Exhibit 10.1.1
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMERICAN REAL ESTATE INVESTMENT, L. P.
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMERICAN REAL ESTATE INVESTMENT, L. P.
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of
the 10th day of November by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, the parties hereto desire to organize a limited partnership
under the Revised Uniform Limited Partnership Act of the State of Delaware;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
ARTICLE I
Definitions; Etc.
1.1 Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings set forth below:
"Accountants" shall mean the firm or firms of independent certified
public accountants selected by the General Partner on behalf of the Partnership
to audit the books and records of the Partnership and to prepare statements and
reports in connection therewith.
"Acquisition Cost" shall have the meaning set forth in Section
4.7(b) hereof.
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"Act" shall mean the Revised Uniform Limited Partnership Act as
enacted in the State of Delaware, and as the same may hereafter be amended from
time to time.
"Additional Interests" shall have the meaning set forth in Section
9.3 hereof.
"Additional Partner" shall have the meaning set forth in Section
9.3 hereof.
"Adjustment Date" shall have the meaning set forth in Section 4.3(b)
hereof.
"Administrative Expenses" shall mean (i) all administrative and
operating costs and expenses incurred by the Partnership, including, without
limitation, organizational expenses, (ii) those administrative costs and
expenses of the General Partner, including salaries paid to officers of the
General Partner, and accounting and legal expenses undertaken by the General
Partner on behalf or for the benefit of the Partnership, and (iii) to the extent
not included in clause (ii) above, REIT Expenses.
"Affiliate" shall mean, with respect to any Partner (or as to any
other person the affiliates of whom are relevant for purposes of any of the
provisions of this Agreement), (i) any member of the Immediate Family of such
Partner; (ii) any trustee or beneficiary of a Partner; (iii) any legal
representative, successor, or assignee of any Person referred to in the
preceding clauses (i) and (ii); (iv) any trustee or trust for the benefit of any
Person referred to in the preceding clauses (i) through (iii);
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or (v) any Entity which directly or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, any
Person referred to in the preceding clauses (i) through (iv).
"Affiliate Financing" means financing or refinancing obtained from a
Partner or an Affiliate of a Partner by the Partnership.
"Agreement" shall mean this Agreement of Limited Partnership, as
originally executed and as amended, modified, supplemented or restated from time
to time, as the context requires.
"Bankruptcy" shall mean, with respect to any Partner, (i) the
commencement by such Partner of any proceeding seeking relief under any
provision or chapter of the federal Bankruptcy Code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Partner is insolvent or bankrupt; (iii) the entry of an
order for relief under the federal Bankruptcy Code with respect to such Partner,
(iv) the filing of any such petition or the commencement of any such case or
proceeding against such Partner, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing, (v) the filing of an answer by such Partner admitting the allegations of
any such petition, (vi) the appointment of a trustee, receiver or custodian for
all or substantially all of the assets of such Partner unless such appointment
is vacated or dismissed
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within ninety (90) days from the date of such appointment but not less than five
(5) days before the proposed sale of any assets of such Partner, (vii) the
insolvency of such Partner or the execution by such Partner of a general
assignment for the benefit of creditors, (viii) the failure of such Partner to
pay its debts as they mature, (ix) the levy, attachment, execution or other
seizure of substantially all of the assets of such Partner where such seizure is
not discharged within thirty (30) days thereafter, or (x) the admission by such
Partner in writing of its inability to pay its debts as they mature or that it
is generally not paying its debts as they become due.
"Beneficially Own" shall mean the ownership of Shares by a Person
who would be treated as an owner of such Shares either directly or
constructively through the application of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code.
"Capital Contribution" shall mean, with respect to
any Partner, the amount of money and the initial Gross Asset Value of any
property other than money contributed to the Partnership with respect to the
Partnership Interest held by such Partner (net of liabilities to which such
property is subject).
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State, as it may be amended from time to time in accordance with the terms of
this Agreement and the Act.
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"Closing Price" on any date shall mean the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the American Stock Exchange or, if the Shares
are not listed or admitted to trading on the American Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Shares are listed or admitted to trading or, if the Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers,Inc. Automated Quotations System or, if such system is no longer in use,
the principal other automated quotations system that may then be in use or, if
the Shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Shares as such person is selected from time to time by the Board of
Directors of the General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Completion of the Offering" shall mean the closing of the sale of
Shares in the Offering.
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"Computation Date" shall have the meaning set forth in Section 11.5
hereof.
"Consent of the Limited Partners" means the written consent of a
Majority-In-Interest of the Limited Partners, which consent shall be obtained
prior to the taking of any action for which it is required by this Agreement and
may be given or withheld by a Majority-In-Interest of the Limited Partners,
unless otherwise expressly provided herein, in their sole and absolute
discretion.
"Contributed Funds" shall have the meaning set forth in Section
4.3(b) hereof.
"Contributed Property" shall have the meaning set forth in Section
4.7(b) hereof.
"Contributed Limited Partner Assets" shall mean all right, title and
interest of the Limited Partners in and to the partnership interests, together
with assignments of such rights and other agreements as may relate to such
interests, as more particularly described in the Contribution Agreement.
"Contribution Agreement" shall mean and refer to the agreement
described in Section 4.2 hereof.
"Contribution Date" shall have the meaning set forth in Section
9.3(a) hereof.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership, or
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otherwise to select, or have the power to remove and then select, a majority of
those persons exercising governing authority over an Entity. In the case of a
limited partnership, the sole general partner, all of the general partners to
the extent each has equal management control and authority, or the managing
general partner or managing general partners thereof shall be deemed to have
control of such partnership and, in the case of a trust, any trustee thereof or
any Person having the right to select any such trustee shall be deemed to have
control of such trust.
"Conversion Exercise Notice" shall have the meaning set forth in
Section 11.2 hereof.
"Conversion Right" shall have the meaning set forth in Section 11.1
hereof.
"Current Per Share Market Price" on any date shall mean the average
of the Closing Price for the thirty (30) consecutive Trading Days ending on such
date.
"Deemed Partnership Interest Value" as of any date, shall mean with
respect to a Partner, the Deemed Value of the Partnership (as of the day
preceding such date) multiplied by such Partner's Percentage Interest.
"Deemed Value of the Partnership" as of any date, shall mean and be
equal to the quotient of (i) the Share Value as of the Trading Day immediately
preceding such date divided by (ii) the Percentage Interest of the General
Partner on the Trading Day immediately preceding such date.
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"Depreciation" shall mean for each Partnership Fiscal Year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable under the Code with respect to an asset for such
year or other period, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such
year or other period, Depreciation shall be an amount which bears the same ratio
to such beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis; provided, however, that if the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, trust, business trust, cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time (or any corresponding provisions of
succeeding laws).
"Exercise Notice" shall have the meaning set forth in Section 11.2
hereof.
"Exercising Partners" shall have the meaning set forth in Section
11.2 hereof.
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"GAAP" shall mean generally accepted accounting principles
consistently applied.
"General Partner" shall mean American Real Estate Investment
Corporation, a Delaware corporation, its duly admitted successors and assigns
and any other Person who is a general partner of the Partnership at the time of
reference thereto.
"General Partner Capital Contribution" shall have the meaning set
forth in Section 4.1 hereof.
"General Partner's Preference Amount" for a Partnership Fiscal Year
shall mean an amount equal to the product of (a) .8 and (b) the number of Shares
outstanding as of the end of such Partnership Fiscal Year.
"Gross Asset Value" shall have the meaning set forth in Section
4.7(b) hereof.
"Gross Income" means the income of the Partnership determined
pursuant to Section 61 of the Code before deduction of items of expense or
deduction.
"Xxxx Xxxxx Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Immediate Family" shall mean, with respect to any Person, such
Person's spouse, parents, parents-in-law, descendants by blood or adoption,
nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and
children-in-law.
"Incentive Option" means an option to purchase Shares granted under
the Stock Incentive Plan.
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"Incentive Option Agreement" means the form or forms of Incentive
Option Agreement to be used under the Stock Incentive Plan.
"Initial Offering Price Per Share" means the price at which the
Shares were sold to the public in the Offering.
"Lien" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, restrictions, pledges, options, rights of
first offer or first refusal and any other rights or interests of others of any
kind or nature, actual or contingent, or other similar encumbrances of any
nature whatsoever.
"Limited Partner Allocation Catch-Up Amount" shall mean the amount
determined for X pursuant to the following formula:
X = A (B + X) - C
Where A = the aggregate Percentage Interests of the Limited
Partners as of the end of the Fiscal Year;
B = the sum of (a) the aggregate amount of Profits allocated to
all of the Partners pursuant to clauses (1), (4) and (5) of Section 6.1(b) for
all prior Partnership Fiscal Years and (b) the amount of Profits allocated to
the General Partner for the current Partnership Fiscal Year pursuant to clause
(1) of Section 6.1(b); and
C = the aggregate amount of Profits allocated to the Limited
Partners pursuant to clauses (4) and (5) of Section 6.1(b) for all prior
Partnership Fiscal Years.
"Limited Partner Distribution Catch-Up Amount" shall mean the amount
determined for X pursuant to the following formula:
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X = A (B + X) - C
Where A = the aggregate Percentage Interests of the Limited
Partners as of the end of the Fiscal Year;
B = the sum of (a) the aggregate amount distributed to all of
the Partners pursuant to Section 6.2(b) for all prior Partnership Fiscal Years
and (b) the amount distributed to the General Partner for the current
Partnership Fiscal Year pursuant to clause (1) of Section 6.2(b); and
C = the aggregate amount distributed to the Limited Partners
pursuant to clauses (2) and (3) of Section 6.2(b) for all prior Partnership
Fiscal Years.
"Limited Partners" shall mean those Persons listed under the heading
"Limited Partners" on the signature page hereto who have executed (in person or
pursuant to power of attorney) this Agreement in their respective capacities as
limited partners of the Partnership, their permitted successors or assigns as a
limited partner hereof, or any Person who, at the time of reference thereto, is
a limited partner of the Partnership.
"Liquidating Trustee" shall mean such individual or Entity as is
selected as the Liquidating Trustee hereunder by the General Partner, which
individual or Entity may include the General Partner or an Affiliate of the
General Partner, provided such Liquidating Trustee agrees in writing to be bound
by the terms of this Agreement. The Liquidating Trustee shall be empowered to
give and receive notices, reports and payments in connection with the
dissolution, liquidation and/or winding-up of the Partnership and shall hold and
exercise such other rights and powers as are necessary or required to permit all
parties to deal with the Liquidating Trustee in connection with the dissolution,
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liquidation and/or winding-up of the Partnership.
"Losses" shall have the meaning set forth in Section 6.1 hereof.
"Major Decisions" shall have the meaning set forth in Section 7.3
hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
Partner(s) who hold in the aggregate more than fifty percent (50%) of the
Percentage Interests then allocable to and held by the Limited Partners, as a
class.
"Minimum Gain" shall have the meaning set forth in Section 6.l(d)(l)
hereof.
"Minimum Gain Chargeback" shall have the meaning
set forth in Section 6.1(d)(1) hereof.
"Net Financing Proceeds" shall mean the cash proceeds received by
the Partnership in connection with any borrowing by or on behalf of the
Partnership (whether or not secured), after deduction of all costs and expenses
incurred by the Partnership in connection with such borrowing, and after
deduction of that portion of such proceeds used to repay any other indebtedness
of the Partnership, or any interest or premium thereon.
"Net Operating Cash Flow" shall mean, with respect to any fiscal
period of the Partnership, the excess, if any, of "Receipts" over
"Expenditures". For purposes hereof, the term "Receipts" means the sum of all
cash receipts of the Partnership from all sources for such period, including Net
Sale Proceeds and Net Financing Proceeds but excluding Capital Contributions,
and
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any amounts held as reserves as of the last day of such period which the
General Partner reasonably deems to be in excess of necessary reserves as
determined below. The term "Expenditures" means the sum of (a) all cash expenses
of the Partnership for such period, (b) the amount of all payments of principal
and interest on account of any indebtedness of the Partnership, or amounts due
on such indebtedness during such period, and (c) such additional cash reserves
as of the last day of such period as the General Partner deems necessary for any
capital or operating expenditure permitted hereunder.
"Net Sale Proceeds" means the cash proceeds received by the
Partnership in connection with a sale of any asset by or on behalf of the
Partnership after deduction of any costs or expenses incurred by the
Partnership, or payable specifically out of the proceeds of such sale
(including, without limitation, any repayment of any indebtedness required to be
repaid as a result of such sale or which the General Partner elects to repay out
of the proceeds of such sale, together with accrued interest and premium, if
any, thereon and any sales commissions or other costs and expenses due and
payable to any Person in connection with a sale).
"Nonrecourse Liabilities" shall have the meaning set forth in
Section 6.l(d)(l) hereof.
"Offered Interests" shall mean the Partnership Interests of the
Exercising Partners identified in an Exercise Notice which, pursuant to the
exercise of Conversion Rights, can be acquired by the General Partner under the
terms hereof.
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"Offering" shall have the meaning set forth in the Registration
Statement.
"Ownership Limit" shall have the meaning set forth in Section 11.4
hereof.
"Partner Nonrecourse Debt" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning set
forth in Section 6.1(d)(2) hereof.
"Partner Nonrecourse Deduction" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partners" shall mean the General Partner and the Limited Partners,
their duly admitted successors or assigns or any Person who is a partner of the
Partnership at the time of reference thereto.
"Partnership" shall mean the limited partnership hereby constituted,
as such limited partnership may from time to time be constituted.
"Partnership Fiscal Year" shall mean the calendar year.
"Partnership Interest" shall mean with respect to a Partner, such
Partner's right to the allocations (and each item thereof), specified in Section
6.1 hereof and all distributions from the Partnership, and its rights of
management, consent, approval, or participation, if any, as provided in this
Agreement.
"Partnership Minimum Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations.
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"Percentage Interest" shall mean, with respect to any Partner, the
percentage ownership interest of such Partner in the Partnership. The initial
Percentage Interest of each Partner is as set forth opposite its respective name
on attached Exhibit A.
"Person" shall mean any individual or Entity.
"Pledge" means a pledge or grant of a mortgage,
security interest, lien or other encumbrance in respect of a Partnership
Interest.
"Profits" shall have the meaning set forth in Section 6.1 hereof.
"Property" shall mean any real estate in which the Partnership,
directly or indirectly, acquires ownership of a fee or leasehold interest.
"Purchase Price" shall have the meaning set forth in Section 11.5.
"Registration Statement" shall mean the Registration Statement No.
33-63120 (including the prospectus contained therein) heretofore filed by the
General Partner with the SEC, and any amendments at any time hereafter made
thereto (other than post-effective amendments) pursuant to which the General
Partner proposes to offer and sell certain of its Shares.
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations)
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"REIT" shall mean a real estate investment trust as defined in
Section 856 of the Code.
"REIT Expenses" shall mean (i) costs and expenses relating to the
formation and continuity of existence of the General Partner and its
subsidiaries (which subsidiaries shall, for purposes of this definition be
included within the definition of General Partner), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable to
any director of the General Partner or such subsidiaries, (ii) costs and
expenses relating to any offer or registration of securities by the General
Partner and all statements, reports, fees and expenses incidental thereto,
including underwriting discounts and selling commissions applicable to any such
offer of securities, (iii) costs and expenses associated with the preparation
and filing of any periodic reports by the General Partner under federal, state
or local laws or regulations, including filings with the SEC and any stock
exchanges on which the Shares are listed, (iv) costs and expenses associated
with compliance by the General Partner with laws, rules and regulations
promulgated by any regulatory body, including the SEC, and (v) all other
operating or administrative costs of the General Partner incurred in the
ordinary course of its business on behalf of the Partnership.
"REIT Requirements" shall have the meaning set forth in Section
7.11 hereof.
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"Required Funds" shall have the meaning set forth in Section 4.3
hereof.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Shares" shall mean the shares of Common Stock, par value $.001 per
share, of the General Partner.
"Share Value" as of any date shall mean the total number of Shares
issued and outstanding at the close of business on such date (and excluding any
treasury shares) multiplied by the Current Per Share Market Price on such date.
"Stock Incentive Plan" means the General Partner's 1993 Omnibus
Incentive Plan.
"Substituted Limited Partner" shall have the meaning set forth in
Section 9.2 hereof.
"Third Party": or "Third Parties" means a Person or Persons who is
or are neither a Partner or Partners nor an Affiliate or Affiliates of a Partner
or Partners.
"Third Party Financing" means financing or refinancing obtained from
a Third Party by the Partnership.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Shares are listed or admitted to trading is
open for the transaction of business or, if the Shares are not listed or
admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a
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Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Transfer" means any assignment, sale, transfer, conveyance, Pledge,
grant of an option or proxy, or other disposition or act of alienation, whether
voluntary or involuntary, or by operation of law.
"Underwriting Agreement" shall mean that certain Underwriting
Agreement among the General Partner and the underwriters named therein, in
substantially the form attached hereto as Exhibit D.
1.2 Exhibit, Etc. References to "Exhibit" are, unless otherwise specified,
to one of the Exhibits attached to this Agreement, and references to an
"Article" or a "Section" are, unless otherwise specified, to one of the Articles
or Sections of this Agreement. Each Exhibit attached hereto and referred to
herein is hereby incorporated herein by reference.
ARTICLE II
Organization
2.1 Formation. The parties hereto do hereby form a limited
partnership pursuant to the provisions of the Act, and all other pertinent laws
of the State of Delaware, for the purposes and upon the terms and conditions
hereinafter set forth. The Partners agree that the rights and liabilities of the
Partners
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shall be as provided in the Act except as otherwise herein expressly provided.
Promptly upon the execution and delivery hereof, the General Partner shall cause
a Certificate of Limited Partnership and such other notice, instrument,
document, or certificate as may be required by applicable law, and which may be
necessary to enable the Partnership to conduct its business, and to own its
properties, under the Partnership name, to be filed or recorded in all
appropriate public offices.
2.2 Name. The business of the Partnership shall be conducted
under the name of American Real Estate Investment, L. P. or such other name
as the General Partner may select, and all transactions of the Partnership,
to the extent permitted by applicable law, shall be carried on and completed
in such name.
2.3 Character of the Business. The purpose of the Partnership shall
be to acquire, hold, own, develop, redevelop, construct, improve, maintain,
operate, sell, lease, transfer, encumber, convey, exchange, and otherwise
dispose of or deal with Properties; to acquire, hold, own, develop, redevelop,
construct, improve, maintain, operate, sell, lease, transfer, encumber, convey,
exchange, and otherwise dispose of or deal with real and personal property of
all kinds; to undertake such other activities as may be necessary, advisable,
desirable or convenient to the business of the Partnership, and to engage in
such other ancillary activities as shall be necessary or desirable to effectuate
the foregoing purposes. The Partnership shall have all powers necessary or
desirable to accomplish the purposes enumerated. In
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connection with the foregoing, but subject to all of the terms, covenants,
conditions and limitations contained in this Agreement and any other agreement
entered into by the Partnership, the Partnership shall have full power and
authority to enter into, perform, and carry out contracts of any kind, to borrow
or lend money and to issue evidences of indebtedness, whether or not secured by
mortgage, trust deed, pledge or other lien, and, directly or indirectly, to
acquire, hold, own, develop, redevelop, construct, improve, maintain, operate,
sell, lease, transfer, encumber, convey, exchange and otherwise dispose of or
deal with additional Properties necessary or useful in connection with its
business.
2.4 Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be at 0000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or such other location as shall be
selected from time to time by the General Partner in its sole discretion.
2.5 Registered Agent and Registered Office. The Registered Agent of
the Partnership shall be Xxxxxxxx-Xxxx Corporation System, Inc. or such other
Person as the General Partner may select in its sole discretion. The Registered
Office of the Partnership shall be 00 Xxxxxxxxxx Xxxxxx, Xxxxx X-000, Xxxxx,
Xxxxxxxx 00000 or such other location as the General Partner may select in its
sole and absolute discretion.
2.6 Power of Attorney. Each Limited Partner constitutes and appoints
the General Partner and authorized
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officers and attorneys-in-fact of the General Partner, and each of those acting
singly, in each case with full power of substitution, its true and lawful agent
and attorney-in-fact, with full power and authority in its name, place and stead
to:
(1) execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices (a) all certificates, documents
and other instruments (including, without limitation, this
Agreement and Certificate and all amendments or restatements
thereof) that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue the
existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners
have limited liability) in the State of Delaware and in all
other jurisdictions in which the Partnership may conduct
business or own property; (b) all instruments that the General
Partner deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this
Agreement in accordance with its terms; (c) all conveyances
and other instruments or documents that the General Partner
deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this
Agreement, including, without
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limitation, a certificate of cancellation; (d) all instruments
relating to the admission, withdrawal, removal or substitution
of any Partner and (e) all certificates, documents and other
instruments relating to the termination of the rights,
preferences and privileges of Partnership Interests; and
(2) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion
of the General Partner, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner, to
effectuate the terms or intent of this Agreement.
ARTICLE III
Term
3.1 Commencement. The Partnership shall commence business as a
limited partnership upon the filing of the
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Certificate of Limited Partnership with the Secretary of State of the State of
Delaware.
3.2 Dissolution. The Partnership shall continue until dissolved upon
the occurrence of the earliest of the following events:
(a) The dissolution, termination, retirement or Bankruptcy of the
General Partner unless the Partnership is continued as provided in Section 9.1
hereof;
(b) The election to dissolve the Partnership made in writing by the
General Partner with the Consent of the Limited Partners;
(c) The sale or other disposition of all or substantially all the
assets of the Partnership; or
(d) Dissolution required by operation of law.
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contribution. Concurrently herewith, the
General Partner shall contribute to the Partnership (the "General Partner
Capital Contribution") as its initial contribution to the capital the amount of
Nine-Million-Eight Hundred-Ninety-Thousand dollars ($9,890,000) by deposit of
its check in a Partnership bank account.
4.2 Limited Partner Capital Contributions. Concurrently herewith,
each Limited Partner shall contribute, or cause to be
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contributed as its initial Capital Contribution to the capital of the
Partnership, the Contributed Limited Partner Assets as set forth on attached
Exhibit B, in accordance with and subject to the terms and conditions of a
certain Contribution Agreement. The agreed-to gross fair market value of each of
the Contributed Limited Partner Assets, which shall be their initial Gross Asset
Value, is as set forth opposite the contributing Limited Partner's name on
attached Exhibit B.
4.3 Additional Funds.
(a) The Partnership may obtain funds ("Required Funds") (i) which it
considers necessary to meet the needs and obligations and requirements of the
Partnership, or to maintain adequate working capital or to repay Partnership
indebtedness, or to carry out the Partnership's purposes, from the proceeds of
Third Party Financing or Affiliate Financing, in each case pursuant to such
terms, provisions, and conditions and in such manner (including the engagement
of brokers and/or investment bankers to assist in providing such financing) and
amounts as the General Partner shall determine in its sole discretion or (ii)
from the exercise of the option granted in Section 4 of the Underwriting
Agreement or (iii) from the exercise of Incentive Options pursuant to Section
4.4 hereof. Any and all funds required or expended, directly or indirectly, by
the Partnership for capital expenditures may be obtained or replenished through
Partnership borrowings. Any Third Party Financing or Affiliate Financing
obtained by the General Partner, on behalf of the Partnership may be convertible
in whole
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or in part into Additional Interests (to be issued in accordance with
Section 9.3 hereof), may be unsecured, may be secured by a mortgage or
mortgages, or deed(s) of trust and/or assignments on or in respect of all or any
portion of the assets of the Partnership or any other security made available by
the Partnership, may include or be obtained through the public or private
placement of debt and/or other instruments, domestic and foreign, and may
include the provision for the option to acquire Additional Interests (to be
issued in accordance with Section 9.3 hereof), and may include the acquisition
of or provision for interest rate swaps, credit enhancers, and/or other
transactions or items in respect of such Third Party Financing or Affiliate
Financing; provided, however, that in no event may the Partnership obtain any
Third Party Financing that is recourse to any Partner or any Affiliate, partner,
shareholder, beneficiary, principal, officer, or director of any Partner without
the consent of the affected Partner and any other Person or Persons to whom such
recourse may be had.
(b) To the extent the Partnership does not borrow all of the
Required Funds, the General Partner may (but is not required to) contribute to
the Partnership as an additional Capital Contribution the amount of the Required
Funds ("Contributed Funds") (hereinafter, each date on which the General Partner
so contributes Contributed Funds pursuant to this paragraph (b) is referred to
as an "Adjustment Date"). In the event the General Partner advances Required
Funds to the Part-
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nership as Contributed Funds pursuant to this paragraph (b), then (x) the
Partnership shall assume and pay (or reflect on its books as additional
Contributed Funds) the costs, fees and expenses (including any applicable
underwriting discounts and selling commissions) incurred by the General Partner
in connection with raising such Contributed Funds through a public offering of
its securities or otherwise and (y) the Percentage Interests of the Partners
shall be adjusted as follows:
(i) Effective on each Adjustment Date, the Percentage Interest
of each Limited Partner shall be adjusted such that the Percentage
Interest of the Limited Partner shall be equal to a fraction, the
numerator of which is equal to the Deemed Partnership Interest Value
of such Limited Partner (computed as of the Trading Day immediately
preceding the Adjustment Date) and the denominator of which is equal
to the sum of (i) the Deemed Value of the Partnership (computed as
of the Trading Day immediately preceding the Adjustment Date) and
(ii) the amount of Contributed Funds contributed by the General
Partner on such Adjustment Date. The General Partner shall promptly
give each Limited Partner written notice of its Percentage Interest,
as adjusted.
(ii) Effective on each Adjustment Date, the Percentage
Interest of the General Partner shall be adjusted such that the
Percentage Interest of the
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General Partner shall be equal to a fraction, the numerator of which
is equal to the sum of (i) the Deemed Partnership Interest Value of
the General Partner (computed as of the Trading Day immediately
preceding the Adjustment Date) and (ii) the amount of the
Contributed Funds contributed by the General Partner on such
Adjustment Date and the denominator of which is equal to the sum of
(iii) the Deemed Value of the Partnership (computed as of the
Trading Day immediately preceding the Adjustment Date) and (iv) the
amount of the Contributed Funds contributed by the General Partner.
4.4 Stock Incentive Plan. If at any time or from time to time
Incentive Options granted in connection with the General Partner's Stock
Incentive Plan are exercised in accordance with the terms of the Incentive
Option Agreement, the General Partner shall, as soon as practicable after such
exercise, contribute to the capital of the Partnership an amount equal to the
exercise price paid to the General Partner by such exercising party in
connection with the exercise of the Incentive Option.
4.5 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 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
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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 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.
Notwithstanding the foregoing, the stockholders of the General Partner shall not
be considered creditors or third parties for the purposes of this Agreement but
shall be considered third party beneficiaries with the right to enforce this
Agreement.
4.6 No Interest; No Return. No Partner shall be entitled to interest
on its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to withdraw any part
of its Capital Account or to demand or receive the return of its Capital
Contribution from the Partnership.
4.7 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital
account ("Capital Account") for each Partner, including a substitute partner who
shall pursuant to the provisions hereof acquire a Partnership Interest, which
Capital Account shall be:
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(1) credited with the amount of cash; the initial Gross Asset Value
(net of liabilities secured by such contributed property that the
Partnership assumes or takes subject to) of any other property
contributed by such Partner to the capital of the Partnership; in
the case of the General Partner, (i) the amount, if any, of Required
Funds contributed to the Partnership from the exercise of the option
contained in Section 4 of the Underwriting Agreement, and (ii) upon
exercise of an Incentive Option, the amount described in Section
4.4; such Partner's distributive share of Profits; and any other
items in the nature of income or gain that are allocated to such
Partner pursuant to Section 6.1 hereof, but excluding tax items
described in Regulations Section 1.704- l(b)(4)(i); and
(2) debited with the amount of cash; the Gross Asset Value (net of
liabilities secured by such distributed property that such Partner
assumes or takes subject to) of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement; such
Partner's distributive share of Losses; and any other items in the
nature of expenses or losses that are allocated to such Partner
pursuant to Section 6.1 hereof, but excluding tax items described in
Regulations Section 1.704-l(b)(4)(i).
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In the event that a Partner's Partnership Interest or portion
thereof is transferred within the meaning of Regulations Section
1.704-l(b)(2)(iv)(f), the transferee shall succeed to the Capital Account of the
transferor to the extent that it relates to the Partnership Interest or portion
thereof so transferred.
In the event that the Gross Asset Values of Partnership assets are
adjusted as described below in Section 4.7(b) hereof, the Capital Accounts of
the Partners shall be adjusted to reflect the aggregate net adjustments as if
the Partnership sold all of its property for their fair market values and
recognized gain or loss for federal income tax purposes equal to the amount of
such aggregate net adjustment.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Section 1.704-l(b) of the Regulations, and shall be interpreted and applied as
provided in the Regulations. In the event that the General Partner reasonably
determines that the manner in which the Capital Accounts, or any debits or
credits thereto, are maintained or computed under the Regulations should be
further amended, the General Partner shall be authorized, without the approval,
consent or act of any of the Partners, to amend this Agreement, provided that
such amendment shall not directly and adversely affect the Partnership Interest
of a Partner, including without limitation, the right to receive distributions
allocable thereto, without the written concurrence of such Partner. In
determining whether this Agreement should be
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amended to reflect the foregoing, the General Partner shall be entitled to rely
on the advice of the Partnership Accountants and/or counsel to the Partnership.
(b) The term "Gross Asset Value" or "Gross Asset Values" means, with
respect to any asset of the Partnership, such asset's adjusted basis for federal
income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be (i) in the case of any asset described
on attached Exhibit B, the gross fair market value ascribed thereto on
such Exhibit B and (ii) in the case of any other asset hereafter
contributed by a Partner, the gross fair market value of such asset as
reasonably determined by the General Partner;
(b) the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, immediately prior to the following
events:
(i) a Capital Contribution (other than a de minimis Capital
Contribution) to the Partnership by a new or existing Partner as
consideration for a Partnership Interest, including in connection
with the exercise of an Incentive Option;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration
for the redemption of a Partnership Interest;
(iii) the liquidation of the Partnership within the meaning
of Section 1.704-l(b)(2)(ii)(g) of the Regulations; and
(iv) the exercise by a Limited Partner of its Conversion
Rights.
(c) the Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross fair market values of such assets as reasonably
determined by the General Partner as of the date of distribution.
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The agreed-to gross fair market value of each of the Contributed Limited Partner
Assets shall be its initial Gross Asset Value as set forth on attached Exhibit
B. The gross fair market value of any property contributed by the General
Partner to the Partnership ("Contributed Property"), other than money and other
than property contributed to the Partnership by the General Partner as its
initial contribution described in Section 4.1 above, shall be the Acquisition
Cost of such Contributed Property. For purposes hereof, the Acquisition Cost of
Contributed Property shall be (i) in the case of Contributed Property acquired
by the General Partner in exchange for Shares, the Current Per Share Market
Price as of the closing date on which the General Partner acquired such
Contributed Property multiplied by the number of Shares issued in the
acquisition or (ii) in the case of Contributed Property acquired by the General
Partner for consideration other than Shares, the amount of such consideration
plus, in either case, any costs and expenses incurred by the General Partner in
connection with such acquisition or contribution; provided, however, that in the
event the Acquisition Cost of Contributed Property is financed by any borrowings
by the General Partner, the Partnership shall assume any such obligations of the
General Partner so that the General Partner shall be released therefrom
concurrently with the contributions of such property to the Partnership or, if
impossible, shall obligate itself to the General Partner in an amount and on
terms equal to such indebtedness, and the Acquisition Cost shall be reduced
appropriately.
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At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Profits and Losses. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts as
described in Section 4.7(a) above.
4.8 No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership; or (ii) issuance or sale of any
Partnership Interests.
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ARTICLE V
Conditions/Representations and Warranties
5.1 General Partner Conditions. The obligation of the General
Partner to consummate the transactions contemplated herein is subject to
fulfillment of all of the following conditions on or prior to the date hereof:
(a) Each Limited Partner shall transfer and assign all of its right,
title and interest in and to the Contributed Limited Partner Assets to the
Partnership free and clear of all Liens other than those Liens described on
Exhibit B and, in connection therewith, shall execute and deliver to the
Partnership such instruments as may be necessary or desirable to effectuate the
transfer of the Contributed Limited Partner Assets to the Partnership;
(b) All consents, waivers, approvals and authorizations required for
the consummation of the transactions contemplated hereby shall have been
obtained, including, if required, approvals required under the Xxxx-Xxxxx Act;
(c) All necessary filings for any transfer taxes payable in respect
of the transfer to the Partnership of the Contributed Limited Partner Assets, or
resulting therefrom, shall have been prepared and payment of or provisions for
any amounts due shall have been made by the General Partner;
(d) All of the representations and warranties or the Limited
Partners shall be true and correct in all material
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respects as of the date hereof;
(e) The Registration Statement shall become effective under the
provisions of the Securities Act of 1933, as amended, and no stop order or other
administrative proceeding shall have been entered or instituted with respect
thereto as of the date hereof; and
(f) The Offering shall have been consummated in accordance with the
Underwriting Agreement.
5.2 Limited Partner Conditions. The obligation of the Limited
Partners to consummate the transactions contemplated herein is subject to
fulfillment of all of the following conditions on or prior to the date hereof:
(a) The General Partner shall have made the General Partner Capital
Contribution as provided in Section 4.1(a) hereof and, in connection therewith,
shall execute and deliver to the Partnership such instruments as may be
necessary or desirable.
(b) All consents, waivers, approvals and authorizations required for
the consummation of the transactions contemplated hereby shall have been
obtained, including, if required, approvals required under the Xxxx-Xxxxx Act;
(c) All necessary filings for any transfer taxes payable in respect
of the transfer to the Partnership of the Contributed Limited Partner Assets
shall have been prepared and payment of or provisions for any amounts due shall
have been made by the General Partner;
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(d) All of the representations and warranties of the General Partner
shall be true and correct in all material respects as of the date hereof;
(e) The Registration Statement shall become effective under the
provisions of the Securities Act of 1933, as amended, and no stop order or other
administrative proceeding shall have been entered or instituted with respect
thereto as of the date hereof; and
(f) The Offering shall have been consummated in accordance with the
Underwriting Agreement.
5.3 Representations and Warranties by the General Partner.
The General Partner represents and warrants to the Limited Partners
and to the Partnership that (i) it is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware; (ii) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action, including without limitation, that of its
directors and/or shareholder(s), as the case may be, as required, (iii) the
consummation of such transactions shall not result in a breach or violation of,
or a default under the General Partner's certificate of incorporation or
by-laws, any agreement by which the General Partner or any of its properties or
any of its directors and/or shareholders, as the case may be, is or are bound,
or any statute, regulation, order, or other law to which it or any of its
directors are bound and/or
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(iv) this Agreement is binding upon, and enforceable against the General Partner
in accordance with its terms; and (v) no consent, waiver approval or
authorization of, or filing, registration or qualification with, or notice to,
any governmental unit or any other person is required to be made, obtained or
given by the General Partner in connection with the execution, delivery and
performance of this Agreement other than consents, waivers, approvals or
authorizations which have been obtained prior to the date hereof.
5.4 Representations and Warranties by the Limited Partners. Each
Limited Partner severally represents and warrants to the General Partner and the
Partnership as follows:
(a) the consummation of the transactions contemplated by this
Agreement and the Contribution Agreement to be performed by the Limited Partner
will not result in a breach or violation of, or a default under, any agreement
by which such Limited Partner is bound, or any statute, regulation, order, or
other law to which the Limited Partner is subject, (ii) such Limited Partner is
neither a "foreign person" within the meaning of Section 1445(f) of the Code nor
a "foreign partner" within the meaning of Section 1446(e) of the Code, (iii) the
Limited Partner has received all authorization necessary to enter into and to
perform this Agreement and (iv) this Agreement and the Contribution Agreement
have been duly executed and delivered by and are binding upon, and enforceable
against, the Limited Partner in accordance with their respective terms; and no
consent, waiver approval or
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authorization of, or filing, registration or qualification with, or notice to,
any governmental unit or any other person is required to be made, obtained or
given by any of the Limited Partner in connection with the execution, delivery
and performance of this Agreement and the Contribution Agreement.
(b) there is no litigation or governmental, administrative or
arbitration proceeding or investigation pending, or, to the knowledge of the
Limited Partners, threatened, or any unsatisfied arbitration awards or judicial
orders against the Limited Partner and which affects any of the Contributed
Limited Partner Assets, or which might affect the ability of the Limited Partner
to perform its obligations under this Agreement, except as set forth in Exhibit
;
(c) no attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings are pending or, to the best of such Limited Partner's knowledge,
threatened against the Limited Partner nor are any of such proceedings
anticipated or contemplated by the Limited Partner;
(d) the Limited Partners will cooperate with the General Partner
after the date hereof in obtaining any initial licenses, approvals, permits and
certificates which become necessary after the date hereof for the Partnership to
commence the operation of the Contributed Limited Partner Properties and the
assets relating thereto.
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(e) Each Alpine Affiliate, of which such Limited Partner is a
partner, has good and marketable title in fee simple to the Property owned by
such Alpine Affiliate, free and clear of any liens, charges or encumbrances,
except liens referred to in the Registration Statement; the statements in the
Registration Statement relating to such Property are complete and accurate in
all material respects; to the knowledge of such Limited Partner, there exists no
defaults in respect to any leases or agreements of such Alpine Affiliate
relating to such property which default could be material to such Alpine
Affiliate and the consummation of the transactions described in the Prospectus
will not conflict with any such lease or agreement; such Property and the
business indicated thereof by such Alpine Affiliate comply in all material
respects with all applicable federal, state and local laws and regulations; and
there is no proceeding or action pending or, to the knowledge of such Limited
Partner, threatened in respect of such property or such Alpine Affiliate, except
such that would not have a material adverse effect on such Alpine Affiliate. Any
term used in this subsection not otherwise defined in this Agreement, shall be
as defined in the Registration Statement.
5.5 Survival of Representations and Warranties. The representations
and warranties made by the General Partner in paragraph 5.3 hereof shall survive
for twelve (12) months after the date hereof. The representations and warranties
made by the Limited Partners in Section 5.4 hereof shall survive for twelve
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(12) months after the date hereof.
5.6 Indemnification by the Limited Partners.
Subject to the provisions of paragraph 5.7 hereof, each Limited Partner,
severally, indemnifies and holds harmless the Partnership and the General
Partner against and from all liability, demands, claims, actions or causes of
action, assessments, losses, fines, penalties, costs, damages and expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses) sustained or incurred by the Partnership or the General Partner as a
result of or arising out of (i) any inaccuracy in a representation or warranty
made by such Limited Partner under this Agreement or the Contribution Agreement
or (ii) any liability of the General Partner or the Partnership arising under
the Underwriting Agreement arising from any inaccuracy in a representation or
warranty made by the Partnership therein.
5.7 Limitations on Representations and Warranties by the Limited
Partners. Notwithstanding anything to the contrary in this Agreement, the sole
recourse of the General Partner or the Partnership under this Article V shall be
against the Limited Partners' Partnership Interests, all right, title and
interest of the Limited Partners under this Agreement in and to the assets or
properties of the Partnership and in all Shares owned by the Limited Partners,
including Shares acquired upon exercise of Rights.
5.8 Acknowledgement by Each Partner. Except as otherwise provided
herein, each Partner hereby acknowledges that
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no representations as to potential profit, cash flows, or yield, if any, in
respect of the Partnership or any one or more or all of the Properties have been
made by any Partner or any employee or
representative or Affiliate of any Partner, and that projections and any other
information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute any representation or warranty, express or
implied.
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations.
(a) For the purpose of this Agreement, the terms "Profits" and
"Losses" mean, respectively, for each Partnership Fiscal Year or other period,
the Partnership's taxable income or loss for such Partnership Fiscal Year or
other period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses pursuant
to this Section 6.l(a) shall be added to such taxable income or loss;
-42-
(2) in lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Partnership Fiscal Year
or other period;
(3) any items that are specially allocated pursuant to Section
6.1(d) or 6.1(f) hereof shall not be taken into account in computing Profits or
Losses; and
(4) any expenditures of the Partnership described Section
705(a)(2)(B) of the Code (or treated as such under Regulation Section
704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or
Losses pursuant to this Section 6.1(a) shall be deducted from such taxable
income or loss.
(b) Except as otherwise provided in Section 6.1(d) hereof, the
Profits of the Partnership (and each item thereof) for each Partnership Fiscal
Year shall be allocated among the Partners as follows:
(1) First, to the General Partner, an amount of Profits up to
the General Partner's Preference Amount for such Partnership Fiscal year.
(2) Then, to the Partners in an amount equal to the excess of
(i) the aggregate amount of Losses allocated to the Partners pursuant to clause
(7) of this Section 6.1(b) for all prior Partnership Fiscal Years over (ii) the
aggregate amount of Profits allocated to the Partners pursuant to this clause
(2) of Section 6.1(b) for all prior Partnership Fiscal years (with respect to
each Partner, such amount being referred to herein as
-43-
its "Section 6.1(b)(2) Amount"), in proportion to their respective Section
6.1(b)(2) Amounts;
(3) Then, to the Partners in an amount equal to the excess of
(i) the aggregate amount of Losses allocated to the Partners pursuant to clause
(6) of this Section 6.1(b) for all prior Partnership Fiscal Years over (ii) the
aggregate amount of Profits allocated to the Partners pursuant to this clause
(3) of Section 6.1(b) for all prior Partnership Fiscal Years (with respect to
each Partner, such amount being referred to herein as its "Section 6.1(b)(3)
Amount"), in proportion to their respect Section 6.1(b)(3) Amounts;
(4) Then, to the Limited Partners in proportion to their
respective Percentage Interests, an amount of Profits up to the Limited Partner
Allocation Catch-Up Amount;
(5) Thereafter, to the Partners in proportion to their
respective Percentage Interests.
Except as otherwise provided in Section 6.1(d) hereof, the
Losses of the Partnership (and each item thereof) for each Partnership Fiscal
year shall be allocated among the Partners as follows:
(6) First, to the Partners in an amount up to the aggregate
positive balances in their Capital Accounts, in proportion to their respective
positive Capital Account balances;
(7) Thereafter, to the Partners in proportion to their
respective Percentage Interests.
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(c) For the purpose of Section 6.1(b) hereof, gain or loss resulting
from any disposition of Partnership property shall be computed by reference to
the Gross Asset Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property for federal income tax purposes differs from
its Gross Asset Value.
(d) Notwithstanding the foregoing provisions of this Section 6.1,
the following provisions shall apply:
(1) A Partner shall not receive an allocation of any Partnership
deduction that would result in total loss allocations attributable to
"Nonrecourse Liabilities" (as defined in Regulations Section 1.704-2(b)(3)) in
excess of such Partner's share of Minimum Gain (as determined under Regulations
Section 1.704-2(g)). The term "Minimum Gain" means an amount determined in
accordance with Regulations Section 1.704-2(d) by computing, with respect to
each Nonrecourse Liability of the Partnership, the amount of gain, if any, that
the Partnership would realize if it disposed of the property subject to such
liability for no consideration other than full satisfaction thereof, and by then
aggregating the amounts so computed. If there is a net decrease in Partnership
Minimum Gain for a Partnership Fiscal Year, in accordance with Regulations
Section 1.704-2(f) and the exceptions contained therein, the Partners shall be
allocated items of Partnership income and gain for such Partnership Fiscal Year
(and, if necessary, for subsequent Partnership Fiscal Years) equal to the
Partners' respective shares of the net decrease in Minimum
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Gain within the meaning of Regulations Section 1.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to this Section 6.l(d)(l) shall
be determined in accordance with Regulations Section 1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as defined in
Regulations Section 1.704- 2(i)) with respect to a "Partner Nonrecourse Debt"
(as defined in Regulations Section 1.704-2(b)(4)) shall be allocated to the
Partner or Partners who bear the economic risk of loss for such Partner
Nonrecourse Debt in accordance with Regulations Section 1.704-2(i)(1). Subject
to Section 6.1(d)(1) hereof, but notwithstanding any other provision of this
Agreement, in the event that there is a net decrease in Minimum Gain
attributable to a Partner Nonrecourse Debt (such Minimum Gain being hereinafter
referred to as "Partner Nonrecourse Debt Minimum Gain") for a Partnership Fiscal
Year, then after taking into account allocations pursuant to Section 6.1(d)(1)
hereof, but before any other allocations are made for such taxable year, and
subject to the exceptions set forth in Regulations Section 1.704- 2(i)(4), each
Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning
of such Partnership Fiscal Year shall be allocated items of income and gain for
such Partnership Fiscal Year (and, if necessary, for subsequent Partnership
Fiscal Years) equal to such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain as determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). The items to be allocated
pursuant to this Section
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6.1(d)(2) shall be determined in accordance with Regulations Section 1.704-2(i)
(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the purpose
of determining each Partner's share of excess nonrecourse liabilities of the
Partnership, and solely for such purpose, each Partner's interest in Partnership
profits is hereby specified to be such Partner's Percentage Interest.
(4) No Limited Partner shall be allocated any item of deduction or
loss of the Partnership if such allocation would cause such Limited Partner's
Capital Account to become negative by more than the sum of (i) any amount such
Limited Partner is obligated to restore upon liquidation of the Partnership,
plus (ii) such Limited Partner's share of the Partnership's Minimum Gain and
Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot
be allocated to a Limited Partner pursuant to this Section 6.1(d)(4) shall be
allocated to the General Partner. For this purpose, in determining the Capital
Account balance of such Limited Partner, the items described in Regulations
Section 1.704-l(b)(2)(ii)(d)(4), (5), and (6) shall be taken into account. In
the event that (A) any Limited Partner unexpectedly receives any adjustment,
allocation, or distribution described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or
distribution causes or increases a deficit balance (net of amounts which such
Limited Partner is obligated to restore or deemed obligated to restore under
Regulations Section 1.704- 2(g)(1) and 1.704-2(i)(5) and
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determined after taking into account any adjustments, allocations, or
distributions described in Regulations Sections 1.704- 1(b)(2)(ii)(d)(4), (5),
or (6) that, as of the end of the Partnership Fiscal Year, reasonably are
expected to be made to such Limited Partner) in such Limited Partner's Capital
Account as of the end of the Partnership Fiscal Year to which such adjustment,
allocation, or distribution relates, then items of Gross Income (consisting of a
pro rata portion of each item of Gross Income) for such Partnership Fiscal Year
and each subsequent Partnership Fiscal Year shall be allocated to such Limited
Partner until such deficit balance or increase in such deficit balance, as the
case may be, has been eliminated. In the event that this Section 6.1(d)(4) and
Section 6.l(d)(l) and/or (2) hereof apply, Section 6.l(d)(l) and/or (2) hereof
shall be applied prior to this Section 6.1(d)(4).
(5) In accordance with Sections 704(b) and 704(c) of the Code and
the Regulations thereunder, income, gain, loss, and deduction with respect to
any property contributed to the capital of the Partnership shall, solely for
federal income tax purposes, be allocated among the Partners so as to take
account of any variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and the initial Gross Asset Value of
such property, all as set forth on Exhibit E hereto. If the Gross Asset Value of
any Partnership property is adjusted as described in the definition of Gross
Asset Value, subsequent allocations of income, gain, loss, and deduction with
-48-
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and the Gross Asset Value of
such asset in the manner prescribed under Sections 704(b) and 704(c) of the Code
and the Regulations thereunder.
(e) Notwithstanding anything to the contrary contained in this
Section 6.1, the allocation of Profits and Losses for any Partnership Fiscal
Year during which a Person acquires a Partnership Interest (other than upon
formation of the Partnership) shall take into account the Partners' varying
interests for such Partnership Fiscal Year pursuant to any method permissible
under Section 706 of the Code that is selected by the General Partner
(notwithstanding any agreement between the assignor and assignee of such
Partnership Interest although the General Partner may recognize any such
agreement), which method may take into account the date on which the Transfer or
an agreement to Transfer becomes irrevocable pursuant to its terms, as
determined by the General Partner.
(f) In the event of a sale or exchange of a Partner's Partnership
Interest or portion thereof or upon the death of a Partner, if the Partnership
has not theretofore elected, pursuant to Section 754 of the Code, to adjust the
basis of Partnership property, the General Partner shall cause the Partnership
to elect, if the Person acquiring such Partnership Interest or portion thereof
so requests, pursuant to Section 754 of the Code, to adjust the basis of
Partnership property. In addition, in the
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event of a distribution referred to in Section 734(b) of the Code, if the
Partnership has not theretofore elected, the General Partner may, in the
exercise of its reasonable discretion, cause the Partnership to elect, pursuant
to Section 754 of the Code, to adjust the basis of Partnership property. Except
as provided in Regulations Section 1.704-l(b)(2)(iv)(m), such adjustment shall
not be reflected in the Partners' Capital Accounts and shall be effective solely
for federal and (if applicable) state and local income tax purposes. Each
Partner hereby agrees to provide the Partnership with all information necessary
to give effect to such election. With respect to such election:
(1) Any change in the amount of the depreciation deducted by the
partnership and any change in the gain or loss of the Partnership, for federal
income tax purposes, resulting from an adjustment pursuant to Section 743(b) or
the Code shall be allocated entirely to the transferee of the Partnership
Interest or portion thereof so transferred. Neither the capital contribution
obligations of, nor the Partnership Interest of, nor the amount of any cash
distributions to, the Partners shall be affected as a result of such election,
and except as provided in Regulations Section 1.704-l(b)(2)(iv)(m), the making
of such election shall have no effect except for federal and (if applicable)
state and local income tax purposes.
(2) Solely for federal and (if applicable) state and local income
tax purposes and not for the purpose of maintaining the Partners' Capital
Accounts (except as provided in Regulations
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Section 1.704-l(b)(2)(iv)(m)), the Partnership shall keep a written record for
those assets, the bases of which is adjusted as a result of such election, and
the amount at which such assets are carried on such record shall be debited (in
the case of an increase in basis) or credited (in the case of a decrease in
basis) by the amount of such basis adjustment. Any change in the amount of the
depreciation deducted by the Partnership and any change in the gain or loss of
the Partnership, for federal and (if applicable) state and local income tax
purposes, attributable to the basis adjustment made as a result of such election
shall be debited or credited, as the case may be, on such record.
(g) The Profits, Losses, gains, deductions, and credits of the
Partnership (and all items thereof) for each Partnership Fiscal Year shall be
determined in accordance with the accounting method followed by the Partnership
for federal income tax purposes.
(h) Except as provided in Sections 6.1(d)(5) and 6.l(f) hereof, for
federal income tax purposes, each item of income, gain, loss, or deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss, or deduction has been allocated pursuant to this
Section 6.1.
(i) Such portion of the gain allocated pursuant to this Section 6.1
that is treated as ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Partners in the proportion
that (i) the amount
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of depreciation previously allocated to each Partner relating to the property
that is the subject of the disposition bears to (ii) the total of such
depreciation allocated to all of the Partners. This Section 6.l(i) shall not
alter the amount of allocations among the Partners pursuant to this Section 6.1,
but merely the character of gain so allocated.
(j) To the extent permitted by Regulations Sections 1.704-2(h)(3)
and 1.704-2(i)(6), the General Partner shall endeavor to treat distributions as
having been made from the proceeds of Nonrecourse Liabilities or Partner
Nonrecourse Debt only to the extent that such distributions would cause or
increase a deficit balance in any Partner's Capital Account that exceeds the
amount such Partner is otherwise obligated to restore (within the meaning of
Regulations Section 1.704-l(b)(2)(ii)(c)) as of the end of the Partnership's
taxable year in which the distribution occurs.
6.2 Except with respect to a liquidation of the Partnership pursuant
to Section 3.2 hereof:
(a) the General Partner shall cause the Partnership to
distribute all or a portion of Net Operating Cash Flow to the Partners from time
to time as determined by the General Partner, but in any event not less
frequently than quarterly in such amounts as the General Partner shall
determine.
(b) For each Partnership Fiscal Year, all distributions made
pursuant to this Section 6.2 shall be made in the following order of priority:
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(1) First, to the General Partner in an amount up to the
General Partner's Preference Amount for such Fiscal year.
(2) Then, to the Limited Partners in proportion to their
respective Percentage Interests, an amount up to the Limited Partner
Distribution Catch-up Amount;
(3) Thereafter, to the Partners in proportion to their
respective Percentage Interests.
(c) Notwithstanding the provisions of Section 6.2(a) and (b),
the General Partner shall use its best efforts to cause the Partnership to
distribute sufficient amounts to enable the General Partner to pay shareholder
dividends that will (1) satisfy the REIT Requirements and (2) avoid any federal
income or excise tax liability of the General Partner.
6.3 Books of Account. At all times during the continuance of the
Partnership, the General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with generally
accepted accounting principles wherein shall be entered particulars of all
monies, goods or effects belonging to or owing to or by the Partnership, or
paid, received, sold or purchased in the course of the Partnership's business,
and all of such other transactions, matters and things relating to the business
of the Partnership as are usually entered in books of account kept by persons
engaged in a business of a like kind and character. In addition, the Partnership
shall keep all records as required to be kept pursuant
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to the Act. The books and records of account shall be kept at the principal
office of the Partnership, and each Partner shall at all reasonable times have
access to such books and records and the right to inspect the same.
6.4 Reports. Within ninety (90) Days after the end of each
Partnership Fiscal Year, the Partnership shall cause to be prepared and
transmitted to each Partner, an annual report of the Partnership relating to the
previous Partnership Fiscal Year containing a statement of financial condition
as of the year then ended, and statements of operations, cash flow and
Partnership equity for the year then ended, which annual statements shall be
prepared in accordance with GAAP and shall be audited by the Accountants. The
Partnership shall also cause to be prepared and transmitted to each Partner
within forty-five (45) Days after the end of each of the first three (3)
quarters of each Partnership Fiscal Year, a quarterly unaudited report of the
Partnership's financial condition and statements of operations, cash flow and
Partnership equity relating to the fiscal quarter then just ended, prepared in
accordance with GAAP. The Partnership shall further cause to be prepared and
transmitted to the General Partner (i) such reports and/or information as are
necessary for the General Partner to fulfill its obligations under the
Securities Act of 1933, the Securities Exchange Act of 1934, as amended, and the
applicable stock exchange rules, and under any other regulations to which the
General Partner or the Partnership may be subject, and (ii) such other reports
and/or information as are necessary
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for the General Partner to determine its qualification as a REIT under the REIT
Requirements or its liability for a tax as a consequence of its Partnership
Interest, including its distributive share of taxable income, in each case, in a
manner that will permit the General Partner to comply with such obligations or
make such determinations in a timely fashion.
6.5 Audits. Not less frequently than annually, the books and
records of the Partnership shall be audited by the Accountants.
6.6 Tax Returns.
(a) The General Partner shall determine the methods to be used in
the preparation of federal, state, and local income and other tax returns for
the Partnership in connection with all items of income and expense, including
but not limited to, valuation of assets, the methods of depreciation and cost
recovery, elections, credits, and tax accounting methods and procedures.
(b) To the extent all necessary information is available, within
ninety (90) Days after the end of each Partnership Fiscal Year, and in any event
within one hundred twenty (120) Days after the end of each Partnership Fiscal
Year, the Partnership shall cause to be prepared and transmitted to the Partners
federal and appropriate state and local Partnership Income Tax Schedules "K-1,"
or any substitute therefor, with respect to such Partnership Fiscal Year on
appropriate forms prescribed.
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6.7 Tax Matters Partner. The General Partner is hereby designated as
the Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code for
the Partnership; provided, however, (i) in exercising its authority as Tax
Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; (ii) the General Partner shall consult
in good faith with the Limited Partners regarding the filing of a Code Section
6227(b) administrative adjustment request with respect to the Partnership before
filing such request, it being understood, however, that the provisions hereof
shall not be construed to limit the ability of any Partner, including the
General Partner, to file an administrative adjustment request on its own behalf
pursuant to Section 6227(a) of the Code; (iii) the General Partner shall consult
in good faith with the Limited Partners regarding the filing of a petition for
judicial review of an administrative adjustment request under Section 6228 of
the Code, or a petition for judicial review of a final partnership
administrative judgment under Section 6226 of the Code relating to the
Partnership before filing such petition; (iv) the General Partner shall give
prompt notice to the Limited Partners of the receipt of any written notice that
the Internal Revenue Service or any state or local taxing authority intends to
examine Partnership income tax returns for any year, receipt of written notice
of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the final Partnership administrative
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adjustment relating to the Partnership pursuant to Section 6223 of the Code, and
receipt of any request from the Internal Revenue Service for waiver of any
applicable statute of limitations with respect to the filing of any tax return
by the Partnership; and (v) the General Partner shall promptly notify the
Limited Partners if the General Partner does not intend to file for judicial
review with respect to the Partnership.
ARTICLE VII
Rights, Duties and Restrictions of the General Partner
7.1 Expenditures by Partnership. The General Partner is hereby
authorized to pay compensation for accounting, administrative, legal, technical,
management and other services rendered to the Partnership. All of the aforesaid
expenditures shall be made on behalf of the Partnership and the General Partner
shall be entitled to reimbursement by the Partnership for any expenditures
incurred by it on behalf of the Partnership which shall be made other than out
of the funds of the Partnership. The Partnership shall also assume, and pay when
due, all Administrative Expenses.
7.2 Powers and Duties of General Partner. The General Partner shall
be responsible for the management of the Partnership's business and affairs.
Except as otherwise herein expressly provided, and subject to the limitations
contained in Section 7.3 hereof with respect to Major Decisions, the General
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Partner shall have, and is hereby granted, full and complete power to the
fullest extent permissible under the Act, authority and discretion to take such
action for and on behalf of the Partnership and in its name as the General
Partner shall, in its sole and absolute discretion, deem necessary or
appropriate to carry out the purposes for which the Partnership was organized.
Except as otherwise expressly provided herein, and subject to Section 7.3
hereof, the General Partner shall have the right, power and authority:
(a) To manage, control, invest, lend, reinvest, acquire by purchase,
lease or otherwise, sell, contract to purchase or sell, grant, obtain, or
exercise options to purchase, options to sell or conversion rights, assign,
transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and otherwise deal with
any and all property of whatsoever kind and nature, and wheresoever situated, in
furtherance of the purposes of the Partnership;
(b) To acquire, directly or indirectly, interests in real or
personal property of any kind and of any type, and any and all kinds of
interests therein, and to determine the manner in which title thereto is to be
held; to manage, insure against loss, protect and subdivide any of the real or
personal property, interests therein or parts thereof; to improve, develop or
redevelop any such real or personal property; to participate in the ownership
and development of any property; to dedicate for public use, to vacate any
subdivisions or parts thereof, to
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resubdivide, to contract to sell, to grant options to purchase or lease, to sell
on any terms; to convey, to mortgage, pledge or otherwise encumber said
property, or any part thereof; to lease said property or any part thereof from
time to time, upon any terms and for any period of time, and to renew or extend
leases, to amend, change or modify the terms and provisions of any leases and to
grant options to lease and options to renew leases and options to purchase; to
partition or to exchange said real property, or any part thereof, for other real
or personal property; to grant easements or charges of any kind; to release,
convey or assign any right, title or interest in or about or easement
appurtenant to said property or any part thereof; to construct and reconstruct,
remodel, alter, repair, add to or take from buildings on said property; to
insure any Person having an interest in or responsibility for the care,
management or repair of such property; to direct the trustee of any land trust
to mortgage, lease, convey or contract to convey the real estate held in such
land trust or to execute and deliver deeds, mortgages, notes, and any and all
documents pertaining to the property subject to such land trust or in any matter
regarding such trust; to execute assignments of all or any part of the
beneficial interest in such land trust;
(c) To employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the General Partner for the
operation and management of the Partnership business, including but not limited
to, contractors,
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subcontractors, engineers, architects, surveyors, mechanics, consultants,
accountants, attorneys, insurance brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow or lend money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure, from any Person,
credit or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to repay,
discharge, settle, adjust, compromise, or liquidate any such loan, advance,
credit, obligation or liability;
(f) To Pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or as
additional or substitute security, or for sale or other disposition any and all
Partnership property, tangible or intangible, including, but not limited to,
real estate and beneficial interests in land trusts, and to make substitutions
thereof, and to receive any proceeds thereof upon the release or surrender
thereof; to sign, execute and deliver any and all assignments, deeds and other
contracts and instruments in writing; to authorize, give, make, procure, accept
and receive moneys, payments, property, notices, demands, vouchers, receipts,
releases, compromises and adjustments; to waive notices, demands, protests and
authorize and execute waivers of every kind and nature; to enter into, make,
execute, deliver and receive written
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agreements, undertakings and instruments of every kind and nature; to give oral
instructions and make oral agreements; and generally to do any and all other
acts and things incidental to any of the foregoing or with reference to any
dealings or transactions which any attorney may deem necessary, proper or
advisable;
(g) To acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any purpose
convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings, and other accounts with
such institutions as the General Partner shall deem appropriate; to draw, sign,
execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bills of exchange, acceptances, notes, obligations, undertakings and
other instruments for or relating to the payment of money in, into, or from any
account in the Partnership's name; to execute, procure, consent to and authorize
extensions and renewals of the same; to make deposits and withdraw the same and
to negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(i) To demand, xxx for, receive, and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods, chattels,
income from property, damages and all other property, to which the Partnership
may be entitled or which
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are or may become due the Partnership from any Person; to commence, prosecute or
enforce, or to defend, answer or oppose, contest and abandon all legal
proceedings in which the Partnership is or may hereafter be interested; and to
settle, compromise or submit to arbitration any accounts, debts, claims,
disputes and matters which may arise between the Partnership and any other
Person and to grant an extension of time for the payment or satisfaction thereof
on any terms, with or without security;
(j) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the General Partner to cause any
approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with applicable arrangements, and other contractual
obligations and arrangements entered into by the Partnership from time to time
in accordance with the provisions of this Agreement, including periodic reports
as required to lenders and using all due diligence to insure that the
Partnership is in compliance with its contractual obligations;
(l) To maintain the Partnership's books and records; and
(m) To prepare and deliver, or cause to be prepared and delivered by
the Accountants, all financial and other reports with respect to the operations
of the Partnership, and preparation and filing of all federal and state tax
returns and reports.
Except as otherwise provided herein, to the extent the duties of the
General Partner require expenditures of funds to be
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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.
7.3 Major Decisions. The General Partner shall not, without the
prior Consent of the Limited Partners, on behalf of the Partnership, undertake
any of the following actions (the "Major Decisions"):
(a) Amend, modify or terminate this Agreement other than to reflect
the admission of additional limited partners pursuant to Section 9.3 hereof.
(b) Make a general assignment for the benefit of creditors or
appoint or acquiesce in the appointment of a custodian, receiver or trustee for
all or any part of the assets of the Partnership.
(c) Take title to any personal or real property, other than in the
name of the Partnership or pursuant to Section 7.7 hereof.
(d) Institute any proceeding for Bankruptcy on behalf of the
Partnership.
(e) Act or cause the taking or refraining of any action with
respect to the following matters:
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(i) the dissolution and winding up of the Partnership or an
election to continue the Partnership or to continue the business
of the Partnership;
(ii) a change in the nature of the business of the
Partnership.
7.4 Other Interests of General Partner. Nothing herein shall limit
or proscribe the General Partner and its Affiliates from having any interest in
other present or future ventures, of whatever nature, including real estate, and
further including ventures that are competitive with the Partnership and,
notwithstanding its status as General Partner, the General Partner and its
Affiliates shall be entitled to obtain and/or continue their respective
individual participation in all such ventures without (i) accounting to the
Partnership or the other Partners for any profits with respect thereto, (ii) any
obligation to advise the other Partners of business opportunities for the
Partnership which may come to its or its Affiliates attention as a result of its
or its Affiliates participation in such other ventures or in the Partnership,
and (iii) being subject to any claims whatsoever on account of such
participation.
7.5 Proscriptions. The General Partner shall not have the authority
to:
(a) Do any act in contravention of this Agreement or which would
make it impossible to carry on the ordinary business of the Partnership;
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(b) Possess any Partnership property or assign rights in specific
Partnership property for other than Partnership purposes; or
(c) Do any act in contravention of applicable law.
Nothing herein contained shall impose any obligation on any Person or firm doing
business with the Partnership to inquire as to whether or not the General
Partner has properly exercised its authority in executing any contract, lease,
mortgage, deed or any other instrument or document on behalf of the Partnership,
and any such Third Person shall be fully protected in relying upon such
authority.
7.6 Additional Partners. Additional Partners may be admitted to the
Partnership only as provided in Section 9.3 hereof.
7.7 Title Holder. To the extent allowable under applicable law,
title to all or any part of the properties of the Partnership may be held in the
name of the Partnership or any other individual, corporation, partnership, trust
or otherwise, the beneficial interest in which shall at all times be vested in
the Partnership. Any such title holder shall perform any and all of its
respective functions to the extent upon such terms and conditions as may be
determined from time to time by the General Partner.
7.8 Compensation of the General Partner. The General Partner shall
not be entitled to any compensation for services rendered to the Partnership
solely in its capacity as General
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Partner except with respect to reimbursement for those costs and expenses
constituting Administrative Expenses.
7.9 Waiver and Indemnification.
(a) Neither the General Partner nor any of its directors, officers,
shareholders, nor any Person acting on its behalf, pursuant hereto, shall be
liable, responsible or accountable in damages or otherwise to the Partnership or
to any Partner for any acts or omissions performed or omitted to be performed by
them within the scope of the authority conferred upon the General Partner by
this Agreement and the Act, provided that the General Partner's or such other
Person's conduct or omission to act was taken in good faith and in the belief
that such conduct or omission was in the best interests of the Partnership and,
provided further, that the General Partner or such other Person shall not be
guilty of fraud, willful misconduct or gross negligence in connection with such
conduct or omission. The Partnership shall, and hereby does, indemnify and hold
harmless the General Partner and its Affiliates, their respective directors,
trust managers, officers, shareholders and any other individual acting on their
behalf from any loss, damage, claim or liability, including, but not limited to,
reasonable attorneys' fees and expenses, incurred by them by reason of any act
performed by them in accordance with the standards set forth above or in
enforcing the provisions of this indemnity; provided, however, no Partner shall
have any personal liability with respect to the foregoing indemnification, any
such indemnification is to be
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satisfied solely out of the assets or the Partnership.
(b) Any Person entitled to indemnification under this Agreement
shall be entitled to receive, upon application therefor, advances to cover the
costs of defending any proceeding against such Person; provided, however, that
such advances shall be repaid to the Partnership, without interest, if such
Person is found by a court of competent jurisdiction upon entry or a final
judgment not to be entitled to such indemnification. All rights of the
indemnitee hereunder shall survive the dissolution of the Partnership; provided,
however, that a claim for Indemnification under this Agreement must be made by
or on behalf of the Person seeking indemnification prior to the time the
Partnership is liquidated hereunder. The indemnification rights contained in
this Agreement shall be cumulative of, and in addition to, any and all rights,
remedies and recourse to which the Person seeking indemnification shall be
entitled, whether at law or at equity. Indemnification pursuant to this
Agreement shall be made solely and entirely from the assets of the Partnership
including, without limitation, proceeds received from insurance coverage and no
Partner shall be liable therefor.
7.10 Real Estate Investment Trust Requirements. Notwithstanding
anything to the contrary contained in this Agreement, for so long as American
Real Estate Investment Corporation is a Partner, the Partnership shall operate
in such a manner and the Partnership shall take or omit to take all actions as
may be necessary (including making appropriate distributions
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from time to time), so as to permit American Real Estate Investment Corporation
(i) to continue to qualify as a REIT so long as such requirements exist and as
such provisions may be amended from time to time, or corresponding provisions of
succeeding law (the "REIT Requirements"), and (ii) to minimize its exposure to
the imposition of an excise tax under Section 4981(a) of the Code or a tax under
Section 857(b)(5) of the Code, so long as such taxes may be imposed and as such
provisions may be amended from time to time, or corresponding provisions of
succeeding law, each of (i) and (ii) to at all times be determined (a) as if
American Real Estate Investment Corporation sole asset is its Partnership
Interest, and (b) without regard to the action or inaction of American Real
Estate Investment Corporation with respect to distributions (by way of dividends
or otherwise) and the timing thereof. The General Partner may cause the
Partnership to obtain an opinion of tax counsel selected by the General Partner
regarding the impact of any proposed action affecting American Real Estate
Investment Corporation's continuing ability to qualify as a REIT, or its
exposure to an excise tax under Section 4981(a) of the Code, or a tax under
Section 857(b)(5) of the Code, so long as such taxes exist and as such
provisions may be amended from time to time or corresponding provisions of
succeeding law.
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
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8.1 Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting (which shall be certified)
shall be made of the Capital Account of each Partner and of the Profits or
Losses of the Partnership from the date of the last previous accounting to the
date of dissolution. Financial statements presenting such accounting shall
include a report of a certified public accountant selected by the Liquidating
Trustee.
8.2 Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than Partners) in
the order of priority as provided by law;
(b) Establishment of reserves as provided by the General Partner to
provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if any, in the
order of priority provided by law;
(d) To the Partners in accordance with the positive balances in
their Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods, including the period in which such distribution
occurs (other than distributions made pursuant to this Section 8.2(d) and
Section 8.3 hereof).
Whenever the Liquidating Trustee reasonably determines that any reserves
established pursuant to paragraph (b) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in
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accordance with the above provisions.
8.3 Timing Requirements. In the event that the Partnership is
"liquidated" within the meaning of Section 1.704-l(b)(2)(ii)(g) of the
Regulations, any and all distributions to the Partners pursuant to Section
8.2(d) hereof shall be made no later than the later to occur of (i) the last day
of the taxable year of the Partnership in which such liquidation occurs or (ii)
ninety (90) days after the date of such liquidation.
8.4 Sale of Partnership Assets. In the event of the liquidation of
the Partnership in accordance with the terms of this Agreement, the Liquidating
Trustee may sell Partnership property; provided, however, all sales, leases,
encumbrances or transfers of Partnership assets shall be made by the Liquidating
Trustee solely on an "arm's-length" basis, at the best price and on the best
terms and conditions as the Liquidating Trustee in good faith believes are
reasonably available at the time and under the circumstances and on a
non-recourse basis to the Limited Partners. The liquidation of the Partnership
shall not be deemed finally terminated until the Partnership shall have received
cash payments in full with respect to obligations such as notes, purchase money
mortgages, installment sale contracts or other similar receivables received by
the Partnership in connection with the sale of Partnership assets and all
obligations of the Partnership have been satisfied or assumed by the General
Partner. The Liquidating Trustee shall continue to act to enforce all of the
rights of the Partnership pursuant to any such obligations
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until paid in full.
8.5 Distributions in Kind. In the event that it becomes necessary to
make a distribution of Partnership property in kind, the General Partner may,
with the Consent of the Limited Partners, transfer and convey such property to
the distributees as tenants in common, subject to any liabilities attached
thereto, so as to vest in them undivided interests in the whole of such property
in proportion to their respective rights to share in the proceeds of the sale of
such property (other than as a creditor) in accordance with the provisions of
Section 8.2 hereof.
8.6 Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
8.7 Liability of the Liquidating Trustee. The Liquidating Trustee
shall be indemnified and held harmless by the Partnership from and against any
and all claims, demands, liabilities, costs, damages and causes of action of any
nature whatsoever arising out of or incidental to the Liquidating Trustee's
taking of any action authorized under or within the scope of this Agreement;
provided, however, that the Liquidating Trustee shall not be entitled to
indemnification, and shall not be held harmless, where the claim, demand,
liability, cost, damage or cause of action at issue arose out of:
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(a) A matter entirely unrelated to the Liquidating Trustee's action
or conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or negligence of the Liquidating Trustee.
ARTICLE IX
Transfer of Partnership Interests
9.1 General Partner Transfer. The General Partner shall not withdraw
from the Partnership and shall not sell, assign, pledge, encumber or otherwise
dispose of all or any portion of its interest in the Partnership without the
Consent of the Limited Partners, which shall not be unreasonably withheld. Upon
any transfer of a Partnership Interest in accordance with the provisions of this
Section 9.1, the transferee General Partner shall become vested with the powers
and rights of the transferor General Partner, and shall be liable for all
obligations and responsible for all duties of the General Partner, once such
transferee has executed such instruments as may be necessary to effectuate such
admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest
so acquired. It is a condition to any transfer otherwise permitted hereunder
that the transferee assumes by operation of law or express agreement all of the
obligations of the transferor General Partner under this Agreement with respect
to such transferred Partnership
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Interest. In the event the General Partner withdraws from the Partnership, in
violation of this Agreement or otherwise, or dissolves, terminates or upon the
Bankruptcy of the General Partner, a Majority-In-Interest of the Limited
Partners may elect to continue the Partnership business by selecting a
substitute general partner.
9.2 Transfers by Limited Partners. No Limited Partner shall sell,
assign, pledge, encumber, or otherwise dispose of all or any portion of its
Partnership Interest to any transferee without the consent of the General
Partner, which consent shall not be unreasonably withheld; provided, however
that each Limited Partner may at any time, without the consent of the General
Partner, transfer all or a portion of its Partnership Interest to an Affiliate
of such Limited Partner, subject to the provisions of this Section 9.2 and
Section 9.4 hereof. Nothing herein shall preclude a Limited Partner from
transferring its Limited Partnership Interest upon exercise of its Conversion
Rights under Article XI hereof. It is a condition to any transfer otherwise
permitted hereunder that the transferee assumes by operation of law or express
agreement all of the obligations of the transferor Limited Partner under this
Agreement with respect to such transferred Partnership Interest and no such
transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor Partner of its
obligations under this Agreement without
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the approval of the General Partner, in its reasonable discretion. Upon such
transfer, the transferee shall be admitted as a Substituted Limited Partner as
such term is defined in the Act and shall succeed to all of the rights,
including rights with respect to the Conversion Rights, of the transferor
Limited Partner under this Agreement in the place and stead of such transferor
Limited Partner; provided, however, that notwithstanding the foregoing, any
transferee of any transferred Partnership Interest shall be subject to any and
all ownership limitations contained in the corporate charter of the General
Partner as may be amended from time to time applicable to persons other than the
Limited Partners and/or their Affiliates which may limit or restrict such
transferee's ability to exercise the Conversion Rights. Any transferee, whether
or not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee of a Partnership Interest pursuant to this
Section 9.2, whether by a voluntary transfer, by operation of law or otherwise,
shall have rights hereunder, other than to receive such portion of the
distributions made by the Partnership as are allocable to the Percentage
Interest transferred.
9.3 Issuance of Additional Partnership Interests. At any time after
the date hereof, subject to the provisions of Section 9.4 hereof, the General
Partner may, upon its determination that the issuance of additional Partnership
Interests ("Additional Interests") is in the best interests of the
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Partnership, cause the Partnership to issue Additional Interests to and admit as
a limited partner in the Partnership, any Person (the "Additional Partner") in
exchange for the contribution by such Person of cash and/or property desirable
to further the purposes of the Partnership under Section 2.3 hereof. In the
event that an Additional Interest is issued by the Partnership pursuant to this
Section 9.3:
(a) the Percentage Interest of such Additional Partner issued the
Additional Interest shall be equal to a fraction, the numerator of which is
equal to the Gross Asset Value of the property contributed by the Additional
Partner as of the date of contribution to the Partnership (the "Contribution
Date") and the denominator of which is equal to the sum of (i) the Deemed Value
of the Partnership (computed as of the Trading Day immediately preceding the
Contribution Date) and (ii) the Gross Asset Value of the property contributed by
the Additional Partner as of the Contribution Date as reasonably determined by
the General Partner; and
(b) the Percentage Interests of each Partner other than the
Additional Partner shall be reduced, as of the Contribution Date, such that the
Percentage Interest of each such Partner shall be equal to a fraction, the
numerator of which is equal to the Deemed Partnership Interest Value of such
Partner (computed as of the Trading Day immediately preceding the Contribution
Date) and the denominator of which is equal to the sum of (i) the Deemed Value
of the Partnership (computed as of the Trading Day
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immediately preceding the Contribution Date) and (ii) the Gross Asset Value of
the property contributed by the Additional Partner as of the Contribution Date.
The General Partner shall be authorized on behalf of each of the
Partners to amend this Agreement to reflect the admission of any Additional
Partner or any increase in the Percentage Interests of any Partner and the
corresponding reduction of the Percentage Interests of the other Partners in
accordance with the provisions of this Section 9.3, and the General Partner
shall promptly deliver a copy of such amendment to each Limited Partner. The
Limited Partners hereby irrevocably appoint the General Partner as their
attorney-in-fact, coupled with an interest, for the purpose of executing and
delivering such documents, and taking such actions, as shall be necessary in
connection with the transfer of such Partner's interest in the Partnership as
required pursuant to this Section 9.3. Notwithstanding anything contained herein
to the contrary, an Additional Partner that acquires an Additional Interest
pursuant to this Section 9.3 shall not acquire any interest in, and may not
exercise or otherwise participate in, any Rights pursuant to Article XI without
the Agreement of the General Partner.
9.4 Restrictions on Transfer. In addition to any other restrictions
on transfer herein contained, in no event may any transfer or assignment of a
Partnership Interest by any Partner be made (i) to any person or entity who
lacks the legal right, power or capacity to own a Partnership Interest; (ii) in
violation of
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any provision of any mortgage or trust deed (or the note or bond secured
thereby) constituting a Lien against a Property or any part thereof, or other
instrument, document or agreement to which the Partnership or any Property is a
party or otherwise bound; (iii) in violation of applicable law; (iv) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (v) in the event such transfer would immediately or with
the passage of time cause the American Real Estate Investment Corporation to
fail to comply with the REIT Requirements, such determination to be made
assuming that the American Real Estate Investment Corporation does comply with
the REIT Requirements immediately prior to the proposed transfer; (vi) if such
transfer would cause a termination of the Partnership for federal income tax
purposes; (vii) if such transfer would, in the opinion of counsel to the
Partnership, cause the Partnership to cease to be classified as a partnership
for Federal income tax purposes; (viii) if such transfer would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(e) of the Code), (ix) if
such transfer would, in the opinion of counsel to the Partnership, cause any
portion of the underlying assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor Regulations Section
2510.3-101 or (x) if such transfer would, in the opinion of
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counsel to the Partnership, violate the Federal Securities Act or applicable
state blue sky laws.
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management. Except as expressly permitted
hereunder, the Limited Partners shall not take part in the management of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership.
10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the Profits or Losses of the Partnership and to
receive distributions of Partnership funds shall, on the happening of such
event, devolve on its successors or assigns, subject to the terms and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
However, in no event shall such assignee(s) become a Substituted Limited
Partner.
10.3 No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other
than as expressly provided in this Agreement.
10.4 Duties and Conflicts. The General Partner recognizes that the
Limited Partners and their Affiliates have or
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may have other business interests, activities and investments, some of which may
be in conflict or competition with the business of the Partnership, and that,
such persons are entitled to carry on such other business interests, activities
and investments. The Limited Partners and their Affiliates may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, on their own behalf or on behalf of other entities with which
they are affiliated or associated, and such persons may engage in any
activities, whether or not competitive with the Partnership, without any
obligation to offer any interest in such activities to the Partnership or to any
Partner. Neither the Partnership nor any Partner shall have any right, by virtue
of this Agreement, in or to such activities, or the income or profits derived
therefrom, and the pursuit of such activities, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper.
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ARTICLE XI
Grant of Rights to Limited Partners
11.1 Grant of Rights. The General Partner does hereby grant to each
of the Limited Partners and the Limited Partners do hereby accept the right, but
not the obligations (hereinafter such right sometimes referred to as the
"Rights" or "Conversion Rights"), to convert all or any portion of their
Partnership Interests into Shares at any time or from time to time after the
first (1st) and no later than the fifth (5th) anniversary of the date on which
the Completion of the Offering occurs, on the terms and subject to the
conditions and restrictions contained in this Article XI, and whereby, upon the
closing of the purchase and sale of the Offered Interests, the General Partner
shall become the owner of such Offered Interests and be a Substituted Partner
pursuant to Section 9.2 hereof. The Conversion Rights granted hereunder may be
exercised by any one or more of the Limited Partners, on the terms and subject
to the conditions and restrictions contained in this Article XI, upon delivery
to the General Partner of an Exercise Notice in the form of Exhibit C, which
notice shall specify the Partnership Interests to be sold by such Limited
Partner. Once delivered, the Exercise Notice shall be irrevocable, subject to
payment by the General Partner of the Purchase Price in respect of such
Partnership Interests in accordance with the terms hereof.
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11.2 Delivery of Exercise Notices. Any one or more Limited Partners
("Exercising Partners") may, subject to the limitations set forth herein deliver
to the General Partner written notice (the "Exercise Notice") pursuant to which
such Exercising Partners elect to exercise their Conversion Rights subject to
the limitations contained in Sections 11.3 and 11.4 below; and
11.3 Limitation on Delivery of Exercise Notices. The ability of
Limited Partners to exercise Conversion Rights shall be restricted so that an
Exercise Notice can be delivered and be effective only at such time as the
Shares issuable on exercise thereof are the subject of an effective registration
statement filed by the Securities Act of 1933, as amended and only one (1)
Exercise Notice may be delivered to the General Partner during each calendar
quarter period; provided, however, such Exercise Notice may be delivered by or
on behalf of one or more Exercising Parties.
11.4 Limitation on Exercise of Conversion Rights. (a) Conversion
Rights may be exercised at any time and from time to time, subject to the
limitation contained in Section 11.3 above and as provided herein. If an
Exercise Notice is delivered to the General Partner but, as a result of a result
of restrictions contained in the Certificate of Incorporation, including any
amendment thereto adopted prior to the date hereof or hereafter, of the General
Partner, the Conversion Rights cannot be exercised in full (the "Ownership
Limit"), the Exercise Notice shall be
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deemed to be modified such that the Conversion Rights shall be exercised only to
the extent permitted under the Certificate of Incorporation, as amended, of the
General Partner; with the remainder of such Conversion Rights being deemed to be
withdrawn and of no effect.
(b) In the event the Underwriter exercises the option granted in
Section 4 of the Underwriting Agreement, the extent to which each of the Limited
Partners may exercise the Conversion Right shall be reduced, pro rata, by up to
20.35966% (herein referred to as "Restricted Conversion Right Shares.")
Restricted Conversion Right Shares will be released from such restriction to the
extent that the Operating Partnership's Funds From Operations during the twelve
months ended with the close of any fiscal quarter exceed herein such excess is
referred to as "Excess Funds From Operations") 105% of the amount of funds
necessary to pay a dividend of $.80 per share per annum on the sum of (i) the
shares issued in the Offering (including shares issued on exercise of the option
granted in Section 4 of the Underwriting Agreement), (ii) the shares issued and
issuable on exercise of the Conversion Right, excluding the Restricted
Conversion Right Shares, and (iii) shares, if any, previously, but no longer,
Restricted Conversion Right Shares. The number of shares no longer Restricted
Conversion Right Shares will be that number resulting from dividing the Excess
Funds From Operations for such twelve month period by $.80. Any term used in
this subsection not otherwise defined in this Agreement, shall be as defined in
the Registration
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Statement.
11.5 Computation of Purchase Price/Form of Payment. The purchase
price ("Purchase Price") payable by the General Partner to each Exercising
Partner shall be equal to the excess of (a) Deemed Partnership Interest Value of
such Exercising Partner's Offered Interest computed as of the date on which the
Exercise Notice was delivered to the General Partner (the "Computation Date")
over (b) the excess, if any, of (1) the aggregate amount distributed to such
Exercising Partner pursuant to Section 6.2 for all periods ending on the closing
of the acquisition of the Offered Interests over (2) the excess of the aggregate
amount of Profits allocated to such Exercising Partner pursuant to Section 6.1
over the aggregate amount of Losses allocated to such Exercising Partner
pursuant to Section 6.1 for all periods ending on the closing of the acquisition
of the Offered Interests. The Purchase Price on exercise of a Conversion Right
for the Offered Interest shall be payable by the issuance by the General Partner
of the number of Shares equal to the quotient of (i) the Purchase Price divided
by (ii) the Current Per Share Market Price as of the Computation Date adjusted
as appropriate to account for stock splits, stock dividends or other similar
transactions between the Computation Date and the closing of the purchase and
sale of the Offered Interest in the manner specified in Section 11.10(d) below.
Upon payment of such Purchase Price, the General Partner shall be the owner of
the Offered Interests.
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11.6 Closing; Delivery of Election Notice. The closing of the
acquisition of Offered Interests shall, unless otherwise mutually agreed, be
held at the principal offices of the General Partner, on the date agreed to by
the General Partner and the Exercising Partners, which date shall in no event be
on the date which is the later of (i) twenty (20) days after the date of the
Exercise Notice and (ii) the expiration or termination of the waiting period
applicable to each Exercising Partner, if any, under the Xxxx-Xxxxx Act.
11.7 Closing Deliveries. At the closing of the purchase and sale of
Offered Interests, payment of the Purchase Price shall be accompanied by proper
instruments of transfer and assignment to transfer and vest ownership of the
Offered Interests in the General Partner and by the delivery of (i)
representations and warranties of (A) the Exercising Partner with respect to its
due authority to sell all of the right, title and interest in and to such
Offered Interests to the General Partner and with respect to the status of the
Limited Partner Interest being sold, free and clear of all Liens, and
(B) the General Partner with respect to due authority for the purchase of such
Offered Interests, and (ii) to the extent that any Shares are issued in payment
of the Purchase Price or any portion thereof, (A) an opinion of counsel for the
General Partner, reasonably satisfactory to the Exercising Partners, to the
effect that such Shares have been duly authorized, are validly issued,
fully-paid and non-assessable, and (B) a stock certificate
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or certificates evidencing the Shares to be issued and registered in the name of
the Exercising Partner or its designee.
11.8 Term of Rights. Unless sooner terminated, the rights of the
parties with respect to the Conversion Rights shall commence after the first
(1st) anniversary of the date of Completion of the Offering and shall lapse for
all purposes and in all respects on the fifth (5th) anniversary of the
Completion of the Offering, provided, however, that the parties hereto shall
continue to be bound by an Exercise Notice delivered to the General Partner
prior to such anniversary.
11.9 Covenants of the General Partner. To facilitate the General
Partner's ability to fully perform its obligations hereunder, the General
Partner covenants and agrees as follows:
(a) At all times during the pendency of the Conversion Rights, the
General Partner shall reserve for issuance such number of Shares as may be
necessary to enable the General Partner to issue such Shares in full payment of
the Purchase Price in regard to all Limited Partnership Interests which are from
time to time outstanding.
(b) As long as the General Partner shall be obligated to file
periodic reports under the Exchange Act, the General Partner will timely file
such reports in such manner as shall enable any recipient of Shares issued to
Limited Partners hereunder in reliance upon an exemption from registration under
the Securities Act to continue to be eligible to utilize Rule 144 promulgated by
the SEC pursuant to the Securities Act, or any
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successor rule or regulation or statute thereunder, for the resale thereof.
(c) During the pendency of the Conversion Rights, the Limited
Partners shall receive in a timely manner all reports filed by the General
Partner with the SEC and all other communications transmitted from time to time
by the General Partner to the owners of its Shares.
(d) The General Partner shall, within five days after request by a
Limited Partner, provide or cause to be provided to such Limited Partner a
computation of the Deemed Value of the Partnership.
11.10 Limited Partners' Covenant. Each Limited Partner covenants and
agrees with the General Partner that all Offered Interests tendered to the
General Partner in accordance with the exercise of Rights herein provided shall
be delivered to the General Partner free and clear of all Liens and should any
Liens exist or arise with respect to such Offered Interests, the General Partner
shall be under no obligation to acquire the same. Each Limited Partner further
agrees that, in the event any state or local property transfer tax is payable as
a result of the transfer of its Offered Interests to the General Partner (or its
designee), such Limited Partner shall assume and pay such transfer tax.
ARTICLE XII
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General Provisions
12.1 Notices. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and may
be personally served or sent by United States mail and shall be deemed to have
been given when delivered in person, upon receipt of telecopy or three business
days after deposit in United States mail, registered or certified, postage
prepaid, and properly addressed, by or to the appropriate party. For purposes of
this Section 12.1, the addresses of the parties hereto shall be as set forth
below their name on a signature page hereof. The address of any party hereto may
be changed by a notice in writing given in accordance with the provisions
hereof.
12.2 Successors. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of all Partners, and
their legal representatives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
12.3 Liability of Limited Partners. The liability of the Limited
Partners for their obligations, covenants, representations and warranties
under this Agreement shall be several and not joint.
12.4 Effect and Interpretation. This Agreement shall be governed
by and construed in conformity with the laws of the State
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of Delaware.
12.5 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.
12.6 Partners Not Agents. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Partners in the
carrying on of their own respective businesses or activities.
12.7 Entire Understanding; Etc. This Agreement constitutes the
entire agreement and understanding among the Partners and supersedes any prior
understandings and/or written or oral agreements among them respecting the
subject matter within.
12.8 Amendments. This Agreement may not be amended, and no provision
benefiting the General Partner may be waived, except by a written instrument
signed by the General Partner (and approved on behalf of the General Partner by
at least a majority of its directors who are not Affiliates of any of the
Limited Partners) and, except as provided in Section 7.3 with respect to the
admission of additional limited partners, a Majority-In-Interest of the Limited
Partners.
12.9 Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those to
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which it is held invalid by such court, shall not be affected thereby.
12.10 Pronouns and Headings. As used herein, all pronouns shall
include the masculine, feminine and neuter, thereof wherever the context and
facts require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof. Any references in this Agreement to
"including" shall be deemed to mean "including without limitation".
12.11 Assurances. Each of the Partners shall hereafter execute and
deliver such further instruments and do such further acts and things as may be
required or useful to carry out the intent and purpose of this Agreement and as
are not inconsistent with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the date and year first above
written.
GENERAL PARTNER:
American Real Estate Investment Corporation
By:_________________________________
Xxxx Xxxxxx, President
LIMITED PARTNERS:
Executed by Xxxx Xxxxxx, Treasurer
of American Real Estate Investment
Corporation, a Delaware corporation,
pursuant to Power of Attorney granted
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by the below named persons
----------------------------------
Xxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxxx
---------------------------------
Xxxx Xxxxxx, III
---------------------------------
Xxxxxxxx Xxxxxxxxxx
---------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Xxxx Xxxx
--------------------------------
JKP Family Associates
--------------------------------
Xxx Xxxxxxx
--------------------------------
Xxxxx Xxxx
--------------------------------
Xxxxxx XxXxxxxxxx
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--------------------------------
Larvo Investments, LLC
--------------------------------
Xxxx Xxxxx
--------------------------------
Xxxxxx Xxxxxxxxx
--------------------------------
Xxxx Xxxxxxxxx, Xx.
--------------------------------
Xxxxxxxxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
--------------------------------
Xxxxxxxx Xxxxxx
--------------------------------
Xxxxxxx XxXxxx
--------------------------------
Xxxxx Xxxxx
--------------------------------
Xxxxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxx
--------------------------------
Xxxx Xxxxxxxx
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--------------------------------
Property Asset Equities
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Exhibit A
---------
Name of Limited Partner Initial Percentage Interest
----------------------- ---------------------------
Interest
--------
Xxxx Xxxxxx 1.5883%
Xxxxx Xxxxxxxxx 0.5646%
Xxxxxxx Xxxxxxxxx 4.0915%
Xxxxxxx Xxxxxxxxx 0.3706%
Xxxx Xxxxxx, III 0.2735%
Xxxxxxxx Xxxxxxxxxx 11.3620%
Xxxx Xxxxxxxxx 9.5584%
Xxxx Xxxx 2.1210%
JKP Family Associates 2.8722%
Xxx Xxxxxxx 0.0927%
Xxxxx Xxxx 0.7412%
Xxxxxx XxXxxxxxxx 0.3705%
Larvo Investments, LLC 0.1834%
Xxxx Xxxxx 0.0367%
Xxxxxx Xxxxxxxxx 0.1101%
Xxxx Xxxxxxxxx, Xx. 0.0074%
Xxxxxxxxxxx Xxxxxxxxx 0.1801%
Xxxxxxx Xxxxxx 0.0165%
Xxxxx Xxxxxx 0.0165%
Xxxxxxxx Xxxxxx 0.0220%
Xxxxxxx XxXxxx 1.5333%
Xxxxx Xxxxx 1.5333%
Xxxxx Xxxxxxxx 1.5333%
New Jersey Real Estate Liquidation Corp. 1.0511%
Xxxxxxx Xxxxx 0.4503%
Xxxx Xxxxxxxx 1.0832%
Property Asset Equities 0.6575%
--------
Totals 42.4212%
========
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Exhibit B
---------
Contributed Limited
Name of Limited Partner Partner Assets
----------------------- -------------------
Xxxx Xxxxxx $272,816.80
Xxxxx Xxxxxxxxx 96,986.40
Xxxxxxx Xxxxxxxxx 702,769.60
Xxxxxxx Xxxxxxxxx 63,654.80
Xxxx Xxxxxx, III 46,975.20
Xxxxxxxx Xxxxxxxxxx 1,951,596.00
Xxxx Xxxxxxxxx 1,641,795.20
Xxxx Xxxx 364,320.80
JKP Family Associates 493,340.80
Xxx Xxxxxxx 15,925.20
Xxxxx Xxxx 127,309.60
Xxxxxx XxXxxxxxxx 63,645.60
Larvo Investments, LLC 31,510.00
Xxxx Xxxxx 6,302.00
Xxxxxx Xxxxxxxxx 18,906.00
Xxxx Xxxxxxxxx, Xx. 1,269.60
Xxxxxxxxxxx Xxxxxxxxx 30,939.60
Xxxxxxx Xxxxxx 2,833.60
Xxxxx Xxxxxx 2,833.60
Xxxxxxxx Xxxxxx 3,781.20
Xxxxxxx XxXxxx 263,359.20
Xxxxx Xxxxx 263,359.20
Xxxxx Xxxxxxxx 263,359.20
New Jersey Real Estate Liquidation Corp. 180,540.80
Xxxxxxx Xxxxx 77,344.40
Xxxx Xxxxxxxx 186,051.60
Property Asset Equities 112,939.20
------------
Totals $7,286,464.40
============
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Exhibit C
---------
Form of Exercise Notice
-----------------------
Pursuant to Article XI, Section 11.1 of the Agreement of Limited
Partnership of American Real Estate Investment, L.P. a Delaware limited
partnership (the "Partnership"), the undersigned hereby irrevocably elects to
exercise the right to sell to American Real Estate Investment Corporation, a
Delaware corporation and the general partner of the Partnership, % Partnership
Interests in the Partnership (the "Offered Interests") and requests that
certificates for the Purchase Price be issued in the name of .
(social security number ).
All terms used herein not otherwise defined shall be defined as set
forth in the aforesaid Agreement of Limited Partnership.
Dated:_____________________
________________________________
(signature)
Signature Guaranteed:
--------------------------
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Exhibit D
Underwriting Agreement
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Exhibit E
(see reference on page 46)
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