Exhibit 10.15
THIRD AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINED TERMS...........................................................................................2
ARTICLE II PARTNERSHIP CONTINUATION AND IDENTIFICATION............................................................8
2.01 Continuation....................................................................................8
2.02 Name, Office and Registered Agent...............................................................8
2.03 Partners........................................................................................8
2.04 Term and Dissolution............................................................................8
2.05 Filing of Certificate and Perfection of Limited Partnership.....................................9
2.06 Certificates Describing Partnership Units.......................................................9
ARTICLE III BUSINESS OF THE PARTNERSHIP..........................................................................10
ARTICLE IV CAPITAL CONTRIBUTIONS AND ACCOUNTS....................................................................10
4.01 Capital Contributions..........................................................................10
4.02 Additional Capital Contributions and Issuances of Additional Partnership Interests.............10
4.03 Additional Funding.............................................................................59
4.04 Capital Accounts...............................................................................59
4.05 Percentage Interests...........................................................................59
4.06 No Interest on Contributions...................................................................60
4.07 Return of Capital Contributions................................................................60
4.08 No Third Party Beneficiary.....................................................................60
ARTICLE V PROFITS AND LOSSES; DISTRIBUTIONS......................................................................60
5.01 Allocation of Profit and Loss..................................................................60
5.02 Distribution of Cash...........................................................................64
5.03 REIT Distribution Requirements.................................................................65
5.04 No Right to Distributions in Kind..............................................................65
5.05 Limitations on Return of Capital Contributions.................................................65
5.06 Distributions Upon Liquidation.................................................................65
5.07 Substantial Economic Effect....................................................................66
ARTICLE VI RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER.................................................66
6.01 Management of the Partnership..................................................................66
6.02 Delegation of Authority........................................................................68
6.03 Indemnification and Exculpation of Indemnitees.................................................69
6.04 Liability of the General Partner...............................................................70
6.05 Reimbursement of General Partner...............................................................71
6.06 Outside Activities.............................................................................71
6.07 Employment or Retention of Affiliates..........................................................71
6.08 General Partner Participation..................................................................72
6.09 Title to Partnership Assets....................................................................72
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6.10 Miscellaneous..................................................................................72
ARTICLE VII CHANGES IN GENERAL PARTNER...........................................................................73
7.01 Transfer of the General Partner's Partnership Interest.........................................73
7.02 Admission of a Substitute or Additional General Partner........................................75
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner....................75
7.04 Removal of a General Partner...................................................................76
ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS......................................................77
8.01 Management of the Partnership..................................................................77
8.02 Power of Attorney..............................................................................77
8.03 Limitation on Liability of Limited Partners....................................................77
8.04 Ownership by Limited Partner of Corporate General Partner or Affiliate.........................77
8.05 Exchange Right.................................................................................77
8.06 Registration...................................................................................79
ARTICLE IX TRANSFERS OF LIMITED PARTNERSHIP INTERESTS............................................................80
9.01 Purchase for Investment........................................................................80
9.02 Restrictions on Transfer of Limited Partnership Interests......................................81
9.03 Admission of Substitute Limited Partner........................................................82
9.04 Rights of Assignees of Partnership Interests...................................................83
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner..................83
9.06 Joint Ownership of Interests...................................................................83
ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS.............................................................84
10.01 Books and Records..............................................................................84
10.02 Custody of Partnership Funds; Bank Accounts....................................................84
10.03 Fiscal and Taxable Year........................................................................84
10.04 Annual Tax Information and Report..............................................................85
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments..................................85
10.06 Reports to Limited Partners....................................................................85
ARTICLE XI AMENDMENT OF AGREEMENT................................................................................86
ARTICLE XII GENERAL PROVISIONS...................................................................................86
12.01 Notices........................................................................................86
12.02 Survival of Rights.............................................................................86
12.03 Additional Documents...........................................................................87
12.04 Severability...................................................................................87
12.05 Entire Agreement...............................................................................87
12.06 Pronouns and Plurals...........................................................................87
12.07 Headings.......................................................................................87
12.08 Counterparts...................................................................................87
12.09 Governing Law..................................................................................87
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Exhibits
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EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - Notice of Exercise of Exchange Right
THIRD AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.
RECITALS
Xxxxxxxx Properties Acquisition Partners, L.P. (the "Partnership") was
formed as a limited partnership under the laws of the State of Delaware,
pursuant to a Certificate of Limited Partnership filed with the Office of the
Secretary of State of the State of Delaware effective as of March 9, 1990. The
Agreement of Limited Partnership, dated as of March 9, 1990, was amended and
restated in its entirety by an Amended and Restated Agreement of Limited
Partnership dated as of July, 0000, (xxx "Xxxxx Xxxxxxxxxxx") and further
amended by the First, Second and Third Amendments to the First Restatement dated
as of January 11, 1991, July 13, 1990 and May 20, 1993, respectively.
On October 22, 1996, the First Restatement was amended and restated in its
entirety (the "Second Restatement") to reflect the transfer of the current
limited partners' partnership interests, the conversion of the current general
partner's partnership interest to that of a limited partner and the admission of
a new general partner and several new limited partners. The Second Restatement
was amended by the First through Fifteenth Amendments, dated as of December 29,
1997, June 25, 1998, November 24, 1998, February 23, 1998, April 29, 1999, July
28, 1999, August 31, 1999, September 29, 1999, March 17, 1999, May 16, 2000,
July 19, 2000, November 29, 2000, March 20, 2001, April 1, 2001 and March 14,
2001 (the "Amendments"). The Second Restatement is hereby amended and restated
in its entirety by this Third Amended and Restated Agreement of Limited
Partnership, entered into as of this 1st day of October, 2001, by and among
Xxxxxxxx Properties I, Inc., a Delaware corporation (the "General Partner") and
the Limited Partners set forth on Exhibit A hereto to incorporate the provisions
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and revisions contemplated by the Amendments.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend and restate the Second Restatement to read in its entirety as
follows:
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ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the meanings
specified below:
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it may
be amended from time to time.
"Additional Funds" has the meaning set forth in Section 4.03 hereof.
"Additional Securities" means any additional REIT Shares (other than REIT
Shares issued in connection with an exchange pursuant to Section 8.05 hereof) or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase REIT Shares, as set forth in Section
4.02(a)(ii).
"Administrative Expenses" means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses; provided, however, that
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Administrative Expenses shall not include any administrative costs and expenses
incurred by the Company that are attributable to Properties or partnership
interests in a Subsidiary Partnership that are owned by the Company directly.
"Affiliate" means, (i) any Person that, directly or indirectly, controls or
is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 10% or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, partner or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities or partnership interests or otherwise.
"Agreed Value" means the fair market value of a Partner's non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner.
"Agreement" means this Third Amended and Restated Agreement of Limited
Partnership.
"Capital Account" has the meaning provided in Section 4.04 hereof.
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"Capital Contribution" means the total amount of cash, cash equivalents,
and the Agreed Value of any Property or other asset contributed or agreed to be
contributed, as the context requires, to the Partnership by each Partner
pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
"Cash Amount" means an amount of cash per Partnership Unit equal to the
value of the REIT Shares Amount on the date of receipt by the Company of a
Notice of Exchange. The value of the REIT Shares Amount shall be based on the
average of the daily market price of REIT Shares for the ten consecutive trading
days immediately preceding the date of such valuation. The market price for each
such trading day shall be: (i) if the REIT Shares are listed or admitted to
trading on any securities exchange or the NYSE, the sale price, regular way, on
such day, or if no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, on such day, (ii) if the REIT Shares are not
listed or admitted to trading on any securities exchange or the NYSE, the last
reported sale price on such day or, if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the Company, or (iii) if the REIT Shares
are not listed or admitted to trading on any securities exchange or the NYSE and
no such last reported sale price or closing bid and asked prices are available,
the average of the reported high bid and low asked prices on such day, as
reported by a reliable quotation source designated by the Company, or if there
shall be no bid and asked prices on such day, the average of the high bid and
low asked prices, as so reported, on the most recent day (not more than ten days
prior to the date in question) for which prices have been so reported; provided
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that if there are no bid and asked prices reported during the ten days prior to
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the date in question, the value of the REIT Shares shall be determined by the
Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the REIT Shares Amount includes rights that a holder of REIT Shares would
be entitled to receive, then the value of such rights shall be determined by the
Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"Certificate" means any instrument or document that is required under the
laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.
"Certificate of Incorporation" means the Certificate of Incorporation of
the General Partner filed with the Secretary of the State of Delaware, as
amended or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
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"Common Units" shall mean all the units of the Partnership that are not
specifically designated as preferred units pursuant to Section 4.02.
"Company" means Xxxxxxxx Properties Trust, a Maryland real estate
investment trust.
"Conversion Factor" means 1.0, provided that in the event that the Company
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(i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on such date and, provided further, that in the event
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that an entity other than an Affiliate of the Company shall become General
Partner pursuant to any merger, consolidation or combination of the Company with
or into another entity (the "Successor Entity"), the Conversion Factor shall be
adjusted by multiplying the Conversion Factor by the number of shares of the
Successor Entity into which one REIT Share is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation or combination. Any adjustment to the Conversion Factor shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event; provided, however, that if the
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Company receives a Notice of Exchange after the record date, but prior to the
effective date of such dividend, distribution, subdivision or combination, the
Conversion Factor shall be determined as if the Company had received the Notice
of Exchange immediately prior to the record date for such dividend,
distribution, subdivision or combination.
"Declaration of Trust" means the Declaration of Trust of the Company filed
with the Maryland State Department of Assessments and Taxation, as amended or
restated from time to time.
"Event of Bankruptcy" as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, provided that if such proceeding is
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commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.
"Exchange Amount" means either the Cash Amount or the REIT Shares Amount,
as selected by the General Partner or the Company in its sole discretion
pursuant to Section 8.05(b) hereof.
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"Exchange Right" has the meaning provided in Section 8.05(a) hereof.
"Exchanging Partner" has the meaning provided in Section 8.05(a) hereof.
"General Partner" means Xxxxxxxx Properties I, Inc. a Delaware corporation,
and any Person who becomes a substitute or additional General Partner as
provided herein, and any of their successors as General Partner.
"General Partnership Interest" means a Partnership Interest held by the
General Partner that is a general partnership interest.
"Indemnitee" means (i) any Person made a party to a proceeding by reason of
its status as the Company, the General Partner or a director, officer or
employee of the Company, the Partnership or the General Partner, and (ii) such
other Persons (including Affiliates of the Company, General Partner or the
Partnership) as the General Partner may designate from time to time, in its sole
and absolute discretion.
"Limited Partner" means any Person named as a Limited Partner on Exhibit A
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attached hereto, and any Person who becomes a Substitute Limited Partner, in
such Person's capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"Loss" has the meaning provided in Section 5.01(f) hereof.
"Minimum Limited Partnership Interest" means the lesser of (i) 1% or (ii)
if the total Capital Contributions to the Partnership exceeds $50 million, 1%
divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
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shall not be less than 0.2% at any time.
"Notice of Exchange" means the Notice of Exercise of Exchange Right
substantially in the form attached as Exhibit B hereto.
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"NYSE" means the New York Stock Exchange.
"Offer" has the meaning set forth in Section 7.01(c) hereof.
"Offering" means the initial offer and sale by the Company and the purchase
by the Underwriters (as defined in the Prospectus) of REIT Shares for sale to
the public.
"Original Limited Partner" means the Limited Partners designated as
"Original Limited Partners" on Exhibit A hereto.
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"Partner" means any General Partner or Limited Partner.
5
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).
"Partnership Interest" means an ownership interest in the Partnership held
by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
"Partnership Minimum Gain" has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).
"Partnership Record Date" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by the Company for
a distribution to its shareholders of some or all of its portion of such
distribution.
"Partnership Unit" means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The allocation of Partnership Units
among the Partners shall be as set forth on Exhibit A, as may be amended from
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time to time.
"Percentage Interest" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
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may be amended from time to time.
"Person" means any individual, partnership, corporation, joint venture,
trust or other entity.
"Profit" has the meaning provided in Section 5.01(f) hereof.
"Property" means any office or industrial property or other investment in
which the Partnership holds an ownership interest.
"Prospectus" means the final prospectus delivered to purchasers of REIT
Shares in the Offering.
"Regulations" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through 860
of the Code.
6
"REIT Expenses" means (i) costs and expenses relating to the formation and
continuity of existence and operation of the Company and any Subsidiaries
thereof, including Xxxxxxxx Properties I, Inc., (which Subsidiaries shall, for
purposes hereof, be included within the definition of Company), including taxes,
fees and assessments associated therewith, any and all costs, expenses or fees
payable to any director, officer, or employee of the Company, (ii) costs and
expenses relating to any public offering and registration of securities by the
Company and all statements, reports, fees and expenses incidental thereto,
including, without limitation, underwriting discounts and selling commissions
applicable to any such offering of securities, and any costs and expenses
associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (iii) costs and expenses associated
with any repurchase of any securities by the Company, (iv) costs and expenses
associated with the preparation and filing of any periodic or other reports and
communications by the Company under federal, state or local laws or regulations,
including filings with the SEC, (v) costs and expenses associated with
compliance by the Company with laws, rules and regulations promulgated by any
regulatory body, including the SEC, and any securities exchange, (vi) costs and
expenses associated with any 401(k) plan, incentive plan, bonus plan or other
plan providing for compensation for the employees of the Company, (vii) costs
and expenses incurred by the Company relating to any issuing or redemption of
Partnership Interests, and (viii) all other operating or administrative costs of
the Company incurred in the ordinary course of its business on behalf of or in
connection with the Partnership.
"REIT Share" means a common share of beneficial interest in the Company (or
Successor Entity, as the case may be).
"REIT Shares Amount" means a number of REIT Shares equal to the product of
the number of Partnership Units offered for exchange by an Exchanging Partner,
multiplied by the Conversion Factor as adjusted to and including the Specified
Exchange Date; provided that in the event the Company issues to all holders of
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REIT Shares rights, options, warrants or convertible or exchangeable securities
entitling the shareholders to subscribe for or purchase REIT Shares, or any
other securities or property (collectively, the "rights"), and the rights have
not expired at the Specified Exchange Date, then the REIT Shares Amount shall
also include the rights issuable to a holder of the REIT Shares Amount of REIT
Shares on the record date fixed for purposes of determining the holders of REIT
Shares entitled to rights.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the U.S. Securities and Exchange Commission.
"Service" means the Internal Revenue Service.
"Specified Exchange Date" means the first business day of the month that is
at least 60 business days after the receipt by the Company of the Notice of
Exchange.
"Share Incentive Plans" means the Xxxxxxxx Properties Trust 1996 Share
Incentive Plan, the Xxxxxxxx Properties Trust Share Incentive Plan, and The
Xxxxxxxx Properties Trust Employees Share Purchase Plan as such plans may be
amended from time to time, or any stock incentive plan adopted in the future by
the Company.
7
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Subsidiary Partnership" means any partnership of which the partnership
interests therein are owned by the Company or a wholly-owned subsidiary of the
Company.
"Substitute Limited Partner" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 9.03 hereof.
"Surviving General Partner" has the meaning set forth in Section 7.01(d)
hereof.
"Transaction" has the meaning set forth in Section 7.01(c) hereof.
"Transfer" has the meaning set forth in Section 9.02(a) hereof.
"Transfer Restriction Date" means October 22, 1999.
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01 Continuation. The Partners hereby agree to continue the Partnership
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pursuant to the Act and upon the terms and conditions set forth in this
Agreement.
2.02 Name, Office and Registered Agent. The name of the Partnership is
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Xxxxxxxx Properties Acquisition Partners, L.P. The specified office and place of
business of the Partnership shall be 0000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000. The General Partner may at any time change the location of
such office, provided the General Partner gives notice to the Partners of any
such change. The name and address of the Partnership's registered agent is The
Corporation Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.Xxx sole duty of the registered
agent as such is to forward to the Partnership any notice that is served on him
as registered agent.
2.03 Partners.
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(a) The General Partner of the Partnership is Xxxxxxxx Properties I, Inc.,
a Delaware corporation. Its principal place of business is the same as that of
the Partnership.
(b) The Limited Partners are those Persons identified as Limited Partners
on Exhibit A hereto, as amended from time to time.
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2.04 Term and Dissolution.
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(a) The term of the Partnership shall continue in full force and effect
until December 31, 2050, except that the Partnership shall be dissolved upon the
first to occur of any of the following events:
8
(i) The occurrence of an Event of Bankruptcy as to a General Partner
or the dissolution, death, removal or withdrawal of a General Partner unless the
business of the Partnership is continued pursuant to Section 7.03(b) hereof;
provided that if a General Partner is on the date of such occurrence a
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partnership, the dissolution of such General Partner as a result of the
dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in
such partnership shall not be an event of dissolution of the Partnership if the
business of such General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and such General Partner and
such partners comply with any other applicable requirements of this Agreement;
(ii) The passage of 90 days after the sale or other disposition of all
or substantially all of the assets of the Partnership (provided that if the
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Partnership receives an installment obligation as consideration for such sale or
other disposition, the Partnership shall continue, unless sooner dissolved under
the provisions of this Agreement, until such time as such note or notes are paid
in full);
(iii) There are no Limited Partners remaining; or
(iv) The election by the General Partner that the Partnership should
be dissolved.
(b) Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either
(i) defer liquidation of, or withhold from distribution for a reasonable time,
any assets of the Partnership(including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.
2.05 Filing of Certificate and Perfection of Limited Partnership. The
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General Partner shall execute, acknowledge, record and file at the expense of
the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.06 Certificates Describing Partnership Units. At the request of a Limited
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Partner, the General Partner, at its option, may issue a certificate summarizing
the terms of such Limited Partner's interest in the Partnership, including the
number of Partnership Units owned and the Percentage Interest represented by
such Partnership Units as of the date of such certificate. Any such certificate
(i) shall be in form and substance as approved by the General Partner, (ii)
shall not be negotiable and (iii) shall bear a legend to the following effect:
This certificate is not negotiable. The
Partnership Units represented by this
certificate are governed by and transferable
9
only in accordance with the provisions of the
Agreement of Limited Partnership of Xxxxxxxx
Properties Acquisition Partners, L.P., as
amended and restated.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act, provided, however, that such business
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shall be limited to and conducted in such a manner as to permit the Company at
all times to qualify as a REIT, unless the Company otherwise ceases to qualify
as a REIT, (ii) to enter into any partnership, joint venture or other similar
arrangement to engage in any of the foregoing or the ownership of interests in
any entity engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, and without
limiting the Company's right in its sole and absolute discretion to cease
qualifying as a REIT, the Partners acknowledge that the Company's current status
as a REIT inures to the benefit of all the Partners and not solely to the
Company. Notwithstanding the foregoing, the Limited Partners agree that the
Company may terminate its status as a REIT under the Code at any time to the
full extent permitted under the Declaration of Trust. The General Partner shall
also be empowered to do any and all acts and things necessary or prudent to
ensure that the Partnership will not be classified as a "publicly traded
partnership" for purposes of Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 Capital Contributions. The General Partner and the Limited Partners
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have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A.
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4.02 Additional Capital Contributions and Issuances of Additional
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Partnership Interests. Except as provided in this Section 4.02 or in Section
---------------------
4.03, the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The General Partner or the
Company may contribute additional capital to the Partnership, from time to time,
and receive additional Partnership Interests in respect thereof, in the manner
contemplated in this Section 4.02.
(a) Issuances of Additional Partnership Interests.
---------------------------------------------
(i) General. The General Partner is hereby authorized to cause the
-------
Partnership to issue such additional Partnership Interests in the form of
Partnership Units for any Partnership purpose at any time or from time to time,
to the Partners (including the General Partner and the Company) or to other
Persons for such consideration and on such terms and conditions as shall be
established by the General Partner in its sole and absolute discretion, all
without the approval of any Limited Partners. Any additional Partnership
Interests issued thereby
10
may be issued in one or more classes, or one or more series of any of such
classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to Limited Partnership Interests, all as shall be determined
by the General Partner in its sole and absolute discretion and without the
approval of any Limited Partner, subject to Delaware law, including, without
limitation, (i) the allocations of items of Partnership income, gain, loss,
deduction and credit to each such class or series of Partnership Interests; (ii)
the right of each such class or series of Partnership Interests to share in
Partnership distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership;
provided, however, that no additional Partnership Interests shall be issued to
the General Partner or the Company unless:
(1) (A) the additional Partnership Interests are issued in
connection with an issuance of REIT Shares of or other interests in the
Company, which shares or interests have designations, preferences and other
rights, all such that the economic interests are substantially similar to
the designations, preferences and other rights of the additional
Partnership Interests issued to the General Partner or the Company by the
Partnership in accordance with this Section 4.02 and (B) the General
Partner or the Company 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 stock of or other interests in the Company, or
(2) the additional Partnership Interests are issued in exchange
for property owned by the Company or the General Partner with a fair market
value, as determined by the General Partner, in good faith, equal to the
value of the Partnership Interests; or
(3) the additional Partnership Interests are issued to all
Partners in proportion to their respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the best interests of the General Partner and the Partnership.
(ii) Upon Issuance of Additional Securities. The Company shall not
--------------------------------------
issue any additional REIT Shares (other than REIT Shares issued in connection
with an exchange pursuant to Section 8.05 hereof) or rights, options, warrants
or convertible or exchangeable securities containing the right to subscribe for
or purchase REIT Shares (collectively, "Additional Securities") other than to
all holders of REIT Shares, unless (A) the General Partner shall cause the
Partnership to issue to the General Partner and the Company, as the Company may
designate, Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences and
other rights, all such that the economic interests are substantially similar to
those of the Additional Securities, and (B) the Company contributes the proceeds
from the issuance of such Additional Securities and from any exercise of rights
contained in such Additional Securities, directly and through the General
Partner, to the Partnership; provided, however, that the Company is allowed to
-------- -------
issue Additional Securities in connection with an acquisition of a property to
be held directly by the Company, but if and only if, such direct acquisition and
issuance of Additional Securities have been approved and
11
determined to be in the best interests of the Company and the Partnership by a
majority of the Board of Trustees except as such approval has been delegated to
a committee of the Board of Trustees. Without limiting the foregoing, the
Company is expressly authorized to issue Additional Securities for less than
fair market value, and to cause the Partnership to issue to the General Partner
and the Company corresponding Partnership Interests, so long as (x) the General
Partner concludes in good faith that such issuance is in the best interests of
the General Partner, the Company and the Partnership, including without
limitation, the issuance of REIT Shares and corresponding Partnership Units
pursuant to an employee share purchase plan providing for employee purchases of
REIT Shares at a discount from fair market value or employee stock options that
have an exercise price that is less than the fair market value of the REIT
Shares, either at the time of issuance or at the time of exercise, and (y) the
Company contributes all proceeds from such issuance, directly or through the
General Partner, to the Partnership. For example, in the event the Company
issues REIT Shares for a cash purchase price and contributes all of the proceeds
of such issuance, directly and through the General Partner, to the Partnership
as required hereunder, the General Partner and the Company, as the Company may
so designate, shall be issued a number of additional Partnership Units equal to
the product of (A) the number of such REIT Shares issued by the Company, the
proceeds of which were so contributed, multiplied by (B) a fraction, the
numerator of which is 100%, and the denominator of which is the Conversion
Factor in effect on the date of such contribution.
(b) Certain Deemed Contributions of Proceeds of Issuance of REIT Shares. In
-------------------------------------------------------------------
connection with any and all issuances of REIT Shares, the Company and the
General Partner, as the Company determines, shall make Capital Contributions to
the Partnership of the proceeds therefrom, provided that if the proceeds
-------- ----
actually received and contributed by the Company, directly or through the
General Partner, are less than the gross proceeds of such issuance as a result
of any underwriter's discount or other expenses paid or incurred in connection
with such issuance, then the General Partner and the Company shall be deemed to
have made Capital Contributions to the Partnership in the aggregate amount of
the gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid such offering expenses in accordance with Section
6.05 hereof and in connection with the required issuance of additional
Partnership Units to the General Partner and the Company for such Capital
Contributions pursuant to Section 4.02(a) hereof.
(c) Minimum Limited Partnership Interest. In the event that either an
------------------------------------
exchange pursuant to Section 8.05 hereof or additional Capital Contributions by
the General Partner and the Company would result in the Limited Partners (other
than the Company), in the aggregate, owning less than the Minimum Limited
Partnership Interest, the General Partner and/or the Company and the Limited
Partners shall form another partnership and contribute sufficient Limited
Partnership Interests together with such other Limited Partners so that the
limited partners (other than the Company) of such partnership own at least the
Minimum Limited Partnership Interest.
12
(d) Series B Cumulative Redeemable Perpetual Preferred Units of Partnership
-----------------------------------------------------------------------
Interest.
--------
(i) Definitions. For purposes of the Series B Preferred Units, the
-----------
following terms shall have the meanings indicated:
"Parity Preferred Units" shall be used to refer to any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with
Series B Preferred Units with respect to distributions or rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership, or
both, as the context may require, and includes the Series D Cumulative
Convertible Redeemable Preferred Units of Partnership Interest of the
Partnership.
"PTP" shall mean a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
The definitions of "Profit" and "Loss" in the Agreement shall be modified
as follows:
Solely for purposes of allocating Profit or Loss in any fiscal year of the
Partnership to the holders of the Series B Preferred Units, items of Profit and
Loss, as the case may be, shall not include depreciation with respect to
properties that are "ceiling limited" in respect of the holders of the Series B
Preferred Units. For purposes of the preceding sentence, Partnership property
shall be considered ceiling limited in respect of a holder of Series B Preferred
Units if depreciation attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this paragraph,
exceeded depreciation determined for federal income tax purposes attributable to
such Partnership property which would otherwise be allocated to such Partner by
more than 5%.
(ii) Designation and Number. A series of preferred units of
----------------------
partnership interest in the Partnership designated as the "8.30% Series B
Cumulative Redeemable Perpetual Preferred Units" (the "Series B Preferred
Units") is hereby established. The number of Series B Preferred Units shall be
1,900,000, which number may be decreased (but not below the aggregate number
thereof then outstanding and/or which have been reserved for issuance) from time
to time by the General Partner.
(iii) Distributions.
-------------
(1) Payment of Distributions. Subject to the rights of holders of
------------------------
Parity Preferred Units as to the payment of distributions and holders of
preferred units ranking senior to the Series B Preferred Units issued after
the date hereof in accordance herewith as to payment of distributions,
holders of Series B Preferred Units shall be entitled to receive, when, as
and if declared by the Partnership acting through the General Partner, out
of funds legally available for the payment of distributions, cumulative
preferential cash distributions at the rate per annum of 8.30% of the
original Capital Contribution per Series B Preferred Unit. Such
distributions shall be cumulative and shall accrue from the first day of
the applicable Distribution Period (as defined herein), and will be payable
(A) quarterly in arrears, not later than the third calendar day after the
end of the applicable Distribution Period and, (B), in the event of (i) an
exchange of Series B Preferred Units into Series B Preferred Shares, or
(ii) a redemption of Series B Preferred
13
Units, on the exchange date or redemption date, as applicable (each a
"Preferred Unit Distribution Payment Date"). For purposes of this Section
4.02(d), the term "Distribution Period" shall mean quarterly distribution
periods commencing on January 1, April 1, July 1 and October 1 of each year
and ending on and including the day preceding the first day of the next
succeeding Distribution Period with respect to any Series B Preferred Units
(other than the initial Distribution Period, which shall commence on the
original date of issuance for such Series B Preferred Units and end on and
include the last day of the calendar quarter immediately following the
original date of issuance, and other than the Distribution Period during
which any Series B Preferred Units shall be redeemed or exchanged, which
shall end on and include the date of such redemption or exchange). The
amount of the distribution payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and for any period shorter
than a full quarterly period for which distributions are computed, the
amount of the distribution payable will be computed on the basis of the
actual number of days elapsed in such a 30-day month. If any date on which
distributions are to be made on the Series B Preferred Units is not a
Business Day (as defined herein), then payment of the distribution to be
made on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date. Distributions on the Series B Preferred Units will be made to
the holders of record of the Series B Preferred Units on July 1, 1998 and
thereafter on the relevant record dates to be fixed by the Partnership
acting through the General Partner, which record dates shall in no event
exceed fifteen (15) Business Days prior to the relevant Preferred Unit
Distribution Payment Date (the "Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(2) Distributions Cumulative. Distributions on the Series B
------------------------
Preferred Units will accrue and accumulate as of each Preferred Unit
Distribution Payment Date whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions,
whether or not the Partnership has earnings, whether or not there are funds
legally available for the payment of such distributions and whether or not
such distributions are authorized. Distributions on account of arrears for
any past Distribution Periods may be declared and paid at any time, without
reference to a regular Preferred Unit Distribution Payment Date to holders
of record of the Series B Preferred Units on the record date fixed by the
Partnership acting through the General Partner which date shall not exceed
fifteen (15) Business Days prior to the payment date. Accumulated and
unpaid distributions will not bear interest.
(3) Priority as to Distributions. (i) So long as any Series B
----------------------------
Preferred Units are outstanding, no distribution of cash or other property
shall be authorized, declared, paid or set apart for payment on or with
respect to any class or series of
14
Partnership Interest of the Partnership ranking junior as to the payment of
distributions to the Series B Preferred Units (collectively, "Junior
Units"), nor shall any cash or other property be set aside for or applied
to the purchase, redemption or other acquisition for consideration of any
Series B Preferred Units, any Parity Preferred Units with respect to
distributions or any Junior Units, unless, in each case, all distributions
accumulated on all Series B Preferred Units and all classes and series of
outstanding Parity Preferred Units as to payment of distributions have been
paid in full. The foregoing sentence will not prohibit (a) distributions
payable solely in Junior Units, (b) the conversion of Junior Units or
Parity Preferred Units into Partnership Interests of the Partnership
ranking junior to the Series B Preferred Units as to distributions, (c) the
redemption of Partnership Interests corresponding to any Series B Preferred
Shares, Parity Preferred Shares with respect to distributions or Junior
Shares to be purchased by the Company pursuant to Article VII of the
Declaration of Trust to preserve the Company's status as a real estate
investment trust, provided that such redemption shall be upon the same
terms as the corresponding purchase pursuant to Article VII of the
Declaration of Trust, or (d) the purchase, redemption or other acquisition
of Common Units made for the purpose of an employee incentive or benefit
plan of the Partnership or any subsidiary.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series B Preferred Units, all distributions authorized
and declared on the Series B Preferred Units and all classes or series of
outstanding Parity Preferred Units with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per Series B Preferred Unit and such other classes or series of
Parity Preferred Units shall in all cases bear to each other the same ratio
that accrued distributions per Series B Preferred Unit and such other
classes or series of Parity Preferred Units (which shall not include any
accumulation in respect of unpaid distributions for prior distribution
periods if such class or series of Parity Preferred Units do not have
cumulative distribution rights) bear to each other.
(4) No Further Rights. Holders of Series B Preferred Units shall
-----------------
not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions
described herein.
(5) No distributions on Series B Preferred Units shall be
declared by the General Partner or paid or set apart for payment by the
Partnership at such time as the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness,
prohibits such declaration, payment or provides that such declaration,
payment or setting apart for payment would constitute a breach thereof or a
default thereunder, or if such declaration or payment shall be restricted
or prohibited by law. Nothing in this subsection (5) shall be deemed to
modify or affect in any manner the accrual provisions set forth in Section
4.02(d)(iii)(2) or the distribution priorities set forth in Section
4.02(d)(iii)(3).
(6) In the event of any conflict between the provisions of this
Section 4.02(d)(iii) and the provisions of Section 5.02(a), the provisions
of this Section 4.02(d)(iii) shall control.
15
(iv) Liquidation Proceeds.
--------------------
(1) Subject to the rights of holders of Parity Preferred Units
with respect to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership and subject to preferred units
ranking senior to the Series B Preferred Units with respect to rights upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership, the holders of Series B Preferred Units shall be entitled to
receive out of the assets of the Partnership legally available for
distribution or the proceeds thereof, after payment or provision for debts
and other liabilities of the Partnership, but before any payment or
distributions of the assets shall be made to holders of Common Units or any
other class or series of Partnership Interests of the Partnership that
ranks junior to the Series B Preferred Units as to rights upon liquidation,
dissolution or winding-up of the Partnership, an amount equal to the sum of
(i) a liquidation preference in an amount equal to the positive Capital
Account balance of the holder of the Series B Preferred Units, determined
after taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs (other than
those made as a result of the liquidating distribution set forth in this
Section 4.02(d)(iv)) and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of payment to
the extent such distributions are not reflected in the Capital Account
balance as of the date of payment. In the event that, upon such voluntary
or involuntary liquidation, dissolution or winding-up, there are
insufficient assets to permit full payment of liquidating distributions to
the holders of Series B Preferred Units and any Parity Preferred Units as
to rights upon liquidation, dissolution or winding-up of the Partnership,
all payments of liquidating distributions on the Series B Preferred Units
and such Parity Preferred Units shall be made so that the payments on the
Series B Preferred Units and such Parity Preferred Units shall in all cases
bear to each other the same ratio that the respective rights of the Series
B Preferred Units and such other Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Units do not have cumulative
distribution rights) upon liquidation, dissolution or winding-up of the
Partnership bear to each other. In the event of any conflict between the
provisions of this Section 4.02(d)(iv) and the provisions of Section 5.06,
the provisions of this Section 4.02(d)(iv) shall control.
(2) Notice. Written notice of any such voluntary or involuntary
------
liquidation, dissolution or winding-up of the Partnership, stating the
payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i)
fax (if the holder of the Series B Preferred Units shall have provided the
Partnership with such holder's fax number) and (ii) first class mail,
postage pre-paid, not less than 30 and not more that 60 days prior to the
payment date stated therein, to each record holder of the Series B
Preferred Units at the respective addresses of such holders as the same
shall appear on the transfer records of the Partnership.
(3) No Further Rights. After payment of the full amount of the
-----------------
liquidating distributions to which they are entitled, the holders of Series
B Preferred Units will have no right or claim to any of the remaining
assets of the Partnership.
16
(4) Consolidation, Merger or Certain Other Transactions. The
---------------------------------------------------
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all of
the property or assets of the Partnership to, or the consolidation or
merger or other business combination of the Partnership with or into, any
corporation, trust or other entity (or of any corporation, trust or other
entity with or into the Partnership) shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Partnership.
(v) Optional Redemption.
-------------------
(1) Right of Optional Redemption. The Series B Preferred Units
----------------------------
may not be redeemed prior to the fifth anniversary of the issuance date. On
or after such date, the Partnership shall have the right to redeem the
Series B Preferred Units, in whole or in part, at any time or from time to
time out of funds legally available therefor, upon not less than 30 nor
more than 60 days' written notice, at a redemption price, payable in cash,
equal to the Capital Account balance (or, if not redeemed in full, the
applicable portion thereof) of the holder of the Series B Preferred Units
(the "Redemption Price"); provided, however, that no redemption pursuant to
--------- -------
this Section 4.02(d)(v) will be permitted if the Redemption Price does not
equal or exceed the original Capital Contribution (or, if not redeemed in
full, the applicable portion thereof) per unit of Series B Preferred Units,
plus accumulated and unpaid distributions, whether or not declared, to the
date of redemption to the extent such distributions are not reflected in
the Capital Account balance as of the date of redemption. If fewer than all
of the outstanding Series B Preferred Units are to be redeemed, the Series
B Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(2) Limitation on Redemption. (i) The Redemption Price of the
------------------------
Series B Preferred Units (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of the
sale proceeds of capital stock of the Company, which will be contributed by
the Company to the Partnership as additional capital contribution, or out
of the sale of limited partner interests in the Partnership and from no
other source. For purposes of the preceding sentence, "capital stock" means
any equity securities (including Common Shares and Preferred Shares (as
such terms are defined in the Declaration of Trust)), shares, participation
or other ownership interests (however designated) and any rights (other
than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of the outstanding
Series B Preferred Units unless all accumulated and unpaid distributions
have been paid on all Series B Preferred Units for all quarterly
Distribution Periods terminating on or prior to the date of redemption.
(3) Procedures for Redemption. (i) Notice of redemption will be
--------------------------
(i) faxed (if the holder of the Series B Preferred Units shall have
provided the Partnership with such holder's fax number) and (ii) mailed by
the Partnership, by certified mail, postage prepaid, not less than 30 nor
more than 60 days prior to the redemption date, addressed to the respective
holders of record of the Series B Preferred Units at their respective
17
addresses as they appear on the records of the Partnership. No failure to
give or defect in such notice shall affect the validity of the proceedings
for the redemption of any Series B Preferred Units except as to the holder
to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (i) the
redemption date, (ii) the Redemption Price, (iii) the aggregate number of
Series B Preferred Units to be redeemed and if fewer than all of the
outstanding Series B Preferred Units are to be redeemed, the number of
Series B Preferred Units to be redeemed held by such holder, (iv) the place
or places where such Series B Preferred Units are to be surrendered for
payment of the Redemption Price, (v) that distributions on the Series B
Preferred Units to be redeemed will cease to accumulate on such redemption
date and (vi) that payment of the Redemption Price will be made upon
presentation and surrender of such Series B Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of
Series B Preferred Units (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series B Preferred
Units being redeemed funds sufficient to pay the applicable Redemption
Price, plus any accumulated and unpaid distributions, whether or not
declared, if any, on such units to the date fixed for redemption, without
interest, and will give irrevocable instructions and authority to pay such
Redemption Price to the holders of the Series B Preferred Units upon
surrender of the Series B Preferred Units by such holders at the place
designated in the notice of redemption. If the Series B Preferred Units are
evidenced by a certificate and if fewer than all Series B Preferred Units
evidenced by any certificate are being redeemed, a new certificate shall be
issued upon surrender of the certificate evidencing all Series B Preferred
Units, evidencing the unredeemed Series B Preferred Units without cost to
the holder thereof. On and after the date of redemption, distributions will
cease to accumulate on the Series B Preferred Units or portions thereof
called for redemption, unless the Partnership defaults in the payment
thereof, such units will no longer be deemed outstanding, and all rights of
the holders thereof as holders of Series B Preferred Units will cease
(except the right to receive the Redemption Price and any accrued and
unpaid distributions upon surrender and endorsement of the certificates
evidencing the Series B Preferred Units, if any). If any date fixed for
redemption of Series B Preferred Units is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Bay (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price is improperly withheld or refused and not paid by the
Partnership, distributions on such Series B Preferred Units will continue
to accumulate from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable Redemption Price.
(vi) Voting Rights.
-------------
18
(1) General. Holders of the Series B Preferred Units will not
-------
have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as set forth below.
(2) Certain Voting Rights. So long as any Series B Preferred
---------------------
Units remains outstanding, the Partnership shall not, without the
affirmative vote of the holders of at least two-thirds of the Series B
Preferred Units outstanding at the time, (i) authorize or create, or
increase the authorized or issued amount of, any class or series of
Partnership Interests ranking prior to the Series B Preferred Units with
respect to payment of distributions or rights upon liquidation, dissolution
or winding-up or reclassify any Partnership Interests of the Partnership
into any such Partnership Interest, or create, authorize or issue any
obligations or security convertible into or evidencing the right to
purchase any such Partnership Interests, (ii) create in favor of or issue
to an affiliate of the Partnership any Parity Preferred Units or reclassify
any Partnership Interest of the Partnership held by an affiliate of the
Partnership into any such Partnership Interest or create, authorize or
issue in favor of or to any affiliate of the Partnership any obligations or
security convertible into or evidencing the right to purchase any Parity
Preferred Units, other than to the Company to the extent the issuance of
such interests was to allow the Company to issue corresponding preferred
shares to persons who are not affiliates of the Partnership or (iii) either
(A) consolidate, merge into or with, or convey, transfer or lease its
assets substantially as an entirety to, any corporation or other entity or
(B) amend, alter or repeal the provisions of the Agreement, whether by
merger, consolidation or otherwise, that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power
of the Series B Preferred Units or the holders thereof; provided, however,
-------- -------
that with respect to the occurrence of a merger,consolidation or a sale or
lease of all of the Partnership's assets as an entirety, so long as (a) the
Partnership is the surviving entity and the Series B Preferred Units remain
outstanding without a change to the terms thereof, or (b) the resulting,
surviving or transferee entity is a partnership, limited liability company
or other pass-through entity organized under the laws of any state and
substitutes the Series B Preferred Units for other interests in such entity
having substantially the same terms and rights as the Series B Preferred
Units, including with respect to distributions, voting rights and rights
upon liquidation, dissolution or winding-up, then the occurrence of any
such event shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers of the Series B Preferred
Units and the holders thereof, and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any
other class or series of Partnership Interests, in each case ranking (a)
junior to the Series B Preferred Units with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution
or winding-up, or (b) on a parity to the Series B Preferred Units with
respect to payment of distributions and the distribution of assets upon
liquidation, dissolution or winding-up, to the extent such Partnership
Interests are not issued to an affiliate of the Partnership, other than the
Company to the extent the issuance of such interests was to allow the
Company to issue corresponding preferred shares to persons who are not
affiliates of the Partnership, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
19
(vii) Transfer Restrictions. The Series B Preferred Units shall be
---------------------
subject to the provisions of Article IX.
(viii) Exchange Rights.
---------------
(1) Right to Exchange. (i) Series B Preferred Units will be
-----------------
exchangeable in whole or in part at anytime on or after the tenth
anniversary of the date of issuance, at the option of the holders thereof,
for authorized but previously unissued shares of 8.30% Series B Cumulative
Redeemable Preferred Shares of the Company (the "Series B Preferred
Shares") at an exchange rate of one share of Series B Preferred Shares for
one Series B Preferred Unit, subject to adjustment as described below (the
"Exchange Price"), provided that the Series B Preferred Units will become
-------- ----
exchangeable at any time, in whole or in part, at the option of the holders
of Series B Preferred Units for Series B Preferred Shares if (y) at any
time full distributions shall not have been timely made on any Series B
Preferred Unit with respect to six (6) prior quarterly distribution
periods, whether or not consecutive, provided, however, that a distribution
-------- -------
in respect of Series B Preferred Units shall be considered timely made if
made within two (2) Business Days after the applicable Preferred Unit
Distribution Payment Date if at the time of such late payment there shall
not be any prior quarterly distribution periods in respect of which full
distributions were not timely made or (z) upon receipt by a holder or
holders of Series B Preferred Units of (A) notice from the General Partner
that the General Partner or a Subsidiary of the General Partner has taken
the position that the Partnership is, or upon the occurrence of a defined
event in the immediate future will be, a PTP and (B) an opinion rendered by
an outside nationally recognized independent counsel familiar with such
matters addressed to a holder or holders of Series B Preferred Units, that
the Partnership is or likely is, or upon the occurrence of a defined event
in the immediate future will be or likely will be, a PTP. In addition, the
Series B Preferred Units may be exchanged for Series B Preferred Stock, in
whole or in part, at the option of any holder prior to the tenth
anniversary of the issuance date and after the third anniversary thereof if
such holder of a Series B Preferred Units shall deliver to the General
Partner either (i) a private ruling letter addressed to such holder of
Series B Preferred Units or (ii) an opinion of independent counsel
reasonably acceptable to the General Partner based on the enactment of
temporary or final Treasury Regulations or the publication of a Revenue
Ruling, in either case to the effect that an exchange of the Series B
Preferred Units at such earlier time would not cause the Series B Preferred
Units to be considered "stock and securities" within the meaning of section
351(e) of the Code for purposes of determining whether the holder of such
Series B Preferred Units is an "investment company" under section 721(b) of
the Code if an exchange is permitted at such earlier date. Furthermore, the
Series B Preferred Units may be exchanged in whole but not in part by any
holder thereof which is a real estate investment trust within the meaning
of Sections 856 through 859 of the Code for Series B Preferred Shares (but
only if the exchange in whole may be accomplished consistently with the
ownership limitations set forth under Article VII of the Declaration of
Trust (taking into account exceptions thereto)) if at any time, (i) the
Partnership reasonably determines that the assets and income of the
Partnership for a taxable year after 1999 would not satisfy the income and
assets tests of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the meaning of the
Code or (ii) any such holder of Series B
20
Preferred Units shall deliver to the Partnership and the General Partner an
opinion of independent counsel reasonably acceptable to the Company to the
effect that, based on the assets and income of the Partnership for a
taxable year after 1999, the Partnership would not satisfy the income and
assets tests of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the meaning of the
Code and that such failure would create a meaningful risk that a holder of
the Series B Preferred Units would fail to maintain qualification as a real
estate investment trust.
(ii) Notwithstanding anything to the contrary set forth in Section
4.02(d)(viii)(1)(i), if an Exchange Notice (as defined herein) has been
delivered to the General Partner, then the General Partner may, at its
option, elect to redeem or cause the Partnership to redeem all or a portion
of the outstanding Series B Preferred Units for cash in an amount equal to
the original Capital Contribution per Series B Preferred Unit and all
accrued and unpaid distributions thereon to the date of redemption. The
General Partner may exercise its option to redeem the Series B Preferred
Units for cash pursuant to this Section 4.02(d)(viii)(1)(ii) by giving each
holder of record of Series B Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after receipt of the
Exchange Notice, by (i) fax (if the holder of the Series B Preferred Units
shall have provided the Partnership with such holder's fax number) and (ii)
registered mail, postage paid, at the address of each holder as it may
appear on the records of the Partnership stating (i) the redemption date,
which shall be no later than sixty (60) days following the receipt of the
Exchange Notice, (ii) the redemption price, (iii) the place or places where
the Series B Preferred Units are to be surrendered for payment of the
redemption price, (iv) that distributions on the Series B Preferred Units
will cease to accrue on such redemption date; (v) that payment of the
redemption price will be made upon presentation and surrender of the Series
B Preferred Units and (vi) the aggregate number of Series B Preferred Units
to be redeemed, and if fewer than all of the outstanding Series B Preferred
Units are to be redeemed, the number of Series B Preferred Units to be
redeemed held by such holder, which number shall equal such holder's
pro-rata share (based on the percentage of the aggregate number of
outstanding Series B Preferred Units the total number of Series B Preferred
Units held by such holder represents) of the aggregate number of Series B
Preferred Units being redeemed.
(iii) In the event an exchange of all or a portion of Series B
Preferred Units pursuant to Section 4.02(d)(viii)(1)(i) would violate the
provisions on ownership limitation of the Company set forth in Article VII
of the Declaration of Trust, the General Partner shall give written notice
thereof to each holder of record of Series B Preferred Units, within five
(5) Business Days following receipt of the Exchange Notice, by fax (if the
holder of the Series B Preferred Units shall have provided the Partnership
with such holder's fax number) and (ii) registered mail, postage prepaid,
at the address of each such holder set forth in the records of the
Partnership. In such event, each holder of Series B Preferred Units shall
be entitled to exchange, pursuant to the provision of Section
4.02(d)(viii)(2) a number of Series B Preferred Units which would comply
with the provisions on the ownership limitation of the Company set forth in
such Article VII of the Declaration of Trust and any Series B Preferred
Units not so exchanged (the "Excess Units") shall be redeemed by the
Partnership for cash in an amount equal to the original Capital
Contribution per Excess Unit, plus any accrued and unpaid distributions
thereon,
21
whether or not declared, to the date of redemption. The written notice of
the General Partner shall state (i) the number of Excess Units held by such
holder, (ii) the redemption price of the Excess Units, (iii) the date on
which such Excess Units shall be redeemed, which date shall be no later
than sixty (60) days following the receipt of the Exchange Notice, (iv) the
place or places where such Excess Units are to be surrendered for payment
of the redemption price, (v) that distributions on the Excess Units will
cease to accrue on such redemption date, and (vi) that payment of the
redemption price will be made upon presentation and surrender of such
Excess Units. In the event an exchange would result in Excess Units, as a
condition to such exchange, each holder of such units agrees to provide
representations and covenants reasonably requested by the General Partner
relating to (i) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of
stock of the Company (without regard to the limits described above) will
not cause any individual to own in excess of 9.8% of the stock of the
Company; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of
tenants of the Partnership and its affiliates.
(iv) The redemption of Series B Preferred Units described in Section
4.02(d)(viii)(1)(ii) and (iii) shall be subject to the provisions of
Section 4.02(d)(v)(3)(ii); provided, however, that for the purposes hereof
-------- -------
the term "Redemption Price" in Section 4.02(d)(v)(3)(ii) shall be read to
mean the original Capital Contribution per Series B Preferred Unit being
redeemed, plus any accumulated and unpaid distributions, whether or not
declared, to the date of redemption to the extent not otherwise accounted
for therein.
(2) Procedure for Exchange. (i) Any exchange shall be exercised
-----------------------
pursuant to a notice of exchange (the "Exchange Notice") delivered to the
General Partner by the holder who is exercising such exchange right, by fax
(if the holder of the Series B Preferred Units shall have provided the
Partnership with such holder's fax number) and (ii) certified mail postage
prepaid. The exchange of Series B Preferred Units, or a specified portion
thereof, may be effected after the fifth (5th) Business Days following
receipt by the General Partner of the Exchange Notice by delivering
certificates, if any, representing such Series B Preferred Units to be
exchanged together with, if applicable, written notice of exchange and a
proper assignment of such Series B Preferred Units to the office of the
General Partner maintained for such purpose. Currently, such office is
located at 0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000. Each
exchange will be deemed to have been effected immediately prior to the
close of business on the date on which such Series B Preferred Units to be
exchanged (together with all required documentation) shall have been
surrendered and notice shall have been received by the General Partner as
aforesaid and the Exchange Price shall have been paid. Any Series B
Preferred Shares issued pursuant to this Section 4.02(d)(viii) shall be
delivered as shares which are duly authorized, validly issued, fully paid
and nonassessable, free of pledge, lien, encumbrance or restriction other
than those provided in the Declaration of Trust, the Bylaws of the Company,
the Securities Act and relevant state securities or blue sky laws.
(ii) In the event of an exchange of Series B Preferred Units for
shares of Series B Preferred Shares, an amount equal to the accrued and
unpaid distributions,
22
whether or not declared, to the date of exchange on any Series B Preferred
Units tendered for exchange shall (i) accrue on the shares of the Series B
Preferred Shares into which such Series B Preferred Units are exchanged,
and (ii) continue to accrue on such Series B Preferred Units, which shall
remain outstanding following such exchange, with the Company as the holder
of such Series B Preferred Units. Notwithstanding anything to the contrary
set forth herein, in no event shall a holder of a Series B Preferred Unit
that was validly exchanged into Series B Preferred Shares pursuant to this
section (other than the Company now holding such Series B Preferred Unit),
receive a distribution out of Available Cash of the Partnership, if such
holder, after exchange, is entitled to receive a distribution out of
Available Cash with respect to the share of Series B Preferred Shares for
which such Series B Preferred Unit was exchanged or redeemed.
(iii) Fractional shares of Series B Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a
cash adjustment based upon the fair market value of the Series B Preferred
Shares on the day prior to the exchange date as determined in good faith by
the Board of Trustees of the Company.
(3) Adjustment of Exchange Price. (i) The Exchange Price is
----------------------------
subject to adjustment upon certain events, including, (x) subdivisions,
combinations and reclassification of the Series B Preferred Shares, and (y)
distributions to all holders of Series B Preferred Shares of evidences of
indebtedness of the Company or assets (including securities, but excluding
dividends and distributions paid in cash out of equity applicable to Series
B Preferred Shares).
(ii) In case the Company shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the Company's
capital stock or sale of all or substantially all of the Company's assets),
in each case as a result of which the Series B Preferred Shares will be
converted into the right to receive shares of capital stock, other
securities or other property (including cash or any combination thereof),
each Series B Preferred Unit will thereafter be exchangeable into the kind
and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the
consummation of such transaction by a holder of that number of shares of
Series B Preferred Shares or fraction thereof into which one Series B
Preferred Unit was exchangeable immediately prior to such transaction. The
Company may not become a party to any such transaction unless the terms
thereof are consistent with the foregoing. In addition, the Company shall
not issue any Additional Securities without the consent of the holders of
the Series B Preferred Units if such consent would be required to be
obtained from holders of Series B Preferred Shares and such Series B
Preferred Shares were outstanding.
(ix) No Conversion Rights. The holders of the Series B Preferred Units
--------------------
shall not have any rights to convert such shares into shares of any other class
or series of stock or into any other securities of, or interest in, the
Partnership.
(x) No Sinking Fund. No sinking fund shall be established for the
---------------
retirement or redemption of Series B Preferred Units.
23
(xi) Record Holders. The General Partner may deem and treat the record
--------------
holder of any Series B Preferred Unit as the true and lawful owner thereof
for all purposes, and the General Partner shall not be affected by any
notice to the contrary.
(e) Series C Cumulative Redeemable Perpetual Preferred Units of Partnership
-----------------------------------------------------------------------
Interest.
--------
(i) Definitions. Capitalized terms used herein and not defined herein
-----------
shall have the meaning given them in the Agreement. For purposes of the Series C
Preferred Units, the following terms shall have the meanings indicated:
"Parity Preferred Units" shall be used to refer to any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with
Series C Preferred Units with respect to distributions and rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership, and
includes the Series D Cumulative Convertible Redeemable Preferred Units of
Partnership Interest of the Partnership and the Series B Cumulative Redeemable
Perpetual Preferred Units of Partnership Interest of the Partnership.
"PTP" shall mean a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
The definitions of "Profit" and "Loss" in the Agreement shall be modified
as follows:
Solely for purposes of allocating Profit or Loss in any fiscal year of the
Partnership to the holders of the Series C Preferred Units, items of Profit and
Loss, as the case may be, shall not include depreciation with respect to
properties that are "ceiling limited" in respect of the holders of the Series C
Preferred Units. For purposes of the preceding sentence, Partnership property
shall be considered ceiling limited in respect of a holder of Series C Preferred
Units if depreciation attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this paragraph,
exceeded depreciation determined for federal income tax purposes attributable to
such Partnership property which would otherwise be allocated to such Partner by
more than 5%.
(ii) Designation and Number. A series of preferred units of
----------------------
partnership interest in the Partnership designated as the "9.45% Series C
Cumulative Redeemable Perpetual Preferred Units" (the "Series C Preferred
Units") is hereby established. The number of Series C Preferred Units shall be
2,000,000, which number may be decreased (but not below the aggregate number
thereof then outstanding and/or which have been reserved for issuance) from time
to time by the General Partner.
(iii) Distributions.
(1) Payment of Distributions. Subject to the rights of holders of
------------------------
Parity Preferred Units and holders of preferred units ranking senior to the
Series C Preferred Units issued after the date hereof in accordance
herewith as to payment of distributions and rights upon voluntary or
involuntary dissolution, liquidation or winding-up, holders of Series C
Preferred Units shall be entitled to receive, when, as and if declared by
the Partnership acting through the General Partner, out of funds legally
available for the
24
payment of distributions, cumulative preferential cash distributions at the
rate per annum of 9.45% of the original Capital Contribution per Series C
Preferred Unit. Such distributions shall be cumulative and shall accrue
from the first day of the applicable Distribution Period (as defined
herein), and will be payable (A) quarterly in arrears, not later than the
third calendar day after the end of the applicable Distribution Period and
(B) in the event of (i) an exchange of Series C Preferred Units into Series
C Preferred Shares, or (ii) a redemption of Series C Preferred Units, on
the exchange date or redemption date, as applicable (each a "Preferred Unit
Distribution Payment Date"). For purposes of this Section 4.02(e), the term
"Distribution Period" shall mean quarterly distribution periods commencing
on January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding
Distribution Period with respect to any Series C Preferred Units (other
than the initial Distribution Period, which shall commence on the original
date of issuance for such Series C Preferred Units and end on and include
the last day of the calendar quarter immediately following the original
date of issuance, and other than the Distribution Period during which any
Series C Preferred Units shall be redeemed or exchanged, which shall end on
and include the date of such redemption or exchange). The amount of the
distribution payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the ratio of the
actual number of days elapsed in such period to ninety (90) days. If any
date on which distributions are to be made on the Series C Preferred Units
is not a Business Day (as defined herein), then payment of the distribution
to be made on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date. Distributions on the Series C Preferred Units will be made to
the holders of record of the Series C Preferred Units on October 1, 1999
and thereafter on the relevant record dates to be fixed by the Partnership
acting through the General Partner, which record dates shall in no event
exceed fifteen (15) Business Days prior to the relevant Preferred Unit
Distribution Payment Date (the "Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(2) Distributions Cumulative. Distributions on the Series C
------------------------
Preferred Units will accrue and accumulate as of each Preferred Unit
Distribution Payment Date whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions,
whether or not the Partnership has earnings, whether or not there are funds
legally available for the payment of such distributions and whether or not
such distributions are authorized. Distributions on account of arrears for
any past Distribution Periods may be declared and paid at any time, without
reference to a regular Preferred Unit Distribution Payment Date to holders
of record of the Series C Preferred Units on
25
the record date fixed by the Partnership acting through the General Partner
which date shall not exceed fifteen (15) Business Days prior to the payment
date. Accumulated and unpaid distributions will not bear interest.
(3) Priority as to Distributions. (i) So long as any Series C
----------------------------
Preferred Units are outstanding, no distribution of cash or other property
shall be authorized, declared, paid or set apart for payment on or with
respect to any class or series of Partnership Interest of the Partnership
ranking junior to the Series C Preferred Units as to the payment of
distributions or rights upon voluntary or involuntary liquidation,
dissolution or winding-up (collectively, "Junior Units"), nor shall any
cash or other property be set aside for or applied to the purchase,
redemption or other acquisition for consideration of any Series C Preferred
Units, any Parity Preferred Units or any Junior Units, unless, in each
case, all distributions accumulated on all Series C Preferred Units and all
classes and series of outstanding Parity Preferred Units have been paid in
full. The foregoing sentence will not prohibit (a) distributions payable
solely in classes or series of Partnership Interest ranking junior to the
Series C Preferred Units as to the payment of distributions and rights upon
voluntary or involuntary liquidation, dissolution or winding-up, (b) the
conversion of Junior Units or Parity Preferred Units into Partnership
Interests of the Partnership ranking junior to the Series C Preferred Units
as to distributions and rights upon voluntary or involuntary liquidation,
dissolution or winding-up, (c) the redemption of Partnership Interests
corresponding to any Series C Preferred Shares, Parity Preferred Shares or
Junior Shares to be purchased by the Company pursuant to Article VII of the
Declaration of Trust to preserve the Company's status as a real estate
investment trust, provided that such redemption shall be upon the same
-------- ----
terms as the corresponding purchase pursuant to Article VII of the
Declaration of Trust, or (d) the purchase, redemption or other acquisition
of Common Units made for the purpose of an employee incentive or benefit
plan of the Partnership or any subsidiary.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series C Preferred Units, all distributions authorized
and declared on the Series C Preferred Units and all classes or series of
outstanding Parity Preferred Units shall be authorized and declared so that
the amount of distributions authorized and declared per Series C Preferred
Unit and such other classes or series of Parity Preferred Units shall in
all cases bear to each other the same ratio that accrued distributions per
Series C Preferred Unit and such other classes or series of Parity
Preferred Units (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such class or series
of Parity Preferred Units do not have cumulative distribution rights) bear
to each other.
(4) No Further Rights. Holders of Series C Preferred Units shall
-----------------
not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions
described herein.
(5) No distributions on Series C Preferred Units shall be
declared by the General Partner or paid or set apart for payment by the
Partnership at such time as the terms and provisions of any agreement of
the Partnership, including any agreement
26
relating to its indebtedness, prohibits such declaration, payment or
provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration
or payment shall be restricted or prohibited by law. Nothing in this
subsection (5) shall be deemed to modify or affect in any manner the
accrual provisions set forth in Section 4.02(e)(iii)(2) or the distribution
priorities set forth in Section 3(c).
(6) In the event of any conflict between the provisions of this
Section 4.02(e)(iii) and the provisions of Section 5.02(a) of the
Agreement, the provisions of this Section 4.02(e)(iii) shall control.
(iv) Liquidation Proceeds.
--------------------
(1) Subject to the rights of holders of Parity Preferred Units
and subject to preferred units ranking senior to the Series C Preferred
Units with respect to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, the holders of Series C
Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof,
after payment or provision for debts and other liabilities of the
Partnership, but before any payment or distributions of the assets shall be
made to holders of Common Units or any other class or series of Partnership
Interests of the Partnership that ranks junior to the Series C Preferred
Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to the sum of (i) a liquidation preference in
an amount equal to the positive Capital Account balance of the holder of
the Series C Preferred Units, determined after taking into account all
Capital Account adjustments for the Partnership taxable year during which
the liquidation occurs (other than those made as a result of the
liquidating distribution set forth in this Section 4.02(e)(iv) and (ii) an
amount equal to any accumulated and unpaid distributions thereon, whether
or not declared, to the date of payment to the extent such distributions
are not reflected in the Capital Account balance as of the date of payment.
In the event that, upon such voluntary or involuntary liquidation,
dissolution or winding-up, there are insufficient assets to permit full
payment of liquidating distributions to the holders of Series C Preferred
Units and any Parity Preferred Units as to rights upon liquidation,
dissolution or winding-up of the Partnership, all payments of liquidating
distributions on the Series C Preferred Units and such Parity Preferred
Units shall be made so that the payments on the Series C Preferred Units
and such Parity Preferred Units shall in all cases bear to each other the
same ratio that the respective rights of the Series C Preferred Units and
such other Parity Preferred Units (which shall not include any accumulation
in respect of unpaid distributions for prior distribution periods if such
Parity Preferred Units do not have cumulative distribution rights) upon
liquidation, dissolution or winding-up of the Partnership bear to each
other. In the event of any conflict between the provisions of this Section
4.02(e)(iv) and the provisions of Section 5.06, the provisions of this
Section 4.02(e)(iv) shall control.
(2) Notice. Written notice of any such voluntary or involuntary
------
liquidation, dissolution or winding-up of the Partnership, stating the
payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i)
fax (if the holder of the Series C
27
Preferred Units shall have provided the Partnership with such holder's fax
number) and (ii) first class mail, postage pre-paid, not less than 30 and
not more that 60 days prior to the payment date stated therein, to each
record holder of the Series C Preferred Units at the respective addresses
of such holders as the same shall appear on the transfer records of the
Partnership.
(3) No Further Rights. After payment of the full amount of the
-----------------
liquidating distributions to which they are entitled, the holders of Series
C Preferred Units will have no right or claim to any of the remaining
assets of the Partnership.
(4) Consolidation, Merger or Certain Other Transactions. The
---------------------------------------------------
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all of
the property or assets of the Partnership to, or the consolidation or
merger or other business combination of the Partnership with or into, any
corporation, trust or other entity (or of any corporation, trust or other
entity with or into the Partnership) shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Partnership.
(v) Optional Redemption.
-------------------
(1) Right of Optional Redemption. The Series C Preferred Units
----------------------------
may not be redeemed prior to the fifth anniversary of the issuance date. On
or after such date, the Partnership shall have the right to redeem the
Series C Preferred Units, in whole or in part, at any time or from time to
time out of funds legally available therefor, upon not less than 30 nor
more than 60 days' written notice, at a redemption price, payable in cash,
equal to the Capital Account balance (or, if not redeemed in full, the
applicable portion thereof) of the holder of the Series C Preferred Units
(the "Redemption Price"); provided, however, that no redemption pursuant to
-------- -------
this Section 4.02(e)(v) will be permitted if the Redemption Price does not
equal or exceed the original Capital Contribution (or, if not redeemed in
full, the applicable portion thereof) per unit of Series C Preferred Units,
plus accumulated and unpaid distributions, whether or not declared, to the
date of redemption to the extent such distributions are not reflected in
the Capital Account balance as of the date of redemption. If fewer than all
of the outstanding Series C Preferred Units are to be redeemed, the Series
C Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(2) Limitation on Redemption. (i) The Redemption Price of the
------------------------
Series C Preferred Units (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of the
sale proceeds of capital stock of the Company, which will be contributed by
the Company to the Partnership as additional capital contribution, or out
of the sale of limited partner interests in the Partnership and from no
other source. For purposes of the preceding sentence, "capital stock" means
any equity securities (including Common Shares and Preferred Shares (as
such terms are defined in the Declaration of Trust)), shares, participation
or other ownership interests (however designated) and any rights (other
than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
28
(ii) The Partnership may not redeem fewer than all of the outstanding
Series C Preferred Units unless all accumulated and unpaid distributions
have been paid on all Series C Preferred Units for all quarterly
Distribution Periods terminating on or prior to the date of redemption.
(3) Procedures for Redemption. (i) Notice of redemption will be
-------------------------
(i) faxed (if the holder of the Series C Preferred Units shall have
provided the Partnership with such holder's fax number) and (ii) mailed by
the Partnership, by certified mail, postage prepaid, not less than 30 nor
more than 60 days prior to the redemption date, addressed to the respective
holders of record of the Series C Preferred Units at their respective
addresses as they appear on the records of the Partnership. No failure to
give or defect in such notice shall affect the validity of the proceedings
for the redemption of any Series C Preferred Units except as to the holder
to whom such notice was defective or not given. In addition to any
information required by law, each such notice shall state: (i) the
redemption date, (ii) the Redemption Price, (iii) the aggregate number of
Series C Preferred Units to be redeemed and if fewer than all of the
outstanding Series C Preferred Units are to be redeemed, the number of
Series C Preferred Units to be redeemed held by such holder, (iv) the place
or places where such Series C Preferred Units are to be surrendered for
payment of the Redemption Price, (v) that distributions on the Series C
Preferred Units to be redeemed will cease to accumulate on such redemption
date and (vi) that payment of the Redemption Price will be made upon
presentation and surrender of such Series C Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of
Series C Preferred Units (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series C Preferred
Units being redeemed funds sufficient to pay the applicable Redemption
Price, plus any accumulated and unpaid distributions, whether or not
declared, if any, on such units to the date fixed for redemption, without
interest, and will give irrevocable instructions and authority to pay such
Redemption Price to the holders of the Series C Preferred Units upon
surrender of the Series C Preferred Units by such holders at the place
designated in the notice of redemption. If the Series C Preferred Units are
evidenced by a certificate and if fewer than all Series C Preferred Units
evidenced by any certificate are being redeemed, a new certificate shall be
issued upon surrender of the certificate evidencing all Series C Preferred
Units, evidencing the unredeemed Series C Preferred Units without cost to
the holder thereof. On and after the date of redemption, distributions will
cease to accumulate on the Series C Preferred Units or portions thereof
called for redemption, unless the Partnership defaults in the payment
thereof, such units will no longer be deemed outstanding, and all rights of
the holders thereof as holders of Series C Preferred Units will cease
(except the right to receive the Redemption Price and any accrued and
unpaid distributions upon surrender and endorsement of the certificates
evidencing the Series C Preferred Units, if any). If any date fixed for
redemption of Series C Preferred Units is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Bay (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each
29
case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price is improperly withheld or
refused and not paid by the Partnership, distributions on such Series C
Preferred Units will continue to accumulate from the original redemption
date to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
(vi) Voting Rights.
-------------
(1) General. Holders of the Series C Preferred Units will not
-------
have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as set forth below.
(2) Certain Voting Rights. So long as any Series C Preferred
---------------------
Units remains outstanding, the Partnership shall not, without the
affirmative vote of the holders of at least two-thirds of the Series C
Preferred Units outstanding at the time, (i) authorize or create, or
increase the authorized or issued amount of, any class or series of
Partnership Interests ranking prior to the Series C Preferred Units with
respect to payment of distributions or rights upon liquidation, dissolution
or winding-up or reclassify any Partnership Interests of the Partnership
into any such Partnership Interest, or create, authorize or issue any
obligations or security convertible into or evidencing the right to
purchase any such Partnership Interests, (ii) create in favor of or issue
to an affiliate of the Partnership any Parity Preferred Units or reclassify
any Partnership Interest of the Partnership held by an affiliate of the
Partnership into any such Partnership Interest or create, authorize or
issue in favor of or to any affiliate of the Partnership any obligations or
security convertible into or evidencing the right to purchase any Parity
Preferred Units, other than to the Company to the extent the issuance of
such interests was to allow the Company to issue corresponding preferred
shares to persons who are not affiliates of the Partnership or (iii) either
(A) consolidate, merge into or with, or convey, transfer or lease its
assets substantially as an entirety to, any corporation or other entity or
(B) amend, alter or repeal the provisions of the Agreement, whether by
merger, consolidation or otherwise, that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power
of the Series C Preferred Units or the holders thereof; provided, however,
that with respect to the occurrence of a merger, consolidation or a sale or
lease of all of the Partnership's assets as an entirety, so long as (a) the
Partnership is the surviving entity and the Series C Preferred Units remain
outstanding without a change to the terms thereof, or (b) the resulting,
surviving or transferee entity is a partnership, limited liability company
or other pass-through entity organized under the laws of any state and
substitutes the Series C Preferred Units for other interests in such entity
having substantially the same terms and rights as the Series C Preferred
Units, including with respect to distributions, voting rights and rights
upon liquidation, dissolution or winding-up, then the occurrence of any
such event shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers of the Series C Preferred
Units and the holders thereof, and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any
other class or series of Partnership Interests, in each case ranking (a)
junior to the Series C Preferred Units with respect to payment of
distributions and the distribution of assets
30
upon liquidation, dissolution or winding-up, or (b) on a parity to the
Series C Preferred Units with respect to payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-up, to the
extent such Partnership Interests are not issued to an affiliate of the
Partnership, other than the Company to the extent the issuance of such
interests was to allow the Company to issue corresponding preferred shares
to persons who are not affiliates of the Partnership, shall not be deemed
to materially and adversely affect such rights, preferences, privileges or
voting powers.
(vii) Transfer Restrictions. The Series C Preferred Units shall be
---------------------
subject to the provisions of Article IX.
(viii) Exchange Rights.
---------------
(1) Right to Exchange. (i) Series C Preferred Units will be
-----------------
exchangeable in whole or in part at anytime on or after the tenth
anniversary of the date of issuance, at the option of the holders thereof,
for authorized but previously unissued shares of 9.45% Series C Cumulative
Redeemable Preferred Shares of the Company (the "Series C Preferred
Shares") at an exchange rate of one share of Series C Preferred Shares for
one Series C Preferred Unit, subject to adjustment as described below (the
"Exchange Price"), provided that the Series C Preferred Units will become
-------------
exchangeable at any time, in whole or in part, at the option of the holders
of Series C Preferred Units for Series C Preferred Shares if (y) at any
time full distributions shall not have been timely made on any Series C
Preferred Unit with respect to six (6) prior quarterly distribution
periods, whether or not consecutive, provided, however, that a distribution
-------- -------
in respect of Series C Preferred Units shall be considered timely made if
made within two (2) Business Days after the applicable Preferred Unit
Distribution Payment Date if at the time of such late payment there shall
not be any prior quarterly distribution periods in respect of which full
distributions were not timely made or (z) upon receipt by a holder or
holders of Series C Preferred Units of (A) notice from the General Partner
that the General Partner or a Subsidiary of the General Partner has taken
the position that the Partnership is, or upon the occurrence of a defined
event in the immediate future will be, a PTP and (B) an opinion rendered by
an outside nationally recognized independent counsel familiar with such
matters addressed to a holder or holders of Series C Preferred Units, that
the Partnership is or likely is, or upon the occurrence of a defined event
in the immediate future will be or likely will be, a PTP. In addition, the
Series C Preferred Units may be exchanged for Series C Preferred Shares, in
whole or in part, at the option of any holder prior to the tenth
anniversary of the issuance date and after the third anniversary thereof if
such holder of a Series C Preferred Units shall deliver to the General
Partner either (i) a private ruling letter addressed to such holder of
Series C Preferred Units or (ii) an opinion of independent counsel
reasonably acceptable to the General Partner based on the enactment of
temporary or final Treasury Regulations or the publication of a Revenue
Ruling, in either case to the effect that an exchange of the Series C
Preferred Units at such earlier time would not cause the Series C Preferred
Units to be considered "stock and securities" within the meaning of section
351(e) of the Code for purposes of determining whether the holder of such
Series C Preferred Units is an "investment company" under section 721(b) of
the Code if an exchange is permitted at such earlier date. Furthermore, the
Series C Preferred Units may be exchanged in whole but not in
31
part by any holder thereof which is a real estate investment trust within
the meaning of Sections 856 through 859 of the Code for Series C Preferred
Shares (but only if the exchange in whole may be accomplished consistently
with the ownership limitations set forth under Article VII of the
Declaration of Trust (taking into account exceptions thereto)) if at any
time, (i) the Partnership reasonably determines that the assets and income
of the Partnership for a taxable year after 1999 would not satisfy the
income and assets tests of Section 856 of the Code for such taxable year if
the Partnership were a real estate investment trust within the meaning of
the Code or (ii) any such holder of Series C Preferred Units shall deliver
to the Partnership and the General Partner an opinion of independent
counsel reasonably acceptable to the Company to the effect that, based on
the assets and income of the Partnership for a taxable year after 1999, the
Partnership would not satisfy the income and assets tests of Section 856 of
the Code for such taxable year if the Partnership were a real estate
investment trust within the meaning of the Code and that such failure would
create a meaningful risk that a holder of the Series C Preferred Units
would fail to maintain qualification as a real estate investment trust.
(ii) Notwithstanding anything to the contrary set forth in Section
4.02(e)(viii)(1)(i), if an Exchange Notice (as defined herein) has been
delivered to the General Partner, then the General Partner may, at its
option, elect to redeem or cause the Partnership to redeem all or a portion
of the outstanding Series C Preferred Units for cash in an amount equal to
the original Capital Contribution per Series C Preferred Unit and all
accrued and unpaid distributions thereon to the date of redemption. The
General Partner may exercise its option to redeem the Series C Preferred
Units for cash pursuant to this 4.02(e)(viii)(1)(ii) by giving each holder
of record of Series C Preferred Units notice of its election to redeem for
cash, within five (5) Business Days after receipt of the Exchange Notice,
by (i) fax (if the holder of the Series C Preferred Units shall have
provided the Partnership with such holder's fax number) and (ii) registered
mail, postage paid, at the address of each holder as it may appear on the
records of the Partnership stating (i) the redemption date, which shall be
no later than sixty (60) days following the receipt of the Exchange Notice,
(ii) the redemption price, (iii) the place or places where the Series C
Preferred Units are to be surrendered for payment of the redemption price,
(iv) that distributions on the Series C Preferred Units will cease to
accrue on such redemption date; (v) that payment of the redemption price
will be made upon presentation and surrender of the Series C Preferred
Units and (vi) the aggregate number of Series C Preferred Units to be
redeemed, and if fewer than all of the outstanding Series C Preferred Units
are to be redeemed, the number of Series C Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro-rata share
(based on the percentage of the aggregate number of outstanding Series C
Preferred Units the total number of Series C Preferred Units held by such
holder represents) of the aggregate number of Series C Preferred Units
being redeemed.
(iii) In the event an exchange of all or a portion of Series C
Preferred Units pursuant to Section 4.02(e)(viii)(1)(i)would violate the
provisions on ownership limitation of the Company set forth in Article VII
of the Declaration of Trust, the General Partner shall give written notice
thereof to each holder of record of Series C Preferred Units, within five
(5) Business Days following receipt of the Exchange Notice, by fax (if the
holder of the Series C Preferred Units shall have provided the Partnership
with such
32
holder's fax number) and (ii) registered mail, postage prepaid, at the
address of each such holder set forth in the records of the Partnership. In
such event, each holder of Series C Preferred Units shall be entitled to
exchange, pursuant to the provision of Section 4.02(e)(viii)(2) a number of
Series C Preferred Units which would comply with the provisions on the
ownership limitation of the Company set forth in such Article VII of the
Declaration of Trust and any Series C Preferred Units not so exchanged (the
"Excess Units") shall be redeemed by the Partnership for cash in an amount
equal to the original Capital Contribution per Excess Unit, plus any
accrued and unpaid distributions thereon, whether or not declared, to the
date of redemption. The written notice of the General Partner shall state
(i) the number of Excess Units held by such holder, (ii) the redemption
price of the Excess Units, (iii) the date on which such Excess Units shall
be redeemed, which date shall be no later than sixty (60) days following
the receipt of the Exchange Notice, (iv) the place or places where such
Excess Units are to be surrendered for payment of the redemption price, (v)
that distributions on the Excess Units will cease to accrue on such
redemption date, and (vi) that payment of the redemption price will be made
upon presentation and surrender of such Excess Units. In the event an
exchange would result in Excess Units, as a condition to such exchange,
each holder of such units agrees to provide representations and covenants
reasonably requested by the General Partner relating to (i) the widely held
nature of the interests in such holder, sufficient to assure the General
Partner that the holder's ownership of stock of the Company (without regard
to the limits described above) will not cause any individual to own in
excess of 9.8% of the stock of the Company; and (ii) to the extent such
holder can so represent and covenant without obtaining information from its
owners, the holder's ownership of tenants of the Partnership and its
affiliates.
(iv) The redemption of Series C Preferred Units described in Section
4.02(e)(viii)(1)(ii) and (iii) shall be subject to the provisions of
Section 4.02(e)(v)(3)(ii); provided, however, that for the purposes hereof
the term "Redemption Price" in Section 4.02(e)(v)(3)(ii) shall be read to
mean the original Capital Contribution per Series C Preferred Unit being
redeemed, plus any accumulated and unpaid distributions, whether or not
declared, to the date of redemption to the extent not otherwise accounted
for therein.
(2) Procedure for Exchange. (i) Any exchange shall be exercised
----------------------
pursuant to a notice of exchange (the "Exchange Notice") delivered to the
General Partner by the holder who is exercising such exchange right, by fax
(if the holder of the Series C Preferred Units shall have provided the
Partnership with such holder's fax number) and certified mail postage
prepaid. The exchange of Series C Preferred Units, or a specified portion
thereof, may be effected after the fifth (5th) Business Days following
receipt by the General Partner of the Exchange Notice by delivering
certificates, if any, representing such Series C Preferred Units to be
exchanged together with, if applicable, written notice of exchange and a
proper assignment of such Series C Preferred Units to the office of the
General Partner maintained for such purpose. Currently, such office is
located at 0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000. Each
exchange will be deemed to have been effected immediately prior to the
close of business on the date on which such Series C Preferred Units to be
exchanged (together with all required documentation) shall have been
surrendered and notice shall have been received by the General Partner as
33
aforesaid and the Exchange Price shall have been paid. Any Series C
Preferred Shares issued pursuant to this Section 4.02(e)(viii) shall be
delivered as shares which are duly authorized, validly issued, fully paid
and nonassessable, free of pledge, lien, encumbrance or restriction other
than those provided in the Declaration of Trust, the Bylaws of the Company,
the Securities Act and relevant state securities or blue sky laws.
(ii) In the event of an exchange of Series C Preferred Units for
shares of Series C Preferred Shares, an amount equal to the accrued and
unpaid distributions, whether or not declared, to the date of exchange on
any Series C Preferred Units tendered for exchange shall (a) accrue on the
shares of the Series C Preferred Shares into which such Series C Preferred
Units are exchanged, and (b) continue to accrue on such Series C Preferred
Units, which shall remain outstanding following such exchange, with the
Company as the holder of such Series C Preferred Units. Notwithstanding
anything to the contrary set forth herein, in no event shall a holder of a
Series C Preferred Unit that was validly exchanged into Series C Preferred
Shares pursuant to this section (other than the Company now holding such
Series C Preferred Unit), receive a distribution out of funds legally
available for the payment of distributions, if such holder, after exchange,
is entitled to receive a distribution out of funds legally available for
the payment of distributions with respect to the share of Series C
Preferred Shares for which such Series C Preferred Unit was exchanged or
redeemed.
(iii) Fractional shares of Series C Preferred Shares are not to be
issued upon exchange but, in lieu thereof, the General Partner will pay a
cash adjustment based upon the fair market value of the Series C Preferred
Shares on the day prior to the exchange date as determined in good faith by
the Board of Trustees of the Company.
(3) Adjustment of Exchange Price. (i) The Exchange Price is
----------------------------
subject to adjustment upon certain events, including, (a) subdivisions,
combinations and reclassification of the Series C Preferred Shares, and (b)
distributions to all holders of Series C Preferred Shares of evidences of
indebtedness of the Company or assets (including securities, but excluding
dividends and distributions paid in cash out of equity applicable to Series
C Preferred Shares).
(ii) In case the Company shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the Company's
capital shares or sale of all or substantially all of the Company's
assets), in each case as a result of which the Series C Preferred Shares
will be converted into the right to receive shares of capital stock, other
securities or other property (including cash or any combination thereof),
each Series C Preferred Unit will thereafter be exchangeable into the kind
and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the
consummation of such transaction by a holder of that number of shares of
Series C Preferred Shares or fraction thereof into which one Series C
Preferred Unit was exchangeable immediately prior to such transaction. The
Company may not become a party to any such transaction unless the terms
thereof are consistent with the foregoing. In addition, the Company shall
not issue any Additional Securities without the consent of the holders of
the Series C Preferred Units if such consent would be required to be
34
obtained from holders of Series C Preferred Shares and such Series C
Preferred Shares were outstanding.
(ix) No Conversion Rights. The holders of the Series C Preferred Units
--------------------
shall not have any rights to convert such shares into shares of any other class
or series of stock or into any other securities of, or interest in, the
Partnership.
(x) No Sinking Fund. No sinking fund shall be established for the
--------------
retirement or redemption of Series C Preferred Units.
(xi) Record Holders. The General Partner may deem and treat the record
--------------
holder of any Series C Preferred Unit as the true and lawful owner thereof for
all purposes, and the General Partner shall not be affected by any notice to the
contrary.
(f) Series D Cumulative Convertible Redeemable Preferred Units of
-------------------------------------------------------------
Partnership Interest.
--------------------
(i) Number of Units and Designation. A series of preferred units of
-------------------------------
partnership interest designated as Series D Cumulative Convertible Redeemable
Preferred Units of Partnership Interest is hereby established and the number of
units which shall constitute such series shall not be more than 3,773,585 units,
which number may be decreased (but not below the aggregate number thereof then
outstanding and/or which have been reserved for issuance) from time to time by
the General Partner.
(ii) For purposes of the Series D Preferred Units, the following terms
shall have the meanings indicated:
"Applicable Treasury Rate," for each Dividend Period, shall mean the annual
yield to maturity to U.S. Treasury securities with a ten-year maturity, as
compiled by and published in the most recent Federal Reserve Statistical Release
H.13(519) which has become publicly available prior to the last Business Day of
such Dividend Period (or, if such Statistical Release is no longer published,
any publicly available source of similar date).
"Base Rate" shall mean an annual dividend payment in an amount per share
equal to $1.60; provided, however, that if the Company gives notice of its
-------- -------
election to make a Dividend Increase (as defined in the Exchange Agreement)
following a Change of Control (as defined in the Exchange Agreement) in
accordance with Section 6.7 of the Exchange Agreement, then from and after the
date of such notice, the "Base Rate" shall mean an annual dividend payment in an
amount per share equal to the product of (a) the greater of (1) 800 basis points
plus the Applicable Treasury Rate or (2) 12% and (b) the greater of (1) the
Liquidation Preference per Series D Preferred Share and (2) the Volume-Weighted
Average trading Price for the thirty trading days preceding the Change of
Control transaction of the number of Common Shares into which each Series D
Preferred Share is then convertible.
"Board of Trustees" shall mean the Board of Trustees of the Company.
"Business Day" shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York
City, New York are authorized or required by law, regulation or executive order
to close.
35
"Call Date" shall mean the date specified in the notice to holders required
under Section 4.02(f)(v)(4) as the Call Date.
"Change of Control" shall have the meaning set forth in Section 6.7(f) of
the Exchange Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Constituent Person" shall have the meaning set forth in Section
4.02(f)(vi)(5).
"Conversion Date" shall have the meaning set forth in Section 4.02(f)(vi).
"Conversion Price" shall mean the conversion price per Common Unit for
which the Series D Preferred Units are convertible, as such Conversion Price
maybe adjusted pursuant to Section 4.02(f)(vi). The initial conversion price
shall be $26.50.
"Current Market Price" of publicly traded Common Units or any other
Partnership Units or other security of the Partnership or any other issuer for
any day shall mean the last reported sales price, regular way, on such day, or,
if no sale takes place on such day, the average of the reported closing bid and
asked prices on such day, regular way, in either case as reported on the NYSE
or, if such security is not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange, on the Nasdaq National Market ("NASDAQ") or, if such
security is not quoted on NASDAQ, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc. (the "NASD") or, if bid and asked prices
for such security on such day shall not have been reported through the NASD, the
average of the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such purpose by the
Board of Trustees. If the Common Units are not publicly traded, then the Current
Market Price of such Common Units shall be equal to the Current Market Price of
common shares of beneficial interest of the Company ("Common Shares"),
multiplied by the then-current Conversion Factor.
"Distribution Payment Date" shall mean (i) for any Distribution Period with
respect to which the Partnership pays a distribution on the Common Units, the
date on which such distribution is paid, or (ii) for any Distribution Period
with respect to' which the Partnership does not pay a distribution on the Common
Units, a date to be set by the General Partner, which date shall not be later
than the thirtieth calendar day after the end of the applicable Distribution
Period.
"Distribution Periods" shall mean quarterly distribution periods commencing
on January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Distribution
Period with respect to any Series D Preferred Units (other than the initial
Distribution Period, which shall commence on the Issue Date for such Series D
Preferred Units and end on and include the last day of the calendar quarter
immediately following such Issue Date, and other than the Distribution Period
during which any Series D Preferred Units shall be redeemed pursuant to Section
4.02(f)(v) or converted pursuant to Section
36
4.02(f)(vi), which shall end on and include the Call Date with respect to the
Series D Preferred Units being redeemed).
"Exchange Agreement" shall mean the Exchange Agreement, dated as of March
20, 2001, by and among Security Capital Preferred Growth Incorporated, a
Maryland corporation, the Company and the Partnership, as amended from time to
time.
"Expiration Time" shall have the meaning set forth in Section
4.02(f)(vi)(4)(D).
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a Common Unit on the five (5) consecutive Trading Days selected by the
General partner commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and the day before any "ex date"
with respect to the issuance or distribution requiring such computation. The
term "ex date," when used with respect to any issuance or distribution, means
the first day on which the Common Units trade regular way, without the right to
receive such issuance or distribution, on the exchange or in the market, as the
case may be, used to determine that day's Current Market Price.
"Fully Junior Units" shall mean the Common Units and any other class or
series of units of partnership interest in the Partnership now or hereafter
issued and outstanding over which the Series D Preferred Units have preference
or priority in both (i) the payment of distributions and (ii) the distribution
of assets on any liquidation, dissolution or winding up of the Company.
"Funds from Operations" shall mean net income (loss) (computed in
accordance with generally accepted accounting principles) excluding gains (or
losses) from debt restructuring, and distributions in excess of earnings
allocated to other minority interests (as reflected in the financial statements
of the Partnership) plus depreciation/amortization of assets unique to the real
estate industry, all computed in a manner consistent with the revised definition
of Funds From Operations adopted by the National Association of Real Estate
Investment Trusts ("NAREIT"), in its White Paper dated March 1995, as such
definitions may be modified from time to time, as determined by the General
Partner in good faith.
"Issue Date" shall mean the date on which the Series D Preferred Units are
issued.
"Junior Units" shall mean the Common Units and any other class or series of
Partnership Units now or hereafter issued and outstanding over which the Series
D Preferred Units have preference or priority in the payment of distributions or
in the distribution of assets on any liquidation, dissolution or winding up of
the Company.
"Non-Electing Unit" shall have the meaning set forth in Section
4.02(f)(vi)(5).
"Parity Preferred Units" shall have the meaning set forth in Section
4.02(f)(vii)(2).
"Person" shall mean any individual, firm, partnership, corporation, limited
liability company, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Purchased Units" shall have the meaning set forth in Section
4.02(f)(vi)(4)(D).
37
"REIT Termination Event" shall mean the earliest to occur of:
(i) the filing of a federal income tax return by the Company for any
taxable year on which the Company does not compute its income as a real estate
investment trust;
(ii) the approval by the unitholders of the Company of a proposal for the
Company to cease to qualify as a real estate investment trust;
(iii) a determination by the Board of Trustees of the Company, based on the
advice of counsel, that the Company has ceased to qualify as a real estate
investment trust; or
(iv) a "determination" within the meaning of Section 1313(a) of the Code
that the Company has ceased to qualify as a real estate investment trust.
"Securities" and "Security" shall have the meanings set forth in Section
4.02(f)(vi)(4)(C).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series D Preferred Units" shall mean the Series D Cumulative Convertible
Redeemable Preferred Units of Partnership Interest of the Partnership.
"Set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Partnership in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration or other action of the General Partner, the allocation of funds to
be so paid on any series or class of Partnership Units of the Company; provided,
--------
however, that if any funds for any class or series of Junior Shares or any class
-------
or series of shares of beneficial interest ranking on a parity with the Series D
Preferred Units as to the payment of distributions are placed in a separate
account of the Company or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Series D Preferred Units
shall mean placing such funds in a separate account or delivering such funds to
a disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for trading
on the NYSE, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities exchange, on NASDAQ, or if such securities are not
quoted on NASDAQ, in the securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in Section 4.02(f)(vi)(5).
"Transfer Agent" shall mean the Company, or such other agent or agents of
the Company as may be designated by the Board of Trustees or their designee as
the transfer agent, registrar and distribution disbursing agent for the Series D
Preferred Units.
"Volume-Weighted Average Trading Price" shall mean, for any period, the
number obtained by dividing (i) the sum of the products, for each sale of any
security during such period, of (a) the sale price of such security, regular
way, as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NYSE or, if the
securities are not listed or admitted to trading on the NYSE, as reported in the
principal consolidated
38
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the securities are admitted to trading or,
if the securities are not listed or admitted to trading on any national
securities exchange, the sale price, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotation system that may then be
in use or, if the securities are not quoted by any such organization, the sales
prices as furnished by professional market makers making a market in the
securities or, if the securities are not publicly traded, the sale price as
reasonably determined in good faith by the Board of Trustees and (b) the number
of such securities sold by (ii) the total number of such securities sold during
such period.
(iii) Distributions.
-------------
(1) Subject to the preferential rights of the holders of Parity
Preferred Units and holders of any preferred units that rank senior in the
payment of distributions to the Series D Preferred Units issued after the
date hereof in accordance herewith as to payment of distributions and
rights upon voluntary or involuntary dissolution, liquidation or winding
up, the holders of Series D Preferred Units shall be entitled to receive,
when, as and if determined by the General Partner in its sole discretion,
out of finds legally available for the payment of distributions, cumulative
preferential distributions payable in cash in an amount per share equal to
the greater of (i) the Base Rate or (ii) the regular cash distributions
(determined on each Distribution Payment Date) on the Common Units, or
portion thereof, into which a Series D Preferred Share is convertible. The
distributions referred to in clause (ii) of the preceding sentence shall
equal the number of Common Units, or portion thereof, into which one Series
D Preferred Unit will be convertible on or after the Conversion Date,
multiplied by the most current quarterly distribution on one Common Unit on
or before the applicable Distribution Payment Date. If the Partnership pays
a regular cash distribution on the Common Units with respect to a
Distribution Period after the date on which the Distribution Payment Date
is declared pursuant to clause (ii) of the definition of Distribution
Payment Date and the distribution calculated pursuant to clause (ii) of
this paragraph (a) with respect to such Distribution Period is greater than
the distribution previously declared on the Series D Preferred Units with
respect to such Distribution Period, the Partnership shall pay an
additional distribution to the holders of the Series D Preferred Units on
the date on which the distribution on the Common Units is paid, in an
amount equal to the difference between (y) the distribution calculated
pursuant to clause (ii) of this paragraph (a) and (z) the amount of
distributions previously declared on the Series D Preferred Units with
respect to such Distribution Period. The distributions shall begin to
accrue and shall be fully cumulative from the first day of the applicable
Distribution Period, whether or not in any Distribution Period or Periods
there shall be funds of the Partnership legally available for the payment
of such distributions, and shall be payable quarterly, when, as and if the
General Partner, in its sole discretion, determines, in arrears on
Distribution Payment Dates. Each such distribution shall be payable in
arrears to the holders of record of Series D Preferred Units as they appear
in the records of the Partnership at the close of business on such record
dates, not less than 10 nor more than 50 days preceding such Distribution
39
Payment Dates thereof, as shall be fixed by the General Partner. Accrued
and unpaid distributions for any past Distribution Periods may be declared
and paid at any time and for such interim periods, without reference to any
regular Distribution Payment Date, to holders of record on such date, not
less than 10 nor more than 50 days preceding the payment date thereof, as
may be fixed by the General Partner. Any distribution payment made on
Series D Preferred Units shall first be credited against the earliest
accrued but unpaid distribution due with respect to Series D Preferred
Units which remains payable.
(2) The amount of distributions referred to in clause (i) of
Section 4.02(f)(iii)(1) payable for each full Distribution Period on the
Series D Preferred Units shall be computed by dividing the annual
distribution rate by four. The initial Distribution Period for the Series D
Preferred Units will include a partial distribution for the period from the
Issue Date until the last day of the calendar quarter immediately following
such Issue Date. The amount of distributions payable for such period, or
any other period shorter than a full Distribution Period, on the Series D
Preferred Units shall be computed by dividing the number of days in such
period by 365 and multiplying the result by the Series D Preferred
distribution rate determined in accordance with Section 4.02(f)(iii)(1).
Holders of Series D Preferred Units shall not be entitled to any
distributions, whether payable in cash, property or shares, in excess of
cumulative distributions, as herein provided, on the Series D Preferred
Units. No interest, or sum of money in lieu of interest, shall be payable
in respect of any distribution or distributions on the Series D Preferred
Units which may be in arrears.
(3) So long as any Series D Preferred Units are outstanding, no
distributions, except as described in the immediately following sentence,
shall be declared or paid or set apart for payment on any class or series
of Parity Preferred Units for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment on the Series D Preferred Units for all Distribution Periods
terminating on or prior to the Distribution Payment Date on such class or
series of Parity Preferred Units. When distributions are not paid in full
or a sum sufficient for such payment is not set apart, as aforesaid, all
distributions declared upon Series D Preferred Units and all distributions
declared upon any other class or series of Parity Preferred Units shall be
declared ratably in proportion to the respective amounts of distributions
accumulated and unpaid on the Series D Preferred Units and accumulated and
unpaid on such Parity Preferred Units.
(4) So long as any Series D Preferred Units are outstanding, no
distributions (other than distributions paid solely in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Fully
Junior Units) shall be declared or paid or set apart for payment or other
distribution shall be declared or made or set apart for payment upon Junior
Units, nor shall any Junior Units be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of Common
Units made for purposes of an employee incentive or benefit plan of the
Partnership or any subsidiary or affiliate) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption
of any Junior Units) by the Partnership, directly or indirectly (except by
conversion into or exchange for Fully Junior Units),
40
unless in each case (i) the full cumulative distributions on all
outstanding Series D Preferred Units and any other Parity Preferred Units
of the Partnership shall have been or contemporaneously are declared and
paid or declared and set apart for payment for all past Distribution
Periods with respect to the Series D Preferred Units and all past
distribution periods with respect to such Parity Preferred Units and (ii)
sufficient funds shall have been or contemporaneously are declared and paid
or declared and set apart for the payment of the distribution for the
current Distribution Period with respect to the Series D Preferred Units
and the current distribution period with respect to such Parity Preferred
Units.
(5) No distributions on Series D Preferred Units shall be
declared by the General Partner or paid or set apart for payment by the
Partnership at such time as the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness,
prohibits such declaration, payment or setting apart for payment or
provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration
or payment shall be restricted or prohibited by law.
(iv) Liquidation Preference.
----------------------
(1) In the event of any liquidation, dissolution or winding up of
the Partnership, whether voluntary or involuntary, subject to the rights of
holders of Parity Preferred Units and subject to the prior preferences and
other rights of any series of Partnership Units ranking senior to the
Series D Preferred Units upon liquidation, distribution or winding up of
the Partnership, before any payment or distribution of the assets of the
Partnership (whether capital or surplus) shall be made to or set apart for
the holders of Junior Units, the holders of the Series D Preferred Units
shall be entitled to receive Twenty Six Dollars and Fifty Cents ($26.50)
(the "Liquidation Preference") per Series D Preferred Unit plus an amount
equal to all distributions (whether or not earned or declared) accrued and
unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment; provided, that the
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distribution payable with respect to the Distribution Period containing the
date of final distribution shall be equal to the greater of (i) the
distribution provided in Section 4.02(f)(iii)(1)(i) or (ii) the
distribution determined pursuant to Section 4.02(f)(iii)(1)(ii) for the
preceding Distribution Period. If, upon any liquidation, dissolution or
winding up of the Partnership, the assets of the Partnership, or proceeds
thereof, distributable among the holders of the Series D Preferred Units
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other shares of any class or series of Parity
Preferred Units, then such assets, or the proceeds thereof, shall be
distributed among the holders of Series D Preferred Units and any such
other Parity Preferred Units ratably in accordance with the respective
amounts that would be payable on such Series D Preferred Units and any such
other Parity Preferred Units if all amounts payable thereon were paid in
full. For the purposes of this Section 4.02(f)(iv), (i) a consolidation or
merger of the Partnership with one or more partnerships, corporations, real
estate investment trusts or other entities or (ii) a sale, lease or
conveyance of all or substantially all of the Partnership's property or
business shall not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary, of the Partnership.
41
(2) Subject to the rights of the holders of shares of any series
or class or classes of units ranking on a parity with or prior to the
Series D Preferred Units upon liquidation, dissolution or winding up, upon
any liquidation, dissolution or winding up of the Partnership, after
payment shall have been made in full to the holders of the Series D
Preferred Units, as provided in this Section 4.02(f)(iv), the holders of
Series D Preferred Units shall have no other claim to the remaining assets
of the Partnership and any other series or class or classes of Junior Units
shall, subject to the respective terms and provisions (if any) applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series D Preferred Units shall not be
entitled to share therein.
(v) Redemption at the Option of the Partnership.
-------------------------------------------
(1) The Series D Preferred Units shall not be redeemable by the
Partnership prior to December 29, 2005. On and after December 29, 2005, the
Partnership, at its option, may redeem the Series D Preferred Units, in
whole at any time or from time to time in part out of funds legally
available therefor at a redemption price payable in cash equal to 100% of
the Liquidation Preference per Series D Preferred Units (plus all
accumulated, accrued and unpaid distributions as provided below).
(2) Upon any redemption of Series D Preferred Units pursuant to
this Section 4.02(f)(v), the Partnership shall pay all accrued and unpaid
distributions, if any, thereon to the Call Date, without interest. If the
Call Date falls after a distribution payment record date and prior to the
corresponding Distribution Payment Date, then each holder of Series D
Preferred Units at the close of business on such distribution payment
record date shall be entitled to the distribution payable on such shares on
the corresponding Distribution Payment Date notwithstanding any redemption
of such shares before such Distribution Payment Date. Except as provided
above, the Partnership shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series D Preferred Units
called for redemption.
(3) If full cumulative distributions on the Series D Preferred
Units and any other class or series of Parity Preferred Units of the
Partnership have not been declared and paid or declared and set apart for
payment; the Series D Preferred Units may not be redeemed under this
Section 4.02(f)(v) in part and the Partnership may not purchase or acquire
Series D Preferred Units, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of Series D Preferred Units.
(4) Notice of the redemption of any Series D Preferred Units
under this Section 4.02(f)(v) shall be mailed by first-class mail to each
holder of record of Series D Preferred Units to be redeemed at the address
of each such holder as shown on the Partnership's records, not less than 30
nor more than 90 days prior to the Call Date. Neither the failure to mail
any notice required by this paragraph (d), nor any defect therein or in the
mailing thereof, to any particular holder, shall affect the sufficiency of
the notice or the validity of the proceedings for redemption with respect
to the other holders. Each such mailed notice shall state, as appropriate:
(1) the Call Date; (2) the number of Series D Preferred Units to be
redeemed and, if fewer than all the shares held
42
by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the then-current Conversion
Price; and (5) that distributions on the shares to be redeemed shall cease
to accrue on such Call Date except as otherwise provided herein. Notice
having been mailed as aforesaid, from and after the Call Date (unless the
Partnership shall fail to make available an amount of cash necessary to
effect such redemption), (i) except as otherwise provided herein,
distributions on the Series D Preferred Units so called for redemption
shall cease to accrue, (ii) such shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of
Series D Preferred Units shall cease (except the rights to convert and to
receive the cash payable upon such redemption, without interest thereon,
upon surrender and endorsement of their certificates if so required and to
receive any distributions payable thereon). The Partnership's obligation to
provide cash in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the Call Date, the Partnership shall deposit
with a bank or trust company (which maybe an affiliate of the Partnership)
that has an office in the Borough of Manhattan, City of New York, and that
has, or is an affiliate of a bank or trust company that has, capital and
surplus of at least $50,000,000, necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption
of the Series D Preferred Units so called for redemption. No interest shall
accrue for the benefit of the holders of Series D Preferred Units to be
redeemed on any cash so set aside by the Partnership. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the Call
Date shall revert to the general funds of the Partnership, after which
reversion the holders of such shares so called for redemption shall look
only to the general funds of the Partnership for the payment of such cash.
As promptly as practicable after the Call Date, such Series D Preferred
Units shall be exchanged for any cash (without interest thereon) for which such
Series D Preferred Units have been redeemed, such exchange to be evidenced by
appropriate amendments of Exhibit A to the Agreement and payment to the holder
---------
thereof (as shown on the records of the Partnership) of such cash. If fewer than
all the outstanding Series D Preferred Units are to be redeemed, shares to be
redeemed shall be selected by the Partnership from outstanding Series D
Preferred Units not previously called for redemption pro rata (as nearly as may
be), by lot or by any other method determined by the Partnership in its sole
discretion to be equitable.
(vi) Conversion. Holders of Series D Preferred Units shall have the
----------
right to convert all or a portion of such units into Common Units, as follows:
(1) Subject to and upon compliance with the provisions of this
Section 4.02(f)(vi), a holder of Series D Preferred Units shall have the
right, at his or her option, at any time after the earliest to occur of (i)
the sixty-first day after such holder provides the Partnership with written
notice of its intent to convert Series D Preferred Units, (ii) the first
day on which a Change of Control occurs, (iii) the occurrence of a REIT
Termination Event, or (iv) such date as determined by the Partnership (the
"Conversion Date"), to convert all or any portion of such units (or such
units as determined by the General Partner if pursuant to clause (iv)
above) into the number of Common Units obtained by dividing the aggregate
Liquidation Preference of such units (inclusive of accrued but unpaid
distributions) by the Conversion Price (as in effect at the time and on
43
the date provided for in the last paragraph of paragraph (2) of this
Section 4.02(f)(vi)), such conversion to be made in the manner provided in
paragraph (2) of this Section 4.02(f)(vi); provided, however, that the
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right to convert units called for redemption pursuant to Section 4.02(f)(v)
shall terminate at the close of business on the fifth Business Day prior to
the Call Date fixed for such redemption, unless the Partnership shall
default in making payment of the cash payable upon such redemption under
Section 4.02(f)(v).
(2) In order to exercise the conversion right, the holder of each
Series D Preferred Unit to be converted shall irrevocably instruct the
General Partner in a writing duly executed by the holder or the holder's
duly authorized attorney, with signature guaranteed, to convert such units
into Common Units. The General Partner, in its sole discretion, may require
such holder to provide additional instruments of transfer as its deems
necessary or desirable to effect the conversion. Each instruction shall be
accompanied by an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the General Partner demonstrating that
such taxes have been paid).
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which such instruction and such notice
shall have been received by the General Partner as aforesaid (and if applicable,
payment of an amount equal to the distribution payable on such units shall have
been received by the General Partner as described above) and such conversion
shall be at the Conversion Price in effect at such time on such date.
Holders of Series D Preferred Units at the close of business on a
distribution payment record date shall be entitled to receive the distribution
payable on such units on the corresponding Distribution Payment Date
notwithstanding the conversion thereof following such distribution payment
record date and prior to such Distribution Payment Date. However, the holder of
Series D Preferred Units converted during the period between the close of
business on any distribution payment record date and the opening of business on
the corresponding Distribution Payment Date (except Series D Preferred Units
converted after the issuance of notice of redemption with respect to a Call Date
during such period, such Series D Preferred Units being entitled to such
distribution on the Distribution Payment Date) must pay to the Partnership an
amount equal to the distribution payable on such units on such Distribution
Payment Date. A holder of Series D Preferred Units on a distribution payment
record date who converts Series D Preferred Units into Common Units on the
corresponding Distribution Payment Date will receive the distribution payable by
the Partnership on such Series D Preferred Units on such date, and the
converting holder need not pay the amount of such distribution upon conversion.
Except as provided above, the Partnership shall make no payment or allowance for
unpaid distributions, whether or not in arrears, on converted units or for
distributions on the Common Units issued upon such conversion.
(3) In lieu of any fractional interest in a Common Unit that
would otherwise be deliverable upon the conversion of a Series D Preferred
Share, the General Partner, in its sole discretion, may cause the
Partnership to pay to the holder of such fractional unit an amount in cash
based upon the Fair Market Value of the Common Units on the Trading Day
immediately preceding the date of conversion. If more than one unit
44
shall be surrendered for conversion at one time by the same holder, the
number of full Common Units issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Series D Preferred Units
so surrendered.
(4) The Conversion Price shall be adjusted from time to time as
follows:
(A) If the Partnership shall after the Issue Date (a) make a
distribution on its Partnership Units in Common Units, (b) subdivide
its outstanding Common Units into a greater number of units, (c)
combine its outstanding Common Units into a smaller number of units or
(d) issue any Partnership Units by reclassification of its Common
Units, the Conversion Price in effect at the opening of business on
the day following the date fixed for the determination of unitholders
entitled to receive such distribution or distribution or at the
opening of business on the Business Day next following the day on
which such subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the holder of
any Series D Preferred Units thereafter surrendered for conversion
shall be entitled to receive the number of Common Units that such
holder would have owned or have been entitled to receive after the
happening of any of the events described above as if such Series D
Preferred Units had been converted immediately prior to the record
date in the case of a distribution or distribution or the effective
date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (A) shall become
effective immediately after the opening of business on the Business
Day next following the record date (except as provided in paragraph
(8) below) in the case of a distribution and shall become effective
immediately after the opening of business on the Business Day next
following the effective date in the case of a subdivision, combination
or reclassification.
(B) If the Partnership shall issue after the Issue Date
rights, options or warrants to all holders of Common Units entitling
them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase Common Units at a price
per share less than 95% (100% if a stand-by underwriter is used and
charges the Partnership a commission) of the Fair Market Value per
Common Unit on the record date for the determination of unitholders
entitled to receive such rights, options or warrants, then the
Conversion Price in effect at the opening of business on the Business
Day next following such record date shall be adjusted to equal the
price determined by multiplying (a) the Conversion Price in effect
immediately prior to the opening of business on the Business Day next
following the date fixed for such determination by (b) a fraction, the
numerator of which shall be the sum of (x) the number of Common Units
outstanding on the close of business on the date fixed for such
determination and (y) the number of shares that the aggregate proceeds
to the Partnership from the exercise of such rights, options or
warrants for Common Units would purchase at 95% of such Fair Market
Value (or 100% in the case of a stand-by underwriting), and the
denominator of which shall be the sum of (x) the number of Common
Units outstanding on the close of business on the date fixed for such
determination and (y) the number of additional Common Units offered
45
for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall become effective immediately after the
opening of business on the day next following such record date (except
as provided in paragraph (8) below). In determining whether any
rights, options or warrants entitle the holders of Common Units to
subscribe for or purchase Common Units at less than 95% of such Fair
Market Value (or 100% in the case of a stand-by underwriting), there
shall be taken into account any consideration received by the
Partnership upon issuance and upon exercise of such rights, options or
warrants, the value of such consideration, if other than cash, to be
determined by the General Partner whose determination shall be
conclusive.
(C) If the Partnership shall distribute to all holders of
its Common Units any securities of the Partnership (other than Common
Units) or evidence of its indebtedness or assets (excluding cumulative
cash distributions or distributions paid with respect to the Common
Units after December 31, 2000 which are not in excess of the
following: the sum of (a) the Partnership's cumulative undistributed
Funds from Operations at December 31, 2000, plus (b) the cumulative
amount of Funds from Operations, as determined by the General Partner,
after December 31, 2000, minus (c) the cumulative amount of
distributions accrued or paid in respect of the Series D Preferred
Units or any other class or series of preferred units of the
Partnership after the Issue Date or rights, options or warrants to
subscribe for or purchase any of its securities (excluding those
rights, options and warrants issued to all holders of Common Units
entitling them for a period expiring within 45 days after the record
date referred to in subparagraph (B) above to subscribe for or
purchase Common Units, which rights and warrants are referred to in
and treated under subparagraph (B) above) (any of the foregoing being
hereinafter in this subparagraph (C) collectively called the
"Securities" and individually a "Security"), then in each such case
the Conversion Price shall be adjusted so that it shall equal the
price determined by multiplying (x) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of unitholders entitled to receive such distribution by
(y) a fraction, the numerator of which shall be the Fair Market Value
per Common Unit on the record date mentioned below less the then fair
market value (as determined by the General Partner, whose
determination shall be conclusive) of the portion of the Securities or
assets or evidences of indebtedness so distributed or of such rights,
options or warrants applicable to one Common Unit, and the denominator
of which shall be the Fair Market Value per Common Unit on the record
date mentioned below. Such adjustment shall become effective
immediately at the opening of business on the Business Day next
following (except as provided in paragraph (h) below) the record date
for the determination of unitholders entitled to receive such
distribution. For the purposes of this subparagraph (C), the
distribution of a Security, which is distributed not only to the
holders of the Common Units on the date fixed for the determination of
unitholders entitled to such distribution of such Security, but also
is distributed with each Common Unit delivered to a Person converting
a Series D Preferred Unit after such determination date, shall not
require an adjustment of the Conversion Price pursuant to this
subparagraph (C);
46
provided that on the date, if any, on which a person converting a
Series D Preferred Unit would no longer be entitled to receive such
Security with a Common Unit (other than as a result of the termination
of all such Securities), a distribution of such Securities shall be
deemed to have occurred and the Conversion Price shall be adjusted as
provided in this subparagraph (C) (and such day shall be deemed to be
"the date fixed for the determination of the unitholders entitled to
receive such distribution" and "the record date" within the meaning of
the two preceding sentences).
(D) In case a tender or exchange offer (which term shall not
include open market repurchases by the Partnership) made by the
Partnership or any subsidiary of the Partnership for all or any
portion of the Common Units shall expire and such tender or exchange
offer shall involve the payment by the Partnership or such subsidiary
of consideration per Common Unit having a fair market value (as
determined in good faith by the General Partner, whose determination
shall be conclusive), at the last time (the "Expiration Time") tenders
or exchanges may be made pursuant to such tender or exchange offer,
that exceeds the Current Market Price per Common Unit on the Trading
Day next succeeding the Expiration Time, the Conversion Price shall be
reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this
subparagraph, by a fraction of which the numerator shall be the number
of Common Units outstanding (including any tendered or exchanged
units) at the Expiration Time, multiplied by the Current Market Price
per Common Unit on the Trading Day next succeeding the Expiration
Time, and the denominator shall be the sum of (a) the fair market
value (determined as aforesaid) of the aggregate consideration payable
to unitholders based upon the acceptance (up to any maximum specified
in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any maximum, being referred to as the
"Purchased Units") and (b) the product of the number of Common Units
outstanding (less any Purchased Units) at the Expiration Time and the
Current Market Price per Common Unit on the Trading Day next
succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time.
(E) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease
of at least 1 % in such price; provided, however, that any adjustments
that by reason of this subparagraph (E) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment until made; and provided, further, that any adjustment
shall be required and made in accordance with the provisions of this
Section 4.02(f)(vi) (other than this subparagraph (E)) not later than
such time as may be required in order to preserve the tax-free nature
of a distribution to the holders of Common Units: Notwithstanding any
other provisions of this Section 4.02(f)(vi), the Partnership shall
not be required to make any adjustment of the Conversion Price for the
issuance of any Common Units pursuant to any plan
47
providing for the reinvestment of distributions or interest payable on
securities of the Partnership and the investment of additional
optional amounts in Common Units under such plan. All calculations
under this Section 4.02(f)(vi) shall be made to the nearest cent (with
$.005 being rounded upward) or to the nearest one-tenth of a unit
(with .05 of a unit being rounded upward), as the case may be.
Anything in this paragraph (4) to the contrary notwithstanding, the
Partnership shall be entitled, to the extent permitted by law, to make
such reductions in the Conversion Price, in addition to those required
by this paragraph (4), as it in its discretion shall determine to be
advisable in order that any share distributions, subdivision of
shares, reclassification or combination of shares, distribution of
rights or warrants to purchase shares or securities, or distribution
of other assets (other than cash distributions) hereafter made by the
Partnership to its partners shall not be taxable.
(5) If the Partnership shall be a party to any transaction
(including without limitation a merger, consolidation, self tender offer
for all or substantially all of its Common Units, sale of all or
substantially all of the Partnership's assets or recapitalization of the
Common Units and excluding any transaction as to which subparagraph (4)(A)
of this Section 4.02(f)(vi) applies) (each of the foregoing being referred
to herein as a "Transaction"), in each case as a result of which all or
substantially all of the Common Units are converted into the right to
receive shares, securities or other property (including cash or any
combination thereof), each Series D Preferred Unit which is not redeemed or
converted into the right to receive shares, securities or other property
prior to such Transaction shall thereafter be convertible into the kind and
amount of shares, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction
by a holder of that number of Common Units into which one Series D
Preferred Unit was convertible immediately prior to such Transaction,
assuming such holder of Common Units (i) is not a Person with which the
Partnership consolidated or into which the Partnership merged or which
merged into the Partnership or to which such sale or transfer was made, as
the case may be ("Constituent Person"), or an affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of shares, securities and other property (including
cash) receivable upon such Transaction (provided that if the kind or amount
of shares, securities and other property (including cash) receivable upon
such Transaction is not the same for each Common Unit held immediately
prior to such Transaction by other than a Constituent Person or an
affiliate thereof and in respect of which such rights of election shall not
have been exercised ("Non-Electing Unit"), then for the purpose of this
paragraph (5) the kind and amount of shares, securities and other property
(including cash) receivable upon such Transaction by each Non-Electing Unit
shall be deemed to be the kind and amount so receivable per unit by holders
of a plurality of the Non-Electing Units). The Partnership shall not be a
party to any Transaction unless the terms of such Transaction are
consistent with the provisions of this paragraph (5), and it shall not
consent or agree to the occurrence of any Transaction until the Partnership
has entered into an agreement with the successor or purchasing entity, as
the case may be, for the benefit of the holders of the Series D Preferred
Units that will contain provisions enabling the holders of the Series D
Preferred Units that remain outstanding after such Transaction to convert
into the consideration received by holders of Common Units at the
48
Conversion Price in effect immediately prior to such Transaction. The
provisions of this paragraph (5) shall similarly apply to successive
Transactions.
(6) If:
(A) the Partnership shall declare a distribution on its
Common Units (other than cash distributions or distributions paid with
respect to the Common Units after December 31, 2000 not in excess of
the sum of the Partnership's cumulative undistributed Funds from
Operations at December 31, 2000, plus the cumulative amount of Funds
from Operations, as determined by the General Partner, after December
31, 2000, minus the cumulative amount of distributions accrued or paid
in respect of the Series D Preferred Units or any other class or
series of preferred units of the Partnership after the Issue Date); or
(B) the Partnership shall authorize the granting to all
holders of Common Units of rights, options or warrants to subscribe
for or purchase any units of any class or any other rights, options or
warrants; or
(C) there shall be any reclassification of the Common Units
(other than an event to which subparagraph (4)(A) of this Section
4.02(f)(vi) applies) or any consolidation or merger to which the
Partnership is a party (other than a merger in which the Partnership
is the surviving entity) and for which approval of any partners of the
Partnership is required, or a self tender offer by the Partnership for
all or substantially all of its outstanding Common Units or the sale
or transfer of all or substantially all of the assets of the
Partnership as an entirety; or
(D) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Partnership;
then the General Partner shall cause to be mailed to the
holders of Series D Preferred Units at their addresses as shown on the
records of the Partnership, as promptly as possible, but at least 10
days prior to the applicable date hereinafter specified, a notice
stating (a) the date on which a record is to be taken for the purpose
of such distribution,-or granting of rights, options or warrants, or,
if a record is not to be taken, the date as of which the holders of
Common Units of record to be entitled to such distribution, or rights,
options or warrants are to be determined or (b) the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Units of record
shall be entitled to exchange their Common Units for securities or
other property, if any, deliverable upon such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or
winding up. Failure to give or receive such notice or any defect
therein shall not affect the legality or validity of the proceedings
described in this Section 4.02(f)(vi).
49
(7) Whenever the Conversion Price is adjusted as herein provided,
the General Partner shall promptly (i) execute and file in its records an
officer's certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment which certificate shall be conclusive evidence of the
correctness of such adjustment absent manifest error, and (ii) prepare a
notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the effective date of such adjustment and
shall mail such notice of such adjustment of the Conversion Price to the
holder of each Series D Preferred Unit at such holder's last address as
shown on the records of the Partnership.
(8) In any case in which paragraph (4) of this Section
4.02(f)(vi) provides that an adjustment shall become effective on the day
next following the record date for an event, the Partnership may defer
until the occurrence of such event (A) issuing to the holder of any Series
D Preferred Unit converted after such record date and before the occurrence
of such event the additional Common Units issuable upon such conversion by
reason of the adjustment required by such event over and above the Common
Units issuable upon such conversion before giving effect to such adjustment
and (B) paying to such holder any amount of cash in lieu of any fraction
pursuant to paragraph (3) of this Section 4.02(f)(vi).
(9) There shall be no adjustment of the Conversion Price in case
of the issuance of any shares of beneficial interest of the Partnership in
a reorganization, acquisition or other similar transaction except as
specifically set forth in this Section 4.02(f)(vi). If any action or
transaction would require adjustment of the Conversion Price pursuant to
more than one paragraph of this Section 4.02(f)(vi), only one adjustment
shall be made and such adjustment shall be the amount of adjustment that
has the highest absolute value.
(10) If the Partnership shall take any action affecting the
Common Units, other than action described in this Section 4.02(f)(vi), that
in the opinion of the General Partner would materially and adversely affect
the conversion rights of the holders of the Series D Preferred Units, the
Conversion Price for the Series D Preferred Units may be adjusted, to the
extent permitted by law, in such manner, if any, and at such time, as the
General Partner, in its sole discretion, may determine to be equitable in
the circumstances.
The Partnership shall endeavor to comply with all federal and
state securities laws and regulations thereunder in connection with the
issuance of any securities that the Partnership shall be obligated to
deliver upon conversion of the Series D Preferred Units.
(11) The Partnership will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery
of Common Units or other securities or property on conversion of the Series
D Preferred Units pursuant hereto; provided, however, that the Partnership
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of Common Units or other
securities or property in a name other than that of the holder of the
Series
50
D Preferred Units to be converted, and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid
to the Partnership the amount of any such tax or established, to the
reasonable satisfaction of the Partnership, that such tax has been paid.
(vii) Ranking. Any class or series of Partnership Units shall be
-------
deemed to rank:
(1) prior to the Series D Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of distributions or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Series D Preferred Units;
(2) on a parity with the Series D Preferred Units, as to the
payment of distributions and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the distribution rates,
Distribution Payment Dates or redemption or liquidation prices per share
thereof shall be different from those of the Series D Preferred Units, if
the holders of such class or series and the Series D Preferred Units shall
be entitled to the receipt of distributions and of amounts distributable
upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid distributions per share or
liquidation preferences, without preference or priority one over the other
("Parity Preferred Units");
(3) junior to the Series D Preferred Units, as to the payment of
distributions or as to the distribution of assets upon liquidation,
dissolution or winding up, if such class or series shall be Junior Shares;
and
(4) junior to the Series D Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation,
dissolution or winding up, if such class or series shall be Fully Junior
Units.
(viii) Voting. Except as expressly provided herein, the holders of
------
Series D Preferred Units shall have no voting rights.
So long as any Series D Preferred Units are outstanding, in addition
to any other vote or consent of partners required by law or by the
Partnership Agreement, the affirmative vote of at least 51% of the votes
entitled to be cast by the holders of the Series D Preferred Units given in
person or by proxy, either in writing without a meeting or by vote at any
meeting called for the purpose, shall be necessary for effecting or
validating:
(1) Any amendment, alteration or repeal of any of the provisions
of the Agreement that materially and adversely affects the voting powers,
rights or preferences of the holders of the Series D Preferred Units;
provided, however, that the amendment of the provisions of the Partnership
Agreement so as to authorize or create or to increase the authorized amount
of, any Parity Preferred Units, Fully Junior Units or Junior Units that are
not senior in any respect to the Series D Preferred Units shall not be
deemed to materially adversely affect the voting powers, rights or
preferences of the holders of Series D Preferred Units; or
51
(2) A consolidation with or merger of the Partnership into
another entity, or a consolidation with or merger of another entity into
the Partnership, unless in each such case each Series D Preferred Units (i)
shall remain outstanding without a material and adverse change to its terms
and rights or (ii) shall be converted into or exchanged for convertible
securities of the surviving entity having preferences, conversion or other
rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms or conditions of redemption thereof identical to
that of a Series D Preferred Unit (except for changes that do not
materially and adversely affect the holders of the Series D Preferred
Units);
provided, however, that no such vote of the holders of Series D
-------- -------
Preferred Units shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of
any such prior shares or convertible security is to be made, as the case
may be, provision is made for the redemption of all Series D Preferred
Units at the time outstanding to the extent such redemption is authorized
by Section 4.02(f)(v) hereof.
For purposes of the foregoing provisions of this Section
4.02(f)(viii), each Series D Preferred Unit shall have one (1) vote per
unit, except that when any other series of Preferred Units shall have the
right to vote with the Series D Preferred Units as a single class on any
matter, then the Series D Preferred Units and such other series shall have
with respect to such matters one (1) vote per $26.50 (or less pursuant to
Section 4.02(f)(iv)(1) hereof) of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein, the Series D
Preferred Units shall not have any relative, participating, optional or
other special voting rights and powers other than as set forth herein, and
the consent of the holders thereof shall not be required for the taking of
any Partnership action.
(ix) Record Holders. The General Partner may deem and treat the record
--------------
holder of any Series D Preferred Units as the true and lawful owner thereof for
all purposes, and the General Partner shall not be affected by any notice to the
contrary.
(g) Series E Cumulative Preferred Units of Partnership Interest.
-----------------------------------------------------------
(i) Designation and Number. A series of Partnership Interests
----------------------
designated as 7.5% Series E Cumulative Preferred Units ("Series E Preferred
Units") is hereby established. The number of Series E Preferred Units shall be
200,000. The stated value of a Series E Preferred Unit shall be $50.00 (the
"Stated Value").
(ii) Rank. The Series E Preferred Units shall, with respect to
----
distribution rights and rights upon liquidation, dissolution or winding up of
the Partnership, rank (i) senior to the Common Units and to all Partnership
Interests ranking junior to the Series E Preferred Units and (ii) on a parity
with all Partnership Interests issued by the Partnership that constitute Parity
Preferred Units.
(iii) Distributions.
-------------
52
(1) Subject to the rights of holders of Parity Preferred Units
and holders of preferred units ranking senior to the Series E Preferred
Units issued after the date hereof in accordance herewith as to payment of
distributions and rights upon liquidation, dissolution or winding-up, the
holders of Series E Preferred Units shall be entitled to receive, when, as
and if declared by the Partnership acting through the General Partner, out
of funds legally available for that purpose, cumulative preferential
distributions payable in cash in an amount per Series E Preferred Unit
equal to $0.9375 per calendar quarter (equivalent to $3.75 per annum or an
annual rate of 7.5%). Such distributions shall be cumulative from the
Series E Issue Date (as defined in Section 4.02(g)(ix) below), whether or
not in any Series E Distribution Period or Periods such distributions shall
be authorized or there shall be funds of the Partnership legally available
for the payment of such distributions, and shall be payable quarterly in
arrears on the Series E Distribution Payment Dates, commencing on the first
Series E Distribution Payment Date after the Series E Issue Date. Each such
distribution shall be payable in arrears to the holders of record of the
Series E Preferred Units, as they appear on the records of the Partnership
at the close of business on a record date which shall be not less than 10
and not more than 60 days prior to the applicable Series E Distribution
Payment Date. Accumulated, accrued and unpaid distributions for any past
Series E Distribution Periods may be authorized and paid at any time,
without reference to any regular Series E Distribution Payment Date, to
holders of record on a given date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Partnership,
acting through the General Partner. The amount of accumulated, accrued and
unpaid distributions on any Series E Preferred Unit, or fraction thereof,
at any date shall be the amount of any distributions thereon calculated at
the applicable rate to and including such date, whether or not earned or
authorized, which have not been paid in cash. The amount of distributions
payable per Series E Preferred Unit for the initial Series E Distribution
Period, or any other period shorter or longer than a full Series E
Distribution Period, shall be computed ratably on the basis of four 90-day
quarters and a 360-day year.
(2) Accumulated but unpaid distributions on the Series E
Preferred Units shall accrue additional distributions at the rate of 12%
per annum. Any distribution payment made on the Series E Preferred Units
shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such Series E Preferred Units which
remains payable.
(3) Except as provided in Section 4.02(g)(iii)(4) below, and for
so long as Series E Preferred Units are outstanding, no distributions
(other than in Common Units or Partnership Interests ranking junior to the
Series E Preferred Units as to distributions and upon liquidation,
dissolution or winding up of the Partnership) shall be authorized or paid
or set aside for payment nor shall any other distribution be authorized or
made upon the Common Units or any other Partnership Interests ranking, as
to distributions or upon liquidation, dissolution or winding up of the
Partnership, on a parity with or junior to the Series E Preferred Units for
any period unless full cumulative distributions have been or
contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof set apart for such payment on the Series
E Preferred Units for all past Series E Distribution Periods and the then
current Series E Distribution Period, nor shall
53
any Common Units, or any Partnership Interests ranking junior to or on a
parity with the Series E Preferred Units as to distributions or upon
liquidation, dissolution or winding up of the Partnership, be redeemed,
purchased or otherwise acquired for any consideration (or any monies be
paid to or made available for a sinking fund for the redemption of any such
Partnership Interests) by the Partnership or any other entity controlled
directly or indirectly by the Partnership (except by conversion into or
exchange for Partnership Interests ranking junior to the Series E Preferred
Units as to distributions and upon liquidation, dissolution or winding up
of the Partnership or for the repurchase of Common Units held by employees,
officers or consultants of the Partnership (or their permitted transferees)
that are subject to restrictive share purchase agreements under which the
Partnership has the option or obligation to repurchase such shares upon the
occurrence of certain events, such as termination of employment). The
foregoing sentence will not prohibit the redemption of Partnership
Interests corresponding to any Series E Preferred Shares or any class or
series of Junior Shares to be purchased by the Company pursuant to Article
VII of the Declaration of Trust to preserve the Company's status as a real
estate investment trust.
(4) When distributions are not paid in full (or a sum sufficient
for such full payment is not so set apart) upon the Series E Preferred
Units and any other Partnership Interests ranking on a parity as to
distributions with the Series E Preferred Units, all distributions
authorized with respect to the Series E Preferred Units and any other
Partnership Interests ranking on a parity as to distributions with the
Series E Preferred Units shall be authorized pro rata so that the amount of
distributions authorized with respect to the Series E Preferred Units and
such other Partnership Interests shall in all cases bear to each other the
same ratio that accumulated distributions with respect to the Series E
Preferred Units and such other Partnership Interests (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such Partnership Interests do not have a cumulative
distribution) bear to each other.
(5) Holders of Series E Preferred Units shall not be entitled to
any distributions, whether payable in cash, other property or otherwise, in
excess of the full cumulative distributions described herein.
(6) No distributions on Series E Preferred Units shall be
declared by the General Partner or paid by the Partnership at such time as
the terms and provisions of any agreement of the Partnership, including any
agreement relating to its indebtedness, prohibits such declaration or
payment or provides that such declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if
such declaration or payment shall be restricted or prohibited by law.
(iv) Liquidation Preference.
----------------------
(1) Subject to the rights of holders of Parity Preferred Units
and holders of preferred units ranking senior to the Series E Preferred
Units issued after the date hereof in accordance herewith with respect to
rights upon voluntary or involuntary liquidation, dissolution or winding-up
of the Partnership, upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Partnership, the holders of
the
54
Series E Preferred Units shall be entitled to receive out of the assets of
the Partnership legally available for distribution to the Partners, after
payment or legally required provision for debts and other liabilities of
the Partnership, a liquidation preference equal to the Stated Value per
Series E Preferred Unit, plus an amount equal to any accumulated and unpaid
distributions to the date of payment, before any distribution of assets is
made to holders of Common Units, General Partnership Interests or any other
Partnership Interests that rank junior to the Series E Preferred Units as
to liquidation rights.
(2) If upon any such voluntary or involuntary liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership
are insufficient to pay the amount of such liquidating distributions on all
outstanding Series E Preferred Units and the corresponding amounts payable
on all other Partnership Interests ranking on a parity with the Series E
Preferred Units in the distribution of assets, then such assets shall be
allocated among the Series E Preferred Units, as a series, and each series
of such other Partnership Interests in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
(3) Written notice of any such liquidation, dissolution or
winding up of the Partnership, stating the payment date or dates when, and
the place or places where, the amounts distributable in such circumstances
shall be payable, shall be given by first class mail, postage pre-paid, not
less than 10 nor more than 60 days prior to the payment date stated
therein, to each holder of the Series E Preferred Units at the respective
addresses of such holders as the same shall appear on the records of the
Partnership.
(4) After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series E Preferred
Units shall have no right or claim to any of the remaining assets of the
Partnership.
(5) Prior to the third (3rd) anniversary of the Series E Issue
Date, the General Partner shall not permit the Partnership to liquidate,
dissolve, wind up or otherwise consummate a transaction that would cause
the holder of the Series E Preferred Units to recognize a taxable event
under Section 1001 of the Internal Revenue Code of 1986, as amended, with
respect to the Section 704(c) gain associated the Series E Preferred Units
and the Common Units issued pursuant to the Contribution Agreement.
(v) Redemption.
----------
(1) On and after the third (3rd) anniversary of the Series E
Issue Date, the holders of Series E Preferred Units may require the
Partnership, upon at least 30 days notice, to redeem in whole, but not in
part, the Series E Preferred Units for a redemption price per Series E
Preferred Unit payable in cash equal to the Stated Value plus an amount
equal to any accumulated and unpaid distributions to the date of redemption
(the "Aggregate Redemption Value"). Notwithstanding the forgoing, upon
receipt of a redemption notice from a holder of the Series E Preferred
Units and in lieu of payment in cash as previously provided, the General
Partner or the Company, (or both) may, in its sole and absolute discretion,
elect to purchase directly and acquire such Series E Preferred Units from
the holder of such Series E Preferred Units in exchange for the
55
number of Common Shares of the Company obtained by dividing the Aggregate
Redemption Value by the Current Market Price on the business day
immediately preceding the redemption date, provided that the Company has
filed with the SEC, a registration statement covering the resale of such
Common Shares and the registration statement has been declared effective by
the SEC under the Securities Act as of the redemption date (without any
stop orders), and the Company has agreed to use its best efforts to
maintain such registration statement effective until the earlier of the
date the Common Shares issue in payment of the Aggregate Redemption Price
have been resold by the holder or six (6) months following the redemption
date. The holder agrees that the Company may extend the redemption date for
up to an additional sixty (60) days as may be deemed necessary by the
Company to have the registration statement declared effective by the SEC
provided that the Company continues to use its best efforts to have the
registration statement declared effective under the Securities Act. No
fractional shares shall be issued upon redemption of the Series E Preferred
Units. Instead of any factional interest in a Common Share that would
otherwise be deliverable, the Company or the General Partner, as the case
may be, shall pay an amount in cash based upon the Current Market Price of
the Common Shares on the business day immediately preceding the redemption
date. If the General Partner or the Company exercises its purchase election
and delivers Common Shares in payment of the Aggregate Redemption Value,
then the Partnership will cause the General Partner or the Company, as the
case may be, to issue to the holder of the redeemed Series E Units
additional Common Shares (collectively, "Additional Common Shares") in the
event that the holder, within thirty (30) days following the redemption
date, resells the Common Shares issued in payment of the Aggregate
Redemption Value and receives net proceeds from such sale(s) in an
aggregate amount less than the Aggregate Redemption Value (the amount of
such shortfall being referred to below as the "Shortfall"), provided that
the Partnership or the Company is notified in writing within three days of
the redemption date of the holder's intention to resell such Common Shares
and/or any Additional Common Shares and provided further that such holder
reasonably cooperates with the Partnership and the Company in any such
sale, including selling the Common Shares through such broker-dealer as the
Partnership or the Company may specify. The number of Additional Common
Shares to be issued in such circumstance would be calculated by dividing
the dollar amount of the Shortfall by the Current Market Price on the date
of the last sale of the Common Shares issued in payment of the Aggregate
Redemption Value, and the Partnership agrees to use best efforts to cause
the Company to register under the Securities Act the resale of such
Additional Common Shares and to maintain such registration statement
effective until the earlier of the date the Additional Common Shares have
been resold by the holder or six (6) months following the date of their
issuance.
(2) Unless full cumulative distributions on all outstanding
Series E Preferred Units have been or contemporaneously are authorized and
paid or authorized and a sum sufficient for the payment thereof set apart
for payment for all past distributions periods and the then current
distribution period, the Partnership shall not purchase or otherwise
acquire directly or indirectly any Partnership Interests ranking junior to
or on a parity with the Series E Preferred Units as to distributions or
upon liquidation, dissolution or winding up of the Partnership; provided
that the foregoing
56
restriction on purchases and acquisitions shall apply only to purchases and
acquisitions of Partnership Interests held by any of the Company, the
General Partner, any direct or indirect subsidiary of the Company or the
General Partner or any of Messrs. Xxxxxxxx, August or XxXxxx.
(3) On or after the redemption date, each holder of Series E
Preferred Units to be redeemed shall present and surrender the certificates
evidencing its Series E Preferred Units to the Partnership at the place
designated by the Partnership and thereupon the redemption price of such
Series E Preferred Units shall be paid or the Company shall issue a
certificate or certificates for the number of full Common Shares issuable
upon redemption of the Series E Preferred Units, as the case may be, to or
on the order of the person whose name appears on such certificate
evidencing Series E Preferred Units as the owner thereof and each
surrendered certificate shall be canceled.
(4) From and after the redemption date (unless the Partnership
defaults in payment of the redemption price), all distributions on the
Series E Preferred Units shall cease to accumulate and all rights of the
holders thereof, except the right to receive the redemption price thereof
(including all accumulated and unpaid distributions up to the redemption
date), shall cease and terminate and such Series E Preferred Units shall
not be deemed to be outstanding for any purpose whatsoever.
(vi) Voting Rights.
-------------
(1) Holders of the Series E Preferred Units shall not have any
voting rights.
(2) So long as any Series E Preferred Units remain outstanding,
the Partnership shall not, without the affirmative vote or consent of the
holders of at least two-thirds of Series E Preferred Units outstanding at
the time, given in person or by proxy, either in writing or at a meeting,
(a) authorize or create, or increase the authorized or issued amount of,
any class or series of Partnership Interests ranking prior to Series E
Preferred Units with respect to the payment of distributions or the
distribution of assets upon voluntary or involuntary liquidation,
dissolution or winding up of the Partnership or reclassify any previously
designated Partnership Interests into such Partnership Interests, or
create, authorize or issue any obligation or Partnership Interests
convertible or exchangeable into or evidencing the right to purchase any
such Partnership Interests; or (b) amend, alter or repeal the provisions of
this Agreement, whether by merger, consolidation or otherwise, or
consummate a merger or consolidation involving the Partnership (any such
merger or consolidation, an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of such Series E
Preferred Units or the holders thereof; provided, however, with respect to
the occurrence of any of the Events set forth in (b) above, the occurrence
of any such Event shall not be deemed to materially adversely affect such
rights, preferences, privileges or voting powers of holders of Series E
Preferred Units if immediately after any such Event (i) in which the
Partnership is the surviving entity, there are outstanding no Partnership
Interests ranking as to distribution rights or liquidation preference
senior to the Series E Preferred Units other than the securities of the
Partnership outstanding prior to such
57
Event, (ii) in which the Partnership is not the surviving entity, as a
result of the Event, the holders of the Series E Preferred Units receive
limited partnership interests with preferences, rights and privileges
substantially similar to the preferences, rights and privileges of the
Series E Preferred Units and there are outstanding no limited partnership
interests of the surviving entity ranking as to distribution rights or
liquidation preference senior to the Series E Preferred Units other than
the securities issued in respect of Partnership Interests outstanding prior
to such Event or (iii) whether or not the Partnership is the surviving
entity, there are no outstanding equity securities of the Partnership or
its successor (other than securities of the Partnership outstanding prior
to such Event, or securities issued in respect of securities of the
Partnership outstanding prior to such Event) ranking as to distribution
rights or liquidation preference senior to the Series E Preferred Units.
(vii) Allocations. Allocations of the Partnership's items of income,
-----------
gain, loss and deduction shall be allocated among holders of Series E Preferred
Units in accordance with Article V of this Agreement.
(viii) Transfers. The Series E Preferred Units shall be subject to the
---------
transfer provisions of Article IX of this Agreement (captioned Transfer of
Limited Partnership Interests); provided that Brandywine may transfer all or any
of the Series E Preferred Units to one or more Affiliates so long as such
transferee-Affiliates remain subject to the restrictions in Article IX.
(ix) Definitions.
-----------
"Current Market Price" shall mean for any day, the last reported sales
price on such day, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, in either case as reported on
the NYSE or, if such security is not listed or admitted for trading on the NYSE,
on the principal national securities exchange on which such security is listed
or admitted for trading or, if not listed or admitted for trading on any
national securities exchange, on the Nasdaq National Market ("NASDAQ") or, if
such security is not quoted on NASDAQ, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc. (the "NASD") or, if bid and asked prices
for such security on such day shall not have been reported through the NASD, the
average of the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such purpose by the
Board of Trustees of the Company.
"Series E Distribution Payment Date" shall mean, with respect to each
Series E Distribution Period, the fifteenth day of January, April, July and
October in each year, commencing, on July 15, 2001; provided, however, that if
any Series E Distribution Payment Date falls on any day other than a business
day, the distribution payment due on such Series E Distribution Payment Date
shall be paid on the business day immediately following such Series E
Distribution Payment Date.
"Series E Distribution Periods" shall mean quarterly distribution periods
commencing on the fifteenth day of each January, April, July and October of each
year and ending on and including the day preceding the first day of the next
succeeding Series E Distribution Period
58
(other than the initial Series E Distribution Period, which shall commence on
the Series E Issue Date and end on and include July 14, 2001).
"Series E Issue Date" shall mean the date on which Series E Preferred Units
are first issued by the Partnership.
4.03 Additional Funding. If the General Partner determines that it is in
------------------
the best interests of the Partnership to provide for additional Partnership
funds ("Additional Funds") for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner, the Company or any of their Affiliates
provide such Additional Funds to the Partnership through loans or otherwise.
4.04 Capital Accounts. A separate capital account (a "Capital Account")
----------------
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires
an additional Partnership Interest in exchange for more than a de minimis
Capital Contribution, (ii) the Partnership distributes to a Partner more than a
de minimis amount of Partnership property as consideration for a Partnership
Interest, or (iii) the Partnership is liquidated within the meaning of
Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the General
Partner, the Capital Accounts of the Partners shall be adjusted in accordance
with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to reflect the manner in which the
unrealized gain or loss inherent in such property (that has not been reflected
in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.01 if there were a taxable disposition of such property
for its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) on the
date of the revaluation.
4.05 Percentage Interests. If the number of outstanding Partnership Units
--------------------
increases or decreases during a taxable year, each Partner's Percentage Interest
shall be adjusted by the General Partner effective as of the effective date of
each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.05, the Profits and Losses for the taxable year in which the adjustment occurs
shall be allocated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.
59
4.06 No Interest on Contributions. No Partner shall be entitled to interest
----------------------------
on its Capital Contribution.
4.07 Return of Capital Contributions. No Partner shall be entitled to
-------------------------------
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.08 No Third Party Beneficiary. No creditor or other third party having
--------------------------
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 Allocation of Profit and Loss.
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(a) General.
(1) Profit. Profit shall be allocated among the Unitholders in
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the following manner:
(A) First, to the Preferred Unitholders in proportion to and
to the extent of any Preferred Unit Distribution Amounts for which
allocations of Profit have not been made previously under this Section
5.01(a)(1)(A);
(B) Second, to the General Partner and Common Unitholders
until the aggregate amount of Profit allocated under this Section
5.01(a)(1)(B), shall equal the aggregate amount of Loss allocated to
the Partners under Section 5.01(a)(2)(E);
60
(C) Third, to each Preferred Unitholder, in proportion to
and to the extent of their respective excesses of (i) the aggregate
amount of Loss allocated to each under Section 5.01(a)(2)(D) over (ii)
the aggregate amount of Profit allocated to each under this Section
5.01(a)(1)(C);
(D) Fourth, to the General Partner and the Common
Unitholders in proportion to and to the extent of their respective
excesses of (i) the aggregate amount of Loss allocated to each under
Section 5.01(a)(2)(C) over (ii) the aggregate amount of Profit
allocated to each under this Section 5.01(a)(1)(D); and
(E) Fifth, to the General Partner and the Common Unitholders
in accordance with the Percentage Interest of each.
(2) Loss. Loss shall be allocated among the Unitholders in the
----
following manner:
(A) First, to the General Partner and the Common Unitholders
to the extent of and in proportion to (i) the aggregate amount of
Profit allocated to each under Section 5.01(a)(1)(E) over (ii) the
aggregate amount of Loss allocated to each under this Section
5.01(a)(2)(A);
(B) Second, proportionately to the Preferred Unitholders to
the extent of their respective Undistributed Preferred Unit
Distribution Amounts for which allocations of Loss have not been made
previously under this Section 5.01(a)(2)(B);
(C) Third, to the General Partner and the Common Unitholders
in proportion to the Percentage Interest of each until the Capital
Account balances of both the General Partner and each Common
Unitholder shall equal zero;
(D) Fourth, to the Preferred Unitholders in proportion to
and to the extent of the Capital Account balances of each; and
(E) Fifth, 100% to the General Partner and Common
Unitholders in accordance with their Percentage Interests.
(3) Definitions. For purposes of this Section 5.01(a), the
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following terms shall have the meanings indicated:
"Common Unitholder(s)" means all Persons holding a Limited Partnership
Interest in the Partnership other than a Preferred Unitholder.
"Preferred Unit Distribution Amount" means, collectively, the Series B
Preferred Unit Distribution Amount, the Series C Preferred Unit Distribution
Amount, the Series D Preferred Unit Distribution Amount, and the Series E
Preferred Unit Distribution Amount.
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"Preferred Unitholder(s)" means all Persons holding a Series B Preferred
Unit, a Series C Preferred Unit, a Series D Preferred Unit, or a Series E
Preferred Unit.
"Series B Preferred Unit Distribution Amount" means the amount
distributable to the Series B Unitholders as provided in Section 4.02(e)(iii).
"Series B Preferred Unitholder" means any Person holding Series B Preferred
Units.
"Series B Preferred Units" means the Series B Cumulative Redeemable
Perpetual Preferred Units of Partnership Interest issued pursuant to the Second
Amendment to the Second Amended and Restated Agreement of Limited Partnership of
the Partnership dated June 25, 1998.
"Series C Preferred Unit Distribution Amount" means the amount
distributable to the Series C Unitholders as provided in Section 4.02(f)(iii).
"Series C Preferred Unitholder" means any Person holding Series C Preferred
Units.
"Series C Preferred Units" means the Series C Cumulative Redeemable
Perpetual Preferred Units of Partnership Interest issued pursuant to the Eighth
Amendment to the Second Amended and Restated Agreement of Limited Partnership of
the Partnership dated September 17, 1999.
"Series D Preferred Unit Distribution Amount" means the amount
distributable to the Series D Preferred Unitholders as provided in Section
4.02(d).
"Series D Preferred Unitholder" means any Person holding Series D Preferred
Units.
"Series D Preferred Units" means the Series D Cumulative Convertible
Redeemable Preferred Units of Partnership Interest issued pursuant to the
Thirteenth Amendment to the Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated March 20, 2001.
"Series E Preferred Unit Distribution Amount" means the amount
distributable to the Series D Preferred Unitholders as provided in Section
4.02(g).
"Series E Preferred Unitholder" means any Person holding Series E Preferred
Units.
"Series E Preferred Units" means the Series E Cumulative Preferred Units of
Partnership Interest issued pursuant to the Fourteenth Amendment to the Second
Amended and Restated Agreement of Limited Partnership of the Partnership dated
April 1, 2001.
"Undistributed Preferred Unit Distribution Amount" means the excess of (i)
the aggregate amount of Profit allocated to each Preferred Unitholder under
Section 5.01(a)(1)(A) over (ii) the aggregate Preferred Unit Distribution Amount
distributions made to that Preferred Unitholder .
62
(b) Minimum Gain Chargeback. Notwithstanding any provision to the contrary,
-----------------------
(i) any expense of the Partnership that is a "nonrecourse deduction" within the
meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance
with the Partners' respective Percentage Interests, (ii) any expense of the
Partnership that is a "partner nonrecourse deduction" within the meaning of
Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears
the "economic risk of loss" of such deduction in accordance with Regulations
Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum
Gain within the meaning of Regulations Section 1.704-2(f)(1) for any Partnership
taxable year, then, subject to the exceptions set forth in Regulations Section
1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated
among the Partners in accordance with Regulations Section 1.704-2(f) and the
ordering rules contained in Regulations Section 1.704-2(j), and (iv) if there is
a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of
Regulations Section 1.704-2(i)(4) for any Partnership taxable year, then,
subject to the exceptions set forth in Regulations Section 1.704(2)(g), items of
gain and income shall be allocated among the Partners in accordance with
Regulations Section 1.704-2(i)(4) and the ordering rules contained in
Regulations Section 1.704-2(j). A Partner's "interest in partnership profits"
for purposes of determining its share of the nonrecourse liabilities of the
Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be
such Partner's Percentage Interest.
(c) Qualified Income Offset. If a Partner receives in any taxable year an
-----------------------
adjustment, allocation, or distribution described in subparagraphs (4), (5), or
(6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a
deficit balance in such Partner's Capital Account that exceeds the sum of such
Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g)
and 1.704-2(i), such Partner shall be allocated specially for such taxable year
(and, if necessary, later taxable years) items of income and gain in an amount
and manner sufficient to eliminate such deficit Capital Account balance as
quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(c), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner
in an amount necessary to offset the income or gain previously allocated to such
Partner under this Section 5.01(c).
(d) Capital Account Deficits. Loss shall not be allocated to a Limited
------------------------
Partner to the extent that such allocation would cause a deficit in such
Partner's Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in an
amount necessary to offset the Loss previously allocated to each Partner under
this Section 5.01(d).
(e) Allocations Between Transferor and Transferee. If a Partner transfers
---------------------------------------------
any part or all of its Partnership Interest, the distributive shares of the
various items of Profit and Loss allocable among the Partners during such fiscal
year of the Partnership shall be allocated between the transferor and the
transferee Partner either (i) as if the Partnership's fiscal year had ended on
the date of the transfer, or (ii) based on the number of days of such fiscal
year that each was a
63
Partner without regard to the results of Partnership activities in the
respective portions of such fiscal year in which the transferor and the
transferee were Partners. The General Partner, in its sole discretion, shall
determine which method shall be used to allocate the distributive shares of the
various items of Profit and Loss between the transferor and the transferee
Partner.
(f) Definition of Profit and Loss. "Profit" and "Loss" and any items of
-----------------------------
income, gain, expense, or loss referred to in this Agreement shall be determined
in accordance with federal income tax accounting principles, as modified by
Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not
include items of income, gain and expense that are specially allocated pursuant
to Section 5.01(b), 5.01(c), or 5.01(d). All allocations of income, Profit,
gain, Loss, and expense (and all items contained therein) for federal income tax
purposes shall be identical to all allocations of such items set forth in this
Section 5.01, except as otherwise required by Section 704(c) of the Code and
Regulations Section 1.704-1(b)(4). The General Partner shall have the authority
to elect the method to be used by the Partnership for allocating items of
income, gain, and expense as required by Section 704(c) of the Code including a
method that may result in a Partner receiving a disproportionately larger share
of the Partnership tax depreciation deductions, and such election shall be
binding on all Partners.
5.02 Distribution of Cash.
--------------------
(a) The Partnership shall distribute cash on a quarterly (or, at the
election of the General Partner, more frequent) basis, in an amount determined
by the General Partner in its sole and absolute discretion, to the Partners who
are Partners on the Partnership Record Date with respect to such quarter (or
other distribution period) in accordance with their respective Percentage
Interests on the Partnership Record Date; provided, however, that if a new or
--------- --------
existing Partner acquires an additional Partnership Interest in exchange for a
Capital Contribution on any date other than a Partnership Record Date, the cash
distribution attributable to such additional Partnership Interest relating to
the Partnership Record Date next following the issuance of such additional
Partnership Interest shall be reduced in the proportion to (i) the number of
days that such additional Partnership Interest is held by such Partner bears to
(ii) the number of days between such Partnership Record Date and the immediately
preceding Partnership Record Date.
(b) Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under the Code or any other federal, state or local law including,
without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.
To the extent that the Partnership is required to withhold and pay over to any
taxing authority any amount resulting from the allocation or distribution of
income to the Partner or assignee (including by reason of Section 1446 of the
Code), either (i) if the actual amount to be distributed to the Partner equals
or exceeds the amount required to be withheld by the Partnership, the amount
withheld shall be treated as a distribution of cash in the amount of such
withholding to such Partner, or (ii) if the actual amount to be distributed to
the Partner is less than the amount required to be withheld by the Partnership,
the amount required to be withheld shall be treated as a loan (a "Partnership
Loan") from the Partnership to the Partner on the day the Partnership pays over
such amount to a taxing authority. A Partnership Loan shall be repaid through
withholding by the Partnership with respect to subsequent distributions to the
applicable Partner or assignee. In the event that a Limited Partner (a
"Defaulting Limited
64
Partner") fails to pay any amount owed to the Partnership with respect to the
Partnership Loan within 15 days after demand for payment thereof is made by the
Partnership on the Limited Partner, the General Partner, in its sole and
absolute discretion, may elect to make the payment to the Partnership on behalf
of such Defaulting Limited Partner. In such event, on the date of payment, the
General Partner shall be deemed to have extended a loan (a "General Partner
Loan") to the Defaulting Limited Partner in the amount of the payment made by
the General Partner and shall succeed to all rights and remedies of the
Partnership against the Defaulting Limited Partner as to that amount. Without
limitation, the General Partner shall have the right to receive any
distributions that otherwise would be made by the Partnership to the Defaulting
Limited Partner until such time as the General Partner Loan has been paid in
full, and any such distributions so received by the General Partner shall be
treated as having been received by the Defaulting Limited Partner and
immediately paid to the General Partner.
Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.02(b) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in The Wall Street Journal, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.
(c) In no event may a Partner receive a distribution of cash with respect
to a Partnership Unit if such Partner is entitled to receive a cash dividend as
the holder of record of a REIT Share for which all or part of such Partnership
Unit has been or will be exchanged.
5.03 REIT Distribution Requirements. The General Partner shall use its
------------------------------
reasonable efforts to cause the Partnership to distribute amounts sufficient to
enable the Company to pay shareholder dividends that will allow the Company to
(i) meet its distribution requirement for qualification as a REIT as set forth
in Section 857 of the Code and (ii) avoid any federal income or excise tax
liability imposed by the Code.
5.04 No Right to Distributions in Kind. No Partner shall be entitled to
---------------------------------
demand property other than cash in connection with any distributions by the
Partnership.
5.05 Limitations on Return of Capital Contributions. Notwithstanding any of
----------------------------------------------
the provisions of this Article V, no Partner shall have the right to receive and
the General Partner shall not have the right to make, a distribution that
includes a return of all or part of a Partner's Capital Contributions, unless
after giving effect to the return of a Capital Contribution, the sum of all
Partnership liabilities, other than the liabilities to a Partner for the return
of his Capital Contribution, does not exceed the fair market value of the
Partnership's assets.
5.06 Distributions Upon Liquidation. Upon liquidation of the Partnership,
------------------------------
after payment of, or adequate provision for, debts and obligations of the
Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts
in accordance with their respective positive Capital Account balances. For
purposes of the preceding sentence, the Capital Account of each Partner shall be
determined after all adjustments made in accordance with Sections 5.01 and 5.02
resulting from Partnership operations and from all sales and dispositions of all
or any part of the Partnership's xxxxxx.Xx
65
the extent deemed advisable by the General Partner, appropriate arrangements
(including the use of a liquidating trust) may be made to assure that adequate
funds are available to pay any contingent debts or obligations.
5.07 Substantial Economic Effect. It is the intent of the Partners that the
---------------------------
allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01 Management of the Partnership.
-----------------------------
(a) Except as otherwise expressly provided in this Agreement, the General
Partner shall have full, complete and exclusive discretion to manage and control
the business of the Partnership for the purposes herein stated, and shall make
all decisions affecting the business and assets of the Partnership. Subject to
the restrictions specifically contained in this Agreement, the powers of the
General Partner shall include, without limitation, the authority to take the
following actions on behalf of the Partnership:
(i) to acquire, purchase, own, operate, lease and dispose of any real
property and any other property or assets including, but not limited to notes
and mortgages, that the General Partner determines are necessary or appropriate
or in the best interests of the business of the Partnership;
(ii) to construct buildings and make other improvements on the
properties owned or leased by the Partnership;
(iii) to authorize, issue, sell, redeem or otherwise purchase any
Partnership Interests or any securities (including secured and unsecured debt
obligations of the Partnership, debt obligations of the Partnership convertible
into any class or series of Partnership Interests, or options, rights, warrants
or appreciation rights relating to any Partnership Interests) of the
Partnership;
(iv) to borrow or lend money for the Partnership, issue or receive
evidences of indebtedness in connection therewith, refinance, increase the
amount of, modify, amend or change the terms of, or extend the time for the
payment of, any such indebtedness, and secure such indebtedness by mortgage,
deed of trust, pledge or other lien on the Partnership's assets;
(v) to pay, either directly or by reimbursement, for all operating
costs and general administrative expenses of the Partnership to third parties or
too the General Partner or its Affiliates as set forth in this Agreement;
66
(vi) to guarantee or become a comaker of indebtedness of the Company
or any Subsidiary thereof, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any such guarantee
or indebtedness, and secure such guarantee or indebtedness by mortgage, deed of
trust, pledge or other lien on the Partnership's assets;
(vii) to use assets of the Partnership (including, without limitation,
cash on hand) for any purpose consistent with this Agreement, including, without
limitation, payment, either directly or by reimbursement, of all operating costs
and general administrative expenses of the Company, the General Partner, the
Partnership or any Subsidiary of either, to third parties or to the General
Partner as set forth in this Agreement;
(viii) to lease all or any portion of any of the Partnership's assets,
whether or not the terms of such leases extend beyond the termination date of
the Partnership and whether or not any portion of the Partnership's assets so
leased are to be occupied by the lessee, or, in turn, subleased in whole or in
part to others, for such consideration and on such terms as the General Partner
may determine;
(ix) to prosecute, defend, arbitrate, or compromise any and all claims
or liabilities in favor of or against the Partnership, on such terms and in such
manner as the General Partner may reasonably determine, and similarly to
prosecute, settle or defend litigation with respect to the Partners, the
Partnership, or the Partnership's assets; provided, however, that the General
Partner may not, without the consent of all of the Partners, confess a judgment
against the Partnership that is in excess of $20,000 or is not covered by
insurance;
(x) to file applications, communicate, and otherwise deal with any and
all governmental agencies having jurisdiction over, or in any way affecting, the
Partnership's assets or any other aspect of the Partnership business;
(xi) to make or revoke any election permitted or required of the
Partnership by any taxing authority;
(xii) to maintain such insurance coverage for public liability, fire
and casualty, and any and all other insurance for the protection of the
Partnership, for the conservation of Partnership assets, or for any other
purpose convenient or beneficial to the Partnership, in such amounts and such
types, as it shall determine from time to time;
(xiii) to determine whether or not to apply any insurance proceeds for
any property to the restoration of such property or to distribute the same;
(xiv) to establish one or more divisions of the Partnership, to hire
and dismiss employees of the Partnership or any division of the Partnership, and
to retain legal counsel, accountants, consultants, real estate brokers, and such
other persons, as the General Partner may deem necessary or appropriate in
connection with the Partnership business and to pay therefor such reasonable
remuneration as the General Partner may deem reasonable and proper;
67
(xv) to retain other services of any kind or nature in connection with
the Partnership business, and to pay therefor such remuneration as the General
Partner may deem reasonable and proper;
(xvi) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority conferred
upon the General Partner;
(xvii) to maintain accurate accounting records and to file promptly
all federal, state and local income tax returns on behalf of the Partnership;
(xviii) to distribute Partnership cash or other Partnership assets in
accordance with this Agreement;
(xix) to form or acquire an interest in, and contribute property to,
any further limited or general partnerships, joint ventures or other
relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, its
Subsidiaries and any other Person in which it has an equity interest from time
to time);
(xx) to establish Partnership reserves for working capital, capital
expenditures, contingent liabilities, or any other valid Partnership purpose;
(xxi) to merge, consolidate or combine the Partnership with or into
another person;
(xxii) to do any and all acts and things necessary or prudent to
ensure that the Partnership will not be classified as a "publicly traded
partnership" for purposes of Section 7704 of the Code; and
(xxiii) to take such other action, execute, acknowledge, swear to or
deliver such other documents and instruments, and perform any and all other acts
that the General Partner deems necessary or appropriate for the formation,
continuation and conduct of the business and affairs of the Partnership
(including, without limitation, all actions consistent with allowing the Company
at all times to qualify as a REIT unless the Company voluntarily terminates its
REIT status) and to possess and enjoy all of the rights and powers of a general
partner as provided by the Act.
(b) Except as otherwise provided herein, to the extent the duties of the
General Partner require expenditures of funds to be paid to third parties, the
General Partner shall not have any obligations hereunder except to the extent
that partnership funds are reasonably available to it for the performance of
such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its individual
funds for payment to third parties or to undertake any individual liability or
obligation on behalf of the Partnership.
6.02 Delegation of Authority. The General Partner may delegate any or all
-----------------------
of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.
68
6.03 Indemnification and Exculpation of Indemnitees.
----------------------------------------------
(a) The Partnership shall indemnify an Indemnitee from and against any and
all losses, claims, damages, liabilities, joint or several, expenses (including
reasonable legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, that relate to the operations
of the Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material to the
matter giving rise to the proceeding and either was committed in bad faith or
was the result of active and deliberate dishonesty; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful. The termination of any proceeding
by judgment, order or settlement does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct set forth in this
Section 6.03(a). The termination of any proceeding by conviction or upon a plea
of nolo contendere or its equivalent, or an entry of an order of probation prior
to judgment, creates a rebuttable presumption that the Indemnitee acted in a
manner contrary to that specified in this Section 6.03(a). Any indemnification
pursuant to this Section 6.03 shall be made only out of the assets of the
Partnership.
(b) The Partnership shall reimburse an Indemnitee for reasonable expenses
incurred by an Indemnitee who is a party to a proceeding in advance of the final
disposition of the proceeding upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.03 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 6.03 shall be in addition
to any other rights to which an Indemnitee or any other Person may be entitled
under any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity.
(d) The Partnership may purchase and maintain insurance, on behalf of the
Indemnitees and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.03, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section 6.03; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to
69
be in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 6.03 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
6.04 Liability of the General Partner.
--------------------------------
(a) Notwithstanding anything to the contrary set forth in this Agreement,
the General Partner shall not be liable for monetary damages to the Partnership
or any Partners for losses sustained or liabilities incurred as a result of
errors in judgment or of any act or omission if the General Partner acted in
good faith. The General Partner shall not be in breach of any duty that the
General Partner may owe to the Limited Partners or the Partnership or any other
Persons under this Agreement or of any duty stated or implied by law or equity
provided the General Partner, acting in good faith, abides by the terms of this
Agreement.
(b) The Limited Partners expressly acknowledge that the General Partner is
acting on behalf of the Partnership, the Company and the Company's shareholders
collectively, that the General Partner is under no obligation to consider the
separate interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or the tax consequences of same, but not
all, of the Limited Partners) in deciding whether to cause the Partnership to
take (or decline to take) any actions. In the event of a conflict between the
interests of the shareholders of the Company on one hand and the Limited
Partners on the other, the General Partner shall endeavor in good faith to
resolve the conflict in a manner not adverse to either the shareholders of the
Company or the Limited Partners; provided, however, that for so long as the
Company, directly or the General Partner owns a controlling interest in the
Partnership, any such conflict that the General Partner, in its sole and
absolute discretion, determines cannot be resolved in a manner not adverse to
either the shareholders of the Company or the Limited Partners shall be resolved
in favor of the shareholders. The General Partner shall not be liable for
monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith.
(c) Subject to its obligations and duties as General Partner set forth in
Section 6.01 hereof, the General Partner may exercise any of the powers granted
to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.
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(d) Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision of
the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the Company to continue to
qualify as a REIT or (ii) to prevent the Company from incurring any taxes under
Section 857, Section 4981, or any other provision of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners.
(e) Any amendment, modification or repeal of this Section 6.04 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.
6.05 Reimbursement of General Partner.
--------------------------------
(a) Except as provided in this Section 6.05 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) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all REIT Expenses and Administrative Expenses.
6.06 Outside Activities. Subject to Section 6.08 hereof, the Certificate of
------------------
Incorporation and any agreements entered into by the General Partner or its
Affiliates with the Partnership or a Subsidiary, any officer, director,
employee, agent, trustee, Affiliate or shareholder of the General Partner, the
General Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership,
including business interests and activities substantially similar or identical
to those of the Partnership. Neither the Partnership nor any of the Limited
Partners shall have any rights by virtue of this Agreement in any such business
ventures, interest or activities. None of the Limited Partners nor any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any such business ventures, interests or
activities, and the General Partner shall have no obligation pursuant to this
Agreement to offer any interest in any such business ventures, interests and
activities to the Partnership or any Limited Partner, even if such opportunity
is of a character which, if presented to the Partnership or any Limited Partner,
could be taken by such Person.
6.07 Employment or Retention of Affiliates.
-------------------------------------
(a) Any Affiliate of the General Partner may be employed or retained by the
Partnership and may otherwise deal with the Partnership (whether as a buyer,
lessor, lessee, manager, furnisher of goods or services, broker, agent, lender
or otherwise) and may receive from the
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Partnership any compensation, price, or other payment therefor which the General
Partner determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries or other
Persons in which it has an equity investment, and such Persons may borrow funds
from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property
to, or purchase any property from, the Partnership, directly or indirectly,
except pursuant to transactions that are on terms that are fair and reasonable
to the Partnership.
6.08 General Partner Participation. The General Partner agrees that all
-----------------------------
business activities of the General Partner, including activities pertaining to
the acquisition, development or ownership of office or industrial property or
other property, shall be conducted through the Partnership or one or more
Subsidiary Partnerships; provided, however, that the Company is allowed to make
a direct acquisition, but if and only if, such acquisition is made in connection
with the issuance of Additional Securities, which direct acquisition and
issuance have been approved and determined to be in the best interests of the
Company and the Partnership by a majority of the Board of Trustees except as
such approval has been delegated to a committee of the Board of Trustees.
6.09 Title to Partnership Assets. Title to Partnership assets, whether
---------------------------
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership
assets for which legal title is held in the name of the General Partner or any
nominee or Affiliate of the General Partner shall be held by the General Partner
for the use and benefit of the Partnership in accordance with the provisions of
this Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.10 Miscellaneous. In the event the Company redeems any REIT Shares, then
-------------
the General Partner shall cause the Partnership to purchase from the General
Partner and the
72
Company a number of Partnership Units as determined based on the application of
the Conversion Factor on the same terms that the Company exchanged such REIT
Shares. Moreover, if the Company makes a cash tender offer or other offer to
acquire REIT Shares, then the General Partner shall cause the Partnership to
make a corresponding offer to the General Partner and the Company to acquire an
equal number of Partnership Units held by the General Partner and the Company.
In the event any REIT Shares are exchanged by the Company pursuant to such
offer, the Partnership shall redeem an equivalent number of the General
Partner's and the Company Partnership Units for an equivalent purchase price
based on the application of the Conversion Factor.
ARTICLE VII
CHANGES IN GENERAL PARTNER
7.01 Transfer of the General Partner's Partnership Interest.
------------------------------------------------------
(a) The General Partner shall not transfer all or any portion of its
General Partnership Interest or withdraw as General Partner except as provided
in, or in connection with, a transaction contemplated by Section 7.01(c), (d) or
(e).
(b) The General Partner agrees that the Percentage Interest for it and the
Company will at all times be in the aggregate, at least a 1%.
(c) Except as otherwise provided in Section 6.04(b) or Section 7.01(d) or
(e) hereof, the Company shall not engage in any merger, consolidation or other
combination with or into another Person or sale of all or substantially all of
its assets, (other than in connection with a change in the Company's state of
incorporation or organizational form) in each case which results in a change of
control of the Company (a "Transaction"), unless:
(i) the consent of Limited Partners (other than the Company or any
Subsidiary) holding more than 50% of the Percentage Interests of the Limited
Partners (other than those held by the Company or any Subsidiary) is obtained;
(ii) as a result of such Transaction all Limited Partners will receive
for each Partnership Unit an amount of cash, securities, or other property equal
to the product of the Conversion Factor and the greatest amount of cash,
securities or other property paid in the Transaction to a holder of one REIT
Share in consideration of one REIT Share, provided that if, in connection with
the Transaction, a purchase, tender or exchange offer ("Offer") shall have been
made to and accepted by the holders of more than 50% of the outstanding REIT
Shares, each holder of Partnership Units shall be given the option to exchange
its Partnership Units for the greatest amount of cash, securities, or other
property which a Limited Partner would have received had it (A) exercised its
Exchange Right and (B) sold, tendered or exchanged pursuant to the Offer the
REIT Shares received upon exercise of the Exchange Right immediately prior to
the expiration of the Offer; or
(iii) the Company is the surviving entity in the Transaction and
either (A) the holders of REIT Shares do not receive cash, securities, or other
property in the Transaction or (B) all Limited Partners (other than the General
Partner or any Subsidiary) receive an amount of
73
cash, securities, or other property (expressed as an amount per REIT Share) that
is no less than the product of the Conversion Factor and the greatest amount of
cash, securities, or other property (expressed as an amount per REIT Share)
received in the Transaction by any holder of REIT Shares.
(d) Notwithstanding Section 7.01(c), the Company or the General Partner may
merge with or into or consolidate with another entity if immediately after such
merger or consolidation (i) substantially all of the assets of the successor or
surviving entity (the "Survivor"), other than Partnership Units held by the
Company or the General Partner, are contributed, directly or indirectly, to the
Partnership as a Capital Contribution in exchange for Partnership Units with a
fair market value equal to the value of the assets so contributed as determined
by the Survivor in good faith and (ii) the Survivor expressly agrees to assume
all obligations of the General Partner or the Company, as appropriate,
hereunder. Upon such contribution and assumption, the Survivor shall have the
right and duty to amend this Agreement as set forth in this Section 7.01(d). The
Survivor shall in good faith arrive at a new method for the calculation of the
Cash Amount, the REIT Shares Amount and Conversion Factor for a Partnership Unit
after any such merger or consolidation so as to approximate the existing method
for such calculation as closely as reasonably possible. Such calculation shall
take into account, among other things, the kind and amount of securities, cash
and other property that was receivable upon such merger or consolidation by a
holder of REIT Shares or options, warrants or other rights relating thereto, and
to which a holder of Partnership Units could have acquired had such Partnership
Units been exchanged immediately prior to such merger or consolidation. Such
amendment to this Agreement shall provide for adjustment to such method of
calculation, which shall be as nearly equivalent as may be practicable to the
adjustments provided for with respect to the Conversion Factor. The Survivor
also shall in good faith modify the definition of REIT Shares and make such
amendments to Section 8.05 hereof so as to approximate the existing rights and
obligations set forth in Section 8.05 as closely as reasonably possible. The
above provisions of this Section 7.01(d) shall similarly apply to successive
mergers or consolidations permitted hereunder.
In respect of any transaction described in the preceding Paragraph, the
Company is required to use its commercially reasonable efforts to structure such
transaction to avoid causing the Limited Partners to recognize a gain for
federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, provided such efforts are consistent with the
exercise of the Board of Trustees' fiduciary duties to the shareholders of the
Company under applicable law.
(e) Notwithstanding Section 7.01(c).
(i) a General Partner may transfer all or any portion of its General
Partnership Interest to (A) a wholly-owned Subsidiary of such General Partner or
(B) the owner of all of the ownership interests of such General Partner, and
following a transfer of all of its General Partnership Interest, may withdraw as
General Partner; and
(ii) the Company may engage in a transaction not required by law or by
the rules of any national securities exchange on which the REIT Shares are
listed to be submitted to the vote of the holders of the REIT Shares.
74
7.02 Admission of a Substitute or Additional General Partner. A Person
-------------------------------------------------------
shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:
(a) the Person to be admitted as a substitute or additional General Partner
shall have accepted and agreed to be bound by all the terms and provisions of
this Agreement by executing a counterpart thereof and such other documents or
instruments as may be required or appropriate in order to effect the admission
of such Person as a General Partner, and a certificate evidencing the admission
of such Person as a General Partner shall have been filed for recordation and
all other actions required by Section 2.05 hereof in connection with such
admission shall have been performed;
(b) if the Person to be admitted as a substitute or additional General
Partner is a corporation or a partnership it shall have provided the Partnership
with evidence satisfactory to counsel for the Partnership of such Person's
authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an opinion (relying on
such opinions from other counsel and the state or any other jurisdiction as may
be necessary) that the admission of the person to be admitted as a substitute or
additional General Partner is in conformity with the Act, that none of the
actions taken in connection with the admission of such Person as a substitute or
additional General Partner will cause (i) the Partnership to be classified other
than as a partnership for federal income tax purposes, or (ii) the loss of any
Limited Partner's limited liability.
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General
-------------------------------------------------------------------
Partner.
------
(a) Upon the occurrence of an Event of Bankruptcy as to a General Partner
(and its removal pursuant to Section 7.04(a) hereof) or the death, withdrawal,
removal or dissolution of a General Partner (except that, if a General Partner
is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.
(b) Following the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Limited Partners, within 90 days after such occurrence, may elect
to continue the business of the Partnership for the balance of the term
specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof
and any other provisions of this Agreement, a substitute General Partner by
consent of a
75
majority in interest of the Limited Partners. If the Limited Partners elect to
continue the business of the Partnership and admit a substitute General Partner,
the relationship with the Partners and of any Person who has acquired an
interest of a Partner in the Partnership shall be governed by this Agreement.
7.04 Removal of a General Partner.
----------------------------
(a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution
of, a General Partner, such General Partner shall be deemed to be removed
automatically; provided, however, that if a General Partner is on the date of
-------- -------
such occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not
to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners.
(b) If a General Partner has been removed pursuant to this Section 7.04 and
the Partnership is continued pursuant to Section 7.03 hereof, such General
Partner shall promptly transfer and assign its General Partnership Interest in
the Partnership to the substitute General Partner approved by a majority in
interest of the Limited Partners in accordance with Section 7.03(b) hereof and
otherwise admitted to the Partnership in accordance with Section 7.02 hereof. At
the time of assignment, the removed General Partner shall be entitled to receive
from the substitute General Partner the fair market value of the General
Partnership Interest of such removed General Partner as reduced by any damages
caused to the Partnership by such General Partner. Such fair market value shall
be determined by an appraiser mutually agreed upon by the General Partner and a
majority in interest of the Limited Partners within 10 days following the
removal of the General Partner. In the event that the parties are unable to
agree upon an appraiser, the removed General Partner and a majority in interest
of the Limited Partners each shall select an appraiser. Each such appraiser
shall complete an appraisal of the fair market value of the removed General
Partner's General Partnership Interest within 30 days of the General Partner's
removal, and the fair market value of the removed General Partner's General
Partnership Interest shall be the average of the two appraisals; provided,
--------
however, that if the higher appraisal exceeds the lower appraisal by more than
-------
20% of the amount of the lower appraisal, the two appraisers, no later than 40
days after the removal of the General Partner, shall select a third appraiser
who shall complete an appraisal of the fair market value of the removed General
Partner's General Partnership Interest no later than 60 days after the removal
of the General Partner. In such case, the fair market value of the removed
General Partner's General Partnership Interest shall be the average of the two
appraisals closest in value.
(c) The General Partnership Interest of a removed General Partner, during
the time after default until transfer under Section 7.04(b), shall be converted
to that of a special Limited Partner; provided, however, such removed General
-------- -------
Partner shall not have any rights to participate in the management and affairs
of the Partnership, and shall not be entitled to any portion of the income,
expense, profit, gain or loss allocations or cash distributions allocable or
payable, as the case may be, to the Limited Partners. Instead, such removed
General Partner shall receive and be entitled only to retain distributions or
allocations of such items that it would have been entitled to receive in its
capacity as General Partner, until the transfer is effective pursuant to Section
7.04(b).
76
(d) All Partners shall have given and hereby do give such consents, shall
take such actions and shall execute such documents as shall be legally necessary
and sufficient to effect all the foregoing provisions of this Section.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01 Management of the Partnership. The Limited Partners shall not
-----------------------------
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.
8.02 Power of Attorney. Each Limited Partner hereby irrevocably appoints
-----------------
the General Partner its true and lawful attorney-in-fact, who may act for each
Limited Partner and in its name, place and stead, and for its use and benefit,
to sign, acknowledge, swear to, deliver, file or record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be
deemed necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement and the Act in accordance with their terms, which
power of attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the transfer by the
Limited Partner of any part or all of its Partnership Interest.
8.03 Limitation on Liability of Limited Partners. No Limited Partner shall
-------------------------------------------
be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due hereunder. After
its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital
Contributions or other payments or lend any funds to the Partnership.
8.04 Ownership by Limited Partner of Corporate General Partner or
------------------------------------------------------------
Affiliate. No Limited Partner shall at any time, either directly or indirectly,
---------
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
8.05 Exchange Right.
--------------
(a) Subject to Sections 8.05(b), 8.05(c), 8.05(d), 8.05(e) and 8.05(f) and
the provisions of any agreements between the Partnership and one or more Limited
Partners with respect to Common Units held by them, each Limited Partner, other
than the Company, shall have the right (the "Exchange Right") to require the
Partnership to redeem on a Specified Exchange Date all or a portion of the
Common Units held by such Limited Partner at an exchange price equal to and in
the form of the Cash Amount to be paid by the Partnership, provided that such
Common Units
77
shall have been outstanding for at least one year. The Exchange Right shall be
exercised pursuant to a Notice of Exchange delivered to the Partnership (with a
copy to the General Partner) by the Limited Partner who is exercising the
Exchange Right (the "Exchanging Partner"); provided, however, that the
-------- -------
Partnership shall not be obligated to satisfy such Exchange Right if the Company
and/or the General Partner elects to purchase the Common Units subject to the
Notice of Exchange pursuant to Section 8.05(b); and provided, further, that no
Limited Partner may deliver more than two Notices of Exchange during each
calendar year. A Limited Partner may not exercise the Exchange Right for less
than 1,000 Common Units or, if such Limited Partner holds less than 1,000 Common
Units, all of the Common Units held by such Partner. The Exchanging Partner
shall have no right, with respect to any Common Units so exchanged, to receive
any distribution paid with respect to Common Units if the record date for such
distribution is on or after the Specified Exchange Date.
(b) Notwithstanding the provisions of Section 8.05(a), a Limited Partner
that exercises the Exchange Right shall be deemed to have offered to sell the
Common Units described in the Notice of Exchange to the General Partner and the
Company, and either of the General Partner or the Company (or both) may, in its
sole and absolute discretion, elect to purchase directly and acquire such Common
Units by paying to the Exchanging Partner either the Cash Amount or the REIT
Shares Amount, as elected by the General Partner or the Company (in its sole and
absolute discretion), on the Specified Exchange Date, whereupon the General
Partner or the Company shall acquire the Common Units offered for exchange by
the exchanging Partner and shall be treated for all purposes of this Agreement
as the owner of such Common Units. If the General Partner and/or the Company
shall elect to exercise its right to purchase Common Units under this Section
8.05(b) with respect to a Notice of Exchange, they shall so notify the
Exchanging Partner within five Business Days after the receipt by the General
Partner of such Notice of Exchange. Unless the General Partner and/or the
Company (in its sole and absolute discretion) shall exercise its right to
purchase Common Units from the Exchanging Partner pursuant to this Section
8.05(b), neither the General Partner nor the Company shall have any obligation
to the Exchanging Partner or the Partnership with respect to the Exchanging
Partner's exercise of the Exchange Right. In the event the General Partner or
the Company shall exercise its right to purchase Common Units with respect to
the exercise of a Exchange Right in the manner described in the first sentence
of this Section 8.05(b), the Partnership shall have no obligation to pay any
amount to the Exchanging Partner with respect to such Exchanging Partner's
exercise of such Exchange Right, and each of the Exchanging Partner, the
Partnership, and the General Partner or the Company, as the case may be, shall
treat the transaction between the General Partner or the Company, as the case
may be, and the Exchanging Partner for federal income tax purposes as a sale of
the Exchanging Partner's Common Units to the General Partner or the Company, as
the case may be. Each Exchanging Partner agrees to execute such documents as the
General Partner may reasonably require in connection with the issuance of REIT
Shares upon exercise of the Exchange Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a
Limited Partner shall not be entitled to exercise the Exchange Right if the
delivery of REIT Shares to such Partner on the Specified Exchange Date by the
General Partner or the Company pursuant to Section 8.05(b) (regardless of
whether or not the General Partner or the Company would in fact exercise its
rights under Section 8.05(b)) would (i) result in such Partner or any other
person owning, directly or indirectly, REIT Shares in excess of the Ownership
Limitation (as defined in the
78
Certificate of Incorporation) and calculated in accordance therewith, except as
provided in the Certificate of Incorporation, (ii) result in REIT Shares being
owned by fewer than 100 persons (determined without reference to any rules of
attribution), except as provided in the Certificate of Incorporation, (iii)
result in the Company being "closely held" within the meaning of Section 856(h)
of the Code, (iv) cause the Company to own, directly or constructively, 10% or
more of the ownership interests in a tenant of the General Partner's, the
Partnership's, or a Subsidiary Partnership's, real property, within the meaning
of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares
by such Partner to be "integrated" with any other distribution of REIT Shares
for purposes of complying with the registration provisions of the Securities Act
of 1933, as amended (the "Securities Act"). The General Partner or the Company,
in their sole and absolute discretion, may waive the restriction on exchange set
forth in this Section 8.05(c); provided, however, that in the event such
restriction is waived, the Exchanging Partner shall be paid the Cash Amount.
(d) Any Cash Amount to be paid to an Exchanging Partner pursuant to this
Section 8.05 shall be paid on the Specified Exchange Date; provided, however,
that the Company or the General Partner may elect to cause the Specified
Exchange Date to be delayed for up to an additional 180 days to the extent
required for the Company to cause additional REIT Shares to be issued to provide
financing to be used to make such payment of the Cash Amount. Notwithstanding
the foregoing, the Company and the General Partner agree to use their best
efforts to cause the closing of the acquisition of exchanged Common Units
hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the General
Partner shall place appropriate restrictions on the ability of the Limited
Partners to exercise their Exchange Rights as and if deemed necessary to ensure
that the Partnership does not constitute a "publicly traded partnership" under
section 7704 of the Code. If and when the General Partner determines that
imposing such restrictions is necessary, the General Partner shall give prompt
written notice thereof (a "Restriction Notice") to each of the Limited Partners,
which notice shall be accompanied by a copy of an opinion of counsel to the
Partnership which states that, in the opinion of such counsel, restrictions are
necessary in order to avoid the Partnership being treated as a "publicly traded
partnership" under section 7704 of the Code.
8.06 Registration. Subject to the terms of any agreement between the
------------
Company or the General Partner and one or more Limited Partners with respect to
Common Units held by them:
(a) Shelf Registration of the Common Stock. Within two weeks prior or
--------------------------------------
subsequent to the first date upon which the Common Units owned by any Limited
Partner may be exchanged (or such later date as may be required under applicable
provisions of the Securities Act), the Company agrees to file with the SEC, a
shelf registration statement on Form S-3 under Rule 415 of the Securities Act (a
"Registration Statement"), or any similar rule that may be adopted by the SEC,
with respect to all of the shares of Common Stock that may be issued upon
exchange of such Common Units pursuant to Section 8.05 hereof ("Exchange
Shares"). The Company will use its best efforts to have the Registration
Statement declared effective under the Securities Act. The Company need not file
a separate Registration Statement, but may file one Registration Statement
covering Exchange Shares issuable to more than one Limited Partner. The Company
further agrees to supplement or make amendments to each Registration Statement,
if required by
79
the rules, regulations or instructions applicable to the registration form
utilized by the Company or by the Securities Act or rules and regulations
thereunder for such Registration Statement.
(b) If a Registration Statement under subsection (a) above is not available
under the securities laws or the rules of the SEC, or if required to permit the
resale of Exchange Shares by Affiliates, the Company agrees to file with the SEC
a Registration Statement covering the resale of Exchange Shares by Affiliates or
others whose Exchange Shares are not covered by a Registration Statement filed
pursuant to subsection (a) above. The Company will use its best efforts to have
the Registration Statement declared effective under the Securities Act. The
Company need not file a separate Registration Statement, but may file one
Registration Statement covering Exchange Shares issuable to more than one
Limited Partner. The Company further agrees to supplement or make amendments to
each Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form utilized by the Company or by
the Securities Act or rules and regulations thereunder for such Registration
Statement.
(c) Listing on Securities Exchange. If the Company shall list or maintain
------------------------------
the listing of any shares of Common Stock on any securities exchange or national
market system, it will at its expense and as necessary to permit the
registration and sale of the Exchange Shares hereunder, list thereon, maintain
and, when necessary, increase such listing to include such Exchange Shares.
(d) Registration Not Required. Notwithstanding the foregoing, the Company
-------------------------
shall not be required to file or maintain the effectiveness of a registration
statement relating to Exchange Shares after the first date upon which, in the
opinion of counsel of the Company, all of the Exchange Shares covered thereby
could be sold by the holders thereof in any period of three months pursuant to
Rule 144 under the Securities Act, or any successor rule thereto.
(e) Registration Expenses. All expenses incurred by the Company in
---------------------
connection with any registration statement filed pursuant to Section 8.06(a) or
(b) above, including all filing fees, underwriting fees, discounts or
commissions, escrow fees, fees and expenses of compliance with securities or
blue sky laws (including fees and disbursements, if any, of the Company's
counsel), rating agency fees, printing expenses, and messenger and delivery
expenses, shall be borne by the Exchanging Partner.
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
9.01 Purchase for Investment.
-----------------------
(a) Each Limited Partner hereby represents and warrants to the General
Partner, to the Company and to the Partnership that the acquisition of his
Partnership Interests is made as a principal for his account for investment
purposes only and not with a view to the resale or distribution of such
Partnership Interest.
(b) Each Limited Partner agrees that he will not sell, assign or otherwise
transfer his Partnership Interest or any fraction thereof, whether voluntarily
or by operation of law or at judicial sale or otherwise, to any Person who does
not make the representations and warranties to
80
the General Partner set forth in Section 9.01(a) above and similarly agree not
to sell, assign or transfer such Partnership Interest or fraction thereof to any
Person who does not similarly represent, warrant and agree.
9.02 Restrictions on Transfer of Limited Partnership Interests.
---------------------------------------------------------
(a) Subject to the provisions of 9.02(b), (c) and (d), no Limited Partner
may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any
portion of his Limited Partnership Interest, or any of such Limited Partner's
economic rights as a Limited Partner, whether voluntarily or by operation of law
or at judicial sale or otherwise (collectively, a "Transfer") without the
consent of the General Partner, which consent may be granted or withheld in its
sole and absolute discretion. Any such purported transfer undertaken without
such consent shall be considered to be null and void ab initio and shall not be
given effect. Each Limited Partner acknowledges that the General Partner has
agreed not to grant any such consent prior to the Transfer Restriction Date. The
General Partner may require, as a condition of any Transfer to which it
consents, that the transferor assume all costs incurred by the Partnership in
connection therewith.
(b) No Limited Partner may withdraw from the Partnership other than as a
result of a permitted Transfer (i.e., a Transfer consented to as contemplated by
---
clause (a) above or clause (c) below or a Transfer pursuant to 9.05 below) of
all of his Partnership Units pursuant to this Article IX or pursuant to an
exchange of all of his Partnership Units pursuant to 8.05. Upon the permitted
Transfer or redemption of all of a Limited Partner's Partnership Units, such
Limited Partner shall cease to be a Limited Partner.
(c) Subject to 9.02(d), (e) and (f) below, a Limited Partner may Transfer,
with the consent of the General Partner, all or a portion of his Partnership
Units to (i) a parent or parent's spouse, natural or adopted descendant or
descendants, spouse of such descendant, or brother or sister, or a trust created
by such Limited Partner for the benefit of such Limited Partner and/or any such
person(s), of which trust such Limited Partner or any such person(s) is a
trustee, (ii) a corporation controlled by a Person or Persons named in (i)
above, or (iii) if the Limited Partner is an entity, its beneficial owners.
(d) No Limited Partner may effect a Transfer of its Limited Partnership
Interest, in whole or in part, if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would require the registration of the
Limited Partnership Interest under the Securities Act of 1933, as amended, or
would otherwise violate any applicable federal or state securities or blue sky
law (including investment suitability standards).
(e) No Transfer by a Limited Partner of its Partnership Units, in whole or
in part, may be made to any Person if (i) in the opinion of legal counsel for
the Partnership, the transfer would result in the Partnership's being treated as
an association taxable as a corporation (other than a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code), (ii) in the opinion of legal
counsel for the Partnership, it would adversely affect the ability of the
Company to continue to qualify as a REIT or subject the Company to any
additional taxes under Section 857 or Section 4981 of the Code, or (iii) such
transfer is effectuated through an "established
81
securities market" or a "secondary market (or the substantial equivalent
thereof)" within the meaning of Section 7704 of the Code.
(f) No transfer of any Partnership Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld in its sole
and absolute discretion, provided that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Cash Amount any Partnership Units
in which a security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.
(g) Any Transfer in contravention of any of the provisions of this Article
IX shall be void and ineffectual and shall not be binding upon, or recognized
by, the Partnership.
(h) Prior to the consummation of any Transfer under this Article IX, the
transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.
9.03 Admission of Substitute Limited Partner.
---------------------------------------
(a) Subject to the other provisions of this Article IX, an assignee of the
Limited Partnership Interest of a Limited Partner (which shall be understood to
include any purchaser, transferee, donee, or other recipient of any disposition
of such Limited Partnership Interest) shall be deemed admitted as a Limited
Partner of the Partnership only with the consent of the General Partner and upon
the satisfactory completion of the following:
(i) The assignee shall have accepted and agreed to be bound by the
terms and provisions of this Agreement by executing a counterpart or an
amendment thereof, including a revised Exhibit A, and such other documents or
---------
instruments as the General Partner may require in order to effect the admission
of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate evidencing the
admission of such Person as a Limited Partner shall have been signed,
acknowledged and filed for record in accordance with the Act.
(iii) The assignee shall have delivered a letter containing the
representation set forth in Section 9.01(a) hereof and the agreement set forth
in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership or trust, the
assignee shall have provided the General Partner with evidence satisfactory to
counsel for the Partnership of the assignee's authority to become a Limited
Partner under the terms and provisions of this Agreement.
(v) The assignee shall have executed a power of attorney containing
the terms and provisions set forth in Section 8.02 hereof.
82
(vi) The assignee shall have paid all legal fees and other expenses of
the Partnership and the General Partner and filing and publication costs in
connection with its substitution as a Limited Partner.
(vii) The assignee has obtained the prior written consent of the
General Partner to its admission as a Substitute Limited Partner, which consent
may be given or denied in the exercise of the General Partner's sole and
absolute discretion.
(b) For the purpose of allocating Profits and Losses and distributing cash
received by the Partnership, a Substitute Limited Partner shall be treated as
having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or,
if no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person seeking to become a
Substitute Limited Partner by preparing the documentation required by this
Section and making all official filings and publications. The Partnership shall
take all such action as promptly as practicable after the satisfaction of the
conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.
9.04 Rights of Assignees of Partnership Interests.
--------------------------------------------
(a) Subject to the provisions of Sections 9.01 and 9.02 hereof, except as
required by operation of law, the Partnership shall not be obligated for any
purposes whatsoever to recognize the assignment by any Limited Partner of its
Partnership Interest until the Partnership has received notice thereof.
(b) Any Person who is the assignee of all or any portion of a Limited
Partner's Limited Partnership Interest, but does not become a Substitute Limited
Partner and desires to make a further assignment of such Limited Partnership
Interest, shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of its Limited Partnership Interest.
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited
---------------------------------------------------------------------
Partner. The occurrence of an Event of Bankruptcy as to a Limited Partner, the
-------
death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to
join with the assignee in satisfying conditions precedent to the admission of
the assignee as a Substitute Limited Partner.
9.06 Joint Ownership of Interests. A Partnership Interest may be acquired
----------------------------
by two individuals as joint tenants with right of survivorship, provided that
-------- ----
such individuals either are
83
married or are related and share the same home as tenants in common. The written
consent or vote of both owners of any such jointly held Partnership Interest
shall be required to constitute the action of the owners of such Partnership
Interest; provided, however, that the written consent of only one joint owner
--------- --------
will be required if the Partnership has been provided with evidence satisfactory
to the counsel for the Partnership that the actions of a single joint owner can
bind both owners under the applicable laws of the state of residence of such
joint owners. Upon the death of one owner of a Partnership Interest held in a
joint tenancy with a right of survivorship, the Partnership Interest shall
become owned solely by the survivor as a Limited Partner and not as an assignee.
The Partnership need not recognize the death of one of the owners of a
jointly-held Partnership Interest until it shall have received notice of such
death. Upon notice to the General Partner from either owner, the General Partner
shall cause the Partnership Interest to be divided into two equal Partnership
Interests, which shall thereafter be owned separately by each of the former
owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 Books and Records. At all times during the continuance of the
-----------------
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, (c) copies of
the Partnership's federal, state and local income tax returns and reports, (d)
copies of the Agreement and any financial statements of the Partnership for the
three most recent years and (e) all documents and information required under the
Act. Any Partner or its duly authorized representative, upon paying the costs of
collection, duplication and mailing, shall be entitled to inspect or copy such
records during ordinary business hours.
10.02 Custody of Partnership Funds; Bank Accounts.
-------------------------------------------
(a) All funds of the Partnership not otherwise invested shall be deposited
in one or more accounts maintained in such banking or brokerage institutions as
the General Partner shall determine, and withdrawals shall be made only on such
signature or signatures as the General Partner may, from time to time,
determine.
(b) All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.02(b).
10.03 Fiscal and Taxable Year. The fiscal and taxable year of the
-----------------------
Partnership shall be the calendar year.
84
10.04 Annual Tax Information and Report. Within 90 days after the end of
---------------------------------
each fiscal year of the Partnership, the General Partner shall furnish to each
person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.
-------------------------------------------------------------
(a) The General Partner shall be the Tax Matters Partner of the Partnership
within the meaning of Section 6231(a)(7) of the Code. As Tax Matters Partner,
the General Partner shall have the right and obligation to take all actions
authorized and required, respectively, by the Code for the Tax Matters Partner.
The General Partner shall have the right to retain professional assistance in
respect of any audit of the Partnership by the Service and all out-of-pocket
expenses and fees incurred by the General Partner on behalf of the Partnership
as Tax Matters Partner shall constitute Partnership expenses. In the event the
General Partner receives notice of a final Partnership adjustment under Section
6223(a)(2) of the Code, the General Partner shall either (i) file a court
petition for judicial review of such final adjustment within the period provided
under Section 6226(a) of the Code, a copy of which petition shall be mailed to
all Limited Partners on the date such petition is filed, or (ii) mail a written
notice to all Limited Partners, within such period, that describes the General
Partner's reasons for determining not to file such a petition.
(b) All elections required or permitted to be made by the Partnership under
the Code or any applicable state or local tax law shall be made by the General
Partner in its sole and absolute discretion.
(c) In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Properties. Notwithstanding anything contained in Article V of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account
in establishing, maintaining or computing Capital Accounts for the other
Partners for any purpose under this Agreement. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.
10.06 Reports to Limited Partners.
---------------------------
(a) As soon as practicable after the close of each fiscal quarter (other
than the last quarter of the fiscal year), the General Partner shall cause to be
mailed to each Limited Partner a quarterly report containing financial
statements of the Partnership, or of the Company if such statements are prepared
solely on a consolidated basis with the Company, for such fiscal quarter,
presented in accordance with generally accepted accounting principles. As soon
as practicable after the close of each fiscal year, the General Partner shall
cause to be mailed to each Limited Partner an annual report containing financial
statements of the Partnership, or of the Company if such statements are prepared
solely on a consolidated basis with the Company, for such fiscal year, presented
in accordance with generally accepted accounting principles. The annual
financial statements shall be audited by accountants selected by the General
Partner.
85
(b) Any Partner shall further have the right to a private audit of the
books and records of the Partnership, provided such audit is made for
Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT
The General Partner's consent shall be required for any amendment to this
Agreement. The General Partner, without the consent of the Limited Partners, may
amend this Agreement in any respect or merge or consolidate the Partnership with
or into any other partnership or business entity (as defined in Section. 17-211
of the Act) in a transaction pursuant to Section 7.01(c), (d) or (e) hereof;
provided, however, that the following amendments and any other merger or
-------- -------
consolidation of the Partnership shall require the consent of Limited Partners
(other than the Company or any Subsidiary) holding more than 50% of the
Percentage Interests of the Limited Partners (other than the Company or any
Subsidiary):
(a) any amendment affecting the operation of the Conversion Factor or the
Exchange Right (except as provided in Section 8.05(d) or 7.01(d) hereof) in a
manner adverse to the Limited Partners;
(b) any amendment that would adversely affect the rights of the Limited
Partners to receive the distributions payable to them hereunder, other than with
respect to the issuance of additional Partnership Units pursuant to Section 4.02
hereof;
(c) any amendment that would alter the Partnership's allocations of Profit
and Loss to the Limited Partners, other than with respect to the issuance of
additional Partnership Units pursuant to Section 4.02 hereof; or
(d) any amendment that would impose on the Limited Partners any obligation
to make additional Capital Contributions to the Partnership.
ARTICLE XII
GENERAL PROVISIONS
12.01 Notices. All communications required or permitted under this
-------
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A attached hereto; provided, however, that any Partner may
--------- -------- -------
specify a different address by notifying the General Partner in writing of such
different address. Notices to the Partnership shall be delivered at or mailed to
its specified office.
12.02 Survival of Rights. Subject to the provisions hereof limiting
------------------
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.
86
12.03 Additional Documents. Each Partner agrees to perform all further acts
--------------------
and execute, swear to, acknowledge and deliver all further documents which may
be reasonable, necessary, appropriate or desirable to carry out the provisions
of this Agreement or the Act.
12.04 Severability. If any provision of this Agreement shall be declared
------------
illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by
law) and in any event such illegality, invalidity or unenforceability shall not
affect the remainder hereof.
12.05 Entire Agreement. This Agreement and exhibits attached hereto
----------------
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
12.06 Pronouns and Plurals. When the context in which words are used in the
--------------------
Agreement indicates that such is the intent, words in the singular number shall
include the plural and the masculine gender shall include the neuter or female
gender as the context may require.
12.07 Headings. The Article headings or sections in this Agreement are for
--------
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article.
12.08 Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original copy and all of which together
shall constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.
12.09 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
[SIGNATURE PAGES FOLLOW]
87
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Third Amended and Restated Agreement of Limited Partnership,
all as of the 1st day of October, 2001.
GENERAL PARTNER
XXXXXXXX PROPERTIES I, INC.
By: /s/ Xxxxxx X. August
------------------------------------------
Xxxxxx X. August
President
LIMITED PARTNERS
Xxxxxx X. August
0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxx X. August
---------------------------------
Xxxxxx X. August
Xxxxxxx X. Xxxxxxxx, Xx.
0000 Xx. Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
Xxxxxx X. XxXxxx
0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxx X. XxXxxx
---------------------------------
Xxxxxx X. XxXxxx
Xxxxxxx X. Xxxxxxxx
0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
S-1
Xxxxxxxx Credit Shelter Trust
0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxx X. XxXxxx
---------------------------------
Xxxxxx X. XxXxxx
Trustee
Xxxxxxxx Properties Trust
0000 X. Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxx X. August
---------------------------------
Xxxxxx X. August
President and Chief Executive
Officer
Xxxxx X. Xxxxxxxx
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
By:
---------------------------------
Xxxxx X. Xxxxxxxx
BT Xxxx Xxxxx Exchange Fund, L.P.
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
By:
---------------------------------
Its General Partner
By:
--------------------------
Name:
--------------------------
Title:
-------------------------
Xxxxx X. Xxxxxxxxxxx, Xx.
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
By: /s/ Xxxxx X. Xxxxxxxxxxx, Xx.
---------------------------------
Xxxxx X. Xxxxxxxxxxx, Xx.
S-2
Xxxxxxx X. Xxxxx
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
Fieldstone Enterprises L.P.
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Its General Partner
By:
--------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------
Title: General Partner
-------------------------
Xxxxxx X. Xxxxxxxx
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
The F.M. (Xxxxx) Xxxxxxxx Trust
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
By:
---------------------------------
Name:
---------------------------------
Title:
--------------------------------
Newport National Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
By:
---------------------------------
Name:
---------------------------------
Title:
--------------------------------
S-3
Xxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
By:
---------------------------------
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
By:
---------------------------------
Xxxxxxx X. Xxxxxxxx
Xxxxxxx Investment Company, L.P.
000 Xxxxxxx Xxxxx, Xxxxx 0
Xxxxxxx Xxxxx, XX 00000
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------
Title: General Partner
-------------------------
D. Xxxx Xxxxxx
0000 XxxXxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
By: /s/ D. Xxxx Xxxxxx
---------------------------------
D. Xxxx Xxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx Xxxxxxx
Trust
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
---------------------------------
Title: Trustee
--------------------------------
S-4
Xxxxxxx X. Xxxxxxxx
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
By:
---------------------------------
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx.
Xxxxx, XX 00000
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
Xxxxxxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx.
Xxxxx, XX 00000
By: /s/ Xxxxxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxxxxx X. Xxxxxx
Brandywine Operating Partnership, L.P.
---------------------------------
---------------------------------
By: Brandywine Realty Trust
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: President & CEO
---------------------------
S-5
SERIES B LIMITED PARTNERS
Belair Real Estate Corporation
c/o Xxxxx Xxxxx Management
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
Argosy Realty Corporation
c/o Xxxxx Xxxxx Management
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
Belmar Realty Corporation
c/o Xxxxx Xxxxx Management
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
SERIES C LIMITED PARTNERS
Belcrest Realty Corporation
c/o Xxxxx Xxxxx Management
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
S-6
Belair Real Estate Corporation
c/o Xxxxx Xxxxx Management
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------
Title: Vice President
---------------------------
SERIES D LIMITED PARTNERS
Xxxxxxxx Properties Trust
0000 X. Xxxxxxxxx Xxxxxxx,
Xxxxx 000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxx X. August
----------------------------
Xxxxxx X. August
President and CEO
SERIES E LIMITED PARTNERS
Brandywine Operating
Partnership, L.P.
---------------------------------
---------------------------------
By: Brandywine Realty Trust
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------
Title: President & CEO
----------------------
S-7
