FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
COLUMBIA EQUITY, LP
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.
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TABLE OF CONTENTS
ARTICLE I DEFINED TERMS...............................................................................1
ARTICLE II FORMATION OF PARTNERSHIP...................................................................10
2.01 Name, Office and Registered Agent..........................................................10
2.02 Partners...................................................................................10
2.03 Term and Dissolution.......................................................................10
2.04 Filing of Certificate and Perfection of Limited Partnership................................11
2.05 Certificates Describing Partnership Units..................................................11
ARTICLE III BUSINESS OF THE PARTNERSHIP................................................................11
ARTICLE IV CAPITAL CONTRIBUTIONS AND ACCOUNTS.........................................................12
4.01 Capital Contributions......................................................................12
4.02 Additional Capital Contributions and Issuances of Additional Partnership Interests.........12
4.03 Additional Funding.........................................................................14
4.04 LTIP Units.................................................................................20
4.05 Conversion of LTIP Units...................................................................20
4.06 Capital Accounts...........................................................................20
4.07 Percentage Interests.......................................................................21
4.08 No Interest on Contributions...............................................................21
4.09 Return of Capital Contributions............................................................21
4.10 No Third Party Beneficiary.................................................................21
ARTICLE V PROFITS AND LOSSES; DISTRIBUTIONS..........................................................22
5.01 Allocation of Profit and Loss..............................................................22
5.02 Distribution of Cash.......................................................................24
5.03 REIT Distribution Requirements.............................................................25
5.04 No Right to Distributions in Kind..........................................................25
5.05 Limitations on Return of Capital Contributions.............................................25
5.06 Distributions Upon Liquidation.............................................................25
5.07 Substantial Economic Effect................................................................26
ARTICLE VI RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER......................................26
6.01 Management of the Partnership..............................................................26
6.02 Delegation of Authority....................................................................29
6.03 Indemnification and Exculpation of Indemnitees.............................................29
6.04 Liability of the General Partner...........................................................30
6.05 Partnership Obligations....................................................................31
6.06 Outside Activities.........................................................................32
6.07 Employment or Retention of Affiliates......................................................32
6.08 General Partner Activities.................................................................32
6.09 Title to Partnership Assets................................................................33
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6.10 Redemption of General Partner Partnership Units............................................33
ARTICLE VII CHANGES IN GENERAL PARTNER.................................................................33
7.01 Transfer of the General Partner's Partnership Interest.....................................33
7.02 Admission of a Substitute or Additional General Partner....................................35
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General
Partner...........................................................................36
7.04 Removal of a General Partner...............................................................36
ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS.............................................37
8.01 Management of the Partnership..............................................................37
8.02 Power of Attorney..........................................................................37
8.03 Limitation on Liability of Limited Partners................................................38
8.04 Redemption Right...........................................................................38
8.05 Registration...............................................................................40
ARTICLE IX TRANSFERS OF PARTNERSHIP INTERESTS.........................................................44
9.01 Purchase for Investment....................................................................44
9.02 Restrictions on Transfer of Partnership Interests..........................................45
9.03 Admission of Substitute Limited Partner....................................................46
9.04 Rights of Assignees of Partnership Interests...............................................47
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner..............47
9.06 Joint Ownership of Interests...............................................................47
ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS.................................................48
10.01 Books and Records..........................................................................48
10.02 Custody of Partnership Funds; Bank Accounts................................................48
10.03 Fiscal and Taxable Year....................................................................48
10.04 Annual Tax Information and Report..........................................................48
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments..............................49
10.06 Reports to Limited Partners................................................................49
ARTICLE XI AMENDMENT OF AGREEMENT; MERGER.............................................................50
11.01 Amendment of Agreement.....................................................................50
11.02 Merger of Partnership......................................................................50
ARTICLE XII GENERAL PROVISIONS.........................................................................51
12.01 Notices 51
12.02 Survival of Rights.........................................................................51
12.03 Additional Documents.......................................................................51
12.04 Severability...............................................................................51
12.05 Entire Agreement...........................................................................51
12.06 Pronouns and Plurals.......................................................................51
12.07 Headings 51
12.08 Counterparts...............................................................................51
12.09 Governing Law..............................................................................51
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EXHIBITS
EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - Notice of Exercise of Redemption Right
EXHIBIT C - Certification of Non-Foreign Status
EXHIBIT D - Notice of Election by Partner to Convert LTIP Units into OP Units
EXHIBIT E - Notice of Election by Partnership to Force Conversion of LTIP Units
into OP Units
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FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
COLUMBIA EQUITY, LP
RECITALS
Columbia Equity, LP (the "Partnership") was formed as a limited
partnership under the laws of the Commonwealth of Virginia, pursuant to a
Certificate of Limited Partnership filed with the Virginia State Corporation
Commission effective as of October 1, 2004 and an Agreement of Limited
Partnership entered into as of October 1, 2004, by and between Columbia Equity
Trust, Inc., a Maryland corporation (the "General Partner" or the "Company"),
and Xxxxxx X. Xxxx, III (the "Original Limited Partner"). This First Amended and
Restated Agreement of Limited Partnership is entered into this ____ day of
__________, 2005 among the General Partner and the Limited Partners set forth on
Exhibit A hereto, for the purpose of amending and restating the Agreement of
Limited Partnership.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the Agreement of Limited Partnership to read in its entirety as
follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the
meanings specified below:
"ACT" means the Virginia Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to Section 8.04
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 4.02(a)(ii).
"ADJUSTMENT EVENT" has the meaning set forth in Section 4.04(a) hereof.
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"ADMINISTRATIVE EXPENSES" means (i) all administrative and operating
costs and expenses incurred by the Partnership, (ii) those administrative costs
and expenses of the Company, including any salaries or other payments to
directors, officers or employees of the Company, and any accounting and legal
expenses of the Company, which expenses, the Partners have agreed, are expenses
of the Partnership and not the Company, and (iii) to the extent not included in
clauses (i) or (ii) above, REIT Expenses; provided, however, that Administrative
Expenses shall not include any administrative costs and expenses incurred by the
Company that are attributable to Properties or interests in a Subsidiary that
are owned by the Company other than through its ownership interest in the
Partnership.
"AFFILIATE" means, (i) any Person that, directly or indirectly,
controls or is controlled by or is under common control with such Person, (ii)
any other Person that owns, beneficially, directly or indirectly, 10% or more of
the outstanding capital stock, shares or equity interests of such Person, or
(iii) any officer, director, employee, partner, member, manager or trustee of
such Person or any Person controlling, controlled by or under common control
with such Person (excluding trustees and persons serving in similar capacities
who are not otherwise an Affiliate of such Person). For the purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities or partnership interests or
otherwise.
"AGREED VALUE" means the fair market value of a Partner's non-cash
Capital Contribution as of the date of contribution as agreed to by such Partner
and the General Partner. The names and addresses of the Partners, number of
Partnership Units issued to each Partner, and the Agreed Value of non-cash
Capital Contributions as of the date of contribution is set forth on Exhibit A.
"AGREEMENT" means this First Amended and Restated Agreement of Limited
Partnership.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"CAPITAL ACCOUNT" has the meaning provided in Section 4.06 hereof.
"CAPITAL ACCOUNT LIMITATION" has the meaning set forth in Section
4.05(b) hereof.
"CAPITAL CONTRIBUTION" means the total amount of cash, cash
equivalents, and the Agreed Value of any Property or other asset contributed or
agreed to be contributed, as the context requires, to the Partnership by each
Partner pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
"CASH AMOUNT" means an amount of cash per OP Unit equal to the Value of
the REIT Shares Amount on the date of receipt by the Partnership and the General
Partner of a Notice of Redemption.
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"CERTIFICATE" means any instrument or document that is required under
the laws of the Commonwealth of Virginia, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the Commonwealth of Virginia or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the Commonwealth of Virginia or such other
jurisdiction.
"CHARTER" means the Articles of Incorporation of the Company filed with
the Maryland State Department of Assessments and Taxation, as amended or
restated from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"COMMON STOCK" means the common stock, par value $0.001 per share, of
the Company.
"COMPANY" means Columbia Equity Trust, Inc., a Maryland corporation.
"CONSTITUENT PERSON" has the meaning set forth in Section 4.05(f)
hereof.
"CONVERSION DATE" has the meaning set forth in Section 4.05(b) hereof.
"CONVERSION FACTOR" means 1.0, provided that in the event that the
Company (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on such date and, provided further, that in the event
that an entity other than an Affiliate of the Company shall become General
Partner pursuant to any merger, consolidation or combination of the Company with
or into another entity (the "Successor Entity"), the Conversion Factor shall be
adjusted by multiplying the Conversion Factor by the number of shares of the
Successor Entity into which one REIT Share is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation 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
Company receives a Notice of Redemption after the record date, but prior to the
effective date of such dividend, distribution, subdivision or combination, the
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Conversion Factor shall be determined as if the Company had received the Notice
of Redemption immediately prior to the record date for such dividend,
distribution, subdivision or combination.
"CONVERSION NOTICE" has the meaning set forth in Section 4.05(b)
hereof.
"CONVERSION RIGHT" has the meaning set forth in Section 4.05(a) hereof.
"DEFAULTING LIMITED PARTNER" means a Limited Partner that has failed to
pay any amount owed to the Partnership under a Partnership Loan within 15 days
after demand for payment thereof is made by the Partnership.
"DISTRIBUTABLE AMOUNT" has the meaning set forth in Section 5.02(c)
hereof.
"ECONOMIC CAPITAL ACCOUNT BALANCES" has the meaning set forth in
Section 5.01(g) hereof.
"EQUITY INCENTIVE PLAN" means any equity incentive plan hereafter
adopted by the Partnership or the Company, including the Company's 2005 equity
incentive plan.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition
for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of
1978, as amended, or similar provision of law of any jurisdiction (except if
such petition is contested by such Person and has been dismissed within 90
days); insolvency or bankruptcy of such Person as finally determined by a court
proceeding; filing by such Person of a petition or application to accomplish the
same or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings relating to such
Person as a debtor under any other reorganization, arrangement, insolvency,
adjustment of debt or liquidation law of any jurisdiction, whether now in
existence or hereinafter in effect, either by such Person or by another,
provided that if such proceeding is commenced by another, such Person indicates
his approval of such proceeding, consents thereto or acquiesces therein, or such
proceeding is contested by such Person and has not been finally dismissed within
90 days.
"FORCED CONVERSION" has the meaning set forth in Section 4.05(c)
hereof.
"FORCED CONVERSION NOTICE" has the meaning set forth in Section 4.05(c)
hereof.
"GENERAL PARTNER" means the Company and any Person who becomes a
substitute or additional General Partner as provided herein, and any of their
successors as General Partner.
"GENERAL PARTNER LOAN" means a loan extended by the General Partner to
a Defaulting Limited Partner in the form of a payment on a Partnership Loan by
the General Partner to the Partnership on behalf of the Defaulting Limited
Partner.
"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by the
General Partner.
"INDEMNITEE" means (i) any Person made a party to a proceeding by
reason of its status as the Company, the General Partner or a director, officer
or employee of the Company, the
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Partnership or the General Partner, and (ii) such other Persons (including
Affiliates of the Company, General Partner or the Partnership) as the General
Partner may designate from time to time, in its sole and absolute discretion.
"INDEPENDENT DIRECTOR" means a director of the Company who meets the
NYSE requirements for an independent director as set forth from time to time.
"LIMITED PARTNER" means any Person named as a Limited Partner on
Exhibit A attached hereto, as it may be amended from time to time, and any
Person who becomes a Substitute or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"LIMITED PARTNERSHIP INTEREST" means a Partnership Interest held by a
Limited Partner at any particular time, including the right of such Limited
Partner to any and all benefits to which such Limited Partner may be entitled as
provided in this Agreement and in the Act, together with the obligations of such
Limited Partner to comply with all the provisions of this Agreement and of such
Act.
"LIQUIDATING GAINS" has the meaning set forth in Section 5.01(g)
hereof.
"LTIP UNIT" means a Partnership Unit which is designated as an LTIP
Unit and which has the rights, preferences and other privileges designated in
Section 4.04 hereof and elsewhere in this Agreement in respect of holders of
LTIP Units. The allocation of LTIP Units among the Partners shall be set forth
on Exhibit A, as it may be amended from time to time.
"LTIP UNITHOLDER" means a Partner that holds LTIP Units.
"LOSS" has the meaning provided in Section 5.01(h) hereof.
"MAJORITY IN INTEREST" means Limited Partners holding a majority of the
outstanding Limited Partnership Interests.
"MINIMUM LIMITED PARTNERSHIP INTEREST" means the lesser of (i) 1% or
(ii) if the total Capital Contributions to the Partnership exceed $50 million,
1% divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
shall not be less than 0.2% at any time.
"NOTICE OF REDEMPTION" means the Notice of Exercise of Redemption Right
substantially in the form attached as Exhibit B hereto.
"NYSE" means the New York Stock Exchange.
"OFFER" has the meaning set forth in Section 7.01(c) hereof.
"OFFERING" means the underwritten initial public offering of REIT
Shares by the Company.
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"OP UNIT" means an undivided, fractional share of the Partnership
Interests of all Partners issued pursuant to Sections 4.01 and 4.02 hereof, but
does not include any LTIP Unit or any other Partnership Unit designated as being
other than an OP Unit.
"OP UNIT ECONOMIC BALANCE" has the meaning set forth in Section
5.01(g).
"OP UNIT TRANSACTION" has the meaning set forth in Section 4.05(f)
hereof.
"ORIGINAL LIMITED PARTNER" means Xxxxxx X. Xxxx, III.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership
held by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Partnership Interest
may be expressed as a number of Partnership Units, LTIP Units, or other
Partnership Units.
"PARTNERSHIP LOAN" means a loan from the Partnership to the Partner on
the day the Partnership pays over the excess of the Withheld Amount over the
Distributable Amount to a taxing authority.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is determined by first computing, for each
Partnership nonrecourse liability, any gain the Partnership would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately
computed gains. A Partner's share of Partnership Minimum Gain shall be
determined in accordance with Regulations Section 1.704-2(g)(1).
"PARTNERSHIP RECORD DATE" means the record date established by the
General Partner for the distribution of cash pursuant to Section 5.02 hereof,
which record date shall be the same as the record date established by the
Company for a distribution to its stockholders of some or all of its portion of
such distribution.
"PARTNERSHIP UNIT" means an OP Unit, an LTIP Unit, or any other
fractional, undivided share of the Partnership Interests of all Partners issued
hereunder. The allocation of Partnership Units among the Partners shall be as
set forth on Exhibit A, as it may be amended from time to time.
"PARTNERSHIP UNIT DISTRIBUTION" has the meaning set forth in Section
4.04(a) hereof.
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"PERCENTAGE INTEREST" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
it may be amended from time to time.
"PERSON" means any individual, partnership, corporation, limited
liability company, joint venture, trust or other entity.
"PROFIT" has the meaning provided in Section 5.01(h) hereof.
"PROPERTY" means any property or other investment in which the
Partnership, directly or indirectly, holds an ownership interest.
"PROSPECTUS" means the final prospectus delivered to purchasers of REIT
Shares in the Offering.
"REDEMPTION AMOUNT" means either the Cash Amount or the REIT Shares
Amount, as selected by the Partnership or as elected by the General Partner
pursuant to Section 8.04(b) hereof.
"REDEMPTION RIGHT" has the meaning provided in Section 8.04(a) hereof.
"REDEMPTION SHARES" has the meaning set forth in Section 8.05(a)
hereof.
"REDEEMING LIMITED PARTNER" has the meaning provided in Section 8.04(a)
hereof.
"REGULATIONS" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through
860 of the Code.
"REIT EXPENSES" means (i) costs and expenses relating to the formation
and continuity of existence and operation of the Company and any Subsidiaries
thereof (which Subsidiaries shall, for purposes hereof, be included within the
definition of Company), including taxes, fees and assessments associated
therewith, any and all costs, expenses or fees payable to any director, officer
or employee of the Company, (ii) costs and expenses relating to any public
offering and registration, including the Offering, or private offering, of
securities by the Company, and all statements, reports, fees and expenses
incidental thereto, including, without limitation, underwriting discounts and
selling commissions applicable to any such offering of securities, and any costs
and expenses associated with any claims made by any holders of such securities
or any underwriters or placement agents thereof, (iii) costs and expenses
associated with any repurchase of any securities by the Company, (iv) costs and
expenses associated with the preparation and filing of any periodic or other
reports and communications by the Company under federal, state or local laws or
regulations, including filings with the Commission, (v) costs and expenses
associated with compliance by the Company with laws, rules and regulations
promulgated by
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any regulatory body, including the Commission and any securities exchange, (vi)
costs and expenses associated with any 401(k) plan, incentive plan, bonus plan
or other plan providing for compensation for the employees of the Company, (vii)
costs and expenses incurred by the Company relating to any issuing or redemption
of Partnership Interests and (viii) all other operating or administrative costs
of the Company incurred in the ordinary course of its business on behalf of or
in connection with the Partnership.
"REIT SHARE" means one share of Common Stock of the Company (or
Successor Entity, as the case may be).
"REIT SHARES AMOUNT" means a number of REIT Shares equal to the product
of the number of OP Units offered for redemption by a Redeeming Limited Partner,
multiplied by the Conversion Factor as adjusted to and including the Specified
Redemption Date; provided that in the event the Company issues to all holders of
REIT Shares rights, options, warrants or convertible or exchangeable securities
entitling the stockholders to subscribe for or purchase REIT Shares, or any
other securities or property (collectively, the "rights"), and the rights have
not expired at the Specified Redemption Date, then the REIT Shares Amount shall
also include the rights issuable to a holder of the REIT Shares Amount on the
record date fixed for purposes of determining the holders of REIT Shares
entitled to rights.
"S-3 ELIGIBLE DATE" has the meaning set forth in Section 8.05(a)
hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERVICE" means the Internal Revenue Service.
"SPECIFIED REDEMPTION DATE" means the first business day of the month
that is at least 60 calendar days after the receipt by the General Partner of a
Notice of Redemption.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership or limited liability
company in which the Company, a wholly-owned subsidiary of the Company or the
Partnership owns a partnership or limited liability company interest.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03 hereof.
"SUCCESSOR ENTITY" has the meaning set forth in the definition of
"Conversion Factor" contained herein.
"SURVIVOR" has the meaning set forth in Section 7.01(d) hereof.
"TAX MATTERS PARTNER" has the meaning set forth within Section
6231(a)(7) of the Code.
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"TRADING DAY" means a day on which the principal national securities
exchange on which a security is listed or admitted to trading is open for the
transaction of business or, if a security is not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"TRANSACTION" has the meaning set forth in Section 7.01(c) hereof.
"TRANSFER" has the meaning set forth in Section 9.02(a) hereof.
"UNVESTED LTIP UNITS" has the meaning set forth in Section 4.04(c)
hereof.
"VALUE" means, with respect to any security, the average of the daily
market price of such security for the ten consecutive Trading Days immediately
preceding the date of such valuation. The market price for each such Trading Day
shall be: (i) if the security is listed or admitted to trading on the NYSE or
any securities exchange, the last reported sale 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, regular way, on such day, (ii) if the security is not listed or
admitted to trading on the NYSE or any securities exchange, 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 security is
not listed or admitted to trading on the NYSE or any securities exchange and no
such last reported sale price or closing bid and asked prices are available, the
average of the reported high bid and low asked prices on such day, as reported
by a 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 days
prior to the date in question) for which prices have been so reported; provided
that if there are no bid and asked prices reported during the ten days prior to
the date in question, the value of the security shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the security includes any additional rights, 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.
"VESTED LTIP UNITS" has the meaning set forth in Section 4.04(c)
hereof.
"VESTING AGREEMENT" means each or any, as the context implies, Equity
Incentive Plan entered into by an LTIP Unitholder upon acceptance of an award of
LTIP Units under an Equity Incentive Plan.
"WITHHELD AMOUNT" means any amount required to be withheld by the
Partnership to pay over to any taxing authority as a result of any allocation or
distribution of income to a Partner.
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ARTICLE II
FORMATION OF PARTNERSHIP
2.01 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership is
Columbia Equity, LP. The specified office and place of business of the
Partnership shall be 0000 X Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 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 of the
Partnership's registered agent is Xxxxx X. Xxxxx, Esq., who is a resident of
Virginia and a member of the Virginia State Bar, and whose business address is
Watt, Tieder, Xxxxxx & Xxxxxxxxxx, LLP, 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000,
XxXxxx, Xxxxxxxx 00000. The sole duty of the registered agent as such is to
forward to the Partnership any notice that is served on him as registered agent.
2.02 PARTNERS.
(a) The General Partner of the Partnership is Columbia Equity
Trust, Inc., a Maryland corporation. Its principal place of business is the same
as that of the Partnership.
(b) The Limited Partners are those Persons identified as
Limited Partners on Exhibit A hereto, as it may be amended from time to time.
2.03 TERM AND DISSOLUTION.
(a) The term of the Partnership shall continue in full force
and effect until December 31, 2075, except that the Partnership shall be
dissolved upon the first to occur of any of the following events:
(i) The occurrence of an Event of Bankruptcy as to a
General Partner or the dissolution, death, removal or withdrawal of a
General Partner unless the business of the Partnership is continued
pursuant to Section 7.03(b) hereof; provided that if a General Partner
is on the date of such occurrence a partnership, the dissolution of
such General Partner as a result of the dissolution, death, withdrawal,
removal or Event of Bankruptcy of a partner in such partnership shall
not be an event of dissolution of the Partnership if the business of
such General Partner is continued by the remaining partner or partners,
either alone or with additional partners, and such General Partner and
such partners comply with any other applicable requirements of this
Agreement; (ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the
Partnership (provided that if the Partnership receives 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 installment
obligations are paid in full);
(iii) The redemption of all Limited Partnership
Interests (other than any such Limited Partnership Interests held by
the General Partner), unless the General Partner determines to continue
the term of the Partnership by the admission of one or more additional
Limited Partners; or
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(iv) The election by the General Partner that the
Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the business
of the Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.
2.04 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.05 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. At the request of a
Limited Partner, the General Partner, at its option, may issue a certificate
summarizing the terms of such Limited Partner's interest in the Partnership,
including the number of Partnership Units owned and the Percentage Interest
represented by such Partnership Units as of the date of such certificate. Any
such certificate (i) shall be in form and substance as determined by the General
Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the
following effect:
This certificate is not negotiable. The Partnership Units
represented by this certificate are governed by and
transferable only in accordance with the provisions of the
Agreement of Limited Partnership of Columbia Equity, LP, as
amended from time to time.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
Company at all times to qualify as a REIT, unless the Company otherwise ceases
to, or the Board of Directors determines that the Company shall no longer,
qualify as a REIT, (ii) to enter into any partnership, joint venture or other
similar arrangement to engage in any of the foregoing or the ownership of
interests in any entity engaged in any of the foregoing and (iii) to do anything
necessary or incidental to the foregoing. In connection with the foregoing, and
without limiting the Company's right in its sole and absolute discretion to
cease qualifying as a REIT, the Partners acknowledge that the Company's current
status as a REIT and the avoidance of income and excise taxes on the Company
inures to the benefit of all
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the Partners and not solely to the Company. Notwithstanding the foregoing, the
Limited Partners agree that the Company may terminate its status as a REIT under
the Code at any time. The General Partner shall also be empowered to do any and
all acts and things necessary or prudent to ensure that the Partnership will not
be classified as a "publicly traded partnership" taxable as a corporation for
purposes of Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 CAPITAL CONTRIBUTIONS. The General Partner and the Limited
Partners have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A, as amended
from time to time.
4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS. Except as provided in this Section 4.02 or in Section
4.03, the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The General Partner may
contribute additional capital to the Partnership, from time to time, and receive
additional Partnership Interests in respect thereof, in the manner contemplated
in this Section 4.02.
(a) Issuances of Additional Partnership Interests.
(i) General. As of the effective date of this
Agreement, the Partnership shall have two classes of Partnership Units,
entitled "OP Units" and "LTIP Units." The General Partner is hereby
authorized to cause the Partnership to issue such additional
Partnership Interests in the form of Partnership Units for any
Partnership purpose at any time or from time to time to the Partners
(including the General Partner) or to other Persons for such
consideration and on such terms and conditions as shall be established
by the General Partner in its sole and absolute discretion, all without
the approval of any Limited Partners. The General Partner's
determination that consideration is adequate shall be conclusive
insofar as the adequacy of consideration relates to whether the
Partnership Interests are validly issued and fully paid. Any additional
Partnership Interests issued thereby may be issued in one or more
classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or
other special rights, powers and duties, including rights, powers and
duties senior to Limited Partnership Interests, all as shall be
determined by the General Partner in its sole and absolute discretion
and without the approval of any Limited Partner, subject to Virginia
law, including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class
or series of Partnership Interests; (ii) the right of each such class
or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the
Partnership; provided, however, that no additional Partnership
Interests shall be issued to the General Partner (or any direct or
indirect wholly-owned Subsidiary of the General Partner) unless:
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(1) (A) the additional Partnership Interests
are issued in connection with an issuance of REIT Shares of or
other interests in the Company, 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 (or any
direct or indirect wholly-owned Subsidiary of the General
Partner) by the Partnership in accordance with this Section
4.02 and (B) the General Partner (or any direct or indirect
wholly-owned Subsidiary of the General Partner) shall make a
Capital Contribution to the Partnership in an amount equal to
the cash consideration received by the Company from the
issuance of such shares of stock of or other interests in the
Company;
(2) the additional Partnership Interests are
issued in exchange for property owned by the General Partner
(or any direct or indirect wholly-owned Subsidiary of the
General Partner) with a fair market value, as determined by
the General Partner, in good faith, equal to the value of the
Partnership Interests; or
(3) the additional Partnership Interests are
issued to all Partners in proportion to their respective
Percentage Interests.
Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Partnership Units for less
than fair market value, so long as the General Partner concludes in
good faith that such issuance is in the best interests of the General
Partner and the Partnership.
(ii) Upon Issuance of Additional Securities. The
Company shall not issue any additional REIT Shares (other than REIT
Shares issued in connection with an exchange pursuant to Section 8.04
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 the
proceeds from the issuance of such Additional Securities and from any
exercise of rights contained in such Additional Securities to the
Partnership; provided, however, that the Company is allowed to issue
Additional Securities in connection with an acquisition of a property
to be held directly by the Company, but if and only if, such direct
acquisition and issuance of Additional Securities have been approved
and determined to be in the best interests of the Company and the
Partnership by a majority of the Independent Directors. Without
limiting the foregoing, the Company is expressly authorized to issue
Additional Securities for less than fair market value, and the General
Partner is authorized 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 Partner and the Partnership and (y) the
General Partner contributes all proceeds from
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such issuance to the Partnership, including without limitation, the
issuance of REIT Shares and corresponding Partnership Units pursuant to
a share purchase plan providing for purchases of REIT Shares at a
discount from fair market value or pursuant to stock awards, including
stock options that have an exercise price that is less than the fair
market value of the REIT Shares, either at the time of issuance or at
the time of exercise, and restricted or other stock awards approved by
the Board of Directors. For example, in the event the Company issues
REIT Shares for a cash purchase price and the General Partner
contributes all of the proceeds of such issuance to the Partnership as
required hereunder, the General Partner shall be issued a number of
additional Partnership Units equal to the product of (A) the number of
such REIT Shares issued by the Company, 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 Contributions of Proceeds of Issuance of REIT
Shares. In connection with any and all issuances of REIT Shares, the
General Partner shall make Capital Contributions to the Partnership of
the proceeds therefrom, 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,
commissions, placement fees or other expenses paid or incurred in
connection with such issuance, then the General Partner shall make a
Capital Contribution of such net proceeds to the Partnership but shall
receive additional Partnership Units with a value equal to the
aggregate amount of the gross proceeds of such issuance pursuant to
Section 4.02(a) hereof. Upon any such Capital Contribution by the
General Partner, the General Partner's Capital Account shall be
increased by the actual amount of its Capital Contribution pursuant to
Section 4.06 hereof.
(c) Minimum Limited Partnership Interest. In the event that
either a redemption pursuant to Section 8.04 hereof or additional
Capital Contributions by the General Partner would result in the
Limited Partners (other than the General Partner), 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 (other than the
General Partner) of such partnership own at least the Minimum Limited
Partnership Interest.
(d) COMPANY REPURCHASE OF CAPITAL STOCK. If the Company shall
repurchase shares of any class of the Company's capital stock, the
purchase price thereof and all costs incurred in connection with such
repurchase shall be reimbursed to the General Partner by the
Partnership pursuant to Section 6.05 hereof and the General Partner
shall cause the Partnership to redeem an equivalent number of
Partnership Interests of the appropriate class held by the General
Partner (which, in the case of Common Stock, shall be a number equal to
the quotient of the number of shares of such Common Stock divided by
the Conversion Factor) in the manner provided in Section 6.10.
4.03 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
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from outside borrowings, or (ii) elect to have the General Partner or any of its
Affiliates provide such Additional Funds to the Partnership through loans or
otherwise.
4.04 LTIP UNITS.
(a) Issuance of LTIP Units. The General Partner may from time
to time issue LTIP Units to Persons who provide services to the Partnership, for
such consideration as the General Partner may determine to be appropriate, and
admit such Persons as Limited Partners. Subject to the following provisions of
this Section 4.04 and the special provisions of Sections 5.01(g) and 4.05, LTIP
Units shall be treated as OP Units, with all of the rights, privileges and
obligations attendant thereto. For purposes of computing the Partners'
Percentage Interests, holders of LTIP Units shall be treated as OP Unit holders
and LTIP Units shall be treated as OP Units. In particular, the Partnership
shall maintain at all times a one-to-one correspondence between LTIP Units and
OP Units for conversion, distribution and other purposes, including, without
limitation, complying with the following procedures:
(i) If an Adjustment Event (as defined below) occurs,
then the General Partner shall make a corresponding adjustment to the
LTIP Units to maintain a one-for-one conversion and economic
equivalence ratio between OP Units and LTIP Units. The following shall
be Adjustment Events: (A) the Partnership makes a distribution on all
outstanding OP Units in Partnership Units, (B) the Partnership
subdivides the outstanding OP Units into a greater number of units or
combines the outstanding OP Units into a smaller number of units, or
(C) the Partnership issues any Partnership Units in exchange for its
outstanding OP Units by way of a reclassification or recapitalization
of its OP Units. If more than one Adjustment Event occurs, the
adjustment to the LTIP Units need be made only once using a single
formula that takes into account each and every Adjustment Event as if
all Adjustment Events occurred simultaneously. For the avoidance of
doubt, the following shall not be Adjustment Events: (x) the issuance
of Partnership Units in a financing, reorganization, acquisition or
other similar business OP Unit Transaction, (y) the issuance of
Partnership Units pursuant to any employee benefit or compensation plan
or distribution reinvestment plan, or (z) the issuance of any
Partnership Units to the Company in respect of a capital contribution
to the Partnership of proceeds from the sale of securities by the
Company. If the Partnership takes an action affecting the OP Units
other than actions specifically described above as "Adjustment Events"
and in the opinion of the General Partner such action would require an
adjustment to the LTIP Units to maintain the one-to-one correspondence
described above, the General Partner shall have the right to make such
adjustment to the LTIP Units, to the extent permitted by law and by any
Equity Incentive Plan, in such manner and at such time as the General
Partner, in its sole discretion, may determine to be appropriate under
the circumstances. If an adjustment is made to the LTIP Units, as
herein provided, the Partnership shall promptly file in the books and
records of the Partnership an officer's certificate setting forth such
adjustment and a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment absent manifest error. Promptly after
filing of such certificate, the Partnership shall mail a notice to each
LTIP Unitholder setting forth the adjustment to his or her LTIP Units
and the effective date of such adjustment; and
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(ii) The LTIP Unitholders shall, when, as and if
authorized and declared by the General Partner out of assets legally
available for that purpose, be entitled to receive distributions in an
amount per LTIP Unit equal to the distributions per OP Unit (the
"Partnership Unit Distribution"), paid to holders of OP Units on such
Partnership Record Date established by the General Partner with respect
to such distribution. So long as any LTIP Units are outstanding, no
distributions (whether in cash or in kind) shall be authorized,
declared or paid on OP Units, unless equal distributions have been or
contemporaneously are authorized, declared and paid on the LTIP Units.
(b) Priority. Subject to the provisions of this Section 4.04
and the special provisions of Sections 5.01(g) and 4.05, the LTIP Units shall
rank pari passu with the OP Units as to the payment of regular and special
periodic or other distributions and distribution of assets upon liquidation,
dissolution or winding up. As to the payment of distributions and as to
distribution of assets upon liquidation, dissolution or winding up, any class or
series of Partnership Units or Partnership Interests which by its terms
specifies that it shall rank junior to, on a parity with, or senior to the OP
Units shall also rank junior to, or pari passu with, or senior to, as the case
may be, the LTIP Units. Subject to the terms of any Vesting Agreement, an LTIP
Unitholder shall be entitled to transfer his or her LTIP Units to the same
extent, and subject to the same restrictions as holders of OP Units are entitled
to transfer their OP Units pursuant to Article IX.
(c) Special Provisions. LTIP Units shall be subject to the
following special provisions:
(i) Vesting Agreements. LTIP Units may, in the sole
discretion of the General Partner, be issued subject to vesting,
forfeiture and additional restrictions on transfer pursuant to the
terms of a Vesting Agreement. The terms of any Vesting Agreement may be
modified by the General Partner from time to time in its sole
discretion, subject to any restrictions on amendment imposed by the
relevant Vesting Agreement or by the Equity Incentive Plan, if
applicable. LTIP Units that have vested under the terms of a Vesting
Agreement are referred to as "Vested LTIP Units"; all other LTIP Units
shall be treated as "Unvested LTIP Units."
(ii) Forfeiture. Unless otherwise specified in the
Vesting Agreement, upon the occurrence of any event specified in a
Vesting Agreement as resulting in either the right of the Partnership
or the General Partner to repurchase LTIP Units at a specified purchase
price or some other forfeiture of any LTIP Units, then if the
Partnership or the General Partner exercises such right to repurchase
or forfeiture in accordance with the applicable Vesting Agreement, the
relevant LTIP Units shall immediately, and without any further action,
be treated as cancelled and no longer outstanding for any purpose.
Unless otherwise specified in the Vesting Agreement, no consideration
or other payment shall be due with respect to any LTIP Units that have
been forfeited, other than any distributions declared with respect to a
Partnership Record Date prior to the effective date of the forfeiture.
In connection with any repurchase or forfeiture of LTIP Units, the
balance of the portion of the Capital Account of the LTIP Unitholder
that is attributable to all of his or her LTIP Units shall be reduced
by the amount, if any, by which it exceeds
- 16 -
the target balance contemplated by Section 5.01(g), calculated with
respect to the LTIP Unitholder's remaining LTIP Units, if any.
(iii) Allocations. LTIP Unitholders shall be entitled
to certain special allocations of gain under Section 5.01(g).
(iv) Redemption. The Redemption Right provided to
Limited Partners under Section 8.04 shall not apply with respect to
LTIP Units unless and until they are converted to OP Units as provided
in clause (v) below and Section 4.05.
(v) Conversion To OP Units. Vested LTIP Units are
eligible to be converted into OP Units in accordance with Section 4.05.
(d) Voting. LTIP Unitholders shall (a) have the same voting
rights as a holder of OP Units, with the LTIP Units voting as a single class
with the OP Units and having one vote per LTIP Unit; and (b) have the additional
voting rights that are expressly set forth below. So long as any LTIP Units
remain outstanding, the Partnership shall not, without the affirmative vote of
the holders of at least a majority of the LTIP Units outstanding at the time,
given in person or by proxy, either in writing or at a meeting (voting
separately as a class), amend, alter or repeal, whether by merger, consolidation
or otherwise, the provisions of this Agreement applicable to LTIP Units so as to
materially and adversely affect any right, privilege or voting power of the LTIP
Units or the LTIP Unitholders as such, unless such amendment, alteration, or
repeal affects equally, ratably and proportionately the rights, privileges and
voting powers of the holders of OP Units; but subject, in any event, to the
following provisions:
(i) With respect to any OP Unit Transaction, so long
as the LTIP Units are treated in accordance with Section 4.05(f)
hereof, the consummation of such OP Unit Transaction shall not be
deemed to materially and adversely affect such rights, preferences,
privileges or voting powers of the LTIP Units or the LTIP Unitholders
as such; and
(ii) Any creation or issuance of any Partnership
Units or of any class or series of Partnership Interest including
without limitation additional OP Units or LTIP Units, whether ranking
senior to, junior to, or on a parity with the LTIP Units with respect
to distributions and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers
of the LTIP Units or the LTIP Unitholders as such.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
will be effected, all outstanding LTIP Units shall have been converted into OP
Units.
4.05 CONVERSION OF LTIP UNITS.
(a) An LTIP Unitholder shall have the right (the "Conversion
Right"), at his or her option, at any time to convert all or a portion of his or
her Vested LTIP Units into OP Units; provided, however, that a holder may not
exercise the Conversion Right for less than
- 17 -
1,000 Vested LTIP Units or, if such holder holds less than one thousand Vested
LTIP Units, all of the Vested LTIP Units held by such holder. LTIP Unitholders
shall not have the right to convert Unvested LTIP Units into OP Units until they
become Vested LTIP Units; provided, however, that when an LTIP Unitholder is
notified of the expected occurrence of an event that will cause his or her
Unvested LTIP Units to become Vested LTIP Units, such LTIP Unitholder may give
the Partnership a Conversion Notice conditioned upon and effective as of the
time of vesting and such Conversion Notice, unless subsequently revoked by the
LTIP Unitholder, shall be accepted by the Partnership subject to such condition.
The General Partner shall have the right at any time to cause a conversion of
Vested LTIP Units into OP Units. In all cases, the conversion of any LTIP Units
into OP Units shall be subject to the conditions and procedures set forth in
this Section 4.05.
(b) A holder of Vested LTIP Units may convert such LTIP Units
into an equal number of fully paid and non-assessable OP Units, giving effect to
all adjustments (if any) made pursuant to Section 4.04. Notwithstanding the
foregoing, in no event may a holder of Vested LTIP Units convert a number of
Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such
Limited Partner, to the extent attributable to its ownership of LTIP Units,
divided by (y) the OP Unit Economic Balance, in each case as determined as of
the effective date of conversion (the "Capital Account Limitation").
In order to exercise his or her Conversion Right, an LTIP Unitholder
shall deliver a notice (a "Conversion Notice") in the form attached as Exhibit D
to the Partnership (with a copy to the General Partner) not less than 10 nor
more than 60 days prior to a date (the "Conversion Date") specified in such
Conversion Notice; provided, however, that if the General Partner has not given
to the LTIP Unitholders notice of a proposed or upcoming OP Unit Transaction (as
defined below in 4.05(f)) at least 30 days prior to the effective date of such
OP Unit Transaction, then LTIP Unitholders shall have the right to deliver a
Conversion Notice until the earlier of (x) the 10th day after such notice from
the General Partner of a OP Unit Transaction or (y) the third business day
immediately preceding the effective date of such OP Unit Transaction. A
Conversion Notice shall be provided in the manner provided in Section 12.01.
Each LTIP Unitholder covenants and agrees with the Partnership that all Vested
LTIP Units to be converted pursuant to this Section 4.05(b) shall be free and
clear of all liens. Notwithstanding anything herein to the contrary, a holder of
LTIP Units may deliver a Notice of Redemption pursuant to Section 8.04(a) hereof
relating to those OP Units that will be issued to such holder upon conversion of
such LTIP Units into OP Units in advance of the Conversion Date; provided,
however, that the redemption of such OP Units by the Partnership shall in no
event take place until after the Conversion Date. For clarity, it is noted that
the objective of this paragraph is to put an LTIP Unitholder in a position
where, if he or she so wishes, the OP Units into which his or her Vested LTIP
Units will be converted can be redeemed by the Partnership simultaneously with
such conversion, with the further consequence that, if the Company elects to
assume the Partnership's redemption obligation with respect to such OP Units
under Section 8.04(b) hereof by delivering to such holder REIT Shares rather
than cash, then such holder can have such REIT Shares issued to him or her
simultaneously with the conversion of his or her Vested LTIP Units into OP
Units. The General Partner shall reasonably cooperate with an LTIP Unitholder to
coordinate the timing of the different events described in the foregoing
sentence.
- 18 -
(c) The Partnership, at any time at the election of the
General Partner, may cause any number of Vested LTIP Units held by an LTIP
Unitholder to be converted (a "Forced Conversion") into an equal number of OP
Units, giving effect to all adjustments (if any) made pursuant to Section 4.04;
provided, however, that the Partnership may not cause Forced Conversion of any
LTIP Units that would not at the time be eligible for conversion at the option
of such LTIP Unitholder pursuant to Section 4.05(b). In order to exercise its
right of Forced Conversion, the Partnership shall deliver a notice (a "Forced
Conversion Notice") in the form attached as Exhibit E to the applicable LTIP
Unitholder not less than 10 nor more than 60 days prior to the Conversion Date
specified in such Forced Conversion Notice. A Forced Conversion Notice shall be
provided in the manner provided in Section 12.01.
(d) A conversion of Vested LTIP Units for which the holder
thereof has given a Conversion Notice or the Partnership has given a Forced
Conversion Notice shall occur automatically after the close of business on the
applicable Conversion Date without any action on the part of such LTIP
Unitholder, as of which time such LTIP Unitholder shall be credited on the books
and records of the Partnership with the issuance as of the opening of business
on the next day of the number of OP Units issuable upon such conversion. After
the conversion of LTIP Units as aforesaid, the Partnership shall deliver to such
LTIP Unitholder, upon his or her written request, a certificate of the General
Partner certifying the number of OP Units and remaining LTIP Units, if any, held
by such person immediately after such conversion. The Assignee of any Limited
Partner pursuant to Article IX hereof may exercise the rights of such Limited
Partner pursuant to this Section 4.05 and such Limited Partner shall be bound by
the exercise of such rights by the Assignee.
(e) For purposes of making future allocations under
Section 5.01(g) and applying the Capital Account Limitation, the portion of the
Economic Capital Account Balance of the applicable LTIP Unitholder that is
treated as attributable to his or her LTIP Units shall be reduced, as of the
date of conversion, by the product of the number of LTIP Units converted and the
OP Unit Economic Balance.
(f) If the Partnership or the General Partner shall be a party
to any OP Unit Transaction (including without limitation a merger,
consolidation, unit exchange, self tender offer for all or substantially all OP
Units or other business combination or reorganization, or sale of all or
substantially all of the Partnership's assets, but excluding any OP Unit
Transaction which constitutes an Adjustment Event) in each case as a result of
which OP Units shall be exchanged for or converted into the right, or the
holders of such Units shall otherwise be entitled, to receive cash, securities
or other property or any combination thereof (each of the foregoing being
referred to herein as a "OP Unit Transaction"), then the General Partner shall,
immediately prior to the OP Unit Transaction, exercise its right to cause a
Forced Conversion with respect to the maximum number of LTIP Units then eligible
for conversion, taking into account any allocations that occur in connection
with the OP Unit Transaction or that would occur in connection with the OP Unit
Transaction if the assets of the Partnership were sold at the OP Unit
Transaction price or, if applicable, at a value determined by the General
Partner in good faith using the value attributed to the Partnership Units in the
context of the OP Unit Transaction (in which case the Conversion Date shall be
the effective date of the OP Unit Transaction).
- 19 -
In anticipation of such Forced Conversion and the consummation of the
OP Unit Transaction, the Partnership shall use commercially reasonable efforts
to cause each LTIP Unitholder to be afforded the right to receive in connection
with such OP Unit Transaction in consideration for the OP Units into which his
or her LTIP Units will be converted the same kind and amount of cash, securities
and other property (or any combination thereof) receivable upon the consummation
of such OP Unit Transaction by a holder of the same number of OP Units, assuming
such holder of OP Units is not a Person with which the Partnership consolidated
or into which the Partnership merged or which merged into the Partnership or to
which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an affiliate of a Constituent Person. In the event that holders of
OP Units have the opportunity to elect the form or type of consideration to be
received upon consummation of the OP Unit Transaction, prior to such OP Unit
Transaction the General Partner shall give prompt written notice to each LTIP
Unitholder of such election, and shall use commercially reasonable efforts to
afford the LTIP Unitholders the right to elect, by written notice to the General
Partner, the form or type of consideration to be received upon conversion of
each LTIP Unit held by such holder into OP Units in connection with such OP Unit
Transaction. If an LTIP Unitholder fails to make such an election, such holder
(and any of its transferees) shall receive upon conversion of each LTIP Unit
held him or her (or by any of his or her transferees) the same kind and amount
of consideration that a holder of a OP Unit would receive if such OP Unit holder
failed to make such an election.
Subject to the rights of the Partnership, the General Partner and the
Parent under any Vesting Agreement and any Equity Incentive Plan, the
Partnership shall use commercially reasonable effort to cause the terms of any
OP Unit Transaction to be consistent with the provisions of this Section 4.05(f)
and to enter into an agreement with the successor or purchasing entity, as the
case may be, for the benefit of any LTIP Unitholders whose LTIP Units will not
be converted into OP Units in connection with the OP Unit Transaction that will
(i) contain provisions enabling the holders of LTIP Units that remain
outstanding after such OP Unit Transaction to convert their LTIP Units into
securities as comparable as reasonably possible under the circumstances to the
OP Units and (ii) preserve as far as reasonably possible under the circumstances
the distribution, special allocation, conversion, and other rights set forth in
this Agreement for the benefit of the LTIP Unitholders.
4.06 CAPITAL ACCOUNTS. A separate capital account (a "Capital Account")
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires
an additional Partnership Interest in exchange for more than a de minimis
Capital Contribution, (ii) the Partnership distributes to a Partner more than a
de minimis amount of Partnership property as consideration for a Partnership
Interest, (iii) the Partnership is liquidated within the meaning of Regulation
Section 1.704-1(b)(2)(ii)(g) or (iv) the Partnership grants a Partnership
Interest (other than a de minimis Partnership Interest) as consideration for the
provision of services to or for the benefit of the Partnership to an existing
Partner acting in a Partner capacity, or to a new Partner acting in a Partner
capacity or in anticipation of being a Partner, the General Partner shall
revalue the property of the Partnership to its fair market value (as determined
by the General Partner, in its sole and absolute discretion, and taking into
account Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f); provided, that the issuance of any LTIP Unit shall be
deemed to require a revaluation pursuant to this Section 4.06. When the
Partnership's
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property is revalued by the General Partner, the Capital Accounts of the
Partners shall be adjusted in accordance with Regulations Sections
1.704-1(b)(2)(iv)(f) and (g), which generally require such Capital Accounts to
be adjusted to reflect the manner in which the unrealized gain or loss inherent
in such property (that has not been reflected in the Capital Accounts
previously) would be allocated among the Partners pursuant to Section 5.01 if
there were a taxable disposition of such property for its fair market value (as
determined by the General Partner, in its sole and absolute discretion, and
taking into account Section 7701(g) of the Code) on the date of the revaluation.
4.07 PERCENTAGE INTERESTS. If the number of outstanding Partnership
Units increases or decreases during a taxable year, each Partner's Percentage
Interest shall be adjusted by the General Partner effective as of the effective
date of each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.07, the Profits and Losses for the taxable year in which the adjustment occurs
shall be allocated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.
4.08 NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to
interest on its Capital Contribution.
4.09 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.10 NO THIRD PARTY BENEFICIARY. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to
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return such money or property, such obligation shall be the obligation of such
Limited Partner and not of the General Partner. Without limiting the generality
of the foregoing, a deficit Capital Account of a Partner shall not be deemed to
be a liability of such Partner nor an asset or property of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 ALLOCATION OF PROFIT AND LOSS.
(a) Profit. Profit of the Partnership for each fiscal year of
the Partnership shall be allocated to the Partners in accordance with their
respective Percentage Interests.
(b) Loss. Loss of the Partnership for each fiscal year of the
Partnership shall be allocated to the Partners in accordance with their
respective Percentage Interests.
(c) Minimum Gain Chargeback. Notwithstanding any provision to
the contrary, (i) any expense of the Partnership that is a "nonrecourse
deduction" within the meaning of Regulations Section 1.704-2(b)(1) shall be
allocated in accordance with the Partners' respective Percentage Interests, (ii)
any expense of the Partnership that is a "partner nonrecourse deduction" within
the meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the
Partner that bears the "economic risk of loss" of such deduction in accordance
with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section
1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j),
and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership
taxable year, then, subject to the exceptions set forth in Regulations Section
1.704(2)(g), items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Regulations Section 1.704-2(j). A Partner's "interest in
partnership profits" for purposes of determining its share of the nonrecourse
liabilities of the Partnership within the meaning of Regulations Section
1.752-3(a)(3) shall be such Partner's Percentage Interest.
(d) Qualified Income Offset. If a Partner receives in any
taxable year an adjustment, allocation or distribution described in
subparagraphs (4), (5) or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that
causes or increases a deficit balance in such Partner's Capital Account that
exceeds the sum of such Partner's shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations
Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially
for such taxable year (and, if necessary, later taxable years) items of income
and gain in an amount and manner sufficient to eliminate such deficit Capital
Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to
a Partner in accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-
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1(b), items of expense or loss shall be allocated to such Partner in an amount
necessary to offset the income or gain previously allocated to such Partner
under this Section 5.01(d).
(e) Capital Account Deficits. Loss shall not be allocated to a
Limited Partner to the extent that such allocation would cause a deficit in such
Partner's Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.01(e), to the extent permitted by
Regulations Section 1.704-1(b), Profit first shall be allocated to the General
Partner in an amount necessary to offset the Loss previously allocated to the
General Partner under this Section 5.01(e).
(f) Allocations Between Transferor and Transferee. If a
Partner transfers any part or all of its Partnership Interest, the distributive
shares of the various items of Profit and Loss allocable among the Partners
during such fiscal year of the Partnership shall be allocated between the
transferor and the transferee Partner either (i) as if the Partnership's fiscal
year had ended on the date of the transfer, or (ii) based on the number of days
of such fiscal year that each was a Partner without regard to the results of
Partnership activities in the respective portions of such fiscal year in which
the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to
allocate the distributive shares of the various items of Profit and Loss between
the transferor and the transferee Partner.
(g) Special Allocations Regarding LTIP Units. Notwithstanding
the provisions of Section 5.01(a) & (b) above, Liquidating Gains shall first be
allocated to the LTIP Unitholders until their Economic Capital Account Balances,
to the extent attributable to their ownership of LTIP Units, are equal to (i)
the OP Unit Economic Balance, multiplied by (ii) the number of their LTIP Units;
provided that no such Liquidating Gains will be allocated with respect to any
particular LTIP Unit unless and to the extent that the OP Unit Economic Balance
exceeds the OP Unit Economic Balance in existence at the time such LTIP Unit was
issued. For this purpose, "Liquidating Gains" means net capital gains realized
in connection with the actual or hypothetical sale of all or substantially all
of the assets of the Partnership, including but not limited to net capital gain
realized in connection with an adjustment to the value of Partnership assets
under Section 704(b) of the Code. The "Economic Capital Account Balances" of the
LTIP Unit holders will be equal to their Capital Account balances to the extent
attributable to their ownership of LTIP Units. Similarly, the "OP Unit Economic
Balance" shall mean (i) the Capital Account balance of the General Partner, plus
the amount of the General Partner's share of any Partner Minimum Gain or
Partnership Minimum Gain, in either case to the extent attributable to the
General Partner's ownership of OP Units and computed on a hypothetical basis
after taking into account all allocations through the date on which any
allocation is made under this Section 5.01(g), divided by (ii) the number of the
General Partner's OP Units. Any such allocations shall be made among the LTIP
Unitholders in proportion to the amounts required to be allocated to each under
this Section 5.01(g). The parties agree that the intent of this Section 5.01(g)
is to make the Capital Account balance associated with each LTIP Unit to be
economically equivalent to the Capital Account balance associated with the
General Partner's OP Units (on a per-Unit
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basis), but only if and to the extent that the Capital Account balance
associated with the General Partner's OP Units has increased on a per-Unit basis
since the issuance of the relevant LTIP Unit.
(h) Definition of Profit and Loss. "Profit" and "Loss" and any
items of income, gain, expense or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.01(c), 5.01(d) or 5.01(e). All allocations of income,
Profit, gain, Loss and expense (and all items contained therein) for federal
income tax purposes shall be identical to all allocations of such items set
forth in this Section 5.01, except as otherwise required by Section 704(c) of
the Code and Regulations Section 1.704-1(b)(4). The Partnership shall use the
traditional method for allocating items of income, gain and expense as required
by Section 704(c) of the Code with respect to the properties acquired by the
Partnership in connection with the Offering. With respect to other properties
acquired by the Partnership, the General Partner shall have the authority to
elect the method to be used by the Partnership for allocating items of income,
gain and expense as required by Section 704(c) of the Code with respect to such
properties, and such election shall be binding on all Partners.
5.02 DISTRIBUTION OF CASH.
(a) Subject to Section 5.02(c) hereof, the Partnership shall
distribute cash at such times and in such amounts as are determined by the
General Partner in its sole and absolute discretion, to the Partners who are
Partners on the Partnership Record Date with respect to such quarter (or other
distribution period) in accordance with their respective Percentage Interests on
the Partnership Record Date.
(b) If a new or existing Partner acquires an additional
Partnership Interest in exchange for a Capital Contribution on any date other
than a Partnership Record Date, the cash distribution attributable to such
additional Partnership Interest relating to the Partnership Record Date next
following the issuance of such additional Partnership Interest shall be reduced
in the proportion to (i) the number of days that such additional Partnership
Interest is held by such Partner bears to (ii) the number of days between such
Partnership Record Date and the immediately preceding Partnership Record Date.
(c) Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to a Partner or assignee (including by reason of Section
1446 of the Code), either (i) if the actual amount to be distributed to the
Partner (the "Distributable Amount") equals or exceeds the Withheld Amount, the
entire Distributable Amount shall be treated as a distribution of cash to such
Partner, or (ii) if the Distributable Amount is less than the Withheld Amount,
the excess of the Withheld Amount over the Distributable Amount shall be treated
as a Partnership Loan from the Partnership to the Partner on the day the
Partnership pays over such amount to a taxing authority. A Partnership Loan
shall be repaid upon the demand of the Partnership or,
- 24 -
alternatively, through withholding by the Partnership with respect to subsequent
distributions to the applicable Partner or assignee. In the event that a Limited
Partner fails to pay any amount owed to the Partnership with respect to the
Partnership Loan within 15 days after demand for payment thereof is made by the
Partnership on the Limited Partner, the General Partner, in its sole and
absolute discretion, may elect to make the payment to the Partnership on behalf
of such Defaulting Limited Partner. In such event, on the date of payment, the
General Partner shall be deemed to have extended a General Partner Loan to the
Defaulting Limited Partner in the amount of the payment made by the General
Partner and shall succeed to all rights and remedies of the Partnership against
the Defaulting Limited Partner as to that amount. Without limitation, the
General Partner shall have the right to receive any distributions that otherwise
would be made by the Partnership to the Defaulting Limited Partner until such
time as the General Partner Loan has been paid in full, and any such
distributions so received by the General Partner shall be treated as having been
received by the Defaulting Limited Partner and immediately paid to the General
Partner.
Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.02(c) shall bear interest at the lesser of (i) 300
basis points above the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in The Wall Street
Journal, or (ii) the maximum lawful rate of interest on such obligation, such
interest to accrue from the date the Partnership or the General Partner, as
applicable, is deemed to extend the loan until such loan is repaid in full.
(d) In no event may a Partner receive a distribution of cash
with respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend as the holder of record of a REIT Share for which all or part of such
Partnership Unit has been or will be redeemed.
5.03 REIT DISTRIBUTION REQUIREMENTS. The General Partner shall use its
reasonable efforts to cause the Partnership to distribute amounts sufficient to
enable the Company to pay stockholder dividends that will allow the Company to
(i) meet its distribution requirement for qualification as a REIT as set forth
in Section 857 of the Code and (ii) avoid any federal income or excise tax
liability imposed by the Code, other than to the extent the General Partner
elects to retain and pay income tax on its net capital gain.
5.04 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be entitled
to demand property other than cash in connection with any distributions by the
Partnership.
5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS. Notwithstanding
any of the provisions of this Article V, no Partner shall have the right to
receive, and the General Partner shall not have the right to make, a
distribution that includes a return of all or part of a Partner's Capital
Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities
to a Partner for the return of his Capital Contribution, does not exceed the
fair market value of the Partnership's assets.
5.06 DISTRIBUTIONS UPON LIQUIDATION.
(a) Upon liquidation of the Partnership, after payment of, or
adequate provision for, debts and obligations of the Partnership, including any
Partner loans, any
- 25 -
remaining assets of the Partnership shall be distributed to all Partners with
positive Capital Accounts in accordance with their respective positive Capital
Account balances.
(b) For purposes of Section 5.06(a), the Capital Account of
each Partner shall be determined after the following adjustments: (i) all
adjustments made in accordance with Sections 5.01 and 5.02 resulting from
Partnership operations and from all sales and dispositions of all or any part of
the Partnership's assets, and (ii) allocating to the General Partner an amount
equal to the excess of (A) the value of the Partnership Units it received in
exchange for Capital Contributions of the proceeds of an issuance of REIT Shares
pursuant to Section 4.02(b) hereof over (B) the actual amount of its Capital
Contributions pursuant to Section 4.02(b) hereof (i.e., as a result of any
underwriters' discount, commissions, placement fees or other expenses paid or
incurred in connection with such issuance).
(c) Any distributions pursuant to this Section 5.06 shall be
made by the end of the Partnership's taxable year in which the liquidation
occurs (or, if later, within 90 days after the date of the liquidation). To the
extent deemed advisable by the General Partner, appropriate arrangements
(including the use of a liquidating trust) may be made to assure that adequate
funds are available to pay any contingent debts or obligations.
5.07 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that
the allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01 MANAGEMENT OF THE PARTNERSHIP.
(a) Except as otherwise expressly provided in this Agreement,
the General Partner shall have full, complete and exclusive discretion to manage
and control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:
(i) to acquire, purchase, own, operate, lease and
dispose of any real property and any other property or assets
including, but not limited to, notes and mortgages that the General
Partner determines are necessary or appropriate in the business of the
Partnership;
(ii) to construct buildings and make other
improvements on the properties owned or leased by the Partnership;
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(iii) to authorize, issue, sell, redeem or otherwise
purchase any Partnership Interests or any securities (including secured
and unsecured debt obligations of the Partnership, debt obligations of
the Partnership convertible into any class or series of Partnership
Interests, or options, rights, warrants or appreciation rights relating
to any Partnership Interests) of the Partnership;
(iv) to borrow or lend money for the Partnership,
issue or receive evidences of indebtedness in connection therewith,
refinance, increase the amount of, modify, amend or change the terms
of, or extend the time for the payment of, any such indebtedness, and
secure indebtedness by mortgage, deed of trust, pledge or other lien on
the Partnership's assets;
(v) to pay, either directly or by reimbursement, for
all operating costs and general administrative expenses of the
Partnership to third parties or to the General Partner or its
Affiliates as set forth in this Agreement;
(vi) to guarantee or become a co-maker of
indebtedness of any Subsidiary of the Company, refinance, increase the
amount of, modify, amend or change the terms of, or extend the time for
the payment of, any such guarantee or indebtedness, and secure such
guarantee or indebtedness by mortgage, deed of trust, pledge or other
lien on the Partnership's assets;
(vii) to use assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent with this
Agreement, including, without limitation, payment, either directly or
by reimbursement, of all operating costs and general and administrative
expenses of the General Partner, the Partnership or any Subsidiary of
either, to third parties or to the General Partner as set forth in this
Agreement;
(viii) 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;
(ix) 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;
(x) 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's business;
(xi) to make or revoke any election permitted or
required of the Partnership by any taxing authority;
(xii) 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
- 27 -
conservation of Partnership assets, or for any other purpose convenient
or beneficial to the Partnership, in such amounts and such types, as it
shall determine from time to time;
(xiii) to determine whether or not to apply any
insurance proceeds for any property to the restoration of such property
or to distribute the same;
(xiv) to establish one or more divisions of the
Partnership, to hire and dismiss employees of the Partnership or any
division of the Partnership, and to retain legal counsel, accountants,
consultants, real estate brokers and such other persons as the General
Partner may deem necessary or appropriate in connection with the
Partnership business and to pay therefor such reasonable remuneration
as the General Partner may deem reasonable and proper;
(xv) to retain other services of any kind or nature
in connection with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and proper;
(xvi) 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;
(xvii) to maintain accurate accounting records and to
file promptly all federal, state and local income tax returns on behalf
of the Partnership;
(xviii) to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(xix) 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);
(xx) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities or any other
valid Partnership purpose;
(xxi) to merge, consolidate or combine the
Partnership with or into another person;
(xxii) to do any and all acts and things necessary or
prudent to ensure that the Partnership will not be classified as a
"publicly traded partnership" taxable as a corporation under Section
7704 of the Code; and
(xxiii) to take such other action, execute,
acknowledge, swear to or deliver such other documents and instruments,
and perform any and all other acts that the General Partner deems
necessary or appropriate for the formation, continuation and conduct of
the business and affairs of the Partnership (including, without
limitation, all actions consistent with allowing the Company at all
times to qualify as a REIT unless the
- 28 -
Company voluntarily terminates its REIT status) and to possess and
enjoy all of the rights and powers of a general partner as provided by
the Act.
(b) Except as otherwise provided herein, to the extent the
duties of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that Partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.
6.02 DELEGATION OF AUTHORITY. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.
6.03 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
(a) The Partnership shall indemnify an Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement
in which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.
(b) The Partnership shall reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 6.03 has been met, and (ii) a
written undertaking by or on behalf of the Indemnitee to repay the amount if it
shall ultimately be determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 6.03 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any
- 29 -
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity.
(d) The Partnership may purchase and maintain insurance, as an
expense of the Partnership, on behalf of the Indemnitees and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
(e) For purposes of this Section 6.03, the Partnership shall
be deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose that is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited Partners
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole
or in part under this Section 6.03 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons.
(i) Any amendment, modification or repeal of this Section 6.03
or any provision hereof shall be prospective only and shall not in any way
affect the indemnification of an Indemnitee by the Partnership under this
Section 6.03 as in effect immediately prior to such amendment, modification or
repeal with respect to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when claims relating to such
matters may arise or be asserted.
6.04 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner, nor any of its directors, officers,
agents or employees shall be liable for monetary damages to the Partnership or
any Partners for losses sustained or liabilities incurred as a result of errors
in judgment or mistakes of fact or law or of any act or omission if any such
party acted in good faith. The General Partner shall not be in breach of any
duty that the General Partner may owe to the Limited Partners or the Partnership
or any other Persons
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under this Agreement or of any duty stated or implied by law or equity provided
the General Partner, acting in good faith, abides by the terms of this
Agreement.
(b) The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership and the Company's
stockholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or the tax consequences of
some, but not all, of the Limited Partners) in deciding whether to cause the
Partnership to take (or decline to take) any actions. In the event of a conflict
between the interests of the stockholders of the Company on the 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 stockholders of
the Company 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 the General Partner, in its sole and absolute discretion,
determines cannot be resolved in a manner not adverse to either the stockholders
of the Company or the Limited Partners shall be resolved in favor of the
stockholders. 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.
(c) Subject to its obligations and duties as General Partner
set forth in Section 6.01 hereof, the General Partner may exercise any of the
powers granted to it under this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
(d) Notwithstanding any other provisions of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the Company to
continue to qualify as a REIT or (ii) to prevent the Company from incurring any
taxes under Section 857, Section 4981 or any other provision of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.
(e) Any amendment, modification or repeal of this Section 6.04
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's or any of its officer's,
director's, agent's or employee's liability to the Partnership and the Limited
Partners under this Section 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.
6.05 PARTNERSHIP OBLIGATIONS.
(a) Except as provided in this Section 6.05 and elsewhere in
this Agreement (including the provisions of Articles V and VI regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
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(b) All Administrative Expenses shall be obligations of the
Partnership, and the General Partner shall be entitled to reimbursement by the
Partnership for any expenditure (including Administrative Expenses) incurred by
it on behalf of the Partnership that shall be made other than out of the funds
of the Partnership.
6.06 OUTSIDE ACTIVITIES. Subject to Section 6.08 hereof, the Charter
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 stockholder of the General Partner, 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 Partnership nor any of the Limited Partners shall have
any rights by virtue of this Agreement in any such business ventures, interest
or activities. None of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any such business ventures, interests or activities, and the General
Partner shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures, interests and activities to the
Partnership or any Limited Partner, even if such opportunity is of a character
that, if presented to the Partnership or any Limited Partner, could be taken by
such Person.
6.07 EMPLOYMENT OR RETENTION OF AFFILIATES.
(a) Any Affiliate of the General Partner may be employed or
retained by the Partnership and may otherwise deal with the Partnership (whether
as a buyer, lessor, lessee, manager, furnisher of goods or services, broker,
agent, lender or otherwise) and may receive from the Partnership any
compensation, price or other payment therefor that the General Partner
determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries
or other Persons in which it has an equity investment, and such Persons may
borrow funds from the Partnership, on terms and conditions established in the
sole and absolute discretion of the General Partner. The foregoing authority
shall not create any right or benefit in favor of any Subsidiary or any other
Person.
(c) The Partnership may transfer assets to joint ventures,
other partnerships, corporations or other business entities in which it is or
thereby becomes a participant upon such terms and subject to such conditions as
the General Partner deems are consistent with this Agreement and applicable law.
6.08 GENERAL PARTNER ACTIVITIES. The General Partner agrees that,
generally, all business activities of the General Partner, including activities
pertaining to the acquisition, development, ownership of or investment in
commercial office property or other property, shall be conducted through the
Partnership or one or more Subsidiary Partnerships; provided, however, that the
General Partner may make direct acquisitions or undertake business activities if
such acquisitions or activities are made in connection with the issuance of
Additional Securities and direct acquisition and issuance or the business
activity has been approved by a majority of the Independent Directors.
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6.09 TITLE TO PARTNERSHIP ASSETS. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.10 REDEMPTION OF GENERAL PARTNER PARTNERSHIP UNITS. In the event the
Company redeems or repurchases any REIT Shares, then the General Partner shall
cause the Partnership to purchase from the General Partner a number of
Partnership Units as determined based on the application of the Conversion
Factor on the same terms that the Company redeemed such REIT Shares. Moreover,
if the Company makes a cash tender offer or other offer to acquire REIT Shares,
then the General Partner shall cause the Partnership to make a corresponding
offer to the General Partner to acquire an equal number of Partnership Units
held by the General Partner. In the event any REIT Shares are redeemed or
repurchased by the Company pursuant to such offer, the Partnership shall redeem
or repurchase an equivalent number of the General Partner's Partnership Units
for an equivalent purchase price based on the application of the Conversion
Factor.
ARTICLE VII
CHANGES IN GENERAL PARTNER
7.01 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a) The General Partner shall not transfer all or any portion
of its Partnership Interest or withdraw as General Partner except as provided in
or in connection with a transaction contemplated by Section 7.01(c), (d) or (e).
(b) The General Partner agrees that its Percentage Interest
will at all times be in the aggregate at least 1.0%.
(c) Except as otherwise provided in Section 7.01(d) or (e)
hereof, the General Partner shall not engage in any merger, consolidation or
other combination with or into another Person or sale of all or substantially
all of its assets (other than in connection with a change in the General
Partner's state of incorporation or organizational form), in each case which
results in a change of control of the General Partner (a "Transaction"), unless
at least one of the following conditions is met:
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(i) the consent of a Majority in Interest (other than
the Company, the General Partner or any Subsidiary) is obtained;
(ii) as a result of such Transaction all Limited
Partners will receive, or have the right to receive, for each
Partnership Unit an amount of cash, securities or other property equal
in value to the product of the Conversion Factor and the greatest
amount of cash, securities or other property paid in the Transaction to
a holder of one REIT Share in consideration of one REIT Share, provided
that if, in connection with the Transaction, a purchase, tender or
exchange offer ("Offer") shall have been made to and accepted by the
holders of more than 50% of the outstanding REIT Shares, each holder of
Partnership Units shall be given the option to exchange its Partnership
Units for the greatest amount of cash, securities or other property
that a Limited Partner would have received had it (A) exercised its
Redemption Right and (B) sold, tendered or exchanged pursuant to the
Offer the REIT Shares received upon exercise of the Redemption Right
immediately prior to the expiration of the Offer; or
(iii) the General Partner is the surviving entity in the Transaction and
either (A) the holders of REIT Shares do not receive cash, securities
or other property in the Transaction or (B) all Limited Partners (other
than the General Partner or any Subsidiary) receive for each
Partnership Unit an amount of cash, securities or other property
(expressed as an amount per REIT Share) that is no less in value than
the product of the Conversion Factor and the greatest amount of cash,
securities or other property (expressed as an amount per REIT Share)
received in the Transaction by any holder of REIT Shares.
(d) Notwithstanding Section 7.01(c), the General Partner may
merge with or 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 "Survivor"), other than Partnership Units held by the
General Partner, are contributed, directly or indirectly, 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
Survivor in good faith and (ii) the Survivor expressly agrees to assume all
obligations of the General Partner hereunder. Upon such contribution and
assumption, the Survivor shall have the right and duty to amend this Agreement
as set forth in this Section 7.01(d). The Survivor shall in good faith arrive at
a new method for the calculation of the Cash Amount, the REIT Shares Amount and
Conversion Factor for a 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
Partnership Units could have acquired had such Partnership Units been exchanged
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 Survivor also shall in good faith
modify the definition of REIT Shares and make such amendments to Section 8.04
hereof so as to approximate the existing rights and obligations set forth in
Section 8.04 as closely as reasonably possible. The above
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provisions of this Section 7.01(d) shall similarly apply to successive mergers
or consolidations permitted hereunder.
In respect of any transaction described in the preceding
paragraph, the General Partner is required to use its commercially reasonable
efforts to structure such transaction to avoid causing the Limited Partners to
recognize a gain for federal income tax purposes by virtue of the occurrence of
or their participation in such transaction, provided such efforts are consistent
with and subject in all respects to the exercise of the Board of Directors'
fiduciary duties to the stockholders of the Company under applicable law.
(e) Notwithstanding anything in this Article VII,
(i) a General Partner may transfer all or any portion
of its General Partnership Interest to (A) any wholly-owned Subsidiary
of such General Partner or the Company or (B) the owner of all of the
ownership interests of such General Partner, and following a transfer
of all of its General Partnership Interest, may withdraw as General
Partner; and
(ii) the General Partner may engage in a transaction
required by law or by the rules of any national securities exchange or
over-the-counter interdealer quotation system on which the REIT Shares
are listed or traded.
7.02 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER. A Person
shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:
(a) the Person to be admitted as a substitute or additional
General Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.04 hereof in connection
with such admission shall have been performed;
(b) if the Person to be admitted as a substitute or additional
General Partner is a corporation or a partnership, it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such
Person's authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel as may be necessary) that the
admission of the Person to be admitted as a substitute or additional General
Partner is in conformity with the Act, that none of the actions taken in
connection with the admission of such Person as a substitute or additional
General Partner will cause (i) the Partnership to be classified other than as a
partnership for federal income tax purposes, or (ii) the loss of any Limited
Partner's limited liability.
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7.03 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Partnership shall be dissolved and
terminated unless the Partnership is continued pursuant to Section 7.03(b)
hereof. The merger of the General Partner with or into any entity that is
admitted as a substitute or successor General Partner pursuant to Section 7.02
hereof shall not be deemed to be the withdrawal, dissolution or removal of the
General Partner.
(b) Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Limited Partners, within 90 days after such
occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 2.03 hereof by selecting, subject to
Section 7.02 hereof and any other provisions of this Agreement, a substitute
General Partner by consent of a Majority in Interest. If the Limited Partners
elect to continue the business of the Partnership and admit a substitute General
Partner, the relationship with the Partners and of any Person who has acquired
an interest of a Partner in the Partnership shall be governed by this Agreement.
7.04 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to, or
the dissolution of, a General Partner, such General Partner shall be deemed to
be removed automatically; provided, however, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.
(b) If a General Partner has been removed pursuant to this
Section 7.04 and the Partnership is continued pursuant to Section 7.03 hereof,
such General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
Majority in Interest in accordance with Section 7.03(b) hereof and otherwise be
admitted to the Partnership in accordance with Section 7.02 hereof. At the time
of assignment, the removed General Partner shall be entitled to receive from the
substitute General Partner the fair market value of the General Partnership
Interest of such removed General Partner as reduced by any damages caused to the
Partnership by such General Partner. Such fair market value shall be determined
by an appraiser mutually agreed upon by the General Partner and a
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Majority in Interest (excluding the General Partner) within 10 days following
the removal of the General Partner. In the event that the parties are unable to
agree upon an appraiser, the removed General Partner and a Majority in Interest
(excluding the General Partner) each shall select an appraiser. Each such
appraiser shall complete an appraisal of the fair market value of the removed
General Partner's General Partnership Interest within 30 days of the General
Partner's removal, and the fair market value of the removed General Partner's
General Partnership Interest shall be the average of the two appraisals;
provided, however, that if the higher appraisal exceeds the lower appraisal by
more than 20% of the amount of the lower appraisal, the two appraisers, no later
than 40 days after the removal of the General Partner, shall select a third
appraiser who shall complete an appraisal of the fair market value of the
removed General Partner's General Partnership Interest no later than 60 days
after the removal of the General Partner. In such case, the fair market value of
the removed General Partner's General Partnership Interest shall be the average
of the two appraisals closest in value.
(c) The General Partnership Interest of a removed General
Partner, during the time after default until transfer under Section 7.04(b),
shall be converted to that of a special Limited Partner; provided, however, such
removed General Partner shall not have any rights to participate in the
management and affairs of the Partnership, and shall not be entitled to any
portion of the income, expense, profit, gain or loss allocations or cash
distributions allocable or payable, as the case may be, to the Limited Partners.
Instead, such removed General Partner shall receive and be entitled only to
retain distributions or allocations of such items that it would have been
entitled to receive in its capacity as General Partner, until the transfer is
effective pursuant to Section 7.04(b).
(d) All Partners shall have given and hereby do give such
consents, shall take such actions and shall execute such documents as shall be
legally necessary and sufficient to effect all the foregoing provisions of this
Section.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01 MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.
8.02 POWER OF ATTORNEY. Each Limited Partner hereby irrevocably
appoints the General Partner its true and lawful attorney-in-fact, who may act
for each Limited Partner and in its name, place and stead, and for its use and
benefit, to sign, acknowledge, swear to, deliver, file or record, at the
appropriate public offices, any and all documents, certificates and instruments
as may be deemed necessary or desirable by the General Partner to carry out
fully the provisions of this Agreement and the Act in accordance with their
terms, including amendments hereto, which power of attorney is coupled with an
interest and shall survive the death, dissolution or legal incapacity of the
Limited Partner, or the transfer by the Limited Partner of any part or all of
its Partnership Interest.
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8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due hereunder. After
its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital
Contributions or other payments or lend any funds to the Partnership.
8.04 REDEMPTION RIGHT.
(a) Subject to Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and
8.04(f) and the provisions of any agreements between the Partnership and one or
more Limited Partners with respect to OP Units (including any LTIP Units that
are converted into OP Units) held by them, each Limited Partner, other than the
Company or 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 OP Units held by such Limited Partner at a redemption price equal
to and in the form of the Redemption Amount to be paid by the Partnership,
provided that such OP Units shall have been outstanding for at least one year
(or such lesser time as determined by the General Partner in its sole and
absolute discretion), and subject to any restriction agreed to in writing
between the Redeeming Limited Partner and the General Partner. The Redemption
Right shall be exercised pursuant to a Notice of Exercise of Redemption Right in
the form attached hereto as Exhibit B delivered to the Partnership (with a copy
to the General Partner) by the Limited Partner who is exercising the Redemption
Right (the "Redeeming Limited Partner"); provided, however, that the Partnership
shall, in its sole and absolute discretion, have the option to deliver either
the Cash Amount or the REIT Shares Amount; provided, further, that the
Partnership shall not be obligated to satisfy such Redemption Right if the
General Partner elects to purchase the OP Units subject to the Notice of
Redemption; and provided, further, that no Limited Partner may deliver more than
two Notices of Redemption during each calendar year. A Limited Partner may not
exercise the Redemption Right for less than 1,000 OP Units or, if such Limited
Partner holds less than 1,000 OP Units, all of the OP Units held by such
Partner. The Redeeming Limited Partner shall have no right, with respect to any
OP Units so redeemed, to receive any distribution paid with respect to OP Units
if the record date for such distribution is on or after the Specified Redemption
Date.
(b) Notwithstanding the provisions of Section 8.04(a), a
Limited Partner that exercises the Redemption Right shall be deemed to have
offered to sell the OP Units described in the Notice of Redemption to the
Company, and the Company may, in its sole and absolute discretion, elect to
purchase directly and acquire such OP Units by paying to the Redeeming Limited
Partner either the Cash Amount or the REIT Shares Amount, as elected by the
Company (in its sole and absolute discretion), on the Specified Redemption Date,
whereupon the Company shall acquire the OP Units offered for redemption by the
Redeeming Limited Partner and shall be treated for all purposes of this
Agreement as the owner of such OP Units. If the Company shall elect to exercise
its right to purchase OP Units under this Section 8.04(b) with respect to a
Notice of Redemption, it shall so notify the Redeeming Limited Partner within
five Business Days after the receipt by the Company of such Notice of
Redemption.
In the event the Company shall exercise its right to purchase OP Units
with respect to the exercise of a Redemption Right, the Partnership shall have
no obligation to pay any amount to
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the Redeeming Limited Partner with respect to such Redeeming Limited Partner's
exercise of such Redemption Right, and each of the Redeeming Limited Partner,
the Partnership, the General Partner and the Company shall treat the transaction
between the Company and the Redeeming Limited Partner for federal income tax
purposes as a sale of the Redeeming Limited Partner's OP Units to the Company.
Each Redeeming Limited Partner agrees to execute such documents as the Company
may reasonably require in connection with the issuance of REIT Shares upon
exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.04(a) and
8.04(b), a Limited Partner shall not be entitled to exercise the Redemption
Right if the delivery of REIT Shares to such Partner on the Specified Redemption
Date by the Company pursuant to Section 8.04(b) (regardless of whether or not
the Company would in fact exercise its rights under Section 8.04(b)) would (i)
result in such Partner or any other person owning, directly or indirectly, REIT
Shares in excess of the Ownership Limitation (as defined in the Charter) and
calculated in accordance therewith, except as provided in the Charter, (ii)
result in REIT Shares being owned by fewer than 100 persons (determined without
reference to any rules of attribution), (iii) result in the Company being
"closely held" within the meaning of Section 856(h) of the Code, (iv) cause the
Company to own, directly or constructively, 10% or more of the ownership
interests in a tenant of the Company's, the General Partner's, the Partnership's
or a Subsidiary Partnership's real property, within the meaning of Section
856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such
Partner to be "integrated" with any other distribution of REIT Shares or OP
Units for purposes of complying with the registration provisions of the
Securities Act. The General Partner, in its sole and absolute discretion, may
waive the restriction on redemption set forth in this Section 8.04(c).
(d) Any Cash Amount to be paid to a Redeeming Limited Partner
pursuant to this Section 8.04 shall be paid on the Specified Redemption Date;
provided, however, that the General Partner may elect to cause the Specified
Redemption Date to be delayed for up to an additional 90 days to the extent
required for the General Partner to cause additional REIT Shares to be issued to
provide financing to be used to make such payment of the Cash Amount. Any REIT
Share Amount to be paid to a Redeeming Limited Partner pursuant to this Section
8.04 shall be paid on the Specified Redemption Date; provided, however, that the
General Partner may elect to cause the Specified Redemption Date to be delayed
for up to an additional 60 days to the extent required for the General Partner
to cause additional REIT Shares to be issued. Notwithstanding the foregoing, the
General Partner agrees to use its best efforts to cause the closing of the
acquisition of redeemed OP Units hereunder to occur as quickly as reasonably
possible.
(e) Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
that apply upon a Redeeming Limited Partner's exercise of the Redemption Right.
If a Redeeming Limited Partner believes that it is exempt from such withholding
upon the exercise of the Redemption Right, such Partner must furnish the General
Partner with a FIRPTA Certificate in the form attached hereto as Exhibit C. If
the Partnership or the General Partner is required to withhold and pay over to
any taxing authority any amount upon a Redeeming Limited Partner's exercise of
the Redemption Right and if the Redemption
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Amount equals or exceeds the Withheld Amount, the Withheld Amount shall be
treated as an amount received by such Partner in redemption of its OP Units. If,
however, the Redemption Amount is less than the Withheld Amount, the Redeeming
Limited Partner shall not receive any portion of the Redemption Amount, the
Redemption Amount shall be treated as an amount received by such Partner in
redemption of its OP Units, and the Partner shall contribute the excess of the
Withheld Amount over the Redemption Amount to the Partnership before the
Partnership is required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the
General Partner shall place appropriate restrictions on the ability of the
Limited Partners to exercise their Redemption Rights as and if deemed necessary
to ensure that the Partnership does not constitute a "publicly traded
partnership" taxable as a corporation under Section 7704 of the Code. If and
when the General Partner determines that imposing such restrictions is
necessary, the General Partner shall give prompt written notice thereof (a
"Restriction Notice") to each of the Limited Partners, which notice shall be
accompanied by a copy of an opinion of counsel to the Partnership that states
that, in the opinion of such counsel, restrictions are necessary in order to
avoid the Partnership being treated as a "publicly traded partnership" under
Section 7704 of the Code.
8.05 REGISTRATION. Subject to the terms of any agreement between the
General Partner and a Limited Partner with respect to OP Units held by such
Limited Partner:
(a) Shelf Registration of the Common Stock. Within 30 days of
the date on which the Company becomes eligible to use a registration statement
on Form S-3 for the registration of securities under the Securities Act (the
"S-3 Eligible Date"), the Company shall file with the Commission a shelf
registration statement under Rule 415 of the Securities Act (a "Registration
Statement"), or any similar rule that may be adopted by the Commission, covering
(i) the issuance of shares of Common Stock issuable upon redemption of the OP
Units ("Redemption Shares") and/or (ii) the resale by the holder of the
Redemption Shares, with respect to OP Units issued prior to the S-3 Eligible
Date. With respect to OP Units issued on or after the S-3 Eligible Date, on such
date or dates as may be set forth in any agreement between the Company and the
Partnership and the holders of such OP Units; provided, however, that the
Company shall be required to file only two such registrations in any
twelve-month period. In connection therewith, the Company will:
(1) use its reasonable best efforts to have such
Registration Statement declared effective;
(2) furnish to each holder of Redemption Shares such
number of copies of prospectuses, and supplements or amendments
thereto, and such other documents as such holder reasonably requests;
(3) register or qualify the Redemption Shares covered
by the Registration Statement under the securities or blue sky laws of
such jurisdictions within the United States as any holder of Redemption
Shares shall reasonably request, and do such other reasonable acts and
things as may be required of it to enable such holders to consummate
the sale or other disposition in such jurisdictions of the Redemption
Shares;
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provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or consent to a general or unlimited
service or process in any jurisdictions in which it would not otherwise
be required to be qualified or so consent or (ii) qualify as a dealer
in securities; and
(4) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission.
The Company further agrees to supplement or make amendments to each
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the Securities
Act or rules and regulations thereunder for such Registration Statement. Each
Limited Partner agrees to furnish to the Company, upon request, such information
with respect to the Limited Partner as may be required to complete and file the
Registration Statement.
In connection with and as a condition to the Company's obligations with
respect to the filing of a Registration Statement pursuant to this Section 8.05,
each Limited Partner agrees with the Company that:
(x) it will not offer or sell its Redemption Shares until (A)
such Redemption Shares have been included in a Registration Statement and (B) it
has received copies of a prospectus, and any supplement or amendment thereto, as
contemplated by Section 8.05(a) hereof, and receives notice that the
Registration Statement covering such Redemption Shares, or any post-effective
amendment thereto, has been declared effective by the Commission;
(y) if the Company determines in its good faith judgment,
after consultation with counsel, that the use of the Registration Statement,
including any post-effective amendment thereto, or the use of any prospectus
contained in such Registration Statement would require the disclosure of
important information that the Company has a bona fide business purpose for
preserving as confidential or the disclosure of which would impede the Company's
ability to consummate a significant transaction, upon written notice of such
determination by the Company, the rights of each Limited Partner to offer, sell
or distribute its Redemption Shares pursuant to such Registration Statement or
prospectus or to require the Company to take action with respect to the
registration or sale of any Redemption Shares pursuant to a Registration
Statement (including any action contemplated by this Section 8.05) will be
suspended until the date upon which the Company notifies such Limited Partner in
writing (which notice shall be deemed sufficient if given through the issuance
of a press release) that suspension of such rights for the grounds set forth in
this paragraph is no longer necessary; provided, however, that the Company may
not suspend such rights for an aggregate period of more than 90 days in any
12-month period; and
(z)in the case of the registration of any underwritten equity
offering proposed by the Company (other than any registration by the Company on
Form S-8, or a successor or substantially similar form, of (A) an employee stock
option, stock purchase or compensation plan or of securities issued or issuable
pursuant to any such plan or (B) a dividend reinvestment plan), each Limited
Partner will agree, if requested in writing by the managing underwriter or
underwriters administering such offering, not to effect any offer, sale or
distribution of any REIT
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Shares or Redemption Shares (or any option or right to acquire REIT Shares or
Redemption Shares) during the period commencing on the 10th day prior to the
expected effective date (which date shall be stated in such notice) of the
registration statement covering such underwritten primary equity offering or, if
such offering shall be a "take-down" from an effective shelf registration
statement, the 10th day prior to the expected commencement date (which date
shall be stated in such notice) of such offering, and ending on the date
specified by such managing underwriter in such written request to the Limited
Partners; provided, however, that no Limited Partner shall be required to agree
not to effect any offer, sale or distribution of its Redemption Shares for a
period of time that is longer than the greater of 90 days or the period of time
for which any senior executive of the Company is required so to agree in
connection with such offering. Nothing in this paragraph shall be read to limit
the ability of any Limited Partner to redeem its OP Units in accordance with the
terms of this Agreement.
(b) Listing on Securities Exchange. If the Company shall list
or maintain the listing of REIT Shares on any securities exchange or national
market system, it will, at its expense and as necessary to permit the
registration and sale of the Redemption Shares hereunder, list thereon, maintain
and, when necessary, increase such listing to include such Redemption Shares.
(c) Registration Not Required. Notwithstanding the foregoing,
the Company shall not be required to file or maintain the effectiveness of a
registration statement relating to Redemption Shares after the earlier of (i)
the first date upon which, in the opinion of counsel to the Company, all of the
Redemption Shares covered thereby could be sold by the holders thereof in any
period of three months pursuant to Rule 144 under the Securities Act, or any
successor rule thereto, or (ii) the second anniversary of the effective date of
the Registration Statement.
(d) Allocation of Expenses. The Partnership shall pay all
expenses in connection with the Registration Statement, including without
limitation (i) all expenses incident to filing with the National Association of
Securities Dealers, Inc., (ii) registration fees, (iii) printing expenses, (iv)
accounting and legal fees and expenses, except to the extent holders of
Redemption Shares elect to engage accountants or attorneys in addition to the
accountants and attorneys engaged by the Company or the Partnership, which fees
and expenses for such accountants or attorneys shall be for the account of the
holders of the Redemption Shares, (v) accounting expenses incident to or
required by any such registration or qualification and (vi) expenses of
complying with the securities or blue sky laws of any jurisdictions in
connection with such registration or qualification; provided, however, neither
the Partnership nor the Company shall be liable for (A) any discounts or
commissions to any underwriter or broker attributable to the sale of Redemption
Shares, or (B) any fees or expenses incurred by holders of Redemption Shares in
connection with such registration that, according to the written instructions of
any regulatory authority, the Partnership or the Company is not permitted to
pay.
(e) Indemnification.
(i) In connection with the Registration Statement,
the Company and the Partnership agree to indemnify holders of
Redemption Shares within the meaning of Section 15 of the Securities
Act, against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) caused by any untrue, or
alleged
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untrue, statement of a material fact contained in the Registration
Statement, preliminary prospectus or prospectus (as amended or
supplemented if the General Partner shall have furnished any amendments
or supplements thereto) or caused by any omission or alleged omission,
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar
as such losses, claims, damages, liabilities or expenses are caused by
any untrue statement, alleged untrue statement, omission, or alleged
omission based upon information furnished to the Company by the Limited
Partner of the holder for use therein. The Company and each officer,
director and controlling person of the Company and the Partnership
shall be indemnified by each Limited Partner or holder of Redemption
Shares covered by the Registration Statement for all such losses,
claims, damages, liabilities and expenses (including reasonable costs
of investigation) caused by any untrue, or alleged untrue, statement or
any omission, or alleged omission, based upon information furnished to
the Company by the Limited Partner or the holder for use therein.
(ii) Promptly upon receipt by a party indemnified
under this Section 8.05(e) of notice of the commencement of any action
against such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party under this
Section 8.05(e), such indemnified party shall notify the indemnifying
party in writing of the commencement of such action, but the failure to
so notify the indemnifying party shall not relieve it of any liability
that it may have to any indemnified party otherwise than under this
Section 8.05(e) unless such failure shall materially adversely affect
the defense of such action. In case notice of commencement of any such
action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the
extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with
counsel chosen by it and reasonably satisfactory to such indemnified
party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but
the reasonable fees and expenses of such counsel (other than reasonable
costs of investigation) shall be paid by the indemnified party unless
(i) the indemnifying party agrees to pay the same, (ii) the
indemnifying party fails to assume the defense of such action with
counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) have
been advised by such counsel that representation of such indemnified
party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (in
which case the indemnified party shall have the right to separate
counsel and the indemnifying party shall pay the reasonable fees and
expenses of such separate counsel, provided that, the indemnifying
party shall not be liable for more than one separate counsel). No
indemnifying party shall be liable for any settlement entered into
without its consent.
(f) Contribution.
(i) If for any reason the indemnification provisions
contemplated by Section 8.05(e) are either unavailable or insufficient
to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities referred to therein, then the party that would
otherwise be required to provide indemnification or the indemnifying
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party (in either case, for purposes of this Section 8.05(f), the
"Indemnifying Party") in respect of such losses, claims, damages or
liabilities, shall contribute to the amount paid or payable by the
party that would otherwise be entitled to indemnification or the
indemnified party (in either case, for purposes of this Section
8.05(f), the "Indemnified Party") as a result of such losses, claims,
damages, liabilities or expense, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and the
Indemnified Party, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and
Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact related
to information supplied by the Indemnifying Party or Indemnified Party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party.
(ii) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 8.05(f)
were determined by pro rata allocation (even if the holders were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. No person or entity
determined to have committed a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(iii) The contribution provided for in this Section
8.05(f) shall survive the termination of this Agreement and shall
remain in full force and effect regardless of any investigation made by
or on behalf of any Indemnified Party.
ARTICLE IX
TRANSFERS OF PARTNERSHIP INTERESTS
9.01 PURCHASE FOR INVESTMENT.
(a) Each Limited Partner, by its signature below or by its
subsequent admission to the Partnership, hereby represents and warrants to the
General Partner and to the Partnership that the acquisition of such Limited
Partner's Partnership Interests is made for investment purposes only and not
with a view to the resale or distribution of such Partnership Interest.
(b) Subject to the provisions of Section 9.02, each Limited
Partner agrees that such Limited Partner will not sell, assign or otherwise
transfer his Partnership Interest or any fraction thereof, whether voluntarily
or by operation of law or at judicial sale or otherwise, to any Person who does
not make the representations and warranties to the General Partner set forth in
Section 9.01(a) above.
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9.02 RESTRICTIONS ON TRANSFER OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.02(b), (c) and
(d), no Limited Partner may offer, sell, assign, hypothecate, pledge or
otherwise transfer all or any portion of such Limited Partner's Partnership
Interest, or any of such Limited Partner's economic rights as a Limited Partner,
whether voluntarily or by operation of law or at judicial sale or otherwise
(collectively, a "Transfer") without the consent of the General Partner, which
consent may be granted or withheld in its sole and absolute discretion. The
General Partner may require, as a condition of any Transfer to which it
consents, that the transferor assume all costs incurred by the Partnership in
connection therewith.
(b) No Limited Partner may withdraw from the Partnership other
than as a result of a permitted Transfer (i.e., a Transfer consented to as
contemplated by clause (a) above or clause (c) below or a Transfer pursuant to
Section 9.05 below) of all of such Limited Partner's Partnership Units pursuant
to this Article IX or pursuant to a redemption of all of such Limited Partner's
OP Units pursuant to Section 8.04. Upon the permitted Transfer or redemption of
all of a Limited Partner's Partnership Units, such Limited Partner shall cease
to be a Limited Partner.
(c) Subject to Sections 9.02(d), (e) and (f) below, a Limited
Partner may Transfer, with the consent of the General Partner, all or a portion
of such Limited Partner's Partnership Units to such Limited Partner's (i) parent
or parent's spouse, (ii) spouse, (iii) natural or adopted descendant or
descendants, (iv) spouse of such Limited Partner's descendant, (v) brother or
sister, (vi) trust created by such Limited Partner for the primary benefit of
such Limited Partner and/or any such Person(s) described in (i) through (v)
above, of which trust such Limited Partner or any such Person(s) or bank or
other commercial entity in the business of acting as a fiduciary in its ordinary
course of business and having an equity capitalization of at least $100,000,000
is a trustee, (vii) a corporation, partnership or limited liability company
controlled by a Person or Persons named in (i) through (v) above, or (viii) if
the Limited Partner is an entity, its beneficial owners.
(d) No Limited Partner may effect a Transfer of its
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Partnership Interest under the Securities Act or would otherwise violate any
applicable federal or state securities or blue sky law (including investment
suitability standards).
(e) No Transfer by a Limited Partner of its Partnership
Interest, in whole or in part, may be made to any Person if (i) in the opinion
of legal counsel for the Partnership, the transfer would result in the
Partnership being treated as an association taxable as a corporation (other than
a qualified REIT subsidiary within the meaning of Section 856(i) of the Code),
(ii) in the opinion of legal counsel for the Partnership, it would adversely
affect the ability of the Company to continue to qualify as a REIT or subject
the Company to any additional taxes under Section 857 or Section 4981 of the
Code or (iii) such transfer is effectuated through an "established securities
market" or a "secondary market (or the substantial equivalent thereof)" within
the meaning of Section 7704 of the Code.
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(f) Any purported Transfer in contravention of any of the
provisions of this Article IX shall be void ab initio and ineffectual and shall
not be binding upon, or recognized by, the General Partner or the Partnership.
(g) Prior to the consummation of any Transfer under this
Article IX, the transferor and/or the transferee shall deliver to the General
Partner such opinions, certificates and other documents as the General Partner
shall request in connection with such Transfer.
9.03 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article IX, an
assignee of the Partnership Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee or other recipient of any
disposition of such Partnership Interest) shall be deemed admitted as a Limited
Partner of the Partnership only with the consent of the General Partner, which
consent may be given or withheld by the General Partner in its sole and absolute
discretion, and upon the satisfactory completion of the following:
(i) The assignee shall have accepted and agreed to be
bound by the terms and provisions of this Agreement by executing a
counterpart or an amendment thereof, including a revised Exhibit A, and
such other documents or instruments as the General Partner may require
in order to effect the admission of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate
evidencing the admission of such Person as a Limited Partner shall have
been signed, acknowledged and filed for record in accordance with the
Act.
(iii) The assignee shall have delivered a letter
containing the representation set forth in Section 9.01(a) hereof and
the agreement set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership or
trust, the assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of the assignee's
authority to become a Limited Partner under the terms and provisions of
this Agreement.
(v) The assignee shall have executed a power of
attorney containing the terms and provisions set forth in Section 8.02
hereof.
(vi) The assignee shall have paid all legal fees and
other expenses of the Partnership and the General Partner and filing
and publication costs in connection with its substitution as a Limited
Partner.
(vii) The assignee shall have obtained the prior
written consent of the General Partner to its admission as a Substitute
Limited Partner, which consent may be given or denied in the exercise
of the General Partner's sole and absolute discretion.
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(b) For the purpose of allocating Profits and Losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the Certificate described in
Section 9.03(a)(ii) hereof or, if no such filing is required, the later of the
date specified in the transfer documents or the date on which the General
Partner has received all necessary instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person
seeking to become a Substitute Limited Partner by preparing the documentation
required by this Section and making all official filings and publications. The
Partnership shall take all such action as promptly as practicable after the
satisfaction of the conditions in this Article IX to the admission of such
Person as a Limited Partner of the Partnership.
9.04 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.01 and 9.02
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 its Partnership Interest until the Partnership has received notice
thereof.
(b) Any Person who is the assignee of all or any portion of a
Limited Partner's Limited Partnership Interest, but does not become a Substitute
Limited Partner and desires to make a further assignment of such Limited
Partnership Interest, shall be subject to all the provisions of this Article IX
to the same extent and in the same manner as any Limited Partner desiring to
make an assignment of its Limited Partnership Interest.
9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue if an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if such Limited Partner dies, such Limited Partner's
executor, administrator or trustee, or, if such Limited Partner is finally
adjudicated incompetent, such Limited Partner's committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing such Limited Partner's estate property and such power as
the bankrupt, deceased or incompetent Limited Partner possessed to assign all or
any part of such Limited Partner's Partnership Interest and to join with the
assignee in satisfying conditions precedent to the admission of the assignee as
a Substitute Limited Partner.
9.06 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; provided, however, that the
written consent of only one joint owner will be required if the Partnership has
been provided with evidence satisfactory to the counsel for the Partnership that
the actions of a single joint owner can bind
- 47 -
both owners under the applicable laws of the state of residence of such joint
owners. Upon the death of one owner of a Partnership Interest held in a joint
tenancy with a right of survivorship, the Partnership Interest shall become
owned solely by the survivor as a Limited Partner and not as an assignee. The
Partnership need not recognize the death of one of the owners of a jointly-held
Partnership Interest until it shall have received notice of such death. Upon
notice to the General Partner from either owner, the General Partner shall cause
the Partnership Interest to be divided into two equal Partnership Interests,
which shall thereafter be owned separately by each of the former owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the General Partner shall keep or cause to be kept at the
Partnership's specified office true and complete books of account in accordance
with generally accepted accounting principles, including: (a) a current list of
the full name and last known business address of each Partner, (b) a copy of the
Certificate of Limited Partnership and all certificates of amendment thereto,
(c) copies of the Partnership's federal, state and local income tax returns and
reports, (d) copies of this Agreement and any financial statements of the
Partnership for the three most recent years and (e) all documents and
information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing,
shall be entitled to inspect or copy such records during ordinary business
hours.
10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a) All funds of the Partnership not otherwise invested shall
be deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.
(b) All deposits and other funds not needed in the operation
of the business of the Partnership may be invested by the General Partner in
investment grade instruments (or investment companies whose portfolio consists
primarily thereof), government obligations, certificates of deposit, bankers'
acceptances and municipal notes and bonds. The funds of the Partnership shall
not be commingled with the funds of any other Person except for such commingling
as may necessarily result from an investment in those investment companies
permitted by this Section 10.02(b).
10.03 FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the
Partnership shall be the calendar year.
10.04 ANNUAL TAX INFORMATION AND REPORT. Within 75 days after the end
of each fiscal year of the Partnership, the General Partner shall furnish to
each person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
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10.05 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
(a) The General Partner shall be the Tax Matters Partner of
the Partnership. As Tax Matters Partner, the General Partner shall have the
right and obligation to take all actions authorized and required, respectively,
by the Code for the Tax Matters Partner. The General Partner shall have the
right to retain professional assistance in respect of any audit of the
Partnership by the Service and all out-of-pocket expenses and fees incurred by
the General Partner on behalf of the Partnership as Tax Matters Partner shall
constitute Partnership expenses. In the event the General Partner receives
notice of a final Partnership adjustment under Section 6223(a)(2) of the Code,
the General Partner shall either (i) file a court petition for judicial review
of such final adjustment within the period provided under Section 6226(a) of the
Code, a copy of which petition shall be mailed to all Limited Partners on the
date such petition is filed, or (ii) mail a written notice to all Limited
Partners, within such period, that describes the General Partner's reasons for
determining not to file such a petition.
(b) All elections required or permitted to be made by the
Partnership under the Code or any applicable state or local tax law shall be
made by the General Partner in its sole and absolute discretion.
(c) In the event of a transfer of all or any part of the
Partnership Interest of any Partner, the Partnership, at the option of the
General Partner, may elect pursuant to Section 754 of the Code to adjust the
basis of the Properties. Notwithstanding anything contained in Article V of this
Agreement, any adjustments made pursuant to Section 754 shall affect only the
successor in interest to the transferring Partner and in no event shall be taken
into account in establishing, maintaining or computing Capital Accounts for the
other Partners for any purpose under this Agreement. Each Partner will furnish
the Partnership with all information necessary to give effect to such election.
(d) To the extent consistent with final regulations following
from proposed regulations published on May 24, 2005, regarding compensatory
partnership interests: (i) the Partnership is authorized and directed to elect
the safe harbor under which the fair market value of a partnership interest that
is transferred in connection with the performance of services is treated as
being equal to the "liquidation value" (as defined in the applicable
regulations) of that interest; and (ii) the Partnership and each Partner
(including any person to whom a partnership interest is transferred in
connection with the performance of services) agrees to comply with all
requirements of such safe harbor with respect to all partnership interests
transferred in connection with the performance of services while the election
remains effective. The Partnership also is authorized to take such actions as
are necessary to achieve, under such final regulations, the effect that the
actions referred to in (i) and (ii) would be intended to achieve under the
proposed regulations, including amending this Agreement.
10.06 REPORTS TO LIMITED PARTNERS.
(a) If the Company is required to furnish an annual report to
its stockholders containing financial statements of the Company, the General
Partner will, at the same time and in the same manner, furnish such annual
report to each Limited Partner. The annual financial statements shall be audited
by accountants selected by the General Partner.
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(b) Any Partner shall further have the right to a private
audit of the books and records of the Partnership, provided such audit is made
for Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER
11.01 AMENDMENT OF AGREEMENT.
The General Partner's consent shall be required for any amendment to
this Agreement. The General Partner, without the consent of the Limited
Partners, may amend this Agreement in any respect; provided, however, that the
following amendments shall require the consent of a Majority in Interest (other
than the Company, the General Partner or any Subsidiary):
(a) any amendment affecting the operation of the Conversion
Factor or the Redemption Right (except as otherwise provided herein) in a manner
that adversely affects the Limited Partners;
(b) any amendment that would adversely affect the rights of
the Limited Partners to receive the distributions payable to them hereunder,
other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.02 hereof;
(c) any amendment that would alter the Partnership's
allocations of Profit and Loss to the Limited Partners, other than with respect
to the issuance of additional Partnership Units pursuant to Section 4.02 hereof;
(d) any amendment that would impose on the Limited Partners
any obligation to make additional Capital Contributions to the Partnership; or
(e) any amendment to this Article XI.
11.02 MERGER OF PARTNERSHIP.
The General Partner, without the consent of the Limited Partners, may
(i) merge or consolidate the Partnership with or into any other domestic or
foreign partnership, limited partnership, limited liability company or
corporation or (ii) sell all or substantially all of the assets of the
Partnership in a transaction pursuant to Section 7.01(c) or (d) hereof and may
amend this Agreement in connection with any such transaction consistent with the
provisions of this Article XI; provided, however, that the consent of a Majority
in Interest shall be required in the case of (a) the merger or consolidation of
the Partnership with or into any other domestic or foreign partnership, limited
partnership, limited liability company or corporation or (b) sale of all or
substantially all of the assets of the Partnership in a transaction that is not
pursuant to Section 7.01(c) or (d), hereof.
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ARTICLE XII
GENERAL PROVISIONS
12.01 NOTICES. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A attached hereto; provided, however, that any Partner may
specify a different address by notifying the General Partner in writing of such
different address. Notices to the General Partner and the Partnership shall be
delivered at or mailed to its office address set forth in Section 2.01 hereof.
The General Partner and the Partnership may specify a different address by
notifying the Limited Partners in writing of such different address.
12.02 SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.
12.03 ADDITIONAL DOCUMENTS. Each Partner agrees to perform all further
acts and execute, swear to, acknowledge and deliver all further documents that
may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act.
12.04 SEVERABILITY. If any provision of this Agreement shall be
declared illegal, invalid or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or
unenforceability shall not affect the remainder hereof.
12.05 ENTIRE AGREEMENT. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
12.06 PRONOUNS AND PLURALS. When the context in which words are used in
the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.
12.07 HEADINGS. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
12.08 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.
12.09 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia.
- 51 -
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this First Amended and Restated Agreement of Limited Partnership,
all as of the __ day of ____________, 2005.
GENERAL PARTNER:
COLUMBIA EQUITY TRUST, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxx, III
Title: President and Chief
Executive Officer
- 52 -
LIMITED PARTNER:
COLUMBIA EQUITY TRUST, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxx, III
Its: President and Chief
Executive Officer
- 53 -
LIMITED PARTNER:
XXXX CAPITAL CORPORATION
By:
----------------------------------
Name: Xxxxxx X. Xxxx, III
Its: President
- 54 -
LIMITED PARTNER:
XXXX CAPITAL REAL ESTATE INVESTMENTS,
LLC
By: Xxxx Capital Corporation, its
managing member
By:
------------------------------
Name: Xxxxxx X. Xxxx, III
Its: President
- 55 -
LIMITED PARTNER:
XXXX HOLDINGS, LLC
By:
----------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Its: Manager
- 56 -
LIMITED PARTNER:
XXXXXXX IV INVESTORS SPE, INC.
By:
----------------------------------------
Name: Xxxxxx X. Xxxx, III
Its: President
- 57 -
LIMITED PARTNER:
THE XXXXXX XXXX COMPANY
By:
----------------------------------------
Name:
Its:
- 58 -
LIMITED PARTNER:
----------------------------------------
Xxx Xxxxxxxx
- 59 -
LIMITED PARTNER:
----------------------------------------
Xxxxxx X. Xxxx, Xx.
- 60 -
LIMITED PARTNER:
----------------------------------------
Xxxxxxx X. Xxxxx
and
----------------------------------------
Xxxxxx X. Xxxxx,
as tenants-by-the-entirety
- 61 -
LIMITED PARTNER:
----------------------------------------
Xxxxx Xxxxxxxx
- 62 -
LIMITED PARTNER:
----------------------------------------
Anson X. X. Xxxxx
- 63 -
LIMITED PARTNER:
----------------------------------------
Xxxxx X. Xxxxx, XX
- 64 -
LIMITED PARTNER:
----------------------------------------
Xxxxxxx Xxxxxxx
- 65 -
LIMITED PARTNER:
----------------------------------
Xxxxxx X. Xxxx, III
- 66 -
LIMITED PARTNER:
----------------------------------
Xxxx X. Xxxxxxxx
- 67 -
LIMITED PARTNER:
----------------------------------
Xxxxxxx X. Xxxxx
- 68 -
LIMITED PARTNER:
----------------------------------
Xxxxxxxxx X. Xxxxxxxx
- 69 -
LIMITED PARTNER:
----------------------------------
Xxxx X. Xxxxxx
- 70 -
LIMITED PARTNER:
----------------------------------
Xxxxx X. Xxxxxxx
- 71 -
LIMITED PARTNER:
----------------------------------
Xxxxxx X. XxXxxxxx
- 72 -
LIMITED PARTNER:
----------------------------------
Xxxxxxx X. Xxxx
- 73 -
LIMITED PARTNER:
----------------------------------
Xxx X. Xxxxxxx
- 74 -
LIMITED PARTNER:
----------------------------------
Xxxxxx X. Xxxxx, Xx.
- 75 -
LIMITED PARTNER:
----------------------------------
Xxxxxx X. Xxxxxxx, Xx.
- 76 -
LIMITED PARTNER:
----------------------------------
Xxxxxxx X. Xxxxxxxxx
- 77 -
LIMITED PARTNER:
----------------------------------
Xxxxx X. Xxxxxxxx
- 78 -
LIMITED PARTNER:
----------------------------------
Xxxxxxxxx X. Xxxxx
- 79 -
LIMITED PARTNER:
----------------------------------
K. Xxxxxxxxx Xxxxxxx
- 80 -
LIMITED PARTNER:
----------------------------------
Xxxxx X. Xxxxx
- 81 -
LIMITED PARTNER:
----------------------------------
Xxxxxxx X. Xxxxxxxx
- 82 -
EXHIBIT A
(As of , 2005)
-----------------
Agreed
Value of
Cash Capital OP LTIP Percentage
Partner Contribution Contribution Units Units Interest
------- ------------ ------------ ----- ----- --------
GENERAL PARTNER:
Columbia Equity Trust, Inc............ $ $
----------- ----------
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
LIMITED PARTNERS:
Columbia Equity Trust, Inc............ $ $
----------- ----------
[TO COME]
TOTALS $ $ 100.00000%
=========== ========== ======== ==========
Exhibit A-1
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.04 of the First Amended and Restated
Agreement of Limited Partnership (the "Agreement") of Columbia Equity, LP, the
undersigned hereby irrevocably (i) presents for redemption ________ OP Units in
Columbia Equity, LP in accordance with the terms of the Agreement and the
Redemption Right referred to in Section 8.04 thereof, (ii) surrenders such OP
Units and all right, title and interest therein and (iii) directs that the Cash
Amount or REIT Shares Amount (as defined in the Agreement) as determined by the
General Partner deliverable upon exercise of the Redemption Right be delivered
to the address specified below, and if REIT Shares (as defined in the Agreement)
are to be delivered, such REIT Shares be registered or placed in the name(s) and
at the address(es) specified below.
Dated:________ __, _____
Name of Limited Partner:
-------------------------------------
(Signature of Limited Partner)
-------------------------------------
(Mailing Address)
-------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-------------------------------------
If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
Exhibit B-1
EXHIBIT C
For Redeeming Limited Partners that are entities:
CERTIFICATION OF NON-FOREIGN STATUS
Under section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), in the event of a disposition by a non-U.S. person of a
partnership interest in a partnership in which (i) 50% or more of the value of
the gross assets consists of United States real property interests ("USRPIs"),
as defined in section 897(c) of the Code, and (ii) 90% or more of the value of
the gross assets consists of USRPIs, cash, and cash equivalents, the transferee
will be required to withhold 10% of the amount realized by the non-U.S. person
upon the disposition. To inform
Columbia Equity Trust, Inc. (the "Company") and
Columbia Equity, LP (the "Partnership") that no withholding is required with
respect to the redemption by ____________ ("Partner") of its units of limited
partnership interest in the Partnership, the undersigned hereby certifies the
following on behalf of Partner:
1. Partner is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate, as those terms are defined in the Code and
the Treasury regulations thereunder.
2. Partner is not a disregarded entity as defined in Treasury Regulation
Section 1.1445-2(b)(2)(iii).
3. The U.S. employer identification number of Partner is _____________.
4. The principal business address of Partner is: ________________________,
__________________________ and Partner's place of incorporation is
_____________.
5. Partner agrees to inform the Company if it becomes a foreign person at
any time during the three-year period immediately following the date of
this notice.
6. Partner understands that this certification may be disclosed to the
Internal Revenue Service by the Company and that any false statement
contained herein could be punished by fine, imprisonment, or both.
PARTNER:
----------------------------------------
By:
--------------------------------
Name:
--------------------------------
Its:
--------------------------------
Exhibit C-1
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further declare that I have authority to sign this document on behalf of
Partner.
Date:
----------------- ---------------------------------------
Name:
Title:
Exhibit C-2
For Redeeming Limited Partners that are individuals:
CERTIFICATION OF NON-FOREIGN STATUS
Under section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), in the event of a disposition by a non-U.S. person of a
partnership interest in a partnership in which (i) 50% or more of the value of
the gross assets consists of United States real property interests ("USRPIs"),
as defined in section 897(c) of the Code, and (ii) 90% or more of the value of
the gross assets consists of USRPIs, cash, and cash equivalents, the transferee
will be required to withhold 10% of the amount realized by the non-U.S. person
upon the disposition. To inform
Columbia Equity Trust, Inc. (the "Company") and
Columbia Equity, LP (the "Partnership") that no withholding is required with
respect to my redemption of my units of limited partnership interest in the
Partnership, I, ___________, hereby certify the following:
1. I am not a nonresident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identification number (social security number) is
_____________.
3. My home address is: _________________________________________________.
4. I agree to inform the Company promptly if I become a nonresident alien
at any time during the three-year period immediately following the date
of this notice.
5. I understand that this certification may be disclosed to the Internal
Revenue Service by the Company and that any false statement contained
herein could be punished by fine, imprisonment, or both.
--------------------------------------
Name:
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete.
Date:
----------------- ---------------------------------------
Name:
Title:
Exhibit C-3
Exhibit D-1
EXHIBIT D
NOTICE OF ELECTION BY PARTNER TO CONVERT LTIP UNITS INTO OP UNITS
The undersigned holder of LTIP Units hereby irrevocably (i) elects to
convert the number of LTIP Units in Columbia Equity, LP (the "Partnership") set
forth below into OP Units in accordance with the terms of the First Amended and
Restated Agreement of Limited Partnership of the Partnership, as amended; and
(ii) directs that any cash in lieu of OP Units that may be deliverable upon such
conversion be delivered to the address specified below. The undersigned hereby
represents, warrants, and certifies that the undersigned (a) has title to such
LTIP Units, free and clear of the rights or interests of any other person or
entity other than the Partnership; (b) has the full right, power, and authority
to cause the conversion of such LTIP Units as provided herein; and (c) has
obtained the consent to or approval of all persons or entities, if any, having
the right to consent or approve such conversion.
Name of Holder:
-----------------------------------------------------------------
(Please Print: Exact Name as Registered with Partnership)
Number of LTIP Units to be Converted:
--------------------------------
Date of this Notice:
---------------------------------
--------------------------------------------------------------------------
(Signature of Holder: Sign Exact Name as Registered with Partnership)
--------------------------------------------------------------------------
(Street Address)
--------------------------------------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
--------------------------------------
Exhibit D-1
EXHIBIT E
NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION OF LTIP
UNITS INTO OP UNITS
Columbia Equity, LP (the "Partnership") hereby irrevocably elects to
cause the number of LTIP Units held by the holder of LTIP Units set forth below
to be converted into OP Units in accordance with the terms of the First Amended
and Restated Agreement of Limited Partnership of the Partnership, as amended.
Name of Holder:
---------------------------------------------------------------
(Please Print: Exact Name as Registered with Partnership)
Number of LTIP Units to be Converted:
-------------------------------
Date of this Notice:
--------------------------------------------
Exhibit E-1
