Exhibit 10.1
FORM OF
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
XXXXXX HOTELS LIMITED PARTNERSHIP, L.P.
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINED TERMS...................................................... 1
ARTICLE II PARTNERSHIP CONTINUATION AND IDENTIFICATION....................... 8
2.01. Continuation...................................................... 8
2.02. Name, Office and Registered Agent................................. 8
2.03. Partners.......................................................... 8
2.04. Term and Dissolution.............................................. 9
2.05. Filing of Certificate and Perfection of Limited Partnership....... 10
2.06. Certificates Describing Partnership Units......................... 10
ARTICLE III BUSINESS OF THE PARTNERSHIP...................................... 10
ARTICLE IV CAPITAL CONTRIBUTIONS AND ACCOUNTS................................ 11
4.01. Capital Contributions............................................. 11
4.02. Additional Capital Contributions and Issuances of Additional
Partnership Interests............................................ 11
4.03. Additional Funding................................................ 13
4.04. Capital Accounts.................................................. 14
4.05. Percentage Interests.............................................. 14
4.06. No Interest on Contributions...................................... 14
4.07. Return of Capital Contributions................................... 14
4.08. No Third Party Beneficiary........................................ 15
ARTICLE V PROFITS AND LOSSES; DISTRIBUTIONS.................................. 15
5.01. Allocation of Profit and Loss..................................... 15
5.02. Distribution of Cash.............................................. 17
5.03. REIT Distribution Requirements.................................... 18
5.04. No Right to Distributions in Kind................................. 18
5.05. Limitations on Return of Capital Contributions.................... 18
5.06. Distributions Upon Liquidation.................................... 18
5.07. Substantial Economic Effect....................................... 19
ARTICLE VI RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER............. 19
6.01. Management of the Partnership..................................... 19
6.02. Delegation of Authority........................................... 22
6.03. Indemnification and Exculpation of Indemnitees.................... 22
6.04. Liability of the General Partner.................................. 23
6.05. Reimbursement..................................................... 24
6.06. Outside Activities................................................ 24
6.07. Employment or Retention of Affiliates............................. 25
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6.08. Title to Partnership Assets....................................... 26
6.09. Miscellaneous..................................................... 26
ARTICLE VII CHANGES IN GENERAL PARTNER....................................... 26
7.01. Transfer of the General Partner's Partnership Interest............ 26
7.02. Admission of a Substitute or Additional General Partner........... 27
7.03. Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General
Partner.......................................................... 28
7.04. Removal of a General Partner...................................... 29
ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS.................. 30
8.01. Management of the Partnership..................................... 30
8.02. Power of Attorney................................................. 30
8.03. Limitation on Liability of Limited Partners....................... 30
8.04. Ownership by Limited Partner of Corporate General Partner or
Affiliate........................................................ 31
8.05. Exchange Right.................................................... 31
8.06. Registration...................................................... 33
ARTICLE IX TRANSFERS OF LIMITED PARTNERSHIP INTERESTS........................ 34
9.01. Purchase for Investment........................................... 34
9.02. Restrictions on Transfer of Limited Partnership Interests......... 34
9.03. Admission of Substitute Limited Partner........................... 35
9.04. Rights of Assignees of Partnership Interests...................... 37
9.05. Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner.................................................. 37
9.06. Joint Ownership of Interests...................................... 37
ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS......................... 38
10.01. Books and Records................................................. 38
10.02. Custody of Partnership Funds; Bank Accounts....................... 38
10.03. Fiscal and Taxable Year........................................... 38
10.04. Annual Tax Information and Report................................. 38
10.05. Tax Matters Partner; Tax Elections; Special Basis Adjustments..... 39
10.06. Reports to Limited Partners....................................... 39
ARTICLE XI AMENDMENT OF AGREEMENT............................................ 40
ARTICLE XII GENERAL PROVISIONS............................................... 40
12.01. Notices........................................................... 40
12.02. Survival of Rights................................................ 40
12.03. Additional Documents.............................................. 41
12.04. Severability...................................................... 41
12.05. Entire Agreement.................................................. 41
12.06. Pronouns and Plurals.............................................. 41
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12.07. Headings.......................................................... 41
12.08. Counterparts...................................................... 41
12.09. Governing Law..................................................... 41
EXHIBITS
EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - List of Initial Properties
EXHIBIT C - Notice of Exercise of Exchange Right
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AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
XXXXXX HOTELS LIMITED PARTNERSHIP, L.P.
RECITALS
Xxxxxx Hotels Limited Partnership, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the Commonwealth of Virginia, pursuant to
an Agreement of Limited Partnership dated as of April 21, 1998 (the "Original
Agreement") and a Certificate of Limited Partnership filed with the Virginia
State Corporation Commission effective as of April 21, 1998. This Amended and
Restated Agreement of Limited Partnership Agreements is entered into this ____
day of July, 1998, among Xxxxxx Hotels Trust, a Maryland real estate investment
trust (the "General Partner" or the "Company") and the limited partners set
forth on Exhibit A hereto, for the purpose of amending and restating the
Original Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the Original Agreement to read in its entirety as follows:
ARTICLE I
DEFINED TERMS
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The following defined terms used in this Agreement shall have the meanings
specified below:
"ACT" means the Virginia Revised Uniform Limited Partnership Act, as it may
be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to this Partnership as
a Limited Partner pursuant to Section 4.02 hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares (other than REIT
Shares issued in connection with an exchange pursuant to Section 8.05 hereof) or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase REIT Shares, as set forth in Section
4.02(a)(ii).
"ADMINISTRATIVE EXPENSES" means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses; provided, however, that
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Administrative Expenses shall not include any administrative costs and expenses
incurred by the Company that are attributable to Properties or partnership
interests in a Subsidiary Partnership that are owned by the Company directly.
"AFFILIATE" means, (i) any Person that, directly or indirectly, controls or
is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 10% or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, partner or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities or partnership interests or otherwise.
"AGREED VALUE" means the fair market value of a Partner's non-cash Capital
Contribution as of the date of contribution as agreed to by the Partners. For
purposes of this Partnership Agreement, the Agreed Value of a Partner's non-cash
Capital Contribution shall be equal to the number of Partnership Units received
by such Partner in exchange for Property or an interest therein or in connection
with the merger of a partnership of which such person is a partner with and into
the Partnership, or for any other non-cash asset so contributed, multiplied by
the Public Offering Price or, if the contribution is made after the date hereof,
the "Market Price" calculated in accordance with the second and third sentences
of the definition of "Cash Amount." The names and addresses of the Partners,
number of Partnership Units issued to each Partner, and the Agreed Value of non-
cash Capital Contributions as of the date of contribution is set forth on
Exhibit A.
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"AGREEMENT" means this Amended and Restated Agreement of Limited
Partnership.
"CAPITAL ACCOUNT" has the meaning provided in Section 4.04 hereof.
"CAPITAL CONTRIBUTION" means the total amount of cash, cash equivalents,
and the Agreed Value of any Property or other asset contributed or agreed to be
contributed, as the context requires, to the Partnership by each Partner
pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
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"CAPITAL TRANSACTION" means the refinancing, sale, exchange, condemnation,
recovery of a damage award or insurance proceeds (other than business or rental
interruption insurance proceeds not reinvested in the repair or reconstruction
of Properties), or other disposition of any Property (or the Partnership's
interest therein).
"CASH AMOUNT" means an amount of cash per Partnership Unit equal to the
value of the REIT Shares Amount on the date of receipt by the Company of a
Notice of Exchange. The value of the REIT Shares Amount shall be based on the
average of the daily market price of REIT Shares for the ten consecutive trading
days immediately preceding the date of such valuation. The market price for each
such trading day shall be: (i) if the REIT Shares are listed or admitted to
trading on any securities exchange or the NYSE, the sale price, regular way, on
such day, or if no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, on such day, (ii) if the REIT Shares are not
listed or admitted to trading on any securities exchange or the NYSE, the last
reported sale price on such day or, if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the Company, or (iii) if the REIT Shares
are not listed or admitted to trading on any securities exchange or the NYSE and
no such last reported sale price or closing bid and asked prices are available,
the average of the reported high bid and low asked prices on such day, as
reported by a reliable quotation source designated by the Company, 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 days
prior to the date in question) for which prices have been so reported; provided
that if there are no bid and asked prices reported during the ten days prior to
the date in question, the value of the REIT Shares shall be determined by the
Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the REIT Shares Amount includes rights that a holder of REIT Shares would
be entitled to receive, then the value of such rights shall be determined by the
Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"CERTIFICATE" means any instrument or document that is required under the
laws of the Commonwealth of Virginia, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the Commonwealth of Virginia or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the Commonwealth of Virginia or such other
jurisdiction.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
"COMMISSION" means the U.S. Securities and Exchange Commission.
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"COMPANY" means Xxxxxx Hotels Trust, a Maryland real estate investment
trust.
"CONVERSION FACTOR" means 1.0, provided that in the event that the Company
(i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on such date. Any adjustment to the Conversion Factor
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event; provided, however, that
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if the Company receives a Notice of Exchange after the record date, but prior to
the effective date of such dividend, distribution, subdivision or combination,
the Conversion Factor shall be determined as if the Company had received the
Notice of Exchange immediately prior to the record date for such dividend,
distribution, subdivision or combination.
"DECLARATION OF TRUST" means the Declaration of Trust of the Company filed
with the Maryland State Department of Assessments and Taxation, as amended or
restated from time to time.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.
"EXCHANGE AMOUNT" means either the Cash Amount or the REIT Shares Amount,
as selected by the General Partner or the Company in its sole discretion
pursuant to Section 8.05(b) hereof.
"EXCHANGE RIGHT" has the meaning provided in Section 8.05(a) hereof.
"EXCHANGING PARTNER" has the meaning provided in Section 8.05(a) hereof.
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"GENERAL PARTNER" means Xxxxxx Hotels Trust, a Maryland real estate
investment trust, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.
"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by the
General Partner that is a general partnership interest.
"INCENTIVE RIGHTS" has the meaning set forth in Section 4.09 hereof.
"INDEMNITEE" means (i) any Person made a party to a proceeding by reason of
its status as the Company, the General Partner or a director, officer or
employee of the Company, the Partnership or the General Partner, and (ii) such
other Persons (including Affiliates of the Company, General Partner or the
Partnership) as the General Partner may designate from time to time, in its sole
and absolute discretion.
"INDEPENDENT DIRECTORS" means a director of the Company who is not an
officer or employee of the Company, any Affiliate of an officer or employee or
any Affiliate of (i) any lessee of any property of the Company or any Subsidiary
of the Company, (ii) any Subsidiary of the Company, or (iii) any partnership
that is an Affiliate of the Company.
"INITIAL PROPERTIES" means those properties listed on Exhibit B hereto.
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"LIMITED PARTNER" means any Person named as a Limited Partner on
Exhibit A attached hereto, and any Person who becomes a Substitute or Additional
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Limited Partner, in such Person's capacity as a Limited Partner in the
Partnership.
"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"LOSS" has the meaning provided in Section 5.01(f) hereof.
"MINIMUM LIMITED PARTNERSHIP INTEREST" means the lesser of (i) 1% or (ii)
if the total Capital Contributions to the Partnership exceeds $50 million, 1%
divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
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shall not be less than 0.2% at any time.
"NOTICE OF EXCHANGE" means the Notice of Exercise of Exchange Right
substantially in the form attached as Exhibit C hereto.
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"NYSE" means the New York Stock Exchange.
"OFFER" has the meaning set forth in Section 7.01(c) hereof.
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"OFFERING" means the initial offer and sale by the Company and the purchase
by the Underwriters (as defined in the Prospectus) of REIT Shares for sale to
the public.
"ORIGINAL AGREEMENT" means the Agreement of Limited Partnership of Xxxxxx
Hotels Limited Partnership, L.P., dated April 21, 1998.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section 1.704-
2(i)(5).
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership held
by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).
"PARTNERSHIP RECORD DATE" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by the Company for
a distribution to its shareholders of some or all of its portion of such
distribution.
"PARTNERSHIP UNIT" means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The allocation of Partnership Units
among the Partners shall be as set forth on Exhibit A, as may be amended from
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time to time.
"PERCENTAGE INTEREST" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
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may be amended from time to time.
"PERSON" means any individual, partnership, corporation, joint venture,
trust or other entity.
"PROFIT" has the meaning provided in Section 5.01(f) hereof.
"PROPERTY" means any hotel property or other investment in which the
Partnership holds an ownership interest.
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"PROSPECTUS" means the final prospectus delivered to purchasers of REIT
Shares in the Offering.
"PUBLIC OFFERING PRICE" shall mean the initial public offering price set
forth in the Prospectus.
"REGULATIONS" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through 860
of the Code.
"REIT EXPENSES" means (i) costs and expenses relating to the formation and
continuity of existence and operation of the Company and any Subsidiaries
thereof, (which Subsidiaries shall, for purposes hereof, be included within the
definition of Company), including taxes, fees and assessments associated
therewith, any and all costs, expenses or fees payable to any director, officer,
or employee of the Company, (ii) costs and expenses relating to the public
offering and registration of securities by the Company and all statements,
reports, fees and expenses incidental thereto, including underwriting discounts
and selling commissions applicable to any such offering of securities, (iii)
costs and expenses associated with the preparation and filing of any periodic
reports by the Company under federal, state or local laws or regulations,
including filings with the Commission, (iv) costs and expenses associated with
compliance by the Company with laws, rules and regulations promulgated by any
regulatory body, including the Commission, and (v) all other operating or
administrative costs of the Company incurred in the ordinary course of its
business on behalf of or in connection with the Partnership.
"REIT SHARE" means a common share of beneficial interest in the Company,
$.01 par value per share.
"REIT SHARES AMOUNT" shall mean a number of REIT Shares equal to the
product of the number of Partnership Units offered for exchange by an Exchanging
Partner, multiplied by the Conversion Factor as adjusted to and including the
Specified Exchange Date; provided that in the event the Company issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the "rights"), and the rights
have not expired at the Specified Exchange Date, then the REIT Shares Amount
shall also include the rights issuable to a holder of the REIT Shares Amount of
REIT Shares on the record date fixed for purposes of determining the holders of
REIT Shares entitled to rights.
"SERVICE" means the Internal Revenue Service.
"SPECIFIED EXCHANGE DATE" means the first business day of the month that is
at least 60 business days after the receipt by the Company of the Notice of
Exchange.
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"SHARE INCENTIVE PLANS" means Xxxxxx Hotels Trust 1998 Share Incentive
Plan, as may be amended from time to time, or any stock incentive plan adopted
by the Company in the future.
"SUBSIDIARY" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership of which the partnership
interests therein are owned by the Company or a wholly-owned subsidiary of the
Company.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 9.03 hereof.
"SURVIVING GENERAL PARTNER" has the meaning set forth in Section 7.01(d)
hereof.
"TRANSACTION" has the meaning set forth in Section 7.01(c) hereof.
"TRANSFER" has the meaning set forth in Section 9.02(a) hereof.
"TRANSFER RESTRICTION DATE" means July __, 1999[one year from closing of
the IPO].
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
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2.01.00 CONTINUATION.
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The Partners hereby agree to continue the Partnership pursuant to the Act
and upon the terms and conditions set forth in this Agreement.
2.02.00 NAME, OFFICE AND REGISTERED AGENT.
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The name of the Partnership is Xxxxxx Hotels Limited Partnership, L.P. The
specified office and place of business of the Partnership shall be c/x Xxxxxx
Hotels Trust, 000 Xxxxxx & Xxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000. The General
Partner may at any time change the location of such office, provided the General
Partner gives notice to the Partners of any such change. The name and address of
the Partnership's registered agent is Xxxxxxx X. Xxxxx, Riverfront Plaza - East
Tower, 000 X. Xxxx Xx., Xxxxxxxx, Xxxxxxxx 00000. The sole duty of the
registered agent as such is to forward to the Partnership any notice that is
served on him as registered agent.
2.03.00 PARTNERS.
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(a) The General Partner of the Partnership is Xxxxxx Hotels Trust, a
Maryland real estate investment trust. Its principal place of business shall be
the same as that of the Partnership.
(b) The General Partner hereby consents to admit those persons
identified on Exhibit A as Limited Partners as of the date hereof. The Limited
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Partners shall be those Persons identified as Limited Partners on Exhibit A
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hereto, as amended from time to time.
2.04.00 TERM AND DISSOLUTION.
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(a) The term of the Partnership shall continue in full force and
effect until December 31, 2050, except that the Partnership shall be dissolved
upon the first to occur of any of the following events:
(i) The occurrence of an Event of Bankruptcy as to a General
Partner or the dissolution, death, removal or withdrawal of a General
Partner unless the business of the Partnership is continued pursuant
to Section 7.03(b) hereof; provided that if a General Partner is on
the date of such occurrence a partnership, the dissolution of such
General Partner as a result of the dissolution, death, withdrawal,
removal or Event of Bankruptcy of a partner in such partnership shall
not be an event of dissolution of the Partnership if the business of
such General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and such General
Partner and such partners comply with any other applicable
requirements of this Agreement;
(ii) The passage of 90 days after the sale or other disposition
of all or substantially all of the assets of the Partnership (provided
that if the Partnership receives an installment obligation as
consideration for such sale or other disposition, the Partnership
shall continue, unless sooner dissolved under the provisions of this
Agreement, until such time as such note or notes are paid in full);
[(iii) The exchange of all Limited Partnership Interests; or]
(iv) The election by the General Partner that the Partnership
should be dissolved.
(b) Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and
apply and distribute the proceeds thereof in accordance with Section 5.06
hereof. Notwithstanding the foregoing, the liquidating General Partner may
either (i) defer liquidation of, or withhold from distribution for a
reasonable time, any assets of the Partnership (including those necessary
to satisfy the Partnership's debts and obligations), or (ii) distribute the
assets to the Partners in kind.
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2.05.00 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP.
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The General Partner shall execute, acknowledge, record and file at the
expense of the Partnership, the Certificate and any and all amendments thereto
and all requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.06.00 CERTIFICATES DESCRIBING PARTNERSHIP UNITS.
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At the request of a Limited Partner, the General Partner, at its option,
may issue a certificate summarizing the terms of such Limited Partner's interest
in the Partnership, including the number of Partnership Units owned and the
Percentage Interest represented by such Partnership Units as of the date of such
certificate. Any such certificate (i) shall be in form and substance as approved
by the General Partner, (ii) shall not be negotiable and (iii) shall bear a
legend to the following effect:
This certificate is not negotiable. The Partnership
Units represented by this certificate are governed
by and transferable only in accordance with the
provisions of the Amended and Restated Agreement of
Limited Partnership of Xxxxxx Hotels Limited
Partnership, L.P., as amended and restated.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
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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
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business shall be limited to and conducted in such a manner as to permit the
Company at all times to qualify as a REIT, unless the Company otherwise ceases
to qualify as a REIT, (ii) to enter into any partnership, joint venture or other
similar arrangement to engage in any of the foregoing or the ownership of
interests in any entity engaged in any of the foregoing and (iii) to do anything
necessary or incidental to the foregoing. In connection with the foregoing, and
without limiting the Company's right in its sole discretion to cease qualifying
as a REIT, the Partners acknowledge that the Company's current status as a REIT
inures to the benefit of all the Partners and not solely to the Company. The
General Partner shall also be empowered to do any and all acts and things
necessary or prudent to ensure that the Partnership will not be classified as a
"publicly traded partnership" for purposes of Section 7704 of the Code.
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ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
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4.01.00 CAPITAL CONTRIBUTIONS.
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The General Partner shall contribute to the capital of the Partnership
cash in an amount set forth opposite its name on Exhibit A. The Limited
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Partners shall contribute to the capital of the Partnership interests in one or
more of the Properties or the partnerships owning such Properties, or interests
in certain property management and related assets, each with values as set forth
opposite their names on Exhibit A. The Agreed Values of such Limited Partners'
---------
ownership interests in the Properties that are contributed to the Partnership
are as set forth opposite their names on Exhibit A.
---------
4.02.00 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
------------------------------------------------------------
PARTNERSHIP INTERESTS.
---------------------
Except as provided in this Section 4.02 or in Section 4.03, the
Partners shall have no right or obligation to make any additional Capital
Contributions or loans to the Partnership. The General Partner may contribute
additional capital to the Partnership, from time to time, and receive additional
Partnership Interests in respect thereof, in the manner contemplated in this
Section 4.02.
(a) Issuances of Additional Partnership Interests.
---------------------------------------------
(i) General. The General Partner is hereby authorized to cause
-------
the Partnership to issue such additional Partnership Interests in the
form of Partnership Units for any Partnership purpose at any time or
from time to time, to the Partners (including the General Partner and
the Company) or to other Persons for such consideration and on such
terms and conditions as shall be established by the General Partner in
its sole and absolute discretion, all without the approval of any
Limited Partners. Any additional Partnership Interests issued thereby
may be issued in one or more classes, or one or more series of any of
such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to Limited Partnership
Interests, all as shall be determined by the General Partner in its
sole and absolute discretion and without the approval of any Limited
Partner, subject to Virginia law, including, without limitation, (i)
the allocations of items of Partnership income, gain, loss, deduction
and credit to each such class or series of Partnership Interests; (ii)
the right of each such class or series of Partnership Interests to
share in Partnership distributions; and (iii) the rights of each such
class or series of Partnership Interests upon dissolution and
liquidation of the Partnership; provided, however, that no additional
-------- -------
Partnership Interests shall be issued to the General Partner or the
Company unless either:
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(1) (A) the additional Partnership Interests are issued in
connection with an issuance of REIT Shares of or other interests in
the Company, which shares or interests have designations, preferences
and other rights, all such that the economic interests are
substantially similar to the designations, preferences and other
rights of the additional Partnership Interests issued to the General
Partner or the Company by the Partnership in accordance with this
Section 4.02 and (B) the General Partner or the Company shall make a
Capital Contribution to the Partnership in an amount equal to the
proceeds raised in connection with the issuance of such shares of
stock of or other interests in the Company, or
(2) the additional Partnership Interests are issued to all
Partners in proportion to their respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the best interests of the General Partner and the Partnership.
(ii) Upon Issuance of Additional Securities. After the Offering,
--------------------------------------
the Company shall not issue any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to Section
8.05 hereof) or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or
purchase REIT Shares (collectively, "Additional Securities") other
than to all holders of REIT Shares, unless (A) the General Partner
shall cause the Partnership to issue to the General Partner and the
Company, as the Company may designate, Partnership Interests or
rights, options, warrants or convertible or exchangeable securities of
the Partnership having designations, preferences and other rights, all
such that the economic interests are substantially similar to those of
the Additional Securities, and (B) the Company contributes the
proceeds from the issuance of such Additional Securities and from any
exercise of rights contained in such Additional Securities, directly
and through the General Partner, to the Partnership; provided,
--------
however, that the Company is allowed to issue Additional Securities
-------
without complying with the provisions of (A) and (B) above if such
issuance of Additional Securities has been approved and determined to
be in the best interests of the Company and the Partnership by a
majority of the Independent Trustees (as defined in the Company's
Amended and Restated Declaration of Trust). Without limiting the
foregoing, the Company is expressly authorized to issue Additional
Securities for less than fair market value, and to cause the
Partnership to issue to the General Partner and the Company
corresponding Partnership Interests, so long as (x) the General
Partner concludes in good faith that such issuance is in the best
interests of the General Partner, the Company and the Partnership,
including without limitation, the issuance of REIT Shares and
corresponding Partnership Units pursuant to an employee share
-12-
purchase plan providing for employee purchases of REIT Shares at a
discount from fair market value or employee stock options that have an
exercise price that is less than the fair market value of the REIT
Shares, either at the time of issuance or at the time of exercise, and
(y) the Company contributes all proceeds from such issuance, directly
or through the General Partner, to the Partnership. For example, in
the event the Company issues REIT Shares for a cash purchase price and
contributes all of the proceeds of such issuance to the Partnership,
directly and through the General Partner, the General Partner and the
Company, as the Company may so designate, shall be issued a number of
additional Partnership Units equal to the product of (A) the number of
such REIT Shares issued by the Company, the proceeds of which were so
contributed, multiplied by (B) a fraction, the numerator of which is
100%, and the denominator of which is the Conversion Factor in effect
on the date of such contribution.
(b) Certain Deemed Contributions of Proceeds of Issuance of REIT
------------------------------------------------------------
Shares. In connection with any and all issuances of REIT Shares, the Company and
------
the General Partner, as the Company determines, shall make Capital Contributions
to the Partnership of the proceeds therefrom, provided that if the proceeds
actually received and contributed by the Company, directly or through the
General Partner, are less than the gross proceeds of such issuance as a result
of any underwriter's discount or other expenses paid or incurred in connection
with such issuance, then the General Partner and the Company shall be deemed to
have made Capital Contributions to the Partnership in the aggregate amount of
the gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid such offering expenses in accordance with Section
6.05 hereof and in connection with the required issuance of additional
Partnership Units to the General Partner and the Company for such Capital
Contributions pursuant to Section 4.02(a) hereof.
(c) Minimum Limited Partnership Interest. In the event that either an
------------------------------------
exchange pursuant to Section 8.05 hereof or additional Capital Contributions by
the General Partner and the Company would result in the Limited Partners (other
than the Company), in the aggregate, owning less than the Minimum Limited
Partnership Interest, the General Partner and/or the Company and the Limited
Partners shall form another partnership and contribute sufficient Limited
Partnership Interests together with such other Limited Partners so that the
limited partners (other than the Company) of such partnership own at least the
Minimum Limited Partnership Interest.
4.03.00 ADDITIONAL FUNDING.
------------------
If the General Partner determines that it is in the best interests of the
Partnership to provide for additional Partnership funds ("Additional Funds") for
any Partnership purpose, the General Partner may (i) cause the Partnership to
obtain such funds from outside borrowings, or (ii) elect to have the General
Partner or the Company provide such Additional Funds to the Partnership through
loans or otherwise.
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4.04.00 CAPITAL ACCOUNTS.
----------------
A separate capital account (a "Capital Account") shall be established and
maintained for each Partner in accordance with Regulations Section 1.704-
1(b)(2)(iv). If (i) a new or existing Partner acquires an additional Partnership
Interest in exchange for more than a de minimis Capital Contribution, (ii) the
Partnership distributes to a Partner more than a de minimis amount of
Partnership property as consideration for a Partnership Interest, or (iii) the
Partnership is liquidated within the meaning of Regulation Section 1.704-
1(b)(2)(ii)(g), the General Partner shall revalue the property of the
Partnership to its fair market value (as determined by the General Partner, in
its sole discretion, and taking into account Section 7701(g) of the Code) in
accordance with Regulations Section 1.704-1(b)(2)(iv)(f). When the Partnership's
property is revalued by the General Partner, the Capital Accounts of the
Partners shall be adjusted in accordance with Regulations Sections 1.704-
1(b)(2)(iv)(f) and (g), which generally require such Capital Accounts to be
adjusted to reflect the manner in which the unrealized gain or loss inherent in
such property (that has not been reflected in the Capital Accounts previously)
would be allocated among the Partners pursuant to Section 5.01 if there were a
taxable disposition of such property for its fair market value (as determined by
the General Partner, in its sole discretion, and taking into account Section
7701(g) of the Code) on the date of the revaluation.
4.05.00 PERCENTAGE INTERESTS.
--------------------
If the number of outstanding Partnership Units increases or decreases
during a taxable year, each Partner's Percentage Interest shall be adjusted by
the General Partner effective as of the effective date of each such increase or
decrease to a percentage equal to the number of Partnership Units held by such
Partner divided by the aggregate number of Partnership Units outstanding after
giving effect to such increase or decrease. If the Partners' Percentage
Interests are adjusted pursuant to this Section 4.05, the Profits and Losses for
the taxable year in which the adjustment occurs shall be allocated between the
part of the year ending on the day when the Partnership's property is revalued
by the General Partner and the part of the year beginning on the following day
either (i) as if the taxable year had ended on the date of the adjustment or
(ii) based on the number of days in each part. The General Partner, in its sole
discretion, shall determine which method shall be used to allocate Profits and
Losses for the taxable year in which the adjustment occurs. The allocation of
Profits and Losses for the earlier part of the year shall be based on the
Percentage Interests before adjustment, and the allocation of Profits and Losses
for the later part shall be based on the adjusted Percentage Interests.
4.06.00 NO INTEREST ON CONTRIBUTIONS.
----------------------------
No Partner shall be entitled to interest on its Capital Contribution.
4.07.00 RETURN OF CAPITAL CONTRIBUTIONS.
-------------------------------
No Partner shall be entitled to withdraw any part of its Capital
Contribution or its Capital Account or to receive any distribution from the
Partnership, except as specifically provided in this Agreement. Except as
otherwise provided herein, there shall be no obligation to return to
-14-
any Partner or withdrawn Partner any part of such Partner's Capital Contribution
for so long as the Partnership continues in existence.
4.08.00 NO THIRD PARTY BENEFICIARY.
--------------------------
No creditor or other third party having dealings with the Partnership shall
have the right to enforce the right or obligation of any Partner to make Capital
Contributions or loans or to pursue any other right or remedy hereunder or at
law or in equity, it being understood and agreed that the provisions of this
Agreement shall be solely for the benefit of, and may be enforced solely by, the
parties hereto and their respective successors and assigns. None of the rights
or obligations of the Partners herein set forth to make Capital Contributions or
loans to the Partnership shall be deemed an asset of the Partnership for any
purpose by any creditor or other third party, nor may such rights or obligations
be sold, transferred or assigned by the Partnership or pledged or encumbered by
the Partnership to secure any debt or other obligation of the Partnership or of
any of the Partners. In addition, it is the intent of the parties hereto that no
distribution to any Limited Partner shall be deemed a return of money or other
property in violation of the Act. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any
Limited Partner is obligated to return such money or property, such obligation
shall be the obligation of such Limited Partner and not of the General Partner.
Without limiting the generality of the foregoing, a deficit Capital Account of a
Partner shall not be deemed to be a liability of such Partner nor an asset or
property of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
---------------------------------
5.01.00 ALLOCATION OF PROFIT AND LOSS.
-----------------------------
(a) General. Profit and Loss of the Partnership for each fiscal
-------
year of the Partnership shall be allocated among the Partners in accordance with
their respective Percentage Interests.
(b) Minimum Gain Chargeback. Notwithstanding any provision to
-----------------------
the contrary, (i) any expense of the Partnership that is a "nonrecourse
deduction" within the meaning of Regulations Section 1.704-2(b)(1) shall be
allocated in accordance with the Partners' respective Percentage Interests, (ii)
any expense of the Partnership that is a "partner nonrecourse deduction" within
the meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the
Partner that bears the "economic risk of loss" of such deduction in accordance
with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section
1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j),
and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section
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1.704-2(i)(4) for any Partnership taxable year, then, subject to the exceptions
set forth in Regulations Section 1.704(2)(g), items of gain and income shall be
allocated among the Partners in accordance with Regulations Section 1.704-
2(i)(4) and the ordering rules contained in Regulations Section 1.704-2(j). A
Partner's "interest in partnership profits" for purposes of determining its
share of the nonrecourse liabilities of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3) shall be such Partner's Percentage Interest.
(c) Qualified Income Offset. If a Partner receives in any taxable
-----------------------
year an adjustment, allocation, or distribution described in subparagraphs (4),
(5), or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases
a deficit balance in such Partner's Capital Account that exceeds the sum of such
Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g)
and 1.704-2(i), such Partner shall be allocated specially for such taxable year
(and, if necessary, later taxable years) items of income and gain in an amount
and manner sufficient to eliminate such deficit Capital Account balance as
quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(c), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner
in an amount necessary to offset the income or gain previously allocated to such
Partner under this Section 5.01(c).
(d) Capital Account Deficits. Loss shall not be allocated to a
------------------------
Partner to the extent that such allocation would cause a deficit in such
Partner's Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
other Partners in accordance with their respective Percentage Interests. After
the occurrence of an allocation of Loss to a Partner in accordance with this
Section 5.01(d), to the extent permitted by Regulations Section 1.704-1(b),
Profit shall be allocated to such Partner in an amount necessary to offset the
Loss previously allocated to such Partner under this Section 5.01(d).
(e) Allocations Between Transferor and Transferee. If a Partner
---------------------------------------------
transfers any part or all of its Partnership Interest, the distributive shares
of the various items of Profit and Loss allocable among the Partners during such
fiscal year of the Partnership shall be allocated between the transferor and the
transferee Partner either (i) as if the Partnership's fiscal year had ended on
the date of the transfer, or (ii) based on the number of days of such fiscal
year that each was a Partner without regard to the results of Partnership
activities in the respective portions of such fiscal year in which the
transferor and the transferee were Partners. The General Partner, in its sole
discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and Loss between the
transferor and the transferee Partner.
(f) Definition of Profit and Loss. "Profit" and "Loss" and any items
-----------------------------
of income, gain, expense, or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially allocated
pursuant to Section 5.01(b), 5.01(c), or 5.01(d). All allocations of
-16-
income, Profit, gain, Loss, and expense (and all items contained therein) for
federal income tax purposes shall be identical to all allocations of such items
set forth in this Section 5.01, except as otherwise required by Section 704(c)
of the Code and Regulations Section 1.704-1(b)(4). The General Partner shall
have the authority to elect the method to be used by the Partnership for
allocating items of income, gain, and expense as required by Section 704(c) of
the Code and such election shall be binding on all Partners.
5.02.00 DISTRIBUTION OF CASH.
--------------------
(a) The Partnership shall distribute cash on a quarterly (or, at
the election of the General Partner, more frequent) basis, in an amount
determined by the General Partner in its sole discretion, to the Partners who
are Partners on the Partnership Record Date with respect to such quarter (or
other distribution period) in accordance with their respective Percentage
Interests on the Partnership Record Date; provided, however, that if a new or
-------- -------
existing Partner acquires an additional Partnership Interest in exchange for a
Capital Contribution on any date other than a Partnership Record Date, the cash
distribution attributable to such additional Partnership Interest relating to
the Partnership Record Date next following the issuance of such additional
Partnership Interest shall be reduced in the proportion to (i) the number of
days that such additional Partnership Interest is held by such Partner bears to
(ii) the number of days between such Partnership Record Date and the immediately
preceding Partnership Record Date.
(b) Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to the Partner or assignee (including by reason of
Section 1446 of the Code), either (i) if the actual amount to be distributed to
the Partner equals or exceeds the amount required to be withheld by the
Partnership, the amount withheld shall be treated as a distribution of cash in
the amount of such withholding to such Partner, or (ii) if the actual amount to
be distributed to the Partner is less than the amount required to be withheld by
the Partnership, the amount required to be withheld shall be treated as a loan
(a "Partnership Loan") from the Partnership to the Partner on the day the
Partnership pays over such amount to a taxing authority. A Partnership Loan
shall be repaid through withholding by the Partnership with respect to
subsequent distributions to the applicable Partner or assignee. In the event
that a Limited Partner (a "Defaulting Limited Partner") fails to pay any amount
owed to the Partnership with respect to the Partnership Loan within 15 days
after demand for payment thereof is made by the Partnership on the Limited
Partner, the General Partner, in its sole discretion, may elect to make the
payment to the Partnership on behalf of such Defaulting Limited Partner. In such
event, on the date of payment, the General Partner shall be deemed to have
extended a loan (a "General Partner Loan") to the Defaulting Limited Partner in
the amount of the payment made by the General Partner and shall succeed to all
rights and remedies of the Partnership against the Defaulting Limited Partner as
to that amount. Without limitation, the General Partner shall have the right to
receive any distributions that otherwise would be made by the Partnership to the
Defaulting Limited Partner
-17-
until such time as the General Partner Loan has been paid in full, and any such
distributions so received by the General Partner shall be treated as having been
received by the Defaulting Limited Partner and immediately paid to the General
Partner.
Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.02(b) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in The Wall Street Journal, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.
(c) In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend as the holder of record of a REIT Share for which all or part of such
Partnership Unit has been or will be exchanged.
5.03.00 REIT DISTRIBUTION REQUIREMENTS.
------------------------------
The General Partner shall use its reasonable efforts to cause the
Partnership to distribute amounts sufficient to enable the Company to pay
shareholder dividends that will allow the Company to (i) meet its distribution
requirement for qualification as a REIT as set forth in Section 857 of the Code
and (ii) avoid any federal income or excise tax liability imposed by the Code.
5.04.00 NO RIGHT TO DISTRIBUTIONS IN KIND.
---------------------------------
No Partner shall be entitled to demand property other than cash in
connection with any distributions by the Partnership.
5.05.00 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS.
----------------------------------------------
Notwithstanding any of the provisions of this Article V, no Partner shall
have the right to receive and the General Partner shall not have the right to
make, a distribution that includes a return of all or part of a Partner's
Capital Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities
to a Partner for the return of his Capital Contribution, does not exceed the
fair market value of the Partnership's assets.
5.06.00 DISTRIBUTIONS UPON LIQUIDATION.
------------------------------
Upon liquidation of the Partnership, after payment of, or adequate
provision for, debts and obligations of the Partnership, including any Partner
loans, any remaining assets of the Partnership shall be distributed to all
Partners with positive Capital Accounts in accordance with their respective
positive Capital Account balances. For purposes of the preceding sentence, the
Capital Account of each Partner shall be determined after all adjustments made
in accordance with Sections 5.01 and 5.02 resulting from Partnership operations
and from all sales and dispositions of all or any part of the Partnership's
assets. To the extent deemed advisable by the
-18-
General Partner, appropriate arrangements (including the use of a liquidating
trust) may be made to assure that adequate funds are available to pay any
contingent debts or obligations.
5.07.00 SUBSTANTIAL ECONOMIC EFFECT.
---------------------------
It is the intent of the Partners that the allocations of Profit and Loss
under the Agreement have substantial economic effect (or be consistent with the
Partners' interests in the Partnership in the case of the allocation of losses
attributable to nonrecourse debt) within the meaning of Section 704(b) of the
Code as interpreted by the Regulations promulgated pursuant thereto. Article V
and other relevant provisions of this Agreement shall be interpreted in a manner
consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
-----------------------------
6.01.00 MANAGEMENT OF THE PARTNERSHIP.
-----------------------------
(a) Except as otherwise expressly provided in this Agreement,
the General Partner shall have full, complete and exclusive discretion to manage
and control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:
(i) to acquire, purchase, own, operate, lease and dispose
of any real property and any other property or assets including, but
not limited to notes and mortgages, that the General Partner
determines are necessary or appropriate or in the best interests of
the business of the Partnership;
(ii) to construct buildings and make other improvements on
the properties owned or leased by the Partnership;
(iii) to authorize, issue, sell, redeem or otherwise
purchase any Partnership Interests or any securities (including
secured and unsecured debt obligations of the Partnership, debt
obligations of the Partnership convertible into any class or series
of Partnership Interests, or options, rights, warrants or
appreciation rights relating to any Partnership Interests) of the
Partnership;
(iv) to borrow or lend money for the Partnership, issue or
receive evidences of indebtedness in connection therewith,
refinance, increase the amount of, modify, amend or change the terms
of, or extend the time for the payment of,
-19-
any such indebtedness, and secure such indebtedness by mortgage,
deed of trust, pledge or other lien on the Partnership's assets;
(v) to guarantee or become a comaker of indebtedness of
the Company or any Subsidiary thereof, refinance, increase the
amount of, modify, amend or change the terms of, or extend the time
for the payment of, any such guarantee or indebtedness, and secure
such guarantee or indebtedness by mortgage, deed of trust, pledge or
other lien on the Partnership's assets;
(vi) to use assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with this
Agreement, including, without limitation, payment, either directly
or by reimbursement, of all operating costs and general
administrative expenses of the Company, the General Partner, the
Partnership or any Subsidiary of either, to third parties or to the
General Partner as set forth in this Agreement;
(vii) to lease all or any portion of any of the
Partnership's assets, whether or not the terms of such leases extend
beyond the termination date of the Partnership and whether or not
any portion of the Partnership's assets so leased are to be occupied
by the lessee, or, in turn, subleased in whole or in part to others,
for such consideration and on such terms as the General Partner may
determine;
(viii) to prosecute, defend, arbitrate, or compromise any
and all claims or liabilities in favor of or against the
Partnership, on such terms and in such manner as the General Partner
may reasonably determine, and similarly to prosecute, settle or
defend litigation with respect to the Partners, the Partnership, or
the Partnership's assets;
(ix) to file applications, communicate, and otherwise deal
with any and all governmental agencies having jurisdiction over, or
in any way affecting, the Partnership's assets or any other aspect
of the Partnership business;
(x) to make or revoke any election permitted or required
of the Partnership by any taxing authority;
(xi) to maintain such insurance coverage for public
liability, fire and casualty, and any and all other insurance for
the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or
beneficial to the Partnership, in such amounts and such types, as it
shall determine from time to time;
(xii) to determine whether or not to apply any insurance
proceeds for any property to the restoration of such property or to
distribute the same;
-20-
(xiii) to establish one or more divisions of the
Partnership, to hire and dismiss employees of the Partnership or any
division of the Partnership, and to retain legal counsel, accountants,
consultants, real estate brokers, and such other persons, as the
General Partner may deem necessary or appropriate in connection with
the Partnership business and to pay therefor such reasonable
remuneration as the General Partner may deem reasonable and proper;
(xiv) to retain other services of any kind or nature
in connection with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and proper;
(xv) to negotiate and conclude agreements on behalf
of the Partnership with respect to any of the rights, powers and
authority conferred upon the General Partner;
(xvi) to maintain accurate accounting records and to
file promptly all federal, state and local income tax returns on
behalf of the Partnership;
(xvii) to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(xviii) to form or acquire an interest in, and
contribute property to, any further limited or general partnerships,
joint ventures or other relationships that it deems desirable
(including, without limitation, the acquisition of interests in, and
the contributions of property to, its Subsidiaries and any other
Person in which it has an equity interest from time to time);
(xix) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities, or any other
valid Partnership purpose; and
(xx) to take such other action, execute,
acknowledge, swear to or deliver such other documents and instruments,
and perform any and all other acts that the General Partner deems
necessary or appropriate for the formation, continuation and conduct
of the business and affairs of the Partnership (including, without
limitation, all actions consistent with allowing the Company at all
times to qualify as a REIT unless the Company voluntarily terminates
its REIT status) and to possess and enjoy all of the rights and powers
of a general partner as provided by the Act.
(b) Except as otherwise provided herein, to the extent the
duties of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.
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6.02.00 DELEGATION OF AUTHORITY.
-----------------------
The General Partner may delegate any or all of its powers, rights and
obligations hereunder, and may appoint, employ, contract or otherwise deal with
any Person for the transaction of the business of the Partnership, which Person
may, under supervision of the General Partner, perform any acts or services for
the Partnership as the General Partner may approve.
6.03.00 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
----------------------------------------------
(a) The Partnership shall indemnify an Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement
in which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.
(b) The Partnership shall reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 6.03 has been met, and (ii) a
written undertaking by or on behalf of the Indemnitee to repay the amount if it
shall ultimately be determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 6.03 shall
be in addition to any other rights to which an Indemnitee or any other Person
may be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance, on
behalf of the Indemnitees and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by such Person in connection with
-22-
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 6.03, the Partnership shall
be deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited
Partners to personal liability by reason of the indemnification provisions set
forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in
whole or in part under this Section 6.03 because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the benefit
of the Indemnitees, their heirs, successors, assigns and administrators and
shall not be deemed to create any rights for the benefit of any other Persons.
6.04.00 LIABILITY OF THE GENERAL PARTNER.
--------------------------------
(a) Notwithstanding anything to the contrary set forth in
this Agreement, the General Partner shall not be liable for monetary damages to
the Partnership or any Partners for losses sustained or liabilities incurred as
a result of errors in judgment or of any act or omission if the General Partner
acted in good faith. The General Partner shall not be in breach of any duty that
the General Partner may owe to the Limited Partners or the Partnership or any
other Persons under this Agreement or of any duty stated or implied by law or
equity provided the General Partner, acting in good faith, abides by the terms
of this Agreement.
(b) The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership, the Company and the
Company's shareholders collectively, that the General Partner is under no
obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or the
tax consequences of same, but not all, of the Limited Partners) in deciding
whether to cause the Partnership to take (or decline to take) any actions. In
the event of a conflict between the interests of the shareholders of the Company
on one hand and the Limited Partners on the other, the General Partner shall
endeavor in good faith to resolve the conflict in a manner not adverse to either
the shareholders of the Company or the Limited Partners; provided, however, that
-------- -------
for so long as the Company, directly or the General Partner owns a controlling
interest in the
-23-
Partnership, any such conflict that cannot be resolved in a manner not adverse
to either the shareholders of the Company or the Limited Partners shall be
resolved in favor of the shareholders. The General Partner shall not be liable
for monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith.
(c) Subject to its obligations and duties as General Partner
set forth in Section 6.01 hereof, the General Partner may exercise any of the
powers granted to it under this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
(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 Company to
continue to qualify as a REIT or (ii) to prevent the Company from incurring any
taxes under Section 857, Section 4981, or any other provision of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.
(e) Any amendment, modification or repeal of this Section
6.04 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership and
the Limited Partners under this Section 6.04 as in effect immediately prior to
such amendment, modification or repeal with respect to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when claims relating to such matters may arise or be asserted.
6.05.00 REIMBURSEMENT.
-------------
The General Partner is hereby authorized to pay compensation for
accounting, administrative, legal, technical, management and other services
rendered to the Partnership. All of the aforesaid expenditures (including
Administrative Expenses) shall be obligations of the Partnership, and the
General Partner shall be entitled to reimbursement by the Partnership for any
expenditure (including Administrative Expenses) incurred by it on behalf of the
Partnership which shall be made other than out of the funds of the Partnership.
6.06.00 OUTSIDE ACTIVITIES.
------------------
Subject to Section 6.08 hereof, the Declaration of Trust and any
agreements entered into by the General Partner or its Affiliates with the
Partnership or a Subsidiary, any officer, director, employee, agent, trustee,
Affiliate or shareholder of the General Partner, the General Partner shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and
activities substantially similar or identical to those of the Partnership.
Neither the Partnership nor any of the Limited Partners shall have any rights by
virtue of this Agreement in any such business ventures, interest
-24-
or activities. None of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any such business ventures, interests or activities, and the General
Partner shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures, interests and activities to the
Partnership or any Limited Partner, even if such opportunity is of a character
which, if presented to the Partnership or any Limited Partner, could be taken by
such Person.
6.07.00 EMPLOYMENT OR RETENTION OF AFFILIATES.
-------------------------------------
(a) Any Affiliate of the General Partner may be employed or retained
by the Partnership and may otherwise deal with the Partnership (whether as a
buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent,
lender or otherwise) and may receive from the Partnership any compensation,
price, or other payment therefor which the General Partner determines to be fair
and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries or
other Persons in which it has an equity investment, and such Persons may borrow
funds from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.
-25-
6.08.00 TITLE TO PARTNERSHIP ASSETS.
---------------------------
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or all
of the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General 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.
6.09.00 MISCELLANEOUS.
-------------
In the event the Company redeems any REIT Shares, then the General
Partner shall cause the Partnership to purchase from the General Partner and the
Company a number of Partnership Units as determined based on the application of
the Conversion Factor on the same terms that the Company exchanged such REIT
Shares. Moreover, if the Company makes a cash tender offer or other offer to
acquire REIT Shares, then the General Partner shall cause the Partnership to
make a corresponding offer to the General Partner and the Company to acquire an
equal number of Partnership Units held by the General Partner and the Company.
In the event any REIT Shares are exchanged by the Company pursuant to such
offer, the Partnership shall redeem an equivalent number of the General
Partner's and the Company Partnership Units for an equivalent purchase price
based on the application of the Conversion Factor.
ARTICLE VII
CHANGES IN GENERAL PARTNER
--------------------------
7.01.00 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
------------------------------------------------------
(a) The General Partner shall not transfer all or any portion of its
General Partnership Interest or withdraw as General Partner except as provided
in Section 7.01(c) or in connection with a transaction described in Section
7.01(d).
(b) The General Partner agrees that the Percentage Interest for it
and the Company will at all times be in the aggregate, at least 20%.
(c) Except as otherwise provided herein, in Section 6.04(b) or
Section 7.01(d) hereof, the Company shall not engage in any merger,
consolidation or other combination with or into another Person or sale of all or
substantially all of its assets, or any reclassification, or any
recapitalization or change of
-26-
outstanding REIT Shares (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination of REIT Shares), in
each case which results in a change of control of the Company (a "Transaction"),
unless as a result of such Transaction all Limited Partners will receive for
each Partnership Unit an amount of cash, securities, or other property equal to
the product of the Conversion Factor and the greatest amount of cash, securities
or other property paid in the Transaction to a holder of one REIT Share in
consideration of one REIT Share, provided that if, in connection with the
Transaction, a purchase, tender or exchange offer ("Offer") shall have been made
to and accepted by the holders of more than 50% of the outstanding REIT Shares,
each holder of Partnership Units shall be given the option to exchange its
Partnership Units for the greatest amount of cash, securities, or other property
which a Limited Partner would have received had it (A) exercised its Exchange
Right and (B) sold, tendered or exchanged pursuant to the Offer the REIT Shares
received upon exercise of the Exchange Right immediately prior to the expiration
of the Offer.
(d) Notwithstanding Section 7.01(c), the Company or the General
Partner may merge with or into or consolidate with another entity if immediately
after such merger or consolidation (i) substantially all of the assets of the
successor or surviving entity (the "Survivor"), other than Partnership Units
held by the Company or the General Partner, are contributed, directly or
indirectly, to the Partnership as a Capital Contribution in exchange for
Partnership Units with a fair market value equal to the value of the assets so
contributed as determined by the Survivor in good faith and (ii) the Survivor
expressly agrees to assume all obligations of the General Partner or the
Company, as appropriate, hereunder. Upon such contribution and assumption, the
Survivor shall have the right and duty to amend this Agreement as set forth in
this Section 7.01(d). The Survivor shall in good faith arrive at a new method
for the calculation of the Cash Amount, the REIT Shares Amount and Conversion
Factor for a Partnership Unit after any such merger or consolidation so as to
approximate the existing method for such calculation as closely as reasonably
possible. Such calculation shall take into account, among other things, the kind
and amount of securities, cash and other property that was receivable upon such
merger or consolidation by a holder of REIT Shares or options, warrants or other
rights relating thereto, and to which a holder of Partnership Units could have
acquired had such Partnership Units been exchanged immediately prior to such
merger or consolidation. Such amendment to this Agreement shall provide for
adjustment to such method of calculation, which shall be as nearly equivalent as
may be practicable to the adjustments provided for with respect to the
Conversion Factor. The Survivor also shall in good faith modify the definition
of REIT Shares and make such amendments to Section 8.05 hereof so as to
approximate the existing rights and obligations set forth in Section 8.05 as
closely as reasonably possible. The above provisions of this Section 7.01(d)
shall similarly apply to successive mergers or consolidations permitted
hereunder.
7.02.00 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER.
-------------------------------------------------------
A Person shall be admitted as a substitute or additional General Partner of
the Partnership only if the following terms and conditions are satisfied:
-27-
(a) a majority in interest of the Limited Partners (other than the
Company) shall have consented in writing to the admission of the substitute or
additional General Partner, which consent may be withheld in the sole discretion
of such Limited Partners;
(b) the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;
(c) if the Person to be admitted as a substitute or additional
General Partner is a corporation or a partnership it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such
Person's authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and
(d) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel and the state or any other
jurisdiction as may be necessary) that the admission of the person to be
admitted as a substitute or additional General Partner is in conformity with the
Act, that none of the actions taken in connection with the admission of such
Person as a substitute or additional General Partner will cause (i) the
Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner's limited liability.
7.03.00 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
-----------------------------------------------------------
GENERAL PARTNER.
---------------
(a) Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof.
(b) Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Limited Partners, within 90 days after such
occurrence, may elect to reconstitute the Partnership and continue the business
of the Partnership for the balance of the term specified
-28-
in Section 2.04 hereof by selecting, subject to Section 7.02 hereof and any
other provisions of this Agreement, a substitute General Partner by unanimous
consent of the Limited Partners. If the Limited Partners elect to reconstitute
the Partnership and admit a substitute General Partner, the relationship with
the Partners and of any Person who has acquired an interest of a Partner in the
Partnership shall be governed by this Agreement.
7.04.00 REMOVAL OF A GENERAL PARTNER.
----------------------------
(a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; provided, however, that if a General Partner is on the
-------- -------
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners.
(b) If a General Partner has been removed pursuant to this Section
7.04 and the Partnership is continued pursuant to Section 7.03 hereof, such
General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
majority in interest of the Limited Partners in accordance with Section 7.03(b)
hereof and otherwise admitted to the Partnership in accordance with Section 7.02
hereof. At the time of assignment, the removed General Partner shall be entitled
to receive from the substitute General Partner the fair market value of the
General Partnership Interest of such removed General Partner as reduced by any
damages caused to the Partnership by such General Partner. Such fair market
value shall be determined by an appraiser mutually agreed upon by the General
Partner and a majority in interest of the Limited Partners within 10 days
following the removal of the General Partner. In the event that the parties are
unable to agree upon an appraiser, the removed General Partner and a majority in
interest of the Limited Partners each shall select an appraiser. Each such
appraiser shall complete an appraisal of the fair market value of the removed
General Partner's General Partnership Interest within 30 days of the General
Partner's removal, and the fair market value of the removed General Partner's
General Partnership Interest shall be the average of the two appraisals;
provided, however, that if the higher appraisal exceeds the lower appraisal by
-------- -------
more than 20% of the amount of the lower appraisal, the two appraisers, no later
than 40 days after the removal of the General Partner, shall select a third
appraiser who shall complete an appraisal of the fair market value of the
removed General Partner's General Partnership Interest no later than 60 days
after the removal of the General Partner. In such case, the fair market value of
the removed General Partner's General Partnership Interest shall be the average
of the two appraisals closest in value.
(c) The General Partnership Interest of a removed General Partner,
during the time after default until transfer under Section 7.04(b), shall be
converted to that of a special Limited Partner; provided, however, such removed
-------- -------
General Partner shall not have any rights to participate in the management and
affairs of the Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash distributions
allocable or payable, as the case may be, to the Limited Partners. Instead, such
removed General Partner shall receive and be entitled only to retain
distributions or allocations of such items that it would
-29-
have been entitled to receive in its capacity as General Partner, until the
transfer is effective pursuant to Section 7.04(b).
(d) All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this Section.
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
----------------------------------------------
8.01.00 MANAGEMENT OF THE PARTNERSHIP.
-----------------------------
The Limited Partners shall not participate in the management or control of
Partnership business nor shall they transact any business for the Partnership,
nor shall they have the power to sign for or bind the Partnership, such powers
being vested solely and exclusively in the General Partner.
8.02.00 POWER OF ATTORNEY.
-----------------
Each Limited Partner hereby irrevocably appoints the General Partner its
true and lawful attorney-in-fact, who may act for each Limited Partner and in
its name, place and stead, and for its use and benefit, to sign, acknowledge,
swear to, deliver, file and record, at the appropriate public offices, any and
all documents, certificates, and instruments as may be deemed necessary or
desirable by the General Partner to carry out fully the provisions of this
Agreement and the Act in accordance with their terms, which power of attorney is
coupled with an interest and shall survive the death, dissolution or legal
incapacity of the Limited Partner, or the transfer by the Limited Partner of any
part or all of its Partnership Interest.
8.03.00 LIMITATION ON LIABILITY OF LIMITED PARTNERS.
-------------------------------------------
No Limited Partner shall be liable for any debts, liabilities, contracts or
obligations of the Partnership. A Limited Partner shall be liable to the
Partnership only to make payments of its Capital Contribution, if any, as and
when due hereunder. After its Capital Contribution is fully paid, no Limited
Partner shall, except as otherwise required by the Act, be required to make any
further Capital Contributions or other payments or lend any funds to the
Partnership.
-30-
8.04.00 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR
------------------------------------------------------------
AFFILIATE.
---------
No Limited Partner shall at any time, either directly or indirectly, own
any stock or other interest in the General Partner or in any Affiliate thereof,
if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
8.05.00 EXCHANGE RIGHT.
--------------
(a) Subject to the provisions of this Section 8.05 and the terms of
an agreement between the Partnership or the General Partner and a Limited
Partner, each Limited Partner, other than the HHT, Ltd. Inc., the General
Partner, or any wholly owned subsidiaries of the Company, shall have the right
(the "Exchange Right") to require the Partnership to redeem on a Specified
Exchange Date all or a portion of the Partnership Units held by such Limited
Partner at an exchange price equal to and in the form of the Cash Amount to be
paid by the Partnership. The Exchange Right shall be exercised pursuant to a
Notice of Exchange delivered to the Partnership (with a copy to the General
Partner) by the Limited Partner who is exercising the Exchange Right (the
"Exchanging Partner"); provided, however, that the Partnership shall not be
-------- -------
obligated to satisfy such Exchange Right if the Company and/or the General
Partner elects to purchase the Partnership Units subject to the Notice of
Exchange pursuant to Section 8.05(b); and provided, further, that no Limited
-------- -------
Partner may deliver more than two Notices of Exchange during each calendar year.
A Limited Partner may not exercise the Exchange Right for less than 1,000
Partnership Units or, if such Limited Partner holds less than 1,000 Partnership
Units, all of the Partnership Units held by such Partner. The Exchanging Partner
shall have no right, with respect to any Partnership Units so exchanged, to
receive any distribution paid with respect to Partnership Units if the record
date for such distribution is on or after the Specified Exchange Date.
(b) Notwithstanding the provisions of Section 8.05(a), a Limited
Partner that exercises the Exchange Right shall be deemed to have offered to
sell the Partnership Units described in the Notice of Exchange to the General
Partner and the Company, and either of the General Partner or the Company (or
both) may, in its sole and absolute discretion, elect to purchase directly and
acquire such Partnership Units by paying to the Exchanging Partner either the
Cash Amount or the REIT Shares Amount, as elected by the General Partner or the
Company (in their sole and absolute discretion), on the Specified Exchange Date,
whereupon the General Partner or the Company shall acquire the Partnership Units
offered for exchange by the exchanging Partner and shall be treated for all
purposes of this Agreement as the owner of such Partnership Units. If the
General Partner or the Company shall elect to exercise its right to purchase
Partnership Units under this Section 8.05(b) with respect to a Notice of
Exchange, it shall so notify the Exchanging Partner within five Business Days
after the receipt by the General Partner of such Notice of Exchange. Unless the
General Partner and/or the Company (in its sole
-31-
and absolute discretion) shall exercise its right to purchase Partnership Units
from the Exchanging Partner pursuant to this Section 8.05(b), neither the
General Partner nor the Company shall have any obligation to the Exchanging
Partner or the Partnership with respect to the Exchanging Partner's exercise of
the Exchange Right. In the event the General Partner or the Company shall
exercise its right to purchase Partnership Units with respect to the exercise of
a Exchange Right in the manner described in the first sentence of this Section
8.05(b), the Partnership shall have no obligation to pay any amount to the
Exchanging Partner with respect to such Exchanging Partner's exercise of such
Exchange Right, and each of the Exchanging Partner, the Partnership, and the
General Partner or the Company, as the case may be, shall treat the transaction
between the General Partner or the Company, as the case may be, and the
Exchanging Partner for federal income tax purposes as a sale of the Exchanging
Partner's Partnership Units to the General Partner or the Company, as the case
may be. Each Exchanging Partner agrees to execute such documents as the General
Partner may reasonably require in connection with the issuance of REIT Shares
upon exercise of the Exchange Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a
Limited Partner shall not be entitled to exercise the Exchange Right if the
delivery of REIT Shares to such Partner on the Specified Exchange Date by the
General Partner or the Company pursuant to Section 8.05(b) (regardless of
whether or not the General Partner or the Company would in fact exercise its
rights under Section 8.05(b)) would (i) result in such Partner or any other
person owning, directly or indirectly, REIT Shares in excess of the Ownership
Limitation (as defined in the Articles of Incorporation) and calculated in
accordance therewith, except as provided in the Declaration of Trust, (ii)
result in REIT Shares being owned by fewer than 100 persons (determined without
reference to any rules of attribution), except as provided in the Declaration of
Trust, (iii) result in the Company being "closely held" within the meaning of
Section 856(h) of the Code, (iv) cause the Company to own, directly or
constructively, 10% or more of the ownership interests in a tenant of the
General Partner's, the Partnership's, or a Subsidiary Partnership's, real
property, within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause
the acquisition of REIT Shares by such Partner to be "integrated" with any other
distribution of REIT Shares for purposes of complying with the registration
provisions of the Securities Act of 1933, as amended (the "Securities Act"). The
General Partner or the Company, in their sole discretion, may waive the
restriction on exchange set forth in this Section 8.05(c).
(d) Any Cash Amount to be paid to an Exchanging Partner pursuant to
this Section 8.05 shall be paid on the Specified Exchange Date; provided,
--------
however, that the Company or the General Partner may elect to cause the
-------
Specified Exchange Date to be delayed for up to an additional 180 days to the
extent required for the Company to cause additional REIT Shares to be issued to
provide financing to be used to make such payment of the Cash Amount.
Notwithstanding the foregoing, the Company and the General Partner agree to use
their best efforts to cause the closing of the acquisition of exchanged
Partnership Units hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, the
General Partner shall place appropriate restrictions on the ability of the
Limited Partners to exercise their Exchange Rights as and if deemed necessary to
ensure that the Partnership does not constitute a
-32-
"publicly traded partnership" under section 7704 of the Code. If and when the
General Partner determines that imposing such restrictions is necessary, the
General Partner shall give prompt written notice thereof (a "Restriction
Notice") to each of the Limited Partners, which notice shall be accompanied by a
copy of an opinion of counsel to the Partnership which states that, in the
opinion of such counsel, restrictions are necessary in order to avoid the
Partnership being treated as a "publicly traded partnership" under section 7704
of the Code.
8.06.00 REGISTRATION.
------------
(a) Shelf Registration of the Common Stock. Prior to or on the first
--------------------------------------
date upon which the Partnership Units owned by any Limited Partner may be
exchanged (or such other date as may be required under applicable provisions of
the Securities Act), the Company agrees to file with the Securities and Exchange
Commission (the "Commission"), a shelf registration statement on Form S-3 under
Rule 415 of the Securities Act (a "Registration Statement"), or any similar rule
that may be adopted by the Commission, with respect to all of the Reit Shares
that may be issued upon exchange of such Partnership Units pursuant to Section
8.05 hereof ("Exchange Shares"). The Company will use its best efforts to have
the Registration Statement declared effective under the Securities Act. The
Company need not file a separate Registration Statement, but may file one
Registration Statement covering Exchange Shares issuable to more than one
Limited Partner. The Company further agrees to supplement or make amendments to
each Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form utilized by the Company or by
the Securities Act or rules and regulations thereunder for such Registration
Statement.
(b) If a Registration Statement under subsection (a) above is not
available under the securities laws or the rules of the Commission, or if
required to permit the resale of Exchange Shares by "Affiliates" (as defined in
the Securities Act), the Company agrees to file with the Commission a
Registration Statement covering the resale of Exchange Shares by Affiliates or
others whose Exchange Shares are not covered by a Registration Statement filed
pursuant to subsection (a) above, provided that the Company is furnished all
information with respect to holders of Exchange Shares required to complete such
Registration Statement and have it declared effective by the Commission. The
Company will use its best efforts to have the Registration Statement declared
effective under the Securities Act. The Company need not file a separate
Registration Statement, but may file one Registration Statement covering
Exchange Shares issuable to more than one Limited Partner. The Company further
agrees to supplement or make amendments to each Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form utilized by the Company or by the Securities Act or rules and
regulations thereunder for such Registration Statement.
(c) Listing on Securities Exchange. If the Company shall list or
------------------------------
maintain the listing of Reit Shares of on any securities exchange or national
market system, it will at its expense and as necessary to permit the
registration and sale of the Exchange Shares hereunder, list thereon, maintain
and, when necessary, increase such listing to include such Exchange Shares.
-33-
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
------------------------------------------
9.01.00 PURCHASE FOR INVESTMENT.
-----------------------
(a) Each Limited Partner hereby represents and warrants to the
General Partner, to the Company and to the Partnership that the acquisition of
his Partnership Interests is made as a principal for his account for investment
purposes only and not with a view to the resale or distribution of such
Partnership Interest.
(b) Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.
9.02.00 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
---------------------------------------------------------
(a) Subject to the provisions of this Article IX, no Limited Partner
may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any
portion of his Limited Partnership Interest, or any of such Limited Partner's
economic rights as a Limited Partner, whether voluntarily or by operation of law
or at judicial sale or otherwise (collectively, a "Transfer") without the
consent of the General Partner, which consent may be granted or withheld in its
sole and absolute discretion. Any such purported transfer undertaken without
such consent shall be considered to be null and void ab initio and shall not be
given effect. Each Limited Partner acknowledges that the General Partner has
agreed not to grant any such consent prior to the Transfer Restriction Date. The
General Partner may require, as a condition of any Transfer to which it
consents, that the transferor assume all costs incurred by the Partnership in
connection therewith.
(b) No Limited Partner may withdraw from the Partnership other than
as a result of a permitted Transfer (i.e., a Transfer consented to as
contemplated by clause (a) above or clause (c) below or a Transfer pursuant to
9.05 below) of all of his Partnership Units pursuant to this Article IX or
pursuant to an exchange of all of his Partnership Units pursuant to 8.05. Upon
the permitted Transfer or redemption of all of a Limited Partner's Partnership
Units, such Limited Partner shall cease to be a Limited Partner.
(c) Subject to the provisions of this Article IX, a Limited Partner
may Transfer, with the consent of the General Partner, all or a portion of his
Partnership Units to (i) a parent or parent's spouse, natural or adopted
descendant or descendants, spouse of such descendant, or brother or sister, or a
trust created by such Limited Partner for the benefit of such Limited Partner
and/or any such person(s), of which trust such Limited Partner or any such
-34-
person(s) is a trustee, (ii) a corporation controlled by a Person or Persons
named in (i) above, or (ii) if the Limited Partner is an entity, its beneficial
owners.
(d) No Limited Partner may effect a Transfer of its Limited
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Limited Partnership Interest under the Securities Act, or would otherwise
violate any applicable federal or state securities or blue sky law (including
investment suitability standards).
(e) No Transfer by a Limited Partner of its Partnership Units, in
whole or in part, may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the
opinion of legal counsel for the Partnership, it would adversely affect the
ability of the Company to continue to qualify as a REIT or subject the Company
to any additional taxes under Section 857 or Section 4981 of the Code, or (iii)
such transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code.
(f) 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 Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld in its sole
and absolute discretion, provided that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Cash Amount any Partnership Units
in which a security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.
(g) Any Transfer in contravention of any of the provisions of this
Article IX shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.
(h) Prior to the consummation of any Transfer under this Article IX,
the transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.
9.03.00 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
---------------------------------------
(a) Subject to the other provisions of this Article IX, an assignee
of the Limited Partnership Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee, or other recipient of
any disposition of such Limited Partnership Interest) shall be deemed admitted
as a Limited Partner of the Partnership only with the consent of the General
Partner and upon the satisfactory completion of the following:
-35-
(i) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a counterpart
or an amendment thereof, including a revised Exhibit A, and such other
---------
documents or instruments as the General Partner may require in order
to effect the admission of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate evidencing
the admission of such Person as a Limited Partner shall have been
signed, acknowledged and filed for record in accordance with the Act.
(iii) The assignee shall have delivered a letter containing the
representation set forth in Section 9.01(a) hereof and the agreement
set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership or trust,
the assignee shall have provided the General Partner with evidence
satisfactory to counsel for the Partnership of the assignee's
authority to become a Limited Partner under the terms and provisions
of this Agreement.
(v) The assignee shall have executed a power of attorney
containing the terms and provisions set forth in Section 8.02 hereof.
(vi) The assignee shall have paid all reasonable legal fees of
the Partnership and the General Partner and filing and publication
costs in connection with its substitution as a Limited Partner.
(vii) The assignee has obtained the prior written consent of the
General Partner to its admission as a Substitute Limited Partner,
which consent may be given or denied in the exercise of the General
Partner's sole and absolute discretion.
(b) For the purpose of allocating Profits and Losses and distributing
cash received by the Partnership, a Substitute Limited Partner shall be treated
as having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or,
if no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section and making all official filings and publications. The Partnership
shall take all such action as promptly as practicable after the satisfaction of
the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.
-36-
9.04.00 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
--------------------------------------------
(a) Subject to the provisions of Sections 9.01 and 9.02 hereof,
except as required by operation of law, the Partnership shall not be obligated
for any purposes whatsoever to recognize the assignment by any Limited Partner
of its Partnership Interest until the Partnership has received notice thereof.
(b) Any Person who is the assignee of all or any portion of a Limited
Partner's Limited Partnership Interest, but does not become a Substitute Limited
Partner and desires to make a further assignment of such Limited Partnership
Interest, shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of its Limited Partnership Interest.
9.05.00 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
-------------------------------------------------------------
LIMITED PARTNER.
---------------
The occurrence of an Event of Bankruptcy as to a Limited Partner, the death
of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to
join with the assignee in satisfying conditions precedent to the admission of
the assignee as a Substitute Limited Partner.
9.06.00 JOINT OWNERSHIP OF INTERESTS.
----------------------------
A Partnership Interest may be acquired by two individuals as joint tenants
with right of survivorship, provided that such individuals either are married or
are related and share the same home as tenants in common. The written consent or
vote of both owners of any such jointly held Partnership Interest shall be
required to constitute the action of the owners of such Partnership Interest;
provided, however, that the written consent of only one joint owner will be
-------- -------
required if the Partnership has been provided with evidence satisfactory to the
counsel for the Partnership that the actions of a single joint owner can bind
both owners under the applicable laws of the state of residence of such joint
owners. Upon the death of one owner of a Partnership Interest held in a joint
tenancy with a right of survivorship, the Partnership Interest shall become
owned solely by the survivor as a Limited Partner and not as an assignee. The
Partnership need not recognize the death of one of the owners of a jointly-held
Partnership Interest until it shall have received notice of such death. Upon
notice to the General Partner from either owner, the General Partner shall cause
the Partnership Interest to be divided into two equal Partnership Interests,
which shall thereafter be owned separately by each of the former owners.
-37-
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
------------------------------------------
10.01.00 BOOKS AND RECORDS.
-----------------
At all times during the continuance of the Partnership, the Partners shall
keep or cause to be kept at the Partnership's specified office true and complete
books of account in accordance with generally accepted accounting principles,
including: (a) a current list of the full name and last known business address
of each Partner, (b) a copy of the Certificate of Limited Partnership and all
certificates of amendment thereto, (c) copies of the Partnership's federal,
state and local income tax returns and reports, (d) copies of the Agreement and
any financial statements of the Partnership for the three most recent years and
(e) all documents and information required under the Act. Any Partner or its
duly authorized representative, upon paying the costs of collection, duplication
and mailing, shall be entitled to inspect or copy such records during ordinary
business hours.
10.02.00 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
-------------------------------------------
(a) All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.
(b) All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.02(b).
10.03.00 FISCAL AND TAXABLE YEAR.
-----------------------
The fiscal and taxable year of the Partnership shall be the calendar year.
10.04.00 ANNUAL TAX INFORMATION AND REPORT.
---------------------------------
Within 75 days after the end of each fiscal year of the Partnership, the
General Partner shall furnish to each person who was a Limited Partner at any
time during such year the tax information necessary to file such Limited
Partner's individual tax returns as shall be reasonably required by law.
-38-
10.05.00 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
-------------------------------------------------------------
(a) The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all
actions authorized and required, respectively, by the Code for the Tax Matters
Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.
(b) All elections required or permitted to be made by the Partnership
under the Code or any applicable state or local tax law shall be made by the
General Partner in its sole discretion.
(c) In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Properties. Notwithstanding anything contained in Article V of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account
in establishing, maintaining or computing Capital Accounts for the other
Partners for any purpose under this Agreement. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.
10.06.00 REPORTS TO LIMITED PARTNERS.
---------------------------
(a) As soon as practicable after the close of each fiscal quarter
(other than the last quarter of the fiscal year), the General Partner shall
cause to be mailed to each Limited Partner a quarterly report containing
financial statements of the Partnership, or of the Company if such statements
are prepared solely on a consolidated basis with the Company, for such fiscal
quarter, presented in accordance with generally accepted accounting principles.
As soon as practicable after the close of each fiscal year, the General Partner
shall cause to be mailed to each Limited Partner an annual report containing
financial statements of the Partnership, or of the Company if such statements
are prepared solely on a consolidated basis with the Company, for such fiscal
year, presented in accordance with generally accepted accounting principles. The
annual financial statements shall be audited by accountants selected by the
General Partner.
(b) Any Partner shall further have the right to a private audit of
the books and records of the Partnership, provided such audit is made for
Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
-39-
ARTICLE XI
AMENDMENT OF AGREEMENT
----------------------
The General Partner's consent shall be required for any amendment to this
Agreement. The General Partner, without the consent of the Limited Partners, may
amend this Agreement in any respect; provided, however, that the following
-------- -------
amendments shall require the consent of Limited Partners (other than the
Company) holding more than 50% of the Percentage Interests of the Limited
Partners (other than the Company):
(a) any amendment affecting the operation of the Conversion Factor or
the Exchange Right (except as provided in Section 8.05(d) or 7.01(c) or 7.01(d)
hereof) in a manner adverse to the Limited Partners;
(b) any amendment that would adversely affect the rights of the
Limited Partners to receive the distributions payable to them hereunder, other
than with respect to the issuance of additional Partnership Units pursuant to
Section 4.02 hereof;
(c) any amendment that would alter the Partnership's allocations of
Profit and Loss to the Limited Partners, other than with respect to the issuance
of additional Partnership Units pursuant to Section 4.02 hereof; or
(d) any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership.
ARTICLE XII
GENERAL PROVISIONS
------------------
12.01.00 NOTICES.
-------
All communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or upon
deposit in the United States mail, registered, postage prepaid return receipt
requested, to the Partners at the addresses set forth in Exhibit A attached
---------
hereto; provided, however, that any Partner may specify a different address by
-------- -------
notifying the General Partner in writing of such different address. Notices to
the Partnership shall be delivered at or mailed to its specified office.
12.02.00 SURVIVAL OF RIGHTS.
------------------
Subject to the provisions hereof limiting transfers, this Agreement shall
be binding upon and inure to the benefit of the Partners and the Partnership and
their respective legal representatives, successors, transferees and assigns.
-40-
12.03.00 ADDITIONAL DOCUMENTS.
--------------------
Each Partner agrees to perform all further acts and execute, swear to,
acknowledge and deliver all further documents which may be reasonable,
necessary, appropriate or desirable to carry out the provisions of this
Agreement or the Act.
12.04.00 SEVERABILITY.
------------
If any provision of this Agreement shall be declared illegal, invalid, or
unenforceable in any jurisdiction, then such provision shall be deemed to be
severable from this Agreement (to the extent permitted by law) and in any event
such illegality, invalidity or unenforceability shall not affect the remainder
hereof.
12.05.00 ENTIRE AGREEMENT.
----------------
This Agreement and exhibits attached hereto constitute the entire Agreement
of the Partners and supersede all prior written agreements and prior and
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
12.06.00 PRONOUNS AND PLURALS.
--------------------
When the context in which words are used in the Agreement indicates that
such is the intent, words in the singular number shall include the plural and
the masculine gender shall include the neuter or female gender as the context
may require.
12.07.00 HEADINGS.
--------
The Article headings or sections in this Agreement are for convenience only
and shall not be used in construing the scope of this Agreement or any
particular Article.
12.08.00 COUNTERPARTS.
------------
This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original copy and all of which together shall constitute one
and the same instrument binding on all parties hereto, notwithstanding that all
parties shall not have signed the same counterpart.
12.09.00 GOVERNING LAW.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia.
-41-
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Amended and Restated Agreement of Limited Partnership, all as
of the ____ day of July, 1998.
GENERAL PARTNER:
XXXXXX HOTELS TRUST, a Maryland real estate
investment trust
By: ___________________________________________
Name:
Title:
LIMITED PARTNERS:
HHT, LTD. INC., a Virginia corporation
By: ___________________________________________
Name:
Title:
HUDSON HOTELS CORPORATION, a New York corporation
By: ___________________________________________
Name:
Title:
-42-
EXHIBIT A
---------
AS OF JULY __, 1998
Agreed Value of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
------------ ------------ ----------- --------
GENERAL PARTNER:
XXXXXX HOTELS TRUST $
Xxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx International Airport
Rochester, New York 14624
LIMITED PARTNERS:
HHT, LTD. INC. $
Xxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx International Airport
Rochester, New York 14624
HUDSON HOTELS CORPORATION
Xxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx International Airport
Xxxxxxxxx, Xxx Xxxx 00000
-43-
EXHIBIT B
---------
LIST OF INITIAL PROPERTIES
NAME ADDRESS
---- -------
FAIRFIELD INNS:
Hartford, CT
Wilmington, DE
Portland, ME
Buffalo, NY
Syracuse, NY
Harrisburg, PA
Warrendale (Metropolitan Pittsburgh), PA
Winter Park (Orlando), FL
Rocky Mount, NC
Chattanooga, TN
Glenview (Metropolitan Chicago), IL
Willowbrook (Metropolitan Chicago), IL
Fort Xxxxx, IN
Cedar Rapids, IA
Xxxxxxxx (Metropolitan Cincinnati), KY
Louisville, KY
Akron, OH
Sharonville (Metropolitan Cincinnati), OH
Columbus, OH
Willoughby (Metropolitan Cleveland), OH
Flagstaff, AZ
Phoenix West, AZ (5)
Scottsdale, AZ
Ontario, CA
Rancho Cordova, CA
Las Vegas, NV (6)
COMFORT SUITES:
Metropolitan Buffalo, NY
HAMPTON INN:
Metropolitan Buffalo, NY
HOLIDAY INN:
Cleveland, OH
-44-
EXHIBIT C
---------
NOTICE OF EXERCISE OF EXCHANGE RIGHT
In accordance with Section 8.05 of the First Amended and Restated Agreement
of Limited Partnership (the "Agreement") of Xxxxxx Hotels Limited Partnership,
L.P., the undersigned hereby irrevocably (i) presents for exchange ________
Partnership Units in Xxxxxx Hotels Limited Partnership, L.P. in accordance with
the terms of the Agreement and the Exchange Right referred to in Section 8.05
thereof, (ii) surrenders such Partnership Units and all right, title and
interest therein, and (iii) directs that the Cash Amount or REIT Shares Amount
(as defined in the Agreement) as determined by the General Partner deliverable
upon exercise of the Exchange Right be delivered to the address specified below,
and if REIT Shares (as defined in the Agreement) are to be delivered, such REIT
Shares be registered or placed in the name(s) and at the address(es) specified
below.
Dated:________ __, _____
Name of Limited Partner:
______________________________________
(Signature of Limited Partner)
______________________________________
(Mailing Address)
______________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
______________________________________
If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
-45-
