EXHIBIT 10.1
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CAPITAL AUTOMOTIVE L.P.
TABLE OF CONTENTS
ARTICLE I - DEFINED TERMS.........................................................................................2
ARTICLE II - PARTNERSHIP FORMATION AND IDENTIFICATION.............................................................9
2.01 Name, Office and Registered Agent...............................................................9
2.02 Partners........................................................................................9
2.03 Term and Dissolution............................................................................9
2.04 Filing of Certificate and Perfection of Limited Partnership....................................10
ARTICLE III - BUSINESS OF THE PARTNERSHIP........................................................................10
ARTICLE IV - CAPITAL CONTRIBUTIONS AND ACCOUNTS..................................................................10
4.01 Capital Contributions..........................................................................10
4.02 Additional Capital Contributions and Issuances of Additional
Partnership Interests..........................................................................11
4.03 General Partner Loans..........................................................................13
4.04 Capital Accounts...............................................................................13
4.05 Percentage Interests...........................................................................14
4.06 No Interest on Contributions...................................................................14
4.07 Return of Capital Contributions................................................................14
4.08 No Third Party Beneficiary.....................................................................14
4.09 Equity Incentive Plan..........................................................................15
ARTICLE V - PROFITS AND LOSSES; DISTRIBUTIONS....................................................................16
5.01 Allocation of Profit and Loss..................................................................16
5.02 Distribution of Cash...........................................................................17
5.03 Reit Distribution Requirements.................................................................19
5.04 No Right to Distributions in Kind..............................................................19
5.05 Limitations on Return of Capital Contributions.................................................19
5.06 Distributions upon Liquidation.................................................................19
5.07 Substantial Economic Effect....................................................................20
ARTICLE VI - RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER...............................................20
6.01 Management of the Partnership..................................................................20
6.02 Delegation of Authority........................................................................22
6.03 Indemnification and Exculpation of Indemnitees.................................................22
6.04 Liability of the General Partner...............................................................24
6.05 Expenditures by the Partnership................................................................25
6.06 Outside Activities.............................................................................25
6.07 Employment or Retention of Affiliates..........................................................25
6.08 General Partner Participation..................................................................26
6.09 Title to Partnership Assets....................................................................26
6.10 Miscellaneous..................................................................................26
ARTICLE VII - CHANGES IN GENERAL PARTNER.........................................................................27
7.01 Transfer of the General Partner's Partnership Interest.........................................27
7.02 Admission of a Substitute or Successor General Partner.........................................28
i
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a
General Partner................................................................................28
7.04 Removal of a General Partner...................................................................29
ARTICLE VIII - RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS....................................................30
8.01 Management of the Partnership..................................................................30
8.02 Power of Attorney..............................................................................30
8.03 Limitation on Liability of Limited Partners....................................................31
8.04 Redemption Right...............................................................................31
8.05 Registration...................................................................................33
8.06 "Piggyback" Registration Rights................................................................34
ARTICLE IX - TRANSFERS OF LIMITED PARTNERSHIP INTERESTS..........................................................39
9.01 Purchase for Investment........................................................................39
9.02 Restrictions on Transfer of Limited Partnership Interests......................................40
9.03 Admission of Substitute Limited Partner........................................................41
9.04 Rights of Assignees of Partnership Interests...................................................43
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner................................................................................43
9.06 Joint Ownership of Interests...................................................................43
ARTICLE X - BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS...........................................................44
10.01 Books and Records..............................................................................44
10.02 Custody of Partnership Funds; Bank Accounts....................................................44
10.03 Fiscal and Taxable Year........................................................................44
10.04 Annual Tax Information and Report..............................................................45
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments..................................45
10.06 Reports to Limited Partners....................................................................45
ARTICLE XI - AMENDMENT OF AGREEMENT; SALE OF ALL OR SUBSTANTIALLY ALL OF COMPANY'S ASSETS........................46
11.01 Amendment of Agreement.........................................................................46
11.02 Sale of All or Substantially All of the Assets of the Partnership; Change in Control...........46
ARTICLE XII - GENERAL PROVISIONS.................................................................................47
12.01 Notices........................................................................................47
12.02 Survival of Rights.............................................................................47
12.03 Additional Documents...........................................................................47
12.04 Severability...................................................................................47
12.05 Entire Agreement...............................................................................47
12.06 Pronouns and Plurals...........................................................................47
12.07 Headings.......................................................................................47
12.08 Counterparts...................................................................................47
12.09 Governing Law..................................................................................48
12.10 Guaranty by Company............................................................................48
EXHIBIT A - SCHEDULE OF PARTNERS, NUMBER OF PARTNERSHIP UNITS AND THE AGREED VALUE OF NON-CASH CAPITAL
CONTRIBUTIONS.................................................................................A-1
ii
EXHIBIT B - INITIAL PROPERTIES............................................................................B-1
EXHIBIT C - NOTICE OF EXERCISE OF REDEMPTION RIGHT........................................................C-1
iii
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CAPITAL AUTOMOTIVE L.P.
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF CAPITAL
AUTOMOTIVE L.P. (this "Agreement"), is made this ____, day of February, 1998 by
and among CAPITAL AUTOMOTIVE REIT, a Maryland real estate investment trust (in
its capacity as General Partner, the "General Partner"), and each of the Limited
Partners signatory hereto.
THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts,
understandings and intentions:
A. Capital Automotive L.P. (the "Partnership") was formed as a limited
partnership under the laws of the State of Delaware by a Certificate of Limited
Partnership filed with the Secretary of State of Delaware on November 14, 1997.
The Partnership is governed by a Limited Partnership Agreement dated November
21, 1997 maintained at the offices of the Partnership.
B. Capital Automotive L.P. is intended to result in an umbrella
partnership real estate investment trust in which Capital Automotive REIT shall
be the general partner.
C. In order to fund certain Administrative Expenses, as defined herein,
the Partnership assumed the obligation to repay certain obligations of the
General Partner, and has otherwise agreed to reimburse the General Partner for
any and all Administrative Expenses in connection with the formation of Capital
Automotive REIT and the Partnership.
D. The parties have reached certain understandings with respect to their
relative sharing of the benefits and burdens to be derived from the business
operations of the Partnership, and desire to enter into this Agreement in order
to (i) set forth herein such understandings and agreements; and (ii) set forth
their rights, obligations and understandings with respect to the Partnership and
its business.
NOW, THEREFORE, in consideration of the foregoing, and the covenants and
agreements between the parties hereto, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINED TERMS
The following defined terms used in this Agreement shall have the meanings
specified below:
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it may
be amended from time to time.
"Additional Limited Partner" means a Person admitted to this Partnership as
a Limited Partner pursuant to Section 4.02 hereof.
"Administrative Expenses" means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) all administrative and operating
costs and expenses of the General Partner, including any salaries or other
payments to trustees, officers and/or employees of the General Partner, and any
accounting and legal expenses of the General Partner, all of which costs and
expenses, the Partners have agreed, are expenses of the Partnership and not the
General Partner, and (iii) to the extent not included in clause (ii) above, REIT
Expenses.
"Affiliate" means, (i) any Person that, directly or indirectly, controls or
is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 5% or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, partner or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other equity interests.
"Agreed Value" means the fair market value of a Partner's non-cash Capital
Contribution as of the date hereof as agreed to by the Partners. For purposes
of this Agreement, the Agreed Value of a Partner's non-cash Capital Contribution
shall be equal to the number of Partnership Units received by such Partner in
exchange for an Initial Property or an interest therein or in connection with
the merger of a partnership of which such person is a partner with and into the
Partnership, or for any other non-cash asset so contributed, multiplied by the
Public Offering Price or, if the contribution is made after the date hereof, the
"Market Price" on the date of the contribution calculated in accordance with the
second and third sentences of the definition of "Cash Amount." The names and
addresses of the Partners, number of Partnership Units issued to each Partner,
and the Agreed Value of non-cash Capital Contributions is set forth on EXHIBIT
A.
"Agreement" means this Agreement of Limited Partnership of the Partnership.
"Capital Account" has the meaning provided in Section 4.04 hereof.
"Capital Automotive L.P." means Capital Automotive L.P., a Delaware limited
partnership.
"Capital Automotive REIT" means Capital Automotive REIT, a Maryland real
estate investment trust.
"Capital Contribution" means the total amount of capital initially
contributed or agreed to be contributed, as the context requires, to the
Partnership by each Partner pursuant to the terms of the Agreement. Any
reference to the Capital Contribution of a Partner shall include the Capital
Contribution made by a predecessor holder of the Partnership Interest of such
Partner. The paid-in Capital Contribution shall mean the cash amount or the
Agreed Value of other assets actually contributed by each Partner to the capital
of the Partnership.
"Capital Transaction" means the refinancing, sale, exchange, condemnation,
recovery of a damage award or insurance proceeds (other than business or rental
interruption insurance
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proceeds not reinvested in the repair or reconstruction of Properties), or other
disposition of any Property (or the Partnership's interest therein).
"Cash Amount" means an amount of cash per Partnership Unit equal to the
value of the REIT Shares Amount on the date of receipt by the General Partner of
a Notice of Redemption. The value of the REIT Shares Amount shall be based on
the average of the daily market price of REIT Shares for the twenty consecutive
trading days immediately preceding the five trading days prior to the date of
receipt by the General Partner of a Notice of Redemption. The market price for
each such trading day shall be: (i) if the REIT Shares are listed or admitted to
trading on any securities exchange or the NYSE, the sale price, regular way, on
such day, or if no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, on such day, (ii) if the REIT Shares are not
listed or admitted to trading on any securities exchange or the NYSE, the last
reported sale price on such day or, if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the General Partner, or (iii) if the
REIT Shares are not listed or admitted to trading on any securities exchange or
the NYSE and no such last reported sale price or closing bid and asked prices
are available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the General
Partner, or if there shall be no bid and asked prices on such day, the average
of the high bid and low asked prices, as so reported, on the most recent day
(not more than 10 days prior to the date in question) for which prices have been
so reported; PROVIDED THAT if there are no bid and asked prices reported during
the ten days prior to the date in question, the value of the REIT Shares shall
be determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. In the event the REIT Shares Amount includes rights that a holder
of REIT Shares would be entitled to receive, then the value of such rights shall
be determined by the Company acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate.
"Certificate" means any instrument or document that is required under the
laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.
"Charter" means the Declaration of Trust filed with the Secretary of State
of the State of Maryland, as amended or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
succeeding provision of the Code.
"Commission" means the U.S. Securities and Exchange Commission.
"Company" means Capital Automotive REIT, a Maryland real estate investment
trust.
"Conversion Factor" means 1.0, PROVIDED THAT in the event that the Company
(i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a
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distribution to all holders of its outstanding REIT Shares in REIT Shares, (ii)
subdivides its outstanding REIT Shares, or (iii) combines its outstanding REIT
Shares into a smaller number of REIT Shares, the Conversion Factor shall be
adjusted by multiplying the Conversion Factor by a fraction, the numerator of
which shall be the number of REIT Shares issued and outstanding on the record
date for such dividend, distribution, subdivision or combination (assuming for
such purposes that such dividend, distribution, subdivision or combination has
occurred as of such time), and the denominator of which shall be the actual
number of REIT Shares (determined without the above assumption) issued and
outstanding on such date. Any adjustment to the Conversion Factor shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event; PROVIDED, HOWEVER, that if the Company
receives a Notice of Redemption after the record date, but prior to the
effective date of such dividend, distribution, subdivision or combination, the
Conversion Factor shall be determined as if the Company had received the Notice
of Redemption immediately prior to the record date for such dividend,
distribution, subdivision or combination.
"Defaulting Limited Partner" has the meaning provided in Section 5.02(b)
hereof.
"Effective Date" means the date of closing of the Initial Offering.
"Equity Incentive Plan" means the Capital Automotive REIT 1998 Equity
Incentive Plan, as such plan may be amended from time to time, or any equity
incentive plan adopted in the future by the Company.
"Event of Bankruptcy" as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.
"Funding Loan" has the meaning provided in Section 4.03 hereof.
"GAAP" means generally accepted accounting principles, consistently
applied.
"General Partner" means Capital Automotive REIT, a Maryland real estate
investment trust, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.
"General Partnership Interest" means the Partnership Interest held by the
General Partner.
"Incentive Rights" has the meaning set forth in Section 4.02 hereof.
"Indemnitee" means (i) any Person made a party to a proceeding by reason of
his status as the General Partner or an affiliate of the General Partner or a
trustee or officer of the
4
Partnership or the General Partner or an affiliate of the General Partner or the
Partnership and (ii) such other Persons as the General Partner may designate in
good faith from time to time, in its reasonable discretion, giving consideration
to the interest of the Partnership.
"Independent Trustee" shall mean those individuals, who shall comprise a
majority of the Board of Trustee of the Company, who are not officers or
employees of the Company or Affiliates of (i) any lessee of any property of the
Company or the Partnership, (ii) any subsidiary of the Company or (iii) any
partnership which is an Affiliate of the Company, including the Partnership.
"Initial Properties" means those properties listed on EXHIBIT B attached
hereto.
"Initial Offering" means the initial offer and sale by the Company and the
purchase by the Underwriters (as defined in the Prospectus) of the common shares
of the Company for sale to the public.
"Limited Partner" means any Person named as a Limited Partner on EXHIBIT A
attached hereto, and any Person who becomes a Substitute or Additional Limited
Partner, in such Person's capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"Loss" has the meaning provided in Section 5.01(f) hereof.
"Minimum Limited Partnership Interest" means the lesser of (i) 1% or (ii)
if the total Capital Contributions to the Partnership exceed $50 million, 1%
divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
shall not be less than 0.2% at any time.
"New Securities" has the meaning set forth in Section 4.02(a)(ii) hereof.
"Notice of Redemption" means the Notice of Exercise of Redemption Right
substantially in the form attached as EXHIBIT C hereto.
"NYSE" means the New York Stock Exchange.
"Partner" means any General Partner or Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section 1.704-
2(i)(5).
"Partnership Interest" means an ownership interest in the Partnership by
either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
5
"Partnership Minimum Gain" has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).
"Partnership Record Date" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by the Company for
a distribution to its shareholders of some or all of its portion of such
distribution.
"Partnership Unit" means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The initial allocation of
Partnership Units among the Partners is as set forth on EXHIBIT A, as may be
amended from time to time.
"Percentage Interest" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The initial Percentage Interest of each Partner is as set forth opposite its
respective name on EXHIBIT A, as may be amended from time to time.
"Person" means any individual, partnership, corporation, joint venture,
trust or other entity.
"Profit" has the meaning provided in Section 5.01(f) hereof.
"Property" means any real estate property or other investment in which the
Partnership holds an ownership interest.
"Prospectus" means the final prospectus delivered to purchasers of the
Company's common stock in the Initial Offering.
"Public Offering Price" shall mean the initial public offering price set
forth in the Prospectus.
"Redeeming Partner" has the meaning provided in Section 8.04(a) hereof.
"Redemption Amount" means either the Cash Amount or the REIT Shares Amount,
as determined pursuant to Section 8.04(b) hereof.
"Redemption Right" has the meaning provided in Section 8.04(a) hereof.
"Redemption Shares" has the meaning provided in Section 8.05(a) hereof.
"Regulations" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any succeeding provision of the Regulations.
6
"REIT" means a real estate investment trust under Sections 856 through 859
of the Code.
"REIT Expenses" means (i) costs and expenses relating to the formation and
continuity of existence of the Company, including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
trustee, officer, or employee of the Company, (ii) costs and expenses relating
to the public offering and registration of securities by the Company and all
statements, reports, fees and expenses incidental thereto, including
underwriting discounts and selling commissions applicable to any such offering
of securities, (iii) costs and expenses associated with the preparation and
filing of any periodic reports by the Company under federal, state or local laws
or regulations, including filings with the Commission, (iv) costs and expenses
associated with compliance by the Company with laws, rules and regulations
promulgated by any regulatory body, including the Commission, and (v) all other
operating or administrative costs of the Company incurred in the ordinary course
of its business on behalf of the Partnership.
"REIT Share" means a share of common stock of the Company.
"REIT Shares Amount" shall mean a number of REIT Shares equal to the number
of Partnership Units offered for redemption by a Redeeming Partner, multiplied
by the Conversion Factor; PROVIDED THAT in the event the Company issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the "rights"), then the REIT
Shares Amount shall also include such rights that a holder of that number of
REIT Shares would be entitled to receive.
"Rule 144" has the meaning set forth in Section 8.05(a) hereof.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" has the meaning set forth in Section 8.04(b) hereof.
"Service" means the Internal Revenue Service.
"Specified Redemption Date" means 30 days after the receipt by the Company
of the Notice of Redemption.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Substitute Limited Partner" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 9.03 hereof.
"Transaction" has the meaning set forth in Section 7.01(c) hereof.
"Transfer" has the meaning set forth in Section 9.02(a) hereof.
2. PARTNERSHIP FORMATION AND IDENTIFICATION
a. NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership shall
be Capital Automotive L.P. The specified office and place of business
of the
7
Partnership shall be 0000 Xxxxx Xxxx Xxxxxx, #000, Xxxxxxxxx,
Xxxxxxxx 00000. The General Partner may at any time change the
location of such office, provided the General Partner gives notice to
the Partners of any such change. The name and address of the
Partnership's registered agent is Corporation Service Company, 0000
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The sole duty of the
registered agent as such is to forward to the Partnership any notice
that is served on him as registered agent.
b. PARTNERS.
i. As of the date hereof, the General Partner of the Partnership
shall be Capital Automotive REIT, a Maryland real estate
investment trust. Its principal place of business shall be the
same as that of the Partnership.
ii. The Limited Partners shall be those Persons identified as
Limited Partners in EXHIBIT A hereto, as amended from time to
time. The Limited Partners (other than the Original Limited
Partner) hereby are admitted as Limited Partners.
c. TERM AND DISSOLUTION.
i. The term of the Partnership shall continue in full force and
effect until December 31, 2073 except that the Partnership
shall be dissolved upon the happening of any of the following
events:
(1) The occurrence of an Event of Bankruptcy as to a General
Partner or the dissolution, death or withdrawal of a
General Partner unless the business of the Partnership is
continued pursuant to Section 7.03(b) hereof; PROVIDED
THAT if a General Partner is on the date of such
occurrence a partnership, the dissolution of such General
Partner as a result of the dissolution, death,
withdrawal, removal or Event of Bankruptcy of a partner
in such partnership shall not be an event of dissolution
of the Partnership if the business of such General
Partner is continued by the remaining partner or
partners, either alone or with additional partners, and
such General Partner and such partners comply with any
other applicable requirements of this Agreement;
(2) The passage of 90 days after the sale or other
disposition of all or substantially all the assets of the
Partnership; (provided that if the Partnership receives
an installment obligation as consideration for such sale
or other disposition, the Partnership shall continue,
unless sooner dissolved under the provisions of this
Agreement, until such time as such note or notes are paid
in full);
(3) The redemption of all Limited Partnership Interests
(other than any of such interests held by the Company);
or
(4) The election by the General Partner that the Partnership
should be dissolved.
8
ii. Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof),
the General Partner (or its trustee, receiver, successor or
legal representative) shall amend or cancel the Certificate and
liquidate the Partnership's assets and apply and distribute the
proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner
may either (i) defer liquidation of, or withhold from
distribution, for a reasonable time, any assets of the
Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the
assets to the Partners in kind.
d. FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file at the
expense of the Partnership, the Certificate and any and all
amendments thereto and all requisite fictitious name statements and
notices in such places and jurisdictions as may be necessary to cause
the Partnership to be treated as a limited partnership under, and
otherwise to comply with, the laws of each state or other
jurisdiction in which the Partnership conducts business.
3. BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act, provided, however, that such business
shall be limited to and conducted in such a manner as to permit the Company at
all times to qualify as a REIT, unless the Company otherwise ceases to qualify
as a REIT, (ii) to enter into any partnership, joint venture or other similar
arrangement to engage in any of the foregoing or the ownership of interests in
any entity engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. The General Partner shall also be empowered to do
any and all acts and things necessary or prudent to ensure that the Partnership
will not be classified as a "publicly traded partnership" for purposes of
Section 7704 of the Code.
4. CAPITAL CONTRIBUTIONS AND ACCOUNTS
a. CAPITAL CONTRIBUTIONS. The Company, in its capacity as General
Partner and as a Limited Partner shall contribute to the capital of
the Partnership cash in an amount set forth on EXHIBIT A, which shall
represent the gross proceeds of the Initial Offering. The Limited
Partners, other than the Company, shall contribute to the capital of
the Partnership certain real property interests in one or more of the
Initial Properties as set forth opposite their names on EXHIBIT A.
The Agreed Values of the Limited Partners' ownership interests in the
Initial Property that are contributed to the Partnership are as set
forth opposite their names on EXHIBIT A.
b. ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS. Except as provided in Sections 4.02 or 4.03,
the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The General
Partner may contribute additional capital to the Partnership, from
time to time, and receive
9
additional Partnership Interests in respect thereof, in the manner
contemplated in this Section 4.02.
i. ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.
(1) GENERAL. The General Partner is hereby authorized to
cause the Partnership to issue such additional
Partnership Interests in the form of Partnership Units
for any Partnership purpose at any time or from time to
time, to the Partners (including the Company) or to other
Persons for such consideration and on such terms and
conditions as shall be established by the General Partner
in its sole and absolute discretion, all without the
approval of any Limited Partners. Any additional
Partnership Interests issued thereby may be issued in one
or more classes, or one or more series of any of such
classes, with such designations, preferences and
relative, participating, optional or other special
rights, powers and duties, including rights, powers and
duties senior to Limited Partnership Interests, all as
shall be determined by the General Partner in its sole
and absolute discretion and without the approval of any
Limited Partner, subject to Delaware law, including,
without limitation, (i) the allocation of items of
Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests; (ii)
the right of each such class or series of Partnership
Interests to share in Partnership distributions; and
(iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of
the Partnership; PROVIDED, HOWEVER, that no additional
Partnership Interests shall be issued to the Company
unless either:
(a) the additional Partnership Interests are issued in
connection with an issuance of shares of or other
interests in the Company, which shares or interests
have designations, preferences and other rights,
all such that the economic interests are
substantially similar to the designations,
preferences and other rights of the additional
Partnership Interests issued to the Company by the
Partnership in accordance with this Section 4.02
and (B) except as provided in Section 4.02(a)(ii)
hereof, the Company shall make a Capital
Contribution to the Partnership in an amount equal
to the proceeds raised in connection with the
issuance of such shares of or other interests in
the Company, or
(b) the additional Partnership Interests are issued to
all Partners in proportion to their respective
Percentage Interests.
Without limiting the foregoing, the General Partner is
expressly authorized to cause the Partnership to issue Partnership
Units for less than fair market value, under the Equity Incentive
Plan or otherwise, so long as the General Partner
10
concludes in good faith that such issuance is in the best interests of
the General Partner, the Company and the Partnership.
(2) UPON ISSUANCE OF NEW SECURITIES. After the Initial
Offering, the Company shall not issue any additional REIT
Shares (other than REIT Shares issued in connection with a
redemption pursuant to Section 8.04 hereof) or rights,
options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT
Shares (collectively, "New Securities") other than to all
holders of REIT Shares, unless (A) the General Partner shall
cause the Partnership to issue to the Company Partnership
Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having
designations, preferences and other rights, all such that
the economic interests are substantially similar to those of
the New Securities, and (B) the Company contributes the
proceeds from the issuance of such New Securities (including
property) and from the exercise of rights contained in such
New Securities to the Partnership; provided, however, that
the Company is allowed to issue New Securities in connection
with an acquisition of property to be held directly by the
Company, but if and only if, such direct acquisition and
issuance of New Securities have been approved and determined
to be in the best interests of the Company and the
Partnership by a majority of the Independent Trustees.
Without limiting the foregoing, the Company is expressly
authorized to issue New Securities for less than fair market
value, and to cause the Partnership to issue to the General
Partner corresponding Partnership Interests, so long as (x)
the General Partner concludes in good faith that such
issuance is in the best interests of the General Partner and
the Partnership (for example, and not by way of limitation,
the issuance of REIT Shares and corresponding Partnership
Units pursuant to an employee stock purchase plan providing
for employee purchases of REIT Shares at a discount from
fair market value or employee stock options that have an
exercise price that is less than the fair market value of
the REIT Shares, either at the time of issuance or at the
time of exercise), and (y) the Company contributes all
proceeds from such issuance to the Partnership. By way of
example, in the event the Company issues REIT Shares for a
cash purchase price and contributes all of the proceeds of
such issuance to the Partnership as required hereunder, the
Company shall be issued a number of additional Partnership
Units equal to the product of (A) the number of such REIT
Shares issued by the Company the proceeds of which were so
contributed, multiplied by (B) a fraction, the numerator of
which is one hundred percent (100%), and the denominator of
which is the Conversion Factor in effect on the date of such
contribution.
ii. CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE OF SHARES.
In connection with any and all issuances of
11
REIT Shares, the Company shall contribute all of the proceeds
raised in connection with such issuance as capital contributions
to the Partnership of such proceeds, provided that if the
proceeds actually received by and contributed by the Company are
less than the gross proceeds of such issuance as a result of any
underwriter's discount or other expenses paid or incurred in
connection with such issuance, then the Company shall be deemed
to have made a Capital Contribution to the Partnership in the
amount of the gross proceeds of such issuance and the Partnership
shall be deemed simultaneously to have paid such offering
expenses as an expense of the Partnership in connection with the
required issuance of additional Partnership Units to the Company
for such Capital Contribution pursuant to Section 4.02(a) hereof.
iii. MINIMUM LIMITED PARTNERSHIP INTEREST. In the event that either a
redemption pursuant to Section 8.04 hereof or an additional
Capital Contribution by the Company would result in the Limited
Partners (other than the Company in its capacity as a Limited
Partner), in the aggregate, owning less than the Minimum Limited
Partnership Interest, the General Partner and the Limited
Partners shall form another partnership and contribute sufficient
Limited Partnership Interests together with such other Limited
Partners so that the Limited Partners (other than the Company in
its capacity as a Limited Partner) own at least the Minimum
Limited Partnership Interest.
iv. WARRANTS. No warrant issued by the Company or the Partnership
may be exercised for Partnership Units if, in the opinion of
legal counsel for the Partnership, the issuance of such
Partnership Units would result in the Partnership's being treated
as an association taxable as a corporation (other than a
qualified REIT subsidiary within the meaning of Section 856(i) of
the Code).
c. GENERAL PARTNER LOANS. The General Partner may from time to time
advance funds to the Partnership for any proper Partnership purpose as a loan
("Funding Loan"), provided that any such funds must first be obtained by the
General Partner from a third party lender, and then all of such funds must be
loaned by the General Partner to the Partnership on the same terms and
conditions, including principal amount, interest rate, repayment schedule and
costs and expenses, as shall be applicable with respect to or incurred in
connection with such loan with such third party lender. Except for Funding
Loans, the General Partner shall not incur any indebtedness for borrowed funds;
provided, however, that any loan proceeds received by the General Partner may be
distributed to the Company and, in turn, to the Company's shareholders or other
equity holders if such loan and distribution have been approved and determined
to be necessary to enable the Company to maintain its status as a REIT under
Sections 856-859 of the Code by a majority of the Independent Trustees.
d. CAPITAL ACCOUNTS. A separate capital account (a "Capital Account")
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires
an additional Partnership Interest in exchange for more than a de minimis
Capital Contribution,
12
(ii) the Partnership distributes to a Partner more than a de minimis
amount of Partnership property as consideration for a Partnership
Interest, or (iii) the Partnership is liquidated within the meaning of
Regulation Section 1.704-l(b)(2)(ii)(g), the General Partner shall
revalue the property of the Partnership to its fair market value (as
determined by the General Partner and taking into account Section
7701(g) of the Code) in accordance with Regulations Section 1.704-
l(b)(2)(iv)(f). When the Partnership's property is revalued by the
General Partner, the Capital Accounts of the Partners shall be
adjusted in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f)
and (g), which generally require such Capital Accounts to be adjusted
to reflect the manner in which the unrealized gain or loss inherent in
such property (that has not been reflected in the Capital Accounts
previously) would be allocated among the Partners pursuant to Section
5.01 if there were a taxable disposition of such property for its fair
market value (as determined by the General Partner and taking into
account Section 7701(g) of the Code) on the date of the revaluation.
e. PERCENTAGE INTERESTS. If the number of outstanding Partnership Units
increases or decreases during a taxable year, each Partner's
Percentage Interest shall be adjusted to a percentage equal to the
number of Partnership Units held by such Partner divided by the
aggregate number of Partnership Units outstanding after giving effect
to such increase or decrease. If the Partners' Percentage Interests
are adjusted pursuant to this Section 4.05, the Profits and Losses for
the taxable year in which the adjustment occurs shall be allocated
between the part of the year ending on the day of the adjustment and
the part of the year beginning on the following day either (i) as if
the taxable year had ended on the date of the adjustment or (ii) based
on the number of days in each part. The General Partner, in its sole
discretion, shall determine which method shall be used to allocate
Profits and Losses for the taxable year in which the adjustment
occurs. The allocation of Profits and Losses for the earlier part of
the year shall be based on the Percentage Interests before adjustment,
and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.
f. NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to interest
on its Capital Contribution.
g. RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account
or to receive any distribution from the Partnership, except as
specifically provided in this Agreement. Except as otherwise provided
herein, there shall be no obligation to return to any Partner or
withdrawn Partner any part of such Partner's Capital Contribution for
so long as the Partnership continues in existence.
h. NO THIRD PARTY BENEFICIARY. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the
right or obligation of any Partner to make Capital Contributions or
loans or to pursue any other right or remedy hereunder or at law or in
equity, it being understood and agreed that the provisions of this
Agreement shall be solely for the benefit of, and may be enforced
solely by, the parties hereto and their respective successors and
assigns. None of the rights or obligations of the Partners herein set
forth to make Capital Contributions or loans to the Partnership shall
be deemed an asset of the
13
Partnership for any purpose by any creditor or other third party, nor
may such rights or obligations be sold, transferred or assigned by the
Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners.
In addition, it is the intent of the parties hereto that no
distribution to any Limited Partner shall be deemed a return of money
or other property in violation of the Act.
i. EQUITY INCENTIVE PLAN.
i. If grants of REIT Shares are made in connection with a Equity
Incentive Plan:
(1) The Company shall contribute, as soon as practicable after
such grant, to the Partnership (to be thereafter taken into
account for the purposes of calculating any cash
distributable to the Partners), an amount equal to the
price, if any, paid to the Company by the party receiving
such REIT Shares;
(2) The Partnership shall issue to the Company an aggregate
number of additional Partnership Units equal to the product
of (1) the number of such REIT Shares issued by the Company,
multiplied by (2) a fraction, the numerator of which is
100%, and the denominator of which is the Conversion Factor
in effect on the date of such contribution; and
(3) The Company's Percentage Interest and the Percentage
Interests of the other Limited Partners shall be adjusted as
set forth in Section 4.02.
ii. If stock options or warrants granted in connection with a Equity
Incentive Plan or the Initial Offering are exercised:
(1) The Company shall contribute, as soon as practicable after
such exercise, to the Partnership (to be thereafter taken
into account for purposes of calculating any cash
distributable to the Partners), an amount equal to the
exercise price, if any, paid to the Company by the
exercising party in connection with the exercise of the
option or warrant;
(2) The Partnership shall issue to the Company as a
reimbursement of a Partnership expense pursuant to Section
6.05 an aggregate number of additional Partnership Units
equal to the product of (1) the number of REIT Shares issued
by the Company in satisfaction of such exercised option or
warrant, multiplied by (2) a fraction, the numerator of
which is 100%, and the denominator of which is the
Conversion Factor in effect on the date of such
contribution; and
14
(3) The Company's Percentage Interest and the Percentage
Interests of the other Limited Partners shall be adjusted as
set forth in Section 4.02.
iii. If the Company grants any trustee or, officer or employee share
appreciation rights, performance share awards or other similar
rights ("Incentive Rights"), then simultaneously, the Partnership
shall grant the Company corresponding and economically equivalent
rights with respect to their Partnership Units. Consequently,
upon the cash payment by the Company to its trustees, officers or
employees pursuant to such Incentive Rights, the Partnership
shall make an equal cash payment to the Company as a
reimbursement of a Partnership expense pursuant to Section 6.05
hereof.
5. PROFITS AND LOSSES; DISTRIBUTIONS
a. ALLOCATION OF PROFIT AND LOSS.
i. GENERAL. Except as otherwise provided in this Section 5.01,
Profit and Loss of the Partnership for each fiscal year of the
Partnership shall be allocated among the Partners in accordance
with their respective Percentage Interests.
ii. MINIMUM GAIN CHARGEBACK. Notwithstanding any provision to the
contrary, (i) any expense of the Partnership that is a
"nonrecourse deduction" within the meaning of Regulations Section
1.704-2(b)(1) shall be allocated in accordance with the Partners'
respective Percentage Interests, (ii) any expense of the
Partnership that is a "partner nonrecourse deduction" within the
meaning of Regulations Section 1.704-2(i)(2) shall be allocated
in accordance with Regulations Section 1.704-2(i)(1), (iii) if
there is a net decrease in Partnership Minimum Gain within the
meaning of Regulations Section 1.704-2(f)(1) for any Partnership
taxable year, items of gain and income shall be allocated among
the Partners in accordance with Regulations Section 1.704-2(f)
and the ordering rules contained in Regulations Section 1.704-
2(j), and (iv) if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain within the meaning of Regulations Section
1.704-2(i)(4) for any Partnership taxable year, items of gain and
income shall be allocated among the Partners in accordance with
Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Regulations Section 1.704-2(j). A Partner's
"interest in partnership profits" for purposes of determining its
share of the nonrecourse liabilities of the Partnership within
the meaning of Regulations Section 1.752-3(a)(3) shall be such
Partner's Percentage Interest.
iii. QUALIFIED INCOME OFFSET. If a Limited Partner receives in any
taxable year an adjustment, allocation, or distribution described
in subparagraphs (4), (5), or (6) of Regulations Section 1.704-
l(b)(2)(ii)(d) that causes or increases a negative balance in
such Partner's Capital Account that exceeds the sum of such
Partner's shares of Partnership
15
Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Sections 1.704-2(g) and
1.704-2(i), such Partner shall be allocated specially for such
taxable year (and, if necessary, later taxable years) items of
income and gain in an amount and manner sufficient to eliminate
such negative Capital Account balance as quickly as possible as
provided in Regulations Section 1.704-l(b)(2)(ii)(d). After the
occurrence of an allocation of income or gain to a Limited
Partner in accordance with this Section 5.01(c), to the extent
permitted by Regulations Section 1.704-l(b), items of expense or
loss shall be allocated to such Partner in an amount necessary to
offset the income or gain previously allocated to such Partner
under this Section 5.01(c).
iv. CAPITAL ACCOUNT DEFICITS. Loss shall not be allocated to a
Limited Partner to the extent that such allocation would cause a
deficit in such Partner's Capital Account (after reduction to
reflect the items described in Regulations Section 1.704-
1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such
Partner's shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain. Any Loss in excess of that
limitation shall be allocated to the General Partner. After the
occurrence of an allocation of Loss to the General Partner in
accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-l(b), Profit shall be allocated to such
Partner in an amount necessary to offset the Loss previously
allocated to such Partner under this Section 5.01(d).
v. ALLOCATIONS BETWEEN TRANSFEROR AND TRANSFEREE. If a Partner
transfers any part or all of its Partnership Interest, and the
transferee is admitted as a substitute Partner as provided
herein, the distributive shares of the various items of Profit
and Loss allocable among the Partners during such fiscal year of
the Partnership shall be allocated between the transferor and the
substitute Partner either (i) as if the Partnership's fiscal year
had ended on the date of the transfer, or (ii) based on the
number of days of such fiscal year that each was a Partner
without regard to the results of Partnership activities in the
respective portions of such fiscal year in which the transferor
and the transferee were Partners. The General Partner, in its
sole discretion, shall determine which method shall be used to
allocate the distributive shares of the various items of Profit
and Loss between the transferor and the substitute Partner.
vi. DEFINITION OF PROFIT AND LOSS. "Profit" and "Loss" and any items
of income, gain, expense, or loss referred to in this Agreement
shall be determined in accordance with federal income tax
accounting principles, as modified by Regulations Section 1.704-
l(b)(2)(iv), except that Profit and Loss shall not include items
of income, gain and expense that are specially allocated pursuant
to Section 5.01(b), 5.01(c), or 5.01(d). All allocations of
income, Profit, gain, Loss, and expense (and all items contained
therein) for federal income tax purposes shall be identical to
all allocations of such items set forth in this Section 5.01,
except as otherwise required by Section 704(c) of the Code and
Regulations Section 1.704-l(b)(4). The General Partner shall have
the authority to elect the method to be used by the Partnership
for allocating items of income, gain, and
16
expense as required by Section 704(c) of the Code and such
election shall be binding on all Partners.
b. DISTRIBUTION OF CASH.
i. The General Partner shall distribute cash on a quarterly (or, at
the election of the General Partner, more frequent) basis, in an
amount determined by the General Partner in its sole discretion,
to the Partners who are Partners on the Partnership Record Date
with respect to such quarter (or other distribution period) in
accordance with their respective Percentage Interests on the
Partnership Record Date; PROVIDED, HOWEVER, that if a new or
existing Partner acquires an additional Partnership Interest in
exchange for a Capital Contribution on any date other than a
Partnership Record Date, the cash distribution attributable to
such additional Partnership Interest relating to the Partnership
Record Date next following the issuance of such additional
Partnership Interest shall be reduced in the proportion to (i)
the number of days that such additional Partnership Interest is
held by such Partner bears to (ii) the number of days between
such Partnership Record Date and the immediately preceding
Partnership Record Date.
ii. Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it
determines to be necessary or appropriate to cause the
Partnership to comply with any withholding requirements
established under the Code or any other federal, state or local
law including, without limitation, pursuant to Sections 1441,
1442, 1445 and 1446 of the Code. To the extent that the
Partnership is required to withhold and pay over to any taxing
authority any amount resulting from the allocation or
distribution of income to the Partner or assignee (including by
reason of Section 1446 of the Code), either (i) if the actual
amount to be distributed to the Partner or assignee equals or
exceeds the amount required to be withheld by the Partnership,
the amount withheld shall be treated as a distribution of cash in
the amount of such withholding to such Partner or assignee, or
(ii) if the actual amount to be distributed to the Partner or
assignee is less than the amount required to be withheld by the
Partnership, the amount required to be withheld shall be treated
as a loan (a "Partnership Loan") from the Partnership to the
Partner on the day the Partnership pays over such amount to the
applicable taxing authority. A Partnership Loan shall be repaid
through withholding by the Partnership with respect to subsequent
distributions to the applicable Partner or assignee. In the
event that a Limited Partner or assignee (collectively, a
"Defaulting Limited Partner") fails to pay any amount owed to the
Partnership with respect to the Partnership Loan within 15 days
after demand for payment thereof is made by the Partnership on
the Defaulting Limited Partner, the General Partner, in its sole
discretion, may elect to make the payment to the Partnership on
behalf of such Defaulting Limited Partner. In such event, on the
date of payment, the General Partner shall be deemed to have
extended a loan (a "General Partner Loan") to the Defaulting
Limited Partner in the amount of the payment made by the General
Partner and shall succeed to all rights and remedies of the
17
Partnership against the Defaulting Limited Partner as to that
amount. Without limitation, the General Partner shall have the
right to receive any distributions that otherwise would be made
by the Partnership to the Defaulting Limited Partner until such
time as the General Partner Loan has been paid in full, and any
such distributions so received by the General Partner shall be
treated as having been received by the Defaulting Limited Partner
and immediately paid to the General Partner.
Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.02(b) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in THE WALL STREET JOURNAL, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.
iii. In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to
receive a dividend with respect to a REIT Share for which all or
part of such Partnership Unit has been or will be exchanged.
c. REIT DISTRIBUTION REQUIREMENTS. The General Partner shall use its
reasonable efforts to cause the Partnership to distribute amounts
sufficient to enable the Company (i) to meet its distribution
requirement for qualification as a REIT as set forth in Section
857(a)(1) of the Code and (ii) to avoid any federal income or excise
tax liability imposed by the Code.
d. NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be entitled to
demand property other than cash in connection with any distributions
by the Partnership.
e. LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS. Notwithstanding any of
the provisions of this Article V, no Partner shall have the right to
receive and the General Partner shall not have the right to make, a
distribution which includes a return of all or part of a Partner's
Capital Contributions, unless after giving effect to the return of a
Capital Contribution, the sum of all liabilities of the Partnership,
other than the liabilities to a Partner for the return of his Capital
Contribution, does not exceed the fair market value of the
Partnership's assets.
f. DISTRIBUTIONS UPON LIQUIDATION.
i. Upon liquidation of the Partnership, after payment of, or
adequate provision for, debts and obligations of the Partnership,
including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive
Capital Accounts in accordance with their respective positive
Capital Account balances. For purposes of the preceding sentence,
the Capital Account of each Partner shall be determined after all
adjustments made in accordance with Sections 5.01 and 5.02
resulting from Partnership operations and from all sales and
dispositions of all or any part of the Partnership's assets. Any
distributions
18
pursuant to this Section 5.06 should be made by the end of the
Partnership's taxable year in which the liquidation occurs (or,
if later, within 90 days after the date of the liquidation). To
the extent deemed advisable by the General Partner, appropriate
arrangements (including the use of a liquidating trust) may be
made to assure that adequate funds are available to pay any
contingent debts or obligations.
ii. If the General Partner has a negative balance in its Capital
Account following a liquidation of the Partnership, as determined
after taking into account all Capital Account adjustments in
accordance with Sections 5.01 and 5.02 resulting from Partnership
operations and from all sales and dispositions of all or any part
of the Partnership's assets, the General Partner shall contribute
to the Partnership an amount of cash equal to the negative
balance in its Capital Account and such cash shall be paid or
distributed by the Partnership to creditors, if any, and then to
the Limited Partners in accordance with Section 5.06(a). Such
contribution by the General Partner shall be made by the end of
the Partnership's taxable year in which the liquidation occurs
(or, if later, within 90 days after the date of the liquidation).
g. SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that the
allocations of Profit and Loss under the Agreement have substantial
economic effect (or be consistent with the Partners' interests in the
Partnership in the case of the allocation of losses attributable to
nonrecourse debt) within the meaning of Section 704(b) of the Code as
interpreted by the Regulations promulgated pursuant thereto. Article V
and other relevant provisions of this Agreement shall be interpreted
in a manner consistent with such intent.
6. RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
a. MANAGEMENT OF THE PARTNERSHIP.
i. Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive
discretion to manage and control the business of the Partnership
for the purposes herein stated, and shall make all decisions
affecting the business and assets of the Partnership. Subject to
the restrictions specifically contained in this Agreement, the
powers of the General Partner shall include, without limitation,
the authority to take the following actions on behalf of the
Partnership:
(1) to acquire, purchase, own, lease and dispose of any real
property and any other property or assets that the General
Partner determines are necessary or appropriate or in the
best interests of the business of the Partnership;
(2) subject to the terms of any applicable lease, to construct
buildings and make other improvements on the properties
owned or leased by the Partnership;
19
(3) to borrow money for the Partnership, issue evidences of
indebtedness in connection therewith, refinance, guarantee,
increase the amount of, modify, amend or change the terms
of, or extend the time for the payment of, any indebtedness
or obligation to the Partnership, and secure such
indebtedness by mortgage, deed of trust, pledge or other
lien on the Partnership's assets;
(4) to pay, either directly or by reimbursement, for all
operating costs and general administrative expenses of the
Company or the Partnership, to third parties or to the
General Partner as set forth in this Agreement;
(5) to lease all or any portion of any of the Partnership's
assets, whether or not the terms of such leases extend
beyond the termination date of the Partnership and whether
or not any portion of the Partnership's assets so leased are
to be occupied by the lessee, or, in turn, subleased in
whole or in part to others, for such consideration and on
such terms as the General Partner may determine;
(6) to prosecute, defend, arbitrate, or compromise any and all
claims or Liabilities in favor of or against the
Partnership, on such terms and in such manner as the General
Partner may reasonably determine, and similarly to
prosecute, settle or defend litigation with respect to the
Partners, the Partnership, or the Partnership's assets;
PROVIDED, HOWEVER, that the General Partner may not, without
the consent of all of the Partners, confess a judgment
against the Partnership;
(7) to file applications, communicate, and otherwise deal with
any and all governmental agencies having jurisdiction over,
or in any way affecting, the Partnership's assets or any
other aspect of the Partnership business;
(8) to make or revoke any election permitted or required of the
Partnership by any taxing authority;
(9) to maintain such insurance coverage for public liability,
fire and casualty, and any and all other insurance for the
protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or
beneficial to the Partnership, in such amounts and such
types, as it shall determine from time to time;
(10) to determine whether or not to apply any insurance proceeds
for any property to the restoration of such property or to
distribute the same;
(11) to retain legal counsel, accountants, consultants, real
estate brokers, and such other persons, as the General
Partner may deem necessary or appropriate in connection with
the Partnership business and to
20
pay therefor such reasonable remuneration as the General
Partner may deem reasonable and proper;
(12) to retain other services of any kind or nature in connection
with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and
proper;
(13) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and
authority conferred upon the General Partner;
(14) to maintain accurate accounting records and to file promptly
all federal, state and local income tax returns on behalf of
the Partnership;
(15) to distribute Partnership cash or other Partnership assets
in accordance with this Agreement;
(16) to form or acquire an interest in, and contribute property
to, any further limited or general partnerships, joint
ventures or other relationships that it deems desirable
(including, without limitation, the acquisition of interests
in, and the contributions of property to, its Subsidiaries
and any other Person in which it has an equity interest from
time to time);
(17) to establish Partnership reserves for working capital,
capital expenditures, contingent liabilities, or any other
valid Partnership purpose; and
(18) to take such other action, execute, acknowledge, swear to or
deliver such other documents and instruments, and perform
any and all other acts the General Partner deems necessary
or appropriate for the formation, continuation and conduct
of the business and affairs of the Partnership (including,
without limitation, all actions consistent with allowing the
Company at all times to qualify as a REIT unless the Company
voluntarily terminates its REIT status) and to possess and
enjoy all of the rights and powers of a general partner as
provided by the Act.
ii. Except as otherwise provided herein, to the extent the duties of
the General Partner require expenditures of funds to be paid to
third parties, the General Partner shall not have any obligations
hereunder except to the extent that Partnership funds are
reasonably available to it for the performance of such duties,
and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend
its individual funds for payment to third parties or to undertake
any individual liability or obligation on behalf of the
Partnership.
b. DELEGATION OF AUTHORITY. The General Partner may delegate any or all
of its powers, rights and obligations hereunder, and may appoint,
employ, contract
21
or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General
Partner, perform any acts or services for the Partnership as the
General Partner may approve.
c. INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
i. The Partnership shall indemnify an Indemnitee from and against
any and all losses, claims, damages, liabilities (joint or
several), expenses (including reasonable legal fees and
expenses), judgments, fines, settlements, and other amounts
arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in
this Agreement in which any Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was
material to the matter giving rise to the proceeding and either
was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) the Indemnitee actually received an
improper personal benefit in money, property or services; or
(iii) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did
not meet the requisite standard of conduct set forth in this
Section 6.03(a). The termination of any proceeding by conviction
or upon a plea of nolo contendere or its equivalent, or an entry
of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to
that specified in this Section 6.03(a). Any indemnification
pursuant to this Section 6.03 shall be made only out of the
assets of the Partnership.
ii. The Partnership may reimburse an Indemnitee for reasonable
expenses incurred by an Indemnitee who is a party to a proceeding
in advance of the final disposition of the proceeding upon
receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the
Partnership as authorized in this Section 6.03 has been met, and
(ii) a written undertaking by or on behalf of the Indemnitee to
repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.
iii. The indemnification provided by this Section 6.03 shall be in
addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote
of the Partners, as a matter of law or otherwise, and shall
continue as to an Indemnitee who has ceased to serve in such
capacity.
iv. The Partnership may purchase and maintain insurance, on behalf of
the Indemnitees and such other Persons as the General Partner
shall determine, against any liability that may be asserted
against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of
whether the Partnership would have the power to
22
indemnify such Person against such liability under the provisions
of this Agreement.
v. For purposes of this Section 6.03, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of
an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise
involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee
with respect to an employee benefit plan pursuant to applicable
law shall constitute fines within the meaning of this Section
6.03; and actions taken or omitted by the Indemnitee with respect
to an employee benefit plan in the performance of its duties for
a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the
Partnership.
vi. In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions
set forth in this Agreement.
vii. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.03 because the Indemnitee had an
interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
viii.The provisions of this Section 6.03 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of
any other Persons.
d. LIABILITY OF THE GENERAL PARTNER.
i. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary
damages to the Partnership or any Partners for losses sustained
or liabilities incurred as a result of errors in judgment or of
any act or omission if the General Partner acted in good faith.
Additionally, the General Partner shall not be in breach of any
duty that the General Partner may owe to the Limited Partners or
the Partnership or any other Persons under this Agreement or of
any duty stated or implied by law or equity, provided the General
Partner, acting in good faith, abides by the terms of this
Agreement.
ii. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the Company's
shareholders collectively, that the General Partner is under no
obligation to consider the separate interests of the Limited
Partners (including, without limitation, the tax consequences to
the Limited Partners) in deciding whether to cause the
Partnership to take (or decline to take) any actions. In the
event of a conflict between the interests of the shareholders of
the Company on one hand and the Limited Partners on the other,
the General Partner shall endeavor in good faith to resolve the
conflict in a manner not adverse to
23
either the shareholders of the Company or the Limited Partners;
provided the General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits
not derived by Limited Partners in connection with such
decisions, provided that the General Partner has acted in good
faith.
iii. Subject to its obligations and duties as General Partner set
forth in Section 6.01 hereof, the General Partner may exercise
any of the powers granted to it under this Agreement and perform
any of the duties imposed upon it hereunder either directly or by
or through its agents. The General Partner shall not be
responsible for any misconduct or negligence on the part of any
such agent appointed by it in good faith.
iv. Notwithstanding any other provisions of this Agreement or the
Act, any action of the General Partner on behalf of the
Partnership or any decision of the General Partner to refrain
from acting on behalf of the Partnership, undertaken in the good
faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the Company to
continue to qualify as a REIT or (ii) to prevent the Company from
incurring any taxes under Section 857, Section 4981, or any other
provision of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
v. Any amendment, modification or repeal of this Section 6.04 or any
provision hereof shall be prospective only and shall not in any
way affect the limitations on the General Partner's liability to
the Partnership and the Limited Partners under this Section 6.04
as in effect immediately prior to such amendment, modification or
repeal with respect to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of
when claims relating to such matters may arise or be asserted.
e. EXPENDITURES BY THE 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 (including Administrative Expenses)
shall be obligations of the Partnership, and the General Partner shall
be entitled to reimbursement by the Partnership for any expenditure
(including Administrative Expenses) incurred by it on behalf of the
Partnership 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. This provision shall be given effect as of
the date of formation of the Partnership.
f. OUTSIDE ACTIVITIES. Subject to Section 6.08 hereof, the Charter and
any agreements entered into by the General Partner or its Affiliates
with the Partnership or a Subsidiary, any officer, director, employee,
agent, trustee, Affiliate or shareholder of the General Partner shall
be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including
business interests and activities substantially similar or identical
to those of the Partnership. Neither the Partnership nor any of the
24
Limited Partners shall have any rights by virtue of this Agreement in
any such business ventures, interests or activities. None of the
Limited Partners nor any other Person shall have any rights by virtue
of this Agreement or the partnership relationship established hereby
in any such business ventures, interests or activities, and the
General Partner shall have no obligation pursuant to this Agreement to
offer any interest in any such business ventures, interests and
activities to the Partnership or any Limited Partner, even if such
opportunity is of a character which, if presented to the Partnership
or any Limited Partner, could be taken by such Person.
g. EMPLOYMENT OR RETENTION OF AFFILIATES.
i. Any Affiliate of the General Partner may be employed or retained
by the Partnership and may otherwise deal with the Partnership
(whether as a buyer, lessor, lessee, manager, furnisher of goods
or services, broker, agent, lender or otherwise) and may receive
from the Partnership any compensation, price, or other payment
therefor which the General Partner determines to be fair and
reasonable.
ii. The Partnership may lend or contribute to its Subsidiaries or
other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and
conditions established in the sole and absolute discretion of the
General Partner. The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other Person.
iii. The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it
is or thereby becomes a participant upon such terms and subject
to such conditions as the General Partner deems are consistent
with this Agreement and applicable law.
iv. Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or
convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to
transactions that are on terms that are fair and reasonable to
the Partnership.
h. GENERAL PARTNER PARTICIPATION. The General Partner agrees that all
business activities of the General Partner, including activities
pertaining to the acquisition, development and/or ownership of
property, shall be conducted through the Partnership or one or more
subsidiary partnerships. The General Partner also agrees that all
loans from the General Partner to the Partnership shall constitute
Funding Loans, subject to the exception set forth in Section 4.03
hereof.
i. TITLE TO PARTNERSHIP ASSETS. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively, shall have any ownership interest in
such Partnership assets or any portion thereof. Title to any or all of
the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General
25
Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership
assets for which legal title is held in the name of the General
Partner or any nominee or Affiliate of the General Partner shall be
held by the General Partner for the use and benefit of the Partnership
in accordance with the provisions of this Agreement; PROVIDED,
HOWEVER, that the General Partner shall use its best efforts to cause
beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets
shall be recorded as the property of the Partnership in its books and
records, irrespective of the name in which legal title to such
Partnership assets is held.
j. MISCELLANEOUS. In the event the Company redeems any REIT Shares, then
the General Partner shall cause the Partnership to purchase from the
Company a number of Partnership Units as determined based on the
application of the Conversion Factor on the same terms that the
Company redeemed such REIT Shares. Moreover, if the Company makes a
cash tender offer or other offer to acquire REIT Shares, then the
General Partner shall cause the Partnership to make a corresponding
offer to the Company to acquire an equal number of Partnership Units
held by the Company. In the event any REIT Shares are redeemed by the
Company pursuant to such offer, the Partnership shall redeem an
equivalent number of the Company's Partnership Units for an equivalent
purchase price based on the application of the Conversion Factor.
7. CHANGES IN GENERAL PARTNER
a. TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
i. The General Partner may not transfer or assign any of its General
Partnership Interest or withdraw as General Partner except as
provided in Section 7.01(c) or in connection with a transaction
described in Section 7.01(d).
ii. The Company agrees that it will at all times own, through its
General Partnership Interest and Limited Partnership Interest, in
the aggregate at least a 20% Percentage Interest in the
Partnership.
iii. Except as otherwise provided in Section 6.07(c) or Section
7.01(d) hereof, the Company shall not engage in any merger,
consolidation or other combination with or into another Person or
sale of all or substantially all of its assets, or any
reclassification, or any recapitalization or change of
outstanding REIT Shares (other than a change in par value, or
from par value to no par value, or as a result of a subdivision
or combination of REIT Shares) (a "Transaction"), unless (i) the
Transaction also includes a merger of the Partnership or sale of
substantially all of the assets of the Partnership as a result of
which all Limited Partners will receive for each Partnership Unit
an amount of cash, securities, or other property equal to the
product of the Conversion Factor and the greatest amount of cash,
securities or other property paid in the Transaction to a holder
of one REIT Share in consideration of one REIT Share, PROVIDED
THAT if, in connection with the Transaction, a purchase, tender
or exchange offer
26
("Offer") shall have been made to and accepted by the holders of
more than 50% of the outstanding REIT Shares, each holder of
Partnership Units shall be given the option to exchange its
Partnership Units for the greatest amount of cash, securities, or
other property which a Limited Partner would have received had it
(A) exercised its Redemption Right and received REIT Shares and
(B) sold, tendered or exchanged pursuant to the Offer the REIT
Shares received upon exercise of the Redemption Right immediately
prior to the expiration of the Offer; and (ii) no more than 75%
of the equity securities of the acquiring Person in such
Transaction shall be owned, after consummation of such
Transaction, by the General Partner or Persons who were
Affiliates of the Partnership or the General Partner immediately
prior to the date on which the Transaction is consummated.
iv. Notwithstanding Section 7.01(c), the Company may merge into or
consolidate with another entity if immediately after such merger
or consolidation (i) substantially all of the assets of the
successor or surviving entity (the "Surviving Entity"), other
than Partnership Units held by the General Partner, are
contributed to the Partnership as a Capital Contribution in
exchange for Partnership Units with a fair market value equal to
the value of the assets so contributed as determined by the
Surviving Entity in good faith and (ii) the Surviving Entity
expressly agrees to assume, or acknowledge and ratify, all
obligations of the General Partner under the Partnership
Agreement. Upon such contribution and assumption, the Surviving
Entity shall have the right and duty to amend this Agreement as
set forth in this Section 7.01(d). The Surviving Entity shall in
good faith arrive at a new method for the calculation of the Cash
Amount and Conversion Factor for a Partnership Unit after any
such merger or consolidation so as to approximate the existing
method for such calculation as closely as reasonably possible.
Such calculation shall take into account, among other things, the
kind and amount of securities, cash and other property that was
receivable upon such merger or consolidation by a holder of REIT
Shares and/or options, warrants or other rights relating thereto,
and to which a holder of Partnership Units could have acquired
had such Partnership Units been redeemed immediately prior to
such merger or consolidation. Such amendment to this Agreement
shall provide for adjustment to such method of calculation which
shall be as nearly equivalent as may be practicable to the
adjustments provided for with respect to the Conversion Factor.
The above provisions of this Section 7.01(d) shall similarly
apply to successive mergers or consolidations permitted
hereunder.
b. ADMISSION OF A SUBSTITUTE OR SUCCESSOR GENERAL PARTNER. A Person shall
be admitted as a substitute or successor General Partner of the
Partnership only if the following terms and conditions are satisfied:
i. a majority in interest of the Limited Partners (other than the
Company in its capacity as a Limited Partner) shall have
consented in writing to the admission of the substitute or
successor General Partner;
27
ii. the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the
terms and provisions of this Agreement by executing a counterpart
thereof and such other documents or instruments as may be
required or appropriate in order to effect the admission of such
Person as a General Partner, and a certificate evidencing the
admission of such Person as a General Partner shall have been
filed for recordation and all other actions required by Section
2.05 hereof in connection with such admission shall have been
performed;
iii. if the Person to be admitted as a substitute or additional
General Partner is a corporation or a partnership it shall have
provided the Partnership with evidence satisfactory to counsel
for the Partnership of such Person's authority to become a
General Partner and to be bound by the terms and provisions of
this Agreement; and
iv. counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel and the state or any
other jurisdiction as may be necessary) that the admission of the
person to be admitted as a substitute or additional General
Partner is in conformity with the Act, that none of the actions
taken in connection with the admission of such Person as a
substitute or additional General Partner will cause (i) the
Partnership to be classified other than as a partnership for
federal income tax purposes, or (ii) the loss of any Limited
Partner's limited liability.
c. EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL
PARTNER.
i. Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or
the withdrawal, death or dissolution of a General Partner (except
that, if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to, or removal of a partner in, such partnership
shall be deemed not to be a dissolution of such General Partner
if the business of such General Partner is continued by the
remaining partner or partners), the Partnership shall be
dissolved and terminated unless the Partnership is continued
pursuant to Section 7.03(b) hereof.
ii. Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a)
hereof) or the death, withdrawal, removal or dissolution of a
General Partner (except that, if a General Partner is on the date
of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to, or removal of a partner
in, such partnership shall be deemed not to be a dissolution of
such General Partner if the business of such General Partner is
continued by the remaining partner or partners), the Limited
Partners, within 90 days after such occurrence, may elect to
reconstitute the Partnership and continue the business of the
Partnership for the balance of the term specified in Section 2.04
hereof by selecting, subject to Section 7.02 hereof and any other
provisions of this Agreement, a substitute General Partner by
unanimous consent of the Limited Partners. If the Limited
Partners elect to
28
reconstitute the Partnership and admit a substitute General
Partner, the relationship with the Partners and of any Person who
has acquired an interest of a Partner in the Partnership shall be
governed by this Agreement.
d. REMOVAL OF A GENERAL PARTNER.
i. Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be
deemed to be removed automatically; PROVIDED, HOWEVER, that if a
General Partner is on the date of such occurrence a partnership,
the withdrawal, death, dissolution, Event of Bankruptcy as to or
removal of a partner in such partnership shall be deemed not to
be a dissolution of the General Partner if the business of such
General Partner is continued by the remaining partner or
partners.
ii. If a General Partner has been removed pursuant to this Section
7.04 and the Partnership is continued pursuant to Section 7.03
hereof, such General Partner shall promptly transfer and assign
its General Partnership Interest in the Partnership to the
substitute General Partner approved by a majority in interest of
the Limited Partners (excluding the Company in its capacity as a
Limited Partner) in accordance with Section 7.03(b) hereof and
otherwise admitted to the Partnership in accordance with Section
7.02 hereof. At the time of assignment, the removed General
Partner shall be entitled to receive from the substitute General
Partner the fair market value of the General Partnership Interest
of such removed General Partner as reduced by any damages caused
to the Partnership Interest of such removed General Partner.
Such fair market value shall be determined by an appraiser
mutually agreed upon by the General Partner and a majority in
interest of the Limited Partners (excluding the Company in its
capacity as a Limited Partner) within 10 days following the
removal of the General Partner. In the event that the parties
are unable to agree upon an appraiser, the removed General
Partner and a majority in interest of the Limited Partners
(excluding the Company in its capacity as a Limited Partner) each
shall select an appraiser. Each such appraiser shall complete an
appraisal of the fair market value of the removed General
Partner's General Partnership Interest within 30 days of the
General Partner's removal, and the fair market value of the
removed General Partner's General Partnership Interest shall be
the average of the two appraisals; PROVIDED, HOWEVER, that if the
higher appraisal exceeds the lower appraisal by more than 20% of
the amount of the lower appraisal, the two appraisers, no later
than 40 days after the removal of the General Partner, shall
select a third appraiser who shall complete an appraisal of the
fair market value of the removed General Partner's General
Partnership Interest no later than 60 days after the removal of
the General Partner. In such case, the fair market value of the
removed General Partner's General Partnership Interest shall be
the average of the two appraisals closest in value.
29
iii. The General Partnership Interest of a removed General Partner,
during the time after default until transfer under Section
7.04(b), shall be converted to that of a special Limited Partner;
PROVIDED, HOWEVER, such removed General Partner shall not have
any rights to participate in the management and affairs of the
Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash
distributions allocable or payable, as the case may be, to the
Limited Partners. Instead, such removed General Partner shall
receive and be entitled only to retain distributions or
allocations of such items that it would have been entitled to
receive in its capacity as General Partner, until the transfer is
effective pursuant to Section 7.04(b).
iv. All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall
be legally necessary and sufficient to effect all the foregoing
provisions of this Section.
8. RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
a. MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor
shall they transact any business for the Partnership, nor shall they
have the power to sign for or bind the Partnership, such powers being
vested solely and exclusively in the General Partner.
b. POWER OF ATTORNEY. Each Limited Partner hereby irrevocably appoints
the General Partner his true and lawful attorney-in-fact, who may act
for each Limited Partner and in his name, place and xxxxx, and for his
use and benefit, to sign, acknowledge, swear to, deliver, file and
record, at the appropriate public offices, any and all documents,
certificates, and instruments as may be deemed necessary or desirable
by the General Partner to carry out fully the provisions of this
Agreement and the Act in accordance with their terms, which power of
attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the
transfer by the Limited Partner of any part or all of his Partnership
Interest.
c. LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner shall
be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only
to make payments of his Capital Contribution, if any, as and when due
hereunder. After his Capital Contribution is fully paid, no Limited
Partner shall, except as otherwise required by the Act, be required to
make any further Capital Contributions or other payments or lend any
funds to the Partnership.
d. REDEMPTION RIGHT.
i. Subject to Sections 8.04(b)-(f), on or after the date which is
one (1) year after the Effective Date, each Limited Partner
(other than the Company in its capacity as a Limited Partner)
shall have the right (the "Redemption Right") to require the
Partnership to redeem on a Specified Redemption
30
Date all or a portion of the Partnership Units held by such
Limited Partner at a redemption price equal to and in the form of
the Cash Amount to be paid by the Partnership. The Redemption
Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner)
by the Limited Partner who is exercising the Redemption Right
(the "Redeeming Partner"); provided, however, that the
Partnership shall not be obligated to satisfy such Redemption
Right if the Company elects to purchase the Partnership Units
subject to the Notice of Redemption pursuant to Section 8.04(b);
and provided, further, that no Limited Partner may deliver to the
General Partner more than four (4) Notices of Redemption during
each calendar year. In addition to the restrictions on redemption
set forth in Section 8.04(f), a Limited Partner may not exercise
the Redemption Right for less than one thousand (1,000)
Partnership Units or, if such Limited Partner holds less than one
thousand (1,000) Partnership Units, all of the Partnership Units
held by such Partner. Notwithstanding the foregoing provisions of
this Section 8.04(a), the Company agrees to use its best efforts
to cause the closing of the acquisition of redeemed Partnership
Units hereunder to occur as quickly as reasonably possible. The
Redeeming Partner shall have no right, with respect to any
Partnership Units so redeemed, to receive any distribution paid
with respect to Partnership Units if the record date for such
distribution is on or after the Specified Redemption Date.
ii. Notwithstanding the provisions of Section 8.04(a), a Limited
Partner that exercises the Redemption Right shall be deemed to
have offered to sell the Partnership Units described in the
Notice of Redemption to the Company, and the Company may, in its
sole and absolute discretion, elect to purchase directly and
acquire such Partnership Units by paying to the Redeeming Partner
either the Cash Amount, or, provided that the REIT Shares have
been registered pursuant to a registration statement declared
effective under the Securities Act of 1933, as amended (the
"Securities Act") the REIT Shares Amount, as elected by the
Company (in its sole and absolute discretion), on the Specified
Redemption Date, whereupon the Company shall acquire the
Partnership Units offered for redemption by the Redeeming Partner
and shall be treated for all purposes of this Agreement as the
owner of such Partnership Units. If the Company shall elect to
exercise its right to purchase Partnership Units under this
Section 8.04(b) with respect to a Notice of Redemption, it shall
so notify the Redeeming Partner within five Business Days after
the receipt by the General Partner of such Notice of Redemption.
Unless the Company (in its sole and absolute discretion) shall
exercise its right to purchase Partnership Units from the
Redeeming Partner pursuant to this Section 8.04(b), the Company
shall not have any obligation to the Redeeming Partner or the
Partnership with respect to the Redeeming Partner's exercise of
the Redemption Right. In the event the Company shall exercise
its right to purchase Partnership Units with respect to the
exercise of a Redemption Right in the manner described in the
first sentence of this Section 8.04(b), the Partnership shall
have no obligation to pay any amount to the Redeeming Partner
with respect to such Redeeming Partner's exercise of such
Redemption Right, and each of the Redeeming Partner, the
31
Partnership, and the Company, as the case may be, shall treat the
transaction between the Company and the Redeeming Partner for
federal income tax purposes as a sale of the Redeeming Partner's
Partnership Units to the Company. Each Redeeming Partner agrees
to execute such documents as the General Partner may reasonably
require in connection with the issuance of REIT Shares upon
exercise of the Redemption Right.
iii. Notwithstanding the provisions of Section 8.04(a) and 8.04(b),
the Company shall not exercise its rights under Section 8.04(b)
to deliver the REIT Shares Amount, if the delivery of REIT Shares
to a Redeeming Partner on the Specified Redemption Date by the
Company pursuant to Section 8.04(b) would (i) result in such
Partner or any other person owning, directly or indirectly, REIT
Shares in excess of the Ownership Limit (as defined in the
Charter) and calculated in accordance therewith, except as
provided in the Charter, (ii) result in REIT Shares being owned
by fewer than 100 persons (determined without reference to any
rules of attribution), (iii) result in the Company being "closely
held" within the meaning of Section 856(h) of the Code, (iv)
cause the Company to own, directly or constructively, 10% or more
of the ownership interests in a tenant of the Company's, the
Partnership's, or a subsidiary partnership's, real property,
within the meaning of Section 856(d)(2)(B) of the Code, (v) cause
the acquisition of REIT Shares by such Partner to be "integrated"
with any other distribution of REIT Shares for purposes of
complying with the registration provisions of the Securities Act,
or (vi) otherwise violate the Charter.
iv. Any Cash Amount to be paid to a Redeeming Partner pursuant to
this Section 8.04 shall be paid within 30 days after the initial
date of receipt by the Company of the Notice of Redemption
relating to the Partnership Units to be redeemed.
Notwithstanding the foregoing, the Company agrees to use its best
efforts to cause the closing of the acquisition of redeemed
Partnership Units hereunder to occur as quickly as reasonably
possible.
v. In the event that the General Partner permits the pledge of a
Limited Partner's Partnership Units to a lender, the General
Partner may agree, in its sole discretion, to allow such lender,
upon foreclosure of such Partnership Units, to redeem such
Partnership Units prior to the expiration of the one-year period
described in Section 8.04(a); provided, that any such redemption
shall be effected by the Partnership in the form of the Cash
Amount.
vi. Notwithstanding any other provision of this Agreement, the
General Partner shall place appropriate restrictions on the
ability of the Limited Partners to exercise their Redemption
Rights as and if deemed necessary to ensure that the Partnership
does not constitute a "publicly traded partnership" under Section
7704 of the Code.
e. REGISTRATION.
32
i. SHELF REGISTRATION. Prior to or on the first date upon which the
Partnership Units owned by any Limited Partner may be redeemed,
at the request of a Limited Partner, the Company agrees to file
with the Commission, a shelf registration statement on Form S-3
under Rule 415 of the Securities Act, or any similar rule that
may be adopted by the Commission (the "Shelf Registration"), with
respect to all of the REIT Shares issued to the Limited Partners
pursuant to Section 8.04(b) hereof (the "Redemption Shares").
The Company will use its best efforts to have the Shelf
Registration declared effective under the Securities Act and to
keep the Shelf Registration continuously effective until a date
agreed upon by the Company and a majority of the Limited Partners
or until such time as all of the shares registered pursuant to
such Shelf Registration (i) have been disposed of pursuant to
such Shelf Registration, (ii) have otherwise been distributed
pursuant to Rule 144 promulgated under the Securities Act ("Rule
144"), or (iii) have been otherwise transferred in a transaction
resulting in the transferee receiving REIT Shares not deemed to
be "restricted securities" under Rule 144. The Company further
agrees to supplement or make amendments to the Shelf
Registration, if required by the rules, regulations or
instructions applicable to the registration form utilized by the
Company or by the Securities Act or rules and regulations
thereunder for the Shelf Registration. No provision of this
Agreement shall require the Company to file a registration
statement on any form other than Form S-3. The Company, in the
exercise of its reasonable judgment, shall have the right to
delay the filing of the Shelf Registration for up to 120 days.
ii. REGISTRATION AND QUALIFICATION PROCEDURES. The Company, upon the
written request of a Limited Partner, is required by the
provisions of Section 8.05(a) hereof to use its best efforts to
have the Shelf Registration declared effective under the
Securities Act. Accordingly, the Company will:
(1) prepare and file with the Commission a registration
statement, including amendments thereof and supplements
relating thereto, with respect to the Redemption Shares;
(2) use its best efforts to cause the Shelf Registration to be
declared effective by the Commission;
(3) keep the Shelf Registration effective and the related
prospectus current as described in Section 8.04(a) hereof;
provided, however, that the Company shall have no obligation
to file any amendment or supplement at its own expense or
the Partnership's expense more than 90 days after the
effective date of the Shelf Registration;
(4) furnish to each holder of Redemption Shares such numbers of
copies of prospectuses, and supplements or amendments
thereto, and such other documents as such holder reasonably
requests;
33
(5) register or qualify the securities covered by the
registration statement under the securities or blue sky laws
of such jurisdictions within the United States as any holder
of Redemption Shares shall reasonably request, and do such
other reasonable acts and things as may be required of it to
enable such holders to consummate the sale or other
disposition in such jurisdictions of the Redemption Shares;
provided, however, that the Company shall not be required to
(i) qualify as a foreign corporation or consent to a general
and unlimited service or process in any jurisdictions in
which it would not otherwise be required to be qualified or
so consent or (ii) qualify as a dealer in securities; and
(6) keep the holders of Redemption Shares advised as to the
initiation and progress of the registration.
iii. ALLOCATION OF EXPENSES. The Partnership shall pay all expenses in
connection with the Shelf Registration, including without
limitation (i) all expenses incident to filing with the National
Association of Securities Dealers, Inc., (ii) registration fees,
(iii) printing expenses, (iv) accounting and legal fees and
expenses, except to the extent holders of Redemption Shares elect
to engage accountants or attorneys in addition to the accountants
and attorneys engaged by the Partnership or the Company, (v)
accounting expenses incident to or required by any such
registration or qualification and (vi) expenses of complying with
the securities or blue sky laws of any jurisdictions in
connection with such registration or qualification; provided,
however, the Partnership shall not be liable for (A) any
discounts or commissions to any broker attributable to the sale
of Redemption Shares, or (B) any fees or expenses incurred by
holders of Redemption Shares in connection with such registration
which, according to the written instructions of any regulatory
authority, the Partnership is not permitted to pay.
iv. SALE OF REDEMPTION SHARES. The Company may require in its sole
discretion that the Redemption Shares be sold in block trades
through underwriters or broker-dealers or that the sale of the
Redemption Shares be underwritten by investment banking firms
selected by the Company.
v. LISTING ON SECURITIES EXCHANGE. If the Company shall list or
maintain the listing of any REIT Shares on any securities
exchange or national market system, it will at its expense and as
necessary to permit the registration and sale of the Redemption
Shares hereunder, list thereon, maintain and, when necessary,
increase such listing to include such Redemption Shares.
f. "PIGGYBACK" REGISTRATION RIGHTS.
i. NOTICE OF REGISTRATION. If, at any time commencing upon the date
upon which all or any portion of the Partnership Units shall have
been redeemed for the Redemption Shares (but not if such
Partnership Units shall have been redeemed for cash in accordance
with the provisions
34
hereof), the Company files a registration statement under the
Securities Act with respect to a firm commitment underwritten
public offering of any securities of the Company, the Company
shall give thirty (30) days prior written notice thereof to each
Limited Partner and shall, upon the written request of any or all
of the Limited Partners, include in the underwritten public
offering the number of Redemption Shares that each such Limited
Partner may request (except as set forth in Section 8.06(b)
below). The Company will keep such registration statement
effective and current under the Securities Act permitting the
sale of Redemption Shares covered thereby for the same period
that the registration statement is maintained effective for the
other persons (including the Company) selling thereunder. In any
underwritten offering, however, the Redemption Shares to be
included will be sold at the same time and at the same price as
the Company's securities. In the event that the Company fails to
receive a written request from a Limited Partner within thirty
(30) days of its written notice, then the Company shall have no
obligation to include any of the Redemption Shares in the
offering. In connection with any registration statement or
subsequent amendment or similar document filed pursuant to this
Section 8.06, the Company shall take all reasonable steps to make
the securities covered thereby eligible for public offering and
sale under the securities or blue sky laws of the applicable
jurisdictions by the effective date of such registration
statement; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it
is not so qualified at the time of filing such documents or to
take any action which would subject it to unlimited service of
process in any jurisdiction where it is not so subject at such
time. The Company shall keep such filing current for the length
of time it must keep any registration statement, post-effective
amendment, prospectus or offering circular effective pursuant
hereto.
ii. UNDERWRITING. In the event of an offering by the Company in
which one or more Limited Partners wishes to include Redemption
Shares under this Section 8.06, and it is determined in good
faith by the managing underwriter of such offering, giving effect
to the number of REIT Shares to be offered by the Company, that
the total number of Redemption Shares that would consequently be
offered is in excess of the number of Redemption Shares that can
be sold at the proposed price, then the number of Redemption
Shares of the Limited Partners to be offered will be reduced
ratably, based upon the number of Redemption Shares each Limited
Partner has requested to include in such registration; provided,
however, that notwithstanding anything in this Section 8.06(b) to
the contrary, the Limited Partners shall have the right to
contribute, on a pro-rata basis as described above, an aggregate
of Redemption Shares equaling at least fifteen percent (15%) of
the total value of such offering.
iii. OBLIGATION OF LIMITED PARTNERS UPON REGISTRATION. To include
Redemption Shares in any registration, each Limited Partner
shall:
35
(1) Cooperate with the Company in preparing each such
registration and execute all such agreements as any
underwriter may deem reasonably necessary in favor of such
underwriter;
(2) Promptly supply the Company with all information, documents,
representations and agreements as such underwriter may deem
reasonably necessary in connection with such registration;
and
(3) Agree in writing not to sell or transfer any share of the
Redemption Shares not included in such underwritten offering
for a period of seven (7) days prior to and thirty (30) days
after the effective date of such registration without the
underwriters' consent, but no Limited Partner shall be
required to make such agreement unless the other Limited
Partners included in any offering covered by such
registration shall similarly agree.
iv. COMPANY'S OBLIGATIONS UPON REGISTRATION. If and whenever the
Company is obligated by the provisions of this Section 8.06 to
effect the registration of any offering of REIT Shares under the
Securities Act, as expeditiously as possible the Company will, or
will use its best efforts to, as the case may be:
(1) Prepare and file with the SEC a registration statement with
respect to such REIT Shares and, use its best efforts to
cause such registration statement to become effective;
(2) Prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective until the
earlier of the sale of all securities covered thereby or the
date on which such REIT Shares may be sold into the market
without restriction under Rule 144;
(3) Furnish to each Limited Partner so many copies of a
prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and
such other documents, as such Limited Partner may reasonably
request; and
(4) Register or qualify the securities covered by such
registration statement under such other securities or blue
sky laws of such jurisdictions as such Limited Partner shall
reasonably request, and do any and all other acts and things
that may be reasonably necessary or advisable to enable the
Limited Partners to consummate the disposition in such
jurisdictions of such securities.
v. EXPENSES. In connection with any filing or other registration
hereunder the Partnership shall bear all the expenses and
professional fees which arise in connection with such filings or
registration (except for the Limited Partner's pro rata share of
any underwriters' discount) and all expenses incurred in making
such filings and keeping them effective and correct as
36
provided hereunder and shall also provide each Limited Partner
with a reasonable number of printed copies of the prospectus,
offering circulars and/or supplemental prospectuses or amended
prospectuses in final and preliminary form; PROVIDED, HOWEVER,
each Limited Partner will pay its own direct out-of-pocket costs
incurred with the registration of REIT Shares, including but not
limited to Limited Partner's attorney and accountants; fees,
travel expenses and any consulting fees.
vi. INDEMNIFICATION BY THE COMPANY. The Company will indemnify each
Limited Partner, each of its officers and trustees, and each
person controlling the Limited Partner, with respect to which
registration, qualification or compliance has been effected
pursuant to this Section 8.06, against all claims, losses,
damages, costs, expenses and liabilities whatsoever (or actions
in respect thereof) arising out of or based on (i) any untrue
statement, (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering
circular or other similar document (including any related
registration statement, notification or the like) incident to any
such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under
which they were made or (ii) any violation by the Company of the
Securities Act or any state securities law or of any rule or
regulation promulgated under the Securities Act or any state
securities law applicable to the Company and relating to action
or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse the
Limited Partner, each of its officers and trustees, and each
person controlling the Limited Partner, for any legal and any
other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage,
liability or action, provided, however, that (x) the Company will
not be liable in any such case to the extent that any such claim,
loss, damage, liability, or action arises out of or is based on
any untrue statement (or alleged untrue statement) or omission
(or alleged omission) based upon written information furnished to
the Company by an instrument duly executed by the Limited Partner
and stated to be specifically for use therein or furnished by the
Limited Partner to the Company in response to a request by the
Company stating specifically that such information will be used
by the Company therein, and (y) such indemnity agreement shall
not inure to the benefit of the Limited Partner, insofar as it
relates to any such untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in the
preliminary prospectus or prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time
the registration statement becomes effective or in the amended
prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act or in any subsequent amended prospectus
filed with the Commission prior to the written confirmation of
the sale of the Registrable Securities at issue (collectively,
the "Final Prospectus"), if a copy of the Final Prospectus was
not furnished to the person or entity asserting the loss,
liability, claim
37
or damage at or prior to the time such action is required by the
Securities Act.
vii. INDEMNIFICATION BY THE LIMITED PARTNERS. The Limited Partners
will, if Redemption Shares held by or issuable to such Limited
Partners are included in the REIT Shares to which such
registration, qualification or compliance is being effected,
indemnify the Company, each of its trustees and officers, each
underwriter, if any, of the REIT Shares covered by such
registration statement, and each person who controls the Company
within the meaning of the Securities Act against all claims,
losses, damages, costs, expenses and liabilities whatsoever (or
actions in respect thereof) arising out of or based on any untrue
Statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus,
offering circular or other similar document (including any
related registration statement, notification or the like)
incident to any such registration, qualification or compliance,
or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances under which they were made, and will reimburse the
Company, such trustees, officers, persons or underwriters for any
legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage,
costs, expense, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in
such registration statement, prospectus, offering circular or
other document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly
executed by the Limited Partners and stated to be specifically
for use therein or furnished by any Limited Partner to the
Company in response to a request by the Company stating
specifically that such information will be used by the Company
therein, provided, however, that the foregoing indemnity
agreement is subject to the condition that, such indemnity
agreement shall not inure to the benefit of the Company or any
underwriter insofar as it relates to any such untrue statements
(or alleged untrue statements) or omission (or alleged omission)
made in the preliminary prospectus or prospectus but eliminated
or remedied in the Final Prospectus, if a copy of the Final
Prospectus was not furnished to the person or entity asserting
the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
vii. INDEMNIFICATION PROCEDURES. Each party entitled to
indemnification under this Section 8.06 (the "Indemnified Party")
shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld). The failure of any Indemnified
Party
38
to give notice as provided herein shall relieve the Indemnifying
Party of its obligations under this Agreement only to the extent
that such failure to give notice shall materially prejudice the
Indemnifying Party in the defense of any such claim or any such
litigation. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into
any settlement that attributes any liability to the Indemnified
Party, unless the settlement includes as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to
such claim or litigation. If any such Indemnified Party shall
have been advised by counsel chosen by it that there may be one
or more legal defenses available to such Indemnified Party that
are different from or additional to those available to the
Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of such
Indemnified Party and will reimburse such Indemnified Party and
any person controlling such Indemnified Party for the reasonable
fees and expenses of any counsel retained by the Indemnified
Party, it being understood that the Indemnifying Party shall not,
in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys for each Indemnified Party or controlling person (and
all other Indemnified Parties and controlling persons which may
be represented without conflict by one counsel), which firm shall
be designated in writing by the Indemnified Party (or Indemnified
Parties, if more than one Indemnified Party is to be represented
by such counsel) to the Indemnifying Party. The Indemnifying
Party shall not be subject to any liability for any settlement
made without its consent, which shall not be unreasonably
withheld.
If the indemnification provided for in this Section 8.06 from the
Indemnifying Party is unavailable to an Indemnified Party hereunder in respect
of any losses, claims, damages, labilities or expenses referred to therein, then
the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, labilities or expenses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Parties, and the parties, relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8.06 were determined by pro rata
allocation or by any other method of
39
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9. TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
a. PURCHASE FOR INVESTMENT.
i. Each Limited Partner hereby represents and warrants to the
Company and to the Partnership that the acquisition of his
Partnership Interest is made as a principal for his account for
investment purposes only and not with a view to the resale or
distribution of such Partnership Interest.
ii. Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction
thereof, whether voluntarily or by operation of law or at
judicial sale or otherwise, to any Person who does not make the
representations and warranties to the Company set forth in
Section 9.01(a) above and similarly agree not to sell, assign or
transfer such Partnership Interest or fraction thereof to any
Person who does not similarly represent, warrant and agree.
b. RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
i. Except as otherwise provided in Section 9.02(d) hereof and except
for the pledge rights contained in Section 9.02(f) hereof, no
Limited Partner (other than the General Partner) may offer, sell,
assign, hypothecate, pledge or otherwise transfer his Limited
Partnership Interest, in whole or in part, whether voluntarily or
by operation of law or at judicial sale or otherwise
(collectively, a "Transfer") without the written consent of the
General Partner, which consent may be withheld in the reasonable
discretion of the General Partner. The General Partner may
require, as a condition of any Transfer, that the transferor
assume all costs incurred by the Partnership in connection
therewith.
ii. No Limited Partner may effect a Transfer of his Limited
Partnership Interest, in whole or in part, if, in the opinion of
legal counsel for the Partnership, such proposed Transfer would
require the registration of the Limited Partnership Interest
under the Securities Act or would otherwise violate any
applicable federal or state securities or "Blue Sky" law
(including investment suitability standards).
iii No transfer by a Limited Partner of his Partnership Units, in
whole or in part, may be made to any Person if (i) in the opinion
of legal counsel for the Partnership, the transfer would result
in the Partnership's being treated as an association taxable as a
corporation (other than a qualified REIT subsidiary within the
meaning of Section 856(i) of the Code), or (ii) such transfer is
effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within
the meaning of Section 7704 of the Code.
40
iv. Section 9.02(a) shall not apply to the following transactions,
except that the General Partner may require that the transferor
assume all costs incurred by the Partnership in connection
therewith:
(1) any Transfer by a Limited Partner pursuant to the exercise
of its Redemption Right under Section 8.04 hereof;
(2) any Transfer by a Limited Partner that is a corporation or
other business entity to any of its Affiliates or
subsidiaries or to any successor in interest of such Limited
Partner; or
(3) any donative Transfer (including for such purposes transfers
at death) by an individual Limited Partner to his immediate
family members or any trust in which the individual or his
immediate family members own, collectively, 100% of the
beneficial interests. For purposes of this Section
9.02(d)(iii), the term "immediate family member" shall be
deemed to include only an individual Limited Partner's
spouse, children, grandchildren, nieces and nephews,
provided that such Limited Partner shall give 30 days notice of any transfer
-------------
under this Section 9.02(d) to the General Partner so that a determination can be
made whether the transfer otherwise is prohibited under Sections 9.02(b) or
9.02(c).
v. Any Transfer in contravention of any of the provisions of this
Article IX shall be void and ineffectual and shall not be binding
upon, or recognized by, the Partnership.
vi. Notwithstanding Section 9.01(a), during the period in which all
or a portion of a Limited Partner's Partnership Units are
restricted from transfer pursuant to Article 9 hereof, the
Limited Partner may pledge any or all of its Partnership Units as
collateral in any borrowing from an institutional lender upon
receiving the consent of the General Partner to such pledge. The
Limited Partner must seek such consent in writing and provide to
the General Partner complete copies of the commitment letter, all
loan documentation and any other materials deemed necessary in
the General Partner's discretion. Upon granting its consent, the
General Partner will agree to issue a letter to such lender
agreeing to exchange or redeem such Limited Partner's Partnership
Units for the Cash Amount upon a default by the applicable
Limited Partner under such loan if (i) the lender and the
applicable Limited Partner each request that such letter be
issued; (ii) such loan transaction is deemed by the General
Partner to be arm's-length and not designed to circumvent the
Agreement or restrictions contained herein; and (iii) the
applicable Limited Partner acknowledges that any such exchange or
redemption could potentially cause a taxable event to such
Limited Partner. In no event will the Company or the Partnership
guarantee or be liable to the lender or others for any such
permissible loans wherein the Limited Partner's Partnership Units
are used as collateral.
41
vii. No transfer of any Partnership Units may be made to a lender to
the Partnership or to any Person who is related (within the
meaning of Regulations Section 1.752-4(b)) to any lender to the
Partnership whose loan constitutes a non-recourse liability
(within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld
in its sole and absolute discretion; PROVIDED, HOWEVER, that as a
condition to such consent the lender will be required to enter
into an arrangement with the Partnership and the General Partner
to exchange or redeem for the Cash Amount any Partnership Units
in which a security interest is held simultaneously with the time
at which such lender would be deemed to be a partner in the
Partnership for purposes of allocating liabilities to such lender
under Section 752 of the Code.
viii. No Limited Partner may effect a Transfer of any warrant held by
such Limited Partner, in whole or in part, if, in the opinion of
legal counsel for the Partnership, such proposed Transfer would
result in the Partnership's being treated as an association
taxable as a corporation (other than a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code), determined as
if such warrant had been exercised. Such Limited Partner shall
give 30 days notice of any transfer under this Section 9.02(d) to
the General Partner so that a determination can be made whether
the transfer otherwise is prohibited under Sections 9.02(b) or
9.02(c).
c. ADMISSION OF SUBSTITUTE LIMITED PARTNER.
i. Subject to the other provisions of this Article IX, an assignee
of the Limited Partnership Interest of a Limited Partner (which
shall be understood to include any purchaser, transferee, donee,
or other recipient of any disposition of such Limited Partnership
Interest) shall be deemed admitted as a Limited Partner of the
Partnership only upon the satisfactory completion of the
following:
(1) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a
counterpart or an amendment thereof, including a revised
EXHIBIT A, and such other documents or instruments as the
General Partner may require in order to effect the admission
of such Person as a Limited Partner.
(2) To the extent required, an amended Certificate evidencing
the admission of such Person as a Limited Partner shall have
been signed, acknowledged and filed for record in accordance
with the Act.
(3) The assignee shall have delivered a letter containing the
representation set forth in Section 9.01(a) hereof and the
agreement set forth in Section 9.01(b) hereof.
42
(4) If the assignee is a corporation, partnership or trust, the
assignee shall have provided the General Partner with
evidence satisfactory to counsel for the Partnership of the
assignee's authority to become a Limited Partner under the
terms and provisions of this Agreement.
(5) The assignee shall have executed a power of attorney
containing the terms and provisions set forth in Section
8.02 hereof.
(6) The assignee shall have paid all reasonable legal fees of
the Partnership and the General Partner and filing and
publication costs in connection with his substitution as a
Limited Partner.
(7) The assignee has obtained the prior written consent of the
General Partner to its admission as a Substitute Limited
Partner, which consent may be given or denied in the
exercise of General Partner's sole and absolute discretion.
(8) In the case of an assignee of the Limited Partnership
Interest of the General Partner except in the case of a
transaction described in Section 7.01(c) or (d) (in which
case no consent is necessary), the assignee has obtained
the prior written consent of a majority-in-interest of the
Limited Partners (other than the General Partner) to its
admission as a Substitute Limited Partner, which consent may
be given or denied in the exercise of such Limited Partners'
sole and absolute discretion.
ii. For the purpose of allocating profits and losses and distributing
cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records
of the Partnership as, a Partner upon the filing of the
Certificate described in Section 9.03(a)(ii) hereof or, if no
such filing is required, the later of the date specified in the
transfer documents or the date on which the General Partner has
received all necessary instruments of transfer and substitution.
iii. The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the
documentation required by this Section and making all official
filings and publications. The Partnership shall take all such
action as promptly as practicable after the satisfaction of the
conditions in this Article IX to the admission of such Person as
a Limited Partner of the Partnership.
d. RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
i. Subject to the provisions of Sections 9.01 and 9.02 hereof,
except as required by operation of law, the Partnership shall not
be obligated for any purposes whatsoever to recognize the
assignment by any Limited Partner of his Partnership Interest
until the Partnership has received notice thereof.
43
ii. Any Person who is the assignee of all or any portion of a Limited
Partner's Limited Partnership Interest, but does not become a
Substitute Limited Partner and desires to make a further
assignment of such Limited Partnership Interest, shall be subject
to all the provisions of this Article IX to the same extent and
in the same manner as any Limited Partner desiring to make an
assignment of his Limited Partnership Interest.
e. EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED
PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a
Limited Partner is incompetent (which term shall include, but not be
limited to, insanity) shall not cause the termination or dissolution
of the Partnership, and the business of the Partnership shall continue
if an order for relief in a bankruptcy proceeding is entered against a
Limited Partner. The trustee or receiver of his estate or, if he dies,
his executor, administrator or trustee or, if he is finally
adjudicated incompetent, his committee, guardian or conservator shall
have the rights of such Limited Partner for the purpose of settling or
managing his estate property and such power as the bankrupt, deceased
or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying
conditions precedent to the admission of the assignee as a Substitute
Limited Partner.
f. JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be acquired
by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and
share the same home as tenants in common. The written consent or vote
of both owners of any such jointly held Partnership Interest shall be
required to constitute the action of the owners of such Partnership
Interest; provided, however, that the written consent of only one
joint owner will be required if the Partnership has been provided with
evidence satisfactory to the counsel for the Partnership that the
actions of a single joint owner can bind both owners under the
applicable laws of the state of residence of such joint owners. Upon
the death of one owner of a Partnership Interest held in a joint
tenancy with a right of survivorship, the Partnership Interest shall
become owned solely by the survivor as a Limited Partner and not as an
assignee. The Partnership need not recognize the death of one of the
owners of a jointly-held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from
either owner, the General Partner shall cause the Partnership Interest
to be divided into two equal Partnership Interests, which shall
thereafter be owned separately by each of the former owners.
10. BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
a. BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the
Partnership's specified office true and complete books of account in
accordance with generally accepted accounting principles, including:
(a) a current list of the full name and last known business address of
each Partner, (b) a copy of the Certificate of Limited Partnership and
all certificates of amendment thereto, (c) copies of the Partnership's
federal, state and local income tax returns and reports, (d) copies of
the Agreement and any financial statements of the Partnership for the
three most
44
recent years and (e) all documents and information required under the
Act. Any Partner or his duly authorized representative, upon paying
the costs of collection, duplication and mailing, shall be entitled to
inspect or copy such records during ordinary business hours.
b. CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
i. All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or
brokerage institutions as the General Partner shall determine,
and withdrawals shall be made only on such signature or
signatures as the General Partner may, from time to time,
determine.
ii. All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General
Partner in investment grade instruments (or investment companies
whose portfolio consists primarily thereof), government
obligations, certificates of deposit, bankers' acceptances and
municipal notes and bonds. The funds of the Partnership shall not
be commingled with the funds of any other Person except for such
commingling as may necessarily result from an investment in those
investment companies permitted by this Section 10.02(b).
c. FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the
Partnership shall be the calendar year.
d. ANNUAL TAX INFORMATION AND REPORT. Within 90 days after the end of
each fiscal year of the Partnership, the General Partner shall furnish
to each person who was a Limited Partner at any time during such year
the tax information necessary to file such Limited Partner's
individual tax returns as shall be reasonably required by law.
e. TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
i. The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code.
As Tax Matters Partner, the General Partner shall have the right
and obligation to take all actions authorized and required,
respectively, by the Code for the Tax Matters Partner. The
General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the
Service and all out-of-pocket expenses and fees incurred by the
General Partner on behalf of the Partnership as Tax Matters
Partner shall constitute Partnership expenses. In the event the
General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall
either (i) file a court petition for judicial review of such
final adjustment within the period provided under Section 6226(a)
of the Code, a copy of which petition shall be mailed to all
Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period,
that describes the General Partner's reasons for determining not
to file such a petition.
45
ii. All elections required or permitted to be made by the Partnership
under the Code or under any applicable state law shall be made by
the General Partner in its sole discretion.
iii. In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the
General Partner, may elect pursuant to Section 754 of the Code to
adjust the basis of the Properties. Notwithstanding anything
contained in Article V of this Agreement, any adjustments made
pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be
taken into account in establishing, maintaining or computing
Capital Accounts for the other Partners for any purpose under
this Agreement. Each Partner will furnish the Partnership with
all information necessary to give effect to such election.
f. REPORTS TO LIMITED PARTNERS.
i. As soon as practicable after the close of each fiscal quarter,
but in no event later than 45 days (other than the last quarter
of the fiscal year), the General Partner shall cause to be mailed
to each Limited Partner a quarterly report containing financial
statements of the Partnership, or of the Company if such
statements are prepared solely on a consolidated basis with the
Company, for such fiscal quarter, presented in accordance with
generally accepted accounting principles. As soon as practicable
after the close of each fiscal year, the General Partner shall
cause to be mailed to each Limited Partner an annual report
containing financial statements of the Partnership, or of the
Company if such statements are prepared solely on a consolidated
basis with the Company for such fiscal year, prepared in
accordance with generally accepted accounting principles. The
annual financial statements shall be audited by accountants
selected by the General Partner.
ii. Any Partner shall further have the right to a private audit of
the books and records of the Partnership, provided such audit is
made for Partnership purposes, at the expense of the Partner
desiring it and is made during normal business hours.
11. AMENDMENT OF AGREEMENT;
SALE OF ALL OR SUBSTANTIALLY ALL OF COMPANY'S ASSETS
a. AMENDMENT OF AGREEMENT. The General Partner, without the consent of
the Limited Partners, may amend this Agreement in any respect;
provided, however, that the following amendments shall require the
consent of Limited Partners (other than the Company in its capacity as
a Limited Partner) holding at least two-thirds (2/3rds) of the
Percentage Interests of the Limited Partners (other than the Company
in its capacity as a Limited Partner):
46
i. any amendment affecting the operation of the Conversion Factor or
Redemption Right (except as provided in Section 8.04(d) hereof)
in a manner adverse to the Limited Partners;
ii. any amendment that would adversely affect the rights of the
Limited Partners to receive the distributions payable to them
hereunder other than with respect to the issuance of additional
Partnership Units pursuant to Section 4.02 of this Agreement;
iii. any amendment that would alter the Partnership's allocations of
Profit and Loss to the Limited Partners in a manner adverse to
Limited Partners, other than with respect to the issuance of
additional Partnership Units pursuant to Section 4.02 of this
Agreement;
iv. any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the
Partnership;
v. any amendment to Section 8.06 above in a manner adverse to any
Limited Partner; and
vi. any amendment to this Article XI.
b. SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE PARTNERSHIP;
CHANGE IN CONTROL. The General Partner, without the consent of the
Limited Partners (including the Company in its capacity as a Limited
Partner) holding 66.67% of the Percentage Interests of the Limited
Partners (including the Company in its capacity as a Limited Partner),
may not sell, transfer, or convey all or substantially all of the
assets of the Partnership, including, without limitation, a sale,
assignment or transfer to another public or private company, or
approve a merger or consolidation of the Partnership.
12. GENERAL PROVISIONS
a. NOTICES. All communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail,
registered, postage prepaid return receipt requested, to the Partners
at the addresses set forth in EXHIBIT A attached hereto; provided,
however, that any Partner may specify a different address by notifying
the General Partner in writing of such different address. Notices to
the Partnership shall be delivered at or mailed to its specified
office.
b. SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the
benefit of the Partners and the Partnership and their respective legal
representatives, successors, transferees and assigns.
c. ADDITIONAL DOCUMENTS. Each Partner agrees to perform all further acts
and execute, swear to, acknowledge and deliver all further documents
which may be reasonable, necessary, appropriate or desirable to carry
out the provisions of this Agreement or the Act.
47
d. SEVERABILITY. If any provision of this Agreement shall be declared
illegal, invalid, or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the
extent permitted by law) and in any event such illegality, invalidity
or unenforceability shall not affect the remainder hereof.
e. ENTIRE AGREEMENT. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all
prior written agreements and prior and contemporaneous oral
agreements, understandings and negotiations with respect to the
subject matter hereof.
f. PRONOUNS AND PLURALS. When the context in which words are used in the
Agreement indicates that such is the intent, words in the singular
number shall include the plural and the masculine gender shall include
the neuter or female gender as the context may require.
g. HEADINGS. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
h. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original copy and all of which
together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed
the same counterpart.
i. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
j. GUARANTY BY COMPANY. The Company unconditionally and irrevocably
guarantees to the Limited Partners the performance by the Company of
its respective obligations as the General Partner and a Limited
Partner under this Agreement. This guaranty is exclusively for the
benefit of the Limited Partners and shall not extend to the benefit of
any creditor of the Partnership.
(Remainder of Page Intentionally Left Blank)
48
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Agreement of Limited Partnership, all as of the ___ day of
February, 1998.
GENERAL PARTNER
CAPITAL AUTOMOTIVE REIT, a
Maryland real estate investment trust
By: ______________________
Its: _______________________
LIMITED PARTNERS
By: ______________________
Its: _______________________
[to be added]
49
EXHIBIT A
SCHEDULE OF PARTNERS,
NUMBER OF PARTNERSHIP UNITS AND
THE AGREED VALUE OF NON-CASH CAPITAL CONTRIBUTIONS
A-1
EXHIBIT B
INITIAL PROPERTIES
B-1
EXHIBIT C
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.04 of the Agreement of Limited Partnership (the
"Agreement") of Capital Automotive L.P., the undersigned hereby irrevocably (i)
presents for redemption ________ units of limited partnership interest ("Units")
in Capital Automotive L.P. (the "Partnership") in accordance with the terms of
the Agreement and the "Redemption Right" referred to in Section 8.04 thereof,
(ii) surrenders such Units and all right, title and interest therein, (iii)
surrenders herewith any certificate or other writing evidencing the Units (and
requests that any Units so evidenced that are not redeemed be evidenced by the
issuance of a new certificate or writing) and (iv) directs that the "Cash
Amount" or "REIT Shares Amount" (as determined by the General Partner), as
defined in the Agreement, deliverable upon exercise of the Redemption Rights be
delivered to the address specified below, and if REIT Shares are to be
delivered, such REIT Shares be registered or placed in the name(s) and at the
address(es) specified below.
Dated: __________________________
Name of Limited Partner:
_________________________________
(Signature of Limited Partner)
_________________________________
(Mailing Address)
_________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
_________________________________
If REIT Shares are to be issued, issue to:
_________________________________
_________________________________
_________________________________
Please insert social security or identifying number:
_________________________________
C-1
