Exhibit 10.1b
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXX HOTEL PROPERTIES, L.P.
DATED: SEPTEMBER 30, 2002
TABLE OF CONTENTS
PAGE
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RECITALS ............................................................................................1
ARTICLE I DEFINED TERMS...............................................................................1
ARTICLE II PARTNERSHIP CONTINUATION; ADMISSION OF LIMITED PARTNERS; NAME; PLACE OF BUSINESS AND
REGISTERED AGENT............................................................................8
Section 2.1 Continuation...........................................................................8
Section 2.2 Restated Certificate of Limited Partnership; Other Filings.............................8
Section 2.3 Limited Partners; Additional Limited Partners..........................................8
Section 2.4 Name, Office and Registered Agent......................................................8
ARTICLE III BUSINESS AND TERM OF PARTNERSHIP............................................................8
Section 3.1 Business...............................................................................9
Section 3.2 Term...................................................................................9
ARTICLE IV CAPITAL CONTRIBUTIONS.......................................................................9
Section 4.1 General Partner........................................................................9
Section 4.3 Additional Capital Contributions and Issuances of Additional Partnership Interests.....9
Section 4.4 Additional Funding....................................................................12
Section 4.5 Interest..............................................................................12
Section 4.6 Return of Capital.....................................................................12
ARTICLE V PROFITS, LOSSES AND ACCOUNTING.............................................................12
Section 5.1 Allocation of Profits and Losses......................................................12
Section 5.2 Accounting............................................................................13
Section 5.3 Partners' Accounts....................................................................14
Section 5.4 Section 754 Elections.................................................................15
ARTICLE VI POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING OF GENERAL PARTNER....................15
Section 6.1 Powers of General Partner.............................................................15
Section 6.2 Delegation of Authority...............................................................16
Section 6.3 Duties of General Partner.............................................................16
Section 6.4 Liabilities of General Partner; Indemnification.......................................17
Section 6.5 Compensation of General Partner; Reimbursement........................................19
Section 6.6 Reliance on Act of General Partner....................................................19
Section 6.7 Outside Services; Dealings with Affiliates; Outside Activities........................19
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Section 6.8 Initial Loan to the Partnership; Additional Loans to the Partnership..................20
Section 6.9 Contribution of Assets................................................................20
ARTICLE VII RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT TO LIMITED PARTNERS..................20
Section 7.1 Rights of Limited Partners............................................................20
Section 7.2 Prohibitions with Respect to the Limited Partners.....................................21
Section 7.3 Ownership by Limited Partner of Corporate General Partner or Affiliate................21
Section 7.4 Redemption Right......................................................................21
Section 7.5 Warranties and Representations of the Limited Partners................................23
Section 7.6 Indemnification by Limited Partners...................................................23
Section 7.7 Notice of Sale or Refinancing.........................................................24
Section 7.8 Basis Analysis and Limited Partner Guarantees.........................................24
ARTICLE VIII DISTRIBUTIONS AND PAYMENTS TO PARTNERS.....................................................24
Section 8.1 Distributions of Cash Flow............................................................24
Section 8.2 REIT Distribution Requirements........................................................24
Section 8.3 No Right to Distributions in Kind.....................................................25
Section 8.4 Disposition Proceeds..................................................................25
Section 8.5 Withdrawals...........................................................................25
ARTICLE IX TRANSFERS OF INTEREST......................................................................25
Section 9.1 General Partner.......................................................................25
Section 9.2 Admission of a Substitute or Additional General Partner...............................26
Section 9.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner...........26
Section 9.4 Removal of a General Partner..........................................................27
Section 9.5 Restrictions on Transfer of Limited Partnership Interests.............................27
Section 9.6 Admission of Substitute Limited Partner...............................................28
Section 9.7 Rights of Assignees of Partnership Interests..........................................28
Section 9.8 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.........29
Section 9.9 Joint Ownership of Interests..........................................................29
Section 9.10 Transferees...........................................................................29
Section 9.11 Absolute Restriction..................................................................29
Section 9.12 Investment Representation.............................................................29
ARTICLE X TERMINATION OF THE PARTNERSHIP.............................................................30
Section 10.1 Termination...........................................................................30
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Section 10.2 Payment of Debts......................................................................30
Section 10.3 Debts to Partners.....................................................................30
Section 10.4 Remaining Distribution................................................................30
Section 10.5 Reserve...............................................................................30
Section 10.6 Final Accounting......................................................................30
ARTICLE XI AMENDMENTS................................................................................31
Section 11.1 Authority to Amend....................................................................31
Section 11.2 Notice of Amendments..................................................................31
ARTICLE XII POWER OF ATTORNEY.........................................................................31
Section 12.1 Power.................................................................................31
Section 12.2 Survival of Power.....................................................................32
ARTICLE XIII CONSENTS, APPROVALS, VOTING AND MEETINGS..................................................32
Section 13.1 Method of Giving Consent or Approval..................................................32
Section 13.2 Meetings of Limited Partners..........................................................33
Section 13.3 Opinion...............................................................................33
Section 13.4 Submissions to Partners...............................................................33
ARTICLE XIV MISCELLANEOUS.............................................................................33
Section 14.1 Governing Law.........................................................................33
Section 14.2 Agreement for Further Execution.......................................................33
Section 14.3 Entire Agreement......................................................................33
Section 14.4 Severability..........................................................................33
Section 14.5 Notices...............................................................................33
Section 14.6 Titles and Captions...................................................................34
Section 14.7 Counterparts..........................................................................34
Section 14.8 Pronouns..............................................................................34
Section 14.9 Survival of Rights....................................................................34
EXHIBIT A
FEDERAL INCOME TAX MATTERS
EXHIBIT C
EXHIBIT D
EXHIBIT E
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THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXX HOTEL PROPERTIES, L.P.
RECITALS:
Xxxxxx Hotel Properties, L.P. (the "Partnership"), was formed
as a limited partnership under the laws of the State of Ohio by the filing of a
Certificate of Limited Partnership with the Secretary of State of Ohio on
February 12, 1996. The Partnership's original Limited Partnership Agreement was
superseded by an Amended and Restated Agreement of Limited Partnership on
November 4, 1996 (the "Amended Agreement"), which was superseded by a Second
Amended and Restated Agreement of Limited Partnership on May 20, 1998 (the
"Second Amended Agreement"). The Second Amended Agreement was amended on
February 1, 1999 and further amended on January 1, 2002.
The General Partner and the Original Limited Partner desire
to, with the Limited Partners, amend and restate the Second Amended Agreement,
as amended, in its entirety. This Third Amended and Restated Agreement of
Limited Partnership is entered into by the parties as of September , 2002.
NOW, THEREFORE, in consideration of the foregoing, of the
mutual covenants between the parties hereto, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree to amend and restate the Second Amended Agreement, as
amended, to read in its entirety as follows:
ARTICLE I
DEFINED TERMS
Whenever used in this Agreement, the following terms shall
have the meanings respectively assigned to them in this Article I, unless
otherwise expressly provided herein or unless the context otherwise requires:
ACT: "Act" shall mean the Uniform Limited Partnership Act,
Ohio Revised Code xx.xx. 1782.01 ET SEQ., as in effect from time to time in the
State of Ohio.
ADDITIONAL FUNDS: "Additional Funds" has the meaning set forth
in Section 4.4 hereof.
ADDITIONAL LIMITED PARTNER: "Additional Limited Partner" shall
mean a Person admitted to this Partnership as a Limited Partner pursuant to and
in accordance with Section 2.3(b) of this Agreement.
ADDITIONAL SECURITIES: "Additional Securities" means any
additional REIT Shares (other than REIT Shares issued in connection with a
redemption pursuant to Section 7.4 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase REIT Shares, as set forth in Section 4.3(a)(ii).
AFFILIATE: "Affiliate" of another Person shall mean (a) any
Person directly or indirectly owning, controlling or holding with power to vote
ten percent (10%) or more of the outstanding voting securities of such other
Person; (b) any Person ten percent (10%) or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with power to
vote by such other Person; (c) any Person directly or indirectly controlling,
controlled by, or under common control with, such other Person; (d) any officer,
director, member or partner of such other Person; and (e) if such other Person
is an officer, director, member or partner in a company, the company for which
such Person acts in any such capacity.
AGREED VALUE: "Agreed Value" shall mean the fair market value
of Contributed Property as agreed to by the Contributing Partner and the
Partnership, using such reasonable method of valuation as they may adopt.
AGREEMENT: "Agreement" shall mean this Agreement of Limited
Partnership of Xxxxxx Hotel Properties, L.P., as amended from time to time.
ARTICLES OF INCORPORATION: "Articles of Incorporation" means
the Amended and Restated Articles of Incorporation of the General Partner filed
with the Secretary of State of the State of Ohio, as amended or restated from
time to time.
BANKRUPTCY CODE: "Bankruptcy Code" shall mean the United
States Bankruptcy Code, as amended, 11 U.S.C. xx.xx. 101 ET SEQ., and as
hereafter amended from time to time.
XXXXXXX: "Xxxxxxx" shall mean Xxxxxx X. Xxxxxx and Xxxx X.
Xxxxxx, their spouses and lineal ascendants and lineal descendants, and any
person employed on a full-time basis at any time during the five (5) year period
ending on November 4, 1996 by any entity owned (directly or indirectly) more
than fifty percent (50%) by Xxxxxx X. Xxxxxx or Xxxx X. Xxxxxx or both.
BUSINESS DAY: "Business Day" shall mean any day when the New
York Stock Exchange is open for trading.
CAPITAL ACCOUNT: "Capital Account" shall mean, as to any
Partner, the account established and maintained for such Partner pursuant to
Section 5.3 hereof.
CAPITAL CONTRIBUTION: "Capital Contribution" shall mean the
amount in cash or the Agreed Value of Contributed Property contributed by each
Partner (or his original predecessor in interest) to the capital of the
Partnership for his interest in the Partnership.
CASH AMOUNT: "Cash Amount" means an amount of cash per Common
Partnership Unit equal to the Value on the Valuation Date of the REIT Common
Shares Amount.
CASH FLOW: "Cash Flow" shall mean the excess of cash revenues
actually received by the Partnership in respect of Partnership operations for
any period, less Operating Expenses for such period. Cash Flow shall not include
Disposition Proceeds.
CODE: "Code" shall mean the Internal Revenue Code of 1986, as
amended, and as hereafter amended from time to time. Reference to any particular
provision of the Code shall mean that provision in the Code at the date hereof
and any succeeding provision of the Code.
COMMISSION: "Commission" shall mean the U.S. Securities and
Exchange Commission.
COMMON PARTNERSHIP INTEREST: "Common Partnership Interest"
shall mean an ownership interest in the Partnership, other than a Preferred
Partnership Interest, representing a Capital Contribution by either a Limited
Partner or the General Partner and includes any and all benefits to which the
holder of
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such an ownership interest may be entitled as provided in this Agreement or the
Act, together with all obligations of such Person to comply with the terms and
provisions of this Agreement and the Act.
COMMON PARTNERSHIP UNIT: "Common Partnership Unit" shall mean
a fractional, undivided share of the Common Partnership Interests of all
Partners issued hereunder. As of September 30, 2002, there shall be considered
to be _________________________ Common Partnership Units outstanding, with each
Common Partnership Unit representing a ____ percent (____%) Common Percentage
Interest in the Partnership. At all times there shall be maintained an
equivalency of Common Partnership Units and REIT Common Shares, except as
otherwise provided herein, and except that the conversion of the Subordinated
Convertible Debt shall be effected without the issuance of additional REIT
Common Shares.
COMMON PERCENTAGE INTEREST: "Common Percentage Interest" shall
mean the percentage ownership interest in the Common Partnership Units of each
Partner, as determined by dividing the Common Partnership Units owned by a
Partner by the total number of Common Partnership Units then outstanding.
CONTRIBUTED PARTNERSHIPS: "Contributed Partnerships" shall
mean the various limited partnerships that own the Initial Hotels prior to the
formation transaction.
CONTRIBUTED PROPERTY: "Contributed Property" shall mean a
Partner's interest in property or other consideration (excluding services and
cash) contributed to the Partnership by such Partner.
CONVERSION FACTOR: "Conversion Factor" shall mean 1.0;
provided, however, that in the event the General Partner (i) declares or pays a
dividend on its outstanding REIT Common Shares in REIT Common Shares or makes a
distribution to all holders of its outstanding REIT Common Shares in REIT Common
Shares, (ii) subdivides its outstanding REIT Common Shares, or (iii) combines
its outstanding REIT Common Shares into a smaller number of REIT Common 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 Common Shares
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination (assuming for such purposes that such dividend,
distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Common Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination. Any adjustment
to the Conversion Factor shall become effective immediately after the effective
date of such event retroactive to the record date, if any, for such event;
PROVIDED, HOWEVER, that if the General Partner receives a Notice of Redemption
after the record date, but prior to the effective date of such dividend,
distribution, subdivision or combination, the Conversion Factor shall be
determined as if the General Partner had received the Notice of Redemption
immediately prior to the record date for such dividend, distribution,
subdivision or combination.
DISPOSITION PROCEEDS: "Disposition Proceeds" shall mean the
excess of the proceeds received by the Partnership from the sale, exchange or
other disposition of all or substantially all of the Partnership's Property less
any expenses incurred or paid by the Partnership in connection with such
transaction.
EVENT OF BANKRUPTCY: "Event of Bankruptcy" shall mean as to
any Person the filing of a petition for relief as to such Person as debtor or
bankrupt under the Bankruptcy Code or similar provision of law of any
jurisdiction (except if such petition is contested by such Person and has been
dismissed within ninety (90) days of the filing thereof); insolvency of such
Person as finally determined by a court of competent jurisdiction; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
such Person's assets; commencement of any proceedings relating to such Person as
a debtor under any other reorganization, arrangement, insolvency, adjustment of
debt or liquidation law of any jurisdiction, whether now in
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existence or hereinafter in effect, either by such Person or by another, but if
such proceeding is commenced by another, only if such Person indicates his
approval of such proceeding, or such proceeding is contested by such Person and
has not been finally dismissed within ninety (90) days.
GENERAL PARTNER: "General Partner" shall mean Xxxxxx Lodging
Company and any Person who becomes a substitute or additional General Partner as
provided herein, and any of their successors as General Partner.
GENERAL PARTNERSHIP INTEREST: "General Partnership Interest"
shall mean the ownership interest of a General Partner in the Partnership.
GOVERNMENT OBLIGATIONS: "Government Obligations" shall mean
securities that are (i) direct obligations of the United States of America, for
the payment of which its full faith and credit is pledged, or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, that are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust as custodian with respect to any such obligation held by such custodian
for the account of the holder of a depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Obligation or the specific payment
of interest on or principal of the Government Obligation evidenced by such
depository receipt.
INDEMNITEE: "Indemnitee" shall mean (i) any Person made a
party to a proceeding by reason of its status as (A) the General Partner, or (B)
a director or officer of the General Partner, and (ii) such other Persons
(including Affiliates of the General Partner or the Partnership) as the General
Partner may designate from time to time, in its sole and absolute discretion.
INDEPENDENT DIRECTOR: "Independent Director" shall mean a
director of the General Partner who is not (i) an officer or employee of the
General Partner, (ii) an Affiliate of an officer or employee of the General
Partner (iii) an Affiliate of (w) any lessee of any property of the General
Partner or of any Subsidiary of the General Partner, (x) any Subsidiary of the
General Partner, or (y) any partnership that is an Affiliate of the General
Partner, or (iv) a Person who acts on a regular basis as an individual or as a
representative of an organization serving as a professional advisor, legal
counsel or consultant to management if, in the opinion of the Board of Directors
of the General Partner, that relationship is material to the General Partner or
the Partnership, that Person, or the organization represented.
INITIAL HOTELS: "Initial Hotels" shall mean those properties
listed on Exhibit C hereto.
INITIAL LOAN: "Initial Loan" shall have the meaning provided
in Section 6.8(a) hereof.
INTERCOMPANY CONVERTIBLE NOTE: "Intercompany Convertible Note"
shall mean that certain Loan Agreement dated as of November 4, 1996, between the
General Partner and the Partnership, a copy of which is attached as Exhibit E
hereto, as it may be amended from time to time.
IRS: "IRS" shall mean the Internal Revenue Service.
LIMITED PARTNER: "Limited Partner" shall mean any Person named
as a Limited Partner on Exhibit A attached hereto and any Person who becomes a
Substitute Limited Partner pursuant to Section 9.6 hereof or an Additional
Limited Partner pursuant to Section 2.3(b) hereof, in such Person's capacity as
a Limited Partner in the Partnership.
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LIMITED PARTNERSHIP INTEREST: "Limited Partnership Interest"
shall mean the ownership interest of a Limited Partner in the Partnership at any
particular time, including the right of such Limited Partner to any and all
benefits to which such Limited Partner may be entitled as provided in this
Agreement and in the Act, together with the obligations of such Limited Partner
to comply with all the provisions of this Agreement and of the Act.
MINIMUM LIMITED PARTNERSHIP INTEREST: "Minimum Limited
Partnership Interest" means a one percent (1%) Limited Partnership Interest.
NOTICE OF REDEMPTION: "Notice of Redemption" shall mean the
Notice of Exercise of Redemption Right substantially in the form attached as
Exhibit D hereto.
OFFERING: "Offering" shall mean the offer and sale by the
General Partner and the purchase by the Underwriters (as defined in the
Prospectus) of REIT Common Shares for sale to the public, consummated November
4, 1996.
OPERATING EXPENSES: "Operating Expenses" shall mean (i) all
administrative and operating costs and expenses incurred by the Partnership,
(ii) those administrative costs and expenses of the General Partner, including
any salaries or other payments to directors, officers or employees of the
General Partner, and any accounting and legal expense of the General Partner,
which expenses, the Partners have agreed, are expenses of the Partnership and
not the General Partner, and (iii) to the extent not included in clause (ii)
above, REIT Expenses; PROVIDED, HOWEVER, that Operating Expenses shall not
include any administrative costs and expenses incurred by the General Partner
that are attributable to Properties or partnership interests in a Subsidiary
that are owned by the General Partner directly.
ORIGINAL LIMITED PARTNER: "Original Limited Partner" shall
mean Xxxxxx X. Xxxxxx.
PARTNER: "Partner" shall mean the General Partner or any
Limited Partner.
PARTNERSHIP: "Partnership" shall mean Xxxxxx Hotel Properties,
L.P., an Ohio limited partnership.
PARTNERSHIP INTEREST: "Partnership Interest" shall mean 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 an ownership interest may be entitled as
provided in this Agreement or the Act, together with all obligations of such
Person to comply with the terms and provisions of this Agreement and the Act.
PARTNERSHIP RECORD DATE: "Partnership Record Date" shall mean
the record date established by the General Partner for the distribution of Cash
Flow pursuant to Section 8.1 hereof, which record date shall be the same as the
record date established by the General Partner for a distribution to its
shareholders of some or all of its portion of such distribution.
PERSON: "Person" shall mean any individual, partnership,
corporation, limited liability company, trust or other entity.
PREFERRED PARTNERSHIP INTEREST: "Preferred Partnership
Interest" shall mean an ownership interest in the Partnership, having a
preference in payment of distributions or on liquidation, 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 an ownership interest may be
entitled as provided in this Agreement or the Act, together with all obligations
of such Person to comply with the terms and provisions of this Agreement and the
Act.
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PREFERRED PARTNERSHIP UNIT: "Preferred Partnership Unit" shall
mean a fractional, undivided share of the Preferred Partnership Interests of all
Partners issued hereunder. As of September , 2002, there shall be considered to
be _____________________ Preferred Partnership Units outstanding, with each
Preferred Partnership Unit representing a ___ percent (___%) Preferred
Percentage Interest in the Partnership.
PREFERRED PERCENTAGE INTEREST: "Preferred Percentage Interest"
shall mean the percentage ownership interest in the Preferred Partnership Units
of each Partner, as determined by dividing the Preferred Partnership Units owned
by a Partner by the total number of Preferred Partnership Units then
outstanding.
PREFERRED RETURN: "Preferred Return" shall mean any payment
made or to be made on any Preferred Partnership Unit corresponding to any
dividend paid or to be paid on any preferred shares issued by the General
Partner, in accordance with Section 4.3 hereof.
PROPERTY: "Property" shall mean any hotel property or other
investment in which the Partnership holds an ownership interest.
PROSPECTUS: "Prospectus" shall mean the final prospectus,
dated October 29, 1996, delivered to purchasers of REIT Shares in the Offering.
PUBLIC OFFERING PRICE: "Public Offering Price" shall mean the
price set forth in the Prospectus.
REDEEMING PARTNER: "Redeeming Partner" shall have the meaning
provided in Section 7.4(a) hereof.
REDEMPTION RIGHT: "Redemption Right" shall have the meaning
provided in Section 7.4(a) hereof.
REIT: "REIT" shall mean a real estate investment trust under
Sections 856 through 860, inclusive, of the Code.
REIT COMMON SHARE: "REIT Common Share" shall mean a share of
the common shares of the General Partner.
REIT COMMON SHARES AMOUNT: "REIT Common Shares Amount" shall
mean a whole number of REIT Common Shares equal to the product of the number of
Common Partnership Units offered for redemption by a Redeeming Partner,
multiplied by the Conversion Factor (rounded down to the nearest whole number in
the event such product is not a whole number); provided, however, that in the
event the General Partner at any time issues to all holders of REIT Common
Shares rights, options, warrants or convertible or exchangeable securities
entitling the shareholders to subscribe for or purchase REIT Common Shares, or
any other securities or property (collectively, the "Rights"), which Rights have
not expired pursuant to their terms, then the REIT Common Shares Amount
thereafter shall also include such Rights that a holder of that number of REIT
Common Shares would be entitled to receive.
REIT EXPENSES: "REIT Expenses" means (i) costs and expenses
relating to the formation and continuity of existence of the General Partner and
any Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be
included within the definition of General Partner), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable to
any director, officer, or employee of the General Partner, (ii) costs and
expenses relating to the public offering and registration of securities or
private offering of securities by the General Partner and all statements,
reports, fees and expenses incidental thereto, including underwriting discounts
and selling commissions applicable to any such offering of securities, (iii)
costs and expenses associated with the preparation and filing of any
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periodic reports by the General Partner under federal, state or local laws or
regulations, including filings with the Commission, (iv) costs and expenses
associated with compliance by the General Partner with laws, rules and
regulations promulgated by any regulatory body, including the Commission, and
(v) all other operating or administrative costs of the General Partner,
including, without limitation, insurance premiums, and legal, accounting and
directors' fees, incurred in the ordinary course of its business on behalf of or
in connection with the Partnership.
REIT PREFERRED SHARE: "REIT Preferred Share" shall mean a
share of the preferred shares of the General Partner.
REIT SHARE: "REIT Share" shall mean a REIT Common Share or a
REIT Preferred Share.
SPECIFIED REDEMPTION DATE: "Specified Redemption Date" shall
mean, with respect to a given Partner, the tenth (10th) Business Day after
receipt by the General Partner of a Notice of Redemption; provided, however,
that no Specified Redemption Date shall occur with respect to the Xxxxxxx (as
defined herein) before three (3) years from November 4, 1996; provided, further,
that if the General Partner combines its outstanding REIT Common Shares, no
Specified Redemption Date shall occur after the record date and prior to the
effective date of such combination.
SUBORDINATED CONVERTIBLE DEBT: "Subordinated Convertible Debt"
shall mean the indebtedness of the Partnership to the General Partner evidenced
by the Intercompany Convertible Note.
SUBSIDIARY: "Subsidiary" shall mean, with respect to any
Person, any corporation or other entity of which a majority of (i) the voting
power of the voting equity securities, or (ii) the outstanding equity interests,
are owned, directly or indirectly, by such Person.
SUBSTITUTE GENERAL PARTNER: "Substitute General Partner" has
the meaning set forth in Section 9.2.
SUBSTITUTE LIMITED PARTNER: "Substitute Limited Partner" shall
mean any Person admitted to the Partnership as a Limited Partner pursuant to
Section 9.6 hereof.
SURVIVING GENERAL PARTNER: "Surviving General Partner" has the
meaning set forth in Section 9.1(d) hereof.
TRANSACTION: "Transaction" has the meaning set forth in
Section 9.1(c) hereof.
TRANSFER: "Transfer" has the meaning set forth in Section
9.5(a) hereof.
VALUATION DATE: "Valuation Date" shall mean the date of
receipt by the General Partner of a Notice of Redemption or, if such date is not
a Business Day, the first Business Day thereafter.
VALUE: "Value" shall mean, with respect to a REIT Common
Share, the average of the daily market price for the ten (10) consecutive
trading days immediately preceding the Valuation Date. The market price for each
such trading day shall be: (i) if the REIT Common Shares are listed or admitted
to trading on any securities exchange or the NASDAQ National Market System, 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; (ii) if the
REIT Common Shares are not listed or admitted to trading on any securities
exchange or the NASDAQ National Market System, the last reported sale price on
such day or, if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reliable quotation source
designated by the General Partner; or (iii) if the REIT Common Shares are not
listed or admitted to trading on any securities exchange or the NASDAQ National
Market System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high
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bid and low asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and asked prices
on such day, the average of the high bid and low asked prices, as so reported,
on the most recent day (not more than ten (10) days prior to the date in
question) for which prices have been so reported; provided, however, that if
there are no bid and asked prices reported during the ten (10) days prior to the
date in question, the Value of the REIT Common Shares shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the REIT Common Shares Amount includes rights that a holder of REIT Common
Shares would be entitled to receive, and the General Partner acting in good
faith determines that the value of such rights is not reflected in the Value of
the REIT Common Shares determined as aforesaid, 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 II
PARTNERSHIP CONTINUATION;
ADMISSION OF LIMITED PARTNERS;
NAME; PLACE OF BUSINESS AND REGISTERED AGENT
Section 2.1 CONTINUATION. The Partners hereby agree to
continue the Partnership pursuant to the Act and upon the terms and conditions
set forth in this Agreement.
Section 2.2 RESTATED CERTIFICATE OF LIMITED PARTNERSHIP; OTHER
FILINGS. The General Partner shall prepare (or caused to be prepared), execute,
acknowledge, record and file at the expense of the Partnership, a Restated
Certificate of Limited Partnership and all requisite fictitious name statements
and notices in such places and jurisdictions as may be required by the Act or
necessary to cause the Partnership to be treated as a limited partnership under,
and otherwise to comply with, the laws of each state or other jurisdiction in
which the Partnership conducts business.
Section 2.3 LIMITED PARTNERS; ADDITIONAL LIMITED PARTNERS.
(a) The Limited Partners shall be those Persons
identified as Limited Partners on Exhibit A attached hereto, as amended from
time to time pursuant to the terms of this Agreement, and such Persons are
hereby admitted to the Partnership as Limited Partners.
(b) The General Partner shall in timely fashion amend
this Agreement and, if required by the Act, the Certificate of Limited
Partnership filed for record to reflect the admission pursuant to the terms of
this Agreement of a Person as a Limited Partner.
Section 2.4 NAME, OFFICE AND REGISTERED AGENT. The name of the
Partnership shall be Xxxxxx Hotel Properties, L.P. The principal place of
business of the Partnership shall be at Guildhall Building, Suite 1500, 00 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx, 00000. The General Partner may at any time
change the location of such office, provided the General Partner gives notice to
the Partners of any such change. The name and address of the Partnership's
statutory agent for service of process on the Partnership is Xxxxxx Lodging
Company, Guildhall Building, Suite 1500, 00 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxx, 00000.
ARTICLE III
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BUSINESS AND TERM OF PARTNERSHIP
Section 3.1 BUSINESS. The purpose and nature of the business
of the Partnership is to conduct any business that may lawfully be 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 General Partner at all times to be classified as a REIT, unless the Board of
the General Partner determines to cease to qualify as a REIT. To consummate the
foregoing and to carry out the obligations of the Partnership in connection
therewith or incidental thereto, the General Partner shall have the authority,
in accordance with and subject to the limitations set forth elsewhere in this
Agreement, to make, enter into, perform and carry out any arrangements,
contracts or agreements of every kind for any lawful purpose, without limit as
to amount or otherwise, with any corporation, association, partnership, limited
liability company, firm, trustee, syndicate, individual or any political or
governmental division, subdivision or agency, domestic or foreign, and generally
to make and perform agreements and contracts of every kind and description and
to do any and all things necessary or incidental to the foregoing for the
protection and enhancement of the assets of the Partnership.
Section 3.2 TERM. The Partnership as herein constituted shall
continue until December 31, 2050, unless earlier dissolved or terminated
pursuant to law or the provisions of this Agreement.
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section 4.1 GENERAL PARTNER.
(a) The General Partner has contributed cash to the
capital of the Partnership in the amount set forth opposite the name of the
General Partner on Exhibit A attached hereto.
(b) Upon the termination and dissolution of the
Partnership, the General Partner shall contribute an amount equal to the lesser
of (i) the aggregate deficit balance in the General Partner's Capital Account,
and (ii) the excess of 1.01% of the aggregate capital previously contributed by
the Limited Partners over the aggregate amount of capital previously contributed
by the General Partner, to the Partnership.
Section 4.2 LIMITED PARTNERS. The Limited Partners have
contributed their respective ownership interests in the Contributed Partnerships
to the capital of the Partnership. The Agreed Values of the Limited Partners'
proportionate ownership interests in the Contributed Partnerships are set forth
on Exhibit A attached hereto.
Section 4.3 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF
ADDITIONAL PARTNERSHIP Interests. Except as provided in this Section 4.3 or in
Section 4.4, the Partners shall have no right or obligation to make any
additional Capital Contributions or loans to the Partnership. The General
Partner may contribute additional capital or property to the Partnership, from
time to time, and receive additional Partnership Interests in respect thereof,
in the manner contemplated in this Section 4.3.
(a) ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.
(i) GENERAL. The General Partner is hereby
authorized to cause the Partnership to issue such additional
Partnership Interests in the form of Common Partnership Units and
Preferred Partnership Units for any Partnership purpose at any time or
from time to time, to the Partners or to other Persons for such
consideration and on such terms and conditions
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as shall be established by the General Partner in its sole and absolute
discretion, all without the approval of any of the Limited Partners.
Any additional Partnership Interest issued thereby may be issued in one
or more classes, or one or more series of any of such classes, with
such designations, preferences and relative, participating, optional or
other special rights, powers and duties, including rights, powers and
duties senior to Limited Partnership Interests, all as shall be
determined by the General Partner in its sole and absolute discretion
and without the approval of any Limited Partner, subject to Ohio law,
including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class
or series of Partnership Interests; (ii) the right of each such class
or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each class or series of
Partnership Interests upon dissolution and liquidation of the
Partnership; PROVIDED, HOWEVER, that no additional Partnership
Interests shall be issued to the General Partner unless:
(1) (A) The additional Partnership Interests are
issued in connection with an issuance of REIT Shares of or
other interests in the General Partner, which shares or
interests have designations, preferences and other rights, all
such that the economic interests are substantially similar to
the designations, preferences and other rights of the
additional Partnership Interests issued to the General Partner
by the Partnership in accordance with this Section 4.3 and (B)
the General Partner shall make, directly or through one or
more Affiliates, a Capital Contribution to the Partnership in
an amount equal to the proceeds raised or other property
received by the General Partner, directly or through one or
more Affiliates, in connection with the issuance of such
shares or other interests in the General Partner, or
(2) the additional Partnership Interests are issued
in connection with the conversion of the Subordinated
Convertible Debt at a conversion rate of twenty and 00/100
Dollars ($20.00) of principal amount of such debt per one
Common Partnership Unit, or
(3) the additional Partnership Interests are issued
to all Partners in proportion to their respective Common
Percentage Interests or Preferred Percentage Interests, as
applicable.
Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Common Partnership Units
or Preferred Partnership Units for less than fair market value, so long
as the General Partner concludes in good faith that such issuance is in
the best interests of the General Partner and the Partnership.
(ii) UPON ISSUANCE OF ADDITIONAL SECURITIES. After
the Offering, the Company shall not issue any additional REIT
Shares (other than REIT Shares issued in connection with a
redemption pursuant to Section 7.4 hereof) or rights, options,
warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase REIT Shares
(collectively, "Additional Securities") other than to all
holders of REIT Shares, unless (A) the General Partner shall
cause the Partnership to issue to the General Partner
Partnership Interests or rights, options, warrants or
convertible or exchangeable securities of the Partnership
having designations, preferences and other rights, all such
that the economic interests are substantially similar to those
of the Additional Securities, and (B) the General Partner
contributes, directly or through one or more Affiliates, the
proceeds or other property received from the issuance of such
Additional Securities and from any exercise of rights
contained in such Additional Securities to the Partnership.
Without limiting the foregoing, the General Partner is
expressly authorized to issue Additional Securities for less
than fair market value, and to cause the Partnership to issue
to the General Partner corresponding Partnership Interests, so
long as (x) the General Partner concludes in good faith that
such issuance is in the best interests of the General
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Partner and the Partnership, and (y) the General Partner
contributes all proceeds or other property received from such
issuance to the Partnership. For example, in the event the
General Partner issues REIT Common Shares for a cash purchase
price and contributes all of the proceeds of such issuance to
the Partnership as required hereunder, the General Partner
shall be issued a number of additional Common Partnership
Units equal to the product of (A) the number of such REIT
Common Shares issued by the General Partner, the proceeds of
which were so contributed, multiplied by (B) a fraction, the
numerator of which is 100%, and the denominator of which is
the Conversion Factor in effect on the date of such
contribution.
(b) CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF
ISSUANCE OF REIT SHARES. In connection with any and all issuances of REIT
Shares, the General Partner shall contribute all of the proceeds raised in
connection with such issuance to the Partnership as Capital Contributions,
PROVIDED THAT if the proceeds actually received and contributed by the General
Partner are less than the gross proceeds of such issuance as a result of any
underwriter's discount or other expenses paid or incurred in connection with
such issuance, then the General Partner shall be deemed to have made Capital
Contributions to the Partnership in the aggregate amount of the gross proceeds
of such issuance and the Partnership shall be deemed simultaneously to have paid
such offering expenses in connection with the required issuance of additional
Partnership Units to the General Partner for such Capital Contributions pursuant
to Section 4.3(a) hereof.
(c) MINIMUM LIMITED PARTNERSHIP INTEREST. In the
event that either a redemption pursuant to Section 7.4 hereof or additional
Capital Contributions by the General Partner would result in the Limited
Partners, in the aggregate, owning less than the Minimum Limited Partnership
Interest, the General Partner and the Limited Partners shall form another
partnership and contribute sufficient Limited Partnership Interests together
with such other Limited Partners so that the limited partners of such
partnership own at least the Minimum Limited Partnership Interest.
(d) SERIES 1999-A PREFERRED PARTNERSHIP UNITS.
Without limiting the generality of this Section 4.3, the Partnership is
authorized to issue to the General Partner Series 1999-A Preferred Partnership
Units (the "Series 1999-A Preferred Units"). Upon any issuance by the General
Partner of any of its Class A Cumulative Preferred Shares, Series 1999-A (the
"Series 1999-A Preferred Shares"), the General Partner shall contribute to the
Partnership the net proceeds from that issuance in exchange for a number of
Series 1999-A Preferred Units equal to the number of Series 1999-A Preferred
Shares issued by the General Partner. If and when the holders of Series 1999-A
Preferred Shares are entitled to receive any payment from the General Partner of
any dividend or amount payable on redemption, liquidation or conversion, the
holders of the Series 1999-A Preferred Units will be entitled to receive from
the Partnership an amount of cash equal to the value to be paid to the holders
of the Series 1999-A Preferred Shares prior to the payment of any such amount to
the holders of Common Partnership Units, all such payments being made to the
extent necessary to cause the holders of Series 1999-A Preferred Shares and the
holders of Series 1999-A Preferred Units to have the same economic rights and
preferences on a per-share and per-unit basis. Upon redemption, purchase or
other acquisition by the General Partner of any of the Series 1999-A Preferred
Shares, the Partnership shall redeem, purchase or otherwise acquire an equal
number of Series 1999-A Preferred Units. Upon any conversion of Series 1999-A
Preferred Shares into REIT Common Shares, an equal number of Series 1999-A
Preferred Units will automatically be converted into a number of Common
Partnership Units equal to the number of REIT Common Shares issued on the
conversion of the Series 1999-A Preferred Shares. Upon the issuance of Series
1999-A Preferred Shares at any time and from time to time, the General Partner
shall take all actions necessary to ensure that the Series 1999-A Preferred
Units held by the General Partner have the same economic rights and preferences
as the outstanding Series 1999-A Preferred Shares, all as set forth in the
Certificate of Amendment to the Articles of Incorporation dated as of February
1, 1999.
(e) SERIES 2002-A PREFERRED PARTNERSHIP UNITS.
Without limiting the generality of this Section 4.3, the Partnership is
authorized to issue to the General Partner Series 2002-A Preferred
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Partnership Units (the "Series 2002-A Preferred Units"). Upon any issuance by
the General Partner of any of its Class A Cumulative Preferred Shares, Series
2002-A (the "Series 2002-A Preferred Shares"), the General Partner shall
contribute to the Partnership the net proceeds from that issuance in exchange
for a number of Series 2002-A Preferred Units equal to the number of Series
2002-A Preferred Shares issued by the General Partner. If and when the holders
of Series 2002-A Preferred Shares are entitled to receive any payment from the
General Partner of any dividend or amount payable on redemption or liquidation,
the holders of the Series 2002-A Preferred Units will be entitled to receive
from the Partnership an amount of cash equal to the value to be paid to the
holders of the Series 2002-A Preferred Shares prior to the payment of any such
amount to the holders of Common Partnership Units, all such payments being made
to the extent necessary to cause the holders of Series 2002-A Preferred Shares
and the holders of Series 2002-A Preferred Units to have the same economic
rights and preferences on a per-share and per-unit basis. Upon redemption,
purchase or other acquisition by the General Partner of any of the Series 2002-A
Preferred Shares, the Partnership shall redeem, purchase or otherwise acquire an
equal number of Series 2002-A Preferred Units. Upon the issuance of Series
2002-A Preferred Shares at any time and from time to time, the General Partner
shall take all actions necessary to ensure that the Series 2002-A Preferred
Units held by the General Partner have the same economic rights and preferences
as the outstanding Series 2002-A Preferred Shares, all as set forth in the
Certificate of Amendment to the Articles of Incorporation dated as of September
, 2002.
Section 4.4 ADDITIONAL FUNDING. If the General Partner
determines that it is in the best interests of the Partnership to provide for
additional Partnership funds ("Additional Funds") for any Partnership purpose,
the General Partner may (i) cause the Partnership to obtain such funds from
outside borrowings, or (ii) elect to have the General Partner provide such
Additional Funds to the Partnership through loans or otherwise.
Section 4.5 INTEREST. No interest shall be paid on the Capital
Contribution of any Partner.
Section 4.6 RETURN OF CAPITAL. Except as expressly provided in
this Agreement, no Partner shall be entitled to demand or receive the return of
his Capital Contribution.
ARTICLE V
PROFITS, LOSSES AND ACCOUNTING
Section 5.1 ALLOCATION OF PROFITS AND LOSSES. Except as
otherwise provided herein or in Exhibit B, profits earned and losses incurred by
the Partnership shall be allocated among the Partners as follows:
(a) Profits for each year shall be allocated among
the Partners, and shall be credited to the respective Capital Accounts of the
Partners, in the following order and priority:
(i) First, to the Partners to the extent of
losses, in the proportions and in the reverse order in which losses were
allocated to them pursuant to Section 7.1(b), until the cumulative amounts
allocated to each Partner pursuant to this Section 7.1(a)(i) are equal to the
cumulative losses so allocated to such Partner;
(ii) Second, to the holders of Preferred
Partnership Units, if any, until the cumulative amount of profits allocated to
each such holder pursuant to this Section 5.1(a)(ii) and Section 5.1(a)(iv)
below for the current and all prior taxable years is equal to the sum of the
cumulative amount distributed to each such holder pursuant to Section 8.1(a)(i)
for the current and all prior taxable years;
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(iii) Third, to the holders of Common
Partnership Units in accordance with their Common Percentage Interests, until
the cumulative amount of profits allocated to each such holder pursuant to this
Section 5.1(a)(iii) and Section 5.1(a)(v) below for the current and all prior
taxable years is equal to the sum of the cumulative amount distributed to each
such holder pursuant to Section 8.1(a)(ii) for the current and all prior taxable
years;
(iv) Fourth, to the holders of Preferred
Partnership Units, if any, in accordance with their Preferred Percentage
Interests to the extent there exists any accrued but unpaid Preferred Return for
which profits have not previously been allocated pursuant to this Section
5.1(iv); and
(v) Fifth, any remaining profits shall be
allocated to the holders of Common Partnership Units in accordance with their
Common Partnership Interests.
(b) Losses for each year shall be allocated among the
Partners, and shall be debited to the respective Capital Accounts of the
Partners, in the following order and priority:
(i) First, to the holders of Common Partnership
Units pro rata in accordance with the positive balances in their Adjusted
Capital Account Balances attributable to Common Partnership Units;
(ii) Second to the holders of Preferred
Partnership Units pro rata in accordance with the positive balances in their
Adjusted Capital Account Balances attributable to Preferred Partnership Units;
and
(iii) Thereafter any remaining losses will be
allocated to the General Partner.
Section 5.2 ACCOUNTING.
(a) The books of the Partnership shall be kept on the
accrual basis and in accordance with generally accepted accounting principles
consistently applied.
(b) The fiscal year of the Partnership shall be the
calendar year.
(c) The terms "profits" and "losses," as used herein,
shall mean all items of income, gain, expense or loss as determined utilizing
federal income tax accounting principles and shall also include each Partner's
share of income described in Section 705(a)(1)(B) of the Code, any expenditures
described in Section 705(a)(2)(B) of the Code, any expenditures described in
Section 709(a) of the Code which are not deducted or amortized in accordance
with Section 709(b) of the Code, losses not deductible pursuant to Sections
267(a) and 707(b) of the Code and adjustments made pursuant to Exhibit B
attached hereto.
(d) The General Partner shall be the Tax Matters
Partner of the Partnership within the meaning of Section 6231(a)(7) of the Code.
As Tax Matters Partner, the General Partner shall have the right and obligation
to take all actions authorized and required, respectively, by the Code for the
Tax Matters Partner. The General Partner shall have the right to retain
professional assistance in respect of any audit of the Partnership by the IRS,
and all out-of-pocket expenses and fees incurred by the General Partner on
behalf of the Partnership as Tax Matters Partner shall constitute Operating
Expenses of the Partnership. In the event the General Partner receives notice of
a final Partnership adjustment under Section 6223(a)(2) of the Code, the General
Partner shall either (i) file a court petition for judicial review of such final
adjustment within the period provided under Section 6226(a) of the Code, a copy
of which petition shall be mailed to each Limited Partner on the date such
petition is filed, or (ii) mail a
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written notice to each Limited Partner, within such period, that describes the
General Partner's reasons for determining not to file such a petition.
(e) Except as specifically provided herein, all
elections required or permitted to be made by the Partnership under the Code
shall be made by the General Partner in its sole discretion.
(f) Any Partner shall have the right to a private
audit of the books and records of the Partnership, provided such audit is made
at the expense of the Partner desiring it, and it is made during normal business
hours.
Section 5.3 PARTNERS' ACCOUNTS.
(a) There shall be maintained a Capital Account for
each Partner in accordance with this Section 5.3 and the principles set forth in
Exhibit B attached hereto and made a part hereof. The amount of cash and the net
fair market value of property contributed to the Partnership by each Partner,
net of liabilities assumed by the Partnership, shall be credited to its Capital
Account, and from time to time, but not less often than annually, the share of
each Partner in profits, losses and fair market value of distributions shall be
credited or charged to its Capital Account. The determination of Partners'
Capital Accounts, and any adjustments thereto, shall be made consistent with tax
accounting and other principles set forth in Section 704(b) of the Code and
applicable regulations thereunder and Exhibit B attached hereto.
(b) Except as otherwise specifically provided herein
or in a guarantee of a Partnership liability, signed by a Limited Partner, no
Limited Partner shall be required to make any further contribution to the
capital of the Partnership to restore a loss, to discharge any liability of the
Partnership or for any other purpose, nor shall any Limited Partner personally
be liable for any liabilities of the Partnership or of the General Partner
except as provided by law or this Agreement. All Limited Partners hereby waive
their right of contribution which they may have against other Partners in
respect of any payments made by them under any guarantee of Partnership debt.
(c) Immediately following the transfer of any
Partnership Interest, the Capital Account of the transferee Partner shall be
equal to the Capital Account of the transferor Partner attributable to the
transferred interest, and such Capital Account shall not be adjusted to reflect
any basis adjustment under Section 743 of the Code.
(d) For purposes of computing the amount of any item
of income, gain, deduction or loss to be reflected in the Partners' Capital
Accounts, the determination, recognition and classification of any such item
shall be the same as its determination, recognition and classification for
federal income tax purposes, taking into account any adjustments required
pursuant to Section 704(b) of the Code and the applicable regulations thereunder
as more fully described in Exhibit B attached hereto.
Section 5.4 SECTION 754 ELECTIONS. The General Partner shall
elect, pursuant to Section 754 of the Code, to adjust the basis of the
Partnership's assets for all transfers of Partnership interests if such election
would benefit any Partner or the Partnership.
ARTICLE VI
POWERS, DUTIES, LIABILITIES,
COMPENSATION AND VOTING OF GENERAL PARTNER
Section 6.1 POWERS OF GENERAL PARTNER. Notwithstanding any
provision of this Agreement to the contrary, the General Partner's discretion
and authority are subject to the limitations
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imposed by law, and by the General Partner's articles of incorporation and code
of regulations. Subject to the foregoing and to other limitations imposed by
this Agreement, the General Partner shall have full, complete and exclusive
discretion to manage and control the business and affairs of the Partnership and
make all decisions affecting the business and assets of the Partnership. Without
limiting the generality of the foregoing (but subject to the restrictions
specifically contained in this Agreement), the General Partner shall have the
power and authority to take the following actions on behalf of the Partnership:
(a) to acquire, purchase, own, lease and dispose of
any real property and any other property or assets that the General Partner
determines are necessary or appropriate or in the best interests of conducting
the business of the Partnership;
(b) to construct buildings and make other
improvements (including renovations) on or to the properties owned or leased by
the Partnership;
(c) to borrow money for the Partnership, issue
evidences of indebtedness in connection therewith, refinance, guarantee,
increase the amount of, modify, amend or change the terms of, or extend the time
for the payment of, any indebtedness or obligation of or to the Partnership, and
secure such indebtedness by mortgage, deed of trust, pledge or other lien on the
Partnership's assets;
(d) to pay, either directly or by reimbursement, for
all Operating Expenses to third parties or to the General Partner (as set forth
in this Agreement);
(e) to lease all or any portion of any of the
Partnership's assets, whether or not the terms of such leases extend beyond the
termination date of the Partnership and whether or not any portion of the
Partnership's assets so leased are to be occupied by the lessee, or, in turn,
subleased in whole or in part to others, for such consideration and on such
terms as the General Partner may determine;
(f) to prosecute, defend, arbitrate, or compromise
any and all claims or liabilities in favor of or against the Partnership, on
such terms and in such manner as the General Partner may reasonably determine,
and similarly to prosecute, settle or defend litigation with respect to the
Partners, the Partnership, or the Partnership's assets; provided, however, that
the General Partner may not, without the consent of all of the Partners, confess
a judgment against the Partnership;
(g) to file applications, communicate, and otherwise
deal with any and all governmental agencies having jurisdiction over, or in any
way affecting, the Partnership's assets or any other aspect of the Partnership
business;
(h) to make or revoke any election permitted or
required of the Partnership by any taxing authority;
(i) to maintain such insurance coverage for public
liability, fire and casualty, and any and all other insurance for the protection
of the Partnership, for the conservation of Partnership assets, or for any other
purpose convenient or beneficial to the Partnership, in such amounts and such
types as the General Partner shall determine from time to time;
(j) to determine whether or not to apply any
insurance proceeds for any Property to the restoration of such Property or to
distribute the same;
(k) to retain providers of services of any kind or
nature in connection with the Partnership business and to pay therefor such
reasonable remuneration as the General Partner may deem proper;
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(l) to negotiate and conclude agreements on behalf of
the Partnership with respect to any of the rights, powers and authority
conferred upon the General Partner, including, without limitation, management
agreements, franchise agreements, agreements with federal, state or local liquor
licensing agencies and agreements with operators of restaurants and bars;
(m) to maintain accurate accounting records and to
file promptly all federal, state and local income tax returns on behalf of the
Partnership;
(n) to form or acquire an interest in, and contribute
property to, any further limited or general partnerships, joint ventures or
other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, its
Subsidiaries and any other Person in which it has an equity interest from time
to time);
(o) to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(p) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities or any other valid
Partnership purpose;
(q) to take whatever action the General Partner deems
appropriate to maintain the economic equivalency of Common Partnership Units and
REIT Common Shares and Preferred Partnership Units and REIT Preferred Shares,
respectively; and
(r) to take such other action, execute, acknowledge,
swear to or deliver such other documents and instruments, and perform any and
all other acts the General Partner deems necessary or appropriate for the
formation, continuation and conduct of the business and affairs of the
Partnership (including, without limitation, all actions consistent with
qualification of the General Partner as a REIT) and to possess and enjoy all of
the rights and powers of a general partner as provided by the Act.
Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
Partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Partnership.
Section 6.2 DELEGATION OF AUTHORITY. The General Partner may
delegate any or all of its powers, rights and obligations hereunder, and may
appoint, employ, contract or otherwise deal with any Person for the transaction
of the business of the Partnership, which Person may, under supervision of the
General Partner, perform any acts or services for the Partnership as the General
Partner may approve.
Section 6.3 DUTIES OF GENERAL PARTNER.
(a) The General Partner, subject to the limitations
contained elsewhere in this Agreement, shall manage or cause to be managed the
affairs of the Partnership in a prudent and businesslike manner and shall devote
sufficient time and effort to the Partnership affairs.
(b) In carrying out its obligations, the General
Partner shall:
(i) Render annual reports to all Partners with
respect to the operations of the Partnership;
(ii) On or before March 31st of every year, mail
to all persons who were Partners at any time during the
Partnership's prior fiscal year an annual report of the
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Partnership, including all necessary tax information, and any
other information regarding the Partnership and its operations
during the prior fiscal year deemed by the General Partner to
be material;
(iii) Maintain complete and accurate records of
all business conducted by the Partnership and complete and
accurate books of account (containing such information as
shall be necessary to record allocations and distributions),
and make such records and books of account available for
inspection and audit by any Partner or such Partner's duly
authorized representative (at the sole expense of such
Partner) during regular business hours and at the principal
office of the Partnership; and
(iv) Cause to be filed such certificates and do
such other acts as may be required by law to qualify and
maintain the Partnership as a limited partnership under the
laws of the State of Ohio.
(c) The General Partner shall take such actions as it
deems necessary to maintain the economic equivalency of Common Partnership Units
and REIT Common Shares and Preferred Partnership Units and REIT Preferred
Shares, respectively, required by this Agreement.
Section 6.4 LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION.
(a) The General Partner shall not be liable for the
return of all or any part of the Capital Contributions of the Limited Partners.
Any returns shall be made solely from the assets of the Partnership according to
the terms of this Agreement.
(b) In carrying out its duties hereunder, the General
Partner shall not be liable to the Partnership or to any other Partner for any
actions taken in good faith and reasonably believed to be in the best interests
of the Partnership, or for errors of judgment, but shall be liable only for
fraud, gross negligence or breach of its fiduciary duties. The Limited Partners
expressly acknowledge that the General Partner is acting on behalf of the
Partnership, the General Partner and the General Partner's shareholders
collectively, and that the General Partner is under no obligation to consider
the separate interests of the Limited Partners (including, without limitation,
the tax consequences to Limited Partners) in deciding whether to cause the
Partnership to take (or decline to take) any actions. In the event of a conflict
between the interests of the shareholders of the General Partner on one hand and
the Limited Partners on the other, the General Partner shall endeavor in good
faith to resolve the conflict in a manner not adverse to either the shareholders
of the General Partner or the Limited Partners; provided, however, that for so
long as the General Partner owns a controlling interest in the Partnership, any
such conflict that cannot be resolved in a manner not adverse to either the
shareholders of the General Partner or the Limited Partners shall be resolved in
favor of the shareholders. The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner has acted in good faith. Any amendment, modification or repeal of this
Section 6.4 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the General Partner's liability to the
Partnership and the Limited Partners under this Section 6.4 as in effect
immediately prior to such amendment, modification or repeal with respect to
matters occurring, in whole or in part, prior to such amendment, modification or
repeal, regardless of when claims relating to such matters may arise or be
asserted.
(c) The Partnership shall indemnify an Indemnitee to
the fullest extent permitted by law, and save and hold it harmless from and
against, and in respect of, all: (i) fees, costs and expenses (including
reasonable attorney fees) incurred in connection with or resulting from any
claim, action or demand against any Indemnitee or the Partnership that arises
out of or in any way relates to the Partnership, (ii) claims, actions and
demands arising out of or in any way related to the Partnership, and any losses
or damages resulting from such claims, actions and demands, including, without
limitation, reasonable costs and expenses of litigation and appeal and amounts
paid in settlement or compromise of
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any such claim, action or demand; provided, however, that this indemnification
shall not apply if: (A) the act or omission of the Indemnitee was material to
the matter giving rise to the proceeding and either was committed in bad faith
or was the result of active and deliberate dishonesty; (B) the Indemnitee
actually received an improper personal benefit in money, property or services;
or (C) in the case of any criminal proceeding, the Indemnitee had reasonable
cause to believe that the act or omission was unlawful. The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 6.4(c). The termination of any proceeding by conviction or upon a plea
of nolo contendere or its equivalent, or an entry of an order of probation prior
to judgment, creates a rebuttable presumption that the Indemnitee acted in a
manner contrary to that specified in this Section 6.4(c). Any indemnification
pursuant to this Section 6.4 shall be made only out of the assets of the
Partnership.
(d) The Partnership may reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 6.4 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.
(e) The indemnification provided by this Section 6.4
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.
(f) The Partnership may purchase and maintain
insurance on behalf of the Indemnitees, and such other Persons as the General
Partner shall determine, against any liability that may be asserted against or
expenses that may be incurred by such Person in connection with the
Partnership's activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of
this Agreement.
(g) For purposes of this Section 6.4, the Partnership
shall be deemed to have requested an Indemnitee to serve as fiduciary of an
employee benefit plan whenever the performance by the Indemnitee of its duties
to the Partnership also imposes duties on, or otherwise involves services by,
the Indemnitee to the plan or participants or beneficiaries of the plan; excise
taxes assessed on an Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute fines within the meaning of this
Section 6.4; 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 the Indemnitee 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.
(h) In no event may an Indemnitee subject the Limited
Partners to personal liability by reason of the indemnification provisions set
forth in this Agreement.
(i) An Indemnitee shall not be denied indemnification
in whole or in part under this Section 6.4 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.
(j) The provisions of this Section 6.4 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.
(k) 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
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from acting on behalf of the Partnership, undertaken in the good faith belief
that such action or omission is necessary or advisable in order (i) to protect
the ability of the General Partner to continue to qualify as a REIT, or (ii) to
prevent the General Partner from 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. Further, any provision of this
Agreement that might jeopardize the General Partner's REIT status shall be (i)
void and of no effect, or (ii) reformed, as necessary, to avoid the General
Partner's loss of REIT status.
Section 6.5 COMPENSATION OF GENERAL PARTNER; REIMBURSEMENT.
The General Partner, as such, shall not receive any compensation for services
rendered to the Partnership. Notwithstanding the preceding sentence, the General
Partner shall be entitled to its allocable share of the profits and
distributable Cash Flow of the Partnership and shall be entitled, in accordance
with the provisions of Section 6.7 below, to pay reasonable compensation to its
Affiliates and other entities in which it may be associated for services
performed. The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all REIT Expenses.
Section 6.6 RELIANCE ON ACT OF GENERAL PARTNER. No financial
institution or any other person, firm or corporation dealing with the General
Partner or the Partnership shall be required to ascertain whether the General
Partner is acting in accordance with this Agreement, but such financial
institution or such other person, firm or corporation shall be protected in
relying solely upon the assurance of and the execution of any instrument or
instruments by the General Partner.
Section 6.7 OUTSIDE SERVICES; DEALINGS WITH AFFILIATES;
OUTSIDE ACTIVITIES.
(a) Notwithstanding any provision of this Article VI
to the contrary, the General Partner may employ such agents, accountants,
attorneys and others as it shall deem advisable, including its directors,
officers, shareholders, and its Affiliates and entities with which the General
Partner, any Limited Partner or their respective Affiliates may be associated,
and may pay them reasonable compensation from Partnership funds for services
performed, which compensation shall be reasonably believed by the General
Partner to be comparable to and competitive with fees charged by unrelated
Persons who render comparable services which could reasonably be made available
to the Partnership. The General Partner shall not be liable for the neglect,
omission or wrongdoing of any such Person so long as it was not grossly
negligent in appointing such Person.
(b) The Partnership may lend or contribute to its
Subsidiaries or other Persons in which it has an equity investment Partnership
funds on terms and conditions established in the sole and absolute discretion of
the General Partner. The foregoing authority shall not create any right or
benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint
ventures, other partnerships, corporations or other business entities in which
it is or thereby becomes a participant upon such terms and subject to such
conditions as are consistent with this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement,
neither the General Partner nor any of its Affiliates nor any Limited Partner
shall sell, transfer or convey any property to, or purchase any property from,
the Partnership, directly or indirectly, except pursuant to transactions that
are on terms that are fair and reasonable to the Partnership.
(e) Subject to the Articles of Incorporation and any
agreements entered into by the General Partner or its Affiliates with the
Partnership or a Subsidiary, any officer, director, employee, agent, trustee,
Affiliate or shareholder of the General Partner shall be entitled to and may
have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the
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Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any business ventures of such person.
(f) In the event the General Partner exercises its
rights under its Articles of Incorporation to redeem REIT Common Shares, then
the General Partner shall cause the Partnership to purchase from it a number of
Common Partnership Units determined based on the application of the Conversion
Factor on the same terms as those on which the General Partner redeemed such
REIT Common Shares.
Section 6.8 INITIAL LOAN TO THE PARTNERSHIP; ADDITIONAL LOANS
TO THE PARTNERSHIP.
(a) Upon its receipt of the proceeds from the closing
of the Offering, the General Partner shall make a loan to the Partnership in
accordance with and on the terms and conditions set forth in the Intercompany
Convertible Note (the "Initial Loan").
(b) If additional funds are required by the
Partnership for any purpose relating to the business of the Partnership or for
any of its obligations, expenses, costs, or expenditures, including operating
deficits, the Partnership may borrow such funds as are needed from time to time
from any Person (including, without limitation, the General Partner or any
Affiliate of the General Partner; provided, however, that the terms of any loan
from the General Partner or any Affiliate of the General Partner shall be
substantially equivalent to the terms that could be obtained from a third party
on an arm's-length basis) on such terms as the General Partner and such other
Person may agree.
Section 6.9 CONTRIBUTION OF ASSETS. The General Partner shall
contribute to the capital of the Partnership from time to time each asset it
owns from time to time during the existence of the Partnership, but it is not
required to so contribute:
(a) its General Partnership Interest in the
Partnership;
(b) the Initial Loan;
(c) interest on the Initial Loan;
(d) its direct or indirect interest in any entity in
a chain of entities of which the General Partner is the sole beneficial owner,
so long as all of the assets or other ownership interests in the entity in that
chain furthest removed from the General Partner are contributed directly or
indirectly to the Partnership; or
(e) any equity interest in any entity of which the
General Partner is the sole beneficial owner that is created or used solely by
the General Partner in connection with any borrowing transaction in whole or in
part for the benefit of the Partnership.
ARTICLE VII
RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT
TO LIMITED PARTNERS
Section 7.1 RIGHTS OF LIMITED PARTNERS.
(a) The Partnership may engage the Limited Partners
or persons or firms associated with them for specific purposes and may otherwise
deal with such Partners on terms and for compensation to be agreed upon by any
such Partner and the Partnership; provided, however, that no
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Limited Partner shall be entitled to participate in the management or control of
the business of the Partnership.
(b) Each Limited Partner shall be entitled to have
the Partnership books kept at the principal place of business of the Partnership
and at all times, during reasonable business hours and at such Partner's sole
expense, shall be entitled to inspect and copy any of them and have on demand
true and full information of all things affecting the Partnership and a formal
accounting of Partnership affairs whenever circumstances render it just and
reasonable.
(c) No Limited Partner shall be liable for any debts,
liabilities, contracts or obligations of the Partnership. A Limited Partner
shall be liable to the Partnership only to make payments of its Capital
Contribution, if any, as and when due hereunder. After its Capital Contribution
is fully paid, no Limited Partner shall, except as otherwise required by the
Act, be required to make any further Capital Contributions or other payments or
lend any funds to the Partnership.
Section 7.2 PROHIBITIONS WITH RESPECT TO THE LIMITED PARTNERS.
No Limited Partner shall have the right:
(a) To take part in the control or management of the
Partnership business, to transact business for or on behalf of the Partnership
or to sign for or to bind the Partnership, such powers being vested solely in
the General Partner as set forth herein;
(b) To have such Partner's Capital Contributions
repaid except to the extent provided in this Agreement;
(c) To require partition of Partnership property or
to compel any sale or appraisement of Partnership assets or sale of a deceased
Partner's interests therein, notwithstanding any provisions of law to the
contrary; or
(d) To sell or assign all or any portion of such
Partner's Limited Partnership Interest in the Partnership or to constitute the
vendee or assignee thereunder a Substitute Limited Partner, except as provided
in Article IX hereof.
Section 7.3 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL
PARTNER OR AFFILIATE. No Limited Partner shall at any time, either directly or
indirectly, own any shares or other interest in the General Partner or in any
Affiliate thereof if such ownership by itself or in conjunction with other
shares or other interests owned by other Limited Partners would, in the opinion
of counsel for the Partnership, jeopardize the classification of the Partnership
as a partnership or the General Partner as a REIT for federal income tax
purposes. The General Partner shall be entitled to make such reasonable inquiry
of the Limited Partners as is required to establish compliance by the Limited
Partners with the provisions of this Section 7.3 and the Limited Partners shall
promptly and fully respond to such inquiries.
Section 7.4 REDEMPTION RIGHT.
(a) Subject to Section 7.4(c), on or after a Limited
Partner's Specified Redemption Date, such Limited Partner, other than the
General Partner, shall have the right (the "Redemption Right") to require the
Partnership to redeem on a Specified Redemption Date all or a portion of the
Common Partnership Units held by such Limited Partner at a redemption price
equal to and in the form of the Cash Amount to be paid by the Partnership. The
Partnership shall have up to one (1) year (the "Payout Period") following
exercise of a Redemption Right to pay the Cash Amount to the Limited Partner who
is exercising the redemption right (the "Redeeming Partner"). From and after the
Specified Redemption Date, the Cash Amount (or portion thereof) due and payable
to a Redeeming Partner with respect to such Redeeming Partner's exercise of its
Redemption Right shall bear interest at the rate equal to the lower of (i) the
General Partner's annual dividend rate on REIT Common Shares for
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the prior twelve (12) month period, and (ii) eight percent (8%) per annum, until
the Cash Amount (or portion thereof) shall be paid in full by the Partnership.
The Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner) by the
Redeeming Partner. A Limited Partner may not exercise the Redemption Right for
less than one thousand (1,000) Common Partnership Units or, if such Limited
Partner holds less than one thousand (1,000) Common Partnership Units, all of
the Common Partnership Units held by such Partner. Neither the Redeeming Partner
nor any Assignee of any Limited Partner shall have any right with respect to any
Common Partnership Units so redeemed to receive any distributions paid after the
Specified Redemption Date. The Assignee of any Limited Partner may exercise the
rights of such Limited Partner pursuant to this Section 7.4, and such Limited
Partner shall be deemed to have assigned such rights to such Assignee and shall
be bound by the exercise of such rights by such Limited Partner's Assignee. In
connection with any exercise of such rights by such Assignee on behalf of such
Limited Partner, the Cash Amount shall be paid by the Partnership directly to
such Assignee and not to such Limited Partner. Neither the Redeeming Partner nor
any Assignee of any Limited Partner shall have any right, with respect to any
Common Partnership Units so redeemed, to receive any distributions paid after
the Specified Redemption Date. Each Redeeming Partner agrees to provide such
representations and related indemnities regarding good and unencumbered title,
and to execute such documents, as the General Partner may reasonably require in
connection with any redemption.
Notwithstanding anything to the contrary contained in
this Section 7.4(a), any Limited Partner that owns directly or indirectly, or is
deemed to own, directly or indirectly, any Person (other than an individual),
that is serving as an eligible independent contractor (as defined in the Code)
of the Partnership or of the General Partner, shall be entitled to exercise a
Redemption Right only with respect to that number of Common Partnership Units
such that, if redeemed for only the REIT Common Shares Amount pursuant to
Section 7.4(b) hereof, such Limited Partner would Beneficially Own (as
hereinafter defined) no more than 9.9% of the total number of issued and
outstanding REIT Common Shares; but the limitation set forth in this paragraph
will not apply if either (i) the General Partner receives an opinion from its
counsel that violation of this limitation will not jeopardize the REIT status of
the General Partner or (ii) a transfer or series of related transfers result in
a sale of all or substantially all of the General Partner's or the Partnership's
assets, or result in a sale, merger, reorganization or restructuring, as
described in Sections 9.1(c) and 9.1(d) hereof.
(b) Notwithstanding the provisions of Section 7.4(a),
in the event a Limited Partner elects to exercise the Redemption Right, the
General Partner may, in its sole and absolute discretion, elect to assume
directly and satisfy a Redemption Right by paying to the Redeeming Partner
either (i) the Cash Amount, as provided for in Section 7.4(a), or (ii) the REIT
Common Shares Amount, as elected by the General Partner (in its sole and
absolute discretion) on the Specified Redemption Date. On any such election, the
General Partner shall acquire the Common Partnership Units offered for
redemption by the Redeeming Partner and shall be treated for all purposes of
this Agreement as the owner of such Common Partnership Units. Unless the General
Partner (in its sole and absolute discretion) shall exercise its right to assume
directly and satisfy the Redemption Right, the General Partner itself shall have
no obligation to the Redeeming Partner or to the Partnership with respect to the
Redeeming Partner's exercise of the Redemption Right. In the event the General
Partner shall exercise its right to satisfy the Redemption Right in the manner
described in the first sentence of this Section 7.4(b), the Partnership shall
have no obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner's exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership, and the General Partner shall treat the
transaction between the General Partner and the Redeeming Partner for federal
income tax purposes as a sale of the Redeeming Partner's Common Partnership
Units to the General Partner. Each Redeeming Partner agrees to provide such
representations and related indemnities regarding good title, and to execute
such documents, as the General Partner may reasonably require in connection with
the issuance of REIT Common Shares upon exercise of the Redemption Right. If the
Redemption Right is satisfied by the delivery of REIT Common Shares, the
Redeeming Partner shall be deemed to become a holder of REIT Common Shares as of
the close of business on the Specified Redemption Date.
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Notwithstanding anything to the contrary in Section
7.1(a) or this Section 7.4(b), should the General Partner elect to satisfy a
Redemption Right by paying the Redeeming Partner the REIT Common Shares Amount,
and it is necessary to obtain shareholder approval in order for it to issue
sufficient REIT Common Shares to satisfy such Redemption Right in full, then the
General Partner shall have one hundred twenty (120) days beyond the Specified
Redemption Date in which to obtain such shareholder approval and to pay the REIT
Common Shares Amount, and the redemption Date shall be required to occur by the
earliest of: (i) ten days after shareholder approval of the issuance of the REIT
Common Shares has been obtained, if it is obtained; (ii) the date on which the
General Partner elects to pay such Redeeming Partner the Cash Amount; or (iii)
one hundred and thirty (130) days after such Common Partnership Units are
presented for redemption. If such shareholder approval is not obtained, the
General Partner or the Partnership shall pay to the Redeeming Partner the Cash
Amount no later than the end of what the Payout Period would have been had the
General Partner not elected to pay the REIT Common Share Amount upon the
redemption, together with interest on such Cash Amount as specified in Section
7.4(a) hereof.
(c) Notwithstanding the provisions of Section 7.4(a)
and Section 7.4(b), a Limited Partner shall not be entitled to receive REIT
Common Shares if the delivery of REIT Common Shares to such Partner on the
Specified Redemption Date by the General Partner pursuant to Section 7.4(b)
would be prohibited under the Articles of Incorporation of the General Partner.
Without limiting the effect of the preceding sentence, no Person shall be
permitted to receive REIT Common Shares if as a result of, and after giving
effect to, such exercise any Person would Beneficially Own (as defined in the
Articles of Incorporation of the General Partner) more than 9.9% of the total
number of issued and outstanding REIT Common Shares. The Cash Amount shall be
paid in such instances, in accordance with the terms set forth in Section
7.4(a).
(d) Each Limited Partner covenants and agrees with
the General Partner that all Common Partnership Units delivered for redemption
shall be delivered to the Partnership or the General Partner, as the case may
be, free and clear of all liens and, notwithstanding anything herein contained
to the contrary, neither the General Partner nor the Partnership shall be under
any obligation to acquire Common Partnership Units which are or may be subject
to any liens. Each Limited Partner further agrees that, in the event any state
or local property transfer tax is payable as a result of the transfer of its
Common Partnership Units to the Partnership or the General Partner, such Limited
Partner shall assume and pay such transfer tax.
Section 7.5 WARRANTIES AND REPRESENTATIONS OF THE LIMITED
PARTNERS. Each Limited Partner hereby warrants and represents to and for the
benefit of the General Partner and the Partnership that, as of November 4, 1996,
such Limited Partner owned good, valid and marketable title to the ownership
interests in the Contributed Partnerships being contributed to the capital of
the Partnership by such Limited Partner (the "Ownership Interests") and that
such Ownership Interests were free and clear of all mortgages, pledges, liens,
security interests, encumbrances and restrictions of any nature whatsoever. Each
Limited Partner further warrants and represents to and for the benefit of the
General Partner and the Partnership that such Limited Partner had all necessary
power and authority to transfer the Ownership Interests to the Partnership
without the consent or authorization of, or notice to, any third party, except
those third parties from whom such consents or authorizations were obtained.
Section 7.6 INDEMNIFICATION BY LIMITED PARTNERS. Each Limited
Partner hereby agrees to indemnify the General Partner and the Partnership and
hold the General Partner, its officers and directors and the Partnership and its
partners and each of their respective representatives, successors and assigns
harmless from and against any and all claims, demands, losses, liabilities,
damages and expenses (including reasonable attorneys' fees) arising out of or in
connection with (i) the inaccuracy of the warranties and representations made by
such Limited Partner under Section 7.5 above, or (ii) the ownership of the
Ownership Interests by such Limited Partner and any activities, obligations or
liabilities of the Contributed Partnership to which such Ownership Interest
relates for all periods prior to the date of this Agreement.
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Section 7.7 NOTICE OF SALE OR REFINANCING. The General Partner
shall notify the Limited Partners no less than thirty (30) days prior to any
sale, refinancing, reduction (other than scheduled periodic amortization of
principal) of debt or other event that will reduce the amount of any nonrecourse
liabilities of the Partnership that a Limited Partner may include in the tax
basis of his or its Partnership Interests.
Section 7.8 BASIS ANALYSIS AND LIMITED PARTNER GUARANTEES.
(a) Upon the request of any Limited Partner but
subject to the General Partner's agreement, which may be withheld in the General
Partner's sole discretion, the General Partner may, prior to the end of each
calendar year, beginning in 1997, cause accountants to prepare and provide to
the Limited Partners a study analyzing each refinancing, reduction (other than
scheduled periodic amortization of principal) of debt or other event that
occurred during that year that reduced the amount of any nonrecourse liabilities
of the Partnership that a Limited Partner may include in the tax basis of their
Partnership Interests.
(b) Upon the request of the General Partner, or upon
its own election, a Limited Partner (the "Initiating Limited Partner") from time
to time, may, but shall not be required to, guarantee or otherwise provide
credit support for Partnership indebtedness as such Limited Partner may elect;
provided, however, that the Limited Partner shall be entitled to take such
action only if the General Partner determines that any such action would not
have a material adverse effect on the tax position of the General Partner. All
Partners are entitled to notice of any such guarantee or credit support, and
shall have the right to provide guarantees or credit support on the same terms
and conditions as the Initiating Limited Partner does, and all Limited Partners
interested in providing such guarantee or credit support shall cooperate with
the General Partner and each other in considering any guarantee or credit
support proposal, and the General Partner will cooperate in permitting or
obtaining any consents for such guarantees or credit support.
ARTICLE VIII
DISTRIBUTIONS AND PAYMENTS TO PARTNERS
Section 8.1 DISTRIBUTIONS OF CASH FLOW.
(a) The General Partner shall distribute on a
quarterly basis such portion of the Cash Flow of the Partnership as the General
Partner shall determine in its sole discretion. Except as provided in Section
10.4, all such distributions of Cash Flow shall be made to Partners who are
Partners on the Partnership Record Date (i) first, to the Partners holding
Preferred Partnership Interests on such Partnership Record Date to the extent of
any accrued but unpaid Preferred Return, and (ii) next, to the Partners holding
Common Partnership Interests on such Partnership Record Date in accordance with
such Partners' respective Common Percentage Interests on such Partnership Record
Date.
(b) In no event may a Partner receive a distribution
of Cash Flow with respect to a Partnership Unit if such Partner is entitled to
receive a dividend out of the General Partner's share of such Cash Flow with
respect to a REIT Share for which all or part of such Partnership Unit has been
exchanged.
Section 8.2 REIT DISTRIBUTION REQUIREMENTS. Unless the General
Partner determines that such a distribution would not be in the best interests
of the Partnership, the Partnership shall make a distribution of Cash Flow for
each fiscal year of the Partnership to enable the General Partner (i) to meet
its distribution requirement for qualification as a REIT as set forth in Section
857(a)(1) of the Code, and (ii) to avoid the excise tax imposed by Section 4981
of the Code.
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Section 8.3 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner
shall be entitled to demand property other than cash in connection with any
distribution by the Partnership.
Section 8.4 DISPOSITION PROCEEDS. Disposition Proceeds (less
reasonable reserves set aside by the General Partner for reasonably anticipated
expenses or needs of the Partnership) shall be distributed (i) first, to the
holders of Preferred Partnership Interests, (a) in an amount of money, or (b) in
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment on such Preferred
Partnership Interests, money in an amount, or (c) in a combination thereof, in
any case, in an amount sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized firm of
independent public accounts expressed in a written certification thereof
delivered to the General Partner, to pay and discharge, all amounts that are or
may become due and payable with respect to the Preferred Partnership Interests,
and (2) next, to the holders of Common Partnership Interests, all remaining
Disposition Proceeds (less such reserves) in accordance with their respective
Common Percentage Interests in the Partnership.
Section 8.5 WITHDRAWALS. No Partner shall be entitled to make
withdrawals from its Capital Account except as provided herein.
ARTICLE IX
TRANSFERS OF INTERESTS
Section 9.1 GENERAL PARTNER.
(a) The General Partner may not transfer any of its
General Partnership Interest or Limited Partnership interests or withdraw as
General Partner except as provided in Section 9.1(c) or in connection with a
transaction described in Section 9.1(d).
(b) The General Partner agrees that it will at all
times own at least twenty percent (20%) of the Common Partnership Interests in
the form of a General Partnership Interest.
(c) Except as otherwise provided in Section 6.7 or
Section 9.1(d), the General Partner shall not engage in any merger,
consolidation or other combination with or into another Person or in any sale of
all or substantially all of its assets, or any reclassification, or
recapitalization or change of outstanding REIT Common Shares (other than a
change in par value, or from par value to no par value, or as a result of a
subdivision or combination as described in the definition of "Conversion
Factor") (each of the foregoing being herein referred to as a "Transaction"),
unless the Transaction also includes a merger of the Partnership or sale of
substantially all of the assets of the Partnership or other transaction as a
result of which all Limited Partners will receive for each Common Partnership
Unit an amount of cash, securities, or other property equal to the product of
the Conversion Factor and the greatest amount of cash, securities or other
property paid to a holder of one REIT Common Share in consideration of one REIT
Common Share as a result of the Transaction; provided, however, that if, in
connection with the Transaction, a purchase, tender or exchange offer shall have
been made to and accepted by the holders of more than fifty percent (50%) of the
outstanding REIT Common Shares, the holders of Common Partnership Units shall
receive the greatest amount of cash, securities, or other property which a
Limited
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Partner would have received had it exercised the Redemption Right and the
Company had exercised its election to satisfy the Redemption Right by the
issuance of REIT Common Shares immediately prior to the expiration of such
purchase, tender or exchange offer.
(d) Notwithstanding Section 9.1(c), the General
Partner may merge into or consolidate with another entity if immediately after
such merger or consolidation (i) substantially all of the assets of the
successor or surviving entity (the "Surviving General Partner"), other than
Partnership Units held by the General Partner, are contributed to the
Partnership as a Capital Contribution in exchange for Partnership Units with a
fair market value equal to the value of the assets so contributed as determined
by the Surviving General Partner in good faith and (ii) the Surviving General
Partner expressly agrees to assume all obligations of the General Partner
hereunder. Upon such contribution and assumption, the Surviving General Partner
shall have the right and duty to amend this Agreement as set forth in this
Section 9.1(d). The Surviving General Partner shall in good faith arrive at a
new method for the calculation of the Cash Amount and Conversion Factor for a
Common Partnership Unit after any such merger or consolidation so as to
approximate the existing method for such calculation as closely as reasonably
possible. Such calculation shall take into account, among other things, the kind
and amount of securities, cash and other property that was receivable upon such
merger or consolidation by a holder of REIT Shares or options, warrants or other
rights relating thereto, and which a holder of Common Partnership Units could
have acquired had such Common Partnership Units been redeemed immediately prior
to such merger or consolidation. Such amendment to this Agreement shall provide
for adjustment to such method of calculation, which shall be as nearly
equivalent as may be practicable to the adjustments provided for with respect to
the Conversion Factor. The above provisions of this Section 9.1(d) shall
similarly apply to successive mergers or consolidations permitted hereunder.
Section 9.2 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL
PARTNER. A Person shall be admitted as a Substitute or Additional General
Partner of the Partnership only if the transaction giving rise to such
substitution or admission is otherwise permitted under this Agreement and the
following terms and conditions are satisfied:
(a) the Person to be admitted as a Substitute or
Additional General Partner shall have accepted and agreed to be bound by all the
terms and provisions of this Agreement by executing a counterpart thereof and
such other documents or instruments as may be required or appropriate in order
to effect the admission of such Person as a General Partner, and a certificate
evidencing the admission of such Person as a General Partner shall have been
filed for recordation and all other actions required by the Act in connection
with such admission shall have been performed;
(b) if the Person to be admitted as a Substitute or
Additional General Partner is a corporation or a partnership, it shall have
provided the Partnership with evidence satisfactory to counsel for the
Partnership of such Person's authority to become a General Partner and to be
bound by the terms and provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered
an opinion (relying on such opinions from counsel of the state or any other
jurisdiction as may be necessary) that the admission of the Person to be
admitted as a Substitute or Additional General Partner is in conformity with the
Act and that none of the actions taken in connection with the admission of such
Person as a Substitute or Additional General Partner will cause the termination
of the Partnership under Section 708 of the Code, or will cause it to be
classified as other than a partnership for federal income tax purposes, or will
result in the loss of any Limited Partner's limited liability status.
Section 9.3 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR
DISSOLUTION OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as
to a General Partner or the withdrawal, removal or dissolution of a General
Partner (except that, if a General Partner is on the date of
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such occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not
to be a dissolution of such General Partner if the business of such General
Partner is continued within ninety (90) days by the remaining general partners
or all remaining members of such partnership), the Partnership shall be
dissolved and terminated unless the Partnership is continued pursuant to Section
9.3(b).
(b) Following the occurrence of an Event of
Bankruptcy as to a General Partner or the withdrawal, removal or dissolution of
a General Partner (except that, if a General Partner is on the date of such
occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not
be a dissolution of such General Partner if the business of such General Partner
is continued within ninety (90) days by all remaining general partners or all
remaining members of such partnership), persons holding at least a majority of
the Limited Partnership interests, within ninety (90) days after such
occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 3.2 by selecting, subject to Section
9.2 and any other applicable provisions of this Agreement, a Substitute General
Partner by majority consent of the Limited Partners. If the Limited Partners
elect to reconstitute the Partnership and admit a Substitute General Partner,
the relationship between the Partners and any Person who has acquired an
interest of a Partner in the Partnership shall be governed by this Agreement.
Section 9.4 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as
to, or the dissolution of, a General Partner, such General Partner shall be
deemed to be removed automatically; provided, however, that if a General Partner
is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to or removal of a partner in such
partnership shall be deemed not to be a dissolution of the General Partner if
the business of such General Partner is continued within ninety (90) days by the
remaining general partners or all remaining members of such Partnership.
(b) If a General Partner has been removed pursuant to
this Section 9.4 and the Partnership is not continued pursuant to Section
9.3(b), the partnership shall be dissolved.
Section 9.5 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP
INTERESTS.
(a) Except as otherwise provided in this Article IX,
no Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise
transfer its Limited Partnership Interest, in whole or in part, whether
voluntarily or by operation of law or at judicial sale or otherwise
(collectively, a "Transfer"), without the written consent of the General
Partner, which consent may be withheld in the sole and absolute discretion of
the General Partner. The General Partner may require, as a condition of any
Transfer, that the transferor assume all costs incurred by the Partnership in
connection therewith.
(b) No Limited Partner may effect a Transfer of its
Limited Partnership Interest if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would require the registration of the
Limited Partnership Interest under the Securities Act of 1933, as amended, or
would otherwise violate any applicable federal or state securities or "Blue Sky"
law (including investment suitability standards).
(c) No Transfer by a Limited Partner of its
Partnership Units may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the Transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) 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 (iii) the Transfer would create a risk that the
General Partner would not be taxed as a REIT for federal income tax purposes.
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(d) Section 9.5(a) shall not prevent any donative
Transfer by an individual Limited Partner to his immediate family members or any
trust in which the individual or his immediate family members own, collectively,
one hundred percent (100%) of the beneficial interests, provided that the
transferor assumes all costs of the Partnership in connection therewith and any
such transferee shall not have the rights of a Substitute Limited Partner
(unless and until admitted as a Substitute Limited Partner pursuant to this
Section 9.5 and Section 9.6 of this Agreement).
(e) Any Transfer in contravention of any of the
provisions of this Article IX shall be void and ineffectual and shall not be
binding upon, or recognized by, the Partnership.
Section 9.6 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article
IX (including, without limitation, the provisions of Section 9.5(a) regarding
consent of the General Partner), an assignee of the Limited Partnership Interest
of a Limited Partner (including, without limitation, any purchaser, transferee,
donee, or other recipient of any disposition of such Limited Partnership
Interest) shall be deemed admitted as a Limited Partner of the Partnership only
upon the satisfactory completion of the following:
(i) the assignee shall have accepted and agreed to
be bound by the terms and provisions of this Agreement by
executing a counterpart or an amendment thereof, including a
revised Exhibit A, and such other documents or instruments as
the General Partner may require in order to effect the
admission of such Person as a Limited Partner;
(ii) to the extent required, an amended certificate
of limited partnership evidencing the admission of such Person as a
Limited Partner shall have been signed, acknowledged and filed for
record in accordance with the Act;
(iii) the assignee shall have delivered a letter
containing the representation and warranty set forth in Section 9.12
and the agreement set forth in Section 9.12;
(iv) if the assignee is a corporation, partnership
or trust, the assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of the assignee's
authority to become a Limited Partner under the terms and provisions of
this Agreement;
(v) the assignee shall have executed a power of
attorney containing the terms and provisions set forth in Article XII;
and
(vi) the assignee shall have paid all reasonable
legal fees of the Partnership and the General Partner and all
filing and publication costs incurred in connection with its
substitution as a Limited Partner.
(b) For the purpose of allocating profits and losses
and distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the certificate described in
Section 9.6(a)(ii) or, if no such filing is required, the later of the date
specified in the transfer documents, or the date on which the General Partner
has received all necessary instruments of transfer and substitution.
(c) The General Partner shall as promptly as
practicable take all action required to effectuate the admission of the Person
seeking to become a Substitute Limited Partner, including preparing the
documentation required by this Section and making all official filings and
publications.
Section 9.7 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
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(a) Subject to the provisions of Sections 9.5 and 9.6
hereof, except as required by operation of law, the Partnership shall not be
obligated for any purposes whatsoever to recognize the assignment by any Limited
Partner of his Partnership Interest until the Partnership has received notice
thereof.
(b) Any Person who is the assignee of all or any
portion of a Limited Partner's Limited Partnership Interest, but does not become
a Substitute Limited Partner and desires to make a further assignment of such
Limited Partnership Interest, shall be subject to all of the provisions of this
Article IX to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of its Limited Partnership Interest.
Section 9.8 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR
TERMINATION OF A LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to
a Limited Partner, the death of a Limited Partner or a final adjudication that a
Limited Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue. If an order for relief in a
bankruptcy proceeding is entered against an individual Limited Partner, the
trustee or receiver of his estate or, if he dies, his executor, administrator or
trustee, or, if he is finally adjudicated incompetent, his committee, guardian
or conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.
Section 9.9 JOINT OWNERSHIP OF INTERESTS. A Partnership
Interest may be acquired by two (2) individuals as joint tenants with right of
survivorship (but not as tenants in common), provided that such individuals
either are married or are related and share the same home as tenants in common.
The written consent or vote of both owners of any such jointly held Partnership
Interest shall be required to constitute the action of the owners of such
Partnership Interest; provided, however, that the written consent of only one
(1) joint owner will be required if the Partnership has been provided with
evidence satisfactory to counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state
of residence of such joint owners. Upon the death of one (1) owner of a
Partnership Interest held in a joint tenancy with a right of survivorship, the
Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one (1) of the owners of a jointly held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner, the General Partner shall cause the Partnership Interest to be divided
into two (2) equal Partnership Interests, which shall thereafter be owned
separately by each of the former owners.
Section 9.10 TRANSFEREES. Any Partnership Interests owned by
the Partners and transferred pursuant to this Article IX shall be and remain
subject to all of the provisions of this Agreement.
Section 9.11 ABSOLUTE RESTRICTION. Notwithstanding any
provision of this Agreement to the contrary, the sale or exchange of any
interest in the Partnership will not be permitted if the interest sought to be
sold or exchanged, when added to the total of all other interests sold or
exchanged within the period of twelve (12) consecutive months ending with the
proposed date of the sale or exchange, would result in the termination of the
Partnership under Section 708 of the Code, if such termination would materially
and adversely affect the Partnership or any Partner.
Section 9.12 INVESTMENT REPRESENTATION. Each Limited Partner
hereby represents and warrants to the General Partner and to the Partnership
that the acquisition of his Partnership Interest is made as a principal for his
account for investment purposes only and not with a view to the resale or
distribution of such Partnership Interest. Each Limited Partner agrees that he
will not sell, assign or otherwise transfer his Partnership Interest or any
fraction thereof, whether voluntarily or by operation of
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law or at judicial sale or otherwise, to any Person who does not similarly
represent and warrant and similarly agree not to sell, assign or transfer such
Partnership Interest or fraction thereof to any Person who does not similarly
represent, warrant and agree.
ARTICLE X
TERMINATION OF THE PARTNERSHIP
Section 10.1 TERMINATION. The Partnership shall be dissolved
upon (i) an Event of Bankruptcy as to the General Partner or the dissolution or
withdrawal of the General Partner (unless within ninety (90) days thereafter
Limited Partners holding more than fifty percent (50%) of the Limited
Partnership Interests in the Partnership elect to continue the Partnership and
to elect one or more persons to serve as the General Partner or General Partners
of the Partnership), (ii) ninety (90) days following the sale of all or
substantially all of the Partnership's assets (provided that if the Partnership
receives an installment obligation as consideration for such sale or other
disposition, the Partnership shall continue, unless sooner dissolved under the
provisions of this Agreement, until such time as such obligation is paid in
full), (iii) the expiration of the term specified in Section 3.2, (iv) the
redemption of all Limited Partnership Interests (other than any of such
interests held by the General Partner), or (v) the election by the General
Partner (but only in accordance with and as permitted by applicable law) that
the Partnership should be dissolved. Upon dissolution of the Partnership (unless
the business of the Partnership is continued as set forth above), the General
Partner (or its trustee, receiver, successor or legal representative) shall
proceed with the winding up of the Partnership, and its assets shall be applied
and distributed as herein provided.
Section 10.2 PAYMENT OF DEBTS. The assets shall first be
applied to the payment of the liabilities of the Partnership (other than any
loans or advances that may have been made by Partners to the Partnership) and
the expenses of liquidation. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Partnership and the discharge of liabilities to
creditors so as to enable the General Partner to minimize any losses resulting
from liquidation.
Section 10.3 DEBTS TO PARTNERS. The remaining assets shall
next be applied to the repayment of any loans made by any Partner to the
Partnership.
Section 10.4 REMAINING DISTRIBUTION. The remaining assets
shall then be distributed, first to the holders of Preferred Partnership
Interests in accordance with their positive Capital Account balances, and then
to the holders of Common Partnership Interests in accordance with their positive
Capital Account balances, in each case after making the adjustments for
allocations under Article V hereof.
Section 10.5 RESERVE. Notwithstanding the provisions of
Sections 10.3 and 10.4, the General Partner may retain such amount as it deems
necessary as a reserve for any contingent liabilities or obligations of the
Partnership, which reserve, after the passage of a reasonable period of time,
shall be distributed pursuant to the provisions of this Article X.
Section 10.6 FINAL ACCOUNTING. Each of the Partners shall be
furnished with a statement examined by the Partnership's independent
accountants, which shall set forth the assets and liabilities of the Partnership
as of the date of the complete liquidation. Upon the compliance by the General
Partner with the foregoing distribution plan, the Limited Partners shall cease
to be such, and the General Partner, as the sole remaining Partner of the
Partnership, shall execute and cause to be filed a Certificate of Cancellation
of the Partnership and any and all other documents necessary with respect to
termination and cancellation of the Partnership.
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ARTICLE XI
AMENDMENTS
Section 11.1 AUTHORITY TO AMEND.
(a) This Agreement may be amended by the General
Partner without the approval of any other Partner if such amendment is solely
for the purpose of clarification and does not change the substance hereof and
the Partnership has obtained an opinion of counsel to that effect.
(b) This Agreement may be amended by the General
Partner without the approval of any other Partner if such amendment is for the
purpose of adding or substituting Limited Partners.
(c) This Agreement may be amended by the General
Partner without the approval of any other Partner if such amendment is, in the
opinion of counsel for the Partnership, necessary or appropriate to satisfy
requirements of the Code with respect to partnerships or REITs or of any federal
or state securities laws or regulations. Any amendment made pursuant to this
Section 11.1(c) may be made effective as of the date of this Agreement.
(d) Notwithstanding any contrary provision of this
Agreement, any amendment to this Agreement or other act which would (i)
adversely affect the limited liabilities of the Limited Partners, (ii) change
the method of allocation of profit and loss as provided in Article V or the
distribution provisions of Articles VIII and X hereof, (iii) seek to impose
personal liability on the Limited Partners, or (iv) affect the operation of the
Conversion Factor of the Redemption Right shall require the consent and approval
of Limited Partners holding more than sixty-six and two-thirds percent (66 2/3%)
of the Common Percentage Interests of the Limited Partners.
(e) Except as otherwise specifically provided in this
Section 11.1, amendments to this Agreement shall require the approval of the
General Partner and Limited Partners holding more than fifty percent (50%) of
the Common Percentage Interests of the Limited Partners.
Section 11.2 NOTICE OF AMENDMENTS. A copy of any amendment to
be approved by the Partners pursuant to Sections 11.1(d) or 11.1(e) shall be
mailed in advance to such Partners. Partners shall be notified as to the
substance of any amendment pursuant to Sections 11.1(a), (b) or (c), and upon
request shall be furnished a copy thereof.
ARTICLE XII
POWER OF ATTORNEY
Section 12.1 POWER. Each of the Limited Partners irrevocably
constitutes and appoints the General Partner as such Limited Partner's true and
lawful attorney in such Limited Partner's name, place and stead to make,
execute, swear to, acknowledge, deliver and file:
(a) Any certificates or other instruments which may
be required to be filed by the Partnership under the laws of the State of Ohio
or of any other state or jurisdiction in which the General Partner shall deem it
advisable to file;
(b) Any documents, certificates or other instruments,
including, but not limited to, any and all amendments and modifications of this
Agreement or of the instruments described in Section 12.1(a) which may be
required or deemed desirable by the General Partner to effectuate the
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provisions of any part of this Agreement and, by way of extension and not in
limitation, to do all such other things as shall be necessary to continue and to
carry on the business of the Partnership; and
(c) All documents, certificates or other instruments
which may be required to effectuate the dissolution and termination of the
Partnership, to the extent such dissolution and termination is authorized
hereby. The power of attorney granted hereby shall not constitute a waiver of,
or be used to avoid, the rights of the Partners to approve certain amendments to
this Agreement pursuant to Sections 11.1(d) and 11.1(e) or be used in any other
manner inconsistent with the status of the Partnership as a limited partnership
or inconsistent with the provisions of this Agreement.
Section 12.2 SURVIVAL OF POWER. It is expressly intended by
each of the Partners that the foregoing power of attorney is coupled with an
interest, is irrevocable and shall survive the death, incompetence, dissolution,
liquidation or adjudication of insanity or bankruptcy or insolvency of each such
Partner. The foregoing power of attorney shall survive the delivery of an
assignment by any of the Partners of such Partner's entire interest in the
Partnership, except that where an assignee of such entire interest has become a
substitute Limited Partner, then the foregoing power of attorney of the assignor
Partner shall survive the delivery of such assignment for the sole purpose of
enabling the General Partner to execute, acknowledge and file any and all
instruments necessary to effectuate such substitution.
ARTICLE XIII
CONSENTS, APPROVALS, VOTING AND MEETINGS
Section 13.1 METHOD OF GIVING CONSENT OR APPROVAL. Any consent
or approval required by this Agreement may be given as follows:
(a) by a written consent given by the consenting
Partner and received by the General Partner at or prior to the doing of the act
or thing for which the consent is solicited, provided that such consent shall
not have been nullified by:
(i) Notice to the General Partner of such
nullification by the consenting Partner prior to the doing of
any act or thing, the doing of which is not subject to
approval at a meeting called pursuant to Section 13.2, or
(ii) Notice to the General Partner of such
nullification by the consenting Partner prior to the time of
any meeting called pursuant to Section 13.2 to consider the
doing of such act or thing, or
(iii) The negative vote by such consenting Partner
at any meeting called pursuant to Section 13.2 to consider the
doing of such act or thing;
(b) by the affirmative vote by the consenting Partner
for the doing of the act or thing for which the consent is solicited at any
meeting called pursuant to Section 13.2 to consider the doing of such act or
thing; or
(c) by the failure of the Partner to respond or
object to a request from the General Partner for such Partner's consent within
thirty (30) days from its receipt of such request (or such shorter period of
time as the General Partner may indicate in such request in order to ensure that
the General Partner has sufficient time to respond, if required, to any third
party with respect to the subject matter of such request).
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Section 13.2 MEETINGS OF LIMITED PARTNERS. Any matter
requiring the consent or vote of all or any of the Partners may be considered at
a meeting of the Partners held not less than five (5) nor more than sixty (60)
days after notice thereof shall have been given by the General Partner to all
Partners. Such notice (i) may be given by the General Partner, in its
discretion, at any time, or (ii) shall be given by the General Partner within
fifteen (15) days after receipt from Limited Partners holding more than fifty
percent (50%) of the Percentage Interests of the Limited Partners of a request
for such meeting.
Section 13.3 OPINION. Except for Consents obtained pursuant to
Sections 13.1 or 13.2, no Limited Partner shall exercise any consent or voting
rights unless either (a) at the time of the giving of consent or casting of any
vote by the Partners hereunder, counsel for the Partnership or counsel employed
by the Limited Partners shall have delivered to the Partnership an opinion
satisfactory to the Partners to the effect that such conduct (i) is permitted by
the Act, (ii) will not impair the limited liability of the Limited Partners, and
(iii) will not adversely affect the classification of the Partnership as a
partnership for federal income tax purposes, or (b) irrespective of the delivery
or nondelivery of such opinion of counsel, Limited Partners holding more than
seventy-five percent (75%) of the Percentage Interests of the Limited Partners
determine to exercise their consent or voting rights.
Section 13.4 SUBMISSIONS TO PARTNERS. The General Partner
shall give the Partners notice of any proposal or other matter required by any
provision of this Agreement, or by law, to be submitted for consideration and
approval of the Partners. Such notice shall include any information required by
the relevant provision or by law.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 GOVERNING LAW. The Partnership and this Agreement
shall be governed by and construed in accordance with the laws of the State of
Ohio.
Section 14.2 AGREEMENT FOR FURTHER EXECUTION. At any time or
times upon the request of the General Partner, the Limited Partners hereby agree
to sign, swear to, acknowledge and deliver all further documents and
certificates required by the laws of Ohio, or any other jurisdiction in which
the Partnership does, or proposes to do, business, or which may be reasonable,
necessary, appropriate or desirable to carry out the provisions of this
Agreement or the Act. This Section 14.2 shall not prejudice or affect the rights
of the Limited Partners to approve certain amendments to this Agreement pursuant
to Sections 11.1(d) and 11.1(e).
Section 14.3 ENTIRE AGREEMENT. This Agreement and the exhibits
attached hereto contain the entire understanding among the parties and supersede
any prior understandings or agreements among them respecting the within subject
matter. There are no representations, agreements, arrangements or
understandings, oral or written, between or among the parties hereto relating to
the subject matter of this Agreement which are not fully expressed herein.
Section 14.4 SEVERABILITY. This Agreement is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations of the jurisdictions in which
the Partnership does business. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
Section 14.5 NOTICES. Notices to Partners or to the
Partnership shall be deemed to have been given when personally delivered or
mailed, by prepaid registered or certified mail, addressed as set forth in
Exhibit A attached hereto, unless a notice of change of address has previously
been given in
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writing by the addressee to the addressor, in which case such notice shall be
addressed to the address set forth in such notice of change of address.
Section 14.6 TITLES AND CAPTIONS. All titles and captions are
for convenience only, do not form a substantive part of this Agreement, and
shall not restrict or enlarge any substantive provisions of this Agreement.
Section 14.7 COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each one of which shall constitute an original executed
copy of this Agreement.
Section 14.8 PRONOUNS. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural,
as the identity of the person or persons may require.
Section 14.9 SURVIVAL OF RIGHTS. Subject to the provisions
hereof limiting transfers, this Agreement shall be binding upon and inure to the
benefit of the Partners and the Partnership and their respective legal
representatives, successors, transferees and assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands
as of the day and year first above written.
GENERAL PARTNER:
XXXXXX LODGING COMPANY,
an Ohio corporation
By:/s/ XXXXXX X. XXXXXX
-----------------------------------
Xxxxxx X. Xxxxxx, President
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EXHIBIT A
LIST OF PARTNERS
AS OF SEPTEMBER 30, 2002
Percentage
Partners Units Interest
-------- ----- ------------
General Partner:
---------------
Xxxxxx Lodging Company 15,268,902 84.8878%
Xxxxxxxx Xxxxx, Xxxxx 0000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Limited Partners:
-----------------
The Xxxxxx Group, Inc. 779,941 4.3361%
Xxxx X. Xxxxxx 124,438 .6918%
Xxxxxx X. Xxxxxx 157,114 .8735%
Xxxxxxx X. Xxxxxx, Trustee of the 150,000 .8339%
trusts held under Declaration of
Xxxxxxx X. Xxxxxx Trust Agreement
No. 3 dated October 14, 1987
X.X. Xxxxxx, Trustee of the Xxxxxx X. Xxxxxx 17,201 .0956%
Revocable Trust under Agreement Dated
as of October 31, 1995
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx H 17,201 .0956%
Crane Revocable Living Trust under Agreement
Dated as of September 11, 1992
Xxxxxxx X. Xxxx, Trustee of the 10,650 .0592%
Xxxxxxx X. Xxxx Trust dated December 20, 1995
Xxxxxxx X. Xxxxxxxx 10,650 .0592%
M & P Partners (Xxxxxx X. Xxxxxx, Trustee of 2,591 .0144%
The Xxxxxx X. Xxxxxx Revocable Trust Dated
March 4, 1993, Managing Partner)
Xxxx X. X'Xxxx 1,400 .0078%
Percentage
Partners Units Interest
-------- ----- ------------
Xxxxxx X. Xxxxxxxx, Trustee of the Xxxxxx E 8,601 .0478%
Pawlisch Revocable Living Trust under
Agreement Dated March 4, 1992
Xxxxxxx X. Xxxxxxxx, Trustee of the DAV-JVJ 2,726 2,726 .0152%
Trust under Agreement Dated January 4, 1993
Xxxxxxx X. Xxxxxxx, Trustee of the 8,601 .0478%
Xxxxxxx X. Xxxxxxx Revocable Living Trust
under Agreement Dated October 6, 1987
JABO LLC 1,427,142 7.9342%
---------- ------
TOTAL 17,987,158 100.00%
========== ======
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EXHIBIT B
FEDERAL INCOME TAX MATTERS
For purposes of interpreting and implementing Article V of the
Partnership Agreement, the following rules shall apply and shall be treated as
part of the terms of the Partnership Agreement:
A. SPECIAL ALLOCATION PROVISIONS.
1. For purposes of determining the amount of
gain or loss to be allocated pursuant to Article V of the Partnership Agreement,
any basis adjustments permitted pursuant to Section 743 of the Code shall be
disregarded.
2. When Partnership Interests are transferred
during any taxable year, the General Partner intends to allocate Partnership
income, loss, deductions and credits using the closing of the books method.
3. Notwithstanding any other provision of the
Partnership Agreement, to the extent required by law, income, gain, loss and
deduction attributable to property contributed to the Partnership by a Partner
shall be shared among the Partners so as to take into account any variation
between the basis of the property and the fair market value of the property at
the time of contribution in accordance with the requirements of Section 704(c)
of the Code and the applicable regulations thereunder as more fully described in
Part B hereof. Treasury regulations under Section 704(c) of the Code allow
partnerships to use any reasonable method for accounting for Book-Tax
Differences for contributions of property so that a contributing partner
receives the tax benefits and burdens of any built-in gain or loss associated
with contributed property. The Operating Partnership shall account for Book-Tax
Differences using a method specifically approved in the regulations, the
traditional method. An allocation of remaining built-in gain under Section
704(c) will be made when Section 704(c) property is sold.
4. Notwithstanding any other provision of the
Partnership Agreement, in the event the Partnership is entitled to a deduction
for interest imputed under any provision of the Code on any loan or advance from
a Partner (whether such interest is currently deducted, capitalized or
amortized), such deduction shall be allocated solely to such Partner.
5. Notwithstanding any provision of the
Partnership Agreement to the contrary, to the extent any payments in the nature
of fees made to a Partner or reimbursements of expenses to any Partner are
finally determined by the Internal Revenue Service to be distributions to a
Partner for federal income tax purposes, there will be a gross income allocation
to such Partner in the amount of such distribution.
6. (a) Notwithstanding any provision of the
Partnership Agreement to the contrary and subject to the exceptions set forth in
Section 1.704-2(f)(2)-(5) of the Treasury Regulations, if there is a net
decrease in Partnership Minimum Gain during any Partnership fiscal 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 determined in
accordance with Section 1.704-2(g)(2) of the Treasury Regulations. 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 Section 1.704-2(f) of the
Treasury Regulations. This paragraph 6(a) is intended to comply with the minimum
gain chargeback requirement in such Section of the Regulations and shall be
interpreted consistently therewith. To the extent permitted by such Section of
the Regulations and for purposes of this paragraph 6(a) only, each Partner's
Adjusted Capital Account Balance shall be determined prior to any other
allocations pursuant to Article V of the Partnership Agreement with respect to
such fiscal year and without regard to any net decrease in Partner Minimum Gain
during such fiscal year.
(b) Notwithstanding any provision of the
Partnership Agreement to the contrary, except paragraph 6(a) of this Exhibit and
subject to the exceptions set forth in Section 1.704-2(i)(4) of the Treasury
Regulations, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
during any Partnership fiscal year, each Partner who has a share of the Partner
Nonrecourse Debt Minimum Gain, determined in accordance with Section
1.704-2(i)(3) of the Treasury Regulations, 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
Nonrecourse Debt Minimum Gain, determined in accordance with Section
1.704-2(i)(5) of the Treasury Regulations. 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 Section 1.704-2(i)(4) of the Treasury
Regulations. This paragraph 6(b) is intended to comply with the minimum gain
chargeback requirement in such Section of the Treasury Regulations and shall be
interpreted consistently therewith. Solely for purposes of this paragraph 6(b),
each Partner's Adjusted Capital Account Balance shall be determined prior to any
other allocations pursuant to Article V of the Partnership Agreement with
respect to such fiscal year, other than allocations pursuant to paragraph 6(a)
hereof.
7. Notwithstanding any provision of the
Partnership Agreement to the contrary, in the event any Partners unexpectedly
receive any adjustments, allocations or distributions described in Treasury
Regulation Section 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), items of Partnership income and gain shall be specially
allocated to such Partners in an amount and manner sufficient to eliminate the
deficits in their Adjusted Capital Account Balances created by such adjustments,
allocations or distributions as quickly as possible.
8. No loss shall be allocated to any Partner to
the extent that such allocation would result in a deficit in its Adjusted
Capital Account Balance while any other Partner continues to have a positive
Adjusted Capital Account Balance; in such event, losses shall first be allocated
to any Partners with positive Adjusted Capital Account Balances, and in
proportion to such balances, to the extent necessary to reduce their positive
Adjusted Capital Account Balances to zero. Any excess shall be allocated to the
General Partner.
9. Any special allocations of items pursuant to
this Part A shall be taken into account in computing subsequent allocations so
that the net amount of any items so allocated and the profits, losses and all
other items allocated to each such Partner pursuant to Article V of the
Partnership Agreement shall, to the extent possible, be equal to the net amount
that would have been allocated to each such Partner pursuant to the provisions
of Article V of the Partnership Agreement if such special allocations had not
occurred.
10. Notwithstanding any provision of the
Partnership Agreement to the contrary, Nonrecourse Deductions for any fiscal
year or other period shall be specially allocated to the Partners in the manner
and in accordance with the percentages set forth in Section 5.1 of the
Partnership Agreement.
11. Notwithstanding any provision of the
Partnership Agreement to the contrary, any Partner Nonrecourse Deduction for any
fiscal year or other period 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
Section 1.704-2(i) of the Treasury Regulations.
B. CAPITAL ACCOUNT ADJUSTMENTS AND 704(c) TAX
ALLOCATIONS.
1. For purposes of computing the amount of any
item of income, gain, deduction or loss to be reflected in the Partners' capital
accounts, the determination, recognition and
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classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes; provided,
however, that:
(a) Any income, gain or loss attributable to
the taxable disposition of any property shall be determined by the
Partnership as if the adjusted basis of such property as of such date
of disposition was equal in amount to (i) the Agreed Value in the case
of the Initial Hotels or other contributed properties, or (ii) the
Carrying Value with respect to property subsequently purchased.
(b) The computation of all items of income,
gain, loss and deduction shall be made by the Partnership and, as to
those items described in Section 705(a)(1)(B) or Section 705(a)(2)(B)
of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor
capitalizable for federal income tax purposes.
2. A transferee of a Partnership interest will
succeed to the capital account relating to the Partnership interest transferred;
provided, however, that if the transfer causes a termination of the Partnership
under Section 708(b)(1)(B) of the Code, the Partnership properties shall be
deemed to have been distributed in liquidation of the Partnership to the
Partners (including the transferee of a Partnership interest) and recontributed
by such Partners and transferees in reconstitution of the Partnership. The
capital accounts of such reconstituted Partnership shall be maintained in
accordance with the principles set forth herein.
3. Upon an issuance of additional Partnership
interests for cash, the capital accounts of all Partners (and the Agreed Values
of all Partnership properties) shall, immediately prior to such issuance, be
adjusted (consistent with the provisions hereof) upward or downward to reflect
any unrealized gain or unrealized loss attributable to each Partnership property
(as if such unrealized gain or unrealized loss had been recognized upon an
actual sale of such property at the fair market value thereof, immediately prior
to such issuance, and had been allocated to the Partners, at such time, pursuant
to Article V of the Partnership Agreement). In determining such unrealized gain
or unrealized loss attributable to the properties, the fair market value of
Partnership properties shall be determined by the General Partner using such
reasonable methods of valuation as it may adopt.
4. Immediately prior to the distribution of any
Partnership property in liquidation of the Partnership, the capital accounts of
all Partners shall be adjusted (consistent with the provisions hereof and
Section 704 of the Code) upward or downward to reflect any unrealized gain or
unrealized loss attributable to the Partnership property (as if such unrealized
gain or unrealized loss had been recognized upon an actual sale of each such
property, immediately prior to such distribution, and had been allocated to the
Partners, at such time, pursuant to Article V of the Partnership Agreement). In
determining such unrealized gain or unrealized loss attributable to property,
the fair market value of Partnership property shall be determined by the General
Partner using such reasonable methods of valuation as it may adopt.
5. In accordance with Section 704(c) of the
Code and the regulations thereunder, income, gain, loss and deduction with
respect to any property shall, solely for tax purposes, and not for capital
account purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes.
6. In the event the Agreed Value of any
Partnership asset is adjusted as described in paragraph 3 above, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Agreed Value in the same manner as under
Section 704(c) of the Code and the regulations thereunder.
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7. Any elections or other decisions relating to
such allocations shall be made by the General Partner in any manner that
reasonably reflects the purpose and intention of this Agreement.
C. DEFINITIONS. For the purposes of this Exhibit, the
following terms shall have the meanings indicated unless the context clearly
indicates otherwise:
"ADJUSTED CAPITAL ACCOUNT BALANCE": means the
balance in the capital account of a Partner as of the end of the relevant fiscal
year of the Partnership, after giving effect to the following: (i) credit to
such capital account any amounts the Partner is obligated to restore, pursuant
to the terms of this Agreement or otherwise, or is deemed obligated to restore
pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Treasury Regulations, and (ii) debit to such capital
account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of
the Regulations.
"AGREED VALUE": means the net fair market value of
Contributed Property as agreed to by the Contributing Partner and the
Partnership (or other property subsequently adjusted to reflect contributions),
using such reasonable method of valuation as they may adopt.
"CARRYING VALUE": means the adjusted basis of such
property for federal income tax purposes as of the time of determination.
"NONRECOURSE DEDUCTIONS": shall have the meaning set
forth in Section 1.704-2(b)(1) of the Treasury Regulations. The amount of
Nonrecourse Deductions for a Partnership fiscal year equals the excess, if any,
of the net increase, if any, in the amount of Partnership Minimum Gain during
that fiscal year over the aggregate amount of any distributions during that
fiscal year of proceeds of a Nonrecourse Liability, that are allocable to an
increase in Partnership Minimum Gain, determined according to the provisions of
Section 1.704-2(c) of the Treasury Regulations.
"NONRECOURSE LIABILITY": shall have the meaning set
forth in Section 1.704-2(b)(3) of the Treasury Regulations.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN": means an
amount, with respect to each Partner Nonrecourse Debt, determined in accordance
with Section 1.704-2(i) of the Treasury Regulations.
"PARTNER NONRECOURSE DEBT": shall have the meaning
set forth in Section 1.704-2(b)(4) of the Treasury Regulations.
"PARTNER NONRECOURSE DEDUCTIONS": shall have the
meaning set forth in Section 1.704-2(i)(2) of the Treasury Regulations. For any
Partnership taxable year, the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt equal the net increase during the year, if
any, in the amount of Partner Nonrecourse Debt Minimum Gain reduced (but not
below zero) by proceeds of the liability that are both attributable to the
liability and allocable to an increase in the Partner Nonrecourse Debt Minimum
Gain.
"PARTNERSHIP AGREEMENT": shall mean this Amended and
Restated Limited Partnership Agreement of Xxxxxx Hotel Properties, L.P.
"PARTNERSHIP MINIMUM GAIN": shall have the meaning
set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.
For purposes of this Exhibit, all other capitalized terms will have the
same definition as in the Partnership Agreement.
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EXHIBIT C
INITIAL HOTELS
Number
Hotel of Rooms Location
----- -------- --------
Berkeley Marina Marriott 373 Berkeley, CA
Buffalo Marriott 000 Xxxxxxx, XX
Xxxxxxxxx Xxxxxxx Xxxxxxxx 000 Xxxxxxxxx, XX
Cleveland Marriott East 403 Cleveland, OH
Columbus North Marriott 300 Columbus, OH
Lake Xxxxxx Xxxxxxx Xxx 000 Xxxxxxxxx, XX
Lake Xxxxxx Holiday Inn 000 Xxxxxxxxx, XX
Melbourne Quality Xxxxxx 000 Xxxxxxxxx, XX
Radisson Inn Sanibel Gateway 000 Xxxx Xxxxx, XX
EXHIBIT D
NOTICE OF EXERCISE OF REDEMPTION RIGHT
The undersigned hereby irrevocably (i) presents for redemption
_________ Partnership Units (as defined in the Partnership Agreement defined
below) in Xxxxxx Hotel Properties, L.P., in accordance with the terms of the
Agreement of Limited Partnership of Xxxxxx Hotel Properties, L.P. (the
"Partnership Agreement"), and the Redemption Right (as defined in the
Partnership Agreement) referred to therein, (ii) surrenders such Partnership
Units and all right, title and interest therein, and (iii) directs that the Cash
Amount or REIT Shares (both as defined in the Partnership Agreement) deliverable
upon exercise of the Redemption Right be delivered to the address specified
below, and if REIT Shares are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the addresses specified below.
Dated: Name of Limited Partner:
-------------------
---------------------------------------
---------------------------------------
(Signature of Limited Partner)
---------------------------------------
(Street Address)
---------------------------------------
(City State Zip Code)
IF REIT Shares are to be issued, issue to:
-----------------------------
(Name)
-----------------------------
(Social Security or
Identifying Number)
EXHIBIT E
INTERCOMPANY CONVERTIBLE NOTE
