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Exhibit 3.4
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LEPERCQ CORPORATE INCOME FUND II L.P.
Dated as of August 27, 1998
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TABLE OF CONTENTS
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ARTICLE 1 DEFINED TERMS ................................................ 1
ARTICLE 2 ORGANIZATIONAL MATTERS ....................................... 18
Section 2.1 Organization ........................................ 18
Section 2.2 LCIF II Merger ...................................... 18
Section 2.3 Name ................................................ 19
Section 2.4 Registered Office and Agent Principal Office ........ 19
Section 2.5 Term ................................................ 20
ARTICLE 3 PURPOSE ...................................................... 20
Section 3.1 Purpose and Business ................................ 20
Section 3.2 Powers .............................................. 21
ARTICLE 4 CAPITAL CONTRIBUTIONS ........................................ 21
Section 4.1 Capital Contributions of the Partners ............... 21
Section 4.2 Issuances of Additional Partnership Interests ....... 22
ARTICLE 5 DISTRIBUTIONS ................................................ 23
Section 5.1 Requirement and Characterization of Distributions ... 23
Section 5.2 Amounts Withheld .................................... 24
Section 5.3 Distributions Upon Liquidation ...................... 24
ARTICLE 6 ALLOCATIONS .................................................. 25
Section 6.1 Allocations For Capital Account Purposes ............ 25
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS ........................ 26
Section 7.1 Management .......................................... 26
Section 7.2 Certificate of Limited Partnership .................. 29
Section 7.3 Restrictions on Authority ........................... 30
Section 7.4 Reimbursement of LXP ................................ 30
Section 7.5 Outside Activities of and Participation in Other
Transactions by LXP and the General Partner ........ 32
Section 7.6 Indemnification ..................................... 32
ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS ............... 34
Section 8.1 Management of Business .............................. 34
Section 8.2 Outside Activities of Additional Limited Partners ... 35
Section 8.3 Return of Capital ................................... 35
Section 8.4 Redemption Rights ................................... 35
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS ....................... 43
Section 9.1 Records and Accounting .............................. 43
Section 9.2 Fiscal Year ......................................... 43
ARTICLE 10 TAX MATTERS ..................................................... 43
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Section 10.1 Preparation of Tax Returns .......................... 43
Section 10.2 Tax Elections ....................................... 43
Section 10.3 Tax Matters Partner ................................. 44
Section 10.4 Withholding ......................................... 45
ARTICLE 11 TRANSFERS AND WITHDRAWALS ...................................... 46
Section 11.1 Transfer ............................................ 46
Section 11.2 Transfer of Partnership Interests by the General
Partner and the Initial Limited Partner ........... 46
Section 11.3 Additional Limited Partners' Rights to Transfer ..... 47
Section 11.4 Substituted Additional Limited Partners ............. 49
Section 11.5 Assignees ........................................... 50
Section 11.6 General Provisions .................................. 50
ARTICLE 12 ADMISSION OF PARTNERS .......................................... 52
Section 12.1 Admission of Subsequent Partner ..................... 52
Section 12.2 Amendment of Agreement and Certificate of Limited
Partnership ....................................... 53
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION ....................... 53
Section 13.1 Dissolution ......................................... 53
Section 13.2 Winding Up .......................................... 54
Section 13.3 Negative Capital Accounts ........................... 55
Section 13.4 Deemed Distribution and Recontribution .............. 56
Section 13.5 Rights of the Limited Partners ...................... 57
Section 13.6 Waiver of Partition ................................. 57
ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT ............................. 57
ARTICLE 15 GENERAL PROVISIONS ............................................. 59
Section 15.1 Addresses and Notice ................................ 59
Section 15.2 Titles and Captions ................................. 59
Section 15.3 Pronouns and Plurals ................................ 59
Section 15.4 Further Action ...................................... 60
Section 15.5 Binding Effect ...................................... 60
Section 15.6 Waiver .............................................. 60
Section 15.7 Counterparts ........................................ 60
Section 15.8 Applicable Law ...................................... 60
Section 15.9 Invalidity of Provisions ............................ 61
Section 15.10 Entire Agreement .................................... 61
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LEPERCQ CORPORATE INCOME FUND II L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP,
dated as of August 27, 1998, is entered into by and among Lex GP-1, Inc., a
Delaware corporation ("GP-1"), as the General Partner, Lex LP-1, Inc. a Delaware
corporation ("LP-1"), as the Initial Limited Partner, Lexington Corporate
Properties Trust, a Maryland statutory real estate investment trust ("LXP"),
which is the sole stockholder of the General Partner and the Initial Limited
Partner, the Persons whose names will be hereinafter set forth on Exhibit A as
Special Limited Partners as attached hereto, the Person whose name will be
hereinafter set forth on Exhibit A as a Phoenix Limited Partner attached hereto,
and the Persons whose names will be hereinafter set forth on Exhibit A as Xxxxxx
Limited Partners, with any other Persons who become Partners in the Partnership
as provided herein.
ARTICLE 1
DEFINED TERMS
The following definitions shall for all purposes be applied to the
following terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"Additional Limited Partners" means the Special Limited Partners, the
Phoenix Limited Partner, the Xxxxxx Limited Partners, and any other limited
partner admitted to the Partnership pursuant to Section 4.2.A.
"Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each Partnership Year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii)
decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of
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Adjusted Capital Account is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
"Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Adjusted Capital Account as of
the end of the relevant Partnership Year.
"Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Exhibit B hereof. Once an Adjusted Property is deemed
distributed by, and re-contributed to, the Partnership for federal income tax
purposes upon a termination thereof pursuant to Section 708 of the Code, such
property shall thereafter constitute a Contributed Property until the Carrying
Value of such property is further adjusted pursuant to Exhibit B hereof.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Agreed Value" means (i) the 704(c) Value of such property or other
consideration in the case of any Contributed Property as of the time of its
contribution to the Partnership, reduced by any liabilities either assumed by
the Partnership upon such contribution or to which such property is subject when
contributed, and (ii) in the case of any property distributed to a Partner by
the Partnership, the Partnership's Carrying Value of such property at the time
such Property is distributed, reduced by any indebtedness either assumed by such
Partner upon such distribution or to which such property is subject at the time
of distribution under Section 752 of the Code and the Regulations thereunder.
"Agreement" means this Second Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
"Assignee" means a Person to whom one or more Partnership Units held by
an Additional Limited Partner have been transferred in a manner permitted under
this Agreement, but who has not become a Substituted Additional Limited Partner
and who has the rights set forth in Section 11.5.
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"Book-Tax Disparities" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Capital Account" means the Capital Account maintained for a Partner
pursuant to Exhibit B hereof.
"Capital Contributions" means, with respect to any Partner, any cash,
cash equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Section
4.1 or 4.2 hereof.
"Capital Event" means the sale, refinancing or other disposition of a
Partnership asset outside the ordinary course of the Partnership's business.
"Carrying Value" means (i) with respect to a Contributed Property or
Adjusted Property, the 704(c) Value of such property reduced (but not below
zero) by all Depreciation with respect to such property charged to the Partners'
Capital Accounts and (ii) with respect to any other Partnership property, the
adjusted basis of such property for federal income tax purposes, all as of the
time of determination. The Carrying Value of any property shall be adjusted from
time to time in accordance with Exhibit B hereof, and to reflect changes,
additions or other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate by the General
Partner.
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"Certificate" means the Certificate of Limited Partnership relating to
the Partnership filed in the office of the Delaware Secretary of State, as
amended from time to time in accordance with the terms hereof and the Act.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Contributed Property" means each property or other asset, in such form
as may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership (or deemed contributed to the Partnership on
termination and reconstitution thereof pursuant to Section 708 of the Code).
Once the Carrying Value of a Contributed Property is adjusted pursuant to
Exhibit B hereof, such property shall no longer constitute a Contributed
Property for purposes of Exhibit B hereof, but shall be deemed an Adjusted
Property for such purposes.
"Declaration of Trust" means the Declaration of Trust of LXP, as
amended or restated from time to time.
"Depreciation" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year, except that if the Carrying
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.
"Effective Date" shall mean the date of the filing of the LCIF II
Merger Certificate with the Secretary of State of the State of Delaware.
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"Effective Time" shall mean the time of the filing of the LCIF II
Merger Certificate with the Secretary of State of Delaware.
"General Partner" means Lex GP-1, Inc. or its successors as general
partner of the Partnership.
"General Partner Interest" means a Partnership Interest held by the
General Partner that is a general partner interest. A General Partner Interest
shall be expressed as a number of Partnership Units.
"Immediate Family" means, with respect to any natural Person, such
natural Person's spouse and such natural Person's natural or adoptive parents,
descendants, nephews, nieces, brothers, and sisters.
"Incapacity" or "Incapacitated" means (i) as to any individual Partner,
death, total physical disability or entry by a court of competent jurisdiction
adjudicating him incompetent to manage his Person or his estate; (ii) as to any
corporation which is a Partner, the filing of a certificate of dissolution, or
its equivalent, for the corporation or the revocation of its charter; (iii) as
to any partnership which is a Partner, the dissolution and commencement of
winding up of the partnership; (iv) as to any estate which is a Partner, the
distribution by the fiduciary of the estate's entire interest in the
Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any Bankruptcy, insolvency or similar law
now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner's
creditors, (d) the Partner files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks,
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consents to or acquiesces in the appointment of a trustee, receiver or
liquidator for the Partner or for all or any substantial part of the Partner's
properties, (f) any proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect has not been dismissed within one hundred
twenty (120) days after the commencement thereof, (g) the appointment without
the Partner's consent or acquiescence of a trustee, receiver or liquidator for
the assets of the Partner which such appointment has not been vacated or stayed
within ninety (90) days of such appointment, or (h) an appointment referred to
in clause (g) is not vacated within ninety (90) days after the expiration of any
such stay.
"Indemnitee" means (i) any Person made a party to a proceeding by
reason of his status as (A) the General Partner, or (B) a director or officer of
the Partnership, the General Partner, the Initial Limited Partner or LXP, and
(ii) such other Persons (including Affiliates of the Partnership, the General
Partner, the Initial Limited Partner or LXP) as the General Partner may
designate from time to time (whether before or after the event giving rise to
potential liability), in its sole and absolute discretion.
"Initial Limited Partner" means Lex LP-1, Inc.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.
"LCIF I" means Lepercq Corporate Income Fund L.P., a Delaware limited
partnership.
"LCIF II" means Lepercq Corporate Income Fund II L.P., a Delaware
limited partnership.
"LCIF II Merger" means the Merger of Lex M-2 with and into LCIF II
pursuant to the LCIF II Merger Agreement.
"LCIF II Merger Agreement" means the Agreement and Plan of Merger of
Lex M-2 into LCIF II dated as of October 12, 1993.
"LCIF II Merger Certificate" means the Certificate of Merger of the
Partnership into LCIF II, dated
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October 12, 1993 filed in the office of the Delaware Secretary of State on
October 12, 1993.
"Lex M-2" means Lex M-2, L.P., a Delaware limited partnership.
"Limited Partner Interest" means a Partnership Interest held by a
Limited Partner in the Partnership that is a limited partner interest. A Limited
Partner Interest shall be expressed as a number of Partnership Units.
"Limited Partners" means the Initial Limited Partner, the Special
Limited Partners, the Phoenix Limited Partner and the Xxxxxx Limited Partners.
"Liquidator" has the meaning set forth in Section 13.2.
"LCP" means The LCP Group, L.P.
"LXP" means Lexington Corporate Properties Trust, a Maryland statutory
real estate investment trust which is the sole stockholder of the General
Partner and the Initial Limited Partner.
"Mergers" means the merger of Lex M-1 with and into LCIF I and the
merger of Lex M-2 with and into LCIF II, which mergers became effective on
October 12, 1993.
"Net Income" means, for any taxable period, the excess, if any, of the
Partnership's items of income and gain for such taxable period over the
Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit B. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to the special
allocation rules in Exhibit C, Net Income or the resulting Net Loss, whichever
the case may be, shall be recomputed without regard to such item.
"Net Loss" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction for such taxable period over the
Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined
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in accordance with Exhibit B. Once an item of income, gain, loss or deduction
that has been included in the initial computation of Net Loss is subjected to
the special allocation rules in Exhibit C, Net Loss or the resulting Net Income,
whichever the case may be, shall be recomputed without regard to such item.
"Nonrecourse Built-in Gain" means, with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such
properties were disposed of in a taxable transaction in full satisfaction of
such liabilities and for no other consideration.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption substantially in
the form of Exhibit D-1, Exhibit D-2, or Exhibit D-3 to this Agreement.
"Operating Cash Flow" means, for any period, operating revenue from
leases on real property investments, partnership distributions with respect to
partnerships in which the Partnership has interests, and interest on uninvested
funds and other cash investment returns, less operating expenses, capital
expenditures and regularly scheduled principal and interest payments (exclusive
of balloon payments due at maturity) on outstanding mortgage and other
indebtedness. The General Partner may, in its discretion, reduce Operating Cash
Flow for any period by an amount determined by the General Partner to be
necessary to fund reserves required by the Partnership.
"Partner" means a General Partner, the Initial Limited Partner, any
Special Limited Partner, the Phoenix Limited Partner or any Xxxxxx Limited
Partners and "Partners" means the General Partner, the Initial Limited
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Partner, the Special Limited Partners, the Phoenix Limited Partner and the
Xxxxxx Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" shall have the meaning set forth in Section 2.3 of this
Agreement.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by a Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Partnership Interest
shall be expressed as a number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of Operating Cash Flow pursuant to Section
5.1 hereof, which record date shall be the same as the record date established
by LXP for a distribution to its stockholders of some or all of such
distribution.
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"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2.
"Partnership Year" means the fiscal year of the Partnership,
which shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in the
Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.
"Phoenix Limited Partner" means the Person admitted to the Partnership
as a Phoenix Limited Partner pursuant to Section 4.2 hereof as a result of the
contribution of the Phoenix Limited Partner's general partnership interest in
the Phoenix Hotel Associates Limited Partnership and who is shown as such on the
books and records of the Partnership.
"Phoenix Limited Partner Interest" means a Partnership Interest of a
Phoenix Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Phoenix Limited Partners and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Phoenix Limited
Partner Interest may be expressed as a number of Partnership Units.
"Phoenix Limited Partner Redemption Right" shall have the meaning set
forth in Section 8.4.
"Phoenix Partners Closing Date" shall mean January 29, 1998.
"Phoenix Redeeming Partner" shall have the meaning set forth in Section
8.4.
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"Prior Agreements" means the Agreement of Limited Partnership of Lex
M-2, L.P., dated as of October 5, 1993, between the General Partner and the
Initial Limited Partner, the First Amended and Restated Agreement of Limited
Partnership of Lex M-2, L.P., dated as of October 8, 1993, between the General
Partner, the Initial Limited Partner and the Special Limited Partners, the First
Amendment to the First Amended and Restated Agreement of Limited Partnership of
Lepercq Corporate Income Fund II L.P. dated as of October 12, 1993, between the
General Partner, the Initial Limited Partner and the Special Limited Partners,
the Second Amendment to the First Amended and Restated Agreement of Limited
Partnership of Lepercq Corporate Income Fund II L.P., dated as of October 12,
1993 between the General Partner, the Initial Limited Partner and the Special
Limited Partners, and the Third Amendment to the First Amended and Restated
Agreement of Limited Partnership of Lepercq Corporate Income Fund II L.P. dated
January 29, 1998 between the General Partner, the Initial Limited Partner, the
Special Limited Partners and the Phoenix Limited Partner.
"Recapture Income" means any gain recognized by the Partnership upon
the disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.
"Redeeming Partner" shall mean either a Special Redeeming Partner, a
Phoenix Redeeming Partner or a Xxxxxx Redeeming Partner.
"Redemption Amount" means the number of REIT Shares equal to the
product of the number of Partnership Units offered for redemption by a Redeeming
Partner, multiplied by the Redemption Factor; provided that in the event the
General Partner issues to all holders of REIT Shares rights, options, warrants
or convertible or exchangeable securities entitling the stockholders to
subscribe for or purchase REIT Shares, or any other securities or property
(collectively, the "rights") then the Redemption Amount shall also include such
rights that a holder of that number of REIT Shares would be entitled to receive.
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"Redemption Exercise Date" shall mean that applicable date as set forth
next to each [Special Limited Partner], Phoenix Limited Partners' name, and each
Xxxxxx Limited Partners' name, on Exhibit A.
"Redemption Factor" means 1.0, provided that in the event that LXP (i)
declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Redemption
Factor shall be adjusted by multiplying the Redemption Factor in effect
immediately before such event by a fraction, the numerator of which shall be the
number of REIT Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend distribution, subdivision or combination. Any
adjustment to the Redemption Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
"Redemption Right" shall mean either the Special Limited Partner
Redemption Right, the Phoenix Limited Partner Redemption Right or the Xxxxxx
Limited Partner Redemption Right, as the case may be.
"Regulations" means the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"REIT" means a real estate investment trust under Section 856 of the
Code.
"REIT Share" shall mean a common share of LXP, $.0001 par value,. A
REIT Share shall also mean an excess share of LXP, $.0001 par value, issued in
exchange or upon conversion of a common share of LXP under the circumstances
contemplated by the Declaration of Trust.
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"Relative Interest" means the percentage determined by a fraction, the
numerator of which is the Capital Contributions deemed to be made by the General
Partner, the Initial Limited Partner and the Special Limited Partners on the
Effective Date to the Partnership and the denominator of which is such Capital
Contributions plus the capital contributions deemed to be made by the partners
of LCIF I to LCIF I on the Effective Date. LXP may require the Partnership to
adjust the Relative Interest from time to time, in its discretion (provided that
the sum of the Relative Interest of the Partnership and the relative interest of
LCIF I continue to total one (1.0)), so that each Partnership Unit held by the
Special Limited Partners remains substantially equivalent to each partnership
unit held by the special limited partners in LCIF I with regard to (i)
allocations of income, gain, loss, deduction and credit, (ii) distributions from
Operating Cash Flow and (iii) distributions upon dissolution and liquidation of
the Partnership and LCIF I.
"Residual Gain" or "Residual Loss" means any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 2.X.x(a) or 2.B.2(a) of Exhibit C to eliminate Book-Tax
Disparities.
"704(c) Value" of any Contributed Property means the fair market value
of such property or other consideration at the time of contribution as
determined by the General Partner using such reasonable method of valuation as
it may adopt; provided that the 704(c) Value of any property deemed contributed
to the Partnership for federal income tax purposes upon termination and
reconstitution thereof pursuant to Section 708 of the Code shall be determined
in accordance with Exhibit B hereof. Subject to Exhibit B hereof, the General
Partner shall, in its sole and absolute discretion, use such method as it deems
reasonable and appropriate to allocate the aggregate of the 704(c) Values of
Contributed Properties in a single or integrated transaction among the separate
properties on a basis proportional to their respective fair market values.
"Special Limited Partner" means a Person admitted to the Partnership as
a Special Limited Partner pursuant to
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Section 4.2 hereof and who is shown as such on the books and records of the
Partnership.
"Special Limited Partner Interest" means a Partnership Interest of the
Special Limited Partners in the Partnership representing a fractional part of
the Partnership Interests of all Special Limited Partners and includes any and
all benefits to which the holder of such a Partnership Interest may be entitled
as provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Special Limited
Partner Interest may be expressed as a number of Partnership Units.
"Special Limited Partner Redemption Right" shall have the meaning set
forth in Section 8.4 hereof.
"Special Redeeming Partner" has the meaning set forth in Section 8.4
hereof.
"Specified Redemption Date" means the tenth (10th) Business Day after
receipt by the General Partner and LXP of a Notice of Redemption.
"Subsequent Partner" means a Person admitted to the Partnership as a
Partner after the date hereof through the sale or issuance by the Partnership of
additional Partnership Interests and not through the transfer of existing
Partnership Interests.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person.
"Substituted Additional Limited Partner" means a Person who is admitted
as an Additional Limited Partner to the Partnership pursuant to Section 11.4.
"Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
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"Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the fair
market value of such property (as determined under Exhibit B hereof) as of such
date, over (ii) the Carrying Value of such property (prior to any adjustment to
be made pursuant to Exhibit B hereof) as of such date.
"Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the Carrying
Value of such property (prior to any adjustment to be made pursuant to Exhibit B
hereof) as of such date, over (ii) the fair market value of such property (as
determined under Exhibit B hereof) as of such date.
"Xxxxxx" means Xxxxxx Property Associates, a limited partnership
organized under the laws of the State of New York.
"Xxxxxx Limited Partner" means a Person admitted to the Partnership as
a Xxxxxx Limited Partner pursuant to Section 4.2 hereof as a result of the
contribution by Xxxxxx of all of its interest in the Xxxxxx Property and the
subsequent dissolution of Xxxxxx and who is shown as such on the books and
records of the Partnership.
"Xxxxxx Limited Partner Interest" means a Partnership Interest of a
Xxxxxx Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Xxxxxx Limited Partners and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Xxxxxx Limited Partner
Interest may be expressed as a number of Partnership Units.
"Xxxxxx Limited Partner Redemption Right" shall have the meaning set
forth in Section 8.4.
"Xxxxxx Partners Closing Date" shall mean the date hereof.
"Xxxxxx Property" means all of Xxxxxx'x interest in that property
located near Warren, Ohio.
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"Xxxxxx Redeeming Partners" shall have the meaning set forth in Section
8.4.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization
A. The Partnership is a limited partnership formed pursuant to the
provisions of the Act and upon the terms and conditions set forth in the Prior
Agreements. The Partners hereby amend and restate the Prior Agreements in their
entirety as of the date hereof to reflect the admission of the Xxxxxx Limited
Partners into the Partnership. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Act. The Partnership
Interest of each Partner shall be personal property for all purposes.
Section 2.2 LCIF II Merger
A. GP-1 in its capacity as the general partner of the Partnership, and
LP-1 in its capacity as the limited partner of the Partnership, authorized and
approved the LCIF II Merger and the execution of the LCIF II Merger Agreement by
the Partnership. At the Effective Time, (i) Lex M-2 merged with and into LCIF
II, whereupon the separate existence of Lex M-2 ceased and (ii) LCIF II, also
referred to as the Partnership in this Agreement, was the surviving limited
partnership of the LCIF II Merger.
B. At the Effective Time:
(1) Each limited partner interest in LCIF II outstanding immediately
prior to the Effective Time was exchanged for either shares of common stock in
LXP, or subordinated notes issued by LXP;
(2) Secured Property Associates II L.P.'s interest in LCIF II
outstanding immediately prior to the Effective Time was exchanged for Special
Limited Partner Interests in LCIF II, and Secured Property
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Associates II L.P. was admitted to the Partnership as a Special Limited Partner;
(3) GP-1's interest in Lex M-2 was cancelled, and GP-1 was admitted to
the Partnership as a general partner of the Partnership; and
(4) LP-1's limited partner interest in Lex M-2 was cancelled, and LP-1
was admitted to the Partnership as a limited partner of the Partnership.
Section 2.3 Name
The name of the Partnership is Lepercq Corporate Income Fund II L.P.
The Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time.
Section 2.4 Registered Office and Agent Principal Office
The address of the registered office of the Partnership in the State of
Delaware is located at 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx
Xxxxxx, Xxxxxxxx 00000, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office is The
Corporation Trust Company. The principal office of the Partnership is located at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and may be changed to such other
place as the General Partner may from time to time designate. The Partnership
may maintain offices at such other place or places within or outside the State
of Delaware as the General Partner deems advisable.
Section 2.5 Term
The term of the Partnership commenced on January 27, 1987, the date the
Certificate was filed in the office of the Secretary of State of Delaware in
accordance with the
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Act and shall continue until December 31, 2093, unless the Partnership is
dissolved sooner pursuant to the provisions of Article 13 or as otherwise
provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided that such business
shall be limited to and conducted in such a manner as to permit LXP at all times
to be classified as a REIT, unless LXP ceases to qualify as a REIT for reasons
other than the conduct of the business of the Partnership, (ii) to enter into
any partnership, joint venture or other similar arrangement to engage in any of
the foregoing or to own interests in any entity engaged in any of the foregoing
and (iii) to do anything necessary or incidental to the foregoing. In connection
with the foregoing, and without limiting LXP's right in its sole discretion to
cease qualifying as a REIT, the Partners acknowledge that LXP's status as a REIT
inures to the benefit of all the Partners and not solely to LXP.
Section 3.2 Powers
The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership; provided that the Partnership
shall not take, or refrain from taking, any action which, in the judgment of
LXP, in its sole and absolute discretion, (i) could adversely affect the ability
of LXP to continue to qualify as a REIT under Section 857 of the Code, (ii)
could subject LXP to any additional taxes under any Section of the Code or (iii)
could violate any law or regulation of any governmental body or agency having
jurisdiction over LXP or its securities, unless such action (or inaction) shall
have been specifically consented to by LXP in writing.
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Notwithstanding anything to the contrary that may be contained herein,
the Partnership had and continues to have the power and authority to execute,
acknowledge, verify, deliver, file and record any and all documents and
instruments, including the LCIF II Merger Agreement and the LCIF II Merger
Certificate, and to perform any and all acts required by applicable law or which
were or may be necessary or advisable in order to give effect to the
consummation of the LCIF II Merger.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners
As of the date of this Agreement, (i) the Partners shall be deemed to
have made the Capital Contributions set forth in Exhibit A to this Agreement and
(ii) each Partner shall own Partnership Units in the amount set forth for such
Partner in Exhibit A and shall have a Percentage Interest in the Partnership as
set forth for such Partner in Exhibit A, which Percentage Interest shall be
adjusted in Exhibit A from time to time by the General Partner to the extent
necessary to reflect accurately redemptions, Capital Contributions, Capital
Events, the issuance of additional Partnership Units or similar events having an
effect on a Partner's Percentage Interest. Except as provided in Sections 4.2
and 10.4, the Partners shall have no obligation to make any additional Capital
Contributions or loans to the Partnership.
Section 4.2 Issuances of Additional Partnership Interests
A. The General Partner is hereby authorized to cause the Partnership
from time to time to issue to the Partners or other Persons additional
Partnership Units or other Partnership Interests in one or more classes, or one
or more series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to existing Partnership Interests,
all as shall be determined by the General Partner in its sole and absolute
discretion, including, without limitation, (i) the allocations of items
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of Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions, and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership.
B. Notwithstanding any provision of Section 4.2.A to the contrary, no
such additional Partnership Units or other Partnership Interests shall be issued
to the General Partner, the Initial Limited Partner, LXP or any of their
Subsidiaries unless
(1) (a) the additional Partnership Interests are issued in connection
with an issuance of shares of LXP, which shares have designations, preferences
and other rights, all such that the economic interests are substantially similar
to the designations, preferences and other rights of the additional Partnership
Interests issued to the General Partner, the Initial Limited Partner, LXP or any
of their Subsidiaries in accordance with Section 4.2.A, and (b) LXP through the
General Partner or the Limited Partner shall make a Capital Contribution to the
Partnership in an amount equal to the proceeds raised in connection with the
issuance of such shares of LXP, or (2)ab the additional Partnership Interests
are issued to all Partners in proportion to their respective Percentage
Interests.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
A. General. The General Partner shall distribute quarterly an amount
equal to 100% of the Operating Cash Flow generated by the Partnership during
such quarter to the Partners, who are Partners on the Partnership Record Date
with respect to such quarter in accordance with their respective Percentage
Interests on such Partnership Record Date; provided, that in no event may a
Partner receive a distribution of Operating Cash Flow with respect to a
Partnership Unit if such Partner is entitled to receive a distribution out of
such Operating Cash Flow with respect
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to a REIT Share for which such Partnership Unit has been redeemed or exchanged.
B. Phoenix Limited Partner. Notwithstanding Section 5.1.A, the Phoenix
Limited Partner shall receive a share of Operating Cash Flow equal to a cash
distribution of $0.29 per Partnership Unit per quarter ($1.16 per Partnership
Unit per annum), provided, that if LXP reduces its dividend below $1.16 then the
distribution to which such Phoenix Limited Partner is entitled shall be reduced
by the percentage reduction in the LXP divided, and provided, further, that if
LXP increases its dividend above $1.16 then the distribution to which such
Phoenix Limited Partner is entitled shall be increased by the percentage
increase in the LXP dividend.
X. Xxxxxx Limited Partners. Notwithstanding Section 5.1.A, the Xxxxxx
Limited Partners shall receive a share of Operating Cash Flow equal to a cash
distribution of $0.29 per Partnership Unit per quarter ($1.16 per Partnership
Unit per annum), provided, that if LXP reduces its dividend below $1.16 then the
distribution to which such Xxxxxx Limited Partner is entitled shall be reduced
by the percentage reduction in the LXP divided, and provided, further, that if
LXP increases its dividend above $1.16 then the distribution to which such
Xxxxxx Limited Partner is entitled shall be increased by the percentage increase
in the LXP dividend.
Section 5.2 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of any
state or local tax law and Section 10.4 hereof with respect to any allocations,
payment or distribution to the Partners or the Assignees shall be treated as
amounts distributed to the Partners or the Assignees pursuant to Section 5.1 for
all purposes under this Agreement.
Section 5.3 Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction, and any other cash
received or reductions in reserves made after commencement of the liquidation of
the Partnership, shall be distributed to the Partners in accordance with Section
13.2.
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ARTICLE 6
ALLOCATIONS
Section 6.1 Allocations For Capital Account Purposes
For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Exhibit B hereof) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.
A. Net Income. After giving effect to the special allocations set forth
in Section 1 of Exhibit C, and to the allocations of Net Income to the Phoenix
Limited Partner and the Xxxxxx Limited Partners set forth below, Net Income
shall be allocated to the General Partner and the Limited Partners in accordance
with their respective Percentage Interests (determined as a percentage of total
Partnership Units outstanding other than Partnership Units held by the Phoenix
Limited Partner and the Xxxxxx Limited Partners); provided, that following (i)
the Effective Date and (ii) the sale or other disposition (in which gain or loss
is recognized) of real properties representing at least fifty (50%) percent of
the Carrying Value of such properties as of the Effective Date, gains from the
sale or other disposition of partnership assets shall be allocated to the
Partners having negative Capital Accounts, to the extent and in accordance with
such negative Capital Accounts and thereafter to all Partners in accordance with
their Percentage Interests; provided, further, that a Phoenix Limited Partner
and a Xxxxxx Limited Partner will be allocated taxable income only in an amount
equal to the cash distributions received.
B. Net Losses. After giving effect to the special allocations set forth
in Exhibit C, Net Losses shall be allocated first, to any Partner having a
positive Capital Account in accordance with and to the extent of such positive
Capital Account, and thereafter to the Limited Partners in accordance with their
respective Percentage Interests.
C. For purposes of Regulations Section 1.752-3(a)(3), the Partners
agree that Nonrecourse
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Liabilities of the Partnership in excess of the sum of the amount of Partnership
Minimum Gain and the total amount of Nonrecourse Built-in Gain shall be
allocated first to account for any income or gain to be allocated to the Phoenix
Limited Partner and the Xxxxxx Limited Partners pursuant to Sections 2.B and 2.D
of Exhibit C and then among the Partners in accordance with their respective
Percentage Interests.
D. Any gains upon the sale or other taxable disposition of any
Partnership asset shall, to the extent possible, after taking into account other
required allocations of gain pursuant to Exhibit C that are characterized as
Recapture Income, be allocated to Partners in the same proportions and to the
same extent as such Partners have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall
be exclusively vested in the General Partner. The Limited Partners shall not
have any right to participate in or exercise control or management power over
the business and affairs of the Partnership. The General Partner may not be
removed by the Limited Partners. In addition to the powers now or hereafter
granted to a general partner of a limited partnership under applicable law or
which are granted to the General Partner under any other provision of this
Agreement, the General Partner, subject to Section 7.3 hereof, shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(1) the execution, acknowledgment, verification, delivery, filing and
recording, for and in the name of the Partnership, and, to the extent necessary,
GP-1 and LP-l, of any and all documents and instruments,
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including the LCIF II Merger Agreement and the performance of any and all acts
required by applicable law or which GP-1 deems necessary or advisable in order
to give effect to the consummation of the LCIF II Merger;
(2) the making of any expenditures, the lending or borrowing of money
(including, without limitation, making prepayments on loans and borrowing money
to permit the Partnership to make distributions to its Partners in such amounts
as will permit LXP (so long as LXP qualifies as a REIT) to avoid the payment of
any federal income tax (including, for this purpose, any excise tax pursuant to
Section 4981 of the Code) and to make distributions to its stockholders
sufficient to permit LXP to maintain REIT status) and the assumption or
guarantee of, or other contracting for, indebtedness and other liabilities;
(3) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any assets of the Partnership or the merger or
other combination of the Partnership with or into another entity (all of the
foregoing subject to any prior approval only to the extent required by Section
7.3 hereof);
(4) the use of the assets of the Partnership for any purpose consistent
with the terms of this Agreement and on any terms the General Partner sees fit,
and the making of capital contributions or loans to its Subsidiaries;
(5) the management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or improvements owned
by the Partnership or any Subsidiary of the Partnership;
(6) the negotiation, execution and performance of any contracts,
conveyances or other instruments that the General Partner considers useful or
necessary to the conduct of the Partnership's operations or the implementation
of the General Partner's powers under this Agreement;
(7) the distribution of Partnership cash or other Partnership assets in
accordance with this Agreement;
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(8) the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general partnerships or
joint ventures that the General Partner deems desirable;
(9) the undertaking of any action in connection with the Partnership's
direct or indirect investment in its Subsidiaries or any other Person
(including, without limitation, the contribution or loan of funds by the
Partnership to such Persons);
(10) the determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of valuation as the
General Partner may adopt;
(11) the exercise, directly or indirectly, through any attorney-in-fact
acting under a general or limited power of attorney, of any right, including the
right to vote, appurtenant to any asset or investment held by the Partnership;
and
(12) the making, execution and delivery of any and all deeds, leases,
notes, deeds to secure debt, mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties, indemnities, waivers, releases
or legal instruments or agreements in writing necessary or appropriate in the
judgment of the General Partner for the accomplishment of any of the powers of
the General Partner enumerated in this Agreement.
B. At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the properties of the Partnership and (ii) liability insurance for
the Indemnitees hereunder.
C. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain any and all reserves, working
capital accounts and other cash or similar balances in such amounts as the
General Partner, in its sole discretion, deems appropriate and reasonable from
time to time.
D. In exercising its authority under this Agreement, the General
Partner may, but shall not be
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obligated to, take into account the tax consequences to any Partner of any
action taken by it. The General Partner and the Partnership shall not, however,
have liability to an Additional Limited Partner under any circumstances as a
result of an income tax liability incurred by such Additional Limited Partner as
a result of an action (or inaction) by the General Partner pursuant to its
authority under this Agreement.
Section 7.2 Certificate of Limited Partnership
To the extent that such action is determined by the General Partner to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to the Certificate and do all the things to maintain the Partnership
as a limited partnership (or a partnership in which the limited partners have
limited liability) under the laws of the State of Delaware and each other state,
or the District of Columbia, in which the partnership may elect to do business
or own property. The General Partner shall use all reasonable efforts to cause
to be filed such other certificates or documents as may be reasonable and
necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability to the extent provided by applicable law) in the
State of Delaware and any other state, or the District of Columbia, in which the
Partnership may elect to do business or own property.
Section 7.3 Restrictions on Authority
After the Effective Date, without the consent of holders of a majority
of the outstanding Partnership Units held by the Special Limited Partners, the
General Partner may not consent to the Partnership participating in any merger,
consolidation or other combination with or into another Person or sale of all or
substantially all of its assets.
The General Partner shall not dispose of its interest in the Xxxxxx
Property prior to January 1, 2002 except in the event of a foreclosure, casualty
or condemnation, or in the event that the General Partner determines that the
failure to dispose of the Xxxxxx Property would result in the disqualification
of LXP as a
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real estate investment trust under the Code. In addition, through January 1,
2002, the General Partner shall not take any action that will result in a
reduction in any Limited Partner's share of nonrecourse liabilities attributable
to the Limited Partner's Partnership Units by an amount which would cause a
taxable event to the Limited Partners.
Section 7.4 Reimbursement of LXP
A. Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments and allocations to which it may be entitled), the General Partner shall
not be compensated for its services as general partner of the Partnership.
B. LXP and the General Partner shall be reimbursed on a monthly basis,
or such other basis as LXP may determine in its sole and absolute discretion,
for all expenses LXP incurs relating to the ownership and operation of, or for
the benefit of, the Partnership; provided that the amount of such reimbursement
shall be reduced by the product of (i) the Relative Interest and (ii) any
interest earned by LXP or the General Partner with respect to bank accounts or
other instruments or accounts held by either of them on behalf of the
Partnership as permitted in Section 7.5.A. Such reimbursements shall be in
addition to any reimbursement to LXP or the General Partner as a result of
indemnification pursuant to Section 7.6 hereof.
C. LXP shall also be reimbursed by the Partnership for the product of
(i) the Relative Interest and (ii) all expenses LXP incurs relating to the
reorganization of LXP, the Partnership, the General Partner and the Limited
Partner, and any other issuance of REIT Shares pursuant to Section 4.2 hereof.
D. In the event that LXP shall elect to purchase from stockholders REIT
Shares pursuant to any stock repurchase program or for the purpose of delivering
such REIT Shares to satisfy an obligation under Section 8.4 of this Agreement,
any dividend reinvestment program adopted by LXP, any employee stock purchase
plan adopted by LXP, or any other similar obligation or arrangement undertaken
by LXP in the future, the purchase price paid by LXP for such REIT Shares and
any other expenses incurred by LXP in connection
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with such purchase shall be considered expenses of the Partnership and shall be
reimbursed to LXP to such extent, subject to the condition that, if such REIT
Shares are sold, the General Partner shall contribute to the Partnership,
through the General or Limited Partner, any proceeds received by the General
Partner for such REIT Shares (provided that REIT shares delivered to an
Additional Limited Partner in exchange for Partnership Units pursuant to Section
8.4 shall not be considered a sale of REIT Shares for such purpose).
Section 7.5 Outside Activities of and Participation in Other
Transactions by LXP and the General Partner
Without the consent of holders of a majority of the outstanding
Partnership Units held by the Special Limited Partners, LXP agrees that,
following the Effective Date, it will not (i) permit the General Partner or the
Initial Limited Partner to issue additional shares of capital stock, (ii)
assign, sell, pledge, hypothecate or otherwise transfer any outstanding shares
of capital stock in the General Partner or in the Initial Limited Partner, (iii)
permit the General Partner or the Initial Limited Partner to incur any
indebtedness or to engage in any business other than to hold and own the
Partnership Interests in the Partnership or (iv) allow or consent to any merger,
consolidation or other combination of the General Partner or the Initial Limited
Partner with or into another Person or the sale of all or substantially all of
its assets.
Section 7.6 Indemnification
A. The Partnership shall indemnify and hold harmless each Indemnitee
from and against any and all losses, claims, damages, liabilities, joint or
several, expenses (including, without limitation, attorney's fees and other
legal fees and expenses), judgments, fines, settlements, and other amounts
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, that relate to the Mergers or to the
operations of the Partnership as set forth in this Agreement in which such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise; provided that the Partnership shall not indemnify
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Exhibit 3.4
an Indemnitee for such Indemnitee's breach of duty of loyalty to the Partnership
or for acts or omissions not taken by the Indemnitee in good faith or which
involve intentional misconduct or a knowing violation of law or in which such
Indemnitee received an improper personal benefit. The General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this Section 7.6 in
favor of any Indemnitee having or potentially having liability for any such
indebtedness. It is the intention of this Section 7.6.A that the Partnership
indemnify each Indemnitee to the fullest extent permitted under the Act. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee did not meet the requisite standard of conduct
set forth in this Section 7.6.A. The termination of any proceeding by conviction
of an Indemnitee or upon a plea of nolo contendere or its equivalent by an
Indemnitee, or an entry of an order of probation against an Indemnitee prior to
judgment, creates a rebuttable presumption that such Indemnitee acted in a
manner contrary to that specified in this Section 7.6.A with respect to the
subject matter of such proceeding.
B. Reasonable expenses incurred by an Indemnitee who is a
party to a proceeding may be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in Section 7.6.A has been met and (ii) a written undertaking by or on
behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
C. The indemnification provided by this Section 7.6 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise.
D. The Partnership may, but shall not be obligated to,
purchase and maintain insurance on behalf of any of the Indemnitees and such
other Persons as the General Partner shall determine against any liability that
may be
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asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
E. In no event may an Indemnitee subject any of the Partners
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
F. The provisions of this Section 7.6 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.6 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.6 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
Section 8.1 Management of Business
The Limited Partners and Assignees shall not take part in the
operation, management or control of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such, shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners or Assignees
under this Agreement.
Section 8.2 Outside Activities of Additional
Limited Partners
Neither the Partnership nor any Partners shall
have any rights by virtue of this Agreement in any business
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ventures of any Additional Limited Partner or Assignee. None of the Additional
Limited Partners nor any other Person shall have any rights by virtue of this
Agreement or the partnership relationship established hereby in any business
ventures of any other Person (other than the General Partner and the Initial
Limited Partner to the extent expressly provided herein) and such Person shall
have no obligation pursuant to this Agreement or otherwise to offer any interest
in any such business ventures to the Partnership, any Additional Limited Partner
or any such other Person, even if such opportunity is of a character which, if
presented to the Partnership, any Additional Limited Partner, or such other
Person, could be taken by such Person.
Section 8.3 Return of Capital
Except pursuant to the right of redemption set forth in
Section 8.4, no Partner shall be entitled to the withdrawal or return of his
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein.
Section 8.4 Redemption Rights
A. Subject to Section 8.4.C, on or at any time after the
Effective Date, each Special Limited Partner shall have the right (the "Special
Limited Partner Redemption Right") to require the Partnership to redeem on a
Specified Redemption Date all or a portion of the Partnership Units held by such
Special Limited Partner for the Redemption Amount to be delivered by the
Partnership. The Special Limited Partner Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the General Partner and LXP by
the Special Limited Partner who is exercising the Special Limited Partner
Redemption Right (the "Special Redeeming Partner"). A Special Limited Partner
may not exercise the Redemption Right for fewer than one thousand (1,000)
Partnership Units or, if such Special Limited Partner holds fewer than one
thousand (1,000) Partnership Units, all of the Partnership Units held by such
Special Limited Partner. The Special Redeeming Partner shall have no right, with
respect to any Partnership Units so redeemed,
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to receive any distributions paid after the Specified Redemption Date. The
Assignee of any Special Limited Partner may exercise the rights of such Special
Limited Partner pursuant to this Section 8.4, and such Special Limited Partner
shall be deemed to have assigned such rights to such Assignee and shall be bound
by the exercise of such rights by such Special Limited Partner's Assignee. In
connection with any exercise of such rights by such Assignee on behalf of such
Special Limited Partner, the Redemption Amount shall be delivered by the
Partnership directly to such Assignee and not to such Special Limited Partner.
B. LXP hereby agrees to enter into a Guaranty Agreement with
the Partnership on the Effective Date, on terms reasonably satisfactory to LXP
and the Partnership, pursuant to which LXP shall guaranty the obligations of the
Partnership under Section 8.4.A and arrange for the delivery, if the Partnership
is unable, of the Redemption Amount on the Specified Redemption Date, whereupon
LXP or, if specified by LXP, the General Partner shall acquire the Partnership
Units offered for redemption by the Special Redeeming Partner and shall be
treated for all purposes of this Agreement as the owner of such Partnership
Units. Each of the Special Redeeming Partner, LXP, the Partnership, and the
General Partner shall treat the transaction between LXP and the Special
Redeeming Partner as a sale of the Special Redeeming Partner's Partnership Units
to LXP or the General Partner, as the case may be, for federal income tax
purposes. Each Special Redeeming Partner agrees to execute such documents as LXP
or the General Partner may reasonably require in connection with the issuance of
REIT Shares upon exercise of the Special Limited Partner Redemption Right.
C. Following the date that at least 50% of the Partnership
Units held by the Special Limited Partners immediately following the Effective
Date have been redeemed in accordance with the provisions of Section 8.4, LXP or
the General Partner may require the remaining Special Limited Partners to redeem
their Partnership Units for the Redemption Amount to be delivered by the
Partnership. The right of LXP or the General Partner under this Section 8.4.C
shall be exercised pursuant to a notice delivered to all remaining Special
Limited Partners. Such redemption shall be effective on the date specified in
the notice, which date shall be at least 30 days after the notice is sent to the
Special Limited Partners.
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At any time that (i) LXP shall be considering a sale of all or
substantially all of its assets, or a merger, consolidation, stock issuance,
stock redemption or other similar transaction that would result in a change in
the beneficial ownership of LXP by 50% or more, or (ii) the Partnership shall be
considering a sale of all or substantially all of its assets or a merger,
consolidation, or issuance or redemption of partnership interests which would
result in a change in the beneficial ownership in LCIF capital or profits of 50%
or more, then the General Partner shall have the right to redeem the Partnership
Units held by all, but not less than all, of the Additional Limited Partners
(other than the Special Limited Partners) for the Redemption Amount provided
that such redemption is contingent upon the completion of such transaction. In
such event, the General Partner shall provide notice to the Limited Partners and
such Limited Partners shall be required to surrender their Partnership Units for
cancellation. The rights of such Additional Limited Partners shall be limited to
the receipt of the Redemption Amount.
D. In connection with any REIT Shares delivered to any
Additional Limited Partner upon the redemption of Partnership Units held by such
Additional Limited Partner, it is intended that such Additional Limited Partner
be able to resell publicly such REIT Shares pursuant to the provisions of Rule
144 under the Securities Act of 1933, but without the need to comply with the
holding period requirements of Rule 144(d). To the extent that counsel to LXP
reasonably determines that resales of any such REIT Shares cannot be made
pursuant to the provisions of Rule 144, and without the need to comply with the
holding period requirements of Rule 144(d), LXP agrees, at its sole cost and
expense, if requested by Special Limited Partners representing a majority of the
Partnership Units (including REIT Shares delivered upon exchange of such
Partnership Units) held by such Special Limited Partners, or by Additional
Limited Partners representing a majority of the Partnership Units (including
REIT Shares delivered upon the exchange of such Partnership Units) held by such
class of Additional Limited Partners, to include REIT Shares that may be (or
already have been) acquired by any Special Limited Partner or any Additional
Limited Partner, as the case may be, in an effective registration statement
under the Securities Act of 1933; provided that LXP's obligations to include
such REIT Shares in such an effective registration
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statement shall be conditioned upon Special Limited Partners representing a
majority of the Partnership Units (including REIT Shares delivered upon exchange
of such Partnership Units) held by such Special Limited Partners or, where
applicable, by Additional Limited Partners representing a majority of the
Partnership Units (including REIT Shares delivered upon the exchange of such
Partnership Units) held by such class of Additional Limited Partners, agreeing
to be bound by a customary registration rights agreements to be prepared by LXP.
In addition, any Additional Limited Partner whose REIT Shares are included in
such registration statement must also agree to be bound by the terms and
provisions of a registration rights agreement.
E. Notwithstanding the provisions of Section 8.4.A, Section
8.4.B, Section 8.4.G, and Section 8.4.H, a Subsequent Partner shall not be
entitled to exercise the Redemption Right pursuant to Section 8.4.A, Section
8.4.B, Section 8.4.G or Section 8.4.H if the delivery of REIT Shares to such
Subsequent Partner on the Specified Redemption Date would be prohibited under
the Declaration of Trust and shall be subject in any event to the issuance of
REIT Shares being in compliance with all applicable Federal and State securities
laws.
F. Notwithstanding any other provision of this Agreement, upon
the occurrence of a Capital Event prior to the Redemption Exercise Date, the
proceeds of which are distributed to the Partners, and ultimately
proportionately to the shareholders of LXP, the Percentage Interest of each
Partner shall, from the date of such Capital Event, be equal to (i) the product
of (a) such Partner's Percentage Interest prior to such Capital Event and (b)
the difference between (x) the fair market value of the assets of the
Partnership and (y) any amounts distributed to such Partner as a result of the
Capital Event, divided by (ii) the fair market value of the assets of the
Partnership after such distribution. The General Partner shall adjust the number
of Partnership Units owned by each Partner to appropriately reflect the
adjustments made by this Section 8.4.F.
G. On January 15, 1999, and on each April 15, July 15, October
15 and January 15 thereafter, the Phoenix Limited Partner shall have the right
(the "Phoenix Limited Partner Redemption Right") to require the Partnership to
redeem on a Specified Redemption Date all, but not less than
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all, of the Partnership Units held by the Phoenix Limited Partner for the
Redemption Amount to be delivered by the Partnership. The Phoenix Limited
Partner Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the General Partner and LXP by the Phoenix Limited Partner who is
exercising the redemption right (the "Phoenix Redeeming Partner"). The Phoenix
Redeeming Partner shall have no right, with respect to any Partnership Units so
redeemed, to receive any distributions paid after the Specified Redemption Date.
The Assignee of the Phoenix Limited Partner may exercise the rights of such
Phoenix Limited Partner pursuant to the exercise of this Section 8.4.G, and such
Phoenix Limited Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by such Phoenix
Limited Partner's Assignee. In connection with any exercise of such rights by
such Assignee on behalf of such Phoenix Limited Partner, the Redemption Amount
shall be delivered by the Partnership directly to such Assignee and not to such
Phoenix Limited Partner.
The Partnership hereby covenants not to permit Phoenix Hotel
Associates Limited Partnership ("Phoenix") to dispose of its interest in those
properties acquired by Phoenix in connection with its rights under that certain
Exchange Agreement between Phoenix and Security Trust Company (the property so
acquired the "Replacement Property") prior to January 1, 2003 without the
consent of the holder of the Partnership Units held by the Phoenix Limited
Partner, except in the event of a foreclosure or in the event the Partnership
determines that such a disposition is necessary to ensure its continued
qualification as a real estate investment trust. In any event in which the
Partnership determines to cause Phoenix to dispose of the Replacement Property,
the Partnership agrees to use its best efforts to cause Phoenix to structure
such a disposition as an exchange that meets the requirements of Code Section
1031. Notwithstanding the foregoing, if the Partnership does dispose of its
interest prior to January 15, 1999, then the General Partner shall provide
prompt written notification to the Phoenix Limited Partner of such disposition
and such Phoenix Limited Partner may exercise its Phoenix Limited Partner
Redemption Right on the last Business Day of the calendar year in which such
disposition occurs or, if later, ten (10) Business Days following the
consummation of such transaction. In addition, if the Code
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Section 1031 exchange described in the Exchange Agreement does not result in a
deferral of all of the gain that would have been recognized upon the sale by
Phoenix of the Relinquished Property (as defined in the Exchange Agreement),
then the General Partner shall provide prompt written notification to the
Phoenix Limited Partner and shall cause LCIF II to distribute cash to the
Phoenix Limited Partner in redemption of the portion of its Partnership Units
corresponding to the portion of the value of the Relinquished Property which is
treated as transferred in a taxable transaction.
LXP agrees to enter into a Guaranty Agreement with the
Partnership on the Phoenix Partners Closing Date, on terms reasonably
satisfactory to LXP and the Partnership, pursuant to which LXP shall guaranty
the obligations of the Partnership under this Section 8.4.G to pay the
Redemption Amount on the Specified Redemption Date, whereupon the Partnership
shall acquire the Partnership Units offered for redemption by the Phoenix
Redeeming Partner. Each of the Phoenix Redeeming Partner, LXP, the Partnership
and the General Partner shall treat the transaction between LXP and the Phoenix
Redeeming Partner as a sale of the Phoenix Re deeming Partner's Partnership
Units to LXP or the General Partner, as the case may be, for federal income tax
purposes. The Phoenix Redeeming Partner agrees to execute such documents as the
Partnership may reasonably require in connection with the issuance of REIT
shares upon exercise of the Phoenix Limited Partner Redemption Right.
H. On September 1, 1999, and on each December 1, March 1, June
1 and September 1 thereafter (each a "Notice Date"), each Xxxxxx Limited Partner
shall have the right (the "Xxxxxx Limited Partner Redemption Right") to require
the Partnership to redeem on a Specified Redemption Date all, but not less than
all, of the Partnership Units held by a Xxxxxx Limited Partner for the
Redemption Amount to be delivered by the Partnership. The Xxxxxx Limited Partner
Redemption Right shall be exercised pursuant to a Notice of Redemption delivered
to the General Partner and LXP by the Xxxxxx Limited Partner who is exercising
the redemption right (the "Xxxxxx Redeeming Partner"). The Xxxxxx Redeeming
Partner shall have no right, with respect to any Partnership Units so redeemed,
to receive any distributions paid after the Specified Redemption Date. The
Assignee of any Xxxxxx Limited Partner may exercise the
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rights of such Xxxxxx Limited Partner pursuant to the exercise of this Section
8.4.H, and such Xxxxxx Limited Partner shall be deemed to have assigned such
rights to such Assignee and shall be bound by the exercise of such rights by
such Xxxxxx Limited Partner's Assignee. In connection with any exercise of such
rights by such Assignee on behalf of such Xxxxxx Limited Partner, the Redemption
Amount shall be delivered by the Partnership directly to such Assignee and not
to such Xxxxxx Limited Partner.
The Partnership hereby covenants not to dispose of its
interest in the Xxxxxx Property prior to January 1, 2002, except in the event of
a foreclosure, or a casualty or condemnation. Notwithstanding the foregoing, if
the Partnership does dispose of its interest prior to January 1, 2002, then the
General Partner shall provide prompt written notification to the Xxxxxx Limited
Partners of such disposition and each such Xxxxxx Limited Partner may exercise
its Xxxxxx Limited Partner Redemption Right on the last Business Day of the
calendar year in which such disposition occurs or, if later, ten (10) Business
Days following the consummation of such transaction.
LXP agrees to enter into a Guaranty Agreement with the
Partnership on the Xxxxxx Partners Closing Date, on terms reasonably
satisfactory to LXP and the Partnership, pursuant to which LXP shall guaranty
the obligations of the Partnership under this Section 8.4.H to pay the
Redemption Amount on the Specified Redemption Date, whereupon the Partnership
shall acquire the Partnership Units offered for redemption by the Xxxxxx
Redeeming Partner. Each of the Xxxxxx Redeeming Partner, LXP, the Partnership
and the General Partner shall treat the transaction between LXP and the Xxxxxx
Redeeming Partner as a sale of the Xxxxxx Redeeming Partner's Partnership Units
to LXP or the General Partner, as the case may be, for federal income tax pur-
poses. Each Xxxxxx Redeeming Partner agrees to execute such documents as the
Partnership may reasonably require in connection with the issuance of REIT
shares upon exercise of the Xxxxxx Limited Partner Redemption Right.
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ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate with respect to the Partnership's business. The books of the
Partnership shall be maintained, for financial and tax reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles, or on
such other basis as the General Partner determines to be necessary or
appropriate.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and
timely filing of all returns of Partnership income, gains, deductions, losses
and other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by the Additional Limited Partners for federal and state income tax reporting
purposes.
Section 10.2 Tax Elections
Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code; provided that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
Regulations thereunder. The General Partner shall have the right to seek to
revoke any such elections (including, without limitation, the election under
Section
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754 of the Code) upon the General Partner's determination in its sole and
absolute discretion that such revocation is in the best interests of the
Partners.
Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of
the Partnership for federal income tax purposes. The tax matters partner is
authorized but not required, to take any action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review proceeding to
the extent permitted by law.
B. The taking of any action and the incurring of any expense
by the tax matters partner in connection with any such audit or proceeding,
except to the extent required by law, is a matter in the sole and absolute
discretion of the tax matters partner and the provisions relating to
indemnification of the General Partner set forth in Section 7.7 of this
Agreement shall be fully applicable to the tax matters partner in its capacity
as such.
C. The tax matters partner shall receive no compensation for
its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm to assist
the tax matters partner in discharging its duties hereunder, so long as the
compensation paid by the Partnership for such services is reasonable.
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Section 10.4 Withholding
Each Additional Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such
Additional Limited Partner any amount of federal, state, local, or foreign taxes
that the General Partner determines that the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Additional
Limited Partner pursuant to this Agreement. Any amount paid on behalf of or with
respect to an Additional Limited Partner shall constitute a loan by the
Partnership to such Additional Limited Partner which loan shall be repaid by
such Additional Limited Partner within fifteen (15) days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to such
Additional Limited Partner or (ii) the General Partner determines, in its sole
and absolute discretion, that such payment may be satisfied out of the available
funds of the Partnership which would, but for such payment, be distributed to
Additional Limited Partner. Any amounts withheld pursuant to the foregoing
clauses (i) or (ii) shall be treated as having been distributed to such
Additional Limited Partner. Any amounts payable by a Limited Partner hereunder
shall bear interest at the base rate on corporate loans at large United States
money center commercial banks, as published from time to time in The Wall Street
Journal, such interest to accrue from the date such amount is due (i.e., fifteen
(15) days after demand) until such amount is paid in full.
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ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer," when used in this Article 11 with
respect to a Partnership Unit, shall be deemed to refer to a transaction by
which a Partner purports to assign all or any part of its Partnership Interest
to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term "transfer" when used in this Article 11 does not include any redemption
of Partnership Units by an Additional Limited Partner or acquisition of
Partnership Units from an Additional Limited Partner by the General Partner
pursuant to Section 8.4.
B. No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.
Section 11.2 Transfer of Partnership Interests by the General
Partner and the Initial Limited Partner
A. The General Partner may not transfer any of its General
Partner Interest except to the Initial Limited Partner or to LXP. The General
Partner may not withdraw as General Partner except in connection with the
complete transfer of its Partnership Interest as permitted hereunder.
B. The Initial Limited Partner may not transfer any of its
Partnership Interests, except to the General Partner or to LXP. The Initial
Limited Partner may not withdraw as Initial Limited Partner except in connection
with the complete transfer of its Partnership Interest as permitted hereunder.
C. If LXP acquires any or all of the Partnership Interests of
the General Partner or the Initial Limited Partner as permitted hereunder, LXP
agrees that it will not transfer any of its Partnership Interests, except to the
Initial Limited Partner or to the General Partner.
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LXP may not withdraw as Partner except in connection with the complete transfer
of any Partnership Interest as permitted hereunder.
D. Any transferee who acquires a Partnership Interest under
this Section 11.2 may become a Substituted Additional Limited Partner, or a
successor General Partner upon such terms specified by the General Partner,
including the delivery to the General Partner of such documents or instruments,
including powers of attorney, as may be required in the discretion of the
General Partner in order to effect such Person's admission as a Partner.
Section 11.3 Additional Limited Partners' Rights to Transfer
A. Subject to the provisions of Section 11.3.E, no Additional
Limited Partner shall have the right to transfer all or any portion of its
Partnership Interest, or any of such Additional Limited Partner's rights as a
Special Limited Partner, a Phoenix Limited Partner, or a Xxxxxx Limited Partner,
as the case may be, without the prior written consent of the General Partner,
which consent may be given or withheld by the General Partner in its sole and
absolute discretion. Any purported transfer of a Partnership Interest by an
Additional Limited Partner in violation of this Section 11.3.A shall be void ab
initio and shall not be given effect for any purpose by the Partnership.
B. If an Additional Limited Partner is subject to Incapacity,
the executor, administrator, trustee, committee, guardian, conservator or
receiver of such Additional Limited Partner's estate shall have all the rights
of a Special Limited Partner, a Phoenix Limited Partner, or a Xxxxxx Limited
Partner, as the case may be, but no more rights than those enjoyed by other
Special Limited Partners, the Phoenix Limited Partner, or Xxxxxx Limited
Partners, as the case may be, for the purpose of settling or managing the estate
and such power as the Incapacitated Additional Limited Partner possessed to
transfer all or any part of its interest in the Partnership. The Incapacity of
an Additional Limited Partner, in and of itself, shall not dissolve or terminate
the Partnership.
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C. The General Partner may prohibit any transfer otherwise
permitted under Section 11.3.E by an Additional Limited Partner of his
Partnership Units (i) if, in the opinion of legal counsel to the Partnership,
such transfer would require filing of a registration statement under the
Securities Act of 1933 or would otherwise violate any federal, state, or foreign
securities laws or regulations applicable to the Partnership or the Partnership
Units or, (ii) if the transferring Additional Limited Partner, fails or is
unable to obtain and deliver to the Partnership, after request therefor is made
by the General Partner, a legal opinion from counsel acceptable to the General
Partner, addressed to the Partnership and the General Partner, that such
registration is not required in connection with such transfer and that such
transfer does not violate any federal, state or foreign securities laws or
regulations applicable to the Partnership or the Partnership Units.
D. No transfer by an Additional Limited Partner of its
Partnership Units may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, it would result in the Partnership being treated as
an association taxable as a corporation or (ii) such transfer is effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704(b) of the
Code.
E. Notwithstanding the provisions of Section 11.3.A (but
subject to the provisions of Section 11.3.C and 11.3.D), an Additional Limited
Partner may, with or without the consent of the General Partner, transfer all or
a portion of his Partnership Units to (i)(a) a member of his Immediate Family,
or a trust for the benefit of a member of his Immediate Family, (b) an
organization that qualifies under Section 501(c)(3) of the Code and that is not
a private foundation within the meaning of Section 509(a) of the Code or (c) in
the case of an Additional Partner that is a partnership, a partner in the
Additional Limited Partner in a distribution by that Additional Limited Partner
to its partners under the partnership agreement of such Additional Limited
Partner or (ii) a lender as security for a loan made to or guaranteed by the
Additional Limited Partner, provided that in connection with any such transfer
the lender does not acquire greater rights with respect to the Partnership
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Units than those held by the transferring Additional Limited Partner.
Section 11.4 Substituted Additional Limited Partners
A. No Additional Limited Partner shall have the right to
substitute a transferee in his place. The General Partner shall, however, have
the right to consent to the admission of a transferee of the interest of an
Additional Limited Partner pursuant to this Section 11.4 as a Substituted
Additional Limited Partner which consent may be given or withheld by the General
Partner in its sole and absolute discretion. The General Partner's failure or
refusal to permit a transferee of any such interests to become a Substituted
Additional Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner.
B. A transferee who has been admitted as a Substituted
Additional Limited Partner in accordance with this Article 11 shall have all the
rights and powers and be subject to all the restrictions and liabilities of the
transferor Additional Limited Partner under this Agreement.
C. Upon the admission of a Substituted Additional Limited
Partner, the General Partner shall amend Exhibit A, where applicable, to reflect
the name, address, number of Partnership Units, and Percentage Interest of such
Substituted Additional Limited Partner, and to eliminate or adjust, if
necessary, the name, address and interest of the predecessor of such Substituted
Additional Limited Partner.
Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section
11.3 as an Additional Limited Partner, as described in Section 11.4, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be deemed to have had assigned to it, and shall be entitled to
receive, distributions from the Partnership and the share of Net Income, Net
Losses, Recapture Income, and any other items of income, gain, loss, deduction
and credit of the Partnership attributable to the Partnership Units assigned to
such transferee, but shall not
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be deemed to be a holder of Partnership Units for any other purpose under this
Agreement, and shall not be entitled to vote such Partnership Units in any
matter presented to the Additional Limited Partners for a vote (such Partnership
Units being deemed to have been voted on such matter in the same proportion as
all other Partnership Units held by Special Limited Partners, the Phoenix
Limited Partner, Xxxxxx Limited Partners, or other Additional Limited Partners,
where applicable, are voted). In the event any such transferee desires to make a
further assignment of any such Partnership Units, such transferee shall be
subject to all the provisions of this Article 11 to the same extent and in the
same manner as any Additional Limited Partner desiring to make an assignment of
Partnership Units.
Section 11.6 General Provisions
A. No Additional Limited Partner may withdraw from the
Partnership other than as a result of a permitted transfer of all of such
Additional Limited Partner's Partnership Units in accordance with this Article
11 or pursuant to redemption of all of its Partnership Units under Section 8.4.
B. Any Additional Limited Partner who shall transfer all of
his Partnership Units in a transfer permitted pursuant to this Article 11 shall
cease to be an Additional Limited Partner upon the admission of an Assignee of
such Partnership Units as a Substituted Additional Limited Partner. Similarly,
any Additional Limited Partner who shall transfer all of his Partnership Units
pursuant to a redemption of all of his Partnership Units under Section 8.4 shall
cease to be an Additional Limited Partner.
C. Transfers pursuant to this Article 11 may only be made on
the first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise agrees.
D. If any Partnership Unit is transferred or assigned in
compliance with the provisions of this Article 11, or redeemed or transferred
pursuant to Section 8.4 on any day other than the first day of a Partnership
Year, then Net Income, Net Losses, each item thereof and all other items
attributable to such Partnership Unit for such Partnership Year shall be
allocated to the transferor Partner or the Redeeming Partner, as the case may
be, and, in the case
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of a transfer or assignment other than a redemption, to the transferee Partner,
by taking into account their varying interests during the Partnership Year in
accordance with Section 706(d) of the Code, using the interim closing of the
books method. Solely for purposes of making such allocations, each of such
items for the calendar month in which a transfer or assignment occurs shall be
allocated to the transferee Partner, and none of such items for the calendar
month in which a transfer or a redemption occurs shall be allocated to the
transferor Partner or the Redeeming Partner, as the case may be. All
distributions of Operating Cash Flow attributable to such Partnership Unit with
respect to which the Partnership Record Date is before the date of such
transfer, assignment or redemption shall be made to the transferor Partner or
the Redeeming Partner, as the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of Operating Cash Flow
thereafter attributable to such Partnership Unit shall be made to the transferee
Partner.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Subsequent Partner
No person shall be admitted as a Partner except in accordance
with the terms of this Agreement and upon obtaining the consent of the General
Partner. Any prospective Partner must submit to the General Partner (i) evidence
of acceptance in form satisfactory to the General Partner of all of the terms
and conditions of this Agreement, and (ii) such other documents or instruments,
including powers of attorney, as may be required in the discretion of the
General Partner in order to effect such Person's admission as a Partner.
A. The admission of any Person as a Subsequent Partner shall
become effective on the date upon which the name of such Person is recorded in
the books and records of the Partnership, following the consent of the General
Partner to such admission.
B. If any Subsequent Partner is admitted to the Partnership on
any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items allocable among Partners and
Assignees
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for such Partnership Year shall be allocated among such Subsequent Partner and
all other Partners and Assignees by taking into account their varying interests
during the Partnership Year in accordance with Section 706(d) of the Code, using
the interim closing of the books method. Solely for purposes of making such
allocations, each of such items for the calendar month in which an admission of
any Subsequent Partner occurs shall be allocated among all the Partners and
Assignees including such Additional Limited Partner. All distributions of
Operating Cash Flow with respect to which the Partnership Record Date is before
the date of such admission shall be made solely to Partners and Assignees other
than the Subsequent Partner, and all distributions of Operating Cash Flow
thereafter shall be made to all the Partners and Assignees including such
Subsequent Partner.
Section 12.2 Amendment of Agreement and Certificate of
Limited Partnership
For the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership and, if necessary, to prepare as soon as
practicable an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Additional Limited Partners or Subsequent Partners or by the
admission of a successor General Partner in accordance with the terms of this
Agreement. Upon the withdrawal of the General Partner, any successor General
Partner shall continue the business of the Partnership. The Partnership shall
dissolve, and its affairs shall be wound up, upon the first to occur of any of
the following ("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5
hereof;
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B. an event of withdrawal of the General Partner, as defined
in the Act, unless (i) at the time of such event there is at least one remaining
general partner of the Partnership who carries on the business of the
Partnership (and each remaining general partner of the Partnership is hereby
authorized to carry on the business of the Partner ship in such an event) or
(ii) within ninety (90) days after such event, all Partners agree in writing to
continue the business of the Partnership and to the appointment, effective as
of the date of such event, of LXP as the general partner of the Partnership (and
LXP agrees to become a general partner of the Partnership);
C. entry of a decree of judicial dissolution of the
Partnership pursuant to the provision of the Act; or
D. the sale of all or substantially all of the assets and
properties of the Partnership.
Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs. The General Partner or, in the event there is no remaining General
Partner, any Person elected by a majority in interest of the Limited Partners
(the General Partner or such other Person being referred to herein as the
"Liquidator") shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom shall be applied and distributed in the following order:
(1) First, to the satisfaction of all of
the Partnership's debts and liabilities, including all contingent, conditional
or immature claims and obligations to creditors other than the Partners (whether
by payment or the making of reasonable provision for payment thereof);
-48-
52
(2) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the General Partner;
(3) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other Partners;
(4) The balance if any, to the Partners in accordance with the
positive Capital Account balances of the Partners, after giving effect to all
contributions, distributions, and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof
which require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion (subject to
its obligation to gradually settle and close the Partnership's business under
Section 17-803 of the Act), defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership
(including to those Partners as creditors).
Section 13.3 Negative Capital Accounts
A. Except as provided in this Section 13.3, no Partner,
general or limited, shall be liable to the Partnership or to any other Partner
for any negative balance outstanding in each such Partner's Capital Account,
whether such negative Capital Account results from the allocation of Net Losses,
or other items of deduction and loss to such Partner or from distributions to
such Partner.
B. Subject to Section 13.3.C, if any Special Limited Partner
on the date of the "liquidation" of his respective interest in the Partnership
(within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)), including a
redemption under Section 8.4, would, following a hypotheti-
-49-
53
cal sale of Partnership assets and the liquidation of the Partnership, have a
negative balance in his Capital Account, then such Special Limited Partner shall
contribute in cash to the capital of the Partnership the amount required to
increase his Capital Account as of such date to zero. Any such contribution
required of such Special Limited Partner hereunder shall be made on or before
the later of (i) the end of the Partnership Year in which the interest of such
Special Limited Partner is liquidated or (ii) the ninetieth (90th) day following
the date of such liquidation.
C. After the death of a Special Limited Partner, the executor
of the estate of such Special Limited Partner may elect to reduce (or eliminate)
the deficit Capital Account restoration obligation of such Special Limited
Partner. Pursuant to Section 13.3.B. such election may be made by such executor
by delivering to the General Partner within two hundred seventy (270) days of
the death of such Special Limited Partner a written notice setting forth the
maximum deficit balance in his Capital Account that such executor agrees to
restore under Section 13.3.B, if any. If such executor does not make a timely
election pursuant to this Section 13.3.C (whether or not the balance in his
Capital Account is negative at such time), then a Special Limited Partner's
estate (and the beneficiaries thereof who receive distribution of Partnership
Units therefrom) shall be deemed to have a deficit Capital Account restoration
obligation as set forth pursuant to the terms of Section 13.3.B.
Section 13.4 Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in
the event the Partnership is liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the
Partnership's property shall not be liquidated, the Partnership's liabilities
shall not be paid or discharged, and the Partnership's affairs shall not be
wound up. Instead, for federal income tax purposes and for purposes of
maintaining Capital Accounts pursuant to Exhibit B hereto, the Partnership
shall be deemed to have distributed the property in kind to the Partners, who
shall be deemed to have assumed and taken such property subject to all
Partnership liabilities, all in accordance with their respective Capital
Accounts. Immedi-
-50-
54
ately thereafter, the General Partner and Limited Partners shall be deemed to
have re-contributed the Partnership property in kind to the Partnership, which
shall be deemed to have assumed and taken such property subject to all such
liabilities.
Section 13.5 Rights of the Limited Partners
Except as otherwise provided in this Agreement, the Limited
Partners shall look solely to the assets of the Partnership for the return of
its Capital Contribution and shall have no right or power to demand or receive
property other than cash from the Partnership.
Section 13.6 Waiver of Partition
Each Partner hereby waives any right to partition of the
Partnership property.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT
Section 14.1 Amendments
A. This Agreement may be amended with the con sent of the
General Partner, the Initial Limited Partner, and the Special Limited Partners
representing a majority of Partnership Units held by such Special Limited
Partners, but such amendments shall not require the approval of any Additional
Limited Partners other than the Special Limited Partners.
B. Notwithstanding Section 14.1.A, the General Partner shall
have the power, without the consent of any other Partner to amend this Agreement
as may be required to facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner
or surrender any right or power granted to the General Partner or any Affiliate
of the General Partner for the benefit of the Limited Partners; to set forth the
designation, rights, powers, duties, and preferences of the holders of any
additional Partnership Interests issued pursuant to Section 4.2.A hereof;
-51-
55
(2) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any provision in this
Agreement not inconsistent with law or with other provisions, or make other
changes with respect to matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement; and
(3) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling, or regulation of
a federal or state agency or contained in federal or state law.
The General Partner shall provide notice to the other Partners when any action
under this Section 14.1.B is taken.
C. Notwithstanding Sections 14.1.A and 14.1.B hereof, this
Agreement shall not be amended without the consent of each Partner adversely
affected if such amendment would (i) convert a Limited Partner's interest in the
Partnership into a general partner interest, (ii) modify the limited liability
of a Limited Partner in a manner adverse to such Partner, (iii) alter or modify
the Redemption Right and REIT Shares Amount as set forth in Section 8.4 in a
manner adverse to such Partner, or (iv) amend this Section 14.1.C. Further, no
amendment may alter the restrictions on the General Partner's authority set
forth in Section 7.3 without the consent specified in that section.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice
Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication to
the Partner or Assignee at the address set forth in Exhibit A or such other
address of which the Partner shall notify the General Partner in writing.
-52-
56
Section 15.2 Titles and Captions
All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in
no way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa. Each reference herein to Partnership Units held by the General
Partner, a Special Limited Partner, a Phoenix Limited Partner or a Xxxxxx
Limited Partner shall be deemed to be a reference to Partnership Units held by
such Partner in its role as such.
Section 15.4 Further Action
The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.
Section 15.6 Waiver
No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver or
any such breach or any other covenant, duty, agreement or condition.
Section 15.7 Counterparts
-53-
57
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affirming its signature hereto.
Section 15.8 Applicable Law
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
-54-
58
Section 15.9 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
Section 15.10 Entire Agreement
This Agreement contains the entire understanding and agreement
among the Partners with respect to the subject matter hereof and supersedes the
Prior Agreements and any other prior written or oral understandings or
agreements among them with respect thereto.
-55-
59
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first written above.
GENERAL PARTNER:
Lex GP-1, Inc.
By________________________
Name:
Title:
LIMITED PARTNER:
Lex LP-1, Inc.
By________________________
Name:
Title:
LEXINGTON CORPORATE PROPERTIES TRUST
By________________________
Name:
Title:
SPECIAL LIMITED PARTNERS
By________________________
On behalf of the Special Limited
Partners set forth on Exhibit A
PHOENIX LIMITED PARTNER
By_______________________
On behalf of the Phoenix Limited
Partner set forth on Exhibit A
XXXXXX LIMITED PARTNERS
By____________________________
On behalf of the Xxxxxx Limited
Partners set forth on Exhibit A
-56-
60
Execution Copy
EXHIBIT A
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
----------------------------------------------------------------------------------------------------
GENERAL PARTNER
Lex GP-1, Inc. $100 30,470 .62852% N/A
LIMITED PARTNER
Lex LP-1, Inc. $100 3,095,177 63.84614% N/A
SPECIAL LIMITED PARTNERS
Xxxxxxxx X. Xxxxxxx ____ 3,354 .06919% N/A
The LCP Group, L.P. ____ 14,914 .30764% N/A
Xxxxxxx X. Xxxx ____ 2,161.5 .04459% N/A
Xxxxx X. Xxxx ____ 2,161.5 .04459% N/A
E. Xxxxxx Xxxxxxx ____ 21,443 .44231% N/A
Xxxxxxx X. Xxxxx ____ 8,241 .16999% N/A
Xxxxxx X. Xxxxxxx ____ 4,605 .09499% N/A
A-1
61
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
PHOENIX LIMITED PARTNER January 15, 1999
E. Xxxxxx Xxxxxxx G.P. 215,306 4.44125%
interest
XXXXXX LIMITED PARTNERS (Units September 1, 1999
Contributed)
AGR Trust 2.0 6,672 .13762%
Xxxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxx X. III 1.0 3,336 .06881%
Xxxxxx, E. Xxx 1.0 3,336 .06881%
Xxxxxxxxxx, Xxxxxxx X. & Xxxxx 1.0 3,336 .06881%
Xxxx, Xxxxx X.(Jr.) & Xxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxx X. Xx. 1.0 3,336 .06881%
Xxxxxxx, Xxxx 0.5 1,668 .03441%
Xxxxxxxx, Xxxx X. 1.0 3,336 .06881%
Xxxxxxx, X. Xxxxxx 0.5 1,668 .03441%
Xxxxxx, Xxxx X. 0.5 1,668 .03441%
Xxxx, Xxxxxxx X. & Xxxxxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxxxx 1.0 3,336 .06881%
Xxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxx X. & Xxxxxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxx X. (Estate of) 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxxx X. 0.5 1,668 .03441%
Xxxx, Xxxx X. & Xxxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxxx X. 0.5 1,668 .03441%
Xxxx, Xxxx & Xxxxxx 1.0 3,336 .06881%
Xxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxx X. & Xxxxx 1.0 3,336 .06881%
A-2
62
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx, Xx 1.0 3,336 .06881%
Xxxxxxxxx, Xxxxx X. 0.5 1,668 .03441%
Xxxx, Xxxxxx X. Xx. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxx, Xxx Long & Xxxx Xxx 0.5 1,668 .03441%
Xxxxxx, Xxxxxx X. 0.5 1,668 .03441%
Xxxxx, Xxxxx 1.0 3,336 .06881%
Xxxxx, Xxxxxxx X. & Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxx (Xxxxxx X. Xx.) 1.0 3,336 .06881%
Revocable Trust
Xxxxx, Xxxxxx & Xxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxxxx X. 0.5 1,668 .03441%
Croft (Xxxxx X.) Trust dtd 6/2/89 1.0 3,336 .06881%
Xxxx, Xxxxx (Jr.) & Xxxxxxxx 0.5 1,668 .03441%
Xxxxx, Xxxxxx X. 1.0 3,336 .06881%
Dafcik (Xxxxxxx X.) Trust 1.0 3,336 .06881%
Dash, Xxx 1.0 3,336 .06881%
Xxxxxxxxxx, Xxxxx X. & Xxxx 1.0 3,336 .06881%
Xxxxx, Xxxxxxx X. 1.0 3,336 .06881%
XxXxxx, Xxxxxxx X. 1.0 3,336 .06881%
DMK Trust 1.0 3,336 .06881%
Xxxxxx, Xxxxxxx X. 0.5 1,668 .03441%
Xxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxx X. & Xxxxx X. 1.0 3,336 .06881%
Edelman (Xxxx) Trust 1.0 3,336 .06881%
Xxxxxx, Xxxxxxxxx 0.333 1,111 .02292%
Xxxxxxxxx, Xxxxxxx 1.0 3,336 .06881%
Xxxx, Xxxxx 1.0 3,336 .06881%
A-3
63
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx, (Xxxx X. Xx.) Ins. 1.0 3,336 .06881%
Trust ...
Xxxxxxx Family LLC 1.0 3,336 .06881%
Xxxxx, Xxxxxx X. & Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxx X. & Xxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxx X. & Xxxxx 1.0 3,336 .06881%
Xxxx, Xxxxx X. 0.5 1,668 .03441%
Xxxxx, Xxxx X. & Xxxxx 1.0 3,336 .06881%
Xxx, Xxxxxxx & Xxxxxx 1.0 3,336 .06881%
Xxxxxxxx (Xxxxx X.) Trust u/a/d 1.0 3,336 .06881%
5/7/90
Xxxxx, Xxxx X. 0.5 1,668 .03441%
Xxxxxxx, Xxxxxx 1.0 3,336 .06881%
Xxxxxxx, Xxxxx X. & Xxxxxxxx X. 1.0 3,336 .06881%
Xxxxx, Xxxx X. 1.0 3,336 .06881%
Gold, Xxxxxx X. 1.0 3,336 .06881%
Goldfinger, Xxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxx X. & Xxxxxxxx X. 1.0 3,336 .06881%
The LCP Group 1.0 3,336 .06881%
Xxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxxxx, Xxxxxx X. 0.5 1,668 .03441%
Xxxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxxxx, Xxxxx X. & Xxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxx X. & Xxxxxxxxx 1.0 3,336 .06881%
Xxxxxx, Xxxxx X. 0.5 1,668 .03441%
Hanger, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxxx, Drexwell & Xxxxx 4.0 13,343 .27523%
A-4
64
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxx, Xxxxxx X. 1.0 3,336 .06881%
HMSP Realty Co. 1.0 3,336 .06881%
Xxxxxxxxxx, Xxxxxxx 1.0 3,336 .06881%
Hoot, Xxxxxxx X. 0.5 1,668 .03441%
Houston, Xxxxxx X. 1.0 3,336 .06881%
H.P.D. Co. 2.0 6,672 .13762%
Xxxxxxx (Xxxx X.) Trust 1.0 3,336 .06881%
Huron, Xxxxxxx & Xxxxxx 1.0 3,336 .06881%
Xxxx, Xxxxx X. 0.5 1,668 .03441%
Xxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Irmscher, Max G. & Xxxxx X. 1.0 3,336 .06881%
Ito, Xxxxxx Xxxxxx 0.5 1,668 .03441%
Xxxxxxx, Xxxxxxxxxx 0.333 1,111 .02292%
Xxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxxx X. & Xxxx X. 1.0 3,336 .06881%
Xxxxx (Xxxx X.) Rev. Trust uad 1.0 3,336 .06881%
9/24/91
Xxxxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxxxx 1.0 3,336 .06881%
Xxxxxxxxx, Xxxxxx 1.0 3,336 .06881%
Xxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxxxx (Irving & Xxxxxxxx) Rev 1.0 3,336 .06881%
Trust
Xxxxxx, Xxxxxx 1.0 3,336 .06881%
Xxxxx, Xxxxx X. 1.0 3,336 .06881%
Keto, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxxxx X. 3.0 10,007 .20642%
Xxxxxxx, Xxxxxxx X. 8.0 26,686 .55047%
A-5
65
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 3.0 10,007 .20642%
Xxxxxxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxxx 1.0 3,336 .06881%
Xxx, Xxxxxx X. 0.5 1,668 .03441%
Xxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxx & Xxxxx 1.0 3,336 .06881%
Lesser, Xxxxxx X. 1.5 5,004 .10322%
Lesser, Xxxxxx X. 0.5 1,668 .03441%
Xxxxxx (Xxxxxx & Xxxxx) Trust 1.0 3,336 .06881%
Xxxx, Xxxxx X. & Xxxx X. 1.0 3,336 .06881%
Xxxx, Xxx & Xxxxx 1.0 3,336 .06881%
Xxxxxxx, Xxxx X. Xx. 1.0 3,336 .06881%
Love, Xxxxxxxxx 1.0 3,336 .06881%
Xxxxx, Xxxxxxx Xxxxxxxxx 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxx 0.5 1,668 .03441%
Xxxxxx, Xxxxxx X. & Xxxxxx 0.5 1,668 .03441%
Xxxxxxx, Xxxxxxxxxx X. 1.0 3,336 .06881%
Xxxxxxx (Xxxxx), Hawaiian Tr Co. 0.5 1,668 .03441%
succ..
Markstein Trust 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxx 0.5 1,668 .03441%
Xxxxxxxx, Xxxxxxx X. 0.5 1,668 .03441%
Matsushita, Xxxxxx X. & Xxxxxx 1.0 3,336 .06881%
XxXxxxx, Xxx X. & Daisy 0.5 1,668 .03441%
XxXxxxx, Xxxxxx X. 1.0 3,336 .06881%
XxXxx, Xxxxxx X. 1.0 3,336 .06881%
XxXxxxxx, Xxxxx X. 0.5 1,668 .03441%
XxXxxxx, Xxxxx X. 0.5 1,668 .03441%
XxXxx, Xxxxx X. 0.5 1,668 .03441%
A-6
66
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 1.0 3,336 .06881%
Xxxxxx, Xxxxxx X. & Xxxxxx X. 0.5 1,668 .03441%
Xxxx, Xxxxxx X. 0.5 1,668 .03441%
Xxxx, Xxxx 0.5 1,668 .03441%
Xxxxxxx, Xxxxxx X. 0.5 1,668 .03441%
Oceans Unlimited Partnership 1.0 3,336 .06881%
Xxxxxx, Xxxx X. 1.0 3,336 .06881%
O'Meallie, Xxxxxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxxxx X. 0.5 1,668 .03441%
Otsuka, Xxxxxxx X. 1.0 3,336 .06881%
Xxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxx, Chupendra & Indira 1.0 3,336 .06881%
Xxxx, Xxxxxxx X. Xx. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxx 0.5 1,668 .03441%
Xxxxxxx, Xxxxxx 1.0 3,336 .06881%
Pompeo, Xxxxxxx 1.0 3,336 .06881%
Xxxxx, Xxxx X. & Xxx X. 1.0 3,336 .06881%
Xxxxx, Xxxxx X. 0.5 1,668 .03441%
Xxxxxxx, Xxxxxxxx 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxx 2.0 6,672 .13762%
Xxxxxxxxx, Xxxxxx X. 0.5 1,668 .03441%
Xxxxxx, Xxxxx X. 0.5 1,668 .03441%
Xxxxxxxxx, Xxxxxxxx 1.0 3,336 .06881%
Xxxxxx, Xxxxxxx 0.5 1,668 .03441%
Xxxx, Xxxx X. Xx. 2.0 6,672 .13762%
Xxxxxxx, Xxxxxxx X. Xx. 0.5 1,668 .03441%
Xxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxx (Xxxxxxx X.) Trust 1.0 3,336 .06881%
Xxxxxx, X. Xxxxx 1.0 3,336 .06881%
A-7
67
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx X. & Xxxxxx X. 3.0 10,007 .20642%
Xxxxxxx, Xxxxxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxxxx X.& Xxxxxxxx X. 1.0 3,336 .06881%
Xxxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxx, Xxxxx 1.0 3,336 .06881%
Xxxxx, Xxxxxx 5.0 16,679 .34405%
Xxxxxx, Xxxx 1.0 3,336 .06881%
Xxxxx, Xxxxxx 1.0 3,336 .06881%
St. Xxxxxx, M. Xxxxxx Xx. 1.0 3,336 .06881%
Xxxxx, Xxxxxx 0.5 1,668 .03441%
Xxxxx, Xxxx 0.5 1,668 .03441%
Xxxxx, Xxxxxx X. 0.5 1,668 .03441%
Xxxxxxxxx (Xxxx) Marital Trust... 1.0 3,336 .06881%
Xxxxxxxxxxx, Xxxx X. & XxXxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxxx Xxxx 0.333 1,111 .02292%
Xxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Tipp (Xxxxxx), Hawaiian Tr Co, 0.5 1,668 .03441%
succ Ttee
Travis, Sonaia 1.0 3,336 .06881%
UBATCO & CO. 0.5 1,668 .03441%
Xxx Xxxxxx, Xxxxxx 0.5 1,668 .03441%
Xxxxxx, Xxxxxx 1.0 3,336 .06881%
Voute, P. Xxxxxxx 1.0 3,336 .06881%
Xxxxxx, Xxxx X. 1.0 3,336 .06881%
Xxxxxxx, Xxxxx X. 1.0 3,336 .06881%
Xxxxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxxxx, Xxxxxxx 1.0 3,336 .06881%
Xxxxxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxx, Xxxx X. 1.0 3,336 .06881%
A-8
68
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx 1.0 3,336 .06881%
Xxxxxxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Xxxxxxxxxx (Xxxxxxxx Xxxxxxxx) 0.6 2,002 .04128%
Trust
Xxxxxxxxxx (H.A.M.E.) Trust 0.4 1,334 .02754%
Worthington (Xxxxxxx Xxxx) Special 1.0 3,336 .06881%
Trust
Xxxxxx, Xxxxxx X. 1.0 3,336 .06881%
Wu, Yen Bin & Xxxx Eng 0.5 1,668 .03441%
Xxxxx, Xxxxxx & Jo Xxxx 1.0 3,336 .06881%
Xxxx, Xxxxxx & Muna 1.0 3,336 .06881%
Xxxxxx, Xxxxxxx & Xxxxxx 1.0 3,336 .06881%
Roskind, E. Xxxxxx 0.302 3,407 .07028%
Xxxx, Xxxxxx X. 0.1125 1,575 .03249%
Xxxx, Xxxxx X. 0.1125 1,575 .03249%
Xxxxx, Xxxxxxx X. 0.121 1,873 .03864%
Xxxxxxx, Xxxxxx X. 0.095 1,783 .03678%
Xxxxxxxx, Xxxxx X. 0.078 1,240 .02558%
Xxxxxxxx (Xxxxxxx) Trust dtd. 0.024 1,060 .02187%
4/5/90
Xxxxxxxxxx, Xxxxx X. 0.010 33 .00068%
Letaconnoux, Francois 0.023 588 .01213%
Lepercq, de Neuflize & Co. 0.124 413 .00852%
Incorporated
Xxxxxx Page, Inc. 88,944 1.83470%
Xxxxxxxx, Xxxxx X. 34,154 .70451%
The LCP Group, L.P. 315,424 6.50645%
Letaconnoux, Francois 13,377 .27594%
Xxxxxxxx (Xxxxxxx)Trust dtd. 34,154 .70451%
4/5/90
Roskind, E. Xxxxxx 52,226 1.07730%
A-9
69
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx X. 38,423 .79258%
Third Xxxxxx Page, Inc. 83,605 1.72457%
Xxxxxxx, Xxxxxx X. 51,232 1.05679%
The LCP Group, L.P. 57,692 1.19005%
Xxxxxx Property Corp. 3,404 .07022%
A-10
70
EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
1. Capital Accounts of the Partners
A. The Partnership shall maintain for each Partner a separate
Capital Account in accordance with the rules of Regulations Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions and any other deemed contributions made by such
Partner to the Partnership pursuant to this Agreement and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 1.B hereof and allocated to such Partner pursuant to
Section 6.1.A of the Agreement and Exhibit C hereof, and decreased by (x) the
amount of cash or Agreed Value of all actual and deemed distributions of cash or
property made to such Partner pursuant to this Agreement and (y) all items of
Partnership deduction and loss computed in accordance with Section 1.B hereof
and allocated to such Partner pursuant to Section 6.1.B of the Agreement and
Exhibit C hereof.
B. For purposes of computing the amount of any item of income,
gain, deduction or loss to be reflected in the Partners' Capital Accounts,
unless otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
(1) Except as otherwise provided in Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership; provided that the amounts of any
adjustments to the adjusted bases of the assets of the Partnership made pursuant
to Section 734 of the Code as a result of the distribution of property by the
Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to the
limitations prescribed in Regulations Section 1.704-1(b)(2)(iv)(m)(4).
(2) The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items described in
Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable in gross
income or are neither currently deductible nor capitalized for federal income
tax purposes.
B-1
71
(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the adjusted
basis of such property as of such date of disposition were equal in amount to
the Partnership's Carrying Value with respect to such property as of such date.
(4) In lieu of the depreciation, amortization, and other
cash recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such fiscal year.
(5) In the event the Carrying Value of any Partnership
Asset is adjusted pursuant to Section 1.D hereof, the amount of any such
adjustment shall be taken into account as gain or loss from the disposition of
such asset.
(6) Any items specially allocated under Section 2 of
Exhibit C hereof shall not be taken into account.
C. Generally, a transferee (including any Assignee) of a
Partnership Unit shall succeed to a pro rata portion of the Capital Account of
the transferor; provided that if the transfer causes a termination of the
Partnership under Section 708(b)(1)(B) of the Code, the Partnership's properties
shall be deemed, solely for federal income tax purposes, to have been
distributed in liquidation of the Partnership to the holders of Partnership
Units (including such transferee) and re-contributed by such Persons in
reconstitution of the Partnership. In such event, the Carrying Values of the
Partnership properties shall be adjusted immediately prior to such deemed
distribution pursuant to Section x.X.(2) hereof. The Capital Accounts of such
reconstituted Partnership shall be maintained in accordance with the principles
of this Exhibit B.
D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D.(2), the Carrying Values of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
of the times of the adjustments provided in Section 1.D.(2) hereto, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each
such property and allocated pursuant to Section 6.1 of the Agreement.
(2) Such adjustments shall be made as of the following
times: (a) immediately prior to the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (b) immediately prior to the distribution by the
Partnership to a Partner of more than a de minimis amount of property as
consideration for an interest in the Partnership; and
B-2
72
(c) immediately prior to the liquidation of the Partnership within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(g); provided that adjustments pursuant
to clauses (a) and (b) above shall be made only if the General Partner
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership.
(3) In accordance with Regulations Section
1.704-1(b)(2)(iv)(e) the Carrying Value of Partnership assets distributed in
kind shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as of the time any
such asset is distributed.
(4) In determining Unrealized Gain or Unrealized Loss for
purposes of this Exhibit B, the aggregate cash amount and fair market value of
all Partnership assets (including cash or cash equivalents) shall be determined
by the General Partner using such reasonable method of valuation as it may
adopt, or in the case of a liquidating distribution pursuant to Article 13 of
the Agreement, be determined and allocated by the Liquidator using such
reasonable methods of valuation as it may adopt. The General Partner, or the
Liquidator, as the case may be, shall allocate such aggregate value among the
assets of the Partnership (in such manner as it determines in its sole and
absolute discretion to arrive at a fair market value for individual properties).
E. The provisions of this Agreement (including this Exhibit B
and the other Exhibits to this Agreement) relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities which
are secured by contributed or distributed property or which are assumed by the
Partnership, the General Partner, or the Limited Partners), are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Person pursuant to Article 13 of the Agreement upon
the dissolution of the Partnership. The General Partner also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership Capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
2. No Interest
B-3
73
No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
3. No Withdrawal
No Partner shall be entitled to withdraw any part of his
Capital Contributions or his Capital Account or to receive any distribution from
the Partnership, except as provided in this Agreement.
B-4
74
EXHIBIT C
SPECIAL ALLOCATION RULES
1. Special Allocation Rules
Notwithstanding any other provision of the Agreement or this
Exhibit C, the following special allocations shall be made in the following
order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if there
is a net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
l.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of thishe net decrease only,
each Partner's Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of this Agreement with respect to such
Partnership Year and without regard to any decrease in Partner Minimum Gain
during such Partnership Year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of the Agreement or any other provisions of this
Exhibit C (except Section l.A. hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(i)(4). This Section 1.B is intended to comply
with the minimum gain chargeback requirement in such Section of the Regulations
and shall be interpreted consistently therewith. Solely for the purposes of this
Section 1.B, each Partner's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to
C-1
75
Section 6.1 of the Agreement or this Exhibit C with respect to such Partnership
Year, other than allocations-pursuant to Section 1.A hereof.
C. Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections l.A and l.B hereof, such Partner has an Adjusted Capital Account
Deficit, items of Partnership income and gain shall be specifically allocated to
such Partner in an amount and manner sufficient to eliminate, to the extent
required by the Regulations, its Adjusted Capital Account Deficit created by
such adjust ments, allocations or distributions as quickly as possible.
D. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that Nonrecourse Deductions for any Partnership Year must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General Partner is
authorized, upon notice to the Initial Limited Partner and the Limited Partners,
to revise the prescribed ratio for such Partnership Year to the numerically
closest ratio which does satisfy such requirements.
E. Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Partner
who bears the economic risk of loss with respect to the Partner Nonrecourse Debt
to which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(2).
F. Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.
2. Allocations for Tax Purposes
A. Except as otherwise provided in this Section 2, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
C-2
76
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.
B. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income,
gain, loss and deduction shall be allocated for federal income tax purposes
among the Partners as follows:
(1) (a) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners consistent with the
principles of Section 704(c) of the Code that takes into account the variation
between the 704(c) Value of such property and its adjusted basis at the time of
contribution; and
(b) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be allocated among the Partners in
the same manner as its correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.
(2) (a) In the case of an Adjusted Property, such items
shall
(1) first, be allocated among the Partners in a manner
consistent with the principles of Section 704(c) of the Code to take into
account the Unrealized Gain or Unrealized Loss attributable to such property and
the allocations thereof pursuant to Exhibit B and
(2) second, in the event such property was originally a
Contributed Property, be allocated among the Partners in a manner consistent
with Section 2.B.(1) of this Exhibit C; and
(b) any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be allocated among the Partners in
the same manner as its correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.
(3) All other items of income, gain, loss and deduction
shall be allocated among the Partners in the same manner as their correlative
item of "book" gain or loss is allocated pursuant to Section 6.1 of the
Agreement and Section 1 of this Exhibit C.
C. To the extent Regulations promulgated pursuant to 704(c) of
the Code permit a partnership to utilize creative methods to eliminate the
disparities between the value of property and its adjusted basis (including,
without limitation, the implementation of curative allocations), the General
Partner shall have the authority to elect the
C-3
77
method used by the Partnership and such election shall be binding on the
Partners.
Without limiting the foregoing, the General Partner shall take
all steps (including, without limitation, implementing curative allocations)
that it determines are necessary or appropriate to ensure that the amount of
taxable gain required to be recognized by the General Partner upon a disposition
by the Partnership of any Contributed Property or Adjusted Property does exceed
the sum of (i) the gain that would be recognized by the General Partner if such
property had an adjusted tax basis at the time of disposition equal to the
704(c) Value of such property plus (ii) the deductions for depreciation,
amortization or other cost recovery actually allowed to the General Partner with
respect to such property for federal income tax purposes (after giving effect to
the "ceiling rule").
C-4
78
EXHIBIT D-1
NOTICE OF REDEMPTION
The undersigned Special Limited Partner hereby irrevocably (i)
redeems ___________ Partnership Units in Lepercq Corporate Income Fund II L.P.
in accordance with the terms of the Second Amended and Restated Agreement of
Limited Partnership of Lepercq Corporate Income Fund II L.P., as amended, and
the Special Limited Partner Redemption Right referred to therein, (ii)
surrenders such Partnership Units and all right, title and interest therein, and
(iii) directs that the Redemption Amount deliverable upon exercise of the
Special Limited Partner Redemption Right be delivered to the address and placed
in the name(s) and at the address(es) specified below. The undersigned hereby
represents, warrants, certifies and agrees (a) that the undersigned has good,
marketable and unencumbered title to such Partnership Units, free and clear of
the rights or interests of any other person or entity, (b) that the undersigned
has the full right, power and authority to redeem and surrender such Partnership
Units as provided herein, (c) that the undersigned has obtained the consent or
approval of all persons or entities, if any, having the right to consent to or
approve such redemption and surrender, (d) that if the undersigned is acquiring
REIT Shares, the undersigned is doing so with the understanding that such REIT
Shares may only be resold or distributed pursuant to a registration statement
under the Securities Act of 1933 or in a transaction exempt from the
registration requirements of such Act and (e) that Lexington Corporate
Properties Trust may refuse to transfer such REIT Shares as to which evidence
satisfactory to it of such registration or exemption is not provided to it.
Dated: _____________
Name of Special Limited Partner:
________________________________________
(Signature of Special Limited Partner)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
D-1-1
79
Signature Guaranteed by:
-----------------------------------------
If REIT Shares are issued, issue them to:
Please insert social security or identifying number:
Name:
X-0-0
00
XXXXXXX X-0
NOTICE OF REDEMPTION
The undersigned Phoenix Limited Partner hereby irrevocably (i)
redeems ___________ Partnership Units in Lepercq Corporate Income Fund II L.P.
in accordance with the terms of the Second Amended and Restated Agreement of
Limited Partnership of Lepercq Corporate Income Fund II L.P., as amended, and
the Phoenix Limited Partner Redemption Right referred to therein, (ii)
surrenders such Partnership Units and all right, title and interest therein, and
(iii) directs that the Redemption Amount deliverable upon exercise of the
Phoenix Limited Partner Redemption Right be delivered to the address and placed
in the name(s) and at the address(es) specified below. The undersigned hereby
represents, warrants, certifies and agrees (a) that the undersigned has good,
marketable and unencumbered title to such Partnership Units, free and clear of
the rights or interests of any other person or entity, (b) that the undersigned
has the full right, power and authority to redeem and surrender such Partnership
Units as provided herein, (c) that the undersigned has obtained the consent or
approval of all persons or entities, if any, having the right to consent to or
approve such redemption and surrender, (d) that if the undersigned is acquiring
REIT Shares, the undersigned is doing so with the understanding that such REIT
Shares may only be resold or distributed pursuant to a registration statement
under the Securities Act of 1933 or in a transaction exempt from the
registration requirements of such Act and (e) that Lexington Corporate
Properties Trust may refuse to transfer such REIT Shares as to which evidence
satisfactory to it of such registration or exemption is not provided to it.
Dated: _____________
Name of Phoenix Limited Partner:
----------------------------------------
(Signature of Phoenix Limited Partner)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
D-2-1
81
Signature Guaranteed by:
----------------------------------------
If REIT Shares are issued, issue them to:
Please insert social security or identifying number:
Name:
X-0-0
00
XXXXXXX X-0
NOTICE OF REDEMPTION
The undersigned Xxxxxx Limited Partner hereby irrevocably (i)
redeems ___________ Partnership Units in Lepercq Corporate Income Fund II L.P.
in accordance with the terms of the Second Amended and Restated Agreement of
Limited Partnership of Lepercq Corporate Income Fund II L.P., as amended, and
the Xxxxxx Limited Partner Redemption Right referred to therein, (ii) surrenders
such Partnership Units and all right, title and interest therein, and (iii)
directs that the Redemption Amount deliverable upon exercise of the Xxxxxx
Limited Partner Redemption Right be delivered to the address and placed in the
name(s) and at the address(es) specified below. The undersigned hereby
represents, warrants, certifies and agrees (a) that the undersigned has good,
marketable and unencumbered title to such Partnership Units, free and clear of
the rights or interests of any other person or entity, (b) that the undersigned
has the full right, power and authority to redeem and surrender such Partnership
Units as provided herein, (c) that the undersigned has obtained the consent or
approval of all persons or entities, if any, having the right to consent to or
approve such redemption and surrender, (d) that if the undersigned is acquiring
REIT Shares, the undersigned is doing so with the understanding that such REIT
Shares may only be resold or distributed pursuant to a registration statement
under the Securities Act of 1933 or in a transaction exempt from the
registration requirements of such Act and (e) that Lexington Corporate
Properties Trust may refuse to transfer such REIT Shares as to which evidence
satisfactory to it of such registration or exemption is not provided to it.
Dated: _____________
Name of Xxxxxx Limited Partner:
----------------------------------------
(Signature of Xxxxxx Limited Partner)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
D-3-1
83
Signature Guaranteed by:
----------------------------------------
If REIT Shares are issued, issue them to:
Please insert social security or identifying number:
Name:
D-3-2
84
D-4-1
