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EXHIBIT 10.1
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY, L.P.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINED TERMS..................................................................1
ARTICLE 2. ORGANIZATIONAL MATTERS........................................................16
Section 2.1. Organization.....................................................16
Section 2.2. Name ............................................................16
Section 2.3. Resident Agent; Principal Office.................................16
Section 2.4. Power of Attorney................................................17
Section 2.5. Term ............................................................18
Section 2.6. Number of Partners...............................................18
ARTICLE 3. PURPOSE.......................................................................18
Section 3.1. Purpose and Business.............................................18
Section 3.2. Powers ..........................................................19
Section 3.3. Partnership Only for Purposes Specified..........................19
Section 3.4. Representations and Warranties by the Parties....................19
ARTICLE 4. CAPITAL CONTRIBUTIONS.........................................................21
Section 4.1. Capital Contributions of the Partners............................21
Section 4.2. Loans by Third Parties...........................................22
Section 4.3. Additional Funding and Capital Contributions.....................22
Section 4.4. Stock Incentive Plan.............................................24
Section 4.5. No Preemptive Rights.............................................25
Section 4.6. Other Contribution Provisions....................................25
ARTICLE 5. DISTRIBUTIONS.................................................................25
Section 5.1. Requirement and Characterization of Distributions................25
Section 5.2. Distributions in Kind............................................25
Section 5.3. Distributions Upon Liquidation...................................26
Section 5.4. Distributions to Reflect Issuance of Additional
Partnership Interests..........................................26
ARTICLE 6. ALLOCATIONS...................................................................26
Section 6.1. Timing and Amount of Allocations of Net Income and Net Loss......26
Section 6.2. General Allocations..............................................26
Section 6.3. Additional Allocation Provisions.................................28
Section 6.4. Tax Allocations..................................................30
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS.........................................30
Section 7.1. Management.......................................................30
Section 7.2. Certificate of Limited Partnership...............................34
Section 7.3. Restrictions on General Partner's Authority......................34
Section 7.4. Reimbursement of the General Partner.............................37
Section 7.5. Outside Activities of the General Partner........................37
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Section 7.6. Contracts with Affiliates........................................38
Section 7.7. Indemnification..................................................39
Section 7.8. Liability of the General Partner.................................41
Section 7.9. Other Matters Concerning the General Partner.....................41
Section 7.10. Title to Partnership Assets.....................................42
Section 7.11. Reliance by Third Parties.......................................42
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS....................................43
Section 8.1. Limitation of Liability..........................................43
Section 8.2. Management of Business...........................................43
Section 8.3. Outside Activities of Limited Partners...........................43
Section 8.4. Return of Capital................................................44
Section 8.5. Rights of Limited Partners Relating to the Partnership...........44
Section 8.6. Redemption Rights................................................45
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS........................................47
Section 9.1. Records and Accounting...........................................47
Section 9.2. Fiscal Year......................................................47
Section 9.3. Reports .........................................................47
Section 9.4. Nondisclosure of Certain Information.............................48
ARTICLE 10. TAX MATTERS...................................................................48
Section 10.1. Preparation of Tax Returns......................................48
Section 10.2. Tax Elections...................................................48
Section 10.3. Tax Matters Partner.............................................48
Section 10.4. Organizational Expenses.........................................50
Section 10.5. Withholding.....................................................50
ARTICLE 11. TRANSFERS AND WITHDRAWALS.....................................................51
Section 11.1. Transfer........................................................51
Section 11.2. Transfer of General Partner's Partnership Interest..............51
Section 11.3. Limited Partners' Rights to Transfer............................53
Section 11.4. Substituted Limited Partners....................................55
Section 11.5. Assignees.......................................................55
Section 11.6. General Provisions..............................................56
ARTICLE 12. ADMISSION OF PARTNERS.........................................................58
Section 12.1. Admission of Successor General Partner..........................58
Section 12.2. Admission of Additional Limited Partners........................58
Section 12.3. Amendment of Agreement and Certificate of Limited
Partnership...................................................59
ARTICLE 13. DISSOLUTION AND LIQUIDATION...................................................59
Section 13.1. Dissolution.....................................................59
Section 13.2. Winding Up......................................................60
Section 13.3. Compliance with Timing Requirements of Regulations..............61
Section 13.4. Deemed Distribution and Recontribution..........................61
Section 13.5. Rights of Limited Partners......................................62
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Section 13.6. Notice of Dissolution...........................................62
Section 13.7. Cancellation of Certificate of Limited Partnership..............62
Section 13.8. Reasonable Time for Winding-Up..................................62
Section 13.9. Waiver of Partition.............................................62
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS..................................63
Section 14.1. Amendments......................................................63
Section 14.2. Action by the Partners..........................................63
ARTICLE 15. GENERAL PROVISIONS............................................................64
Section 15.1. Addresses and Notice............................................64
Section 15.2. Titles and Captions.............................................64
Section 15.3. Pronouns and Plurals............................................64
Section 15.4. Further Action..................................................64
Section 15.5. Binding Effect..................................................64
Section 15.6. Creditors.......................................................65
Section 15.7. Waiver .........................................................65
Section 15.8. Counterparts....................................................65
Section 15.9. Applicable Law..................................................65
Section 15.10. Invalidity of Provisions.......................................65
Section 15.11. Limitation to Preserve REIT Status.............................65
Section 15.12. Entire Agreement...............................................66
Section 15.13. No Rights as Stockholders......................................66
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMB PROPERTY, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
November __, 1997, is entered into by and among AMB Property Corporation, a
Maryland corporation (the "Company"), as the General Partner and the Persons
whose names are set forth on Exhibit A attached hereto, as the Limited Partners,
together with any other Persons who become Partners in the Partnership as
provided herein.
WHEREAS, the Company proposes to effect a public offering of its common
stock, to acquire and cause the Partnership to acquire direct and indirect
interests in [100] industrial and retail properties and other assets, to cause
the Partnership to enter into certain mortgage financing transactions, and to
contribute the remaining net proceeds from the public offering to the
Partnership;
WHEREAS, the Partnership will issue Partnership Interests to the Company
and other persons in accordance with the foregoing transactions;
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1.
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
"Additional Funds" shall have the meaning set forth in Section 4.3.A.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 12.2 and who is shown as such on the
books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(i) decrease such deficit by any amounts which such Partner is
obligated to restore pursuant to this Agreement or is deemed to
be obligated to restore
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pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the
penultimate sentence of each of Regulations Sections
1.704-2(i)(5) and 1.704-2(g); and
(ii) increase such deficit by the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended
to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.
"Adjustment Date" means, with respect to any Capital Contribution, the
close of business on the Business Day last preceding the date of the Capital
Contribution; provided that, if such Capital Contribution is being made by the
General Partner in respect of the proceeds from the issuance of REIT Shares (or
the issuance of the General Partner's securities exercisable for, convertible
into or exchangeable for REIT Shares), then the Adjustment Date shall be as of
the close of business on the Business Day last preceding the date of the
issuance of such securities.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Agreed Value" means (i) in the case of any Contributed Property set
forth in Exhibit A and as of the time of its contribution to the Partnership,
the Agreed Value of such property as set forth in Exhibit A; (ii) in the case of
any Contributed Property not set forth in Exhibit A and as of the time of its
contribution to the Partnership, the fair market value of such property or other
consideration as determined by the General Partner, reduced by any liabilities
either assumed by the Partnership upon such contribution or to which such
property is subject when contributed; and (iii) in the case of any property
distributed to a Partner by the Partnership, the fair market value of such
property as determined by the General Partner at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of the
distribution as determined under Section 752 of the Code and the Regulations
thereunder.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended, modified, supplemented or restated from time
to time.
"Appraisal" means with respect to any assets, the opinion of an
independent third party experienced in the valuation of similar assets, selected
by the General Partner in good faith; such opinion may be in the form of an
opinion by such independent third party that the value for such asset as set by
the General Partner is fair, from a financial point of view, to the Partnership.
"Assignee" means a Person to whom one or more Partnership Units have
been transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5.
"Available Cash" means, with respect to any period for which such
calculation is being made, (i) the sum of:
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(a) the Partnership's Net Income or Net Loss (as the case may
be) for such period,
(b) Depreciation and all other noncash charges deducted in
determining Net Income or Net Loss for such period,
(c) the amount of any reduction in reserves of the Partnership
referred to in clause (ii)(f) below (including, without limitation,
reductions resulting because the General Partner determines such amounts
are no longer necessary),
(d) the excess of the net proceeds from the sale, exchange,
disposition, or refinancing of Partnership property for such period over
the gain (or loss, as the case may be) recognized from any such sale,
exchange, disposition, or refinancing during such period (excluding
Terminating Capital Transactions), and
(e) all other cash received by the Partnership for such period
that was not included in determining Net Income or Net Loss for such
period;
(ii) less the sum of:
(a) all principal debt payments made during such period by the
Partnership,
(b) capital expenditures made by the Partnership during such
period,
(c) investments in any entity (including loans made thereto) to
the extent that such investments are not otherwise described in clauses
(ii)(a) or (b),
(d) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period,
(e) any amount included in determining Net Income or Net Loss
for such period that was not received by the Partnership during such
period,
(f) the amount of any increase in reserves established during
such period which the General Partner determines are necessary or
appropriate in its sole and absolute discretion, and
(g) the amount of any working capital accounts and other cash or
similar balances which the General Partner determines to be necessary or
appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
"Board of Directors" means the Board of Directors of the General
Partner.
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"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Los Angeles, California and New York, New York are
authorized or required by law to be closed.
"Capital Account" means, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following provisions:
(i) To each Partner's Capital Account there shall be added such
Partner's Capital Contributions, such Partner's share of Net Income and any
items in the nature of income or gain which are specially allocated pursuant to
Section 6.3, and the amount of any Partnership liabilities assumed by such
Partner or which are secured by any property distributed to such Partner.
(ii) From each Partner's Capital Account there shall be subtracted
the amount of cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement, such Partner's distributive
share of Net Losses and any items in the nature of expenses or losses which are
specially allocated pursuant to Section 6.3 hereof, and the amount of any
liabilities of such Partner assumed by the Partnership or which are secured by
any property contributed by such Partner to the Partnership.
(iii) In the event any interest in the Partnership is transferred in
accordance with the terms of this Agreement (which does not result in a
termination of the Partnership for Federal income tax purposes), the transferee
shall succeed to the Capital Account of the transferor to the extent it relates
to the transferred interest.
(iv) In determining the amount of any liability for purposes of
subsections (i) and (ii) hereof, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and Regulations.
(v) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Regulations. In the event the General
Partner shall determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Partnership, the
General Partner, or the Limited Partners) are computed in order to comply with
such Regulations, the General Partner may make such modification; provided that,
it is not likely to have a material effect on the amounts distributable to any
Person pursuant to Article 13 of this Agreement upon the dissolution of the
Partnership. The General Partner also shall (a) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2.
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"Capital Contribution" means, with respect to any Partner, the amount of
money and the initial Gross Asset Value of any property (other than money)
contributed to the Partnership by such Partner.
"Cash Amount" means, with respect to any Partnership Units subject to a
Redemption, an amount of cash equal to the Deemed Partnership Interest Value
attributable to such Partnership Units.
"Certificate" means the Certificate of Limited Partnership relating to
the Partnership filed in the office of the Secretary of State of Delaware, as
amended from time to time in accordance with the terms hereof and the Act.
"Charter" means the Articles of Incorporation of the General Partner
filed with the Maryland State Department of Assessments and Taxation on
___________________, 1997, as amended or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time or any successor statute thereto, as interpreted by the applicable
regulations thereunder. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Consent" means the consent to, approval of, or vote on a proposed
action by a Partner given in accordance with Article 14 hereof.
"Consent of the Limited Partners" means the Consent of a Majority in
Interest of the Limited Partners, which Consent shall be obtained prior to the
taking of any action for which it is required by this Agreement and may be given
or withheld by a Majority in Interest of the Limited Partners, unless otherwise
expressly provided herein, in their sole and absolute discretion.
"Consent of the Partners" means the Consent of Partners holding
Percentage Interests that in the aggregate are equal to or greater than a
majority of the aggregate Percentage Interests of all Partners, which Consent
shall be obtained prior to the taking of any action for which it is required by
this Agreement and may be given or withheld by such Partners, in their sole and
absolute discretion.
"Constructively Own" means ownership under the constructive ownership
rules described in Exhibit C.
"Contributed Property" means each property or other asset, in such form
as may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership.
"Debt" means, as to any Person, as of any date of determination: (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments
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guaranteeing payment or other performance of obligations by such Person; (iii)
all indebtedness for borrowed money or for the deferred purchase price of
property or services secured by any lien on any property owned by such Person,
to the extent attributable to such Person's interest in such property, even
though such Person has not assumed or become liable for the payment thereof; and
(iv) lease obligations of such Person which, in accordance with generally
accepted accounting principles, should be capitalized.
"Deemed Partnership Interest Value" means, as of any date with respect
to any class of Partnership Interests, the Deemed Value of the Partnership
Interests of such class multiplied by the applicable Partner's Percentage
Interest of such class.
"Deemed Value of the Partnership Interests" means, as of any date with
respect to any class of Partnership Interests, (i) the total number of
Partnership Units of the General Partner in such class of Partnership Interests
(as provided for in Sections 4.1 and 4.3.C) issued and outstanding as of the
close of business on such date multiplied by the Fair Market Value determined as
of such date of a share of capital stock of the General Partner which
corresponds to such class of Partnership Interests; (ii) divided by the
Percentage Interest of the General Partner in such class of Partnership
Interests on such date.
"Depreciation" means, for each fiscal year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for Federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the Federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the Federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.
"Effective Date" means the date of closing of the initial public
offering of REIT Shares upon which date contributions set forth on Exhibit A
shall become effective.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreements" means one or more of the agreements between the
Company, the Partnership and one or more of the Performance Investors, dated as
of the closing of the date of the initial public offering of the common stock of
the General Partner, pursuant to which the Performance Investors have deposited
their Performance Shares in escrow for possible transfer to the General Partner
or the Partnership (as applicable).
"Excess Performance Capital" means, with respect to a Performance
Partner, an amount equal to the number of Partnership Units held by such
Performance Partner, multiplied by the excess of (i) the Capital Account per
Partnership Unit for such Performance Partner; over (ii) the Capital Account per
Partnership Unit for a Limited Partner which is not a PLP or a Performance
Partner. For purposes of (ii) above, it shall be assumed that the Limited
Partner has
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no special arrangements with the Partnership, other than as set forth in this
Agreement, which would cause its Capital Account per Partnership Unit to be
different from the Capital Account per Partnership Unit of other Limited
Partners who are not Performance Partners or PLPs. If the Partner described in
(ii) above does not exist, the amount used for purposes of (ii) shall be the
projected Capital Account balance per Partnership Unit for such Partner,
determined in the reasonable discretion of the General Partner.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"Fair Market Value" means, with respect to any share of capital stock of
the General Partner, the average of the daily market price for the ten (10)
consecutive trading days immediately preceding the date with respect to which
"Fair Market Value" must be determined hereunder or, if such date is not a
Business Day, the immediately preceding Business Day. The market price for each
such trading day shall be (i) if such shares are listed or admitted to trading
on any securities exchange or the Nasdaq National Market, the closing 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 on such day, (ii) if such shares are
not listed or admitted to trading on any securities exchange or the Nasdaq
National Market, 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 such shares are not listed or admitted to trading on any securities
exchange or the Nasdaq National Market 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 ten (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 (10) days prior to the date in
question, the Fair Market Value of such 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 for such shares includes rights that a holder of
such shares would be entitled to receive, then the Fair Market Value of such
rights 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; and provided further that, in connection with
determining the Deemed Value of the Partnership Interests for purposes of
determining the number of additional Partnership Units issuable upon a Capital
Contribution funded by an underwritten public offering of shares of capital
stock of the General Partner, the Fair Market Value of such shares shall be the
public offering price per share of such class of capital stock sold.
"Funding Debt" means the incurrence of any Debt by or on behalf of the
General Partner for the purpose of providing funds to the Partnership.
"General Partner" means the Company or its successors as general partner
of the Partnership.
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"General Partner Interest" means a Partnership Interest held by the
General Partner. A General Partner Interest may be expressed as a number of
Partnership Units.
"General Partner Loan" shall have the meaning set forth in Section
4.3.B.
"General Partner Payment" shall have the meaning set forth in Section
15.11.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for Federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the General Partner (as set forth
on Exhibit A attached hereto, as such Exhibit may be amended from time to time);
provided that, if the contributing Partner is the General Partner then, except
with respect to the General Partner's initial Capital Contribution which shall
be determined as set forth on Exhibit A, or capital contributions of cash, REIT
Shares or other shares of capital stock of the General Partner, the
determination of the fair market value of the contributed asset shall be
determined by (a) the price paid by the General Partner if the asset is acquired
by the General Partner contemporaneously with its contribution to the
Partnership or (b) by Appraisal if otherwise acquired by the General Partner.
(ii) Immediately prior to the times listed below, the Gross Asset
Values of all Partnership assets shall be adjusted to equal their respective
gross fair market values, as determined by the General Partner using such
reasonable method of valuation as it may adopt; provided, however, that for such
purpose, the net value of all of the Partnership assets, in the aggregate, shall
be equal to the Deemed Value of the Partnership Interests of all classes of
Partnership Interests then outstanding, regardless of the method of valuation
adopted by the General Partner:
(a) the acquisition of an additional interest in the Partnership by
a new or existing Partner in exchange for more than a de minimis
Capital Contribution, if the General Partner reasonably
determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Partners in the
Partnership;
(b) the distribution by the Partnership to a Partner of more than a
de minimis amount of Partnership property as consideration for
an interest in the Partnership if the General Partner reasonably
determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Partners in the
Partnership; the Partners agree that such an adjustment is
appropriate when the Partnership effects a Redemption;
(c) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g);
(d) the issuance of Performance Units; and
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(e) at such other times as the General Partner shall reasonably
determine necessary or advisable in order to comply with
Regulations Sections 1.704-1(b) and 1.704-2.
(iii) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the distributee and the General Partner, or if the
distributee and the General Partner cannot agree on such a determination, by
Appraisal.
(iv) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to
the extent that the General Partner reasonably determines that an adjustment
pursuant to subparagraph (ii) is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subparagraph (iv).
(v) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Net Income and Net Losses.
"Holder" means either the Partner or Assignee owning a Partnership Unit.
"Immediate Family" means, with respect to any natural Person, such
natural Person's estate or heirs or current spouse or former spouse, parents,
parents-in-law, children, siblings and grandchildren and any trust or estate,
all of the beneficiaries of which consist of such Person or such Person's
spouse, former spouse, parents, parents-in-law, children, siblings or
grandchildren.
"Incapacity" or "Incapacitated" means: (i) as to any individual Partner,
death, total physical disability or entry by a court of competent jurisdiction
adjudicating him or her incompetent to manage his or her Person or his or her
estate; (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership; (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership; (v) as to any trustee of a trust which is a
Partner, the termination of the trust (but not the substitution of a new
trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For
purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (b) the Partner is adjudged as
bankrupt or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of
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a petition filed against the Partner in any proceeding of the nature described
in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator for the Partner or for all or
any substantial part of the Partner's properties, (f) any proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within one
hundred and twenty (120) days after the commencement thereof, (g) the
appointment without the Partner's consent or acquiescence of a trustee, receiver
or liquidator has not been vacated or stayed within ninety (90) days of such
appointment or (h) an appointment referred to in clause (g) is not vacated
within ninety (90) days after the expiration of any such stay.
"Indemnitee" means (i) any Person subject to a claim or demand or made
or threatened to be made a party to, or involved or threatened to be involved
in, an action, suit or proceeding by reason of his or her status as (a) the
General Partner or (b) a director, officer, employee or agent of the Partnership
or the General Partner and (ii) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from
time to time, in its sole and absolute discretion.
"IRS" means the Internal Revenue Service, which administers the internal
revenue laws of the United States.
"Limited Partner" means any Person (including any PLP) named as a
Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended
from time to time, or any Substituted Limited Partner or Additional Limited
Partner, in such Person's capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of a Limited
Partner representing a fractional part of the Partnership Interests of all
Limited Partners and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Limited Partnership Interest may be expressed as a number of
Partnership Units.
"Liquidating Events" shall have the meaning set forth in Section 13.1.
"Liquidator" shall have the meaning set forth in Section 13.2.A.
"Majority in Interest of the Limited Partners" means Limited Partners
(other than the General Partner and any Limited Partner 50% or more of whose
equity is owned, directly or indirectly, by the General Partner) holding
Percentage Interests that in the aggregate are greater than fifty percent (50%)
of the aggregate Percentage Interests of all Limited Partners (other than the
General Partner and any Limited Partner 50% or more of whose equity is owned,
directly or indirectly, by the General Partner).
"Majority in Interest of Partners" means Partners holding Percentage
Interests that are greater than fifty percent (50%) of the aggregate Percentage
Interests of all Partners.
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"Net Income" or "Net Loss" means for each fiscal year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such fiscal year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from Federal income
tax and not otherwise taken into account in computing Net Income or Net Loss
pursuant to this definition of Net Income or Net Loss shall be added to such
taxable income or loss;
(ii) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Income or Net Loss pursuant to this definition of Net Income or
Net Loss shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (iii) of the definition of Gross Asset Value,
the amount of such adjustment shall be taken into account as gain or loss from
the disposition of such asset for purposes of computing Net Income or Net Loss;
in the event the Gross Asset Value of any Partnership asset is adjusted pursuant
to subparagraph (ii) of the definition of Gross Asset Value, the amount of such
adjustment shall be taken into account as gain or loss from the disposition of
all Partnership assets in a Terminating Capital Transaction for purposes of
computing Net Income or Net Loss as set forth in Section 6.2.A(ii), subject to
Section 6.3; any Net Loss arising under this subparagraph (iii) shall be
allocated to the Partners as set forth in Section 6.2.A(i), subject to Section
6.3;
(iv) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for Federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year;
(vi) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner's interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
purposes of computing Net Income or Net Loss; and
(vii) Notwithstanding any other provision of this definition of Net
Income or Net Loss, any items which are specially allocated pursuant to Section
6.3 shall not be taken into
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account in computing Net Income or Net Loss. The amounts of the items of
Partnership income, gain, loss, or deduction available to be specially allocated
pursuant to Section 6.3 shall be determined by applying rules analogous to those
set forth in this definition of Net Income or Net Loss.
"New Securities" means (i) any rights, options, warrants or convertible
or exchangeable securities having the right to subscribe for or purchase REIT
Shares or other shares of capital stock of the General Partner, excluding grants
under any Stock Option Plan or (ii) any Debt issued by the General Partner that
provides any of the rights described in clause (i).
"Nonrecourse Deductions" shall have the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" shall have the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption substantially in
the form of Exhibit B to this Agreement.
"Offering Costs" means the aggregate amounts expended by the General
Partner which related to the organization of the Partnership and the General
Partner, or to the initial public offering or subsequent offerings of REIT
Shares or other shares of capital stock of the General Partner, the net proceeds
of which were used to make a contribution to the Partnership, in each case to
the extent such expenses of the General Partner were not reimbursed by the
Partnership.
"Offering Memorandum" means that certain "Joint Proxy Statement/Offering
Memorandum/Consent Solicitation" of the General Partner dated July 17, 1997
(including all exhibits and supplements thereto).
"Original Limited Partner" means the Limited Partners of the
Partnership, listed on Exhibit I hereto, as of _____________________, 1997.
"Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" shall have the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a
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Partner Nonrecourse Debt for a Partnership Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means, an ownership interest in the Partnership
of 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. There may be one or more
classes of Partnership Interests as provided in Section 4.3. A Partnership
Interest may be expressed as a number of Partnership Units. Unless otherwise
expressly provided for by the General Partner at the time of the original
issuance of any Partnership Interests, all Partnership Interests (whether of a
Limited Partner or a General Partner) shall be of the same class.
"Partnership Minimum Gain" shall have the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
which record date shall be the same as the record date established by the
General Partner for a distribution to its stockholders of some or all of its
portion of such distribution.
"Partnership Unit" means, with respect to any class of Partnership
Interest, a fractional, undivided share of such class of Partnership Interest
issued pursuant to Sections 4.1 and 4.3 (including Performance Units). The
ownership of Partnership Units may be evidenced by a certificate for units
substantially in the form of Exhibit D-1 or D-2 hereto or as the General Partner
may determine with respect to any class of Partnership Units issued from time to
time under Sections 4.1 and 4.3.
"Partnership Year" means the fiscal year of the Partnership, which shall
be the calendar year.
"Percentage Interest" means, as to a Partner holding a class of
Partnership Interests, its interest in the Partnership as determined by dividing
the Partnership Units of such class owned by such Partner by the total number of
Partnership Units of such class then outstanding as specified in Exhibit A
attached hereto, as such Exhibit may be amended from time to time. If the
Partnership issues more than one class of Partnership Interest, the interest in
the Partnership among the classes of Partnership Interests shall be determined
as set forth in the amendment to the Partnership Agreement setting forth the
rights and privileges of such additional classes of Partnership Interest, if
any, as contemplated by Section 4.3.C.
"Performance Amount" means, with respect to a PLP on a specified date,
(i) in the case of a Redemption, a number of Performance Units equal to (a) the
amount of such PLP's
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Capital Account balance immediately following the revaluation of the
Partnership's assets as of such date pursuant to the definitions of "Gross Asset
Value" (paragraph (ii) therein) and "Net Income" (paragraph (iii) therein),
divided by (b) the Fair Market Value of a REIT Share; and (ii) in the case of an
exchange of Performance Units for the REIT Shares Amount, the same number of
Performance Units as determined pursuant to subparagraph (i) above.
"Performance Investors" means shareholders of the General Partner and
Limited Partners who are parties to one or more of the Escrow Agreements.
"Performance Partners" means Partners which had the number of their
Partnership Units reduced pursuant to Section 4.3.F.
"Performance Shares" means a portion of the REIT Shares or Partnership
Units issued to the Performance Investors which were escrowed pursuant to the
Escrow Agreements for possible transfer to the General Partner or the
Partnership (as applicable), the applicable number of which for each Performance
Investor is described in the applicable Escrow Agreement.
"Performance Units" means those Partnership Units issued pursuant to
Section 4.3.F.
"Permitted Reason" means a termination of employment by reason of death,
disability, termination by the employer without "cause," or termination by a
Person of their employment for "good reason." For purposes of this definition,
"cause" shall mean (i) gross negligence or willful misconduct, (ii) breach by
the Person of the covenant not to compete provided in their employment agreement
during the one year period following the closing of the initial public offering
of common stock of the General Partner, (iii) fraud or other conduct against the
material best interests of the General Partner, the Partnership or their
subsidiaries, or (iv) conviction of a felony if such conviction has a material
adverse effect on the General Partner, the Partnership or their subsidiaries.
For purposes of this definition, "good reason" means (a) a substantial adverse
change in the nature or scope of a Person's responsibilities or authority under
the Person's employment agreement, or (b) an uncured breach by the employer of
any of its material obligations under such employment agreement.
"Person" means an individual or a corporation, partnership, limited
liability company, trust, unincorporated organization, association or other
entity.
"Pledge" shall have the meaning set forth in Section 11.3.A.
"PLP" means at any time, any Person who then owns one or more
Performance Units.
"Properties" means such interests in real property and personal property
including without limitation, fee interests, interests in ground leases,
interests in joint ventures, interests in mortgages, and Debt instruments as the
Partnership may hold from time to time.
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"Qualified REIT Subsidiary" means any Subsidiary of the General Partner
that is a "qualified REIT subsidiary" within the meaning of Section 856(i) of
the Code.
"Qualified Transferee" means an "Accredited Investor" as defined in Rule
501 promulgated under the Securities Act.
"Redemption" shall have the meaning set forth in Section 8.6.A.
"Regulations" means the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in Section
6.3.A(viii).
"REIT" means a real estate investment trust under Sections 856 through
860 of the Code.
"REIT Requirements" shall have the meaning set forth in Section 5.1.
"REIT Share" means a share of common stock, par value $.01 per share, of
the General Partner.
"REIT Shares Amount" means, as of any date, an aggregate number of REIT
Shares equal to the number of Tendered Units, or in the case of Section 11.2.B,
all Units, as adjusted pursuant to Section 7.5 (in the event the General Partner
acquires material assets, other than on behalf of the Partnership) and for stock
dividends and distributions, stock splits and subdivisions, reverse stock splits
and combinations, distributions of rights, warrants or options, and
distributions of evidences of indebtedness or assets relating to assets not
received by the General Partner pursuant to a pro rata distribution by the
Partnership.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
"Specified Redemption Date" means the day of receipt by the General
Partner of a Notice of Redemption.
"Stock Incentive Plan" means any stock incentive plan of the General
Partner.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Subsidiary Partnership" means any partnership or limited liability
company that is a Subsidiary of the Partnership.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.
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"Surviving Partnership" shall have the meaning set forth in Section
11.2.C.
"Tax Items" shall have the meaning set forth in Section 6.4.A.
"Tenant" means any tenant from which the General Partner derives rent
either directly or indirectly through partnerships, including the Partnership.
"Tendered Units" shall have the meaning set forth in Section 8.6.A.
"Tendering Partner" shall have the meaning set forth in Section 8.6.A.
"Terminating Capital Transaction" means any sale or other disposition of
all or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"Termination Transaction" shall have the meaning set forth in Section
11.2.B.
ARTICLE 2.
ORGANIZATIONAL MATTERS
Section 2.1. Organization
The Partnership is a limited partnership formed pursuant to the
provisions of the Act and upon the terms and conditions set forth in this
Agreement. Except as expressly provided herein, the rights and obligations of
the Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal
property for all purposes.
Section 2.2. Name
The name of the Partnership is AMB Property, L.P. The Partnership's
business may be conducted under any other name or names deemed advisable by the
General Partner, including the name of the General Partner or any Affiliate
thereof. The words "Limited Partnership," "L.P.," "Ltd." or similar words or
letters shall be included in the Partnership's name where necessary for the
purposes of complying with the laws of any jurisdiction that so requires. The
General Partner in its sole and absolute discretion may change the name of the
Partnership at any time and from time to time and shall notify the Limited
Partners of such change in the next regular communication to the Limited
Partners.
Section 2.3. Resident Agent; Principal Office
The name and address of the resident agent of the Partnership in the
State of Delaware is [Xxxxxxxx-Xxxx Corporation Systems, Inc., 0000 Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000]. The address of the principal office of the
Partnership in the State of Delaware is [c/o Xxxxxxxx-Xxxx Corporation Systems,
Inc., 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000] at such address. The
principal office of the Partnership is located at 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, or such other place as the General Partner may from
time to
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time designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner deems advisable.
Section 2.4. Power of Attorney
A. Each Limited Partner and each Assignee constitutes and appoints
the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices: (a) all certificates, documents and
other instruments (including, without limitation, this Agreement
and the Certificate and all amendments or restatements thereof)
that the General Partner or the Liquidator deems appropriate or
necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a
partnership in which the Limited Partners have limited
liability) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or
own property; (b) all instruments that the General Partner or
any Liquidator deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this Agreement
in accordance with its terms; (c) all conveyances and other
instruments or documents that the General Partner or any
Liquidator deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the
terms of this Agreement, including, without limitation, a
certificate of cancellation; (d) all instruments relating to the
admission, withdrawal, removal or substitution of any Partner
pursuant to, or other events described in, Articles 11, 12 and
13 or the Capital Contribution of any Partner; and (e) all
certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of
Partnership Interests; and
(ii) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of
the General Partner or any Liquidator, to make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or
other action which is made or given by the Partners hereunder or
is consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner or any
Liquidator, to effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
or as may be otherwise expressly provided for in this Agreement.
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B. The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
and any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or any Liquidator, acting in good faith pursuant to such power
of attorney; and each such Limited Partner or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the General Partner or any Liquidator, taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or any Liquidator, within fifteen (15) days after receipt of the
General Partner's or Liquidator's request therefor, such further designation,
powers of attorney and other instruments as the General Partner or the
Liquidator, as the case may be, deems necessary to effectuate this Agreement and
the purposes of the Partnership.
Section 2.5. Term
The term of the Partnership will commence on ______________, 1997 and
shall continue until December 31, 2097 unless it is dissolved sooner pursuant to
the provisions of Article 13 or as otherwise provided by law.
Section 2.6. Number of Partners
Without the consent of the General Partner which may be given or
withheld in its sole discretion, the Partnership shall not at any time have more
than one hundred (100) partners (including as partners those persons indirectly
owning an interest in the Partnership through a partnership, limited liability
company, S corporation or grantor trust (such entity, a "flow through entity"),
but only if substantially all of the value of such person's interest in the flow
through entity is attributable to the flow through entity's interest (direct or
indirect) in the Partnership).
ARTICLE 3.
PURPOSE
Section 3.1. Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT for Federal income tax
purposes, unless the General Partner ceases to qualify as a REIT for reasons
other than the conduct of the business of the Partnership, (ii) to enter into
any partnership, joint venture or other similar arrangement to engage in any of
the foregoing or to own interests in any entity engaged, directly or indirectly,
in any of the foregoing and (iii) to do anything necessary or incidental to the
foregoing. In connection with the foregoing, and without limiting the General
Partner's right
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in its sole discretion to cease qualifying as a REIT, the Partners acknowledge
that the General Partner's current status as a REIT inures to the benefit of all
the Partners and not solely the General Partner.
Section 3.2. Powers
The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership, including, without
limitation, full power and authority, directly or through its ownership interest
in other entities, to enter into, perform and carry out contracts of any kind,
borrow money and issue evidences of indebtedness, whether or not secured by
mortgage, deed of trust, pledge or other lien, acquire and develop real
property, and manage, lease, sell, transfer and dispose of real property;
provided, however, not withstanding anything to the contrary in this Agreement,
the Partnership shall not take, or refrain from taking, any action which, in the
judgment of the General Partner, in its sole and absolute discretion, (i) could
adversely affect the ability of the General Partner to continue to qualify as a
REIT, (ii) could subject the General Partner to any taxes under Section 857 or
Section 4981 of the Code or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over the General Partner or its
securities, unless any such action (or inaction) under the foregoing clauses
(i), (ii) or (iii) shall have been specifically consented to by the General
Partner in writing.
Section 3.3. Partnership Only for Purposes Specified
The Partnership shall be a partnership only for the purposes specified
in Section 3.1, and this Agreement shall not be deemed to create a partnership
among the Partners with respect to any activities whatsoever other than the
activities within the purposes of the Partnership as specified in Section 3.1.
Except as otherwise provided in this Agreement, no Partner shall have any
authority to act for, bind, commit or assume any obligation or responsibility on
behalf of the Partnership, its properties or any other Partner. No Partner, in
its capacity as a Partner under this Agreement, shall be responsible or liable
for any indebtedness or obligation of another Partner, nor shall the Partnership
be responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement
and the Act.
Section 3.4. Representations and Warranties by the Parties
A. Each Partner that is an individual represents and warrants to
each other Partner that (i) such Partner has in the case of any Person other
than an individual, the power and authority, and in the case of an individual,
the legal capacity, to enter into this Agreement and perform such Partner's
obligations hereunder, (ii) the consummation of the transactions contemplated by
this Agreement to be performed by such Partner will not result in a breach or
violation of, or a default under, any agreement by which such Partner or any of
such Partner's property is or are bound, or any statute, regulation, order or
other law to which such Partner is subject, (iii) such Partner is neither a
"foreign person" within the meaning of Section 1445(f) of
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the Code nor a "foreign partner" within the meaning of Section 1446(e) of the
Code and (iv) this Agreement has been duly executed and delivered by such
Partner and is binding upon, and enforceable against, such Partner in accordance
with its terms.
B. Each Partner that is not an individual represents and warrants
to each other Partner that (i) its execution and delivery of this Agreement and
all transactions contemplated by this Agreement to be performed by it have been
duly authorized by all necessary action, including without limitation, that of
its general partner(s), committee(s), trustee(s), beneficiaries, directors
and/or stockholder(s), as the case may be, as required, (ii) the consummation of
such transactions shall not result in a breach or violation of, or a default
under, its certificate of limited partnership, partnership agreement, trust
agreement, limited liability company operating agreement, charter or by-laws, as
the case may be, any agreement by which such Partner or any of such Partner's
properties or any of its partners, beneficiaries, trustees or stockholders, as
the case may be, is or are bound, or any statute, regulation, order or other law
to which such Partner or any of its partners, trustees, beneficiaries or
stockholders, as the case may be, is or are subject, (iii) such Partner is
neither a "foreign person" within the meaning of Section 1445(f) of the Code nor
a "foreign partner" within the meaning of Section 1446(e) of the Code and (iv)
this Agreement has been duly executed and delivered by such Partner and is
binding upon, and enforceable against, such Partner in accordance with its
terms.
C. Each Partner represents, warrants and agrees that it has
acquired and continues to hold its interest in the Partnership for its own
account for investment only and not for the purpose of, or with a view toward,
the resale or distribution of all or any part thereof, nor with a view toward
selling or otherwise distributing such interest or any part thereof at any
particular time or under any predetermined circumstances. Each Partner further
represents and warrants that it is a sophisticated investor, able and accustomed
to handling sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds it has invested in the Partnership in what it
understands to be a highly speculative and illiquid investment.
D. Each Partner further represents, warrants and agrees as follows:
(i) Except as provided in Exhibit E, at any time such Partner
actually or constructively owns a 25% or greater capital interest or
profits interest in the Partnership, it does not and will not, without
the prior written consent of the General Partner, actually own or
Constructively Own (a) with respect to any Tenant that is a corporation,
any stock of such Tenant and (b) with respect to any Tenant that is not
a corporation, any interests in either the assets or net profits of such
Tenant.
(ii) Except as provided in Exhibit F, at any time such Partner
actually or constructively owns a 25% or greater capital interest or
profits interest in the Partnership, it does not, and agrees that it
will not without the prior written consent of the General Partner,
actually own or Constructively Own, any stock in the General Partner,
other than any REIT Shares or other shares of capital stock of the
General Partner such Partner may acquire (a) as a result of an exchange
of Tendered Units pursuant to Section 8.6 or (b) upon the exercise of
options granted or delivery of REIT Shares pursuant to any
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Stock Incentive Plan, in each case subject to the ownership limitations
set forth in the General Partner's Charter.
(iii) Upon request of the General Partner, it will disclose to
the General Partner the amount of REIT Shares or other shares of capital
stock of the General Partner that it actually owns or Constructively
Owns.
(iv) It understands that if, for any reason, (a) the
representations, warranties or agreements set forth in Section 3.4.D(i)
or (ii) are violated or (b) the Partnership's actual or Constructive
Ownership of the REIT Shares or other shares of capital stock of the
General Partner violates the limitations set forth in the Charter, then
(x) some or all of the Redemption rights of the Partners may become
non-exercisable, and (y) some or all of the REIT Shares owned by the
Partners may be automatically transferred to a trust for the benefit of
a charitable beneficiary, as provided in the Charter.
E. The representations and warranties contained in Sections 3.4.A,
3.4.B, 3.4.C and 3.4.D shall survive the execution and delivery of this
Agreement by each Partner and the dissolution and winding up of the Partnership.
F. Each Partner hereby acknowledges that no representations as to
potential profit, cash flows, funds from operations or yield, if any, in respect
of the Partnership or the General Partner have been made by any Partner or any
employee or representative or Affiliate of any Partner, and that projections and
any other information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.
ARTICLE 4.
CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions of the Partners
At the time of their respective execution of this Agreement, the
Partners shall make Capital Contributions as set forth in Exhibit A to this
Agreement. The Partners shall own Partnership Units of the class and in the
amounts set forth in Exhibit A and shall have a Percentage Interest in the
Partnership as set forth in Exhibit A, which Percentage Interest shall be
adjusted in Exhibit A from time to time by the General Partner to the extent
necessary to accurately reflect exchanges, redemptions, Capital Contributions,
the issuance of additional Partnership Units (including the issuance of
Performance Units pursuant to Section 4.3.F) or similar events having an effect
on a Partner's Percentage Interest. Except as required by law or as otherwise
provided in Sections 4.3, 4.4 and 10.5, no Partner shall be required or
permitted to make any additional Capital Contributions or loans to the
Partnership. Unless otherwise specified by the General Partner at the time of
the creation of any class of Partnership Interests, the corresponding class of
capital stock for any Partnership Units issued shall be REIT Shares.
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Section 4.2. Loans by Third Parties
Subject to Section 4.3, the Partnership may incur Debt, or enter into
other similar credit, guarantee, financing or refinancing arrangements for any
purpose (including, without limitation, in connection with any further
acquisition of Properties) with any Person that is not the General Partner upon
such terms as the General Partner determines appropriate; provided that, the
Partnership shall not incur any Debt that is recourse to the General Partner,
except to the extent otherwise agreed to by the General Partner in its sole
discretion.
Section 4.3. Additional Funding and Capital Contributions
A. General. The General Partner may, at any time and from time to
time, determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition of additional Properties or for such other
Partnership purposes as the General Partner may determine. Additional Funds may
be raised by the Partnership, at the election of the General Partner, in any
manner provided in, and in accordance with, the terms of this Section 4.3. No
Person shall have any preemptive, preferential or similar right or rights to
subscribe for or acquire any Partnership Interest, except as set forth in this
Section 4.3.
B. General Partner Loans. The General Partner may enter into a
Funding Debt, including, without limitation, a Funding Debt that is convertible
into REIT Shares, and lend the Additional Funds to the Partnership (a "General
Partner Loan"); provided, however, that the General Partner shall not be
obligated to lend the net proceeds of any Funding Debt to the Partnership in a
manner that would be inconsistent with the General Partner's ability to remain
qualified as a REIT. If the General Partner enters into such a Funding Debt, the
General Partner Loan will consist of the net proceeds from such Funding Debt and
will be on comparable terms and conditions, including interest rate, repayment
schedule and costs and expenses, as shall be applicable with respect to or
incurred in connection with such Funding Debt.
C. Issuance of Additional Partnership Interests. The General
Partner may raise all or any portion of the Additional Funds by accepting
additional Capital Contributions, including, without limitation, the issuance of
Units for interests in real property. In connection with any such additional
Capital Contributions (of cash or property), the General Partner is hereby
authorized to cause the Partnership from time to time to issue to Partners
(including the General Partner) or other Persons (including, without limitation,
in connection with the contribution of property to the Partnership) additional
Partnership Units or other Partnership Interests in one or more classes, or one
or more series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers, and duties,
including rights, powers, and duties senior to then existing Limited Partnership
Interests, all as shall be determined by the General Partner in its sole and
absolute discretion subject to Delaware law, and as set forth by amendment to
this Agreement, including without limitation: (i) the allocations of items of
Partnership income, gain, loss, deduction, and credit to such class or series of
Partnership Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; (iii) the rights of
each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership; and (iv) the right to vote, including, without
limitation, the limited partner approval rights set forth in Section 11.2.A;
provided that,
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no such additional Partnership Units or other Partnership Interests shall be
issued to the General Partner unless either (a) the additional Partnership
Interests are issued in connection with the grant, award, or issuance of shares
of the General Partner pursuant to Section 4.3.D below, which shares have
designations, preferences, and other rights (except voting rights) such that the
economic interests attributable to such shares are substantially similar to the
designations, preferences and other rights of the additional Partnership
Interests issued to the General Partner in accordance with this Section 4.3.C or
(b) the additional Partnership Interests are issued to all Partners holding
Partnership Interests in the same class in proportion to their respective
Percentage Interests in such class. In the event that the Partnership issues
additional Partnership Interests pursuant to this Section 4.3.C, the General
Partner shall make such revisions to this Agreement (including but not limited
to the revisions described in Sections 5.4, 6.2.B, and 8.6) as it determines are
necessary to reflect the issuance of such additional Partnership Interests.
D. Issuance of REIT Shares or Other Securities by the General
Partner. The General Partner shall not issue any additional REIT Shares (other
than REIT Shares issued pursuant to Section 8.6 or pursuant to a dividend or
distribution (including any stock split) of REIT Shares to all of its
stockholders), other shares of capital stock of the General Partner or New
Securities unless the General Partner shall make a Capital Contribution of the
net proceeds (including, without limitation, cash and Properties) from the
issuance of such additional REIT Shares, other shares of capital stock or New
Securities, as the case may be, and from the exercise of the rights contained in
such additional New Securities, as the case may be. The General Partner's
Capital Account shall be increased by the amount of cash or the value of
Properties so contributed.
E. Percentage Interest Adjustments in the Case of Capital
Contributions for Partnership Units. Upon the acceptance of additional Capital
Contributions in exchange for Partnership Units, the Percentage Interest related
thereto shall be equal to a fraction, the numerator of which is equal to the
amount of cash and the Agreed Value of the Properties contributed as of the
Business Day immediately preceding the date on which the additional Capital
Contributions are made (an "Adjustment Date") and the denominator of which is
equal to the sum of (i) the Deemed Value of the Partnership Interests of such
class (computed as of the Business Day immediately preceding the Adjustment
Date) plus (ii) the aggregate amount of additional Capital Contributions
contributed to the Partnership on such Adjustment Date in respect of such class
of Partnership Interests. The Percentage Interest of each other Partner holding
Partnership Interests of such class not making a full pro rata Capital
Contribution shall be adjusted to equal a fraction, the numerator of which is
equal to the sum of (i) the Deemed Partnership Interest Value of such Limited
Partner of such class (computed as of the Business Day immediately preceding the
Adjustment Date) plus (ii) the amount of additional Capital Contributions made
by such Partner to the Partnership in respect of such class of Partnership
Interests as of such Adjustment Date, and the denominator of which is equal to
the sum of (a) the Deemed Value of the Partnership Interests of such class
(computed as of the Business Day immediately preceding the Adjustment Date),
plus (b) the aggregate amount of additional Capital Contributions contributed to
the Partnership on such Adjustment Date in respect of such class.
Notwithstanding the foregoing, solely for purposes of calculating a Partner's
Percentage Interest pursuant to this Section 4.3.E, (i) in the case of cash
Capital Contributions by the General Partner, such Capital Contributions will be
deemed to equal the cash contributed by the General
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Partner plus, in the case of cash contributions funded by an offering of REIT
Shares or other shares of capital stock of the General Partner, the offering
costs attributable to the cash contributed to the Partnership, and (ii) in the
case of the contribution of Properties (or any portion thereof) by the General
Partner which were acquired by the General Partner in exchange for REIT Shares
immediately prior to such contribution, the General Partner shall be issued a
number of Partnership Units equal to the number of REIT Shares issued by the
General Partner in exchange for such Properties, the Partnership Units held by
the other Partners shall not be adjusted, and the Partners' Percentage Interests
shall be adjusted accordingly. The General Partner shall promptly give each
Partner written notice of its Percentage Interest, as adjusted.
F. Issuance of Performance Units to the PLPs. Performance Investors
may be required pursuant to the terms of the Escrow Agreements to transfer all
or a portion of their Performance Shares to the General Partner or the
Partnership (as applicable). To the extent Performance Shares (i.e., REIT
Shares) are transferred by Performance Investors to the General Partner pursuant
to the Escrow Agreements, the number of Partnership Units held by the General
Partner shall be automatically reduced by such amount on such date. To the
extent Performance Shares (i.e., Partnership Units) are transferred by
Performance Investors to the Partnership pursuant the Escrow Agreements, the
number of Partnership Units held by each such Performance Investor shall be
automatically reduced by such amount on such date. To the extent the Partnership
Units held by the General Partner or Performance Investors are reduced as set
forth in the preceding two sentences, the Partnership shall immediately issue an
equal number of Performance Units to the Persons listed on Exhibit H hereto in
accordance with the percentages set forth on such exhibit. The adjustments in
the number of Partnership Units held by the Performance Partners and the PLPs
set forth above shall have no effect on each such Partners' Capital Account in
the Partnership (except with respect to subsequent allocations of items of
Partnership income, gain, loss, deduction, and credit made to such Partners) and
no PLP shall have an obligation to make a contribution to the capital of the
Partnership in connection with the issuance of Performance Units.
G. Changes in PLPs. Any Person who is listed on Exhibit H and who
does not remain employed by the Partnership for at least one (1) year from the
closing of the initial public offering of the common stock of the General
Partner, other than Persons who cease to be so employed as a result of a
Permitted Reason, shall have their name removed from such exhibit and such
Person's percentage as set forth on such exhibit shall be transferred to the
other Persons listed on such exhibit in proportion to their immediately
preceding percentages.
Section 4.4. Stock Incentive Plan
If at any time or from time to time the General Partner sells or issues
REIT Shares pursuant to any Stock Incentive Plan, the General Partner shall
contribute any proceeds therefrom to the Partnership as an additional Capital
Contribution and shall receive an amount of additional Partnership Units equal
to the number of REIT Shares so sold or issued. The General Partner's Capital
Account shall be increased by the amount of cash so contributed.
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Section 4.5. No Preemptive Rights
Except to the extent expressly granted by the Partnership pursuant to
another agreement, no Person shall have any preemptive, preferential or other
similar right with respect to (i) additional Capital Contributions or loans to
the Partnership or (ii) issuance or sale of any Partnership Units or other
Partnership Interests.
Section 4.6. Other Contribution Provisions
In the event that any Partner is admitted to the Partnership and is
given (or is treated as having received) a Capital Account in exchange for
services rendered to the Partnership, such transaction shall be treated by the
Partnership and the affected Partner as if the Partnership had compensated such
Partner in cash, and the Partner had contributed such cash to the capital of the
Partnership. In addition, with the consent of the General Partner, in its sole
discretion, one or more Limited Partners may enter into contribution agreements
with the Partnership which have the effect of providing a guarantee of certain
obligations of the Partnership.
ARTICLE 5.
DISTRIBUTIONS
Section 5.1. Requirement and Characterization of Distributions
The General Partner shall cause the Partnership to distribute quarterly
all, or such portion as the General Partner may in its discretion determine, of
Available Cash generated by the Partnership during such quarter to the Partners
who are Partners on the Partnership Record Date with respect to such quarter,
(i) first, with respect to any Partnership Interests that are entitled to any
preference in distribution, in accordance with the rights of such class of
Partnership Interests (and within such class, pro rata in proportion to the
respective Percentage Interests on such Partnership Record Date) and (ii)
second, with respect to Partnership Interests that are not entitled to any
preference in distribution, pro rata to each such class in accordance with the
terms of such class (and within each such class, pro rata in proportion with the
respective Percentage Interests on such Partnership Record Date). Unless
otherwise expressly provided for herein or in an agreement at the time a new
class of Partnership Interests is created in accordance with Article 4, no
Partnership Interest shall be entitled to a distribution in preference to any
other Partnership Interest. The General Partner shall take such reasonable
efforts, as determined by it in its sole and absolute discretion and consistent
with its qualification as a REIT, to cause the Partnership to distribute
sufficient amounts to enable the General Partner to pay stockholder dividends
that will (a) satisfy the requirements for qualifying as a REIT under the Code
and Regulations ("REIT Requirements") and (b) avoid any Federal income or excise
tax liability of the General Partner.
Section 5.2. Distributions in Kind
No right is given to any Partner to demand and receive property other
than cash. The General Partner may determine, in its sole and absolute
discretion, to make a distribution in kind to the Partners of Partnership
assets, and such assets shall be distributed in such a fashion as
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to ensure that the fair market value is distributed and allocated in accordance
with Articles 5, 6 and 10.
Section 5.3. Distributions Upon Liquidation
Proceeds from a Terminating Transaction shall be distributed to the
Partners in accordance with Section 13.2.
Section 5.4. Distributions to Reflect Issuance of Additional
Partnership Interests
In the event that the Partnership issues additional Partnership
Interests (other than Performance Units, which shall receive distributions as
set forth in Section 5.1) to the General Partner or any Additional Limited
Partner pursuant to Section 4.3.C or 4.4, the General Partner shall make such
revisions to this Article 5 as it determines are necessary to reflect the
issuance of such additional Partnership Interests.
ARTICLE 6.
ALLOCATIONS
Section 6.1. Timing and Amount of Allocations of Net Income and Net
Loss
Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each fiscal year of the Partnership as of the end of
each such year. Subject to the other provisions of this Article 6, an allocation
to a Partner of a share of Net Income or Net Loss shall be treated as an
allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.
Section 6.2. General Allocations
A. In General. Except as otherwise provided in this Article 6:
(i) Net Income and Net Loss. Net Income and Net Loss shall
be allocated except as provided in Section 6.2.A(ii), to each of the
Partners holding the same class of Partnership Interests in accordance
with their respective Percentage Interest of such class.
(ii) Terminating Capital Transactions.
(a) If no Performance Units are outstanding at the
time of a Terminating Capital Transaction, any
Net Income attributable to such Terminating
Capital Transaction shall first be allocated to
the General Partner in an amount equal to the
Offering Costs, to the extent the General
Partner's Capital Account has not previously
been adjusted to account for such amounts.
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(b) If Performance Units are outstanding at the time
of a Terminating Capital Transaction --
(1) any Net Income attributable to such
Terminating Capital Transaction shall be
allocated as follows: such Net Income
shall first be tentatively allocated
solely as an interim step in calculating
final allocations pursuant to this
Section 6.2.A.(ii)(b)(1), among the
Partners in accordance with Section
6.2.A.(ii)(a) and Section 6.2.A.(i).
Then the amount so tentatively allocated
to each Performance Partner, to the
extent of each such Performance
Partner's Excess Performance Capital,
shall instead be allocated to the PLPs,
pro rata to the number of Performance
Units held by each PLP.
(2) any Net Loss attributable to such
Terminating Capital Transaction shall be
allocated as follows: such Net Loss
shall first be tentatively allocated,
solely as an interim step in calculating
final allocations pursuant to this
Section 6.2.A(ii)(b)(2), among the
Partners in accordance with Section
6.2.A.(i). Then the amount so
tentatively allocated to the PLPs shall
instead be allocated to the Performance
Partners to the extent of the aggregate
Excess Performance Capital of the
Performance Partners. Any amounts so
allocated away from the PLPs shall be
done on a basis which is proportionate
to each PLP's Performance Units. Any
amounts so allocated to the Performance
Partners shall be done on a basis which
is proportionate to each Performance
Partner's Excess Performance Capital.
B. Allocations to Reflect Issuance of Additional Partnership
Interests. In the event that the Partnership issues additional Partnership
Interests to the General Partner or any Additional Limited Partner pursuant to
Section 4.3 or 4.4, the General Partner shall make such revisions to this
Section 6.2 as it determines are necessary to reflect the terms of the issuance
of such additional Partnership Interests, including making preferential
allocations to certain classes of Partnership Interests. In addition, for any
quarter in which Performance Units were issued, Net Income and Net Loss relating
to such units shall be allocated among (i) the PLPs who received such units and
(ii) the Performance Partners who returned the corresponding Partnership Units
to the Partnership, in accordance with any method selected by the General
Partner which is permitted under Section 706 of the Code.
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Section 6.3. Additional Allocation Provisions
Notwithstanding the foregoing provisions of this Article 6:
A. Regulatory Allocations.
(i) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of
Section 6.2, or any other provision of this Article 6, if there is a net
decrease in Partnership Minimum Gain during any fiscal year, each
Partner shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount
equal to such Partner's share of the net decrease in Partnership Minimum
Gain, as determined under Regulations Section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant
thereto. The items to be allocated shall be determined in accordance
with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section
6.3.A(i) is intended to qualify as a "minimum gain chargeback" within
the meaning of Regulation Section 1.704-2(f) which shall be controlling
in the event of a conflict between such Regulation and this Section
6.3.A(i).
(ii) Partner Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2(i)(4), and notwithstanding the
provisions of Section 6.2, or any other provision of this Article 6
(except Section 6.3.A(i)), if there is a net decrease in Partner Minimum
Gain attributable to a Partner Nonrecourse Debt during any fiscal year,
each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in
an amount equal to such Partner's share of the net decrease in Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each General Partner and
Limited Partner pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Sections 1.704-2(i)(4) and
1.704-2(j)(2). This Section 6.3.A(ii) is intended to qualify as a
"chargeback of partner nonrecourse debt minimum gain" within the meaning
of Regulation Section 1.704-2(i) which shall be controlling in the event
of a conflict between such Regulation and this Section 6.3.A(ii).
(iii) Nonrecourse Deductions and Partner Nonrecourse
Deductions. Any Nonrecourse Deductions for any fiscal year shall be
specially allocated to the Partners in accordance with their Percentage
Interests. Any Partner Nonrecourse Deductions for any fiscal year shall
be specially allocated to the Partner(s) who bears the economic risk of
loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable, in accordance with Regulations
Sections 1.704-2(b)(4) and 1.704-2(i).
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(iv) Qualified Income Offset. If any Partner unexpectedly
receives an adjustment, allocation or distribution described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Partnership income and gain shall be allocated, in accordance with
Regulations Section 1.704-1(b)(2)(ii)(d), to the Partner in an amount
and manner sufficient to eliminate, to the extent required by such
Regulations, the Adjusted Capital Account Deficit of the Partner as
quickly as possible provided that an allocation pursuant to this Section
6.3.A(iv) shall be made if and only to the extent that such Partner
would have an Adjusted Capital Account Deficit after all other
allocations provided in this Article 6 have been tentatively made as if
this Section 6.3.A(iv) were not in the Agreement. It is intended that
this Section 6.3.A(iv) qualify and be construed as a "qualified income
offset" within the meaning of Regulations 1.704-1(b)(2)(ii)(d), which
shall be controlling in the event of a conflict between such Regulations
and this Section 6.3.A(iv).
(v) Gross Income Allocation. In the event any Partner has a
deficit Capital Account at the end of any fiscal year which is in excess
of the sum of (a) the amount (if any) such Partner is obligated to
restore to the Partnership and (b) the amount such Partner is deemed to
be obligated to restore pursuant to Regulations Section
1.704-1(b)(2)(ii)(c) or the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be
specially allocated items of Partnership income and gain in the amount
of such excess as quickly as possible; provided that, an allocation
pursuant to this Section 6.3.A(v) shall be made if and only to the
extent that such Partner would have a deficit Capital Account in excess
of such sum after all other allocations provided in this Article 6 have
been tentatively made as if this Section 6.3.A(v) and Section 6.3.A(iv)
were not in the Agreement.
(vi) Limitation on Allocation of Net Loss. To the extent any
allocation of Net Loss would cause or increase an Adjusted Capital
Account Deficit as to any Partner, such allocation of Net Loss shall be
reallocated among the other Partners in accordance with their respective
Percentage Interests, subject to the limitations of this Section
6.3.A(vi).
(vii) Section 754 Adjustment. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete
liquidation of his interest in the Partnership, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be
specially allocated to the Partners in accordance with their interests
in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such
distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(viii) Curative Allocation. The allocations set forth in
Sections 6.3.A(i), (ii), (iii), (iv), (v), (vi), and (vii) (the
"Regulatory Allocations") are intended to comply
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with certain regulatory requirements, including the requirements of
Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Sections 6.1 and 6.2, the Regulatory Allocations shall be
taken into account in allocating other items of income, gain, loss and
deduction among the Partners so that, to the extent possible, the net
amount of such allocations of other items and the Regulatory Allocations
to each Partner shall be equal to the net amount that would have been
allocated to each such Partner if the Regulatory Allocations had not
occurred.
B. For purposes of determining a Partner's proportional share of
the "excess nonrecourse liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), each Partner's interest in Partnership
profits shall be such Partner's Percentage Interest.
Section 6.4. Tax Allocations
A. In General. Except as otherwise provided in this Section 6.4,
for income tax purposes each item of income, gain, loss and deduction
(collectively, "Tax Items") shall be allocated among the Partners in the same
manner as its correlative item of "book" income, gain, loss or deduction is
allocated pursuant to Sections 6.2 and 6.3.
B. Allocations Respecting Section 704(c) Revaluations.
Notwithstanding Section 6.4.A, Tax Items with respect to Partnership property
that is contributed to the Partnership by a Partner shall be shared among the
Partners for income tax purposes pursuant to Regulations promulgated under
Section 704(c) of the Code, so as to take into account the variation, if any,
between the basis of the property to the Partnership and its initial Gross Asset
Value. With respect to Partnership property that is initially contributed to the
Partnership upon its formation pursuant to Section 4.1, such variation between
basis and initial Gross Asset Value shall be taken into account under the
"traditional method" as described in Regulations Section 1.704-3(b). With
respect to properties subsequently contributed to the Partnership, the
Partnership shall account for such variation under any method approved under
Section 704(c) of the Code and the applicable regulations as chosen by the
General Partner. In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value
(provided in Article 1), subsequent allocations of Tax Items with respect to
such asset shall take account of the variation, if any, between the adjusted
basis of such asset and its Gross Asset Value in the same manner as under
Section 704(c) of the Code and the applicable regulations consistent with the
requirements of Regulations Section 1.704-1(b)(2)(iv)(g) using any method
approved under 704(c) of the Code and the applicable regulations as chosen by
the General Partner.
ARTICLE 7.
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1. Management
A. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are
exclusively vested in the General Partner, and no Limited Partner shall have any
right to participate in or exercise control or management power over the
business and affairs of the Partnership. The General Partner may
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not be removed by the Limited Partners with or without cause, except with the
consent of the General Partner. In addition to the powers now or hereafter
granted a general partner of a limited partnership under the Act and other
applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to the other
provisions hereof including Section 7.3, shall have full power and authority to
do all things deemed necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 and to effectuate
the purposes set forth in Section 3.1, including, without limitation:
(i) the making of any expenditures, the lending or borrowing of
money (including, without limitation, making prepayments on
loans and borrowing money to permit the Partnership to make
distributions to its Partners in such amounts as will permit the
General Partner (so long as the General Partner has determined
to qualify as a REIT) to avoid the payment of any Federal income
tax (including, for this purpose, any excise tax pursuant to
Section 4981 of the Code) and to make distributions to its
stockholders sufficient to permit the General Partner to
maintain REIT status), the assumption or guarantee of, or other
contracting for, indebtedness and other liabilities, the
issuance of evidences of indebtedness (including the securing of
same by mortgage, deed of trust or other lien or encumbrance on
all or any of the Partnership's assets) and the incurring of any
obligations it deems necessary for the conduct of the activities
of the Partnership;
(ii) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies
having jurisdiction over the business or assets of the
Partnership;
(iii) subject to the provisions of Section 7.3.D, the acquisition,
disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any assets of the Partnership or the merger or other
combination of the Partnership with or into another entity;
(iv) the mortgage, pledge, encumbrance or hypothecation of all or any
assets of the Partnership, and the use of the assets of the
Partnership (including, without limitation, cash on hand) for
any purpose consistent with the terms of this Agreement and on
any terms it sees fit, including, without limitation, the
financing of the conduct or the operations of the General
Partner or the Partnership, the lending of funds to other
Persons (including, without limitation, the General Partner (if
necessary to permit the financing or capitalization of a
subsidiary of the General Partner or the Partnership) and any
Subsidiaries of the Partnership) and the repayment of
obligations of the Partnership, any of its Subsidiaries and any
other Person in which it has an equity investment;
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(v) the negotiation, execution, and performance of any contracts,
leases, conveyances or other instruments that the General
Partner considers useful or necessary to the conduct of the
Partnership's operations or the implementation of the General
Partner's powers under this Agreement;
(vi) the distribution of Partnership cash or other Partnership assets
in accordance with this Agreement;
(vii) the selection and dismissal of employees of the Partnership
(including, without limitation, employees having titles such as
"president," "vice president," "secretary" and "treasurer"), and
agents, outside attorneys, accountants, consultants and
contractors of the Partnership, the determination of their
compensation and other terms of employment or hiring, including
waivers of conflicts of interest and the payment of their
expenses and compensation out of the Partnership's assets;
(viii) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or
appropriate;
(ix) the formation of, or acquisition of an interest in, and the
contribution of 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 any
Subsidiary and any other Person in which it has an equity
investment from time to time); provided that, as long as the
General Partner has determined to ---- continue to qualify as a
REIT, the Partnership may not engage in any such formation,
acquisition or contribution that would cause the General Partner
to fail to qualify as a REIT;
(x) the control of any matters affecting the rights and obligations
of the Partnership, including the conduct of litigation and the
incurring of legal expense and the settlement of claims and
litigation, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;
(xi) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any Person
(including, without limitation, contributing or loaning
Partnership funds to, incurring indebtedness on behalf of, or
guarantying the obligations of any such Persons);
(xii) subject to the other provisions in this Agreement, the
determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of
valuation as it may adopt; provided that, such methods are
otherwise consistent with requirements of this Agreement;
(xiii) the management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or
improvements owned
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by the Partnership or any Subsidiary of the Partnership or any
Person in which the Partnership has made a direct or indirect
equity investment;
(xiv) holding, managing, investing and reinvesting cash and other
assets of the Partnership;
(xv) the collection and receipt of revenues and income of the
Partnership;
(xvi) the exercise, directly or indirectly through any
attorney-in-fact acting under a general or limited power of
attorney, of any right, including the right to vote, appurtenant
to any asset or investment held by the Partnership;
(xvii) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with
any Subsidiary of the Partnership or any other Person in which
the Partnership has a direct or indirect interest, or jointly
with any such Subsidiary or other Person;
(xviii) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which
the Partnership does not have an interest, pursuant to
contractual or other arrangements with such Person; and
(xix) the making, execution and delivery of any and all deeds, leases,
notes, deeds to secure debt, mortgages, deeds of trust, security
agreements, conveyances, contracts, guarantees, warranties,
indemnities, waivers, releases or legal instruments or other
agreements in writing necessary or appropriate in the judgment
of the General Partner for the accomplishment of any of the
powers of the General Partner enumerated in this Agreement.
B. Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the partners, notwithstanding any other provisions of this Agreement
(except as provided in Section 7.3), the Act or any applicable law, rule or
regulation. The execution, delivery or performance by the General Partner or the
Partnership of any agreement authorized or permitted under this Agreement shall
not constitute a breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners or any other Persons
under this Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner
may cause the Partnership to obtain and maintain (i) casualty, liability and
other insurance (including, without limitation, earthquake insurance) on the
properties of the Partnership and (ii) liability insurance for the Indemnities
hereunder.
D. At all times from and after the date hereof, the General Partner
may cause the Partnership to establish and maintain working capital and other
reserves in such amounts as
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the General Partner, in it sole and absolute discretion, deems appropriate and
reasonable from time to time.
E. In exercising its authority under this Agreement, the General
Partner may, but, other than as set forth in the following sentence, shall be
under no obligation to, take into account the tax consequences to any Partner
(including the General Partner) of any action taken by the General Partner. The
General Partner, on behalf of the Partnership, shall use commercially reasonable
efforts to cooperate with the Limited Partners to minimize any taxes payable in
connection with any repayment, refinancing, replacement or restructuring of
Debt, or any sale, exchange or any other disposition of assets, of the
Partnership. The General Partner and the Partnership shall not have liability to
a Limited Partner under any circumstances as a result of an income tax liability
incurred by such Limited Partner as a result of an action (or inaction) by the
General Partner pursuant to its authority under this Agreement.
F. 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.
Section 7.2. Certificate of Limited Partnership
To the extent that such action is determined by the General Partner to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and to maintain the Partnership's qualification to do business as a foreign
limited partnership in each other state, the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(iv), the General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate
or any amendment thereto to any Limited Partner. The General Partner shall use
all reasonable efforts to cause to be filed such other certificates or documents
as may be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware, and any other state, or the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.
Section 7.3. Restrictions on General Partner's Authority
A. The General Partner may not take any action in contravention of
this Agreement, including, without limitation:
(i) take any action that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise
provided in this Agreement;
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(ii) possess Partnership property, or assign any rights in specific
Partnership property, for other than a Partnership purpose
except as otherwise provided in this Agreement;
(iii) admit a Person as a Partner, except as otherwise provided in
this Agreement (including with respect to the PLPs, who shall
become Partners upon their receipt of Performance Units);
(iv) perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other
liability except as provided herein or under the Act; or
(v) enter into any contract, mortgage, loan or other agreement that
prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of a Limited Partner to exercise its
rights to a Redemption in full, except with the written consent
of such Limited Partner.
B. The General Partner shall not, without the prior Consent of the
Partners (in addition to any Consent of the Limited Partners required by any
other provision hereof), undertake, on behalf of the Partnership, any of the
following actions or enter into any transaction which would have the effect of
such transactions:
(i) except as provided in Section 7.3.D below, amend, modify or
terminate this Agreement other than to reflect the admission,
substitution, termination or withdrawal of partners pursuant to
Article 12;
(ii) make a general assignment for the benefit of creditors or
appoint or acquiesce in the appointment of a custodian, receiver
or trustee for all or any part of the assets of the Partnership;
(iii) institute any proceeding for bankruptcy on behalf of the
Partnership;
(iv) confess a judgment against the Partnership; or
(v) enter into a merger (including a triangular merger),
consolidation or other combination of the Partnership with or
into another entity.
C. Except in the case of a Liquidating Event pursuant to Section
13.1 (other than Section 13.1.F), the General Partner shall not, without the
prior Consent of the Limited Partners, undertake, on behalf of the Partnership,
any actions or enter into any transaction which would have the effect of a
dissolution of the Partnership, including a sale, exchange, transfer or other
disposition of all or substantially all of the Partnership's assets in a single
transaction or a series of related transactions.
D. Notwithstanding Sections 7.3.B, 7.3.C and 7.3.D, but subject to
Section 7.3.E, the General Partner shall have the power, without the Consent of
the Limited Partners, to
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amend this Agreement as may be required to facilitate or implement any of the
following purposes:
(i) to add to the obligations of the General Partner or surrender
any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited
Partners;
(ii) to reflect the issuance of additional Partnership Interests
pursuant to Sections 4.3.C, 4.3.F and 4.4, or the admission,
substitution, termination, reduction in Partnership Units or
withdrawal of Partners in accordance with this Agreement (which
may be effected through the replacement of Exhibit A with an
amended Exhibit A);
(iii) to set forth the designations, rights, powers, duties, and
preferences of the holders of any additional Partnership
Interests issued pursuant to Article 4;
(iv) to reflect a change that is of an inconsequential nature and
does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity in, correct or supplement any
provision, or make other changes with respect to matters arising
under, this Agreement that will not be inconsistent with law or
with the provisions of this Agreement;
(v) to satisfy any requirements, conditions, or guidelines contained
in any order, directive, opinion, ruling or regulation of a
Federal, state of local agency or contained in Federal, state or
local law.
(vi) to reflect such changes as are reasonably necessary for the
General Partner to maintain its status as a REIT, including
changes which may be necessitated due to a change in applicable
law (or an authoritative interpretation thereof) or a ruling of
the IRS; and
(vii) to modify, as set forth in the definition of "Capital Account,"
the manner in which Capital Accounts are computed.
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.D is taken.
E. Notwithstanding Sections 7.3.B, 7.3.C and 7.3.D, this Agreement
shall not be amended, and no action may be taken by the General Partner,
including in either case through merger or sale of assets of the Partnership or
otherwise without the Consent of each Partner adversely affected if such
amendment or action would (i) convert a Limited Partner's interest in the
Partnership into a general partner's interest (except as the result of the
General Partner acquiring such interest), (ii) modify the limited liability of a
Limited Partner, (iii) alter rights of the Partner to receive distributions
pursuant to Article 5 or Section 13.2.A(4), or the allocations specified in
Article 6 (except as permitted pursuant to Section 4.3 and Section 7.3.D(2)),
(iv) alter or modify the rights to a Redemption or the REIT Shares Amount as set
forth in Section 8.6, and related definitions hereof, or (v) amend this Section
7.3.E. Further, no amendment may
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alter the restrictions on the General Partner's authority set forth elsewhere in
this Section 7.3 without the Consent specified in such section. In addition, (a)
Section 11.2 of this Agreement shall not be amended, and no action in
contravention of Section 11.2 shall be taken, including in either case through
merger or sale of assets of the Partnership or otherwise, without the Consent of
the Limited Partners and (b) this Agreement shall not be amended, and no action
shall be taken, including in either case through merger or sale of assets of the
Partnership or otherwise, which would adversely affect the rights of the Persons
set forth in Exhibit H to receive Performance Units as described herein.
Section 7.4. Reimbursement of the General Partner
A. Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments and allocations to which it may be entitled), the General Partner shall
not be compensated for its services as general partner of the Partnership.
B. Subject to Section 15.11, the General Partner shall be
reimbursed on a monthly basis, or such other basis as the General Partner may
determine in its sole and absolute discretion, for all expenses it incurs
relating to the ownership of interests in and operation of, or for the benefit
of, the Partnership. The Limited Partners acknowledge that the General Partner's
sole business is the ownership of interests in and operation of the Partnership
and that such expenses are incurred for the benefit of the Partnership; provided
that, the General Partner shall not be reimbursed for expenses it incurs
relating to the organization of the Partnership and the General Partner, or the
initial public offering or subsequent offerings of REIT Shares, other shares of
capital stock or Funding Debt by the General Partner, but shall be reimbursed
for expenses it incurs with respect to any other issuance of additional
Partnership Interests pursuant to the provisions hereof. Such reimbursements
shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7.
C. If and to the extent any reimbursements to the General Partner
pursuant to this Section 7.4 constitute gross income of the General Partner (as
opposed to the repayment of advances made by the General Partner on behalf of
the Partnership), such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners' Capital Accounts.
Section 7.5. Outside Activities of the General Partner
A. Except in connection with a transaction authorized in Section
11.2, without the Consent of the Limited Partners, the General Partner shall
not, directly or indirectly, enter into or conduct any business, other than in
connection with the ownership, acquisition and disposition of Partnership
Interests as a General Partner and the management of the business of the
Partnership, its operation as a public reporting company with a class (or
classes) of securities registered under the Exchange Act, its operation as a
REIT and such activities as are incidental to the same. Without the Consent of
the Limited Partners, the General Partner shall not, directly or indirectly,
participate in or otherwise acquire any interest in any real or personal
property, except its General Partner Interest, its interest in any Subsidiary
Partnership(s) (held directly or
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indirectly through a Qualified REIT Subsidiary) that the General Partner holds
in order to maintain such Subsidiary Partnership's status as a partnership, and
such bank accounts, similar instruments or other short-term investments as it
deems necessary to carry out its responsibilities contemplated under this
Agreement and the Charter. Notwithstanding the foregoing, the General Partner
may acquire Properties in exchange for REIT Shares, to the extent such
Properties are immediately contributed by the General Partner to the
Partnership, pursuant to the terms described in Section 4.3.E. Any Limited
Partner Interests acquired by the General Partner, whether pursuant to exercise
by a Limited Partner of its right of Redemption, or otherwise, shall be
automatically converted into a General Partner Interest comprised of an
identical number of Partnership Units of the same class. If, at any time, the
General Partner acquires material assets (other than on behalf of the
Partnership) the definition of "REIT Shares Amount" shall be adjusted, as
reasonably agreed to by the General Partner and the other Limited Partners, to
reflect the relative Fair Market Value of a share of capital stock of the
General Partner relative to the Deemed Partnership Interest Value of the related
Partnership Unit. The General Partner's General Partner Interest in the
Partnership, its minority interest in any Subsidiary Partnership(s) (held
directly or indirectly through a Qualified REIT Subsidiary) that the General
Partner holds in order to maintain such Subsidiary Partnership's status as a
partnership, and interests in such short-term liquid investments, bank accounts
or similar instruments as the General Partner deems necessary to carry out its
responsibilities contemplated under this Agreement and the Charter are interests
which the General Partner is permitted to acquire and hold for purposes of this
Section 7.5.A.
B. In the event the General Partner exercises its rights under the
Charter to purchase REIT Shares, then the General Partner shall cause the
Partnership to purchase from it a number of Partnership Units of the appropriate
class as determined based on the REIT Shares Amount equal to the number of REIT
Shares so purchased on the same terms that the General Partner purchased such
REIT Shares.
Section 7.6. Contracts with Affiliates
A. Except as expressly permitted by this Agreement, the Partnership
shall not, directly or indirectly, sell, transfer or convey any property to, or
purchase any property from, or borrow funds from, or lend funds to, any Partner
or any Affiliate of the Partnership that is not also a Subsidiary of the
Partnership, except pursuant to transactions that are on terms that are fair and
reasonable and no less favorable to the Partnership than would be obtained from
an unaffiliated third party.
B. The General Partner, in its sole and absolute discretion and
without the approval of the Limited Partners, may propose and adopt on behalf of
the Partnership employee benefit plans funded by the Partnership for the benefit
of employees of the General Partner, the Partnership, Subsidiaries of the
Partnership or any Affiliate of any of them in respect of services performed,
directly or indirectly, for the benefit of the Partnership, the General Partner,
or any of the Partnership's Subsidiaries. The General Partner also is expressly
authorized to cause the Partnership to issue to it Partnership Units
corresponding to REIT Shares issued by the General Partner pursuant to its Stock
Incentive Plan or any similar or successor plan and to repurchase
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such Partnership Units from the General Partner to the extent necessary to
permit the General Partner to repurchase such REIT Shares in accordance with
such plan.
Section 7.7. Indemnification
A. The Partnership shall indemnify an Indemnitee from and against
any and all losses, claims, damages, liabilities, joint or several, expenses
(including 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. Without limitation, the foregoing
indemnity shall extend to any liability of any Indemnitee, pursuant to a loan
guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary
of the Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and the General Partner is hereby authorized and empowered, on behalf of
the Partnership, to enter into one or more indemnity agreements consistent with
the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such indebtedness. The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 7.7.A. The termination of any proceeding by conviction or upon a plea of
nolo contendere or its equivalent, or any 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 7.7.A. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the
Partnership, and any insurance proceeds from the liability policy covering the
General Partner and any Indemnitee, and neither the General Partner nor any
Limited Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.
B. Reasonable expenses incurred by an Indemnitee who is a party to
a proceeding may be paid or reimbursed by the Partnership in advance of the
final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in Section 7.7.A has been met and (ii) a written undertaking by or on
behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
C. The indemnification provided by this Section 7.7 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.
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D. The Partnership may purchase and maintain insurance, on behalf
of the Indemnitees and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by any such Person in connection with the Partnership's
activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
E. For purposes of this Section 7.7, 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 Section 7.7; 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.
F. In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. If and to the extent any reimbursements to the General Partner
pursuant to this Section 7.7 constitute gross income of the General Partner (as
opposed to the repayment of advances made by the General Partner on behalf of
the Partnership) such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners' Capital Accounts.
J. Any indemnification hereunder is subject to, and limited by, the
provisions of Section 17-108 of the Act.
K. In the event the Partnership is made a party to any litigation
or otherwise incurs any loss or expense as a result of or in connection with any
Partner's personal obligations or liabilities unrelated to Partnership business,
such Partner shall indemnify and reimburse the Partnership for all such loss and
expense incurred, including legal fees, and the Partnership
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Interest of such Partner may be charged therefor. The liability of a Partner
under this Section 7.7.K shall not be limited to such Partner's Partnership
Interest, but shall be enforceable against such Partner personally.
Section 7.8. Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this
Agreement, none of the General Partner and any of its officers, directors,
agents and employees shall be liable or accountable in damages or otherwise to
the Partnership, any Partners or any Assignees, or their successors or assigns,
for losses sustained, liabilities incurred or benefits not derived as a result
of errors in judgment or mistakes of fact or law or any act or omission if the
General Partner acted in good faith.
B. The Limited Partners expressly acknowledge that the General
Partner is acting for the benefit of the Partnership, the Limited Partners and
the General Partner's stockholders collectively, that the General Partner is
under no obligation to give priority to the separate interests of the Limited
Partners or the General Partner's stockholders (including, without limitation,
the tax consequences to Limited Partners or Assignees or to stockholders) in
deciding whether to cause the Partnership to take (or decline to take) any
actions and that the General Partner shall not be liable to the Partnership or
to any Limited Partner for monetary damages for losses sustained, liabilities
incurred, or benefits not derived by Limited Partners in connection with such
decisions; provided that, the General Partner has acted in good faith.
C. Subject to its obligations and duties as General Partner set
forth in Section 7.1.A, the General Partner may exercise any of the powers
granted to it by 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. In no event shall the liability of the
General Partner and its officers, directors, agents and employees, to the
Partnership and the Limited Partners under this Section 7.8 be greater than the
Partnership Interest of the General Partner.
D. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability of the General Partner and any of its officers,
directors, agents and employees to the Partnership and the Limited Partners
under this Section 7.8 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or
repeal, regardless of when such claims may arise or be asserted.
Section 7.9. Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
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B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion of such Persons as to matters which such General Partner
reasonably believes to be within such Person's professional or expert competence
shall be conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion. C. The General Partner shall have the right, in
respect of any of its powers or obligations hereunder, to act through any of its
duly authorized officers and a duly appointed attorney or attorneys-in-fact.
Each such attorney shall, to the extent provided by the General Partner in the
power of attorney, have full power and authority to do and perform all and every
act and duty which is permitted or required to be done by the General Partner
hereunder.
D. Notwithstanding any other provisions of this Agreement or any
non-mandatory provision of 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 General Partner to continue to qualify as a REIT or (ii) to avoid the
General Partner incurring any taxes under Section 857 or Section 4981 of the
Code, is expressly authorized under this Agreement and is deemed approved by all
of the Limited Partners.
Section 7.10. 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 Partners, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or all
of the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby declares
and warrants that any Partnership assets for which legal title is held in the
name of the General Partner or any nominee or Affiliate of the General Partner
shall be deemed held by the General Partner or such nominee or Affiliate 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.
Section 7.11. Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority to encumber, sell or otherwise use in any
manner any and all assets of the Partnership and to enter into any contracts on
behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner as if it were the Partnership's sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the
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General Partner or its representatives be obligated to ascertain that the terms
of this Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its representatives.
Each and every certificate, document or other instrument executed on behalf of
the Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (i) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (ii) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (iii) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
ARTICLE 8.
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1. Limitation of Liability
The Limited Partners shall have no liability under this Agreement except
as expressly provided in this Agreement or under the Act.
Section 8.2. Management of Business
No Limited Partner or Assignee (other than the General Partner,
any of its Affiliates or any officer, director, employee, general partner, agent
or trustee of the General Partner, the Partnership or any of their Affiliates,
in their capacity as such) shall take part in the operations, management or
control (within the meaning of the Act) of the Partnership's business, transact
any business in the Partnership's name or have the power to sign documents for
or otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, employee,
general partner, agent or trustee of the General Partner, the Partnership or any
of their Affiliates, in their capacity as such, shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners or Assignees
under this Agreement.
Section 8.3. Outside Activities of Limited Partners
Subject to any agreements entered into by a Limited Partner or its
Affiliates with the General Partner, Partnership or a Subsidiary, any Limited
Partner and any officer, director, employee, agent, trustee, Affiliate or
stockholder of any Limited 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 in direct competition
with the Partnership or that are enhanced by the activities of the Partnership.
Neither the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. Subject
to such agreements, 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 business ventures of any other Person, other than the
Limited Partners benefiting from the business conducted by the General Partner,
and such other Person shall have no obligation pursuant to this Agreement to
offer any interest in any such business ventures to the Partnership, any Limited
Partner or any such other Person, even if such opportunity is of a character
which, if
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presented to the Partnership, any Limited Partner or such other Person, could be
taken by such other Person.
Section 8.4. Return of Capital
Except pursuant to the rights of Redemption set forth in Section 8.6, no
Limited Partner shall be entitled to the withdrawal or return of his or her
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein. No
Limited Partner or Assignee shall have priority over any other Limited Partner
or Assignee either as to the return of Capital Contributions, or as otherwise
expressly provided in this Agreement, as to profits, losses, distributions or
credits.
Section 8.5. Rights of Limited Partners Relating to the Partnership
A. In addition to other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.C, each Limited Partner shall have the
right, for a purpose reasonably related to such Limited Partner's interest as a
limited partner in the Partnership, upon written demand with a statement of the
purpose of such demand and at the Partnership's expense:
(i) to obtain a copy of the most recent annual and quarterly reports
filed with the Securities and Exchange Commission by the General
Partner pursuant to the Exchange Act, and each communication
sent to the stockholders of the General Partner;
(ii) to obtain a copy of the Partnership's Federal, state and local
income tax returns for each Partnership Year;
(iii) to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers
of attorney pursuant to which this Agreement, the Certificate
and all amendments thereto have been executed; and
(v) to obtain true and full information regarding the amount of cash
and a description and statement of any other property or
services contributed by each Partner and which each Partner has
agreed to contribute in the future, and the date on which each
became a Partner.
B. The Partnership shall notify each Limited Partner in writing of
any adjustment made in the calculation of the REIT Shares Amount within ten (10)
Business Days of the date such change becomes effective.
C. Notwithstanding any other provision of this Section 8.5, the
General Partner may keep confidential from the Limited Partners, for such period
of time as the General Partner determines in its sole and absolute discretion to
be reasonable, any information that
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(i) the General Partner believes to be in the nature of trade secrets or other
information the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or (ii) the Partnership or the
General Partner is required by law or by agreements with unaffiliated third
parties to keep confidential.
Section 8.6. Redemption Rights
A. On or after the date one year after the Effective Date, each
Limited Partner shall have the right (subject to the terms and conditions set
forth herein) to require the Partnership to redeem all or a portion of the
Partnership Units held by such Limited Partner (such Partnership Units being
hereafter referred to as "Tendered Units") in exchange for the Cash Amount (a
"Redemption"); provided that, the terms of such Partnership Units do not provide
that such Partnership Units are not entitled to a right of Redemption. Unless
otherwise expressly provided in this Agreement or a separate agreement entered
into between the Partnership and the holders of such Partnership Units, all
Partnership Units shall be entitled to a right of Redemption hereunder.
Notwithstanding the foregoing, a PLP shall not have the right to require the
Partnership to redeem, and the Partnership may not redeem, [(i)] a number of
Performance Units held by such PLP in excess of the Performance Amount; [or (ii)
any Performance Units prior to the second anniversary of their issuance.] Any
Redemption shall be exercised pursuant to a Notice of Redemption delivered to
the General Partner by the Limited Partner who is exercising the right (the
"Tendering Partner"). The Cash Amount shall be delivered as a certified check
payable to the Tendering Partner within ten (10) days of the Specified
Redemption Date in accordance with the instructions set forth in the Notice of
Redemption.
B. Notwithstanding Section 8.6.A above, if a Limited Partner has
delivered to the General Partner a Notice of Redemption then the General Partner
may, in its sole and absolute discretion, (subject to the limitations on
ownership and transfer of REIT Shares set forth in Article IV.E of the Charter)
elect to acquire some or all of the Tendered Units from the Tendering Partner in
exchange for the REIT Shares Amount (as of the Specified Redemption Date) and,
if the General Partner so elects, the Tendering Partner shall sell the Tendered
Units to the General Partner in exchange for the REIT Shares Amount. In such
event, the Tendering Partner shall have no right to cause the Partnership to
redeem such Tendered Units. The General Partner shall promptly give such
Tendering Partner written notice of its election, and the Tendering Partner may
elect to withdraw its redemption request at any time prior to the acceptance of
the Cash Amount or REIT Shares Amount by such Tendering Partner.
C. The REIT Shares Amount, if applicable, shall be delivered as
duly authorized, validly issued, fully paid and nonassessable REIT Shares and,
if applicable, free of any pledge, lien, encumbrance or restriction, other than
those provided in the Charter, the Bylaws of the General Partner, the Securities
Act, relevant state securities or blue sky laws and any applicable registration
rights agreement with respect to such REIT Shares entered into by the Tendering
Partner. The REIT Shares Amount shall be registered in the name and otherwise
delivered as set forth in the Notice of Redemption. Notwithstanding any delay in
such delivery (but subject to Section 8.6.E below), the Tendering Partner shall
be deemed the owner of such REIT Shares for all purposes, including without
limitation, rights to vote or consent, and receive dividends, as of the
Specified Redemption Date.
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D. Each Limited Partner covenants and agrees with the General
Partner that all Tendered Units shall be delivered to the General Partner free
and clear of all liens, claims and encumbrances whatsoever and should any such
liens, claims and/or encumbrances exist or arise with respect to such Tendered
Units, the General Partner shall be under no obligation to acquire the same.
Each Limited Partner further agrees that, in the event any state or local
property transfer tax is payable as a result of the transfer of its Tendered
Units to the General Partner (or its designee), such Limited Partner shall
assume and pay such transfer tax.
E. Notwithstanding the provisions of Sections 8.6.A, 8.6.B, 8.6.C
or any other provision of this Agreement, a Limited Partner (i) shall not be
entitled to effect a Redemption for cash or an exchange for REIT Shares to the
extent the ownership or right to acquire REIT Shares pursuant to such exchange
by such Partner on the Specified Redemption Date would cause such Partner or any
other Person, or, in the opinion of counsel selected by the General Partner, may
cause such Partner or any other Person, to violate the restrictions on ownership
and transfer of REIT Shares set forth in Article IV.E of the Charter and (ii)
shall have no rights under this Agreement to acquire REIT Shares which would
otherwise be prohibited under the Charter. To the extent any attempted
Redemption or exchange for REIT Shares would be in violation of this Section
8.6.E, it shall be null and void ab initio and such Limited Partner shall not
acquire any rights or economic interest in the cash otherwise payable upon such
redemption or the REIT Shares otherwise issuable upon such exchange.
F. Notwithstanding anything herein to the contrary (but subject to
Section 8.6.E above), with respect to any Redemption or exchange for REIT Shares
pursuant to this Section 8.6:
(i) All Partnership Units acquired by the General Partner pursuant
thereto shall automatically, and without further action
required, be converted into and deemed to be General Partner
Interests comprised of the same number and class of Partnership
Units.
(ii) Without the consent of the General Partner, each Limited Partner
may not effect a Redemption for less than 10,000 Partnership
Units or, if the Limited Partner holds less than 10,000
Partnership Units, all of the Partnership Units held by such
Limited Partner.
(iii) Without the consent of the General Partner, each Limited Partner
may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and
before the record date established by the General Partner for a
distribution to its stockholders of some or all of its portion
of such distribution.
(iv) The consummation of any Redemption or exchange for REIT Shares
shall be subject to the expiration or termination of the
applicable waiting period, if any, under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended.
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(v) Each Tendering Partner shall continue to own all Partnership
Units subject to any Redemption or exchange for REIT Shares, and
be treated as a Limited Partner with respect to such Partnership
Units for all purposes of this Agreement, until such Partnership
Units are transferred to the General Partner and paid for or
exchanged as of the Specified Redemption Date. Until a Specified
Redemption Date, the Tendering Partner shall have no rights as a
stockholder of the General Partner with respect to such
Tendering Partner's Partnership Units.
G. In the event that the Partnership issues additional Partnership
Interests to any Additional Limited Partner pursuant to Section 4.3.C, the
General Partner shall make such revisions to this Section 8.6 as it determines
are necessary to reflect the issuance of such additional Partnership Interests.
ARTICLE 9.
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1. Records and Accounting
The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership's business, including without limitation, all books and records
necessary to provide to the Limited Partners any information, lists and copies
of documents required to be provided pursuant to Section 9.3. Any records
maintained by or on behalf of the Partnership in the regular course of its
business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographics or any other information storage device; provided
that, the records so maintained are convertible into clearly legible written
form within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.
Section 9.2. Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3. Reports
A. As soon as practicable, but in no event later than one hundred
and five (105) days after the close of each Partnership Year, or such earlier
date as they are filed with the Securities and Exchange Commission, the General
Partner shall cause to be mailed to each Limited Partner as of the close of the
Partnership Year, an annual report containing financial statements of the
Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such Partnership Year,
presented in accordance with generally accepted accounting principles, such
statements to be audited by a nationally recognized firm of independent public
accountants selected by the General Partner.
B. As soon as practicable, but in no event later than forty-five
(45) days after the close of each calendar quarter (except the last calendar
quarter of each year), or such earlier
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date as they are filed with the Securities and Exchange Commission, the General
Partner shall cause to be mailed to each Limited Partner as of the last day of
the calendar quarter, a report containing unaudited financial statements of the
Partnership, or of the General Partner, if such statements are prepared solely
on a consolidated basis with the General Partner, presented in accordance with
the applicable law or regulation, or as the General Partner determines to be
appropriate.
Section 9.4. Nondisclosure of Certain Information
Notwithstanding the provisions of Sections 9.1 and 9.3, the General
Partner may keep confidential from the Limited Partners any information that the
General Partner believes to be in the nature of trade secrets or other
information the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or which the Partnership is
required by law or by agreements with unaffiliated third parties to keep
confidential.
ARTICLE 10.
TAX MATTERS
Section 10.1. Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing
of all returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for Federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the close of
each taxable year, the tax information reasonably required by Limited Partners
for Federal and state income tax reporting purposes.
Section 10.2. Tax Elections
Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
pursuant to the Code, including the election under Section 754 of the Code. The
General Partner shall have the right to seek to revoke any such election
(including without limitation, any election under Section 754 of the Code) upon
the General Partner's determination in its sole and absolute discretion that
such revocation is the best interests of the Partners.
Section 10.3. Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of the
Partnership for Federal income tax purposes. Pursuant to Section 6223(c) of the
Code, upon receipt of notice from the IRS of the beginning of an administrative
proceeding with respect to the Partnership, the tax matters partner shall
furnish the IRS with the name, address and profit interest of each of the
Limited Partners and Assignees; provided, however, that such information is
provided to the Partnership by the Limited Partners and Assignees.
B. The tax matters partner is authorized, but not required:
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(i) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner
for income tax purposes (such administrative proceedings being
referred to as a "tax audit" and such judicial proceedings being
referred to as "judicial review"), and in the settlement
agreement the tax matters partner may expressly state that such
agreement shall bind all Partners, except that such settlement
agreement shall not bind any Partner (a) who (within the time
prescribed pursuant to the Code and Regulations) files a
statement with the IRS providing that the tax matters partner
shall not have the authority to enter into a settlement
agreement on behalf of such Partner or (b) who is a "notice
partner" (as defined in Section 6231 of the Code) or a member of
a "notice group" (as defined in Section 6223(b)(2) of the Code);
(ii) in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into
account by a Partner for tax purposes (a "final adjustment") is
mailed to the tax matters partner, to seek judicial review of
such final adjustment, including the filing of a petition for
readjustment with the Tax Court or the United States Claims
Court, or the filing of a complaint for refund with the District
Court of the United States for the district in which the
Partnership's principal place of business is located;
(iii) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment with the IRS
at any time and, if any part of such request is not allowed by
the IRS, to file an appropriate pleading (petition or complaint)
for judicial review with respect to such request;
(v) to enter into an agreement with the IRS to extend the period for
assessing any tax which is attributable to any item required to
be taken into account by a Partner for tax purposes, or an item
affected by such item; and
(vi) to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review
proceeding to the extent permitted by applicable law or
regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 shall be fully applicable to the tax matters
partner in its capacity as such.
C. The tax matters partner shall receive no compensation for its
services. All third party costs and expenses incurred by the tax matters partner
in performing its duties as such
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(including legal and accounting fees) shall be borne by the Partnership. Nothing
herein shall be construed to restrict the Partnership from engaging an
accounting firm to assist the tax matters partner in discharging its duties
hereunder, so long as the compensation paid by the Partnership for such services
is reasonable.
Section 10.4. Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60) month period as provided
in Section 709 of the Code.
Section 10.5. Withholding
Each Limited Partner hereby authorizes the Partnership to withhold from
or pay on behalf of or with respect to such Limited Partner any amount of
Federal, state, local, or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by
such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited Partner
or (ii) the General Partner determines, in its sole and absolute discretion,
that such payment may be satisfied out of the available funds of the Partnership
which would, but for such payment, be distributed to the Limited Partner. Any
amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated
as having been distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner's Partnership Interest to secure such Limited Partner's
obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 10.5. In the event that a Limited Partner fails to pay any amounts
owed to the Partnership pursuant to this Section 10.5 when due, the General
Partner may, in its sole and absolute discretion, elect to make the payment to
the Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner (including, without limitation, the right to receive
distributions and the holding of a security interest in such Limited Partner's
Partnership Interest). Any amounts payable by a Limited Partner hereunder shall
bear interest at the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in the Wall Street
Journal, plus two percentage points (but not higher than the maximum lawful
rate) from the date such amount is due (i.e., 15 days after demand) until such
amount is paid in full. Each Limited Partner shall take such actions as the
Partnership or the General Partner shall request in order to perfect or enforce
the security interest created hereunder.
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ARTICLE 11.
TRANSFERS AND WITHDRAWALS
Section 11.1. Transfer
A. The term "transfer," when used in this Article 11 with respect
to a Partnership Interest, shall be deemed to refer to a transaction by which
the General Partner purports to assign its General Partner Interest to another
Person or by which a Limited Partner purports to assign its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift (outright or
in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise. The term "transfer" when used in this Article
11 does not include any Redemption or exchange for REIT Shares pursuant to
Section 8.6. No part of the interest of a Limited Partner shall be subject to
the claims of any creditor, any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered,
except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.
Section 11.2. Transfer of General Partner's Partnership Interest
A. The General Partner shall not withdraw from the Partnership and
shall not transfer all or any portion of its interest in the Partnership
(whether by sale, statutory merger, consolidation, liquidation or otherwise)
without the Consent of the Limited Partners which may be given or withheld by
each Limited Partner in its sole and absolute discretion, and only upon the
admission of a successor General Partner pursuant to Section 12.1; provided,
however, that, subject to Sections 11.2.B, 11.2.C, 11.2.D and 11.2.E, the
General Partner may withdraw from the Partnership and transfer all of its
interest upon the merger, consolidation or sale of substantially all of the
assets of the General Partner without the consent of any Limited Partners. Upon
any transfer of a Partnership Interest in accordance with the provisions of this
Section 11.2, the transferee shall become a substitute General Partner for all
purposes herein, and shall be vested with the powers and rights of the
transferor General Partner, and shall be liable for all obligations and
responsible for all duties of the General Partner, once such transferee has
executed such instruments as may be necessary to effectuate such admission and
to confirm the agreement of such transferee to be bound by all the terms and
provisions of this Agreement with respect to the Partnership Interest so
acquired. It is a condition to any transfer otherwise permitted hereunder that
the transferee assumes, by operation of law or express agreement, all of the
obligations of the transferor General Partner under this Agreement with respect
to such transferred Partnership Interest, and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor General Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor General Partner of
its obligations under this Agreement without the Consent of the Partners, in
their reasonable discretion. In the event the General Partner withdraws from the
Partnership, or otherwise dissolves or terminates, or upon the Incapacity of the
General Partner, all of the remaining
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Partners may elect to continue the Partnership business by selecting a
substitute General Partner in accordance with the Act.
B. Neither the General Partner nor the Partnership may engage in
any merger, consolidation or other combination with or into another person, or
effect any reclassification, recapitalization or change of its outstanding
equity interests, and the General Partner may not sell all or substantially all
of its assets (each a "Termination Transaction") unless in connection with the
Termination Transaction all holders of Partnership Units either will receive, or
will have the right to elect to receive, for each Unit an amount of cash,
securities or other property equal to the product of the REIT Share Amount and
the greatest amount of cash, securities or other property paid to the holder of
one REIT Share in consideration of one REIT Share pursuant to the Termination
Transaction. If, in connection with the Termination Transaction, a purchase,
tender or exchange offer shall have been made to and accepted by the holders of
the outstanding REIT Shares, each holder of Partnership Units will receive, or
will have the right to elect to receive, the greatest amount of cash, securities
or other property which such holder would have received had it exercised its
rights to Redemption and received REIT Shares in exchange for its Partnership
Units immediately prior to the expiration of such purchase, tender or exchange
offer and had thereupon accepted such purchase, tender or exchange offer. The
PLPs shall have the benefit of the foregoing provisions with respect to all of
their Performance Units, notwithstanding the limitation set forth in Section
8.6.A on a PLPs ability to exercise its rights to a Redemption.
C. A Termination Transaction may also occur if the following
conditions are met: (i) substantially all of the assets directly or indirectly
owned by the surviving entity are held directly or indirectly by the Partnership
or another limited partnership or limited liability company which is the
survivor of a merger, consolidation or combination of assets with the
Partnership (in each case, the "Surviving Partnership"); (ii) the holders of
Partnership Units, including the holders of Performance Units issued or to be
issued, own a percentage interest of the Surviving Partnership based on the
relative fair market value of the net assets of the Partnership and the other
net assets of the Surviving Partnership immediately prior to the consummation of
such transaction; (iii) the rights, preferences and privileges of such holders
in the Surviving Partnership, including the holders of Performance Units issued
or to be issued, are at least as favorable as those in effect immediately prior
to the consummation of such transaction and as those applicable to any other
limited partners or non-managing members of the Surviving Partnership (except,
as to Performance Units, for such differences with Units regarding liquidation,
Redemption and exchange as are set forth herein); and (iv) such rights of the
Limited Partners, including the holders of Performance Units issued or to be
issued, include at least one of the following: (a) the right to redeem their
interests in the Surviving Partnership for the consideration available to such
persons pursuant to Section 11.2.B; or (b) the right to redeem their Partnership
Units for cash on terms equivalent to those in effect with respect to their
Partnership Units immediately prior to the consummation of such transaction, or,
if the ultimate controlling person of the Surviving Partnership has publicly
traded common equity securities, such common equity securities, with an exchange
ratio based on the determination of relative fair market value of such
securities and the REIT Shares.
D. In connection with any transactions permitted by Section 11.2.B
or 11.2.C the determination of relative fair market values and rights,
preferences and privileges of the
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Limited Partners shall be reasonably determined by the General Partner's Board
of Directors as of the time of the Termination Transaction and, to the extent
applicable, the values shall be no less favorable to the holders of Partnership
Units than the relative values reflected in the terms of the Termination
Transaction.
E. In the event of a Termination Transaction, the arrangements with
respect to Performance Units and Performance Shares will be equitably adjusted
to reflect the terms of the transaction, including, to the extent that the REIT
Shares are exchanged for consideration other than publicly traded common equity,
the transfer or release of remaining Performance Shares pursuant to the Escrow
Agreements, and resulting issuance of any Performance Units as set forth in
Section 4.3.F.
Section 11.3. Limited Partners' Rights to Transfer
A. Any Limited Partner may, at any time without the consent of the
General Partner, (i) transfer all or any portion of its Partnership Interest to
the General Partner, (ii) transfer all or any portion of its Partnership
Interest to an Affiliate, another Original Limited Partner or to an Immediate
Family member, subject to the provisions of Section 11.6, (iii) transfer all or
any portion of its Partnership Interest to a trust for the benefit of a
charitable beneficiary or to a charitable foundation, subject to the provisions
of Section 11.6 and (iv) subject to the provisions of Section 11.6, (a) pledge
(a "Pledge") all or any portion of its Partnership Interest to a lending
institution, which is not an Affiliate of such Limited Partner, as collateral or
security for a bona fide loan or other extension of credit, or (b) transfer such
pledged Partnership Interest to such lending institution in connection with the
exercise of remedies under such loan or extension of credit. Each Limited
Partner or Assignee (resulting from a transfer made pursuant to clauses (i)-(iv)
of the proviso of the preceding sentence) shall have the right to transfer all
or any portion of its Partnership Interest, subject to the provisions of Section
11.6 and the satisfaction of each of the following conditions (in addition to
the right of each such Limited Partner or Assignee to continue to make any such
transfer permitted by clauses (i)-(iv) of such proviso without satisfying either
of the following conditions):
(a) General Partner Right of First Refusal. The transferring Partner
shall give written notice of the proposed transfer to the
General Partner, which notice shall state (x) the identity of
the proposed transferee and (y) the amount and type of
consideration proposed to be received for the transferred
Partnership Units. The General Partner shall have ten (10) days
upon which to give the transferring Partner notice of its
election to acquire the Partnership Units on the proposed terms.
If it so elects, it shall purchase the Partnership Units on such
terms within ten (10) days after giving notice of such election.
If it does not so elect, the transferring Partner may transfer
such Partnership Units to a third party, on economic terms no
more favorable to the transferee than the proposed terms,
subject to the other conditions of this Section 11.3.
(b) Qualified Transferee. Any transfer of a Partnership Interest
shall be made only to Qualified Transferees.
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It is a condition to any transfer otherwise permitted hereunder that the
transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such transferred Partnership Interest and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations under
this Agreement without the approval of the General Partner, in its reasonable
discretion. Notwithstanding the foregoing, any transferee of any transferred
Partnership Interest shall be subject to any and all ownership limitations
contained in the Charter and the representations in Section 3.4.D. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall take
subject to the obligations of the transferor hereunder. Unless admitted as a
Substitute Limited Partner, no transferee, whether by a voluntary transfer, by
operation of law or otherwise, shall have rights hereunder, other than the
rights of an Assignee as provided in Section 11.5.
B. If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator, or receiver of such
Limited Partner's estate shall have all the rights of a Limited Partner, but not
more rights than those enjoyed by other Limited Partners, for the purpose of
settling or managing the estate, and such power as the Incapacitated Limited
Partner possessed to transfer all or any part of his or its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer otherwise
permitted under this Section 11.3 by a Limited Partner of his or her Partnership
Units if, in the opinion of legal counsel to the Partnership, such transfer
would require the filing of a registration statement under the Securities Act by
the Partnership or would otherwise violate any Federal or state securities laws
or regulations applicable to the Partnership or the Partnership Unit.
D. No transfer by a Limited Partner of his or her Partnership Units
(including any Redemption or exchange for REIT Shares pursuant to Section 8.6)
may be made to any person if (i) in the opinion of legal counsel for the
Partnership, it could result in the Partnership being treated as an association
taxable as a corporation or (ii) such transfer could be treated as effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704 of the Code.
E. No transfer of any Partnership Units may be made to a lender to
the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability, without the consent of the General Partner,
in its sole and absolute discretion; provided that, as a condition to such
consent, the lender will be required to enter into an arrangement with the
Partnership and the General Partner to redeem or exchange for the REIT Shares
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.
F. No Limited Partner may withdraw from the Partnership except as a
result of transfer, redemption or exchange of Partnership Units pursuant hereto.
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[G. No PLP (or any transferee described below) shall be entitled to
transfer any Performance Units prior to the second anniversary of their
issuance, without the consent of the General Partner, which may be given or
withheld in its sole discretion; provided, however, no such consent shall be
required under this Section 11.3.G (but subject to the other limitations of this
Article XI) for a transfer of all or a portion of such Performance Units to an
Affiliate, to Immediate Family Members, to a trust described in Section
11.3.A(iii), pursuant to a Pledge, or a transfer of such pledged units to such
lending institution in connection with the exercise of remedies under such loan
or extension of credit.]
Section 11.4. Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a
transferee as a Limited Partner in his or her place (including any transferee
permitted by Section 11.3 above). The General Partner shall, however, have the
right to consent to the admission of a permitted transferee of the interest of a
Limited Partner, as a Substituted Limited Partner, pursuant to this Section
11.4, which consent may be given or withheld by the General Partner in its sole
and absolute discretion. The General Partner's failure or refusal to permit a
transferee of any such interests to become a Substituted Limited Partner shall
not give rise to any cause of action against the Partnership or any Partner.
B. A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement. The admission of any transferee as a Substituted Limited
Partner shall be subject to the transferee executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
(including, without limitation, the provisions of Section 2.4 and such other
documents or instruments as may be required to effect the admission, each in
form and substance satisfactory to the General Partner) and the acknowledgment
by such transferee that each of the representations and warranties set forth in
Section 3.4 are true and correct with respect to such transferee as of the date
of the transfer of the Partnership Interest to such transferee.
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units, and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.
Section 11.5. Assignees
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 as a
Substituted Limited Partner, as described in Section 11.4, such transferee shall
be considered an Assignee for purposes of this Agreement. An Assignee shall be
entitled to all the rights of an assignee of a limited partnership interest
under the Act, including the right to receive distributions from the Partnership
and the share of Net Income, Net Losses, gain and loss attributable to the
Partnership Units assigned to such transferee, the rights to transfer the
Partnership Units provided in this Article 11, and the right of Redemption
provided in Section 8.6, but shall not be deemed to be a holder of Partnership
Units for any other purpose under this Agreement, and shall not be entitled to
effect a
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Consent with respect to such Partnership Units on any matter presented to the
Limited Partners for approval (such Consent remaining with the transferor
Limited Partner). In the event any such transferee desires to make a further
assignment of any such Partnership Units, such transferee shall be subject to
all the provisions of this Article 11 to the same extent and in the same manner
as any Limited Partner desiring to make an assignment of Partnership Units.
Section 11.6. General Provisions
A. No Limited Partner may withdraw from the Partnership other than
as a result of (i) a permitted transfer of all of such Limited Partner's
Partnership Units in accordance with this Article 11 and the transferee(s) of
such Units being admitted to the Partnership as a Substituted Limited Partner(s)
or (ii) pursuant to the exercise of its right of Redemption of all of such
Limited Partner's Partnership Units under Section 8.6.
B. Any Limited Partner who shall transfer all of such Limited
Partner's Partnership Units in a transfer permitted pursuant to this Article 11
where such transferee was admitted as a Substituted Limited Partner or pursuant
to the exercise of its rights of Redemption of all of such Limited Partner's
Partnership Units under Section 8.6 shall cease to be a Limited Partner.
C. Transfers pursuant to this Article 11 may only be made effective
on the last day of the month set forth on the written instrument of transfer,
unless the General Partner otherwise agrees.
D. If any Partnership Interest is transferred, assigned or redeemed
during any quarterly segment of the Partnership's fiscal year in compliance with
the provisions of this Article 11 or transferred or redeemed pursuant to Section
8.6, on any day other than the first day of a Partnership Year, then Net Income,
Net Losses, each item thereof and all other items attributable to such
Partnership Interest for such fiscal year shall be divided and allocated between
the transferor Partner and the transferee Partner by taking into account their
varying interests during the fiscal year in accordance with Section 706(d) of
the Code, using the interim closing of the books method. Except as otherwise
required by Section 706(d) of the Code or as otherwise specified in this
Agreement, solely for purposes of making such allocations, each of such items
for the calendar month in which the transfer, assignment or redemption occurs
shall be allocated to the Person who is a Partner as of midnight on the last day
of said month and none of such items for the calendar month in which a
redemption occurs will be allocated to the redeeming Partner. All distributions
of Available Cash with respect to which the Partnership Record Date is before
the date of such transfer, assignment or redemption shall be made to the
transferor Partner, and all distributions of Available Cash thereafter, in the
case of a transfer or assignment other than a redemption, shall be made to the
transferee Partner.
E. In addition to any other restrictions on transfer herein
contained, including without limitation the provisions of this Article 11 and
Section 2.6, in no event may any transfer or assignment of a Partnership
Interest by any Partner (including by way of a Redemption) be made (i) to any
person or entity who lacks the legal right, power or capacity to own a
Partnership Interest; (ii) in violation of applicable law; (iii) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other
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components of a Partnership Interest; (iv) if in the opinion of legal counsel to
the Partnership such transfer would cause a termination of the Partnership for
Federal or state income tax purposes (except as a result of the Redemption or
exchange for REIT Shares of all Partnership Units held by all Limited Partners
or pursuant to a Termination Transaction expressly permitted under Section
11.2); (v) if in the opinion of counsel to the Partnership such transfer would
cause the Partnership to cease to be classified as a partnership for Federal or
state income tax purposes (except as a result of the Redemption or exchange for
REIT Shares of all Partnership Units held by all Limited Partners); (vi) if such
transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA, a "party-in-interest" (as defined in
Section 3(14) of ERISA) or a "disqualified person" (as defined in Section
4975(c) of the Code); (vii) if such transfer would, in the opinion of counsel to
the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.2-101; (viii) if such transfer requires the
registration of such Partnership Interest pursuant to any applicable Federal or
state securities laws; (ix) if 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 or such
transfer causes the Partnership to become a "Publicly Traded Partnership," as
such term is defined in Sections 469(k)(2) or 7704(b) of the Code; (x) if such
transfer subjects the Partnership to be regulated under the Investment Company
Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement
Income Security Act of 1974, each as amended; (xi) if the transferee or assignee
of such Partnership Interest is unable to make the representations set forth in
Section 3.4.D or such transfer could otherwise adversely affect the ability of
the General Partner to remain qualified as a REIT; or (xii) if in the opinion of
legal counsel for the Partnership such transfer would adversely affect the
ability of the General Partner to continue to qualify as a REIT or subject the
General Partner to any additional taxes under Section 857 or Section 4981 of the
Code.
F. The General Partner shall monitor the transfers of interests in
the Partnership to determine (i) if such interests are being traded on an
"established securities market" or a "secondary market (or the substantial
equivalent thereof)" within the meaning of Section 7704 of the Code and (ii)
whether additional transfers of interests would result in the Partnership being
unable to qualify for at least one of the "safe harbors" set forth in
Regulations Section 1.7704-1 (or such other guidance subsequently published by
the IRS setting forth safe harbors under which interests will not be treated as
"readily tradable on a secondary market (or the substantial equivalent thereof)"
within the meaning of Section 7704 of the Code) (the "Safe Harbors"). The
General Partner shall take all steps reasonably necessary or appropriate to
prevent any trading of interests or any recognition by the Partnership of
transfers made on such markets and, except as otherwise provided herein, to
insure that at least one of the Safe Harbors is met.
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ARTICLE 12.
ADMISSION OF PARTNERS
Section 12.1. Admission of Successor General Partner
A successor to all of the General Partner's General Partner Interest
pursuant to Section 11.2 who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
upon such transfer. Any such transferee shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to
the successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission. In the case
of such admission on any day other than the first day of a Partnership Year, all
items attributable to the General Partner Interest for such Partnership Year
shall be allocated between the transferring General Partner and such successor
as provided in Article 11.
Section 12.2. Admission of Additional Limited Partners
A. After the admission to the Partnership of the initial Limited
Partners on the date hereof, a Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 2.4 and (ii) such other
documents or instruments as may be required in the discretion of the General
Partner in order to effect such Person's admission as an Additional Limited
Partner.
B. Notwithstanding anything to the contrary in this Section 12.2,
no Person shall be admitted as an Additional Limited Partner without the consent
of the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the receipt of the Capital Contribution in respect of such Limited
Partner, the documents set forth in this Section 12.2.A and the consent of the
General Partner to such admission. If any Additional Limited Partner is admitted
to the Partnership on any day other than the first day of a Partnership Year,
then Net Income, Net Losses, each item thereof and all other items allocable
among Partners and Assignees for such Partnership Year shall be allocated among
such Limited Partner and all other Partners and Assignees by taking into account
their varying interests during the Partnership Year in accordance with Section
706(d) of the Code, using the interim closing books method. Solely for purposes
of making such allocations, each of such items for the calendar month in which
an admission of an Additional Limited Partner occurs shall be allocated among
all the Partners and Assignees including such Additional Limited Partner. All
distributions of Available Cash with respect to which the Partnership Record
Date is before the date of such admission shall be made solely to Partners and
Assignees other than the Additional Limited Partner (other than in its capacity
as an Assignee) and except as otherwise agreed to by the Additional Limited
Partners and the General Partner, and all distributions of
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Available Cash thereafter shall be made to all Partners and Assignees including
such Additional Limited Partner.
Section 12.3. Amendment of Agreement and Certificate of Limited
Partnership
For the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend the
records of the Partnership and, if necessary, to prepare as soon as practical an
amendment of this Agreement (including an amendment of Exhibit A) and, if
required by law, shall prepare and file an amendment to the Certificate and may
for this purpose exercise the power of attorney granted pursuant to Section 2.4.
ARTICLE 13.
DISSOLUTION AND LIQUIDATION
Section 13.1. Dissolution
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner (selected
as described in Section 13.1.B below) shall continue the business of the
Partnership. The Partnership shall dissolve, and its affairs shall be wound up,
upon the first to occur of any of the following ("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5;
B. an event of withdrawal of the General Partner, as defined in the
Act, unless, within ninety (90) days after the withdrawal, all of the remaining
Partners agree in writing, in their sole and absolute discretion, to continue
the business of the Partnership and to the appointment, effective as of the date
of withdrawal, of a substitute General Partner;
C. prior to December 31, 2097, an election to dissolve the
Partnership made by the General Partner with the consent of Limited Partners who
hold ninety percent (90%) of the outstanding Units held by Limited Partners;
D. subject to the provisions of Section 7.3.C(i), an election to
dissolve the Partnership made by the General Partner in its sole and absolute
discretion;
E. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
F. the sale or disposition of all or substantially all of the
assets and properties of the Partnership; or
G. a final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt or insolvent,
or a final and non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in
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each case under any Federal or state bankruptcy or insolvency laws as now or
hereafter in effect, unless prior to or at the time of the entry of such order
or judgment a Majority in Interest of the remaining Limited Partners Consent in
writing to continue the business of the Partnership and to the appointment,
effective as of a date prior to the date of such order or judgment, of a
substitute General Partner.
Section 13.2. Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs. The General Partner (or, in the event there is no remaining General
Partner, any Person elected by a Majority in Interest of the Limited Partners
(the "Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and assets and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock of the General Partner) shall be applied and distributed
in the following order:
(i) First, to the payment and discharge of all of the Partnership's
debts and liabilities to creditors other than the Partners;
(ii) Second, to the payment and discharge of all of the Partnership's
debts and liabilities to the General Partner;
(iii) Third, to the payment and discharge of all of the Partnership's
debts and liabilities to the other Partners; and
(iv) The balance, if any, to the Partners in accordance with their
Capital Account balances determined after giving effect to all
contributions and distributions for all periods, and after
taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs
(other than those made as a result of the liquidating
distribution set forth in this Section 13.2.A(iv).
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13 other than reimbursement of its
expenses as provided in Section 7.4.
B. Notwithstanding the provisions of Section 13.2.A which require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A, undivided interests in such
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Partnership assets as the Liquidator deems not suitable for liquidation. Any
such distributions in kind shall be made only if, in the good faith judgment of
the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
C. The Partnership shall be terminated when any notes received in
connection with any such sale or disposition referenced in Section 13.1.E above,
or in connection with the liquidation of the Partnership have been paid and all
of the cash or property available for application and distribution under this
Agreement have been applied and distributed in accordance with this Agreement.
Section 13.3. Compliance with Timing Requirements of Regulations
In the event the Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 to the General Partner and Limited Partners who have positive
Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2).
If any Partner has a deficit balance in his or her Capital Account (after giving
effect to all contributions, distributions and allocations for the taxable
years, including the year during which such liquidation occurs), such Partner
shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever, except to the extent otherwise agreed to by such Partner and the
General Partner. In the discretion of the Liquidator or the General Partner, a
pro rata portion of the distributions that would otherwise be made to the
General Partner and Limited Partners pursuant to this Article 13 may be:
A. distributed to a trust established for the benefit of the
General Partner and Limited Partners for the purposes of liquidating Partnership
assets, collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership. The assets of any
such trust shall be distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of the Liquidator or the General
Partner, in the same proportions and the amount distributed to such trust by the
Partnership would otherwise have been distributed to the General Partner and
Limited Partners pursuant to this Agreement; or
B. withheld to establish any reserves deemed necessary or
appropriate for any contingent or unforeseen liabilities or obligations of the
Partnership; and to reflect the unrealized portion of any installment
obligations owed to the Partnership; provided that, such withheld amounts shall
be distributed to the General Partner and Limited Partners as soon as
practicable.
Section 13.4. Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the event the
Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no
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Liquidating Event has occurred, the Partnership's property shall not be
liquidated, the Partnership's liabilities shall not be paid or discharged, and
the Partnership's affairs shall not be wound up. Instead, the Partnership shall
be deemed to have distributed the Partnership property in kind to the General
Partner and Limited Partners, who shall be deemed to have assumed and taken such
property subject to all Partnership liabilities, all in accordance with their
respective Capital Accounts. Immediately thereafter, the General Partner and
Limited Partners shall be deemed to have recontributed the Partnership property
in kind to the Partnership, which shall be deemed to have assumed and taken such
property subject to all such liabilities.
Section 13.5. Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of his Capital
Contribution and shall have no right or power to demand or receive property from
the General Partner. No Limited Partner shall have priority over any other
Limited Partner as to the return of his Capital Contributions, distributions or
allocations.
Section 13.6. Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs that would,
but for provisions of Section 13.1, result in a dissolution of the Partnership,
the General Partner shall, within thirty (30) days thereafter, provide written
notice thereof to each of the Partners and to all other parties with whom the
Partnership regularly conducts business (as determined in the discretion of the
General Partner) and shall publish notice thereof in a newspaper of general
circulation in each place in which the Partnership regularly conducts business
(as determined in the discretion of the General Partner).
Section 13.7. Cancellation of Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2, the Partnership shall be terminated and
the Certificate and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.
Section 13.8. Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2, in order to minimize any losses otherwise attendant
upon such winding-up, and the provisions of this Agreement shall remain in
effect between the Partners during the period of liquidation.
Section 13.9. Waiver of Partition
Each Partner hereby waives any right to partition of the Partnership
property.
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ARTICLE 14.
AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS
Section 14.1. Amendments
A. The actions requiring consent or approval of the Partners or of
the Limited Partners pursuant to this Agreement, including Section 7.3, or
otherwise pursuant to applicable law, are subject to the procedures in this
Article 14.
B. Amendments to this Agreement requiring the consent or approval
of Limited Partners may be proposed by the General Partner or by Limited
Partners holding twenty-five percent (25%) or more of the Partnership Interests
held by Limited Partners. Following such proposal, the General Partner shall
submit any proposed amendment to the Partners or of the Limited Partners, as
applicable. The General Partner shall seek the written consent or approval of
the Partners or of the Limited Partners on the proposed amendment or shall call
a meeting to vote thereon and to transact any other business that it may deem
appropriate. For purposes of obtaining a written consent, the General Partner
may require a response within a reasonable specified time, but not less than
fifteen (15) days, and failure to respond in such time period shall constitute a
consent which is consistent with the General Partner's recommendation (if so
recommended); provided that, an action shall become effective at such time as
requisite consents are received even if prior to such specified time.
Section 14.2. Action by the Partners
A. Meetings of the Partners may be called by the General Partner
and shall be called upon the receipt by the General Partner of a written request
by Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests held by Limited Partners. The call shall state the nature of the
business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven days nor more than thirty (30) days prior to the
date of such meeting. Partners may vote in person or by proxy at such meeting.
Whenever the vote of the Percentage Interests of the Partners, or the Consent of
the Partners or Consent of the Limited Partners is permitted or required under
this Agreement, such vote or Consent may be given at a meeting of Partners or
may be given in accordance with the procedure prescribed in Section 14.1.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by the Percentage Interests as is expressly required
by this Agreement for the action in question. Such consent may be in one
instrument or in several instruments, and shall have the same force and effect
as a vote of the Percentage Interests of the Partners (expressly required by
this Agreement). Such consent shall be filed with the General Partner. An action
so taken shall be deemed to have been taken at a meeting held on the effective
date so certified.
C. Each Limited Partner may authorize any Person or Persons to act
for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven
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(11) months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Limited Partner executing it.
D. Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate.
E. On matters on which Limited Partners are entitled to vote, each
Limited Partner shall have a vote equal to the number of Partnership Units held.
ARTICLE 15.
GENERAL PROVISIONS
Section 15.1. Addresses and Notice
Any notice, demand, request or report required or permitted to be given
or made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or when sent by certified
first class United States mail, nationally recognized overnight delivery service
or facsimile transmission to the Partner or Assignee at the address set forth in
Exhibit A or such other address as the Partners shall notify the General Partner
in writing.
Section 15.2. Titles and Captions
All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.3. Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
Section 15.4. Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5. Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto including the Persons set forth in Exhibit H, and their heirs,
executors, administrators, successors, legal representatives and permitted
assigns.
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Section 15.6. Creditors
Other than as expressly set forth herein with respect to Indemnitees,
none of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership.
Section 15.7. Waiver
No failure or delay by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon any breach thereof shall constitute waiver
of any such breach or any other covenant, duty, agreement or condition.
Section 15.8. Counterparts
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
Section 15.9. Applicable Law
This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.
Section 15.10. Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
Section 15.11. Limitation to Preserve REIT Status
To the extent that any amount paid or credited to the General Partner or
its officers, directors, employees or agents pursuant to Section 7.4 or 7.7
would constitute gross income to the General Partner for purposes of Sections
856(c)(2) or 856(c)(3) of the Code (a "General Partner Payment") then,
notwithstanding any other provision of this Agreement, the amount of such
General Partner Payments for any fiscal year shall not exceed the lesser of:
(i) an amount equal to the excess, if any, of (a) 4.17% of
the General Partner's total gross income (but not including the amount
of any General Partner Payments) for the fiscal year which is described
in subsections (A) through (H) of Section 856(c)(2) of the Code over (b)
the amount of gross income (within the meaning of Section 856(c)(2) of
the Code) derived by the General Partner from sources other than those
described in subsections (A) through (H) of Section 856(c)(2) of the
Code (but not including the amount of any General Partner Payments); or
65
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(ii) an amount equal to the excess, if any, of (a) 25% of the
General Partner's total gross income (but not including the amount of
any General Partner Payments) for the fiscal year which is described in
subsections (A) through (I) of Section 856(c)(3) of the Code over (b)
the amount of gross income (within the meaning of Section 856(c)(3) of
the Code) derived by the General Partner from sources other than those
described in subsections (A) through (I) of Section 856(c)(3) of the
Code (but not including the amount of any General Partner Payments);
provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (i) and (ii) above may be made if the General Partner, as
a condition precedent, obtains an opinion of tax counsel that the receipt of
such excess amounts would not adversely affect the General Partner's ability to
qualify as a REIT. To the extent General Partner Payments may not be made in a
year due to the foregoing limitations, such General Partner Payments shall carry
over and be treated as arising in the following year; provided, however, that
such amounts shall not carry over for more than five years, and if not paid
within such five year period, shall expire; provided, further, that (a) as
General Partner Payments are made, such payments shall be applied first to carry
over amounts outstanding, if any and (b) with respect to carry over amounts for
more than one Partnership Year, such payments shall be applied to the earliest
Partnership Year first.
Section 15.12. Entire Agreement
This Agreement contains the entire understanding and agreement among the
Partners with respect to the subject matter hereof and supersedes any other
prior written or oral understandings or agreements among them with respect
thereto.
Section 15.13. No Rights as Stockholders
Nothing contained in this Agreement shall be construed as conferring
upon the holders of Partnership Units any rights whatsoever as stockholders of
the General Partner, including without limitation any right to receive dividends
or other distributions made to stockholders of the General Partner or to vote or
to consent or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the General Partner or any other
matter.
(Signature Page Follows.)
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71
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
AMB PROPERTY CORPORATION
By: ____________________________________
X. Xxxxx Xxxxxxxxx
Managing Director, General Counsel,
Chief Financial Officer and Secretary
LIMITED PARTNERS:
FIRST ALLMERICA LIFE INSURANCE COMPANY
XXXXXX X. XXXXXX
XXXXXX X. XXXXXX
XXXXXXXX X. XXXXXXX 1954 TRUST
XXXXXXX X. XXXXXXX 1954 TRUST
XXXXXXXXX X. XXXXXXX 1954 TRUST
XXXXXXXX X. XXXXXXX 1957 TRUST
XXXXXXX X. XXXXXXX 1957 TRUST
XXXXXXXXX X. XXXXXXX 1957 TRUST
XXXXXXXX X. XXXXXXX 1958 TRUST
XXXXXXX X. XXXXXXX 1958 TRUST
XXXXXXXXX X. XXXXXXX 1958 TRUST
XXXXX X. XXXXX
THE XXXXXX 1982 REVOCABLE TRUST
DATED APRIL 21, 1982
XXXXXX X. XXXXXX
By: ____________________________________
X. Xxxxx Xxxxxxxxx
Attorney-In-Fact
S-1
72
EXHIBIT A
PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTERESTS
AGREED VALUE OF
CASH CONTRIBUTED GROSS ASSET TOTAL PARTNERSHIP PERCENTAGE
NAME OF PARTNER CONTRIBUTIONS PROPERTY* VALUE CONTRIBUTIONS UNITS INTEREST
--------------- ------------- --------------- ----------- ------------- ----------- ----------
AMB Property Corporation
Totals:
----------
*Net of Debt (if any)
A-1
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EXHIBIT B
NOTICE OF REDEMPTION
The undersigned hereby [irrevocably] (i) exchanges ____________ Limited
Partnership Units in AMB Property, L.P. in accordance with the terms of the
Limited Partnership Agreement of AMB Property, L.P. dated as of
_________________, and the rights of Redemption referred to therein, (ii)
surrenders such Limited Partnership Units and all right, title and interest
therein and (iii) directs that the cash (or, if applicable, REIT Shares)
deliverable upon Redemption or exchange be delivered to the address specified
below, and if applicable, that 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)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
---------------------------------
Issue REIT Shares in the name of:
Please insert social security or identifying number:
Address (if different than above):
B-1
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EXHIBIT C
CONSTRUCTIVE OWNERSHIP DEFINITION
The term "Constructively Owns" means ownership determined through the
application of the constructive ownership rules of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code. Generally, these rules provide the
following:
a. an individual is considered as owning the Ownership Interest
that is owned, actually or constructively, by or for his spouse, his children,
his grandchildren, and his parents;
b. an Ownership Interest that is owned, actually or constructively,
by or for a partnership or estate is considered as owned proportionately by its
partners or beneficiaries;
c. an Ownership Interest that is owned, actually or constructively,
by or for a trust is considered as owned by its beneficiaries in proportion to
the actuarial interest of such beneficiaries (provided, however, that in the
case of a "grantor trust" the Ownership Interest will be considered as owned by
the grantors);
d. if ten percent (10%) or more in value of the stock in a
corporation is owned, actually or constructively, by or for any person, such
person shall be considered as owning the Ownership Interest that is owned,
actually or constructively, by or for such corporation in that proportion which
the value of the stock which such person so owns bears to the value of all the
stock in such corporation;
e. an Ownership Interest that is owned, actually or constructively,
by or for a partner which actually or constructively owns a 25% or greater
capital interest or profits interest in a partnership or a beneficiary of an
estate or trust shall be considered as owned by the partnership, estate, or
trust (or, in the case of a grantor trust, the grantors);
f. if ten percent (10%) or more in value of the stock in a
corporation is owned, actually or constructively, by or for any person, such
corporation shall be considered as owning the Ownership Interest that is owned,
actually or constructively, by or for such person;
g. if any person has an option to acquire an Ownership Interest
(including an option to acquire an option or any one of a series of such
options), such Ownership Interest shall be considered as owned by such person;
h. an Ownership Interest that is constructively owned by a person
by reason of the application of the rules described in paragraphs (a) through
(g) above shall, for purposes of applying paragraphs (a) through (g), be
considered as actually owned by such person provided, however, that (i) an
Ownership Interest constructively owned by an individual by reason of paragraph
(a) shall not be considered as owned by him for purposes of again applying
paragraph (a) in order to make another the constructive owner of such Ownership
Interest, (ii) an Ownership Interest constructively owned by a partnership,
estate, trust, or corporation by reason of the application of paragraphs (e) or
(f) shall not be considered as owned by it for purposes of applying paragraphs
(b), (c), or (d) in order to make another the constructive owner of such
Ownership Interest, (iii) if an Ownership Interest may be considered as owned by
an individual under paragraphs (a) or (g), it shall be considered as owned by
him under paragraph (g) and (iv) for purposes of the above described rules, an S
corporation shall be treated as a partnership and any stockholder of the S
corporation shall be treated as a partner of such partnership except that this
rule shall not apply for purposes of determining whether stock in the S
corporation is constructively owned by any person.
i. For purposes of the above summary of the constructive ownership
rules, the term "Ownership Interest" means the ownership of stock with respect
to a corporation and, with respect to any other type of entity, the ownership of
an interest in either its assets or net profits.
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EXHIBIT D-1
FORM OF PARTNERSHIP UNIT CERTIFICATE
CERTIFICATE FOR PARTNERSHIP UNITS OF
AMB PROPERTY, L.P.
No. _______________ ____________ UNITS
AMB Property Corporation as the General Partner of AMB Property, L.P., a
Delaware limited partnership (the "Operating Partnership"), hereby certifies
that ___________________________ is a Limited Partner of the Operating
Partnership whose Partnership Interests therein, as set forth in the Agreement
of Limited Partnership of AMB Property, L.P., dated as of ______________, 1997
(as it may be amended, modified or supplemented from time to time in accordance
with its terms, (the "Partnership Agreement"), under which the Operating
Partnership is existing and as filed in the office of the Delaware [State
Department of Assessments and Taxation] (copies of which are on file at the
Operating Partnership's principal office at _________________________________,
represent ________________ units of limited partnership interest in the
Operating Partnership (the "Partnership Units").
THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF
WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED
IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF
THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER OF THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE
THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER.
DATED: _______________, 1997.
AMB PROPERTY CORPORATION
General Partner of
AMB Property, L.P.
ATTEST:
By: _________________________ By: ___________________________________
X-0
00
XXXXXXX X-0
FORM OF PARTNERSHIP UNIT CERTIFICATE
CERTIFICATE FOR PERFORMANCE UNITS OF
AMB PROPERTY, L.P.
No. _______________ ____________ UNITS
AMB Property Corporation as the General Partner of AMB Property, L.P., a
Delaware limited partnership (the "Operating Partnership"), hereby certifies
that ___________________ is a Limited Partner of the Operating Partnership whose
Partnership Interests therein, as set forth in the Agreement of Limited
Partnership of AMB Property, L.P., dated as of ______________, 1997 (as it may
be amended, modified or supplemented from time to time in accordance with its
terms, (the "Partnership Agreement"), under which the Operating Partnership is
existing and as filed in the office of the Delaware [State Department of
Assessments and Taxation] (copies of which are on file at the Operating
Partnership's principal office at __________________________________________,
represent __________ performance units (as defined in the Partnership Agreement)
of limited partnership interest in the Operating Partnership (the "Performance
Units").
THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF
WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED
IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE PERFORMANCE UNITS REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF
THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF
COUNSEL FOR THE HOLDER OF THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE
THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER.
DATED: _______________, 1997.
AMB PROPERTY CORPORATION
General Partner of
AMB Property, L.P.
ATTEST:
By: _________________________ By: ___________________________________
D-2
77
[EXHIBIT E
SCHEDULE OF PARTNERS' OWNERSHIP
WITH RESPECT TO TENANTS]
E-1
78
EXHIBIT F
SCHEDULE OF REIT SHARES
ACTUALLY OR CONSTRUCTIVELY OWNED BY LIMITED PARTNERS
OTHER THAN THOSE ACQUIRED PURSUANT TO AN EXCHANGE
F-1
79
EXHIBIT G
SCHEDULE OF CERTAIN PROPERTY OF THE PARTNERSHIP
G-1
80
EXHIBIT H
PERCENTAGE
----------
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
T. Xxxxxx Xxxxx
Xxxx X. Xxxxxxxx
X. Xxxxx Xxxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxx Xxxxxxx Xxxxxx
Xxxxxxx X. Xxxx
Xxxxx X. Xxxxxxxxx
----
100%
H-1
81
EXHIBIT I
ORIGINAL LIMITED PARTNERS OF THE PARTNERSHIP
I-1
