AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MAR MAR REALTY L.P.
TABLE OF CONTENTS
Page
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EXHIBIT A -- PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTERESTS
EXHIBIT B -- VALUE OF CONTRIBUTED PROPERTY
EXHIBIT C -- RIGHTS AND PREFERENCES OF UNITS
C-1 -- CLASS B UNITS
EXHIBIT D -- NOTICE OF CONVERSION
EXHIBIT E -- FORM OF UNIT CERTIFICATE
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MAR MAR REALTY L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated
as of July __, 1998, of Mar Mar Realty L.P. (the "Partnership") is entered into
by and among Mar Mar Realty Trust, a Maryland real estate investment trust, as
General Partner (the "General Partner") and the Persons (as defined herein)
identified as "Limited Partners" on Exhibit A, as the Limited Partners (as
defined herein), together with any other Persons who become Partners (as defined
herein) in the Partnership as provided herein;
WHEREAS, the Partnership was formed by the filing of a certificate of
limited partnership with the Secretary of State of the State of Delaware on July
__, 1998 by the General Partner;
WHEREAS, the General Partner and the Initial Limited Partner (as defined
herein) entered into an Agreement of Limited Partnership on July __, 1998 for
the formation of the Partnership under the Revised Uniform Limited Partnership
Act of the State of Delaware; and
WHEREAS, the Partners now desire to amend and restate the Agreement of
Limited Partnership and to continue the Partnership under the Act (as
hereinafter defined) and to set forth their respective rights and duties
relating to the Partnership on the terms as provided herein;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein made, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Partners hereby agree as
follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as
it may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.2 and who is shown as
such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each Partnership Year (a) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5) and (b) decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account
as of the end of the relevant Partnership Year.
"Adjusted Property" means any property the Carrying Value of which
has been adjusted pursuant to Section 4.4.
"Affiliate" means, with respect to any Person, (a) any Person
directly or indirectly controlling, controlled by or under common control with
such Person, (b) any Person directly or indirectly owning or controlling 10
percent or more of the outstanding voting interests of such Person, (c) any
Person as to which such Person directly or indirectly owns or controls 10
percent or more of the voting interests, or (d) any officer, director, general
partner or trustee of such Person or any Person referred to in clauses (a), (b)
and (c) above. As used herein "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreed Value" means (a) in the case of any Contributed Property set
forth on Exhibit B and as of the time of its contribution to the Partnership,
the Agreed Value of such property as set forth on Exhibit B; (b) in the case of
any Contributed Property not set forth on Exhibit B and as of the time of its
contribution to the Partnership, the 704(c) Value of such property or other
consideration, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed, and (c)
in the case of any property distributed to a Partner by the Partnership, the
Partnership's Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the Regulations
thereunder.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership and all Exhibits attached hereto, as the same may be amended,
supplemented or restated from time to time.
"Assignee" means a Person to whom one or more Partnership Units have
been transferred but who has not been admitted as a Substituted Limited Partner,
and who has the rights set forth in Section 11.5.
"Available Cash" means, with respect to any period for which such
calculation is being made, (a) all cash revenues and funds received by the
Partnership from whatever source
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(excluding the proceeds of any Capital Contribution to the Partnership pursuant
to Section 4.1) plus the amount of any reduction (including, without limitation,
a reduction resulting because the General Partner determines such amounts are no
longer necessary) in reserves of the Partnership, which reserves are referred to
in clause (b)(iv) below;
(b) less the sum of the following (except to the extent made with
the proceeds of any Capital Contribution):
(i) all interest, principal and other debt payments made
during such period by the Partnership,
(ii) all cash expenditures (including capital expenditures)
made by the Partnership during such period,
(iii) investments in any entity (including loans made thereto)
to the extent that such investments are not otherwise described in clauses
(b)(i) or (ii), and
(iv) the amount of any reserve created or increase in reserves
established during such period which the General Partner determines are
necessary or appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any
cash received or reductions in reserves, or take into account any disbursements
made or reserves established, after commencement of the dissolution and
liquidation of the Partnership.
"Bankruptcy" as to any Person, shall be deemed to have occurred when
(i) such Person commences a voluntary proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) such Person is adjudged as bankrupt or
insolvent, or a final and nonappealable order for relief under any bankruptcy,
insolvency or similar law now or hereafter in effect has been entered against
such Person, (iii) such Person executes and delivers a general assignment for
the benefit of such Person's creditors, (iv) such Person files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against such Person in any proceeding of the nature described in
clause (ii) above, (v) such Person seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator for such Person or for all or
any substantial part of such Person's properties, (vi) any proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within 120
days after the commencement thereof, (vii) the appointment without such Person's
consent or acquiescence of a trustee, receiver or liquidator has not been
vacated or stayed within 90 days of such appointment, or (viii) an appointment
referred to in clause (vii) is not vacated within 90 days after the expiration
of any such stay.
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"Book-Tax Disparities" means, with respect to any item of
Contributed Property or Adjusted Property, as of the date of any determination,
the difference between the Carrying Value of such Contributed Property or
Adjusted Property and the adjusted basis thereof for Federal income tax purposes
as of such date. A Partner's share of the Partnership's Book-Tax Disparities in
all of its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 4.4 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with Federal income
tax accounting principles.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close.
"Capital Account" means the capital account maintained by the
Partnership for each Partner pursuant to Section 4.4.
"Capital Contribution" means, with respect to each Partner, the
total amount of cash, cash equivalents and the Agreed Value of Contributed
Property which such Partner contributes or is deemed to contribute to the
Partnership pursuant to Section 4.1 or 4.2 and which are intended to be treated
as a contribution to the Partnership pursuant to Section 721(a) of the Code.
"Carrying Value" means (a) with respect to a Contributed Property or
Adjusted Property, the 704(c) Value of such property reduced (but not below
zero) by all Depreciation with respect to such Contributed Property or Adjusted
Property charged to the Partners' Capital Accounts and (b) with respect to any
other Partnership property, the adjusted basis of such property for Federal
income tax purposes, all as of the time of determination. The Carrying Value of
any property shall be adjusted from time to time in accordance with Section
4.4(d), and to reflect changes, additions or other adjustments to the Carrying
Value for dispositions and acquisitions of Partnership properties, as deemed
appropriate by the General Partner.
"Certificate" means the Certificate of Limited Partnership relating
to the Partnership filed in the office of the Secretary of State of the State of
Delaware, as amended from time to time in accordance with the terms hereof and
the Act.
"Code" means the Internal Revenue Code of 1986, as amended. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.
"Common Share Rights" has the meaning set forth in Section 4.2(e).
"Common Shares" means the common shares of beneficial interest,
$1.00 par value per share, of the General Partner.
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"Consent" means the consent or approval of a proposed action by a
Partner given in accordance with Section 14.1.
"Contributed Property" means each property or other asset (but
excluding cash and cash equivalents), in such form as may be permitted by the
Act contributed or deemed contributed to the Partnership. Once the Carrying
Value of a Contributed Property is adjusted pursuant to Section 4.4, such
property shall no longer constitute a Contributed Property, but shall be deemed
an Adjusted Property for purposes of Section 4.4.
"Conversion Right" has the meaning set forth in Section 4.2(e)(1).
"Converting Partner" has the meaning set forth in Section 4.2(e)(1).
"Debt" means, as to any Person, as of any date of determination, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, which purchase price is due more than six months
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, (b) all amounts owed by such Person
to banks or other Persons in respect of reimbursement obligations under letters
of credit, surety bonds and other similar instruments guaranteeing payment or
other performance of obligations by such Person, (c) all indebtedness for
borrowed money or for the deferred purchase price of property or services
secured by any lien on any property owned by such Person, to the extent
attributable to such Person's interest in such property, even though such Person
has not assumed or become liable for the payment thereof, (d) lease obligations
of such Person which, in accordance with generally accepted accounting
principles, should be capitalized and (e) all guarantees and other contingent
obligations of such Person with respect to Debt of others.
"Declaration of Trust" means the Declaration of Trust of the General
Partner filed with the Office of Assessments and Taxation of the State of
Maryland, as the same may be amended, supplemented or restated from time to
time.
"Depreciation" means for each fiscal year or other period, an amount
equal to the Federal income tax depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Carrying Value of an asset differs from its adjusted
basis for Federal income tax purposes at the beginning of such year or other
period, Depreciation shall be an amount which bears the same ratio to such
beginning Carrying Value as the Federal income tax depreciation, amortization,
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the Federal income tax
depreciation, amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Carrying
Value using any reasonable method selected by the General Partner.
"Dispose of" has the meaning set forth in Section 11.7(a).
"Effective Date" means the date of closing of the sale of Common
Shares pursuant to that certain Underwriting Agreement among the General Partner
and Wheat First Union, as representative of the other underwriters participating
in the initial public offering of the General Partner's Common Shares.
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"Events of Dissolution" has the meaning set forth in Section 13.1.
"Exchange Act" has the meaning set forth in Section 8.5(a).
"General Partner" means Mar Mar Realty Trust, a Maryland real estate
investment trust, and its successors as a general partner of the Partnership in
accordance with the terms of this Agreement.
"General Partnership Interest" means a Partnership Interest held by
the General Partner (including any Partnership Interest acquired by the General
Partner pursuant to Sections 4.2 or 8.6 hereof) that is a general partnership
interest and includes any and all benefits to which the General Partner may be
entitled and all obligations of the General Partner hereunder. A General
Partnership Interest may be expressed as a number of Partnership Units. All
Partnership Units held by the General Partner shall be deemed to be the General
Partner Interest.
"IRS" means the Internal Revenue Service, which is charged with
administering the internal revenue laws of the United States.
"Immediate Family" means, with respect to any natural Person, such
natural Person's spouse, parents, grandparents, descendants (including adopted
children and step-children), nephews, nieces, brothers, and sisters.
"Incapacity" or "Incapacitated" means, (a) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his Person or his estate,
(b) as to any corporation which is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter, (c) as to any partnership which is a Partner, the dissolution and
commencement of winding up of the partnership's affairs, (d) as to any estate
which is a Partner, the distribution by the fiduciary of the estate's entire
interest in the Partnership, (e) as to any trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee), or (f) as
to any Partner, the Bankruptcy of such Partner.
"Indemnitee" means (a) any Person made a party to a proceeding by
reason of his status as (i) the General Partner (including as a guarantor of any
Partnership Debt) or (ii) an officer of the Partnership or a trustee or officer
of the General Partner, and (b) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from
time to time, in its sole and absolute discretion.
"Initial Limited Partner" means __________________.
"Limited Partner" means any Person named as a Limited Partner on
Exhibit A, as such Exhibit may be amended from time to time, including any
Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
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"Limited Partnership Interest" means a Partnership Interest held by
a Limited Partner representing a fractional part of the Partnership Interests of
all Limited Partners and includes any and all benefits to which such Limited
Partner may be entitled and all obligations of such Limited Partner hereunder. A
Limited Partnership Interest may be expressed as a number of Partnership Units.
"Liquidating Transaction" means any sale or other disposition of all
or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, results in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"Liquidator" has the meaning set forth in Section 13.2.
"Lock-up" has the meaning set forth in Section 11.7(a).
"Lock-up Period" has the meaning set forth in Section 11.7(a).
"Net Income" means for any taxable period, the excess, if any, of
the Partnership's items of income and gain for such taxable period over the
Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Section 4.4. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to the special
allocation rules in Sections 6.3 and 6.4, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"Net Loss" means for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction for such taxable period over the
Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Section 4.4. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Loss is subjected to the special
allocation rules in Sections 6.3 and 6.4, Net Loss or the resulting Net Income,
whichever the case may be, shall be recomputed without regard to such item.
"New Securities" has the meaning set forth in Section 4.2(c).
"Nonrecourse Built-in Gain" means, with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 6.4(b) if such properties
were disposed of in a taxable transaction in full satisfaction of such
liabilities and for no other consideration.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
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"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Conversion" means a Notice of Conversion substantially in
the form of Exhibit D.
"Option Plans" means the option plans for Common Shares or Units, as
the case may be, restricted share plans or employee benefit plans established
by, or for the benefit of the employees of, the General Partner, the Partnership
or any Subsidiary.
"Partner" means individually, the General Partner or a Limited
Partner, and "Partners" means collectively, the General Partner and the Limited
Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means Mar Mar Realty L.P., the limited partnership
formed under the Act and pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution 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. A Partnership Interest may be expressed as a
number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).
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"Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof, which record date shall be the same as the record date established by
the General Partner for a distribution to its shareholders of some or all of its
portion of such distribution, and also means any record date established by the
General Partner in connection with any vote or consent of the Limited Partners
pursuant to this Agreement.
"Partnership Unit" or "Unit" means a fractional, undivided share of
the Partnership Interests of all Partners issued pursuant to Sections 4.1 and
4.2, in such number as set forth on Exhibit A, as such Exhibit may be amended
from time to time. Any rights and preferences or other obligations with respect
to Units as may be authorized hereunder shall be set forth in Exhibit C hereto.
The ownership of Partnership Units may be evidenced by the form of
non-transferable, non-negotiable certificate for units substantially in the form
of Exhibit E.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Percentage Interest" means, as to any Partner, its interest in the
Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified on Exhibit A, as such Exhibit may be amended from time to time.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company, estate or
other entity.
"Preferred Shares" has the meaning set forth in Section 4.2(c).
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Redemption Amount" means an amount of cash per Partnership Unit
equal to the Value on the Valuation Date of the Common Shares that the Partner
being redeemed would have been entitled to receive under Section 4.2(e).
"Registration Rights and Lock-up Agreement" means that certain
Registration Rights and Lock-up Agreement dated as of the date hereof among the
General Partner and the Persons identified as "Holders" on the signature pages
thereto.
"Regulations" means the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
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"REIT" means a real estate investment trust as defined under Section
856 of the Code.
"Residual Gain" or "Residual Loss" means any item of gain or loss,
as the case may be, of the Partnership recognized for Federal income tax
purposes resulting from a sale, exchange or other disposition of Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to Section 6.4(b)(1)(i) or 6.4(b)(2)(i) to eliminate Book-Tax
Disparities.
"Securities Act" has the meaning set forth in Section 11.5(c).
"704(c) Value" of any Contributed Property means the value of such
property as set forth on Exhibit B, or if no value is set forth on Exhibit B,
the fair market value of such property or other consideration at the time of
contribution as determined by the General Partner using such reasonable method
of valuation as it may adopt. Subject to Section 4.4, the General Partner shall
use such method as it deems reasonable and appropriate to allocate the aggregate
of the 704(c) Value of Contributed Properties among each separate property on a
basis proportional to its fair market value. [Should the General Partner retain
this flexibility, should a method be established in the partnership agreement
that can only be changed with the approval of the limited partners or should a
method be established in the partnership agreement with respect to the initial
contributors only?]
"Shares" means any Common Shares and Preferred Shares issued to a
Limited Partner upon conversion of its Units pursuant to Section 4.2(e).
"Specified Conversion Date" means the tenth Business Day after
receipt by the General Partner of a Notice of Conversion; provided, however,
that no Specified Conversion Date shall occur before one year from the date of
this Agreement without the consent of the General Partner except as provided in
Section 4.2(e).
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (a) the voting power of the voting equity
securities or (b) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.
"Transaction" has the meaning set forth in Section 11.2(c).
"Unit Adjustment Factor" means the factor applied for converting
Partnership Units to Common Shares, which shall initially be 1.0; provided,
however, that in the event that the General Partner (a) declares or pays a
dividend on its outstanding Common Shares in Common Shares or makes a
distribution to all holders of its outstanding Common Shares in Common Shares,
(b) subdivides its outstanding Common Shares, or (c) combines its outstanding
Common Shares into a smaller number of Common Shares, the Unit Adjustment Factor
shall be adjusted by multiplying
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the Unit Adjustment Factor by a fraction, the numerator of which shall be the
number of Common Shares issued and outstanding on the record date (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 Common Shares (determined without the above assumption) issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination. Any adjustment to the Unit Adjustment Factor shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event. Any adjustment to the Unit Adjustment Factor shall
be carried forward to successive adjustments.
"Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the fair
market value of such property (as determined under Section 4.4) as of such date,
over (b) the Carrying Value of such property (prior to any adjustment to be made
pursuant to Section 4.4) as of such date.
"Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the Carrying
Value of such property (prior to any adjustment to be made pursuant to Section
4.4) as of such date, over (b) the fair market value of such property (as
determined under Section 4.4) as of such date.
"Valuation Date" means the date of receipt by the General Partner of
a Notice of Conversion or, if such date is not a Business Day, the first
Business Day thereafter.
"Value" means, with respect to a Common Share, the average of the
daily market price for the ten (10) consecutive trading days immediately
preceding the Valuation Date. The market price for each such trading day shall
be: (a) if the Common Shares are listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System, the closing price, regular way,
on such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices on such day; (b) if the Common Shares are not
listed or admitted to trading on any securities exchange or the NASDAQ-National
Market System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on such day,
as reported by a reliable quotation source designated by the General Partner; or
(c) if the Common Shares are not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation
source designated by the General Partner, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than 10 days prior to the date in
question) for which prices have been so reported; provided, however, that if
there are no bid and asked prices reported during the 10 days prior to the date
in question, the Value of the Common Shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event a holder of Common Shares would be entitled to receive Common Share
Rights, then the Value of such Common Share Rights shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
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ARTICLE II
ORGANIZATIONAL MATTERS
Section 2.1 Organization and Continuation; Application of Act.
(a) Organization and Continuation of Partnership. The General
Partner and the Limited Partners do hereby continue, and ratify the
formation of, the Partnership as a limited partnership according to all of
the terms and provisions of this Agreement and otherwise in accordance
with the Act. The General Partner is the sole general partner and the
Limited Partners are the sole limited partners of the Partnership.
Effective as of the date hereof, the Initial Limited Partner has withdrawn
from the Partnership in exchange for his original capital contribution.
[Will the Initial Limited Partner remain or withdraw?]
(b) Application of Act. The Partnership is a limited partnership
subject to the provisions of the Act and the terms and conditions set
forth in this Agreement. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the
Act. No Partner has any interest in any Partnership property, and the
Partnership Interest of each Partner shall be personal property for all
purposes.
Section 2.2 Name. The name of the Partnership is Mar Mar Realty L.P. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.", "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Limited Partners of such change in the next regular communication to the
Limited Partners; provided, however, that the name of the Partnership may not be
changed to include the name of any Limited Partner, or any variant thereof,
without the written consent of that Limited Partner.
Section 2.3 Registered Office and Agent; Principal Office. The address of
the registered office of the Partnership in the State of Delaware is located c/o
Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
County of New Castle and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office is the
Corporation Service Company. The principal office of the Partnership is located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or such other place as the General Partner may from time to time designate by
notice to the Limited Partners. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner deems advisable.
Section 2.4 Withdrawal. The Initial Limited Partner hereby withdraws from
the Partnership.
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Section 2.5 Term. The term of the Partnership commenced, and shall
continue until December 31, 2098 unless it is dissolved sooner pursuant to the
provisions of Article XIII or as otherwise provided by law.
ARTICLE III
PURPOSE
Section 3.1 Purpose and Business. The purpose and nature of the business
to be conducted by the Partnership is (a) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Act, (b)
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 (c) to do anything necessary or incidental
to the foregoing which, in each case, is not in breach of this Agreement;
provided, however, that each of the foregoing clauses (a), (b) and (c) shall be
limited and conducted in such a manner as to permit the General Partner at all
times to be classified as a REIT, unless the General Partner provides notice to
the Partnership that it intends to cease or has ceased to qualify as a REIT.
Section 3.2 Powers. The Partnership is empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership;
provided, however, that the Partnership shall not take, or refrain from taking,
any action which, in the judgment of the General Partner, in its sole and
absolute discretion, (a) could adversely affect the ability of the General
Partner to continue to qualify as a REIT, (b) could subject the General Partner
to any additional taxes under Section 857 or Section 4981 of the Code, or (c)
could violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.
ARTICLE IV
CAPITAL CONTRIBUTIONS; ISSUANCE OF UNITS;
CAPITAL ACCOUNTS
Section 4.1 Capital Contributions of the Partners.
(a) Initial Capital Contributions. At the time of the execution of
this Agreement, the Partners shall make or shall have made the Capital
Contributions set forth in Exhibit A to this Agreement, provided that the
Initial Limited Partner does hereby withdraw as the Initial Limited
Partner upon the execution of this Agreement. The Partners shall own
Partnership Units in the amounts set forth on Exhibit A and shall have a
Percentage Interest
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in the Partnership as set forth on Exhibit A, which Percentage Interest
shall be adjusted on Exhibit A from time to time by the General Partner to
the extent necessary to reflect accurately redemptions, conversions,
Capital Contributions, the issuance of additional Partnership Units, or
similar events having an effect on a Partner's Percentage Interest.
Notwithstanding anything to the contrary in this Agreement, no Partner
(other than the General Partner) shall be permitted to own (actually or
constructively, through the application of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code) a Percentage Interest equal to
or greater than twenty five percent (25%). The Partnership Units held by
the General Partner shall at all times be deemed to be General Partner
units and shall constitute the General Partnership Interest.
(b) Additional Capital Contributions.
(1) No Partner shall be assessed or, except as provided for in
Sections 4.1(b)(2) and 13.3(b) below and except for any such amounts
which a Limited Partner may be obligated to repay under Section
10.5, be required to contribute additional funds or other property
to the Partnership. Any additional funds or other property required
by the Partnership, as determined by the General Partner in its sole
discretion, may, at the option of the General Partner and without an
obligation to do so (except as provided for in Section 4.1(b)(2) and
Section 13.3(b) below), be contributed by the General Partner as
additional Capital Contributions. If and as the General Partner or
any other Partner makes additional Capital Contributions to the
Partnership, each such Partner shall receive additional Partnership
Units as provided for in Section 4.2.
(2) Except to the extent provided in Section 7.5 below
relating to interests in Partnership properties held directly by the
Partnership or through Subsidiaries, the net proceeds of any and all
funds raised by or through the General Partner through the issuance
of additional shares of the General Partner (whether Common Shares
or preferred shares) shall be contributed to the Partnership as
additional Capital Contributions, and in such event the General
Partner shall be issued additional Partnership Units pursuant to
Section 4.2 below.
(c) Return of Capital Contributions. Except as otherwise expressly
provided herein, the Capital Contribution of each Limited Partner will be
returned to that Partner only in the manner and to the extent provided in
Article V and Article XIII hereof, and no Partner may withdraw from the
Partnership or otherwise have any right to demand or receive the return of
its Capital Contribution to the Partnership (as such), except as
specifically provided herein. Under circumstances requiring a return of
any Capital Contribution, no Partner shall have the right to receive
property other than cash, except as specifically provided herein. No
Partner shall be entitled to interest on any Capital Contribution or
Capital Account notwithstanding any disproportion therein as between the
Partners. Except as specifically provided herein, the General Partner
shall not be liable for the return of any portion of the
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Capital Contribution of any Limited Partner, and the return of such
Capital Contributions shall be made solely from Partnership assets.
(d) Liability of Limited Partners. No Limited Partner shall have any
further personal liability to contribute money to, or in respect of, the
liabilities or the obligations of the Partnership, nor shall any Limited
Partner be personally liable for any obligations of the Partnership,
except as otherwise provided in this Article IV or in the Act. No Limited
Partner shall be required to make any contributions to the capital of the
Partnership other than its Capital Contribution.
Section 4.2 Issuances of Additional Partnership Interests.
(a) Issuance to Other Than the General Partner. 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 (other than
issuances to the General Partner, which issuances are governed by Section
4.2(b)) 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
except to the extent provided herein; provided, however, that the
Partnership also may from time to time issue to third parties additional
Partnership Interests (other than any such issuance to the General Partner
which is governed by Sections 4.2(b) and 4.2(c)) 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, as may be set forth in Exhibit C attached hereto
from time to time, subject to Delaware law, including, without limitation,
with respect to (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 further however, that any
issuance of any classes as provided in the foregoing proviso, made or
authorized to be made prior to the first anniversary of the Effective Date
shall be permitted only with the Consent of the Limited Partners holding a
majority of the Percentage Interests of the Limited Partners. To the
extent more than one class of Partnership Units is outstanding, the
Partnership Units in this Agreement shall be referred to as Class A Units.
(b) Issuance to the General Partner. The Partnership also may from
time to time issue to the General Partner additional Partnership Units or
other Partnership Interests in one or more classes, or one or more series
of any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to Limited Partnership
Interests, as may be set forth in Exhibit C attached hereto from time to
time, all as shall be determined by the General Partner, subject to
Delaware law, including, without limitation, with respect to (i)
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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 (x) the additional Partnership
Interests are issued in connection with an issuance of shares of the
General Partner, which shares 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 in accordance with
this Section 4.2(b), and (y) the General Partner shall make a Capital
Contribution to the Partnership (1) in an amount equal to the net proceeds
raised in connection with the issuance of such shares of the General
Partner in the event such shares are sold for cash or cash equivalents or
(2) in the form of the property received in consideration for such shares,
in the event such shares are issued in consideration for other property.
(c) Issuance of Additional Common Shares or Preferred Shares. The
General Partner is explicitly authorized to issue additional Common Shares
or preferred shares of beneficial interest of the General Partner
("Preferred Shares"), or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
Common Shares or Preferred Shares ("New Securities") and in connection
therewith, as further provided in Section 4.2(b), (i) the General Partner
shall cause the Partnership to issue to the General Partner Partnership
Interests or rights, options, warrants or convertible or exchangeable
securities of the Partnership having designations, preferences and other
rights, as may be set forth on Exhibit C attached hereto from time to
time, all such that the economic interests are substantially similar to
those of the New Securities, and (ii) the General Partner shall contribute
the net proceeds from, or the property received in consideration for, the
issuance of such New Securities and from the exercise of rights contained
in such New Securities to the Partnership. In connection with the issuance
of Partnership Interests which are substantially similar to New
Securities, the General Partner is authorized to modify or amend the
distributions or allocations hereunder solely to the extent necessary to
give effect to the designations, preferences and other rights pertaining
to such Partnership Interests.
(d) Issuance Pursuant to Option Plans.
(1) Upon the exercise of an option granted by the General
Partner for Common Shares, the General Partner shall cause the
Partnership to issue to the General Partner one Partnership Unit for
each Common Share acquired upon such exercise pursuant to the Option
Plans (or such other number of Partnership Units based on the
relationship a different class of Common Shares bears to Common
Shares), and the General Partner shall contribute to the Partnership
the net proceeds received upon such exercise (it being understood
that the General Partner may issue Common Shares in connection with
the Option Plans without receiving a specified
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amount of proceeds and that the issuance of such Common Shares shall
nonetheless entitle the General Partner to additional Partnership
Units).
(2) The General Partner shall cause the Partnership to issue
Partnership Units to employees of the Partnership upon the exercise
by any such employees of an option to acquire Partnership Units
granted by the Partnership pursuant to the Option Plans in
accordance with the terms of the Option Plans. Partnership Units so
issued shall represent Limited Partnership Interests.
(3) The General Partner shall cause the Partnership to issue
Partnership Units to any Subsidiary upon the exercise by an employee
of such Subsidiary of an option to acquire Partnership Units granted
by such Subsidiary pursuant to the Option Plans, and such Subsidiary
shall transfer to the Partnership the price per Partnership Unit
required by the Option Plans to be paid by Subsidiaries. Partnership
Units issued to any such Subsidiary shall represent Limited
Partnership Interests.
(e) Conversion of Units.
(1) Subject to the further provisions of this Section 4.2(e)
and the provisions of Sections 8.6 and 11.7, beginning one year
after the Effective Date or earlier with the written consent of the
General Partner (except as otherwise contractually restricted), the
General Partner hereby grants to each Limited Partner the right (the
"Conversion Right") to exchange any or all of the Partnership Units
held by that Partner for Common Shares, with one Partnership Unit
being exchangeable for one Common Share; provided, however, that in
the event the General Partner issues to all holders of Common Shares
rights, options, warrants or convertible or exchangeable securities
entitling the shareholders to subscribe for or purchase Common
Shares, or any other securities or property (collectively, the
"Common Share Rights") then (except to the extent such rights have
already been reflected in an adjustment to the Unit Adjustment
Factor as provided in Section 4.2(e)(2) below) the Converting
Partner shall also be entitled to receive such Common Share Rights
that a holder of that number of Common Shares would be entitled to
receive. The Conversion Right may be exercised by a Limited Partner
(a "Converting Partner") at any time beginning one year after the
Effective Date (or earlier upon the written consent of the General
Partner) and from time to time by delivering a Notice of Conversion
to the General Partner not less than ten (10) days prior to such
exchange. The General Partner shall at all times reserve and keep
available out of its authorized but unissued Common Shares, solely
for the purpose of effecting the exchange of Partnership Units for
Common Shares, such number of Common Shares as shall from time to
time be sufficient to effect the conversion of all outstanding
Partnership Units not owned by the General Partner. No Limited
Partner shall, solely by virtue of being the holder of one or more
Partnership Units, be deemed to be a shareholder of or have any
other interest in the General Partner.
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(2) In the event of any change in the Unit Adjustment Factor,
the number of Partnership Units held by each Partner shall be
proportionately adjusted by multiplying the number of Partnership
Units held by such Partner immediately prior to the change in the
Unit Adjustment Factor by the new Unit Adjustment Factor; the intent
of this provision is that one Partnership Unit remains exchangeable
for one Common Share without dilution (including any securities for
which Shares are exchanged in a transaction contemplated by Section
11.2(c)). In the event the General Partner issues any Common Shares
in exchange for Partnership Units pursuant to this Section 4.2(e),
any such Partnership Units so acquired by the General Partner shall
immediately thereafter be canceled by the Partnership and the
Partnership shall issue to the General Partner new Partnership Units
pursuant to Section 4.2(c) hereof. Each Converting Partner agrees to
execute such documents as the General Partner may reasonably require
in connection with the issuance of Common Shares upon exercise of
the Conversion Right. Notwithstanding the foregoing provisions of
this Section 4.2(e), a Limited Partner shall not have the right to
exchange Partnership Units for Common Shares if (i) in the opinion
of counsel for the General Partner, the General Partner would, as a
result thereof, no longer qualify (or it would be more likely than
not that the General Partner no longer would qualify) as a REIT; or
(ii) such exchange would in the opinion of counsel for the General
Partner, constitute or be more likely than not to constitute a
violation of applicable securities laws.
Section 4.3 No Preemptive Rights. Except as specifically provided in this
Agreement, no Person shall have any preemptive, preferential or other similar
right with respect to (a) additional Capital Contributions or loans to the
Partnership, or (b) issuance or sale of any Partnership Units.
Section 4.4 Capital Accounts of the Partners.
(a) General. The Partnership shall maintain for each Partner a
separate Capital Account in accordance with the rules of Regulations
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (a)
the amount of all Capital Contributions made by such Partner to the
Partnership pursuant to this Agreement and (b) all items of Partnership
income and gain (including income and gain exempt from tax) computed in
accordance with Section 4.4(b) hereof and allocated to such Partner
pursuant to Sections 6.1 through Section 6.3 of the Agreement, and
decreased by (i) the amount of cash or Agreed Value of all actual and
deemed distributions of cash or property made to such Partner pursuant to
this Agreement and (ii) all items of Partnership deduction and loss
computed in accordance with Section 4.4(b) hereof and allocated to such
Partner pursuant to Sections 6.1 through Section 6.3 of the Agreement.
(b) Income, Gains, Deductions and Losses. For purposes of computing
the amount of any item of income, gain, loss or deduction to be reflected
in the Partners' Capital
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Accounts, unless otherwise specified in this Agreement, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for Federal income tax
purposes determined in accordance with Section 703(a) of the Code (for
this purpose all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a)(1) of the Code shall be
included in taxable income or loss), with the following adjustments:
(1) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain,
loss and deduction shall be made without regard to any election
under Section 754 of the Code which may be made by the Partnership.
(2) The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items
described in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are
not includable in gross income or are neither currently deductible
nor capitalized for Federal income tax purposes.
(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if
the adjusted basis of such property as of such date of disposition
were equal in amount to the Partnership's Carrying Value with
respect to such property as of such date.
(4) In lieu of the depreciation, amortization, and other cash
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such fiscal year.
(5) In the event the Carrying Value of any Partnership asset
is adjusted pursuant to Section 4.4(d) hereof, the amount of any
such adjustment shall be taken into account as gain or loss from the
disposition of such asset.
(6) Any items specially allocated under Section 6.4 hereof
shall not be taken into account.
(c) Transfers of Partnership Units. A transferee of a Partnership
Unit shall succeed to a pro rata portion of the Capital Account of the
transferor.
(d) Unrealized Gains and Losses.
(1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 4.4(d)(2), the
Carrying Values of all Partnership assets shall be adjusted upward
or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as of the times of the
adjustments provided in Section 4.4(d)(2) hereof, as if such
Unrealized Gain or
- 19 -
Unrealized Loss had been recognized on an actual sale of each such
property and allocated pursuant to Section 6.1 of the Agreement.
(2) Such adjustments shall be made as of the following times:
(i) immediately prior to the acquisition of an additional interest
in the Partnership by any new or existing Partner in exchange for
more than a de minimis Capital Contribution; (ii) immediately prior
to the distribution by the Partnership to a Partner of more than a
de minimis amount of Property as consideration for an interest in
the Partnership; and (iii) immediately prior to the liquidation of
the Partnership or the General Partner's interest in the Partnership
within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g);
provided, however, that adjustments pursuant to clauses (a) and (b)
above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners in the
Partnership.
(3) In accordance with Regulations Section
1.704-1(b)(2)(iv)(e), the Carrying Values of Partnership assets
distributed in kind shall be adjusted upward or downward to reflect
any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as of the time any such asset is distributed.
(4) In determining such Unrealized Gain or Unrealized Loss the
aggregate cash amount and fair market value of all Partnership
assets (including cash or cash equivalents) shall be determined by
the General Partner using such reasonable method of valuation as it
may adopt, or in the case of a liquidating distribution pursuant to
Article XIII of this Agreement, be determined and allocated by the
Liquidator using such reasonable methods of valuation as it may
adopt. The General Partner, or the Liquidator, as the case may be,
shall allocate such aggregate value among the assets of the
Partnership (in such manner as it determines in its sole and
absolute discretion to arrive at a fair market value for individual
properties).
(e) Modification by General Partner. The provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to
comply with Regulations Section 1.704-1(b), and shall be interpreted and
applied in a manner consistent with such Regulations. In the event the
General Partner shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto (including,
without limitation, debits or credits relating to liabilities which are
secured by contributed or distributed property or which are assumed by the
Partnership, the General Partner, or any Limited Partners) are computed in
order to comply with such Regulations, the General Partner may make such
modification; provided, however, that it will not have a material effect
on the amounts distributable to any Person pursuant to Article XIII of
this Agreement upon the liquidation of the Partnership. The General
Partner also shall (a) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the
Partners and the amount of Partnership capital reflected on the
Partnership's
- 20 -
balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(q), and (b) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
ARTICLE V
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions. The General
Partner shall distribute not less frequently than quarterly an amount equal to
100% of Available Cash (other than amounts treated as net capital gains as
defined in Code Section 857(b)(3), which the General Partner shall distribute,
in whole or in part, or not distribute, in the General Partner's sole and
absolute discretion) generated by the Partnership during such quarter to the
Partners who are Partners on the Partnership Record Date with respect to such
quarter (i) first, with respect to any class of Partnership Interests issued
pursuant to Sections 4.2(a) or 4.2(b) which are entitled to a preference over
Partnership Units on the distribution of Available Cash and are specially
allocated items under Section 6.1 prior to allocated items with respect to
amounts distributed pursuant to Paragraph (ii) below (and within and among such
classes, in order of the preferences designated therein and pro rata among any
such classes), and (ii) thereafter, in accordance with their respective
Percentage Interests on such Partnership Record Date; provided, however, that in
no event may a Partner receive a distribution of Available Cash with respect to
a Unit if such Partner is entitled to receive a dividend from the General
Partner which is derived from a distribution of Available Cash to the General
Partner with respect to a Common Share for which such Unit has been redeemed or
exchanged.
Section 5.2 Amounts Withheld. All amounts withheld pursuant to the Code or
any provisions of any state or local tax law and Section 10.5 hereof with
respect to any allocation, payment or distribution to the General Partner, or
any Limited Partners or Assignees shall be treated as amounts distributed to the
General Partner or such Limited Partners, or Assignees pursuant to Section 5.1
for all purposes under this Agreement.
Section 5.3 Distributions Upon Liquidation. Proceeds from a Liquidating
Transaction shall be distributed to the Partners in accordance with Section
13.2.
ARTICLE VI
ALLOCATIONS
Section 6.1 Allocations For Capital Account Purposes Other than the
Taxable Year of Liquidation. Subject to any class of Partnership Interests
issued pursuant to Section 4.2(a) or 4.2(b) which are entitled to a preference
over Partnership Units on the distribution of Available Cash, for purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Section 4.4 hereof) shall be allocated among the
Partners for each taxable year (or portion thereof) as provided herein below:
- 21 -
(a) Net Income. After giving effect to the special allocations set
forth in Sections 6.2 and 6.3 below, Net Income shall be allocated (i)
first, to the General Partner to the extent that, on a cumulative basis,
Net Losses previously allocated to the General Partner pursuant to the
last sentence of Section 6.1(b) exceed Net Income previously allocated to
the General Partner pursuant to this clause (a) of Section 6.1(a), and
(ii) thereafter, Net Income shall be allocated to the Partners in
accordance with their respective Percentage Interests.
(b) Net Losses. After giving effect to the special allocations set
forth in Sections 6.2 and 6.3 below, Net Losses shall be allocated to the
Partners in accordance with their respective Percentage Interests;
provided, however, that Net Losses shall not be allocated to any Limited
Partner pursuant to this Section 6.1(b) to the extent that such allocation
would cause such Limited Partner to have an Adjusted Capital Account
Deficit at the end of such taxable year (or increase any existing Adjusted
Capital Account Deficit). All Net Losses in excess of the limitations set
forth in the preceding sentence of this Section 6.1(b) shall be allocated
to the General Partner.
(c) Nonrecourse Liabilities. For purposes of Regulations Section
1.752-3(a), the Partners agree that Nonrecourse Liabilities of the
Partnership in excess of the sum of (i) the amount of Partnership Minimum
Gain and (ii) the total amount of Nonrecourse Built-in Gain shall be
allocated among the Partners in accordance with their respective
Percentage Interests.
(d) Gains. Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall to the extent possible,
after taking into account other required allocations of gain pursuant to
Section 6.3 below, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners have been allocated
any deductions directly or indirectly giving rise to the treatment of such
gains as Recapture Income, all in such a manner consistent with Regulation
Section 1.1245-1.
Section 6.2 Allocations for Capital Account Purposes in the Taxable Year
of Liquidation. Subject to Section 6.3, the Net Income and Net Loss of the
Partnership for the taxable year of liquidation of the Partnership shall be
allocated prior to the final liquidating distributions of the Partnership and
shall be allocated first to eliminate any Partner's Adjusted Capital Account
Deficit and then, to the extent possible, in a manner such that the Capital
Accounts of the Partners immediately prior to such final liquidating
distributions are equal to the amount which would have been distributable to the
Partners under Section 5.1 if such distributions were to be governed by Section
5.1. Notwithstanding the preceding sentence, actual distributions made
subsequent to the allocations under this Section 6.2 shall be made pursuant to
Section 5.3.
Section 6.3 Special Allocation Rules. Notwithstanding any other provision
of this Agreement, the following special allocations shall be made in the
following order:
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(a) Minimum Gain Chargeback. Notwithstanding any other provisions of
Article VI, if there is a net decrease in Partnership Minimum Gain during
any Partnership Year, each Partner shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, as determined under Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be determined
in accordance with Regulations Section 1.704-2(f)(6). This Section 6.3(a)
is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of this Section 6.3(a)
only, each Partner's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to Section 6.1 of the Agreement
with respect to such fiscal year and without regard to any decrease in
Partner Minimum Gain during such fiscal year.
(b) Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Article VI (except Section 6.2 hereof), if there is a net
decrease in Partner Minimum Gain attributable to a Partner Nonrecourse
Debt during any Partnership fiscal year, each Partner who has a share of
the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such Partner's
share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5). Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be allocated
to each Partner pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2(i)(4). This
Section 6.3(b) is intended to comply with the minimum gain chargeback
requirement in such Section of the Regulations and shall be interpreted
consistently therewith. Solely for purposes of this Section 6.3(b), each
Partner's Adjusted Capital Account Deficit shall be determined prior to
any other allocations pursuant to Article VI of this Agreement with
respect to such fiscal year, other than allocations pursuant to Section
6.3(a) hereof.
(c) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations
required under Sections 6.3(a) and 6.3(b) hereof, such Partner has an
Adjusted Capital Account Deficit, items of Partnership income and gain
shall be specially allocated to such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, its
Adjusted Capital Account Deficit created by such adjustments, allocations
or distributions as quickly as possible.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any taxable
period shall be allocated to the Partners in accordance with their
respective Percentage Interests.
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If the General Partner determines in its good faith discretion that the
Partnership's Nonrecourse Deductions must be allocated in a different
ratio to satisfy the safe harbor requirements of the Regulations
promulgated under Section 704(b) of the Code, the General Partner is
authorized, upon notice to the Limited Partners, to revise the prescribed
ratio to the numerically closest ratio which does satisfy such
requirements.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any fiscal year shall be specially allocated to the Partner
who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)(2).
(f) Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis), and such item of
gain or loss shall be specially allocated to the Partners in a manner
consistent with the manner in which their Capital Accounts are required to
be adjusted pursuant to such Section of the Regulations.
Section 6.4 Allocations for Tax Purposes.
(a) General. Except as otherwise provided in this Section 6.4, for
Federal income tax purposes, each item of income, gain, loss and deduction
shall be allocated among the Partners in the same manner as its
correlative item of "book" income, gain, loss or deduction is allocated
pursuant to Sections 6.1 and 6.3 of this Agreement.
(b) To Eliminate Book-Tax Disparities. In an attempt to eliminate
Book-Tax Disparities attributable to a Contributed Property or Adjusted
Property, items of income, gain, loss, and deduction shall be allocated
for Federal income tax purposes among the Partners as follows:
(1) (i) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners
consistent with the principles of Section 704(c) of the Code in a
manner that takes into account the variation between the 704(c)
Value of such property and its adjusted basis at the time of
contribution, and (ii) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be allocated among the
Partners in the same manner as its correlative item of "book" gain
or loss is allocated pursuant to Sections 6.1 and 6.3 of this
Agreement.
(2) (i) In the case of an Adjusted Property, such items shall
(A) first, be allocated among the Partners in a manner consistent
with the principles of Section 704(c) of the Code in a manner to
take into account the Unrealized Gain or Unrealized Loss
attributable to such property and the allocations thereof pursuant
to
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Section 4.4 and (B) second, in the event such property was
originally a Contributed Property, be allocated among the Partners
in a manner consistent with Section 6.4(b)(1)(i), and (ii) any item
of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner as
its correlative item of "book" gain or loss is allocated pursuant to
Sections 6.1 and 6.4 of this Agreement.
(3) All other items of income, gain, loss and deduction shall
be allocated among the Partners in the same manner as their
correlative item of "book" gain or loss is allocated pursuant to
Sections 6.1 and 6.3 of this Agreement.
(c) Power of General Partner to Elect Method. To the extent Treasury
Regulations promulgated pursuant to Section 704(c) of the Code permit a
partnership to utilize alternative methods to eliminate the disparities
between the agreed value of property and its adjusted basis, the General
Partner shall have the authority to elect the method to be used by the
Partnership and such election shall be binding on all Partners.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 Management.
(a) Powers of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business and
affairs of the Partnership are exclusively vested in the General Partner,
and no Limited Partner shall have any right to participate in or exercise
control or management power over the business and affairs of the
Partnership. Notwithstanding anything to the contrary in this Agreement,
the General Partner may not be removed by the Limited Partners with or
without cause. In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or which are
granted to the General Partner under any other provision of this
Agreement, the General Partner, subject to Section 7.3 hereof, shall have
full power and authority to do all things deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all powers set
forth in Section 3.2 hereof and to effectuate the purposes set forth in
Section 3.1 hereof including, without limitation:
(1) the making of any expenditures, the lending or borrowing
of money (including, without limitation, making prepayments on loans
and borrowing money to permit the Partnership to make distributions
to its Partners in such amounts as will permit the General Partner
(so long as the General Partner qualifies as a REIT) to avoid the
payment of any Federal income tax (including, for this purpose, any
excise tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit the General
Partner to maintain REIT status), the assumption or guarantee of, or
other contracting for, indebtedness and other
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liabilities, the issuance of evidences of indebtedness (including
the securing of same by mortgage, deed of trust or other lien or
encumbrance on the Partnership's assets) and the incurring of any
obligations it deems necessary for the conduct of the activities of
the Partnership;
(2) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the
Partnership;
(3) the acquisition, disposition, sale, conveyance, mortgage,
pledge, encumbrance, hypothecation, contribution or exchange of any
assets of the Partnership or the merger or other combination of the
Partnership with or into another entity on such terms as the General
Partner deems proper;
(4) the use of the assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent with
the terms of this Agreement and on any terms it sees fit including,
without limitation, the financing of the conduct of the operations
of the General Partner, the Partnership or any of the Partnership's
Subsidiaries, the lending of funds to other Persons (including the
Partnership's Subsidiaries) and the repayment of obligations of the
Partnership and its Subsidiaries and any other Person in which it
has an equity investment and the making of capital contributions to
its Subsidiaries, the holding of any real, personal and mixed
property of the Partnership in the name of the Partnership or in the
name of a nominee or trustee (subject to Section 7.10), the
creation, by grant or otherwise, of easements or servitudes, and the
performance of any and all acts necessary or appropriate to the
operation of the Partnership assets including, but not limited to,
applications for rezoning, objections to rezoning, constructing,
altering, improving, repairing, renovating, rehabilitating, razing,
demolishing or condemning any improvements or property of the
Partnership;
(5) the negotiation, execution, and performance of any
contracts, conveyances or other instruments (including with
Affiliates of the Partnership to the extent provided in Section 7.6)
that the General Partner considers useful or necessary to the
conduct of the Partnership's operations or the implementation of the
General Partner's powers under this Agreement including, without
limitation, the execution and delivery of leases on behalf of or in
the name of the Partnership (including the lease of Partnership
property for any purpose and without limit as to the term thereof,
whether or not such term (including renewal terms) shall extend
beyond the date of termination of the Partnership and whether or not
the portion so leased is to be occupied by the lessee or, in turn,
subleased in whole or in part to others);
(6) the opening and closing of bank accounts, the investment
of Partnership funds in securities, certificates of deposit and
other instruments, and the
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distribution of Partnership cash or other Partnership assets in
accordance with this Agreement;
(7) the selection and dismissal of employees of the
Partnership or the General Partner (including, without limitation,
employees having titles such as "president", "vice president",
"secretary" and "treasurer"), and the engagement and dismissal of
agents, outside attorneys, accountants, engineers, appraisers,
consultants, contractors and other professionals on behalf of the
General Partner or the Partnership and the determination of their
compensation and other terms of employment or hiring;
(8) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;
(9) the formation of, or acquisition of an interest in, and
the contribution of property to, any further limited or general
partnerships, joint ventures or other relationships that it deems
desirable (including, without limitation, the acquisition of
interests in, and the contribution of property to, its Subsidiaries
and any other Person in which it has an equity investment from time
to time);
(10) the control of any matters affecting the rights and
obligations of the Partnership, including the conduct of litigation
and the incurring of legal expense and the settlement of claims and
litigation, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;
(11) the undertaking of any action in connection with the
Partnership's direct or indirect investment in its Subsidiaries or
any other Person (including, without limitation, the contribution or
loan of funds by the Partnership to such Persons);
(12) the determination of the fair market value of any
Partnership property distributed in kind using such reasonable
method of valuation as it may adopt;
(13) the execution, acknowledgment and delivery of any and all
documents and instruments to effectuate any or all of the foregoing;
and
(14) the issuance of Partnership Units to any Subsidiary which
may be necessary for such Subsidiary to satisfy such Subsidiary's
obligations under the Option Plans, in exchange for the transfer to
the Partnership by such Subsidiary of the price per Partnership Unit
required by the Option Plans to be paid by Subsidiaries.
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(b) No Approval Required for Above Powers. Except as expressly
provided in this Agreement (including, without limitation, the last
sentence of this Section 7.1(b)), each of the Limited Partners agrees that
the General Partner is authorized to execute, deliver and perform the
above-mentioned agreements and transactions on behalf of the Partnership
without any further act, approval or vote of the Partners, notwithstanding
any other provision of this Agreement, the Act or any applicable law, rule
or regulation. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under
this Agreement shall not constitute a breach by the General Partner of any
duty that the General Partner may owe the Partnership or the Limited
Partners or any other Persons under this Agreement or of any duty stated
or implied by law or equity. Notwithstanding the foregoing, the General
Partner agrees that it will not take any of the following actions at any
time prior to the first anniversary of the Effective Date without the
Consent of Limited Partners holding a majority of the outstanding Limited
Partnership Interests: (i) a merger, consolidation or share exchange of
the General Partner and requiring the approval of the General Partner's
shareholders or any merger, consolidation or partnership interest exchange
of the Partnership; (ii) a sale, lease, transfer or other disposition of
all of substantially all of the General Partner's assets requiring the
approval of the General Partner's shareholders, a sale, lease, transfer or
other disposition of all or substantially all of the Partnership's assets,
or any election to dissolve the General Partner requiring the approval of
the General Partner's shareholders; or (iii) an amendment to the
Declaration of Trust requiring the approval of the General Partner's
shareholders.
(c) Insurance. At all times from and after the date hereof, the
General Partner may cause the Partnership to obtain and maintain casualty,
liability and other insurance on the properties of the Partnership and
liability insurance for the Indemnitees hereunder. The right to procure
such insurance on behalf of the Indemnities shall in no way mitigate or
otherwise affect the right of any such Indemnitee to indemnification under
Section 7.7.
(d) Working Capital Reserves. At all times from and after the date
hereof, the General Partner may cause the Partnership to establish and
maintain working capital reserves in such amounts as the General Partner,
in its sole and absolute discretion, deems appropriate and reasonable from
time to time.
(e) No Obligation to Consider Tax Consequences to Limited Partners.
In exercising its authority under this Agreement, the General Partner may,
but shall be under no obligation to, take into account the tax
consequences to any Partner of any action taken by it. The General Partner
and the Partnership shall not have liability to a Limited Partner under
any circumstances as a result of an income tax liability incurred by such
Limited Partner as a result of an action (or inaction) by the General
Partner pursuant to its authority under this Agreement.
Section 7.2 Certificate of Limited Partnership. To the extent that such
action is determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner
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shall file amendments to and restatements of the Certificate and do all the
things to maintain the Partnership as a limited partnership (or a partnership in
which the limited partners have limited liability) under the laws of the State
of Delaware and each other jurisdiction in which the Partnership may elect to do
business or own property. Subject to the terms of Section 8.5(a)(4) hereof, the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate, as it may be amended or restated from time to
time, to any Limited Partner. The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or documents as may be
reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the Limited Partners have limited liability) in the State of Delaware and any
other jurisdiction in which the Partnership may elect to do business or own
property.
Section 7.3 Restrictions on General Partner's Authority. The General
Partner may not, without the written Consent of all of the Limited Partners,
take any action in contravention of this Agreement including, without
limitation:
(a) take any action that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement (provided that this restriction shall not be deemed to restrict
the sale, lease, transfer ir disposition of all or substantially all of
the Partnership's assets as may otherwise be provided herein);
(b) possess Partnership property, or assign any rights in specific
Partnership property, for other than a Partnership purpose except as
otherwise provided in this Agreement;
(c) admit a Person as a Partner, except as otherwise provided in
this Agreement; or
(d) perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other liability
except as provided herein or under the Act.
Section 7.4 Responsibility for Expenses.
(a) No Compensation. Except as provided in this Section 7.4 and
elsewhere in this Agreement (including the provisions of Articles V and VI
regarding distributions, payments and allocations to which it may be
entitled), the General Partner shall not be compensated for its services
as general partner of the Partnership.
(b) Responsibility for Ownership and Operation Expenses. The
Partnership shall be responsible for and shall pay all expenses relating
to the Partnership's ownership of its assets, and the operation of, or for
the benefit of, the Partnership, and the General Partner shall be
reimbursed on a monthly basis, or such other basis as the General Partner
may determine in its sole and absolute discretion, for all expenses it
incurs relating to the
- 29 -
Partnership's ownership of its assets and the operation of, or for the
benefit of, the Partnership; provided, however, that the amount of any
such reimbursement shall be reduced by any interest or other amounts
earned by the General Partner with respect to bank accounts or other
instruments held by it as permitted in Section 7.5(a). Such reimbursements
shall be in addition to any reimbursement to the General Partner as a
result of indemnification pursuant to Section 7.7 hereof.
(c) Responsibility for Organization Expenses. The Partnership shall
be responsible for and shall pay all expenses incurred relating to the
organization of the Partnership.
Section 7.5 Outside Activities of the General Partner.
(a) The General Partner shall not directly or indirectly enter into
or conduct any business, other than in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner
or Limited Partner and the management of the business of the Partnership,
and such activities as are incidental thereto. The General Partner shall
not incur any Debt other than that for which it may be liable in its
capacity as General Partner of the Partnership (and other than any
guarantee of Partnership Debt). The General Partner shall not own any
assets other than Partnership Interests (except for certain interests in
Partnership properties held directly by the General Partner or which have
been caused by the General Partner to be contributed to or purchased by
Subsidiaries (including qualified REIT subsidiaries, as defined in Section
856(i) of the Code, of the General Partner), which interests shall not
exceed 1% of the aggregate economic interests of any property) and other
than such bank accounts or similar instruments as it deems necessary to
carry out its responsibilities contemplated under this Agreement and the
Declaration of Trust. The General Partner and Affiliates of the General
Partner may acquire Limited Partnership Interests and shall be entitled to
exercise all rights of a Limited Partner relating to such Limited
Partnership Interests.
(b) Purchases of Shares. In the event the General Partner exercises
its rights under the Declaration of Trust to purchase Shares, then the
General Partner shall cause the Partnership to purchase from it an equal
number of Partnership Units (after application of the Unit Adjustment
Factor) on the same terms that the General Partner purchased such Shares.
Section 7.6 Contracts with Affiliates.
(a) Loans. The General Partner may cause the Partnership to 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.
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(b) Transfers of Assets. Except as provided in Section 7.5(a), the
General Partner may cause the Partnership to 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 consistent with this Agreement and applicable law.
(c) Contracts With General Partner. After the Effective Date and
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 and no less favorable to the Partnership than would be
obtained from an unaffiliated third party in connection therewith.
(d) Employee Benefit Plans. The General Partner, in its sole and
absolute discretion and without the approval of the Limited Partners, may
propose and adopt on behalf of the General Partner and the Partnership
employee benefit plans funded by the Partnership for the benefit of
employees of the General Partner, the Partnership, Subsidiaries of the
Partnership or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership, the
General Partner, or any of the Partnership's Subsidiaries, including any
such plan which requires the Partnership, the General Partner or any of
the Partnership's Subsidiaries to issue or transfer Partnership Units to
employees.
Section 7.7 Indemnification.
(a) General. The Partnership shall indemnify an Indemnitee from and
against any and all losses, claims, damages, liabilities, joint or
several, expenses (including legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or
investigative, that relate to the operations of the Partnership as set
forth in this Agreement in which any Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material
to the matter giving rise to the proceeding and was committed in bad
faith, with gross negligence 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 7.7(a). The termination of any proceeding by conviction or
upon a plea of nolo contendere or its equivalent, or an entry of an order
of probation prior to judgment, creates a rebuttable presumption that the
Indemnitee acted in a manner contrary to that specified in this Section
7.7(a). Any indemnification pursuant to this Section 7.7 shall be made
only out of the assets of the Partnership.
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(b) In Advance of Final Disposition. Reasonable expenses incurred by
an Indemnitee who is a party to a proceeding may be paid or reimbursed by
the Partnership in advance of the final disposition of the proceeding upon
receipt by the Partnership of (a) 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 7.7 has been met, and (b) 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) Non-Exclusive Section. The indemnification provided by this
Section 7.7 shall be in addition to any other rights to which an
Indemnitee or any other Person may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or otherwise, and
shall continue as to an Indemnitee who has ceased to serve in such
capacity.
(d) Insurance. The Partnership may purchase and maintain insurance,
on behalf of the Indemnitees and such other Persons as the General Partner
shall determine, against any liability that may be asserted against or
expenses that may be incurred by such Person in connection with the
Partnership's activities, regardless of whether the Partnership would have
the power to indemnify such Person against such liability under the
provisions of this Agreement. The right to procure such insurance on
behalf of the Indemnitees shall in no way mitigate or otherwise affect the
right of any Indemnitees to indemnification under this Section 7.7.
(e) Employee Benefit Plans. For purposes of this Section 7.7, the
Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by it of
its duties to the Partnership also imposes duties on, or otherwise
involves services by, it to the plan or participants or beneficiaries of
the plan; excise taxes assessed on an Indemnitee with respect to an
employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of Section 7.7(a); 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) No Personal Liability for Limited Partners. 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) Interested Transactions. An Indemnitee shall not be denied
indemnification in whole or in part under this Section 7.7 because the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.
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(h) Binding Effect. The provisions of this Section 7.7 are for the
benefit of the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for the
benefit of any other Persons.
Section 7.8 Liability of the General Partner.
(a) General. Notwithstanding anything to the contrary set forth in
this Agreement, the General Partner shall not be liable for monetary
damages to the Partnership, any Partners or any Assignees for losses
sustained or liabilities incurred as a result of errors in judgment or of
any act or omission, unless (i) the General Partner actually received an
improper benefit in money, property or services (in which case, such
liability shall be for the amount of the benefit in money, property or
services actually received), or (ii) the General Partner's action or
failure to act was the result of active and deliberate dishonesty, gross
negligence or bad faith and was material to the cause of action being
adjudicated; provided, however, that the General Partner shall owe the
same duty of care to the Limited Partners as its Trustees owe to the
Shareholders of the General Partner.
(b) No Obligation to Consider Interests of Limited Partners. The
Limited Partners expressly acknowledge that the General Partner is acting
on behalf of the Partnership and the General Partner's shareholders
collectively, that, except as otherwise provided in Section 7.8(a), 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 Assignees) in deciding whether to
cause the Partnership to take (or decline to take) any actions which the
General Partner has undertaken in good faith on behalf of the Partnership,
and that 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, unless (i) the General Partner
actually received an improper benefit in money, property or services (in
which case, such liability shall be for the amount of the benefit in
money, property or services actually received), or (ii) the General
Partner's action or failure to act was the result of active and deliberate
dishonesty, gross negligence or bad faith and was material to the cause of
action being adjudicated.
(c) Acts of Agents. Subject to its obligations and duties as General
Partner set forth in Section 7.1(a) hereof, the General Partner may
exercise any of the powers granted to it by this Agreement and perform any
of the duties imposed upon it hereunder either directly or by or through
its 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) Effect of Amendment. Any amendment, modification or repeal of
this Section 7.8 or any provision hereof shall be prospective only and
shall not in any way affect the limitations on the General Partner's
liability to the Partnership and the Limited Partners under this Section
7.8 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters
occurring, in whole or in part,
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prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.
(e) Limitation of Liability of Shareholders and Officers of the
General Partner. ANY OBLIGATION OR LIABILITY WHATSOEVER OF THE GENERAL
PARTNER WHICH MAY ARISE AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION
OR LIABILITY WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER INSTRUMENT,
TRANSACTION OR UNDERTAKING CONTEMPLATED HEREBY SHALL BE SATISFIED, IF AT
ALL, OUT OF THE GENERAL PARTNER'S ASSETS ONLY. NO SUCH OBLIGATION OR
LIABILITY SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE
ENFORCEMENT THEREOF BE HAD TO, THE PROPERTY OF ANY OF ITS SHAREHOLDERS,
TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS, REGARDLESS OF WHETHER SUCH
OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE.
Section 7.9 Other Matters Concerning the General Partner.
(a) Reliance on Documents. The General Partner may rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties.
(b) Reliance on Consultants and Advisers. The General Partner may
consult with legal counsel, accountants, appraisers, management
consultants, investment bankers and other consultants and advisers
selected by it, and any act taken or omitted to be taken in reliance upon
the opinion of such Persons as to matters which such General Partner
reasonably believes to be within such Person's professional or expert
competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.
(c) Action Through Officers and Attorneys. The General Partner shall
have the right, in respect of any of its powers or obligations hereunder,
to act through any of its duly authorized officers and a duly appointed
attorney or attorneys-in-fact. Each such attorney shall, to the extent
provided by the General Partner in the power of attorney, have full power
and authority to do and perform all and every act and duty which is
permitted or required to be done by the General Partner hereunder.
(d) Actions to Maintain REIT Status or Avoid Taxation of General
Partner. Notwithstanding any other provisions of this Agreement or the
Act, any action of the General Partner on behalf of the Partnership
(including, subject to Section 14.1(c) and (d), the amendment of this
Agreement) or any decision of the General Partner to refrain from acting
- 34 -
on behalf of the Partnership, undertaken in the good faith belief that
such action or omission is necessary or advisable in order (i) to protect
the ability of the General Partner to continue to qualify as a REIT or
(ii) to avoid the General Partner incurring any taxes under Section 857 or
Section 4981 of the Code, is expressly authorized under this Agreement and
is deemed approved by all of the Limited Partners.
Section 7.10 Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no 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 covenants, declares and warrants that any Partnership
assets as to 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
or such nominee or Affiliate for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided, however, that the
General Partner shall use its best efforts to cause beneficial and record title
to such assets to be vested in the Partnership as soon as reasonably
practicable. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which legal
title to such Partnership assets is held.
Section 7.11 Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (b) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (c) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
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ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability. The Limited Partners shall have no
liability under this Agreement except as expressly provided in this Agreement,
including Section 10.5 hereof, or under the Act.
Section 8.2 Management of Business. No Limited Partner or Assignee (other
than the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner, the Partnership or
any of their Affiliates, in their capacity as such) shall take part in the
operation, management or control (within the meaning of the Act) of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such,
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners. Subject to any
agreements entered into pursuant to Section 7.6(c) hereof and subject to any
other agreements entered into by a Limited Partner or its Affiliates with the
General Partner, the Partnership or a Subsidiary, the following rights shall
govern outside activities of Limited Partners: (a) any Limited Partner (other
than the General Partner) and any officer, director, employee, agent, trustee,
Affiliate or shareholder of any Limited Partner shall be entitled to and may
have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities in
direct competition with the Partnership; (b) neither the Partnership nor any
Partners shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner or Assignee; (c) none of the Limited Partners
nor any other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any business ventures of any
other Person, other than the General Partner, and such Person shall have no
obligation pursuant to this Agreement to offer any interest in any such business
ventures to the Partnership, any Limited Partner or any such other Person, even
if such opportunity is of a character which, if presented to the Partnership,
any Limited Partner or such other Person, could be taken by such Person; (d) the
fact that a Limited Partner may encounter opportunities to purchase, otherwise
acquire, lease, sell or otherwise dispose of real or personal property and may
take advantage of such opportunities himself or introduce such opportunities to
entities in which it has or has not any interest, shall not subject such Partner
to liability to the Partnership or any of the other Partners on account of the
lost opportunity; and (e) except as otherwise specifically provided herein,
nothing contained in this Agreement shall be deemed to prohibit a Limited
Partner or any Affiliate of a Limited Partner from dealing, or otherwise
engaging in business, with Persons transacting business with the Partnership or
from providing services relating to the purchase, sale, rental, management or
operation of real or personal property (including real estate brokerage
services) and receiving compensation therefor, from any Persons who have
transacted business with the Partnership or other third parties.
Section 8.4 Priority Among Partners. No Partner (Limited or General) or
Assignee shall have priority over any other Partner (Limited or General) or
Assignee either as to the return of
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Capital Contributions or otherwise unless expressly provided in this Agreement,
as to profits, losses or distributions.
Section 8.5 Rights of Limited Partners Relating to the Partnership.
(a) Copies of Business Records. In addition to other rights provided
by this Agreement or by the Act, and except as limited by Section 8.5(c)
hereof, each Limited Partner shall have the right, for a purpose
reasonably related to such Limited Partner's interest as a limited partner
in the Partnership, upon written demand with a statement of the purpose of
such demand and at such Limited Partner's own expense:
(1) to obtain a copy of the most recent annual and quarterly
reports filed with the Securities and Exchange Commission by the
General Partner pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(2) to obtain a copy of the Partnership's Federal, state and
local income tax returns for each Partnership Year;
(3) to obtain a current list of the name and last known
business, residence or mailing address of each Partner;
(4) to obtain a copy of this Agreement and the Certificate and
all amendments thereto, together with executed copies of all powers
of attorney pursuant to which this Agreement, the Certificate and
all amendments thereto have been executed; and
(5) to obtain true and full information regarding the amount
of cash and a description and statement of any other property or
services contributed by each Partner and which each Partner has
agreed to contribute in the future, and the date on which each
became a partner.
(b) Notification of Changes in Unit Adjustment Factor. The
Partnership shall notify each Limited Partner in writing of any change
made to the Unit Adjustment Factor within 10 Business Days of the date
such change becomes effective.
(c) Confidential Information. Notwithstanding any other provision of
this Section 8.5, the General Partner may keep confidential from the
Limited Partners, for such period of time as the General Partner
determines in its sole and absolute discretion to be reasonable, any
Partnership information that (i) the General Partner believes to be in the
nature of trade secrets or other information the disclosure of which the
General Partner in good faith believes is not in the best interests of the
Partnership or (ii) the Partnership is required by law or by agreements
with unaffiliated third parties to keep confidential.
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(d) Debt Allocation. The General Partner may allow any Limited
Partner to guarantee on a "bottom dollar basis," an amount of indebtedness
of the Partnership or any successor thereto, as is necessary from time to
time to provide an allocation of debt to such Limited Partner equal to the
amount of debt then required to be allocated to such Limited Partner to
enable such Limited Partner to avoid recognizing gain pursuant to Section
731(a)(1) of the Code as a result of a deemed distribution of money to
such Limited Partner pursuant to Section 752(b) of the Code. The General
Partner may, in its discretion, permit other Limited Partners to provide
similar guarantees from time to time or as a result of minimum gain
chargebacks.
Section 8.6 Redemption Right.
(a) General. Notwithstanding the provisions of Section 4.2(e), the
General Partner may satisfy the Conversion Right exercised by a Converting
Partner set forth in a Notice of Conversion by paying to such Converting
Partner the Redemption Amount on the Specified Conversion Date, whereupon
the General Partner shall acquire the Partnership Units to be exchanged by
such Converting Partner and shall be treated for all purposes of this
Agreement as the owner of such Partnership Units. The General Partner may
elect to pay the Redemption Amount for Partnership Units only upon a
receipt of a Notice of Conversion. In the event the General Partner shall
exercise its right to satisfy the Conversion Right in the manner described
in this Section 8.6(a), the Partnership shall have no obligation to pay
any amount to the Converting Partner with respect to such Converting
Partner's exercise of the Conversion Right, and each of the Converting
Partner, the Partnership, and the General Partner shall treat the
transaction between the General Partner and the Converting Partner as a
sale of the Converting Partner's Partnership Units to the General Partner
for Federal income tax purposes. Each Converting Partner which the General
Partner has elected to pay the Redemption Amount agrees to execute such
documents as the General Partner may reasonably require in connection with
the payment of the Redemption Amount.
(b) Where Delivery of Shares Prohibited. Notwithstanding the
provisions of Section 4.2(e) and Section 8.6(a), a Partner shall not be
entitled to exercise the Conversion Right pursuant to Section 4.2(e), and
accordingly Section 8.6(a) shall not apply, if the delivery of Shares to
such Partner on the Specified Conversion Date would be prohibited under
the Declaration of Trust, including without limitation, if the delivery of
such shares on such date would result in such Partner owning, directly or
indirectly and actually or constructively (which shall be determined by
applying Section 856(d)(5) of the Code), 10% or more in value of the
shares of the General Partner.
Section 8.7 Notice for Certain Transactions. In the event of (a) a
dissolution or liquidation of the Partnership or the General Partner, (b) a
merger, consolidation or combination of the Partnership or the General Partner
with or into another Person (including the events set forth in Sections 11.2(c)
and 11.2(d)), (c) the sale of all or substantially all of the assets of the
Partnership or the General Partner, or (d) the transfer by the General Partner
of all or any part of its interest in
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the Partnership, the General Partner shall give written notice thereof to each
Limited Partner at least twenty (20) Business Days prior to the effective date
or, to the extent applicable, record date of such transaction, whichever comes
first.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting. The General Partner shall keep or
cause to be kept at the principal office of the Partnership appropriate books
and records with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 9.3 hereof or required by the Act. Any records maintained by or on
behalf of the Partnership in the regular course of its business may be kept on,
or be in the form of, punch cards, magnetic tape, photographs, micrographics or
any other information storage device; provided, however, that the records so
maintained are convertible into clearly legible written form within a reasonable
period of time. The books of the Partnership shall be maintained for financial
purposes on an accrual basis in accordance with generally accepted accounting
principles and for tax reporting purposes on the accrual basis.
Section 9.2 Fiscal Year. The fiscal year of the Partnership shall be the
calendar year.
Section 9.3 Reports.
(a) Annual Reports. As soon as practicable, but in no event later
than 120 days after the close of each Partnership Year, the General
Partner shall cause to be mailed to each Limited Partner as of the close
of the Partnership Year, an annual report containing financial statements
of the Partnership, or of the General Partner if such statements are
prepared solely on a consolidated basis with the General Partner, for such
Partnership Year, presented in accordance with generally accepted
accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the General
Partner.
(b) Quarterly Reports. As soon as practicable, but in no event later
than 60 days after the close of each calendar quarter (except the last
calendar quarter of each year), the General Partner shall cause to be
mailed to each Limited Partner as of the last day of the calendar quarter,
a report containing unaudited financial statements of the Partnership, or
of the General Partner, if such statements are prepared solely on a
consolidated basis with the General Partner, and such other information as
may be required by applicable law or regulation, or as the General Partner
determines to be appropriate.
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ARTICLE X
TAX MATTERS
Section 10.1 Preparation of Tax Returns. The General Partner shall arrange
for the preparation and timely filing of all returns of Partnership income,
gains, deductions, losses and other items required of the Partnership for
Federal and state income tax purposes and shall use all reasonable efforts to
furnish, within 90 days of the close of each taxable year, the tax information
reasonably required by the General Partner and the Limited Partners for Federal
and state income tax reporting purposes.
Section 10.2 Tax Elections. Except as otherwise provided herein, the
General Partner shall, in its sole and absolute discretion, determine whether to
make any available election pursuant to the Code including, without limitation,
the election under Section 754 of the Code in accordance with applicable
regulations thereunder. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
and absolute discretion that such revocation is in the best interests of the
Partners.
Section 10.3 Tax Matters Partner.
(a) General. The General Partner shall be the "tax matters partner"
of the Partnership for Federal income tax purposes. Pursuant to Section
6223(c) of the Code, upon receipt of notice from the IRS of the beginning
of an administrative proceeding with respect to the Partnership, the tax
matters partner shall furnish the IRS with the name, address and profit
interest of each of the Limited Partners; provided, however, that such
information is provided to the Partnership by the Limited Partners. The
Limited Partners shall provide such information to the Partnership as the
General Partner shall reasonably request.
(b) Powers. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to
any administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for
income tax purposes (such administrative proceedings being referred
to as a "tax audit" and such judicial proceedings being referred to
as "judicial review"), and in the settlement agreement the tax
matters partner may expressly state that such agreement shall bind
all Partners, except that such settlement agreement shall not bind
any Partner (a) who (within the time prescribed pursuant to the Code
and Regulations) files a statement with the IRS providing that the
tax matters partner shall not have the authority to enter into a
settlement agreement on behalf of such Partner or (b) who is a
"notice partner" (as defined in Section 6231 of the Code) or a
member of a "notice group" (as defined in Section 6223(b)(2) of the
Code);
(2) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken
into account by a partner for tax purposes (a "final adjustment") is
mailed or otherwise given to the tax matters
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partner, to seek judicial review of such final adjustment, including
the filing of a petition for readjustment with the Tax Court or the
United States Claims Court, or the filing of a complaint for refund
with the District Court of the United States for the district in
which the Partnership's principal place of business is located;
(3) to intervene in any action brought by any other Partner
for judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with
the IRS at any time and, if any part of such request is not allowed
by the IRS, to file an appropriate pleading (petition, complaint or
other document) for judicial review with respect to such request;
(5) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to any item
required to be taken into account by a Partner for tax purposes, or
an item affected by such item; and
(6) to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review
proceeding to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of
the tax matters partner, and the provisions relating to indemnification of
the General Partner set forth in Section 7.7 of this Agreement shall be
fully applicable to the tax matters partner in its capacity as such.
(c) Reimbursement. The tax matters partner shall receive no
compensation for its services. All third-party costs and expenses incurred
by the tax matters partner in performing its duties as such (including
legal and accounting fees) shall be borne by the Partnership. Nothing
herein shall be construed to restrict the Partnership from engaging an
accounting firm and a law firm to assist the tax matters partner in
discharging its duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.
Section 10.4 Organizational Expenses. The Partnership shall elect to
deduct expenses, if any, incurred by it in organizing the Partnership ratably
over a 60-month period as provided in Section 709 of the Code.
Section 10.5 Withholding. Each Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such Limited
Partner any amount of Federal, state, local, or foreign taxes that the General
Partner determines that the Partnership is required to withhold or pay with
respect to any amount distributable or allocable to such Limited Partner
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pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445 or
1446 of the Code. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner,
which loan shall be repaid by such Limited Partner within 15 days after notice
from the General Partner that such payment must be made unless (a) the
Partnership withholds such payment from a distribution which would otherwise be
made to the Limited Partner or (b) the General Partner determines, in its sole
and absolute discretion, that such payment may be satisfied out of the available
funds of the Partnership which would, but for such payment, be distributed to
the Limited Partner. Any amounts withheld pursuant to the foregoing clauses (a)
or (b) shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner's Partnership Interest to secure
such Limited Partner's obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.5. In the event that a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.5
when due, the General Partner may, in its sole and absolute discretion, elect to
make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in the Wall Street Journal, plus four percentage points (but not
higher than the maximum lawful rate) from the date such amount is due (i.e., 15
days after demand) until such amount is paid in full. Each Limited Partner shall
take such actions as the Partnership or the General Partner shall request in
order to perfect or enforce the security interest created hereunder.
ARTICLE XI
TRANSFERS, WITHDRAWALS AND LOCK-UP
Section 11.1 Transfer.
(a) Definition. The term "transfer," when used in this Article XI
with respect to a Partnership Unit, shall be deemed to refer to a
transaction by which the General Partner purports to assign its General
Partnership Interest to another Person or by which a Limited Partner
purports to assign its Limited Partnership Interest to another Person, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise. The term
"transfer" when used in this Article XI does not include any Conversion of
Partnership Units by a Limited Partner pursuant to Section 4.2(e) or
acquisition of Partnership Units from a Limited Partner by the General
Partner pursuant to Section 8.6(a).
(b) Requirements. No Partnership Interest shall be transferred, in
whole or in part, except in accordance with the terms and conditions set
forth in this Article XI. Any
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transfer or purported transfer of a Partnership Interest not made in
accordance with this Article XI shall be null and void.
Section 11.2 Transfer of General Partner's Partnership Interest.
(a) General. The General Partner may not transfer any of its General
Partnership Interest or withdraw as General Partner except as provided in
Section 11.2(b) or in connection with a transaction described in Section
11.2(c).
(b) Transfer to Partnership. The General Partner may transfer
Partnership Interests held by it to the Partnership in accordance with
Section 7.5(b) hereof.
(c) Transfer in Connection With Reclassification, Recapitalization,
or Business Combination Involving General Partner. Except as otherwise
provided in Section 11.2(d), the General Partner shall not engage in any
merger, consolidation or other business combination with or into another
Person or sale of all or substantially all of its assets, or any
reclassification, or recapitalization or change of outstanding Common
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 as described in the
definition of "Unit Adjustment Factor") ("Transaction"), unless as a
result of the Transaction each Limited Partner thereafter remains entitled
to exchange each Partnership Unit owned by such Limited Partner (after
application of the Unit Adjustment Factor) for an amount of cash,
securities, or other property equal to, without taking into account any
tax considerations, the greatest amount of cash, securities or other
property which such Limited Partner would have received from such
Transaction, if such Limited Partner had exercised its Conversion Right
immediately prior to the Transaction, provided that if, in connection with
the Transaction, a purchase, tender or exchange offer shall have been made
to and accepted by the holders of more than 50 percent of the outstanding
Common Shares, the holders of Partnership Units shall receive the greatest
amount of cash, securities, or other property which a Limited Partner
would have received had it exercised the Conversion Right and received
Common Shares in exchange for its Partnership Units immediately prior to
the expiration of such purchase, tender or exchange offer. In connection
with any merger, consolidation or business combination described in this
Section 11.2(c) in which Common Shares were exchanged for securities of
the acquiring Person, the Limited Partners shall (unless Limited Partners
Consent is obtained) remain entitled to exercise their Conversion Right
with respect to such securities and the Unit Adjustment Factor continues
to apply with respect to such securities.
(d) Merger Involving General Partner Where Surviving Entity's Assets
Contributed to Partnership. Notwithstanding Section 11.2(c), the General
Partner may merge with another entity if, under the terms of the
transaction, Limited Partners will not engage in a sale or exchange for
Federal income tax purposes and immediately after such merger
substantially all of the assets of the surviving entity, other than
Partnership Units held by the General Partner, are contributed to the
Partnership as a Capital Contribution in exchange for
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Partnership Units with a fair market value equal to the 704(c) Value of
the assets so contributed.
Section 11.3 Limited Partners' Rights to Transfer.
(a) General. Subject to the remaining provisions of this Section
11.3 as well as Sections 11.4 and 11.7, a Limited Partner may transfer all
or any portion of his Partnership Interest, or any of such Limited
Partner's rights as a Limited Partner, without the prior written consent
of the General Partner. In order to effect such transfer, the Limited
Partner must deliver to the General Partner a duly executed copy of the
instrument making such transfer and such instrument must evidence the
written acceptance by the assignee of all of the terms and conditions of
this Agreement and represent that such assignment was made in accordance
with all applicable laws and regulations.
(b) Incapacitated Limited Partners. If a Limited Partner is subject
to Incapacity, the executor, administrator, trustee, committee, guardian,
conservator or receiver of such Limited Partner's estate shall have all
the rights of a Limited Partner, but not more rights than those enjoyed by
other Limited Partners for the purpose of settling or managing the estate
and such power as the Incapacitated Limited Partner possessed to transfer
all or any part of his or its interest in the Partnership. The Incapacity
of a Limited Partner, in and of itself, shall not dissolve or terminate
the Partnership.
(c) Transfers Contrary to Securities Laws. The General Partner may
prohibit any transfer otherwise permitted under this Section 11.3 by a
Limited Partner of its Partnership Units if, in the opinion of legal
counsel to the Partnership, such transfer would require filing of a
registration statement under the Securities Act of 1933 (the "Securities
Act"), as amended, or would otherwise violate any Federal or state
securities laws or regulations applicable to the Partnership or the
Partnership Units.
(d) Transfers Resulting in Corporation Status; Transfers Through
Established Securities or Secondary Markets. No transfer by a Limited
Partner of his Partnership Units (or any economic or other interest, right
or attribute therein) may be made to any Person if (i) in the opinion of
legal counsel for the Partnership, it would result in the Partnership
being treated as an association taxable as a corporation, or (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the
meaning of Section 7704 of the Code. Notwithstanding anything to the
contrary in this Agreement, (x) no interests in the Partnership shall be
issued in a transaction that is (or transactions that are) registered or
required to be registered under the Securities Act, and to the extent such
interests were not required to be registered under the Securities Act by
reason of Regulation S (17 CFR 230.901 through 230.904) or any successor
thereto, such issuances would not have been required to be registered
under the Securities Act if the interests so offered or sold had been
offered and sold within the United States, (y) any admission (or purported
admission) of a Partner and any transfer or assignment (or purported
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transfer or assignment) of all or part of a Partner's interest (or any
interest or right or attribute therein) in the Partnership, whether to
another Partner or to a third party, shall not be effective, and any such
transfer or assignment (or purported transfer or assignment) shall be void
ab initio, and no person shall otherwise become a Partner if (A) at the
time of such transfer or assignment (or purported transfer or assignment)
any interest in the Partnership (or economic interest therein) is traded
on an established securities market or readily tradeable on a secondary
market or the substantial equivalent thereof or (B) after such transfer or
assignment (or purported transfer or assignment) the Partnership would
have more than 100 Partners. For purposes of clause (A) of the preceding
sentence and clause (ii) above, an established securities market is a
national securities exchange that is either registered under Section 6 of
the Exchange Act or exempt from registration because of the limited volume
of transactions, a foreign securities exchange that, under the law of the
jurisdiction where it is organized, satisfies regulatory requirements that
are analogous to the regulatory requirements of the Exchange Act, a
regional or local exchange, or an interdealer quotation system that
regularly disseminates firm buy or sell quotations by identified brokers
or dealers by electronic means or otherwise. For purposes of such clause
(A) and clause (ii) above, interests in the Partnership (or interests
therein) are readily tradeable on a secondary market or the substantial
equivalent thereof if (i) interests in the Partnership (or interests
therein) are regularly quoted by any person, such as a broker or dealer,
making a market in the interests; (ii) any person regularly makes
available to the public (including customers or subscribers) bid or offer
quotes with respect to interests in the Partnership (or interests therein)
and stands ready to effect buy or sell transactions at the quoted prices
for itself or on behalf of others; (iii) the holder of an interest in the
Partnership has a readily available, regular, and ongoing opportunity to
sell or exchange such interest (or interests therein) through a public
means of obtaining or providing information of offers to buy, sell, or
exchange such interests; or (iv) prospective buyers and sellers otherwise
have the opportunity to buy, sell, or exchange interests in the
Partnership (or interests therein) in a time frame and with the regularity
and continuity that is comparable to that described in clauses (i), (ii)
and (iii) of this sentence. For purposes of determining whether the
Partnership will have more than 100 Partners, each person indirectly
owning an interest in the Partnership through a partnership (including any
entity treated as a partnership for federal income tax purposes), a
grantor trust or an S corporation (each such entity a "flow-through
entity") shall be treated as a Partner unless the General Partner
determines in its sole and absolute discretion that less than
substantially all of the value of the beneficial owner's interest in the
flow-through entity is attributable to the flow-through entity's interest
(direct or indirect) in the Partnership. Notwithstanding anything to the
contrary in this Section 11.3(d), the exercise of the Conversion Right by
a Limited Partner will not be subject to the restrictions set forth in
this Section 11.3(d).
(e) Transfers to Holders of Nonrecourse Liabilities. No transfer or
pledge of any Partnership Units may be made to a lender to the Partnership
or any Person who is related (within the meaning of Section 1.752-4(b) of
the Regulations) to any lender to the Partnership whose loan constitutes a
Nonrecourse Liability without the consent of the
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General Partner, in its sole and absolute discretion, provided that as a
condition to such consent the lender will be required to enter into an
arrangement with the Partnership and the General Partner to exchange or
redeem for the Redemption 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.
Section 11.4 Substituted Limited Partners.
(a) Consent of General Partner Required. A Limited Partner shall
have the right in its discretion to substitute a transferee as a Limited
Partner in his place, in which event such substitution shall occur if the
Limited Partner so provides; provided however, that any transferee
desiring to become a Substituted Limited Partner must furnish to the
General Partner (i) evidence of acceptance in form satisfactory to the
General Partner of all of the terms and conditions of this Agreement,
including, without limitation, the power of attorney granted in Article
XVI and (ii) such other documents or instruments as may be required in the
discretion of the General Partner in order to effect such Person's
admission as a Substituted Limited Partner.
(b) Rights and Duties of Substituted Limited Partners. A transferee
who has been admitted as a Substituted Limited Partner in accordance with
this Article XI shall have all the rights and powers and be subject to all
the restrictions and liabilities of a Limited Partner under this
Agreement.
(c) Amendment of Exhibit A. Upon the admission of a Substituted
Limited Partner, the General Partner shall amend Exhibit A to reflect the
name, address, number of Partnership Units, and Percentage Interest of
such Substituted Limited Partner and to eliminate or adjust, if necessary,
the name, address and interest of the predecessor of such Substituted
Limited Partner.
Section 11.5 Assignees. If a Limited Partner, in its sole and absolute
discretion, does not provide for the admission of any permitted transferee under
Section 11.4(a) as a Substituted Limited Partner, as described in Section 11.4,
such transferee shall be considered an Assignee for purposes of this Agreement.
An Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions
from the Partnership and the share of Net Income, Net Losses, gain, loss and
Recapture Income attributable to the Partnership Units assigned to such
transferee, but shall not be deemed to be a holder of Partnership Units for any
other purpose under this Agreement, and shall not be entitled to vote such
Partnership Units in any matter presented to the Limited Partners for a vote
(such Partnership Units being deemed to have been voted on such matter in the
same proportion as all Partnership Units held by Limited Partners are voted,
except for Partnership Units assigned by Mr. O. ▇▇▇▇▇▇ ▇▇▇▇▇ or any of his
Affiliates, which Partnership Units shall be entitled to be voted by such
assignee in his, her or its discretion). In the event any such transferee
desires to make a further assignment of any such
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Partnership Units, such transferee shall be subject to all the provisions of
this Article XI to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Units.
Section 11.6 General Provisions.
(a) Withdrawal of Limited Partner. No Limited Partner may withdraw
from the Partnership other than as a result of a permitted transfer of all
of such Limited Partner's Partnership Units in accordance with this
Article XI or pursuant to Conversion of all of its Partnership Units under
Section 4.2(e) or the redemption of its Partnership Units under Section
8.6(a).
(b) Transfer of All Partnership Units by Limited Partner. Any
Limited Partner who shall transfer all of his Partnership Units in a
transfer permitted pursuant to this Article XI or pursuant to the
Conversion Rights of all of its Partnership Units under Section 4.2(e) or
pursuant to redemption of all of its Partnership Units under Section
8.6(a) shall cease to be a Limited Partner.
(c) Timing of Transfers. Transfers pursuant to this Article XI may
only be made on the first day of a fiscal quarter of the Partnership,
unless the General Partner otherwise agrees.
(d) Allocation When Transfer Occurs. If any Partnership Interest is
transferred during any quarterly segment of the Partnership's fiscal year
in compliance with the provisions of this Article XI or converted pursuant
to Section 4.2(e) or redeemed pursuant to Section 8.6(a), Net Income, Net
Losses, each item thereof and all other items attributable to such
interest for such fiscal year shall be divided and allocated between the
transferor Partner and the transferee Partner by taking into account their
varying interests during the fiscal year in accordance with Section 706(d)
of the Code, based on the portion of the year for which the transferor
Partner and the transferee Partner were Partners. Solely for purposes of
making such allocations, each of such items for the calendar month in
which the transfer or redemption occurs shall be allocated to the Person
who is a Partner as of midnight on the last day of said month. All
distributions of Available Cash with respect to which the Partnership
Record Date is before the date of such transfer or redemption shall be
made to the transferor Partner, and all distributions of Available Cash
with Partnership Record Dates thereafter shall be made to the transferee
Partner.
Section 11.7 Lock-up Agreement.
(a) Lock-up Period. Each of the Limited Partners who is a Limited
Partner as of the closing of the initial public offering of the Common
Shares hereby agrees that, except as set forth in Section 11.7(b), from
the Effective Date until one year following the Effective Date (the
"Lock-up Period"), without the prior written consent of the General
Partner, it will
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not offer, pledge, sell, contract to sell, grant any options for the sale
of or otherwise dispose of, directly or indirectly (collectively, "Dispose
of"), any Shares or Partnership Units (the "Lock-up"). Each Limited
Partner agrees to be bound by the Registration Rights and Lock-up
Agreement and specifically authorizes the General Partner as its
attorney-in-fact to execute the Registration Rights and Lock-up Agreement
on its behalf.
(b) Exceptions. The following transfers of Shares or Partnership
Units shall not be subject to the Lock-up set forth in Section 11.7(a):
(1) a Limited Partner who is a natural person may Dispose of
Shares or Partnership Units to his or her spouse, siblings, parents
or any natural or adopted children or other descendants or to any
personal trust in which such family members or such Limited Partner
retain the entire beneficial interest;
(2) a Limited Partner who is a natural person may Dispose of
Shares or Partnership Units on his or her death to such Limited
Partner's estate, executor, administrator or personal representative
or to such Limited Partner's beneficiaries pursuant to a devise or
bequest or by the laws of descent and distribution;
(3) a Limited Partner that is a corporation, partnership,
trust or other business entity may (A) Dispose of Shares or
Partnership Units to one or more other entities that are wholly
owned and controlled, legally and beneficially, by such Limited
Partner or by a Person or Persons that directly or indirectly wholly
owns and controls such Limited Partner or (B) Dispose of Shares or
Partnership Units by distributing such Shares or Partnership Units
in a merger, liquidation, dissolution, winding up or otherwise
without consideration to the equity owners of such corporation,
partnership or business entity or to any other corporation,
partnership or business entity that is wholly owned by such equity
owners;
(4) a Limited Partner that is a master pension or profit
sharing trust or a group trust may Dispose of Shares or Partnership
Units to one or more of its participating trusts or to a successor
trustee;
(5) a Limited Partner may Dispose of Shares or Partnership
Units as a bona fide gift; and
(6) a Limited Partner may Dispose of Shares or Partnership
Units pursuant to a pledge, grant of security interest or other
encumbrance effected in a bona fide transaction with an unrelated
and unaffiliated pledgee;
provided, however, that in the case of any transfer of Shares or
Partnership Units pursuant to clauses (1), (3) and (4), the transfers
shall each be effected pursuant to a bona fide exemption under the
Securities Act.
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In the event any Limited Partner Disposes of Shares or Partnership Units
described in this Section 11.7(b) during the Lock-up Period, such Shares
or Partnership Units shall be subject to this Section 11.7 and the
Registration Rights and Lock-up Agreement and, as a condition of the
validity of such disposition, the transferee (and any pledgee who acquires
Shares or Partnership Units upon foreclosure or any transferee thereof)
shall be required to execute and deliver a counterpart of this Agreement
and the Registration Rights and Lock-up Agreement. Thereafter, such
transferee shall be deemed to be a "Holder" for purposes of the
Registration Rights and Lock-up Agreement.
ARTICLE XII
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner. A successor to all of
the General Partner's General Partnership Interest pursuant to Section 11.2
hereof who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective upon such
transfer. Any such transferee shall carry on the business of the Partnership
without dissolution. In each case, the admission shall be subject to the
successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.
Section 12.2 Admission of Additional Limited Partners.
(a) General. A Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement or who exercises an option
to receive Partnership Units shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the General Partner (i)
evidence of acceptance in form satisfactory to the General Partner of all
of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Article XVI hereof and (ii)
such other documents or instruments as may be required in the discretion
of the General Partner in order to effect such Person's admission as an
Additional Limited Partner.
(b) Consent of General Partner Required. Notwithstanding anything to
the contrary in this Section 12.2, no Person shall be admitted as an
Additional Limited Partner without the consent of the General Partner,
which consent may be given or withheld in the General Partner's sole and
absolute discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such
Person is recorded on the books and records of the Partnership, following
the consent of the General Partner to such admission.
Section 12.3 Amendment of Agreement and Certificate. For the admission to
the Partnership of any Partner, the General Partner shall take all steps
necessary and appropriate under the Act to amend the records of the Partnership
and, if necessary, to prepare as soon as practical an amendment of this
Agreement (including an amendment of Exhibit A) and, if required by law, shall
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prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Article XVI hereof.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. The Partnership shall dissolve, and its affairs shall be wound
up, upon the first to occur of any of the following ("Events of Dissolution"):
(a) Expiration of Term--the expiration of its term as provided in
Section 2.5 hereof;
(b) Withdrawal of General Partner--an event of withdrawal of the
General Partner, as defined in the Act, unless, within 90 days after the
withdrawal all the remaining Partners agree in writing to continue the
business of the Partnership and to the appointment, effective as of the
date of withdrawal, of a substitute General Partner;
(c) Dissolution Prior to 2098--from and after the date of this
Agreement through December 31, 2098, with the Consent of a majority of the
Percentage Interests of the Limited Partners, an election to dissolve the
Partnership made by the General Partner, in its sole and absolute
discretion;
(d) Judicial Dissolution Decree--entry of a decree of judicial
dissolution of the Partnership pursuant to the provisions of the Act;
(e) Sale of Partnership's Assets--the sale or disposition of all or
substantially all of the assets and properties of the Partnership;
(f) Merger--the merger or other combination of the Partnership with
or into another entity;
(g) Bankruptcy or Insolvency of General Partner--the General Partner
(1) makes an assignment for the benefit of creditors;
(2) files a voluntary petition in bankruptcy;
(3) is adjudged a bankrupt or insolvent, or has entered
against it an order for relief in any bankruptcy or insolvency
proceeding;
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(4) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation;
(5) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in
any proceeding of this nature; or
(6) seeks, consents to or acquiesces in the appointment of a
trustee, receiver or liquidator of the General Partner or of all or
any substantial part of its properties; or
(h) Readjustment, etc. One hundred and twenty (120) days after the
commencement of any proceeding against the General Partner seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, the
proceeding has not been dismissed, or if within 90 days after the
appointment without the General Partner's consent or acquiescence of a
trustee, receiver or liquidator of the General Partner or of all or any
substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the
appointment is not vacated.
Section 13.2 Winding Up.
(a) General. Upon the occurrence of an Event of Dissolution, the
Partnership shall continue solely for the purposes of winding up its
affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors and Partners. No Partner shall take any action
that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership's business and affairs. The General Partner
(or, in the event there is no remaining General Partner, any Person
elected by a majority in interest of the Limited Partners (the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the
Partnership's liabilities and property and the Partnership property shall
be liquidated as promptly as is consistent with obtaining the fair value
thereof, and the proceeds therefrom shall be applied and distributed in
the following order:
(1) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than the
Partners;
(2) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the Partners, pro rata in
accordance with amounts owed to each such Partner; and
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(3) The balance, if any, to the General Partner and Limited
Partners in accordance with their Capital Accounts, after giving
effect to all contributions, distributions, and allocations for all
periods.
The General Partner shall not receive any additional compensation
for any services performed pursuant to this Article XIII.
(b) Where Immediate Sale of Partnership's Assets Impractical.
Notwithstanding the provisions of Section 13.2(a) hereof which require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or
all of the Partnership's assets would be impractical or would cause undue
loss to the Partners, the Liquidator may, in its sole and absolute
discretion, defer for a reasonable time the liquidation of any assets
except those necessary to satisfy liabilities of the Partnership
(including to those Partners as creditors) or, with the Consent of the
Limited Partners holding a majority of the Limited Partnership Units,
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2(a) hereof, undivided
interests in such Partnership assets as the Liquidator deems not suitable
for liquidation. Any such distributions in kind shall be made only if, in
the good faith judgment of the Liquidator, such distributions in kind are
in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties
as the Liquidator deems reasonable and equitable and to any agreements
governing the operation of such properties at such time. The Liquidator
shall determine the fair market value of any property distributed in kind
using such reasonable method of valuation as it may adopt.
Section 13.3 Compliance with Timing Requirements of Regulations; Allowance
for Contingent or Unforeseen Liabilities or Obligations.
(a) Liquidation. Notwithstanding anything to the contrary in this
Agreement, in the event the Partnership is "liquidated" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
pursuant to this Article XIII to the General Partner and Limited Partners
who have positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2) (including any timing requirements therein). In
the discretion of the General Partner, a pro rata portion of the
distributions that would otherwise be made to the General Partner and
Limited Partners pursuant to this Article XIII may be: (i) distributed to
a liquidating trust established for the benefit of the General Partner and
Limited Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership (the assets
of any such trust shall be distributed to the General Partner and Limited
Partners from time to time, in the reasonable discretion of the General
Partner, in the same proportions as the amount distributed to such trust
by the Partnership would
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otherwise have been distributed to the General Partner and Limited
Partners pursuant to this Agreement); or (ii) withheld to provide a
reasonable reserve for Partnership liabilities (contingent or otherwise)
and to reflect the unrealized portion of any installment obligations owed
to the Partnership, provided that such withheld amounts shall be
distributed to the General Partner and Limited Partners as soon as
practicable.
(b) Deficit Balance of General Partner. Notwithstanding anything to
the contrary in this Agreement, (i) if the General Partner has a deficit
balance in its Capital Account following the liquidation (within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g)) of its interest in
the Partnership, as determined after taking into account all Capital
Account adjustments for the Partnership taxable year during which such
liquidation occurs (other than any adjustment for a capital contribution
of the General Partner made pursuant to this sentence), the General
Partner shall make a capital contribution to the Partnership in an amount
equal to such deficit balance by the end of the Partnership taxable year
during which such liquidation occurs (or, if later, within 90 days after
date of such liquidation); and (ii) such capital contribution made
pursuant to clause (i) of this Section 13.3(b) shall be distributed or
utilized as provided in Section 13.2 or 13.3(a).
Section 13.4 Other Events. Notwithstanding any other provision of this
Article XIII (but subject to Section 13.3(b)), in the event the Partnership is
liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no
Event of Dissolution has occurred, the Partnership's property shall not be
liquidated, the Partnership's liabilities shall not be paid or discharged, and
the Partnership's affairs shall not be wound up. Instead, for federal income tax
purposes the Partnership shall be deemed to have contributed all of its assets
and liabilities to a new partnership in exchange for an interest in the new
partnership and, immediately thereafter, the terminated partnership shall be
deemed to distribute interests in the new partnership to the General Partner and
Limited Partners in proportion to their respective interests in the terminated
partnership in liquidation of the terminated partnership.
Section 13.5 Rights of Limited Partners. Except as specifically provided
in this Agreement, each Limited Partner shall look solely to the assets of the
Partnership for the return of his Capital Contribution and shall have no right
or power to demand or receive property other than cash from the Partnership.
Except as specifically provided in this Agreement, no Limited Partner shall have
priority over any other Limited Partner as to the return of his Capital
Contributions, distributions, or allocations.
Section 13.6 Notice of Dissolution. In the event an Event of Dissolution
or an event occurs that would, but for provisions of Section 13.1, result in a
dissolution of the Partnership, the General Partner shall, within 30 days
thereafter, provide written notice thereof to each of the Partners and to all
other parties with whom the Partnership regularly conducts business (as
determined in the discretion of the General Partner) and shall publish notice
thereof in a newspaper of general circulation in each place in which the
Partnership regularly conducts business (as determined in the discretion of the
General Partner).
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Section 13.7 Cancellation of Certificate of Limited Partnership. Upon the
completion of the liquidation of the Partnership as provided in Section 13.2
hereof, the Partnership shall be terminated and the Certificate and all
qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.
Section 13.8 Reasonable Time for Winding-Up. A reasonable time shall be
allowed for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.2 hereof,
in order to minimize any losses otherwise attendant upon such winding-up, and
the provisions of this Agreement shall remain in effect between the Partners
during the period of liquidation.
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments.
(a) General. Amendments to this Agreement may be proposed by the
General Partner or by any Limited Partners holding 25 percent or more in
the aggregate of the Partnership Interests held by all Limited Partners.
Following such proposal, the General Partner shall submit any proposed
amendment to the Limited Partners. The General Partner shall seek the
written vote of the Partners on the proposed amendment or shall call a
meeting to vote thereon and to transact any other business that it may
deem appropriate. Except as provided in Section 14.1(b), 14.1(c) or
14.1(d), a proposed amendment shall be adopted and be effective as an
amendment hereto if it is approved by the General Partner and it receives
the Consent of Limited Partners holding a majority of the Percentage
Interests of the Limited Partners.
(b) General Partner's Power to Amend. Notwithstanding Section
14.1(a), the General Partner shall have the power, without the consent of
the Limited Partners, to amend this Agreement as may be required to
facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner or
surrender for the benefit of the Limited Partners any right or power
granted to the General Partner or any Affiliate of the General
Partner;
(2) to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement;
(3) to set forth the rights, powers, duties, and preferences
of the holders of any additional Partnership Interests issued
pursuant to Section 4.2(b) hereof;
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(4) to reflect a change that is of an inconsequential nature
and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any
provision in this Agreement not inconsistent with law or with other
provisions, or make other changes with respect to matters arising
under this Agreement that will not be inconsistent with law or with
the provisions of this Agreement; and
(5) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or regulation of
a Federal or state agency or contained in Federal or state law.
The General Partner will provide notice to the Limited Partners when
any action under this Section 14.1(b) is taken.
(c) Consent of Adversely Affected Partner Required. Notwithstanding
Section 14.1(a) and Section 14.1(b) hereof, this Agreement shall not be
amended without the Consent of each Partner adversely affected if such
amendment would (i) convert a Limited Partner's interest in the
Partnership into a general partner's interest, (ii) modify the limited
liability of a Limited Partner, (iii) alter rights of the Partner to
receive distributions pursuant to Article V, or the allocations specified
in Article VI (except as permitted pursuant to Section 4.2 and Section
14.1(b)(3) hereof), (iv) alter or modify the Conversion Right or the
Redemption Amount as set forth in Sections 4.2(e), 8.6 and 11.2(b), and
related definitions hereof, (v) cause the termination of the Partnership
prior to the time set forth in Sections 2.5 or 13.1, (vi) amend this
Section 14.1(c) or (vii) amend Article VI or any definition used therein
that would have the effect of causing the allocations in Article VI to
fail to comply with the requirements of Section 514(c)(9)(E) of the Code.
Further, no amendment may alter the restrictions on the General Partner's
authority set forth in Section 7.3 without the Consent specified in that
section.
(d) When Consent of Majority of Limited Partnership Interests
Required. Notwithstanding Section 14.1(a) hereof, the General Partner
shall not amend Section 4.2(b), the second sentence of Section 7.1(a),
Sections 7.5, 7.6, 7.8, 11.2, and 13.1(c), this Section 14.1(d) or Section
14.2 without the Consent of two-thirds of the Percentage Interests of the
Limited Partners.
Section 14.2 Meetings of the Partners.
(a) General. Meetings of the Partners may be called by the General
Partner and shall be called upon the receipt by the General Partner of a
written request by Limited Partners holding 25 percent or more of the
Partnership Interests. The call shall state the nature of the business to
be transacted. Notice of any such meeting shall be given to all Partners
not less than seven days nor more than 30 days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Whenever
the vote or Consent of
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Partners is permitted or required under this Agreement, such vote or
Consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 14.1 hereof. Except as
otherwise expressly provided in this Agreement, the Consent of holders of
a majority of the Percentage Interests shall control.
(b) Informal Action. Any action required or permitted to be taken at
a meeting of the Partners may be taken without a meeting if a written
Consent setting forth the action so taken is signed by a majority of the
Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such Consent may be in one
instrument or in several instruments, and shall have the same force and
effect as a vote of a majority of the Percentage Interests of the Partners
(or such other percentage as is expressly required by this Agreement).
Such Consent shall be filed with the General Partner. An action so taken
shall be deemed to have been taken at a meeting held on the effective date
so certified.
(c) Proxies. Each Limited Partner may authorize any Person or
Persons to act for him by proxy on all matters in which a Limited Partner
is entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. Every proxy must be signed by the
Limited Partner or his attorney-in-fact. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Limited
Partner executing it.
(d) Conduct of Meeting. Each meeting of Partners shall be conducted
by the General Partner or such other Person as the General Partner may
appoint pursuant to such rules for the conduct of the meeting as the
General Partner or such other Person deems appropriate.
ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Addresses and Notice. All notices and demands under this
Agreement shall be in writing, and may be either delivered personally (which
shall include deliveries by courier), by telefax, telex or other wire
transmission (with request for assurance of receipt in a manner appropriate with
respect to communications of that type, provided that a confirmation copy is
concurrently sent by a nationally recognized express courier for overnight
delivery) or mailed, postage prepaid, by certified or registered mail, return
receipt requested, directed to the parties at their respective addresses set
forth on Exhibit A, as it may be amended from time to time, and, if to the
Partnership, such notices and demands sent in the aforesaid manner must be
delivered at its principal place of business set forth above. Unless delivered
personally or by telefax, telex or other wire transmission as above (which shall
be effective on the date of such delivery or transmission), any notice shall be
deemed to have been made three (3) days following the date so mailed. Any party
hereto may designate a different address to which notices and demands shall
thereafter be directed
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by written notice given in the same manner and directed to the Partnership at
its office hereinabove set forth.
Section 15.2 Titles and Captions. All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the scope
or intent of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
Section 15.3 Pronouns and Plurals. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
Section 15.4 Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.
Section 15.6 Waiver of Partition. The Partners hereby agree that the
Partnership properties are not and will not be suitable for partition.
Accordingly, each of the Partners hereby irrevocably waives any and all rights
(if any) that it may have to maintain any action for partition of any of the
Partnership properties.
Section 15.7 Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the matters contained herein; it
supersedes any prior agreements or understandings among them and it may not be
modified or amended in any manner other than pursuant to Article XIV.
Section 15.8 Securities Law Provisions. The Partnership Units have not
been registered under the Federal or state securities laws of any state and,
therefore, may not be resold unless appropriate Federal and state securities
laws, as well as the provisions of Article XI hereof, have been complied with.
Section 15.9 Remedies Not Exclusive. Any remedies herein contained for
breaches of obligations hereunder shall not be deemed to be exclusive and shall
not impair the right of any party to exercise any other right or remedy, whether
for damages, injunction or otherwise.
Section 15.10 Time. Time is of the essence of this Agreement.
Section 15.11 Creditors. None of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Partnership.
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Section 15.12 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
Section 15.13 Execution Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.
Section 15.14 Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
regard to the principles of conflicts of law.
Section 15.15 Judicial Proceedings. Any judicial proceedings involving any
dispute, controversy or claim arising out of or relating to this agreement or to
the General Partner's affairs or the rights or interests or the partners or any
of them or the breach or alleged breach of this agreement, whether arising
during the partnership's term or at or after its termination or during or after
the liquidation of the partnership (each of the foregoing disputes,
controversies and claims is hereinafter referred to as a "Partnership Dispute"),
shall be brought only in a court located in the State of North Carolina, and
each of the parties hereto (i) unconditionally accepts the exclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any judgment rendered thereby and (ii) irrevocably wives
any objection such party may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such court is an inconvenient forum.
Each of the parties hereto hereby waives trial by jury in any judicial
proceeding to which they are parties involving a Partnership Dispute.
Section 15.16 Invalidity of Provisions. If any provision of this Agreement
is or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
ARTICLE XVI
POWER OF ATTORNEY
Section 16.1 Power of Attorney.
(a) Scope. Each Limited Partner and each Assignee constitutes and
appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case
with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and
stead to:
(1) execute, swear to, acknowledge, deliver, publish, file and
record in the appropriate public offices (a) all certificates,
documents and other instruments
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(including, without limitation, this Agreement and the Certificate
and all amendments or restatements thereof) that the General Partner
or the Liquidator deems appropriate or necessary to form, qualify or
continue the existence or qualification of the Partnership as a
limited partnership (or a partnership in which the limited partners
have limited liability) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or own
property; (b) all instruments that the General Partner deems
appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its
terms; (c) all conveyances and other instruments or documents that
the General Partner deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms
of this Agreement, including, without limitation, a certificate of
cancellation; (d) all instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or
other events described in, Article XI, XII or XIII hereof or the
Capital Contribution of any Partner; and (e) all certificates,
documents and other instruments relating to the determination of the
rights, preferences and privileges of Partnership Interests; and
(2) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of the
General Partner, to make, evidence, give, confirm or ratify any
vote, consent, approval, agreement or other action which is made or
given by the Partners hereunder or is consistent with the terms of
this Agreement or appropriate or necessary, in the sole discretion
of the General Partner, to effectuate the terms or intent of this
Agreement.
Nothing contained herein shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article
XIV hereof or as may be otherwise expressly provided for in this
Agreement.
(b) Irrevocability. The foregoing power of attorney is hereby
declared to be irrevocable and a power coupled with an interest, in
recognition of the fact that each of the Partners will be relying upon the
power of the General Partner to act as contemplated by this Agreement in
any filing or other action by it on behalf of the Partnership, and it
shall survive and not be affected by the subsequent Incapacity of any
Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner's or Assignee's Partnership Units and shall extend to such
Limited Partner's or Assignee's heirs, successors, assigns and personal
representatives. Each such Limited Partner or Assignee hereby agrees to be
bound by any representation made by the General Partner, acting in good
faith pursuant to such power of attorney; and each such Limited Partner or
Assignee hereby waives any and all defenses which may be available to
contest, negate or disaffirm the action of the General Partner, taken in
good faith under such power of attorney. Each Limited Partner or Assignee
shall execute and deliver to the General Partner or the Liquidator, within
15 days after receipt of the General Partner's request therefor, such
further designation, powers of attorney and other
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instruments as the General Partner or the Liquidator, as the case may be,
deems necessary to effectuate this Agreement and the purposes of the
Partnership.
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Agreement of Limited Partnership of Mar Mar Realty L.P. as of the date
first written above.
GENERAL PARTNER:
Mar Mar Realty Trust
By:__________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
WITHDRAWING INITIAL LIMITED PARTNER:
______________________________________
Name:
LIMITED PARTNERS:
SONIC FINANCIAL CORPORATION
By:__________________________________
Name:
Title:
TOWN & COUNTRY FORD, INC.
By:__________________________________
Name:
Title:
O. ▇▇▇▇▇▇ ▇▇▇▇▇
______________________________________
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PRIMAX PROPERTIES, LLC
By:__________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________________
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