AGREEMENT OF LIMITED PARTNERSHIP
OF
SOUTHWEST ASSOCIATES, L.P.
Dated as of the 31st day of December, 1996
THE INTERESTS ISSUED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR
QUALIFIED UNDER THE APPLI- CABLE STATE SECURITIES LAWS, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION PROVIDED IN THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION OR REGISTRATION UNDER THE APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED. IN ADDITION, THE INTERESTS ISSUED UNDER THIS
AGREEMENT MAY BE SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRIC- TIONS
ON TRANSFER SET FORTH HEREIN.
AGREEMENT OF LIMITED PARTNERSHIP
OF
SOUTHWEST ASSOCIATES, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP ("Agreement") is made and entered
into as of the 31st day of December, 1996, by and between NPI-AP Management,
L.P., a Delaware limited partnership, as a general partner and a limited partner
(in its capacity as a general partner the "Managing General Partner" and in its
capacity as a limited partner, the "Insignia Limited Partner", or generally the
"Insignia Partner") and BRE/Southwest Partners I L.P., a Delaware limited
partnership, as a general partner (the "Blackstone General Partner", together
with the Managing General Partner, the "General Partners") and Blackstone Real
Estate Partners II L.P., a Delaware limited partnership, Blackstone Real Estate
Partners II TE.1 L.P., a Delaware limited partnership, Blackstone Real Estate
Partners II TE.2 L.P., a Delaware limited partnership, and Blackstone Real
Estate Holdings II L.P., a Delaware limited partnership, as limited partners
(the "Blackstone Limited Partners", together with the Insignia Limited Partner,
the "Limited Partners" and each a "Limited Partner") (the Blackstone Limited
Partners and the Blackstone General Partner are collectively referred to as the
"Blackstone Partners" or "Blackstone") with reference to the following:
RECITALS
A. The Insignia Partner and the Blackstone Partners desire to form a
limited partnership pursuant to the provisions of the Revised Uniform Limited
Partnership Act of the State of Delaware, Delaware Code, Title 6, Sections
17-101, et seq., as amended from time to time, and to constitute themselves as
Southwest Associates, L.P., a Delaware limited partnership (the "Partnership"),
on the terms and conditions set forth below.
B. Each of the Insignia Partner and the Blackstone Partners desires to make
its respective capital contribution to the Partnership as described in this
Agreement and to be admitted as a Partner of the Partnership.
C. In order to effect the foregoing, the parties hereto desire to enter
into this Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein (the receipt and sufficiency of which hereby are acknowledged
by each party hereto), the parties hereto, intending to be legally bound, do
hereby agree as follows:
ARTICLE 1
GENERAL PROVISIONS
1.1 Formation. The General Partners and the Limited Partners hereby form
the Partnership as a Delaware limited partnership pursuant to the terms of this
Agreement and the Act. This Agreement shall constitute the agreement of limited
partnership among the Partners. All capitalized terms used and not otherwise
defined herein shall have the meanings set forth in Section 1.8 hereof. The
Partners further agree to take such other actions as may from time to time be
necessary or appropriate under the laws of the State of Delaware with respect to
the formation, operation and continued good standing of the Partnership as a
Delaware limited partnership.
1.2 Name of Partnership. The name of the Partnership shall be "Southwest
Associates, L.P."
1.3 Compliance.
1.3.1 Certificate of Limited Partnership. The General Partners have
executed the Certificate of Limited Partnership for the Partnership, and
filed the same with the Office of the Secretary of State of Delaware, which
certificate due to clerical error was filed on January 13, 1997. Due to the
delay in the filing of the Certificate of Limited Partnership for the
Partnership, the Partners hereby confirm and ratify all of the actions,
covenants, obligations, duties, liabilities, indemnities, waivers and
guarantees made and given by the Partnership as of December 31, 1996 up to
and including the date of the filing of the Certificate of Limited
Partnership for the Partnership. The General Partners shall cause the
Partnership to take any other steps that are necessary for the Partnership
to conduct the Partnership's business in the states in which it does
business. The Certificate shall be amended whenever, and within the time
periods, required by the Act.
1.3.2 Principal Office, Resident Agent and Registered Office. The
principal office of the Partnership shall be located at c/o Blackstone Real
Estate Advisors L.P., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
or at such other place or places as may from time to time be Approved by
the General Partners; provided, however, that the Partnership shall at all
times maintain a registered agent and an office in the State of Delaware
and in such other states as required by law. The name and address of the
registered agent for service of process on the Partnership in the State of
Delaware is CT Corporation Systems, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000. The address of the registered office of the Partnership in
the State of Delaware is CT Corporation Systems, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000. Such principal office, registered agent or
registered office may be changed by the Blackstone General Partner from
time to time upon the Approval of the Managing General Partner, so long as
in accordance with the Act.
1.4 Purposes of Partnership. The purposes of the Partnership shall be:
1.4.1 (i) To acquire the limited partnership interests in the REO
Partnerships listed on Exhibit D to this Agreement (the "REO Partnerships"
and the "REO Partnership
Interests") for investment purposes, (ii) to enter into the amended and
restated agreements of limited partnership for each REO Partnership as a
limited partner (together with any ancillary documents to be executed by
the Partnership in connection therewith the "REO Partnership Agreements"),
(iii) to own, hold, finance, refinance, sell, exchange, transfer or
otherwise dispose of and otherwise exercise all rights, powers, privileges
and other incidents of ownership or possession with respect to the REO
Partnership Interests, and (iv) to enter into that certain contract to
acquire the REO Partnership Interests dated as of December 31, 1996 by and
among the Partnership (with respect to the REO Partnership limited
partnership interests), and GSSW-REO Ownership Corporation and GSSW Limited
Partnership (together with any ancillary documents to be executed by the
Partnership in connection with the Partnership's acquisition of the REO
Partnership Interests) (collectively, the "Purchase Agreement"). The
Purchase Agreement is hereby Approved by the General Partners (the "Initial
Approved Contract" together with any other agreements or other contracts
Approved by the General Partners from time to time, the "Approved
Contracts");
1.4.2 The Partnership may carry on and engage in other lawful general
business activities, in furtherance of the purposes listed in Section
1.4.1, including, borrowing money from any source, whether secured or
unsecured, acquiring additional real and personal property in connection
with its acquisition or ownership of the REO Partnership Interests,
contracting for necessary or desirable services of professionals and
others, owning the REO Partnership Interests and, consistent with the
Partnership's investment purposes with respect to the REO Partnership
Interests, the Partnership may sell, exchange or otherwise dispose of all
or any portion of the REO Partnership Interests.
1.5 Percentage Interests.
1.5.1 The respective Percentage Interests in the Partnership of the
Partners as of the Agreement Date are set forth on Exhibit A. All
references in this Agreement to any Exhibit are references to such Exhibit
as amended from time to time pursuant to this Agreement.
1.5.2 Unless the context otherwise clearly indicates, the terms
"interest" or "interests" in the Partnership shall include both General
Partner interests and Limited Partner interests. A Partner's "interest" in
the Partnership shall mean and include its share of the capital of the
Partnership, its share of the Profits and Losses and other tax items of the
Partnership, its share of the distributions of the Partnership, its Capital
Account, and its other rights and obligations, all as determined under this
Agreement.
1.6 Other Qualifications. At the expense of the Partnership, the General
Partners shall cause the Partnership to be qualified to do business in each
jurisdiction in which such qualification becomes necessary, on or before the
date on which such qualification becomes necessary, in each case in accordance
with the requirements of Section 1.3.2.
1.7 Term of Partnership. The term of the Partnership shall commence as of
the date of filing the Certificate and shall continue until the Partnership
shall be dissolved, liquidated and terminated pursuant to the provisions of
Article 8.
1.8 Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
1.8.1 "Act" shall mean the Delaware Revised Uniform Limited
Partnership Act, Delaware Code, Title 6, Sections 17-101, et seq., as
amended from time to time.
1.8.2 "Adjusted Capital Account Deficit" shall mean, with respect to
any Partner, the deficit balance, if any, in such Partner's Capital Account
as of the end of the relevant tax year, after giving effect to the
following adjustments:
1.8.2.1 Credit to such Capital Account any amounts which such
Partner is obligated to restore or is deemed to be obligated to
restore to the Partnership pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
1.8.2.2 Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
1.8.3 "Affiliate" shall mean (a) with respect to Insignia: (i) any
Entity Controlling or under common Control with Insignia and (ii) any
Entity which is Controlled (directly or indirectly) by one or more of
(A) Insignia, (B) Metropolitan Asset Enhancement, L.P. or (C) any of their
respective Affiliates, and (b) with respect to Blackstone: (i) any Entity
Controlling or under common Control with Blackstone, including the partners
of Blackstone, (ii) any Entity which is Controlled (directly or indirectly)
by one or more of (A) Blackstone, (B) Blackstone Real Estate Advisors II
L.P., The Blackstone Group L.P. and/or any successor to their duties in
connection with the management of Blackstone, or (C) any of
their respective Affiliates. For the purposes of this Agreement, the term
"Control," or any derivative thereof (including "Controlled by" or
"Controlling"), when used with respect to any specified Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through
ownership of voting securities or partnership or other ownership interests,
or by contract; provided, however, that, without limiting the generality of
the foregoing, (a) any Person which owns, directly or indirectly,
securities representing more than 50% of the value or ordinary voting power
of a corporation or more than 50% of the partnership, membership or other
ownership interests (based upon value or vote) of any other Person is
deemed to Control such corporation or other Person, (b) a general partner
shall always be deemed to Control any partnership of which it is a general
partner, and (c) a member-manager of a limited liability company shall
always be deemed to Control any limited liability company of which it is a
member-manager.
1.8.4 "Agreement" shall mean and refer to this Agreement of Limited
Partnership and all Exhibits referred to herein and attached hereto, each
of which is hereby made a part hereof, as amended and in effect from time
to time.
1.8.5 "Agreement Date" shall mean the date first written above as of
which this Agreement is effective.
1.8.6 "Approval" (and any variation thereof) of the General Partners,
the Blackstone General Partner or the Managing General Partner shall mean
the prior written consent or approval (or deemed approval) of such Partner
or Partners. Approval of Major Decisions (other than a Major Decision
described in Sections 5.5.5.1, 5.5.5.2, 5.5.5.4 or 5.5.5.12) after January
1, 1998 may be unreasonably withheld. All other decisions requiring the
Approval of a Partner shall not be withheld or delayed unreasonably.. Such
Approval shall be valid for a Partner who is not a natural person only if
given by at least one Authorized Representative of such Partner. If the
Approval of a Partner to any action is required under this Agreement and
such Partner shall not have given notice of disapproval or Approval of such
action to the Partner required to be given such notice within ten (10)
Business Days after receipt of the notice requesting that such Approval be
given (or such earlier or later date as may be established pursuant to this
Agreement for the giving or withholding of such Approval), such Partner
shall be deemed to have given such Approval. Any act taken or proposed to
be taken by the Blackstone General Partner shall be deemed approved by that
Partner. Notwithstanding the foregoing, or anything in this Agreement, with
respect to any decision which is subject to the dispute resolution set
forth in Section 5.9, the Managing General Partner shall be deemed to have
approved such decision unless the Managing General Partner timely exercises
its rights under Section 5.9.
1.8.7 "Approved Contracts" is defined in Section 1.4.1
1.8.8 "Authorized Representatives" is defined in Section 1.10.
1.8.9 "Bankrupt" shall mean, with respect to any Partner, if:
1.8.9.1 Such Partner, or a Person that Controls such Partner (the
"Controlling Person"), shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
administrator, liquidator or the like of itself or of all or of a
substantial portion of its assets, (ii) admit in writing its inability, or
be generally unable or deemed unable under any applicable law, to pay its
debts as such debts become due, (iii) convene a meeting of creditors for
the purpose of consummating an out-of-court arrangement, or entering into a
composition, extension or similar arrangement, with creditors in respect of
all or a substantial portion of its debts, (iv) make a general assignment
for the benefit of its creditors, (v) place itself or allow itself to be
placed, voluntarily or involuntarily, under the protection of the law of
any jurisdiction relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, or (vi) take any action
for the purpose of effecting any of the foregoing; or
1.8.9.2 A proceeding or case shall be commenced in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution,
winding-up, or composition or readjustment of debts, of such Partner
or a Controlling Person with respect thereto, (ii) the appointment of
a trustee, receiver, custodian, administrator, liquidator or the like
of such Partner or of a Controlling Person with respect thereto or of
all or a substantial portion of such Partner's or such Controlling
Person's assets, or (iii) similar relief in respect of such Partner or
such Controlling Person under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment
of debts, in each case, without the Approval of the General Partners,
and such proceeding or case shall continue undismissed for a period of
ninety (90) days, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed
and in effect for a period of sixty (60) days, or an order for relief
or other legal instrument of similar effect against such Partner or
such Controlling Person shall be entered in an involuntary case under
such law and shall continue for a period of sixty (60) days.
1.8.10 "Bankruptcy" shall mean any condition described in the
definition of "Bankrupt" which renders a Partner a Bankrupt.
1.8.11 "Blackstone" is defined in the Heading to this Agreement.
1.8.12 "Blackstone Limited Partners" is defined in the Heading to
this Agreement.
1.8.13 "Blackstone General Partner" means BRE/Southwest Partners
I L.P., a Delaware limited partnership.
1.8.14 "Business Day" shall mean any day on which commercial
banks are authorized to do business and are not required by law or
executive order to close in New York, New York.
1.8.15 "Capital Account" shall mean, with respect to any Partner,
the Capital Account maintained for such Partner in accordance with the
provisions of Section 3.1.
1.8.16 "Capital Contribution" or "Capital Contributions" shall
mean the amount of cash and the net fair market value of any property
contributed to the capital of the Partnership by the Partners pursuant
to this Agreement.
1.8.17 "Capital Receipts" shall mean (i) the sum of (a) the
proceeds received by the Partnership from the sale, exchange or any
other disposition of all or any portion of the Properties or any other
asset of the Partnership reduced by (ii) all expenditures made by the
Partnership that are required in connection with such sale, exchange
or other disposition plus (b) amounts set aside as reserves therefrom
for Shortfall Disbursements. For purposes of this Agreement, Capital
Receipts, shall, to the extent necessary, be determined at the REO
Partnership level on a look through basis.
1.8.18 "Certificate" shall mean the Certificate of Limited
Partnership of the Partnership required to be filed with the Secretary
of State of the State of Delaware in accordance with the Act, as
amended and in effect from time to time.
1.8.19 "Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time (or any corresponding
provision of succeeding law).
1.8.20 "Control" or "Controlled by" or "Controlling" is defined
in the definition of "Affiliate."
1.8.21 "Controlling Person" is defined in the definition of the
term "Bankrupt."
1.8.22 "Deadlock" is defined in Section 5.9.
1.8.23 "Deadlock Election" is defined in Section 5.9(a)(i).
1.8.24 "Deadlock Notice" is defined in Section 5.9.
1.8.25 "Defaulting Partner" shall have the meaning set forth in
Section 2.2.2.
1.8.26 "Determination Date" is defined in Section 5.8.
1.8.27 "Due Date" is defined in Section 2.2.1.
1.8.28 "Due Diligence Materials" shall mean any documents that
have been made available to the Partners in connection with acquiring
the REO Partnerships and the Properties, such as lease abstracts,
partnership agreements and related schedules and exhibits, contracts
(including service contracts and brokerage agreements), title reports,
engineering and geological studies and reports, environmental
investigations and reports, cost analyses, feasibility studies,
leases, financial projections and other such materials relating to the
REO Partnerships and the Properties and any proposed investment by the
Partnership therein.
1.8.29 "Emergency" shall mean an event which reasonably requires
immediate action involving the expenditure of funds or other action in
order to avert or mitigate significant damage to Persons or property
in connection with the Partnership, the Properties or any other asset
of the Partnership.
1.8.30 "Entity" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture,
trust, business trust, joint-stock company, cooperative, association
or other firm or any governmental or political subdivision or agency,
department or instrumentality thereof.
1.8.31 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any successor statute.
1.8.32 "Family Member" with respect to an individual shall mean
such individual's present or former spouse, brothers and sisters
(whether by whole or half blood),
12
lineal ascendants or descendants or their respective spouses, or a
trustee or custodian for the benefit of any of them.
1.8.33 "Force Majeure" shall mean any act of God (including
weather disturbance, earthquake, fire, mechanical failure of
equipment, disease and the like), labor strike or work stoppage or
slowdown, material shortages, sabotage, war, riot, moratorium,
governmental action or inaction, or any other act of any third party
that reasonably prevents an action from being taken through no fault
of the party who is required to take such action.
1.8.34 "Funding Notice" is defined in Section 2.1.2.
1.8.35 "GAV Notice" is defined in Section 5.9(iii).
1.8.36 "General Partners" shall mean the Blackstone General
Partner and the Managing General Partner.
1.8.37 "Gross Asset Value" shall mean, with respect to any asset,
the adjusted basis of the asset for federal income tax purposes,
adjusted as provided in Section 3.8. 1.8.38 "Including" or "including"
shall mean "including, without limitation."
1.8.39 "Income Tax Regulations" or "Regulations" shall mean the
final or temporary regulations promulgated from time to time under the
Code or, if no final or temporary regulations with respect to a tax
issue then are in effect, proposed regulations then in effects, and
administrative and judicial interpretations thereof.
1.8.40 "Initial Approved Contracts" is defined Section 1.4.1.
1.8.41 "Insignia" is defined in the Heading to this Agreement.
1.8.42 "Insignia Limited Partner" is defined in the Heading to
this Agreement.
1.8.43 "Liabilities" is defined in Section 5.5.3.
1.8.44 "Limited Partner" shall mean NPI-AP Management, L.P., a
Delaware limited partnership, in its capacity as a limited partner and
Blackstone Real Estate Partners II L.P., a Delaware limited
partnership, Blackstone Real Estate Partners II TE.1 L.P., a Delaware
limited partnership, Blackstone Real Estate Partners II TE.2 L.P., a
Delaware limited partnership, and Blackstone Real Estate Holdings II
L.P., a Delaware limited partnership and/or any successor to any
portion of such interests in the Partnership that is admitted to the
Partnership as a Limited Partner hereunder, and any other Person
admitted as a Limited Partner hereunder, for so long as such Person is
a Limited Partner under the terms of this Agreement.
1.8.45 "Liquidator" is defined in Section 8.3.
13
1.8.46 "Major Decisions" is defined in Section 5.1.5.
1.8.47 "Management Agreements" shall mean the property management
agreements between each REO Partnership and the Property Manager for
such REO Partnership.
1.8.48 "Managing General Partner" shall mean NPI-AP Management,
L.P., a Delaware limited partnership.
1.8.49 "Net Available Cash," with respect to any period, shall
mean (i) the sum of all cash receipts of the Partnership during such
period from all sources (including Capital Contributions, Capital
Receipts, Net Mortgage Proceeds, cash on hand at the beginning of such
period to the extent not held in reserves, and any funds released
during such period from cash reserves previously established), minus
(ii) Operating Costs for such period. Net Available Cash shall, to the
extent necessary, be determined at the REO Partnership level on a look
through basis.
1.8.50 "Net Mortgage Proceeds" shall mean (i) the sum of (a) the
proceeds of any loan made to the Partnership or the proceeds from
refinancing any such loan, as applicable, plus (b) any amount released
from cash escrow accounts established under any loan to the
Partnership, reduced by (ii) the sum of (a) any amounts required to
fund the Partnership's capital expenditures that are otherwise
permitted to be withheld from such amounts for such purpose under this
Agreement, (b) any and all expenses incurred by the Partnership in
connection with such loan or refinancing, (c) amounts used as
permitted under this Agreement to repay the loan being refinanced and
any other indebtedness of the Partnership, plus (d) amounts thereof
retained as reserves under this Agreement. For purposes of this
Agreement, Net Mortgage Proceeds, shall, to the extent necessary, be
determined at the REO Partnership level on a look through basis.
1.8.51 "Non-Defaulting Partner" is defined in Section 2.2.2.
1.8.52 "Non-Discretionary Items" shall mean expenditures payable
by the Partnership for taxes, utilities, insurance, debt service and
expenses or other amounts required to be paid by the Partnership under
contracts or agreements of the Partnership.
1.8.53 "Nonrecourse Deductions" is defined in Section 3.4.6.
1.8.54 "Nonrecourse Liability" is defined in Section 3.4.6.
1.8.55 "Operating Costs" shall mean the sum of (i) all cash
expenditures of the Partnership made during a period for current costs
and expenses (except to the extent constituting a reduction in
computing Net Mortgage Proceeds or Capital Receipts for such period),
including the closing costs associated with the Partnership's
acquisition of the Properties, due diligence expenditures, payments of
interest and principal or other monetary obligations due under any
loan made to the Partnership; accounting, legal and auditing fees;
taxes payable by the Partnership; public or private utility charges;
sales, use, payroll taxes and withholding taxes related thereto; and
all other entitlement,
14
infrastructure, subdivision, surveying, advertising, management,
leasing, and rezoning costs, government approval, and other operating
costs, expenses and capital expenditures (including fees of land use
consultants, engineers, architects, municipal development fees, bond
costs and the like) actually paid with respect to the Properties or
the Partnership's business generally or reimbursed to Partners, plus
(ii) such reserves established from time to time during such period
(except to the extent constituting a reduction in computing Net
Mortgage Proceeds or Capital Receipts for such period). For purposes
of this Agreement, Operating Costs, shall, to the extent necessary, be
determined at the REO Partnership level on a look through basis.
1.8.56 "Partner Assignee" is defined in Section 7.4.
1.8.57 "Partner Group" is defined in Section 5.9(ii).
1.8.58 "Partner Nonrecourse Debt" is defined in Section 3.5.6.4
hereof.
1.8.59 "Partner Nonrecourse Debt Minimum Gain" is defined in
Section 3.5.6.3 hereof.
1.8.60 "Partner Nonrecourse Deductions" is defined in Section
3.5.6.5 hereof.
1.8.61 "Partners" shall mean, collectively, the General Partners
and the Limited Partners, and any of their successors in their
respective capacities as Partners admitted to the Partnership as
Partners hereunder, and any other Person admitted as a Partner under
this Agreement, for so long as any such Person is a Partner under the
terms of this Agreement, and a "Partner" shall mean any one of the
Partners.
1.8.62 "Partnership" shall mean the applicable limited
partnership described on Schedule A hereto and operated pursuant to
this Agreement.
1.8.63 "Partnership Accounting Year" shall mean and refer to the
accounting year of the Partnership ending on December 31 of each
calendar year or such shorter fiscal period during such year for which
a relevant determination is being made under this Agreement.
1.8.64 "Partnership Minimum Gain" is defined in Section 3.4.6.6
hereof.
1.8.65 "Percentage Interest" of a Partner as of any relevant time
shall mean the applicable Percentage Interest set forth on Exhibit A
for such Partner. Such Percentage Interest shall be adjusted as
provided in Section 2.2.2.1 if a Partner becomes a Defaulting Partner
under Section 2.2.2.
1.8.66 "Person" shall mean any individual or Entity.
15
1.8.67 "Profit" or "Loss" shall mean, for each Partnership
Accounting Year, an amount equal to the Partnership's net taxable
income or loss for such Accounting Year, determined in accordance with
Code Section 703(a) (for this purpose, all items of income, gain, loss
or deduction required to be stated separately pursuant to Code Section
703(a)(1) shall be included in computing such taxable income or loss),
with the following adjustments:
1.8.67.1 Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in computing
Profit or Loss shall be added to such taxable income or loss;
1.8.67.2 In the event the agreed fair market value of any
Partnership asset is adjusted pursuant to Regulations Section
1.704-l(b)(2)(iv)(f) or other pertinent sections of such Regulations,
the amount of such adjustment shall be taken into account for purposes
of computing Profit or Loss; and in lieu of the depreciation,
amortization and other cost recovery deductions taken into account in
computing such taxable income or loss, there shall be taken into
account depreciation, amortization or other cost recovery computed
with reference to the Gross Asset Value of Partnership property
Approved by the General Partners (if different from its adjusted tax
basis) pursuant to Regulations Section 1.704-l(b)(2)(iv)(g) for such
Partnership Accounting Year; and
1.8.67.3 Notwithstanding any other provisions, any items which
are specially allocated pursuant to Sections 3.3 and 3.4 shall not be
taken into account in computing Profit or Loss.
1.8.68 "Properties" shall mean the properties and assets held by
each of the REO Partnerships.
1.8.69 "Property Managers" shall mean the property managers for
the Properties.
1.8.70 "Purchase Agreement" is defined in Section 1.4.1.
1.8.71 "Regulations" is defined in the definition of "Income Tax
Regulations."
1.8.72 "REIT" shall mean a real estate investment trust or a
partnership or other joint venture with a real estate investment trust
as a partner (directly or indirectly).
1.8.73 "REO Partnerships" is defined in Section 1.4.1.
1.8.74 "REO Partnership Agreements" is defined in Section 1.4.1.
1.8.75 "REO Partnership Interests" is defined in Section 1.4.1.
1.8.76 "Required Additional Contributions" is defined in Section
2.1.1.
16
1.8.77 "Revalued Property" is defined in Section 3.4.3.2.
1.8.78 "Securities Act" is defined on the cover page of this
Agreement.
1.8.79 "Shortfall Disbursement" is defined in Section 2.1.1.
1.8.80 "Tax Matters Partner" is defined in Section 5.4.
1.8.81 "Tax Termination" is defined in Section 7.5.1.3.
1.8.82 "Transfer" shall mean (i) the issuance, transfer, sale,
gift, grant, conveyance, assignment, encumbrance, hypothecation or
redemption, directly or indirectly, of any equity ownership interest
(whether stock, membership interest, partnership interest or
otherwise) in the Partnership or in any Person holding a direct (or
indirect through tiered Entities) interest in the Partnership, or the
merger or consolidation of any such Person into or with another
Person, as the case may be; and (ii) the execution and delivery by the
Partnership or any Person holding an equity ownership (directly or
indirectly through tiered Entities) interest in the Partnership of a
contract of sale, option or other agreement providing for any of the
foregoing; provided, however, that the interests of a Partner in the
Partnership may be pledged to lenders as security for a loan or loans
(and such pledge shall not be considered a Transfer), provided
further, that in the event any such lender forecloses on (or otherwise
acquires) the pledged interest, such interest shall be deemed a
limited partner interest with no approvals or consent rights.
1.9 Authorized Acts. In furtherance of its purposes, but subject to all the
other provisions of this Agreement including required Approvals of the General
Partners set forth in this Agreement (including under Article 5), the
Partnership (and the Blackstone General Partner on behalf of the Partnership) is
hereby authorized:
1.9.1 To pursue any rights of the Partnership with respect to the REO
Partnerships pursuant to any agreement to which it is a party, and to own
the REO Partnership Interests or any other asset acquired by the
Partnership pursuant to the provisions of this Agreement, including taking
the actions described in Section 1.4;
1.9.2 To own the REO Partnership Interests for investment purposes and
to finance, sell, convey, assign, transfer or mortgage the REO Partnership
Interests, any other asset of the Partnership, or any of them, necessary,
convenient or incidental to the accomplishment of the purposes of the
Partnership;
1.9.3 To operate, maintain, improve, develop and lease any assets
acquired by the Partnership;
1.9.4 To take any and all actions necessary, convenient or appropriate
as a limited partner of the REO Partnerships and exercise all rights or
powers relating thereto and execute appropriate documents on behalf of the
Partnership in connection therewith;
17
1.9.5 To borrow money on behalf of itself (whether secured or
unsecured) and issue evidences of indebtedness in furtherance of any or all
of the purposes of the Partnership, and to secure the same by mortgage,
deed of trust, pledge or other lien on any assets of the Partnership;
1.9.6 To borrow money on the general credit of the Partnership for use
in the Partnership business;
1.9.7 To enter into, perform and carry out contracts of any kind,
including contracts with Affiliates of any of the Partners, necessary to,
in connection with or incidental to the accomplishment of the purposes of
the Partnership;
1.9.8 To issue Funding Notices calling for additional Capital
Contributions in accordance with the provisions of this Agreement;
1.9.9 To enter into any kind of lawful activity and to perform and
carry out contracts of any kind necessary to or in connection with or
incidental to the accomplishment of the purposes of the Partnership,
including the Approved Contracts.
The Blackstone General Partner hereby is authorized to cause the Partnership to
execute and deliver all documents and instruments reasonably necessary or
appropriate to close any of the foregoing transactions. No Partner shall cause
the Partnership to execute and deliver any conveyance, loan or lease documents
without first obtaining the Approval of the General Partners; provided, however,
that once Approved by the General Partners, the Blackstone General Partner may
execute and deliver any such documents with such material changes thereto as
shall be Approved by the General Partners, and only the Blackstone General
Partner shall execute such documents on behalf of the Partnership which
execution by the Blackstone General Partner shall be binding on the Partnership.
Third parties shall be entitled to rely on the authority of the Blackstone
General Partner to execute and deliver any document on behalf of the Partnership
without the execution thereof by the Managing General Partner being required;
1.9.10 To enter into and to perform the Partnership's obligations
under any agreement to which it becomes a party; and
1.9.11 To enter into and to perform the Partnership's obligations
under: (i) all conveyance documents necessary to acquire the Partnership's
interest in the REO Partnerships, (ii) to undertake all required actions
necessary with respect to the operation of the REO Partnership Interests
(including the obligation to sell, exchange or otherwise dispose of the REO
Partnership Interests for the Partnership's account), all of the foregoing
to be subject to such approvals of the Partnership and the General
Partners, as are set forth herein (all of such documents are referred to as
the "Acquisition Documents"); and (iii) any other agreement to which the
Partnership becomes a party pursuant to this Agreement. Notwithstanding any
provision herein, the Blackstone General Partner may enforce (including
termination where permitted under the Management Agreement) the Management
Agreement
18
in its reasonable discretion, without any approval rights given to the
Managing General Partner.
1.10 Authorized Representatives. The "Authorized Representatives" of a
General Partner that is not a natural person shall be those representatives
designated by notice to the Blackstone General Partner by such Partner from time
to time to represent such Partner in connection with the Partnership, unless and
until replaced or removed by notice from such Partner to the Blackstone General
Partner. The written statements and representations of an Authorized
Representative for a Partner that is not a natural Person shall be the only
authorized statements and representations of such Partner with respect to the
matters covered by this Agreement. The initial Authorized Representatives are
(i) Xxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, and Xxxxxxx Xxxxxxxx for the Blackstone
General Partner and (ii) Xxxx Xxxxx, Xxxxxxx Xxxxxxxx and Xxxxx Xxxxx for the
Managing General Partner. The written statement or representation of any one
Authorized Representative of such Partner shall be sufficient to bind such
Partner with respect to all matters pertaining to the Partnership. The term
"Approved by" or "Consented to by" or "Consent of" or "satisfactory to" with
respect to a Partner that is not a natural Person means a decision or action
which has been consented to in writing by an Authorized Representative of such
Partner, and with respect to a Partner who is an individual, means a decision or
action which has been consented to in writing by such individual. In order for a
decision or action to be "Approved by the General Partners" (or any variation
thereof), the decision or action must be Approved by at least one Authorized
Representative of the Blackstone General Partner and the Managing General
Partner or otherwise deemed approved in accordance with the provisions of this
Agreement.
ARTICLE 2
CAPITAL CONTRIBUTIONS
AND ADDITION CONTRIBUTIONS
2.1 Capital Contributions.
2.1.1 Initial Capital Contributions. On the date hereof, each Partner
has contributed the amount in cash to the capital of the Partnership) that
is set forth for such Partner on Exhibit A as its Section 2.1.1
Contribution.
2.1.2 Required Additional Contributions. Except as provided in this
Section 2.1.2, no Partner shall be required to make any Capital
Contributions other than those described in Section 2.1.1. Each Partner
shall be required to make additional Capital Contributions to the
Partnership if the Blackstone General Partner or the Managing General
Partner gives notice to all Partners (a "Funding Notice") that meets the
requirements of this Section 2.1.2. The amount of additional Capital
Contributions so required from each Partner shall be an amount equal to
(a) such Partner's Percentage Interest multiplied by (b) the amount of cash
that is reasonably needed ("Shortfall Disbursement") for expenditures
necessary to undertake the actions that are Approved by the General
Partners (or permitted to be taken under this Agreement without such
Approval) with respect to the operation of the
19
REO Partnerships or the Partnership and with respect to capital
expenditures and rehabilitation expenditures ("Rehabilitation Costs") that
have not previously been Approved by the General Partners, in each case as
set forth in such Funding Notice; provided, however, that the Blackstone
General Partner shall be the only Partner entitle to issue a Funding Notice
for Rehabilitation Costs and neither the Blackstone General Partner nor the
Managing General Partner shall be required to issue a Funding Notice under
any circumstances, and provided, further, that with respect to each REO
Partnership, no Partner shall be required to make any additional Capital
Contributions pursuant to this Section 2.1.2 in an aggregate amount for all
periods greater than (i) its Percentage Interest multiplied by
(ii) $1,000,000, and provided, further, that in the aggregate among all the
REO Partnerships, no Partner shall be required to make any additional
Capital Contributions pursuant to this Section 2.1.2 in an aggregate amount
for all periods greater than (i) its Percentage Interest multiplied by
(ii) $3,500,000. Each Funding Notice shall describe the Shortfall
Disbursement and set forth the Required Additional Contribution of each
Partner as determined pursuant to this Section 2.1.2. If a Funding Notice
is properly issued as provided above in this Section 2.1.2, each Partner
shall contribute the amount required to be contributed by such Partner
pursuant to this Section 2.1.2 ("Required Additional Contributions") on or
before the Due Date therefor under Section 2.2.1.
2.2 Withdrawal of Capital; Return of Capital; Deficit Balance in Capital
Account; Additional Capital Contributions and Capital Calls.
2.2.1 If a Funding Notice is properly given by the Blackstone General
Partner pursuant to Section 2.1.2 or the general partner of an REO
Partnership pursuant to Section 2.1.2 of the REO Partnership Agreement,
each Partner shall have the obligation to contribute additional cash to the
capital of the Partnership (and the general partners shall have the
obligation to contribute additional cash to the capital of the REO
partnership pursuant to the REO Partnership Agreement) in an amount equal
to the product of (a) the Shortfall Disbursement multiplied by (b) such
Partner's Percentage Interest, which amount shall be used to satisfy the
items described in such Funding Notice. Each Partner shall contribute its
share of any Shortfall Disbursement within ten (10) Business Days after the
later to occur of (i) the date on which the Funding Notice with respect
thereto has been received (or deemed received hereunder) or (ii) the
required funding date that is set forth in the Funding Notice (the
expiration of such ten-day period is referred to as the "Due Date"). There
shall be a cure period of ten (10) Business Days after the Due Date for
each Partner to contribute its share of such Shortfall Disbursement, as
provided in Section 2.2.2.
2.2.2 If any Partner fails to contribute the full amount of its
Additional Capital Contributions required to be made pursuant to Section
2.1.2 within ten (10) Business Days after the Due Date thereunder (such
Partner, the "Defaulting Partner"), then, as the exclusive remedy of the
Partnership and the other Partners who are not Defaulting Partners (the
"Non-Defaulting Partners"), the Non-Defaulting Partners (in proportion to
their Percentage interests) may contribute to the Partnership the amount of
such Capital Contribution that was not made timely by the Defaulting
Partner with such contribution, at the election of the Non-Defaulting
Partners, deemed a loan (a "Default Loan") to the Defaulting Partner by the
Non-Defaulting Partner and a Capital Contribution
by the Defaulting Partner to the Partnership. All distributions payable to
the Defaulting Partner hereunder will be paid to the Non-Defaulting Partner
until the Non-Defaulting Partner has received distributions otherwise
payable to the Defaulting Partner in an amount equal to the Default Loan
and interest thereon at a rate equal to the interest provided in section
2.4 below.
2.2.2.1 If the Non-Defaulting Partners that timely contribute the
amount of the Capital Contribution required to be made by the
Non-Defaulting Partners and the Non-Defaulting Partners do not elect to
treat such contribution as a loan as provided in Section 2.2.2, the
Percentage Interests shall be adjusted, by reducing the Percentage Interest
of the Defaulting Partner (and increasing the Percentage Interest of the
Non-Defaulting Partners by the amount of such reduction) to the amount
determined by subtracting from such Percentage Interest the percentage
obtained by multiplying (A) the Defaulting Partner's Percentage Interest by
(B) a fraction, (x) the numerator of which is 150% of the amount of the
Required Additional Contribution that was not made timely by the Defaulting
Partner, and (y) the denominator of which shall be the sum of the numerator
plus the Capital Contributions made by the Defaulting Partner for all
periods. The Capital Contributions made (or deemed made) by the
Non-Defaulting Partners instead of the Defaulting Partner pursuant to
Section 2.2.2.1 shall be treated as Capital Contributions of the
Non-Defaulting Partners for all purposes of this Agreement (including for
purposes of determining whether such Partner has satisfied its potential
maximum Capital Contribution under Section 2.1.2).
The foregoing adjustments shall not require a reallocation of Profit or
Loss, or any other tax items for any Partnership Accounting Year in respect
of which such tax items already were allocated among the Partners on any
tax return of the Partnership that was filed prior to the event giving rise
to the adjustment.
If none of the Partners timely contributes any portion of its Capital
Contribution required pursuant to a Funding Notice, there shall be no
reduction of any Partner's Percentage pursuant to this Section 2.2.2 with
respect to the failure of a partner to timely make Capital Contributions
under such Funding Notice.
2.2.3 Except as otherwise specifically set forth in this Agreement, no
Partner shall have the right to (i) make any Capital Contribution to the
Partnership, (ii) withdraw such Partner's Capital Contribution or to demand
or receive the return of a Capital Contribution or make any claim to any
portion of Partnership capital or (iii) demand or receive property other
than cash in return for a Capital Contribution or to receive any cash in
return for a Capital Contribution.
2.2.4 Except as expressly provided in this Agreement, no Partner shall
have personal liability to make any Capital Contribution.
2.2.5 A deficit Capital Account of a Partner (or of a partner, member
or venturer of a Partner) shall not be deemed to be a liability of such
Partner (or of such partner, member or venturer) or an asset or property of
the Partnership (or any
Partner). Furthermore, no Partner shall have any obligation to the
Partnership or any other Partner for any deficit balance in such Partner's
Capital Account.
2.3 Use of Capital Contributions; Certain Expenses.
2.3.1 The initial Capital Contributions made pursuant to Section 2.1.1
shall be used as follows: (i) to pay unpaid third-party formation and
start-up costs of the Partnership, including the costs of entering into
this Agreement and any reimbursements to the Partners with respect to due
diligence, formation and start-up expenditures, including attorneys' fees
and expenses and qualification costs (and to reimburse each Partner for
portions thereof already paid by such Partner or its Affiliates), such
amounts (a) to include the Partners' attorneys' fees and expenses in
connection with the preparation of this Agreement, and the documents
contemplated hereby, and (b) to be paid or reimbursed to the Partners on
behalf of the Partnership out of such Capital Contributions promptly after
invoices for such amounts are submitted to the General Partners, and (ii)
the balance, if any, shall be held in reserves pending expenditure as set
forth in an Approved Budget (or otherwise as Approved by the Partners or
permitted without such Approval under Section 5.1.3.2). The Partnership's
reasonable expenses of acquiring the REO Partnership Interests and the
Properties that have been funded by the Partners shall be set forth on
Exhibit B and Exhibit B-1, respectively, promptly following the Agreement
Date. Such payments shall be treated as Capital Contributions pursuant to
Section 2.1.1, shall be credited to the Partner's Capital Account, in each
case as of the Agreement Date and shall be reimbursed by the Partnership as
necessary to cause the Capital Contributions of the Partners to be in
proportion to the Partners' respective Percentage Interests.
2.4 Loans to the Partnership. To the extent available cash flow, borrowings
and Capital Contributions, including Required Additional Contributions under
Section 2.1.2, are insufficient for the reasonable requirements of the
Partnership and the REO Partnerships, and the Partners fail, within ten (10)
days after receiving notice from the Blackstone General Partner or the Managing
General Partner requesting same, to Approve the Partners' making Capital
Contributions in excess of the remaining amount of Contributions that are
required under Section 2.1.2, the Blackstone Partners or the Insignia Partner
shall, upon notice to the other, have the unilateral right (but not the
obligation) to finance (directly, or through an Affiliate) any Partnership
expenditure by making a loan or loans to the Partnership at an interest rate
equal to the lesser of (a) twelve percent (12%) per annum, cumulative and
compounded quarterly, or (b) the maximum rate permitted by law, provided,
however, that prior to making any loan pursuant to this Section 2.4, the lending
Partners shall give at least ten (10) Business Days prior written notice to the
other Partners and offer to the other Partners the opportunity to participate
(in proportion to the Percentage Interests of the other Partners) in such loan
or loans. Any notice from a General Partner pursuant to this Section 2.4 shall
specify the amount of such loan, the share thereof which each Partner (or its
Affiliates) may lend and the earliest date on which such loan is to be made to
the Partnership (which date shall not, except in case of Emergency, be earlier
than ten (10) Business Days after such notice is received by the other
Partners). The other Partners may participate in any loan pursuant to this
Section 2.4, if at all, only by delivery to the Partnership, not later than the
date specified in such notice, of its share of such loan. All
loans described in this Section 2.4 shall be repayable as provided for in
Sections 4.1 and 4.2. If the Insignia Partner elects not to participate in a
loan, the Blackstone General Partner, on behalf of the Blackstone Partners, may
elect to loan a proportionate amount to the Insignia Partner to be loaned to the
Partnership by the Insignia Partner.
ARTICLE 3
ALLOCATIONS
3.1 Establishment and Maintenance of Capital Accounts; Partnership Status.
The Blackstone General Partner shall establish and cause the Partnership to
maintain a single Capital Account for each Partner which reflects each Partner's
Capital Contributions to the Partnership. Each Capital Account shall also
reflect the allocations and distributions made pursuant to Articles 3 and 4 and
otherwise be adjusted in accordance with Code Section 704 and the principles set
forth in Regulations Sections 1.704-l(b) and 1.704-2. In applying such
principles, any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-l(b)(2)(iv)(i) shall be allocated among the Partners
in the same manner as such expenditures would be allocated among the Partners
pursuant to this Article 3 if such expenditures were treated as additional items
of deduction of the Partnership that were recognized and required to be
allocated among the Partners pursuant to this Article 3 with respect to the
Partnership Accounting Year in which such expenditures were made. The Partners
intend that the Partnership be treated as a partnership for tax purposes.
3.2 Profit and Loss Allocations. Except as expressly provided to the
contrary in this Section 3.2, for purposes of determining Capital Account
balances under this Section 3.2, (a) Profit and Loss with respect to any
Partnership Accounting Year shall be allocated prior to reducing Capital
Accounts by any distributions with respect to such Partnership Accounting Year,
and (b) Section 3.2 shall be applied before applying Section 3.3.
Notwithstanding anything to the contrary in this Article 3, the allocations of
Profit and Loss pursuant to this Article 3 are intended to satisfy the
"fractions" and "substantial economic effect" rules contained in Section
514(c)(9)(E) of the Code, and Profits and Losses shall be allocated among the
Partners only to the extent that such allocations would not violate such rules.
3.2.1 Loss. For each Partnership Accounting Year from the Agreement
Date until the termination of the Partnership, Loss from Partnership
operations shall be allocated among the Partners in the following order of
priority:
3.2.1.1 First, to offset any cumulative Profits allocated to the
Partners pursuant to Section 3.2.2.2; and
3.2.1.2 Thereafter, after giving effect to the allocations made
pursuant to Section 3.2.1.1, among the Partners in proportion to the
Partners' then respective Percentage Interests.
3.2.2 Profit. For each Partnership Accounting Year, Profit shall be
allocated in the following order of priority:
3.2.2.1 First, to offset any cumulative losses allocated to the
Partners pursuant to Section 3.2.1.2,
3.2.2.2 Thereafter, giving effect to the Allocations made
pursuant to Section 3.2.2.1, among the Partners in proportion to the
Partners' then effective Percentage Interests.
3.2.3 Rules of Construction.
3.2.3.1 For purposes of applying Section 3.3 as a result of a
disposition occurring with respect to part (but less than all) of any
capital asset of the Partnership, a Partner's Capital Account balance
shall be deemed to be increased by such Partner's share of Partnership
Minimum Gain and Partner Nonrecourse Debt Minimum Gain remaining after
such disposition as determined under the Regulations under Code
Section 704(b).
3.2.3.2 Except as is otherwise provided in this Article 3, an
allocation of Partnership taxable income or taxable loss to a Partner
shall be treated as an allocation to such Partner of the same share of
each item of income, gain, loss and deduction that has been taken into
account in computing such taxable income or taxable loss.
3.3 Minimum Gain Chargeback and Qualified Income Offset.
3.3.1 No Impermissible Deficits. Notwithstanding any other provision
of this Agreement, taxable loss (or items of deduction) shall not be
allocated to a Partner to the extent that the Partner has or would have, as
a result of such allocations, an Adjusted Capital Account Deficit. Any
taxable loss (or items of deduction) which otherwise would be allocated to
a Partner, but which cannot be allocated to such Partner because of the
application of the immediately preceding sentence, shall instead be
allocated to the other Partners.
3.3.2 Qualified Income Offset. In order to comply with the "qualified
income offset" requirement of the Regulations under Code Section 704(b),
and notwithstanding any other provision of this Agreement to the contrary
except Sections 3.3.3 and 3.4.3 below, in the event a Partner for any
reason (whether or not expected) has an Adjusted Capital Account Deficit,
items of Profits (consisting of a pro rata portion of each item of income
comprising the Partnership's Profits, including both gross income and gain
for the taxable year) shall be allocated to such Partner in an amount and
manner sufficient to eliminate as quickly as possible the Adjusted Capital
Account Deficit.
3.3.3 Minimum Gain Chargeback. In order to comply with the "minimum
gain chargeback" requirements of Regulations Sections 1.704-2(f)(1) and
1.704-2(i)(4), and notwithstanding any other provision of this Agreement to
the contrary, in the event there is a net decrease in a Partner's share of
Partnership Minimum Gain and/or Partner Nonrecourse Debt Minimum Gain
during a Partnership taxable year, such Partner shall be specially
allocated items of income and gain for that year (and if necessary, other
years) in an amount equal to its respective share of such net decrease
during such year, determined pursuant to Regulations Sections 1.704-2(g)
and 1.704-(2)(i)(5) as required by and in accordance with Regulations
Sections 1.704-2(f) and 1.704-2(i)(4) before any other allocation is made.
3.4 Other Tax Allocation Provisions.
3.4.1 Income Characterization. For purposes of determining the
character (as ordinary income or capital gain) of any Profit allocated to
the Partners pursuant to Section 3.3 or 3.4, such portion of the taxable
income of the Partnership allocated pursuant to Section 3.3 which is
treated as ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Partners in the
proportion which (i) the amount of depreciation previously allocated to
each Partner bears to (ii) the total of such depreciation allocated to all
Partners. This Section 3.4.1 shall not alter the amount of allocations
among the Partners pursuant to Section 3.2 but merely the character of
income so allocated.
3.4.2 Change in Percentage Interests. Notwithstanding the foregoing,
in the event any Partner's Percentage Interest changes during a fiscal year
for any reason other than an adjustment thereof pursuant to Section
2.2.2.1, including the Transfer of any interest in the Partnership, the
allocations of taxable income or loss under this Article 3, and
distributions, shall be adjusted as necessary to reflect the varying
interests of the Partners during such year using an interim closing of the
books method as of the date of such change, or such other method as is
Approved by the General Partners.
3.4.3 Mandatory Allocations -- Section 704(c) and Partner Nonrecourse
Debt.
3.4.3.1 Notwithstanding the foregoing, (i) in the event Code
Section 704(c) or Code Section 704(c) principles applicable under
Regulations Section 1.704-1(b)(2)(iv) require allocations of income or
loss of the Partnership in a manner different than that set forth
above, the provisions of Code Sections 704(b) and 704(c) and the
Regulations thereunder shall control such allocations among the
Partners; and (ii) all tax deductions and taxable losses of the
Partnership that, pursuant to Regulations Section 1.704- 2(i), are
attributable to a Partner Nonrecourse Debt for which a Partner (or a
Person related to such Partner under Treasury Regulations Section
1.752-4(b)) bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) shall be allocated to such Partner as
required by Regulations Section 1.704-2.
3.4.3.2 Any item of income, gain, loss and deduction with respect
to any property (other than cash) that has been contributed by a
Partner to the capital of the Partnership or which has been revalued
for Capital Account
purposes pursuant to Regulations Section 1.704-1(b)(2)(iv) and which
is required or permitted to be allocated to such Partner for income
tax purposes under Code Section 704(c) so as to take into account the
variation between the tax basis of such property and its fair market
value at the time of its contribution or at the time of its
revaluation for Capital Account purposes pursuant to Regulations
Section 1.704-1(b)(2)(iv) (such contributed or revalued property is
referred to as "Revalued Property") shall be allocated solely for
income tax purposes in the manner so required or permitted under Code
Section 704(c) using the "traditional method" described in Regulations
Section 1.704-3(b) (or any successor Regulation), such allocations to
be made as shall be Approved by the General Partners; provided,
however, that curative allocations consisting of the special
allocation of gain or loss upon the sale or other disposition of the
Revalued Property shall be made in accordance with Regulations Section
1.704-3(c) to the extent necessary to eliminate any disparity, to the
extent possible, between the Partners' book and tax Capital Accounts
attributable to such property; and further provided, however, that any
other method allowable under applicable Regulations may be used in
connection with any Revalued Property as shall be Approved by the
General Partners. Notwithstanding anything in this Agreement to the
contrary, the determination of Gross Asset Value for any asset
contributed to the Partnership, distributed from the Partnership or
any other Revalued Property shall be as Approved by the General
Partners.
3.4.4 Guarantee of Partnership Indebtedness. Except for arrangements
expressly described in this Agreement (including loans described in
Section 2.2.2 or 2.4), no Partner shall enter into (or permit any Person
related to the Partner to enter into) any arrangement with respect to any
liability of the Partnership that would result in such Partner (or a Person
related to such Partner under Regulations Section 1.752- 4(b)) bearing the
economic risk of loss (within the meaning of Regulations Section 1.752-2)
with respect to such liability unless such arrangement has been Approved by
the General Partners. To the extent a Partner is permitted to guarantee the
repayment of any Partnership indebtedness under this Agreement, each of the
other Partners shall be afforded the opportunity to guarantee such
Partner's pro rata share of such indebtedness, determined in accordance
with the Partners' respective Percentage Interests. If a loan is to be made
to the Partnership and such loan is to be guaranteed by any Partners or
their Affiliates (which guaranty by a Partner or such Partner's Affiliate
shall occur only upon the Approval of the General Partners and the Approval
of such Partner), then such guaranty shall be made in the proportion that
is Approved by the General Partners. Nothing in this Section 3.4.4 shall
prohibit the Blackstone General Partner from entering into any contract or
other arrangement that has been Approved by the General Partners (or
otherwise is permitted to be entered into under this Agreement without the
Approval of the General Partners) and that results in contingent liability
for the Blackstone General Partner by operation of law by reason of the
Blackstone General Partner being a general partner of the Partnership.
3.4.5 References to Regulations. Any reference in this Agreement to a
provision of final, proposed and/or temporary Regulations shall, in the
event such provision is modified or renumbered, be deemed to refer to the
successor provision as so modified or renumbered, but only to the extent
such successor provision applies to the
Partnership under the effective date rules applicable to such successor
provision or the Partners otherwise so Approve under applicable elections
contained in such Regulations.
3.4.6 Tax Definitions.
3.4.6.1 "Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(c). The amount of Nonrecourse Deductions
for a Partnership Accounting Year equals the excess, if any, of the
net increase, if any, in the amount of Partnership Minimum Gain during
that fiscal year, over the aggregate amount of any distributions
during that fiscal year of proceeds of a Nonrecourse Liability that
are allocable to an increase in Partnership Minimum Gain, determined
according to the provisions of Regulations Section 1.704-2(c).
3.4.6.2 "Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.704-2(b)(3).
3.4.6.3 "Partner Nonrecourse Debt Minimum Gain" means an amount,
with respect to each Partner Nonrecourse Debt, equal to the
Partnership Minimum Gain that would result if such Partner Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance
with Regulations Section 1.704-2(i)(2).
3.4.6.4 "Partner Nonrecourse Debt" has the meaning for the term
"Partner Nonrecourse Debt" set forth in Regulations Section 1.704-
2(b)(4).
3.4.6.5 "Partner Nonrecourse Deductions" has the meaning for the
term "Partner Nonrecourse Deductions" set forth in Regulations Section
1.704-2(i). The amount of Partner Nonrecourse Deductions with respect
to a Partner Nonrecourse Debt for a Partnership Accounting Year equals
the excess, if any, (i) of the net increase, if any, in the amount of
the Partnership Minimum Gain attributable to such Partner Nonrecourse
Debt during such Partnership Accounting Year, over (ii) the aggregate
amount of any distributions during such year to the Partner that bears
the economic risk of loss for such Partner Nonrecourse Debt to the
extent such distributions are from proceeds of such Partner
Nonrecourse Debt and are allocable to an increase in Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined according to the provisions of Regulations Section
1.704-2(i).
3.4.6.6 "Partnership Minimum Gain" has the meaning ascribed to
the term "Partnership Minimum Gain" in Regulations Section 1.704-
2(d)(1).
3.5 Basis Elections. In the event of a transfer of all or any part of a
Partner's interest in the Partnership, the Partnership shall make the election
described in Code Section 754 to adjust the basis of the Partnership's assets
under Code Section 743(b). The transferor or transferee of a Partnership
interest shall pay all costs of preparing and filing all instruments or
documents necessary to effectuate such election if made.
3.6 General Allocation Rules. All Profit and Loss of the Partnership shall
be allocated with respect to each Partnership Accounting Year (or part thereof)
as of the end of, and within ninety (90) days after the end of, such year, or as
soon thereafter as is practically possible. All Profit and Loss shall be
allocated to the Partners shown on the records of the Partnership to have been
Partners as of the last day of the Partnership Accounting Year for which such
allocation is to be made, except that, if a Partner sells or exchanges its
interest in the Partnership or otherwise is admitted as a substituted Partner,
the Profit or Loss shall be allocated between the transferor and the transferee
by taking into account their varying interests during the Partnership Accounting
Year in accordance with Code Section 706(d), using the interim closing of the
books method or such other method as shall be Approved by the General Partners.
3.7 Sharing of Partnership Nonrecourse Debt. Throughout the term of the
Partnership, the nonrecourse debt of the Partnership (other than Partner
Nonrecourse Debt) shall be allocated for tax purposes among the Partners in
accordance with their then respective Percentage Interests. To the extent that
any Partner's share of such nonrecourse debt as so specified exceeds the amounts
referred to in Regulations Sections 1.752-3(a)(1) and (2), it is intended that
the foregoing shares shall be viewed and treated as reasonably consistent with
allocations (which have substantial economic effect) of some significant item of
partnership income or gain within the meaning of Regulations Section
1.752-3(a)(3).
3.8 Adjustment of Gross Asset Value. Gross Asset Value, with respect to any
asset, shall be the adjusted basis for federal income tax purposes of that
asset, except as follows:
3.8.1 Except as provided in Section 2.1.1, the initial Gross Asset
Value of any asset contributed (or deemed contributed under Regulations
Section 1.708-1(b)(1)(iv)) by a Partner to the Partnership shall be the
fair market value of the asset on the date of the contribution, as Approved
by the General Partners (subject to Section 5.9(iii).
3.8.2 The Gross Asset Values of all Partnership assets shall be
adjusted to equal the respective fair market values of the assets, as
Approved by the General Partners (subject to Section 5.9(iii):
3.8.2.1 If the Partners Approve that an adjustment is necessary
or appropriate to reflect the relative economic interests of the
Partners in the Partnership, as a result of (i) the acquisition of an
additional interest in the Partnership by any new or existing Partner
in exchange for more than a de minimis capital contribution; or
(ii) the distribution by the Partnership to a Partner of more than a
de minimis amount of Partnership property as consideration for an
interest in the Partnership; and
3.8.2.2 As of the liquidation of the Partnership within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g).
3.8.3 The Gross Asset Value of any Partnership asset distributed to
any Partner shall be the gross fair market value of the asset on the date
of distribution as Approved by the General Partners (subject to Section
5.9(iii) (less any liabilities assumed by the distributee Partner or to
which such asset is subject as of the time of distribution).
3.8.4 The Gross Asset Values of Partnership assets shall be increased
or decreased to reflect any adjustment to the adjusted basis of the assets
under Code Section 734(b) or 743(b), but only to the extent that the
adjustment is taken into account in determining Capital Accounts under
Regulations Section 1.704-1(b)(2)(iv)(m), provided that Gross Asset Values
shall not be adjusted under this Section 3.8.4 to the extent that the
General Partners Approve that an adjustment under Section 3.8.2 is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment under this Section 3.8.4.
After the Gross Asset Value of any asset has been determined or adjusted
under Section 3.8.1, 3.8.2 or 3.8.4, Gross Asset Value shall be adjusted by
the depreciation taken into account with respect to the asset for purposes
of computing Profits or Loss.
3.9 Approvals Relating to Tax Issues.
During all periods, all material tax elections, the determination of Gross
Asset Value for any property, other decisions relating to taxes and tax returns,
require the Approval of the General Partners.
ARTICLE 4
LOAN REPAYMENTS AND
DISTRIBUTIONS
4.1 Net Available Cash. The Blackstone General Partner shall, at the end of
each quarter, determine the amount of Net Available Cash. All Net Available Cash
for any period shall be distributed in the following order of priority within
thirty (30) days after the end of each calendar quarter, after first repaying
any loans to the Partnership from the Partners under Section 2.4 (loans which
have been outstanding the longest shall be repaid first and if two or more
Partners have loans which have been outstanding for equal periods, repayment of
such loans shall be made pro rata, in proportion to the Partners' then
respective loan balances, with payments first repaying accrued but unpaid
interest and then repaying principal) and subject to the terms of Sections 4.2
and 4.3, to the Partners in proportion to the Partners' respective Percentage
Interests.
4.2 Proceeds and Distributions in Liquidation. The proceeds received by the
Partnership in connection with the liquidation and winding up of the Partnership
shall be applied in the following order of priority:
4.2.1 First, to the payment of creditors of the Partnership (including
any creditors that are also Partners), except secured creditors whose
obligations will be assumed or otherwise transferred on a liquidation of
the Partnership property or assets;
4.2.2 Second, to the payment of expenses incurred in the dissolution
and termination of the Partnership; and
4.2.3 Third, the balance, if any, shall be distributed to the Partners
in accordance with the positive Capital Asset balances of the Partners.
4.3 General Distribution Rules. The timing and amount of all distributions
shall be in accordance with Sections 4.1, 4.2, 8.4 and 8.5. All distributions of
cash shall be made to the Partners shown on the records of the Partnership to
have been Partners on the date of the distribution. All distributions, upon
request by a Partner, shall be made by wire transfer in immediately available
funds to such Partner's account specified in such request. Distributions of Net
Available Cash made to a Partner shall be deemed to be advances on account of
such Partner's share of the distributable amounts thereof. For purposes of this
Agreement, the term "distributable" with respect to such distributions shall
mean the amount of such distributions as finally determined pursuant to the
provisions of this Agreement by the Partners for the Partnership Accounting Year
in respect of which they were made and for the term of the Partnership.
4.4 Source of Distributions. Each Partner shall look solely to the assets
of the Partnership for the return of its Capital Contributions and its share of
distributions and shall have no recourse upon dissolution or otherwise against
the Partnership, the Partners or the Liquidator. No holder of an interest in the
Partnership shall have any right to receive any distributions except as provided
in this Agreement or any right to demand or receive property other than cash
upon dissolution and termination of the Partnership.
ARTICLE 5
MANAGEMENT; DUTIES AND POWERS OF THE GENERAL
PARTNER AND PARTNERS; RIGHTS AND DUTIES OF PARTNERS
5.1 Management of Business; Partner Obligations; Reimbursements; Major
Decisions; Retained Approvals.
5.1.1 Management. The Partnership shall be managed by the Blackstone
General Partner, subject to the Approval rights of the Managing General
Partner under this Agreement. Except to the extent the Approval of the
Managing General Partner is expressly required under this Agreement, no
consent or Approval of the Managing General Partner shall be required with
respect to any action or decision of the Blackstone General Partner with
respect to Partnership matters. Except as otherwise provided in this
Agreement, the Blackstone General Partner shall be responsible for
supervising and undertaking the
business of the Partnership and shall make all decisions affecting the
day-to-day operations of the Partnership, the REO Partnerships. The
Blackstone General Partner and the Managing General Partner shall cause
each of its Authorized Representatives to devote as much time as is
reasonably necessary to fulfill such Partner's obligations under this
Agreement.
The General Partners, at Partnership expense, shall be responsible for
obtaining appropriate information and conducting due diligence concerning
the Properties and the REO Partnerships and negotiating the purchase of the
Properties and the REO Partnerships on behalf of the Partnership. The
General Partners shall negotiate all documents with respect to Properties
and the REO Partnerships that are Approved by the General Partners,
including the Approved Contracts, contracts with surveyors, architects,
governmental authorities and others concerning entitlements, easements,
surveying, landscaping, insuring, zoning, construction, grading,
improvements, and the like, all leases related to the Properties, offers
and terms of sale of the Partnership assets, and contracts for necessary
goods or services or borrowings regarding the Properties; all to the extent
Approved by the General Partners from time to time.
The signature of the Blackstone General Partner shall be required on
all contracts and documents of the Partnership and shall be required to
bind and shall be binding upon the Partnership for all purposes, and third
parties shall be entitled to rely on the authority of the Blackstone
General Partner to take any action on behalf of the Partnership.
Notwithstanding the foregoing, the Blackstone General Partner shall not
take any action requiring Approval of the General Partners under this
Agreement unless the provisions of this Agreement concerning such Approval
have been fully satisfied.
The exercise by the Limited Partner of any right or power conferred to
it herein shall not be construed to constitute participation by the Limited
Partner in the control of the business of the Partnership so as to make the
Limited Partner liable as a general partner for the debts and obligations
of the Partnership. If any right or power conferred on the Limited Partner
herein would have the effect of causing the Limited Partner to be liable as
a general partner of the Partnership, the Limited Partner shall be deemed
to not have such right or power.
5.1.2 Compensation; Reimbursement. Other than fees,
reimbursements or commissions otherwise permitted under this
Agreement, no compensation shall be payable by the Partnership to any
Partner or to an Affiliate of any Partner. The Partnership shall
reimburse the Partners for their actual and reasonable out-of-pocket
expenses incurred in connection with Partnership business to the
extent such Partner is authorized to take the action resulting in such
expenses, including those expenses that are described in this Section
5.1, or that are otherwise specifically authorized by this Agreement
(including Section 5.1.3). Promptly following the Agreement Date, the
General Partners shall cause the Partnership to reimburse or pay, as
the case may be (from the initial Capital Contributions to the
Partnership), the expenses described in Section 2.3.
5.1.3 Permitted Expenditures. The Blackstone General Partner
shall not, without the Approval of the Managing General Partner, make
any
expenditure of funds of the Partnership, or commit to make any such
expenditure, other than in response to an Emergency, except as
provided for in an Approved Budget of an REO Partnership; provided,
however, the provisions of this Section 5.1.3 shall in no way limit
the General Partner's authority to cause the Partnership to fund
Emergency expenditures or Non- Discretionary Items when due that are
billed to or incurred by the Partnership or an REO Partnership in
excess of the amounts budgeted therefor. Notice of Emergency
expenditures or actions shall be given by the Blackstone General
Partner as soon as practicable after such expenditures are made or
actions are taken.
5.1.4 Powers of the General Partner. The Blackstone General
Partner, in extension and not in limitation of the powers given to it
by law or this Agreement, shall have full power and shall have the
obligation, without the necessity of obtaining the Approval of the
Managing General Partner, and at the expense of the Partnership, to
take all actions required to conduct the day-to-day operations of the
Partnership and, subject to the availability of Partnership funds and
the funding limitations of Section 5.1.3., implement the Major
Decisions and other decisions that have been Approved by the General
Partners and pay expenses of the Partnership to the extent the
Approval of the Managing General Partner with respect thereto is not
required under this Agreement.
5.1.4.1 Employees. The Partnership shall not have any employees.
5.1.4.2 General Partner Duties. The Blackstone General Partner
shall use its reasonable efforts, subject to the availability of
Partnership funds, to (i) cause the Partnership to enter into any
Approved Contracts and take the other actions that are described in
Section 1.4 and 1.9 that have been Approved by the General Partners,
(ii) cause the Major Decisions and other actions that have been
Approved by the General Partners to be implemented, (iii) cause the
Partnership to timely issue the reports and tax returns required under
this Agreement, (iv) undertake its other obligations under this
Agreement. and (v) monitor and supervise the performance of Persons
contracting with the Partnership. The Blackstone General Partner shall
not be required to conduct the Partnership's day-to-day operations and
implement Major Decisions as the General Partner's sole and exclusive
function, and it and its Affiliates may (and expect to) have other
business interests and may (and expect to) engage in other activities
in addition to those relating to the Partnership, without having or
incurring any obligation to offer any interest in such activities to
the Partnership or any Partner. Notwithstanding the foregoing, the
Blackstone General Partner shall be obligated to devote, and cause its
Controlling persons to devote, so much of their time to the
Partnership's business as shall be reasonably required to meet the
Blackstone General Partner's obligations hereunder and the obligations
of any of its Affiliates to the Partnership under any contracts with
the Partnership.
5.1.5 Major Decisions. The following are major decisions (the
"Major Decisions") requiring the Approval of the General Partners:
5.1.5.1 Any act in contravention of this Agreement or
extending the term of the Partnership.
5.1.5.2 Amending this Agreement to the benefit or detriment
of any Partner.
5.1.5.3 Establishing or adjusting Gross Asset Value under
Section 3.8 for any contributed asset or distributed asset or
other Revalued Properties; Indemnification of any Person other
than a Partner or its Affiliates pursuant to Section 5.5.2 or
otherwise as permitted by this Agreement;
5.1.5.4 Except for liabilities to which the Blackstone
General Partner is subject as a matter of law by reason of being
a General Partner, entering into any agreement (i) which would
cause any Partner to become personally liable on or in respect of
or to guarantee any indebtedness of the Partnership or (ii) which
is not nonrecourse to such Partner;
5.1.5.5 Causing the Partnership to redeem or repurchase all
or any portion of the interest of a Partner (not including any
change in Percentage Interests pursuant to Section 2.2.2.1) or
causing the Partnership to enter into any contract in connection
with the acquisition, leasing or disposition of the Properties
other than an Approved Contract; or to borrow money from a
Partner or its Affiliates except pursuant to Sections 2.2.2 or
2.4;
5.1.5.6 Causing or permitting the Partnership to be merged
with any other entity; selling Partnership assets for
consideration including notes payable; or otherwise disposing of
Partnership assets;
5.1.5.7 Establishing or adjusting Gross Asset Value under
Section 3.8 for any contributed asset or distributed asset or
other Revalued Property;
5.1.5.8 Causing or permitting the Partnership to make loans
to, or (except for Approved Contracts or as provided in the REO
Partnership Agreements) enter into any contract with any Partner
or any Affiliate of a Partner;
5.1.5.9 Dissolving, terminating or liquidating the
Partnership, except as provided in Article 8 of this Agreement;
5.1.5.10 Terminating or substantially modifying any Approved
Contract, disposing of the REO Partnership Interests any other
asset of the Partnership (or any portion thereof) or permitting
an encumbrance to be placed on Partnership assets other than as
contemplated by the Approved Contracts, unless such action has
been Approved by the General Partners. Notwithstanding any
provision herein, the Blackstone General Partner may enforce
(including termination where permitted under the Management
Agreement) the Management Agreement in its sole discretion,
without any approval rights given to the Managing General
Partner);
5.1.5.11 Obtain any third-party loans other than those
Approved by the General Partners to be entered into in connection
with the Approved Contracts (whether secured or unsecured), or,
in connection with any third-party loan Approved by the General
Partners, execute or deliver on behalf of the Partnership any
guarantee or other agreement whereby the Partnership is or may
become liable for any obligations of any other Entity;
5.1.5.12 Acquire any asset other than pursuant to Approved
Contracts, or take any action on behalf of the Partnership that
is not within the scope of the Partnership purposes as set forth
in Sections 1.4 and 1.9;
5.1.5.13 Modify, prepay or refinance any indebtedness of the
Partnership other than those Approved by the General Partners to
be lenders in connection with the Approved Contracts;
5.1.5.14 Commence, dismiss, terminate or settle any material
litigation matter, material condemnation claim, or any matter or
claim (including an insurance claim) in connection with which the
amount in controversy is reasonably expected to exceed One
Hundred Thousand Dollars ($100,000);
5.1.5.15 Make any distribution except as permitted under
Article 4 except in connection with the liquidation of the
Partnership under Article 8, or make any Partnership expenditure
except as otherwise permitted or authorized by this Agreement
(including Section 5.1.3);
5.1.5.16 Except as otherwise provided in Sections 7.1(a),
admit transferee Partners to the Partnership as substituted
Partners or enter into financing that participates in profits;
or, except as provided in Article 7, permit any Transfer of any
interest in the Partnership to the extent Approval of the General
Partners for such Transfer is required under this Agreement; or
5.1.5.17 Confess any judgment against the Partnership or
cause the Partnership to file for Bankruptcy or other relief from
creditors; or
The enumeration of the foregoing rights shall not diminish or affect the
existence or exercise of other rights expressly granted to each of the Partners
under this Agreement. In the event of a deadlock in obtaining the Approval of
the General Partners with respect to any Major Decision, the deadlock shall be
resolved as provided in Section 5.9.
5.1.5.18 Approval Procedure. Notice of the request for the
Managing General Partner's Approval of any matter for which such
Approval is required pursuant to this Agreement shall be
delivered by the Blackstone General Partner to each Authorized
Representative of the Managing General Partner, the Partner's
summary and analysis of any other matter for which such Approval
is requested and the Partner's recommendations with respect to
any matter for which Approval is requested. Unless some other
time is specified in this Agreement, each such Authorized
Representative shall approve
or disapprove such matter by notice to the Blackstone General
Partner given within ten (10) Business Days following delivery of
such notice. Failure of all Authorized Representatives of any
Managing General Partner to timely respond by written notice to
the Authorized Representatives of the Blackstone General Partner,
indicating Approval or disapproval of such matter, shall be
deemed Approval by all Authorized Representative of such matter
for which Approval is requested. From and after any such
submission to the Authorized Representatives of the Partners, and
continuing until the matters addressed in such submission are
Approved or otherwise resolved, each such Authorized
Representative shall, upon request to the Partner who has
possession thereof, be furnished promptly with access to or, if
feasible, copies of such additional information and all Due
Diligence Materials which become available to such Partner that
are requested by the Partner whose Approval has been sought.
Notwithstanding anything to the contrary contained herein, (i)
the Blackstone General Partner may enter into commercial leases
without the Managing General Partner's Approval provided such
commercial leases cover demised premises of 5,000 rentable square
feet or less, and (ii) no Approval shall be required with respect
to any financing or refinancing that meets the parameters set
forth in the letter attached hereto as Exhibit C.
5.2 Sale of Properties.
Right to Sell. The foregoing notwithstanding, in connection with any
proposed sale of any REO Partnership Interest by the Partnership, the Blackstone
General Partner shall in good faith consider retention of an affiliate of the
Managing General Partner as the exclusive broker for marketing such interest for
sale and to complete a sale of any such interest for compensation commensurate
with that which would be paid to a third party performing similar services in a
similar geographic location.
5.3 Reporting Requirements; Financials; Meetings.
5.3.1 Governmental Reports; Meetings. The Blackstone General Partner
shall, at Partnership expense, use reasonable efforts to cause to be
prepared and timely filed with appropriate federal, state and foreign
regulatory and administrative bodies, all reports required to be filed with
such entities under then current applicable laws, rules and regulations.
Such reports shall be prepared on the accounting or reporting basis
required by such regulatory bodies. The Partners shall be provided with a
copy of any such report. No meeting of the Partners shall be required
unless requested by any Partner upon notice to all Partners, which notice
may be given by any Partner at any time. All Partners shall be given
written notice of any meeting of the Partnership at least twenty (20) days
prior to any such meeting by the Partner requesting such meeting. Any
meetings shall be held at the record-keeping office of the Partnership or
at any other reasonably convenient location within the United States as the
Partners may Approve and specify in such notice.
5.3.2 Access; Audit. The Blackstone General Partner shall permit any
Partner to review and copy, during normal business hours at the office of
the Partnership, all Partnership financial records and information. Each
Partner shall have the
right to have such records and information audited at such Partner's
expense to the extent such audit is not required at Partnership expense
under Section 5.3.3(i). The Blackstone General Partner shall maintain (at
the office of the Partnership) reports required or otherwise prepared and
delivered hereunder, copies of which shall be furnished to each Partner
when available, at the Partnership's expense, together with such
supplementary records and reports as are necessary to reflect the
allocation among the Partners of the tax items and distributions of the
Partnership. The Partnership's annual financial statements (and such other
financial statements as required by loan documents to which the Partnership
is a party) shall be audited at the Partnership's expense.
5.3.3 Financials and Status Reports. The Blackstone General Partner
shall cause the following reports to be issued:
(i) At Partnership expense, the Blackstone General Partner shall
use reasonable efforts to cause to be issued to the Partners annual
financials, in reasonable detail, which shall be prepared by the
Partnership's independent certified public accountants at Partnership
expense, within sixty (60) days after the close of each year
(including a balance sheet and income and expense statements, sources
and uses of funds, cash on hand, distributions, changes in financial
position, tax information, and unrepaid Partner loans). Such financial
reports shall be prepared on an income tax basis and in accordance
with generally accepted accounting rules. As soon as is practicable
after the execution of this Agreement, the Partners shall meet to
discuss the methodology to be used in preparing such reports;
(ii) At Partnership expense, the Managing General Partner shall
use reasonable efforts to cause to be issued to the Partners quarterly
unaudited financials, in reasonable detail, within sixty (60) days
after the close of each calendar quarter (commencing with the calendar
quarter beginning on January 1, 1997), including a balance sheet,
income and expense statements, sources and uses of funds, cash on
hand, distributions, changes in financial position, and unrepaid
Partner loans;
(iii) At Partnership expense, the Managing General Partner shall
cause to be issued to the limited Partner a monthly income and expense
statement, in reasonable detail within thirty (30) days after the
close of each month, showing sources and uses of Partnership funds and
changes in the Partnership's financial position during such month. In
connection with preparing such monthly income and expense statement,
the Managing General Partner shall use commercially reasonable efforts
to review the data provided by the Property Manager that is to be
presented in such income and expense statement, such review to be
commenced and completed to the extent possible, after using
commercially reasonable efforts to do so, before the Managing General
Partner furnishes such statement to the Partners. If such review is
not completed prior to furnishing such statement, such review shall be
completed as soon as is practicable thereafter (with notice being
given to the Blackstone General Partner by the Managing General
Partner of any variance from such statement that is discovered by the
Managing General Partner in such review); and
(iv) In preparing reports required under this Agreement, the
Blackstone General Partner and the Managing General may rely on
information furnished by the Property Managers to the extent that it
is reasonable to do so.
5.4 Tax Matters Partner; Tax Returns. The Blackstone General Partner is
hereby designated as the "Tax Matters Partner", as such term is defined in
Section 6231(a)(7) of the Code, and it shall serve as such at Partnership
expense with all powers granted to a tax matters partner under the Code. Each
Partner shall give prompt notice to each other Partner of any and all notices it
receives from the Internal Revenue Service (or any other taxing authority)
concerning the Partnership, including any notice of audit, any notice of action
with respect to a revenue agent's report, any notice of a 30-day appeal letter
and any notice of a deficiency in tax concerning the Partnership's federal,
state or local income tax returns. At Partnership expense, the Tax Matters
Partner shall furnish each Partner with status reports regarding any negotiation
between the Internal Revenue Service (or other taxing authority) and the
Partnership promptly after any material new development. The Tax Matters Partner
shall use its reasonable efforts to cause the Partnership's accountants to
prepare and file on a timely basis, without regard to extensions, all tax and
information returns which the Partnership may be required to file. No tax or
information return shall be filed without the reasonable Approval of the General
Partners in all cases. The Blackstone General Partner shall cause the
Partnership's accountants to prepare and deliver, at Partnership expense, to
each Partner on a timely basis an information reporting return (K-1) reflecting
each Partner's distributive share of all income, gain, loss, deductions,
allowances or credits of the Partnership for each Partnership Accounting Year,
as computed pursuant to Article 3.
5.5 Indemnification and Liability of Partners.
5.5.1 No Partner shall be liable, responsible or accountable in
damages or otherwise to any of the Partners or the Partnership for any act
or omission performed or omitted by it in good faith on behalf of the
Partnership and in a manner reasonably believed by it to be (i) within the
scope of the authority granted to it by this Agreement and (ii) in the best
interests of the Partnership, the Partners or their Affiliates unless such
Partner or such Partner's Affiliate has engaged in actual fraud,
intentional misappropriation of funds, gross negligence or breach of
fiduciary duty in connection with such act or omission.
5.5.2 The Partnership shall indemnify and hold harmless each Partner
and its Affiliates from and against any obligations, actual damages,
penalties, actions, judgments, suits, expenses, disbursements, losses,
costs or liabilities of any kind or nature whatsoever which may be imposed
upon, incurred or asserted against such Partner or its Affiliates (or the
Affiliates, partners and members of such Partner or its Affiliates)
(including reasonable attorneys' and paralegals' fees and court costs) in
connection with, due to or arising out of such Partner's serving as a
Partner or the Blackstone General Partner of the Partnership if such
Partner acted in good faith, with reasonable belief that such actions were
within the scope of authority granted to such Partner under this Agreement.
5.5.3 Each Partner shall indemnify and hold harmless each other
Partner and the Partnership from and against any direct (and not
consequential or incidental) obligations, actual damages, penalties,
actions, judgments, suits, expenses, disbursements, losses, costs or
liabilities (collectively, the "Liabilities") incurred or paid by such
other Partners or the Partnership (to the extent such Liabilities are not
reimbursed by insurance proceeds or indemnities from third parties), to the
extent such Liabilities are caused by, and such Partner or such Partner's
Affiliate has engaged in, actual fraud, intentional misappropriation of
funds, gross negligence or breach of fiduciary duty.
5.5.4 In any case where indemnity is sought by a Partner, such Partner
shall give notice of the request for indemnification to the Partnership and
the other Partners from whom the indemnity is required and give them the
opportunity to the extent reasonably possible, to participate in the
defense of the claim giving rise to the claim for indemnity, all at
Partnership expense and subject to the reasonable Approval of the General
Partners.
5.6 Limitation of Liability. Each Partner's liability shall be limited as
set forth in this Agreement, the Act and other applicable law. Except as
provided in Sections 5.5.1, 5.5.3 or 7.4, a Partner shall not be personally
liable for any debts or losses of the Partnership beyond the Partner's
respective interest in the Partnership, other than distributions received by a
Partner as to which, by terms of the Act, such Partner is obligated to return.
Except as expressly provided in this Agreement, the Limited Partner shall not be
liable for the debts or obligations of the Partnership. No partner, officer,
director, shareholder, manager or member of a Partner shall be liable for the
obligations of such Partner to the Partnership or the other Partners under any
circumstances.
5.7 No Priorities. Except as specifically provided in this Agreement, no
Partner shall have any priority over any other Partner as to the return of his
or its Capital Contributions or as to distributions or allocations of Profits or
Losses or other tax items.
5.8 Determination Date for Indemnity Payments. For purposes of this
Agreement, until the "Determination Date" (defined below) has occurred, no
amount shall be due and owing by any Partner to the Partnership or to another
Partner pursuant to Section 5.5.1 or 5.5.3, 7.5 or 9.2, if there is a bona fide
dispute as to whether such amount is due or whether a Partner. The
"Determination Date" shall be deemed to have occurred only upon the earlier to
occur of the following: (a) the final determination by a Court described in
Section 9.4 that an amount described in Section 5.5.1, 5.5.3, 7.5 or 9.2 is due
and payable, and time to file a notice of appeal from such determination has
expired without such notice having been filed; or (b) the affirmation of a
determination described in preceding clause (a) by the entry of judgment to such
effect by the court to which such determination has been appealed.
5.9 Deadlock. On and after January 1, 1998, upon (i) a bona fide dispute as
to whether any Major Decision (other than the Major Decisions in Section
5.1.5.1, 5.1.5.2, 5.1.5.4, and 5.1.5.12) proposed by the Blackstone General
Partner should be Approved by the Managing General Partner or (ii) the
termination of Management
Agreements (other than terminations by the Property Manager or as a result of
dispositions of the assets held by the REO Partnership) with respect to 25% or
more of the REO Partnerships (a "Deadlock"), the Managing General Partner may
issue a notice thereof to the Blackstone General Partner (a "Deadlock Notice").
The Deadlock Notice shall describe the Deadlock and the resolution proposed by
the Partner issuing the Deadlock Notice. If a Deadlock Notice is properly
issued, the Partners shall meet in good faith during the 10-day period after the
Deadlock Notice has been received. If (i) a Major Decision that is the subject
of the Deadlock is not resolved within such 10-day period or (ii) any Major
Decision that is the subject of the Deadlock at any of the REO Partnerships is
not resolved within the 10-day period applicable to such Major Decision, then:
(i) Unless the Major Decision is described in this Section 5.9(i) or
Section 5.9(iii), (a) the Managing General Partner may elect to exercise
the buy\sell provisions set forth in Section 5.9(ii) below (the "Deadlock
Election") by giving written notice of such election to the Blackstone
General Partner within ten (10) Business Days after the end of such 10-day
period, or (b) absent the timely issuance of such a Deadlock Election by
the Managing General Partner, the Blackstone General Partner's decision
with respect to the Major Decision that is the subject of such Deadlock
shall be deemed Approved. The Major Decision described in this Section
5.9(i) for which a Deadlock Election may not be issued is a Deadlock
concerning whether a Funding Notice may be issued to the extent such
Funding Notice would require Capital Contributions exceeding the dollar
limitation contained in Section 2.1.2 (the sole remedy provided under this
Agreement for such a Deadlock is provided in Section 2.4).
(ii) Within thirty (30) days after a Deadlock Election is timely
issued by the Managing General Partner pursuant to Section 5.9(i)(a), the
Managing General Partner shall give notice (a "Deadlock Amount Notice") to
the Blackstone General Partner of the amount (the "Deadlock Amount"), which
would determine the price at which the Insignia Partners or its Affiliates
or designees would be willing to (i) acquire all of the Blackstone
Partners' interests in the Partnership and the REO Partnerships or
(ii) sell the Insignia Partners' interests in the Partnership and the REO
Partnerships to the Blackstone Partners or an Affiliate or designee (the
Blackstone Partners and the Insignia Partners are each referred to herein
as a "Partner Group"). The Deadlock Amount shall be an amount equal to the
gross value of the assets of the Partnership and the REO Partnerships as
determined by the Managing General Partner. The amount which the Insignia
Partners (or Affiliates and designees) shall pay to the Blackstone Partners
and the amount which the Blackstone Partners (or Affiliates and designees)
shall pay, if the Blackstone Partners elect, to the Insignia Partners for
their respective interests in the Partnership and the REO Partnerships,
shall be the amounts the selling Partner Group would receive pursuant to
Sections 4.2.2 and 4.2.3 of this Agreement with respect to their general
and limited partner interests and the REO Partnership Agreements with
respect to their general partnership interests if all
the assets of the REO Partnerships were sold for the Deadlock Amount and
the Partnership and the REO Partnerships were liquidated, after paying all
liabilities set forth on the books of the Partnership and the REO
Partnerships (the "Insignia Buy-Out Price" or the "Blackstone Buy-Out
Price", as applicable). Within sixty (60) days after receipt of a timely
Deadlock Amount Notice, the Blackstone General Partner may elect by giving
notice to the Managing General Partner to purchase (or to cause its
Affiliate or designees to purchase) the Insignia Partners' interest in the
Partnership and the REO Partnerships for the Insignia Buy-Out Price. If the
Blackstone General Partner fails to elect to purchase (or to cause its
Affiliates or designees to purchase) the Insignia Partners' interests in
the Partnership and the REO Partnerships (including any general partner
interests in any of the REO Partnerships held by Affiliates of Insignia)
pursuant to the preceding sentence within such 60-day period, the
Blackstone Partners shall sell their interests in the Partnership and the
REO Partnerships (including any general partner interests in any of the REO
Partnerships held by Affiliates of Blackstone) to the Managing General
Partner (or its Affiliates) for the Blackstone Buy-Out Price. The purchase
and sale of the interests in the Partnership and the REO Partnerships
pursuant to this Section 5.9(ii) shall be consummated on or before
thirtieth day following the expiration of the 60-day period within which
the Blackstone General Partner may elect (the "GP Election") to purchase
(or cause its Affiliate to purchase) the Blackstone Partners' interests in
the Partnership and the REO Partnerships without the Blackstone General
Partner having made such election (the "Deemed Election"); The Partner
Group obligated to purchase hereunder shall put a deposit in escrow equal
to five (5) percent of the purchase price (the "Deposit") with an escrow
agent selected by selling Partner Group within 10 days after the GP
Election is received or the Deemed Election occurs. Such Deposit shall be
(i) nonrefundable except in the case of a default by the purchasing Partner
Group and (ii) credited toward the amount to be paid at Closing by the
purchasing Partner Group. If the purchasing Partner Group defaults in its
obligation to purchase the applicable Partnership Interests of the selling
Partner Group, the Deposit will be distributed to the selling Partner
Group. At the closing, the selling Partner Group shall deliver to the
Partnership and the REO Partnerships and the purchasing Partner Group such
instruments of assignment, conveyance and transfer as the purchasing
partners may reasonably deem necessary or appropriate to consummate the
purchase and sale, and the purchasing Partner Group shall pay cash to the
selling Partner Group in an amount equal to the Blackstone Buy-Out Price or
the Insignia Buy-Out Price, as applicable. The purchasing Partner Group
shall pay all transfer taxes related to the purchase and sale. Following
the closing date, the Partnership, the REO partnerships and the purchasing
Partner Group shall indemnify and hold each selling Partner harmless from
and against all liabilities of the Partnership and the REO Partnerships
arising from acts taken or omitted to be taken by the Partnership or the
REO Partnerships after the date of the closing of the sale of such selling
Partner Group's interests to the
purchasing Partner Group, except to the extent such selling Partner Group
is not entitled to be indemnified therefor under Section 5.5.2.
(iii) in the case of a Major Decision described in Section 5.1.5.7 of
this Agreement or any REO Partnership Agreement concerning the Gross Asset
Value of any property, the Deadlock concerning such Major Decision shall be
resolved in the following manner. Unless and until such Gross Asset Value
has been Approved by the General Partners or determined as provided in this
paragraph (iii), the transaction giving rise to the determination of Gross
Asset Value shall not be consummated by the Blackstone General Partner. The
Managing General Partner may give notice to the Blackstone General Partner
stating that such Partner is invoking the following procedure, setting
forth its proposed Gross Asset Value for such property (the "GAV Notice"),
and appointing a "qualified appraiser" (defined below). Within five (5)
Business Days after receiving a GAV Notice, the Blackstone General Partner
shall, by notice to the Managing General Partner, appoint a second
qualified appraiser. If the Blackstone General Partner fails timely to so
appoint such second qualified appraiser, the Gross Asset Value shall be
deemed to be that set forth in the GAV Notice. If the Blackstone General
Partner timely so appoints such second qualified appraiser, the two
appraisers so appointed shall appoint a third qualified appraiser within
ten (10) Business Days after the notice of the appointment of the second
appraiser is received by the Managing General Partner. Within five (5)
Business Days after being appointed, the third appraiser shall (A) consider
the evidence submitted by the General Partners and (B) upon notice to both
General Partners, determine such Gross Asset Value. The cost of the
appraisal shall be funded by the Partnership, and the Partners shall bear
their own attorneys fees, during the appraisal. A "qualified appraiser"
means any M.A.I. appraiser who has had over fifteen (15) years of
experience in valuing multi-family real estate.
(iv) Until it has been determined which Partner Group, if any, will
sell its Partnership Interests pursuant to Section 5.9(ii), no action shall
be taken with respect to the Major Decision that is the subject of the
Deadlock. The Partner Group that is determined to be the Buyer of the
Partnership Interests shall have the right to decide the Major Decision.
ARTICLE 6
BOOKS, RECORDS AND BANK ACCOUNTS
6.1 Books and Records. At Partnership expense, the Blackstone General
Partner shall cause to be kept (at the office of the Partnership referred to in
Section 1.3.2) accurate, just and true books of account, in which shall be
entered fully and accurately each and every transaction of the Partnership. The
books and records of the Partnership shall separately identify, and account for,
the Partnership's investment in, and the Profits, Losses and distributions
attributable to, the Properties. The books shall be kept in accordance with
the Partnership's method of reporting for federal income tax purposes (which
shall be the accrual method of accounting), with supplementary records
maintained on a cash basis. Tax accounting elections, including methods of
depreciation and deduction or capitalization of interest, taxes and insurance
premiums during a construction period, if any, shall be made as the General
Partners shall Approve. The Partnership's financial statements shall be prepared
in accordance with generally accepted accounting principles, consistently
applied.
6.2 Bank Accounts. The funds of the Partnership shall be deposited in the
name of the Partnership, in such bank account or accounts as the General
Partners shall Approve and direct from time to time. Such funds shall be
invested by the Blackstone General Partner in short term instruments. Each of
the Blackstone General Partner and the Managing General Partner shall be an
individual signatory on all Partnership accounts, with the signature of any such
Partner or its designee being sufficient to effect withdrawals.
ARTICLE 7
TRANSFERS OF PARTNERSHIP INTERESTS
7.1 Restrictions on Transfer. (a) Except as hereinafter provided, no
Partner shall be permitted to Transfer all or any part of its interest in the
Partnership [or permit any Transfer of ownership interests in such Partner
unless such Transfer does not result in a change in Control of such Partner. Any
attempted or actual Transfer shall be null and void ab initio and of no force
and effect.
(b) Notwithstanding the foregoing, a Partner may Transfer all or part
of its interest in the Partnership, or allow the Transfer of ownership
interests in such Partner, as follows:
7.1.1 To the Partnership or another Partner or a partner, member or
shareholder or Affiliate of a Partner; provided however that the term
Affiliate for purposes of this Section 7.1.1. shall not include any REIT
(or any similar entity that is not subject to income tax if it meets
certain requirements relating to distributions to its shareholders and the
character of its income and assets);
7.1.2 If the proposed transferor is a natural Person, by succession or
testamentary disposition upon his death;
7.1.3 If the proposed transferor is a natural Person, to a trust for
the benefit of any Family Member with respect to the proposed transferor,
but only if the proposed transferor retains Control of the interest so
transferred;
7.1.4 Any other Transfer which is Approved by the General Partners;
7.1.5 In connection with (or as the method for) a sale of all or
substantially all of the assets of the Partnership; and
7.1.6 Transfers of any interests within the limited partners (which
are Affiliates of Blackstone) of the Limited Partner as long as an
Affiliate of Blackstone remains in Control of the Limited Partner.
The following shall be conditions to any Transfer of any interest in
the Partnership pursuant to this Article 7: (i) with respect to direct
Transfers of interests in the Partnership only, the transferee shall assume
in writing each of the obligations of the transferor to the Partnership;
(ii) with respect to direct Transfers of interests in the Partnership only,
such transferee shall agree in writing to be bound by each of the terms and
conditions of this Agreement; (iii) the transferee shall deliver to the
Partnership instruments of assumption and security Approved by the General
Partners, for the payment and performance of all obligations of or
attendant to the interest so transferred and assumed; and (iv) the
requirements of Sections 7.3 and 7.4 shall be satisfied.
7.2 Take-Along Rights. There shall be no right of any other Partner to
participate in any Transfer permitted by a Partner under this Agreement.
7.3 Substitution of Partner. Subject to the restrictions and Approval
rights of the Partners as set forth in Section 7.1 and the provisions of Section
7.4, with respect to direct Transfers of interests in the Partnership only, the
assignee of any Transfer by a Partner (a "Partner Assignee") shall become a
substitute Partner only if (i) the assignor Partner so provides in an instrument
of assignment, (ii) the Partner Assignee agrees in writing to be bound by the
provisions of this Agreement and of the Certificate and any amendments hereto
and thereto, and (iii) each General Partner Approves such substitution, which
Approval may be given or withheld in its sole and absolute discretion. If the
assignor Partner so provides and the Partner Assignee agrees to be bound as
aforesaid, the Partner Assignee shall have the right to become a substitute
Partner upon payment to the Partnership of all costs and expenses of reviewing
the instrument of assignment, if appropriate, and, if required by law, an
amendment to the Certificate to reflect such substitution. In such event, if and
as required by law, the Partners shall prepare or cause to be prepared an
amendment to the Certificate to be signed by the Partners and, to the extent
required, by the Partner Assignee. The Partners shall attend to the due
execution and filing of an amendment to the Certificate, if such amendment is
required. Unless named in this Agreement, or unless admitted to the Partnership
as provided in this Agreement, no Person shall be considered a Partner, and the
Partnership, each Partner and any other Persons having business with the
Partnership need deal only with Partners so named or so admitted and shall not
be required to deal with any other Person by reason of an assignment or pledge
by a Partner (or realization of a pledge) or by reason of the death of a
Partner. In the absence of the substitution of a Partner for a deceased Partner
as provided in Section 7.1(a) or this Section 7.3, any payment to the executors,
administrators or personal representatives of such deceased Partner shall acquit
the Partnership of all liability with respect to such payment to any other
Persons who may be interested in such payment by reason of the death of such
Partner. A Partner Assignee of an interest in the Partnership who is not
admitted as a
substitute Partner as provided in this Section 7.3 shall be entitled to receive
the economic benefits of the interest purported to be Transferred but shall not
be considered a Partner for any purposes and shall have none of the rights of a
Partner under this Agreement or under the Act.
7.4 Additional Transfer Restrictions.
7.4.1 Notwithstanding any provision of this Agreement to the contrary,
and subject to the limitations in Sections 7.1 through 7.3, a Partner's
ability to Transfer all or any portion of its Partnership interest, or to
permit the Transfer of ownership interests in such Partner relating
specifically or generally to such Partner's interest in the Partnership,
shall be subject to the following additional restrictions:
7.4.1.1 No Transfer of all or any portion of such interest shall
be effective unless (i) such Transfer complies with the Transfer
restrictions in all agreements to which the Partnership or such
Partner is a party, and (ii) such interest is registered under the
Securities Act and any applicable state securities laws, or an
exemption from registration is available, and, for any direct Transfer
of an interest in the Partnership, the Partnership shall have received
an opinion of counsel, Approved by the other General Partner, to such
effect (unless the requirement that the Partnership receive such legal
opinion is waived by the other Partner);
7.4.1.2 No Partner shall be permitted to Transfer any portion of
its Partnership interest or take any other action which would cause
the Partnership to be (i) treated as a "publicly traded partnership"
within the meaning of Code Section 7704 or (ii) classified as a
corporation (or as an association taxable as a corporation) within the
meaning of Code Section 7701(a);
7.4.1.3 Unless arrangements concerning withholding are Approved
by the General Partners not making a Transfer (if such withholding is
required of the Partnership), no Partner shall be permitted to
Transfer all or any portion of its interest in the Partnership to any
Person, unless such Person is a United States Person as defined in
Code Section 7701(a)(30) and is not subject to withholding of any
federal tax; and
7.4.1.4 No Partner shall be permitted to Transfer all or any
portion of its Partnership interest if such Transfer will (i) cause
the assets of the Partnership to be deemed to be "plan assets" under
ERISA or its accompanying regulations or the Code or (ii) result in
any "prohibited transaction" under ERISA or its accompanying
regulations affecting the Partnership.
7.4.2 Any purported transfer or any other action taken in violation of
this Section 7.4 shall be void ab initio.
7.5 Transfer Indemnification and Contribution Provisions.
Each Partner shall indemnify, defend and hold the Partnership and the other
Partner, and the shareholders, partners, employees, agents, members and
Affiliates thereof, harmless from any Liabilities in any way arising from the
failure of a Transfer of any interest in the Partnership (including any Transfer
of an interest in any partners, members or shareholders of the indemnifying
Partner, or the partners, members or shareholders therein, and regardless of
whether occurring before or after the date of this Agreement) to comply with all
applicable federal and state securities laws, including all registration or
qualification requirements and anti-fraud requirements, or the impact of such
Transfer upon compliance of the Partnership and its Partners with those
securities laws in connection with any previous Transfer of an interest in the
Partnership. Should the preceding indemnity be unenforceable to any extent,
then, to such extent the Partner otherwise required to so indemnify the
Partnership and the other Partner shall be obligated to contribute to any loss,
liability, cost or expense resulting from the actions, omissions or events set
forth in the above indemnification to the extent of its responsibility therefor,
as determined by the trier of fact.
7.6 Basis for Restrictions and Remedies. The Partners acknowledge that the
relationship of each Partner to the other Partners is a personal relationship
and that the restrictions on the power of each Partner to withdraw or Transfer
its interest in the Partnership and permit the Transfer of ownership interests
in such Partner (i) are necessary to preserve such personal relationship and
safeguard the investment of the other Partners in the Partnership and, in the
case of Transfer restrictions under current law, to help preserve the
Partnership's status as a partnership for tax purposes, (ii) were a material
inducement to the other Partner entering into this Agreement, and (iii) shall be
enforceable notwithstanding the Bankruptcy of any Partner or any applicable
prohibition against restraints on alienation.
7.7 Representations, Warranties and Covenants.
Each Partner hereby represents and warrants to each of the other Partners
as follows:
7.7.1 Such Partner, if not a natural Person, is duly formed and
validly existing under the laws of the jurisdiction of its organization
with full power and authority to enter into this Agreement and to conduct
its business to the extent contemplated in this Agreement;
7.7.2 This Agreement has been duly authorized, executed and delivered
by such Partner and constitutes the valid and legally binding agreement of
such Partner, enforceable in accordance with its terms against such
Partner, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium and other similar laws relating to creditors' rights
generally, by general equitable principles and by any implied covenant of
good faith and fair dealing;
7.7.3 The execution and delivery of this Agreement by such Partner and
the performance of its duties and obligations hereunder do not result in a
breach of any of the terms, conditions or provisions of, or constitute a
default under, any indenture,
mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness, or any lease or other agreement, or any license, permit,
franchise or certificate to which such Partner is a party or by which it is
bound or to which its properties are subject or require any authorization
or approval under or pursuant to any of the foregoing, or violate any
statute, regulation, law, order, writ, injunction, judgment or decree to
which such Partner is subject;
7.7.4 Such Partner is not in default (nor has any event occurred which
with notice, lapse of time, or both, would constitute a default) in the
performance of any obligation, agreement or condition contained in any
indenture, mortgage, deed of trust, credit agreement, note or other
evidence of indebtedness or any lease or other agreement, or any license,
permit, franchise or certificate, to which it is a party or by which it is
bound or to which any of its properties are subject, nor is it in violation
of any statute, regulation, law, order, writ, injunction, judgment or
decree to which it is subject, in each case if such default or violation
would materially and adversely affect such Partner's ability to carry out
its obligations under this Agreement;
7.7.5 There is no litigation, investigation or other proceeding
pending or, to the knowledge of such Partner, threatened against such
Partner or any of its Affiliates which, if adversely determined, would
materially and adversely affect such Partner's ability to carry out its
obligations under this Agreement, and, to the knowledge of such Partner and
its Affiliates, (i) there is no lawsuit pending against such Partner or its
Affiliates alleging fraud against them and (ii) there is no criminal
investigation or indictment pending against such Partner or its Affiliates;
7.7.6 To the knowledge of such Partner, no consent, approval or
authorization of, or filing, registration or qualification with, any court
or governmental authority on the part of such Partner is required for the
execution and delivery of this Agreement by such Partner and the
performance of its obligations and duties hereunder;
7.7.7 Such Partner is acquiring its interest in the Partnership for
investment purposes and without a view toward its resale or distribution;
7.7.8 Such Partner is sophisticated in real estate transactions, has
been granted access to such financial and other material information
concerning the Partnership, its purchase of the REO Partnerships and the
Properties, the Initial Approved Contracts and all Due Diligence Materials
as it has requested in connection with its investment in the Partnership,
is able, either directly or through its agents and representatives, to
evaluate such information and any Due Diligence Materials provided or made
available to it from time to time hereunder, and is able to bear the
financial risk of loss presented by an investment in the Partnership (which
includes the risk of loss of such Partner's entire investment),
particularly in light of the fact that the Property is subject to
unpredictable real estate values, and the other risks of owning equity or
debt investments concerning real estate;
7.7.9 Such Partner is aware that transfers of interests in the
Partnership and within such Partner are not permitted except in the limited
circumstances expressly as provided in Article 7 hereof and that an
investment in the Partnership is a long- term investment, without
liquidity;
7.7.10 Such Partner and its Affiliates are not relying upon any of the
other Partners, nor any of their Affiliates in connection with any of the
matters referred to in this Agreement, including any projections,
information, due diligence, representations, statements or other matters
concerning the Partnership, the REO Partnerships, the Properties or
otherwise;
7.7.11 None of the Partner's agents or representatives has made any
binding representations, warranties, projections or assurances to such
Partner with respect to the Partnership, the REO Partnerships and the
Properties, the performance of the Partnership and the Properties, the
safety or the risks involved and/or the tax or economic consequences
thereof;
7.7.12 Such Partner is aware that the other Partner and/or the other
Partner's Affiliates now and in the future will be, and in the past have
been, engaged in businesses which are competitive with that of the
Partnership, the REO Partnerships and/or the Property, and that, no Partner
or its Affiliates is required to bring any Properties opportunities to the
attention of the Partnership, the REO Partnerships or any Partner (or their
Affiliates) for investment;
7.7.13 Such Partner understands that the federal, state and local tax
liability of such Partner and its Affiliates with respect to the taxable
income and gain allocated to such Partner and its Affiliates hereunder for
any year may exceed the cash distributions from the Partnership to such
Partner and its Affiliates, and such Partner and its Affiliates may have to
look to sources other than distributions from the Partnership to pay such
tax;
7.7.14 Except as specifically provided in this Section 7.7, such
Partner is not relying upon any representation or warranty of any other
Partner, the Partnership or any of their respective Affiliates, express or
implied, oral or written;
7.7.15 No Partner is required to cause the controlling persons of such
Partner to devote any specific portion of their time to Partnership
business other than as necessary to fulfill such Partner's obligations
under this Agreement, and such controlling persons are expected to spend
substantial amounts of their time on activities that are unrelated to the
Partnership; and
7.7.16 Such Partner understands that the Partnership and its Partners
are relying on the accuracy of the representations set forth in this
Section 7.7 in entering into this Agreement without requiring that the
interests in the Partnership be registered under federal or state
securities laws.
ARTICLE 8
TERM, DISSOLUTION AND TERMINATION
8.1 Events of Dissolution. The Partnership shall continue until December
31, 2025, or such later date as is Approved by the General Partners; provided,
however, that dissolution and liquidation shall occur prior to that date upon
the occurrence of any one of the following events:
8.1.1 An election to dissolve the Partnership being made in writing by
the Approval of the General Partners;
8.1.2 The sale for cash, exchange or other disposition of all or
substantially all of the assets of the Partnership and the receipt of the
proceeds of such sale; or
8.1.3 The Bankruptcy or dissolution (without reconstitution within
sixty (60) days thereafter) of the Blackstone General Partner and the
Managing General Partner.
8.2 Limitation on Dissolution. Until the dissolution of the Partnership
otherwise occurs, the General Partners shall not voluntarily retire, resign or
withdraw from the Partnership, take any step voluntarily to dissolve itself or
voluntarily cause a dissolution of the Partnership, except as provided in
Section 8.1.
8.3 Liquidation and Winding Up.
8.3.1 If the Partnership is dissolved for any reason , the Blackstone
General Partner (the "Liquidator"), shall commence to wind up the affairs
of the Partnership and to liquidate and sell or otherwise dispose of and
the Properties and any other asset of the Partnership (unless the
distribution of any Partnership asset or interests therein in-kind to the
Partners is Approved by the General Partners) in an orderly manner as
Approved by the General Partners as soon as is practicable thereafter. A
third-party liquidator may be appointed if Approved by the General
Partners. Any Liquidator other than the Blackstone General Partner shall
have sufficient business expertise and competence to conduct the winding up
and termination of the business of the Partnership as it has theretofore
been conducted or (subject to the limitations hereinafter set forth) which
the Partnership may thereafter enter into. No Liquidator who is a Partner
or an Affiliate of a Partner shall be paid any compensation or fee for
conducting the liquidation of the Partnership.
8.3.2 The Liquidator shall proceed with such liquidation in as
expeditious a manner as is reasonably practicable. The holders of interests
in the Partnership shall continue to share income and losses during the
period of liquidation in accordance with Article 4.
8.3.3 If a Partner or an Affiliate of a Partner desires to purchase
any of the Partnership's remaining assets, the price, terms and conditions
of such purchase shall be subject to the Approval of the General Partners.
8.3.4 Except as expressly provided in this Article 8, any Liquidator
which is not the Blackstone General Partner shall have and may exercise all
of the powers conferred upon the Blackstone General Partner under the terms
of this Agreement (but subject to all of the applicable limitations,
contractual and otherwise, upon the exercise of such powers), to the extent
necessary or desirable in the good faith judgment of the Liquidator to
carry out the duties and functions of the Liquidator hereunder for and
during the Liquidation Period.
8.3.5 If (i) the Partnership is dissolved for any reason (ii) the
General Partners have become Bankrupt or been dissolved, and (iii) within
ninety (90) days following the date of dissolution a Liquidator or
successor Liquidator has not been appointed by remaining Partners pursuant
to Section 8.3.1, any interested party shall have the right to seek
judicial supervision of the winding up of the Partnership pursuant to the
Act.
8.3.6 After making payment or provision for payment of all debts and
liabilities of the Partnership and all expenses of liquidation, the
Liquidator may establish, for a period not to exceed eighteen (18) months
after the date the liquidation is complete, such cash reserves as the
General Partners may Approve to be necessary for any contingent or
unforeseen liabilities or obligations of the Partnership.
8.4 Distribution Upon Dissolution and Capital Account Adjustments. Upon
dissolution of the Partnership without reconstitution as permitted by this
Article 8, the Partnership's assets shall be sold or otherwise disposed of to
third parties as directed by the Liquidator (unless the Partners Approve a
distribution of any Partnership asset or interests therein in-kind to the
Partners), and, after paying or providing for liabilities owing to creditors
(including Partners) and the establishment of such reserves as the Liquidator
reasonably deems necessary for contingent or unforeseen liabilities or
obligations of the Partnership for a period of up to eighteen (18) months after
the liquidation has been completed, the remaining liquidation proceeds (and the
reserves, after the expiration of a period of time deemed reasonable by the
Liquidator for a period of up to eighteen (18) months after the liquidation has
been completed) shall be distributed pursuant to Section 4.2.
8.5 Compliance with Timing Requirements of Treasury Regulations.
Notwithstanding anything in this Article 8 to the contrary, in the event the
Partnership is "liquidated" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made to the Partners within the
time required by Regulations Section 1.704-1(b)(2)(ii)(b)(2) to the extent
practicable. However, a liquidation occurring as a result of a Tax Termination
shall not require an actual distribution of Partnership assets, but shall
instead be treated as a constructive liquidation and reformation in the manner
provided in Regulations Section 1.708-1(b)(1)(iv), or otherwise as required by
successor Regulations, if any.
ARTICLE 9
MISCELLANEOUS
9.1 Other Interests. No Partner and no Affiliate of a Partner shall have
any right, by virtue of this Agreement or otherwise, to share or participate in
or to Approve any other investments or activities of any other Partner or the
income or proceeds derived therefrom, no Partner and no Affiliate of any Partner
shall be obligated to offer or to bring
to the attention of the Partnership or the Partners any property or other
business investment or opportunity, whether or not within the scope of the
Partnership's purposes, and any Partner and any Affiliate of any Partner may at
any time during the term of the Partnership own, invest in, develop or manage,
directly or indirectly, any property or other business investment or
opportunity, whether or not competitive with the Partnership, the Properties or
the Partnership's other assets or otherwise within the scope of the Partnership
purposes. Each of the Partners acknowledges and agrees that each Partner and its
Affiliates have engaged or invested in, are now engaged and investing in and
will in the future be offered, consider, engage and/or invest in other business
or real property ventures of every kind and nature, including the ownership,
acquisition, financing, leasing, operating, management, syndication, brokerage
and development of real property and other investments and oppor- tunities to
make or purchase loans which are competitive with the Properties and the
business of the Partnership, and none of the Partners or their Affiliates shall
have any obligation or responsibility to disclose, account for or offer any of
such real properties, investments or opportunities to the Partnership or any
Partner or their Affiliates, and the Partnership, the Partners and their
Affiliates shall have no rights or interests therein.
9.2 Damages; Certain Cure Rights; Offset. Each Partner shall be liable to
the Partnership and the other Partners for any actual (but not consequential or
incidental) damages arising from any breach hereof. Except as provided in
Sections 2.2.2.1, 3.5.4, 5.5.1, 5.5.3 or 7.4, the liability of any Partner shall
be limited to the extent of such Partner's interest in the Partnership. Upon any
alleged breach or default of this Agreement by any Partner, it shall be a
condition to any action against such Partner that such Partner have received
notice of such alleged breach or default (which may be any notice otherwise
required by this Agreement) and that such Partner shall have failed to cure such
alleged breach or default within thirty (30) days following such notice.
Notwithstanding anything in this Agreement to the contrary, the only cure period
for failure timely to make a Capital Contribution under Article 2 is set forth
in Sections 2.2.1 and 2.2.2.
9.3 No Agency. Except as provided herein, nothing herein contained shall be
construed to constitute any Partner hereof the agent of any other Partner hereof
or to limit in any manner the carrying on of each Partner's respective
businesses or activities.
9.4 Governing Law. It is the intent of the parties hereto that all
questions with respect to the construction of this Agreement and the rights and
liabilities of the parties hereto shall be determined in accordance with the
provisions of the laws of the State of Delaware as applicable to a limited
liability company formed under the Act. The United States District Court for the
Southern District of New York and the Supreme Court
for New York County, New York shall be the exclusive appropriate venues to
litigate questions of interpretation under this Agreement or the rights of the
parties hereunder. Each of the parties hereto hereby waives any and all rights
to a trial by jury with respect to any dispute among the Partners or their
Affiliates or among a Partner (or its Affiliates) and the Partnership concerning
this Agreement, the Partnership or the Properties. In any dispute among the
Partners concerning the Partnership or this Agreement, the prevailing Partner
shall be entitled to recover its reasonable attorneys' fees and costs (including
litigation and collection costs) from the non-prevailing Partners.
9.5 Notices. Any notices or solicitations of Approval required or permitted
to be given under the terms of this Agreement shall be in writing and shall be
deemed to have been given when (i) personally delivered with signed delivery
receipt obtained, (ii) when transmitted by facsimile machine, with printed
confirmation of successful transmission to the facsimile number set forth in the
appropriate address listed below being obtained by the sender from the sender's
facsimile machine, or (iii) by a nationally recognized overnight courier
service, fees prepaid, when delivered, in each case addressed as follows:
If to Blackstone or the Limited Partner, to it in care of:
Blackstone Real Estate Advisors II L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
Phone: 000-000-0000
Fax: 000-000-0000
If to Insignia, to it in care of:
Xx. Xxxxx Xxxxx, Mr. Xxxxxxx Xxxxxxxx
and Mr. Xxxx Xxxxx
One Insignia Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
The time to respond to any notice shall commence to run on the date of delivery
at the appropriate addresses (or attempted delivery if delivery is refused
during normal business hours). A Partner may change the address to which notices
shall be sent to it, or any of its Authorized Representatives, by written notice
to all Partners (said change of address or of Authorized Representatives to be
effective upon receipt by all Partners).
9.6 Pronouns and Plurals. References herein to the singular shall include
the plural and to the plural shall include the singular, and references to the
masculine gender shall include the feminine and neuter genders (and vice versa),
except where the same shall not be appropriate.
9.7 Waiver. No consent or waiver, express or implied, by any Partner to or
of any breach or default by any other Partner in the performance by the other of
its obligations hereunder shall be deemed or construed to be a consent or waiver
to or of any other breach or default by the other in the performance by such
other party of the same or any other obligations of such Partner hereunder.
Failure on the part of any Partner to object to or complain of any act or
failure to act of any other Partner or to declare any other Partner in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such Partner of its rights hereunder.
9.8 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other Persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
9.9 Titles and Captions. All Article or Section titles or captions
contained in this Agreement are for convenience only and shall not be deemed a
part of the content of this Agreement.
9.10 Agreement in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than
one counterpart of the signature page and the Agreement may be executed by the
affixing of the signatures of each of the Partners to one or more of such
counterpart signature pages; all of such signature pages shall be read as though
one, and shall have the same force and effect as though all of the signers had
signed a single signature page. A party to this Agreement may execute and
deliver this Agreement by executing a counterpart of the signature pages hereto
and sending a copy thereof to the other parties to this Agreement by facsimile
transmission. Any party who executes and delivers this Agreement by facsimile
transmission shall deliver four (4) manually executed copies of such signature
page to each other party to this Agreement within three (3) Business Days after
such facsimile transmission (but failure to do so shall not affect the validity
of such party's execution and delivery by facsimile transmission). This
Agreement shall not be effective or binding on any party to this Agreement for
any purpose unless and until each party to this Agreement has executed and
delivered a counterpart signature page to this Agreement to the other parties to
this Agreement.
9.11 Binding Agreement. Subject to the restrictions on Transfers set forth
herein, this Agreement shall inure to the benefit of and be binding upon the
undersigned Partners and their respective heirs, executors, legal or personal
representatives, successors and assigns. Whenever in this instrument a reference
to any party or Partner is made, such reference shall be deemed to include a
reference to the heirs, executors, legal or personal representatives, successors
and assigns of such party or Partner.
9.12 Further Assurances. The Partners shall execute and deliver such
further instruments and do such further acts and things as may reasonably be
required to carry out the intent and purposes of this Agreement promptly upon
request from either Partner.
9.13 Waiver of Partition. Unless otherwise specifically provided in this
Agreement (including Article 8), no Partner shall, and each Partner hereby
irrevocably waives the right to, either directly or indirectly, take any action
to require partition or appraisement of the Partnership, the Properties or any
part thereof, and, notwithstanding any provision of applicable law to the
contrary, each Partner hereby irrevocably waives any and all right to maintain
any action for partition or to compel any sale with respect to its interest in
the Partnership or with respect to the assets of the Partnership, including the
Properties, or any part thereof.
9.14 Entire Agreement. This Agreement contains the final and entire
agreement among the parties hereto with respect to the subject matter hereof,
including the Properties, and they shall not be bound by any terms, conditions,
statements or representations, oral or written, with respect thereto that are
not contained herein. This Agreement does not modify any other agreement among
the parties hereto or their Affiliates except to the extent specifically set
forth in this Agreement.
9.15 Amendments. Except as expressly provided in this Agreement, this
Agreement may be modified or amended only upon the Approval of the General
Partners.
9.16 No Drafting Presumption. In interpreting the provisions of this
Agreement, no presumption shall apply against any Partner that otherwise would
operate against such Partner by reason of such document having been drafted by
such Partner or at the direction of such Partner or an Affiliate of such
Partner.
9.17 No Third-Party Beneficiaries. The provisions of this Agreement are not
intended to be for the benefit of any creditor or other Person (other than the
Partners in their capacities as such) to whom any debts, liabilities or
obligations are owed by (or who otherwise have a claim against or dealings with)
the Partnership or the Partners, and no such creditor or other Person shall
obtain any rights under any of such provisions (whether as a third-party
beneficiary or otherwise) or shall by reason of any such provisions make any
claim in respect to any debt, liability or obligation (or otherwise) including
any debt, liability or obligation with respect to Capital Contributions, against
the Partnership or the Partners. In addition, no deficit balance in any
Partner's Capital Account or in the capital account of any partner or member of
a Partner shall be an asset of the Partnership, and no Partner shall be
obligated to restore any such deficit balance.
[signatures begin on next page]
IN WITNESS WHEREOF, this Agreement is executed, and is effective for all
purposes, as of the date first set forth above.
PARTNERS:
BLACKSTONE GENERAL PARTNER
BRE/Southwest Partners I L.P., a Delaware limited
partnership
By: BRE/Southwest Partners I L.L.C., its general
partner
By: Xxxxxxx Xxxxxxxx
---------------------
Name:
Title:
MANAGING GENERAL PARTNER AND LIMITED
PARTNER
NPI-AP MANAGEMENT, L.P., a Delaware
limited partnership
By: NPI Property Management Corporation, its
general partner
By: Xxxxxxx X. Xxxxxxxx
-------------------------
Name:
Title:
[Signatures Continue]
LIMITED PARTNERS
BLACKSTONE REAL ESTATE PARTNERS II L.P.,
a Delaware limited partnership
By: Blackstone Real Estate Associates II L.P., a
Delaware limited partnership, its general
partner
By: Blackstone Real Estate Management
Associates II L.P., its general partner
By: BREA II L.L.C., a Delaware
limited liability company, its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------
Name:
Title:
BLACKSTONE REAL ESTATE PARTNERS II TE.1
L.P., a Delaware limited partnership
By: Blackstone Real Estate Associates II L.P., a
Delaware limited partnership, its general
partner
By: Blackstone Real Estate Management
Associates II L.P., its general partner
By: BREA II L.L.C., a Delaware
limited liability company, its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
------------------------
Name:
Title:
BLACKSTONE REAL ESTATE PARTNERS II TE.2
L.P., a Delaware limited partnership
By: Blackstone Real Estate Associates II L.P., a
Delaware limited partnership, its general
partner
By: Blackstone Real Estate Management
Associates II L.P., its general partner
By: BREA II L.L.C., a Delaware
limited liability company, its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------
Name:
Title:
[signatures continue]
BLACKSTONE REAL ESTATE HOLDINGS II L.P.,
a Delaware limited partnership
By: Blackstone Real Estate Management
Associates II L.P., its general partner
By: BREA II L.L.C., a Delaware
limited liability company, its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------
Name:
Title:
[signatures conclude]
