, subject to the specific adjustments
provided for in Exhibit B.
"New Securities" means (a) any rights, options, warrants or convertible
or exchangeable securities having the right to subscribe for or purchase REIT
Shares, or (b) any Debt issued by the General Partner that provides any of the
rights described in clause (a).
"Non-convertible Partnership Units" means Partnership Units which may
not be converted into REIT Shares pursuant to Section 8.6 hereof.
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"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 2.2 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 taxable 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 Conversion" means the Notice of Conversion substantially in
the form of Exhibit D to this Agreement.
"Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners collectively.
"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).
"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 taxable
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 and
pursuant to this Agreement, as it may be amended and/or restated, and any
successor to such limited partnership.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. 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 a Partnership Minimum Gain, for a Partnership
taxable year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
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"Partnership Record Date" means the record date established by the
General Partner 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 Company for a distribution to its shareholders of some of all of its portion
of such distribution.
"Partnership Unit" or "Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1, 4.2 and
4.3. The number of Partnership Units outstanding and the Percentage Interest in
the Partnership represented by such Units are set forth in Exhibit A hereto, as
such Exhibit may be amended from time to time. The ownership of Partnership
Units shall be evidenced by such form of certificate for units as the General
Partner adopts from time to time unless the General Partner determines that the
Partnership Units shall be uncertificated securities.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in the
Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time.
"Person" means an individual or a corporation, limited liability
company, partnership, trust, unincorporated organization, association or other
entity.
"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 Stock Market, Inc. National
Market, or any successor to any of the foregoing.
"Qualified REIT Subsidiary" means any Subsidiary of the Company that is
a "qualified REIT subsidiary" within the meaning of Section 856(i) of the Code.
"Recapture Income" means any gain recognized by the Partnership 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.
"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).
"REIT" means a real estate investment trust under Section 856 of the
Code.
"REIT Share" means a share of common stock, par value $.01 per share,
of the Company.
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"REIT Shares Amount" shall mean a number of REIT Shares equal to the
product of the number of Partnership Units offered for redemption by a
Converting Partner, multiplied by the Conversion Factor in effect on the date of
receipt by the General Partner of a Notice of Conversion, provided that in the
event the Company issues to all holders of REIT Shares rights, options, warrants
or convertible or exchangeable securities entitling the shareholders to
subscribe for or purchase REIT Shares, or any other securities or property
(collectively, "Rights"), and the Rights have not expired at the Specified
Conversion Date, then the REIT Shares Amount shall also include the Rights that
were issuable to a holder of the REIT Shares Amount of REIT Shares on the
applicable record date relating to the issuance of such Rights.
"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 2.2.A.(1) or 2.2.B.(1)(a) of Exhibit C hereto to eliminate
Book-Tax Disparities.
"Rights" has the meaning set forth in the definition of "REIT Shares
Amount."
"Safe Harbor" has the meaning set forth in Section 11.1(g).
"704(c) Value" of any Contributed Property means the fair market value
of such property or other consideration at the time of contribution, as
determined by the General Partner using such reasonable method of valuation as
it may adopt; provided, however, that the 704(c) Value of any property deemed
contributed to the Partnership for federal income tax purposes upon termination
and reconstitution thereof pursuant to Section 708 of the Code shall be
determined in accordance with Exhibit B hereto. Subject to Exhibit B hereto, the
General Partner shall, in its sole and absolute discretion, use such method as
it deems reasonable and appropriate to allocate the aggregate of the 704(c)
Values of Contributed Properties in a single or integrated transaction among the
separate properties on a basis proportional to their respective fair market
values. The 704(c) Values of the Contributed Properties contributed to the
Partnership as of the Effective Date are set forth on Exhibit E hereto.
"Services Agreement" means any management, development or advisory
agreement with a property and/or asset for the provision of property management,
asset management, leasing, development and/or similar services with respect to
the properties and any agreement for the provision of services of accountants,
legal counsel, appraisers, insurers, brokers, transfer agents, registrars,
developers, financial advisors and other professional services.
"Specified Conversion Date" means the tenth (10th) Business Day after
receipt by the Company of a Notice of Conversion; provided that if the Company
combines its outstanding REIT Shares, no Specified Conversion Date shall occur
after the record date of such combination of REIT Shares and prior to the
effective date of such combination.
"Stock Plan" means the 1998 Omnibus Securities and Incentive Plan of
the Company, as amended from time to time, or any other stock incentive plan
adopted by the Company.
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"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which a majority of (a) the voting power of the
voting equity securities; or (b) 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.
"Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership 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.
"Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the fair
market value of such property (as determined in Section 4.1(e) hereto) as of
such date; over (b) the Carrying Value of such property (prior to any adjustment
to be made pursuant to Exhibit B hereto) 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 (a) the Carrying
Value of such property (prior to any adjustment to be made pursuant to Exhibit B
hereto) as of such date; over (b) the fair market value of such property (as
determined in Section 4.1(e) hereto) as of such date.
"Valuation Date" means the date of receipt by the General Partner of a
Notice of Conversion or, if such date is not a Business Day, the first Business
Day thereafter.
"Value" means, with respect to any outstanding REIT Shares 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 must be
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 REIT
Shares are Publicly Traded and the REIT 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 other information as it considers, in its reasonable
judgment, appropriate.
ARTICLE 2. ORGANIZATIONAL MATTERS
Section 2.1. Formation
The Partnership is a limited partnership organized pursuant to the
provisions of the Act. The Partners hereby agree to form and operate the
Partnership upon the terms and conditions set forth in this Agreement. Except as
expressly provided herein to the contrary, the rights and obligations of the
Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal
property for all purposes.
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Section 2.2. Name
The name of the Partnership is "Monarch Properties, LP" The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "LP," "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.
Section 2.3. Registered Office and Agent; Principal Office
The address of the registered office of the Partnership in the State of
Delaware and the name and address of the registered agent for service of process
on the Partnership in the State of Delaware is the Corporation Trust Company,
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx,
Xxxxxxxx 00000. The principal office of the Partnership shall be 0000 Xxxxxxx
Xxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 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.
Section 2.4. Term
The term of the Partnership will commence on the date on which the
Certificate of Limited Partnership is filed in the office of the Secretary of
State of the State of Delaware, and shall continue until December 31, 2098,
unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 or as otherwise provided by law.
ARTICLE 3. PURPOSE
Section 3.1. Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (a) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
Company at all times to be classified as a REIT, unless the Company ceases to
qualify as a REIT for reasons other than the conduct of the business of the
Partnership; (b) to enter into any partnership, joint venture, limited liability
company or other similar arrangement to engage in any of the foregoing or to own
interests in any entity engaged, directly or indirectly, in any of the
foregoing; and (c) to do anything necessary or incidental to the foregoing. In
connection with the foregoing, and without limiting the Company's right, in its
sole discretion, to cease qualifying as a REIT, the Partners acknowledge the
Company's current status as a REIT inures to the benefit of all of the Partners
and not solely the General Partner.
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Section 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 discretion, (a) could adversely affect the ability of the Company to
continue to qualify as a REIT or could result in any adverse federal, state or
local income tax consequences to the Company or the Partnership; (b) could
subject the Company to any additional taxes under Section 857 or Section 4981 of
the Code; or (c) could violate any law or regulation of any governmental body or
agency having jurisdiction over the Company or its securities, unless such
action (or inaction) shall have been specifically consented to by the General
Partner in writing.
Section 3.3. Representations and Warranties by the Parties
(a) Each Partner (including, without limitation, each Additional
Limited Partner or Substituted Limited Partner as a condition to becoming an
Additional Limited Partner or a Substituted Limited Partner) represents and
warrants to each other Partner(s) that (i) all transactions contemplated by this
Agreement to be performed by it have been duly authorized by all necessary
action, including, without limitation, that of its general partner(s),
committee(s), trustee(s), beneficiaries, directors and/or shareholder(s), as the
case may be, as required, (ii) the consummation of such transactions shall not
result in a breach or violation of, or a default under, its partnership or
operating agreement, trust agreement, articles, charter or bylaws, as the case
may be, any material agreement by which such Partner or any of such Partner's
properties or any of its partners, members, beneficiaries, trustees or
shareholders, as the case may be, is or are bound, or any statute, regulation,
order or other law to which such Partner or any of its partners, members,
trustees, beneficiaries or shareholders, as the case may be, is or are subject,
(iii) subject to the last sentence of this Section 3.3(a), such Partner is
neither a "foreign person" within the meaning of Code Section 1445(f) nor a
"foreign person" within the meaning of Code Section 1445(f) nor a "foreign
partner" within the meaning of Code Section 1446(e), (iv) such Partner does not
own, directly or indirectly, (A) ten percent (10%) or more of the total combined
voting power of all classes of stock entitled to vote, or ten percent (10%) or
more of the total number of shares of all classes of stock, of any corporation
that is a tenant of either (1) the Company or any Qualified REIT Subsidiary, (2)
the Partnership or (3) any partnership, venture or limited liability company for
which the Company, any Qualified REIT Subsidiary or the Partnership is a member
or (B) an interest of ten percent (10%) or more in the assets of any tenant of
either (1) the Company or any Qualified REIT Subsidiary, (2) the Partnership or
(3) any partnership, venture or limited liability company for which the Company,
any Qualified REIT Subsidiary or the Partnership is a member and (v) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms. Notwithstanding anything contained herein to the contrary,
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in the event that the representation contained in clause (iii) foregoing would
be inaccurate if given by a Partner, such Partner (w) shall not be required to
make and shall not be deemed to have made such representation, (x) shall deliver
to the General Partner in connection with or prior to its execution of this
Agreement written notice that it may not truthfully make such representation,
(y) hereby agrees that it is subject to, and hereby authorizes the General
Partner to withhold, all withholdings to which such a "foreign person" or
"foreign partner", as applicable, is subject under the Code and (z) hereby
agrees to cooperate fully with the General Partner with respect to such
withholdings, including by effecting the timely completion and delivery to the
General Partner of all internal revenue forms required in connection therewith.
(b) Each Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner)
represents, warrants and agrees that it has acquired and continues to hold its
interest in the Partnership for its own account for investment purposes only and
not for the purpose of, or with a view toward, the resale or distribution of all
or any part thereof, and not with a view toward selling or otherwise
distributing such interest or any part thereof at any particular time or under
any predetermined circumstances. Each Partner further represents and warrants
that it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds that it has invested in the Partnership in what
it understands to be a highly speculative and illiquid investment.
(c) The representations and warranties contained in Sections 3.3(a) and
3.3(b) hereto shall survive the execution and delivery of this Agreement by each
Partner (and, in the case of an Additional Limited Partner or a Substituted
Limited Partner, the admission of such Additional Limited Partner or Substituted
Limited Partner as a Limited Partner in the Partnership) and the dissolution,
liquidation and termination of the Partnership.
(d) Each Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner) hereby
acknowledges that no representations as to potential profit, cash flows, funds
from operations or yield, if any, in respect of the Partnership or the General
Partner have been made by any Partner or any employee or representative or
Affiliate of any Partner, and that projections and any other information,
including, without limitation, financial and descriptive information and
documentation, that may have been in any manner submitted to such Partner shall
not constitute any representation or warranty of any kind or nature, express or
implied.
ARTICLE 4. CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions of the Partners
(a) Initial Capital Contributions of the Partnership on the Effective
Date. On the Effective Date, the General Partner and the other Persons listed on
Exhibit A will make Capital Contributions to the Partnership as set forth
therein. On the Effective Date, the General Partner will complete Exhibit A to
reflect the Capital Contributions made by each Partner, the Partnership Units
assigned to each Partner and the Percentage Interest in the Partnership
represented by such
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Partnership Units. The Capital Accounts of the Partners and the Carrying Values
of the Partnership's Assets shall be determined as of the Effective Date
pursuant to Section I.D of Exhibit B hereto to reflect the Capital Contributions
made on the Effective Date.
(b) Partnerships Units and Percentage Interests. Each Partner shall own
the number of Partnership Units set forth for such Partner in Exhibit A and
shall have a Percentage Interest in the Partnership as set forth in Exhibit A,
which Percentage Interest shall be adjusted in Exhibit A from time to time by
the General Partner to the extent necessary to reflect accurately redemptions,
additional Capital Contributions, the issuance of additional Partnership Units
(pursuant to any merger or otherwise), or similar events having an effect on any
Partner's Percentage Interest. The number of Partnership Units held by the
General Partner (equal to one percent (1%) of all outstanding Partnership Units
from time to time) shall be deemed to be the General Partnership Interest.
(c) Capital Contributions by Merger. To the extent the Partnership
acquires any property by the merger of any other Person into the Partnership,
Persons who receive Partnership Interests in exchange for their interests in the
Person merging into the Partnership shall become Partners and shall be deemed to
have made Capital Contributions as provided in the applicable merger agreement
and as set forth in Exhibit A, as amended to reflect such deemed Capital
Contributions.
(d) No Additional Obligations. Except as provided elsewhere in this
Agreement, the Partners shall have no obligation to make any additional Capital
Contributions or loans to the Partnership.
(e) Method of Determining Fair Market Value of the Partnership; Value
of a Partnership Unit. For purposes of this Agreement, the fair market value of
the Partnership shall be determined by dividing the Value of all outstanding
REIT Shares as of the date of determination by the total Percentage Interests of
the General Partner and MP as of such date. The value of a Partnership Unit
shall be determined by dividing the fair market value of the Partnership as of
the date of determination by the total number of Partnership Units issued as of
such date.
Section 4.2. Issuances of Additional Partnership Interests
(a) General. The General Partner is hereby authorized to cause the
Partnership to issue additional Partnership Interests, in the form of
Partnership Units (which may be Convertible Partnership Units or Non-Convertible
Partnership Units) for any Partnership purpose, at any time or from time to
time, to the Partners (including the General Partner and MP) or to other Persons
(including the Company) and to admit such Persons as Additional Limited
Partners, for such consideration and on such terms and conditions as shall be
established by the General Partner in its sole and absolute discretion, all
without the approval of any Limited Partners. Without limiting the foregoing,
the General Partner is expressly authorized to cause the Partnership to issue
Partnership Units (i) upon the conversion, redemption or exchange of any
indebtedness, Partnership Units or other securities issued by the Partnership,
and (ii) in connection with any
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merger of any other Person into the Partnership if the applicable merger
agreement provides that Persons are to receive Partnership Units in exchange for
their interests in the Person merging into the Partnership. The number of
Partnership Units issued to any Additional Limited Partner shall be equal to the
number of REIT Shares that could be purchased with an amount equal to the value
of such Partner's Capital Contribution on the date of admission of such
Additional Limited Partner, using the definition of Value set forth in this
Agreement to determine the value of a REIT Share as of the date of admission.
The number of Partnership Units issued to the Additional Limited Partner shall
equal, also, the quotient of such Partner's Capital Contribution divided by the
value of a Partnership Unit (as determined pursuant to Section 4.1(e)) after
such Additional Limited Partner's Capital Contribution has been made. For the
avoidance of doubt, the purpose of the calculations in the two preceding
sentences are to determine the current fair market value of the Partnership (as
described in Section 4.1(e) hereof) when additional Partnership Units are issued
so that the admission of new Partners does not unfairly increase or decrease the
value of Partnership Units or the Percentage Interests of existing Partners.
Upon the issuance of additional Partnership Units (i) the difference between (A)
the number of Partnership Units equal to 1% of all Partnership Units immediately
following the issuance of the additional Partnership Units, and (B) the number
of Partnership Units held by the General Partner immediately prior to the
issuance of the additional Partnership Units, and (ii) a corresponding
percentage of MP's capital contribution, shall be transferred automatically from
MP to the General Partner so that the General Partner holds 1% of the total
number of Partnership Units at all times. Following such issuance, the
Percentage Interest of MP shall be equal to a fraction, the numerator of which
is equal to the number of Partnership Units held by it (after the automatic
transfer of units to the General Partner described in the preceding sentence)
and the denominator of which is equal to the total number of Partnership Units
following such issuance. The Percentage Interest of each other Limited Partner
shall be equal to a fraction, the numerator of which is equal to the number of
Partnership Units held by it, and the denominator of which is equal to the total
number of Partnership Units following such issuance. The General Partner shall
be authorized on behalf of each of the Partners to amend this Agreement to
reflect the admission of any Additional Limited Partner, the increase in the
number of Partnership Units of the General Partner, and the decrease in the
number of Partnership Units of MP. The number of Partnership Units owned by the
Limited Partners (other than MP) and Assignees shall not be decreased in
connection with any admission of an Additional Limited Partner pursuant to this
Section 4.2.
(b) Issuances to the Company. No additional Partnership Units shall be
issued to the Company unless (i) the additional Partnership Interests are issued
to all Partners in proportion to their respective Percentage Interests, (ii) (A)
the additional Partnership Units are (1) Partnership Units issued in connection
with an issuance of REIT Shares, or (2) Partnership Units issued in connection
with an issuance of New Securities or other interests in the Company (other than
REIT Shares), which New Securities or other interests have designations,
preferences and other rights, terms and provisions that are substantially the
same as the designations, preferences and other rights, terms and provisions of
the additional Partnership Units issued to the Company, and (B) the General
Partner contributes to the Partnership the cash proceeds or other consideration
received in connection with the issuance of such REIT Shares, New Securities or
other interests in the Company or (iii) the additional Partnership Units are
issued upon the conversion,
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redemption or exchange of indebtedness, Partnership Units or other securities
issued by the Partnership pursuant to Section 8.6 or otherwise.
Section 4.3. Additional Funds and Capital Contributions.
(a) General. The General Partner may, at any time and from time to
time, determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition or development of additional Properties, for the
redemption of Partnership Units or for such other purposes as the General
Partner may determine in its sole and absolute discretion. Additional Funds may
be obtained by the Partnership, at the election of the General Partner, in any
manner provided in, and in accordance with, the terms of this Section 4.3
without the approval of any Limited Partners.
(b) Additional Capital Contributions. The General Partner, on behalf of
the Partnership, may obtain any Additional Funds by accepting Capital
Contributions from any Partners or other Persons. In connection with any such
Capital Contribution (of cash or property), the General Partner is hereby
authorized to cause the Partnership from time to time to issue additional
Partnership Units (as set forth in Section 4.2 above), in consideration therefor
and the Percentage Interests of the General Partner and the Limited Partners
shall be adjusted as provided in Section 4.3(f) to reflect the issuance of such
additional Partnership Units.
(c) Loans by Third Parties. The General Partner, on behalf of the
Partnership, may obtain any Additional Funds by causing the Partnership to incur
Debt to any Person upon such terms as the General Partner determines
appropriate, including making such Debt convertible, redeemable or exchangeable
for Partnership Units; provided, however, that the Partnership shall not incur
any such Debt if (i) a breach, violation or default of such Debt would be deemed
to occur by virtue of the transfer of any Partnership Interest, or (ii) such
Debt is recourse to any Partner (unless the Partner otherwise agrees).
(d) Company Loans. The General Partner, on behalf of the Partnership,
may obtain any Additional Funds by causing the Partnership to incur Debt with
the Company (each, a "Company Loan") if (i) such Debt is, to the extent
permitted by law, on substantially the same terms and conditions (including
interest rate, repayment schedule, and conversion, redemption, repurchase and
exchange rights) as Funding Debt incurred by the Company, the net proceeds of
which are loaned to the Partnership to provide such Additional Funds, or (ii)
such Debt is on terms and conditions no less favorable to the Partnership than
would be available to the Partnership from any third party; provided, however,
that the Partnership shall not incur any such Debt if (A) a breach, violation or
default of such Debt would be deemed to occur by virtue of the transfer of any
Partnership Interest, or (B) such Debt is recourse to any Partner (unless the
Partner otherwise agrees).
(e) Issuance of Securities by the Company. The Company shall not issue
any additional REIT Shares, New Securities, or other interests unless the
Company contributes the cash proceeds or other consideration received from the
issuance of such additional REIT Shares, New Securities, or other interests, as
the case may be, and from the exercise of the rights
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contained in any such additional New Securities, to the Partnership in exchange
for (i) in the case of an issuance of REIT Shares, Partnership Units, or (ii) in
the case of an issuance of New Securities or other interests, Partnership Units
with designations, preferences and other rights, terms and provisions that are
substantially the same as the designations, preferences and other rights, terms
and provisions of such New Securities or other interests; provided, however,
that notwithstanding the foregoing, the Company may issue REIT Shares, New
Securities or other interests (A) pursuant to Section 4.4 or Section 8.6 hereto,
(B) pursuant to a dividend or distribution (including any stock split) of REIT
Shares, New Securities or other interests to all of the holders of REIT Shares,
New Securities or other interests, as the case may be, (C) upon a conversion,
redemption, exchange or exercise of New Securities or (D) in connection with an
acquisition of a property or other asset to be owned, directly or indirectly, by
the Company if the General Partner determines that such acquisition is in the
best interests of the Partnership. In the event of any issuance of additional
REIT Shares, New Securities or other interests by the Company, and the
contribution to the Partnership, by the Company, of the cash proceeds or other
consideration received from such issuance, the Partnership shall pay the
Company's expenses associated with such issuance, including any underwriting
discounts or commissions.
(f) Adjustment of Percentage Interests. On the date that any Person not
a Partner contributes Additional Funds to the Partnership, such Person shall
become an Additional Limited Partner with Partnership Units and a Percentage
Interest calculated in accordance with Section 4.2 and the Percentage Interests
of the other Partners shall be adjusted as provided in Section 4.2. On the date
that any Partner contributes Additional Funds to the Partnership (each such
date, a "Contribution Date"), the contributing Partner shall receive a number of
additional Partnership Units equal to the number of REIT Shares that could be
purchased with an amount equal to the Additional Funds (or, if such Additional
Funds are in the form of Contributed Property, the Agreed Value of such
property) on the Contribution Date, using the definition of Value set forth in
this Agreement to determine the value of a REIT Share as of the Contribution
Date. The number of additional Partnership Units issued to the contributing
Partner shall equal, also, the quotient of the Additional Funds (or if such
Additional Funds are in the form of Contributed Property, the Agreed Value of
such property) divided by the value of a Partnership Unit (as determined
pursuant to Section 4.1(e)) after the Contribution Date. For the avoidance of
doubt, the purpose of the calculations in the preceding two sentences are to
determine the current fair market value to the Partnership (as described in
Section 4.1(e) hereof) when additional Partnership Units are issued so that the
issuance of additional Partnership Units does not unfairly increase or decrease
the value of Partnership Units or the Percentage Interests of the other
Partners. Upon the issuance of additional Partnership Units, (i) the difference
between (A) the number of Partnership Units equal to one percent (1%) of all
Partnership Units immediately following the issuance of the additional
Partnership Units, and (B) the number of Partnership Units held by the General
Partner immediately prior to the issuance of the additional Partnership Units,
and (ii) a corresponding percentage of MP's capital contribution, shall be
transferred automatically from MP to the General Partner so that the General
Partner holds one percent (1%) of all Partnership Units at all times. The
Percentage Interest of MP shall be equal to a fraction, the numerator of which
is equal to the number of Partnership Units held by it (after the automatic
transfer of units to the General Partner described in the preceding sentence)
and the denominator of which is equal to the total number of Partnership Units
following such issuance. The Percentage Interest of all other
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Limited Partners shall be equal to a fraction, the numerator of which is equal
to the number of Partnership Units held by it, and the denominator of which is
equal to the total number of Partnership Units following such issuance. The
General Partner shall be authorized on behalf of each of the Partners to amend
this Agreement to reflect the increase in the Partnership Units of the
contributing Partner and the General Partner, and the decrease in the number of
Partnership Units of MP. The number of Partnership Units owned by the Limited
Partners (other than MP) and Assignees shall not be decreased in connection with
any additional contribution of funds to the Partnership pursuant to this Section
4.3.
Section 4.4. Stock Plans.
(a) Grants of REIT Shares. If at any time or from time to time, in
connection with the Stock Plan, grants of REIT Shares are made:
(i) The Company shall, as soon as practicable after such
exercise, make a Capital Contribution to the Partnership in an amount
equal to the price (if any) paid to the Company by such party receiving
the grant of REIT Shares;
(ii) Notwithstanding the amount of the Capital Contribution
actually made pursuant to Section 4.4(a)(i) hereto, the Company shall
be deemed to have contributed to the Partnership as a Capital
Contribution, in consideration of an additional Limited Partnership
Interest (expressed in and as additional Partnership Units), an amount
equal to the Value of a REIT Share as of the date of exercise
multiplied by the number of REIT Shares then being issued to such
party; and
(iii) An equitable Percentage Interest adjustment shall be
made in which the Company shall be treated as having made a cash
contribution equal to the amount described in Section 4.4(a)(ii)
hereto.
(b) Exercise of Options. If at any time or from time to time, in
connection with the Stock Plan, a stock option granted is duly exercised:
(i) The Company shall, as soon as practicable after such
exercise, make a Capital Contribution to the Partnership in an amount
equal to the exercise price paid to the Company by such exercising
party in connection with the exercise of such stock option;
(ii) Notwithstanding the amount of the Capital Contribution
actually made pursuant to Section 4.4(b)(i) hereto, the Company shall
be deemed to have contributed to the Partnership as a Capital
Contribution, in consideration of an additional Limited Partnership
Interest (expressed in and as additional Partnership Units), an amount
equal to the Value of a REIT Share as of the date of exercise
multiplied by the number of REIT Shares then being issued in connection
with the exercise of such stock option; and
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(iii) An equitable Percentage Interest adjustment shall be
made in which the Company shall be treated as having made a cash
contribution equal to the amount described in Section 4.4(b)(ii)
hereto.
(c) Future Stock Incentive Plans. Nothing in this Agreement shall be
construed or applied to preclude or restrain the General Partner from adopting,
modifying or terminating stock incentive plans, in addition to the Stock Plan,
for the benefit of employees, directors or other business associates of the
Monarch REIT Group, the Partnership, subsidiaries of the Partnership, or any of
their Affiliates. The Limited Partners acknowledge and agree that, in the event
that any such plan is adopted, modified or terminated by the Company, amendments
to this Section 4.4 may become necessary or advisable, and that any approval or
consent to any such amendments requested by the General Partner shall not be
unreasonably withheld or delayed.
Section 4.5. 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 (a) additional Capital Contributions or loans to
the Partnership or (b) issuance or sale of any Partnership Units or other
Partnership Interests.
Section 4.6. Other Contribution Provisions
If any Partner is admitted to the Partnership and is given a Capital
Account in exchange for properties, securities or other noncash contributions or
services rendered to the Partnership, such transactions shall be treated by the
Partnership and the affected Partner as if such Partner had contributed cash to
the capital of the Partnership.
ARTICLE 5. DISTRIBUTIONS
Section 5.1. Requirement and Characterization of Distributions
(a) General. The General Partner shall distribute at least quarterly an
amount equal to one hundred percent (100%) of Available Cash generated by the
Partnership during such quarter or shorter period to the Partners who are
Partners on the Partnership Record Date with respect to such quarter or shorter
period in accordance with their respective Percentage Interests on such
Partnership Record Date; provided that in no event may a Partner receive a
distribution of Available Cash with respect to a Partnership Unit if such
Partner has converted such Unit prior to the Partnership Record Date pursuant to
Section 8.6. The General Partner shall take such reasonable efforts, as
determined by it in its sole and absolute discretion and consistent with the
Company's qualification as a REIT, to distribute Available Cash to the Limited
Partners so as to preclude any such distribution or portion thereof from being
treated as part of a sale of property to 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. The General Partner shall take all actions necessary
to satisfy the requirements for
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qualifying the Company as a REIT under the Code and avoid any federal income tax
liability for the Company, including but not limited to making sufficient
distributions of cash to the Company to enable the Company to meet its
distribution requirements under Section 857 of the Code. Except to the extent
inconsistent with the requirement that the General Partner make distributions
sufficient for the Company to qualify as a REIT, no Partnership Interest shall
be entitled to a distribution in preference to any other Partnership Interest.
(b) Method. Each holder of a Partnership Interest shall be entitled to
a distribution from Available Cash in proportion to its Percentage Interest on
the applicable Partnership Record Date.
Section 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 hereto with respect to any allocation,
payment or distribution to the Partners or Assignees shall be treated as amounts
distributed to the Partners or Assignees pursuant to Section 5.1 for all
purposes under this Agreement.
Section 5.3. Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction and any other cash
received or reductions in reserves made after commencement of the liquidation of
the Partnership shall be distributed to the Partners in accordance with Section
13.2.
Section 5.4. Revisions to Reflect Issuance of Additional Partnership
Interests
In the event that the Partnership issues additional Partnership
Interests to the General Partner or any Additional Limited Partner pursuant to
Article 4 hereto, the General Partner shall make such revisions to this Article
5 as it deems necessary to reflect the issuance of such additional Partnership
Interests and any special rights, duties or powers with respect thereto.
ARTICLE 6. ALLOCATIONS
Section 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 hereto) 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 hereto, Net Income shall be allocated (i) first,
to the General Partner to the extent that the Net Losses previously allocated to
the General Partner pursuant to the last sentence of Section 6.1(b) exceed Net
Income previously allocated to the General Partner pursuant to this clause (i)
of Section 6.1(a), and (ii) second, in proportion to the respective Percentage
Interests as of the
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last day of the period for which such allocation is being made; provided
however, gain on the sale of property contributed as of the Effective Date with
respect to which the General Partner elects, the "traditional method with
cumulative allocations" described in Treasury Regulation Section
1.704-3(c)(3)(iii)(B) shall first be allocated to solely to the Partners who
contributed such Property, pro rata, in proportion to their Percentage
Interests, to the extent allocations to non-contributing Partners of
depreciation deductions with respect to such Contributed Property have been
limited by the so-called "ceiling rule".
(b) Net Losses. After giving effect to the special allocations set
forth in Section 1 of Exhibit C hereto, Net Losses shall be allocated to each
Partner in proportion to the respective Percentage Interests as of the last day
of the period for which such allocation is being made; provided that Net Losses
shall not be allocated to any Partner (including the General Partner) pursuant
to this Section 6.1(b) to the extent that such allocation would cause such
Partner (including the General Partner) to have an Adjusted Capital Account
Deficit (or increase any existing Adjusted Capital Account Deficit) at the end
of such taxable year (or portion thereof). All Net Losses in excess of the
limitations set forth in this Section 6.1(b) shall be allocated to the General
Partner.
(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.
(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.
Section 6.2. Revisions to Allocations to Reflect Issuance of
Partnership Interests
In the event that the Partnership issues additional Partnership
Interests to the General Partner, or any Additional Limited Partner pursuant to
Article 4 hereto, the General Partner shall make such revisions to this Section
6.1 and Exhibit A as it determines are necessary to reflect the terms of the
issuance of such additional Partnership Interests.
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1. Management
(a) Powers of the General Partner. 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
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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 7.3 hereto, 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 hereto and to
effectuate the purposes set forth in Section 3.1 hereto, including, without
limitation:
(i) 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 will permit the Company (so
long as the Company qualifies as a 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 in
amounts sufficient to permit the Company to maintain
REIT status), the assumption or guarantee of, or other
contracting for, indebtedness and other liabilities,
the issuance of evidence of indebtedness (including the
securing of the same by deed, mortgage, deed of trust
or other lien or encumbrance on the Partnership's
assets) and the incurring of any obligations it deems
necessary for the conduct of the activities of the
Partnership;
(ii) 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;
(iii) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any 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 (all of the foregoing subject to any
prior approval only to the extent required by Section
7.3 hereto);
(iv) 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
Company, the Partnership or any of the Partnership's
Subsidiaries, the lending of funds to other Persons
(including, without limitation, the Subsidiaries of the
Partnership and/or the Company) and the repayment of
obligations of the Partnership and its Subsidiaries and
any other Person in which it has an equity investment,
and the making of capital contributions to its
Subsidiaries;
(v) the management, operation, leasing, landscaping,
repair, alteration, demolition or improvement of any
real property or improvements owned
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by the Partnership or any Subsidiary of the Partnership
whether pursuant to the Master Lease, any Services
Agreement or otherwise;
(vi) 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,
Lyric, other professional advisors and other agents and
the payment of their expenses and compensation out of
the Partnership's assets;
(vii) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement;
(viii) the holding, managing, investing and reinvesting cash
and other assets of the Partnership;
(ix) the collection and receipt of revenues and income of
the Partnership;
(x) the selection and dismissal of employees of the
Partnership (including, without limitation, employees
having titles such as "president," "vice president,"
"secretary" and "treasurer" of the Partnership), and
agents, outside attorneys, accountants, consultants and
contractors of the Partnership, and the determination
of their compensation and other terms of employment or
hiring;
(xi) the maintenance of such insurance for the benefit of
the Partnership, the Partners and directors and
officers thereof as it deems necessary or appropriate;
(xii) the formation of, or acquisition of an interest in, and
the contribution of property to, any further limited or
general partnerships, limited liability companies,
joint ventures or other relationships that it deems
desirable (including, without limitation, the
acquisition of interests in, and the contributions of
property to, its Qualified REIT Subsidiaries and any
other Person in which it has an equity investment from
time to time); provided that the Partnership may not
engage in any such formation, acquisition or
contribution that would cause the Company to fail to
qualify as a REIT;
(xiii) 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, arbitration or other forms
of dispute resolution,
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and 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;
(xiv) the undertaking of any action in connection with the
Partnership's direct or indirect investment in its
Qualified REIT Subsidiaries or any other Person
(including, without limitation, the contribution or
loan of funds by the Partnership to such Persons);
(xv) 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;
(xvi) 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 asset or investment held by
the Partnership;
(xvii) 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, or jointly with any such
Subsidiary or other Person;
(xviii) 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 an
interest pursuant to contractual or other arrangements
with such Person;
(xix) the making, execution and delivery of any and all
deeds, leases, notes, mortgages, deeds of trust,
security agreements, conveyances, contracts,
guarantees, warranties, indemnities, waivers, releases
or 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; and
(xx) the issuance of additional Partnership Units, as
appropriate, in connection with Capital Contributions
by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4 hereto.
(b) No Approval of the Limited Partners. 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 (except as provided in Section 7.3), the Act
or any applicable law, rule or regulation, to the fullest extent permitted under
the Act or other applicable law, rule or regulation. The execution, delivery or
performance by the
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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) 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 at any and all times working capital accounts and other cash or similar
balances in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time; provided,
however, that the General Partner shall not maintain reserves unless the
Partnership can distribute sufficient amounts to enable the Company to pay
shareholder dividends that will (i) allow the Company to achieve and maintain
qualification as a REIT, and (ii) avoid the imposition of any additional taxes
under Section 857 or Section 4981 of the Code.
(d) No Obligation to Consider Tax Consequences. 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 (other than
the General Partner and MP) of any action taken by it. The General Partner and
the Partnership shall not have liability to a Limited Partner under any
circumstances, as a result of an income tax liability or loss incurred or
benefit not derived by such Limited Partner as a result of an action (or
inaction) by the General Partner taken pursuant to its authority under this
Agreement and in accordance with the terms of Section 7.3.
Section 7.2. Certificate of Limited Partnership
The Certificate of Limited Partnership has been filed with the
Secretary of State of the State of Delaware as required by the Act. To the
extent that such action is determined by the General Partner to be reasonable
and necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership and do all of 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 the District of Columbia, in which the
Partnership may elect to do business or own property. Subject to the terms of
Section 8.5(a)(iv) hereto, the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate of Limited
Partnership 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 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, or the District of Columbia, in which the
Partnership may elect to do business or own property.
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Section 7.3. Restrictions on General Partner Authority
The General Partner may not take any action in contravention of an
express prohibition or limitation of this Agreement without the written Consent
of Limited Partners holding a majority of the Percentage Interests of the
Limited Partners (including Limited Partnership Interests held by the Company),
or such other percentage of the Limited Partners as may be specifically provided
for under a provision of this Agreement.
Section 7.4. Reimbursement of the General Partner and the Company
(a) No Compensation. Except as provided in this Section 7.4 and
elsewhere in this Agreement (including the provisions of Articles 5 and 6
regarding distributions, payments, and allocations to which it may be entitled),
the General Partner shall not be compensated for its services as general partner
of the Partnership.
(b) Responsibility for Partnership Expenses. The Monarch REIT Group
shall be reimbursed on a monthly basis, or such other basis as it may determine
in its sole and absolute discretion, for all expenses that it incurs relating to
the ownership and operation of, or for the benefit of, the Partnership
(including, without limitation, (i) expenses relating to the ownership of
interests in and operation of the Partnership, (ii) compensation of the Monarch
REIT Group's officers and employees including, without limitation, payments
under the Company's Stock Incentive Plans that provides for stock units, or
other phantom stock, pursuant to which employees of the Monarch REIT Group will
receive payments based upon dividends on or the value of REIT Shares, (iii)
director fees and expenses and (iv) all costs and expenses of being a public
company, including costs of filings with the SEC, reports and other
distributions to its stockholders); provided that the amount of any such
reimbursement shall be reduced by any interest earned by the Monarch REIT Group
with respect to bank accounts or other instruments or accounts held by it on
behalf of the Partnership. The Partners acknowledge that all such expenses of
the Monarch REIT Group are deemed to be for the benefit of the Partnership. Such
reimbursement shall be in addition to any reimbursement made as a result of
indemnification pursuant to Section 7.7 hereto.
(c) Issuance Expenses. The Monarch REIT Group shall also be reimbursed
for all expenses it incurs relating to any issuance of Partnership Interests,
REIT Shares, Debt of the Partnership or the Monarch REIT Group 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 REIT Shares. In the event that the Company shall elect
to purchase from its shareholders REIT Shares for the purpose of delivering such
REIT Shares to satisfy an obligation under any dividend reinvestment program
adopted by the Company, any employee stock purchase plan adopted by the Company,
or any similar obligation or arrangement undertaken by the Company in the future
or for the purpose of retiring such REIT Shares, the purchase price
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paid by the Company for such REIT Shares and any other expenses incurred by the
Company in connection with such purchase shall be considered expenses of the
Partnership and shall be advanced to the Company or reimbursed to the Company,
subject to the condition that: (i) if such REIT Shares subsequently are sold by
the Company, the Company shall pay to the Partnership any proceeds received by
the Company for such REIT Shares (which sales proceeds shall include the amount
of dividends reinvested under any dividend reinvestment or similar program
provided that a transfer of REIT Shares for Partnership Units pursuant to
Section 8.6 would not be considered a sale for such purposes); and (ii) if such
REIT Shares are not retransferred by the Company within thirty (30) days after
the purchase thereto, or the Company otherwise determines not to retransfer such
REIT Shares, the General Partner shall cause the Partnership to redeem a number
of Partnership Units held by the Company equal to the product obtained by
dividing the number of such REIT Shares by the Conversion Factor (in which case
such advancement or reimbursement of expenses shall be treated as having been
made as a distribution in redemption of such number of Partnership Units held by
the Company).
Section 7.5. Outside Activities of the General Partner
The Monarch REIT Group shall not directly or indirectly enter into or
conduct any business, other than in connection with (a) the ownership,
acquisition and disposition of Partnership Interests of the Monarch REIT Group,
(b) the management of the business of the Partnership, (c) the operation of the
Company as a reporting company with a class (or classes) of securities
registered under the Exchange Act, (d) the Company's operations as a REIT, (e)
the offering, sale, syndication, private placement or public offering of stock,
bonds, securities or other interests, (f) financing or refinancing of any type
related to the Partnership or its assets or activities, (g) any of the foregoing
activities as they relate to a Subsidiary of the Partnership or of the Monarch
REIT Group and (h) such activities as are incidental thereto. Nothing contained
herein shall be deemed to prohibit the General Partner from executing guarantees
of Partnership debt for which it would otherwise be liable in its capacity as
General Partner. Subject to Section 7.4(b) hereto, the Monarch REIT Group shall
not own any assets or take title to assets, other than (i) temporarily in
connection with an acquisition prior to contributing such assets to the
Partnership, MP and/or the General Partner, (ii) the Partnership Interests of MP
and the General Partner, and (iii) such cash and cash equivalents, bank accounts
or similar instruments or accounts as the General Partner deems reasonably
necessary, taking into account Section 7.1(c) hereto and the requirements
necessary for the Company to carry out its responsibilities contemplated under
this Agreement and the Certificate of Incorporation and to qualify as a REIT.
Notwithstanding the foregoing, if the Monarch REIT Group acquires assets in its
own name and owns property other than through the Partnership, the Partners
agree to negotiate in good faith to amend this Agreement, including, without
limitation, the definition of "Conversion Factor," to reflect such activities
and the direct ownership of assets by the Monarch REIT Group. The Monarch REIT
Group and any Affiliates of the Monarch REIT Group may acquire Limited
Partnership Interests and shall be entitled to exercise all rights of a Limited
Partner relating to such Limited Partnership Interests.
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Section 7.6. Contracts with Affiliates
(a) Transactions with Subsidiaries and Investees. The Partnership may
lend or contribute funds or other assets to its Subsidiaries or other Persons in
which it has an equity investment and such Persons may borrow funds from the
Partnership, on terms and conditions established in the sole and absolute
discretion of the General Partner. The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other Person.
(b) General. Except as provided in Section 7.5, the Partnership may
transfer assets to joint ventures, other partnerships, limited liability
companies, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent
with this Agreement and applicable law as the General Partner, in its sole and
absolute discretion, believes are advisable.
(c) Limitation. Except as expressly permitted by this Agreement, none
of the Partners nor any of their respective Affiliates shall sell, transfer or
convey any property to, or purchase any property from, the Partnership, directly
or indirectly, except pursuant to transactions that are determined by the
General Partner in good faith to be fair and reasonable.
(d) 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, stock option plans, and similar plans funded by the Partnership for the
benefit of employees of the Monarch REIT Group, the Partnership, Subsidiaries of
the Partnership, or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Monarch REIT Group,
the Partnership, any Subsidiaries of the Partnership or any Affiliate of any of
them.
(e) 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 the General Partner, on such terms as the
General Partner, in its sole and absolute discretion, believes is advisable.
Section 7.7. Indemnification
(a) General. To the fullest extent permitted by applicable law, if
Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Partnership) that relates to the operations of the Partnership or the Company in
which such Indemnitee may be (or may have been) involved, the Partnership shall
indemnify each Indemnitee from and against any and all expenses (including,
without limitation, attorneys fees and other legal fees and expenses),
judgments, fines, and amounts paid in settlement (if such settlement is approved
in advance by the Partnership, which approval shall not be unreasonably
withheld), actually and reasonably incurred by Indemnitee in connection with
investigating, preparing for, defending or settling such action or proceeding.
The Partnership hereby agrees to indemnify each Indemnitee's spouse (whether by
statute or at common law and without regard to
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the location of the governing jurisdiction) and children as express third party
beneficiaries hereunder to the same extent and subject to the same limitations
applicable to Indemnitee hereunder for claims arising out of the status of such
person as a spouse or child of such Indemnitee, including claims seeking damages
from marital property (including community property) or property held by the
Indemnitee and such spouse or property transferred to such spouse or child. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, and neither the 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) Advance of Expenses. Reasonable expenses incurred by an Indemnitee
who is a party to a proceeding shall be paid or reimbursed by the Partnership in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership 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.
(d) Insurance. The Partnership may, but shall not be obligated to,
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, the
Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services
by, it to the plan or participants or beneficiaries of the plan; excise taxes
assessed on an Indemnitee with respect to an employee benefit plan pursuant to
applicable law shall constitute fines within the meaning of Section 7.7; and
actions taken or omitted by the Indemnitee with respect to an employee benefit
plan in the performance of its duties for a purpose reasonably believed by it to
be in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose 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.
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(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 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 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 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.
Section 7.8. Liability of the General Partner
(a) General. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner and its partners, shareholders, members,
managers, directors and employees shall not be liable for monetary damages to
the Partnership, any Partners or any Assignees for losses sustained or
liabilities incurred or benefits denied as a result of errors in judgment or
mistakes of fact or law or of any act or omission if such Person acted in good
faith.
(b) No Obligation to Consider Separate Interests of Limited Partners.
The Limited Partners expressly acknowledge that, as stated in Section 7.1(d),
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 and the shareholders of the Company (except as otherwise provided
herein) 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 its obligations and duties as General
Partner set forth in Section 7.1(a) hereto, the General Partner may exercise any
of the powers granted to it by this Agreement and perform any of the duties
imposed upon it hereunder either directly or by or through its agents. The
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by the General Partner in good faith.
(d) Effect of Amendment. 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 and each other Person'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.
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Section 7.9. Other Matters Concerning the General Partner
(a) Reliance on Documents. The 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,
architects, engineers, environmental consultants and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion of such Persons as to matters which such 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.
(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 duly appointed 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 the General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith belief that
such action or omission is necessary or advisable in order (i) to protect the
ability of the Company to continue to qualify as a REIT; or (ii) to avoid the
Company incurring any taxes under Section 857 or Section 4981 of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.
Section 7.10. Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partner, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause beneficial
and record title to such assets to be vested in the Partnership as soon as
reasonably practicable if failure to so vest such title would have a material
adverse effect on the Partnership. 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.
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Section 7.11. 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 and to enter into any contracts on behalf of the
Partnership, and 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 (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect; (b) 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 (c)
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.
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 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 hereto,
or under the Act.
Section 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
the 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.
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Section 8.3. Outside Activities of Limited Partners
Subject to any agreements entered into pursuant to Section 7.6(e)
hereto and any other agreements entered into by a Limited Partner or its
Affiliates with the Partnership or any of its Subsidiaries, any Limited Partner
(other than the Company) and any officer, director, employee, agent, trustee,
Affiliate or shareholder of any Limited 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 that
are in direct competition with the Partnership or that are enhanced by the
activities of the Partnership. Neither the Partnership nor any Partners shall
have any rights by virtue of this Agreement in any business ventures of any
Limited Partner or Assignee. None of the Limited Partners (other than the
Company) 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 Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.
Section 8.4. Return of Capital
Except pursuant to the right of redemption set forth in Section 8.6, 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. Except to
the extent provided by Exhibit C hereto or as otherwise expressly provided in
this Agreement, no Limited Partner or Assignee shall have priority over any
other Limited Partner or Assignee, either as to the return of Capital
Contributions or as to profits, losses, distributions or credits.
Section 8.5. Rights of Limited Partners Relating to the Partnership
(a) General. In addition to the other rights provided by this Agreement
or by the Act, and except as limited by Section 8.5(c) hereto, 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 (including such copying and administrative charges as the General
Partner may establish from time to time):
(i) to obtain, after any public offering, a copy of the
most recent annual and quarterly reports filed with
the Securities and Exchange Commission by the Company
pursuant to the Exchange Act;
(ii) to obtain a copy of the Partnership's federal, state
and local income tax returns for each Partnership
Year;
(iii) to obtain a current list of the name and last known
business, residence or mailing address of each
Partner;
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(iv) to obtain a copy of this Agreement and the
Certificate of Limited Partnership and all amendments
thereto, together with executed copies of all powers
of attorney pursuant to which this Agreement, the
Certificate of Limited Partnership and all amendments
thereto have been executed; and
(v) 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 the
REIT Shares Amount per Partnership Unit and, with reasonable detail, how the
same was determined.
(c) Confidentiality. Notwithstanding any other provision of this
Section 8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines 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 an unaffiliated third party to keep confidential.
Section 8.6. Conversion Right
(a) General. Each Limited Partner holding Convertible Partnership Units
shall have the right (the "Conversion Right") to require the Partnership to
purchase all or a portion of the Convertible Partnership Units held by such
Limited Partner for the Cash Amount. The Conversion Right shall be exercised
pursuant to a Notice of Conversion delivered by the Partner who is exercising
the Conversion Right (the "Converting Partner") to the Partnership (with a copy
to the Company); provided, however, that the Partnership shall not be obligated
to satisfy the Conversion Right if the Company elects to purchase the
Partnership Units pursuant to Section 8.6(b). A Limited Partner may not exercise
the Conversion Right for less than one thousand (1,000) Partnership Units or, if
such Limited Partner holds less than one thousand (1,000) Partnership Units, all
of the Partnership Units held by such Partner. The Partnership shall acquire the
number of Partnership Units specified in the Notice of Conversion by paying to
the Converting Partner the Cash Amount on the Specified Conversion Date,
whereupon the Partnership shall acquire such Partnership Units from the
Converting Partner. Immediately following acquisition by the Partnership, such
Partnership Units shall be cancelled.
(b) Company Assumption of Right. Notwithstanding the provisions of
Section 8.6(a), a Limited Partner that exercises the Conversion Right shall be
deemed to have offered to sell the Partnership Units described in the Notice of
Conversion to the Company, and the Company may, in its sole and absolute
discretion, elect to purchase directly and acquire such Partnership Units by
paying to the Converting Partner either the Cash Amount or the REIT Shares
Amount, as elected by the Company (in its sole and absolute discretion), on the
Specified Conversion Date,
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whereupon the Company shall acquire the Partnership Units offered for conversion
by the Converting Partner. Immediately following acquisition by the Company, the
Company shall contribute such Partnership Units to MP. If the Company shall
elect to exercise its right to purchase Partnership Units under this Section
8.6(b) with respect to a Notice of Conversion, it shall so notify the Converting
Partner within five (5) Business Days after the receipt by it of such Notice of
Conversion. Unless the Company (in its sole and absolute discretion) shall
exercise its right to purchase Partnership Units from the Converting Partner
pursuant to this Section 8.6(b), the Company shall not have any obligation to
the Converting Partner or the Partnership with respect to the Converting
Partner's exercise of the Conversion Right. In the event the Company shall
exercise its right to purchase Partnership Units with respect to the exercise of
a Conversion Right in the manner described in the first sentence of this Section
8.6(b), the Partnership shall have no obligation to pay any amount to the
Converting Partner with respect to such Converting Partner's exercise of such
Conversion Right, and each of the Converting Partner, the Partnership, and the
Company shall treat the transaction between the Company and the Converting
Partner, for federal income tax purposes, as a sale of the Converting Partner's
Partnership Units to the Company. Each Converting Partner agrees to execute such
documents as the Company may reasonably require in connection with the issuance
of REIT Shares upon exercise of the Conversion Right.
(c) Exceptions to Exercise of Conversion Right. Notwithstanding the
provisions of Sections 8.6(a) and 8.6(b), a Partner shall not be entitled to
exercise the Conversion Right pursuant to Section 8.6(a) if the delivery of REIT
Shares to such Partner on the Specified Conversion Date by the Company pursuant
to Section 8.6(b) (regardless of whether or not the Company would in fact
exercise its rights under Section 8.6(b)) would be prohibited under the
Certificate or Articles of Incorporation or By-laws of the Company or other
applicable federal or state securities law and regulations. Any Partnership
Units held by MP, the Company or General Partner shall be considered
Non-convertible Partnership Units (regardless of whether such Units were
originally issued as Convertible Units).
(d) No Liens on Partnership Units Delivered for Conversion. Each
Limited Partner covenants and agrees with the General Partner that all
Partnership Units delivered for conversion shall be delivered to the Partnership
or the Company, as the case may be, free and clear of all liens, and,
notwithstanding anything contained herein to the contrary, neither the Company
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 Company, such
Limited Partner shall assume and pay such transfer tax.
(e) Additional Partnership Interests. In the event that the Partnership
issues additional Partnership Interests pursuant to Section 4.2(a) hereto, the
General Partner shall make such revisions to this Section 8.6 as it determines
are necessary to reflect the issuance of such additional Partnership Interests.
(f) Adjustment of Percentage Interests following a Conversion.
Following each exercise of the Conversion Right by the Company, the Percentage
Interest of MP shall be equal
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to a fraction, the numerator of which is equal to the number of Partnership
Units held by MP (including the Partnership Units contributed to MP by the
Company pursuant to Section 8.6(b)) and the denominator of which is equal to the
total number of Partnership Units, and the Percentage Interests of the General
Partner and all other Limited Partners shall not change. Following each exercise
of the Conversion Right by the Partnership, the Percentage Interest of each
Limited Partner other than MP shall be equal to a fraction, the numerator of
which is equal to the number of Partnership Units held by such Limited Partner
and the denominator of which is the total number of Partnership Units following
the cancellation of the converted Units. Following each exercise of the
Conversion Right by the Partnership, (i) the difference between (A) the number
of Partnership Units equal to one percent (1%) of all Partnership Units
immediately following the cancellation of the converted Units, and (B) the
number of Partnership Units held by the General Partner immediately following
the cancellation of the converted Units, and (ii) a corresponding percentage of
the General Partner's capital contribution, shall be transferred automatically
from the General Partner to MP so that the General Partner holds one percent
(1%) of all Partnership Units at all times. Following each exercise of the
Conversion Right by the Partnership, the Percentage Interest of MP shall be
equal to a fraction, the numerator of which is equal to the number of
Partnership Units held by it (including the Units authomatically transferred
from the General Partner described in the preceding sentence) and the
denominator of which is equal to the total number of Partnership Units following
the cancellation of the converted Units. The General Partner shall be authorized
on behalf of each of the Partners to amend this Agreement to reflect the
increase in Partnership Units of MP, the changes in the Percentage Interests of
the Partners (as applicable), and the withdrawal of the Converting Partner from
the Partnership. The number of Partnership Units owned by the Partners and
Assignees shall not be decreased in connection with any exercise of the
Conversion Right pursuant to this Article 8.
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1. Records and Accounting
The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be maintained
by the Act and other books and records deemed by the General Partner to be
appropriate 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 hereto. 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 maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting principles.
Section 9.2. Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
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Section 9.3. Reports
(a) Annual Reports. As soon as practicable, but in no event later than
one hundred five (105) days after the close of each Partnership Year, the
General Partner shall cause to be mailed to each Limited Partner as of the close
of the Partnership Year, an annual report containing financial statements of the
Partnership, or of the Company if such statements are prepared solely on a
consolidated basis with the Company, for such 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.
(b) Quarterly Reports. As soon as practicable, but in no event later
than one hundred five (105) days after the close of each calendar quarter
(except the last calendar quarter of each year), the General Partner shall cause
to be mailed to each Limited Partner as of the last day of the calendar quarter,
a report containing unaudited financial statements of the Partnership, or of the
Company, if such statements are prepared solely on a consolidated basis with the
Company, and such other information as may be required by applicable law or
regulation, or as the General Partner determines to be appropriate.
ARTICLE 10. TAX MATTERS
Section 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.
Section 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. The General Partner shall make such tax elections on
behalf of the Partnership as the Limited Partners holding a majority of the
Percentage Interests of the Limited Partners (excluding Limited Partnership
Interests held by the Company) request, provided that the General Partner
believes that such election is not adverse to the interests of the General
Partner, including its interest in preserving its qualification as a REIT under
the Code. The General Partner intends that Section 704(c) allocations with
respect to property contributed as of the Effective Date shall be made by the
election of the so-called "traditional method" with curative allocations limited
solely to allocations of gain on sale of such contributed property to the extent
allocations of depreciation deductions with respect to such contributed property
to non-contributing Partners have been limited by the so-called "ceiling rule",
as described in Regulations Section 1.704- 3(c)(3)(iii)(B). The General Partner
shall have the right to seek to revoke any tax election it makes (including,
without limitation, the election under Section 754 of the Code) upon the General
Partner's determination, in its sole and absolute discretion, that such
revocation is in the best interests of the Partners.
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Section 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 6230(e) 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, taxpayer identification
number, and Percentage Interest each of the Limited Partners and the Assignees;
provided, however, that such information (other than the Percentage Interest) is
provided to the Partnership by the Limited Partners and the Assignees.
(b) Powers. The tax matters partner is authorized, but not required:
(i) 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 (1) 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 (2) 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);
(ii) in the event that 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;
(iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment
with the IRS 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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(v) 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 account of by a Partner
for tax purposes, or an item affected by such item;
and
(vi) to take any other action on behalf of the Partners or
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 of this Agreement 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
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.
Section 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.
Section 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 Sections 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 (a) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited
Partner; or (b) 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 (a) or (b) 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. In the event that a Limited Partner
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fails to pay 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. Without limitation, in
such event the General Partner shall have the right to receive distributions
that would otherwise be distributable to such defaulting Limited Partner until
such time as such loan, together with all interest thereon, has been paid in
full, and any such distributions so received by the General Partner shall be
treated as having been distributed to the defaulting Limited Partner and
immediately paid by the defaulting Limited Partner to the General Partner in
repayment of such loan. Any amounts payable by a Limited Partner hereunder shall
bear interest at the lesser of (A) 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, or (B) the maximum
lawful rate of interest on such obligation, such interest to accrue 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 in order to perfect or enforce the security
interest created hereunder.
ARTICLE 11. TRANSFERS AND WITHDRAWALS
Section 11.1. Transfer
(a) Definition. The term "transfer," when used in this Article 11 with
respect to 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 operation of law or otherwise.
The term "transfer" when used in this Article 11 does not include any redemption
of Partnership Interests by the Partnership from a Limited Partner or any
acquisition of Partnership Units from a Limited Partner by the Company pursuant
to Section 8.6. 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 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.
Section 11.2. Transfer of the Partnership Interests of General Partner
and MP: Extraordinary Transactions
(a) General Restrictions. Neither the General Partner nor MP may
transfer any of its Partnership Interest or withdraw as a Partner, and the
Company shall not transfer all or any of its
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ownership interest in MP or the General Partner, except, in any such case, (i)
if Limited Partners holding at least three-fourths of the Percentage Interests
of the Limited Partners (other than Limited Partnership Interests held by the
Company or its Affiliates) consent to any such transfer or withdrawal, (ii) if
such transfer is to an entity that is wholly-owned by the Company and is a
Qualified REIT Subsidiary under Section 856(i) of the Code or (iii) the Company
may liquidate MP or the General Partner.
(b) Extraordinary Transactions. The Company shall not engage in any
Extraordinary Transactions, except the Company is permitted to engage in the
following Extraordinary Transactions without the approval or vote of the Limited
Partners except as provided in Section 11.2(c):
(i) an Extraordinary Transaction 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 REIT
Shares Amount and the greatest amount of cash,
securities or other property paid to a holder of one
REIT Share in consideration of one REIT Share
pursuant to the terms of the Extraordinary
Transaction; provided that, if, in connection with
the Extraordinary Transaction, a purchase, tender or
exchange offer shall have been made to and accepted
by the holders of the outstanding REIT Shares, each
holder of Partnership Units shall receive, or shall
have the right to elect to receive, the greatest
amount of cash, securities, or other property which
such holder would have received had it exercised its
Conversion Right (as set forth in Section 8.6) and
received REIT 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 and
then such Extraordinary Transaction shall have been
consummated; and
(ii) a merger, or other combination of assets, with
another entity if: (w) immediately after such
Extraordinary Transaction, substantially all of the
assets directly or indirectly owned by the surviving
entity, other than Partnership Units held by the
Company, are owned directly or indirectly by the
Partnership or another limited partnership or limited
liability company which is the survivor of a merger,
consolidation or combination of assets with the
Partnership (in each case, the "Surviving
Partnership"); (x) the Limited Partners own a
percentage interest of the Surviving Partnership
based on the relative fair market value of the net
assets of the Partnership (as determined pursuant to
Section 11.2(e)) and the other net assets of the
Surviving Partnership (as determined pursuant to
Section 11.2(e)) immediately prior to the
consummation of such transaction; (y) the rights,
preferences and privileges of the Limited Partners in
the Surviving Partnership are at least as favorable
as those in effect immediately prior to the
consummation of such transaction and as those
applicable to any other
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limited partners or non-managing members of the
Surviving Partnership; and (z) such rights of the
Limited Partners include the right to exchange their
interests in the Surviving Partnership for at least
one of: (a) the consideration available to such
Limited Partners pursuant to Section 11.2(b)(i) or
(b) if the ultimate controlling person of the
Surviving Partnership has publicly traded common
equity securities, such common equity securities,
with an exchange ratio based on the relative fair
market value of such securities (as determined
pursuant to Section 11.2(e)) and the REIT Shares.
(c) Voting Procedures. The Company shall not consummate any
Extraordinary Transaction in connection with which it conducted a vote of its
stockholders (a "Stockholder Vote") unless the General Partner also conducts a
vote of the Partners of the Partnership (the "Partnership Vote") in which (i)
the General Partner provides the Partners with advance notice equal in time to
the advance notice given in the case of the Stockholder Vote, (ii) in connection
with such advance notice the General Partner provides the Partners with written
materials describing the proposed Extraordinary Transaction as well as the tax
effect of the consummation thereof on the Limited Partners, (iii) in such vote
of the Partners, the General Partner and MP vote their Partnership Interests in
proportion to the manner in which all outstanding shares of capital stock of the
Company were voted at the Stockholder Meeting (such votes to be "For,"
"Against," "Abstain" and "Not Present"), and (iv) the total votes of the General
and Limited Partners voted "For," "Against," "Abstain" and "Not Present" would
be sufficient, if such vote were a vote by the Company of its stockholders, to
approve the Extraordinary Transaction. For purposes of the Partnership Vote,
each holder of a Partnership Interest shall be entitled to a number of votes
equal to the total votes such holder would have been entitled to at the
Stockholder Meeting had such holder presented its Partnership Interest for
redemption and such Partnership Interest had been acquired by the Company for
the REIT Shares Amount of REIT Shares prior to the record date therefor.
(d) Tax Implications. Without in any way limiting the exculpation from
liability set forth in Section 7.1(d) and 7.8(b), in connection with any
transaction permitted by Section 11.2(b) or Section 11.2(c) hereto, the General
Partner shall use its commercially reasonable efforts to structure such
Extraordinary Transaction to avoid causing the Limited Partners to recognize
gain for federal income tax purposes by virtue of the occurrence of or their
participation in such Extraordinary Transaction.
(e) Fair Market Values. In connection with any transaction permitted by
Section 11.2(b) or 11.2(c), the relative fair market values shall be reasonably
determined by the General Partner as of the time of such transaction and, to the
extent applicable, shall be no less favorable to the Limited Partners than the
relative values reflected in the terms of such transaction.
Section 11.3. Limited Partners' Rights to Transfer
(a) General. Subject to the provisions of Sections 11.3(c), 11.3(e),
11.3(f), 11.3(g) and 11.4, a Limited Partner (other than MP) may transfer, with
or without the consent of the
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General Partner, all or any portion of its Partnership Interest, or any of such
Limited Partner's economic rights as a Limited Partner.
(b) Incorporated 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 of 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 his or its interest in the Partnership. The Incapacity of a Limited Partner,
in and of itself, shall not dissolve or terminate the Partnership.
(c) No Transfer Violating Securities Laws. The General Partner may
prohibit any transfer by a Limited Partner of its Partnership Units if, in the
opinion of legal counsel to the Partnership, such transfer would require filing
of a registration statement under the Securities Act of 1933 or would otherwise
violate any federal or state securities laws or regulations applicable to the
Partnership or the Partnership Units.
(d) Permitted Transfers. A Limited Partner (other than MP) may
transfer, with or without the consent of the General Partner, all or a portion
of its Partnership Interest (i) in the case of a Limited Partner who is an
individual, or a member of his Immediate Family, any trust formed for the
benefit of himself and/or members of his Immediate Family, or any partnership,
limited liability company, joint venture, corporation or other business entity
comprised only of himself, and/or members of his Immediate Family and entities
the ownership interests in which are owned by or for the benefit of himself
and/or members of his Immediate Family, (ii) in the case of a Limited Partner
which is a trust, to the beneficiaries of such trust, (iii) in the case of a
Limited Partner which is a partnership, limited liability company, joint
venture, corporation or other business entity to which Partnership Units were
transferred pursuant to (i) above, to its partners, owners, or stockholders, as
the case may be, who are members of the Immediate Family of or are actually the
Person(s) who transferred Partnership Units to it pursuant to (i) above, (iv) in
the case of a Limited Partner which acquired Partnership Units as of the
Effective Date and which is a partnership, limited liability company, joint
venture, corporation or other business entity, to its partners, owners, or
stockholders, as the case may be, or the Persons owning the beneficial interests
in any of its partners, owners or stockholders which are entities, (v) pursuant
to a gift or other transfer without consideration, (vi) pursuant to applicable
laws of descent or distribution, (vii) to another Limited Partner and (viii)
pursuant to a grant of security interest or other encumbrance affected in a bona
fide transaction or as a result of the exercise of remedies related thereto,
subject to the provisions of Section 11.3(f) hereto. A trust or other entity
will be considered formed "for the benefit" of a Partner's Immediately Family
even though some other Person has a remainder interest under or with respect to
such trust or other entity.
(e) Restricted Transfers. No transfer by a Limited Partner of its
Partnership Units may be made to any Person: (i) 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
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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 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 11.2); (vi) if such transfer would cause the Partnership Interests of
"benefit plan investors" to become "significant," as those terms are used in 29
C.F.R. ss. 2510.3-101(f), or any successor regulation thereto, 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, with respect to any plan defined in Section 4975(e) of the Code, a
"disqualified person" (as defined in Section 4975(e) 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 ERISA Plan Investor
pursuant to 29 C.F.R. ss. 2510.3-101, or any successor regulation thereto;
(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 Conversion
Right under Section 8.6 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 or the
activities of 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 Company to 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 Company to continue to qualify as a REIT or subject
the Company to any additional taxes under Section 857 or Section 4981 of the
Code.
(f) No Transfers to Holders of Nonrecourse Liabilities. No transfer of
any Partnership Units may be made to a lender to the Partnership or any Person
who is related (within the meaning of Section 1.752- 4(b) of the Regulations) to
any lender to the Partnership whose loan constitutes a Nonrecourse Liability,
without the consent of the General Partner, in its sole and absolute discretion;
provided that as a condition to such consent the lender will be required to
enter into an arrangement with the Partnership and the General Partner to redeem
for the Cash Amount any Partnership Units in which a security interest is held
simultaneously with the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such lender
under Section 752 of the Code.
(g) Avoidance of "Publicly Traded Partnership" Status. The General
Partner shall monitor the transfer of interests in the Partnership to determine
(i) if such interests are being
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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 Conversion Right in accordance with the terms of Section 8.6 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.
Section 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 his 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.
(b) Rights of Substituted Limited Partner. A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article 11
shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement.
(c) Amendment of Exhibit A. Upon the admission of a Substituted Limited
Partner, the General Partner shall amend Exhibit A hereto to reflect the name,
address, number of Partnership Units, and Percentage Interest of such
Substituted Limited Partner and to eliminate or adjust, if necessary, the name,
address and interest of the predecessor of such Substituted Limited Partner.
Section 11.5. Assignees
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee 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 deemed to have had
assigned to it, and shall be entitled to receive distributions from the
Partnership and the share of Net Income, Net Losses, Recapture Income, and any
other items of gain, loss, deduction and credit of the Partnership attributable
to the Partnership Units assigned to such transferee, but shall not be deemed to
be a holder of Partnership Units for any other
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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).
In the event any such transferee desires to make a further assignment of any
such Partnership Units, such transferee shall be subject to all of the
provisions of this Article 11 to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of Partnership Units.
Section 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 11 or
pursuant to redemption of all of its Partnership Units under Section 8.6.
(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 11 shall cease to be a Limited Partner upon the admission of all
Assignees of such Partnership Units as Substitute Limited Partners. Similarly,
any Limited Partner who shall transfer all of its Partnership Units pursuant to
a conversion of all of its Partnership Units under Section 8.6 shall cease to be
a Limited Partner.
(c) Timing of Transfers. Transfers pursuant to this Article 11 may only
be made on the first day of a fiscal quarter of the Partnership, unless the
General Partner otherwise agrees.
(d) Allocations. If any Partnership Interest is transferred or assigned
during any quarterly segment of the Partnership's fiscal year in compliance with
the provisions of this Article 11 or redeemed or transferred pursuant to Section
8.6 on any day other than the first day of a Partnership Year, then Net Income,
Net Losses, each item thereof and all other items attributable to such interest
for such Partnership Year shall be divided and allocated between the transferor
Partner and the transferee Partner 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. Solely for purposes of
making such allocations, each of such items for the calendar month in which the
transfer or assignment occurs shall be allocated to the transferee Partner, and
none of such items for the calendar month in which a redemption occurs shall be
allocated to the Converting Partner; provided, however, that the General Partner
may adopt such other conventions relating to allocations in connection with
transfers, assignments or redemptions as it determines are necessary or
appropriate. All distributions of Available Cash attributable to such
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 Converting 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.
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ARTICLE 12. ADMISSION OF PARTNERS
Section 12.1. Admission of Successor General Partner
A successor to all of the General Partner Interest pursuant to Section
11.2 hereto who is proposed to be admitted as a successor General Partner shall
be admitted to the Partnership as the 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 the
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. In the case
of such admission on any day other than the first day of a Partnership Year, all
items attributable to the General Partner Interest for such Partnership Year
shall be allocated between the transferring General Partner and such successor
as provided in Section 11.6(d) hereto.
Section 12.2. Admission of Additional Limited Partners
(a) Requirements. After the admission to the Partnership of the initial
Limited Partner on the date hereof, a Person who makes a Capital Contribution to
the Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing 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 hereto, and (ii) such
other documents or instruments as may be required in the discretion of the
General Partner in order to effect such Person's admission as an Additional
Limited Partner.
(b) General Partner Consent. Notwithstanding anything to the contrary
in this Section 12.2, no Person shall be admitted as an Additional Limited
Partner without the consent of the General Partner, which consent may be given
or withheld in the General Partner's sole and absolute discretion. 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.
(c) 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 any
convention permitted by law and selected by the General Partner. Solely for
purposes of making such allocations, each such item for the calendar month in
which an admission of any Additional Limited Partner occurs shall be allocated
among all of the Partners and Assignees, including such Additional Limited
Partner; provided, however, that the General Partner may adopt such other
conventions relating to allocations to Additional Limited Partners as it
determines are necessary or appropriate. All distributions of Available Cash
with respect to which the Partnership Record Date is before the
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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 of the Partners and Assignees, including such
Additional Limited Partner.
Section 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
of Limited Partnership and may for this purpose exercise the power of attorney
granted pursuant to Section 15.11 hereto.
ARTICLE 13. DISSOLUTION, LIQUIDATION AND TERMINATION
Section 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 the General Partner, any successor General Partner shall
continue the business of the Partnership. The Partnership shall dissolve, and
its affairs shall be wound up, only upon the first to occur of any of the
following ("Liquidating Events"):
(a) the expiration of its term as provided in Section 2.4 hereto;
(b) an event of withdrawal of the General Partner, as defined in
the Act (other than a liquidation of the General Partner into
the Company, in which event the Company shall become a General
Partner, or an event of bankruptcy), unless, within ninety
(90) days after such event of withdrawal a majority in
interest of the remaining Partners agree in writing to
continue the business of the Partnership and to the
appointment, effective as of the date of withdrawal, of a
successor General Partner;
(c) from and after the date of this Agreement through December 31,
2058, an election to dissolve the Partnership made by the
General Partner with the Consent of Partners holding
eighty-five percent (85%) of the Percentage Interests of the
Limited Partners (including Limited Partnership Interests held
by the Company);
(d) on or after January 1, 2059, an election to dissolve the
Partnership made by the General Partner, in its sole and
absolute discretion;
(e) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
(f) the sale of all or substantially all of the assets and
properties of the Partnership; or
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(g) a final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that either the Company or the
General Partner is bankrupt or insolvent, or a final and
non-appealable order for relief is entered by a court with
appropriate jurisdiction against either the Company or the
General Partner, in each case under any federal or state
bankruptcy or insolvency laws as now or hereafter in effect,
unless prior to the entry of such order or judgment all of the
remaining Partners agree 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.
Section 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, in the event there
is no remaining General Partner, any Person elected by a majority in interest of
the Limited Partners (the General Partner or such other Person being referred to
herein as 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 shares of common stock in the Company) shall be applied and
distributed in the following order:
(i) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than
the Partners;
(ii) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the General Partner;
(iii) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other Partners; and
(iv) The balance, if any, to the General Partner and Limited
Partners in accordance with their Capital Accounts, after
giving effect to all contributions, distributions, and
allocations for all periods.
The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article 13.
(b) Deferred Liquidation. Notwithstanding the provisions of Section
13.2(a) hereto 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
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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) and/or distribute to the Partners, in lieu of cash, as tenants in
common and in accordance with the provisions of Section 13.2(a) hereto,
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.
(c) Liquidating Trust; Reserves. In the discretion of the Liquidator, a
pro rata portion of the distributions that would otherwise be made to the
General Partner and Limited Partners pursuant to this Article 13 may be:
(i) 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 the General
Partner arising out of or in connection with the Partnership.
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 Liquidator, 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
(ii) withheld or escrowed 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 or
escrowed amounts shall be distributed to the General Partner
and Limited Partners in the manner and order of priority set
forth in Section 13.2(a) as soon as practicable.
Section 13.3. Compliance with Timing Requirements of Regulations
In the event the Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 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).
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Section 13.4. Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the event
the Partnership is considered "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 hereto, the Partnership shall
be deemed to have distributed the property in kind to the General Partner and
Limited Partners, who shall be deemed to have assumed and taken such property
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 property in kind
to the Partnership, which shall be deemed to have assumed and taken such
property subject to all such liabilities.
Section 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 provided in this
Agreement, no Limited Partner shall have priority over any other Partner as to
the return of its Capital Contributions, distributions, or allocations.
Section 13.6. Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs that would,
but for the 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.
Section 13.7. Termination of Partnership and Cancellation of
Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership's assets, as
provided in Section 13.2 hereto, the Partnership shall be terminated, a
certificate of cancellation shall be filed, 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.
Section 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 hereto, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.
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Section 13.9. Waiver of Partition
Each Partner hereby waives any right to partition of the Partnership
property.
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1. Amendments
(a) General. Amendments to this Agreement may be proposed by the
General Partner or by any Limited Partners (other than the Company) holding
twenty percent (20%) or more of the Partnership Interests. Following such
proposal, 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 it 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, and failure to respond in such time
period shall constitute a vote which is consistent with the General Partner's
recommendation with respect to the proposal. Except as provided in Section
13.1(c), 14.1(b), 14.1(c) or 14.1(d), a proposed amendment shall be adopted and
be effective as an amendment hereto if it is approved by the General Partner and
it receives the Consent of Partners holding a majority of the Percentage
Interests of the Limited Partners (including Limited Partnership Interests held
by the Company); provided that an action shall become effective at such time as
the requisite consents are received even if prior to such specified time.
(b) Amendments Not Requiring Limited Partner Approval. Notwithstanding
Section 14.1(a), 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:
(i) 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;
(ii) to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement
(which may be effected through an amendment to Exhibit A of
this Agreement);
(iii) to set forth and reflect in the Agreement the designations,
rights, powers and duties of the holders of any additional
Partnership Interests issued pursuant to Section 4.2 hereto;
(iv) to reflect a change that is of an inconsequential nature and
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, or make other changes with respect to
matters arising under this Agreement that will not be
inconsistent
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with law or with the provisions of this Agreement; and
(v) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in
federal or state law.
The General Partner shall provide notice to the Limited Partners when
any action under this Section 14.1(b) is taken.
(c) Amendments Requiring Limited Partner Approval. Notwithstanding
Section 14.1(a) and 14.1(b) hereto, this Agreement shall not be amended without
the Consent of the General Partner and each Limited Partner adversely affected
if such amendment would (1) convert a Limited Partner's interest in the
Partnership into a General Partner Interest; (2) modify the limited liability of
a Limited Partner in a manner adverse to such Limited Partner; (3) alter rights
of the Partner (other than as a result of the issuance of Partnership Interests)
to receive distributions pursuant to Article 5 or Article 13 or the allocations
specified in Article 6 (except as permitted pursuant to Section 4.2 and Section
14.1(b)(iii) hereto); (4) alter or modify the Conversion Right and REIT Shares
Amount as set forth in Sections 8.6 and 11.2(b), and the related definitions, in
a manner adverse to such Partner; (5) cause the termination of the Partnership
prior to the time set forth in Sections 2.4 or 13.1; or (vi) amend this Section
14.1(c). Further, no amendment may alter the restrictions on the General
Partner's authority set forth in Section 7.3 without the Consent specified in
that section.
(d) Other Amendments Requiring Limited Partner Approval.
Notwithstanding Section 14.1(a) or Section 14.1(b) hereto, the General Partner
shall not (except in connection with amendments made to reflect the issuance of
additional Partnership Interests and the relative rights, powers and duties
incident thereto) amend Sections 4.2(a), 7.5, 7.6, 11.2 or 14.2 without the
Consent of Limited Partners holding a majority of the Percentage Interests of
the Limited Partners, excluding Limited Partnership Interests held by the
Company.
Section 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 (other than the Company) holding twenty percent
(20%) or more of the Partnership Interests. The request 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 the Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of the
Partners or may be given in accordance with the procedure prescribed in Section
14.1(a) hereto. 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 Company) shall
control.
(b) Actions Without a Meeting. Any action required or permitted to be
taken at a
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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 his
attorney-in-fact. No proxy shall be valid after the expiration of twelve (12)
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 of
such revocation from the Limited Partner executing such proxy.
(d) Conduct of Meeting. Each meeting of the 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 deems appropriate. Without limitation, meetings of Partners
may be conducted in the same manner as meetings of the shareholders of the
Company and may be held at the same time, and as part of, meetings of the
shareholders of the Company.
ARTICLE 15. GENERAL PROVISIONS
Section 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 when delivered in person or when sent by first
class United States mail, by hand, via Fedex (or other nationally recognized
overnight courier service), or via facsimile (with confirmed answer back) to the
Partner or Assignee at the address set forth in Exhibit A hereto or such other
address of which the Partner shall notify the General Partner in writing.
Section 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.
Section 15.3. Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement
shall include the
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corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa.
Section 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.
Section 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.
Section 15.6. Creditors
Other than as expressly set forth herein with respect to the
Indemnitees, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.
Section 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.
Section 15.8. Counterparts
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all of 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.
Section 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.
Section 15.10. Invalidity of Provisions
If any provision of this Agreement shall to any extent be held void or
unenforceable (as to duration, scope, activity, subject or otherwise) by a court
of competent jurisdiction, such provision shall be deemed to be modified so as
to constitute a provision conforming as nearly as possible to the original
provision while still remaining valid and enforceable. In such event, the
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remainder of this Agreement (or the application of such provision to persons or
circumstances other than those in respect of which it is deemed to be void or
unenforceable) shall not be affected thereby. Each other provision of this
Agreement, unless specifically conditioned upon the voided aspect of such
provision, shall remain valid and enforceable to the fullest extent permitted by
law; any other provisions of this Agreement that are specifically conditioned on
the voided aspect of such invalid provision shall also be deemed to be modified
so as to constitute a provision conforming as nearly as possible to the original
provision while still remaining valid and enforceable to the fullest extent
permitted by law.
Section 15.11. Power of Attorney
(a) General. Each Limited Partner and each Assignee hereby constitutes
and appoints 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:
(i) 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 of Limited Partnership and all
amendments or restatements thereof) that the General Partner
or the 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 or plans to conduct business or own property;
(B) all instruments that the General Partner deems appropriate
or necessary to reflect any amendment, change, modification or
restatement of this Agreement in accordance with its terms;
(C) all conveyances and other instruments or documents that
the General Partner or the 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 11, 12 or 13 hereto or the
Capital Contribution of any Partner; and (E) all certificates,
documents and other instruments relating to the determination
of the rights and privileges of Partnership Interests; and
(ii) execute, swear to, seal, 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
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or necessary, in the sole discretion of the General Partner or
any Liquidator, to effectuate the terms or intent of this
Agreement.
Nothing contained herein shall be construed as authorizing the General
Partner or any Liquidator to amend this Agreement except in accordance with
Article 14 hereto 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 and 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.
Section 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 other
prior written or oral understandings or agreements among them with respect
thereto.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement of
Limited Partnership as of the date first written above.
GENERAL PARTNER:
MP OPERATING, INC.
By: ________________________________
Xxxx X. Xxxxx
President and Chief Executive Officer
LIMITED PARTNER:
MP PROPERTIES LP, INC.
By: _________________________________
Xxxx X. Xxxxx
President and Chief Executive Officer
ACKNOWLEDGED BY AND AGREED TO:
MONARCH PROPERTIES, INC.
By: _________________________
Xxxx X. Xxxxx
President and Chief Executive Officer
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EXHIBIT A
PARTNER CONTRIBUTIONS AND PARTNERSHIP INTERESTS
AGREED VALUE OF
CASH NON-CASH
PARTNERSHIP CONTRIBUTED TOTAL
NAME AND ADDRESS OF PARTNER CONTRIBUTION PROPERTY CONTRIBUTION UNITS INTEREST
--------------------------- ------------ -------- ------------ ----- --------
MP Operating, Inc. 1%
0000 Xxxxxxx Xxx Xxxxxxxxx - General
Suite 501 Partner
Xxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx
President and CEO
MP Properties LP, Inc. 99%
0000 Xxxxxxx Xxx Xxxxxxxxx - Limited
Suite 501 Partner
Xxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx
President and CEO
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 1.704-1(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 or any deemed gain pursuant
to Section 1.B.(5) hereof) computed in accordance with Section 1.B. hereof and
allocated to such Partner pursuant to Section 6.1(a) of the Agreement and
Exhibit C hereof, 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
(any deemed loss pursuant to Section 1.B.(5) hereof) computed in accordance with
Section 1.B. hereof and allocated to such Partner pursuant to Section 6.1(b) of
the Agreement and Exhibit C hereof.
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 1.704(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)(1)(B) or 705(a)(2)(B) of the Code are not
includable 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.
(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 hereto, the amount of any
such adjustment shall be taken into account as gain or loss
from the disposition of such asset.
C. Generally, a transferee (including an Assignee) of a Partnership
Unit shall succeed to a pro rata portion of the Capital Account of the
transferor; provided, however, that, if the transfer causes a termination of the
Partnership under Section 708(b)(1)(B) of the Code, the Partnership's properties
shall be deemed solely for federal income tax purposes, to have been distributed
in liquidation of the Partnership to the holders of Partnership Units (including
such transferee) and recontributed by such Persons in reconstitution of the
Partnership. In such event, the Carrying Values of the Partnership properties
shall be adjusted immediately prior to such deemed distribution pursuant to
Section 1.D(2) hereto. The Capital Accounts of such reconstituted Partnership
shall be maintained in accordance with the principles of this Exhibit B.
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 Value 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)
hereto, 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 issuance of additional Partnership
Units to 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 1.704-1(b)(2)(ii)(g) provided, however,
that adjustments pursuant to (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 1.704-1(b)(2)(iv)(e),
the Carrying Value of Partnership assets distributed in kind
shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership
property, as of the time any such asset is distributed.
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(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 or
Liquidator in accordance with Section 4.1(e).
E. The provisions of this Agreement (including this Exhibit B and other
Exhibits to this 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 (i) 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; or (ii) the manner in
which items are allocated among the Partners for federal income tax purposes in
order to comply with such Regulations or to comply with Section 704(c) of the
Code, the General Partner may make such modification without regard to Article
14 of the Agreement, provided that it is not likely to have a material effect on
the amounts distributable to any Person pursuant to Article 13 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 1.704-1(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 1.704-1(b). In
addition, the General Partner may adopt and employ such methods and procedures
for (i) the maintenance of book and tax capital accounts; (ii) the determination
and allocation of adjustments under Sections 704(c), 734 and 743 of the Code;
(iii) the determination of Net Income, Net Loss, taxable loss and items thereof
under this Agreement and pursuant to the Code; (iv) the adoption of reasonable
conventions and methods for the valuation of assets and the determination of tax
basis; (v) the allocation of asset value and tax basis; and (vi) conventions for
the determination of cost recovery, depreciation and amortization deductions, as
it determines in its sole discretion are necessary or appropriate to execute the
provisions of this Agreement, to comply with federal and state tax laws, and are
in the best interest of the Partners.
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 his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 7 and 13 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:
1.1. 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 taxable 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
1.1 is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
Solely for purposes of this Section 1.1, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of Partner Minimum Gain during such Partnership taxable year.
1.2. 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 1.1 hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
taxable year, each Partner who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.702-2(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 Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with Regulations Section 1.704-2(i)(4). This
Section 1.2 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 Section 1.2, 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
taxable year, other than allocations pursuant to Section 1.1 hereof.
1.3. Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 1.1 and 1.2 hereof such Partner has an Adjusted Capital Account
Deficit, 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 taxable year) shall be specially
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.
1.4. Nonrecourse Deductions. Nonrecourse Deductions for any Partnership
taxable 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 to the
numerically closest ratio for such Partnership taxable year which would satisfy
such requirements.
1.5. Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any Partnership taxable 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 Section 1.704-2(i).
1.6. 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 1.704-1(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.
1.7. Curative Allocations. The allocations set forth in Section 1.1
through 1.6 of this Exhibit C (the "Regulatory Allocations") are intended to
comply with certain requirements of the Regulations under Section 704(b) of the
Code. The Regulatory Allocations may not be consistent with the manner in which
the Partners intend to divide Partnership distributions. Accordingly, the
General Partner is hereby authorized to divide other allocations of income,
gain, deduction and loss among the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided among the Partners. In general, the Partners anticipate that, if
necessary, this will be accomplished by specially allocating other items of
income, gain, loss and deduction among the Partners so that the net amount of
the Regulatory Allocations and such special allocations to each person is zero.
However, the General Partner will have discretion to accomplish this result in
any reasonable manner; provided, however, that no allocation pursuant to this
Section 1.7 shall cause the Partnership to fail to comply with the requirements
of Regulations Sections 1.704-1(b)(2)(ii)(d), -2(e) or -2(i).
2. Allocations for Tax Purposes.
2.1. 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
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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.
2.2. 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:
A. (1) 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 and the Regulations thereunder, to
take into account the variation between the 704(c)
Value of such property and its adjusted basis at the
time of contribution; and
(2) 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.
B. (1) In the case of an Adjusted Property, such items shall
(a) first, be allocated among the Partners in a
manner consistent with the principles of
Section 704(c) of the Code and the
Regulations thereunder to take into account
the Unrealized Gain or Unrealized Loss
attributable to such property and the
allocations thereof pursuant to Exhibit B
hereof; and
(b) second, in the event such property was
originally a Contributed Property, be
allocated among the Partners in a manner
consistent with Section 2.2(A) of this
Exhibit C; and
(2) 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. ---------
C. 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.
2.3. To the extent that the Treasury Regulations promulgated pursuant
to Section 704(c) of the Code permit the 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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3. No Withdrawal.
No Partner shall be entitled to withdraw any part of his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 8 and 13 of the Agreement.
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EXHIBIT D
NOTICE OF CONVERSION
The undersigned Limited Partner hereby irrevocably (i) converts [Insert
Number] Limited Partnership Units in Monarch Properties, LP in accordance with
the terms of the Agreement of Limited Partnership of Monarch Properties, LP and
the Conversion Right referred to therein; (ii) surrenders such Limited
Partnership Units and all right, title and interest therein; and (iii) directs
that the Cash Amount or the REIT Shares Amount deliverable upon exercise of the
Conversion Right be delivered to the address specified below, and, if the Units
are converted for REIT Shares that such REIT Shares be registered or placed in
the name(s) and at the address(es) specified below. The undersigned hereby,
represents, warrants, and certifies that the undersigned (a) has marketable and
unencumbered title to such Limited Partnership Units, free and clear of the
rights or interests of any other person or entity; (b) has the full right,
power, and authority to redeem and surrender such Limited Partnership Units as
provided herein; and (c) has obtained the consent or approval of all person or
entities, if any, having the right to consent or approve such redemption and
surrender.
Dated:_________________________
Name of Limited Partner:____________________________________
Please Print
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(Signature of Limited Partner)
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(Street Address)
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(City) (State) (Zip Code)
Signature Guaranteed by:
------------------------------------
Issue REIT Shares to:
Name:_________________________________
Please insert social security or tax identifying number:__________________
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EXHIBIT E
VALUE OF CONTRIBUTED PROPERTY
UNDERLYING PROPERTY 704(C) VALUE AGREED VALUE
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UNDERLYING PROPERTY 704(C) VALUE AGREED VALUE
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EXHIBIT F
RECOURSE DEBT LEVEL SCHEDULE
