CP LIMITED PARTNERSHIP
Amended and Restated Agreement of Limited Partnership
Transfer of the Limited Partnership Interests
("Partnership Interests") represented hereby is restricted
by the terms of this Agreement. In addition, the sale of the
Partnership Interests has not been registered under the
Securities Act of 1933, as amended, nor any state's security law, and
they may not be transferred or sold unless such sale is subsequently
registered or an exemption from registration is available.
CP LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement") is made as of the _____ day of ____________, 1996, by and among
CHATEAU PROPERTIES, INC., a Maryland corporation (the "Chateau"), and each of
the limited partners whose names appear as such on Exhibit A attached hereto
(the "Limited Partners"). The Company and the Limited Partners are hereinafter
sometimes individually referred to as a "Partner" or collectively as the
"Partners."
WITNESSETH:
WHEREAS, CP Limited Partnership, a Maryland limited partnership (the
"Partnership"), was formed under the laws of the State of Maryland pursuant to a
Certificate of Limited Partnership filed September 16, 1993 with the Maryland
Department of Assessments and Taxation (the "Original Certificate") and an
Agreement of Limited Partnership dated September 16, 1993, as thereafter amended
and restated and most recently amended on October 24, 1994 and September 26,
1995 (the "Original Partnership Agreement");
WHEREAS, Chateau, ROC Communities, Inc., a Maryland corporation
("ROC"), Chateau Communities, Inc., a Maryland corporation (the "Company")
and a merger subsidiary of the Company have entered into an Amended and
Restated Agreement and Plan of Merger dated as of September 17, 1996, as
amended by the Amendment thereto dated December 20, 1996 (the "Merger
Agreement");
WHEREAS, pursuant to the Merger Agreement, at the Effective Time of the
Mergers, as defined in the Merger Agreement, the merger subsidiary of the
Company shall merge with and into ROC, with ROC being the surviving
corporation in such merger, and certain of the Limited Partners will transfer
OP Units and cash (as defined herein) to Chateau in exchange for shares of
Chateau Common Stock;
WHEREAS, Section 5.15 of the Merger Agreement requires that, immediately
following the Effective Time of the Mergers, as defined in the Merger Agreement,
ROC shall, pursuant to a Contribution Agreement contemplated by the Merger
Agreement (the "Contribution Agreement") (i) contribute to the capital of the
Partnership the Contributor Properties, the Other Assets and the Management
Agreements, as each term is defined in the Contribution Agreement, (ii) cause
its wholly owned subsidiary, Redwood Acquisition Corp., a Maryland corporation
("RAC"), to contribute to the capital of the Partnership the RAC Properties (as
defined in the Contribution Agreement) and (iii) cause its wholly owned
subsidiary, ROCF, Inc., a Maryland corporation, to merge with and into a newly
organized financing partnership subsidiary of the Partnership ("Financing
Partnership"), with the Financing Partnership surviving such merger (the
"Financing Partnership Merger"), and concurrently therewith contribute to the
capital of the Partnership its ninety-nine percent limited partnership interest
in the Financing Partnership to be received pursuant to the Financing
Partnership Merger, all in accordance with the terms of the Contribution
Agreement;
1.
WHEREAS, upon the effectiveness of this Agreement, and in exchange for the
contributions to the capital of the Partnership as set forth herein, ROC is to
receive OP Units of the Partnership and is to be admitted as a general partner
of the Partnership;
WHEREAS, the Partners desire to amend and restate the Original Partnership
Agreement as set forth herein, to be effective immediately following the
Effective Time of the Mergers, as defined in the Merger Agreement, if and only
if the Mergers and other transactions contemplated by the Merger Agreement and
the Contribution Agreement are consummated in accordance with their respective
terms; and
WHEREAS, if the Mergers and other transactions contemplated by the Merger
Agreement and the Contribution Agreement are not consummated in accordance with
their respective terms, then this amendment shall be void and of no force and
effect whatsoever.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree that, effective immediately following the Effective Time of the
Mergers, as defined in the Merger Agreement, if and only if the Mergers and
other transactions contemplated by the Merger Agreement and the Contribution
Agreement are consummated in accordance with their respective terms, the
Original Partnership Agreement shall be amended and restated in its entirety to
read as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Act" shall mean the Maryland Revised Uniform Limited Partnership Act
as amended from time to time, and any corresponding provision of future laws.
"Additional Capital Contributions" shall mean the capital contributions
described 1.2 in Paragraph 4.5 hereof.
1.3 "Adjusted Capital Account Deficit" shall mean, at any time with
respect to any Partner, the deficit balance, if any, in such Partner's Capital
Account, after giving effect to the following adjustments:
(a) Such Capital Account shall be increased by the amounts which
such Partner is deemed obligated to restore as described in the
penultimate sentence of Treasury Regulation Section 1.704-2~)(1) and
Treasury Regulation Section 1.704-2(i)(5), or any successor provisions;
and
(b) Such Capital Account shall be reduced by the amount of the items
described in Treasury Regulation Sections 1.704-1(b)(2) (ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
2.
The definition of Adjusted Capital Account Deficit is intended to comply
with Treasury Regulation Section 1.704(1)(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
1.4 "Affiliate" shall mean (i) any person or entity directly or indirectly
controlling, controlled by or under common control with any Partner, (ii) any
person or entity owning or controlling five (5%) percent or more of the
outstanding voting interests of any Partner, (iii) any officer, director,
employee, general partner, shareholder or beneficiary of any Partner, or (iv)
any person or entity who is an officer, director, general partner, trustee or
holder of five (5%) percent or more of the voting interests or beneficial
interest of any person or entity described in clause (i) (ii) or (iii) of this
Paragraph.
1.5 "Agent for Service of Process" shall be CT Corp., which is hereby
designated as the Agent of the Partnership for purposes of accepting service of
process for the Partnership.
1.6 "Bankruptcy" of a Partner shall mean (a) the filing by a Partner of a
voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States Code
(or corresponding provisions of future laws) or any other Federal or state
insolvency law, or a Partner's filing an answer consenting to or acquiescing in
any such petition, (b)the making by a Partner of any assignment for the benefit
of its creditors or the admission by a Partner in writing of its inability to
pay its debts as they mature, or (c) the expiration of sixty (60) days after the
filing of an involuntary petition under Title 11 of the United States Code (or
corresponding provisions of future laws), seeking an application for the
appointment of a receiver for the assets of a Partner, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment of its
debts under any other Federal or state insolvency law, provided that the same
shall not have been vacated, set aside or stayed within such 60 day period.
1.7 "Capital Account" shall mean, with respect to any Partner, a
bookkeeping account maintained by the Partnership for such Partner, which shall
be credited with the amount of such Partner's Capital Contributions paid in cash
to the Partnership, and with such Partner's distributive share of Net Profits
and any items in the nature of income or gain specially allocated pursuant to
Paragraph 6.4 hereof, and which shall be debited with the amount of cash
distributed to such Partner pursuant to any provision of this Agreement, and
such Partner's distributive share of Partnership Net Losses and any items in the
nature of expenses or losses specially allocated pursuant to Paragraph 6.4
hereof. If a Partner makes a contribution of (or receives a distribution of)
non-cash property, such Partner's Capital Account shall be credited (or debited)
with the Gross Asset Value of such property, net of liabilities assumed by the
Partnership (or the Partner) in connection with such contribution (or
distribution) and liabilities to which such property is 'subject. In the case of
a transfer of a Partnership Interest permitted under this Agreement, the
transferee shall succeed to the Capital Account of the transferor to the extent
it related to the transferred interest. In determining the amount of any
liability for purposes of this Paragraph 1.7 there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code and
Regulations. The foregoing provisions and other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulation Section 1.704-1(b) and shall be interpreted and applied in a
manner consistent with such Regulations. In the event the General Partners shall
determine that it is prudent to modify the
3.
manner in which the Capital Accounts, or any debits or credits thereto, are
computed in order to comply with such Regulations, the General Partners may make
such modification, provided that such modification is not likely to have a
material effect on the amounts distributable to any Partner pursuant to this
Agreement upon the dissolution of the Partnership. The General Partners also
shall (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, or computed
for book purposes, in accordance with Treasury Regulation Section
1.704(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Treasury Regulation Section 1.704-1(b).
1.8 "Capital Cash Flow" of the Partnership shall have the meaning set
forth in Paragraph 6.3 hereof.
1.9 "Capital Contribution" shall mean, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the capital of the Partnership (net of liabilities assumed
by the Partnership in connection with such contribution and liabilities to which
such property is subject) contributed by such Partner to the capital of the
Partnership pursuant to the terms of this Agreement, including the Capital
Contribution made by any predecessor holder of the Partnership Interest of such
Partner.
1.10 "Company" shall mean Chateau Communities, Inc., a Maryland
corporation, the successor in interest to Chateau Properties, Inc., a Maryland
corporation.
1.11 "Depreciation" shall mean, for each fiscal year or other period, an
amount equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to any 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 that if the federal income tax depreciation,
amortization, or other cost recovery deduction is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partners.
1.12 "General Partner" shall mean the Company and ROC or any other person
(i) admitted to the Partnership and designated as a General Partner in Exhibit A
attached hereto, or who has become a General Partner pursuant to the terms and
conditions of this Agreement, and (ii) who holds a Partnership Interest. General
Partners shall mean all such persons.
1.13 "General Partnership Interest" shall mean the Partnership Interest
owned by the General Partners together with all the rights, benefits and
obligations of the General Partners pursuant to this Agreement. Notwithstanding
anything contained in this Agreement to the contrary, the General Partners shall
at all times have an aggregate interest of not less than a one (1%) percent in
each material item of Partnership income, gain, loss, deduction or credit.
4.
1.14 "Gross Asset Value" shall mean, with respect to any Partnership
asset, the asset's adjusted basis for federal income tax purposes, except as
follows:
(a) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such
asset, as determined by the contributing Partner and the General Partners,
and as set forth on Exhibit B attached hereto;
(b) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as determined
by the General Partners, as of the following times: (i) the acquisition of
an additional interest in the Partnership by any new or existing Partner
in exchange for more than a de minimis Capital Contribution; (ii) 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, and (iii) the liquidation of the Partnership within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); provided,
however, that adjustments pursuant to clauses (i) and (ii) above shall be
made only if the General Partners reasonably determine that such
adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(c) 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 743(b), but only to the extent
that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and
Paragraph 6.4(e) hereof; provided that the Gross Asset Values shall not be
adjusted pursuant to this Paragraph 1.14(c) to the extent the General
Partners determine that an adjustment pursuant to Paragraph 1.14(b) is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this Paragraph 1.14(c); and
(d) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to Paragraph 1.14(a), (b) or (c) hereof, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Net Profits
and Net Losses.
1.15 "Gross Income" shall mean, for each fiscal year or other period, the
gross income of the Partnership, as finally determined for federal income tax
purposes.
1.16 "Internal Revenue Code" or "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time (or any corresponding provision of
future laws).
1.17 "Limited Partner" shall mean any person (i) admitted to the
Partnership and designated as a Limited Partner in Exhibit A attached hereto, or
who has become a Limited Partner pursuant to the terms and conditions of this
Agreement, and (ii) who holds a Partnership Interest. "Limited Partners" shall
mean all such persons.
5.
1.18 "Limited Partnership Interests" shall mean the Partnership Interests
of the Limited Partners.
1.19 "Majority in Interest" shall mean the Limited Partners who, in the
aggregate, own more than one-half (1/2) of the total Percentage Interests owned
by the Limited Partners.
1.20 "Net Profits" and "Net Losses" shall mean, for each fiscal year or
other period, the taxable income of the Partnership as finally determined in
accordance with Internal Revenue Code Section 703(a) for Federal income tax
purposes (for this purpose all items of income, gain, loss or deduction required
to be stated separately pursuant to Internal Revenue Code Section 703(a)(1)
shall be included in taxable income or loss), with the following adjustments:
(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Profits or Net
Losses shall be added to such taxable income or loss;
(b) Any expenditures of the Partnership described in Internal
Revenue Code Section 705(a)(2)(B) or treated as Internal Revenue Code
Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Net Profits or Net Losses, shall be subtracted from such taxable income or
loss;
6.
(c) Gain or loss resulting from any disposition of Partnership
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;
(d) If the Gross Asset Value of any Partnership asset is adjusted
pursuant to Paragraph 1.14 hereof, the amount of such adjustment shall be
taken into account as gain (if an increase) or loss (if a decrease) from
the disposition of such asset for purposes of computing Net Profits or Net
Losses;
(e) 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
or other period; and
(f) 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 Treasury Regulation 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 complete liquidation
of a Partner's Partnership Interest, 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 Profits or Net Losses;
(g) Any items which are specially allocated pursuant to Paragraphs
6.4 or 6.5 hereof shall not be taken into account in computing Net Profits
or Net Losses.
1.21 "Nonrecourse Debt" is any liability of the Partnership for which (as
between the Partnership and the creditor) the creditor's right to repayment is
limited to one or more assets of the Partnership, within the meaning of Section
1.1001-2 of the Treasury Regulations.
1.22 "Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(3) of the Treasury Regulations.
1.23 "Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Treasury Regulations.
1.24 "Operating Cash Flow" of the Partnership shall have the meaning set
forth in Paragraph 6.2 hereof.
1.25 "Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Section 1.704-2(i)(3) of the Treasury Regulations.
1.26 "Partner Nonrecourse Debt" or "Partner Nonrecourse Liability" have
the meanings set forth in Section 1.704-2(b)(4) of the Treasury Regulations.
7.
1.27 "Partner Nonrecourse Deductions" has the meaning set forth in
Sections 1.704-2(i)(l) and l.704-2(i)(2) of the Treasury Regulations.
1.28 A "Partner's Share of Partnership Minimum Gain" at the end of any
Partnership fiscal year has the meaning set forth in Section 1.704-2(g) of the
Treasury Regulations.
1.29 A "Partner's Share of Partner Nonrecourse Debt Minimum Gain" at the
end of any Partnership fiscal year has the meaning set forth in Section
1.704-2(i)(5) of the Treasury Regulations.
1.30 "Partners" shall mean, collectively, the General Partners and Limited
Partners. Any reference to a Partner shall, unless the context clearly requires
otherwise, be deemed a reference to any one of the Partners, his or her
predecessor and substituted successor in interest.
1.31 "Partnership" means CP Limited Partnership, a Maryland limited
partnership formed under and pursuant to the Act.
1.32 "Partnership Interest" means a Partner's ownership interest in the
Partnership as set forth on Exhibit A attached hereto, including the right of a
Partner to any and all benefits to which it may be entitled pursuant to this
Agreement, and to the extent not inconsistent with this Agreement, under the
Act, together with the obligations of a Partner to comply with all the terms and
provisions of this Agreement and of the Act.
1.33 "Partnership Minimum Gain" has the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.
1.34 "Percentage Interest" of a Partner in the Partnership shall mean the
percentage interest of such Partner as stated in Exhibit A of this Agreement, as
such percentage interest may be adjusted from time to time in accordance with
the provisions of this Agreement.
1.35 "Regulations" or "Treasury Regulations" shall mean the Income Tax
Regulations, including Temporary Regulations, promulgated under the Code, as
such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
1.36 "Substitute Limited Partner" shall mean a permitted successor to a
Limited Partner's Partnership Interest pursuant to Paragraph 9.2 hereof who has
been admitted to the Partnership as a Limited Partner.
1.37 "Syndication Expenses" shall mean all expenditures classified as
syndication expenses pursuant to Treasury Regulation Section 1.709-2(b).
Syndication Expenses shall be taken into account under this Agreement at the
time they would be taken into account under the Partnership's method of
accounting if they were deductible expenses.
1.38 "Tax Matters Partner" shall mean the Company who shall have the
rights and authority as described in Paragraph 5.1(1) hereof.
8.
All references to statutory provisions shall be deemed to include
reference to corresponding provisions of subsequent law.
ARTICLE TWO
CONTINUATION OF PARTNERSHIP, NAME, OFFICE LOCATION AND TERM
2.1 Continuation. The Partnership was originally formed under the name CP
LIMITED PARTNERSHIP, on September 16, 1993 pursuant to the provisions of the
Original Certificate filed as of such date, and the terms of the Act, and the
parties hereto hereby agree to continue the Partnership on the terms and
conditions set forth herein. The General Partners and the Limited Partners shall
continue to carry on the Partnership, as a limited partnership under the Act,
for the purposes set forth herein and in accordance with the provisions of this
Agreement.
The name of the Partnership shall continue to be CP LIMITED PARTNERSHIP,
or such other name or names as shall be selected from time to time by the
General Partners. The Partnership may transact its business under any trade or
fictitious name or names selected by the General Partners at any time and from
time to time.
2.2 Admission of ROC. ROC is hereby admitted to the Partnership as a
General Partner, subject to the terms and conditions of this Agreement.
2.3 Office Location. The location of the principal office of the
Partnership shall be 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at
such other location as may be designated by the General Partners. Notice of any
change of office shall be given to all Limited Partners prior to or within ten
(10) days after such change in location.
2.4 Amended and Restated Certificate of Limited Partnership. Promptly
after the admission of ROC as a General Partner in the Partnership the General
Partners shall sign a Restated Certificate of Limited Partnership, with respect
to the Partnership on behalf of themselves and the Limited Partners as their
attorney-in-fact pursuant to the power(s) of attorney provided in Paragraph
5.1(k) of this Agreement, and the General Partners shall cause same to be filed
in the office of the Maryland State Department of Assessment and Taxation,
Department of Commerce.
2.5 Term. The term of the Partnership, which commenced on the effective
date of the Original Certificate, shall continue until the winding up and
liquidation of the Partnership and its business is completed following a
Liquidating Event as provided in Paragraph 7.2 hereof.
2.6 Qualification to Do Business. The General Partners shall take all
actions necessary or required to qualify the Partnership to transact business in
all jurisdictions where such qualification is required.
9.
ARTICLE THREE
PURPOSES AND POWERS OF PARTNERSHIP
3.1 Purpose. The purpose of the Partnership is to acquire, purchase, own,
operate, manage, develop, redevelop, invest in, finance, refinance, sell, lease
and otherwise deal with manufactured housing community properties and assets
related thereto, and interests therein, whether directly or indirectly, alone or
in association with others. The purposes of the Partnership include, but are not
limited to:
(a) acquiring, developing, operating, leasing and managing
manufactured housing community properties and conducting any other lawful
business relating thereto:
(b) mortgaging, exchanging, selling, encumbering or otherwise
disposing of all or any part of a manufactured housing community property
or any interest therein:
(c) constructing, reconstructing, altering, modifying and
subtracting from or adding to a manufactured housing community property or
any part thereof;
(d) organizing and holding partnership interests in partnerships
owning or otherwise having an interest in, whether directly or indirectly,
one or more manufactured housing community properties; and
(e) in general, the making of any investments or expenditures, the
borrowing and lending of money and the taking of any and all actions which
are incidental or related to any of the purposes recited above.
It is agreed that each of the foregoing is an ordinary part of the
Partnership's business and affairs. Property may be acquired subject to, or by
assuming, the liens, encumbrances, and other title exceptions which affect such
property. The Partnership may also be a partner, general or limited, in
partnerships, general or limited, and joint ventures created to accomplish all
or any or the foregoing.
The Partnership purposes may be accomplished by taking any action which is
not prohibited under the Act and which is related to the acquisition, ownership,
development, improvement, operation, management, financing, leasing, exchanging,
selling or otherwise encumbering or disposing of all or any portion of the
assets of the Partnership, or any interest therein.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS, ADMISSION OF PARTNERS, OP UNITS
4.1 Capital Contributions. Each of the Partners (or their respective
predecessors in interest), other than ROC, have heretofore made Capital
Contributions to the Partnership. In connection with the admission of ROC as a
General Partner, and in accordance with the terms of the Contribution Agreement,
ROC is hereby contributing to the capital of the Partnership the amounts and/or
properties set forth on Exhibit C attached hereto, and in exchange therefor the
10.
Partnership is hereby issuing to ROC _________ OP Units.
4.2 Omitted
4.3 Admission of Partners. Upon admission of a Partner into the
Partnership and receipt of the Partner's Capital Contribution, the Percentage
Interest of the Partner shall be set forth opposite the Partner's name in
Exhibit A attached hereto, which shall be amended as appropriate to reflect
changes in the Percentage Interest of each Partner pursuant to the provisions of
this Agreement.
4.4 Issuance and Conversion of OP Units.
A. The interest of a Partner in the Partnership is sometimes
referred to as being evidenced by one or more "OP Units." The aggregate
total of all OP Units outstanding as of the date of this Agreement and
after giving effect to the Capital Contribution by ROC in accordance with
Paragraph 4.1 hereof is _________________(_______)and the number of OP
Units owned by each Partner is set forth on Exhibit A attached hereto.
B. From time to time, the General Partners, subject to the
provisions of this Paragraph 4.4(B), shall cause the Partnership to issue
additional OP Units either (i) to existing or newly-admitted Partners
(including itself) in exchange for the contribution by a Partner (the
"Contributing Partner") of additional Capital Contributions to the
Partnership, (ii) to the Company upon the issuance by the Company of
additional shares of its common stock ("Common Stock") not in connection
with the exchange of OP Units as provided in Paragraph 4.4(C) hereof,
provided that any net proceeds received by the Company as a result of the
issuance of such additional shares 6f Common Stock are contributed to the
Partnership as additional Capital Contributions, in accordance with
Paragraph 4.5(B) hereof (it being understood that the Company may issue
shares of Common Stock in connection with stock option plans, restricted
stock plans or other employee benefit plans without receiving any proceeds
and that the issuance of such shares shall nonetheless entitle the Company
to additional OP Units). The number of OP Units issued to a Contributing
Partner under clause (i) of this Paragraph 4.4(B) shall be equal to the
quotient (rounded to the nearest whole number) arrived at by dividing (x)
the initial Gross Asset Value of the property contributed as additional
Capital Contributions (net of any debt to which such property is subject
or assumed by the Partnership in connection with such contribution) by (y)
such price as may be determined by the General Partners in connection with
such contributions. The number of OP Units issued to the Company under
clause (ii) of this Paragraph 4.4(B) shall be equal to the number of
shares of Common Stock issued. Upon the issuance of additional OP Units,
or upon the exchange of OP Units for Common Stock as provided in Paragraph
4.4(C) hereof, the Percentage Interests of all of the Partners shall be
adjusted by the General Partners so that the Percentage Interest of each
Partner is equal to the quotient (expressed as a percentage) arrived at by
dividing the number of OP Units held by a Partner by the total number of
OP Units then outstanding. Notwithstanding anything to the contrary
contained herein, in no event shall any additional OP Units be issued
(pursuant to this Paragraph 4.4(B) or
11.
otherwise) to the extent that the effect of such issuance would be to
reduce the General Partners' aggregate Percentage Interest to less than
one (1%) percent.
C. Subject to the further provisions of this Paragraph 4.4(C), the
Company hereby grants to each Limited Partner the right to exchange any or
all of the OP Units held by that Partner for shares of Common Stock. In
the case of an exchange of OP Units pursuant to this Paragraph 4.4(C), one
OP Unit shall be exchangeable for one share of Common Stock. Such right
may be exercised by a Limited Partner from time to time upon not less than
ten (10) days prior written notice to the Company. The Company shall at
all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the exchange
of OP Units for shares Common Stock, such number of shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding OP Units subject to conversion and not owned by the Company.
No Limited Partner shall, by virtue of being the holder of one or more OP
Units, be deemed to be a shareholder of or have any other interest in the
Company. In the event of any change in the outstanding shares of Common
Stock by reason of any stock dividend, split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, the number of OP Units held by each partner shall be
proportionately adjusted so that one OP Unit remains exchangeable for one
share of Common Stock without dilution. In the event the Company issues
any Common Stock in exchange for OP Units pursuant to this Paragraph
4.4(C), any such OP Units so acquired by the Company shall immediately
thereafter be converted in the hands of the Company into General
Partnership Interests. Notwithstanding the foregoing provisions of this
Paragraph 4.4(C), a Limited Partner shall not have the right to exchange
OP Units for Common Stock if (i) in the opinion of counsel to the Company,
acceptable to such Limited Partner and the Company, the Company would, as
a result of such exchange (or the right to effectuate such exchange), no
longer qualify (or it would be likely that the Company no longer would
qualify) as a real estate investment trust under the Code; or (ii) such
exchange (or the right to effectuate such exchange) would violate the
ownership limitations set forth in the Articles of Incorporation of the
Company; or (iii) such exchange would not, in the opinion of counsel
acceptable to such Limited Partner and the Company, be an exempt
transaction under applicable securities laws.
4.5 Additional Capital Contributions.
A. No Partner shall be assessed or, except as provided in Paragraph
4.5(B) below, required to contribute additional funds or other property
to the Partnership. Any additional funds or other property required by the
Partnership, as determined by the General Partners in their sole
discretion, may, at the option of the General Partners and without any
obligation to do so (except as provided for in Paragraph 4.5(B) below),
be contributed by the General Partners as additional Capital
Contributions. If and when the General Partners or any other Partner makes
additional Capital Contributions to the Partnership, each such Partner
shall receive additional OP Units as provided for in Paragraph 4.4 above.
The General Partners shall also have the right (but not the obligation) to
raise any additional funds required for the Partnership by causing the
12.
Partnership to borrow the necessary funds from third parties on such terms
and conditions as the General Partners shall deem appropriate in their
sole discretion. If the General Partners elect to cause the Partnership to
borrow the additional funds, they may cause one or more of the
Partnership's assets to be encumbered to secure the loan. No Limited
Partner shall have the right to contribute additional Capital
Contributions to the Partnership without the prior written consent of the
General Partners.
B. The net proceeds of any and all funds raised by or through the
Company or ROC through the issuance of additional shares of common stock
of the Company or ROC, as the case may be, shall be contributed to the
Partnership as additional Capita Contributions, and in such event the
Company or ROC, as the case may be, shall be issued additional OP Units
pursuant to Paragraph 4.4 above.
C. The net proceeds of any and all funds raised by or through the
Company or ROC through the issuance of shares of preferred stock of the
Company or ROC, as the case may be, shall be contributed to the
Partnership as additional Capital Contributions, and in such event the
Company or ROC, as the case may be, shall be issued additional OP Units
pursuant to Paragraph 4.4 above; provided that any such OP Units
("Preferred OP Units") shall have such terms, preferences and limitations
consistent with the terms, preferences and limitations of such preferred
stock. The General Partners shall have the right to amend this Agreement
at their sole discretion and without the consent of any other Partner
solely as to matters respecting the issuance of Preferred OP Units by the
Partnership.
4.6 Return of Capital. Except as expressly provided for in this Agreement,
no Partner shall have the right to demand or to receive the return of all or any
part of his Capital Contributions to the Partnership and there shall be no
priority of one Partner over another as to the return of Capital Contributions
or withdrawals or distributions of Net Profits and Net Losses. No Partner shall
have the right to demand or receive property other than cash in return for the
contributions of such Partner to the Partnership.
4.7 Interest. No interest shall be paid to any Partner on any contribution
to the capital of the Partnership.
4.8 Negative Capital Accounts. No Partner shall be required to pay to the
Partnership any deficit or negative balance which may exist in its Capital
Account.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
5.1 Management of Partnership. The General Partners shall be the sole
managers of the Partnership business, and shall have the right and power to make
all decisions and take any and every action with respect to the property,
business and affairs of the Partnership and shall have all the rights, power and
authority generally conferred by law, or necessary, advisable or consistent with
accomplishing the purposes of the Partnership. All decisions or actions made or
taken by the General Partners hereunder shall require the consent of all General
Partners and
13.
shall be binding upon all of the Partners and the Partnership. The powers of the
General Partners to manage the Partnership business shall include, without
limitation, the power and authority to:
(a)operate any business normal or customary for the owner of or
investor in manufactured housing community property;
(b) perform any and all acts necessary or appropriate to the
operation of the Partnership assets, including, but not limited to,
applications for rezoning, objections to rezoning of other property and
the establishment of bank accounts in the name of the Partnership;
(c) procure and maintain with responsible companies such insurance
as may be available in such amounts and covering such risks as are deemed
appropriate by the General Partner;
(d) take and hold all real, personal and mixed property of the
Partnership in the name of the Partnership or in the name of a nominee;
(e) execute and deliver leases on behalf of and in the name of the
Partnership;
(f) borrow money, finance and refinance the assets of the
Partnership or any part thereof or interest therein;
(g) coordinate all accounting and clerical functions of the
Partnership and employ such accountants, lawyers, property managers,
leasing agents and other management or service personnel as may from time
to time be required to carry on the business of the Partnership;
(h) acquire, encumber, sell, ground lease or otherwise dispose of
any or all of the assets of the Partnership, or any part thereof or
interest therein; and
(i) organize one or more partnerships or corporations which are
controlled, directly or indirectly by the Partnership and make any capital
contributions required pursuant to the partnership agreements of any such
partnership.
(j) The Company is hereby designated as the Tax Matters Partner
("TPM") as defined in Section 6231(a)(7) of the Code. As Tax Matters
Partner, the Company shall have full power and authority to act as such
for the Partnership and the Partners, with all the rights and
responsibilities of that position described in Sections 6222 through 6232
of the Internal Revenue Code. The Tax Matters Partner is authorized to
enter into any settlement with the Internal Revenue Service 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, and in the settlement agreement the Tax Matters
Partners may expressly state that such agreement shall bind all Partners
except that such settlement agreement shall not bind any Partner (i) who
(within the time prescribed
14.
pursuant to the Code and Regulations) files a statement with the Internal
Revenue Service providing that the Tax Matters Partner shall not have the
authority to enter into a settlement agreement on behalf of such Partner
or (ii) 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. In addition, except as restricted hereunder, the Company is
hereby authorized to make or revoke any election permitted by the
Partnership by any taxing authority. If the TMP receives notice of a Final
Partnership Administrative Adjustment ("FPAA") or if a request for an
administrative adjustment made by the TMP is not allowed by the United
States Internal Revenue Service ("IRS") and the IRS does not notify the
TMP of the beginning of an administrative proceeding with respect to the
Partnership's taxable year to which such request relates (or if the IRS so
notifies the TMP but falls to mail a timely notice of an FPAA), the TMP
may, but shall not be obligated to, petition a Court for readjustment of
partnership items. In the case of a notice of an FPAA, if the TMP
determines that the United States District Court or Claims Court is the
most appropriate forum for such a petition, the TMP shall notify each
person who was Partner at any time during the Partnership's taxable year
to which the IRS notice relates of the approximate amount by which its tax
liability would be increased (based on such assumptions as the TMP may in
good faith make) if the treatment of partnership items on his return was
made consistent with the treatment of partnership items on the
Partnership's return, as adjusted by the FPAA. Unless each such person
deposits with the TMP, for deposit with the IRS, the approximate amount of
such Partner's increased tax liability, together with a written agreement
to make additional deposits if required to satisfy the jurisdictional
requirements of the Court, within thirty days after the TMP's notice to
such person, the TMP shall not file a petition in such Court. Instead, the
TMP may, but shall not be obligated to, file a petition in the United
States Tax Court.
(k) Each Limited Partner irrevocably appoints the Company as the
Limited Partner's attorney-in-fact on the behalf and in the stead of such
Limited Partner to execute, swear to, and file the Partnership's Amended
and Restated Certificate of Limited Partnership and any amendment or
revocation thereof, and to execute, sign any Partner's name to, swear to,
and file any writing, and to give any notice which may be required by any
rule or law, or which may be appropriate to the effecting of any action by
or on behalf of the Partnership or the Partners which has been taken as
provided in this Agreement. This power of attorney is coupled with an
interest and shall not be revoked by the act, death, or incapacity of any
Partner. This power of attorney shall survive an assignment by any Limited
Partner of his or her interest in the Partnership.
5.2 Limitations on Powers and Authorities of Partners. Notwithstanding the
power of the General Partners set forth in Section 5.1 above, no Partner shall
have the right or power to do any of the following:
(a) do any act in contravention of this Agreement, or any amendment
hereto;
(b) do any act which would make it impossible to carry on the
ordinary business of the Partnership, except to the extent that such act
is specifically permitted by the terms
15.
hereof (it being understood and agreed that, except as hereafter provided
in this Paragraph 5.2, a sale of any or all of the assets of the
Partnership, for example, would be an ordinary part of the Partnership's
business and affairs and is specifically permitted hereby); or
(c) confess a judgment against the Partnership.
5.3 Limited Partners. The Limited Partners shall have no right or
authority to act for or to bind the Partnership and no Limited Partner shall
participate in the conduct or control of the Partnership's affairs or business.
5.4 Liability of General Partners. No General Partner shall be liable or
accountable, in damages or otherwise, to the Partnership or to any other Partner
for any error of judgment or for any mistakes of fact or law or for anything
which it may do or refrain from doing hereafter in connection with the business
and affairs of the Partnership except (i) in the case of fraud, willful
misconduct (such as an intentional breach of fiduciary duty or an intentional
breach of this Agreement) or gross negligence, and (ii) for other breaches of
this Agreement, but the liability of a General Partner under this clause (ii)
shall be limited to its interest in the Partnership as more particularly
provided for in Paragraph 5.8 below. No General Partner shall have any personal
liability for the return of any Limited Partner's capital.
5.5 Indemnity. The Partnership shall indenmify and shall hold each General
Partner (and the officer and directors thereof) harmless from any loss or
damage, including without limitation reasonable legal fees and court costs,
incurred by it by reason of anything it may do or refrain from doing hereafter
for and on behalf of the Partnership or in connection with its business or
affairs; provided, however, that (i) the Partnership shall not be required to
indemnify a General Partner (or any officer or director thereof) for any loss or
damage which it might incur as a result of its fraud, willful misconduct or
gross negligence in the performance of its duties hereunder and (ii) this
indemnification shall not relieve a General Partner of its proportionate part of
the obligations of the Partnership as a Partner. In addition, each General
Partner shall be entitled to reimbursement by the Partnership for any amounts
paid by it in satisfaction of indemnification obligations owed by such General
Partner to present or former directors of such General Partner or their
predecessors, as provided for in or pursuant to the Articles of Incorporation
and By-Laws of such General Partner. The right of indemnification set forth in
this Paragraph 5.5 shall be in addition to any rights to which the person or
entity seeking indemnification may otherwise be entitled and shall inure to the
benefit of the successors and assigns or any such person or entity. No Partner
shall be personally liable with respect to any claim for indemnification
pursuant to this Paragraph 5.5, but such claim shall be satisfied solely out of
assets of the Partnership.
5.6 Other Activities of Partners and Agreements with Related Parties. The
General Partners shall devote their full-time efforts in furtherance of the
Partnership business, it being expressly understood that except for any direct
interest in a partnership in which the Partnership and one or more of the
General Partners (or a wholly owned subsidiary thereof) are the only partners
and in which the General Partners (or their wholly owned subsidiaries) have an
aggregate interest of not more than one (1%) percent therein, without the
consent of a Majority
16.
in Interest the General Partners shall conduct all of their activities with
respect to the manufactured housing community property business exclusively
through the Partnership and shall not conduct or engage in any way in any other
business. Except as may otherwise be agreed to in writing, each Limited Partner,
and its Affiliates, shall be free to engage in, to conduct or to participate in
any business or activity whatsoever, including, without limitation, the
acquisition, development, management and exploitation of real and personal
property (other than property of the Partnership), without any accountability,
liability or obligation whatsoever to the Partnership or to any other Partner,
even if such business or activity competes with or is enhanced by the business
of the Partnership. The General Partners, in the exercise of their power and
authority under this Agreement, may contract and otherwise deal with or
otherwise obligate the Partnership to entities in which the General Partners or
any one or more of the officers, directors or shareholders of the General
Partners may have an ownership or other financial interest, whether direct or
indirect.
5.7 Other Matters Concerning the General Partners.
(a) The General Partners shall be protected in relying, acting or
refraining from acting on 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.
(b) The General Partners may exercise any of the powers granted or
perform any of the duties imposed by this Agreement either directly or
through agents. The General Partners may consult with counsel,
accountants, appraisers, management consultants, investment bankers and
other consultants selected by them, each of whom may serve as consultants
for the Partnership. An opinion by any consultant on a matter which the
General Partners believe to be within its professional or expert
competence shall be full and complete protection as to any action taken or
omitted by the General Partners based on the opinion and taken or omitted
in good faith. The General Partners shall not be responsible for the
misconduct, negligence, acts or omissions of any consultant or contractor
of the Partnership or of the General Partners and shall assume no
obligations other than to use due care in the selection of all consultants
and contractors.
(c) No mortgagee, grantee, creditor or other person dealing with the
Partnership shall be required to investigate the authority of any General
Partner or secure the approval of or confirmation by any Limited Partner
of any act of any General Partner in connection with the conduct of the
Partnership business.
(d) The General Partners may retain such persons or entities as they
shall determine (including the General Partners or any entity in which the
General Partners shall have an interest or with which it is affiliated) to
provide services to or on behalf of the Partnership. The General Partners
shall be entitled to reimbursement from their Partnership for their
out-of-pocket expenses (including, without limitation, amounts paid and
payable to the General Partners or any entity in which its General
Partners shall have an interest or with which it is affiliated) incurred
in connection with Partnership business. Such expenses shall be deemed to
include the expenses required in connection with the
17.
administration of the Partnership such as the maintenance of Partnership
books and records, management of the Partnership properties and assets and
preparation of information respecting the Partnership needed by the
Partners in the preparation of their individual tax returns.
5.8 Partnership Exculpation. Except for fraud, willful misconduct and
gross negligence, no Partner shall have any personal liability whatever, whether
to the Partnership or to the other Partners, for the debts or liabilities of the
Partnership or its obligations hereunder, and the full recourse of the other
Partner shall be limited to the interest of that Partner in the Partnership. To
the fullest extent permitted by law, no officer, director or shareholder of the
General Partners shall be liable to the Partnership for money damages except for
(i) active and deliberate dishonesty established by a final judgment or (ii)
actual receipt of an improper benefit or profit in money, property or services.
Without limitation of the foregoing, and except for fraud, willful misconduct
and gross negligence, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of each Partner
solely as officers of the same and not in their own individual capacities. No
advisor, trustee, director, officer, partner, employee, beneficiary,
shareholder, participant or agent of any Partner (or of any partner of a
Partner) shall be personally liable in any matter or to any extent under or in
connection with this Agreement, and the Partnership, each Partner and their
respective successors and assigns shall look solely to the interest of the other
Partner in the Partnership for the payment of any claim or for any performance
hereunder.
5.9 General Partner Expenses and Liabilities. All costs and expenses
incurred by the General Partners in connection with their activities as the
General Partners hereunder, all costs and expenses incurred by the General
Partners in connection with their qualification as real estate investment trusts
under the Code and otherwise, other than directors' fees, any income tax
liabilities and any filing or similar fees in connection with maintaining its
continued corporate existence, and all other liabilities incurred or suffered by
the General Partners in connection with the pursuit of their business and
affairs as contemplated hereunder and in connection herewith, shall be paid (or
reimbursed to the General Partners, if paid by the General Partners) by the
Partnership unless and to the extent that any such costs were paid by the
General Partners in connection with the issuance of additional shares of stock
of the Company as contemplated by Paragraph 4.5(B) above.
5.10 Banking. The funds of the Partnership shall be kept in accounts
designated by the General Partners and all withdrawals therefrom shall be made
on such signature or signatures as shall be designated by the General Partners.
18.
ARTICLE SIX
ALLOCATION OF NET PROFITS AND NET LOSSES
CASH FLOW AND DISTRIBUTIONS
6.1 Allocation of Net Profits and Net Losses.
6.1.1 After giving effect to the special allocations set forth in
Paragraphs 6.4 and 6.5 hereof, Net Profits for any Partnership fiscal year shall
be allocated first, one hundred percent (100%) to the General Partners to the
extent of the excess, if any, of the cumulative Net Losses allocated pursuant to
Paragraph 6.1.4, which have not effectively been reversed under Paragraphs
6.4(a) or 6.4(d) hereof, over the cumulative Net Profits allocated pursuant to
this Paragraph 6.1.1 for all prior fiscal years;
6.1.2 Next, among the Partners in proportion to their respective
Percentage Interests.
6.1.3 After giving effect to the special allocations set forth in
Paragraphs 6.4 and 6.5 hereof, Net Losses for any Partnership fiscal year shall
be allocated among the Partners in proportion to their respective Percentage
Interests.
6.1.4 The Net Losses allocated pursuant to Paragraph 6.1.3 hereof shall
not exceed the maximum amount of Net Losses that can be allocated without
causing any Partner who is not a General Partner to have an Adjusted Capital
Account Deficit at the end of any fiscal year. All losses in excess of the
limitations set forth in this Paragraph 6.1.4 shall be allocated to the General
Partners in proportion to their respective Percentage Interests.
6.2 Distributions of Operating Cash Flow. As used in this Agreement,
Operating Cash Flow shall mean and be defined as the Net Profits or Net Losses
(a Net Loss being treated as a negative Net Profit amount) during the period in
question of the Partnership increased by the following:
(a) Any receipts, but excluding Capital Cash Flow and excluding the
proceeds of any additional Capital Contributions to the Partnership
pursuant to Paragraphs 4.1 and 4.5 hereof, which are not included in Net
Profits including, but not limited to, capital contributions and
withdrawals from operating reserves established by the General Partners;
and
(b) Any non-cash charges (such as Depreciation and amortization)
deducted in determining Net Profits and Net Losses;
---and decreased by the following:
(c) All expenditures, including any principal payments with respect
to any indebtedness of the Partnership, which are not deducted in
determining Net Profits or Net Losses; and
(d) Any amounts set aside by the General Partners to provide a
reserve for
19.
working capital needs, improvements, repairs or replacements or such other
purposes as the General Partners shall determine in their sole discretion,
including but not limited to reserves of cash held for future
acquisitions.
Operating Cash Flow of the Partnership shall be determined by the General
Partners not less frequently than quarterly and shall be distributed to or for
the benefit of the Partners in accordance with the respective Percentage
Interests of the Partners not later than fifteen (15) days following the date of
each such determination, except that with respect to OP Units issued pursuant to
clause (i) of the first sentence of Paragraph 4.4(B) hereof, the distribution
with respect to the calendar quarter in which such OP Units are first issued
shall be pro rated based upon a fraction the numerator of which is the number of
days in such calendar quarter such OP Units were outstanding and the denominator
of which is the total number of days in such calendar quarter.
6.3 Capital Cash Flow. As used in this Agreement, "Capital Cash Flow"
shall mean and be defined as collectively (a) gross proceeds realized in
connection with the sale of any assets of the Partnership, (b) gross financing
or refinancing proceeds, (c) gross condemnation proceeds (excluding condemnation
proceeds applied to restoration of remaining Partnership property) and (d) gross
insurance proceeds (excluding rental insurance proceeds or insurance proceeds
applied to restoration of Partnership property), less (a) applicable closing
costs, (b) the cost to discharge any Partnership financing encumbering or
otherwise associated with the asset(s) involved in any such transaction, (c) the
establishment of reserves (as determined by the General Partners in their sole
discretion, and which may include cash held for future acquisitions), and (d)
other expenses of the Partnership then due and owing. Subject to Paragraph 8.1
below, if applicable, Capital Cash Flow shall be distributed to or for the
benefit of the Partners not less frequently than quarterly and shall be
distributed to the Partners in accordance with the respective Percentage
Interests of the Partners not later than fifteen (15) days following the date of
each such determination.
6.4 Special Allocations. Notwithstanding the foregoing provisions of this
Article Six, the following allocations may apply:
(a) Except as provided in Paragraphs 6.4(b) and 6.4(c) hereof, in
the event any Partner unexpectedly receives any adjustments, allocations,
or distributions described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), which create or increase an Adjusted Capital
Account Deficit items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital Account
Deficit created by such adjustments, allocations, or distributions as
quickly as possible; provided that an allocation pursuant to this
Paragraph 6.4(a) shall be made if and only to the extent that such Partner
would have an Adjusted Capital Account Deficit after all allocations
provided for in this Article Six have been tentatively made as if this
Paragraph 6.4(a) were not in this Agreement.
(b) Except as otherwise provided in Regulations Section 1.704-2(f),
notwithstanding any other provision of this Article Six, if there is a net
decrease in
20.
Partnership Minimum Gain during any Partnership fiscal year, each Partner
shall be specially allocated items of Partnership income and gain for such
year (and, if necessary, for subsequent years) in an amount equal to such
Partner's Share of the net decrease in Partnership Minimum Gain, to the
extent required and in the manner provided by Sections 1.704-2(g) of the
Treasury Regulations. The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This
Paragraph 6.4(b) is intended to comply with the minimum gain charge-back
provision of Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.
(c) Except as otherwise provided in Regulations Section
1.704-2(i)(4), notwithstanding any other provision of this Article Six, if
there is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any. Partnership fiscal
year, each Partner who has a share of the Partner Nonrecourse Debt 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, for subsequent years) in an amount equal to such Partner's
share of the net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, to the extent required and
in the manner provided by Section 1.704-2(i)(4) of the Treasury
Regulations. The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(i)(2). This
Paragraph 6.4(c) is intended to comply with the minimum gain charge-back
provision of Regulations Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.
(d) In the event any Partner has a deficit Capital Account at the
end of any Partnership fiscal year which is in excess of the sum of (i)
the amount such Partner is obligated to restore pursuant to any provision
of this Agreement, and (ii) the amount such Partner is deemed to be
obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be
specifically allocated items of Partnership income and gain in the amount
of such excess as quickly as possible, provided that an allocation
pursuant to this Paragraph 6.4(d) shall be made only if and to the extent
that such Partner would have a deficit Capital Account in excess of such
amount after all other allocations provided for in this Paragraph 6.4 have
been made as if Paragraph 6.4(a) hereof and this Paragraph 6.4(d) were not
in this Agreement.
(e) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or 743(b) is required to
be taken into account in computing Capital Accounts pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), 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 shall be specially allocated to the Partners in
a manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such regulations.
(f) Syndication Expenses for any fiscal year of the Partnership or
other period
21.
shall be allocated to the Partners in proportion to their Partnership
Interests, provided that if additional Partners are admitted to the
Partnership on different dates, all Syndication Expenses shall be divided
among the Partners who own Partnership Interests from time to time so
that, to the extent possible, the cumulative Syndication Expenses are
allocated with respect to each Partner in proportion to their respective
Partnership Interests. In the event the General Partners determine that
such result is not likely to be achieved through future allocations of
Syndication Expenses, the General Partners may allocate a portion of Net
Profits or Net Losses so as to achieve the same effect in the Capital
Accounts of the Partners, notwithstanding any other provision with this
Agreement.
(g) Nonrecourse Deductions for any fiscal year or other period shall
be allocated among the Partners in accordance with their respective
Percentage Interests.
(h) Partner Nonrecourse Deductions for any fiscal year or other
period shall be allocated to the Partners who bear the economic risk of
loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury
Regulation Section 1.704-2(i)(1).
The allocations set forth in this Paragraph 6.4 (the "Regulatory
Allocations") are intended to comply with certain requirements of Treasury
Regulation Section 1.704-1(b). The Regulatory Allocations may not be
consistent with the manner in which the Partners intend to divide
Partnership distributions. Accordingly, the General Partners are hereby
authorized to divide other allocations of Net Profit, Net Losses, and
other items among the Partners so as to prevent the Regulatory Allocations
from distorting the manner in which Partnership distributions will be
divided among the Partners pursuant to Article 6 hereof. In general, the
Partners anticipate that this will be accomplished by specially allocating
other Net Profit, Net Losses, and items of income, gain, loss, and
deduction among the Partners so that the net amount of the Regulatory
Allocations and such special allocations to each such person is zero.
However, the General Partners shall have discretion to accomplish this
result in any reasonable manner.
6.5 Other Allocation Rules
(a) For purposes of determining the Net Profits, Net Losses, or any
other items allocable to any period, Net Profits, Net Losses, and any such
other items shall be determined on a dally, monthly, or other basis, as
determined by the General Partners using any permissible method under Code
Section 706 and the Regulations thereunder.
(b) Any provision of this Agreement to the contrary notwithstanding,
the allocation of Net Profits or Net Losses for any fiscal year of the
Partnership during which a person acquires a Partnership Interest (other
than on formation of the Partnership) shall take into account the
Partners' varying interests in the Partnership for such fiscal year,
pursuant to any method permissible under Section 706 of the Internal
Revenue Code that is selected by the General Partners.
(c) The Partners are aware of the income tax consequences of the
allocations
22.
made by this Article Six and hereby agree to be bound by the provisions of
this Article Six in reporting their share of Partnership income and loss
for income tax purposes.
(d) Solely for purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within
the meaning of Regulations Section 1.752-3(a)(3), the Partners' interests
in Partnership profits are equal to their respective Percentage Interests.
6.6 Tax Allocations; Code Section 704(c)
(a) Income, gain, loss, and deduction with respect to any property
contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership
for federal income tax purposes and its initial Gross Asset Value in
accordance with any permissible manner or manners under Code Section
704(c) and the Regulations thereunder.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to Paragraph 1.14(b) hereof, subsequent allocations of
income, gain, loss, and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner
or manners as under Code Section 704(c) and the Regulations thereunder.
(c) Any elections or other decisions relating to such allocations
shall be made by the General Partners in any permissible manner under the
Code or the Regulations that the General Partners may elect in their sole
discretion. Allocations pursuant to this Paragraph 6.6 are solely for
purposes of federal, state, and local taxes and shall not affect, or in
any way be taken into account in computing, any Partner's Capital Account
or share of Net Profits, Net Losses, other items, or distributions
pursuant to any provision of this Agreement.
6.7 Amounts Withheld. 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
Partners determine 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 15 days after notice
from the General Partners 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 Partners determine, in their
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
23.
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 6.7. In the event that
a Limited Partner fails to pay any amounts owed to the Partnership pursuant to
this Section 6.7 when due, the General Partners may, in their 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). 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 four 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
Partners shall request in order to perfect or enforce the security interest
created hereunder.
ARTICLE SEVEN
TERM OF PARTNERSHIP
7.1 Commencement. The term of the Partnership shall be deemed to have
commenced upon the filing of the Original Certificate of Limited Partnership.
7.2 Termination. The term of the Partnership shall end, and the
Partnership shall be dissolved and its affairs wound up in the manner hereafter
provided, solely on the first to occur of the following events ("Liquidating
Event"):
(a) December 31, 2093;
(b) the agreement of those Partners holding at least ninety percent
(90%) of the Percentage Interests of all of the Partners determining that
the Partnership should be dissolved;
(c) the happening of any other event that makes it unlawful,
impossible, or impractical to carry on the business of the Partnership; or
(d) the withdrawal or removal of the last remaining General Partner,
the assignment by the last remaining General Partner of its entire
Partnership Interest (other than by virtue of a merger of such General
Partner), or the happening of any other event that causes any General
Partner to cease to be a general partner under the Act, provided that any
such event shall not constitute a Liquidating Event if the Partnership is
continued pursuant to this Paragraph 7.2.
The Partners hereby agree that, notwithstanding any provision of the Act,
the Partnership shall not dissolve prior to the occurrence of a Liquidating
Event. Upon the occurrence of any
24.
event set forth in Paragraph 7.2(d) hereof, the Partnership shall not be
dissolved or required to be wound up if within ninety (90) days after such event
a majority in interest (within the meaning of Section 301.7701-2(b)(1) of the
Treasury Regulations, determined in accordance with Revenue Procedure 94-46,
1994-28 I.R.B. 129, or any successor revenue procedure or pronouncement of the
Internal Revenue Service) of all the remaining Partners agree in writing to
continue the business of the Partnership and to the appointment, effective as of
the date of such event, of one or more additional General Partners If the
successor general partner is not a former General Partner, then the interest in
the Partnership of any former General Partner shall be treated thereafter as the
interest of a Limited Partner.
7.3 Continuation. None of the following shall cause a dissolution or
termination of the Partnership: the death, legal incompetency, dissolution or
insolvency of a Limited Partner or the admission of a new General or Limited
Partner. In such event, and subject to other provisions of this Agreement, the
Partnership shall continue among the remaining Partners and the successor to
such Limited Partner's Partnership Interest. In the event of the death of an
individual Partner, such individual Limited Partner's interest in the
Partnership shall be transferred either by will, the laws of intestacy or
otherwise to the legal representative or successor of such individual Limited
Partner.
ARTICLE EIGHT
APPLICATION OF ASSETS
8.1 Dissolution and Liquidation. Upon the happening of any of the events
specified in Paragraph 7.2 hereof, the General Partners shall conclude the
affairs and liquidate the property and assets of the Partnership and the
proceeds of such liquidation shall be applied in the order of priority as
follows:
(a) First, to the payment of, or to a reserve for the payment of,
Partnership liabilities and obligations (other than those described in
Paragraph 8.1(b) hereof) including such provision for contingent or
unforeseen liabilities as the General Partners, or by the person(s)
winding up the affairs of the Partnership in the event there is no
remaining General Partner of the Partnership, may establish for any
contingent or unforeseen liabilities or obligations of the Partnership.
Such reserves established hereunder shall be held for the purpose of
paying any such contingent or unforeseen liabilities or obligations and,
at the expiration of such period as the General Partners, or such
person(s) deems advisable, the balance of such reserves shall be
distributed in the manner provided hereinafter in this Paragraph 8.1 as
though such reserves had been distributed contemporaneously with the other
funds distributed hereunder:
(b) Second, to the General Partners and any Affiliate, an amount
equal to the outstanding principal balance of, and all accrued and unpaid
interest on, any loans made by them to the Partnership, apportioned
between them, pro rata, based on the respective balances of such loans;
and
(c) Then, to the Partners in accordance with their respective
Capital Accounts, after giving effect to all contributions, distributions,
and allocations for all periods.
25.
To the extent that Partnership assets cannot either be sold without undue
loss or readily divided for distribution in kind to the Partners, then the
Partnership may, as determined by the General Partners or the Trustee appointed
pursuant to Paragraph 8.4 hereof, convey those assets to a trust or other
suitable holding entity established for the benefit of the Partners in order to
permit the assets to be sold without undue loss and the proceeds thereof
distributed to the Partners at a future date. The legal form of the holding
entity, the identity of the trustee or other fiduciary, and the terms of its
governing instrument shall be determined by the General Partners or the Trustee.
8.2 Power of Attorney. The Limited Partners hereby appoint each of the
General Partners as their true and lawful attorney-in-fact to hold, collect and
disburse, in accordance with this Agreement, any Partnership receivables
existing at the time of the termination of the Partnership and the proceeds of
the collection of such receivables, including those arising from the sale of
Partnership property and assets. The foregoing power of attorney (and all other
powers of attorney granted hereunder) is a special power of attorney coupled
with an interest, is irrevocable and shall survive the transfer or assignment by
a Limited Partner of his or her Partnership Interest and the death or disability
of each Limited Partner; provided, however, such power of attorney shall
terminate upon the distribution of the proceeds of all of such receivables in
accordance with the provisions of this Agreement. The General Partners shall be
entitled to reimbursement for the reasonable expenses incurred by them in acting
under this power of attorney.
8.4 Appointment of Trustee. If, at the time of dissolution and winding up
of the Partnership there is no General Partner, or if the General Partners have
failed to act in accordance with this Agreement or are otherwise in default
under the terms of this Agreement, which default has not been cured, those
Limited Partners constituting a Majority in Interest shall appoint a liquidating
trustee ("Trustee") to wind up the affairs and liquidate (and/or, if applicable,
distribute) the property and assets of the Partnership, and such Trustee shall
have all powers necessary under this Article Eight and shall be compensated as
agreed upon by the Majority Interest and such Trustee. Such Trustee may, but
need not, be one of the Limited Partners.
8.5 Date of Termination. The Partnership shall be terminated when all
notes received in connection with the disposition of its assets have been paid
and all of the cash or property available for application and distribution under
Paragraph 8.1 hereof (including amounts held as reserves) shall have been
applied and distributed in accordance therewith.
26.
ARTICLE NINE
ASSIGNABILITY OF PARTNERSHIP INTERESTS
AND WITHDRAWAL BY A PARTNER
9.1 Assignment by the General Partner. In no event may a General Partner
at any time assign, sell, transfer, pledge, hypothecate or otherwise dispose of
all or any portion of its Partnership Interest, except by operation of law,
which would include a statutory merger or consolidation of a General Partner.
9.2 Limited Partner.
(a) No Limited Partner or Substituted Limited Partner shall, without
the prior written consent of the General Partners (which consent may be
given or withheld in the sole discretion of the General Partners), sell,
assign, distribute or otherwise transfer (a "Transfer") all or any part of
such Partner's interest in the Partnership except by operation of law,
gift (outright or in trust) or by sale or distribution, in each case to or
for the benefit of his spouse or descendants, or to one or more partner,
shareholder, beneficiary or Affiliate of such Partner, except for pledges
or other collateral transfers effected by a Limited Partner to secure the
repayment of a loan, and except for the exchange of OP Units for shares of
common stock of the company, pursuant to Paragraph 4.4(C) hereof. A
Limited Partner shall notify the General Partners of any Transfer of
beneficial interest or other interest which occurs without a transfer of
record ownership, as well as any pledge or other collateral transfer. 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) An assignee, legatee, distributee or other transferee (whether
by conveyance, operation of law or otherwise) (a "Transferee") of all or
any portion of a Limited Partner's interest in the Partnership shall be
entitled to receive Net Profits, Net Losses and distributions hereunder
attributable to such interest acquired by reason of such Transfer, from
and after the effective date of the Transfer of such interest; provided,
however, anything in this Agreement to the contrary notwithstanding, (a)
no Transfer by a Limited Partner shall be effective until such Transfer
has been consented to by the General Partners, (b) no Transferee shall be
considered a Substituted Limited Partner without the prior written consent
of the General Partners, in their sole discretion, (c) the Partnership and
the General Partners shall be entitled to treat the transferor of such
interest as the absolute owner thereof in all respects, and shall incur no
liability for the allocation of Net Profits and Net Losses or
distributions which are made to such transferor until such time as the
written instrument of Transfer has been received by the General Partners
and the "effective date" of the Transfer has passed. The "effective date"
of any Transfer shall be the last day of the month set forth on the
written instrument of Transfer or such other date consented to in writing
by the General Partners as the "effective date."
(c) Notwithstanding anything to the contrary contained in this
Paragraph 9.2,
27.
(i) in the event of a permitted transfer under Paragraph 9.2(a) hereof or
in the event an Affiliate distributes, in dissolution and liquidation or
otherwise, all or any portion of its interest in the Partnership, the
permitted transferee and/or partners in such Affiliate receiving such
interest shall become Substituted Limited Partners, and shall succeed to
the rights, interests and obligations of their respective transferor in
the Partnership, in proportion to their respective interests so received,
and (ii) no Transfer shall be effective to the extent that such Transfer
would, by treating the interest in the Partnership so transferred as if it
had been exchanged for Common Stock in accordance with Paragraph 4.4(C)
hereof, violate the limitations on ownership of Common Stock contained in
Article VII of the Articles of Incorporation of the Company.
(d) Admission Adjustments. The General Partners shall, when
necessary, cause this Agreement to be amended from time to time to reflect
the addition or withdrawal of Partners, including the corresponding
adjustments to Percentage Interests and OP Units required pursuant to
Paragraphs 4.4(B), 4.4(C) and 9.2(c) hereof.
9.3 Withdrawal of a Limited Partner. No Limited Partner may retire or
withdraw from the Partnership prior to the dissolution of the Partnership and
the completion of the winding up of the affairs and the liquidation (and/or
distribution, as the case may be) of the property and assets of the Partnership
pursuant to the provisions of Article Eight hereof.
ARTICLE TEN
OBLIGATIONS AND RIGHTS OF TRANSFEREES
10.1 Acceptance of this Agreement. Any person who acquires in any manner
whatsoever any interest in the Partnership, irrespective of whether such person
has accepted and adopted in writing the terms and provisions of this Agreement,
shall be deemed by the acceptance of the benefit of the acquisition thereof to
have agreed to be subject to and bound by all the obligations of this Agreement
to which or by which any predecessor in interest of such person was subject or
bound.
ARTICLE ELEVEN
INVESTMENT REPRESENTATION
11.1 Investment. The Partners represent to each other and to the
Partnership that they are acquiring their respective interests in the
Partnership for their own personal accounts for investment purposes only, and
without a view to pledging, transferring or distributing their Partnership
Interests.
11.2 Restrictive Legend. If at any time the Partnership Interests are
evidenced by certificates or other documents, each such certificate or other
document will contain a legend stating that (i) such Partnership Interests (1)
have not been registered under the Securities Act of 1933 (the "Federal Act") or
the securities laws of any other state, (2) have been issued pursuant to a claim
of exemption from the registration provisions of the Federal Act and any state
securities law which may be applicable, and (3) may not be sold, transferred or
assigned without
28.
compliance with the registration provisions of the Federal Act and any other
applicable Federal or state securities laws or compliance with applicable
exemptions therefrom, and (ii) sale, transfer or assignment of such Partnership
Interests is further subject to restrictions contained in this Agreement and a
subscription agreement pursuant to which each Limited Partner subscribed for his
or her Partnership Interests, and such Partnership Interests may not be sold,
transferred or assigned unless and to the extent permitted by, and in accordance
with, the provisions of this Agreement and such subscription agreement.
ARTICLE TWELVE
AMENDMENTS
12.1 Amendments to this Agreement. This Agreement shall not be amended
without the prior written consent of the General Partners and a Majority in
Interest; provided, however, that (1) except as otherwise specifically provided
herein, no amendment shall reduce a Partner's interest in the Partnership except
to reflect the admission of additional Partners, unless the Partner consents
thereto in writing, (2) no amendment shall effect any change in this Article
unless all the Partners consent thereto in writing, and (3) Exhibit A may be
modified from time to time by the General Partners to reflect any change in the
Limited Partners or in the interest of any Partner which has been effected by
appropriate action of the parties involved, by filing with the appropriate
authorities an amendment to the Certificate of Limited Partnership setting forth
the Partners and the interest owned by each. Any amendment made pursuant to this
Article may be made effective as of any earlier or later date.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
13.1 Books of Account, Reports.
(a) The General Partners shall keep true and complete books of
account and records of all Partnership transactions. The books of account
and records shall be kept at the principal office of the Partnership. Each
Partner may inspect and make copies of all Partnership books and records,
at reasonable hours and such Partner's expense.
(b) The General Partners shall maintain at the offices of the
Partnership a list of the names and addresses of all Limited Partners
which shall be available to any Limited Partner or designated
representative.
(c) The General Partners shall furnish each Limited Partner a report
setting forth the Partnership assets and liabilities, the Partnership Net
Profits or Net Losses for the year, and the allocation thereof among the
Partners, and such other information relating to the Partnership as may be
reasonably required in order to permit that Partner to file its federal
income tax return for that year.
(d) The fiscal year of the Partnership shall be the calendar year,
unless the Internal Revenue Code requires that some other fiscal year be
utilized.
29.
13.2 Bank Accounts and Investment of Funds. All funds of the Partnership
shall be deposited in its name in such checking accounts, savings accounts, time
deposits, or certificates of deposit or shall be invested in such other manner
as shall be designated by the General Partners from time to time. Withdrawals
shall be made upon such signature or signatures as the General Partners may
designate.
13.3 Accounting Decisions. All decisions as to accounting matters, except
as specifically provided to the contrary herein, shall be made by the General
Partners in accordance with generally accepted federal income tax accounting
principles consistently applied. Such decisions may be acceptable to the
accountants retained by the Partnership, and the General Partners may rely upon
the advice of the accountants as to whether such decisions are in accordance
with generally accepted federal income tax accounting principles.
13.4 Federal Income Tax Elections.
(a) The Partnership shall, to the extent permitted by applicable law
and regulations and upon obtaining any necessary approval of the
Commissioner of Internal Revenue, elect to use such methods of
depreciation, and make all other federal income tax elections in such
manner, as the General Partners determine to be most favorable to the
Partners. The General Partners may rely upon its tax advisors as to the
unavailability and effect of all such elections.
(b) In the event of a permitted transfer of all or part of the
interest of a Partner, the Partnership may, if the transferee so requests
and if the General Partners in its sole and absolute discretion agrees to
do so, file an election in accordance with Section 754 of the Internal
Revenue Code, or any similar provisions enacted in lieu thereof, and the
regulations promulgated thereunder, to adjust the basis of the Partnership
Property. In the event of the death of a Partner the Partnership shall, if
the successor to such deceased Partner's interest in the Partnership
timely requests, file such election in accordance with section 754 of the
Internal Revenue Code. Each Partner hereby agrees to provide the
Partnership with all information necessary to give effect to such
election.
13.5 Conveyances. Any deed, xxxx of sale, mortgage, lease, contract of
sale, or other commitment purporting to convey or encumber the interest of the
Partnership in all or any portion of any real or personal property at any time
held in its name shall be signed by any General Partner on behalf of the
Partnership, and no other signature shall be required and any transferee of such
interest and any title company may rely upon the authority herein granted and
conferred.
13.6 Recovery of Attorney's Fees. In any action between the parties to
enforce any of the terms of this Agreement or of any other contract relating to
the Partnership, or an action in any other way pertaining to Partnership affairs
or this Agreement, the prevailing party shall be entitled to recover expenses,
including a reasonable attorney's fee.
13.7 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and may be modified only as provided herein. No
representations, warranties or oral or
30.
implied agreements have been made or are being relied upon by any party hereto
or his agent except as expressly set forth herein.
13.8 Notices, Etc. Any notice, writing, or other matter, and any
distribution, to be delivered hereunder shall be deemed delivered when delivered
by hand or by telecopy or other facsimile transmission, the first business day
after sent by overnight courier (such as Federal Express), or on the second
business day after deposited in the United States mail with postage prepaid,
return receipt requested, properly addressed to the Partner o whom such notice
is intended to be given at the address for the Partner set forth on the
signature pages of this Agreement, or at such other address as such person may
have previously furnished in writing to the Partnership and each Partner with
copies to:
Timmis & Xxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx III, Esq.
and:
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
13.9 Consent of Limited Partners. Various provisions of this Agreement
require or permit the consent, approval, or agreement, written or otherwise, of
the Partners or some specific proportion thereof. In any such case, the General
Partners may give all the Limited Partners written notice that any Limited
Partner who does not indicate disapproval by written notice to the Partnership
within a specified period of time (not less than 90 days after mailing of the
notice) shall be deemed to have given consent or approval to the action or event
or to have made the agreement referred to in the notice. In such event, any
Limited Partner who does not indicate disapproval by written notice to the
Partnership within the time specified shall be deemed to have given his written
consent, approval, or agreement.
13.10 Meetings. The General Partners shall promptly call an information
meeting of all Limited Partners upon the request by Limited Partners who
constitute a Majority in Interest.
13.11 Further Execution. Upon request of the General Partners from time to
time, the Partners shall execute and swear to or acknowledge any amended
Certificate of Limited Partnership or any other writing which may be required by
any rule or law or which may be appropriate to the effecting of any action by or
on behalf of the Partnership or the Partners which has been taken in accordance
with the provisions of this Agreement.
13.12 Submission to Maryland Jurisdiction. During such time as any Limited
Partner is not a resident of the State of Maryland, such Limited Partner
irrevocably designates the General Partners as his or her agent to accept
service of process in any action or proceeding brought by the Partnership or any
party to this Agreement (but not any third party unless such Limited Partner is
impleaded by the Partnership or a party to this Agreement) against such Partner
and
31.
arising out of this Agreement or any breach thereof. Such designation shall not
be revoked by the act, death, or incapacity of any Limited Partner and shall
bind heirs, personal representatives, successors, and assigns of such Limited
Partner. The General Partners accepting such service on behalf of a Limited
Partner agrees to give such Limited Partner written notice thereof as soon as
practicable.
13.13 Benefits. This Agreement shall inure to the benefit of and shall
bind the parties hereto, their successors and permitted assigns. None of the
provisions of this Agreement shall be construed as for the benefit of or as
enforceable by any creditor of the Partnership or the Partners or any other
person n6t a party to this Agreement.
13.14 Severability. The invalidity or unenforceability of any provision of
this Agreement in a particular respect shall not affect the validity and
enforceability of any other provision of this Agreement or of the same provision
in any other respect.
13.15 Captions. All captions are for convenience only, they do not form a
substantive part of this Agreement, and they shall not restrict or enlarge any
substantive provisions of this Agreement.
13.16 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument. The General Partners shall have custody of
counterparts executed in the aggregate by all Partners.
13.17 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws and decisions of the State of Maryland.
Except to the extent the Act is inconsistent with provisions of this Agreement,
the provisions of the Act shall apply to the Partnership.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
32.
