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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
BAY-GARD, LTD.
a Florida limited partnership
Dated as of May 15, 1998
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINED TERMS......................................................................................... 2
ARTICLE 2. ORGANIZATIONAL MATTERS................................................................................14
Section 2.1. Formation.........................................................................14
Section 2.2. Name..............................................................................14
Section 2.3. Registered Office and Agent; Principal Place of Business;
Other Places of Business......................................................15
Section 2.4. Power of Attorney.................................................................15
Section 2.5. Term..............................................................................16
Section 2.6. Effective Time....................................................................16
ARTICLE 3. PURPOSE...............................................................................................16
Section 3.1. Purpose and Business..............................................................16
Section 3.2. Powers............................................................................17
Section 3.3. Specified Purposes................................................................17
Section 3.4. Representations and Warranties by the Partners....................................17
ARTICLE 4. CAPITAL CONTRIBUTIONS.................................................................................19
Section 4.1. Capital Contributions of the Initial Partners.....................................19
Section 4.2. Additional Partners...............................................................19
Section 4.3. Loans by Third Parties............................................................19
Section 4.4. Additional Funding and Capital Contributions......................................20
Section 4.5. No Interest; No Return............................................................21
ARTICLE 5. DISTRIBUTIONS.........................................................................................21
Section 5.1. Requirement and Characterization of Distributions.................................21
Section 5.2. Distributions in Kind.............................................................21
Section 5.3. Amounts Withheld..................................................................22
Section 5.4. Distributions Upon Liquidation....................................................22
Section 5.5. Restricted Distributions..........................................................22
ARTICLE 6. ALLOCATIONS...........................................................................................22
Section 6.1. Timing and Amount of Allocations of Net Income and Net Loss.......................22
Section 6.2. General Allocations...............................................................23
Section 6.3. Additional Allocation Provisions..................................................24
Section 6.4. Tax Allocations...................................................................26
Section 6.5. Other Provisions..................................................................26
Section 6.6. Amendments to Allocation to Reflect Issuance of Additional
Partnership Interests.........................................................27
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ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS.................................................................27
Section 7.1. Management........................................................................27
Section 7.2. Certificate of Formation..........................................................31
Section 7.3. Restrictions on General Partner's Authority.......................................31
Section 7.4. Reimbursement of the General Partner..............................................33
Section 7.5. Other Business of General Partner.................................................34
Section 7.6. Contracts with Affiliates.........................................................34
Section 7.7. Indemnification...................................................................35
Section 7.8. Liability of the General Partner..................................................37
Section 7.9. Other Matters Concerning the General Partner......................................37
Section 7.10. Title to Partnership Assets......................................................38
Section 7.11. Reliance by Third Parties........................................................38
ARTICLE 8. RIGHTS AND OBLIGATIONS OF PARTNERS....................................................................39
Section 8.1. Limitation of Liability...........................................................39
Section 8.2. Managing of Business..............................................................39
Section 8.3. Outside Activities of Partners....................................................39
Section 8.4. Return of Capital.................................................................39
Section 8.5. Rights of Limited Partners Relating to the Partnership............................40
Section 8.6. Exchange Rights...................................................................40
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS................................................................42
Section 9.1. Records and Accounting............................................................42
Section 9.2. Fiscal Year.......................................................................43
Section 9.3. Reports...........................................................................43
ARTICLE 10. TAX MATTERS..........................................................................................43
Section 10.1. Preparation of Tax Returns.......................................................43
Section 10.2. Tax Elections....................................................................43
Section 10.3. Tax Matters Partner..............................................................44
Section 10.4. Organizational Expenses..........................................................44
ARTICLE 11. TRANSFERS AND WITHDRAWALS............................................................................44
Section 11.1. Transfer.........................................................................44
Section 11.2. Transfer of General Partner's Partnership Interest...............................44
Section 11.3. Limited Partners' Rights to Transfer.............................................45
Section 11.4. Substituted Partners.............................................................46
Section 11.5. Assignees........................................................................47
Section 11.6. General Provisions...............................................................47
ARTICLE 12. ADMISSION OF PARTNERS................................................................................48
Section 12.1. Admission of Successor General Partner...........................................48
Section 12.2. Admission of Additional Partners.................................................49
Section 12.3. Amendment of Agreement and Certificate of Partnership............................49
ARTICLE 13. DISSOLUTION, LIQUIDATION AND TERMINATION.............................................................49
Section 13.1. Dissolution......................................................................49
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Section 13.2. Winding Up.......................................................................50
Section 13.3. Deemed Distribution and Recontribution...........................................52
Section 13.4. Rights of Partners...............................................................52
Section 13.5. Notice of Dissolution............................................................52
Section 13.6. Cancellation of Certificate of Limited Partnership...............................52
Section 13.7. Reasonable Time for Winding-Up...................................................52
Section 13.8. Liability of Liquidator..........................................................52
ARTICLE 14. GENERAL PROVISIONS...................................................................................53
Section 14.1. Addresses and Notice.............................................................53
Section 14.2. Titles and Captions..............................................................53
Section 14.3. Pronouns and Plurals.............................................................53
Section 14.4. Further Action...................................................................53
Section 14.5. Binding Effect...................................................................53
Section 14.6. Creditors........................................................................53
Section 14.7. Waiver...........................................................................54
Section 14.8. Counterparts.....................................................................54
Section 14.9. Applicable Law...................................................................54
Section 14.10. Entire Agreement................................................................54
Section 14.11. Invalidity of Provisions........................................................54
Section 14.12. Limitation to Preserve REIT Status..............................................54
Section 14.13. No Partition....................................................................55
Exhibit A Partner Information...........................................................................A-1
Exhibit B Notice of Exchange............................................................................B-1
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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
BAY-GARD, LTD.
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") of BAY-GARD, LTD., a Florida limited partnership (the
"Partnership"), dated as of May 15, 1998, is entered into by and among KIMCO
BRADENTON 698, INC., a Florida corporation (the "General Partner"), and the
Persons whose names are set forth on Exhibit A as attached hereto (the "Limited
Partners," and together with the General Partner, the "Partners"), together with
any other Persons who become Partners in the limited partnership as provided
herein.
WHEREAS, the Partnership was formed as a limited partnership
under the laws of the State of Florida pursuant to the Limited Partnership
Agreement dated March 7, 1996; and
WHEREAS, the Partners of the Partnership wish to amend and
restate their original limited partnership agreement (the "Original Partnership
Agreement") to provide that KIMCO BRADENTON 698, INC. become the General Partner
of the Partnership and Midway Holdings, Inc., Palmetto Holdings I, Inc. and X.X.
Xxxxxxx Land Company, Inc. become Limited Partners of the Partnership and cease
to be the General Partners; and
WHEREAS, this Amended and Restated Limited Partnership
Agreement will be binding as of the Effective Time (defined herein) and the
Original Partnership Agreement will cease to be in effect as of the Effective
Time; and
WHEREAS, the General Partner, the Partnership and the parties
set forth on Exhibit A hereto have entered into that certain Contribution
Agreement dated as of April 6, 1998 (the "Contribution Agreement"), providing
for the contribution of a sum certain to, and the acquisition of certain
interests in, the Partnership; and
WHEREAS, the Partnership Interest of Xxxxxxx X. Wafer in its
entirety, and a portion of the other Pre Closing Partner's Partnership
Interests, as set forth in Exhibit A attached hereto, is being acquired by KIMCO
BRADENTON 698, INC., at the Effective Time the Capital Account of KIMCO
BRADENTON 698, INC., shall be as set forth on Exhibit A and Xxxxxxx X. Wafer
shall withdraw from the Partnership and thereupon cease to be a Partner in the
Partnership; and
WHEREAS, it is a condition to the closing of the transactions
contemplated by the Contribution Agreement that the parties hereto enter this
Agreement;
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby, as of the date hereof, amend and restate the Original
Partnership Agreement to read in full, and hereby agree, as follows:
ARTICLE 1.
DEFINED TERMS
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the Florida Uniform Limited Partnership Law, as it
may be amended from time to time, and any successor to such statute.
"Actions" has the meaning set forth in Section 7.7 hereof.
"Additional Funds" has the meaning set forth in Section 4.4.A
hereof.
"Additional Partner" means a Person admitted to the
Partnership as a Partner pursuant to Section 4.2 or Section 4.4.D and Section
12.2 hereof and who is shown as such on the books and records of the Partner.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant Fiscal Year, after giving effect to the following
adjustments:
(a) decrease such deficit by any amounts that such Partner is
obligated to restore pursuant to this Agreement or by operation of law
upon liquidation of such Partner's Partnership Interest or is deemed to
be obligated to restore pursuant to Regulation Section
1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) increase such deficit by the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of "Adjusted Capital Account Deficit" is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling or controlled by or under common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Amended and Restated Limited
Partnership Agreement of BAY-GARD, LTD., as it may be amended, supplemented or
restated from time to time.
"Appraisal" means, with respect to any assets, the written
opinion of an independent third party experienced in the valuation of similar
assets, selected by the General Partner in good faith. Such opinion may be in
the form of an opinion by such independent third party that the value for such
property or asset as set by the General Partner is fair, from a financial point
of view, to the Partnership.
"Appraised Value" means, with respect to any asset, including
any Contributed Property, the value of such asset as determined by Appraisal.
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"Assignee" means a Person to whom one or more Partnership
Units have been Transferred in a manner permitted under this Agreement, but who
has not become a Substituted Partner, and who has the rights set forth in
Section 11.5 hereof.
"Available Cash" means, with respect to any period for which
such calculation is being made,
(a) the sum, without duplication, of:
(1) the Partnership's Net Income or Net Loss (as the
case may be) for such period,
(2) Depreciation and all other noncash charges to the
extent deducted in determining Net Income or Net Loss for such period,
(3) the amount of any reduction in reserves of the
Partnership referred to in clause (b)(6) below (including, without
limitation, reductions resulting because the General Partner determines
such amounts are no longer necessary),
(4) the excess, if any, of the net cash proceeds from
the sale, exchange, disposition, financing or refinancing of
Partnership property for such period over the gain (or loss, as the
case may be) recognized from such sale, exchange, disposition,
financing or refinancing during such period, and
(5) all other cash received (excluding security
deposits) (including amounts previously accrued as Net Income and
amounts of deferred income) or any net amounts borrowed by the
Partnership for such period that was not included in determining Net
Income or Net Loss for such period;
(b) less the sum, without duplication, of:
(1) all principal debt payments made during such
period by the Partnership,
(2) capital expenditures made by the Partnership
during such period,
(3) investments in any entity (including loans made
thereto) to the extent that such investments are not otherwise
described in clause (b)(1) or clause (b)(2) above,
(4) all other expenditures and payments not deducted
in determining Net Income or Net Loss for such period (including
amounts paid in respect of expenses previously accrued),
(5) any amount included in determining Net Income or
Net Loss for such period that was not received by the Partnership
during such period, and
(6) the amount of any increase in reserves
(including, without limitation, working capital reserves) established
during such period that the General Partner determines are necessary or
appropriate in its sole and absolute discretion.
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Notwithstanding the foregoing, Available Cash shall not include (i) any cash
received or reductions in reserves, or take into account any disbursements made,
or reserves established, after dissolution and the commencement of the
liquidation and winding up of the Partnership or (ii) any Capital Contributions,
whenever received.
"Bankruptcy Law" means Title II, U.S. Code or any similar
federal or state law for the relief of debtors.
"Beneficial Ownership" means ownership of REIT Shares by a
Person who is or would be treated as an owner of such REIT Shares either
actually or constructively through the application of Section 544 of the Code,
as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficially Own,"
"Beneficially Owned," "Beneficially Owns" and "Beneficial Owner" shall have the
correlative meanings.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
"Capital Account" means, with respect to any Partner, the
Capital Account maintained for such Partner on the Partnership's books and
records in accordance with the following provisions:
(a) To each Partner's Capital Account, there shall be added
such Partner's Capital Contributions, such Partner's allocable share of
Net Income and any items of income or gain specially allocated pursuant
to Article 6 hereof, and the principal amount of any Partnership
liabilities assumed by such Partner or that are secured by any property
distributed to such Partner.
(b) From each Partner's Capital Account, there shall be
subtracted the amount of cash and the Gross Asset Value of any property
(other than cash) distributed to such Partner pursuant to any provision
of this Agreement, such Partner's allocable share of Net Losses and any
items of loss or deductions specially allocated pursuant to Article 6
hereof, and the principal amount of any liabilities of such Partner
assumed by the Partnership or that are secured by any property
contributed by such Partner to the Partnership.
(c) In the event any interest in the Partnership is
Transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to
the extent that it relates to the Transferred interest.
(d) In determining the principal amount of any liability for
purposes of subsections (a) and (b) hereof, there shall be taken into
account Code Section 752(c) and any other applicable provisions of the
Code and Regulations.
(e) The provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations
Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied
in a manner consistent with such Regulations. If the General Partner
shall determine that it is prudent to modify the manner in which the
Capital Accounts are maintained in order to comply with such
Regulations, the General Partner may make such modification provided
that such modification is not likely to have a material effect on the
amounts distributable to any Partner without such Partner's Consent.
The General Partner also shall (i) make any adjustments that are
necessary or
4
appropriate to maintain equality between the Capital Accounts of the
Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make
any appropriate modifications in the event that unanticipated events
might otherwise cause this Agreement not to comply with Regulations
Section 1.704-1(b) or Section 1.704-2.
"Capital Contribution" means, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any Contributed Property
that such Partner contributes to the Partnership pursuant to Section 4.1,
Section 4.2 or Section 4.4 hereof.
"Cash Amount Per Unit" means an amount of cash equal to the
sum of (1) $1.00 and (2) the Preferred Return Shortfall with respect to the
Tendered Unit (if any) at the Specified Exchange Date and (3) a pro rata amount
per unit calculated to achieve the agreed upon rate of return (8% annual) for
the last short period, if any, before the Specified Exchange Date.
"Certificate" means the Certificate of Formation of the
Partnership filed in the office of the Secretary of State of the State of
Delaware, as amended from time to time in accordance with the terms hereof and
the Act.
"Charter" means the Articles of Incorporation of the General
Partner, as amended, supplemented or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time or any successor statute thereto, as interpreted by
the applicable Regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
"Consent of the Limited Partner" means the Consent of a
Majority in Interest of the Limited Partners, which Consent shall be obtained
prior to the taking of any action for which it is required by this Agreement
and, except as otherwise provided in this Agreement, may be given or withheld by
a Majority in Interest of the Limited Partners, in their reasonable discretion.
"Constructive Ownership" means ownership of REIT Shares, or
any other interest in an entity by a Person who is or would be treated as an
owner thereof either actually or constructively through the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructively Own," "Constructively Owned," "Constructively Owns" and
"Constructive Owner" shall have the correlative meanings.
"Contributed Property" means each Property or other asset, in
such form as may be permitted by the Act, but excluding cash, contributed or
deemed contributed to the Partnership.
"Contribution Agreement" means the Contribution Agreement
dated as of March __, 1998 by and between the Contributors (as defined therein),
and the Partnership.
"Custodian" means any receiver, trustee, assignee, liquidator
or other similar official under any Bankruptcy Law.
"Debt" means, as to any Person, as of any date of
determination, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services; (ii) all
5
amounts owed by such Person to banks or other Persons in respect of
reimbursement obligations under letters of credit, surety bonds and other
similar instruments guaranteeing payment or other performance of obligations by
such Person; (iii) all indebtedness for borrowed money or for the deferred
purchase price of property or services secured by any lien on any property owned
by such Person, to the extent attributable to such Person's interest in such
property, even though such Person has not assumed or become liable for the
payment thereof; and (iv) lease obligations of such Person that, in accordance
with generally accepted accounting principles, should be capitalized.
"Depreciation" means, for each Fiscal Year or other applicable
period, an amount equal to the federal income tax depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for such year
or other period, except that, if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such year
or period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that, if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Effective Time" means the time and date set forth in Section
2.6.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excepted Property" has the meaning set forth in Section
7.3.D(2) hereof.
"Excess Partnership Units" means any Partnership Units held by
a Limited Partner to the extent that, if such Partnership Units were exchanged
for the REIT Shares Amount pursuant to Section 8.6 hereof, such Limited Partner
would either Beneficially Own or Constructively Own REIT Shares in excess of the
Ownership Limit.
"Exchange" has the meaning set forth in Section 8.6.A hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Family Members" means, as to a Person that is an individual,
(a) such Person's spouse, (b) such Person's ancestors, (c) such Person's
descendants (whether by blood or by adoption), (d) such Person's brothers and
sisters, (e) inter vivos or testamentary trusts of which only such Person or his
spouse, ancestors, descendants (whether by blood or by adoption), brothers or
sisters are beneficiaries and (f) any partnership or limited liability company
all of whose partners or members consist of such Person or his spouse,
ancestors, descendants (whether by blood or by adoption), brothers or sisters or
inter vivos or testamentary trusts of which only such Person or his spouse,
ancestors, descendants (whether by blood or by adoption), brothers or sisters
are beneficiaries.
"Fiscal Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Funding Debt" means any Debt incurred by or on behalf of the
General Partner for the purpose of providing funds to the Partnership.
"Funding Notice" has the meaning set forth in Section 4.4.B
hereof.
6
"General Partner" means KIMCO BRADENTON 698, INC., a Florida
corporation, in its capacity as a Partner, or any successor General Partner
designated pursuant to the terms of this Agreement.
"General Partner Loan" has the meaning set forth in Section
4.4.C hereof.
"Gross Asset Value" means, with respect to any 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 its fair market value, as agreed
to by such Partner and the General Partner, and set forth on Exhibit A
with respect to that Partner.
(b) The Gross Asset Values of all Partnership assets
immediately prior to the occurrence of any event described in clause
(1), clause (2), clause (3), or clause (4) hereof shall be adjusted to
equal their respective gross fair market values, as determined by the
General Partner using such reasonable method of valuation as it may
adopt, as of the following times:
(1) the acquisition of an additional interest in the
Partnership (other than in connection with the execution of this
Agreement but including, without limitation, acquisitions pursuant to
Section 4.4 hereof or contributions or deemed contributions by the
General Partner pursuant to Section 4.4 hereof) by a new or existing
General Partner in exchange for more than a de minimis Capital
Contribution, if the General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(2) the distribution by the Partnership to a Partner
of more than a de minimis amount of Partnership property as
consideration for an interest in the Partnership, if the General
Partner reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Partner
in the Partnership;
(3) the liquidation of the Partnership within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and
(4) at such other times as the General Partner shall
reasonably determine necessary or advisable in order to comply with
Regulations Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed
to a Partner shall be the gross fair market value of such asset on the
date of distribution as determined by the distributee and the General
Partner, provided that, if the distributee is the General Partner or if
the distributee and the General Partner cannot agree on such a
determination, such gross fair market value shall be determined by
Appraisal.
(d) At the election of the General Partner, the Gross Asset
Values of Partner assets shall be increased (or decreased) to reflect
any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts
7
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
subsection (d) to the extent that the General Partner reasonably
determines that an adjustment pursuant to subsection (b) above is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this subsection (d).
(e) If the Gross Asset Value of a Partner asset has been
determined or adjusted pursuant to subsection (a), subsection (b) or
subsection (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such
asset for purposes of computing Net Income and Net Loss.
"Incapacity" or "Incapacitated" means, (i) as to any Partner
who is an individual, death, total physical disability or entry by a court of
competent jurisdiction adjudicating such Partner incompetent to manage his or
her person or his or her estate; (ii) as to any Partner that is a corporation or
limited liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or limited liability company or the revocation
of its charter; (iii) as to any Partner that is a partnership, the dissolution
and commencement of winding up of the partnership; (iv) as to any Partner that
is an estate, the distribution by the fiduciary of the estate's entire interest
in the Partnership; (v) as to any trustee of a trust that is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and non-appealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within 120 days after the commencement thereof, (g) the
appointment without the Partner's consent or acquiescence of a trustee, receiver
or liquidator has not been vacated or stayed within 90 days of such appointment,
or (h) an appointment referred to in clause (g) above is not vacated within 90
days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding
by reason of its status as (A) the General Partner or (B) a director of the
General Partner or an officer or employee of the Partnership or the General
Partner and (ii) such other Persons (including Affiliates of the General Partner
or the Partnership) as the General Partner may designate from time to time
(whether before or after the event giving rise to potential liability), in its
sole and absolute discretion.
"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"Kimco Realty Corporation" means Kimco Realty Corporation, a
Maryland corporation.
"Limited Partner" means any Partner other than the General
Partner.
8
"Limited Partnership Record Date" means the record date
established by the General Partner for the distribution of Available Cash
pursuant to Section 5.1 hereof, which record date shall be the same as the
record date established by the Kimco Realty Corporation for a dividend to
holders of REIT Shares.
"Liquidating Event" has the meaning set forth in Section 13.1
hereof.
"Liquidator" has the meaning set forth in Section 13.2.A
hereof.
"Majority in Interest of the Limited Partners" means those
Limited Partners holding in the aggregate more than 50% of the aggregate
outstanding Partnership Units of all the Limited Partners.
"Majority of Remaining Partners" means Limited Partners owning
(a) a majority of the profits interests in the Limited Partnership held by all
Limited Partners, determined and allocated based on any reasonable estimate of
profits from the relevant date to the projected termination of the Limited
Partnership and taking into account present and future allocations of profits
under the Agreement as it is in effect on the relevant date, and (b) a majority
of the capital interests in the Partnership, determined as of the relevant date
under the Agreement, owned by all Limited Partners.
"Manual" has the meaning set forth in Section 8.6.B hereof.
"Net Income" or "Net Loss" means, for each Fiscal Year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such year, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(a) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Income
(or Net Loss) pursuant to this definition of "Net Income" or "Net Loss"
shall be added to (or subtracted from, as the case may be) such taxable
income (or loss);
(b) Any expenditure of the Partnership described in Code
Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B)
expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account in computing Net Income (or Net Loss)
pursuant to this definition of "Net Income" or "Net Loss," shall be
subtracted from (or added to, as the case may be) such taxable income
(or loss);
(c) In the event that the Gross Asset Value of any Partnership
asset is adjusted pursuant to subsection (b) or subsection (c) of the
definition of "Gross Asset Value," the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such
asset for purposes of computing Net Income or Net Loss;
(d) In lieu of the depreciation, amortization and other cost
recovery deductions that would otherwise be taken into account in
computing such taxable income or loss, there shall be taken into
account Depreciation for such Fiscal Year;
(e) To the extent that an adjustment to the adjusted tax basis
of any Company asset pursuant to Code Section 734(b) or Code Section
743(b) is required
9
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's interest in the
Partnership, the amount of such adjustment shall be treated as an item
of gain (if the adjustment increases the basis of the asset) or loss
(if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes
of computing Net Income or Net Loss; and
(f) Notwithstanding any other provision of this definition of
"Net Income" or "Net Loss," any item allocated pursuant to Section
6.3.A hereof shall not be taken into account in computing Net Income or
Net Loss. The amounts of the items of Partnership income, gain, loss or
deduction available to be allocated pursuant to Section 6.3.A hereof
shall be determined by applying rules analogous to those set forth in
this definition of "Net Income" or "Net Loss."
"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Fiscal Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations Sections 1.752-1(a)(2) and 1.704-2(b)(3).
"Notice of Exchange" means the Notice of Exchange
substantially in the form of Exhibit B attached to this Agreement.
"No Transfer Partners" means the Partners (or successors in
interest thereof) who acquired their Partnership Units in exchange for Real
Properties on the Effective Date.
"No Transfer Period" means (i) a period of five (5) years from
the Effective Date.
"Ownership Limit" means with respect to Beneficial Ownership,
2.0%, and with respect to Constructive Ownership, 2.0% of the number of shares
or value (whichever is more restrictive) of the outstanding REIT Shares.
"Parent" means any entity that, with respect to another
entity, directly or indirectly owns more than 10% of the voting stock of the
other entity.
"Partners" means the Persons owning Partnership Interests,
including the General Partner and any Additional and Substitute Partners, named
as Partners in Exhibit A attached hereto, which Exhibit A may be amended from
time to time.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i) with respect to
"partner nonrecourse debt minimum gain."
"Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4) for the phrase "partner nonrecourse debt."
"Partnership" means the limited partnership formed under the
Act and pursuant to this Agreement, and any successor thereto.
10
"Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution by a Partner and includes any
and all benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement. A Partnership
Interest may be expressed as a number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2) for the phrase "partnership minimum gain," and
the amount of Partnership Minimum Gain, as well as any net increase or decrease
in Partnership Minimum Gain, for a Fiscal Year shall be determined in accordance
with the rules of Regulations Section 1.704-2(d).
"Partnership Nonrecourse Deductions" has the meaning set forth
in Regulations Section 1.704-2(i)(2) for the phrase "partner nonrecourse
deductions," and the amount of Partner Nonrecourse Deductions with respect to a
Partner Nonrecourse Debt for a Fiscal Year shall be determined in accordance
with the rules of Regulations Section 1.704-2(i)(2).
"Partnership Unit" means a fractional share of the Partnership
Interests of all Partners issued pursuant to Section 4.1, Section 4.2 or Section
4.4 hereof, as the same may be modified from time to time as provided in this
Agreement. The ownership of Partnership Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced in the form of a
certificate for Partnership Units.
"Percentage Interest" means as to a Partner holding a class of
Partnership Units, its interest in the Partnership as determined by dividing the
Partnership Units of such class owned by such Partner by the total number of
Partnership Units of such class then outstanding as specified in Exhibit A
attached hereto, as such Exhibit may be amended from time to time.
"Permitted Transfer" has the meaning set forth in Section
11.3.A hereof.
"Person" means an individual or a corporation, partnership,
trust, unincorporated organization, association, limited liability company or
other entity.
"Pre Closing Partners" means the Partners of the Operating
Partnership immediately prior to the Closing.
"Preferred Return Per Unit" means with respect to a
Partnership Unit outstanding on a Limited Partnership Record Date (other than
those Partnership Units held by the General Partner) an amount initially equal
to zero, and increased cumulatively on each Limited Partnership Record Date by
an amount equal to $.02 per unit (8% annual), less any amount required to be
withheld from time to time as required by the Contribution Agreement. With
respect to the first such Limited Partnership Record Date the amount will be a
pro-rata amount to achieve the agreed upon rate of return for the first short
period.
"Preferred Return Shortfall" means, for any holder of
Partnership Units (other than the General Partner), the excess (if any) of (i)
the Preferred Return Per Unit with respect to all Partnership Units held by such
holder over (ii) the aggregate amount previously distributed with respect to
such Limited Partner Units pursuant to Section 5.1 hereof (and Section 8.6
hereof, to the extent attributed to Preferred Return Shortfall), such amount not
to include any distribution amount paid to the General Partner according to the
terms and provisions of the Contribution Agreement.
11
"Properties" means any assets and property of the Partnership
such as, but not limited to, interests in real property (including the Real
Properties) and personal property, including, without limitation, fee interests,
interests in ground leases, interests in limited liability companies, joint
ventures or partnerships, interests in mortgages, and Debt instruments as the
Partnership may hold from time to time.
"Qualified Transferee" means an "accredited investor" as
defined in Rule 501 promulgated under the Securities Act.
"Real Properties" has the meaning set forth in Section
7.3.D(2) hereof
"Regulations" means the applicable income tax regulations
under the Code, whether such regulations are in proposed, temporary or final
form, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section
6.3.A(7) hereof.
"REIT" means a real estate investment trust qualifying under
Code Section 856, et seq.
"REIT Payment" has the meaning set forth in Section 14.12
hereof.
"REIT Requirements" has the meaning set forth in Section 5.1
hereof.
"REIT Share" means a share of Kimco Realty Corporation's
Common Stock, par value $.01 per share.
"REIT Shares Amount" means a number of REIT Shares equal to
the product of (a) the number of Tendered Units times (b) the Cash Amount Per
Unit divided by (c) the Value of a REIT Share; provided, however, that, in the
event that the General Partner or its Parent issues to all holders of REIT
Shares as of a certain record date rights, options, warrants or convertible or
exchangeable securities entitling the General Partner's or its Parent's
shareholders to subscribe for or purchase REIT Shares, or any other securities
or property (collectively, the "Rights"), with the record date for such Rights
issuance falling within the period starting on the date of the Notice of
Exchange and ending on the day immediately preceding the Specified Exchange
Date, which Rights will not be distributed before the relevant Specified
Exchange Date, then the REIT Shares Amount shall also include such Rights that a
holder of that number of REIT Shares would be entitled to receive, expressed,
where relevant hereunder, in a number of REIT Shares determined by the General
Partner in good faith.
"Related Party" means, with respect to any Person, any other
Person whose ownership of shares of the General Partner's capital stock would be
attributed to the first such Person under Code Section 544 (as modified by Code
Section 856(h)(1)(B)) or Code Section 318 (as modified by Code Section
856(d)(5).
"Rights" has the meaning set forth in the definition of "REIT
Shares Amount."
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
12
"Shortfall Amount" has the meaning set forth in Section 6.2.A
hereof.
"Specified Exchange Date" means the 30th calendar day (or, if
such day is not a Business Day, the next following Business Day) after the
receipt by the General Partner of a Notice of Exchange; provided, however, that
no Specified Exchange Date shall occur prior to the first anniversary of the
Effective Date; provided, further, that the Specified Exchange Date, as well as
the closing of an Exchange on any Specified Exchange Date, may be deferred, in
the General Partner's sole and absolute discretion, for such time (but in any
event not more than 30 days in the aggregate) as may reasonably be required to
effect compliance with the Securities Act or other laws.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person; provided, however, that, with respect to
the Partnership, "Subsidiary" means solely a partnership or limited partnership
(taxed, for federal income tax purposes, as a partnership and not as an
association or publicly traded partnership taxable as a corporation) of which
the Partnership is a partner unless the General Partner has received an
unqualified opinion from independent counsel of recognized standing, or a ruling
from the IRS, that the ownership of shares of stock of a corporation or other
entity will not jeopardize the General Partner's status as a REIT, in which
event the term "Subsidiary" shall include the corporation or other entity which
is the subject of such opinion or ruling.
"Substituted Partner" means an Assignee who is admitted as a
Partner to the Partnership pursuant to Section 11.4 hereof. The term
"Substituted Partner" shall not include any Additional Partner.
"Tax Items" has the meaning set forth in Section 6.4.A hereof.
"Tendered Units" has the meaning set forth in Section 8.6.A
hereof.
"Tendering Party" has the meaning set forth in Section 8.6.A
hereof.
"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
"Transfer," when used with respect to an Partnership Unit or
all or any portion of a Partnership Interest, means any sale, assignment,
bequest, conveyance, devise, gift (outright or in trust), pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other disposition or act of
alienation, whether voluntary or involuntary or by operation of law. The terms
"Transferred" and "Transferring" have correlative meanings.
"Valuation Date" means (a) in the case of a tender of
Partnership Units for Exchange, the date of receipt by the General Partner of a
Notice of Exchange or, if such date is not a Business Day, the immediately
preceding Business Day or (b) in any other case, the date specified in this
Agreement.
"Value" means, on any Valuation Date with respect to a REIT
Share, the average of the daily market prices for a REIT Share over the ten (10)
consecutive trading days immediately preceding the Valuation Date. The market
price for any such trading day shall be:
13
(1) if the REIT Shares are listed or admitted to trading on
any securities exchange or the Nasdaq Stock Market's National Market
System, the closing price, regular way, on such day, or if no such sale
takes place on such day, the average of the closing bid and asked
prices on such day, in either case as reported in the principal
consolidated transaction reporting system,
(2) if the REIT Shares are not listed or admitted to trading
on any securities exchange or the Nasdaq Stock Market's National Market
System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the
General Partner, or
(3) if the REIT Shares are not listed or admitted to trading
on any securities exchange or the Nasdaq Stock Market's National Market
System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have been so
reported; provided, however, that, if there are no bid and asked prices
reported during the ten (10) days prior to the date in question, the
market price of the REIT Shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
In the event that the REIT Shares Amount includes Rights that
a holder of REIT Shares would be entitled to receive, then the Value of such
Rights shall be determined by the General Partner acting in good faith on the
basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.
ARTICLE 2.
ORGANIZATIONAL MATTERS
Section 2.1. Formation
The Partnership is a limited partnership formed pursuant to
the provisions of the Act for the purposes and upon the terms and subject to the
conditions set forth in this Agreement. Except as expressly provided herein, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act.
Section 2.2. Name
The name of the Partnership is BAY-GARD, LTD. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The General Partner in its sole and absolute discretion
may change the name of the Partnership at any time and from time to time in
accordance with applicable law and shall notify the Partners of such change in
the next regular communication to the Partners.
14
Section 2.3. Registered Office and Agent; Principal
Place of Business; Other Places of
Business
The principal office of the Partnership is located at 0000
Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx, 00000, or such other place as the
General Partner may from time to time designate by notice to the Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Florida as the General Partner deems advisable.
Section 2.4. Power of Attorney
A. Each Partner (other than the General Partner) and each
Assignee hereby irrevocably constitutes and appoints the General Partner, any
Liquidator, and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to:
(1) execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (a) all certificates,
documents and other instruments (including, without limitation, this
Agreement and the Certificate and all amendments or restatements
thereof) that the General Partner or any Liquidator deems appropriate
or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership in the State
of Delaware and in all other jurisdictions in which the Partnership may
conduct business or own property; (b) all instruments that the General
Partner or any Liquidator deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this Agreement in
accordance with its terms; (c) all conveyances and other instruments or
documents that the General Partner or any Liquidator deems appropriate
or necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, including, without
limitation, a certificate of cancellation; (d) all instruments relating
to the admission, withdrawal, removal or substitution of any Partner
pursuant to, or other events described in, Articles 11, 12 or 13 hereof
or the Capital Contribution of any Partner; and (e) all certificates,
documents and other instruments relating to the determination of the
rights, preferences and privileges of Partner Interests; and
(2) execute, swear to, acknowledge and file all
ballots, consents, approvals, waivers, certificates and other
instruments appropriate or necessary, in the sole and absolute
discretion of the General Partner or any Liquidator, to make, evidence,
give, confirm or ratify any vote, consent, approval, agreement or other
action which is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner or any
Liquidator, to effectuate the terms or intent of this Agreement.
B. The foregoing power of attorney is hereby declared to be
irrevocable and a special power coupled with an interest, in recognition of the
fact that each of the Partners and Assignees will be relying upon the power of
the General Partner to act as contemplated by this Agreement, and it shall
survive and not be affected by the subsequent Incapacity of any Partner or
Assignee and the Transfer of all or any portion of such Partner's or Assignee's
Limited Partners Units or Partnership Interest and shall extend to such
Partner's or Assignee's heirs, successors, assigns and personal representatives.
Each such Partner or Assignee hereby agrees to be bound by any representation
made by the General Partner or any Liquidator, acting in good faith pursuant to
such power of attorney; and each
15
such Partner or Assignee hereby waives any and all defenses which may be
available to contest, negate or disaffirm the action of the General Partner or
any Liquidator, taken in good faith under such power of attorney. Each Partner
or Assignee shall execute and deliver to the General Partner or any Liquidator,
within 15 days after receipt of the General Partner's or Liquidator's request
therefor, such further designation, powers of attorney and other instruments as
the General Partner or the Liquidator, as the case may be, deems necessary to
effectuate this Agreement and the purposes of the Partnership.
Section 2.5. Term
The term of the Partnership commenced on March 13, 1996, the
date that the original Certificate was filed in the office of the Secretary of
State of Florida in accordance with the Act, and shall continue until March 31,
2026 unless extended by mutual agreement of the Partners or earlier terminated
pursuant the provisions of Section 13 hereof or as otherwise provided by law.
Section 2.6. Effective Time
Upon the closing of the transactions set forth in Section 13
of the Contribution Agreement (the time and date of such closing, the "Effective
Time"), Midway Holdings, Inc., Palmetto Holdings I, Inc. and X.X. Xxxxxxx Land
Company, Inc. shall become Limited Partners and Kimco Bradenton 698, Inc. shall
become the sole General Partner of the Partnership, each with the Capital
Account equal to $1.00 times the number of Partnership Units set forth on
Exhibit A hereto, and Xx. Xxxxxxx X. Wafer shall withdraw completely from the
Partnership. Each of the Limited Partners shall have, at the Effective Time, the
stated value of Partnership Units set forth on Exhibit A hereto. At the
Effective Time there shall be no other Partners of the Partnership except those
set forth on Exhibit A.
ARTICLE 3.
PURPOSE
Section 3.1. Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner's Parent at all times to be classified as a REIT for federal
income tax purposes, unless the General Partner's Parent ceases to qualify as a
REIT for reasons other than the conduct of the business of the Partnership, (ii)
to enter into any partnership, joint venture, limited liability company or other
similar arrangement to engage in any business described in the foregoing clause
(i) or to own interests in any entity engaged, directly or indirectly, in any
such business and (iii) to do anything necessary or incidental to the foregoing.
In connection with the foregoing, and without limiting the General Partner's
Parent's right in its sole discretion to cease qualifying as a REIT, the
Partners acknowledge that the General Partner's Parent's current status as a
REIT inures to the benefit of all the Partners and not solely the General
Partner or its Affiliates.
Section 3.2. Powers
The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership including, without limitation,
full power and authority, directly or through its ownership interest in other
entities, to enter into, perform and carry out contracts of any kind, borrow
money and issue evidences of indebtedness,
16
whether or not secured by mortgage, deed of trust, pledge or other lien,
acquire, own, manage, improve and develop real property, and lease, sell,
transfer and dispose of real property; provided, however, that notwithstanding
any other provision in this Agreement, the General Partner may cause the
Partnership not to take, or to refrain from taking, any action that, in the
judgment of the General Partner, in its sole and absolute discretion, (i) could
adversely affect the ability of the General Partner to continue to qualify as a
REIT, (ii) could subject the Parent of the Parent of the General Partner to any
additional taxes under Code Section 857 or Code Section 4981 or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner, its securities or the Partnership, unless
such action (or inaction) under clause (i), clause (ii) or clause (iii) above
shall have been specifically consented to by the General Partner in writing.
Section 3.3. Specified Purposes
The Partnership shall be a limited partnership only for the
purposes specified in Section 3.1 hereof, and this Agreement shall not be deemed
to create a company, venture or partnership between or among the Partners with
respect to any activities whatsoever other than the activities within the
purposes of the Partnership as specified in Section 3.1 hereof. Except as
otherwise provided in this Agreement, no Partner shall have any authority to act
for, bind, commit or assume any obligation or responsibility on behalf of the
Partnership, its properties or any other Partner. No Partner, in its capacity as
a Partner under this Agreement, shall be responsible or liable for any
indebtedness or obligation of another Partner, nor shall the Partnership be
responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement
and the Act.
Section 3.4. Representations and Warranties by the
Partners
A. Each Partner that is an individual (including, without
limitation, each Additional Partner or Substituted Partner as a condition to
becoming an Additional Partner or a Substituted Partner) represents and warrants
to the Partnership, the General Partner and each other Partner that (i) such
Partner has the legal capacity to enter into this Agreement and perform such
Partner's obligations hereunder, (ii) the consummation of the transactions
contemplated by this Agreement to be performed by such Partner will not result
in a breach or violation of, or a default under, any material agreement by which
such Partner or any of such Partner's property is bound, or any statute,
regulation, order or other law to which such Partner is subject, (iii) such
Partner is neither a "foreign person" within the meaning of Code Section 1445(f)
nor a "foreign partner" within the meaning of Code Section 1446(e), (iv) such
Partner (other than the General Partner) either (A) does not own, directly or
indirectly or by attribution under Code Section 318 (as modified by Code Section
856(d)(5)), more than 25% of the interests in capital or profits of the
Partnership or (B) does not own, directly or indirectly or by attribution under
Code Section 318 (as modified by Code Section 856(d)(5)) any interest in any
entity that is a tenant of the General Partner, the Parent of the General
Partner, the Partnership or any partnership, venture or limited liability
company of which the General Partner, its Parent, or any of its or its Parent's
Subsidiaries or the Partnership is a partner, and (vi) this Agreement is binding
upon, and enforceable against, such Partner in accordance with its terms.
B. Each Partner that is not an individual (including, without
limitation, each Additional Partner or Substituted Partner as a condition to
becoming an Additional Partner or a Substituted Partner) represents and warrants
to the Partnership, the General Partner and each other Partner that (i) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action, including, without limitation, that of its
general partner(s) (or, if there
17
is no general partner, a majority in interest of all Partners), committee(s),
trustee(s), general partner(s), beneficiaries, directors and shareholder(s), as
the case may be, as required, (ii) the consummation of such transactions will
not result in a breach or violation of, or a default under, its partnership or
operating agreement, trust agreement, charter or bylaws, as the case may be, any
material agreement by which such Partner or any of such Partner's properties or
any of its partners, beneficiaries, trustees or shareholders, as the case may
be, is or are bound, or any statute, regulation, order or other law to which
such Partner or any of its partners, trustees, beneficiaries or shareholders, as
the case may be, is or are subject, (iii) such Partner is neither a "foreign
person" within the meaning of Code Section 1445(f) nor a "foreign partner"
within the meaning of Code Section 1446(e), (iv) such Partner (other than the
General Partner), except as disclosed in writing to the General Partner, (A)
does not own, directly or indirectly or by attribution under Code Section 318
(as modified by Code Section 856(d)(5)) any shares of stock of the General
Partner, and (B) does not own, directly or indirectly or by attribution under
Code Section 318 (as modified by Code Section 856(d)(5)), any interest in any
entity that is a tenant of either the General Partner, the Partnership or any
partnership venture or limited liability company of which the General Partner or
any of its Subsidiaries or the Partnership is a partner, (v) if the
representation hereunder is being made subsequent to December 31, 1997, such
Partner (other than the General Partner) either (A) does not own, directly or
indirectly or by attribution under Code Section 318 (as modified by Code Section
856(d)(5)), more than 25% of the interests in capital of profits of the
Partnership or (B) does not own, directly or indirectly or by attribution under
Code Section 318 (as modified by Code Section 856(d)(5)) any interest in any
entity that is a tenant of the General Partner, the Parent of the General
Partner, the Partnership or any partnership, venture or limited liability
company of which the General Partner, its Parent, or any of its or its Parent's
Subsidiaries or the Partnership is a partner, (vi) this Agreement is binding
upon, and enforceable against, such Partner in accordance with its terms.
C. Each Partner (including, without limitation, each
Substituted Partner as a condition to becoming a Substituted Partner)
represents, warrants and agrees that it has acquired and continues to hold its
interest in the Partnership for its own account for investment only and not for
the purpose of, or with a view toward, the resale or distribution of all or any
part thereof, nor with a view toward selling or otherwise distributing such
interest or any part thereof at any particular time or under any predetermined
circumstances. Each Partner further represents and warrants that it is an
"accredited investor" as defined in Rule 501 promulgated under the Securities
Act and is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds that it has invested in the Partnership in what
it understands to be a highly speculative and illiquid investment.
D. The representations and warranties contained in Sections
3.4.A, 3.4.B and 3.4.C hereof shall survive the execution and delivery of this
Agreement by each Partner (and, in the case of an Additional Partners or a
Substituted Partner, the admission of such Additional Partner or Substituted
Partner as a Partner in the Partnership) and the dissolution, liquidation and
termination of the Partnership. The General Partner may, in its sole and
absolute discretion on behalf of the Partnership and its Partners, grant waivers
and exceptions to the representations and warranties contained in Sections
3.4.A, 3.4.B and 3.4.C hereof, but any such waiver or exception must be in
writing, must refer to this Section 3.4.D and must describe with particularity
the representation or warranty as to which such waiver or exception shall apply.
E. Each Partner (including, without limitation, each
Substituted Partner as a condition to becoming a Substituted Partner) hereby
represents that it has consulted and been advised by its legal counsel and tax
advisor in connection with, and acknowledges that no representations as to
potential profit, tax consequences of any sort (including, without limitation,
the tax consequences
18
resulting from forming the Partnership, executing this Agreement, consummating
the transaction provided for in or contemplated by the Contribution Agreement,
making a Capital Contribution, being admitted to the Partnership or being
allocated Tax Items), cash flows, funds from operations or yield, if any, in
respect of the Partnership or the General Partner have been made by any Partner
or any employee or representative or Affiliate of any Partner, and that
projections and any other information, including, without limitation, financial
and descriptive information and documentation, that may have been in any manner
submitted to such Partner shall not constitute any representation or warranty of
any kind or nature, express or implied.
ARTICLE 4.
CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions of the Initial
Partners
At the Effective Time, Kimco Bradenton 698, Inc. shall make a
Capital Contribution as set forth in Exhibit A to this Agreement. As of the
Effective Time, the Pre Closing Partners shall acknowledge receipt of the
Capital Contribution from which those amounts, as required to be paid out by the
Contribution Agreement, shall immediately be paid out. The Partners shall own
Partnership Units the value of which shall be the amounts set forth in Exhibit
A. Except as required by law or as otherwise provided in Sections 4.3 and 4.4,
no Partner shall be required or permitted to make any additional Capital
Contributions or loans to the Partnership.
Section 4.2. Additional Partners
The General Partner, with the Consent of the Limited Partners,
is authorized to admit one or more Additional Partners to the Partnership from
time to time, on terms and conditions and for such Capital Contributions as may
be established by the General Partner, with the Consent of the Limited Partners.
As a condition to being admitted to the Partnership, each Additional Partner
shall execute an agreement to be bound by the terms and conditions of this
Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, the Partnership shall not at any time have more than 100 partners
(including as partners those persons indirectly owning an interest in the
Partnership through a partnership, limited liability company, S corporation or
grantor trust (such entity, a "flow through entity"), but only if substantially
all of the value of such person's interest in the flow through entity is
attributable to the flow through entity's interest (direct or indirect) in the
Partnership).
Section 4.3. Loans by Third Parties
Subject to the provisions of Section 4.4 and Section 7.3
hereof, the Partnership may incur or assume Debt, or enter into other similar
credit, guarantee, financing or refinancing arrangements, for any purpose
(including, without limitation, in connection with any further acquisition of
Properties from any Person), upon such terms as the General Partner determines
appropriate; provided, however, that the Partnership shall not incur or assume
any Debt under which a breach, violation or default would be deemed to occur by
virtue of the Transfer of any Partnership Interest; provided, further, that any
Debt shall be nonrecourse to the General Partner unless the General Partner
otherwise agrees.
Section 4.4. Additional Funding and Capital Contributions
A. General. The General Partner may, at any time and from time
to time, determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition or development of additional Properties or for such
purposes as the General Partner may determine.
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Additional Funds may be raised by the Partnership, at the election of the
General Partner, in any manner provided in, and in accordance with, the terms of
this Section 4.4 or, alternatively, the terms of Section 4.3 hereof. No Person,
including, without limitation, any Partner or Assignee, shall have any
preemptive, preferential, participation or similar right or rights to subscribe
for or acquire any Partnership Interest.
B. Notice of Additional Funds Requirement. The General Partner
may, but shall not be required to, give written notice (the "Funding Notice") to
the Partners of the need for Additional Funds and the anticipated source(s)
thereof.
C. General Partner Loans. Whether or not a Funding Notice is
given to the Partners , the General Partner may enter into a Funding Debt and
lend the Additional Funds to the Partnership (a "General Partner Loan");
provided, however, that the General Partner shall not be obligated to lend the
net proceeds of any Funding Debt to the Partnership in a manner that would be
inconsistent with the General Partner's Parent's ability to remain qualified as
a REIT. If the General Partner enters into such a Funding Debt, the General
Partner Loan will consist of the net proceeds from such Funding Debt and, to the
extent permitted by law, will be on the same terms and conditions, including
interest rate and repayment schedule, and providing for the reimbursement of
costs and expenses, as shall be applicable with respect to or incurred in
connection with such Funding Debt. All General Partner Loans made pursuant to
this Section 4.4 shall be on terms and conditions generally available to the
Partnership from commercial lending institutions at the time such General
Partner Loan is made.
D. Additional General Partner Contributions; Additional
Partners. Whether or not a Funding Notice is given to the Partners, the General
Partner on behalf of the Partnership, with the Consent of the Limited Partners
may raise all or any portion of the Additional Funds by making additional
Capital Contributions or accepting additional Capital Contributions from any
other Partners or third parties and either (a) in the case of Partners
(including the General Partner), increasing that Partner's Partnership Units or
(b) in the case of a third party, admitting that third party as an Additional
Partner as contemplated by Section 4.2 of this Agreement. Subject to the terms
of this Section 4.4 and to the definition of "Gross Asset Value," the General
Partner shall determine in good faith the amount, terms and conditions of such
additional Capital Contributions; provided, however, that, in the case of an
additional Capital Contribution by the General Partner, the Partnership shall
issue to the General Partner the number of Partnership Units equal to the amount
of the additional Capital Contribution (net of any liabilities assumed or taken
subject to by the Partnership) rounded to the nearest whole unit.
E. Timing of Additional Capital Contributions. If additional
Capital Contributions are made by Partners on any day other than the first day
of a Fiscal Year, then Net Income, Net Loss, each item thereof and all other
items of income, gain, loss, deduction and credit allocable among Partners and
Assignees for such Fiscal Year shall be allocated among such Partners and
Assignees by taking into account their varying interests during the Fiscal Year
in accordance with Code Section 706(d), using the "interim closing of the books"
or "daily proration" method or another permissible method selected by the
General Partner.
Section 4.5. No Interest; No Return
No Partner shall be entitled to interest on its Capital
Contribution or on such Partner's Capital Account. Except as provided herein or
by law, no Partner shall have any right to demand or receive the return of its
Capital Contribution from the Partnership.
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ARTICLE 5.
DISTRIBUTIONS
Section 5.1. Requirement and Characterization of
Distributions
Subject to the terms and provisions of the Contribution
Agreement dated on the date herein, the General Partner shall cause the
Partnership to distribute quarterly, on each day that Kimco Realty Corporation
has scheduled for payment of its regular quarterly dividend on its Common Stock
(provided that, if no dividend is paid for such quarter such date shall be the
corresponding dividend date of the last previous year when a dividend was paid)
all (or with respect to amounts distributed pursuant to the following clause
(2), such portion as the General Partner may in its discretion determine) of
Available Cash generated by the Partnership during such quarter to the Partners
on the Partnership Record Date with respect to such quarter (1) first, to the
Limited Partners, in accordance with their relative Preferred Return Shortfall,
until the cumulative amount distributed to the Limited Partners for the current
and all prior fiscal quarters equals the Preferred Return Per Unit with respect
to all outstanding Partnership Units (other than those held by the General
Partner); and (2) thereafter, to the General Partner. The General Partner shall
take such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with its Parent's qualification as a REIT, to cause
the Partnership to distribute sufficient amounts to enable the General Partner's
Parent to pay stockholder dividends that will (a) satisfy the requirements for
qualifying as a REIT under the Code and Regulations ("REIT Requirements"), and
(b) avoid any federal income or excise tax liability of the General Partner or
its Parent.
Section 5.2. Distributions in Kind
No right is given to any Partner to demand and receive
property other than cash. The General Partner may determine, in its sole and
absolute discretion, to make a distribution in kind to the Partners of
Partnership assets, and such assets shall be distributed in such a fashion as to
ensure that the fair market value is distributed and allocated in accordance
with Articles 5 and 6 hereof.
Section 5.3. Amounts Withheld
Each Partner hereby authorizes the Partnership to withhold
from or pay on behalf of or with respect to such Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Section 1441, Code Section 1442, Code Section 1445
or Code Section 1446. Any amount paid on behalf of or with respect to a Partner
shall constitute a loan by the Partnership to such Partner, which loan shall be
repaid by such Partner within 15 days after notice from the General Partner that
such payment must be made unless (i) the Partnership withholds such payment from
a distribution that would otherwise be made to the Partner or (ii) the General
Partner determines, in its sole and absolute discretion, that such payment may
be satisfied out of the Available Cash of the Partnership that would, but for
such payment, be distributed to the Partner. Any amounts withheld pursuant to
the foregoing clauses (i) or (ii) shall be treated as having been distributed to
such Partner. Each Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Partner's Partnership Interest to secure
such Partner's obligation to pay to the Partnership any amounts required to be
paid pursuant to this Section 5.3. In the event that a Partner fails to pay any
amounts owed to the Partnership pursuant to this Section 5.3 when due, the
General Partner may, in its sole and absolute discretion, elect to make the
payment to the Partnership on behalf of such defaulting Partner, and in such
event shall be deemed to have loaned such amount to such defaulting Partner and
21
shall succeed to all rights and remedies of the Partnership as against such
defaulting Partner (including, without limitation, the right to receive
distributions). Any amounts payable by a 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 (4) 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 Partner shall take such actions as the Partnership or the
General Partner shall request in order to perfect or enforce the security
interest created hereunder.
Section 5.4. Distributions Upon Liquidation
Notwithstanding the other provisions of this Article 5, net
proceeds from a Terminating Capital Transaction and any other cash received or
reductions in reserves made after commencement of the liquidation of the
Partnership shall be distributed to the Partners in accordance with Section 13.2
hereof.
Section 5.5. Restricted Distributions
Notwithstanding any provision to the contrary contained in
this Agreement, neither the Partnership nor the General Partner, on behalf of
the Partnership, shall make a distribution to any Partner on account of its
Partnership Interest or interest in Partnership Units if such distribution would
violate Section 18-607 of the Act or other applicable law.
ARTICLE 6.
ALLOCATIONS
Section 6.1. Timing and Amount of Allocations of Net
Income and Net Loss
Net Income and Net Loss of the Partnership shall be determined
and allocated with respect to each Fiscal Year of the Partnership as of the end
of each such year. Except as otherwise provided in this Article 6, an allocation
to a Partner of a share of Net Income or Net Loss shall be treated as an
allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.
Section 6.2. General Allocations Except as otherwise
provided in this Article 6:
A. Net Income. Net Income for any Fiscal Year shall be
allocated, for purposes of adjusting the Capital Accounts of the Partners, in
accordance with the following order of priority:
(1) first, to the General Partner, until the
cumulative amount of Net Income allocated to the General Partner for
the current and all prior periods pursuant to this Section 6.2.A(1) is
equal to the cumulative amount of Net Loss allocated to the General
Partner pursuant to Section 6.2.B(3) for all prior periods;
(2) second, to the Limited Partners, pro rata to each
Limited Partner in accordance with the relative amount of Net Loss
previously allocated to the Limited Partners pursuant to Section
6.2.B(2), until the cumulative amount of Net Income allocated to each
Limited Partner for the current and all prior periods pursuant to this
Section 6.2.A(2) is equal to the cumulative amount of Net Loss
allocated to the Limited Partners pursuant to Section 6.2.B(2) for all
prior periods;
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(3) third, to the General Partner, until the
cumulative amount of Net Income allocated to the General Partner for
the current and all prior periods pursuant to this Section 6.2.A(3) is
equal to the cumulative amount of Net Loss allocated to the General
Partner pursuant to Section 6.2.B(1) for all prior periods;
(4) fourth, to the Limited Partners, pro rata in
accordance with their relative Shortfall Amounts, until the cumulative
amount of Net Income allocated to each such Limited Partner pursuant to
this Section 6.2.A(4) for the current and all prior Fiscal Years is
equal to the cumulative amount distributed to each such Limited Partner
pursuant to Section 5.1 for the current and all prior Fiscal Years.
"Shortfall Amount" shall mean, with respect to each Partner, the excess
if any of the cumulative amount distributed to such Limited Partner
pursuant to Section 5.1 for the current and all prior Fiscal Years over
(ii) the cumulative amount of Net Income previously allocated to such
Limited Partner pursuant to this Section 6.2.A(4), and
(5) thereafter, to the General Partner.
B. Net Loss. Net Loss for any Fiscal Year shall be allocated,
for purposes of adjusting the Capital Accounts of the Partners in accordance
with the following order of priority:
(1) first, to the General Partner, until the Capital Account
balance of the General Partner (calculated for this purpose by adding
to the General Partner's Capital Account such Partner's share of
Partnership Minimum Gain and Partner Minimum Gain) is equal to zero;
(2) second, to the Limited Partners, pro rata to each Limited
Partner in accordance with their relative positive Capital Account
balances (calculated for this purpose by adding to each Limited
Partner's Capital Account such Partner's share of Partnership Minimum
Gain and Partner Minimum Gain), until the balance of each Limited
Partner's Capital Account (calculated for this purpose by adding to
each Limited Partner's Capital Account such Partner's share of
Partnership Minimum Gain and Partner Minimum Gain) is equal to zero;
and
(3) thereafter, to the General Partner.
C. Special Allocation in Year of Liquidation. Notwithstanding
Section 6.2.A and Section 6.2.B (but subject to Section 6.3) Net Income, Net
Loss and, if necessary, items of gross income, gain, loss, and deduction arising
in the year of liquidation of the Partnership (or if earlier, the year in which
all or substantially all of the assets of the Partnership are sold) shall be
allocated in a manner so that, to the extent possible, upon liquidation of the
Partnership, liquidating distributions pursuant to Section 13.2.A(4) will be
made as follows:
(1) first, to the Limited Partners, pro rata in accordance
with the relative amounts distributable to each such Partner pursuant to this
clause (1), until each Limited Partner has received an amount equal to the sum
of (a) the product of (i) $1.00 and (ii) the number of Partnership Units held by
such Partner and (b) such Partner's Preferred Return Shortfall (if any); and
(2) thereafter, to the General Partner.
Section 6.3. Additional Allocation Provisions
A. Regulatory Allocations
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(1) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of Section 6.2
hereof, or any other provision of this Article 6, if there is a net decrease in
Partnership Minimum Gain during any Fiscal Year, each Partner shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto.
The items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.B(1) is intended to
qualify as a "minimum gain chargeback" within the meaning of Regulations Section
1.704-2(f) and shall be interpreted consistently therewith.
(2) Partner Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2(i)(4) or in Section 6.3.A(1) hereof, if
there is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Partner who has a share of the
Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(5), shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant thereto. The items to
be so allocated shall be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.A(2) is intended to qualify as
a "chargeback of partner nonrecourse debt minimum gain" within the meaning of
Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.
(3) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the Partner(s)
who bears the economic risk of loss with respect to the Partner Nonrecourse Debt
to which such Partner Nonrecourse Deductions are attributable, in accordance
with Regulations Section 1.704-2(i).
(4) Qualified Income Offset. If any Partner unexpectedly
receives an adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be allocated, in accordance with Regulations Section
1.704-1(b)(2)(ii)(d), to such Partner in an amount and manner sufficient to
eliminate, to the extent required by such Regulations, the Adjusted Capital
Account Deficit of such Partner as quickly as possible, provided that an
allocation pursuant to this Section 6.3.A(4) shall be made if and only to the
extent that such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided in this Article 6 have been tentatively made as
if this Section 6.3.A(4) were not in the Agreement. It is intended that this
Section 6.3.A(4) qualify and be construed as a "qualified income offset" within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
(5) Limitation on Allocation of Net Loss. To the extent that
any allocation of Net Loss would cause or increase an Adjusted Capital Account
Deficit as to any Partner, such allocation of Net Loss shall be reallocated
among the other Partners in accordance with their respective Partnership Units,
subject to the limitations of this Section 6.3.A(5).
(6) Section 754 Adjustment. To the extent that an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is
24
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
its interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their Partnership Units in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(7) Curative Allocations. The allocations set forth in
Sections 6.3.A(1) through (6) hereof (the "Regulatory Allocations") are intended
to comply with certain regulatory requirements, including the requirements of
Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of
Section 6.1 hereof, the Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss and deduction among the Partners so
that, to the extent possible without violating the requirements giving rise to
the Regulatory Allocations, the net amount of such allocations of other items
and the Regulatory Allocations to each Partner shall be equal to the net amount
that would have been allocated to each such Partner if the Regulatory
Allocations had not occurred.
B. Allocation of Excess Nonrecourse Liabilities. For purposes
of determining a Partner's proportional share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of Regulations Section
1.752-3(a)(3), each Partner's interest in Partnership profits shall be its
Percentage Interest.
Section 6.4. Tax Allocations
A. In General. Except as otherwise provided in this Section
6.4, for income tax purposes under the Code and the Regulations each Partnership
item of income, gain, loss and deduction (collectively, "Tax Items") shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Sections 6.2 and
6.3 hereof.
B. Allocations Respecting Section 704(c) Reevaluations.
Notwithstanding Section 6.4.A hereof, Tax Items with respect to Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated among the Partners for income tax purposes
pursuant to the "traditional method" as described in Regulations Section
1.704-3(b). In the event that the Gross Asset Value of any Partnership asset is
adjusted pursuant to subsection (b) of the definition of "Gross Asset Value"
(provided in Article 1 hereof), subsequent allocations of Tax Items with respect
to such asset shall take account of the variation, if any, between the adjusted
basis of such asset and its Gross Asset Value in the same manner as under Code
Section 704(c) and the applicable Regulations and this Section 6.4.B.
Section 6.5. Other Provisions
A. Other Allocations. In the event that (i) any modifications
are made to the Code or any Regulations, (ii) any changes occur in any case law
applying or interpreting the Code or any Regulations, (iii) the IRS changes or
clarifies the manner in which it applies or interprets the Code or any
Regulations or any case law applying or interpreting the Code or any Regulations
or (iv) the IRS adjusts the reporting of any of the transactions contemplated by
this Agreement which, in each case, either (a) requires allocations of items of
income, gain, loss, deduction or credit or (b) requires reporting of any
25
of the transactions contemplated by this Agreement in a manner different from
that set forth in this Article 6, the General Partner is hereby authorized to
make new allocations or report any such transactions (as the case may be) in
reliance of the foregoing, and such new allocations and reporting shall be
deemed to be made pursuant to the fiduciary duty of the General Partner to the
Partnership and the other Partners, and no such new allocation or reporting
shall give rise to any claim or cause of action by any Partner.
B. Consistent Tax Reporting. The Partners acknowledge and are
aware of the income tax consequences of the allocations made by this Article 6
and hereby agree to be bound by the provisions of this Article 6 in reporting
their shares of Net Income, Net Loss and other items of income, gain, loss,
deduction and credit for federal, state and local income tax purposes.
Section 6.6. Amendments to Allocation to Reflect
Issuance of Additional Partnership
Interests
In the event that the Partnership issues additional
Partnership Interests to the General or any Additional Partner pursuant to
Article 4 hereof, the General Partner shall make such revisions to this Article
6 as it determines are necessary to reflect the terms of the issuance of such
additional Partnership Interests, including making preferential allocations to
certain classes of Partnership Interests.
ARTICLE 7.
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1. Management
A........Except as otherwise expressly provided in this
Agreement, the General Partner, in its capacity as a Partner of the Partnership
under the Act, shall have sole and complete charge and management over the
business and affairs of the Partnership, in all respects and in all matters. The
General Partner shall be an agent of the Partnership's business, and the actions
of the General Partner taken in such capacity and in accordance with this
Agreement shall bind the Partnership. The General Partner shall at all times be
a Partner of the Partnership. Except as otherwise expressly provided in this
Agreement or required by any non-waivable provisions of applicable law, the
Limited Partners shall not participate in the control of the Partnership, shall
have no right, power or authority to act for or on behalf of, or otherwise bind,
the Partnership and shall have no right to vote on or consent to any other
matter, act, decision or document involving the Partnership or its business. The
General Partner may not be removed by the Partners with or without cause, except
with the consent of the General Partner. In addition to the powers now or
hereafter granted a general partner of a limited partnership under applicable
law or that are granted to the General Partner under any other provision of this
Agreement, the General Partner, subject to the other provisions hereof including
the limitations on the authority of the General Partner set forth in Section
7.3, shall have full power and authority to do all things deemed necessary or
desirable by it to conduct the business of the Partnership, to exercise all
powers set forth in Section 3.2 hereof and to effectuate the purposes set forth
in Section 3.1 hereof, including, without limitation:
(1) the making of any expenditures, the lending or
borrowing of money (including, without limitation, making prepayments
on loans and borrowing money to permit the Partnership to make
distributions to its Partners in such amounts as will permit the
General Partner and its Parent (so long as the General Partner's Parent
qualifies as a REIT) to avoid the payment of any federal income tax
(including, for this purpose, any excise tax pursuant to Code Section
4981) and to make distributions to its
26
shareholders sufficient to permit the General Partner's Parent to
maintain REIT status or otherwise to satisfy the REIT Requirements),
the assumption or guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of indebtedness
(including the securing of same by deed to secure debt, mortgage, deed
of trust or other lien or encumbrance on the Partnership's assets) and
the incurring of any obligations that it deems necessary for the
conduct of the activities of the Partnership;
(2) the making of tax, regulatory and other filings,
or rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the
Partnership;
(3) except as restricted pursuant to Section 7.3.D(2)
hereof, the acquisition, sale, transfer, exchange or other disposition
of any assets of the Partnership (including, but not limited to, the
exercise or grant of any conversion, option, privilege or subscription
right or any other right available in connection with any assets at any
time held by the Partnership) or the merger, consolidation,
reorganization or other combination of the Partnership with or into
another entity;
(4) the mortgage, pledge, encumbrance or
hypothecation of any assets of the Partnership (including, without
limitation, any Contributed Property), the use of the assets of the
Partnership (including, without limitation, cash on hand) for any
purpose consistent with the terms of this Agreement which the General
Partner believes will directly benefit the Partnership and on any terms
that the General Partner sees fit, including, without limitation, the
financing of the conduct or the operations of the General Partner or
the Partnership, the lending of funds to other Persons (including,
without limitation, the General Partner (if necessary to permit the
financing or capitalization of a subsidiary of the General Partner or
the Partnership) and the repayment of obligations of the Partnership,
any of its Subsidiaries and any other Person in which it has an equity
investment;
(5) the management, operation, leasing (including the
amendment and/or termination of any lease), landscaping, repair,
alteration, demolition, replacement or improvement of any Property,
including, without limitation, any Contributed Property, or other asset
of the Partnership or any Subsidiary;
(6) the negotiation, execution and performance of any
contracts, leases, conveyances or other instruments that the General
Partner considers useful or necessary to the conduct of the
Partnership's operations or the implementation of the General Partner's
powers under this Agreement, including contracting with property
managers (including, without limitation, as to any Contributed Property
or other Property, contracting with the contributing or any other
Partner or its Affiliates for property management services),
contractors, developers, consultants, accountants, legal counsel, other
professional advisors and other agents and the payment of their
expenses and compensation out of the Partnership's assets;
(7) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement, the holding,
management, investment and reinvestment of cash and other assets of the
Partnership, and the collection and receipt of revenues, rents and
income of the Partnership;
27
(8) the selection and dismissal of employees of the
Partnership or the General Partner (including, without limitation,
employees having titles or offices such as "president," "vice
president," "secretary" and "treasurer"), and agents, outside
attorneys, accountants, consultants and contractors of the Partnership
or the General Partner and the determination of their compensation and
other terms of employment or hiring;
(9) the maintenance of such insurance for the benefit
of the Partnership and the Partners as it deems necessary or
appropriate including casualty, liability and other insurance on the
Properties of the Partnership;
(10) the formation of, or acquisition of an interest
in, and the contribution of property to, any corporation, limited or
general partnerships, joint ventures, limited liability companies or
other relationships that it deems desirable (including, without
limitation, the acquisition of interests in, and the contributions of
property to any Subsidiary and any other Person in which it has an
equity investment from time to time); provided that, as long as the
General Partner's Parent has determined to continue to qualify as a
REIT, the Partnership may not engage in any such formation, acquisition
or contribution that would cause the General Partner's Parent to fail
to qualify as a REIT;
(11) the control of any matters affecting the rights
and obligations of the Partnership, including the settlement,
compromise, submission to arbitration or any other form of dispute
resolution, or abandonment, of any claim, cause of action, liability,
debt or damages, due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings, administrative
proceedings, arbitration's or other forms of dispute resolution, and
the representation of the Partnership in all suits or legal
proceedings, administrative proceedings, arbitrations or other forms of
dispute resolution, the incurring of legal expense, and the
indemnification of any Person against liabilities and contingencies to
the extent permitted by law;
(12) the undertaking of any action in connection with
the Partnership's direct or indirect investment in its Subsidiaries or
any other Person (including, without limitation, contributing or
loaning Partnership funds to, incurring indebtedness on behalf of, or
guaranteeing the obligations of any such Persons);
(13) the determination of the fair market value of
any Partnership property distributed in kind using such reasonable
method of valuation as it may adopt; provided that such methods are
otherwise consistent with the requirements of this Agreement;
(14) the enforcement of any rights against any
Partner pursuant to representations, warranties, covenants and
indemnities relating to such Partner's contribution of property or
assets to the Partnership;
(15) holding, managing, investing and reinvesting
cash and other assets of the Partnership;
(16) the collection and receipt of revenues and
income of the Partnership;
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(17) the exercise, directly or indirectly, through
any attorney-in-fact acting under a general or limited power of
attorney, of any right, including the right to vote, appurtenant to any
asset or investment held by the Partnership;
(18) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of or in connection with
any Subsidiary of the Partnership or any other Person in which the
Partnership has a direct or indirect interest, or jointly with any such
Subsidiary or other Person;
(19) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of any Person in which
the Partnership does not have an interest pursuant to contractual or
other arrangements with such Person;
(20) the maintenance of working capital and other
reserves in such amounts as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to
time;
(21) the making, execution and delivery of any and
all deeds, leases, notes, deeds to secure debt, mortgages, deeds of
trust, security agreements, conveyances, contracts, guarantees,
warranties, indemnities, waivers, releases or legal instruments or
agreements in writing necessary or appropriate in the judgment of the
General Partner for the accomplishment of any of the powers of the
General Partner enumerated in this Agreement;
(22) the distribution of cash to acquire Partnership
Units held by a Partner in connection with a Partner's exercise of its
Exchange Right under Section 8.6 hereof; and
(23) the amendment and restatement of Exhibit A
hereto to reflect accurately at all times the Capital Accounts,
Partnership Units, and Percentage Interests of the Partners as the same
are adjusted from time to time to the extent necessary to reflect
redemptions, Capital Contributions, the issuance of Partnership Units,
the admission of any Additional Partners or any Substituted Partner or
otherwise, as long as the matter or event being reflected in Exhibit A
hereto otherwise is authorized by this Agreement.
B. Each of the Limited Partner agrees that, except as provided
in Section 7.3 hereof, the General Partner is authorized to execute, deliver and
perform the above-mentioned agreements and transactions on behalf of the
Partnership without any further act, approval or vote of the Limited Partners,
notwithstanding any other provision of this Agreement (except as provided in
Section 4.2 and Section 7.3 hereof), the Act or any applicable law, rule or
regulation. The execution, delivery or performance by the General Partner or the
Partnership of any agreement authorized or permitted under this Agreement shall
not constitute a breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Partners or any other Persons under this
Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General
Partner may cause the Partnership to obtain and maintain (i) casualty, liability
and other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder.
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D. At all times from and after the date hereof, the General
Partner may cause the Partnership to establish and maintain working capital
reserves in such amounts as the General Partner, in it sole and absolute
discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the
General Partner may, but shall be under no obligation to, take into account the
tax consequences to any Partner (including the General Partner) of any action
taken by it. The General Partner and the Partnership shall not have liability to
a Partner under any circumstances as a result of an income tax liability
incurred by such Partner as a result of an action (or inaction) by the General
Partner pursuant to its authority under this Agreement so long as the action or
inaction is taken in good faith.
Section 7.2. Certificate of Formation
To the extent that such action is determined by the General
Partner to be reasonable and necessary or appropriate, the General Partner shall
file amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership under the laws of the State of
Florida and each other state, the District of Columbia or any other jurisdiction
in which the Partnership may elect to do business or own property. Subject to
the terms of Section 8.5.A(4) hereof, the General Partner shall not be required,
before or after filing, to deliver or mail a copy of the Certificate or any
amendment thereto to any Partner. The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or documents as may be
reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited liability company in the State of
Delaware and any other state, or the District of Columbia or other jurisdiction
in which the Partnership may elect to do business or own property.
Section 7.3. Restrictions on General Partner's Authority
A. The General Partner may not take any action in
contravention of an express prohibition or limitation of this Agreement,
including, without limitation:
(1) take any action that would make it impossible to
carry on the ordinary business of the Partnership, except as otherwise
provided in this Agreement;
(2) possess Partnership property, or assign any
rights in specific Partnership property, for other than a Partnership
purpose except as otherwise provided in this Agreement;
(3) perform any act that would subject a Partner to
liability as a General Partner in any jurisdiction or any other
liability except as provided herein or under the Act; or
(4) enter into any contract, mortgage, loan or other
agreement that expressly prohibits or restricts, or has the effect of
prohibiting or restricting, the ability of (a) the General Partner or
the Partnership from satisfying its obligations under Section 8.6
hereof in full or (b) a Partner from exercising its rights to an
Exchange in full, except, in either case, with the written consent of
such Partner affected by the prohibition.
B. The General Partner shall not, without the prior Consent of
the Limited Partners undertake or have the authority to do or undertake, on
behalf of the Partnership, any of the following actions or enter into any
transaction which would have the effect of such transactions:
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(1) except as provided in Section 7.3.C, amend,
modify or terminate this Agreement other than to reflect the admission,
substitution, termination or withdrawal of Partners pursuant to Article
4, Article 11 or Article 12 hereof;
(2) make a general assignment for the benefit of
creditors or appoint or acquiesce in the appointment of a custodian,
receiver or trustee for all or any part of the assets of the
Partnership;
(3) institute any proceeding for bankruptcy on behalf
of the Partnership;
(4) confess a judgment against the Partnership;
(5) approve or acquiesce to the Transfer of the
Partnership Interest of the General Partner to any Person other than
the Partnership;
(6) admit into the Partnership any Additional or
Substitute General Partner;
(7) admit into the Partnership any Additional Limited
Partners;
C. Notwithstanding Section 7.3.B, the General Partner shall
have the exclusive right and power to amend this Agreement as may be required to
facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner
or surrender any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited
Partners;
(2) to reflect the admission, substitution,
termination, or withdrawal of Partners in accordance with this
Agreement and to amend Exhibit A in connection with such admission,
substitution or withdrawal;
(3) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any
material respect, or to cure any ambiguity, correct or supplement any
provision in this Agreement not inconsistent with law or with other
provisions, or make other changes with respect to matters arising under
this Agreement that will not be inconsistent with law or with the
provisions of this Agreement;
(4) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in federal or
state law;
(5) to reflect such changes as are reasonably
necessary for the General Partner's Parent to maintain its status as a
REIT or to satisfy the REIT Requirements; and
(6) to modify, as set forth in the definition of
"Capital Account," the manner in which Capital Accounts are computed.
31
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.C is taken.
D. So long as the Limited Partners own at least 15% of the
aggregate Partnership Interests of the Partnership, the General Partner shall
not, on behalf of the Partnership, take any of the following actions without the
prior Consent of the Limited Partners who contributed the Real Properties (as
defined below) that would be affected by any proposed transaction described
below:
(1) dissolve the Partnership, other than incident to
a sale, disposition, conveyance or other transfer of all or
substantially all of the assets of the Partnership, in one or a series
of related transactions (an "Asset Sale") after the expiration of the
No Transfer Period; or
(2) except in connection with a tax-free transaction
or a loan secured by any real property of the Partnership, sell,
dispose, convey or otherwise transfer any of the real properties the
Partnership acquired in connection with the transactions consummated
pursuant to the Contribution Agreement (collectively, the "Real
Properties") for a period of five (5) years from the Effective Date.
Section 7.4. Reimbursement of the General Partner
A. Except as set forth below, the General Partner shall not be
compensated for its services as the manager of the Partnership. Distributions,
payments and allocations to which the General Partner may be entitled in its
capacity as the General Partner shall not constitute compensation for services
rendered by the General Partner as provided in this Agreement (including the
provisions of Articles 5 and 6 hereof).
B. Subject to Sections 7.4.C and 14.12 hereof, the Partnership
shall be liable, and shall reimburse the General Partner on a monthly basis (or
such other basis as the General Partner may determine in its sole and absolute
discretion), for all sums expended in connection with the Partnership's
business. Any such reimbursements shall be in addition to any reimbursement of
the General Partner as a result of indemnification pursuant to Section 7.7
hereof.
C. To the extent practicable, Partnership expenses shall be
billed directly to and paid by the Partnership. Subject to Sections 7.1.C and
14.12 hereof, reimbursements to the General Partner or any of its Affiliates by
the Partnership shall be allowed, however, for the actual cost to the General
Partner or any of its Affiliates of operating and other expenses of the
Partnership, including, without limitation, the actual cost of goods, materials
and administrative services related to (i) Partnership operations, (ii)
Partnership accounting, (iii) communications with Partners, (iv) legal services,
(v) tax services, (vi) computer services, (vii) risk management, (viii) mileage
and travel expenses and (ix) such other related operational and administrative
expenses as are necessary for the prudent organization and operation of the
Partnership. "Actual cost of goods and materials" means the actual cost to the
General Partner or any of its Affiliates of goods and materials used for or by
the Partnership obtained from entities not affiliated with the General Partner,
and "actual cost of administrative services" means the pro rata cost of
personnel (as if such persons were employees of the Partnership) providing
administrative services to the Partnership. The cost for such services to be
reimbursed to the General Partner or any Affiliate thereof shall be the lesser
of the General Partner's or Affiliate's actual cost, or the amount the
Partnership would be required to pay to independent parties for comparable
administrative services in the same geographic location. In addition to the
foregoing, the General Partner may also provide the following services to the
Partnership at reasonable market rates
32
generally in effect at the time such services are provided: (i) legal services
(by the general Partner's in-house counsel and their assistants), (ii) leasing
brokerage services, (iii) property management services, (iv) construction
services and (v) any other service the Partnership requires which the General
Partner, in its sole and absolute discretion, has the expertise to provide.
D. The General Partner shall also be reimbursed for all
expenses it incurs relating to any issuance of additional Partnership Interests,
Debt of the Partnership, or rights, options, warrants or convertible or
exchangeable securities of the Partnership pursuant to Article IV hereof
(including, without limitation, all costs, expenses, damages and other payments
resulting from or arising in connection with litigation related to any of the
foregoing), all of which expenses are considered by the Partners to constitute
expenses of, and for the benefit of, the Partnership.
To the extent that reimbursements to the General Partner or
any of its Affiliates by the Partnership pursuant to this Section 7.4 would
constitute gross income to the General Partner for purposes of Code Section
856(c)(2) or 856(c)(3), then such amounts shall be treated as "guaranteed
payments" within the meaning of Code Section 707(c).
Section 7.5. Other Business of General Partner
The General Partner shall devote to the Partnership such time
as may be necessary for the performance of its duties as General Partner, but
the General Partner is not required, and is not expected, to devote its full
time to the performance of such duties The General Partner may engage
independently or with others in other business ventures of every nature and
description, including, without limitation, the ownership of other properties
(including properties which may directly compete with properties owned by the
Partnership) and the making or management of other investments (including
investments which directly compete with investments owned by the Partnership).
Nothing in this Agreement shall be deemed to prohibit the General Partner or any
Affiliate of the General Partner from dealing, or otherwise engaging in business
with, Persons transacting business with the Partnership, or from providing
services related to the purchase, sale, financing, management, development or
operation of real or personal property and receiving compensation therefor, not
involving any rebate or reciprocal arrangement that would have the effect of
circumventing any restriction set forth herein upon dealings with the General
Partner or any Affiliate of the General Partner. Neither the Partnership nor any
Partner shall have any right by virtue of this Agreement or the relationship
created hereby in or to such other ventures or activities or to the income or
proceeds derived therefrom, and the pursuit of such ventures, even if
competitive with the business of the Partnership, shall not be deemed wrongful
or improper.
Section 7.6. Contracts with Affiliates
A. Subject to Section 7.6.B below, the Partnership may lend or
contribute to Persons in which it has an equity investment, and such Persons may
borrow funds from the Partnership, on terms and conditions established in the
sole and absolute discretion of the General Partner. The foregoing authority
shall not create any right or benefit in favor of any Person.
B. Except as expressly permitted by this Agreement, neither
the General Partner nor any of its Affiliates, directly or indirectly, shall
sell, transfer or convey any property to, or purchase any property from, or
borrow funds from, or lend funds to, the Partnership or engage in any other
transaction with the Partnership, except upon terms determined by the General
Partner in good faith to be fair and reasonable and comparable to terms that
could be obtained from an unaffiliated party in an arm's length transaction.
33
C. The Partnership may transfer assets to joint ventures,
limited liability companies, partnerships, corporations, business trusts or
other business entities in which it is or thereby becomes a participant upon
such terms and subject to such conditions consistent with this Agreement and
applicable law as the General Partner, in its sole and absolute discretion,
believes to be advisable.
D. The General Partner is expressly authorized to enter into,
in the name and on behalf of the Partnership, a right of first opportunity
arrangement and other conflict avoidance agreements with various Affiliates of
the Partnership and the General Partner, on such terms as the General Partner,
in its sole and absolute discretion, believes are advisable.
Section 7.7. Indemnification
A. To the fullest extent permitted by applicable law, the
Partnership shall indemnify each Indemnitee from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including, without
limitation, attorney's fees and other legal fees and expenses), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership ("Actions") as set forth in
this Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise unless it is established that: (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) the Indemnitee actually received an improper
personal benefit in money, property or services; or (iii) in the case of any
criminal proceeding, the Indemnitee had reasonable cause to believe that the act
or omission was unlawful. Without limitation the foregoing indemnity shall
extend to any liability of any Indemnitee, pursuant to a loan guaranty or
otherwise, for any indebtedness of the Partnership or any Subsidiary of the
Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and the General Partner is hereby authorized and empowered, on behalf of
the Partnership, to enter into one or more indemnity agreements consistent with
the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such indebtedness. The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 7.7.A. The termination of any proceeding by conviction or upon a plea of
nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee acted in a manner
contrary to that specified in this Section 7.7.A with respect to the subject
matter of such proceeding. Any indemnification pursuant to this Section 7.7
shall be made only out of the assets of the Partnership, and any insurance
proceeds from the liability policy covering the General Partner and any
Indemnitees, and neither the General Partner nor any Limited Partner shall have
any obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
Section 7.7.
B. Reasonable expenses incurred by an Indemnitee who is a
party to a proceeding or otherwise subject to or the focus of or is involved in
any Action shall be paid or reimbursed by the Partnership as incurred by the
Indemnitee in advance of the final disposition of the Action upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in Section 7.7.A has been met, and (ii) a written
undertaking by or on behalf of the Indemnitee to repay the amount if it shall
ultimately be determined that the standard of conduct has not been met.
C. The indemnification provided by this Section 7.7 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to
34
any vote of the Partners, as a matter of law or otherwise, and shall continue as
to an Indemnitee who has ceased to serve in such capacity unless otherwise
provided in a written agreement with such Indemnitee or in the writing pursuant
to which such Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to,
purchase and maintain insurance, on behalf of any of the Indemnitees and such
other Persons as the General Partner shall determine, against any liability that
may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such liability
under the provisions of this Agreement.
E. For purposes of this Section 7.7, (i) the Partnership shall
be deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 7.7 and (iii) actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
Partnership.
F. In no event may an Indemnitee subject any of the Partners
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
G. An Indemnitee shall not be denied indemnification in whole
or in part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. If and to the extent any reimbursements to the General
Partner pursuant to this Section 7.7 constitute gross income to the General
Partner (as opposed to the repayment of advances made by the General Partner on
behalf of the Partnership) such amounts shall constitute guaranteed payments
within the meaning of Code Section 707(c), shall be treated consistently
therewith by the Partnership and all Partners, and shall not be treated as
distributions for purposes of computing the Partners' Capital Accounts.
Section 7.8. Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner nor any of its directors or officers
shall be liable or accountable in damages or otherwise to the Partnership, any
Partners or any Assignees for losses sustained, liabilities incurred or benefits
not derived as a result of errors in judgment or mistakes of fact or law or of
any act or omission if the General Partner or such director or officer acted in
good faith.
35
B. The Limited Partners expressly acknowledge that the General
Partner is acting for the benefit of the Partnership, the Partners and the
General Partner's shareholders collectively, that the General Partner is under
no obligation to give priority to the separate interests of the Partners or the
General Partner's shareholders (including, without limitation, the tax
consequences to Partners, Assignees or the General Partner's shareholders) in
deciding whether to cause the Partnership to take (or decline to take) any
actions and that the General Partner shall not be liable to the Partnership or
to any Partner for monetary damages for losses sustained, liabilities incurred,
or benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith.
C. Subject to its obligations and duties as General Partner
set forth in Section 7.1.A hereof, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its employees or agents. The
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's, and its officers' and
directors', liability to the Partnership and the Limited Partners under this
Section 7.8 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when such claims may arise or be asserted.
Section 7.9. Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other paper or document believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties.
B. The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers, architects,
engineers, surveyors, environmental consultants and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion of such Persons as to matters that the General Partner
reasonably believes to be within such Person's professional or expert competence
shall be conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.
C. The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its duly
authorized officers and a duly appointed attorney or attorneys-in-fact. Each
such attorney shall, to the extent provided by the General Partner in the power
of attorney, have full power and authority to do and perform all and every act
and duty that is permitted or required to be done by the General Partner
hereunder.
D. Notwithstanding any other provisions of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the General
Partner's Parent to continue to qualify as a REIT, (ii) for the General
Partner's Parent otherwise to satisfy the REIT Requirements or (iii) to allow
the General Partner or its Parent to avoid incurring any liability for taxes
under Section 857 or Section 4981 of the Code, is expressly authorized under
this Agreement and is deemed approved by all of the Limited Partners.
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Section 7.10. Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively with
other Partners or Persons, shall have any ownership interest in such Partnership
assets or any portion thereof. Title to any or all of the Partnership assets may
be held in the name of the Partnership, the General Partner or one or more
nominees, as the General Partner may determine, including Affiliates of the
General Partner. The General Partner hereby declares and warrants that any
Partnership assets for which legal title is held in the name of the General
Partner or any nominee or Affiliate of the General Partner shall be held by the
General Partner for the use and benefit of the Partnership in accordance with
the provisions of this Agreement; provided, however, that the General Partner
shall use its best efforts to cause beneficial and record title to such assets
to be vested in the Partnership as soon as reasonably practicable. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.
Section 7.11. Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement,
any Person dealing with the Partnership shall be entitled to assume that the
General Partner has full power and authority, without the consent or approval of
any other Partner or Person, to encumber, sell or otherwise use in any manner
any and all assets of the Partnership and to enter into any contracts on behalf
of the Partnership, and take any and all actions on behalf of the Partnership,
and such Person shall be entitled to deal with the General Partner as if it were
the Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expediency of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
ARTICLE 8.
RIGHTS AND OBLIGATIONS OF PARTNERS
Section 8.1. Limitation of Liability
The Limited Partners shall have no liability under this
Agreement except as expressly provided in this Agreement or under the Act.
Section 8.2. Managing of Business
No Limited Partners or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, employee, partner,
agent or trustee of the General Partner, the Partnership or any of their
Affiliates, in their capacity as such) shall take part in the operations,
management or control (within
37
the meaning of the Act) of the Partnership's business, transact any business in
the Partnership's name or have the power to sign documents for, or otherwise
bind the Partnership. The transaction of any such business by the General
Partner, any of its Affiliates or any officer, director, employee, partner,
agent or trustee of the General Partner, the Partnership or any of their
Affiliates, in their capacity as such, shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees under this
Agreement.
Section 8.3. Outside Activities of Partners
Subject to any agreements entered into pursuant to Section
7.6. hereof and any other agreements entered into by a Partner or its Affiliates
with the General Partner, the Partnership or a Subsidiary (including, without
limitation, any employment agreement), any Partner and any Assignee, officer,
director, employee, agent, trustee, Affiliate or shareholder of any Partner
shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business
interests and activities that are in direct or indirect competition with the
Partnership or that are enhanced by the activities of the Partnership. Neither
the Partnership nor any Partner shall have any rights by virtue of this
Agreement in any business ventures of any Partner or Assignee. Subject to such
agreements, none of the Partners nor any other Person shall have any rights by
virtue of this Agreement or the relationship established hereby in any business
ventures of any other Person (other than the General Partner, to the extent
expressly provided herein), and such Person shall have no obligation pursuant to
this Agreement, subject to Section 7.6. hereof and any other agreements entered
into by a Partner or its Affiliates with the General Partner, the Partnership or
a Subsidiary, to offer any interest in any such business ventures to the
Partnership, any Partner or any such other Person, even if such opportunity is
of a character that, if presented to the Partnership, any Partner or such other
Person, could be taken by such Person.
Section 8.4. Return of Capital
Except pursuant to the rights of Exchange set forth in Section
8.6 hereof, no Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein. Except
to the extent expressly provided in this Agreement, no Partner or Assignee shall
have priority over any other Partner or Assignee either as to the return of
Capital Contributions or as to profits, losses, distributions or credits.
Section 8.5. Rights of Limited Partners Relating to the
Partnership
A. In addition to other rights provided by this Agreement or
by the Act, and except as limited by Section 8.5.C hereof, each Limited Partner
shall have the right, for a purpose reasonably related to such Limited Partner's
Partnership Interest in the Partnership, upon written demand with a statement of
the purpose of such demand and at such Limited Partner's own expense:
(1) to obtain a copy of (i) the most recent annual
and quarterly reports filed with the SEC by the General Partner or the
Parent of the General Partner pursuant to the Exchange Act and (ii)
each report or other written communication sent to the shareholders of
the General Partner;
(2) to obtain a copy of the Partnership's federal,
state and local income tax returns for each Fiscal Year;
38
(3) to obtain a current list of the name and last
known business, residence or mailing address of each Partner;
(4) to obtain a copy of this Agreement and the
Certificate and all amendments thereto, together with executed copies
of all powers of attorney pursuant to which this Agreement, the
Certificate and all amendments thereto have been executed; and
(5) to obtain true and full information regarding the
amount of cash and a description and statement of any other property or
services contributed by each Partner and that each Partner has agreed
to contribute in the future, and the date on which each became a
Partner.
B. On written request, the Partnership shall notify any
Limited Partner of the then current Adjustment Factor or any change made to the
Adjustment Factor or to the REIT Shares Amount.
C. Notwithstanding any other provision of this Section 8.5,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or could damage the Partnership or its
business or (ii) the Partnership or the General Partner is required by law or by
agreements with unaffiliated third parties to keep confidential.
Section 8.6. Exchange Rights
A. On or after the date one year after the Effective Date,
each Limited Partner shall have the right (subject to the terms and conditions
set forth herein) to require the General Partner to acquire all or a portion of
the Partnership Units held by such Limited Partner (such Partnership Units being
hereafter called "Tendered Units") in exchange (an "Exchange") for, at the
election of and in the sole and absolute discretion of the General Partner,
either the Cash Amount Per Unit times the number of Tendered Units or a number
of REIT Shares equal to the REIT Shares Amount payable on the Specified Exchange
Date. Any Exchange shall be exercised pursuant to a Notice of Exchange delivered
to the General Partner by the Limited Partner exercising the Exchange right (the
"Tendering Party"). On the Specified Exchange Date, the Tendering Party shall
sell the Tendered Units to the General Partner in exchange for, at the election
of in the sole and absolute discretion of the General Partner, either the Cash
Amount Per Unit times the number of Tendered Units or a number of REIT Shares
equal to the REIT Shares Amount. The Tendering Party shall submit (i) such
information, certification or affidavit as the General Partner may reasonably
require in connection with the application of the Ownership Limit and the
application of any restrictions and limitations of the Charter to any such
Exchange and (ii) such written representations, investment letters, legal
opinions or other instruments necessary, in the General Partner's view, to
effect compliance with the Securities Act. If applicable, the cash shall be
delivered as a certified check payable to the Tendering Party or, in the General
Partner's sole discretion, in immediately available funds. If applicable, the
REIT Shares Amount shall be delivered by the General Partner's Parent as duly
authorized, validly issued, fully paid and nonassessable REIT Shares and, if
applicable, Rights, free of any pledge, lien, encumbrance or restriction, other
than the Ownership Limit and other restrictions provided in the Charter, the
Bylaws of the General Partner's Parent, the Securities Act and relevant state
securities or "blue sky" laws. Neither any Tendering Party whose Tendered Units
are acquired by the General Partner pursuant to this Section 8.6.A, any other
Partner, any Assignee nor any other interested Person shall have any right to
require or cause the General Partner's Parent to
39
register, qualify or list any REIT Shares owned or held by such Person, whether
or not such REIT Shares are issued pursuant to this Section 8.6.A, with the SEC,
with any state securities commissioner, department or agency, under the
Securities Act or the Exchange Act or with any stock exchange; provided,
however, that this limitation shall not be in derogation of any registration or
similar rights granted pursuant to any other written agreement between the
General Partner's Parent and any such Person. Notwithstanding any delay in such
delivery, the Tendering Party shall be deemed the owner of such REIT Shares and
Rights for all purposes, including, without limitation, rights to vote or
consent, receive dividends, and exercise rights, as of the Specified Exchange
Date. REIT Shares issued upon an acquisition of the Tendered Units by the
General Partner's Parent pursuant to this Section 8.6.A may contain such legends
regarding restrictions under the Securities Act and applicable state securities
laws as the General Partner's Parent in good faith determines to be necessary or
advisable in order to ensure compliance with such laws.
B. Notwithstanding the provisions of Section 8.6.A hereof, no
Limited Partner shall have any right to tender for Exchange (whether for the
REIT Shares Amount or for cash) any Excess Partnership Units held by such
Limited Partner. The General Partner's Parent shall have no obligation to
acquire Excess Partnership Units, whether for the REIT Shares Amount or cash.
C. Notwithstanding anything herein to the contrary, with
respect to any Exchange pursuant to this Section 8.6:
(1) Without the Consent of the General Partner, no
Limited Partner may effect an Exchange for less than 1,000,000
Partnership Units or, if the Limited Partner holds less than 1,000,000
Partnership Units, less than all of the Partnership Units held by such
Limited Partner.
(2) The consummation of any Exchange shall be subject
to the expiration or termination of the applicable waiting period, if
any, under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, if such Act is determined to be applicable to any such
Exchange.
(3) Each Tendering Party shall continue to own all
Partnership Units subject to any Exchange, and be treated as a Partner
with respect to such Partnership Units for all purposes of this
Agreement, until such Partnership Units are transferred to the General
Partner and paid for or exchanged on the Specified Exchange Date. Until
a Specified Exchange Date and an acquisition of the Tendered Units by
the General Partner pursuant to Section 8.6.A hereof, the Tendering
Party shall have no rights as a shareholder of the General Partner's
Parent with respect to the REIT Shares issuable in connection with such
acquisition.
D. In connection with an exercise of Exchange rights pursuant
to this Section 8.6, the Tendering Party shall submit the following to the
General Partner's Parent, in addition to the Notice of Exchange:
(1) A written affidavit, dated the same date as, and
accompanying, the Notice of Exchange, (a) disclosing the actual and
constructive ownership, as determined for purposes of Code Sections
856(a)(6), 856(h), 856(d)(2)(B) and 856(d)(5), of REIT Shares by (i)
such Tendering Party and (ii) any Related Party and (b) representing
that, after giving effect to the Exchange, neither the Tendering Party
nor any Related Party will own REIT Shares in excess of the Ownership
Limit;
40
(2) A written representation that neither the
Tendering Party nor any Related Party has any intention to acquire any
additional REIT Shares prior to the closing of the Exchange on the
Specified Exchange Date; and
(3) An undertaking to certify, at and as a condition
to the closing of the Exchange that either (a) the actual and
constructive ownership of REIT Shares by the Tendering Party and any
Related Party remain unchanged from that disclosed in the affidavit
required by Section 8.6.E(1) or (2) after giving effect to the
Exchange, neither the Tendering Party nor any Related Party shall own
REIT Shares in violation of the Ownership Limit.
E. The General Partner may require that every Limited Partner
Exchange all of the Partnership Units of the Limited Partners in connection with
the sale or disposition by the Partnership of all or substantially all of the
real properties of the Partnership, other than to an Affiliate of the General
Partner, subject to compliance with Section 7.3.D(2). In such event, the
Exchange shall occur and be effective immediately prior to the date of such sale
or disposition and the General Partner shall be deemed to have acquired all of
the Partnership Units (and all capital accounts) prior to any Liquidating Event
of the Partnership. In addition, if the General Partner requests that every
Limited Partner Exchange, pursuant to this Section 8.6.E., at the election of
any Limited Partner the General Partner shall Exchange the Units for cash in
lieu of REIT Shares.
ARTICLE 9.
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1. Records and Accounting
A. The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Partners any
information, lists and copies of documents required to be provided pursuant to
Section 9.3 hereof. Any records maintained by or on behalf of the Partnership in
the regular course of its business may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time.
B. The books of the Partnership shall be maintained, for
financial and tax reporting purposes, on an accrual basis in accordance with
generally accepted accounting principles, or on such other basis as the General
Partner determines to be necessary or appropriate. To the extent permitted by
sound accounting practices and principles, the Partnership and the General
Partner may operate with integrated or consolidated accounting records,
operations and principles.
Section 9.2. Fiscal Year
The Fiscal Year of the Partnership shall be the calendar year.
Section 9.3. Reports
A. As soon as practicable, but in no event later than 90 days
after the close of each Fiscal Year, the General Partner shall cause to be
mailed to each Partner, of record as of the close of the
41
Fiscal Year, an annual report containing financial statements of the
Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such Fiscal Year, presented
in accordance with generally accepted accounting principles, such statements to
be audited by a nationally recognized firm of independent public accountants
selected by the General Partner.
B. As soon as practicable, but in no event later than 90 days
after the close of each calendar quarter (except the last calendar quarter of
each year), the General Partner shall cause to be mailed to each Partner, of
record as of the last day of the calendar quarter, a report containing unaudited
financial statements of the Partnership, or of the General Partner, if such
statements are prepared solely on a consolidated basis with the General Partner,
and such other information as may be required by applicable law or regulation or
as the General Partner determines to be appropriate.
ARTICLE 10.
TAX MATTERS
Section 10.1. Preparation of Tax Returns
The General Partner shall arrange for the preparation and
timely filing of all returns with respect to Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year, the tax information reasonably
required by Partners for federal and state income tax reporting purposes.
Section 10.2. Tax Elections
Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code, including, without limitation, the
election under Section 754 of the Code. The General Partner shall have the right
to seek to revoke any such election (including, without limitation, any election
under Code Sections 754) upon the General Partner's determination in its sole
and absolute discretion that such revocation is in the best interests of the
Partners.
Section 10.3. Tax Matters Partner
A. The General Partner shall be designated and shall operate
as "Tax Matters Partner" (as defined in Code Section 6231), to oversee or handle
matters relating to the taxation of the Partnership.
B. The Partner designated as "Tax Matters Partner" may make
all elections for federal income and all other tax purposes (including, without
limitation, pursuant to Code Section 754).
C. Income tax returns of the Partnership shall be prepared by
such certified public accountant(s) as the General Partner shall retain at the
expense of the Partnership.
Section 10.4. Organizational Expenses
The Partnership shall elect to deduct expenses, if any,
incurred by it in organizing the Partnership ratably over a 60-month period as
provided in Code Section 709.
42
ARTICLE 11.
TRANSFERS AND WITHDRAWALS
Section 11.1. Transfer
A. The term "transfer," when used in this Article 11 with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which the General Partner purports to assign all or any part of its Partnership
Interest to another Person or by which a Limited Partner purports to assign all
or any part of its Partnership Interest to another Person, and includes a sale,
assignment, gift (outright or in trust), pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise. The term
"transfer" when used in this Article 11 does not include any Exchange pursuant
to Section 8.6. No part of the interest of a Partner shall be subject to the
claims of any creditor, to any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered
except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void ab initio.
Section 11.2. Transfer of General Partner's Partnership
Interest
The General Partner shall not withdraw from the Partnership
and shall not transfer all or any portion of its interest in the Partnership
without the Consent of all of the Limited Partners, which may be given or
withheld by each Limited Partner in its sole and absolute discretion, except
that the General Partner may transfer all of its interests to an Affiliate of
the General Partner without any consent required from the Limited Partners. Upon
any transfer of the Partnership Interest of the General Partner in accordance
with the provisions of this Section 11.2, the transferee shall become a
Substitute General Partner for all purposes herein, and shall be vested with the
powers and rights of the transferor General Partner, and shall be liable for all
obligations and responsible for all duties of the General Partner, once such
transferee has executed such instruments as may be necessary to effectuate such
admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest
so acquired. It is a condition to any transfer otherwise permitted hereunder
that the transferee assumes, by operation of law or express agreement, all of
the obligations of the transferor General Partner under this Agreement with
respect to such transferred Partnership Interest, and such transfer shall
relieve the transferor General Partner of its obligations under this Agreement
accruing subsequent to the date of such transfer. In the event the General
Partner withdraws from the Partnership, in violation of this Agreement or
otherwise, or otherwise dissolves or terminates, or upon the Incapacity of the
General Partner, all of the remaining Partners may elect to continue the
Partnership business by selecting a Substitute General Partner in accordance
with the Act.
Section 11.3. Limited Partners' Rights to Transfer
A. General. No Limited Partner shall Transfer all or any
portion of its Partnership Interest, or any of such Limited Partners economic
rights as a Limited Partner, to any transferee without the consent of the
General Partner, which consent shall not be unreasonably withheld, provided,
however, that any Limited Partner may, at any time, without the consent of the
General Partner, Transfer all or part of its Partnership Interest (i) in the
case of a Partner which is an individual, to any Family Member, any trust
(whether or not revocable) of which such Limited Partner or such Limited
Partner's Family Members are the sole beneficiaries, (ii) in the case of a
Partner which is not an individual, to the persons who were partners,
stockholders or owners of the Partner as of the Effective Date, (iii) pursuant
to a gift
43
or other transfer without consideration, (iv) pursuant to the applicable laws of
descent or distribution, (v) to another Partner, (vi) subject to the provisions
of Section 11.6, pursuant to a grant of a security interest, pledge or other
encumbrance effected in a bona fide transaction or as a result of the exercise
of remedies related to the security interest, pledge or other encumbrance (other
than, in each case, to a lender to the Partnership or a Person who is related to
a lender to the Partnership) or (vii) to any Affiliate, provided that the
transferee is, in any such case, a Qualified Transferee. Any Transfer permitted
by this proviso is referred to as a "Permitted Transfer." It is a condition to
any Transfer otherwise permitted hereunder that the transferee assume by
operation of law or express agreement all of the obligations of the transferor
Partner under this Agreement with respect to such Transferred Partnership
Interest. Notwithstanding the foregoing, any transferee of any Transferred
Partnership Interest shall be subject to the Ownership Limits and any and all
ownership limitations contained in the Charter. Any transferee, whether or not
admitted as a Substituted Partner, shall take subject to the obligations of the
transferor hereunder. Unless admitted as a Substituted Partner, no transferee,
whether by a voluntary Transfer, by operation of law or otherwise, shall have
any rights hereunder, other than the rights of an Assignee as provided in
Section 11.5 hereof.
B. Incapacity. If a Limited Partner is subject to Incapacity,
the executor, administrator, trustee, committee, guardian, conservator or
receiver of such Limited Partner's estate shall have all the rights of a Limited
Partner, but not more rights than those enjoyed by other Limited Partners, for
the purpose of settling or managing the estate, and such power as the
Incapacitated Limited Partner possessed to Transfer all or any part of its
interest in the Partnership. The Incapacity of a Limited Partner, in and of
itself, shall not dissolve or terminate the Partnership.
C. Opinion of Counsel. In connection with any Transfer of a
Partnership Interest, the General Partner shall have the right to receive an
opinion of counsel reasonably satisfactory to it to the effect that the proposed
Transfer may be effected without registration under the Securities Act and will
not otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred. If, in
the opinion of such counsel, such Transfer would require the filing of a
registration statement under the Securities Act or would otherwise violate any
federal or state securities laws or regulations applicable to the Partnership or
the Partnership Units, the General Partner may prohibit any Transfer by a
Partner of Partnership Interests otherwise permitted under this Section 11.3.
D. Adverse Tax Consequences. No Transfer by a Partner of its
Partnership Interests (including any Exchange pursuant to Section 8.6) may be
made to any Person if (i) in the opinion of legal counsel for the Partnership,
it would result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes, (ii) in the opinion of legal
counsel for the Partnership, it would adversely affect the ability of the
General Partner or any Parent of General Partner to continue to qualify as a
REIT or would subject the General Partner or its Parent to any additional taxes
under Code Section 857 or Code Section 4981 (provided, that this requirement may
be waived by the General Partner in its sole and absolute discretion) or (iii)
such Transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Code Section 7704.
E. Transfers to Lenders. No transfer of any Partnership Units
may be made to a lender to the Partnership or any Person who is related (within
the meaning of Section 1.752-4(b) of the Regulations) to any lender to the
Partnership whose loan constitutes a Nonrecourse Liability, without the consent
of the General Partner, which consent shall not be unreasonably withheld;
provided that, as a condition to such consent, the lender will be required to
enter into an arrangement with the Partnership and the General Partner to redeem
or exchange for the REIT Shares Amount any Partnership Units in
44
which a security interest is held simultaneously with the time at which such
lender would be deemed to be a Partner in the Partnership for purposes of
allocating liabilities to such lender under Code Section 752.
Section 11.4. Substituted Partners
A. Notwithstanding anything in this agreement to the contrary,
no Partner shall have the right to substitute a transferee as a Partner in its
place, including, without limitation, a transferee pursuant to any Permitted
Transfer. The General Partner shall, however, have the right to consent to the
admission of a transferee of the interest of a Partner pursuant to this Section
11.4 as a Substituted Partner, which consent may be given or withheld by the
General Partner in its sole and absolute discretion. The General Partner's
failure or refusal to permit a transferee of any such interests to become a
Substituted Partner shall not give rise to any cause of action against the
Partnership or any Partner.
B. A transferee who has been admitted as a Substituted Partner
in accordance with this Section 11.4 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Partner under this
Agreement. The admission of any transferee as a Substituted Partner shall be
subject to the transferee executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement (including
without limitation, the provisions of Section 2.4 and such other documents or
instruments as may be required to effect the admission).
C. Upon the admission of a Substituted Partner, the General
Partner shall amend Exhibit A to reflect the name, address, Capital Account,
number of Partnership Units of such Substituted Partner and to eliminate or
adjust, if necessary, the name, address, Capital Account, number of Partnership
Units of the predecessor of such Substituted Partner (and any other Partner, as
necessary).
Section 11.5. Assignees
Unless and until a Partnership Interest transferee (including,
without limitation, a transferee meeting the requirements provided for in
Section 11.3) is admitted to the Partnership as a Substituted Limited Partner
pursuant to Section 11.4, such transferee shall be considered an Assignee for
purposes of this Agreement. An Assignee shall be entitled to all the rights of
an assignee of a limited partnership interest under the Act, including the right
to receive distributions from the Partnership and the share of Net Income, Net
Losses and other items of income, gain, loss, deduction and credit of the
Partnership attributable to the Partnership Units assigned to such transferee,
the rights to Transfer the Partnership Units provided in this Article 11, and
the right of Exchange provided in Section 8.6, but shall not be deemed to be a
Partner of Partnership Units for any other purpose under this Agreement, and
shall not be entitled to effect a Consent or vote with respect to such
Partnership Units on any matter presented to the Partners for approval (such
right to Consent or vote, to the extent provided in this Agreement or under the
Act, fully remaining with the transferor Partner). In the event that any such
transferee desires to make a further assignment of any such Partnership Units,
such transferee shall be subject to all the provisions of this Article 11 to the
same extent and in the same manner as any Partners desiring to make an
assignment of Partnership Units. The General Partner shall have no liability
under any circumstance with respect to any Assignee as to which it does not have
notice.
Section 11.6. General Provisions
A. No General Partner may withdraw from the Partnership other
than as a result of (i) a permitted Transfer of all of such General Partner's
Partnership Units in accordance with this Article 11, and the transferee of such
Partnership Units being admitting to the Partnership as a Substituted
45
Partner, or (ii) pursuant to an Exchange by the General Partner of all of its
Partnership Units under Section 8.6 hereof.
B. Any Partner who shall Transfer all of its Partnership Units
in a Transfer (i) permitted pursuant to this Article 11 where such transferee
was admitted as a Substituted Partner or (ii) pursuant to the exercise of its
rights to effect an Exchange of all of its Partnership Units under Section 8.6
hereof, shall cease to be a Partner.
C. Transfers pursuant to this Article 11 may only be made on
the first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise agrees.
D. All distributions of Available Cash attributable to an
Partnership Unit with respect to which the Partnership Record Date is before the
date of a Transfer or an Exchange of the Partnership Unit shall be made to the
transferor Partner or the exchanging Partner, as the case may be, and, in the
case of a Transfer other than an Exchange, all distributions of Available Cash
thereafter attributable to such Partnership Unit shall be made to the transferee
Partner.
E. In addition to any other restrictions on Transfer herein
contained, in no event may any Transfer or assignment of a Partnership Interest
by any Partner (including any Exchange or any other acquisition of Partnership
Units by the Partnership) be made:
(a) to any person or entity who lacks the legal
right, power or capacity to own a Partnership Interest;
(b) in violation of applicable law;
(c) if such Transfer would, in the opinion of counsel
to the Partnership or the General Partner, cause an increased tax
liability to any other Partner or Assignee as a result of the
termination of the Partnership, in either case for federal or state
income or franchise tax purposes (except as a result of the Exchange of
all Partnership Units held by all Partners);
(d) if such Transfer would, in the opinion of legal
counsel to the Partnership, cause the Partnership or its Parent either
(i) to cease to be classified as a partnership or (ii) to be classified
as a publicly traded partnership treated as a corporation, in either
case for federal or state income tax purposes (except as a result of an
the Exchange of all Partnership Units held by all Partners);
(e) if such Transfer would cause the Partnership or
its Parent to become, with respect to any employee benefit plan subject
to Title I of ERISA, a "party-in-interest" (as defined in ERISA Section
3(14)) or a "disqualified person" (as defined in Code Section 4975(c));
(f) if such Transfer would, in the opinion of legal
counsel to the Partnership, cause any portion of the assets of the
Partnership or its Parent to constitute assets of any employee benefit
plan pursuant to Department of Labor Regulations Section 2510.2-101;
(g) if such Transfer causes the Partnership or its
Parent (as opposed to the General Partner) to become a reporting
company under the Exchange Act; or
46
(h) if such Transfer subjects the Partnership or its
Parent to regulation under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or ERISA, each as amended.
ARTICLE 12.
ADMISSION OF PARTNERS
Section 12.1. Admission of Successor General Partner
A successor to all of the General Partner's Partnership
Interest pursuant to Section 11.2 hereof who is proposed to be admitted as a
successor General Partner shall be admitted to the Partnership as the General
Partner, effective immediately upon such Transfer. Any such successor shall
carry on the business of the Partnership without dissolution. In each case, the
admission shall be subject to the successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms, conditions and
applicable obligations of this Agreement and such other documents or instruments
as may be required to effect the admission.
Section 12.2. Admission of Additional Partners
A. Subject to Section 7.3.(B), a Person (other than an
existing Partner) who makes a Capital Contribution to the Partnership in
accordance with this Agreement shall be admitted to the Partnership as an
Additional Partner only upon furnishing to the General Partner (i) evidence of
acceptance, in form and substance satisfactory to the General Partner, of all of
the terms and conditions of this Agreement, including, without limitation, the
power of attorney granted in Section 2.4 hereof and the consent required under
Section 4.2, and (ii) such other documents or instruments as may be required in
the sole and absolute discretion of the General Partner in order to effect such
Person's admission as an Additional Partner.
B. Notwithstanding anything to the contrary in this Section
12.2, and subject to Section 7.3(B) and Section 11.3 as to a Permitted Transfer,
no Person shall be admitted as an Additional Partner without the consent of the
General Partner, which consent may be given or withheld in the General Partner's
sole and absolute discretion. The admission of any Person as an Additional
Partner shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the General Partner to such admission.
C. If any Additional Partner is admitted to the Partnership on
any day other than the first day of a Fiscal Year, then Net Income, Net Loss,
each item thereof and all other items of income, gain, loss, deduction and
credit allocable among Partners and Assignees for such Fiscal Year shall be
allocated among such Additional Partner and all other Partners and Assignees by
taking into account their varying interests during the Fiscal Year in accordance
with Code Section 706(d), using the "interim closing of the books" method or
another permissible method selected by the General Partner. Solely for purposes
of making such allocations, each of such items for the calendar month in which
an admission of any Additional Partner occurs shall be allocated among all the
Partners and Assignees including such Additional Partner, in accordance with the
principles described in Section 11.6.C hereof. All distributions of Available
Cash with respect to which the Partnership Record Date is before the date of
such admission shall be made solely to Partners and Assignees other than the
Additional Partner, and all distributions of Available Cash thereafter shall be
made to all the Partners and Assignees including such Additional Partner.
47
Section 12.3. Amendment of Agreement and Certificate of
Partnership
For the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
ARTICLE 13.
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1. Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Partners or Additional Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the
withdrawal of the General Partner, any successor General Partner shall continue
the business of the Partnership without dissolution. However, the Partnership
shall dissolve, and its affairs shall be wound up, upon the first to occur of
any of the following (each a "Liquidating Event"):
A. the expiration of its term as provided in Section 2.5
hereof;
B. an event of withdrawal of the General Partner, as defined
in the Act (other than an event of bankruptcy and other than the cessation of
the functioning of Midway Holdings, Inc., Palmetto Holdings I, Inc. and X.X.
Xxxxxxx Land Holdings Co., Inc. as General Partners of the Partnership), unless,
within 90 days after the withdrawal of a General Partner, the remaining Partners
unanimously agree in writing to continue the business of the Partnership and to
the appointment, effective as of the date of withdrawal, of a substitute General
Partner;
C. an election to dissolve the Partnership after the No
Transfer Period expires made by the General Partner, in its sole and absolute
discretion;
D. entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act;
E. the sale of all or substantially all of the assets and
properties of the Partnership for cash or marketable securities;
F. a final and non-appealable judgment is entered by a court
of competent jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a court
with appropriate jurisdiction against the General Partner, in each case under
any federal or state bankruptcy or insolvency laws as now or hereafter in
effect, unless prior to or within ninety days after the entry of such order or
judgment a Majority of Remaining Partners Consent in writing to continue the
business of the Partnership and to the appointment, effective as of a date prior
to the date of such order or judgment, of a substitute General Partner;
G. the Incapacity of the General Partner other than an event
covered under B above, unless a Majority of Remaining Partners agree in writing
to continue the business of the Partnership and to the appointment, effective as
of a date prior to the date of such Incapacity, of a substitute General Partner;
or
48
H. the Exchange of all Partnership Units (other than those of
the General Partner).
Section 13.2. Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets and satisfying the claims of its creditors and
Partners. After the occurrence of a Liquidating Event, no Partner shall take any
action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership's business and affairs. The General Partner (or,
in the event that there is no remaining General Partner, any Person elected by a
Majority in Interest of the Limited Partners (the General Partner or such other
Person being referred to herein as the "Liquidator")) shall be responsible for
overseeing the winding up and dissolution of the Partnership and shall take full
account of the Partnership's liabilities and property, and the Partnership
property shall be liquidated as promptly as is consistent with obtaining the
fair value thereof, and the proceeds therefrom (which may, to the extent
determined by the General Partner, include shares of stock in the General
Partner) shall be applied and distributed in the following order:
(1) First, to the satisfaction of all of the
Partnership's debts and liabilities to creditors other than the
Partners and their Assignees (whether by payment or the making of
reasonable provision for payment thereof);
(2) Second, to the satisfaction of all of the
Partnership's debts and liabilities to the Limited Partners and any
Assignees (whether by payment or the making of reasonable provision for
payment thereof);
(3) Third, to the satisfaction of all of the
Partnership's debts and liabilities to the General Partner (whether by
payment or the making of reasonable provision for payment thereof),
including, but not limited to, amounts due as reimbursements under
Section 7.4 hereof; and
(4) The balance, if any, to the Partners and any
Assignees in accordance with and proportion to their positive Capital
Account balances, after giving effect to all contributions,
distributions and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof
that require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part of all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time.
49
The Liquidator shall determine the fair market value of any property distributed
in kind using such reasonable method of valuation as it may adopt.
C. In the event that the Partnership is "liquidated" within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be
made pursuant to this Article 13 to the Partners and Assignees that have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2) to the extent of, and in proportion to, their positive
Capital Account balances. If any Partner has a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs),
such Partner shall have no obligation to make any contribution to the capital of
the Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever. In the sole and absolute discretion of the General Partner or the
Liquidator, a pro rata portion of the distributions that would otherwise be made
to the Partners pursuant to this Article 13 may be withheld or escrowed to
provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Partnership, provided that such withheld or escrowed amounts shall
be distributed to the Partners in the manner and order of priority set forth in
Section 13.2.A hereof as soon as practicable.
Section 13.3. Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the
event that the Partnership is liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the
Partnership's Property shall not be liquidated, the Partnership's liabilities
shall not be paid or discharged and the Partnership's affairs shall not be wound
up. Instead, for federal and state income tax purposes, the Partnership shall be
deemed to have distributed its assets in kind to the Partners, who shall be
deemed to have assumed and taken such assets subject to all Partnership
liabilities, all in accordance with their respective Capital Accounts.
Immediately thereafter, the Partners shall be deemed to have recontributed the
Partnership assets in kind to the Partnership, which shall be deemed to have
assumed and taken such assets subject to all such liabilities.
Section 13.4. Rights of Partners
Except as otherwise provided in this Agreement, (a) each
Partner shall look solely to the assets of the Partnership for the return of its
Capital Contribution, (b) no Partner shall have the right or power to demand or
receive property other than cash from the Partnership and (c) no Partner shall
have priority over any other Partner as to the return of its Capital
Contributions, distributions or allocations.
Section 13.5. Notice of Dissolution
In the event that a Liquidating Event occurs or an event
occurs that would, but for an election or objection by one or more Partners
pursuant to Section 13.1 hereof, result in a dissolution of the Partnership, the
General Partner shall, within 30 days thereafter, provide written notice thereof
to each of the Partners and, in the General Partner's sole and absolute
discretion or as required by the Act, to all other parties with whom the
Partnership regularly conducts business (as determined in the sole and absolute
discretion of the General Partner), and the General Partner may, or, if required
by the Act, shall, publish notice thereof in a newspaper of general circulation
in each place in which the Partnership regularly conduct business (as determined
in the sole and absolute discretion of the General Partner).
50
Section 13.6. Cancellation of Certificate of Limited
Partnership
Upon the completion of the liquidation of the Partnership cash
and property as provided in Section 13.2 hereof, the Partnership shall be
terminated and the Certificate and all qualifications of the Partnership as a
foreign limited partnership in jurisdictions other than the State of Florida
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.
Section 13.7. Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up
of the business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.
Section 13.8. Liability of Liquidator
The Liquidator shall be indemnified and held harmless by the
Partnership from and against any and all claims, liabilities, costs, damages,
and causes of action of any nature whatsoever arising out of or incidental to
the Liquidator's taking of any action authorized under or within the scope of
this Agreement; provided, however, that the Liquidator shall not be entitled to
indemnification, and shall not be held harmless, where the claim, demand,
liability, cost, damage or cause of action at issue arises out of (i) a matter
entirely unrelated to the Liquidator's action or conduct pursuant to the
provisions of this Agreement or (ii) the proven willful misconduct or gross
negligence of the Liquidator.
ARTICLE 14.
GENERAL PROVISIONS
Section 14.1. Addresses and Notice
Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication
(including by telecopy, facsimile, or commercial courier service) (i) in the
case of a Partner, to that Partner at the address set forth on the signature
pages attached hereto, or such other address of which the Partner shall notify
the General Partner in writing and (ii) in the case of an Assignee, to the
address of which such Assignee shall notify the General Partner in writing.
Section 14.2. Titles and Captions
All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in
no way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to "Articles" or
"Sections" are to Articles and Sections of this Agreement.
Section 14.3. Pronouns and Plurals
Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
51
Section 14.4. Further Action
The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 14.5. Binding Effect
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.
Section 14.6. Creditors
Other than as expressly set forth herein with respect to
Indemnitees, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.
Section 14.7. Waiver
No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
Section 14.8. Counterparts
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
Section 14.9. Applicable Law
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Florida, without regard to the
principles of conflicts of law. In the event of a conflict between any provision
of this Agreement and any non-mandatory provision of the Act, the provisions of
this Agreement shall control and take precedence.
Section 14.10. Entire Agreement
This Agreement contains all of the understandings and
agreements between and among the Partners with respect to the subject matter of
this Agreement and the rights, interests and obligations of the Partners with
respect to the Partnership.
Section 14.11. Invalidity of Provisions
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
Section 14.12. Limitation to Preserve REIT Status
Notwithstanding anything else in this Agreement, to the extent
that the amount paid, credited, distributed or reimbursed by the Partnership to,
for or with respect to the General Partner or its
52
officers, directors, employees or agents, whether as a reimbursement, fee,
expense or indemnity (a "REIT Payment"), would constitute gross income to the
General Partner or its Parent for purposes of Code Section 856(c)(2) or Code
Section 856(c)(3), then, notwithstanding any other provision of this Agreement,
the amount of such REIT Payments, as selected by the General Partner in its
discretion from among items of potential distribution, reimbursement, fees,
expenses and indemnities, shall be reduced for any Fiscal Year so that the REIT
Payments, as so reduced, to, for or with respect to the General Partner shall
not exceed the lesser of:
(a) an amount equal to the excess, if any, of (i)
four and nine-tenths percent (4.9%) of the General Partner's Parent's
total gross income (but excluding the amount of any REIT Payments) for
the Fiscal Year that is described in subsections (A) through (H) of
Code Section 856(c)(2) over (ii) the amount of gross income (within the
meaning of Code Section 856(c)(2)) derived by the General Partner's
Parent from sources other than those described in subsections (A)
through (H) of Code Section 856(c)(2) (but not including the amount of
any REIT Payments); or
(b) an amount equal to the excess, if any, of (i) 24%
of the General Partner's Parent's total gross income (but excluding the
amount of any REIT Payments) for the Fiscal Year that is described in
subsections (A) through (I) of Code Section 856(c)(3) over (ii) the
amount of gross income (within the meaning of Code Section 856(c)(3))
derived by the General Partner's Parent from sources other than those
described in subsections (A) through (I) of Code Section 856(c)(3) (but
not including the amount of any REIT Payments);
provided, however, that REIT Payments in excess of the amounts set forth in
clauses (a) and (b) above may be made if the General Partner, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts shall not adversely affect the General Partner's Parent's ability to
qualify as a REIT. To the extent that REIT Payments may not be made in a Fiscal
Year as a consequence of the limitations set forth in this Section 14.12, such
REIT Payments shall carry over and shall be treated as arising in the following
Fiscal Year. The purpose of the limitations contained in this Section 14.12 is
to prevent General Partner's Parent from failing to qualify as a REIT under the
Code by reason of the Parent's allocable share of the General Partner's share of
items, including distributions, reimbursements, fees, expenses or indemnities,
receivable directly or indirectly from the Partnership, and this Section 14.12
shall be interpreted and applied to effectuate such purpose.
Section 14.13. No Partition
No Partner nor any successor-in-interest to a Partner shall
have the right while this Agreement remains in effect to have any property of
the Partnership partitioned, or to file a complaint or institute to any
proceeding at law or in equity to have such property of the Partnership
partitioned, and each Partner, on behalf of itself and its successors and
assigns hereby waives any such right. It is the intention of the Partners that
the rights of the parties hereto and their successors-in-interest to Partnership
property, as among themselves, shall be governed by the terms of this Agreement,
and that the rights of the Partners and their successors-in-interest shall be
subject to the limitations and restrictions as set forth in this Agreement.
53
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the date first written above.
GENERAL PARTNER:
KIMCO BRADENTON 698, INC.,
a Florida corporation
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------
Title: V.P.
----------------------------
Address:
c/o Kimco Realty Corporation
0000 Xxx Xxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxx Xxxx, XX 00000-0000
/s/ Xxxxxxx X. Wafer
-----------------------------------
Xxxxxxx X. Wafer, Withdrawing Partner from
the Operating Partnership
LIMITED PARTNERS:
----------------
XXXXXX INVESTMENT CORPORATION
By: /s/ Xxxxx X. Xxxxxx XX
-------------------------------
Name:
-----------------------------
Title: President
----------------------------
Address:
Xxxxxx Investment Corporation
Xxxxx X. Xxxxxx, XX
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
54
FARGO INVESTMENTS
By: /s/ X. Xxxxxxx
-------------------------------
Name: X. Xxxxxxx
-----------------------------
Title: G.P.
----------------------------
Address:
Fargo Investments
Xxxxxxx Xxxxxx & Co.
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
PALMETTO HOLDINGS I, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
-----------------------------
Title: President
----------------------------
Palmetto Holdings I, Inc.
Xx. Xxxx X. Xxxxxxxx
0000 Xxxx Xxxxxx Xxx
Xxxxxx Xxxxxx, XX 00000
MIDWAY HOLDINGS, INC.
By: /s/ Xxxx Xxx Xxxxxx
-------------------------------
Name: Xxxx Xxx Xxxxxx
-----------------------------
Title: President
----------------------------
Address:
Midway Holdings, Inc.
Xxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0
Xxxxxxxxx, XX 00000
55
X.X. XXXXXXX LAND COMPANY, INC.
By: /s/ X. X. Xxxxxxx
-------------------------------
Name: X. X. Xxxxxxx
-----------------------------
Title: Pres.
----------------------------
Address:
X.X. Xxxxxxx Land Company
Xxxxxxx-Xxxxxxx Realty
X.X. Xxx 000
Xxxx Xxxxxx, XX 00000
56
Kimco Realty Corporation, a Maryland corporation, hereby executed this
agreement solely for the purpose of acknowledging its agreement to make REIT
shares available to the General Partner in the event of an exchange pursuant to
Section 8.6 and not as a partner of the Partnership.
By: KIMCO REALTY CORPORATION
a Maryland corporation
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
--------------------------------
EXHIBIT A
PARTNER'S PARTNERSHIP UNITS
Value of Partnership
Name of Partner Units
--------------------------------------------------------
General Partner:
Kimco Bradenton 698 Inc. 9,299,788
Limited Partners:
Midway Holdings, Inc. 1,300,000
Xxxxxx Investment Corp. 345,532
Fargo Investments 1,727,664
Palmetto Holdings I, Inc. 500,000
X.X. Xxxxxxx Land Co. 1,100,000
A-1
EXHIBIT B
NOTICE OF EXCHANGE
To: Kimco Bradenton 698, Inc.
0000 Xxx Xxxx Xxxx Xxxx
Xxxxx 000
X.X. Xxx 0000
Xxx Xxxx Xxxx, XX 00000-0000
The undersigned Partner or Assignee hereby irrevocably tenders for
Exchange __________ Partnership Units in BAY-GARD, LTD., in accordance with the
terms of the Amended and Restated Limited Partnership Agreement of BAY-GARD,
LTD., dated as of _________ ___, 1998 (the "Agreement"), and the Exchange rights
referred to therein. The undersigned Partner or Assignee:
(a) undertakes (i) to surrender such Partnership
Units and any certificate therefor at the closing of the Exchange and
(ii) to furnish to the General Partner, prior to the Specified Exchange
Date, the documentation, instruments and information required under
Section 8.6.D of the Agreement;
(b) directs that, at the sole discretion of the
General Partner, either (i) a certified check representing the Cash
Amount deliverable upon closing of the Exchange be delivered to the
address specified below or (ii) a certificate(s) representing the REIT
Shares deliverable upon the closing of such Exchange be delivered to
the address specified below;
(c) represents, warrants, certifies and agrees that:
(1) the undersigned Partner or Assignee has, and at the closing of the
Exchange will have, good, marketable and unencumbered title to such
Partnership Units, free and clear of the rights or interests of any
other person or entity, (2) the undersigned Partner or Assignee has,
and at the closing of the Exchange will have, the full right, power and
authority to tender and surrender such Partnership Units as provided
herein, and (3) the undersigned Partner or Assignee has obtained the
consent or approval of all persons and entities, if any, having the
right to consent to or approve such tender and surrender; and
(d) acknowledges that it will continue to own such
Partnership Units until and unless such Exchange transaction closes.
B-1
All capitalized terms used herein and not otherwise defined
shall have the same meaning ascribed to them respectively in the Agreement.
Dated:
-----------------------
Name of Partner or Assignee:
----------------------------------------
----------------------------------------
(Signature of Partner or Assignee)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip)
Signature Guaranteed by:
----------------------------------------
Issue REIT Shares in the name of:
----------------------------------
Please insert social security or
identifying number: ----------------------------------
B-2
